SCHEDULE 14A

                            SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934
                               (Amendment No. __)

Filed by 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 ss.240.14a-11(c) or ss.240.14a-12


                                V-ONE Corporation
               --------------------------------------------------
                (Name of Registrant as Specified In Its Charter)

               --------------------------------------------------
      (Name of Person(s) Filing Proxy Statement, if other than Registrant)

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                pursuant to Exchange Act Rule 0-11 (set forth the amount on
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      [ ] Fee paid previously with preliminary materials.

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          Act Rule 0-11(a)(2) and identify the filing for which the offsetting
          fee was paid previously. Identify the previous filing by registration
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                                  [LOGO] V-ONE
                         Security For A Connected World


                                   May 2, 2003

Dear Shareholder:

         On behalf of the Board of Directors,  I cordially  invite you to attend
the Annual Meeting of Shareholders of V-ONE Corporation ("Company").  The annual
meeting  will be held at the  Holiday  Inn-Gaithersburg,  2  Montgomery  Village
Avenue,  Gaithersburg,  Maryland 20879 on Thursday,  June 5, 2003, at 10:00 a.m.
Gaithersburg, Maryland time.

         At the meeting, you will be asked (i) to elect two directors each for a
three-year  term  expiring  in 2006  and (ii) to  approve  an  amendment  to the
Company's certificate of incorporation, as amended and restated, to increase the
number of  authorized  shares of common  stock of the  Company  from  50,000,000
shares to 75,000,000  shares.  The Board of Directors has  unanimously  approved
these  proposals  and we urge you to vote in favor  of  these  proposals  and in
accordance  with the  Board's  recommendation  on such  other  matters as may be
submitted to you for a vote at the meeting.

         Your vote is very  important,  regardless  of the  number of shares you
own. Please sign and return each proxy card that you receive in the postage-paid
return  envelope,  which is provided  for your  convenience.  The return of your
proxy card will not  prevent you from voting in person but will assure that your
vote is counted if you are unable to attend the annual meeting.  We look forward
to seeing you on June 5.

                                       Sincerely,

                                       /s/ Margaret E. Grayson
                                       Margaret E. Grayson
                                       Director, President,
                                       Chief Executive Officer and
                                       Principal Financial Officer

  20300 Century Boulevard, Suite 200, Germantown, Maryland 20874 (301) 515-5200







                                V-ONE CORPORATION

20300 Century Boulevard, Suite 200   Germantown, Maryland 20874   (301) 515-5200


                                     NOTICE

                         ANNUAL MEETING OF SHAREHOLDERS

                             TO BE HELD JUNE 5, 2003

         NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of  Shareholders of
V-ONE Corporation  ("Company") will be held on Thursday,  June 5, 2003, at 10:00
a.m. Gaithersburg, Maryland time, at the Holiday Inn-Gaithersburg,  2 Montgomery
Village Avenue, Gaithersburg, Maryland 20879, for the following purposes:

         1. To elect two directors each for a three-year term expiring in 2006;

         2. To  approve  an   amendment   to  the   Company's   certificate   of
            incorporation,  as amended and  restated,  to increase the number of
            authorized  shares of common  stock of the Company  from  50,000,000
            shares to 75,000,000 shares; and

         3. To  transact  any other  business  as may  properly  come before the
            annual meeting or any adjournment thereof.

         The Board of  Directors  has fixed the close of  business  on April 10,
2003 as the record date for the determination of shareholders entitled to notice
of and to vote at the annual meeting and at any adjournment  thereof. A complete
list of  shareholders  of  record  of the  Company  on the  record  date will be
available for  examination by any  shareholder,  for any purpose  germane to the
annual meeting,  during ordinary business hours, for the ten-day period prior to
the annual  meeting,  at the  executive  offices of the Company,  20300  Century
Boulevard, Suite 200, Germantown, Maryland 20874.

                                    BY ORDER OF THE BOARD OF DIRECTORS

                                    /s/ Joseph D. Gallagher
                                    Joseph D. Gallagher
                                    Secretary


Germantown, Maryland
May 2, 2003

         IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.  THEREFORE,  WHETHER
OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING,  PLEASE COMPLETE,
SIGN  AND  DATE  THE  ENCLOSED  PROXY  AND  RETURN  IT  IN  THE  SELF-ADDRESSED,
POSTAGE-PAID  ENVELOPE.  ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING, OR IN
PERSON, AT ANY TIME PRIOR TO ITS EXERCISE.



