Edgar Filing: NEW VISUAL CORP

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YOUR VOTE IS IMPORTANT

[NEW VISUAL CORPORATION LOGO HERE]

PROXY STATEMENT

2003 ANNUAL MEETING OF SHAREHOLDERS

[NEW VISUAL CORPORATION LOGO HERE]

RAY WILLENBERG, JR.
CHAIRMAN OF THE BOARD

July 31, 2003

Dear Shareholder:

I am pleased to invite you to New Visual Corporation's 2003 Annual
Meeting of Shareholders. The meeting will be held at 1:00 p.m. on Monday, August
25, 2003 at the Portland Marriott Hotel, 1404 SW Naito Parkway, Portland,
Oregon.

At the meeting, you and the other shareholders will be asked to (1)
elect directors to the New Visual Corporation Board; (2) approve an amendment to
Article I of our Articles of Incorporation to change our corporate name to Rim
Semiconductor Company; (3) approve an amendment to Article IV of our Articles of
Incorporation to increase our authorized common stock from 100 million shares to
500 million shares; and (4) ratify the appointment of Marcum & Kliegman, LLP, as
our independent auditors for the current fiscal year. You will also have the
opportunity to hear what has happened in our business in the past year and to
ask questions. You will find other detailed information about our operations,
including our audited financial statements, in the enclosed Annual Report.

Your vote is very important. We encourage you to read this proxy
statement and vote your shares as soon as possible. A return envelope for your
proxy card is enclosed for convenience. You also may have the option of voting
by using a toll-free telephone number or via the Internet. Instructions for
using these services are included on the proxy card.

Thank you for your continued support of New Visual Corporation. We look
forward to seeing you on August 25th.

Very truly yours,

Ray Willenberg, Jr.
CHAIRMAN OF THE BOARD

[LOGO]

5920 FRIARS ROAD, SUITE 104
SAN DIEGO, CALIFORNIA 92108
619.692.0333

July 31, 2003

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 25, 2003

New Visual Corporation will hold its 2003 Annual Meeting of
Shareholders at the Portland Marriott Hotel, 1404 SW Naito Parkway, Portland,
Oregon, on Monday, August 25, 2003 at 1:00 p.m.

We are holding this meeting:

o To elect seven directors to serve until the 2004 Annual Meeting of
Shareholders and their successors are elected and qualified;

o To amend Article I of our Articles of Incorporation to change our
name from New Visual Corporation to Rim Semiconductor Company;

o To amend Article IV of our Articles of Incorporation to increase
the number of authorized shares of common stock from 100 million
to 500 million;

o To ratify the appointment of Marcum & Kliegman, LLP, as our
independent auditors; and

o To transact any other business that properly comes before the
meeting.

Your board of directors recommends that you vote in favor of each of
the proposals outlined in this proxy statement.

Your board of directors has selected July 14, 2003 as the record date
for determining shareholders entitled to vote at the meeting. A list of
shareholders on that date will be available for inspection at our corporate
headquarters, 5920 Friars Road, Suite 104, San Diego, California, for at least
ten days before the meeting. The list also will be available for inspection at
the meeting.

This notice of annual meeting, proxy statement, proxy and our 2002
Annual Report to Shareholders are being distributed on or about July 31, 2003.

By Order of the Board of Directors,

C. Rich Wilson III
Vice President and Secretary

TABLE OF CONTENTS

QUESTIONS AND ANSWERS..........................................................1

ITEM 1. ELECTION OF DIRECTORS..................................................4

ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS.......................7

Committees of the Board of Directors..................................8

STOCK OWNERSHIP................................................................8

Beneficial Ownership of Certain Shareholders, Directors and
Executive Officers....................................................8

Section 16(a) Beneficial Ownership Reporting Compliance...............9

ITEM 2. AMENDMENT OF ARTICLE I OF OUR ARTICLES OF INCORPORATION TO CHANGE
OUR NAME TO RIM SEMICONDUCTOR COMPANY................................10

General..............................................................10

Reasons for the Name Change..........................................10

ITEM 3. AMENDMENT OF ARTICLE IV OF OUR ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK......................10

Reasons for Approving the Increase in Authorized Shares..............11

Description of Preferred Stock Issued to Mercatus....................12

Proposed Amendment; Required Vote; Board Recommendation..............13

ITEM 4. RATIFICATION OF INDEPENDENT AUDITORS.................................13

Audit Committee Report...............................................14

ADDITIONAL INFORMATION CONCERNING OUR MANAGEMENT..............................15

Executive Officers...................................................15

Executive Compensation...............................................16

Employment Agreements with Executive Officers........................18

Compensation Committee Interlocks and Insider Participation..........20

Compensation Committee Report........................................20

Stock Performance Graph..............................................22

Certain Relationships and Related Transactions.......................22

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS....................................24

WHERE YOU CAN FIND MORE INFORMATION...........................................25

-i-

QUESTIONS AND ANSWERS

Q1: WHO IS SOLICITING MY PROXY?

A: We, the board of directors of New Visual, are sending you this proxy
statement in connection with our solicitation of proxies for use at the
2003 Annual Meeting of Shareholders (the "Annual Meeting" or the
"Meeting"). Certain directors, officers and employees of New Visual also
may solicit proxies on our behalf by mail, phone, fax or in person.

Q2: WHO IS PAYING FOR THIS SOLICITATION?

A: New Visual will pay for the solicitation of proxies. New Visual also will
reimburse banks, brokers, custodians, nominees and fiduciaries for their
reasonable charges and expenses in forwarding our proxy materials to the
beneficial owners of New Visual common stock.

Q3: WHAT AM I VOTING ON?

A: Four items: (1) the election of Ivan Berkowitz, Bruce Brown, Thomas J.
Cooper, John Howell, Brad Ketch, Ray Willenberg, Jr. and C. Rich Wilson
III to our board of directors; (2) the approval of an amendment to
Article I of our Articles of Incorporation to change the company's name
from New Visual Corporation to Rim Semiconductor Company; (3) the
approval of an amendment to Article IV of our Articles of Incorporation
to increase the number of shares of common stock from 100 million shares
to 500 million shares; and (4) the ratification of Marcum & Kliegman,
LLP, as our independent auditors for the current fiscal year.

Q4: WHO CAN VOTE?

A: Only those who owned New Visual common stock at the close of business on
July 14, 2003, the record date for the Annual Meeting, can vote. If you
owned New Visual common stock on the record date, you have one vote per
share for each matter presented at the Annual Meeting.

Q5: HOW DO I VOTE?

A: You may vote your shares either in person or by proxy.

There are generally four ways to vote:

o by Internet at www.proxyvote.com;
o by toll-free telephone at 1-800-690-6903;
o by completing, executing and returning your proxy card; and
o by written ballot at the meeting.

Please see your proxy card for the voting options available to you. If
your shares are held in a brokerage account in your broker's name (this
is called street name), you should follow the voting directions provided
by your broker or nominee. You may complete and mail a voting instruction
card to your broker or nominee or, in most cases, submit voting
instructions by telephone or the Internet. If you provide specific voting
instructions by mail, telephone or the Internet, your shares should be
voted by your broker or nominee as you have directed.

We will pass out written ballots to anyone who wants to vote at the
Meeting. If you hold your shares in street name, you must request a legal
proxy from your broker to vote at the Meeting.

If you vote by Internet or telephone, your vote must be received by 11:59
p.m., Eastern Time on August 24th, the day before the meeting. Your
shares will be voted as you indicate. If you return your proxy card but

you do not mark your voting preference, the individuals named as proxies
will vote your shares FOR the election of the seven nominees for director
named in this proxy statement, FOR the amendment to our Articles of
Incorporation to change our name to Rim Semiconductor Company, FOR the
amendment to our Articles of Incorporation to increase our authorized
common stock to 500 million shares, and FOR ratification of Marcum &
Kliegman, LLP as our independent auditors.

Q6: WHAT CONSTITUTES A QUORUM?

A: Voting can take place at the Annual Meeting only if shareholders owning a
majority of the voting power of the common stock (a majority of the total
number of votes entitled to be cast) are present in person or represented
by effective proxies. On the record date, we had 65,879,914 shares of
common stock outstanding. Both abstentions and broker non-votes are
counted as present for purposes of establishing the quorum necessary for
the meeting to proceed. A broker non-vote results from a situation in
which a broker holding your shares in "street" or "nominee" name
indicates to us on a proxy that you have not voted and it lacks
discretionary authority to vote your shares.

Q7: WHAT VOTE OF THE SHAREHOLDERS WILL RESULT IN THE MATTERS BEING PASSED?

A: ELECTION OF DIRECTORS. Directors need the affirmative vote of holders of
a plurality of the voting power present to be elected. At this year's
Meeting, the seven nominees receiving the greatest number of votes will
be deemed to have received a plurality of the voting power present.
Neither abstentions nor broker non-votes will have any effect on the
election of directors.

