SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] 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 Band Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
[GRAPHIC-V Band Logo]
V Band Corporation
565 Taxter Road
Elmsford, NY 10523
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS--MAY 14, 1997
To the Shareholders of V Band Corporation:
The Annual Meeting of Shareholders of V Band Corporation (the
"Company"), a New York corporation, will be held at the principal office of the
Company, 565 Taxter Road, Elmsford, New York 10523, on May 14, 1997, at 10:00
a.m., for the following purposes:
(1) To elect a Board of Directors to hold office for a term expiring upon
the 1998 Annual Meeting of Shareholders or until their successors shall have
been duly elected and qualified.
(2) To approve the retention of Deloitte & Touche LLP as independent
auditors for the 1997 fiscal year.
(3) To approve the adoption of the Company's Amended and Restated Stock
Compensation Plan for Non-Employee Directors (1997).
(4) To transact such other business as may legally come before the meeting
or any adjournment or adjournments thereof, although management of the Company
was not aware on April 14, 1997 of any other business to be considered.
Reference is made to the accompanying Proxy Statement for more complete
information concerning the foregoing matters.
Only shareholders of record at the close of business on March 31, 1997
are entitled to vote at the Annual Meeting.
We look forward to seeing as many shareholders as possible at the
meeting. Whether or not you expect to be present, please mark, sign and date the
enclosed form of proxy and return it in the envelope provided. No postage need
be added if you deposit the envelope in a mail depository in the United States.
By Order of the Board of Directors
THOMAS E. FEIL
Chairman and Chief Executive Officer
Elmsford, New York
April 14, 1997
SHAREHOLDERS CAN HELP THE COMPANY AVOID UNNECESSARY EXPENSE AND DELAY BY
PROMPTLY COMPLETING AND RETURNING THE ENCLOSED PROXY CARD. THE BUSINESS OF THE
MEETING IS IMPORTANT TO THE COMPANY AND CANNOT BE TRANSACTED UNLESS A MAJORITY
OF THE OUTSTANDING SHARES ARE REPRESENTED.
<PAGE>
[GRAPHIC-V Band Logo]
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of V Band Corporation (the "Company"), 565 Taxter
Road, Elmsford, New York 10523, of proxies for use at the Annual Meeting of
Shareholders to be held on May 14, 1997 and any adjournments thereof. A proxy
may be revoked by a shareholder at any time prior to its use by filing with the
Company a duly executed proxy bearing a later date or by giving written notice
of such revocation to the Secretary of the Company prior to the meeting. A proxy
is also subject to revocation if the person executing the proxy is present at
the meeting and chooses to vote in person.
The expenses of proxy solicitation will be paid by the Company. The
principal solicitation of proxies is being made by mail; however, officers and
other employees of the Company may solicit proxies by telephone, telegraph or
personal interview, without additional compensation therefor. Forms of proxies
and proxy material will also be distributed through brokers, custodians and
other like persons to the beneficial owners of Common Stock of the Company, and
the Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred in connection therewith.
The Annual Report of the Company to Shareholders for the fiscal year
ended October 31, 1996, including financial statements, accompanies this Proxy
Statement. The proxy and this Proxy Statement, together with the Annual Report
to Shareholders, are being mailed to shareholders on or about April 14, 1997.
DESCRIPTION OF CAPITAL STOCK AND VOTING RIGHTS
The record date for the determination of shareholders entitled to vote
at the meeting is the close of business on March 31, 1997. On that date, the
Company had 5,328,303 shares of Common Stock, par value $.01 per share (the
"Common Stock"), issued and outstanding. Each holder of Common Stock is entitled
to one vote per share on all matters to come before the meeting.
All of the shares of Common Stock of the Company represented by valid
proxies, unless otherwise specified therein or unless revoked, will be voted FOR
the election of the persons nominated as directors, FOR the approval of the
adoption of the Amended and Restated Stock Compensation Plan for Non-Employee
Directors (1997), FOR the approval of the retention of Deloitte & Touche LLP as
the Company's independent public auditors for the 1997 fiscal year, and at the
discretion of the proxy holders on any other matters that may properly come
before the Annual Meeting, although as of the date of this Proxy Statement, the
Company was not aware of any other business to be considered. Where a
shareholder has appropriately specified how a proxy is to be voted, it will be
voted accordingly. However, if a broker or shareholder nominee limits on the
proxy card the number of shares voted on a proposal or indicates that the shares
represented by a proxy card are not voted on a proposal, such "non-votes" will
not be voted on the proposal and will not be counted in determining the number
of affirmative votes required for approval.
