SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. __)
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
V-ONE Corporation
--------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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 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.
<PAGE>
1) Amount Previously Paid:_____________________________________________
2) Form, Schedule or Registration Statement No.:_______________________
3) Filing Party:_______________________________________________________
4) Date Filed:_________________________________________________________
- 2 -
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[V-ONE LOGO]
April 5, 1999
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Shareholders of V-ONE Corporation ("Company"). The Annual
Meeting will be held at The Hampton Inn Germantown, 20260 Goldenrod Lane,
Germantown, Maryland 20876, on Thursday, May 13, 1999 at 10:00 a.m. Germantown,
Maryland time.
The shareholders will be asked at the Annual Meeting to vote on 1
proposal. The proposal relates to the reelection, with a term ending in the year
2002, of two directors of the Company. The Board of Directors unanimously
recommends that the Company's shareholders vote for the proposal.
Your vote is very important, regardless of the number of shares you own.
Please sign and return each proxy card that you receive in the postage-paid
return envelope, which is provided for your convenience. The return of your
proxy card will not prevent you from voting in person but will assure that your
vote is counted if you are unable to attend the Annual Meeting. We look forward
to seeing you on May 13.
Sincerely,
/s/ David D. Dawson
DAVID D. DAWSON
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
20250 Century Boulevard, Suite 300, Germantown, Maryland 20874/ (301) 515-5200
<PAGE>
V-ONE CORPORATION
20250 CENTURY BOULEVARD, SUITE 300 GERMANTOWN, MARYLAND 20874 (301)515-5200
NOTICE
ANNUAL MEETING OF SHAREHOLDERS
APRIL 5, 1999
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders
("Annual Meeting") of V-ONE Corporation ("Company") will be held on Thursday,
May 13, 1999 at 10:00 a.m., Germantown, Maryland time, at The Hampton Inn
Germantown, 20260 Goldenrod Lane, Germantown, Maryland 20876, for the following
purposes:
1. To elect two directors, whose terms shall expire at the 2002 annual
meeting, or until their successors have been elected and qualified;
and
2. To transact any 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 24, 1999
as the record date ("Record Date") for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting and at any adjournment
thereof. A complete list of shareholders of record of the Company on the Record
Date will be available for examination by any shareholder, for any purpose
germane to the Annual Meeting, during ordinary business hours, for the 10-day
period prior to the Annual Meeting, at the executive offices of the Company,
20250 Century Boulevard, Suite 300, Germantown, Maryland 20874.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Joseph D. Gallagher
JOSEPH D. GALLAGHER
SECRETARY
Germantown, Maryland
April 5, 1999
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING, OR IN
PERSON, AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
V-ONE CORPORATION
20250 CENTURY BOULEVARD, SUITE 300 GERMANTOWN, MARYLAND 20874 (301)515-5200
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited by the Board of Directors ("Board") of
V-ONE Corporation, a Delaware corporation ("Company"), for use at the Annual
Meeting of Shareholders on Thursday, May 13, 1999 ("Annual Meeting"), and at any
adjournment thereof. The approximate date of mailing of this Proxy Statement is
April 5, 1999.
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
The securities to be voted at the Annual Meeting consist of shares of
common stock of the Company, $0.001 par value per share ("Common Stock"), with
each share entitling its record owner to one vote on the Proposal and on all
other matters properly brought before the Annual Meeting. The close of business
on March 24, 1999 has been fixed by the Board as the record date ("Record Date")
for determination of shareholders entitled to notice of, and to vote at, the
Annual Meeting. There were 124 record holders of the Common Stock on the Record
Date and 16,773,075 shares of Common Stock were outstanding and eligible to be
voted at the Annual Meeting as of that date. The Company had no other class of
voting securities outstanding on the Record Date.
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of the Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the Annual Meeting. If less than
a majority of the outstanding shares are present at the Annual Meeting, either
in person or by proxy, a majority of the shares so represented may vote to
adjourn the Annual Meeting from time to time without further notice. Directors
receiving a plurality of votes will be elected in the order of the number of
votes received. There is no cumulative voting in the election of directors. With
respect to any other matter properly brought before the Annual Meeting or any
adjournment thereof, the vote required for approval shall be the affirmative
vote of a majority of the total number of votes that those present at the Annual
Meeting, in person or by proxy, are entitled to cast.
All shares entitled to vote represented by a properly executed and
unrevoked proxy received in time for the Annual Meeting will be voted at the
Annual Meeting in accordance with the instructions given; in the absence of
instructions to the contrary, such shares will be voted FOR the Proposal to
elect the designated nominees for director. If any other matters properly come
before the Annual Meeting, the persons named as proxies will vote upon such
matters as determined by a majority of the Board.
Under Delaware law, shares represented at the Annual Meeting (either by
properly executed proxy or in person) that reflect abstentions or "broker
non-votes" (I.E., shares held by a broker or nominee that are represented at the
Annual Meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions as to any Proposal will have the same effect as votes
against the Proposal. Broker non-votes, however, will be treated as unvoted for
purposes of determining approval of such Proposal (and therefore will reduce the
absolute number - although not the percentage - of votes needed for approval)
and will not be counted as votes for or against the Proposal.
The cost of soliciting proxies will be borne by the Company. In addition
to use of the mails, proxies may be solicited personally or by telephone or
telegraph by officers, directors or employees of the Company who will not be
specially compensated for such solicitation activities. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
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forwarding solicitation materials to the beneficial owners of shares held of
record by such persons, and the Company will reimburse such persons for their
reasonable expenses incurred in that connection.
A shareholder may revoke his or her proxy at any time prior to its
exercise by (i) filing with Joseph D. Gallagher, Secretary, V-ONE Corporation,
20250 Century Boulevard, Suite 300, Germantown, Maryland 20874, written notice
thereof, (ii) submitting a duly executed proxy bearing a later date or (iii)
appearing at the Annual Meeting and giving the Secretary notice of his or her
intention to vote in person. Unless previously revoked or otherwise instructed
thereon, proxies will be voted at the Annual Meeting on the Proposal as
described above.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The number of shares of Common Stock held as of March 1, 1999, by each
holder, if any, of more than 5% of the outstanding Common Stock of the Company,
by each director of the Company, each nominee for reelection as a director, each
executive officer named in the "Summary Compensation Table," and by all
executive officers and directors of the Company is set forth below. All of the
shares shown in the following table are shares of Common Stock and are owned
both of record and beneficially by the person named; the person named possesses
sole voting and investment power, except as otherwise indicated in the footnotes
to the table.
