<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MRV COMMUNICATIONS, INC.
(Name of Registrant as Specified in Its Charter)
MRV COMMUNICATIONS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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.
_______________________________________________________________________
4) Proposed maximum aggregate value of transaction.
_______________________________________________________________________
5) Total fee paid:
_______________________________________________________________________
/X/ 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 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
MRV COMMUNICATIONS, INC.
8917 FULLBRIGHT AVE.
CHATSWORTH, CALIFORNIA 91311
DEAR STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of Stockholders of MRV
Communications, Inc. (the "Corporation") to be held on Thursday, July 11, 1996
at 10:00 a.m. at the Warner Center Marriott Hotel, 21850 Oxnard Street,
Woodland Hills, California 91311.
At the Annual Meeting, you will be asked to elect five directors of the
Corporation; to approve an amendment to the Company's Certificate of
Incorporation to effect a 2-for-1 stock split, to proportionately increase the
number of authorized shares of the Company's Common Stock, and to
proportionately decrease the par value per share of the Company's Common Stock;
to approve amendments to the Company's 1992 Stock Option Plan (the "Stock Option
Plan") to increase by 75,000 shares (150,000 shares giving effect to the
proposed 2-for-1 stock split) the number of shares of Common Stock that can be
optioned and sold under the Stock Option Plan; and to ratify the selection of
the Corporation's independent accountants
Details of the matters to be considered at the Annual Meeting are contained in
the accompanying Proxy Statement which we urge you to consider carefully.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY.
Sincerely,
Noam Lotan
President and Chief Executive Officer
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL STOCKHOLDERS' MEETING,
YOU ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED.
<PAGE> 3
MRV COMMUNICATIONS, INC.
8917 FULLBRIGHT AVE.
CHATSWORTH, CALIFORNIA 91311
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MRV
Communications, Inc. (the Company), a Delaware corporation, will be held on
Thursday, July 11, 1996 at 10:00 a.m. at the Warner Center Marriott Hotel,
21850 Oxnard Street, Woodland Hills, California and thereafter as
it may be adjourned from time to time:
At the Meeting the Stockholders will be asked:
1. To elect five members of the Board of Directors to serve for the
ensuing years, all of whom currently serve as Directors;
2. To approve an amendment to the Company's Certificate of
Incorporation to effect a two-for-one split of the Company's
Common Stock, to proportionately increase the number of authorized
shares of the Company's Common Stock from 20,000,000 to 40,000,000
shares and to proportionately decrease the par value per share of
the Company's Common Stock from $0.0067 to $0.0034.
3. To approve amendments to the Company's 1992 Stock Option Plan (the
"Stock Option Plan") to increase by 75,000 shares (150,000 shares
giving effect to the proposed 2-for-1 stock split) the number of
shares of Common Stock that can be optioned and sold under the
Stock Option Plan.
4. To ratify the selection of Arthur Andersen LLP as independent
auditors for the Corporation for the fiscal year ending December
31, 1996;
5. To consider and act upon any matters incidental to the foregoing
and any other matters which may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 10, 1996
as the record date for the determination of Stockholders entitled to notice of
and vote at the meeting and any adjournment or adjournments thereof.
WE HOPE THAT ALL STOCKHOLDERS WILL BE ABLE TO ATTEND THE MEETING IN
PERSON. IN ORDER TO ASSURE THAT A QUORUM IS PRESENT AT THE MEETING, PLEASE DATE,
SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY WHETHER OR NOT YOU EXPECT TO ATTEND
THE MEETING. A POSTAGE PAID ENVELOPE, ADDRESSED TO AMERICAN STOCK TRANSFER &
TRUST CO., THE COMPANY'S TRANSFER AGENT AND REGISTRAR, HAS BEEN ENCLOSED FOR
YOUR CONVENIENCE. IF YOU ATTEND THE MEETING, YOUR PROXY WILL, AT YOUR REQUEST,
BE RETURNED TO YOU AND YOU MAY VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
Shlomo Margalit
Secretary
Chatsworth, California
June 12, 1996
<PAGE> 4
MRV COMMUNICATIONS, INC.
8917 FULLBRIGHT AVE.
CHATSWORTH, CALIFORNIA 91311
---------------------
PROXY STATEMENT
---------------------
June 12, 1996
The enclosed Proxy is solicited by the Board of Directors of MRV
Communications, Inc. (the "Corporation" or the "Company") for use at the Annual
Meeting of Stockholders to be held at the Warner Center Marriott Hotel, 21850
Oxnard Street, Woodland Hills, California 91311, at 10:00 a.m. on
Thursday, July 11, 1996, and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on June 10, 1996 (the
"Record Date") will be entitled to vote at the meeting or any adjournment
thereof. On that date, 9,597,437 shares of Common Stock, $.0067 par value, of
the Corporation were issued and outstanding. There are no other voting
securities of the Corporation. Each share entitles the holder to one vote with
respect to all matters submitted to Stockholders at the meeting. A quorum for
the meeting is a majority of the shares outstanding. The Company intends to
include abstentions and broker non-votes as present or represented for purposes
of establishing a quorum for the transaction of business.
The Directors and Officers of the Corporation as a group owned
approximately 28.4% of the outstanding shares of Common Stock of the Corporation
at the Record Date. Each of the Directors and Officers has indicated his intent
to vote all shares of Common Stock owned by him in favor of each item set forth
herein.
Execution of a Proxy will not in any way affect a Stockholders' right
to attend the meeting and vote in person. The Proxy may be revoked at any time
before it is exercised by written notice to the Secretary prior to the Annual
Meeting, or by giving to the Secretary a duly executed Proxy bearing a later
date than the Proxy being revoked at any time before such Proxy is voted, or by
appearing at the Annual Meeting and voting in person. The shares represented by
all properly executed Proxies received in time for the meeting will be voted as
specified therein. In the absence of a special choice, shares will be voted in
favor of the election of those persons named in this Proxy Statement as
Directors and in favor of all other items set forth herein.
The cost of soliciting proxies will be borne by the Company. The
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares of their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and employees, without compensation, personally or by
telephone, telegram, letter or facsimile.
The Board of Directors knows of no other matter to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote may be taken, such shares represented by all Proxies received by the Board
of Directors will be voted with respect thereto in accordance with the judgment
of the persons named as attorney in the Proxies.
