<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Global Village Communications, Inc.
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
GLOBAL VILLAGE COMMUNICATION, INC.
1144 EAST ARQUES AVENUE
SUNNYVALE, CALIFORNIA 94086
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 31, 1997
To the Stockholders of Global Village Communication, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Global
Village Communication, Inc., a Delaware corporation (the "Company"), will be
held on Thursday, July 31, 1997 at 9:00 a.m. local time at the Company's
headquarters located at 1144 East Arques Avenue, Sunnyvale, California, for the
following purposes:
1. To elect six (6) directors to hold office until the 1998 Annual Meeting
of Stockholders.
2. To approve an amendment to the 1991 Stock Option Plan to increase the
number of shares of Common Stock authorized for issuance thereunder by
500,000 shares.
3. To approve an amendment to the Employee Stock Purchase Plan to increase
the number of shares of Common Stock authorized for issuance thereunder
by 100,000 shares.
4. To ratify the selection of KPMG Peat Marwick LLP as independent auditors
of the Company for its fiscal year ending March 31, 1998.
5. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on June 10, 1997, as
the record date for the determination of stockholders entitled to notice of and
to vote at this Annual Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ Neil Selvin
Neil Selvin
President and Chief Executive Officer
Sunnyvale, California
June 20, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU STILL MAY VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
GLOBAL VILLAGE COMMUNICATION, INC.
1144 EAST ARQUES AVENUE
SUNNYVALE, CALIFORNIA 94086
------------------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Global Village Communication, Inc., a Delaware corporation (the "Company"), for
use at the Annual Meeting of Stockholders to be held on July 31, 1997, at 9:00
a.m. local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at the Company's principal
executive offices located at 1144 East Arques Avenue, Sunnyvale, California. The
Company intends to mail this proxy statement and accompanying proxy card on or
about June 20, 1997, to all stockholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of the Company.
No additional compensation will be paid to directors, officers or other regular
employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on June 10,
1997 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on June 10, 1997, the Company had outstanding and entitled to
vote 16,933,950 shares of Common Stock. Each holder of record of Common Stock on
such date will be entitled to one vote for each share held on all matters to be
voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. The proxy may be revoked by filing
with the Secretary of the Company at the Company's principal executive office,
1144 East Arques Avenue, Sunnyvale, California 94086, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
<PAGE> 4
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received by the Company
not later than February 20, 1998 in order to be included in the proxy statement
and proxy relating to that Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
There are six nominees for the six Board positions presently authorized.
Each director to be elected will hold office until the next annual meeting of
stockholders and until his successor is elected and has qualified or until such
director's earlier death, resignation or removal. All of the nominees listed
below are currently directors of the Company.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the six nominees named below. In the event
that any nominee should be unavailable for election as a result of an unexpected
occurrence, such shares will be voted for the election of such substitute
nominee as management may propose. Each person nominated for election has agreed
to serve if elected, and management has no reason to believe that any nominee
will be unable to serve.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
NOMINEES
The names of the nominees and certain information about them are set forth
below:
Neil Selvin, age 44, has served as President and Chief Executive Officer
and director of the Company since March 1993. From February 1990 to March 1993,
he was Director of Marketing at Apple Computer for the PowerBook product family
and prior to that for Apple's peripherals product line. From 1985 to 1990, Mr.
Selvin was employed by Ampex Corporation, a manufacturer of electronics
products, most recently as Chief Operating Officer of its Video Systems division
and also as business unit general manager and in several marketing management
positions. Prior to joining Ampex Corporation, Mr. Selvin held marketing, sales
and technical management positions at Varian Associates and Apollo Lasers. Mr.
Selvin is also a director of two privately held corporations, GlobalCenter, Inc.
and AirMedia, Inc. Mr. Selvin received a B.A. in physics and mathematics from
Pomona College, an M.S. in physics from Brown University, and an M.B.A. from
Harvard Business School.
Leonard A. Lehmann, age 42, has served as Chairman of the Board of the
Company since its founding in June 1989. From January 1993 to March 1996, Mr.
Lehmann served as Vice President, Advanced Products and has evaluated new
technologies and performed strategic planning for the Company. From March 1992
to January 1993, he served as Vice President, Engineering of the Company. From
June 1989 to March 1992, he served as the Company's Chief Executive Officer. Mr.
Lehmann was also a founder of DigiRad Corporation, a medical imaging company,
and GreenSpring Computers, Inc., an industrial computer manufacturer. Mr.
Lehmann received a B.S. in electrical engineering from Cornell University, and
an M.S. and a Ph.D. in electrical engineering from Stanford University.
Kevin R. Compton, age 38, has been a director of the Company since July
1992. Since December 1990, Mr. Compton has been a partner of Kleiner Perkins
Caufield & Byers, a venture capital firm. From May 1985 to December 1990, Mr.
Compton was the Vice President and General Manager of the network systems team
at Businessland, Inc., a computer retailer, and at AmeriSource Corporation prior
to its acquisition by Businessland. Mr. Compton is also a director of several
privately held companies.
