<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
EON COMMUNICATIONS 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[LETTERHEAD OF EON COMMUNICATIONS CORPORATION]
November 17, 2000
To Our Stockholders:
The Board of Directors joins me in extending to you a cordial invitation to
attend the 2000 Annual Meeting of Stockholders of eOn Communications
Corporation. The Annual Meeting will be held at our corporate headquarters, 4105
Royal Drive NW, Suite 100, Kennesaw, Georgia, at 4:00 PM local time on December
20, 2000.
In addition to voting on the matters described in this Proxy Statement, we
will review our fiscal year 2000 results and discuss our plans for fiscal year
2001 and beyond. There will be an opportunity to discuss matters of interest to
you as a stockholder.
We hope many eOn Communications stockholders will find it convenient to be
present at the meeting, and we look forward to greeting those personally able to
attend. It is important that your shares be represented and voted whether or not
you plan to be present. THEREFORE, REGARDLESS OF THE NUMBER OF SHARES YOU OWN,
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
POSTAGE-PAID ENVELOPE PROVIDED. No postage is necessary if the envelope is
mailed in the United States. The prompt return of your proxy will save the
expense involved in further communications. Any stockholder attending the Annual
Meeting may vote in person even if a proxy has been returned.
We hope that you will be able to attend the Annual Meeting, and we look
forward to seeing you.
Sincerely,
David S. Lee
Chairman of the Board and
Chief Executive Officer
<PAGE>
EON COMMUNICATIONS CORPORATION
4105 ROYAL DRIVE NW, SUITE 100
KENNESAW, GEORGIA 30144
----------------------------------------------
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 20, 2000
----------------------------------------------
TO OUR STOCKHOLDERS:
Notice is hereby given that the 2000 Annual Meeting of Stockholders of eOn
Communications Corporation (the "Corporation") will be held at 4105 Royal Drive
NW, Suite 100, Kennesaw, Georgia, at 4:00 PM on December 20, 2000, for the
following purposes:
(1) To elect two Class I directors to serve on the Corporation's Board of
Directors for a term of three years or until their successors are
elected and qualified.
(2) To ratify the appointment of Deloitte & Touche LLP as the
Corporation's independent auditors for the fiscal year ending July 31,
2001.
(3) To transact any other business which may be properly brought before
the Annual Meeting or any adjournment or postponement thereof.
The above items of business are more fully described in the Proxy Statement
accompanying this notice. Please read the Proxy Statement carefully.
Only stockholders of record at the close of business on October 30, 2000
are entitled to receive notice of, and to vote at, the Annual Meeting or at any
adjournments or postponements of the meeting. A list of the stockholders
entitled to vote at the Annual Meeting will be available for inspection by any
stockholder during usual business hours ten days prior to the meeting date at
the principal offices of the Corporation located at 4105 Royal Drive NW, Suite
100, Kennesaw, Georgia.
By Order of the Board of Directors,
eOn Communications Corporation
/s/ Stephen N. Samp
Stephen N. Samp
CORPORATE SECRETARY
Kennesaw, Georgia
November 17, 2000
Your vote is important. Whether or not you expect to attend the Annual
Meeting, please complete, sign, date, and return the enclosed proxy card in the
enclosed postage-prepaid envelope in order to ensure your representation at the
Annual Meeting. You may revoke your proxy at any time prior to the Annual
Meeting. If you decide to attend the Annual Meeting and wish to change your
proxy vote, you may do so automatically by voting in person at the Annual
Meeting.
<PAGE>
EON COMMUNICATIONS CORPORATION
4105 ROYAL DRIVE NW, SUITE 100
KENNESAW, GEORGIA 30144
------------------------------------
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 20, 2000
------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of the Corporation for use at the
2000 Annual Meeting of Stockholders to be held on December 20, 2000 for the
purposes set forth in the foregoing Notice. This statement and the form of proxy
are being first sent to security holders on or about November 17, 2000.
The accompanying form of proxy has been prepared at the direction of the
Board of Directors and is sent to you at its request. The proxies named therein
have been designated by the Board of Directors.
Stockholders who execute proxies retain the right to revoke them at any time
before they are voted by attending the Annual Meeting and voting in person or by
notifying the Secretary of the Corporation at 4105 Royal Drive NW, Suite 100,
Kennesaw, Georgia 30144, in writing of such revocation prior to the Annual
Meeting. A proxy, when properly executed, duly returned and not so revoked, will
be voted and, if it contains any specification, will be voted in accordance
therewith, provided the proxy is not mutilated or otherwise received in such
form or at such time as to render it unvotable. If no choice is specified, the
proxy will be voted in accordance with the recommendations of the Board of
Directors as stated on the proxy form and in this Proxy Statement.
The recommendations of the Board of Directors with respect to voting on each
scheduled item of business at the Annual Meeting are set forth in this Proxy
Statement. In summary, the Board recommends that stockholders vote:
. for the election of the nominated slate of two Class I directors to serve on
the Corporation's Board of Directors for a term of three years or until their
successors are elected and qualified (see page 2); and
. for the ratification of the appointment of Deloitte & Touche LLP as the
Corporation's independent auditors for the fiscal year ending July 31, 2001
(see page 5).
With respect to any other item of business that properly comes before the Annual
Meeting, the proxy holders will vote the shares of Common Stock represented by
valid proxies as recommended by the Board of Directors or, if no recommendation
is given, as they may determine in their own discretion.
The proxy solicitation will be conducted by mail, except that in a limited
number of instances proxies may be solicited by officers, directors and regular
employees of the Corporation personally, by telephone or by facsimile. The
Corporation does not presently anticipate payment of any compensation or fees of
any nature to anyone for the solicitation of these proxies, except that the
Corporation may pay persons holding shares in their name, or of their nominees,
for the expense of sending proxies and proxy material to principals. The entire
cost of solicitation will be borne by the Corporation.