                                V-ONE CORPORATION

20300 Century Boulevard, Suite 200   Germantown, Maryland 20874   (301) 515-5200


                                 PROXY STATEMENT

                         ANNUAL MEETING OF SHAREHOLDERS

                                  JUNE 5, 2003

         The  enclosed  proxy is  solicited  by the Board of  Directors of V-ONE
Corporation,  a Delaware corporation ("Company"),  for use at the Annual Meeting
of Shareholders on Thursday,  June 5, 2003, and at any adjournment  thereof. The
approximate date of mailing of this Proxy Statement and the form of proxy is May
2, 2003.

              INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING

         The securities to be voted at the annual meeting  consist of (i) shares
of common stock of the  Company,  $0.001 par value per share  ("Common  Stock"),
with each share  entitling its record owner to one vote on each of the proposals
and on all other matters properly brought before the annual meeting, (ii) shares
of Series C Preferred Stock, $0.001 par value per share ("Series C Stock"), with
each share entitling its record owner to 10 votes on Proposal 2 and on all other
matters properly  brought before the annual meeting,  except with respect to the
election  of  directors  for  which  record  holders  of  Series C Stock are not
entitled to vote, and (iii) Series D Preferred Stock, $0.001 par value per share
("Series D Stock"),  with each share  entitling  its record owner to one vote on
each of the  proposals  and on all other  matters  properly  brought  before the
annual  meeting.  The close of  business on April 10, 2003 has been fixed by the
Board of Directors as the record date for determination of shareholders entitled
to notice of, and to vote at, the annual meeting.  As of the record date,  there
were 216 record  holders of Common Stock and  26,755,551  shares of Common Stock
outstanding and eligible to be voted at the annual meeting,  4 record holders of
Series C Stock and 42,904 shares of Series C Stock  outstanding  and eligible to
be voted at the  annual  meeting  and 19  record  holders  of Series D Stock and
3,021,000  shares of Series D Stock  outstanding and eligible to be voted at the
annual  meeting.   The  Common  Stock,   Series  C  Stock  and  Series  D  Stock
(collectively  "Voting Stock") are the only outstanding voting securities of the
Company.

         The  presence,  in person or by proxy,  of at least a  majority  of the
total  number of  outstanding  shares of Voting  Stock  entitled  to vote at the
annual  meeting is necessary to  constitute a quorum at the annual  meeting.  If
less than a majority of the  outstanding  shares entitled to vote are present at
the annual  meeting,  either in person or by proxy,  a majority of the shares so
represented  may vote to adjourn the annual  meeting  from time to time  without
further notice.

         With  respect to Proposal 1,  directors  receiving a plurality of votes
will be  elected  in the  order of the  number  of votes  received.  There is no
cumulative voting in the election of directors.  With respect to Proposal 2, the
vote required for approval  shall be the  affirmative  vote of the holders of at
least a majority of the issued and  outstanding  shares of Common Stock entitled
to vote at the annual meeting. With respect to any other matter properly brought
before the annual  meeting or any  adjournment  thereof,  the vote  required for
approval  shall be the  affirmative  vote of a majority  of the total  number of
votes that  those  present at the  annual  meeting,  in person or by proxy,  are
entitled to cast.

         All shares  entitled to vote  represented  by a properly  executed  and
unrevoked  proxy  received in time for the annual  meeting  will be voted at the
annual  meeting in accordance  with the  instructions  given.  In the absence of
instructions  to the  contrary,  such shares  will be voted FOR the  proposal to
elect the  designated  nominees  for  director and FOR the proposal to amend the
certificate  of  incorporation,  as amended and  restated.  If any other matters
properly come before the annual meeting,  the persons named as proxies will vote
upon such matters as determined by a majority of the Board of Directors.

         Under Delaware law, shares represented at the annual meeting (either by
properly  executed  proxies or in person)  that reflect  abstentions  or "broker
non-votes" (i.e., shares held by a broker or nominee that are represented at the
annual  meeting,  but with  respect  to which  such  broker  or  nominee  is not
empowered to vote on a particular  proposal)  will be counted as shares that are
present and  entitled  to vote for  purposes of  determining  the  presence of a
quorum.  Abstentions  as to any  proposal  will  have the same  effect  as votes
against the  proposal.  With  respect to Proposal  1, broker  non-votes  will be
treated as unvoted for purposes of  determining  approval of such  proposal (and
therefore  will reduce the absolute  number - although  not the  percentage - of
votes needed for  approval)  and will not be counted as votes for or against the
proposal.  With respect to Proposal 2, however,  broker  non-votes will have the
same effect as votes against the proposal.


