<PAGE> 1
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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
ISOCOR
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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
LOGO
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 22, 1996
------------------------
TO THE SHAREHOLDERS OF ISOCOR:
Notice is hereby given that a Special Meeting of Shareholders of ISOCOR
(the "Company"), a California corporation, will be held at the principal
executive offices of the Company, 3420 Ocean Park Boulevard, Santa Monica,
California 90405 on Tuesday, October 22, 1996 at 9:00 a.m. local time, for the
following purposes:
1. To authorize an amendment to the Company's 1992 Stock Option Plan
to increase the number of shares of Common Stock reserved for issuance
thereunder by 500,000 shares to an aggregate of 2,300,000 shares.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on September 17, 1996
will be entitled to notice of and to vote at the Special Meeting or any
adjournment thereof.
All shareholders are cordially invited to attend the Special Meeting in
person. However, to assure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. If you decide to attend
the meeting you may vote in person even if you have returned a proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JANINE M. BUSHMAN
JANINE M. BUSHMAN,
Vice President, Finance
and Administration and CFO
Santa Monica, California
September 23, 1996
YOUR VOTE IS IMPORTANT
In order to assure your representation at the meeting, you are requested to
complete, sign and date the enclosed proxy as promptly as possible and return it
in the envelope provided.
<PAGE> 3
LOGO
------------------------
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
ISOCOR (the "Company"), a California corporation, for use at the Special Meeting
of Shareholders to be held October 22, 1996 at 9:00 a.m., local time, or at any
adjournment or postponement thereof, for the purposes set forth in this Proxy
Statement and in the accompanying Notice of Special Meeting of Shareholders. The
Special Meeting will be held at the principal executive offices of the Company,
3420 Ocean Park Boulevard, Santa Monica, California 90405. The Company's
telephone number at that location is (310) 581-8100.
These proxy solicitation materials were mailed on or about September 23,
1996 to all shareholders entitled to vote at the meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Janine M. Bushman, Inspector of Elections) a written notice of revocation or a
duly executed proxy bearing a later date or by attending the meeting and voting
in person.
VOTING AND SOLICITATION
Votes cast by proxy or in person at the Special Meeting will be tabulated
by the Inspector of Elections with the assistance of the Company's transfer
agent. The Inspector of Elections will also determine whether or not a quorum is
present. Except in certain specific circumstances, the affirmative vote of a
majority of shares represented and voting at a duly held meeting at which a
quorum is present is required under California law for approval of proposals
presented to shareholders. In general, California law also provides that a
quorum consists of a majority of the shares entitled to vote, represented either
in person or by proxy. The Inspector of Elections will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as not voting for purposes of determining the approval
of any matter submitted to the shareholders for a vote. Any proxy which is
returned using the form of proxy enclosed and which is not marked will be voted
for approval of the amendment to the Company's 1992 Stock Option Plan and as the
proxy holders deem advisable on other matters that may come before the meeting.
If a broker indicates on the enclosed proxy or its substitute that it does not
have discretionary authority as to certain shares to vote on a particular matter
("broker non-votes"), those shares will not be considered as voting with respect
to that matter. While there is no definitive specific statutory or case law
authority in California concerning the proper treatment of abstentions and
broker non-votes, the Company believes that the tabulation procedures to be
followed by the Inspector of Elections are consistent with the general statutory
requirements in California concerning voting of shares and determination of a
quorum.
The cost of soliciting proxies will be borne by the Company. In addition,
the Company will reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies may be solicited by certain of the
Company's directors, officers and regular employees, without additional
compensation, personally or by telephone or telegram.
<PAGE> 4
RECORD DATE AND SHARE OWNERSHIP
Only shareholders of record at the close of business on September 17, 1996
are entitled to notice of and to vote at the meeting. As of September 17, 1996,
9,277,077 shares of the Company's Common Stock were issued and outstanding.
PROPOSAL NO. 1
AMENDMENT OF THE 1992 STOCK OPTION PLAN
At the Special Meeting, shareholders are being asked to approve an
amendment to the 1992 Stock Option Plan (the "1992 Option Plan") that would
increase the shares reserved for issuance thereunder by 500,000 shares of Common
Stock to an aggregate of 2,300,000 shares.