1
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OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of the 12,027,539 outstanding shares of Common Stock at the
close of business on the record date, October 30, 2000, are entitled to receive
notice of the Annual Meeting and to vote the shares of Common Stock that they
held on that date at the Annual Meeting. Each outstanding share of Common Stock
entitles its holder to cast one vote on each matter to be voted on at the Annual
Meeting.
The presence in person or representation by proxy of a majority of the
outstanding shares of Common Stock as of the record date at the Annual Meeting
will constitute a quorum, thereby permitting the stockholders to conduct their
business at the Annual Meeting.
The election of directors will be determined by a plurality of the votes of
the shares of Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote thereon. A properly executed proxy marked
"WITHHOLD AUTHORITY" with respect to the election of one or more directors will
not be voted with respect to the director or directors indicated, although it
will be counted for the purpose of determining whether there is a quorum.
The ratification of the appointment of Deloitte & Touche LLP as the
Corporation's independent auditors for the fiscal year ending July 31, 2001, and
each other item of business that properly comes before the Annual Meeting, will
be determined by the affirmative vote of the majority of the shares of Common
Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote thereon. A properly executed proxy marked "ABSTAIN" with
respect to any such matter will not be voted on the matter. Under Delaware law,
abstentions are counted for the purpose of determining whether there is a quorum
and, being shares entitled to vote, are counted in the determination of voting
results.
In general, if a stockholder holds shares of Common Stock in "street name"
through a broker or other nominee, and if the broker or other nominee is not
instructed or otherwise empowered to vote the stockholder's shares at a meeting
with respect to a particular matter, then the stockholder's shares will
constitute "broker non-votes" as to such matter. Under Delaware law, broker non-
votes are counted for the purpose of determining whether there is a quorum;
however, because they reflect the withholding of voting power on a specified
matter, they are not shares entitled to vote and thus are not counted in the
determination of voting results. As a practical matter, there will be no "broker
non-votes" at the Annual Meeting, because the nature of the matters to be acted
upon by the Corporation's stockholders at the Annual Meeting is such that the
brokers or other nominees will have discretion to vote the stockholder's shares
even in the absence of express instructions from the stockholders.
At the Annual Meeting, votes will be counted by a representative of
Computershare Investor Services, Inc., the Corporation's independent transfer
agent and registrar. Such representative will process the votes cast by the
stockholders, will make a report of inspection and count of the votes cast by
the stockholders, and will certify as to the number of votes cast on each
proposal.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors of the Corporation currently consists of five
directors divided into three classes designated Class I, Class II, and Class
III. A single class of directors is elected each year at the Annual Meeting.
Subject to transition provisions, each class of directors serves until the third
annual meeting of stockholders after his/her election or until a successor has
been elected and duly qualified. Two Class I directors will be elected at the
Annual Meeting.
In fiscal 2000, J. Michael O'Dell, who was a Class III director and our
President and Chief Executive Officer, resigned from these positions. The
vacancy on the Board of Directors arising from Mr. O'Dell's resignation will
remain open for the time being and will not be filled at this Annual Meeting.
2
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The persons named in the accompanying form of proxy will vote the shares
represented by all valid proxies which are received for the election of the
nominees hereinafter named, unless the authority to do so is withheld on the
proxy. The two nominees for the Class I directors are presently serving in such
capacity.
Management has no reason to believe that the nominees will refuse to act or
be unable to accept election; however, in such event and if any other unforeseen
contingency should arise, it is the intention of the persons named in the
accompanying form of proxy to vote for another nominee selected by the Board of
Directors in accordance with their best judgment.
The following descriptions set forth certain information, as of September 30,
2000, about each director, including each person's business experience for the
past five years. There is no family relationship between any of the directors or
executive officers of the Corporation.
NOMINEES FOR CLASS I DIRECTORS WHOSE TERMS EXPIRE IN 2003
STEPHEN R. BOWLING, age 58, became a director of eOn in 1993. From 1994 to
1997, he was the President of eOn and, from 1994 to 1998, he was the Chief
Executive Officer of eOn. In 1993, Mr. Bowling became President, Chief Executive
Officer and a director of Cortelco Systems Holding Corporation. Mr. Bowling is
the President and Chief Executive Officer of eManage.com, an Internet web site
service company. From 1978 to 1984, Mr. Bowling held executive positions with
Qume Corporation, including Executive Vice President and General Manager. Mr.
Bowling received an M.B.A. from Stanford University and a B.A. from Williams
College.
JENNY HSUI THELEEN, age 48, became a director of eOn in 1997. She is the
Chairman of CV Transportation Services, an integrated transportation and
distribution company. In 1984, Ms. Theleen co-founded ChinaVest, a private
equity investment firm, and today serves as a managing director of ChinaVest.
Ms. Theleen earned her post-graduate degree from L'Institut d'Etudes Politiques
and a bachelor's degree from the University of Singapore.
CLASS II DIRECTORS WHOSE TERMS EXPIRE IN 2001
ROBERT P. DILWORTH, age 59, became a director of eOn in 1998. He serves on
the board of Metricom Inc., a wireless data communications company, and was its
President from 1987 to 1997, its Chief Executive Officer from 1987 to 1998, and
its Chairman from 1997 to 2000. Mr. Dilworth also serves as Chairman of GraphOn
Corporation, a computer software company, and as a director for Mobility
Electronics, a computer peripheral company. Mr. Dilworth received a B.S. from
Los Angeles State University.
DAVID S. LEE, age 63, became the Chairman of the Board of eOn in 1991 and has
served as the Chief Executive Officer since May 2000. Mr. Lee is a Director of
ACT Manufacturing, Inc., a contract manufacturer; ESS Technology, Inc., a
provider of semiconductor and software solutions for multimedia applications;
and Linear Technology Corporation, a semiconductor company. Mr. Lee is also a
Regent of the University of California. From 1985 to 1988, Mr. Lee was President
and Chairman of Data Technology Corporation, a computer peripheral company.