         The  cost of  soliciting  proxies  will be  borne  by the  Company.  In
addition  to  use of the  mails,  proxies  may  be  solicited  personally  or by
telephone or  telegraph  by officers,  directors or employees of the Company who
will not be specially compensated for such solicitation activities. Arrangements
will also be made with  brokerage  houses  and other  custodians,  nominees  and
fiduciaries for forwarding  solicitation  materials to the beneficial  owners of
shares held of record by such  persons,  and the  Company  will  reimburse  such
persons for their related reasonable expenses.

         A  shareholder  may  revoke  his or her proxy at any time  prior to its
exercise  by (i)  filing  written  notice  thereof  with  Joseph  D.  Gallagher,
Secretary,  V-ONE Corporation,  20300 Century Boulevard,  Suite 200, Germantown,
Maryland  20874,  (ii)  submitting a duly executed proxy bearing a later date or
(iii) appearing at the annual meeting and giving the Secretary  notice of his or
her  intention  to  vote in  person.  Unless  previously  revoked  or  otherwise
instructed thereon, proxies will be voted at the annual meeting on the proposals
as described above.

              STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS

         The number of shares of Voting  Stock held as of April 10, 2003 by each
holder of more than 5% of the  outstanding  Voting  Stock of the  Company,  each
director of the  Company,  each  nominee  for  reelection  as a  director,  each
executive  officer  named in the  Summary  Compensation  Table on page 7 of this
Proxy  Statement and all  directors  and executive  officers of the Company as a
group is set forth below.  The names of the  Company's  directors  and executive
officers  named in the Summary  Compensation  Table  appear in  italics.  Unless
otherwise  indicated,  all of the shares shown in the following table are shares
of Common  Stock and are owned  both of record  and  beneficially  by the person
named.  Unless otherwise  indicated,  the person named possesses sole voting and
investment power.

                                                        AMOUNT AND NATURE
            NAME AND ADDRESS (1)                    OF BENEFICIAL OWNERSHIP (2)         PERCENT OF CLASS (3)
            --------------------                    ---------------------------         --------------------
                                                                                         
James F. Chen                                                       2,512,552   (4)            9.40%

Joseph Lupo                                                         2,854,098   (5)            10.67%
758 Oneida Trail
Franklin Lakes, New Jersey  07417

Molly G. Bayley                                                       117,500   (6)              *

Christopher T. Brook                                                  112,621   (7)              *

Margaret E. Grayson**                                                 782,606   (8)            2.93%

Heidi B. Heiden                                                       322,500   (9)            1.21%

Douglas M. Hurt                                                        54,860  (10)              *

James T. Mcmanus                                                      448,968  (11)            1.68%

Merle B. Miller                                                        31,500  (12)              *

Michael D. O'Dell**                                                   117,500  (13)              *

William E. Odom                                                       386,566  (14)            1.45%

Directors and Executive Officers as a group                         2,374,621                  8.88%
                                                         (6) (7) (8) (9) (10)
                                                          (11) (12) (13) (14)

* Less than 1%.
** Nominee.

(1)      Unless otherwise indicated,  the mailing address of each shareholder is
         c/o V-ONE Corporation,  20300 Century Boulevard, Suite 200, Germantown,
         Maryland 20874.

(2)      In accordance  with Rule 13d-3 of the  Securities  Exchange Act of 1934
         ("Exchange  Act"), a person is deemed to be the  beneficial  owner of a
         security if he or she has or shares  voting power or  investment  power
         with  respect  to  such  security  or has the  right  to  acquire  such

                                       2


         ownership  within  60  days.  Each  director,   executive  officer  and
         beneficial  owner  possesses  sole  voting  and  investment  power with
         respect  to the  shares of Voting  Stock  listed,  except as  otherwise
         indicated.  The number of shares  beneficially  owned by each director,
         executive  officer  and  beneficial  owner is  determined  under  rules
         promulgated  under the  Exchange  Act by the  Securities  and  Exchange
         Commission ("SEC"),  and the information is not necessarily  indicative
         of  beneficial  ownership  for any other  purpose.  Under  such  rules,
         beneficial  ownership  includes  any shares as to which the  individual
         currently has sole or shared voting power or investment  power and also
         any shares which the  individual has the right to acquire by conversion
         of preferred  stock or notes into Common Stock,  by exercise of options
         or warrants to purchase Common Stock or otherwise, within 60 days after
         April 10, 2003. As of April 10, 2003, the Company had 26,755,551 shares
         of Common Stock outstanding.