This table does not include shares of Common Stock that may be issued to
Advantage Fund II Ltd. ("Advantage") because Advantage and any person who
acquires warrants from Advantage is not entitled to receive shares of Common
Stock on exercise of these warrants to the extent that the sum of (1) the shares
of Common Stock owned by such holder and its affiliates and (2) the shares of
Common Stock issuable on exercise of these warrants would result in beneficial
ownership by such holder and its affiliates of more than 4.9% of the outstanding
shares of Common Stock. Beneficial ownership for this purpose is determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), excluding shares of Common Stock so owned through ownership of
unexercised warrants.
NAME AND ADDRESS (1) SHARES BENEFICIALLY OWNED (2) PERCENT OF CLASS (3)
---------------- ------------------------- ----------------
James F. Chen** 3,720,152(4) 22.2%
Jieh-Shan Wang 382,492(5) 2.3%
Charles C. Chen 199,500(6) 1.2%
David D. Dawson 210,000(7) 1.2%
Charles B. Griffis 67,300(8) *
A.L. Giannopoulos 10,000(9) *
William E. Odom** 16,666(10) *
Christopher T. Brook 52,500(11) *
Executive Officers and 4,658,610 27.2%
Directors as a group (9 (4) (5) (6) (7)
persons) (8) (9) (10) (11)
- --------------------
2
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* Less than 1%.
** Nominee.
(1) Unless otherwise indicated, the mailing address of each shareholder is c/o
V-ONE Corporation, 20250 Century Boulevard, Suite 300, Germantown, MD
20874.
(2) In accordance with Rule 13d-3 of the Exchange Act, a person is deemed to
be the beneficial owner of a security if he or she has or shares voting
power or investment power with respect to such security or has the right
to acquire such ownership within 60 days.
Each director and executive officer possesses sole voting and investment
power with respect to the shares listed, except as otherwise indicated.
The number of shares beneficially owned by each director or executive
officer is determined under rules promulgated under the Exchange Act by
the Securities and Exchange Commission ("SEC"), and the information is not
necessarily indicative of beneficial ownership for any other purpose.
Under such rules, beneficial ownership includes any shares as to which the
individual currently has sole or shared voting power or investment power,
and also any shares which the individual has the right to acquire within
60 days after March 1, 1999.
(3) Number of shares deemed outstanding includes any shares subject to stock
options and warrants beneficially owned by the person in question that are
currently exercisable or become exercisable within 60 days after March 1,
1999.
(4) Includes: 600,000 shares of Common Stock held in a family limited
partnership, the general partner of which is a corporation controlled by
James F. Chen and his wife Mary S. Chen. Does not include (i) 71,110
shares of Common Stock registered in the name of Mary S. Chen as Trustee
under trusts for the benefit of Mr. Chen's children with respect to which
Mary S. Chen possesses voting and investment power and (ii) 138,100 shares
of Common Stock held by the Chen Foundation, Inc. with respect to which
Mary S. Chen possesses sole voting and dispositive power, for which shares
Mr. Chen disclaims beneficial ownership.
(5) Includes 103,500 shares of Common Stock held in a family limited
partnership, the general partner of which is a corporation controlled by
Jieh-Shan Wang and his wife Shwu-Ru Wang, and options to purchase 15,000
shares of Common Stock.
(6) Owned jointly with Kathleen H. Chen, his wife.
(7) Includes options and warrants to purchase 200,000 shares of Common Stock.
Does not include options and warrants to purchase 600,000 shares of Common
Stock, in the aggregate, that are not currently exercisable.
(8) Includes 2,400 shares held by his wife and options to purchase 62,500
shares of Common Stock.
(9) Includes warrants to purchase 10,000 shares of Common Stock.
(10) Includes options to purchase 6,666 shares of Common Stock and warrants to
purchase 10,000 shares of Common Stock.
(11) Includes options to purchase 52,500 shares of Common Stock.
3
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ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's restated bylaws provide for a Board consisting of up to
seven members serving staggered terms. The terms of office of James F. Chen and
William E. Odom on the Board will expire at the Annual Meeting. James F. Chen
and William E. Odom have been nominated by the Board for reelection to the Board
to serve for a three-year term.
There are no arrangements or understandings between the Company and any
person pursuant to which such person has been elected as a director or selected
as a nominee, except that, under Mr. Dawson's employment agreement, the Board
was required to elect Mr. Dawson to fill a vacancy on the Board. Under his
employment agreement, Mr. Dawson also has the right to nominate a person to
serve as a director of the Company (in addition to himself). Mr. Dawson
nominated Mr. Giannopoulos pursuant to this provision.
If any nominee becomes unavailable for any reason, or if any other vacancy
in the class of directors to be elected at the Annual Meeting should occur
before the election, the shares represented by the proxy will be voted for the
person, if any, who is designated by the Board to replace the nominee or to fill
such other vacancy on the Board. The Board has no reason to believe that the
nominees will be unavailable or that any other vacancy on the Board will occur.
The nominees have consented to be named and have indicated their intent to serve
if elected.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR
REELECTION AS DIRECTORS SET FORTH ABOVE.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The directors of the Company are currently classified into three classes,
which are elected on a staggered basis. Each director serves for a three-year
term and until his successor is duly elected and qualified. The current members
of the Board are set forth below:
DIRECTOR
OF THE
COMPANY TERM POSITION(S) CURRENTLY
NAME SINCE EXPIRES HELD WITH THE COMPANY
---- ----- ------- ---------------------
Charles C. Chen (1)(2).... 1993 2001 Director
James F. Chen (1)(3)...... 1993 1999 Director
David D. Dawson........... 1997 2001 Chairman of the Board,
President and Chief
Executive Officer
A.L. Giannopoulos (2)(4).. 1998 2000 Director
William E. Odom (2)(3)(4). 1996 1999 Director
- ---------------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Nominee for election.