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Eugene Eidenberg, age 57, has been a director of the Company since July
1996. Mr. Eidenberg is an Advisory Director at Hambrecht & Quist working in the
telecommunications services sector. Before joining Hambrecht & Quist in 1995,
Mr. Eidenberg held several executive positions at MCI until 1994, where he most
recently was Executive Vice President and Group Executive for MCI's
international business. From 1990 to 1992, he was Senior Vice President for
regulatory and public policy matters, President of the Pacific Division and
Executive Vice President of the company's strategic planning and corporate
development functions. From 1987 to 1990, Mr. Eidenberg served as President and
CEO of Macrovision Corporation, a privately-held video technology company in the
Silicon Valley. He currently chairs the Board of Directors of publicly-traded
LXY, a biotechnology company.
Kenneth A. Goldman, age 48, has been a director of the Company since July
1996. Mr. Goldman has been Senior Vice President, Finance and Chief Financial
Officer at @Home Corp. since March 1994. From July 1992 through March 1994, he
served as Vice President, Finance and Chief Financial Officer at Sybase, Inc.
Before joining Sybase, Inc., from September 1989 to July 1992, Mr. Goldman
served as Vice President, Finance and Administration and Chief Financial Officer
for Cypress Semiconductor, Inc., a semiconductor manufacturer. Mr. Goldman is a
director of the Baystone Software Company and is an advisory board member of
Qualix Corporation and 4th Network.
Jeremy Jaech, age 42, has been a director of the Company since September,
1996. Mr. Jaech is also a founding member of Visio Corporation and he has served
as President, Chief Executive Officer and Chairman of the Board of Directors of
Visio Corporation from October of 1990 to the present. Mr. Jaech is also
currently a member of the Board of Directors of Pivotal Software, Inc., a
position he has held since August of 1996.
The Company's directors will be elected at each annual stockholders'
meeting and will serve a term of one year or until their respective successors
are elected or until death, resignation or removal. Officers are appointed by,
and serve at the discretion of, the Board of Directors. There are no family
relationships among any directors or executive officers of the Company.
BOARD COMMITTEE AND MEETINGS
During the fiscal year ended March 31, 1997, the Board of Directors held 8
meetings. The Board has an Audit Committee, a Compensation Committee, a
Non-Officer Stock Option Committee, and a Nominating Committee.
The Audit Committee, which consists of Kevin Compton and Kenneth Goldman,
met one time during Fiscal 1997. The Audit Committee makes recommendations to
the Board regarding the selection of independent auditors, reviews the results
and scope of the audit and other services provided by the Company's independent
auditor, reviews the Company's balance sheet, statement of operations and cash
flows and reviews and evaluates the Company's internal control functions.
The Compensation Committee, which consists of Eugene Eidenberg, Kenneth
Goldman and Jeremy Jaech, met two times during Fiscal 1997. The Compensation
Committee administers the Company's 1991 Stock Option Plan and Employee Stock
Purchase Plan and makes recommendations to the Board concerning salaries and
incentive compensation for employees and consultants of the Company.
The Non-Officer Stock Option Committee consists of Kevin Compton, Leonard
Lehmann and Neil Selvin. The Non-Officer Stock Option Committee makes grants of
stock options under the Company's 1991 Stock Option Plan. The Non-Officer Stock
Option Committee met 8 times during fiscal 1997.
During the period of the 1997 fiscal year in which they served, Michael
Moritz and David Ring, former directors of the Company, each attended all of the
meetings of the Board and of the committee on which they served. During fiscal
1997, each other Board member attended 75% or more of the aggregate of the
meetings of the Board and of the committees on which he served that were held
during the period for which he was a director or committee member.
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<PAGE> 6
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
The Company believes that during the 1997 fiscal year all Section 16(a)
filing requirements applicable to its officers, directors and 10% stockholders
were complied with.
To its knowledge, the Company knows of no late Section 16 filings with the
following exceptions: Kevin Compton filed a late form 5 on May 14, 1997 for
fiscal 1996.
PROPOSAL 2
AMENDMENT OF THE 1991 STOCK OPTION PLAN
The Company's 1991 Stock Option Plan (the "Option Plan") was approved by
the Board of Directors and the stockholders in September 1991.
On April 25, 1997, the Board approved an amendment to the Option Plan
increasing the number of shares reserved for issuance by an additional 500,000
shares for an aggregate of 5,600,000 shares reserved for issuance under the
Option Plan.
As of June 10, 1997, options to purchase 2,119,642 shares had been
exercised, options to purchase 2,558,963 shares were outstanding on a weighted
average per share price of $2.56 and 421,395 shares remained available for
future grants under the Option Plan.
The affirmative vote of the holders of a majority of the shares
represented, in person or by proxy, and voting at the Annual Meeting (which
shares voting affirmatively also constitute at least a majority of the required
quorum) will be required to approve the amendment to the Option Plan.
Abstentions will be counted toward the number of shares represented and voting
at the Annual Meeting. Unless otherwise instructed, the proxy holders will vote
the proxies "FOR" the amendment to the Option Plan.
DESCRIPTION OF THE 1991 STOCK OPTION PLAN, AS AMENDED.
THE 1991 STOCK OPTION PLAN
The Company's 1991 Stock Option Plan (the "Option Plan") was adopted by the
Board of Directors in September 1991 and amended in December 1993 and July 1996.
The purpose of the Option Plan is to attract and retain qualified personnel, to
provide additional incentives to employees, officers, directors and consultants
of the Company and to promote the success of the Company's business. Pursuant to
the Option Plan, the Company may grant or issue incentive stock options to
employees and officers and supplemental (nonqualified) stock options to
consultants, employees, officers and directors. The stockholders have authorized
a total of 5,100,000 shares of Common Stock (5,600,000 if Proposal No. 2 is
approved) for issuance under the Option Plan.