An annual report covering the Company's fiscal year ended December 31,
1995 and containing audited consolidated financial statements is being mailed
herewith to all stockholders entitled to vote. This annual report does not form
any part of the proxy solicitation material. This Proxy Statement and the
accompanying Proxy were first mailed to Stockholders on or about June 12, 1996.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, the number of
shares of the Company's Common Stock owned by (i) each Director, (ii) all
Directors, Director nominees and officers as a group, (iii) each person known by
the Company to own beneficially 5% or more of the Common Stock, (iv) the
Company's Chief Executive Officer and the Company's three other most highly
compensated executive officers receiving more than $100,000 in total
compensation for the year ended December 31, 1995, and (v) all Directors and
Executive Officers as a group. Except as otherwise indicated, the stockholders
listed in the table below have sole voting and investment powers with respect to
the shares indicated. The stock information presented below does not reflect the
proposed two-for-one split of the Company's Common Stock.
<TABLE>
<CAPTION>
=======================================================================================================
Name and Address of Beneficial Owner Number of Shares Beneficially Owned(1) Percentage of Class
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shlomo Margalit
8917 Fullbright Avenue 1,024,465 10.8
Chatsworth, CA 91311
- -------------------------------------------------------------------------------------------------------
Zeev Rav-Noy
8917 Fullbright Avenue 988,465 10.4
Chatsworth, CA 91311
- -------------------------------------------------------------------------------------------------------
Noam Lotan
8917 Fullbright Avenue 487,843 5.1
Chatsworth, CA 91311
- -------------------------------------------------------------------------------------------------------
Ken Ahmad (2)
8917 Fullbright Avenue 126,231 1.3
Chatsworth, CA 91311
- -------------------------------------------------------------------------------------------------------
Leonard Mautner
1434 Sixth Street, Suite 10 38,137 *
Santa Monica, CA 90401
- -------------------------------------------------------------------------------------------------------
Milton Rosenberg (3)
10975 Torreyana Road, Suite 304 27,105 *
San Diego, California 92121
- -------------------------------------------------------------------------------------------------------
All Directors and Executive Officers
as a Group (eight persons) (4) 2,701,246 28.0
=======================================================================================================
</TABLE>
* Less than 1%
(1) Pursuant to the rules of the Securities and Exchange Commission,
shares of Common Stock that an individual or group has a right to
acquire within 60 days pursuant to the exercise of options or
warrants are deemed to be outstanding for the purpose of computing
the percentage ownership of such individual or group, but are not
deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table.
(2) Includes 24,999 shares issuable pursuant to stock options
exercisable within 60 days from the Record Date.
(3) Includes 12,000 shares issuable pursuant to stock options
exercisable within 60 days from the Record Date
(4) Includes 45,999 shares issuable pursuant to stock options
exercisable within 60 days from the Record Date.
-2-
<PAGE> 6
ELECTION OF DIRECTORS
The Directors of the Company are elected annually and hold office until
the next annual meeting of stockholders and until their successors shall have
been elected and shall have qualified. In general, vacancies and newly created
directorships resulting from any increase in the authorized number of directors
may be filled by a majority vote of the Directors then in office. Shares
represented by all Proxies received by the Board of Directors and not so marked
as to withhold authority to vote for an individual Director, or for all
Directors, will be voted (unless one or more nominees are unable or unwilling to
serve) for fixing the number of Directors for the ensuing year at five (5) and
for the election of the nominees named below. The Board of Directors knows of no
reason why any such nominee should be unwilling to serve, but if such should be
the case, proxies will be voted for the election of some other person or for
fixing the number of Directors at a lesser number.
The following table sets forth the year each nominee was elected a
Director and the positions presently held by each nominee with the Company. Each
of the current Directors was elected a director of the Company at the Company's
Annual Meeting of Stockholders on June 9, 1995. For information about ownership
of the Company's Common Stock by each nominee, see "Security Ownership of
Certain Beneficial Owners and Management."
<TABLE>
<CAPTION>
=======================================================================================================
Name Year Became a Director Position
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Noam Lotan (1)(3) 1990 President, Chief Executive Officer, and Director
-------------------------------------------------------------------------------------------------------
Shlomo Margalit (1) 1988 Chairman of the Board of Directors, Chief
Technical Officer and Secretary
-------------------------------------------------------------------------------------------------------
Zeev Rav-Noy (1) 1988 Chief Operating Officer, Treasurer and Director
-------------------------------------------------------------------------------------------------------
Leonard Mautner (2)(3) 1992 Director
-------------------------------------------------------------------------------------------------------
Milton Rosenberg (2)(3) 1992 Director
=======================================================================================================
</TABLE>
(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
Each director is elected for a period of one year and serves until his
successor is duly elected by the stockholders. Officers are elected by and serve
at the discretion of the Board of Directors.
Noam Lotan has been the President, Chief Executive Officer, and a
Director of the Company since May 1990. From March 1987 to January 1990, Mr.
Lotan was Managing Director of Fibronics (UK) Ltd., the United Kingdom
subsidiary of Fibronics International Inc. ("Fibronics"), a manufacturer of
fiber optic communication networks. From January 1985 to March 1987, Mr. Lotan
was a Director of European Operations for Fibronics. Prior to such time, Mr.
Lotan held a variety of sales and marketing positions with Fibronics and
Hewlett-Packard. Mr. Lotan holds a Bachelor of Science degree in Electrical
Engineering from the Technion, the Israel Institute of Technology, and a Masters
degree in Business Administration from INSEAD (the European Institute of
Business Administration, Fontainebleu, France).
Dr. Shlomo Margalit, a co-founder of the Company, has been Chairman of
the Board of Directors and Chief Technical Officer since the Company's inception
in July 1988. From May 1985 to July 1988, Dr. Margalit was a founder and Vice
President of Research and Development for LaserCom, Inc. ("LaserCom"), a
manufacturer of semiconductor lasers. From 1982 to 1985, Dr. Margalit was a
Senior Research Associate at the California Institute of Technology ("Caltech"),
and from 1976 to 1982, a Visiting Associate at Caltech. From 1972 to 1978, Dr.
Margalit was a faculty member and Associate Professor at the Technion. During
his tenure at the Technion, Dr. Margalit was awarded the "Israel Defense" prize
for his work in developing infrared detectors for heat guided missiles and the
David Ben Aharon Award for Novel Applied Research. Dr. Margalit holds a Bachelor
of Science degree, a Masters degree, and a Doctor of Science degree (Ph.D.) in
Electrical Engineering from the Technion.