APPROVAL OF AN AMENDMENT TO ARTICLE I OF OUR ARTICLES OF INCORPORATION TO
CHANGE OUR NAME TO RIM SEMICONDUCTOR COMPANY. To approve this item,
shareholders holding a majority of the total voting power of the common
stock must affirmatively vote to approve the matter. Abstentions and
broker non-votes have the same effect as votes "against" the proposal.

APPROVAL OF AN AMENDMENT TO ARTICLE IV OF OUR ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK. To approve
this item, shareholders holding a majority of the total voting power of
the common stock must affirmatively vote to approve the matter.
Abstentions and broker non-votes have the same effect as votes "against"
the proposal.

RATIFICATION OF INDEPENDENT AUDITORS. To ratify the appointment of Marcum
& Kliegman, LLP, as our independent auditors for the current fiscal year,
shareholders holding a majority of the shares represented in person or by
proxy at the Meeting must affirmatively vote to approve the matter.
Abstentions have the same effect as votes "against" the proposal, while
broker non-votes have no effect at all.

Q8: HOW DOES THE BOARD RECOMMEND THAT I VOTE ON THE MATTERS PROPOSED?

A: The board of directors of New Visual unanimously recommends that
shareholders vote FOR each of the proposals submitted at this year's
Annual Meeting.

Q9: WILL THERE BE OTHER MATTERS PROPOSED AT THE ANNUAL MEETING?

A: New Visual's bylaws limit the matters presented at the Annual Meeting to
those in the notice of the meeting (or any supplement), those otherwise
properly presented by the board of directors and those presented by
shareholders so long as the shareholder complies with certain advance

notice requirements. Please refer to the section of this proxy statement
captioned "Annual Meeting Advance Notice Requirements" for a description
of these requirements. We do not expect any other matter to come before
the Annual Meeting. However, if any other matter is presented, your
signed proxy gives the individuals named as proxies authority to vote
your shares in their discretion.

Q10: WHEN ARE 2004 SHAREHOLDER PROPOSALS DUE IF THEY ARE TO BE INCLUDED IN THE
COMPANY'S PROXY MATERIALS?

A: To be included in our proxy statement for the 2004 Annual Meeting of
Shareholders, a shareholder proposal must be received at New Visual's
offices no later than April 2, 2004 (unless next year's meeting date is
before July 26 or after September 24, in which case a proposal must be
received a reasonable time before we begin to print and mail next year's
proxy materials, and in compliance with the advance notice requirements
of our bylaws). To curtail controversy as to the date on which the
Company received a proposal, we suggest that proponents submit their
proposals by certified mail, return receipt requested.

ITEM 1.
ELECTION OF DIRECTORS

The board of directors of New Visual has currently set the number of
directors constituting the whole board at seven. At the Annual Meeting, you and
the other shareholders will elect seven individuals to serve as directors until
the 2004 Annual Meeting and their successors are elected and qualified. All
nominees are currently serving as directors of New Visual.

Directors need the affirmative vote of holders of a plurality of the
voting power present to be elected. At this year's Meeting, the seven nominees
receiving the greatest number of votes will be deemed to have received a
plurality of the voting power present. Neither abstentions nor broker non-votes
will have any effect on the election of directors.

The persons designated as proxies will vote the enclosed proxy for the
election of all of the nominees unless you direct them to withhold your vote for
any one or more nominees. If any nominee becomes unable to serve as a director
before the meeting (or decides not to serve), the individuals named as proxies
may vote for a substitute or we may reduce the number of members of the board.
We recommend a vote FOR each of the nominees.

Below are the names and ages of the nominees for director, the years
they became directors, their principal occupations or employment for at least
the past five years and certain of their other directorships, if any.

o IVAN BERKOWITZ AGE 56, A DIRECTOR SINCE AUGUST 2000.

Mr. Berkowitz has served as a member of our
board of directors since August 2000 and was
named Vice Chairman of the Board in June 2001.
Since 1993, Mr. Berkowitz has served as the
managing general partner of Steib & Company, a
privately held New York-based investment
company. Currently, Mr. Berkowitz serves on
the board of directors of ConnectivCorp, a
deep content provider that facilitates online
connections between consumers and
health-oriented companies. Since 1989, Mr.
Berkowitz has served as President of Great
Court Holdings Corporation, a privately held
New York-based investment company. Mr.
Berkowitz holds a B.A. from Brooklyn College,
an MBA from Baruch College, City University of
New York, and a Ph.D. in International Law
from Cambridge University.

o BRUCE BROWN AGE 65, A DIRECTOR SINCE JUNE 2000.

Mr. Brown has served as a member of our board
of directors since June 2000. Over the past 30
years, Mr. Brown has been an independent
director and producer of motion pictures. He
was nominated for an Academy Award in 1971 for
directing "ON ANY SUNDAY," a motorcycle
adventure film starring Steve McQueen. Mr.
Brown has earned worldwide distinction as the
director and producer of the first of its kind
documentary, "ENDLESS SUMMER," which is the

second highest grossing documentary film of
all time. Its sequel, "ENDLESS SUMMER 2," also
directed by Mr. Brown, grossed more than $10
million in its first year of theatrical
distribution. Mr. Brown has collaborated with
us to produce "STEP INTO LIQUID," a new
surfing adventure film for mainstream
theatrical release. Mr. Brown's other movie
credits include "SLIPPERY WHEN WET," "SURFIN'
SHORTS," "SURF CRAZY," "SURFIN' HOLLOW DAYS,"
"BAREFOOT ADVENTURE" and "WATERLOGGED."

o THOMAS J. COOPER AGE 54, A DIRECTOR SINCE MARCH 2002.

Mr. Cooper has served as a member of our board
of directors since March 2002. From June 1 to
December 2, 2002, Mr. Cooper served as our
President and Chief Executive Officer. Mr.
Cooper has been engaged in the development,
creation and management of global sales and
marketing platforms for businesses operating
in the areas of high technology, real estate,
office automation, and telecommunications for
the past 30 years. From 1994 to 2002, Mr.
Cooper served in various high-ranking
positions at GlobespanVirata Corporation
(formerly Virata), most recently as Senior
Vice President, Corporate Development (from
July 1999 to February 2002), where he was
responsible for the development and
implementation of long range growth
strategies, including defining global
partnership initiatives, identifying potential
acquisition and joint venture candidates, and
directing strategic investment of corporate
capital into select ventures in which the
company acquired minority stakes. From 1994
until 1999, Mr. Cooper served as Virata's
Senior Vice President, Worldwide Sales and
Marketing, where he oversaw all aspects of the
company's product sales and marketing,
corporate marketing/communications and public
relations. During his tenure, Virata grew its
revenues from $8.9 million in 1998, $9.3
million in 1999, and $21.8 million in 2000, to
over $120 million in 2001.

Prior to joining Virata, Mr. Cooper served in
senior sales and management positions at
Hewlett-Packard, Trammell Crow Company,
Rubloff, Inc., Network Equipment Technologies
and Pedcom, Inc. He also has seven pending
U.S. patents for networking method or product.
Mr. Cooper also serves on the boards of
directors of Bsafeonline.com, Inc., a
distributor of Internet filtering and security
applications, and RolaTube Technology, Ltd.,
the developer and patent-holder of a new
materials technology called Bi-stable Reeled
Composite (BRC) technology, which is
headquartered in the United Kingdom. After
earning a Bachelor of Arts degree from
Hamilton College, Mr. Cooper graduated MAGNA
CUM LAUDE from the University of Toledo, where
he earned his MBA.

o JOHN HOWELL AGE 57, A DIRECTOR SINCE APRIL 2000.

Mr. Howell has served as a member of our board
of directors since April 2000 and was our
Executive Vice President from July 2000 until
October 2002. In May 2003, Mr. Howell was
named President and Chief Operating Officer of
Nutrastar Incorporated, a nutraceutical
company that manufactures and markets whole
food supplements derived from stabilized rice
bran that target specific human diseases. Mr.
Howell also serves as a director of Nutrastar
Incorporated. From October 2002 to April 2003,
Mr. Howell served as Executive Vice President
and Chief Operating Officer of Kingdom
Ventures, Inc. a manufacturer and global
distributor of products and services primarily
marketed to the faith-based consumer. From
January 1998 until October 1998, Mr. Howell
served as Vice President of TeraGlobal
Communications Corp., a manufacturer of
hardware for the convergence of voice, video
and data. From 1997 to 1998, Mr. Howell was
Chief Executive Officer of EVERSYS
Corporation, a manufacturer of computer
equipment for the local area network. Mr.
Howell has a Bachelor of Science degree in
Aerospace Engineering from Oregon State
University.

o BRAD KETCH AGE 41, A DIRECTOR SINCE DECEMBER 2002.