Prior to 1985, he was Group Executive and Chairman of the Business Information
Systems Group of ITT Corporation, a diversified company, and President of ITT
Qume, formerly Qume Corporation, a computer systems peripherals company. In
1973, Mr. Lee co-founded Qume Corporation and was its Executive Vice President
until the company was acquired by ITT Corporation in 1978. Mr. Lee received an
M.S. from North Dakota State University and a B.S. and an honorary doctorate
from Montana State University.
3
<PAGE>
CLASS III DIRECTOR WHOSE TERM EXPIRES IN 2002
W. FRANK KING, age 60, became a director of eOn in 1998. Mr. King is a
director of Concero, a software integration consulting firm, and was its
President and Chief Executive Officer from 1992 to 1998. He is also a director
of Excalibur Technologies Corporation, a software company; Allaire Corporation,
an Internet infrastructure software company; Perficient Inc., a professional
services company; and Natural Microsystems Corporation, a telecommunications
company. Dr. King earned a Ph.D. from Princeton University, an M.S. from
Stanford University and a B.S. from the University of Florida.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During fiscal year 2000, 10 meetings of the Board of Directors were held. For
the year, each of the directors during the term of their tenure attended or
participated in at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held by
all committees of the Board of Directors on which such director served. The
Corporation has no standing executive or nominating committee, but does have the
following two standing committees:
Audit Committee
The Audit Committee consists of Robert P. Dilworth, W. Frank King, and Jenny
Hsui Theleen. The Audit Committee makes recommendations to the Board regarding
the selection of independent auditors, reviews the scope and results of the
audit engagement, approves the fees for the auditors, reviews and evaluates
eOn's internal control functions, and reviews all potential conflict of interest
situations. See "Certain Transactions." The Audit Committee has adopted a
written charter (see Appendix A), and all members are considered independent
under criteria defined by the Nasdaq Stock Market. The Audit Committee met three
times during fiscal year 2000.
Compensation Committee
The Compensation Committee consists of Robert P. Dilworth, W. Frank King, and
Jenny Hsui Theleen. The Compensation Committee reviews, determines, and
establishes the salaries, bonuses and other compensation of the Corporation's
executive officers and administers the Corporation's Equity Incentive Plans in
which executive officers and other key employees participate. The Compensation
Committee met two times during fiscal year 2000.
Compensation of Directors
Salaried officers of the Corporation or its subsidiaries do not receive
additional compensation for serving as members of the Board of Directors. No
additional compensation is paid if a full-time officer serves on any committee
of the Board of Directors.
Annual cash payments of $15,000 are paid to each non-employee serving as a
member of the Board of Directors. Directors are also entitled to reimbursement
of expenses incurred to attend meetings. Non-employees serving as members of the
Board of Directors are eligible to receive stock option grants under the eOn
Communications Corporation 1999 Equity Incentive Plan (the "1999 Plan"), which
was adopted by the Board of Directors and approved by a majority of stockholders
in April 1999. As of September 30, 2000, there were five non-employee directors
eligible to participate in the 1999 Plan: Stephen R. Bowling, Robert P.
Dilworth, W. Frank King, David S. Lee, and Jenny Hsui Theleen. Grants of stock
options to purchase 5,000 shares of Common Stock were made to each of these five
directors on April 5, 2000. The exercise price of the stock options was $11.88
per share, which was equal to the fair market value of the Common Stock on the
date of grant, and the stock options become exercisable on April 5, 2001, and
expire on April 5, 2010.
4
<PAGE>
In order to recruit and retain qualified directors, the Board's intent is to
make annual grants of stock options to purchase 5,000 shares of Common Stock to
each director. Exercise prices will be equal to the fair market value on the
date of grant. Each stock option will become exercisable one year following the
date of grant and expire ten years from the date of grant.
Options granted under the 1999 Plan to directors may be exercised only if the
holder has been in continuous service on the Board of Directors at all times
since the date of the grant of the option.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES FOR CLASS I
DIRECTORS LISTED ABOVE.
PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has re-appointed Deloitte & Touche LLP as our
independent auditors for the fiscal year ending July 31, 2001. This accounting
firm has audited the financial statements of the Corporation continuously since
fiscal year 1996. In the event the stockholders fail to ratify the appointment,
the Board of Directors will reconsider its selection. Even if the selection is
ratified, the Board of Directors in its discretion may direct the appointment of
a different independent auditing firm at any time during the year if the Board
of Directors believes such a change would be in the best interests of the
Corporation and its stockholders.
A representative of Deloitte & Touche LLP is expected to be available at the
Annual Meeting to respond to appropriate questions and may make a statement if
he or she so desires.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE CORPORATION'S INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING JULY 31, 2001.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed form will be voted in respect thereof in
accordance with the judgments of the persons voting the proxies.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholders interested in presenting a proposal for consideration at the
Corporation's 2001 Annual Meeting of Stockholders must follow the procedures
prescribed in the Corporation's amended and restated bylaws and the SEC's proxy
rules. Proposals of stockholders that are intended to be presented at the
Corporation's 2001 Annual Meeting of Stockholders (other than those submitted
for inclusion in the Corporation's proxy materials pursuant to rule 14a-8 of the
SEC's proxy rules) must be received by the Corporation (attention: Secretary) no
earlier than August 22, 2001, and no later than September 21, 2001. Proposals of
stockholders pursuant to Rule 14a-8 of the SEC's proxy rules that are intended
to be presented at the Corporation's 2001 Annual Meeting of Stockholders must be
received by the Corporation (attention: Secretary) no later than July 20, 2001,
to be included in the Corporation's proxy materials relating to that meeting.
5
<PAGE>
STOCK OWNERSHIP
The following table sets forth information regarding beneficial ownership of
the Corporation's Common Stock as of September 30, 2000, by each person known by
the Corporation to be the beneficial owner of more than five percent of the
outstanding shares of the Common Stock. Except as otherwise indicated below, the
person owns such Common Stock directly with sole investment and sole voting
power.