(3)      Number of shares of Voting Stock  deemed  outstanding  includes  shares
         issuable  upon  exercise  or  conversion  of stock  options,  warrants,
         preferred stock or notes  beneficially  owned by the person in question
         that are currently  exercisable or convertible or become exercisable or
         convertible within 60 days after April 10, 2003.

(4)      Does not  include  600,000  shares  of  Common  Stock  held in a family
         limited  partnership,  the  general  partner of which is a  corporation
         controlled by Mr. Chen's daughter,  Irene Chen. Does not include 71,110
         shares  of  Common  Stock  registered  in the  name of Mary S.  Chen as
         Trustee  under  trusts for the  benefit  of Mr.  Chen's  children  with
         respect to which Mary S. Chen possesses voting and investment power.

(5)      According to the most recent  Schedule 13D filed with the SEC by Joseph
         Lupo,  represents  896,700 shares of Common Stock,  1,282,720 shares of
         Series D Stock and warrants to purchase  256,544 shares of Common Stock
         held in a Roth IRA account for the benefit of Mr. Lupo. Also represents
         1,746  shares of  Common  Stock,  346,990  shares of Series D Stock and
         warrants to  purchase  69,398  shares of Common  Stock held in a profit
         sharing plan for the benefit of Mr. Lupo.

(6)      Represents options to purchase 117,500 shares of Common Stock.

(7)      Includes options to purchase 104,200 shares of Common Stock.

(8)      Includes  options  to  purchase  627,500  shares  of  Common  Stock and
         warrants to purchase 25,000 shares of Common Stock.

(9)      Includes  options  to  purchase  157,500  shares  of  Common  Stock and
         warrants to purchase 65,000 shares of Common Stock.

(10)     Includes options to purchase 48,750 shares of Common Stock.

(11)     Includes  options  to  purchase  117,500  shares of Common  Stock.  Mr.
         McManus resigned from the Board of Directors effective March 31, 2003.

(12)     Represents options to purchase 31,500 shares of Common Stock.

(13)     Represents options to purchase 117,500 shares of Common Stock.

(14)     Includes  options  to  purchase  274,166  shares  of  Common  Stock and
         warrants to purchase  70,000 shares of Common  Stock.  Does not include
         20,000  shares of Common  Stock held by General  Odom's  wife,  Anne C.
         Odom.

                                       3


                              ELECTION OF DIRECTORS
                                  (PROPOSAL 1)

         The  Company's  restated  bylaws  provide  for  a  Board  of  Directors
consisting of up to seven members serving  staggered  terms. The terms of office
of Margaret E. Grayson and Michael D. O'Dell will expire at the annual  meeting.
Margaret E.  Grayson and Michael D. O'Dell have been  nominated  by the Board to
serve for three-year terms.

         There are no arrangements or understandings between the Company and any
person  pursuant to which such person has been elected as a director or selected
as a nominee.

         If any nominee  becomes  unavailable  for any  reason,  or if any other
vacancy in the class of  directors  to be elected at the annual  meeting  should
occur before the election, the shares represented by proxy will be voted for the
person, if any, who is designated by the Board to replace the nominee or to fill
such other  vacancy on the  Board.  The Board has no reason to believe  that the
nominees will be  unavailable or that any other vacancy on the Board will occur.
The nominees have consented to be named and have indicated their intent to serve
if elected.

THE BOARD  UNANIMOUSLY  RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR REELECTION
AS DIRECTORS SET FORTH ABOVE.

                  INFORMATION CONCERNING THE BOARD OF DIRECTORS

         The directors of the Company are  currently  divided into three classes
that are elected on a staggered  basis.  Each  director  serves for a three-year
term and until his or her  successor  is duly  elected and  qualified.  James T.
McManus,  a director  whose term  expires in 2004,  resigned his position on the
Board  effective  March 31, 2003. The current members of the Board are set forth
below:


                                         DIRECTOR
                                          OF THE
                                          COMPANY        TERM       POSITION(S) CURRENTLY
               NAME                       SINCE         EXPIRES     HELD WITH THE COMPANY
               ----                       -----         -------     ---------------------
                                                           
Molly G. Bayley  (1)                       2001          2004       Director

Margaret E. Grayson  (2)                   1999          2003       Director, President and Chief Executive
                                                                    Officer

Heidi B. Heiden (1)(3)                     2000          2005       Director

Michael D. O'Dell (1)(2)                   2001          2003       Director

William E. Odom (3)                        1996          2005       Chairman of the Board