(4) Member of the Executive Compensation Committee
Biographical information regarding the directors of the Company is as
follows:
4
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CHARLES C. CHEN, D.D.S., 44, has served as a director of the Company since
February 1993 and as the Company's Secretary from December 12, 1995 until
February 2, 1998. Since July 1982, Dr. Chen has practiced periodontics with
Zupnik, Winson & Chen, D.D.S.P.A. Dr. Chen holds a D.D.S. from the Baltimore
College of Dental Surgery, University of Maryland, and a B.S. in Chemistry from
the University of Maryland. He is James F. Chen's brother.
JAMES F. CHEN, 48, founded the Company in February 1993 and has since
served as a director. He also served as Chairman of the Board from November 21,
1997 to July 22, 1998. From inception until November 21, 1997, Mr. Chen served
as the Company's President and Chief Executive Officer. From 1980 to 1990, Mr.
Chen managed INTELSAT's world-wide ground network engineering projects. From
1990 to January 1993, he managed the INTELSAT Ground Network Engineering
Department and, from March 1992 to January 1993, he also directed its Management
Information Systems Division. Mr. Chen holds an M.S. in Computer Science from
George Washington University and a B.S. in Electrical Engineering from Georgia
Institute of Technology. He is Charles C. Chen's brother.
DAVID D. DAWSON, 51, has served as the President and Chief Executive
Officer of the Company since November 21, 1997, as a director since December 12,
1997 and as Chairman of the Board since July 22, 1998. From March 1996 until
November 1997, he served as General Manager of Ascend Communications, Inc., a
data communications hardware company. From April 1994 until March 1996, he
served as Chief Operating Officer, and from November 1995 until March 1996, he
served as Chief Executive Officer of Morning Star Technologies, a firewall and
communications company. From October 1992 until April 1994, he was Vice
President of Development for Net Express Systems, a data communications hardware
company. Mr. Dawson holds an M.S. in Computer Science from Fairleigh Dickinson
University, an M.S. in Operations Research from Air Force Institute of
Technology, and a B.S. in Electrical Engineering from the United States Military
Academy at West Point.
A.L. GIANNOPOULOS, 59, has served as a director of the Company since July
22, 1998. Mr. Giannopoulos was elected a director of MICROS Systems, Inc.
("MICROS") in March 1992 and was elected President and Chief Executive Officer
of MICROS in May 1993. Effective as of June 1, 1995, Mr. Giannopoulos resigned
as General Manager of the Westinghouse Information and Security Systems
Divisions, having been with Westinghouse for approximately 30 years. In prior
assignments at Westinghouse, Mr. Giannopoulos was General Manager of the
Automation Division and National Industrial Systems Sales Force, Industries
Group. Mr. Giannopoulos is a graduate of Lamar University with a Bachelor of
Science degree in Electrical Engineering.
(RETIRED) LT. GEN. WILLIAM E. ODOM, 66, has served as a director of the
Company since June 1996. Since October 1988, General Odom has served as Director
of National Security Studies at the Hudson Institute. He has also served as an
adjunct professor at Yale University since January 1989. Prior to his retirement
from the military in 1988, General Odom held several military posts including,
Director of the National Security Agency, Assistant Chief of Staff for
Intelligence and Military Assistant to the National Security Advisor during the
Carter Administration. He is also a director of Nichols Research Corporation and
American Technologies Group and the Chairman of the Board of American Science &
Engineering. General Odom holds an M.A. and Ph.D. from Columbia University and a
B.S. from the United States Military Academy at West Point.
COMPENSATION OF DIRECTORS
The Company reimburses directors for travel expenses incurred in
connection with their attendance at meetings of the Board and its committees.
James Chen received $185,000 in 1998 pursuant to his employment agreement.
Mr. Chen also received $4,000 in payments from the Company to finance a company
car and $824 in payments by the Company in connection with taxes on such car.
Mr. Chen's employment agreement with the Company has been amended as of January
1, 1999. Mr. Chen will no longer receive a salary and the Company has agreed to
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pay Mr. Chen $5,000 per month during 1999 as a consulting fee starting on
January 1, 1999.
On August 7, 1998, the Company issued warrants to purchase 10,000 shares
of Common Stock each to Gen. Odom and Mr. Giannopoulos. The exercise price of
the warrants is $2.686 per share. The warrants were exercisable upon issuance
and have a term of five years.
BOARD OF DIRECTORS AND COMMITTEES
Meetings of the Board are held regularly each quarter and as required.
During 1998, the Board held four meetings. The following are the committees of
the Board:
The Board has established an Audit Committee ("Audit Committee") to
recommend the firm to be appointed as independent accountants to audit the
Company's financial statements and to perform services related to the audit,
review the scope and results of the audit with the independent accountants,
review with management and the independent accountants the Company's year-end
operating results and consider the adequacy of the internal accounting
procedures. The Audit Committee consists of two directors, none of whom are
employees of the Company. The Audit Committee met twice in 1998.
The Board has also established a Compensation Committee ("Compensation
Committee") and an Executive Committee ("Executive Committee"). The Compensation
Committee, which consisted of two directors until Hai Hua Cheng resigned on
November 7, 1997, reviewed and recommended the compensation arrangements for all
directors and officers, approved such arrangements for other senior level
employees and administered and took such other action as may have been required
in connection with certain compensation and incentive plans of the Company. On
March 4, 1999, the Compensation Committee was reconstituted.
The Executive Committee, which consists of two directors, addresses
significant corporate, operating and management matters between meetings of the
full Board. The Executive Committee did not meet during 1998.
The Company currently has no standing nominating committee. A director can
be nominated by a member of the Board or by written notice to the Board not less
than 120 calendar days in advance of the anniversary date of the Company's
previous year's annual meeting of shareholders.
No current member of the Board attended fewer than seventy-five percent
(75%) of the aggregate of the total number of meetings of the Board and the
total number of meetings held by all committees of the Board on which he served
during 1998.
INFORMATION CONCERNING EXECUTIVE OFFICERS
The Company's executive officers are elected each year by the Board,
unless the Board determines, upon appointing an officer, that he or she shall
serve for a different term. Any executive officer may be removed at any time,
with or without cause, by the Board. Biographical information with respect to
David D. Dawson is provided above. See "Information Concerning the Board of
Directors." Biographical information regarding the other executive officers of
the Company is as follows:
JIEH-SHAN WANG, PH.D., 44, has been with the Company since its inception
and has served as the Company's Chief Technical Officer since August 1998. As of
August 1998, Dr. Wang is no longer an executive officer of the Company. From
January 1997 to July 1998, Dr. Wang served as the Company's Senior Vice
President and Chief Technical Officer, from April 1996 to December 1996, Dr.