Number of Shares Percent
Name And Address of Beneficial Owner Beneficially Owned Of Class (4)
------------------------------------ ------------------ ------------
David S. Lee............................. 2,703,368 (1) 22.14 %
14000 Tracy Court
Los Altos Hills, CA 94022
ChinaVest, Inc. and affiliated entities.. 1,788,457 (2) 14.65 %
19/F Dina House
11 Duddell Street
Central, Hong Kong
Jenny Hsui Theleen....................... 1,788,457 (3) 14.65 %
160 Sansome Street, 18/th/ Floor
San Francisco, CA 94104
------------------------------------
(1) Consists of 2,272,338 shares held directly by David S. Lee and 431,030
shares held by Cortelco Systems Holding Corporation. Mr. Lee is both
Chairman and principal stockholder of Cortelco Systems Holding Corporation.
Mr. Lee disclaims beneficial ownership of the shares held by Cortelco
Systems Holding Corporation.
(2) Consists of 1,538,073 shares held by ChinaVest IV, L.P., 178,416 shares
held by ChinaVest IV-A, L.P. and 71,968 shares held by ChinaVest IV-B, L.P.
(collectively "ChinaVest").
(3) Consists of 1,788,457 shares held by ChinaVest. ChinaVest Partners IV is a
general partner of ChinaVest IV, L.P. and ChinaVest IV-A, L.P. ChinaVest
Management Ltd. is a general partner of ChinaVest IV-B, L.P. Jenny Hsui
Theleen is a general partner of ChinaVest Partners IV and a stockholder of
ChinaVest Management Ltd. Ms. Theleen disclaims beneficial ownership of
these shares except to the extent of her proportional partnership interest
therein.
(4) There were 12,210,336 outstanding shares of Common Stock as of September
30, 2000.
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<PAGE>
Set forth below is information as of September 30, 2000, regarding the shares
of the Corporation's Common Stock beneficially owned by each director and
nominee, each executive officer of the Corporation, and all directors and
executive officers of the Corporation as a group. Except as otherwise indicated
below, each individual owns such Common Stock directly with sole investment and
sole voting power.
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Beneficial Owner Principal Position Beneficially Owned of Class (10)
------------------------ ------------------ ------------------ -------------
<S> <C> <C> <C>
David S. Lee Chairman of the Board, 2,703,368 (1) 22.14 %
Chief Executive Officer
Stephen N. Samp Vice President, Chief 32,537 (2) *
Financial Officer, Secretary
Robert R. Cash Vice President, Chief 41,981 (3) *
Marketing Officer
Troy E. Lynch Executive Vice President, 20,066 (4) *
Chief Technology Officer
Stephen R. Bowling Director 498,191 (5) 4.08 %
Robert P. Dilworth Director 18,655 (6) *
W. Frank King Director 27,905 (7) *
Jenny Hsui Theleen Director 1,788,457 (8) 14.65 %
All directors and executive
officers as a group (8 persons) 4,700,130 (9) 37.97 %
---------------------------------------
</TABLE>
* Less than one percent.
(1) Consists of 2,272,338 shares held directly by David S. Lee and 431,030
shares held by Cortelco Systems Holding Corporation. Mr. Lee is both
Chairman and principal stockholder of Cortelco Systems Holding Corporation.
Mr. Lee disclaims beneficial ownership of the shares held by Cortelco
Systems Holding Corporation.
(2) Consists of 7,106 shares held directly and 25,431 shares issuable upon the
exercise of options that will become exercisable within 60 days of
September 30, 2000.
(3) Consists of 16,124 shares held directly and 25,857 shares issuable upon the
exercise of options that will become exercisable within 60 days of
September 30, 2000.
(4) Consists of 20,066 shares issuable upon the exercise of options that will
become exercisable within 60 days of September 30, 2000.
(5) Consists of 7,988 shares and options to purchase 59,173 shares held
directly by Stephen R. Bowling, and 431,030 shares held by Cortelco Systems
Holding Corporation. Mr. Bowling is the President, Chief Executive Officer,
and a director of Cortelco Systems Holding Corporation. Of the 431,030
shares held by Cortelco Systems Holding Corporation, 83,165 of the shares
are issuable to Mr. Bowling upon the exercise of options to purchase shares
in Cortelco Systems Holding Corporation. Other than his option for 83,165
shares of common stock, Mr. Bowling disclaims beneficial ownership of the
shares held by Cortelco Systems Holding Corporation.
(6) Consists of 18,655 shares issuable upon the exercise of options that will
become exercisable within 60 days of September 30, 2000.
(7) Consists of 10,000 shares held directly and 17,905 shares issuable upon the
exercise of options that will become exercisable within 60 days of
September 30, 2000.
(8) Consists of 1,788,457 shares held by ChinaVest. ChinaVest Partners IV is a
general partner of ChinaVest IV, L.P. and ChinaVest IV-A, L.P. ChinaVest
Management Ltd. is a general partner of ChinaVest IV-B, L.P. Jenny Hsui
Theleen is a general partner of ChinaVest Partners IV and a stockholder of
ChinaVest Management Ltd. Ms. Theleen disclaims beneficial ownership of
these shares except to the extent of her proportional partnership interest
therein.
(9) Includes 167,087 shares issuable upon the exercise of options that will
become exercisable within 60 days of September 30, 2000.
(10) There were 12,210,336 outstanding shares of Common Stock as of September
30, 2000.
7
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning compensation
earned for the fiscal year ended July 31, 2000, by the two individuals who
served as Chief Executive Officer of the Corporation during the year, by each of
the Corporation's three executive officers who were serving in that capacity as
of July 31, 2000, and by the two other highly compensated employees (based upon
salary and bonus earned during the year) who served as executive officers at
some point during the year.