<PAGE>
PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by (i) each person who owns
beneficially more than 5% of the Company's Common Stock, (ii) each director of
the Company, (iii) each executive officer named in the Summary Compensation
Table below, and (iv) all directors and executive officers of the Company as a
group, as of March 31, 1997.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
Thomas E. Feil 1,461,472 (1)(2) 26.3%
565 Taxter Road, Elmsford, NY 10523
Thomas Hughes 69,900 (1) 1.3%
565 Taxter Road, Elmsford, NY 10523
Mark R. Hahn 52,549 (1) 1.0%
565 Taxter Road, Elmsford, NY 10523
Luke P. La Valle, Jr. 20,000 (1) *
50 Broad Street, Suite 1609, New York, NY 10004
Thomas H. Lenagh 13,000 (1) *
6 Greenwich Office Park, Greenwich, CT 06831
Brian S. North 103,000 (1)(3) 1.9%
1800 One Liberty Place, Philadelphia, PA 19103
Joseph M. O'Donnell 20,000 (1) *
7900 Glades Road, Suite 500, Boca Raton, FL 33434
A. Eugene Sapp, Jr. 6,000 (1) *
2101 West Clinton Ave., Huntsville, AL 35807
J. Stephen Vanderwoude 8,000 (1) *
2316 Young Road, Southern Pines, NC 28388
All directors and executive officers as a group (10 persons) 1,753,921 (1) 31.6%
- ---------------------
* less than 1%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(1) Includes shares that may be acquired upon exercise of options, which are currently exercisable or are exercisable within 60
days, as follows: Mr. Feil, 25,000 shares; Mr. Hughes, 68,900 shares; Mr. Hahn, 42,667 shares; Mr. La Valle, 10,000 shares; Mr.
Lenagh, 8,000 shares; Mr. North, 23,000 shares; Mr. O'Donnell, 20,000 shares; Mr. Sapp, 6,000 shares; Mr. Vanderwoude, 6,000
shares; and all directors and executive officers as a group, 209,567 shares.
(2) Excludes 80,000 shares held in an irrevocable trust for Mr. Feil's daughter, over which Mr. Feil holds no voting or investment
power.
(3) Includes 80,000 shares held in an irrevocable trust for which Mr. North is a trustee. Mr. North has no economic interest in the
trust. However, he holds investment and voting authority over such shares.
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS
Name Age Office Held
---- --- -----------
<S> <C> <C>
Thomas E. Feil (1) 55 Chairman, Chief Executive Officer, Director
Thomas Hughes 37 Chief Operating Officer
Mark R. Hahn 39 Vice President - Chief Financial Officer, Treasurer and Secretary
Gerald C. Walsh 51 Senior Vice President - Sales and Operations
Luke P. La Valle, Jr. (2)(3) 55 Director
Thomas H. Lenagh (2) 72 Director
Brian S. North (1) 45 Director
Joseph M. O'Donnell (3) 51 Director
A. Eugene Sapp, Jr. (1) 60 Director
J. Stephen Vanderwoude (2)(3) 53 Director
(1) Member of Stock Option Committee.
(2) Member of Audit Committee.
(3) Member of Executive Compensation Committee.
</TABLE>
Thomas E. Feil has served as Chairman of the Company from April 1985 to
present, as a Director since its inception and as Chief Executive Officer from
April 1985 to August 1988 and from August 1993 to present. From the Company's
inception until April 1985, Mr. Feil was President of the Company.
Thomas Hughes was appointed Chief Operating Officer of the Company in
August 1995. Previously, he served the Company as Vice President of Marketing
and Product Planning from 1993 to 1995. Mr. Hughes began his career with the
Company in 1988 as a Staff Engineer and held various engineering management
positions of increasing responsibility until his appointment as Vice President.
Prior to joining the Company, he worked as a researcher at CBS Laboratories'
Technology Center and a Systems Engineer at United Technologies.
<PAGE>
Mark R. Hahn was appointed Vice President and Chief Financial Officer
of the Company in August 1995. He was elected Secretary of the Company in
December, 1995 and elected Treasurer of the Company in May 1996. Previously, he
served as Controller of the Company since November 1994. Prior to joining the
Company, he was a consultant to American Airlines in Fort Worth, TX. From 1991
to 1994, he served as Vice President of Finance and Controller for Business
Express Corporation in Westport, CT. He joined Business Express in 1990 as
Controller. From 1987 to 1990, he held the positions of Corporate Controller and
Director of Corporate Planning and Accounting with Waldenbooks in Stamford, CT.
He began his career as a certified public accountant with Price Waterhouse.