GENERAL
The Company's 1992 Option Plan provides for the grant of options to
employees of and consultants to the Company. The aggregate number of shares
reserved for issuance under the 1992 Option Plan includes options previously
granted and exercised under the 1992 Option Plan. The increase in shares
reserved for issuance under the 1992 Option Plan has been necessitated by the
growth in the number of employees of the Company, the grant of additional stock
options to current employees of the Company as previously granted options vest
and become exercisable, and commitments by the Company to reserve options for
issuance to employees of NetCS Informationstechnik GmbH ("NetCS"), in connection
with a Stock Purchase Agreement dated August 29, 1996 among the Company, NetCS,
ISOCOR B.V. and the shareholders of NetCS (the "Purchase Agreement") pursuant to
which the Company acquired all of the outstanding shares of NetCS. The Company
does not believe that the shares remaining available for future grant pursuant
to the 1992 Option Plan are sufficient to attract new employees, retain existing
employees or meet its commitments under the Purchase Agreement. The increase
will provide sufficient additional stock to continue the Company's policy of
equity ownership by employees and consultants as an incentive to contribute to
the Company's success. The 1992 Option Plan was adopted by the Board of
Directors in July 1992 and approved by the shareholders in September 1992. A
total of 1,800,000 shares of Common Stock has been reserved for issuance under
the 1992 Option Plan. Subject to shareholder approval, this amount would be
increased to an aggregate of 2,300,000 shares.
Options granted under the 1992 Option Plan may be either "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or nonstatutory stock options at the discretion of the
Board of Directors and as reflected in the terms of the written option
agreement. The 1992 Option Plan is not a qualified deferred compensation plan
under Section 401(a) of the Code, and is not subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
During the year ended December 31, 1995, options to purchase 68,000 shares
of Common Stock of the Company were granted pursuant to the 1992 Option Plan to
all current executive officers as a group (12 persons) and options to purchase
442,400 shares of Common Stock of the Company were granted to all other
employees as a group. For information with respect to the granting of options to
purchase Common Stock of the Company under the 1992 Option Plan to the Company's
President and the four other most highly compensated executive officers whose
annual salary and bonus exceeded $100,000 for 1995, see "Option Grants in Last
Fiscal Year."
As of June 30, 1996, 63,075 shares had been issued upon exercise of options
granted under the 1992 Option Plan, options for 1,269,174 shares were
outstanding under the 1992 Option Plan and options for 467,751 shares remained
available for future grants. Shares not purchased under an option prior to its
expiration will be available for future option grants under the 1992 Option
Plan. As of June 30, 1996, the fair market value of shares subject to
outstanding options was $19,354,903.50, based upon the closing price of the
Common Stock as reported on the Nasdaq National Market on such date.
2
<PAGE> 5
PURPOSE
The purposes of the 1992 Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to employees and consultants of the Company and to promote
the success of the Company's business.
ADMINISTRATION
The 1992 Option Plan may be administered by the Board of Directors or by a
committee of the Board of Directors. The 1992 Option Plan is currently being
administered by the Board of Directors. The Board of Directors has the exclusive
authority to grant stock options and otherwise administer the 1992 Option Plan
with respect to the Company's directors and officers eligible to participate in
the 1992 Option Plan. Members of the Board of Directors receive no additional
compensation for their services in connection with the administration of the
1992 Option Plan. All questions of interpretation of the 1992 Option Plan are
determined by the Board of Directors or its committee and its decisions are
final and binding upon all participants.
ELIGIBILITY
The 1992 Option Plan provides that either incentive stock options or
nonstatutory options may be granted to employees (including officers and
directors who are also employees) of the Company or any of its subsidiaries. In
addition, the 1992 Option Plan provides that nonstatutory options may be granted
to consultants (not including directors who are not compensated for their
services or are paid only a director's fee by the Company) of the Company or any
of its subsidiaries. The Board of Directors or its committee selects the
optionees and determines the number of shares to be subject to each option. In
making such determination, there are taken into account the duties and
responsibilities of the optionee, the value of the optionee's services, the
optionee's present and potential contribution to the success of the Company, and
other relevant factors.