Although no vesting schedule is required under the Option Plan, options
previously granted under the Option Plan generally have become exercisable at a
rate of 20% to 25% of the shares subject to the option on the first anniversary
of the option grant with the remaining shares subject to the option becoming
exercisable in equal monthly installments over the next three or four years. The
maximum term of a stock option under the Option Plan is ten years, but if the
optionee of an incentive stock option at the time of grant has voting power over
more than 10% of the Company's outstanding capital stock, the maximum term of
the incentive stock option is five years. The exercise price of incentive stock
options granted under the Option plan must be at least equal to 100%, or 110%
with respect to holders of 10% of the voting power of the Company's outstanding
capital stock, of the fair market value of the stock subject to the option on
the date of grant. The exercise price of supplemental stock options granted
under the Option Plan must be at least equal to 85% of
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the fair market value of the stock subject to the option on the date of the
grant. No executive officer or director is eligible to be granted options
covering more than 1,000,000 shares of the Company's Common Stock in any
twelve-month period. The Option Plan provides that in the event of any change in
control of the Company, other than a change in control approved by a majority of
the Company's Board of Directors, the vesting of all options issued pursuant to
the Option Plan, including those granted to the Named Executive Officers, shall
accelerate and become immediately exercisable.
The Option Plan may be amended at any time by the Board, although certain
amendments require stockholder approval. The Option Plan will terminate in
September 2001 unless earlier terminated by the Board.
Tax Treatment
The following discussion of the tax treatment of stock options relates
solely to federal income taxes.
Incentive Stock Options. Incentive stock options under the Option Plan are
intended to be eligible for the favorable federal income tax treatment accorded
"incentive stock options" under the Internal Revenue Code of 1986, as amended
(the "Code").
Generally, there are no regular federal income tax consequences to the
optionee or the Company by reason of the grant or exercise of an incentive stock
option. However, the exercise of an incentive stock option may subject the
optionee to alternative minimum tax.
If an optionee holds stock acquired through exercise of an incentive stock
option for more than two years from the date on which the option is granted and
more than one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of such
stock will be long-term capital gain or loss. Generally, if the optionee
disposes of the stock before the expiration of either of these holding periods
(a "disqualifying disposition"), at the time of disposition the optionee will
realize taxable ordinary income equal to the lesser of (i) the excess of the
stock's fair market value on the date of exercise over the exercise price, and
(ii) the amount realized upon the disposition over the exercise price. The
optionee's additional gain, or any loss upon the disqualifying disposition, will
be a capital gain or loss which will be long-term or short-term depending on
whether the stock was held for more than one year. Generally, capital gains
currently are subject to lower tax rates than ordinary income. The maximum
capital gains rate for federal income tax purposes currently is 28% while the
maximum ordinary income rate is effectively 39.6%. Different rules may apply to
optionees who acquire stock subject to certain repurchase options of the Company
or who are subject to Section 16(b) of the Exchange Act.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company generally will be entitled (subject to
the requirement of reasonableness and the provisions of Section 162(m) of the
Code) to a corresponding business expense deduction in the tax year in which the
disqualifying disposition occurs.
Nonstatutory Stock Options. Nonstatutory stock options granted under the
Option Plan generally have the following federal income tax consequences:
There are no tax consequences to the optionee or the Company by reason of
the grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock
option, the optionee normally will recognize taxable ordinary income equal to
the excess of the stock's fair market value on the date of exercise over the
option exercise price. Generally, with respect to employees, the Company is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness and the provisions of Section 162(m) of the Code, the Company
generally will be entitled to a business expense deduction equal to the taxable
ordinary income realized by the optionee. Upon disposition of the stock, the
optionee will recognize a capital gain or loss equal to the difference between
the selling price and the sum of the amount paid for such stock plus any amount
recognized as ordinary income upon exercise of the option. Such gain or loss
will be long or short-term depending on whether the stock was held for more than
one year. Different rules may apply to optionees who acquire stock subject to
certain repurchase options of the Company or who are subject to Section 16(b) of
the Exchange Act.
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Potential Limitation on Company Deductions. As part of the Omnibus Budget
Reconciliation Act of 1933, the U.S. Congress amended the Code to add Section
162(m) which denies a deduction to any publicly held corporation for
compensation paid to certain employees in a taxable year to the extent that
compensation exceeds $1 million for a covered employee. It is possible that
compensation attributable to stock options, when combined with all other types
of compensation received by a covered employee from the Company, may cause this
limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with proposed Treasury regulations issued under Code Section 162(m),
compensation attributable to stock options will qualify as performance-based
compensation, provided that: (i) the option plan contains a per-employee
limitation on the number of shares for which options may be granted during a
specific period; (ii) the per-employee limitation is approved by the
stockholders; (iii) the option is granted by a compensation committee comprised
solely of "outside directors" and (iv) either the exercise price of the option
is no less than the fair market value of the stock on the date of grant or the
option is granted (or exercisable) only upon (as certified by the compensation
committee) the achievement of an objective performance goal established by the
compensation committee while the outcome is substantially uncertain.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
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PROPOSAL 3
AMENDMENT OF THE EMPLOYEE STOCK PURCHASE PLAN
The Company's Employee Stock Purchase Plan (the "Purchase Plan") was
adopted by the Board of Directors and approved by the stockholders of the
Company in December 1993.