Gerald C. Walsh was appointed Senior Vice President, Sales and
Operations of the Company in May 1996. Prior to joining the Company, he was
Eastern Regional Manager, National Accounts at Executone Information Systems,
Inc. From 1993 to 1995, Mr. Walsh served as Chief Operating Officer for Glasgal
Communications, Inc., in Northvale, New Jersey. From 1987 to 1992, he was Senior
Vice President and General Manager for Contel IPC.
Luke P. La Valle, Jr. has served as a Director of the Company since
June 1992. Since 1980, Mr. La Valle has been President and Chief Investment
Officer of American Capital Management, Inc., a New York City based investment
management firm for individuals, trusts, pension and profit sharing accounts.
Prior to forming American Capital Management, Inc., Mr. La Valle worked for
United States Trust Company of New York for 13 years specializing in small
company investing in the Pension and Institutional Investment Division.
Thomas H. Lenagh has served as a Director of the Company since June
1993. Mr. Lenagh has served as an independent financial consultant for the last
six years. He was formerly Chairman and Chief Executive Officer of Greiner
Engineering from 1984 to 1986. Prior to that he was Financial Vice President of
Aspen Institute until 1984. Previously, he was Treasurer and Portfolio Manager
of the Ford Foundation. Mr. Lenagh is a retired Captain of the United States
Naval Reserve. Mr. Lenagh is also a Director of CML, Inc., Gintel Funds, Adams
Express, Clemente Growth Fund, ICN Pharmaceuticals, Inc., Irvine Sensors
Corporation and Franklin Quest.
Brian S. North has served as a Director of the Company since September
1988. Mr. North has been an attorney with the law firm of White and Williams
since 1995. From 1987 to 1994, he was a member of the law firm of Elliott,
Reihner, Siedzikowski, North & Egan, P.C. and predecessor law firms. From 1980
to 1987, he was Senior Corporate Counsel of Sun Company, Inc.
Joseph M. O'Donnell has served as a Director of the Company since June
1991. Since July 1994, Mr. O'Donnell has been the Chief Executive Officer and a
Director of Computer Products, Inc., a publicly held multinational manufacturer
in Boca Raton, Florida. From 1993 to 1994, he was Chief Executive Officer for
Savin Corporation, after one year of being an independent business consultant.
From 1990 to 1992 he served as President and Chief Executive Officer of GO/DAN
Industries Inc., a Connecticut-based manufacturer of automobile parts sold
primarily in the aftermarket. He is also a Director of Cincinnati Microwave,
Inc., a publicly held company, and Boca Research.
A. Eugene Sapp, Jr. has served as a Director of the Company since
August 1994. Mr. Sapp, employed by SCI Systems since 1962, has been its
President, Chief Operating Officer and Director since 1981. Mr. Sapp also serves
as a Director of CMS, Inc. of Tampa, Florida.
<PAGE>
J. Stephen Vanderwoude has served as Director of the Company since May
1994. Mr. Vanderwoude is currently Chairman and Chief Executive Officer of
Madison River Telephone Company LLC. He was President, Chief Executive Officer
and Director for Video Lottery Technologies in Atlanta, Georgia from 1994 to
1995. Prior to that, he was the President and Chief Operating Officer of Sprint
Corporation's Local Telecommunication Division until September 1993. Prior to
the merger of Sprint and Centel corporations in March 1993, Mr. Vanderwoude was
President and a Director of Centel Corporation from 1988 and held various
executive and management positions with Centel since joining that company in
1971. Mr. Vanderwoude is also a Director of First Midwest, a bank holding
company.
The Board of Directors of the Company has an Executive Compensation
Committee, a Stock Option Committee and an Audit Committee. The Executive
Compensation Committee's principal functions are to recommend to the Board of
Directors the compensation arrangements for the executive officers of the
Company. The Stock Option Committee exercises the responsibilities of the Board
in granting options under and administering the Company's 1982 Incentive Stock
Option Plan and its 1984 Stock Option Plan. The Audit Committee's principal
functions are to review with internal financial staff and the Company's
independent auditors the Company's reporting process and internal controls and
to recommend the selection, retention or termination of the independent
auditors. During the 1996 fiscal year, the Audit Committee held 2 formal
meetings with the independent auditors present and an additional 6 informal
meetings preceding the regular board meetings, and the Executive Compensation
Committee and the Stock Option Committee did not hold formal meetings separate
from Board meetings. The Stock Option Committee acted by unanimous written
consent on 2 occasions. The Board of Directors has no other standing committees.