The 1992 Option Plan provides that the maximum number of shares of Common
Stock which may be granted under options to any one employee during any fiscal
year shall be 750,000, subject to adjustment as provided in the 1992 Option
Plan. There is also a limit on the aggregate market value of shares subject to
all incentive stock options that may be granted to an optionee during any
calendar year.
TERMS OF OPTIONS
Each option is evidenced by a stock option agreement between the Company
and the optionee. Each option is subject to the following additional terms and
conditions:
(a) Exercise of the Option. The Board of Directors or its committee
determines when options may be exercised. An option is exercised by giving
written notice of exercise to the Company specifying the number of full
shares of Common Stock to be purchased and by tendering of payment of the
purchase price. The purchase price of the shares purchased upon exercise of
an option shall be paid in consideration of such form as is determined by
the Board of Directors or its committee and specified in the option
agreement, and such form of consideration may vary for each option.
(b) Exercise Price: The exercise price under the 1992 Option Plan is
determined by the Board of Directors or its committee and may not be less
than 100% and 85% of the fair market value of the Common Stock on the date
the option is granted for incentive stock options and nonstatutory stock
options, respectively. The fair market value per share is equal to the
closing price on the Nasdaq National Market on the last day of trading
prior to the date of grant. In the case of an option granted to an optionee
who owns more than 10% of the voting power of all classes of stock of the
Company, its parent or subsidiaries, the exercise price must not be less
than 110% of the fair market value on the date of the grant.
(c) Termination of Employment. If the optionee's employment or
consulting relationship terminates for any reason other than disability or
death, options under the 1992 Option Plan may be exercised not later than
forty-five days (or such other period of time not exceeding three months in
the case of an incentive stock option or six months in the case of a
nonstatutory stock option as is determined by the
3
<PAGE> 6
Board of Directors or its committee) after such termination and may be
exercised only to the extent the option was exercisable on the date of
termination. In no event may an option be exercised by any person after the
expiration of its term.
(d) Disability. If an optionee is unable to continue his or her
employment or consulting relationship with the Company as a result of his
or her total and permanent disability, options may be exercised within
twelve months (or such other period of time not exceeding twelve months as
is determined by the Board of Directors or its committee) of termination
and may be exercised only to the extent the option was exercisable on the
date of termination, but in no event may the option be exercised after its
termination date.
(e) Death. Under the 1992 Option Plan, if an optionee should die
while employed or retained by the Company, and such optionee has been
continuously employed or retained by the Company since the date of grant of
the option, the option may be exercised within six months after the date of
death (or such other period of time, not exceeding six months, as is
determined by the Board of Directors or its committee) by the optionee's
estate or by a person who acquired the right to exercise the option by
bequest or inheritance to the extent the optionee would have been entitled
to exercise the option at the time of the optionee's death, but in no event
may the option be exercised after its termination date.
If an optionee should die within thirty days (or such other period of
time not exceeding three months as is determined by the Board of Directors
or its committee) after the optionee has ceased to be continuously employed
or retained by the Company, the option may be exercised within six months
after the date of death by the optionee's estate or by a person who
acquired the right to exercise the option by bequest or inheritance to the
extent that the optionee was entitled to exercise the option at the date of
termination, but in no event may the option be exercised after its
termination date.
(f) Termination of Options. The 1992 Option Plan provides that
options granted under the 1992 Option Plan have the term provided in the
option agreement. In general, these agreements currently provide for a term
of ten years. Incentive stock options granted to an optionee who,
immediately before the grant of such option, owned more than 10% of the
total combined voting power of all classes of stock of the Company, its
parent or subsidiaries, may not in any case have a term of more than five
years. No option may be exercised by any person after its expiration.
(g) Option Not Transferable. An option is nontransferable by the
optionee other than by will or the laws of descent and distribution, and is
exercisable only by the optionee during his or her lifetime and in the
event of the optionee's death by a person who acquires the right to
exercise the option by bequest or inheritance or by reason of the death.
(h) Other Provisions. The option agreement may contain such other
terms, provisions and conditions not inconsistent with the 1992 Option Plan
as may be determined by the Board of Directors or its committee.