(1)      Member of the Audit Committee
(2)      Nominee for reelection
(3)      Member of the Compensation Committee


         Biographical  information  regarding the directors of the Company is as
follows:

MOLLY G.  BAYLEY  (58) was  appointed a director of the Company in March 2001 to
fill a  vacancy  on  the  Board.  Since  July  2002,  Ms.  Bayley  has  been  an
international  consultant  to  emerging  capital  markets.  Previously,  she was
Executive  Vice  President  of X-Change  Corporation  (OTCBB:  XCHC).  From 1998
through  2000,  Ms. Bayley  served as Vice  President of Exchange  Relations for
OptiMark  Technologies.  From  1989  through  1997,  she  was  an  international
consultant on capital markets development in emerging markets. Also from 1993 to
1996, Ms. Bayley was Chief of Party and Regulatory  Advisor for Arthur  Andersen
in Manila,  the  Philippines.  From 1984 through 1989,  Ms. Bayley was Executive
Director of the Commodity  Futures Trading  Commission.  From 1971 through 1984,
Ms. Bayley held various  positions within Nasdaq,  culminating as Vice President
of Nasdaq Operations. Ms. Bayley holds a B.A. in French from Wellesley College.

MARGARET  E.  GRAYSON  (56) was  elected  President  and CEO of the  Company  in
November 2000.  She had served as the Company's  Senior Vice President and Chief
Financial  Officer  since May 1999.  Ms.  Grayson  was  elected  to the Board of
Directors in August 1999. Prior to joining V-ONE Corporation, Ms. Grayson served
as Vice President of Finance and  Administration and Chief Financial Officer for
SPACEHAB,  Inc. (Nasdaq:  SPAB) from September 1994 to October 1998. Immediately
prior to joining SPAB,  Ms.  Grayson  served as Chief  Financial  Officer for CD
Radio, Inc. in Washington,  D.C., an early entrant in the satellite radio mobile
communications market.  Previously, Ms. Grayson served as a senior executive and


                                       4


consultant to high-technology  start-up  companies.  Ms. Grayson holds an M.B.A.
from the  University of South  Florida and a B.S. in  Accounting  from the State
University of New York at Buffalo.

HEIDI B. HEIDEN (64) has been a director of V-ONE  Corporation  since June 2000.
In June 2001, Mr. Heiden retired from Zephion Networks, Inc., a private company,
where he had been  Chairman and CEO since  January  2001.  Mr.  Heiden  became a
director  of Nx  Networks,  Inc.,  a public  company,  in January  2001,  and of
Broadview Networks,  a private company, in January 2000. Mr. Heiden retired from
UUNET, Inc., an MCI WorldCom company,  in January 1999, where he was Senior Vice
President of  Operations  and  Technology.  Mr. Heiden joined UUNET in September
1995. His  professional  career  includes a five-year  term as Senior  Operating
Officer at Salomon  Brothers  in New York City.  He also  served as Senior  Vice
President for the Wollongong  Group. In the mid-1980's,  Mr. Heiden was employed
at Trusted Information  Systems, a computer and network security company.  Prior
to entering the  commercial  arena,  Mr. Heiden served in the United States Army
and led diverse technology programs. Mr. Heiden also created and ran the Defense
Data Network  consisting  of many  worldwide  computer  networks that formed the
basis of what is now known as the Internet.  Mr. Heiden sits on the Compensation
Committee of Nx Networks,  Inc. Mr. Heiden is a graduate of West Point  Military
Academy.

MICHAEL D. O'DELL (49) has been a director of V-ONE  Corporation  since  January
2001. From 1997 until his appointment to the Company's  Board, Mr. O'Dell served
as Senior Vice  President and Chief  Scientist for UUNET,  Inc., an MCI WorldCom
company, where he was responsible for overall network architecture and technical
strategic  direction for UUNET. Prior to joining UUNET in March 1993, Mr. O'Dell
was a senior  technical staff member at Bellcore where he was chief engineer for
the "RBOC of the Future" project.  Before joining Bellcore, Mr. O'Dell was chief
computer  scientist  and director of operating  systems  development  for Prisma
Computers, a gallium-arsenide SPARC compatible  supercomputer company. He served
eight years as founding  editor-in-chief of Computing Systems,  an international
refereed  scholarly  journal  devoted  to the  pragmatics  of  computer  systems
implementation  experience.  Mr.  O'Dell  holds both a  bachelors  and a masters
degree in computer science from the University of Oklahoma.