The Board of Directors of the Company held 6 meetings during the fiscal
year ended October 31, 1996. Each incumbent director attended over 83 percent of
the meetings of the Board and the committees on which he serves.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information for each of the fiscal years
ended October 31, 1996, 1995 and 1994 concerning the compensation of the
Company's chief executive officer and each of its other executive officers whose
salary and bonus for fiscal 1996 exceeded $100,000:
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation 1
------------------- --------------
Securities
Name/ Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options (#) Compensation 2
- ------------------ ---- ------ ----- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Feil, 1996 $200,000 $ - $ - - $ 2,000
Chairman, Chief Executive 1995 199,000 - - - 1,528
Officer and Director 1994 199,998 - - - -
Thomas Hughes, 3 1996 150,000 - - 90,000 1,500
Chief Operating Officer 1995 103,616 3,276 - 16,000 1,036
1994 88,858 - - 6,000 889
Mark R. Hahn, 3 1996 105,000 - - 60,000 1,050
Vice President - 1995 85,077 - - 17,000 285
Chief Financial Officer 1994 - - - - -
- --------------------------------
1. Other than the Company's 401(k) Plan and its stock option and stock purchase plans, the Company does not have any long-term
incentive plans and does not grant restricted stock awards.
2. Includes amounts contributed by the Company under the Company's 401(k) Plan during the fiscal year and any additional
discretionary annual contributions related to the prior fiscal year.
3. Mr. Hughes and Mr. Hahn entered into agreements with the Company in January 1996 whereby they were each entitled to receive
approximately one year's compensation should there be a change of control of the Company within one year from the date of the
agreements.
</TABLE>
<PAGE>
Stock Options
The following tables summarize options grants during the fiscal year ended
October 31, 1996 to each of the Executive Officers named in the Summary
Compensation Table and the value of the options held by such persons at the end
of such fiscal year. None of those Executive Officers exercised any stock
options during the fiscal year ended October 31, 1996. The Company does not
maintain any pension plans or any supplementary pension award plans.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
----------------------------------------------------------------------------------------
Number of Percentage of
Securities Total Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year (per share) Date 5% 10%
- ---- ------- ----------- ----------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Thomas Hughes 90,000 25% $1.88 2006 $142,326 $326,853
Mark R. Hahn 60,000 17% 1.88 2006 94,884 217,902
<CAPTION>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-end Option Value
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Options Money Options at
at FY-End FY-End
-------------------------------- ---------------------------------
Shares
Acquired on Value
Name Exercise Realized Excercisable Unexercisable Excercisable Unexercisable
- ---- -------- -------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Feil - $ - 25,000 - $ - $ -
Thomas Hughes - - 26,900 88,667 2,917 20,833
Mark R. Hahn - - 15,667 61,333 1,708 13,917
</TABLE>
Compensation Of Directors
Each outside director is entitled to receive an annual director's fee
of $7,500 plus $500 for each board meeting attended (up to a limit of six
meetings per year), plus deferred cash compensation payable upon termination of
service as a director in an amount equal to $2,000 for each year of service as a
director. Pursuant to the Company's Stock Compensation Plan for Non-Employee
Directors, each outside director may elect to have all or a portion of his
compensation paid by the Company by means of the issuance of the Company's
Common Stock in lieu of cash. Additionally, each director is entitled to
reimbursement for out-of-pocket travel expenses incurred to attend a board
meeting and may receive reasonable compensation for chairing any committee of
the board. Outside directors also receive, upon election or re-election as a
director, a grant of stock options under the Company's 1984 Stock Option Plan
covering 2,000 shares of the Company's Common Stock, at an exercise price equal
to the fair market value on the date of grant.
<PAGE>
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
AND THE STOCK OPTION COMMITTEE
Executive Compensation Policies
Executive compensation is set by the Executive Compensation Committee,
which approves cash compensation, and the Stock Option Committee, which
determines stock option grants. The Company's executive compensation program is
designed to provide compensation that is competitive with that offered by other
companies against which the Company competes for executive resources. The
objectives of the program are (1) to attract and retain superior talent and (2)
to reward executives for successful strategic management and for increases in
shareholder value.
Cash compensation is targeted relative to companies of similar size and
in similar businesses. In setting compensation levels, the Executive
Compensation Committee reviews competitive data compiled by an independent
compensation consulting firm. In addition to competitive factors, cash
compensation is based on the Executive Compensation Committee's evaluation of
each executive's performance as measured against individual, business group and
company-wide goals. Target annual incentive bonuses are set at the beginning of
the year and are conditioned on the achievement of a threshold level of
operating profit. If the threshold is reached, the amount of each bonus relative
to the target may vary based on individual performance.