On April 25, 1997, the Board approved an amendment to the Purchase Plan
increasing the number of shares reserved for issuance by an additional 100,000
shares for an aggregate of 400,000 shares reserved for issuance under the
Purchase Plan.
As of June 10, 1997, 193,463 shares have been sold to employees under the
Purchase Plan.
The affirmative vote of the holders of a majority of the shares
represented, in person or by proxy, and voting at the Annual Meeting (which
shares voting affirmatively also constitute at least a majority of the required
quorum) will be required to approve the amendment to the Purchase Plan.
Abstentions will be counted toward the number of shares represented and voting
at the Annual Meeting. Unless otherwise instructed, the proxy holders will vote
the proxies "FOR" the amendment to the Purchase Plan.
SUMMARY OF THE PURCHASE PLAN
General. The purpose of the Purchase Plan is to provide employees with an
opportunity to purchase Common Stock of the Company through payroll deductions.
Administration. The Purchase Plan may be administered by the Board of
Directors (the "Board") or a committee appointed by the Board. All questions of
interpretation or application of the Purchase Plan are determined by the Board
or its appointed committee, and its decisions are final, conclusive and binding
upon all participants.
Eligibility. Each employee of the Company (including officers), whose
customary employment with the Company is at least twenty (20) hours per week and
more than five (5) months in any calendar year, is eligible to participate in an
Offering Period (as defined below); provided, however, that no employee shall be
granted an option under the Purchase Plan (i) to the extent that, immediately
after the grant, such employee would own 5% of either the voting power or value
of the stock of the Company, or (ii) to the extent that his or her rights to
purchase stock under all employee stock purchase plans of the Company accrues at
a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such option is
granted) for each calendar year. Eligible employees become participants in the
Purchase Plan by filing with the Company a subscription agreement authorizing
payroll deductions prior to the beginning of each Offering Period unless a later
time for filing the subscription agreement has been set by the Board.
Participation in an Offering. The Purchase Plan is implemented by offering
periods lasting not more than twenty-seven (27) months (an "Offering Period").
Common Stock may be purchased under the Purchase Plan on each purchase date, as
defined in the relevant Offering (a "Purchase Date"), unless the participant
withdraws or terminates employment earlier. The Board may change the Purchase
Dates or the length or date of commencement of an Offering Period. To
participate in the Purchase Plan, each eligible employee must authorize payroll
deductions pursuant to the Purchase Plan. Such payroll deductions may not exceed
10% of a participant's compensation. Once an employee becomes a participant in
the Purchase Plan, the employee will automatically participate in each
successive Offering Period until such time as the employee withdraws from the
Purchase Plan or the employee's employment with the Company terminates. At the
beginning of each Offering Period, each participant is automatically granted
options to purchase shares of the Company's Common Stock on each Purchase Date
during the Offering Period. Options are exercised on each Purchase Date to the
extent of the payroll deductions accumulated. Options expire on the relevant
Purchase Date or upon termination of employment, whichever is earlier. The
maximum number of shares subject to option is specified by the Board each
Offering Period.
Purchase Price, Shares Purchased. Shares of Common Stock may be purchased
under the Purchase Plan at a price not less than 85% of the lesser of the fair
market value of the Common Stock on (i) the first
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day of the Offering Period or (ii) the Purchase Date. The number of shares of
Common Stock a participant purchases on each Purchase Date is determined by
dividing the total amount of payroll deductions withheld from the participant's
compensation during that Purchase Period by the purchase price.
Termination of Employment. Termination of a participant's employment for
any reason, including disability or death, cancels his or her option and
participation in the Purchase Plan immediately. In such event, the payroll
deductions credited to the participant's account will be returned to him or her
or, in the case of death, to the person or persons entitled thereto as provided
in the Purchase Plan.
Adjustment Upon Change in Capitalization. In the event that the stock of
the Company is changed by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other change in the capital structure
of the Company effected without the receipt of consideration, appropriate
proportional adjustments shall be made in the number and class of shares of
stock subject to the Purchase Plan, the number and class of shares of stock
subject to options outstanding under the Purchase Plan, and the exercise price
of any such outstanding options. Any such adjustment shall be made by the Board,
whose determination shall be conclusive.
In the event of a (i) a dissolution or liquidation of the Company; (ii) a
merger or consolidation in which the Company is not the surviving corporation;
(iii) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property; or (iv) any
other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, then, as determined by the
Board in its sole discretion, any surviving corporation may assume outstanding
rights or substitute similar rights for those under the Plan, such rights may
continue in full force and effect, or participants' accumulated payroll
deductions may be used to purchase Common Stock immediately prior to the
transaction described and the participants' rights under the current Offering
terminated.
Amendment and Termination of the Plan. The Board of Directors may at any
time terminate or amend the Purchase Plan. No amendment shall be effective
unless it is approved by the holders of a majority of the votes cast at a duly
held shareholders' meeting, if such amendment would require shareholder approval
in order to comply with Section 423 of the Code. The Purchase Plan will
terminate in 2003.
Withdrawal. Generally, a participant may withdraw from an Offering Period
at any time without affecting his or her eligibility to participate in future
Offering Periods. However, once a participant withdraws from a particular
offering, that participant may not participate again in the same offering.