Dr. Zeev Rav-Noy, a co-founder of the Company, has been its Chief
Operating Officer and a Director of the Company since its inception and was its
President until May 1990. From May 1985 to July 1988, Dr. Rav-Noy was a
-3-
<PAGE> 7
founder and Vice President of Operations of LaserCom and, from 1982 to 1985, was
a research fellow at Caltech. From 1979 to 1982, Dr. Rav-Noy served as a
consultant to a number of companies, including Tadiran Electronic Industries,
Inc., an Israeli telecommunication, military, and consumer electronics
conglomerate, and the Yeda Research and Development Co. Ltd., a technology
exploitation and application company affiliated with the Weizman Institute in
Israel. Dr. Rav-Noy holds a Bachelor of Science degree and a Masters degree in
physics from Tel Aviv University, and a Ph.D. in applied Physics from the
Weizman Institute in Israel.
Leonard Mautner has been an advisor to the Company since its inception
and was elected a Director in March 1992. Mr. Mautner is President of Leonard
Mautner Associates, a management consulting company, which he founded in 1973,
and in addition, from 1982 to 1988, was a visiting lecturer at the Anderson
School of Management of UCLA. Mr. Mautner is also a Director of two mutual
funds, the First Pacific Advisors Perennial Fund and the First Pacific Advisors
Paramount Fund. From 1969 to 1979, Mr. Mautner was a General Partner of Goodman
& Mautner, Ltd., a venture capital partnership, and President of Goodman &
Mautner, Inc., the partnership's investment manager. Mr. Mautner holds a
Bachelor of Science degree in Electrical Engineering from the Massachusetts
Institute of Technology.
Milton Rosenberg has been an advisor to the Company since its inception
and was elected a Director in March 1992. He is President of M.R. Associates, an
investment and consulting company, which he founded in 1978. For the past 15
years, Mr. Rosenberg has been a director of Bell Industries, a New York Stock
Exchange company engaged in the distribution of electronics components. Mr.
Rosenberg has been a consultant to high technology companies for more than 20
years. Mr. Rosenberg holds a Bachelor of Science degree in Electrical
Engineering from Drexel University and did graduate course work in Electrical
Engineering at Princeton University.
The members of the Board of Directors who are not employees of the
Company receive cash compensation of $800 per month and $500 for each Board of
Directors' meeting attended, while serving as Directors.
None of the persons nominated to serve as Directors of the Company are
related by blood, marriage or adoption to any of the Company's Directors or
executive officers. All of the Directors attended all meetings of the Board of
Directors and the committees on which they served during the fiscal year ended
December 31, 1995. The Board of Directors met fourteen times during fiscal 1995.
The Audit Committee, composed of Messrs. Lotan, Mautner and Rosenberg,
held one meeting during fiscal 1995. The Audit Committee's functions include
making recommendations to the Board of Directors relative to the appointment of
independent public accountants, and conferring with the Company's independent
public accountants regarding the scope and the results of the audit of the
Company's books and accounts and reporting the same to the Board of Directors.
The Compensation Committee, composed of Messrs. Mautner and Rosenberg,
held one meeting during fiscal 1994. The Compensation Committee's functions
include the administration of stock option plans and making recommendations to
the Board of Directors relative to the compensation of officers and employees.
The Company does not have a standing nominating committee of the Board of
Directors or a committee performing similar functions.
The Executive Committee, consisting of Mr. Lotan and Drs. Margalit and
Rav-Noy, did not hold meetings during fiscal 1995. The Executive Committee is
empowered to take any action that the Board of Directorships authorized to act
upon, with the exception of the issuance of stock, the sale of all or
substantially all of the Company's assets and other significant corporate
transactions.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth a summary of all compensation paid by
the Company to its Chief Executive Officer and for each of its other executive
officers whose total annual salary and bonus exceeded $100,000 (the "Named
Executive Officers") during the fiscal year ended December 31, 1995:
-4-
<PAGE> 8
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation
- -------------------------------------- ---------------------------------- ------------
Securities
Underlying
Options
Name and Principal Positions Year Salary Bonus (#)(1)
- -------------------------------------- ---------------------------------- ------------
<S> <C> <C> <C> <C>
Noam Lotan 1995 $ 100,000 $ 0 0
President and Chief Executive Officer 1994 $ 100,000 $ 0 0
1993 $ 100,000 $ 0 0
Shlomo Margalit 1995 $ 110,000 $ 0 0
Chairman of the Board of Directors, 1994 $ 110,000 $ 0 0
Chief Technical Officer and Secretary 1993 $ 110,000 $ 0 0
Zeev Rav-Noy 1995 $ 110,000 $ 60,000 0
Chief Operating Officer 1994 $ 110,000 $ 60,000 0
1993 $ 110,000 $ 25,000 0
Ken Ahmad 1995 $ 90,000 $ 24,750 75,000
Vice President of Marketing and Sales 1994 $ 90,000 $ 30,000 0
1993 $ 90,000 $ 18,000 0
</TABLE>
- -------------------
(1) As adjusted for a three-for-two stock split effected March 20, 1996.
Mr. Lotan and Drs. Margalit and Rav-Noy do not hold any options to
purchase Common Stock of the Company and none were granted to any of them during
1995. The following table provides certain information regarding stock option
grants made to Mr. Ahmad during 1995:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price
Appreciation for Option
Term(1)
--------------------------
Number of Percent of
Securities Total Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted(#) 1995 ($/Sh) (3) Date 5% 10%
---- ---------- ---- ---------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Ken Ahmad...... 75,000(2) 7.5% $7.25 1/13/2000 $150,228 $331,965
</TABLE>
- -------------------
(1) The dollar amounts under these columns are the result of calculations
assuming the price of Common Stock on the date of the grant of the
option ($7.25 per share) increases at the hypothetical 5% and 10% rates
set by the Securities and Exchange Commission ("SEC") and therefore are
not intended to forecast possible future appreciation, if any, of the
Company's stock price.
(2) As adjusted for a three-for-two stock split effected March 20, 1996.
Options are exercisable in equal annual increments of 1/3 beginning on
the anniversary of the grant date.