Long-term compensation consists of stock options. Options are granted
in order to align more closely the interests of executives and shareholders by
creating the opportunity for executives to develop a significant equity interest
in the Company and because the potential value of the option is tied directly to
increases in the fair market value of the Company's common stock during the term
of the option. Mr. Feil, the Company's Chairman and largest stockholder, is a
member of the Stock Option Committee and is not eligible to receive stock
options.
1996 Compensation
The Company's operating results, including operating results for prior
periods, influenced decisions regarding executive compensation during fiscal
year 1996. Increased levels of competition and a maturing market for the
Company's principal products have exerted substantial pressure on the Company's
operating results. Decisions regarding executive compensation during fiscal year
1996 were based upon individual and Company performance and the need to provide
incentives to improve the Company's financial performance and increase
shareholder value. These factors were equally applicable to CEO compensation
during fiscal year 1996.
The Executive Compensation Committee:
Luke P. La Valle, Jr.
Joseph M. O'Donnell
J. Stephen Vanderwoude
The Stock Option Committee:
Thomas E. Feil
Brian S. North
A. Eugene Sapp, Jr.
<PAGE>
Compensation Committee Interlocks and Insider Participation
Messrs. La Valle, O'Donnell and Vanderwoude comprise the Executive Compensation
Committee. Messrs. Feil, North and Sapp comprise the Stock Option Committee.
Messrs. La Valle, Lenagh and Vanderwoude comprise the Audit Committee. Mr. Feil
is an officer and employee of the Company, but is not eligible to receive stock
options while serving on the Stock Option Committee.
PERFORMANCE GRAPH
The following graph sets forth total shareowner return (stock price
plus dividends, assuming dividend reinvestment) on a $100 investment in each of
the following: (i) the Company's Common Stock, (ii) U.S. NASDAQ Stock Market
Index and (iii) the NASDAQ Telecommunications Index, for the five-year period
commencing on November 1, 1991 and ended October 31, 1996.
COMPARISON OF FIVE YEAR TOTAL RETURN
AMONG V BAND CORPORATION, NASDAQ US, &
NASDAQ TELECOMMUNICATIONS INDEX
[GRAPHIC-GRAPH PLOTTED TO POINTS BELOW]
<TABLE>
<CAPTION>
V BAND CORP.
STOCK PERFORMANCE DATA
COMPANY 1991 1992 1993 1994 1995 1996
- ------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NASDAQ INDEX 100 113 145 146 197 232
NASDAQ TELECOMMUNICATIONS INDEX 100 107 213 179 193 211
V BAND CORPORATION 100 118 147 129 68 61
</TABLE>
<PAGE>
1. ELECTION OF A BOARD OF DIRECTORS
Seven directors are to be elected at the meeting for a term of office
which will expire upon the 1998 Annual Meeting of Shareholders, or at such later
date as each director's successor is elected and shall qualify. All current
members of the Board are nominees for election. Information regarding the
nominees is set forth under "Directors and Executive Officers" above. The term
of office of all present directors will expire on May 14, 1997, or at such later
date as each director's successor is elected and shall qualify.
The Board of Directors will consider shareholders' recommendations for
Board of Directors nominations for the 1998 Annual Meeting of Shareholders if
made in writing. The proposed nominee's written consent and sufficient
background information on the candidate must be included to enable the Board of
Directors to make proper judgments as to his or her qualifications.
Recommendations should be addressed to the Chief Executive Officer at the
Company's headquarters and received no later than January 15, 1998.
It is the intention of the persons named as proxies to vote the shares
to which the proxy relates FOR the election of the persons nominated as
directors unless instructed to the contrary. The affirmative vote of those
shareholders of record holding a plurality of the issued and outstanding shares
of Common Stock present in person or represented by proxy and voting at the
meeting (excluding abstentions and broker non-votes, which are not deemed
present and voting for this purpose) is required to elect the persons nominated.
The Board recommends that shareholders vote FOR the nominees for
director.
2. APPROVAL OF THE RETENTION OF INDEPENDENT AUDITORS
The Board of Directors has approved the retention of Deloitte & Touche
LLP as the Company's independent auditors for the 1997 fiscal year. Although
shareholder ratification is not required, the Board of Directors has directed
that such appointment be submitted to the shareholders of the Company for
ratification at the Annual Meeting. In addition, the Board of Directors in its
discretion may direct the appointment of a new independent accounting firm at
any time during the year if the Board believes that such change is in the best
interests of the Company and its shareholders. Deloitte & Touche LLP served as
the Company's independent public auditors for the 1996 fiscal year.
It is anticipated that representatives of Deloitte & Touche LLP will be
present at the Annual Meeting and will have an opportunity to make a statement
if they desire to do so, and to respond to any appropriate inquiries from
shareholders.