AMENDMENT AND TERMINATION
The Board of Directors may amend the 1992 Option Plan at any time or from
time to time or may terminate it without approval of the shareholders; provided,
however, that shareholder approval is required for any amendment to the 1992
Option Plan that increases the number of shares that may be issued under the
1992 Option Plan, modifies the standards of eligibility, modifies the limitation
on grants to employees described in the 1992 Option Plan or results in other
changes which would require shareholder approval to qualify options granted
under the 1992 Option Plan as performance-based compensation under Section
162(m) of the Code, or so long as the Company has a class of equity securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), materially increases the benefits to participants that may
accrue under the 1992 Option Plan. However, no action by the Board of Directors
or shareholders may alter or impair any option previously granted under the 1992
Option Plan. The 1992 Option Plan shall terminate in July 2002, provided that
any options then outstanding under the 1992 Option Plan shall remain outstanding
until they expire by their terms.
4
<PAGE> 7
FEDERAL INCOME TAX ASPECTS OF THE 1992 OPTION PLAN
Options granted under the 1992 Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory stock options.
If an option granted under the 1992 Option Plan is an incentive stock
option, under U.S. tax laws the optionee will recognize no income upon grant of
the incentive stock option and incur no tax liability due to the exercise
although the exercise of an incentive stock option may give rise to alternative
minimum tax. The Company will not be allowed a deduction for federal income tax
purposes as a result of the exercise of an incentive stock option regardless of
the applicability of the alternative minimum tax. Upon the sale or exchange of
the shares at least two years after grant of the option and one year after
receipt of the shares by the optionee, any gain will be treated as long-term
capital gain under U.S. tax laws. If these holding periods are not satisfied,
the optionee will recognize ordinary income under U.S. tax laws equal to the
difference between the exercise price and the lower of the fair market value of
the stock at the date of the option exercise or the sale price of the stock. A
different rule for measuring ordinary income upon such a premature disposition
may apply if the optionee is also an officer, director or 10% shareholder of the
Company. The Company will be entitled to a deduction in the same amount as the
ordinary income recognized by the optionee. Any gain recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income will be characterized under U.S. tax laws as long-term capital gain if
the sale occurs more than one year after exercise of the option or as short-term
capital gain if the sale is made earlier. The federal tax rate on long-term
capital gains is capped at 28%. Capital losses are allowed under U.S. tax laws
in full against capital gains plus $3,000 of other income.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory stock options. An optionee will not recognize any
taxable income under U.S. tax laws at the time he or she is granted a
nonstatutory stock option. However, upon its exercise, under U.S. tax laws the
optionee will recognize ordinary income for tax purposes measured by the excess
of the then fair market value of the shares over the exercise price. In certain
circumstances, where the shares are subject to a substantial risk of forfeiture
when acquired or where the optionee is an officer, director or 10% shareholder
of the Company, the date of taxation under U.S. tax laws may be deferred unless
the optionee files an election with the Internal Revenue Service under Section
83(b) of the Code. The income recognized by an optionee who is also an employee
of the Company will be subject to tax withholding by the Company by payment in
cash or out of the current earnings paid to the optionee. Upon resale of such
shares by the optionee, any difference between the sales price and the exercise
price, to the extent not recognized as ordinary income as provided above, will
be treated under U.S. tax laws as capital gain or loss, and will qualify for
long-term capital gain or loss treatment if the shares have been held for more
than one year. The tax rate on long-term capital gains under U.S. tax laws is
capped at 28%. Capital losses are allowed under U.S. tax laws in full against
capital gains plus $3,000 of other income.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the Common Stock
represented and voting at the Special Meeting is required to approve the
amendment to the 1992 Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE AMENDMENT TO THE 1992
STOCK OPTION PLAN.