Federal Tax Information for Purchase Plan. The Purchase Plan, and the right
of participants to make purchases thereunder, is intended to qualify under the
provisions of Sections 421 and 423 of the Code. Under these provisions, no
income will be taxable to a participant until the shares purchased under the
Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition
of the shares, the participant will generally be subject to tax and the amount
of the tax will depend upon the holding period. If the shares are sold or
otherwise disposed of more than two (2) years from the first day of the Offering
Period or more than one (1) year from the date of transfer of the stock to the
participant, then the participant will recognize ordinary income measured as the
lesser of (i) the excess of the fair market value of the shares at the time of
such sale or disposition over the purchase price, or (ii) an amount equal to 15%
of the fair market value of the shares as of the first day of the Offering
Period. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of this holding
period, the participant will recognize ordinary income generally measured as the
excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company is not entitled to a deduction for amounts taxed
as ordinary income or capital gain to a participant except to the extent of
ordinary income is recognized by participants upon a sale or disposition of
shares prior to the expiration of the holding period(s) described above.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON THE PARTICIPANT AND THE COMPANY WITH RESPECT TO THE SHARES PURCHASED UNDER
THE PURCHASE PLAN. REFERENCE SHOULD BE MADE TO THE
8
<PAGE> 11
APPLICABLE PROVISIONS OF THE CODE. IN ADDITION, THE SUMMARY DOES NOT DISCUSS THE
TAX CONSEQUENCES OF A PARTICIPANT'S DEATH OR THE INCOME TAX LAWS OF ANY STATE OR
FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OR PROPOSAL 3.
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending March 31, 1998 and has further
directed that management submit the selection of independent auditors for
ratification by the stockholders at the Annual Meeting. KPMG Peat Marwick LLP
has been the Company's auditors since November 1992. Representatives of KPMG
Peat Marwick LLP are expected to be present at the Annual Meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
Stockholder ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of KPMG Peat Marwick
LLP to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Audit Committee and the
Board will reconsider whether or not to retain that firm. Even if the selection
is ratified, the Audit Committee and the Board at their discretion may direct
the appointment of different independent auditors at any time during the year if
they determine that such a change would be in the best interests of the Company
and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of KPMG Peat Marwick LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 4.
9
<PAGE> 12
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of May 31, 1997, with respect to: (i)
each person (or group of affiliated persons) who is known by the Company to own
beneficially more than 5% of the Common Stock, (ii) each of the Company's
directors, (iii) each of the Named Executive Officers (as hereinafter defined in
the Summary Compensation Table), and (iv) all directors and executive officers
of the Company as a group. Except as set forth below, the address of each
individual is the address of the Company as set forth herein.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
BENEFICIAL OWNER(1) SHARES TOTAL(2)(3)
----------------------------------------------------- --------- -----------
<S> <C> <C>
KOPP Investment Advisors, Inc........................ 2,903,587 17.2%
6600 France Avenue, Suite 672
Edina, MN 55435
Leonard A. Lehmann(4)................................ 507,985 3.0%
Neil Selvin(5)....................................... 444,809 2.6%
Kevin R. Compton(6).................................. 13,083 *
Eugene Eidenberg..................................... -- *
Kenneth A. Goldman................................... 4,000 *
Jeremy Jaech......................................... -- *
Charles R. Oppenheimer(7)............................ 75,812 *
James Brown(8)....................................... 40,978 *
Marc Linden(9)....................................... 24,996 *
Marsha Raulston(10).................................. 63,000 *
James M. Walker...................................... 18,300 *
Douglas Dennerline................................... 1,159 *
All Directors and Officers as a group (12
persons)(11)....................................... 1,176,663 6.9%
</TABLE>
- ---------------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.
(2) Percentage of Beneficial Ownership is based on 16,932,279 shares of Common
Stock as of May 31, 1997.
(3) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission that deem shares to be beneficially
owned by any person who has or shares voting or investment power with
respect to such shares. Unless otherwise indicated, the persons named in
this table have sole voting and sole investment power with respect to all
shares shown as beneficially owned, subject to community property laws
where applicable. Common Stock subject to options that are currently
exercisable or are exercisable within 60 days of the date of this proxy
statement are deemed to be outstanding and to be beneficially owned by the
person holding such options for the purpose of computing the percentage
ownership of any other person.
(4) Includes 507,985 shares held by Lehmann family trusts.
(5) Includes 138,437 shares subject to stock options exercisable within 60 days
of May 31, 1997.
(6) Includes 8,624 shares subject to stock options exercisable within 60 days
of May 31, 1997.
(7) Includes 53,512 shares subject to stock options exercisable within 60 days
of May 31, 1997.
10
<PAGE> 13
(8) Includes 40,978 shares subject to stock options exercisable within 60 days
of May 31, 1997.
(9) Includes 23,020 shares subject to stock options exercisable within 60 days
of May 31, 1997.
(10) Includes 63,000 shares subject to stock options exercisable within 60 days
of May 31, 1997.
(11) Includes 849,092 shares held by officers and directors or entities
affiliated with officers and directors of the Company and 327,571 shares
subject to stock options held by officers and directors, exercisable within
60 days of May 31, 1997.
SUMMARY COMPENSATION TABLE
The following table shows, as to the Chief Executive Officer, each of the
four most highly compensated executive officers (other than the Chief Executive
Officer) and two former executive officers who would have been among the most
highly compensated officers had such former executive officers been employed by
the Company at the end of the 1997 fiscal year (each, a "Named Executive
Officer") information concerning compensation paid for services to the Company
in all capacities during the fiscal year ended March 31, 1997, as well as the
total compensation paid to each such individual for the Company's previous two
fiscal years (if such person was the Chief Executive Officer or an executive
officer, as the case may be, during any part of such fiscal year).