Mr. Ketch has served the Company in various
roles since March 2002. He has served as our
President and Chief Executive Officer, as well
as a director, since December 2002. In March
2002, Mr. Ketch became a consultant with us on
our broadband technology and served in that
capacity until July 2002, when he became our
Chief Marketing Officer. With over 18 years
experience creating shareholder value through
broadband telecommunications products and
services, Mr. Ketch, from October 2001 to
March 2002, served as CEO of Kentrox LLC, a
manufacturer and marketer of data networking
equipment. At Kentrox, Mr. Ketch was
responsible for a company with 260 employees
and $90 million in annual revenues. From
January 2001 to October 2001 Mr. Ketch
implemented strategic plans for telecom
service providers and equipment manufacturers
through his telecommunications consulting
company, Brad Ketch & Associates, of which he
was founder and President. From February 1999
to January 2001 he was Senior Vice President
of Sales and Marketing for HyperEdge
Corporation, a company he co-founded.
HyperEdge acquired and integrated broadband
access equipment manufacturers to further
enable service providers to deliver broadband

access to the "Last Mile." From August 1997
through February 1999, Mr. Ketch implemented
strategic business and technical plans for
competitive local exchange carrier network
access and created products targeted at the
incumbent local exchange carrier market as a
consultant to various telecommunications
companies as a consultant with Brad Ketch &
Associates. Prior to August 1997 he served in
various capacities at Nortel, Advanced Fibre
Communications and Cincinnati Bell. Mr. Ketch
has a Bachelor of Arts degree in Economics
from Wheaton College and a MBA from
Northwestern University.

o RAY WILLENBERG, JR. AGE 51, A DIRECTOR SINCE OCTOBER 1996.

Mr. Willenberg served as our President, Chief
Executive Officer and Chairman of the Board
from April 1997 until May 2002. He was elected
a director in October 1996 and currently
serves as our Chairman and Executive Vice
President. Mr. Willenberg joined us as Vice
President and Corporate Secretary in 1996.
From 1972 to 1995, Mr. Willenberg was Chief
Executive Officer of Mesa Mortgage Company in
San Diego, California.

o C. RICH WILSON III AGE 34, A DIRECTOR SINCE APRIL 2000.

Mr. Wilson has served as Vice President,
Secretary and a member of our Board of
Directors since April 2000. Since July 1995,
Mr. Wilson has served as an employee or
independent contractor of New Visual,
providing marketing, sales and business
development services. In addition to serving
as our Vice President and corporate Secretary,
Mr. Wilson is Vice President of Marketing for
our wholly-owned subsidiary, NV Technology,
Inc., where he is responsible for technical
research and marketing, strategic alliances
and business development. From March 1993
through July 1995, Mr. Wilson was National
Marketing Manager for Spevco, Inc., a special
events marketing firm. Mr. Wilson holds a
Bachelor of Arts degree in English from the
University of North Carolina at Charlotte.

ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS

The board of directors of New Visual met five times during the fiscal
year ended October 31, 2002. No director who served during the 2002 fiscal year
attended fewer than 75% of the meetings of the Board and of committees of the
Board of which he was a member. Other actions were taken by unanimous consent in
lieu of a meeting during the fiscal year ended October 31, 2002. In addition to
regularly scheduled meetings, a number of directors were involved in numerous
informal meetings with management, offering valuable advice and suggestions on a
broad range of corporate matters.

During 2002, it was our policy to pay each outside director $2,000 for
each meeting of our Board of Directors attended and for each committee meeting
attended. In addition, we have granted stock and stock options to the directors
to compensate them for their services. Our directors are eligible to receive
stock option grants under our 2000 Omnibus Securities Plan. During 2002, we
granted Bruce Brown and Ivan Berkowitz, our non-employee directors, options to

purchase 150,000 and 250,000 shares of our common stock, respectively, at an
exercise price of $0.42 per share. The options were all granted under our 2000
Omnibus Securities Plan and vested quarterly on April 30, 2002, July 31, 2002,
October 31, 2002 and January 31, 2003. We reimburse our directors for reasonable
expenses incurred in traveling to and from board or committee meetings. In
addition, through December 31, 2002, Mr. Berkowitz was entitled to receive
$2,000 per week for serving as our Vice Chairman. $18,000 of this amount has
been deferred.

COMMITTEES OF THE BOARD OF DIRECTORS

Our board of directors operates with the assistance of the Audit
Committee and the Compensation Committee. The function of the Audit Committee is
to:

o make recommendations to the full board of directors with respect
to appointment of the Company's independent auditors; and

o meet periodically with our independent auditors to review the
general scope of audit coverage, including consideration of our
accounting practices and procedures, our system of internal
accounting controls and financial reporting.

The Audit Committee adopted a written charter governing its actions on
June 26, 2000. During the 2002 fiscal year, our Audit Committee was comprised of
three independent directors within the meaning of Rule 4200 of the listing
standards of the National Association of Securities Dealers. The Audit Committee
met five times during the fiscal year ended October 31, 2002. In March 2002, two
members of the Audit Committee resigned from the board of directors and its
committees. Bruce Brown was named to the Audit Committee at that time. Mr. Brown
may not be deemed "independent" under these standards because of his agreement
with us to produce STEP INTO LIQUID.

Ivan Berkowitz and Bruce Brown serve on the Audit Committee, with Mr.
Berkowitz serving as Chairman. For a more detailed discussion of the Audit
Committee, see "Audit Committee Report."

The function of the Compensation Committee is to review and approve the
compensation arrangements for our executive officers. Ivan Berkowitz and Bruce
Brown serve on the Compensation Committee, with Mr. Berkowitz serving as
Chairman. The Compensation Committee met once during the fiscal year ended
October 31, 2002. For a more detailed discussion of the Compensation Committee,
see "Compensation Committee Report."

We do not maintain a formal nominating committee.

STOCK OWNERSHIP

BENEFICIAL OWNERSHIP OF CERTAIN SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information as of July 14, 2003,
concerning all persons known by us to own beneficially more than 5% of our
common stock and concerning shares beneficially owned by each director and named
executive officer and by all directors and executive officers as a group. Unless
expressly indicated otherwise, each shareholder exercises sole voting and
investment power with respect to the shares beneficially owned. The address for
each of our executive officers and directors is 5920 Friars Road, Suite 104, San
Diego, CA 92108.

In accordance with the rules of the SEC, the table gives effect to the
shares of common stock that could be issued upon the exercise of outstanding
options and common stock purchase warrants within 60 days of July 14, 2003.
Unless otherwise noted in the footnotes to the table and subject to community
property laws where applicable, the following individuals have sole voting and
investment control with respect to the shares beneficially owned by them. The
address of each executive officer and director is c/o New Visual Corporation,
5920 Friars Road, Suite 104, San Diego, California 92108. We have calculated the
percentages of shares beneficially owned based on 65,879,914 shares of common
stock outstanding at July 14, 2003.

SHARES BENEFICIALLY OWNED
--------------------------------
PERSON OR GROUP NUMBER PERCENT(1)
----------------------------------------------------------- ------------- -----------

Ray Willenberg, Jr. 2,565,780(2) 3.83%
C. Rich Wilson III 1,053,900(3) 1.58%
Thomas J. Cooper 532,258(4) *
John Howell 971,602(5) 1.47%
Bruce Brown 175,250(6) *
Ivan Berkowitz 1,269,375(7) 1.91%
Brad Ketch 605,000(8) *
Thomas J. Sweeney -- --
All executive officers and directors as a group (8 persons) 7,173,165(9) 10.26%
Charles R. Cono 3,929,500(10) 5.96%
Zaiq Technologies, Inc. 8,400,000(11) 11.31%

---------------
* Less than 1%.
(1) Percentage of beneficial ownership as to any person as of a particular date
is calculated by dividing the number of shares beneficially owned by such
person by the sum of the number of shares outstanding as of such date and
the number of unissued shares as to which such person has the right to
acquire voting and/or investment power within 60 days.
(2) Includes options to purchase 1,117,500 shares of common stock.
(3) Includes options to purchase 742,500 shares of common stock.
(4) Includes options to purchase 500,000 shares of common stock.
(5) Includes options to purchase 160,000 shares of common stock.
(6) Includes options to purchase 160,000 shares of common stock.
(7) Includes options to purchase 722,500 shares of common stock.
(8) Includes options to purchase 605,000 shares of common stock.
(9) Includes options to purchase an aggregate 4,007,500 shares of common stock.
(10) Includes 3,929,500 shares of common stock held by the Charles R. Cono
Trust, of which Mr. Cono is the trustee. Mr. Cono's address is 550
Baltimore Drive, La Mesa, California 91942-1176.
(11) Reflects common stock issuable on conversion of 3,192 shares of Series B
Preferred Stock at an assumed conversion price of $0.00038 on July 14,
2003. The address of Zaiq Technologies, Inc. is 78 Dragon Court, Woburn, MA
01801.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires each of our officers and directors and each person who owns more than
10% of a registered class of our equity securities to file with the SEC an
initial report of ownership and subsequent reports of changes in such ownership.
Such persons are further required by SEC regulation to furnish us with copies of
all Section 16(a) forms (including Forms 3, 4 and 5) that they file. Based
solely on our review of the copies of such forms received by us with respect to
fiscal year 2002, or written representations from certain reporting persons, we

believe all of our directors and executive officers met all applicable filing
requirements, except as described in this paragraph. Ivan Berkowitz, Bruce
Brown, Thomas J. Cooper, John Howell, C. Rich Wilson III and Ray Willenberg, Jr.
each filed late Form 5's for fiscal year 2002. Each of the Form 5's reported a
single transaction, with the exception of the Form 5's filed by Mr. Howell, Mr.
Wilson and Mr. Willenberg, each of which reported two transactions. In addition,
Mr. Howell and Mr. Cooper each filed a late Form 4 during fiscal 2002 reporting
one transaction each.