-5-
<PAGE> 9
(3) The exercise price per share of the options granted represented the
fair market value of the underlying shares on the date of grant (as
adjusted for a three-for-two stock split effected on March 20, 1996).
No options were exercised by Mr. Lotan, Dr. Margalit, Dr. Rav-Noy or
Mr. Ahmad during 1995. The following table provides certain information
concerning Mr. Ahmad's unexercised options at December 31, 1995:
FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 1995 (1) December 31, 1995 (2)
--------------------- ---------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ken Ahmad 25,000 50,000 $241,750 $483,500
</TABLE>
- -------------------
(1) As adjusted for a three-for-two stock split effective March 20, 1996
(2) Based on the difference between $16.92 per share (the last sale price of
the Common Stock on December 29, 1995 as reported on The Nasdaq National
Market, as adjusted for a three-for-two stock split (effected on March 20,
1996) and the per share exercise price (as similarly adjusted).
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Directors, executive officers and
10% or greater shareholders are required by the SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
The Company believes, based solely on a review of the copies of such
reports furnished to the Company, that each report required of the Company's
executive officers, directors and 10% or greater shareholders was duly and
timely filed during the year ended December 31, 1995, except for for the
following reports which were filed late: a Form 4 of Ken Ahmad; a Form 4 of Ofer
Iny; and a Form 5 of Edmund Glazer.
EMPLOYMENT AGREEMENTS
In March 1992, the Company entered into three-year employment
agreements with Mr. Lotan, Dr. Margalit and Dr. Rav-Noy. Pursuant to the
agreements, Mr. Lotan serves as President, Chief Executive Officer, Chief
Financial Officer, and a Director of the Company, Dr. Margalit serves as
Chairman of the Board of Directors, Chief Technical Officer, and Secretary, and
Dr. Rav-Noy serves as a Chief Operating Officer, Treasurer, and a Director. Mr.
Lotan, Dr. Margalit, and Dr. Rav-Noy receive base annual salaries of $100,000,
$110,000, and $110,000, respectively, and each is entitled to receive a bonus
determined and payable at the discretion of the Board of Directors upon the
recommendation of the Compensation Committee of the Board. Recommendations with
respect to bonus levels are based on achievement of specified goals, such as new
product introductions, profitability levels, revenue goals, market expansion,
and other criteria as established by the Compensation Committee.
Each officer also receives employee benefits, such as vacation, sick
pay, and insurance, in accordance with the Company's policies which are
applicable to all employees. The Company has obtained, and is the beneficiary
of, key man life insurance policies in the amount of $1,000,000 on the lives of
each of Drs. Margalit and Rav-Noy and Mr. Lotan. All benefits under these
policies will be payable to the Company upon the death of an insured. In
November 1994, each of Mr. Lotan and Drs. Margalit and Rav-Noy agreed to extend
the terms of their respective employment agreement until March 1998.
-6-
<PAGE> 10
In August 1990, the Company and Mr. Ahmad executed a letter of
employment outlining the terms of Mr. Ahmad's employment as Vice President of
Marketing and Sales, at a base salary of $53,000 per annum plus commissions
based upon sales targets. In May 1993, Mr. Ahmad was elected an executive
officer of the Company. Mr. Ahmad's employment is at will.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As disclosed above, Messrs. Leonard Mautner and Milton Rosenberg are
members of the Company's Compensation Committee. Neither member of the
Compensation Committee was during 1995, nor prior thereto, an officer of the
Company or any of its subsidiaries. No executive officer of the Company serves
or served on the compensation committee of another entity during 1995, which has
or had an executive officer serve on the Compensation Committee of the Company,
and no executive officer of the Company serves or served as a director of
another entity who has or had an executive officer serve on the Compensation
Committee of the Company.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") was formed by the Board of
Directors in 1992 to set and administer the policies governing the Company's
compensation programs, including stock option plans. The Committee receives and
evaluates information regarding compensation practices for comparable businesses
in similar industries, and considers this information in determining base
salaries, bonuses and stock - based compensation. The Committee is authorized to
engage or employ such outside professional consultants or other services as in
its discretion may be required to fulfill its responsibilities. The Committee
also discusses and considers executive compensation matters and makes decisions
thereon.
The Company's compensation policies are structured to link the
compensation to the Chief Executive Officer, the Named Executive Officers and
other executives of the Company with corporate performance. In March 1992, Mr.
Lotan and Drs. Margalit and Rav-Noy entered into employment agreements, which,
as extended, expire in March 1998. Through the establishment of compensation
programs and employment agreements, the Company has attempted to align the
financial interests of its executives with the results of the Company's
performance, which is designed to put the Company in a competitive position
regarding executive compensation and to ensure corporate performance, which will
then enhance stockholder value.
The Company's executive compensation philosophy is to set base salaries
in accordance with those of comparable businesses, and then to provide
performance -based variable compensation, such as bonuses, as determined by the
Compensation Committee according to factors such as the Company's earnings as
well as value received by stockholders. This philosophy allows total
compensation to fluctuate from year to year. As a result, the Named Executive
Officers' actual compensation levels in any particular year may be above or
below those of the Company's competitors, depending upon the evaluation of the
compensation factors described above by the Compensation Committee.
In line with the Company's overall compensation program and the annual
objectives set by the Committee, the Company's executive officers have a high
percentage of their total compensation at risk., dependent upon the Company's
financial performance and other factors as considered by the Committee. The base
compensation for fiscal 1993, 1994, and 1995 for Mr. Lotan, Drs. Margalit and
Rav-Noy and Mr. Ahmad was determined in 1992, based upon employment agreements
entered into by and between the Company and such executives. See "Employment
Agreements."
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Committee considers the anticipated
tax treatment to the Company and to the executives of various compensation. Some
types of compensation and their deductibility depend upon the timing of an
executive's vesting or exercise of previously granted rights. Further,
interpretations of and changes in the tax laws also affect the deductibility of
compensation. To the extent reasonably practicable and to the extent it is
within the Committee's control, the Committee intends to limit executive
compensation in ordinary circumstances to that deductible under Section 162 (m)
of the Internal revenue Code of 1986, as amended. In doing so, the Committee may
utilize alternatives (such deferring compensation) for qualifying
-7-
<PAGE> 11
executive compensation for deductibility and may rely on grand fathering
provisions with respect to existing contractual commitments.
The Committee believes that its overall executive compensation program
has been successful in providing competitive compensation appropriate to attract
and retain highly qualified executives and also to encourage increased
performance from the executive group which should create stockholder value.