5
<PAGE> 8
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of June 30, 1996 as to (i) each person who is known by the
Company to beneficially own more than five percent of the Company's Common
Stock, (ii) each of the Company's directors, (iii) each of the executive
officers of the Company named in the Summary Compensation Table beginning on
page 8, and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
5% SHAREHOLDERS, DIRECTORS, NAMED
OFFICERS AND EXECUTIVE OFFICERS NUMBER OF SHARES PERCENT
AND DIRECTORS AS A GROUP BENEFICIALLY OWNED BENEFICIALLY OWNED
- ------------------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Advent International Corporation(1).......................... 448,331 5.12%
101 Federal Street
Boston, MA 02210
Brentwood Associates......................................... 607,618 6.94
11150 Santa Monica Boulevard
Los Angeles, CA 90025
CFJPE........................................................ 568,964 6.50
12, rue Chauchat
75009 Paris
FRANCE
ISO-Investors................................................ 548,571 6.26
450 N. Roxbury Drive, Suite 600
Beverly Hills, CA 90210
Thomson-CSF Ventures......................................... 897,084 10.24
173 boulevard Haussman
75415 Paris Cedex 08
FRANCE
Bjorn Ahlen(2)............................................... 96,583 1.10
Jean-Michel Barbier(3)....................................... 897,084 10.24
Janine M. Bushman(2)......................................... 20,999 *
Andrew De Mari(2)(4)......................................... 302,000 3.44
Jean Paul Elkann(5).......................................... 628,963 7.18
Alexandra Giurgiu(6)......................................... 422,618 4.83
G. Bradford Jones(7)......................................... 607,618 6.94
Raomal Perera................................................ 86,000 *
John B. Stephensen(2)........................................ 57,889 *
William Wolfe(2)............................................. 12,708 *
All executive officers and directors as a group (12 persons)
(2)(3)(4)(5)(6)(7)......................................... 3,120,932 35.44
</TABLE>
- ---------------
* Less than 1%.
(1) Includes 99,856 shares held by Adtel L.P., 4,074 shares held by Advent
International Investors L.P., 99,856 shares held by Adventact L.P. and
244,545 shares held by Eventech Ltd.
(2) Includes shares subject to options issued pursuant to the Company's 1992
Stock Option Plan which are exercisable on or before August 30, 1996 (60
days from the date of this table). Such shares include: Bjorn Ahlen: 2,583;
Janine M. Bushman: 20,999; Andrew De Mari: 10,000; John B. Stephensen:
33,889; and William Wolfe: 12,708.
(3) Includes 897,084 shares held by Thomson-CSF Ventures. Mr. Barbier, a
director of the Company, is Directeur General of Thomson-CSF Ventures.
Because of his position with Thomson-CSF Ventures, Mr. Barbier may be deemed
to be a beneficial owner of such shares, but disclaims beneficial ownership
of such shares.
6
<PAGE> 9
(4) Excludes shares owned by Antonella De Mari, Luigi De Mari, Allessandra De
Mari and Susanna De Mari, all of whom are adult members of Dr. De Mari's
immediate family. Dr. De Mari disclaims beneficial ownership of such shares.
(5) Includes 568,964 shares held by CFJPE. Mr. Elkann, Chairman of the Board of
Directors of the Company, was formerly president and CEO of CFJPE, with
which he continues to be affiliated. Because of his position with such
entity, Mr. Elkann may be deemed to be a beneficial owner of such shares,
but disclaims beneficial ownership of such shares.
(6) Includes 422,618 shares held by Olivetti Holding N.V. Ms. Giurgiu, a
director of the Company, is President of Olivetti Management of America,
Inc., a wholly owned subsidiary of Olivetti N.V. Because of her position
with Olivetti Management of America, Inc., Ms. Giurgiu may be deemed to be a
beneficial owner of such shares, but disclaims beneficial ownership of such
shares.
(7) Includes 607,618 shares held by Brentwood Associates. Mr. Jones, a director
of the Company is a general partner of Brentwood Associates, a limited
partnership. Because of his position with Brentwood Associates, Mr. Jones
may be deemed to be a beneficial owner of such shares, but disclaims
beneficial ownership of such shares except to the extent of his individual
interest in the partnership.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors are currently Jean Paul Elkann and G. Bradford Jones. Mr. Jones has
not at any time been an officer or employee of the Company. During 1995, Mr.
Elkann was Chairman of the Board of Directors of the Company. Andrew De Mari was
a member of the Compensation Committee between May 1995 and November 1995, was
President and Chief Executive Officer of the Company during 1995 and, until
November 1995, was the Chief Financial Officer of the Company.