ITEM 2.
AMENDMENT OF ARTICLE I OF OUR ARTICLES OF INCORPORATION TO CHANGE
OUR NAME TO RIM SEMICONDUCTOR COMPANY

GENERAL

Our Board of Directors has unanimously approved, and recommends that
the shareholders adopt, a proposal to amend Article I of our Articles of
Incorporation to change the name of the Company from New Visual Corporation to
Rim Semiconductor Company. The text of this proposed amendment is as follows:

"The name of the corporation (hereinafter called "Corporation") is Rim
Semiconductor Company."

REASONS FOR THE NAME CHANGE

The Board of Directors believes our current name, New Visual
Corporation, suggests a focus on our former business of filmed entertainment
rather than our current business focus as a fabless semiconductor company. The
Board of Directors believes that it is in our best interest to change our name
in order to reflect our current and future business activities and strategic
direction. The Board of Directors feels that changing the company's name to Rim
Semiconductor Company better reflects our business as a fabless semiconductor
company.

If the shareholders approve this proposal, it will become effective
upon filing of an amendment to the Articles of Incorporation with the Secretary
of State of the State of Utah. Approval of the proposed amendment requires the
affirmative vote of shareholders holding a majority of the total voting power of
the common stock. Abstentions and broker non-votes have the same effect as votes
"against" the proposal.

We recommend a vote FOR the amendment to Article I of our Articles of
Incorporation to change our name to Rim Semiconductor Company.

ITEM 3.
AMENDMENT OF ARTICLE IV OF OUR ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK

Our Board of Directors recommends that the shareholders approve an
amendment to our Articles of Incorporation to increase the number of authorized
shares of common stock from 100 million to 500 million shares.

Each share of newly authorized common stock will have the same rights
and privileges as each share of existing common stock. Until an authorized share
of common stock is issued, it is not counted in the number of shares that are
outstanding, does not have a vote, and does not decrease our earnings or loss
per share. The amendment will not affect the number of shares of preferred stock
currently authorized.

REASONS FOR APPROVING THE INCREASE IN AUTHORIZED SHARES

As of July 14, 2003, we had 65,879,914 shares of common stock
outstanding. We also had approximately 21,700,000 shares of common stock
reserved for possible future issuance in connection with outstanding options,
warrants, convertible notes and Series B Preferred Stock. Many of these shares
may never actually be issued. For example, some of our outstanding options may
not vest, and many of our outstanding options and warrants have exercise prices
well in excess of our current market price per share, making their exercise
unlikely. Nevertheless, we intend to keep reserved for future issuance a
sufficient number of shares of our authorized common stock to honor our
commitment to issue common stock in the event these options or warrants are
exercised or convertible securities are converted.

In addition, we need to reserve and keep available a large number of
shares of common stock in connection with our May 26, 2003 loan agreement with
Mercatus & Partners Ltd. ("Mercatus"). Under the loan agreement, Mercatus agreed
to use its best efforts to loan us up to $6 million in a series of loans, each
of which will be secured by our issuance to Mercatus of shares of a series of
our preferred stock. If we default on the loan, these shares of preferred stock
would then become convertible into shares of our common stock on a 1 for 1,000
basis. Otherwise, they are not convertible. Except for the preferred stock used
to collateralize the loans, the loans are unsecured and are made without
recourse to us or our assets.

To date, we have issued approximately 92,000 shares of preferred stock
to Mercatus in connection with proposed loans to us of approximately $2,427,000.
If these loans are not made, the shares of preferred stock will not be
convertible, will have no liquidation preference, and must be returned to us on
request under the loan agreement. We agreed in the loan agreement to use our
best efforts to authorize, reserve and keep available a sufficient number of
shares of common stock in case we default on the loans and Mercatus desires to
convert its preferred stock into common stock. If these loans are made, we will
need to reserve and keep available approximately 92,000,000 shares of our
authorized common stock.

We do not know how many additional shares of preferred stock may be
necessary to collateralize other loans that may be made in the future under the
loan agreement, but we assume that we may need to issue 150,000 or more shares
of preferred stock to collateralize the entire $6 million proposed loan amount.
As a result, we may need to reserve 242,000,000 or more shares of common stock
solely to serve as collateral for loans under the Mercatus loan agreement.

As of the date of this Proxy Statement, we therefore have approximately
70 million shares of common stock outstanding and potential or actual
commitments to reserve an additional 263.7 million shares of common stock, or
more, for issuance upon conversion or exercise of the securities described
above.

The Board of Directors believes that the proposed increase in
authorized common stock is advisable to satisfy our current and potential future
commitments to reserve shares, notwithstanding the fact that many of these
reserved shares of common stock may never be issued. The Board of Directors also
believes that having additional shares of common stock available for issuance,
without the delay necessitated by a shareholders meeting, will benefit us under
many circumstances by providing us with the flexibility required to consider and
respond to future business opportunities and financial needs as they arise.

To the extent that shares of common stock are authorized but not issued
in connection with the above transactions, such shares will be available for our
issuance in the future. Shareholder approval will not be required for any such
future issuance, except as may be required by applicable law or the rules of any
stock exchange on which our securities may then be listed. The Board of
Directors believes that the availability of additional authorized shares may
allow New Visual to redeem, convert or restructure indebtedness, issue stock
dividends or distributions, take prompt advantage of market and other conditions
in connection with possible financings, and issue common stock for other proper
corporate purposes when such action is deemed advisable or desirable by the
Board of Directors. Although we are generally exploring possible future
financings, we have no current plans or arrangements regarding the issuance of
these additional authorized shares in connection with any of the foregoing
matters. The issuance of any of these additional authorized shares will dilute
the ownership interest of existing shareholders in the company. Any additional
issuance of common stock also could have the effect of impeding or discouraging
the acquisition of control of us by means of a merger, tender offer, proxy
contest or otherwise.

DESCRIPTION OF PREFERRED STOCK ISSUED TO MERCATUS

To date, we have designated and issued to Mercatus 57,894.201 shares of
Series C Preferred Stock, 9,090.909 shares of Series D Preferred Stock and
25,000 shares of Series E Preferred Stock. These shares were issued to
collateralize proposed loans to be made to us by Mercatus in the approximate
amounts of $1,527,000, $400,000 and $500,000, respectively. The following is a
summary of the material provisions of the Series C, Series D and Series E
Preferred Stock we have issued to Mercatus.

The terms of the Series C, Series D and Series E Preferred Stock are
substantially the same. None of these series is entitled to receive dividends or
to vote, except as required by Utah law, and none of the series is subject to
mandatory redemption. Each of these shares of preferred stock is convertible
into 1,000 shares of our common stock in the event we default on the loans to be
made to us by Mercatus. These preferred shares are otherwise not convertible.
The aggregate liquidation preference of each series is equal to the unpaid
balance of principal and interest on the proposed loan to be collateralized by
the shares of such series.

The terms of any future series of preferred stock that may be issued to
Mercatus in connection with loans under the loan agreement are expected to be
substantially the same. Under our existing Articles of Incorporation, however,
the board of directors has the authority to issue up to 15 million shares of
preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series, without further vote or action by the shareholders.
To date, in addition to the Series C, Series D and Series E Preferred Stock, we
have designated 200,000 shares of Series A Preferred Stock, none of which have
been issued, and 4,000 shares of Series B Preferred Stock, 3,192 of which have
been issued. We have no current plans or arrangements to issue any of our
authorized preferred stock, other than as described above in connection with the
Mercatus loan agreement.