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock present and voting at the meeting (excluding
abstentions and broker non-votes, which are not deemed present and voting for
this purpose) is necessary for the adoption of the proposal. If the shareholders
do not ratify the appointment of Deloitte & Touche LLP, the Board of Directors
may reconsider the appointment.
The Board recommends that shareholders vote FOR approval of the
retention of Deloitte & Touche LLP.
<PAGE>
3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE STOCK COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS (1997)
The Board of Directors has adopted, subject to shareholder approval,
the Stock Compensation Plan for Non-Employee Directors (1997) (the "Directors'
Plan"), an amendment and restatement of the Company's Stock Compensation Plan
for Non-Employee Directors (the "1996 Plan"). The major change to the 1996 Plan
is to increase the number of shares of Common Stock available for issuance under
the 1996 Plan from 25,000 to 150,000.
Background
On September 23, 1996, the Company adopted the 1996 Plan to provide an
alternative form of compensation for the Company's Directors. The terms of the
1996 Plan permit the Company's directors to elect to receive the Company's
Common Stock in lieu of cash for their fees for their services as directors. The
number of shares of Common Stock which may be issued under the 1996 Plan is
limited to 25,000.
Reasons for the Amendment
The proposed amendment to the 1996 Plan will provide a means to more
closely align the interests of the Company's directors with the interests of its
shareholders.
Summary of Amended and Restated Plan
The descriptions of the Directors' Plan set forth above and below are
summaries, do not purport to be complete, and are qualified in their entirety by
reference to the provisions of the Directors' Plan, a copy of which is attached
hereto as Exhibit A.
Purposes
The purpose of the Directors' Plan is to attract and retain outstanding
non-employee directors by enabling them to participate in the Company's growth
by electing to receive all or a portion of director compensation in shares of
the Company's Common Stock.
Administration
The Directors' Plan will be administered and interpreted by the Board
of Directors.
Participation
Non-employee members of the Board of Directors are eligible to
participate in the Directors' Plan.
Authorized Shares
The aggregate number of shares of Common Stock reserved for issuance
under the Directors' Plan is 150,000 shares, subject to adjustments as described
below.
<PAGE>
Adjustments
The Directors' Plan provides that the Board of Directors may make such
equitable changes or adjustments as it deems necessary to the maximum number or
class of shares available for issuance under the Directors' Plan, and the number
and class of shares to be delivered thereunder, in the event that the Board of
Directors determines that adjustment is appropriate in order to prevent dilution
or enlargement of the rights of participants in the event of any reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, spin off or similar corporate transaction.
Exercise of Election
Prior to November 1, 1997, each non-employee director may elect to
receive all or a portion of the fees payable to him or her for services as a
director in shares of Common Stock rather than cash. Any such election for such
compensation to be received with respect to services prior to November 1, 1997
may be made by providing the Company's secretary with notice of such election.
Such shares shall be delivered to each director making such election on the
approximate date the cash compensation would otherwise be payable to such
director.
For each fiscal year commencing on or after November 1, 1997, each
non-employee director may elect to receive shares of Common Stock equal in value
to up to 100% of the fees payable to him or her for services as a director
during such fiscal year in lieu of payment of such percentage of fees in cash.
Any such election shall be irrevocable and shall be made in writing no later
than the last day of the preceding fiscal year. Such shares shall be delivered
to each director making such election by the end of the fiscal year for which
the election is made.
Term of Plan
The Directors' Plan will remain in effect until October 31, 2007,
unless sooner terminated by the Board of Directors.
Amendment
The Board of Directors may alter, amend, suspend, or terminate the
Directors' Plan at any time except that no amendment which requires shareholder
approval under New York law, under the rules of any securities exchange on which
the shares may be listed, or in order for the Directors' Plan to continue to
comply with Rule 16b-3 shall be effective unless the same shall be approved by
the requisite approval of the Company's shareholders.
New Plan Benefits
All non-employee directors of the Company will be eligible to
participate in the Directors' Plan. There are currently six non-employee
directors of the Company. It is not possible to predict the number of shares of
Common Stock that will be issued under the Plan.
Action by Shareholders
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock present and voting at the annual meeting
(excluding abstentions and broker non-votes, which are not deemed present and
voting for this purpose) is necessary for the approval of the proposal.
<PAGE>
The Board of Directors recommends shareholders vote FOR adoption of the
Amended and Restated Stock Compensation Plan For Non-Employee Directors (1997).
4. OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at
the meeting. However, if any other business properly comes before the meeting,
it is the intention of the persons named in the enclosed proxy to vote on such
matters in accordance with their judgment.