Wang served as the Company's Senior Vice President of Engineering, from August
1995 to April 1996, Dr. Wang served as the Company's Vice President of
Engineering and, from April 1994 to August 1995, he served as Chief Engineer.
Dr. Wang was with INTELSAT from June 1991 to April 1994, as Senior Systems
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Engineer, where he led a team of engineers in the development of network
applications. Dr. Wang holds a Ph.D. in Physics from the University of Maryland
and a B.S. in Physics from National Taiwan University.
CHARLES B. GRIFFIS, 54, has served as the Company's Senior Vice President
and Chief Financial Officer since September 1996 and began serving as the
Company's Treasurer as of January 1, 1997. Prior to joining the Company, Mr.
Griffis served as Senior Vice President and Chief Financial Officer of Masstor
Systems Corporation, a company that filed a petition for reorganization under
Chapter 11 of the United States Bankruptcy Code on September 8, 1994, from April
1990 to September 1996. From November 1983 to April 1990, Mr. Griffis served as
a General Partner of Griffis, Sandler & Co., a private venture capital firm, and
as President of Charles Griffis & Co., Inc., a business consulting firm. Mr.
Griffis holds an M.B.A. in Finance from Columbia University and a B.A. in
History from Yale University.
CHRISTOPHER T. BROOK, 59, has served as the Company's Vice President of
Product Development since February 1997. As of August 1998, Mr. Brook is no
longer an executive officer of the Company. From September 1996 to February
1997, Mr. Brook served as the Company's Director of Product Development. Mr.
Brook was with GE Information Services, Inc. for approximately 27 years prior to
joining the Company, holding a number of technology-related positions including
Manager of Directory Services and Network Architecture, Manager of Network
Architecture and most recently, Manager of Emerging Technology, where Mr. Brook
was responsible for investigating new information technologies. Mr. Brook
graduated from Clifton College (Bristol, England) with an emphasis in the
Classics.
ROBERT F. KELLEY, 43, has served as the Company's Vice President of
Engineering since August 1998. Prior to joining the Company, Mr. Kelley served
from October 1996 to August 1998 as the Director, New Product Development for
Symix Systems, Inc., where he led product development of their flagship
SyteLine(R) software product serving the mid-range Manufacturing ERP market.
From October 1993 to October 1996, he managed software development at
CompuServe, Inc., most recently as Group Manager, Software Development in the
Internet Services Group. Previously, he served in a variety of positions with
Soft Step Software, Inc., Meret, Inc., and the General Electric Company. Mr.
Kelley holds an M.B.A from Harvard Business School and a B.S. in Engineering
from Ohio State University.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation paid to the Company's current
President and Chief Executive Officer and the three other most highly
compensated executive officers of the Company whose salary plus bonus exceeded
$100,000 during the year ended December 31, 1998 ("Named Executives") and their
compensation for services in 1998, 1997 and 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------------------
Long Term
Compensation
------------
Awards
------
Name and Principal Other Annual Securities All Other
Position Year Salary ($) Bonus ($) Compensation ($)(1) Underlying Options (#) Compensation ($)
- ------------------ ---- ---------- --------- ------------------- ----------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David D. Dawson 1998 $200,000 -- $22,006(7) -- $54,824(6)
President and Chief 1997 $ 21,282 -- -- 800,000(2) --
Executive Officer 1996 -- -- -- -- --
Jieh-Shan Wang 1998 $110,000 $ 35,000 -- 30,000 --
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Chief Technical 1997 $140,000 -- -- 30,000 $ 3,778(4)
Officer (8)
1996 $101,667 $ 3,000 -- 166,666(3) $ 4,633(4)
Charles B. Griffis 1998 $150,000 -- -- -- --
Senior Vice 1997 $142,500 $ 10,000 -- 45,000 --
President & Chief 1996 $ 36,820 -- -- 75,000 3,240(5)
Financial Officer
Christopher T. Brook 1998 $120,000 -- -- -- --
Vice President of 1997 $118,333 -- -- 15,000 --
Product Development 1996 -- -- -- 60,000 --
(8)
</TABLE>
- ---------------------
(1) Except with respect to Mr. Dawson in 1998, for 1998, 1997 and 1996, the
aggregate amount of perquisites and other personal benefits, securities or
property for each Named Executive is not reportable under SEC rules
because such amount is the lesser of either $50,000 or 10% of total annual
salary and bonus for each Named Executive.
(2) Represents options to purchase 500,000 shares of Common Stock at an
exercise price of $3.125 per share granted under the 1996 Plan and
warrants to purchase 300,000 shares of Common Stock at an exercise price
of $3.125 per share. These options and warrants vest as to 25% of the
shares on the first anniversary of the date of grant and as to an
additional 25% of the shares on the second, third and fourth anniversaries
of the date of grant. The options and warrants become fully vested in the
event of a change in control of the Company.
(3) Represents options granted under the Company's 1996 Non-Statutory Stock
Option Plan (expired on December 31, 1996), which, upon exercise, became
shares of Common Stock subject to restrictions on transferability.
(4) Represents payments made by the Company to finance Mr. Wang's automobile.
(5) Represents payments made by the Company for Mr. Griffis' relocation.
(6) Represents payments made by the Company for Mr. Dawson's relocation.
(7) Represents taxes paid by the Company on behalf of Mr. Dawson.
(8) This person ceased serving as an executive officer of the Company in
August 1998.
STOCK OPTIONS
The following tables set forth further information regarding the grant of
options and warrants to the Named Executives of the Company in 1998. No stock
appreciation rights ("SARs") were granted to any Named Executive during 1998.