PROPOSED AMENDMENT; REQUIRED VOTE; BOARD RECOMMENDATION

In order to increase the number of authorized shares of our common
stock, we will need to amend the first paragraph of Article Four of our Articles
of Incorporation. Currently, our Articles of Incorporation provide for the
issuance of up to 100 million shares of common stock. The Board of Directors
unanimously adopted a resolution proposing and declaring advisable that Article
Four of our Articles of Incorporation be amended in order to increase the number
of authorized shares of common stock to 500 million shares and recommending the
adoption of the proposed amendment by our shareholders. If approved, the text of
this amended first paragraph of Article Four would read as follows:

"The aggregate number of shares which the Corporation shall have the
authority to issue is five hundred fifteen million shares
(515,000,000), of which five hundred million shares (500,000,000) shall
be designated as Common Stock, $.001 par value per share and fifteen
million shares (15,000,000) shall be designated as Preferred Stock,
$.01 par value per share."

If the shareholders approve this proposal, it will become effective
upon filing of an amendment to the Articles of Incorporation with the Secretary
of State of the State of Utah.

Approval of the proposed amendment requires the affirmative vote of
shareholders holding a majority of the total voting power of the common stock.
Abstentions and broker non-votes have the same effect as votes "against" the
proposal. As a condition to the Mercatus loan agreement, each of the directors
has agreed to vote his shares in favor of this proposal. As of the record date,
our directors held 3,165,665 shares of common stock, which represents
approximately 4.8% of our outstanding shares.

We recommend a vote FOR the proposal to amend Article IV of our
Articles of Incorporation to increase our authorized common stock to 500 million
shares.

ITEM 4.
RATIFICATION OF INDEPENDENT AUDITORS

The board of directors has appointed Marcum & Kliegman, LLP ("Marcum")
to serve as our independent auditors for the fiscal year ending October 31, 2003
and is soliciting your ratification of that appointment.

On September 6, 2002, we dismissed our former auditors, Grassi & Co.,
CPAs, P.C. ("Grassi") because several Grassi partners and employees familiar
with our business left Grassi to become partners and employees of Marcum. The
decision to change accountants was approved by the Audit Committee on September
6, 2002. During the two years preceding Grassi's dismissal, there were no
disagreements between us and Grassi on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements (if not resolved to the satisfaction of Grassi) would have caused
Grassi to make reference in connection with their report to the subject matter
of the disagreements. Grassi's reports on New Visual's consolidated financial
statements for the fiscal years ended October 31, 2000 and October 31, 2001 did
not contain any adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty or audit scope or accounting principles. Prior to
retaining Marcum, we did not consult with them regarding the application of
accounting principles to a specific transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our consolidated
financial statements, or any other matters or reportable events set forth in
Item 304(a)(2) of Regulation S-K.

Marcum has served as our independent auditors since September 2002. In
their role as independent auditors, Marcum reports on our financial statements.
They also assist us with due diligence activities in connection with our
acquisitions and provide general accounting and tax consulting. Representatives
of Marcum will be present at the meeting, will have the opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions.

Your ratification of the Board's selection of Marcum is not necessary
because the board of directors has responsibility for selection of our
independent auditors. However, the board of directors and the Audit Committee
will take your vote on this proposal into consideration when selecting our
independent auditors in the future.

Marcum has informed us that neither the firm nor any of its members or
associates has any direct financial interest or material indirect financial
interest in our affiliates or us. During the fiscal year ended October 31, 2002,
we were billed the following fees by Marcum:

AUDIT FEES. The aggregate fees billed by Marcum to us for professional
services rendered for the audit of our annual financial statements for our
fiscal year ended October 31, 2002 and the reviews of the unaudited financial
statements included in our quarterly reports on Form 10-Q for 2002 were
$142,900.

FINANCIAL INFORMATION SYSTEM DESIGN AND IMPLEMENTATION FEES. Marcum
billed no fees to us for the professional services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X (financial design and implementation
services). Marcum rendered no such services to us for the fiscal year ended
October 31, 2002.

ALL OTHER FEES. The aggregate fees billed by Marcum to us for
professional services rendered for the fiscal year ended October 31, 2002, other
than Audit Fees and Financial Information Systems Design and Implementation Fees
described in the preceding two paragraphs, were $7,400 for non-financial
statement audit services such as due diligence procedures associated with
mergers and acquisitions; $15,200 for tax services; and $16,500 for other
regulatory filings. The Audit Committee of the board of directors has concluded
that the provision of these non-audit services is compatible with maintaining
Marcum's independence.

To ratify the appointment of Marcum as our independent auditors for the
current fiscal year, shareholders holding a majority of the shares represented
in person or by proxy at the Meeting must affirmatively vote to approve the
matter. Abstentions have the same effect as votes "against" the proposal, while
broker non-votes have no effect at all.

We recommend a vote FOR the ratification of Marcum as our independent
auditors for the current fiscal year.

AUDIT COMMITTEE REPORT

The Audit Committee's responsibilities are set forth in the Audit
Committee Charter. The Audit Committee assists the full board of directors in
fulfilling its oversight responsibilities. Our management prepares financial
statements and establishes the system of internal control.

In fulfilling its oversight responsibilities, the Audit Committee
reviewed the audited financial statements with management, including a
discussion of the acceptability as well as the appropriateness, of significant
accounting principles. The Audit Committee also reviewed with management the
reasonableness of significant estimates and judgments made in preparing the
financial statements as well as the clarity of the disclosures in the financial
statements.

The Audit Committee reviewed with our independent accountants, Marcum &
Kliegman, LLP, its judgments as to the acceptability as well as appropriateness
of the Company's application of accounting principles. Marcum has the
responsibility for expressing an opinion on the conformity of the Company's
audited financial statements with U.S. generally accepted accounting principles.
The Audit Committee also discussed with Marcum matters required to be discussed
under Statement on Auditing Standards No. 61 (Communicating with Audit
Committees).

In addition, the Audit Committee discussed with Marcum its independence
from management and the Company, the matters included in the written disclosures
required by the Independence Standards Board, and the impact on auditor
independence of non-audit related services provided to us by Marcum during the
2002 fiscal year. The Committee concluded that Marcum is independent from the
Company and its management.

The Audit Committee discussed with Marcum the overall scope and plans
for its audit. The Audit Committee meets with Marcum with and without management
present to discuss the results of its audits, its opinions of the Company's
system of internal controls, and the overall quality of the Company's financial
reporting.

The Audit Committee held four meetings in fiscal 2002.

In reliance on the reviews and discussions noted above, the Audit
Committee recommended to the full board of directors that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
October 31, 2002 for filing with the SEC. The Audit Committee and the full board
of directors have also recommended the selection of Marcum & Kliegman, LLP as
the Company's independent accountants for 2003.

Ivan Berkowitz (Chair) Bruce Brown

ADDITIONAL INFORMATION CONCERNING OUR MANAGEMENT

EXECUTIVE OFFICERS

Below are the names and ages of our executive officers and a brief
description of their prior experience.

BRAD KETCH AGE 41, CHIEF EXECUTIVE OFFICER. See
biography of Mr. Ketch on page 6.

RAY WILLENBERG, JR. AGE 51, CHAIRMAN OF THE BOARD AND EXECUTIVE
VICE PRESIDENT. See biography of Mr.
Willenberg on page 6.

C. RICH WILSON III AGE 34, VICE PRESIDENT AND SECRETARY. See
biography of Mr. Wilson on page 7.

THOMAS J. SWEENEY AGE 52, CHIEF FINANCIAL OFFICER. Mr.
Sweeney has served as our Chief Financial
Officer since April 2001. He holds a B.B.A.
in Accounting and a M.B.A. from The
University of Texas at Austin. He is also a
Certified Public Accountant licensed in the
state of Texas. Since July of 2000, Mr.
Sweeney has been a partner in Tatum CFO
Partners LLP. From November 2000 through
March 2001 he served as Chief Financial
Officer of Mitchell International, a provider
of data and software for the insurance and
automotive collision repair industries.
During 2000, Mr. Sweeney served as Chief
Financial Officer of Edapta, Inc. an Internet
startup company providing personalized
graphical user interfaces for special
applications. From February 1994 through
1999, Mr. Sweeney served as Chief Financial
Officer of Coral Biotechnology, Inc., a
company that he co-founded, which
manufactures and sells a line of automated
diagnostics products to the clinical
laboratory market.

EXECUTIVE COMPENSATION

For services rendered during the fiscal year ended October 31, 2002,
five executive officers received cash compensation in excess of $100,000. The
following table sets forth information regarding compensation paid to such
individuals, including our Chief Executive Officers, for the fiscal years ended
October 31, 2002, 2001 and 2000.