COMPENSATION COMMITTEE
Leonard Mautner
Milton Rosenberg
STOCKHOLDER RETURN PERFORMANCE PRESENTATION*
The following chart shows the value of an investment of $100 on
December 8, 1992 (the date of the Company's initial public offering) in cash of
(i) the Company's Common Stock, (ii) the NASDAQ Stock Market Index-US, (iii) an
index based on companies in a group of companies in the Company's industry
(Hambrecht & Quist Technology Index). All values assume reinvestment of the
fully amount of all dividends.
[Line Graph]
<TABLE>
<CAPTION>
HAMBRECHT & QUIST
MRV COMMUNICATIONS, INC. NASDAQ STOCK MARKET-US TECHNOLOGY
<S> <C> <C>
110 104 104
88 119 113
231 116 132
483 165 198
</TABLE>
* $100 INVESTED ON 12/08/92 IN STOCK OR
ON 11/30/92 IN INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS,
FISCAL YEAR ENDING DECEMBER 31.
-8-
<PAGE> 12
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
The Board of Directors has determined that it is in the best interests
of the Company and its stockholders to amend the Company's Certificate of
Incorporation to effect a two-for-one split of the Company's Common Stock (the
"Stock Split"), to increase proportionately the number of authorized shares of
the Common Stock of the Company from 20,000,000 to 40,000,000 shares and to
decrease proportionately the par value per share of the Company's Common Stock
from $0.0067 to $0.0034. Accordingly the Board of Directors has unanimously
approved the proposed Certificate of Amendment to the Company's Certificate of
Incorporation, in substantially the form attached hereto as Exhibit A (the
"Certificate of Amendment"), and hereby solicits the approval of the Certificate
of Amendment by the Company's stockholders.
If the stockholders approve the Certificate of Amendment, the Board of
Directors currently intends to file the Certificate of Amendment with the
Secretary of State of the State of Delaware within fifteen (15) calendar days
following such stockholder approval. The date of such filing with the Delaware
Secretary of State would be the effective date (the "Effective Date") of the
Stock Split, entitling holders of record of the Company's Common Stock on the
Effective Date to the additional shares resulting from the Stock Split. Within
fifteen (15) calendar days following the Effective Date, the Company will mail
to each stockholder of record on the Effective Date, a share certificate
representing the number of shares of the Company's Common Stock that, when
aggregated with the number of shares held by such stockholder on the Effective
Date, will equal two (2) times the number of shares of the Company's Common
Stock held by such stockholder on the Effective Date. For Example, if a
stockholder owns 100 shares of Common Stock of the Company on the Effective
Date, the Company will mail to such stockholder a stock certificate for 100
shares. Therefore, the stockholder would be the owner of 200 shares of the
Common Stock as of the Effective Date.
In connection with the Stock Split, the numbers of shares of Common
Stock subject to outstanding warrants and options and reserved for issuance
under the Company's stock option plan would be proportionately adjusted to
reflect the Stock Split described above, and the exercise prices of outstanding
warrants and options would be proportionately reduced.
PURPOSE OF THE PROPOSED AMENDMENT
The objectives of the Stock Split are to lower the market price of the
Company's Common Stock and to increase its trading activity, each of which is
expected to increase the liquidity and broaden the marketability of the
Company's Common Stock. The purpose for reducing the par value per share of
Common Stock is merely to decrease the par value to correspond to the Stock
Split. The objectives of the increase in the authorized number of shares of
Common Stock from 20,000,000 to 40,000,000 shares are to ensure by the
proportionate increase that there is a sufficient number of authorized shares to
effect the Stock Split and to have sufficient shares available for future
issuances. For these reasons, the Board of Directors believes that the Stock
Split and the increase in the authorized number of shares of Common Stock are in
the best interest of the Company and its stockholders.
The Board of Directors believes that it is prudent to increase the
authorized number of shares of Common Stock to the proposed level in order to
provide (after giving effect to the Stock Split) a reserve of shares available
for issuance to meet business needs as they arise. Such future activities may
include, without limitation, financings, establishing strategic relationships
with corporate partners, providing equity incentives to employees, officers or
directors, or effecting future stock splits or dividends. The additional shares
of Common Stock authorized but not required to effect the Stock Split may also
be used to acquire or invest in complementary businesses or products or to
obtain the right to use complementary technologies. Although the Company has no
present obligation to issue additional shares of Common Stock (except pursuant
to outstanding warrants and the Company's Stock Option Plan), the Company
continues to evaluate and conduct discussions with third parties with respect to
potential acquisitions or investments. However, the probability that the Company
will enter into any such transaction is presently uncertain. There are no
present plans or proposals to issue any of such additional shares.
-9-
<PAGE> 13
The additional Common Stock issuable upon the Stock Split would have
rights identical to the currently outstanding Common Stock of the Company.
Adoption of the proposed Certificate of Amendment would not affect the rights of
the holders of currently outstanding Common Stock of the Company, except for
effects incidental to increasing the number of shares of the Company's Common
Stock outstanding.
POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT
If the stockholders approve the proposed Certificate of Amendment, the
Board of Directors may cause the issuance of additional shares of Common Stock
without further vote of the stockholders of the Company, except as provided
under Delaware corporate law or under the rules of any national securities
exchange or The Nasdaq National Market on which shares of Common Stock of the
Company are then listed. Current holders of Common Stock have no preemptive or
like rights, which means that current stockholders do not have a prior right to
purchase any new issue of capital stock of the Company in order to maintain
their appropriate ownership thereof. The issuance of additional shares of Common
Stock would decrease the proportionate equity interest of the Company's current
stockholders and, depending upon the price paid for such additional shares,
could result in dilution to the Company's current stockholders.
In addition, the Board of Directors could use authorized but unissued
shares to create impediments to a takeover or a transfer of control of the
Company. Accordingly, the increase in the number of authorized shares of Common
Stock may deter a future takeover attempt which holders of Common Stock may deem
to be in their best interest or in which holders of Common Stock may be offered
a premium for their shares over the market price. The Board of Directors is not
currently aware of any attempt to take over or acquire the Company. While it may
be deemed to have potential anti-takeover effects, the proposed amendment to
increase the authorized Common Stock is not prompted by any specific effort or
takeover threat currently perceived by management.