Long-Term
Annual Compensation Compensation Awards
--------------------- ------------------
Securities
Name and Underlying All Other
Principal Position Salary ($) Bonus ($) Options (#) Compensation($)
----------------------- ---------- ---------- ------------ ---------------
David S. Lee - - 5,000 7,500 (3)
Chairman and Chief
Executive Officer
J. Michael O'Dell 190,384 42,392 20,000 161,107 (4)
Former President and
Chief Executive Officer
David M. Fredrick 170,513 45,833 50,000 2,083 (5)
Former Vice President of
Strategic Accounts (1)
Sergio R. Moren 130,000 80,387 5,000 -
Vice President, General
Manager of Caribbean and
Latin America (2)
Robert R. Cash 150,000 48,044 - 2,423 (6)
Vice President, Chief
Marketing Officer
Troy E. Lynch 147,631 19,109 40,000 1,459 (7)
Executive Vice President,
Chief Technology Officer
Stephen N. Samp 110,000 19,980 8,000 2,285 (8)
Vice President, Chief
Financial Officer,
Secretary
--------------------------
(1) Mr. Fredrick is no longer an executive officer of the Corporation.
(2) Mr. Moren is no longer an executive officer of the Corporation.
(3) Consists entirely of director's fees.
(4) Consists of $158,459 accrued under the termination agreement (see
"Employment Contracts and Termination of Employment and Change in Control
Arrangements"), $2,000 in matching contributions to the Corporation's
401(k) plan, and $648 in term life insurance premiums paid by the
Corporation.
(5) Consists of $2,000 in matching contributions to the Corporation's 401(k)
plan and $83 in term life insurance premiums paid by the Corporation.
(6) Consists of $1,969 in matching contributions to the Corporation's 401(k)
plan and $454 in term life insurance premiums paid by the Corporation.
(7) Consists of $1,038 in matching contributions to the Corporation's 401(k)
plan and $421 in term life insurance premiums paid by the Corporation.
(8) Consists of $1,984 in matching contributions to the Corporation's 401(k)
plan and $301 in term life insurance premiums paid by the Corporation.
8
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Stock Option Grants In Fiscal Year 2000
The following table sets forth information regarding each grant of stock
options made during fiscal year 2000 to each of the named executive officers.
Unless otherwise indicated, options vest at a rate of 25% beginning one year
after the grant date and in equal monthly installments over a three year period
thereafter.
The potential realizable value is calculated based on the term of the
option at the time of grant, which is 10 years. Stock price appreciation of 5%
and 10% is assumed pursuant to rules promulgated by the SEC and does not
represent a prediction of the performance of the Corporation's stock price. The
potential realizable value at 5% and 10% appreciation is calculated by assuming
that the exercise price on the date of grant appreciates at the indicated rate
for the entire term of the option and that the option is exercised at the
exercise price and sold on the last day of its term at the appreciated price.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------
Percentage Potential Realizable
of Total Value at Assumed
Number of Options Annual Rates of Stock
Securities Granted to Exercise Price Appreciation
Underlying Employees Price for Option Term
Options in Fiscal Per Expiration -----------------------
Name Granted 2000 (1) Share Date 5% 10%
-------------------- -------------- ------------ -------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
David S. Lee 5,000 (2) 0.79 % $11.88 04/05/10 $ 37,300 $ 94,564
J. Michael O'Dell 20,000 3.16 % $12.00 02/02/10 $150,935 $382,498
David M. Fredrick 50,000 7.90 % $ 4.25 07/14/10 $133,640 $338,670
Sergio R. Moren 5,000 0.79 % $ 4.56 05/22/10 $ 14,339 $ 36,337
Robert R. Cash - - - - - -
Troy E. Lynch 40,000 6.32 % $ 4.56 05/22/10 $114,710 $290,699
Stephen N. Samp 8,000 1.26 % $12.00 02/02/10 $ 60,374 $152,999
</TABLE>
--------------------------------------
(1) Based upon an aggregate of 632,531 shares subject to options granted to
employees of eOn under the 1999 Equity Incentive Plan in fiscal 2000,
including the named executive officers.
(2) Options vest 100% one year after the grant date.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, for the named executive officers, the
shares acquired and the value realized on each exercise of stock options during
the year ended July 31, 2000, and the number and value of securities underlying
unexercised options held by the named executive officers at July 31, 2000.
Options generally vest at either a rate of (1) 12.5% six months after the grant
date and equal monthly installments thereafter over a 42 month period, or (2)
25% one year after the grant date and equal monthly installments thereafter over
a three year period. These options have a term of 10 years. The value of
unexercised in-the-money options have been calculated using the closing price of
the Corporation's Common Stock on July 31, 2000 of $3.625.
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options In-The-Money Options
On Value ----------------------------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------------------- ---------- -------- ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
David S. Lee - - - 5,000 - -
J. Michael O'Dell - - 131,820 31,456 $152,904 $23,712
David M. Fredrick - - 21,874 98,126 - -
Sergio R. Moren - - 16,894 37,106 - -
Robert R. Cash 8,124 $38,995 19,711 45,915 $ 1,825 $18,287
Troy E. Lynch - - 16,142 70,958 - -
Stephen N. Samp - - 20,672 44,428 $ 12,794 $ 9,144
</TABLE>
--------------------------------------
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Agreement with David M. Fredrick. On April 12, 1999, eOn entered into an
employment agreement with Mr. Fredrick. The agreement included terms and
provisions for an annual salary of $165,000 in 1999 and $175,000 in 2000 and an
option to purchase 70,000 shares of common stock. On March 22, 2000, after Mr.
Fredrick was no longer an executive officer, this agreement was replaced by a
new agreement between the Corporation and Mr. Fredrick.
Agreement with J. Michael O'Dell. In connection with Mr. O'Dell's
resignation as an officer and director of the Corporation, Mr. O'Dell entered
into an agreement to continue as a consultant to the Corporation through
December 31, 2000. The agreement included the following provisions: a salary of
$112,500 during the term of the agreement; $29,959 for earned and unused
vacation and sick time; the right to exercise all vested options from previous
grants within 90 days after December 31, 2000; and reimbursement for relocation
and moving expenses up to $16,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to resignation of J. Michael O'Dell as our Chief Executive Officer,
the Compensation Committee consisted of Stephen R. Bowling, W. Frank King, David
S. Lee, and Jenny Hsui Theleen. When Mr. Lee assumed the role of Chief Executive
Officer, Mr. Bowling and he stepped down from the Compensation Committee. At the
same time, Robert P. Dilworth joined the Compensation Committee. None of the
members of the current Compensation Committee are, or have ever been, officers
or employees of eOn. In addition, no member of the Compensation Committee served
as an executive officer of any entity where any of the Corporation's executive
officers was a director.