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
--------------------------------------------- COMPENSATION AWARDS
NAME AND PRINCIPAL OTHER ANNUAL SECURITIES UNDERLYING
POSITION YEAR(1) SALARY($) BONUS($)(1) COMPENSATION($) OPTIONS(#)
- ------------------------- ------- --------- ----------- --------------- ---------------------
<S> <C> <C> <C> <C> <C>
Neil Selvin.............. 1997 275,002 -- -- 375,000(6)
President and 1996 249,976 173,653 -- --
Chief Executive Officer 1995 200,000 104,700 -- 125,000
Charles R. Oppenheimer... 1997 186,018 -- -- 160,000(7)
Vice President and 1996 160,980 93,191 -- --
General Manager, 1995 133,000 50,130 -- --
Products Group
James Brown.............. 1997 153,985 -- 49,934 172,500(8)
Vice President,
Operations 1996 139,994 77,801 -- --
1995 124,000 48,686 -- 20,000
Marc Linden(4)........... 1997 123,081 -- -- 200,000(9)
Vice President, New 1996 -- -- -- --
Business Development 1995 -- -- -- --
Marsha Raulston.......... 1997 130,003 -- -- 150,000(10)
Vice President,
Customer 1996 119,986 63,903 -- --
Satisfaction 1995 109,982 38,006 -- --
James M. Walker(2)....... 1997 131,691 -- -- 25,000
Former Vice President, 1996 158,983 88,354 -- --
Finance and 1995 150,000 51,827 -- --
Chief Financial Officer
Douglas Dennerline(3).... 1997 127,257 -- -- --
Former Vice President, 1996 119,722 77,361 -- 80,000
Sales 1995 79,492 59,715 -- --
</TABLE>
- ---------------
(1) Bonus amounts are reported in the fiscal year in which they are earned and
accrued.
(2) Mr. Walker ceased to be employed by the Company in December 1996.
(3) Mr. Dennerline ceased to be employed by the Company in November 1996.
(4) Mr. Linden joined the Company as Vice President, New Business Development
in June 1996.
(5) Represents a relocation reimbursement.
11
<PAGE> 14
(6) Includes 125,000 option shares granted to replace certain options cancelled
pursuant to repricing. See "Ten-Year Option Repricing Table".
(7) Includes 25,000 option shares granted to replace certain options cancelled
pursuant to repricing. See "Ten-Year Option Repricing Table".
(8) Includes 87,500 option shares granted to replace certain options cancelled
pursuant to repricing. See "Ten-Year Option Repricing Table".
(9) Includes 85,000 option shares granted to replace certain options cancelled
pursuant to repricing. See "Ten-Year Option Repricing Table".
(10) Includes 90,000 option shares granted to replace certain options cancelled
pursuant to repricing. See "Ten-Year Option Repricing Table".
STOCK OPTION GRANTS AND EXERCISES
The following table sets forth each grant of stock options made during the
fiscal year ended March 31, 1997 to each of the Named Executive Officers:
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------- ANNUAL RATES OF STOCK
NUMBER PERCENTAGE OF PRICE APPRECIATION
SECURITIES TOTAL OPTIONS FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR(2) ($/SH) DATE(3) 5% 10%
- ---------------------------- ---------- -------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Neil Selvin................. 125,000(1) 3.63% $ 3.06 3/16/05 $187,254 $ 450,520
250,000 7.26 1.56 3/21/07 245,661 622,555
Charles R. Oppenheimer...... 110,000(1) 3.20 3.06 1/16/07 211,858 536,891
25,000 .73 16.63 4/23/06 261,462 662,598
25,000 .73 3.06 4/23/06 43,761 108,598
James Brown................. 60,000(1) 1.74 3.06 1/16/07 115,559 292,850
25,000 .73 16.63 4/23/06 261,462 662,598
42,500 1.23 3.06 1/13/04 52,913 123,283
20,000(1) .58 3.06 3/16/05 29,960 72,083
25,000(1) .73 3.06 4/23/06 43,761 108,598
Marc Linden................. 30,000(1) .87 3.06 1/16/07 67,779 146,426
85,000 2.47 9.50 6/24/06 507,832 1,286,947
85,000 2.47 3.06 6/24/06 152,192 379,511
Marsha Raulston............. 60,000(1) 1.74 3.06 1/16/07 115,559 292,850
90,000 2.61 3.06 1/13/04 112.052 261,070
James M. Walker............. 25,000 .73 16.63 4/23/06 261,462 662,593
</TABLE>
- ---------------
(1) Granted as part of the January 1997 repricing, in order to replace options
which were cancelled. See "Ten-Year Option Repricing Table".
(2) The Company granted options to purchase 1,779,330 shares and repriced
options to purchase 1,762,384 shares of Common Stock to employees in fiscal
1997.
(3) Any of the options that are exercisable on the date of termination of
employment may be exercised until the earlier of 30 days after such
termination and the expiration date unless such termination was a result of
total and permanent disability, in which case they are exercisable until the
earlier of one year after such termination and the expiration date, or
death, in which case they are exercisable until the earlier of 18 months
after such termination and the expiration date.