SUMMARY COMPENSATION TABLE

RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION(S) YEAR SALARY COMPENSATION AWARD(S) OPTIONS
------------------------------ ---- ------ ------------ -------- -------

Thomas J. Cooper 2002 $ 129,500(2) $ -- -- 2,000,000(3)
Chief Executive Officer(1) 2001 -- -- -- --
2000 -- -- -- --

Ray Willenberg, Jr. 2002 258,406(5) -- -- 350,000
Chairman of the Board, Chief 2001 229,167 -- -- 20,000
Executive Officer, President and 2000 190,417 112,500(6) -- 750,000
Executive Vice President (4)

C. Rich Wilson III 2002 166,329(7) 91,875(8) -- 600,000
Vice President and Secretary 2001 149,580 -- -- 20,000
2000 62,500 -- -- 125,000

Thomas J. Sweeney 2002 133,455(9) -- -- --
Chief Financial Officer 2001 82,294 -- -- --
2000 -- -- -- --

John Howell 2002 96,250(10) 264,763(11) 500,000(12) --
Executive Vice President 2001 15,000 -- -- 20,000
2000 5,000 -- -- 210,000(13)

--------------
(1) Mr. Cooper served as our Chief Executive Officer from June 1, 2002
until December 2, 2002.
(2) Includes $62,500 in earned, but deferred payroll unpaid as of October
31, 2002 and $4,500 of consulting fees paid to Mr. Cooper prior to his
employment with us.
(3) Includes 1,500,000 options cancelled pursuant to Mr. Cooper's Severance
Agreement. See "Certain Relationships and Related Transactions - Thomas
J. Cooper."
(4) Mr. Willenberg served as our President and Chief Executive Officer
until June 1, 2002, when Mr. Cooper became Chief Executive Officer and
Mr. Willenberg became Executive Vice President.
(5) Includes $14,250 in earned, but deferred payroll unpaid as of October
31, 2002.
(6) Represents the issuance to Mr. Willenberg in November 1999 of 562,500
shares of common stock valued at $0.20 per share.
(7) Includes $29,999 in earned, but deferred payroll unpaid as of October
31, 2002.
(8) Represents the issuance to Mr. Wilson in February 2002 of 250,000
shares of common stock valued at $0.37 per share.
(9) Includes $13,514 in earned, but deferred payroll unpaid as of October
31, 2002.
(10) Includes $10,833 in earned, but deferred payroll unpaid as of October
31, 2002.
(11) Represents the issuance to Mr. Howell in February 2002 of 235,000
shares of common stock valued at 0.37 per share, and includes the
forgiveness of $178,400 of loans from the Company. See "Certain
Relationships and Related Transactions - John Howell."
(12) Represents 100% of Mr. Howell's restricted stock holdings at the end of
the fiscal year, valued at $215,000. The restricted stock award was to
vest in four equal installments of 125,000 shares on April 30, 2002,
July 31, 2002, October 31, 2002 and January 31, 2003. This schedule was
accelerated pursuant to Mr. Howell's Separation Agreement. See "Certain
Relationships and Related Transactions - John Howell."
(13) Includes 70,000 options cancelled in connection with the execution of a
new employment agreement with Mr. Howell.

In accordance with the rules of the SEC, other compensation in the form
of perquisites and other personal benefits has been omitted for the named
executive officers because the aggregate amount of these perquisites and other
personal benefits was less than the lesser of $50,000 or 10% of annual salary
and bonuses for the named executive officers.

STOCK OPTIONS GRANTED DURING THE YEAR ENDED OCTOBER 31, 2002. The
following table sets forth information with respect to the stock options granted
in the last fiscal year to the persons set forth in the Summary Compensation
Table (the "named executive officers").

OPTION GRANTS IN THE LAST FISCAL YEAR

PERCENT OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED TO EXERCISE OR
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME OPTIONS GRANTED (#) FISCAL YEAR ($/SHARE) DATE PRESENT VALUE(1)
---- ------------------- ----------- --------- ---- ----------------

Thomas J. Cooper 1,500,000(2) 44.6% $ 1.02 3/22/12 $ 1,740,000
500,000(3) 14.9% 0.39 2/25/12 165,000

Ray Willenberg, Jr. 250,000(4) 7.4% 0.42 2/25/12 75,000
100,000(5) 3.0% 1.02 3/22/12 116,000

C. Rich Wilson III 600,000(4) 17.8% 0.42 2/25/12 180,000

John Howell -- -- -- -- --

Thomas J. Sweeney -- -- -- -- --

(1) In accordance with SEC rules, the Black-Scholes option pricing model
was chosen to estimate the grant date present value of the options set

forth in this table. Our use of this model should not be construed as
an endorsement of its accuracy at valuing options. All stock option
valuation models, including the Black-Scholes model, require a
prediction about the future movement of the stock price. The following
assumptions were made for purposes of calculating the grant date
present value for the options granted: expected life of this option of
five years, volatility at 53.89%, dividend yield of 0.0% and discount
rate of 5.5%.
(2) These options were to vest quarterly over three years beginning June 1,
2002 in 12 equal installments. These options were all cancelled
pursuant to Mr. Cooper's Separation Agreement with the Company. See
"Certain Relationships and Related Transactions - Thomas J. Cooper."
(3) 250,000 of the options vested on the grant date, February 25, 2002, and
the remainder vest quarterly in four equal installments of 62,500,
beginning May 25, 2002.
(4) The options vested quarterly, in four equal installments beginning
April 30, 2002.
(5) 100% of the options vested on the grant date, March 22, 2002.

YEAR-END OPTION VALUES. The named executive officers did not exercise
any stock options during the year ended October 31, 2002. The following table
sets forth information as of October 31, 2002 concerning options held by the
named executive officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END (#) OPTIONS AT FY-END
---------------------------- ----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------- ------------ ------------ ----------- ------------- ----------- -------------

Thomas J. Cooper ----- ----- 625,000(1) 1,375,000(1) $ 22,500 $ 7,500
Ray Willenberg, Jr. ----- ----- 865,000 255,000 5,625 1,875
C. Rich Wilson III ----- ----- 558,750 186,250 13,500 4,500
John Howell ----- ----- 160,000 ----- 0 0
Thomas J. Sweeney ----- ----- ----- ----- ----- -----

------------------
(1) Includes 250,000 exercisable and 1,250,000 unexercisable options, all
cancelled pursuant to Mr. Cooper's Severance Agreement with the
Company. See "Item 13 - Certain Relationships and Related Transactions
- Thomas J. Cooper."

EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS

RAY WILLENBERG, JR. On February 11, 2000, we entered into an employment
agreement with Ray Willenberg, Jr., our Chief Executive Officer during part of
the 2002 fiscal year. The agreement began on April 1, 2000 for a three year term
and provided for Mr. Willenberg to receive an initial base salary of $250,000,
with annual increases of $50,000 each April. Mr. Willenberg agreed to forego
this increase in both 2001 and 2002. On March 22, 2002, in connection with the
hiring of Thomas J. Cooper as our Chief Executive Officer, we entered into a new
employment agreement with Mr. Willenberg. Pursuant to this new agreement, Mr.
Willenberg agreed to continue to serve as our Chief Executive Officer until June
1, 2002 and to serve as an Executive Vice President thereafter. Under the terms
of the new agreement, Mr. Willenberg will continue to serve as our Chairman of
the Board and as the President of our wholly-owned subsidiary, NV Entertainment,
Inc. Mr. Willenberg is entitled to receive a base salary of $175,000 per year.
He is also entitled to an annual bonus based upon the annual revenues we receive
in connection with our feature film production, STEP INTO LIQUID, and the gross
proceeds we receive from sales of our equity or debt securities obtained as a
result of Mr. Willenberg's personal efforts.

Mr. Willenberg may be terminated for "cause," as defined in his
employment agreement. If Mr. Willenberg is terminated without "cause" or leaves
New Visual for "good reason," each as defined in the agreement, he will receive
a severance payment equal to two years of his base salary on the date of his
termination. If Mr. Willenberg is terminated without cause or with good reason
within one year after a "change of control," as defined in the agreement, he
will receive a severance payment equal to two years of his base salary and an
amount equal to two times the amount of his last bonus received.

THOMAS J. COOPER. On March 22, 2002, we entered into an employment
agreement with Thomas J. Cooper to serve as our Chief Executive Officer
commencing June 1, 2002. Mr. Cooper's agreement, which was for a three-year
term, began on March 22, 2002 and was terminated on December 2, 2002. The
agreement provided for Mr. Cooper to receive an annual base salary of $250,000
per year, commencing June 1, 2002. Prior to that date, the agreement provided
for Mr. Cooper to receive a base salary of $125,000 per year. The agreement also
entitled Mr. Cooper to an annual bonus, payable in cash or stock, in the
discretion of the Board. In addition, the agreement provided for Mr. Cooper to
receive an option to purchase 1,500,000 shares of our common stock. This option
was terminated pursuant to our Separation Agreement with Mr. Cooper, which is
described below under the heading "Certain Relationships and Related
Transactions."