LIEUTENANT  GENERAL WILLIAM E. ODOM, ARMY (RET) (70) was elected Chairman of the
Company's  Board of Directors in November  2000,  and has been a director of the
Company since June 1996. Since October 1988, General Odom has served as Director
of National  Security  Studies at the Hudson  Institute.  He has been an adjunct
professor at Yale  University  since January 1989.  Prior to his retirement from
the  military  in 1988,  General  Odom held  several  military  posts  including
Director  of  the  National  Security  Agency,  Assistant  Chief  of  Staff  for
Intelligence  for the  Department  of the Army,  and  Military  Assistant to the
National Security Advisor in the Carter White House. He is Chairman of the Board
of American  Science &  Engineering.  General  Odom holds a M.A. and a Ph.D from
Columbia  University and a B.S. from the United States Military  Academy at West
Point.

COMPENSATION OF DIRECTORS

         Each  non-employee  director is  entitled  to receive a $1,000  monthly
stipend and annual stock options to purchase 17,500 shares of Common Stock.  The
Chairman of the Board is entitled to receive a $2,000 monthly stipend and annual
stock options to purchase  17,500 shares of Common Stock.  On March 7, 2002, the
Board of Directors determined to defer cash compensation  retroactive to January
2002 and until further notice. The Company also reimburses  directors for travel
expenses  incurred in connection with their  attendance at meetings of the Board
and its committees.

BOARD OF DIRECTORS AND COMMITTEES

         Meetings of the Board are held  regularly each quarter and as required.
In 2002, the Board held 13 meetings and each member of the Board participated in
greater  than 75% of these  meetings and of the  meetings of the  committees  on
which he or she serves.

         The Board has  established an Audit  Committee to recommend the firm to
be appointed as independent public accountants to audit the Company's  financial
statements and to perform  services  related to the audit,  review the scope and
results of the audit with the  independent  accountants,  review with management
and the independent  accountants the Company's  year-end  operating  results and
consider the adequacy of the internal accounting procedures. The Audit Committee
met separately  once during 2002,  and the full board,  including the members of
the Audit Committee,  met several times during the year to discuss the financial
position of the Company,  provide recommendations and guidance to management and
evaluate  strategies and financial  opportunities and initiatives.  In 2002, the
Audit  Committee  consisted of Molly G.  Bayley,  Heidi B. Heiden and Michael D.
O'Dell, none of whom is an employee of the Company.  Mr. Heiden was appointed to
the Audit Committee on August 27, 2002.

         The  Board  has  also   established  a  Compensation   Committee.   The
Compensation Committee reviews and recommends the compensation  arrangements for
all directors and officers,  approves such  arrangements  for other senior level


                                       5


employees  and  administers  and takes such other  actions as may be required in
connection  with certain  compensation  and incentive  plans of the Company.  In
2002, the Compensation Committee consisted of three independent  directors:  Mr.
Heiden,  Mr. McManus and General Odom.  Mr.  McManus  resigned from the Board of
Directors effective March 31, 2003. The Compensation Committee met once in 2002.

         The Company currently has no standing nominating committee.  A director
can be nominated by a member of the Board or by written  notice to the Board not
less than 120 calendar days in advance of the anniversary  date of the Company's
previous year's annual meeting of shareholders.

                   INFORMATION CONCERNING EXECUTIVE OFFICERS

         The Company's  executive officers are elected each year by the Board of
Directors,  unless the Board determines,  upon appointing an officer, that he or
she shall serve for a different  term.  Any executive  officer may be removed at
any time, with or without cause,  by the Board.  Biographical  information  with
respect to Margaret E. Grayson is provided above.  See  "Information  Concerning
the Board of Directors."  Biographical information regarding the other executive
officers of the Company is as follows:

CHRISTOPHER  T. BROOK (62) has been serving as Vice  President of Engineering of
the Company since April 2001. He has been with V-ONE  Corporation since February
1996,  most  recently as Vice  President,  Wireless.  Prior to that, he was Vice
President of Product  Development.  Mr. Brook was with GE Information  Services,
Inc. for approximately 27 years prior to joining the Company. While with GE, Mr.
Brook held a number of technology-related positions, most recently as Manager of
Emerging Technology. Mr. Brook graduated from Clifton College (Bristol, England)
with an emphasis in Classics.