DATE OF RECEIPT OF SHAREHOLDER PROPOSALS
FOR PRESENTATION AT THE 1998 ANNUAL MEETING
Any proposal that a shareholder wishes to present for consideration at
the 1998 Annual Meeting must be received by the Company at its principal
executive offices no later than December 15, 1997, for evaluation as to
inclusion in the Proxy Statement in connection with such meeting.
You are urged to promptly vote, sign, date and return the enclosed
proxy in the postage-paid envelope provided whether or not you currently plan to
attend the meeting in person.
By Order of the Board of Directors
THOMAS E. FEIL
Chairman and Chief Executive Officer
Dated: April 14, 1997
<PAGE>
EXHIBIT A TO PROXY STATEMENT
AMENDED AND RESTATED STOCK COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS (1997)
This is the Amended and Restated Stock Compensation Plan for Non-Employee
Directors (1997) of V Band Corporation (the "Plan").
1. Purpose. The purpose of the Plan is to attract and retain
outstanding non-employee directors for V Band Corporation (the "Company") by
enabling them to participate in the Company's growth by electing to receive all
or a portion of director compensation in shares of the Company's Common Stock.
2. Administration.
(a) Board of Directors. The Plan shall be administrated by the
Board of Directors of the Company (the "Board").
(b) Rules and Procedures. The Board may make such rules and
establish such procedures for the administration of the Plan as it deems
appropriate to carry out the purpose of the Plan. The interpretation and
application of the Plan or of any rule or procedure, and any other matter
relating to or necessary to the administration of the Plan, shall be determined
in the sole discretion of the Board, and any such determination shall be final
and binding on all persons. All determinations of the Board shall be made by a
majority of its members at a meeting duly called pursuant to the provisions of
the Company's By-laws. The Board may delegate to one or more of its members or
to one or more agents such administrative duties as it may deem advisable.
(c) Costs and Expenses. All costs and expenses involved in
administering the Plan shall be borne by the Company.
(d) Eligibility. Eligibility for participation in the Plan is
limited to persons serving as directors of the Company who are not employees of
the Company or any subsidiary.
(e) Capital Adjustments. In the event that the Board shall
determine that any reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, spin-off or a similar
corporate transaction affects the shares of stock to be delivered hereunder such
that an adjustment is appropriate in order to prevent dilution or enlargement of
the rights of non-employee directors under the Plan, the Board shall make such
equitable changes or adjustments as it deems necessary to the maximum number or
class of shares available under the Plan, and the number or class of shares of
stock to be delivered hereunder.
3. Stock Available for Plan. Shares of stock available for issuance
pursuant to the Plan may be either authorized but unissued shares or shares
which have been or may be reacquired by the Company, including treasury shares
of the Company's Common Stock. An aggregate of 150,000 shares of the Company's
Common Stock shall be made available for issuance under the Plan.
<PAGE>
4. Election to Receive Shares.
(a) Exercise of Election.
(i) Prior to November 1, 1997. At any time prior to the date
cash compensation would otherwise be payable to a non-employee director for his
or her services as a director (such compensation includes annual retainer fees,
fees for service as a member of a committee of the Board of Directors, and any
fees earned for attendance at a meeting, and is hereinafter referred to as
"Compensation"), prior to November 1, 1997 such non-employee may make an
election to have all or a portion of his or her Compensation paid by the Company
by means of the issuance of the Company's Common Stock rather than cash. Such
election shall be made by providing the Company's Secretary with notice of such
election, which may, but need not, be in writing (the "Notice of Election"). Any
such election made by a non-employee director shall be effective with respect to
all Compensation payable to such non-employee director after receipt of the
Notice of Election by the Company's Secretary and prior to November 1, 1997
until such time as such non-employee director has provided a new Notice of
Election or has notified the Company that he or she no longer wishes to have all
or a portion of the Compensation paid by the Company by means of the issuance of
the Company's Common Stock.
(ii) Fiscal Year 1998 and Thereafter. For each fiscal year of
the Company commencing on or after November 1, 1997, each non-employee director
may elect to have all or a portion of his or her Compensation paid by the
Company during such fiscal year by means of the issuance of the Company's Common
Stock rather than cash. Any such election shall be irrevocable and shall be made
in writing no later than the last day of the preceding fiscal year. Such shares
shall be delivered to each director making such election by the end of the
fiscal year for which the election is made.