COMPENSATION COMMITTEE REPORT
Overview and Philosophy
Our Compensation Committee is responsible for establishing the compensation
payable to our executive officers, including the named executive officers. Such
compensation is
10
<PAGE>
primarily comprised of the following elements: base salary, bonuses, stock
options, and benefits.
It is the Compensation Committee's objective that executive compensation be
directly influenced by our business results. Accordingly our executive
compensation program is structured to stimulate and reward exceptional
performance that results in enhanced corporate and stockholder values. Industry
compensation surveys are also reviewed in the Compensation Committee's
assessment of appropriate compensation levels.
The Compensation Committee recognizes that the highly-specialized industry
sector in which we operate is extremely competitive world-wide, with the result
that there is substantial demand for high-caliber, seasoned executives. It is
crucial that we be assured of retaining and rewarding our executive personnel
essential in contributing to the attainment of our performance goals. For these
reasons, the Compensation Committee believes our executive compensation
arrangements must remain competitive with other providers.
Cash Compensation
A key objective of our executive compensation program is to position our
key executives to earn annual cash compensation (base salary plus bonus)
generally comparable to that which the executive would earn at other companies
in the industry.
Base salaries for our executive officers are established considering a
number of factors, including the recommendation of our Chief Executive Officer,
our growth and profit margins, the executive's performance and contribution to
our overall performance, and the salary levels of comparable positions reported
in industry surveys. The Compensation Committee adheres to a compensation
philosophy of moderate levels of fixed compensation such as base salary. Base
salary decisions are made as part of a formal review process.
Bonuses are provided in accordance with the executive's written agreement
where one is in place. Otherwise, bonuses are paid on a discretionary basis
based upon individual performance.
Stock Options
The Compensation Committee grants stock options under the 1999 Equity
Incentive Plan to provide direct linkage with stockholder interests. The
Compensation Committee considers the recommendation of our Chief Executive
Officer, stock options previously granted to that individual, industry
practices, the executive's performance and accountability level, and assumed,
potential stock value when determining stock option grants. The Compensation
Committee relies upon competitive guideline ranges of retention-effective,
target gain objectives to be derived from option gains based upon relatively
aggressive assumptions relating to planned growth and earnings. In this manner,
the potential executive's gains parallel those of other stockholders over the
long-term. Therefore, the stock option program serves as our only long-term
incentive and retention tool for executives and other key employees. Stock
options provide an incentive to executives to maximize long-term profitable
growth which ordinarily, over time, should be reflected in the price of our
stock.
Benefits
We offer to our executives benefits that are substantially the same as the
benefits offered to all eOn employees.
Chief Executive Officer Performance and Compensation
In setting the total compensation payable to our former Chief Executive
Officer for the 2000 fiscal year, the Compensation Committee sought to make that
compensation competitive with the compensation paid to the chief executive
officers of the companies in our industry, while at the same time assuring that
a significant percentage of compensation was tied to our performance.
The Compensation Committee awarded a stock option grant to Mr. O'Dell in
fiscal 2000 in order to provide him with an equity incentive to continue
contributing to our financial success after our initial public offering. With
the subsequent resignation of Mr. O'Dell, this option has no value because the
vesting requirements will not be met.
11
<PAGE>
When Mr. Lee assumed the position of Chief Executive Officer in May 2000,
he declined the opportunity to receive compensation related to his performance
in this capacity, due to the fact he already has significant holdings in the
Corporation.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly held companies for compensation exceeding $1 million paid
to certain of the Corporation's executive officers. The compensation to be paid
to any of our executive officers for fiscal year 2000 did not exceed the $1
million limit per officer, nor is it expected that the compensation to be paid
to any of our executive officers for fiscal year 2001 will exceed that limit.
Our 1999 Equity Incentive Plan is structured so that any compensation deemed
paid to an executive officer when he exercises an outstanding option with an
exercise price equal to the fair market value of the option shares on the grant
date will qualify as performance-based compensation which will not be subject to
the $1 million limitation. Because it is very unlikely that the cash
compensation payable to any of our executive officers in the foreseeable future
will approach the $1 million limit, the Compensation Committee has decided at
this time not to take any other action to limit or restructure the elements of
cash compensation payable to our executive officers. The Compensation Committee
will reconsider this decision should the individual compensation of any
executive officer ever approach the $1 million level.
It is the opinion of the Compensation Committee that the adopted executive
compensation policies and plans provide the necessary total remuneration program
to properly align our performance and the interests of our stockholders with
competitive and equitable executive compensation in a balanced and reasonable
manner, for both the short and long-term.
The Compensation Committee of the Board
Robert P. Dilworth
W. Frank King
Jenny Hsui Theleen
12
<PAGE>
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Board of Directors
(see Appendix A), the Audit Committee assists the Board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing, and financial reporting practices of the Corporation. During fiscal
year 2000, the Audit Committee met three times.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Corporation
that might bear on the auditors' independence consistent with Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and discussed with the auditors their independence from the
Corporation and its management.
The Audit Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements.
The Audit Committee reviewed the audited financial statements of the
Corporation for the fiscal year ended July 31, 2000, with management and the
independent auditors. Management has the responsibility for the preparation of
the Corporation's financial statements and the independent auditors have the
responsibility for the examination of those statements.