DOUGLAS  M. HURT (49) is Vice  President,  Sales &  Marketing,  and has 25 years
large account  experience in commercial  and government  information  technology
sales. Mr. Hurt joined V-ONE Corporation in February 1999 as Director of Federal
Sales,  was promoted to Vice President of Federal Sales in October 2000, to Vice
President of U.S. Sales in October 2001 and to Vice President, Sales & Marketing
in April 2002.  Prior to joining  the  Company,  Mr.  Hurt was a national  sales
manager for Siemens Information and Communication  Corporation from 1985 through
1999, with sales responsibility for selected Department of Defense, intelligence
and civil  agencies.  Mr.  Hurt  also held  sales  positions  with Data  General
Corporation  (federal sales) and Burroughs  Corporation  (commercial  sales). He
holds a B.S. in Business Administration, Marketing from Old Dominion University.

MERLE B. MILLER (48) is Vice President,  Administration  and Treasurer,  and has
over 25 years  experience  in  general  accounting  and  management  information
systems,  as well as  customer/supplier  relationships.  Ms. Miller joined V-ONE
Corporation in June 2000 as Director,  Business  Development and was promoted to
Vice President of  Administration in October 2001. Prior to joining the Company,
from March 1999 to March 2000,  Ms.  Miller served as Director,  Operations  and
Finance with  Zabacom,  Inc., a start-up  company.  Prior to that,  she was with
Hayes  Microcomputer  Products,   Inc.  (formerly  Access  Beyond,   Inc./Penril
Datability  Networks) for approximately 24 years.  During her tenure with Hayes,
Ms.  Miller held various  positions in  accounting  and  management  information
systems, culminating as Accounting/MIS Manager.






                                       6


                             EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

         The following table summarizes the compensation paid by the Company for
the last three fiscal  years to its Chief  Executive  Officer and the  Company's
other  most  highly  compensated  executive  officers  whose  salary  plus bonus
exceeded $100,000 during the year ended December 31, 2002 ("Named Executives").


                                  ANNUAL COMPENSATION               LONG-TERM COMPENSATION
                                  -------------------               ----------------------

                                                                            AWARDS
                                                                            ------

  Name and                                                                Securities
  Principal Position             Year     Salary ($)   Bonus ($)(1)   Underlying Options (#)
  ------------------             ----     ----------   ------------   ----------------------
                                                                
  Margaret E. Grayson            2002      $284,580           -             300,000    (2)
  President and Chief            2001      $275,000     $96,276             400,000    (3)
  Executive Officer              2000      $183,750     $92,414             305,000    (4)

  Christopher T. Brook           2002      $145,626           -             100,000    (5)
  Vice President                 2001      $157,300     $13,147              20,000    (6)
  Engineering                    2000      $126,264     $27,449              27,400    (7)

  Douglas M. Hurt (a)            2002      $142,386           -             100,000    (8)
  Vice President                 2001      $132,258      $7,500              20,000    (9)
  Sales and Marketing            2000      $117,217           -              10,000   (10)

  Mandy J. Schuyler (b)          2002      $133,059           -             100,000   (11)
  Vice President                 2001      $113,461           -              35,000   (12)
  Business Development           2000          -              -                 -

  Merle B. Miller (c)            2002      $111,459           -             100,000   (13)
  Vice President                 2001      $101,597      $5,000              20,000   (14)
  Administration                 2000       $46,670           -              23,000   (15)

(a)      Mr. Hurt was promoted to VP of Sales and Marketing in April 2002.

(b)      Ms.  Schuyler's  employment  with the Company began in April 2001.  Ms.
         Schuyler's employment terminated in November 2002.

(c)      Ms.  Miller was  promoted to VP of  Administration  in October 2001 and
         appointed Treasurer in June 2002.

(1)      Includes  bonus paid in cash,  stock or taxes in 2002 unless  otherwise
         provided.

(2)      Represents  options to purchase  150,000  shares of Common  Stock at an
         exercise price of $.69 per share granted under the 1998 Incentive Stock
         Plan ("1998  Plan") and options to  purchase  150,000  shares of Common
         Stock at an  exercise  price of $.25 per share  granted  under the 1996
         Incentive Stock Plan ("1996 Plan"). These options vest as to 25% of the
         shares  on the  first  anniversary  of the date of  grant  and as to an
         additional  25%  of  the  shares  on  the  second,   third  and  fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

(3)      Represents  options to purchase  300,000  shares of Common  Stock at an
         exercise  price of $.625  per  share  granted  under  the 1998 Plan and
         options to purchase 100,000 shares of Common Stock at an exercise price
         of $1.4062 per share granted under the 1996 Plan. These options vest as
         to 25% of the shares on the first  anniversary of the date of grant and
         as to an additional  25% of the shares on the second,  third and fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