REQUIRED VOTE; RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote will be required to approve the Certificate of Amendment.
Both abstentions and broker non-votes will have the same effects as votes
against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
CERTIFICATE OF AMENDMENT
PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S STOCK OPTION PLAN TO
INCREASE BY 75,000 SHARES THE NUMBER OF SHARES OF COMMON STOCK
THAT CAN BE OPTIONED AND SOLD UNDER THE STOCK OPTION PLAN*
The Stock Option Plan was adopted by the Company's Board of Directors
and Stockholders on March 27, 1992 and initially covered 300,000 shares. On
February 23, 1995 and on June 9, 1995 the Board and the stockholders,
respectively, amended the Plan by increasing the shares covered under the Plan
from 300,000 to 600,000 shares. On May 29, 1996, the Company's Board of
Directors approved an increase of 75,000 shares (150,000 if the proposed 2-for-1
stock split is approved) in the number of shares that could be optioned and sold
under the Stock Option Plan bringing to a total of 675,000 shares (1,350,000 if
the proposed 2-for-1 stock split is approved) the number shares of Common Stock
that can be optioned and sold under the Stock Option Plan. This increase of
75,000 shares (150,000 if the proposed 2-for-1 stock split is approved) in the
Stock Option Plan is subject to the approval of shareholders, which the Company
is seeking at the Annual Meeting.
The Board of Directors believes that the selective use of stock options
is an effective means of attracting, motivating and retaining employees and that
the availability of the number of shares covered by the Stock Option Plan,
- ------------------------
*Stock information in this section has been adjusted for a
three-for-two stock split effective March 20, 1996.
-10-
<PAGE> 14
as amended, is essential to the success of the Company. The Board of Directors
recommends that the shareholders approve the proposed amendments. THE
AFFIRMATIVE VOTES OF A MAJORITY OF ALL SHARES OF THE COMPANY PRESENT AT THE
MEETING IN PERSON OR BY PROXY IS REQUIRED TO APPROVE THE AMENDMENTS.
The summary of the provisions of the Stock Option Plan which follows is
not intended to be complete. A copy of the Stock Option Plan, as amended by the
Board, is available without charge to any stockholder upon request.
SUMMARY OF THE PROVISIONS OF THE STOCK OPTION PLAN AS AMENDED
The Company's Stock Option Plan provides for the granting of (i)
incentive stock options to key employees and (ii) nonstatutory stock options to
key employees and non-employee directors of the Company and any person who
performs consulting or advisory services for the Company and who is, by the
Board of Directors or the Stock Option Committee, determined to be eligible to
participate. For information concerning the federal income tax distinctions of
incentive and nonstatutory stock options, see "Federal Income Tax Consequences
of Incentive Stock Options and Nonstatutory Stock Options," below.
The maximum number of shares of the Company's Common Stock that may be
issued pursuant to the exercise of options granted under the Stock Option Plan,
as amended, are 675,000 shares (subject to adjustment in the event of stock
dividends, splits (including the proposed 2-for-1 stock split), reverse splits,
recapitalizations, mergers or other similar changes in the Company's capital
structure). No more than 675,000 (1,350,000 if the proposed 2-for-1 stock split
is approved) shares may be optioned and sold to directors or non-director
officer under the Stock Option Plan as amended. All options must be granted, if
at all, not later than March 26, 2002. The aggregate fair market value
(determined as of the date the option is granted) of the shares of Common Stock
to which incentive stock options granted under the Stock Option Plan are
exercisable for the first time by any employee of the Company during any
calendar year may not exceed $100,000. This limitation shall not apply with
respect to nonstatutory stock options.
The Stock Option Plan is administered by the Compensation Committee of
the Board of Directors, currently consisting of Messrs. Leonard Mautner and
Milton Rosenberg, which determines the terms of options granted, including the
exercise price, the number of shares subject to the option and the terms and
conditions of exercise. No option granted under the Stock Option Plan is
transferable by the optionee other than by will or the laws of descent and
distribution and each option is exercisable during the lifetime of the optionee
only by such optionee. Incentive stock options and nonstatutory stock options
may be granted for exercise for up to ten years from the date granted and vest
in equal installments over the term of the options, as determined by the
Committee
Options granted under the Stock Option Plan are evidenced by written
agreements specifying the number of shares covered thereby and the option price,
the exercise period and all other terms, restrictions and conditions of the
option. The exercise price of all stock options granted under the Stock Option
Plan must be at least equal to the fair market value of such shares on the date
of grant. With respect to any optionee who owns stock possessing more than 10%
of the voting rights of the Company's outstanding capital stock, the exercise
price of any stock option must be not less than 110% of the fair market value on
the date of grant.
Options must be exercised only by written notice from the optionee (or
his estate or other legal representative) to the Company accompanied by payment
of the option price in full. The option price may be paid in cash, cash
equivalents (certified or cashier's check), or with shares of Common Stock of
the Company.
As of the Record Date, options to purchase an aggregate of 788,900
shares of Common Stock, at a weighted average exercise price of $12.20 per
share, were outstanding under the Stock Option Plan. Of these, options to
purchase an aggregate of 459,000 shares of Common Stock were granted in 1995. As
of the Record Date, 234 employees (including three directors who are employees)
and two nonemployee directors were eligible to participate in the Stock Option
Plan. All options granted under of the Stock Option Plan since its inception
have been granted at exercise prices equal to the fair market value at the date
of grant. The fair market value was determined by the Board of Directors
internally prior to the Company's initial public offering in December 8, 1992
and since then at by reference to the closing price of the Company's Common
Stock on The Nasdaq National Market. As of the Record Date, options for a total
of
-11-
<PAGE> 15
86,150 shares of Common Stock had been exercised and 24,950 were available for
future grants (excluding those available under the amendments to the Stock
Option Plan to be approved at the Annual Meeting).