Mr. Cooper's agreement provided that he could be terminated for
"cause," as defined in his employment agreement. If Mr. Cooper were terminated
without "cause" or left New Visual for "good reason," each as defined in the
agreement, the agreement provided for him to receive a severance payment equal
to two years of his base salary on the date of his termination. If Mr. Cooper
were terminated without cause or with good reason within one year after a
"change of control," as defined in the agreement, he was to receive a severance
payment equal to two years of his base salary and an amount equal to two times
the amount of his last bonus received.

Mr. Cooper resigned as Chief Executive Officer for personal reasons
effective December 2, 2002. The foregoing termination and severance provisions
were not implicated by Mr. Cooper's resignation. In connection with his
resignation, we entered into a Separation Agreement with Mr. Cooper. See
"Certain Relationships and Related Transactions - Thomas J. Cooper." The Board
and Compensation Committee believe the terms of the Separation Agreement were
fair to both parties and in the best interests of the Company and its
shareholders.

C. RICH WILSON III. On February 25, 2002, we entered into an employment
agreement with C. Rich Wilson III to serve as our Vice President and Secretary.
This agreement commenced March 1, 2002 and was for a one-year term, which was
and will continue to be automatically renewed for successive one-year terms
unless earlier terminated pursuant to the terms of the agreement or with 60 days
notice prior to the end of its term. Under the agreement, Mr. Wilson's base
salary is $160,000 per year. Mr. Wilson is also entitled to an annual bonus,
payable in cash or stock, in the discretion of the Board, and an annual bonus
based upon the annual revenues we receive in connection with our feature film
production, STEP INTO LIQUID.

Mr. Wilson may be terminated for "cause" as defined in his employment
agreement. If Mr. Wilson is terminated without "cause" or leaves New Visual for
"good reason," each as defined in the agreement, he will receive a severance
payment equal to the longer of that period of time remaining in his employment
agreement or nine months. If Mr. Wilson is terminated without cause or with good
reason within one year after a "change of control," as defined in the agreement,
he will receive a severance payment equal to two years of his base salary plus
an amount equal to two times the amount of his last bonus received.

JOHN HOWELL. In January 2002, we entered into an employment agreement
with John Howell to serve as our Executive Vice President. The agreement became
effective January 1, 2002 and was for a one-year term. Under Mr. Howell's
employment agreement he received an annual base salary of $125,000 per year and
could be terminated by us at any time for "cause," as defined in the agreement.
In the event Mr. Howell was terminated without "cause," left for "good reason,"
or was terminated as a result of a "Change in Control," each as defined in the
agreement, any amounts owed by Mr. Howell under promissory notes issued to us by
Mr. Howell (the "Howell Notes") were to be forgiven by New Visual. In the event
Mr. Howell was terminated or left our employment for any other reason the Howell
Notes were to be due and payable in full, upon demand.

In September 2002, we entered into a Separation Agreement with Mr.
Howell, terminating his employment with us effective September 30, 2002.
Pursuant to the terms of the Separation Agreement, we agreed to forgive all
amounts due on the Howell Notes, resulting in $178,400 in additional
compensation to Mr. Howell. We also accelerated the vesting schedule with
respect to Mr. Howell's restricted stock award and all outstanding options held
by Mr. Howell, such that 100% of the restricted stock and options held by Mr.
Howell became fully vested, subject to a lock-up limiting Mr. Howell's sale of
the restricted stock. This lock-up arrangement expires on December 31, 2003. The
Separation Agreement extended until September 30, 2003 Mr. Howell's right to
exercise 20,000 of his outstanding stock options. The remaining 140,000 stock
options currently held by Mr. Howell were unaffected by his separation from New
Visual.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

There are no compensation committee interlocks between the members of
our Compensation Committee and any other entity. During the beginning of our
2002 fiscal year, the compensation committee was comprised of Lilly Beter, Celso
B. Suarez, Jr. and Ivan Berkowitz. Thomas J. Cooper and Bruce Brown replaced Ms.
Beter and Mr. Suarez on the committee following Ms. Beter's and Mr. Suarez's
resignation from our Board of Directors. Mr. Cooper served as a member of the
compensation committee until becoming our Chief Executive Officer. At present,
Bruce Brown and Ivan Berkowitz are the members of the Compensation Committee.
Mr. Cooper, our former Chief Executive Officer, served on the Compensation
Committee during the last fiscal year; however, Mr. Cooper served on the
Compensation Committee prior to becoming an officer or employee of New Visual.
None of the current members of the Compensation Committee was, or has ever been,
an officer or employee of ours or any of our subsidiaries.

On April 9, 2000, we entered into an agreement with Mr. Brown, as well
as with Dana Brown and John-Paul Beeghly (collectively, the "Brown Partners") in
which we agreed to form a venture and produce our STEP INTO LIQUID motion
picture. In this agreement, we agreed to finance the production of the film for
up to $2,250,000. Upon its release, we will receive all revenues generated by
the film until such time as we recover 100% of our investment in the film. Once
we recoup our investment in the venture, 50% of the net profits generated by the
film will be paid to the Brown Partners and 50% will be paid to the Company.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors consists of Ivan
Berkowitz and Bruce Brown, neither of whom are employees or officers of New
Visual. Mr. Berkowitz serves as the Committee's Chairman. The Committee sets
compensation policy and administers New Visual's cash and equity incentive
programs for the purpose of attracting and retaining skilled executives who will
promote New Visual's business goals and build shareholder value. The Committee

is also responsible for reviewing and making recommendations to the Board
regarding all forms of compensation to be provided to the Company's named
executive officers, including stock compensation and bonuses. The Compensation
Committee met once during the 2002 fiscal year.

COMPENSATION PHILOSOPHY AND POLICIES

The policy of the Committee is to attract and retain key personnel
through the payment of competitive base salaries and to encourage and reward
performance through bonuses and stock ownership. The Committee's objectives are
to ensure that:

o there is an appropriate relationship between executive
compensation and the creation of shareholder value;

o the total compensation program will motivate, retain and attract
quality executives; and

o current cash and equity incentives are competitive with comparable
companies.

ELEMENTS OF COMPENSATION

Compensation for officers and key executives includes:

o Annual cash compensation in the form of base salary;

o Discretionary or contractual bonuses;

o Equity elements through the issuance of stock and stock options;
and

o Employee benefits, such as health insurance.

Salary and Bonus
----------------

Cash compensation consists of base salary, which is determined based
upon the level of responsibility, expertise and experience of the executive and
the competitive conditions of the industry.

Equity Elements
---------------

Ownership of New Visual's common stock is a key element of executive
compensation. The Committee believes that a significant portion of executive
compensation should be dependent upon the value created for the shareholders.
Officers and other employees of New Visual are eligible to participate in the
Company's 2000 Omnibus Securities Plan. This plan allows the Board or the
Committee to grant stock options to employees on such terms as the Board or the
Committee may determine. In addition, employees may be granted stock awards or
stock options outside of these plans.

Benefits
--------

Executive officers also receive benefits generally available to all
employees of the Company (such as health insurance). Our executive officers
receive only the benefits that are available to all of New Visual's employees.

2002 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER

During the first eight months of the 2002 fiscal year, the Company's
Chief Executive Officer was Ray Willenberg, Jr., with whom the Company had an
employment agreement that was entered into in 2000. In light of the Company's
financial situation, Mr. Willenberg agreed to forgo all raises due under his
employment agreement and he continued to receive a salary of $250,000 per year
during his time as the Company's Chief Executive Officer. In March of 2002, we
entered into a three-year employment agreement with Thomas J. Cooper containing
terms similar to Mr. Willenberg's former agreement. Mr. Cooper's contract
provided that the Company would pay Mr. Cooper a base salary of $250,000 per
year. Mr. Cooper's employment agreement also provided that the Board of
Directors may grant to Mr. Cooper a bonus for each year of his employment under
the employment agreement and an option to purchase 1,500,000 shares of the
Company at an exercise price of $1.02. The agreement, as well as the options
granted thereunder were terminated upon Mr. Cooper's resignation in December
2002.

Bruce Brown Ivan Berkowitz, Chairman

STOCK PERFORMANCE GRAPH

The graph below compares the cumulative total shareholder return on New
Visual Corporation's common stock for the period from October 31, 1997 through
October 31, 2002 with the cumulative total return over the same period of the
Russell 2000 Index and the line-of-business index for semiconductors and related
devices (SIC Code 3674) published by Media General Financial Services.

Assuming the value of the investment in our common stock and each index
was $100 on October 31, 1997, and that all dividends were reinvested, the graph
compares our cumulative total return with each of these referent indices plotted
on an annual basis.