Based upon the above-mentioned review and discussions with management and
the independent auditors, the Audit Committee recommended to the Board that the
Corporation's audited financial statements be included in its Annual Report on
Form 10-K for the fiscal year ended July 31, 2000, for filing with the
Securities and Exchange Commission. The Audit Committee also recommended the
reappointment, subject to stockholder approval, of Deloitte & Touche LLP as the
Corporation's independent auditors and the Board concurred in such
recommendation.
The Audit Committee of the Board
Robert P. Dilworth, Chairperson
W. Frank King
Jenny Hsui Theleen
13
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return of the
Corporation's Common Stock with the Nasdaq Stock Market (U.S.) Index ("Nasdaq
US") and the Nasdaq Telecommunications Index. The graph covers the period from
February 4, 2000, the commencement date of our initial public offering of shares
of common stock, to July 31, 2000. The graph assumes that $100 was invested on
February 4, 2000, in our common stock and in the Nasdaq Stock Market (U.S.)
Index and the Nasdaq Telecommunications Index on January 31, 2000, and all
dividends were reinvested. No cash dividends have been declared on our common
stock. The performance shown in the graph represents past performance and should
not be considered an indication of future performance.
COMPARISON OF TOTAL STOCKHOLDER RETURN
AMONG EON COMMUNICATIONS CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX AND
THE NASDAQ TELECOMMUNICATIONS INDEX
[GRAPH]
-------- --------
02/04/00 07/31/00
-------- --------
EON COMMUNICATIONS CORPORATION 100.00 30.21
NASDAQ US 100.00 95.84
NASDAQ TELECOMMUNICATIONS 100.00 63.13
Notwithstanding anything to the contrary set forth in any of our previous
filings made under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings made by
us under those statutes, neither the preceding Stock Performance Graph nor the
Compensation Committee report or the Audit Committee report is to be
incorporated by reference into any such prior filings, nor shall such graph or
reports be incorporated by reference into any future filings made by us under
those statutes.
14
<PAGE>
CERTAIN TRANSACTIONS
During the 2000 fiscal year, we distributed a $2,600,000 note receivable
from Cortelco Systems Holding Corporation ("CSHC") to CSHC in payment of a
dividend declared in fiscal 1999. In addition, we received $420,000 in payments
from CSHC against a separate note receivable in fiscal 2000. This note accrues
interest at a rate of 8% per annum and is due in November 2000. The remaining
balance at July 31, 2000, was $264,000 plus accrued interest. David S. Lee is
the Chairman and a principal stockholder of CSHC. Stephen R. Bowling is
President, Chief Executive Officer and a director of CSHC.
At the time of our initial public offering, the Series A Convertible
Preferred Stock held by ChinaVest was converted into 1,434,894 shares of our
common stock. In addition, we used a portion of the net proceeds of the offering
to repay a $2,314,000 note to ChinaVest, plus accrued interest. The note had a
maturity of July 31, 2002, and accrued interest at the rate of 8%. Jenny Hsui
Theleen, a director of eOn, is a managing director of ChinaVest.
In October 1997, we loaned J. Michael O'Dell, our former Chief Executive
Officer, the principal amount of $132,000 in connection with relocation
expenses. J. Michael O'Dell repaid $61,000 of principal on the note in fiscal
1999 and all of the remaining balance in November 1999.
In March 2000, we sold two communications systems to public universities
for $146,000. The funding for the purchase was based on a directed donation from
David S. Lee through the Asia Cultural Teachings Corporation, a charitable
foundation. David S. Lee is the honorary president of Asia Cultural Teachings
Corporation.
During the year, ACT Manufacturing, Inc. ("ACT") provided certain
manufacturing services on a non-exclusive basis. Our purchases from ACT during
fiscal 2000 totaled $13,571,000, while our sales to ACT totaled $101,000. David
S. Lee is a director of ACT Manufacturing, Inc.
We purchase single line phones from, and sell Millennium related products
to, Cortelco, Inc. ("CI"), a wholly-owned subsidiary of CSHC. In addition, we
shared warehouse space with CI during fiscal 2000. David S. Lee and Stephen R.
Bowling are directors of CI. In fiscal 2000, our purchases from CI totaled
$1,588,000, our sales to CI totaled $187,000, and we were charged $146,000 by CI
for the rental of warehouse space.
We lease office space from Cortelco Puerto Rico, Inc. ("CPR") at our San
Juan location. CPR is a wholly-owned subsidiary of CSHC. David S. Lee and
Stephen R. Bowling are directors of CPR. Rent expense charged by CPR during
fiscal 2000 totaled $304,000.
eOn believes that all of the transactions set forth above were made on
terms no less favorable to eOn than could have been otherwise obtained from
unaffiliated third parties. As a matter of policy, all transactions between eOn
and any of its officers, directors or principal stockholders are approved by a
majority of the board of directors, including a majority of the independent and
disinterested members of the board.
FORM 10-K
We have filed an Annual Report on Form 10-K for the year ended July 31,
2000 with the Securities and Exchange Commission. A copy of the 10-K has been
mailed concurrently with this Proxy Statement to all stockholders entitled to
notice and to vote at the annual meeting. The financial and other information
contained on Form 10-K is hereby incorporated by reference into this proxy
statement.
Dated: November 17, 2000
THE BOARD OF DIRECTORS OF
EON COMMUNICATIONS CORPORATION
15
<PAGE>
APPENDIX A
EON COMMUNICATIONS CORPORATION
AUDIT COMMITTEE CHARTER
This Audit Committee Charter (Charter) has been adopted by the Board of
Directors (the Board) of eOn Communications Corporation (the Company). The Audit
Committee of the Board (the Committee) shall review and reassess this charter
annually and recommend any proposed changes to the Board for approval.