This table does not include information with respect to options that were
repriced during 1998.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------------------------------------------
% of Total
Number of Options
Securities Granted to Potential Realizable Value at
Underlying Employees Exercise or Assumed Annual Rates of Stock
Options Granted in Fiscal Base Price Expiration Price Appreciation for Option
Name (#) Year ($/Sh)(1) Date Term
- -------------------- --------------- ----------- ----------- ---------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
David D. Dawson 0 -- -- -- -- --
Jieh-Shan Wang 30,000(2) 4.3% $2.688 8/6/08 $50,714 $128,519
Charles B. Griffis 0 -- -- -- -- --
Christopher T. Brook 0 -- -- -- -- --
- --------------------
</TABLE>
8
<PAGE>
(1) Represents fair market value on date of grant.
(2) Options vest in equal amounts over a four year period beginning on the
first anniversary of the date of grant. If Mr. Wang's employment is
terminated, other than for death, disability or "just cause" as defined in
his employment agreement, Mr. Wang may exercise within 3 months of the
date of termination all or any part of options that have vested on the
date of termination of his employment. Upon a change of control of the
Company the options will become fully vested and exercisable.
The following table summarizes the value realized upon exercise of
outstanding stock options and the value of the outstanding options held by the
Named Executives at December 31, 1998.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, December 31,
Shares 1998 (#) 1998 ($) (1)
Acquired ------------- -------------
on Value Exercisable/ Exercisable/
Name Exercise(#) Realized ($) Unexercisable Unexercisable
---- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
David D. Dawson - - 200,000/800,000 $0/$0
Jieh-Shan Wang - - 7,500/60,000 $705/$5,640
Charles B. Griffis - - 56,250/75,000 $5,288/$11,280
Christopher T. Brook - - 48,750/75,000 $4,583/$7,050
- -----------------------------
</TABLE>
(1) Based on the closing sales price of $2.969 on December 31, 1998.
On February 17, 1998, the Company offered to reprice all outstanding
options issued pursuant to the Company's 1996 Incentive Stock Plan ("1996
Plan"), other than those issued to the President and any Vice President, at the
option of the holder, by decreasing the exercise price of the options to $2.625,
the current market price of the Company's common stock as of that date. The
repricing was conditioned on the acceptance by each optionholder of (i) the
requalification of any repriced option as a "Non-Qualified Stock Option" as that
term is defined in the 1996 Plan and (ii) agreement that any repriced options
would not become exercisable unless such optionholder remained an employee of
the Company through August 17, 1998.
On May 1, 1998, the Company offered to reprice all outstanding options
issued to the President and any Vice Presidents pursuant to the 1996 Plan, at
the option of the holder, by decreasing the exercise price of the options to
$2.875, the current market price of the Company's common stock as of that date.
The repricing was conditional on the acceptance by each optionholder of (i) the
requalification of any repriced option as a "Non-Qualified Stock Option" as that
term is defined in the 1996 Plan and (ii) agreement that any repriced options
would not become exercisable unless such optionholder remained an employee of
the Company through November 1, 1998.
The following table sets forth information with respect to all repricings
of options held by any of the Company's executive officers since inception. This
table does not reflect the effect on outstanding options as a result of the
Company's 10-for-1 stock split effective November 1, 1995 or its 2-for-3 reverse
stock split effective July 2, 1996 as these adjustments affected all of the
Company's stockholders. The Company has never granted any SARs.
9
<PAGE>
<TABLE>
<CAPTION>
Number of
Securities Length of Original
Underlying Market Price of Exercise Price Option Term
Options/SARs Stock at Time of at Time of New Remaining at Date
Repriced or Repricing or Repricing or Exercise of Repricing or
Name Date Amended(#) Amendment($) Amendment($) Price($) Amendment
- ---- ---- ------------ ---------------- -------------- -------- -------------------
<S> <C> <C> <C> <C> <C> <C>
David D. Dawson -- -- -- -- -- --
Charles B. Griffis 5/1/98 75,000 $2.875 $5.00 $2.875 8 years, 5 months
Charles B. Griffis 5/1/98 25,000 $2.875 $5.875 $2.875 8 years, 9 months
Charles B. Griffis 5/1/98 20,000 $2.875 $4.00 $2.875 9 years, 6 months
Jieh-Shan Wang 5/1/98 30,000 $2.875 $4.00 $2.875 9 years, 6 months
Christopher T. Brook 5/1/98 60,000 $2.875 $5.00 $2.875 8 years, 5 months
Christopher T. Brook 5/1/98 15,000 $2.875 $5.875 $2.875 8 years, 9 months
Robert F. Kelly -- -- -- -- -- --
</TABLE>
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
In June 1996, the Board established the Compensation Committee, which made
recommendations concerning the compensation arrangements for all directors and
executive officers. From January 1 through November 7, 1997, members of the
Compensation Committee were Hai Hua Cheng and William E. Odom. In March 1999,
the Board reconstituted the Executive Compensation Committee with General Odom
and Mr. Giannopoulos as members.
Consistent with the Company's growth, in April 1997, the Compensation
Committee began to adjust the compensation paid to its executive officers to be
competitive within the high technology industry. As a result, compensation for
executive officers currently consists primarily of base salary, cash bonuses and
grants of stock options pursuant to the Company's plans. Base salaries were
initially determined by evaluating the responsibilities of the position and the
experience and knowledge of the individual. Bonuses and annual salary
adjustments, if any, were determined by evaluating performance taking into
account such factors as achievement of the Company's strategic goals, assumption
of additional responsibilities, attainment of specific individual objectives,
and the compensation paid to other senior executives in the Company's industry.
The Board believes that stock ownership by management is especially beneficial
in aligning the interest of management and shareholders in the Company.
From the inception of the Company until 1996, James F. Chen received a
significant number of shares of the Company in lieu of receiving a salary. In
June 1996, Mr. Chen entered into an employment agreement with the Company that
provided for a base salary of $125,000 per annum. In April 1997, the
Compensation Committee determined to increase Mr. Chen's base salary to $185,000
per annum in order to align his compensation with that paid to other senior
executives in the Company's industry. On November 21, 1997, Mr. Chen was
appointed Chairman of the Board of the Company and ceased to serve as its
President and Chief Executive Officer in connection with the Company's retention
of David D. Dawson. On July 22, 1998, Mr. Chen ceased to serve as Chairman of
the Board. See "-- Employment Agreements" for more information regarding Mr.
Chen's employment agreement.