The following table sets forth information from the inception of the
Stock Option Plan through the Record Date concerning the net number of options
under the Stock Option Plan that has been received by (i) each of the Company's
current executive officers, (ii) each nominee for election as director, (iii)
all current executive officers as a group, (iv) all current directors who are
not executive officers as a group, (v) the persons receiving 5 percent or more
of the options granted, and (v) all employees who are not executive officers:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
No. of shares
covered by
Name of Person or Group Position with the Company Options
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Noam Lotan President and Chief Executive Officer, Director and
Director Nominee.............................................. 0
- -------------------------------------------------------------------------------------------------------------
Shlomo Margalit Chairman of the Board, Chief Technical Officer and
Director Nominee.............................................. 0
- -------------------------------------------------------------------------------------------------------------
Zeev Rav-Noy Chief Operating Officer, Director and Director Nominee........ 0
- -------------------------------------------------------------------------------------------------------------
Leonard Mautner Director and Director Nominee................................. 12,000
- -------------------------------------------------------------------------------------------------------------
Milton Rosenberg Director and Director Nominee................................. 12,000
- -------------------------------------------------------------------------------------------------------------
Ken Ahmad Vice President of Marketing and Sales......................... 75,000
- -------------------------------------------------------------------------------------------------------------
Edmund Glazer Chief Financial Officer....................................... 19,500
- -------------------------------------------------------------------------------------------------------------
Ofer Iny Vice President of Engineering................................. 92,500
- -------------------------------------------------------------------------------------------------------------
All current executive officers as a group.................................................. 187,000
- -------------------------------------------------------------------------------------------------------------
All current directors who are not executive officers as a group............................ 24,000
- -------------------------------------------------------------------------------------------------------------
All employees who are not executive officers as a group.................................... 590,800
- -------------------------------------------------------------------------------------------------------------
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES OF INCENTIVE STOCK OPTIONS AND NONSTATUTORY
STOCK OPTIONS
THE FOLLOWING DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES IS BASED
UPON EXISTING STATUTES, REGULATIONS AND INTERPRETATIONS AS OF THE DATE OF THIS
PROXY STATEMENT. BECAUSE THE CURRENTLY APPLICABLE RULES ARE COMPLEX AND THE TAX
LAWS MAY CHANGE AND BECAUSE INCOME TAX CONSEQUENCES MAY VARY DEPENDING UPON THE
PARTICULAR CIRCUMSTANCES OF EACH PARTICIPANT, EACH PARTICIPANT SHOULD CONSULT
HIS OR HER OWN TAX ADVISOR CONCERNING FEDERAL (AND ANY STATE AND LOCAL) INCOME
TAX CONSEQUENCES. THE FOLLOWING DISCUSSION DOES NOT PURPORT TO DESCRIBE STATE OR
LOCAL INCOME TAX CONSEQUENCES.
Options so designated under the Option Plan are intended to qualify as
"incentive stock options" ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986 (the "Code"). All options that are not designated
as ISOs are intended to be "nonstatutory stock options" (NSOs").
Incentive Stock Options. The optionee will recognize no income upon the
grant of an ISO and incur no tax on its exercise (unless the optionee is subject
to the alternative minimum tax described below). If the optionee holds the
-12-
<PAGE> 16
stock acquired upon exercise of an ISO (the "ISO Shares") for more than one year
after the date the option was exercised and for more than two years after the
date the option was granted, the optionee generally will realize long-term
capital gain or loss (rather than ordinary income or loss) upon disposition of
the ISO Shares. This gain or loss will be equal to the difference between the
amount realized upon such disposition and the amount paid for the shares.
If the optionee disposes of ISO shares prior to the expiration or
either required holding period (a "disqualifying disposition"), then gain
realized upon such disposition, up to the difference between the fair market
value of the shares on the date of exercise (or, if less, the amount realized on
a sale of such shares) and the option exercise price, will be treated as
ordinary income. Any additional gain will be long-term or short-term capital
gain, depending upon the amount of time the ISO Shares were held by the
optionee. Special rules apply to officers and directors of the Company. See
"Special Considerations for Officers and Directors," below.
Nonstatutory Stock Options. An optionee will not recognize any taxable
income at the time an NSO is granted. However, upon exercise of an NSO, the
optionee will include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise
(or, in the case of exercise for stock subject to a substantial risk of
forfeiture, at the time such forfeiture restriction lapses) and the amount paid
for that stock upon exercise of the NSO. In the case of stock subject to a
substantial risk of forfeiture, if the optionee makes an 83(b) election, the
included amount will be based on the difference between the fair market value on
the date of exercise and the option exercise price. The included amount will be
treated as ordinary income by the optionee and will be subject to income tax
withholding by the Company (either by payment in cash by the optionee or
withholding out of the optionee's salary). Upon sale of the shares by the
optionee, any appreciation or depreciation in the value of the shares will be
treated as capital gain or loss (either long or short term -- depending upon the
time the optionee holds the shares after exercising the NSO. Special rules apply
to officers and directors of the Company. See "Special Considerations for
Officers and Directors," below.
Special Considerations for Officers and Directors. If the optionee is
an officer or director of the Company who is potentially subject to short-swing
profits liability under Section 16(b) of the Securities Exchange Act of 1934,
ISO Shares purchased by the Optionee within six months from the date of the
grant of an option for such ISO Shares will be treated as subject to a
substantial risk of forfeiture for the six-month period immediately following
the date of grant. Thus, in the case of a disqualifying disposition the optionee
will recognize ordinary income equal to the difference between the fair market
value of the ISO Shares on the date six months after the date of grant (or, if
less, the amount realized on the sale of the ISO shares) and the option exercise
price unless the optionee makes an 83(b) election. Any remaining amount of gain
on the disqualifying disposition will be long or short term capital gain
depending on the amount of time the ISO Shares have been held. If the optionee
makes an 83(b) election the ordinary income would be equal to the difference
between the fair market value on the date of exercise (or, if less, the amount
realized on the sale of the ISO Shares) and the option exercise price (assuming
an 83(b) election is effective for regular tax purposes for an ISO). Moreover,
for alternative minimum tax calculation purposes, unless the optionee makes an
83(b) election, the adjustment to income will be based on the difference between
the fair market value of the shares on the date six months after the date of
grant.
In the event of the exercise of an NSO within six months after the date
of the NSO, the optionee will include in income as compensation an amount equal
to the difference between the option exercise price and the fair market value of
the shares on the date six months after the date of grant unless the optionee
makes an 83(b) election. If the optionee makes an 83(b) election, the optionee
will include in income as compensation an amount equal to the difference between
the option exercise price and the fair market value on the date of exercise.