12
<PAGE> 15
The following table sets forth information for the Named Executive Officers
with respect to (i) the number of securities underlying unexercised options held
as of March 31, 1997 and (ii) the value of unexercised in-the-money options
(i.e., options for which the fair market value of the Common Stock ($1.64 at
March 31, 1997) exceeds the exercise price) as of March 31, 1997:
FISCAL YEAR-END OPTION VALUES AND AGGREGATED
OPTION EXERCISES IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT MARCH 31, 1997 AT MARCH 31, 1997(1)($)
ACQUIRED ON VALUE ------------------------------ ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE(2) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ----------- ----------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Neil Selvin 140,000 416,500 26,635 429,159 $39,702 $ 193,147
Charles R. Oppenheimer -- -- 38,366 164,334 24,577 18,791
James Brown 10,000 98,400 -- 120,667 -- --
Marc Linden -- -- -- 115,000 -- --
Marsha Raulston -- -- -- 93,000 -- --
James M. Walker 47,500 207,812 -- -- -- --
Douglas Dennerline -- -- -- -- -- --
</TABLE>
- ---------------
(1) Based on the fair market value of the Common Stock as of March 31, 1997
($1.64) minus the exercise price, multiplied by the number of shares
underlying the option. As of May 31, 1997, the price of the Company's Common
Stock had appreciated significantly beyond these levels. As of that date,
realizable value exceeded the amounts set forth above.
(2) In connection with the repricing of certain of the above options, the above
employees agreed that such options would not be exercisable for a period of
six months following the date of repricing, January 16, 1997. On July 16,
1997, options for an additional 62,500, 26,833 and 57,000 shares will become
exercisable by Neil Selvin, James Brown and Masha Raulston, respectively.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS ON EXECUTIVE COMPENSATION
GENERAL
The Company was privately held until February 1994 when the Company
completed its initial public offering. Prior to that time, the Board of
Directors made all decisions with respect to executive compensation, including
the establishment of base salaries, equity grants and the Company's Management
Incentive Plan for determining officer bonuses. All decisions with respect to
executive compensation currently are made by the Compensation Committee of the
Board of Directors.
COMPENSATION PHILOSOPHY
The primary goal of the Company is to align compensation with the Company's
business objectives and performance. The Company's aim is to attract, retain and
reward executive officers and other key employees who contribute to the longterm
success of the Company and to motivate those individuals to enhance long-term
stockholder value. To establish this relationship between executive compensation
and the creation of stockholder value, the Compensation Committee has adopted a
total compensation package comprised of base salary, bonus and stock option
awards. Key elements of this compensation package are:
- The Company pays competitively with leading technology companies with
which the Company competes for talent.
- The Company maintains annual incentive opportunities sufficient to
provide motivation to achieve specific operating goals and to generate
rewards that bring total compensation to competitive levels.
13
<PAGE> 16
- The Company provides significant equity-based incentives for executives
and other key employees to ensure that individuals are motivated over the
long term to respond to the Company's business challenges and
opportunities as owners and not just as employees.
EXECUTIVE OFFICER COMPENSATION
The compensation of the Company's executive officers, including salary and
stock option grants, were determined on the basis of negotiations between the
Company and each officer with due regard to such officer's experience, the
Company's needs and market conditions at the time. The Board also examined a
published salary survey of similar companies with a view to ensuring that the
compensation was competitive but reasonable. The salary of the founding officer
was based upon discussions between the Company and such officer.
Bonuses for all executive officers, including the Chief Executive Officer,
were determined in accordance with the Company's Management Incentive Program.
The Management Incentive Program provides that bonuses will be determined in
accordance with a matrix based upon the degree to which the Company's total
revenues and net income before taxes meet the Company's business plan. A target
bonus as a percentage of base salary was established for each executive officer.
As a result of the Company's performance during fiscal 1997, no bonuses were
earned or accrued to any Executive Officer, including the Chief Executive
Officer.
LONG-TERM INCENTIVES
The Company's primary long-term incentive program presently consists of the
1991 Stock Option Plan (the "Option Plan"). Although the Option Plan has no
required vesting schedule, options previously granted under the Option Plan
generally have become exercisable at a rate of 20% to 25% of the shares subject
to the option on the first anniversary of the option grant with the remaining
shares subject to the option becoming exercisable over the next three or four
years. Through option grants, executives receive significant equity incentives
to build long-term stockholder value. The exercise price of incentive options
granted under the Option Plan generally is 100% of the fair market value of the
underlying stock on the date of grant. Officers receive value from these grants
only if the Company's Common Stock appreciates. See "Ten-Year Option Repricing
Table".
COMPANY PERFORMANCE AND CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's salary and stock option grant for fiscal 1997
were determined on the basis of negotiations between the Company and the Chief
Executive Officer with due regard to his experience, the Company's needs and
market conditions. The Board also has examined a published salary survey of
similar companies. The Chief Executive Officer's bonus was determined in
accordance with the Management Incentive Program that governed the bonuses of
the other executive officers.
CERTAIN TAX CONSIDERATION
Section 162(m) of the Internal Revenue Code (the "Code") limits the Company
to a deduction for federal income tax purposes of not more than $1 million of
compensation paid to certain executive officers in a taxable year. Compensation
above $1 million may be deducted if it is "performance-based compensation"
within the meaning of the Code.
The Board believes that at the present time it is unlikely that the
compensation paid to any executive officer in this taxable year will exceed $1
million. Therefore, the Board has not established a policy for determining which
forms of incentive compensation awarded to executive officers shall be designed
to qualify as "performance-based compensation."