EMPLOYMENT AGREEMENTS WITH MANAGEMENT
The Board of Directors elects the Company's officers and such officers
serve at the discretion of the Board of Directors of the Company. Consistent
with other employees of the Company's Irish operation, the Company has entered
into an employment agreement with C. Raomal Perera containing customary
provisions including the rate of compensation, benefits, vacation and a car
allowance consistent with the terms offered to other ISOCOR managers in Ireland.
In addition, his contract provides for the payment of certain management fees
related to his position as General Manager of ISOCOR B.V. Mr. Perera is an
"at-will" employee of the Company.
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<PAGE> 10
SUMMARY COMPENSATION TABLE
The following table shows the compensation received by the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company whose total annual salary and bonus exceeded $100,000 (the "Named
Executive Officers") for the fiscal year ended December 31, 1995.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
--------------------------------------- SECURITIES
BONUS AND OTHER ANNUAL UNDERLYING ALL OTHER
SALARY(1) COMMISSION(2) COMPENSATION OPTIONS(3) COMPENSATION
-------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Andrew De Mari................ $150,000 $ -- $ -- 10,000 $ --
President & CEO
Bjorn Ahlen................... $ 80,000 90,839 -- -- --
Senior Vice President,
International Sales and
Marketing
C. Raomal Perera.............. $ 80,100 -- 27,000(4) -- 11,885(5)
Senior Vice President,
Engineering
William M. Wolfe.............. $ 90,933 40,502 -- 38,000 --
Vice President, Business
Development and Marketing
John B. Stephensen............ $110,000 -- -- -- --
Vice President, Product
Management
</TABLE>
- ---------------
(1) Includes the following amounts earned in 1995, but paid in 1996: Dr. De
Mari, $23,077; Mr. Ahlen, $3,077; Mr. Wolfe, $3,712; and Mr. Stephensen,
$4,231.
(2) Includes the following commissions earned in 1995, but paid in 1996: Mr.
Ahlen, $15,422; and Mr. Wolfe, $12,044.
(3) On January 18, 1996, the Company's Board of Directors granted to the
following Named Executive Officers, options to purchase shares of the
Company's Common Stock that vest and become exercisable over four years at
an exercise price of $8.00 per share in the following amounts: Mr. Perera,
8,000; Mr. Stephensen, 4,000; and Mr. Wolfe, 8,000. On August 14, 1996, the
Company's Board of Directors granted to the following Named Executive
Officers, options to purchase shares of the Company's Common Stock that vest
and become exercisable over four years at an exercise price of $6.75 per
share in the following amounts: Mr. Ahlen, 10,000; Dr. De Mari, 50,000; Mr.
Perera, 20,000; and Mr. Wolfe, 10,000.
(4) Composed of management fees for the Company's Irish subsidiary, $5,400 of
which was earned in 1995 but paid in 1996.
(5) Reflects reimbursement for car-related expenses.
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<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
OPTIONS OF STOCK PRICE
GRANTED APPRECIATION
OPTIONS TO EMPLOYEES EXERCISE OR FOR OPTION TERM(2)
GRANTED IN FISCAL BASE PRICE EXPIRATION -----------------------
NAME (SHARES)(1) YEAR (PER SHARE) DATE 5% ($) 10% ($)
- --------------------------- ----------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Andrew De Mari............. 10,000 1.9% $0.625 05/16/05 $ 3,931 $ 9,961
Bjorn Ahlen................ -- -- -- -- -- --
C. Raomal Perera........... -- -- -- -- -- --
William M. Wolfe........... 28,000 5.3 0.625 01/19/05 11,006 $ 27,890
6,000 1.1 1.250 07/20/05 4,717 $ 11,953
4,000 0.8 1.250 09/15/05 3,144 $ 7,969
John B. Stephensen......... -- -- -- -- -- --
</TABLE>
- ---------------
(1) For a description of the general terms of the options, see "Proposal No. 1
Amendment of the 1992 Stock Option Plan."
(2) Potential realizable values are reported net of the option exercise price
but before taxes associated with exercise. These amounts represent certain
assumed rates of appreciation only. Actual realized gains, if any, on stock
option exercises are dependent on future performance of the Company's Common
Stock, as well as the optionee's continued employment through the vesting
period.