Role and Independence: Organization
The Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing, internal
control and financial reporting practices of the Company. It may also have such
other duties as may from time to time be assigned to it by the Board. The
membership of the Committee shall consist of at least three directors, who are
each free of any relationship that, in the opinion of the Board, may interfere
with such member's individual exercise of independent judgment. Each Committee
member shall also meet the independence and financial literacy requirements for
serving on audit committees, and at least one member shall have accounting or
related financial management expertise, all as set forth in the applicable rules
of the NASDAQ. The Committee shall maintain free and open communication with the
independent auditors and Company management. In discharging its oversight role,
the Committee is empowered to investigate any matter relating to the Company's
accounting, auditing, internal control or financial reporting practices brought
to its attention, with full access to all Company books, records, facilities and
personnel. The Committee may retain outside counsel, auditors or other advisors.
One member of the Committee shall be appointed as chair. The chair shall be
responsible for leadership of the Committee, including scheduling and presiding
over meetings, preparing agendas, and making regular reports to the Board. The
chair will also maintain regular liaison with the CEO, CFO, and the lead audit
partner.
The Committee shall meet at least four times a year, or more frequently as
the Committee considers necessary. At least once each year, the Committee shall
have separate private meetings with the independent auditors and management.
Responsibilities
Although the Committee may wish to consider other duties from time to time,
the general recurring activities of the Committee in carrying out its oversight
role are described below. The Committee shall be responsible for:
. Recommending to the Board the independent auditors to be retained (or
nominated for stockholder approval) to audit the financial statements of the
Company. Such auditors are ultimately accountable to the Board and the
Committee, as representatives of the stockholders.
. Evaluating, together with the Board and management, the performance of the
independent auditors and, where appropriate, replacing such auditors.
. Obtaining annually from the independent auditors a formal written statement
describing all relationships between the auditors and the Company, consistent
with Independence Standards Board Standard Number 1. The Committee shall
actively engage in a dialogue with the independent auditors with respect to
any relationships that may impact the objectivity and independence of the
auditors and shall take, or recommend that the Board take, appropriate
actions to oversee and satisfy itself as to the auditors' independence.
. Reviewing the audited financial statements and discussing them with
management and the independent auditors. These discussions shall include the
matters required to be discussed under Statement of Auditing Standards No. 61
and consideration of the quality of the Company's accounting principles as
applied in Financial Reporting, including a review of particularly sensitive
accounting estimates, reserves and accruals, judgmental areas, audit
adjustments (whether or not recorded), and other such inquiries as the
Committee or the independent auditors shall deem appropriate. Based on such
review, the Committee shall make its recommendation to the Board as to the
inclusion of the Company's audited financial statements in the Company's
Annual Report on Form 10-K.
. Issuing annually a report to be included in the Company's proxy statement as
required by the rules of the Securities and Exchange Commission.
A-1
<PAGE>
. Overseeing the relationship with the independent auditors, including
discussing with the auditors the nature and rigor of the audit process,
receiving and reviewing audit reports, and providing the auditors full access
to the Committee (and the Board) to report on any and all appropriate
matters.
. Discussing with a representative of management and the independent auditors:
(1) the interim financial information contained in the Company's Quarterly
Report on Form 10-Q prior to its filing,
(2) the earnings announcement prior to its release (if practicable), and
(3) the results of the review of such information by the independent
auditors.
. Discussing with management and the independent auditors the quality and
adequacy of and compliance with the Company's internal controls.
. Discussing with management and/or the Company's general counsel any legal
matters (including the status of pending litigation) that may have a material
impact on the Company's financial statements, and any material reports or
inquiries from regulatory or governmental agencies.
. Reviewing the annual management letter with the independent auditors and
discuss with the independent auditors their evaluation of the Company's Chief
Financial Officer and financial staff.
. Reviewing and approving audit fees.
The Committee's job is one of oversight. Management is responsible for the
preparation of the Company's financial statements and the independent auditors
are responsible for auditing those financial statements. The Committee and the
Board recognize that management and the independent auditors have more resources
and time, and more detailed knowledge and information regarding the Company's
accounting, auditing, internal control and financial reporting practices than
the Committee does; accordingly the Committee's oversight role does not provide
any expert or special assurance as to the financial statements and other
financial information provided by the Company to its stockholders and others.
A-2
<PAGE>
Please mark your vote as indicated in this example / X /
1. To elect the following two directors to serve for a three-year term ending
upon the 2003 Annual Meeting of Stockholders or until their successors are
elected and qualified.
FOR all nominees listed to the right Nominees: 01 Stephen R. Bowling
02 Jenny Hsui Theleen
WITHHOLD AUTHORITY to vote all nominees listed to the right
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
-------------------------------
2. To ratify the appointment of Deloitte & Touche LLP as independent auditors
of the Corporation for the fiscal year ending July 31, 2001.
FOR / / AGAINST / / ABSTAIN / /
Signature Signature Date
---------------------- --------------------- -------
The board of directors recommends a vote FOR each of the directors listed above
and a vote FOR the other proposal. This proxy, when properly executed, will be
voted as specified above. This proxy will be voted FOR the election of the
directors listed above and FOR the other proposal if no specification is made.
PLEASE VOTE
<PAGE>
EON COMMUNICATIONS CORPORATION
PROXY
2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 20, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the 2000 Annual Meeting of Stockholders to be held on December 20,
2000, and the Proxy Statement, and appoints David S. Lee and Stephen N. Samp and
each of them, the Proxy of the undersigned, with full power of substitution, to
vote all shares of Common Stock of eOn Communications Corporation (the
"Corporation"), which the undersigned is entitled to vote, either on his own
behalf or on behalf of any entity or entities, at the 2000 Annual Meeting of
Stockholders of eOn Communications Corporation to be held at the Corporation's
executive offices, 4105 Royal Drive NW, Suite 100, Kennesaw, Georgia 30144, on
Thursday, December 20, 2000 at 4:00 PM local time (the "Annual Meeting"), and at
any adjournment or postponement thereof, with the same force and effect as the
undersigned might or could do if personally present thereat. The shares
represented by this proxy shall be voted by the proxies in the manner set forth
on the reverse side and with discretionary authority with respect to any other
business, not known or determined at the time of the solicitation of this proxy,
that properly comes before the Annual Meeting or any postponement or adjournment
thereof.
THANK YOU FOR VOTING