On November 21, 1997, the Company retained Mr. Dawson as its President and
Chief Executive Officer. On that date, the Company entered into an employment
agreement with Mr. Dawson, the terms of which were approved by the Board.
Pursuant to such employment agreement, Mr. Dawson's base salary was set at
$200,000 per annum and he received options and warrants to purchase 800,000
shares of Common Stock at an exercise price of $3.125 per share. The amount of
Mr. Dawson's initial annual salary and the number of options and warrants were
determined after consulting with the executive search firm retained by the
Company to attract candidates for the position of President and Chief Executive
Officer. On July 22, 1998, Mr. Dawson was appointed Chairman of the Board. See
"-- Employment Agreements" for more information regarding Mr. Dawson's
employment agreement.
10
<PAGE>
Also in June 1996, the Company entered into an employment agreement with
Jieh-Shan Wang, who then held the position of Senior Vice President and Chief
Technical Officer. Mr. Wang's agreement provided for a base salary of $100,000
per annum. In April 1997, the Compensation Committee determined to increase Mr.
Wang's base salary to $140,000 per annum in order to align his compensation with
that paid to other senior executives in the Company's industry. In 1998, Mr.
Wang received a salary of $110,000 (as from October 1998 to December 1998 Mr.
Wang took an unpaid sabbatical) and a performance based bonus of $35,000. See
"-- Employment Agreements" for more information regarding Mr. Wang's employment
agreement.
On November 6, 1998 and August 1, 1998, the Company entered into
employment agreements with Charles B. Griffis, its Senior Vice President and
Chief Financial Officer, and Robert F. Kelly, its Vice President of Engineering.
See "-- Employment Agreements" for more information regarding these employment
agreements.
The Compensation Committee did not change the salary of any executive
officer during 1998.
In 1998, Mr. Wang received a bonus of $35,000 based on the Board's
evaluation of his performance as Senior Vice President and Chief Technical
Officer.
Grants of Company stock options are intended to align the interest of
executives, key employees and others with the long-term interests of the
Company's shareholders and to encourage executives and key employees to remain
with the Company. The Board initially authorized the Compensation Committee to
grant stock options to key employees and others under the Company's stock option
plans. Currently, the Board is administering the Company's stock option plans.
In the past, Mr. Chen has recommended, and currently Mr. Dawson recommends, to
the Compensation Committee or the Board levels of stock option grants based upon
the same factors as used for bonus and salary adjustments. Mr. Chen does not
currently hold, nor has he ever been granted, options to purchase the Company's
Common Stock. On May 1, 1998, the Board of Directors voted to reprice certain
stock options held by various officer's of the Company. The exercise price of
the options was changed to $2.875. See "--Executive Compensation - Stock
Options" for more information regarding the repricing of options.
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Code"),
imposes a limitation on the deductibility of nonperformance-based compensation
in excess of $1 million paid to the Named Executives. Currently, no executive
officer of the Company is paid compensation in excess of $1 million per year and
it is not anticipated that any executive officer will be paid in excess of $1
million in 1998. As the Company's Compensation Committee is now reconstituted,
the Company's 1998 Incentive Stock Plan and 1996 Incentive Stock Plan can now
provide for awards that can be made in compliance with Section 162(m).
Charles C. Chen
James F. Chen
David D. Dawson
A.L. Giannopoulos
William E. Odom
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of March 1999, the members of the Company's Compensation Committee are
A.L. Giannopoulos and William E. Odom.
11
<PAGE>
One of the Company's executive officers, Jieh-Shan Wang, paid for options
granted under the Company's 1995 Non-Statutory Stock Option Plan with a
promissory note. Mr. Wang borrowed $124,750 from the Company and executed a 6%
interest-bearing promissory note, due April 22, 2006, that was secured by the
shares of Common Stock issued on exercise of the option by Mr. Wang ("Pledged
Shares"). The terms of the note provided for payments of principal and interest
to be made annually, beginning on April 22, 1997. If, at any time, the fair
market value of the Pledged Shares securing the note was less than the amount
due under the note, Mr. Wang remained liable for the balance due. If Mr. Wang
sold the Pledged Shares at any time prior to April 22, 2006, then the proceeds
of the sale would have been applied to the balance of the note before payment
would be made to Mr. Wang. On February 11, 1998, Mr. Wang repaid the note by
tendering 37,192 shares of Common Stock to the Company, valued at $3.25 per
share. The largest amount of indebtedness outstanding on the note during 1998
was $115,285.
The Company has adopted a policy providing that all material transactions
(other than compensation arrangements that must be approved by the Compensation
Committee) between the Company and its officers, directors and other affiliates
(i) must be approved by a majority of the disinterested members of the Board or
a committee thereof (following disclosure to the Board of the material facts of
the relationship and the transaction), and (ii) must be on terms no less
favorable to the Company than can be obtained from unaffiliated third parties.
STOCK PERFORMANCE GRAPH
The following graph compares the change from the date of the Company's
Common Stock began trading on the Nasdaq National Market in the Company's total
return on its Common Stock with (a) the change in the total return on the stocks
included in the CRSP Total Return Index for the Nasdaq Stock Market (U.S.) and
(b) the change in the total return on the stocks included in the Company's peer
group (4 companies) assuming an initial investment of $100 on October 24, 1996,
the date the Common Stock began trading on Nasdaq. All of these total returns
are computed assuming the reinvestment of dividends at the frequency with which
dividends were paid during the period. The Common Stock price performance shown
below should not be viewed as being indicative of future performance. The
companies currently in the peer group are Check Point Software Technologies
Ltd., Security Dynamics Technologies, Inc., Cylink Corp., and AXENT
Technologies, Inc. Raptor Systems, Inc., a member of the Company's peer group in
1998, was acquired by Accent Technologies, Inc. in 1998 and is no longer in the
peer group.