[STOCK PERFORMANCE GRAPH HERE]

Cumulative Total Return
---------------------------------------------------------
1997 1998 1999 2000 2001 2002
-------- -------- -------- -------- -------- -------
NVEI $100.00 $ 24.44 $257.78 $798.67 $ 56.67 $50.00
SIC Code Index 100.00 101.19 216.22 298.51 138.76 85.44
Russell 2000 100.00 88.16 99.88 115.73 99.56 86.85

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BRAD KETCH. During our 2002 fiscal year we entered into several
agreements with Brad Ketch, our current Chief Executive Officer. In March 2002,
we entered into a one-year consulting arrangement with Mr. Ketch, in which we
retained Mr. Ketch to provide consulting and advisory services with respect to
our technology for transmitting high speed data over extended ranges of copper
telephone wire. Pursuant to this consulting agreement, we agreed to pay Mr.
Ketch $15,000 per month and granted him an option to purchase 50,000 shares of
our common stock at an exercise price of $1.02 per share. The option was
exercisable upon grant.

In July 2002, we entered into an employment agreement and a second
stock option agreement with Mr. Ketch whereby he become our Chief Marketing
Officer. This employment agreement, which was for a three year term, began on
July 1, 2002, and provided for a base salary of $15,000 per month, an annual
bonus to be paid at the discretion of the Board of Directors in either cash or
stock, and a stock option grant of 405,000 shares, of which 105,000 vested on
the date of grant. The remaining options vest quarterly, beginning on May 31,
2003, in equal amounts of 37,500 shares. These options have an exercise price of
$1.09 per share.

This July 2002 employment agreement was replaced in December 2002, when
we entered into a second employment agreement and third stock option agreement
with Mr. Ketch, by which Mr. Ketch became our Chief Executive Officer. This
agreement, which is for a three year term, provides for a base salary of
$250,000 per year, an annual bonus to be paid at the discretion of the Board of
Directors in either cash or stock, and a stock option grant of 1,500,000 shares.
It will be automatically renewed for successive one-year terms unless earlier
terminated pursuant to the terms of the agreement or with 60 days' notice prior
to the end of a term. The stock options awarded to Mr. Ketch in connection with
his employment as our Chief Executive Officer vest in 12 quarterly installments
of 125,000 shares, which began on March 1, 2003. These options are exercisable
at $0.64 per share.

THOMAS J. COOPER. On December 2, 2002, we entered into a Separation
Agreement with Mr. Cooper. Mr. Cooper remains a director of the Company.
Pursuant to this Separation Agreement, Mr. Cooper's employment agreement was
terminated and he ceased to serve as our Chief Executive Officer. We agreed to
reimburse Mr. Cooper for expenses of $10,000 incurred during his employment and
to pay him deferred salary of $57,692.30 (the "Salary Payment") on or before
March 31, 2003. The Salary Payment is payable in two installments, the first of
which, totaling $10,000 was due and paid on or before February 15, 2003. The
remainder of $47,692.30 was due on March 31, 2003. The Separation Agreement
provided that if we failed to make the remaining payment pursuant to this
schedule, we must pay Mr. Cooper interest at a rate of 24% per year on any
unpaid amounts. The Separation Agreement also provided that we would continue
Mr. Cooper's health insurance benefits for up to six months. As of the date of
this Proxy Statement, we continue to owe Mr. Cooper $10,000 of the Salary
Payment; however, Mr. Cooper has agreed to waive the interest payments due in
consideration of our continuing his health insurance benefits, for which we will
deduct $550 per month from the amount still owed to Mr. Cooper. Pursuant to the

terms of the Separation Agreement, the 1,500,000 stock options granted to Mr.
Cooper in connection with his role as Chief Executive Officer were terminated.
Mr. Cooper retained other options previously granted to him and remains a
director of the Company.

JOHN HOWELL. In September 2001 and January 2002, Mr. Howell issued
promissory notes to us (the "Howell Notes"), whereby Mr. Howell agreed to repay
loans we made to him totaling $160,214.72. The Howell Notes were payable on
demand; however, pursuant to the terms of the Mr. Howell's employment agreement,
as an annual bonus, one-fourth of the principal and accrued interest owed on the
Howell Notes was to be forgiven on each anniversary of Mr. Howell's employment.
The Howell Notes were forgiven in connection with Mr. Howell's Separation
Agreement with us. See "Employment Agreements with Executive Officers - John
Howell."

CHARLES R. CONO. In July 2002, we borrowed $500,000 from the Charles
R. Cono Trust, a significant shareholder. The note reflecting this loan was due
and payable with 10% interest on or before November 1, 2002 (the "July Note").
Also in July 2002, we entered into a consulting agreement with Mr. Cono in which
we agreed to pay Mr. Cono $250,000 in exchange for his consulting services upon
our receipt of gross revenues of at least $2,250,000 from our motion picture,
STEP INTO LIQUID. On November 13, 2002, and effective as of October 31, 2002, we
entered into a promissory note with the Charles R. Cono Trust in the amount of
$514,520.55 that amended, restated and replaced in all respects the July Note.
This promissory note, which bears interest at 10% per year, is due and payable
upon three days demand by Mr. Cono, which could not be made prior to December
16, 2002. We currently owe approximately $465,000 on this note.

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS

SHAREHOLDER PROPOSALS. Our bylaws provide that shareholder proposals
and director nominations by shareholders may be made in compliance with certain
advance notice, informational and other applicable requirements. With respect to
shareholder proposals (concerning matters other than the nomination of
directors), the individual submitting the proposal must file a WRITTEN NOTICE
with the Secretary of New Visual at 5920 Friars Road, Suite 104, San Diego,
California 92108 setting forth certain information, including the following:

o a brief description of the business desired to be bought before
the meeting and the reasons for conducting that business at the
meeting;

o the name and address of the proposing shareholder;

o the number of shares of common stock beneficially owned by the
proposing shareholder; and

o any material interest of the proposing shareholder in such
business.

The notice must be delivered to the Secretary (1) at least 30, but no more than
60, days before any scheduled meeting or (2) if less than 40 days notice or
prior public disclosure of the meeting is given, by the close of business on the
10th day following the giving of notice or the date public disclosure was made,
whichever is earlier.

BOARD NOMINATIONS. A shareholder may recommend a nominee to become a
director of New Visual by giving the Secretary of New Visual (at the address set
forth above) a WRITTEN NOTICE setting forth the following information concerning
each person the shareholder proposes to nominate:

o the name, age, business address and residence of the person;

o the principal occupation or employment of the person;

o the number of shares of common stock beneficially owned by the
person; and

o any other information relating to the person that is required to
be disclosed in solicitations for proxies for election of
directors pursuant to the rules of the SEC.

The shareholder's notice must also contain the following information
concerning the proposing shareholder:

o the name and record address of the proposing shareholder; and

o the number of shares of common stock beneficially owned by the
proposing shareholder.

Such nominations must be made pursuant to the same advance notice requirements
for shareholder proposals set forth in the preceding section.

GENERALLY. Our annual meetings are held each year at a time and place
designated by our board of directors in the notice of the meeting. Copies of our
bylaws are available upon written request made to the Secretary of New Visual at
the above address. The requirements described above do not supersede the
requirements or conditions established by the SEC for shareholder proposals to
be included in our proxy materials for a meeting of shareholders. The chairman
of the meeting may refuse to bring before a meeting any business not brought in
compliance with applicable law and our bylaws.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You can read and copy any materials we file with
the SEC at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can obtain information about the operation of the
SEC's public reference room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a web site that contains information we file electronically with the
SEC, which you can access over the Internet at www.sec.gov. Statements contained
in this proxy statement, or in any document incorporated by reference in this
proxy statement, regarding the contents of any contract or other document are
not necessarily complete and each such statement is qualified in its entirety by
reference to such contract or other document filed as an exhibit with the SEC.

The SEC allows us to "incorporate by reference" the information we file
with it, which means we can disclose important information to you by referring
you to those documents. The information we incorporate by reference is an
important part of this proxy statement. We incorporate by reference into this
proxy statement the following:

o Items 6, 7, 7A, 8 (including our audited consolidated
financial statements contained at pages F-1 through F-46) and
9 of our annual report on Form 10-K for the year ended October
31, 2002 (the "2002 10-K"); and

o Items 1, 2, 3 and 4 of our quarterly report on Form 10-Q for
the quarter ended April 30, 2003 (the "April 30 10-Q").

A copy of the 2002 10-K is included in our 2002 Annual Report to
Shareholders. A copy of the 2002 Annual Report to Shareholders and a copy of the
April 30 10-Q are being provided to each shareholder of record and beneficial
owner contemporaneously with this proxy statement.

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PLEASE TAKE A MOMENT NOW TO VOTE. PLEASE SIGN AND RETURN
YOUR PROXY CARD OR FOLLOW THE PROCEDURES ON THE PROXY CARD
FOR VOTING OVER THE INTERNET OR BY TELEPHONE.

THANK YOU.

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