Tax Treatment of the Company. The Company will be entitled to a
deduction in connection with the exercise of an NSO by a domestic employee or
director to the extent that the optionee recognizes ordinary income and the
Company withholds tax. The Company will be entitled to a deduction in connection
with the disposition of ISO Shares only to the extent that the optionee
recognizes ordinary income on a disqualifying disposition of the ISO Shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF AMENDMENTS
TO THE COMPANY'S STOCK OPTION PLAN.
-13-
<PAGE> 17
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The persons named in the enclosed Proxy will vote to ratify the
selection of Arthur Andersen LLP as independent public accountants for the
fiscal year ending December 31, 1996 unless otherwise directed by the
Stockholders. A representative of Arthur Andersen LLP is expected to be present
at the meeting of Stockholders, and will have the opportunity to make a
statement and answer questions from Stockholders if he so desires.
STOCKHOLDERS PROPOSALS
In order to be included in the Proxy material for the 1997 Annual
Meeting, Stockholders' proposed resolutions must be received by the Corporation
before February 10, 1997. It is suggested that proponents submit their proposals
by certified mail, return receipt requested, addressed to the Secretary of the
Corporation.
MISCELLANEOUS
The Management does not know of any other matters which may come before
the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying Proxy to
vote, or otherwise act, in accordance with their judgment on such matters.
By Order of the Board of Directors
Shlomo Margalit
Secretary
June 12, 1996
THE MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THIS MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND YOU ARE URGED TO COMPLETE, DATE, SIGN, AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGHT THEY HAVE SENT IN THEIR PROXIES.
-14-
<PAGE> 18
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
MRV COMMUNICATIONS, INC.
MRV Communications, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY as follows:
FIRST: The Certificate of Incorporation of the Corporation is hereby
amended by deleting the first paragraph of Section 4 of the Certificate of
Incorporation in its present form and substituting therefor new first and second
paragraphs of Section 4 in the following form:
A. This corporation is authorized to issue two classes of stock, to
be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares of this corporation is authorized to
issue is forty- one Million (41,000,000) shares of capital stock.
B. Of such authorized shares, Forty Million (40,000,000) shares shall
be designated "Common Stock" and have a par value of $.0034 per
share. One Million (1,000,000) shares shall be designated
"Preferred Stock" and have a par value of $0.01 per share. Upon
the filing of this Certificate of Amendment of the Certificate of
Incorporation, each outstanding share of Common Stock of the
corporation outstanding immediately prior to such filing shall be
reconstituted as and converted into two shares of Common Stock.
SECOND: The amendment to the Certificate of Incorporation of the
Corporation set forth in this Certificate of Amendment has been duly adopted in
accordance with the provisions of Section 242 of the DGCL by (a) the Board of
Directors of the Corporation having duly adopted a resolution setting forth such
amendment and declaring its advisability and submitting it to the stockholders
of the Corporation for their approval, and (b) the stockholders of the
Corporation having duly adopted such amendment by vote of the holders of a
majority of the outstanding stock entitled to vote thereon at a special meeting
of stockholders called and held upon notice in accordance with Section 222 of
the DGCL.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate of Amendment to be signed by Noam Lotan,
its President and Chief Executive Officer, and attested by Shlomo Margalit, its
Secretary, this day of , 1996.
MRV COMMUNICATIONS, INC.
By: _____________________________________
Noam Lotan
President and Chief Executive Officer
ATTEST:
_____________________________________
Shlomo Margalit
Secretary
-15-
<PAGE> 19
- --------------------------------------------------------------------------------
MRV COMMUNICATIONS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 11, 1996
THIS PROXY IS SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned, having received notice of the Annual Meeting of
Stockholders and the Proxy Statement of the Board of Directors
furnished therewith, hereby appoints Noam Lotan, attorney of the
undersigned (with full power of substituting him) for and in the
name(s) of the undersigned to attend the Annual Meeting of
Stockholders of MRV Communications, Inc. (the "Company") to be held at
the Warner Center Marriott Hotel, 21850 Oxnard Street, Woodland Hills,
California on Thursday, July 11, 1996 at 10:00 a.m. and any
adjournment or adjournments thereof, and there to vote and act in
regard to all matters which may properly come before said meeting
(except those matters as to which authority is hereinafter withheld)
upon and in respect to all shares of the Common Stock of the Company
upon or in respect of which the undersigned would be entitled to vote
or act, and with all power the undersigned would possess, if
personally present, and especially (but without limiting the general
authorization and power hereby given) to vote and act as follows.
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all
below) nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name below.)
Noam Lotan Shlomo Margalit
Zeev Rav-Noy Leonard Mautner
Milton Rosenberg
2. To approve an amendment to the Company's Certificate of
Incorporation to effect a two-for-one split of the Company's Common
Stock, to increase the number of authorized shares of the Company's
Common Stock from 20,000,000 to 40,000,000 shares and to decrease
the par value per share of Common Stock from $0.0067 to $0.0034.
FOR / / AGAINST / / ABSTAIN / /
3. To approve amendments to the Company's 1992 Stock Option Plan (the
"Stock Option Plan") to increase by 75,000 shares the number of
shares of Common Stock that can be optioned and sold under the
Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
(continued and to be signed on the reverse side)
- -------------------------------------------------------------------------------
<PAGE> 20
- --------------------------------------------------------------------------------
(continued from other side)
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
4. To ratify the appointment of Arthur Andersen LLP as independent
accountants for the year ending December 31, 1996.
FOR / / AGAINST / / ABSTAIN / /
5. In their discretion, the Proxies are each authorized to vote upon
such other business as may properly come before the meeting.
FOR / / AGAINST / / ABSTAIN / /
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is
made, this Proxy will be voted FOR Proposals 1, 2, 3 and 4.
The undersigned hereby confer(s) upon said attorney Proxy
discretionary authority to vote upon any other matters of proposals
not known at the time of solicitation of this Proxy which may properly
come before the meeting.
Attendance of the undersigned
at said meeting or at any
adjournment or adjournments
thereof will not be deemed to
revoke this Proxy unless the
undersigned shall affirmatively
indicate thereat his intention to
vote said shares in person. If a
fiduciary capacity is attributed
to the undersigned in imprint
below, this Proxy is signed by
the undersigned in that capacity.
---------------------------------
Signature(s)
---------------------------------
Date
IMPORTANT: In signing this Proxy,
please write name exactly as
appearing on imprint. For stock
held jointly, each joint owners
should personally sign. For stock
held by corporation, please affix
corporate seal.
- ------------------------------------------------------------------------------