SOURCES: NASDAQ
[LINE GRAPH: STOCK PERFORMANCE GRAPH SHOWING THE FOLLOWING PLOT POINTS:
10/24/96 12/31/96 12/31/97 12/31/98
V-ONE CORPORATION 100.00 145.00 70.00 59.38
NASDAQ TOTAL RETURN 100.00 105.44 129.36 181.84
INDEX
PEER GROUP (4 COMPANIES) 100.00 82.17 104.30 104.17]
SOURCES: NASDAQ
<TABLE>
<CAPTION>
October 24, 1996 December 31, 1996 December 31, 1997 December 31, 1998
<S> <C> <C> <C> <C>
</TABLE>
12
<PAGE>
EMPLOYMENT AGREEMENTS
On June 12 and July 8, 1996, respectively, the Company entered into
employment agreements with James F. Chen and Jieh-Shan Wang at initial annual
base salaries of $125,000 and $100,000, respectively. Each employment agreement
had a two year term and was automatically renewed for additional two year terms
on each successive anniversary date, commencing June 12 and July 8, 1997,
respectively. However, either the Company or Mr. Chen or Mr. Wang may serve
written notice of termination prior to June 12 or July 8, 1997, respectively, or
prior to June 12 or July 8 of each succeeding year, as the case may be, in which
case the respective employment agreement will terminate at the end of the two
year period that begins with June 12 or July 8 following the date of such
written notice.
On November 21, 1997, the Company's employment agreement with James F.
Chen was modified to provide that Mr. Chen would serve solely as Chairman of the
Board of the Company. On January 1, 1999, the Company's employment agreement
with Mr. Chen was modified to provide that Mr. Chen was no longer an executive
officer of the Company and that he would not receive any further payments from
the Company pursuant to his employment agreement, including any severance or
termination payments he might otherwise have been entitled to, beginning January
1, 1999. This amendment also provided that the Company would pay Mr. Chen $5,000
per month for the period beginning January 1, 1999 and ending December 31, 1999
as a consulting fee. This consulting arrangement may be continued after December
31, 1999 by mutual agreement of the parties. In 1998, Mr. Chen received payments
of $185,000 from the Company pursuant to this employment agreement.
Under Mr. Wang's employment agreement, the Board (or a Board committee)
was obligated to review his base salary promptly following the completion of the
Company's initial public offering ("Offering") and thereafter at least annually.
As a result of such review, the Board or committee may, in its discretion,
increase, but generally may not decrease, his base salary. After any adjustment
following the Offering, the Board or committee may not increase his base salary
for any one year by an amount greater than 50% of his then base salary. It is
intended that the Board or committee will consider in any such review factors
relating to his performance, duties and responsibilities and endeavor to
maintain his compensation at a level comparable to that of similarly situated
executives in the Company's industry. In April 1997, his annual salary was
increased to $140,000. From October 1998 to December 1998, Mr. Wang took an
unpaid sebatical from the Company. As a result he was only paid $110,000 during
1998. His employment agreement also provides that he may be paid such bonuses,
if any, as may be awarded from time to time by the Board or such committee, in
its discretion. Such bonuses shall be based on results of operations, special
contributions made by him, seniority, competitive conditions in the Company's
industry and such other factors as the Board or such committee considers
relevant.
Under Mr. Wang's employment agreement, in the event that (i) the Company
terminates his employment for any reason (other than because of death,
disability or just cause) within two years following a change in control, (ii)
he terminates his employment with the Company because of the Company's material
breach of the employment agreement, (iii) his base salary is reduced unless such
reduction is permitted by the employment agreement or (iv) the Company's
principal executive offices are relocated to a location outside Montgomery
County, Maryland, or the Company requires him to be based anywhere other than
the Company's principal executive offices, then the Company must make a lump sum
severance payment to Mr. Wang. The payment is equal to the sum of (a) the
aggregate amount of the future base salary payments Mr. Wang would have received
if he continued in the employ of the Company until 24 months following the
termination date and (b) Mr. Wang's projected bonus for the year in which the
termination date occurs. The payment required by clause (a) is calculated at the
highest rate of base salary paid to Mr. Wang at any time under the employment
agreement, with such payments discounted to present value at a discount rate
equal to 1% above the per annum one-year Treasury Bill rate. The bonus amount is
computed assuming that Mr. Wang had remained in the Company's employ until the
end of that year and that all performance goals or other performance measures
have been met at the then current level for the remainder of that year.
13
<PAGE>
On August 1, 1998, the Company's employment agreement with Mr. Wang was
modified to provide that Mr. Wang ceased to be a Senior Vice President of the
Company but will continue to serve as Chief Technical Officer. As a result, Mr.
Wang is no longer an executive officer of the Company.
The Company may terminate Mr. Wang's employment for "just cause" at any
time by giving him written notice, in which case the Company is only obligated
to pay him his base salary as then in effect through the termination date. If he
fails to perform his duties under the employment agreement on account of a
disability, the Company may terminate the agreement on a date not less than 30
days thereafter unless he resumes full performance of his duties within such
period. He is entitled to terminate his employment with the Company on, or at
any date after, a date on which he is at least 65 years old. Each employment
agreement also terminates in the event of his death. In either such event, the
Company must pay him or his legal representative his base salary as then in
effect that has accrued to the last day of the month in which the retirement
date or the date of death occurs.
On November 21, 1997, the Company entered into an employment agreement
with David D. Dawson, its Chairman, President and Chief Executive Officer. The
employment agreement has a two year term and is automatically renewed for an
additional one year term on such second anniversary date and each successive
anniversary date thereafter. However, either the Company or Mr. Dawson may serve
written notice of its or his intention not to renew not less than 30 days prior
to the then current termination date of the agreement, in which case the
employment agreement terminates on such termination date.
Mr. Dawson's salary was initially set at $200,000 per year, subject to
increase by the Board. The employment agreement also provides that Mr. Dawson is
eligible for a cash bonus in the amount of 40% of his base salary if he meets
certain performance objectives; the bonus may be increased if the objectives are
exceeded.
If the Company terminates Mr. Dawson's employment for cause, he is not
entitled to any severance payment. Mr. Dawson is deemed to be terminated for
cause if, in the reasonable determination of the Board, he, among other things,
is convicted of a felony or a crime involving moral turpitude, participates in a
fraud against the Company, or willfully discloses the Company's trade secrets or
other confidential information to any of its competitors. If the Company
terminates Mr. Dawson's employment other than for cause (or fails to renew the
employment agreement other than for cause), Mr. Dawson receives a severance
payment equal to one year's salary (or, if greater, base salary for the period
beginning on the termination date and ending on November 21, 1999). If Mr.
Dawson's employment with the Company terminates, he has agreed to resign as a
director.