STOCK OPTION EXCHANGE
In January 1997, the Board of Directors offered to all employees (including
officers) the opportunity to cancel outstanding stock options with exercise
prices in excess of $3.0625 per share (the fair market value of
14
<PAGE> 17
the common stock at that time) in exchange for options exercisable at $3.0625
per share which were otherwise identical to the canceled options. The option
exchange was an acknowledgment of the importance to the Company of having equity
incentives in the hands of key employees. Stock options which are "out of the
money" provide no particular compensatory incentive if an employee is
considering alternative opportunities. The Committee decided to include officers
in the exchange because of the importance of their administrative and technical
leadership to the success of the Company's business and because of the
importance of providing incentive for the Company's officers to stay on with the
Company in a difficult period. For all of the above reasons, the Compensation
Committee determined that it is in the best interest of the Company and its
Shareholders to continue to provide equity incentives to the Company's employees
and officers, and that the option exchange was the most practical method to
effect such equity incentives.
The following table sets forth all exchange and repricings of officer stock
options since the Company's initial public offering in February 1994:
TEN-YEAR OPTION REPRICING TABLE
<TABLE>
<CAPTION>
LENGTH OF
MARKET PRICE ORIGINAL TERM
OF STOCK AT REMAINING AT
NO. OF SECURITIES TIME OF NEW DATE OF
UNDERLYING OPTIONS REPRICING OF EXERCISE REPRICING OR
NAME DATE REPRICED OR AMENDED(#) AMENDMENT($) PRICE AMENDMENT
- ------------------- ------- ---------------------- ------------ -------- -----------------
<S> <C> <C> <C> <C> <C>
James Brown 1/16/97 42,500 3.06 3.06 6 years, 362 days
James Brown 1/16/97 20,000 3.06 3.06 8 years, 59 days
James Brown 1/16/97 25,000 3.06 3.06 9 years, 97 days
Marc Linden 1/16/97 85,000 3.06 3.06 9 years, 159 days
Charles Oppenheimer 1/16/97 25,000 3.06 3.06 9 years, 97 days
Marsha Raulston 1/16/97 90,000 3.06 3.06 6 years, 362 days
Neil Selvin 1/16/97 125,000 3.06 3.06 8 years, 59 days
</TABLE>
From the members of the Compensation Committee of the Board of Directors of
Global Village Communication, Inc. for the 1997 fiscal year:
Eugene Eidenberg
Kenneth Goldman
Jeremy Jaech
15
<PAGE> 18
PERFORMANCE MEASUREMENT COMPARISON
The following chart shows the value of an investment of $100 in cash of (i)
the Company's Common Stock at the initial offering price on February 24, 1994 of
$8.00 per share, (ii) the Standard & Poor's High Tech Composite Index, (iii) the
Nasdaq Stock Market -- US Index, and (iv) the Hambrecht & Quist Technology
Index, as if all such investments were made as of February 24, 1994. All values
assume reinvestment of the full amount of all dividends:
<TABLE>
<CAPTION>
S&P High Tech
Measurement Period H&Q Technology Nasdaq Stock Composite
(Fiscal Year Covered) GVIL Index Market-US Index
<S> <C> <C> <C> <C>
0 100 100 100 100
12 112 122 105 123
24 142 168 141 164
36 16 214 157 229
38 33 255 180 272
</TABLE>
16
<PAGE> 19
Detach Here
GLOBAL VILLAGE COMMUNICATION, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
P
R
The undersigned stockholder of GLOBAL VILLAGE COMMUNICATION, INC.,
O Delaware corporation, hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders Proxy Statement, each dated June
X 20, 1997, and the Company's Annual Report for its fiscal year ended
March 31, 1997, and hereby appoints Neil Selvin and John Peterson, and
Y each of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned to represent
the undersigned at the 1997 Annual Meeting of Stockholders of GLOBAL
VILLAGE COMMUNICATION, INC., to be held on July 31, 1997, at 9:00a.m.,
local time at the Company's headquarters located at 1144 East Arques
Avenue, Sunnyvale, California and at any adjournment or adjournments
thereof, and to vote all shares of Common Stock which the undersigned
would be entitled to vote, if then and there personally present, on the
matters set forth on the reverse side.
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE> 20
Detach Here
/ / Please mark
votes as in
this example
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, IT WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS, AND
FOR PROPOSALS 2,3 AND 4.
1. Election of Directors
Nominees: Neil Selvin, Leonard A. Lehmann, Kevin R. Compton,
Eugene Eldenberg, Kenneth A. Goldman and Jeremy Jaech
FOR WITHHELD
/ / / /
MARK HERE
FOR ADDRESS CHANGE / /
/ /___________________________ AND NOTE BELOW
FOR AGAINST ABSTAIN
2. To Approve an amendment to the / / / / / /
1991 Stock Option Plan to
increase the number of shares
of Common Stock authorized for
issuance thereunder by 500,000
shares.
FOR AGAINST ABSTAIN
3. To approve an amendment to the / / / / / /
Employee Stock Purchase Plan to
increase the number of shares
of Common Stock authorized for
issuance thereunder by 100,000
shares.
FOR AGAINST ABSTAIN
4. To ratify the appointment of / / / / / /
KPMG Peat Marwick LLP as
independent auditors of the
Company.
5. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Signature________________Date_______Signature_______________Date________