(b) Determination of Number of Shares. The number of shares of the
Company's Common Stock to be issued to a non-employee director who has delivered
a Notice of Election pursuant to this Plan shall be determined by dividing (i)
the amount of Compensation to be paid by means of the issuance of the Company's
Common Stock, by (ii) the Fair Market Value of the Company's Common Stock on the
Payment Date. For the purposes of this Plan (i) the term "Fair Market Value"
shall mean the last sale price for the day for which the Fair Market Value is to
be determined based upon quotations in the over-the-counter market as reported
by NASDAQ and (ii) the term "Payment Date" shall mean the date the Compensation
would have otherwise been paid in cash. The resulting number of shares shall be
rounded to the nearest whole share.
(c) Issuance of Shares. By the last day of each fiscal year of the
Company, a certificate or certificates representing the number of shares to be
issued to each non-employee director shall be registered in the name of such
non-employee director and shall be delivered to such non-employee director at
his or her address as it appears in the Company's records. Such non-employee
director shall not be considered, or have any of the rights and privileges of, a
shareholder of the Company with respect to such shares issuable to him or her
unless and until certificates for such shares shall have been registered and
issued to him or her.
<PAGE>
5. Listing, Registration, and Legal Compliance. Each issuance of shares
of the Company's Common Stock pursuant to this Plan shall be subject to the
requirement that if at any time counsel to the Company shall determine that the
listing, registration or qualification of such shares upon any securities
exchange or under any foreign, federal or state securities law or other law or
regulation, or the consent or approval of any governmental body or the taking or
any other action to comply with or otherwise with respect to any such law or
regulation, is necessary or desirable as a condition to or in connection with
such issuance of shares of the Company's Common Stock, no such issuance may be
made or implemented unless such listing, registration, qualification, consent,
approval or other action shall have been effected or obtained free of any
conditions not acceptable to the Company.
6. No Obligation to Nominate. Nothing contained in this Plan shall be
deemed to create any obligation on the part of the Board of Directors to
nominate any director for re-election by the Company's shareholders.
7. Amendment; Termination. The Board may at any time and from time to
time alter, amend, suspend, or terminate the Plan in whole or in part; provided,
however, no amendment which requires shareholder approval under applicable state
laws, under the rules of any securities exchange on which the shares may be
listed, or in order for the Plan to continue to comply with Rule 16b-3 shall be
effective unless the same shall be approved by the requisite vote of the
shareholders` of the Company.
8. Term of Plan. The Plan shall become effective on September 23, 1996
and shall terminate on October 31, 2007, unless sooner terminated by the Board.
9. No Transfer of Rights. No right under the Plan shall be transferable
or otherwise subject to anticipation, sale, assignment, pledge, encumbrance or
charge, except by will or the law of descent and distribution.
<PAGE>
REVOCABLE PROXY
VBAND CORPORATION
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
1997 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas E. Feil and Mark R. Hahn, and each of
them, with power of substitution, as proxies, to appear and vote, as designated
below, all of the shares of the Common Stock, $.01 par value per share, of V
Band Corporation (the "Company"), held of record by the undersigned on March 31,
1997, at the Annual Meeting of Shareholders to be held at 10:00 a.m. on May 14,
1997, and any adjournments thereof.
1. Election of Directors:
Thomas E. Feil, Luke P. La Valle, Jr., Thomas H. Lenagh, Brian S. North, Joseph
M. O'Donnell, A. Eugene Sapp, Jr., J. Stephen Vanderwoude
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
INSTRUCTION: To withhold your vote for any nominee(s), mark "For All Except" and
write that nominee's name on the line below
- --------------------------------------------------------------------------------
2. Approve the retention of Deloitte & Touche LLP as independent auditors for
the Company for the 1997 fiscal year:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approve the adoption of the Company's Amended and Restated Stock Compensation
Plan for Non-Employee Directors (1997):
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Other Matters:
In their discretion the proxies are authorized to vote upon such other
business as may legally come before the meeting, although management of the
Company was not aware on April 14, 1997 of any other business to be
considered; and providing that in no event shall such discretionary authority
extend to my vote for the election of any person to any office for which a
nominee is not named in the accompanying proxy statement.
The shares represented by this proxy will be voted in the manner directed. In
the absence of any direction, the shares will be voted FOR each nominee listed
in proposal 1, FOR proposal 2, FOR proposal 3 and at the discretion of the
proxies as to other matters.
Please be sure to sign and date this Proxy in the box below.
_____________________
Date
_____________________________
Stokholder sign above
_____________________________
Co-holder (if any) sign above
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
V BAND CORPORATION
565 Taxter Road
Elmsford, New York 10523
PLEASE ACT PROMPTLY
MARK, SIGN, DATE & MAIL YOUR PROXY CARD TODAY
WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT. IF YOU ATTEND, YOU MAY VOTE IN
PERSON IF YOU DESIRE.