On November 6, 1998, the Company entered into an employment agreement with
Charles B. Griffis, its Senior Vice President and Chief Financial Officer. The
employment agreement has an initial term of one year subject to automatic
renewal for additional one year periods; however, if Mr. Griffis is employed by
the Company on the date of a change of control (which term is defined in the
amended employment agreement), Mr. Griffis' employment is extended for 12 months
following the change of control.
On August 1, 1998, the Company entered into an employment agreement with
Robert F. Kelly, its Vice President of Engineering. Mr. Kelly's employment
agreement has an initial term of two years, subject to automatic renewal for
additional two year periods.
Mr. Griffis salary was initially set at $150,000 per year and Mr. Kelly's
salary was initially set at $140,000 per year. Each is also eligible to receive
a bonus. If either of such persons' employment is terminated as a result of his
death or his retirement after age 65, he or his legal representative receives
his salary through the end of the month in which his death or retirement occurs.
If he fails to perform his duties under the employment agreement on account of a
disability, the Company may terminate the agreement on a date not less than 30
days thereafter unless he resumes full performance of his duties within such
14
<PAGE>
period. The Company may terminate his employment for "just cause" at any time by
giving him written notice, in which case the Company is only obligated to pay
him his base salary as then in effect through the termination date.
If (i) Mr. Griffis' employment with the Company is terminated (other than
because of his death, disability or "just cause") within one year following a
change of control (as defined in the amended employment agreement), (ii) Mr.
Kelly's employment is terminated (other than because of death, disability or
"just cause"), (iii) either of such persons terminates his employment with the
Company because of the Company's material breach of the employment agreement,
(iv) his base salary is reduced unless such reduction is permitted by the
agreement or (v) the Company's principal executive offices are relocated to a
location outside Montgomery County, Maryland, or the Company requires him to be
based anywhere other than the Company's principal executive offices, then the
Company must make a lump sum severance payment to such person. The payment is
equal to the sum of (a) the aggregate amount of the future base salary payments
he would have received if he continued in the employ of the Company until 12
months (6 months for Mr. Kelly) following the termination date and (b) his
projected bonus for the year in which the termination date occurs. The payment
required by clause (a) is calculated at the highest rate of base salary paid to
him at any time under the employment agreement, with such payments discounted to
present value at a discount rate equal to 1% above the per annum one-year
Treasury Bill rate. The bonus amount is computed assuming that he had remained
in the Company's employ until the end of that year (the next 6 months for Mr.
Kelly) and that all performance goals or other performance measures have been
met at the then current level for the remainder of that year. In addition, with
respect to Mr. Griffis, all unvested stock options provided for under the terms
of his original employment letter vest on the termination date and the exercise
period of these options is extended until the latest date they could have been
exercised if Mr. Griffis had remained employed by the Company until 12 months
had elapsed following the change of control.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than ten percent of the
Company's Common Stock, to file initial reports of ownership and reports of
changes in ownership with the SEC and the Nasdaq, the exchange on which the
Company's Common Stock is listed for trading. Executive officers, directors and
greater than ten-percent shareholders (collectively, the "Reporting Persons")
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on review of the copies of such forms to the Company, and
written representations by the Reporting Persons, the Company believes that, for
the year ended December 31, 1998, all Section 16(a) filing requirements
applicable to the Reporting Persons were met, except that one Form 4, covering
one transaction, was not timely filed by James F. Chen, a director of the
Company.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. (now PricewaterhouseCoopers LLP) served as the
Company's independent public accountants for the year ended December 31, 1998.
Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting where they will have the opportunity to make a statement if they desire
to do so and where they will be available to respond to any appropriate
questions.
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WITHOUT EXHIBITS, FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1998 ACCOMPANIES THIS PROXY STATEMENT. UPON
WRITTEN REQUEST, THE COMPANY WILL PROVIDE TO ANY SHAREHOLDER, FREE OF CHARGE, A
COPY OF ITS ANNUAL REPORT ON FORM 10-K, WITHOUT EXHIBITS, AS FILED WITH THE
15
<PAGE>
SECURITIES AND EXCHANGE COMMISSION. REQUESTS FOR COPIES OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K SHOULD BE DIRECTED TO CHARLES B. GRIFFIS, SENIOR VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER AND TREASURER, V-ONE CORPORATION, 20251
CENTURY BOULEVARD, SUITE 300, GERMANTOWN, MARYLAND 20874.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2000 Annual
Meeting of Shareholders must be received by the Company no later than December
7, 1999 to be considered for inclusion in the Company's Proxy Statement and form
of proxy relating to such meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no business
other than that described herein that will be presented for consideration at the
Annual Meeting. If, however, any other business shall properly come before the
Annual Meeting, the proxy holders intend to vote the proxies as determined by a
majority of the Board.
By Order of the Board of Directors
/s/ Joseph D. Gallagher
JOSEPH D. GALLAGHER
SECRETARY
April 5, 1999
16
<PAGE>
REVOCABLE PROXY
V-ONE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David D. Dawson and Charles B. Griffis, or
either of them, each with full power of substitution, as the lawful proxies of
the undersigned and hereby authorizes them to represent and to vote as
designated below all shares of common stock of V-ONE Corporation ("Company")
that the undersigned would be entitled to vote if personally present at the
Annual Meeting of Shareholders of the Company to be held on May 13, 1999, and at
any adjournment thereof.
V-ONE CORPORATION
20250 CENTURY BOULEVARD
SUITE 300
GERMANTOWN, MD 20874
1. Proposal One: Election of two directors for a term ending in 2002. Nominees:
James F. Chen and William E. Odom.
FOR [ ] WITHHOLD AUTHORITY [ ] ABSTAIN [ ]
FOR, except vote withheld from the following nominees(s):
----------------------------------------------------------------------------
2. In their discretion on such other business as may properly come before the
meeting or any adjournment thereof.
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE MATTERS LISTED ABOVE.
Whether or not you plan to attend the meeting, you are urged to execute
and return this proxy, which may be revoked at any time prior to its use.
Change of Address or [ ]
Comments Mark Here
Please sign your name exactly
as it appears hereon. 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 authorized person.
Date: __________________________________, 1999
--------------------------------------
Signature of Shareholder
--------------------------------------
Signature of Additional Shareholder(s)
2