FISCAL YEAR-END OPTION VALUE TABLE
The following table provides certain summary information concerning the
shares of Common Stock represented by outstanding stock options held by each of
the Named Executive Officers as of December 31, 1995. None of the Named
Executive Officers exercised any stock options during 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Andrew De Mari................................... 10,000 -- $ 68,750 $ --
Bjorn Ahlen...................................... 1,916 2,804 13,173 19,278
C. Raomal Perera................................. -- -- -- --
William M. Wolfe................................. -- 38,000 -- 255,000
John B. Stephensen............................... 25,002 14,998 171,889 103,111
</TABLE>
- ---------------
(1) Determined based on the estimated fair market value of the Common Stock of
the Company of $7.50 per share at December 31, 1995.
COMPENSATION OF DIRECTORS
With the exception of Jean Paul Elkann, directors of the Company do not
receive any cash compensation for their services as directors. Banque JP Elkann
is reimbursed at the rate of 50,000 French Francs per quarter for office, travel
and entertainment expenses related to services rendered by Mr. Elkann as the
Company's Chairman. All directors are reimbursed for out-of-pocket travel
expenses associated with their attendance at Board meetings. Nonemployee
directors of the Company are automatically granted options to purchase shares of
the Company's Common Stock pursuant to the terms of the Company's 1996
Directors' Stock Option Plan (the "Directors' Plan"). The Directors' Plan
provides that each person who is or becomes a nonemployee director of the
Company and who has not previously been granted an option under the 1992 Stock
Option Plan shall be granted a nonstatutory stock option to purchase 10,000
shares of the Common Stock of the Company (the "First Option") on the date on
which the optionee first becomes a nonemployee director of the Company
9
<PAGE> 12
(or January 18, 1996 with respect to directors who were nonemployee directors as
of the date of adoption of the Directors' Plan). Such First Options are only
granted to directors who meet the foregoing requirements who have not received
an option under the 1992 Stock Option Plan; if a director who would otherwise be
eligible to receive a First Option has previously received an option under the
1992 Stock Option Plan, then such director receives a modified First Option to
purchase 5,000 shares of the Common Stock of the Company. Thereafter, on the
first calendar day of the Company's fiscal year commencing in 1997, each
nonemployee director shall be granted an additional option to purchase 2,500
shares of Common Stock if, on such date, he or she shall have served on the
Company's Board of Directors for at least three months.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of shareholders of the Company that are intended to be presented
by such shareholders at the Company's 1997 Annual Meeting must be received by
the Company no later than December 31, 1996 in order that they may be included
in the proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of Proxy to vote the shares
they represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JANINE M. BUSHMAN
JANINE M. BUSHMAN,
Vice President, Finance
and Administration and CFO
Dated: September 23, 1996
10
<PAGE> 13
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF ISOCOR
SPECIAL MEETING OF SHAREHOLDERS
The undersigned shareholder of ISOCOR, a California corporation, hereby
acknowledges receipt of the Notice of Special Meeting of Shareholders and Proxy
Statement, each dated September 23, 1996, and hereby appoints Andrew De Mari and
Janine M. Bushman or either 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 Special Meeting of Shareholders of ISOCOR to be
held on October 22, 1996 at 9:00 a.m., local time, at the principal executive
offices of the Company, 3420 Ocean Park Boulevard, Santa Monica, California
90405 and at any adjournment or postponement 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 below:
<PAGE> 14
1. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1992 STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE
THEREUNDER BY 500,000 SHARES TO AN AGGREGATE OF 2,300,000 SHARES:
/ / FOR / / AGAINST / / ABSTAIN
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any adjournment(s) thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: FOR APPROVAL OF THE AMENDMENT TO THE COMPANY'S 1992
STOCK OPTION PLAN AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS
MAY COME BEFORE THE MEETING.
-----------------------------------
Signature
-----------------------------------
Signature
Dated:
-----------------------------------
NOTE: (This Proxy should be marked,
dated, signed by the shareholder(s)
exactly as his or her name appears
hereon, and returned promptly in
the enclosed envelope. Persons
signing in a fiduciary capacity
should so indicate. If shares are
held by joint tenants or as
community property, both should
sign.)