(4)      Represents  options to  purchase  50,000  shares of Common  Stock at an
         exercise price of $2.375 per share,  options to purchase  55,000 shares
         of Common Stock at an exercise  price of $1.25 per share and options to
         purchase  200,000 shares of Common Stock at an exercise price of $1.094
         per share, granted under the 1998 Plan. These options vest as to 25% of
         the shares on the first  anniversary  of the date of grant and as to an
                                       7


         additional  25%  of  the  shares  on  the  second,   third  and  fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

(5)      Represents  options to  purchase  50,000  shares of Common  Stock at an
         exercise  price of $.69  per  share  granted  under  the 1998  Plan and
         options to purchase  50,000 shares of Common Stock at an exercise price
         of $.25 per share granted under the 1996 Plan. These options vest as to
         25% of the shares on the first  anniversary of the date of grant and as
         to an  additional  25% of the  shares on the  second,  third and fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

(6)      Represents  options to  purchase  20,000  shares of Common  Stock at an
         exercise price of $1.4062 per share granted under the 1996 Plan.  These
         options  vest as to 25% of the shares on the first  anniversary  of the
         date of grant and as to an additional  25% of the shares on the second,
         third and fourth anniversaries of the date of grant. The options become
         fully vested in the event of a change in control of the Company.

(7)      Represents  options to  purchase  15,400  shares of Common  Stock at an
         exercise price of $1.25 per share and options to purchase 12,000 shares
         of Common Stock at an exercise price of $2.375 per share, granted under
         the 1998 Plan.  These options vest as to 25% of the shares on the first
         anniversary  of the date of grant  and as to an  additional  25% of the
         shares on the  second,  third and fourth  anniversaries  of the date of
         grant.  The  options  become  fully  vested in the event of a change in
         control of the Company.

(8)      Represents  options to  purchase  50,000  shares of Common  Stock at an
         exercise  price of $.69  per  share  granted  under  the 1998  Plan and
         options to purchase  50,000 shares of Common Stock at an exercise price
         of $.25 per share granted under the 1996 Plan. These options vest as to
         25% of the shares on the first  anniversary of the date of grant and as
         to an  additional  25% of the  shares on the  second,  third and fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

(9)      Represents  options to  purchase  20,000  shares of Common  Stock at an
         exercise price of $1.4062 per share granted under the 1996 Plan.  These
         options  vest as to 25% of the shares on the first  anniversary  of the
         date of grant and as to an additional  25% of the shares on the second,
         third and fourth anniversaries of the date of grant. The options become
         fully vested in the event of a change in control of the Company.

(10)     Represents  options  to  purchase  5,000  shares of Common  Stock at an
         exercise price of $2.375 per share and options to purchase 5,000 shares
         of Common Stock at an exercise price of $1.25 per share,  granted under
         the 1998 Plan.  These options vest as to 25% of the shares on the first
         anniversary  of the date of grant  and as to an  additional  25% of the
         shares on the  second,  third and fourth  anniversaries  of the date of
         grant.  The  options  become  fully  vested in the event of a change in
         control of the Company.

(11)     Represents  options to  purchase  50,000  shares of Common  Stock at an
         exercise  price of $.69  per  share  granted  under  the 1998  Plan and
         options to purchase  50,000 shares of Common Stock at an exercise price
         of $.25 per share granted under the 1996 Plan. These options vest as to
         25% of the shares on the first  anniversary of the date of grant and as
         to an  additional  25% of the  shares on the  second,  third and fourth
         anniversaries  of the date of grant. The options become fully vested in
         the  event  of a  change  in  control  of the  Company.  These  options
         terminated on February 22, 2003.

(12)     Represents  options to  purchase  35,000  shares of Common  Stock at an
         exercise  price of $2.02 per share granted  under the 1998 Plan.  These
         options  vest as to 25% of the shares on the first  anniversary  of the
         date of grant and as to an additional  25% of the shares on the second,
         third and fourth anniversaries of the date of grant. The options become
         fully vested in the event of a change in control of the Company.  These
         options terminated on February 22, 2003.

(13)     Represents  options to  purchase  50,000  shares of Common  Stock at an
         exercise  price of $.69  per  share  granted  under  the 1998  Plan and
         options to purchase  50,000 shares of Common Stock at an exercise price
         of $.25 per share granted under the 1996 Plan. These options vest as to
         25% of the shares on the first  anniversary of the date of grant and as
         to an  additional  25% of the  shares on the  second,  third and fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

(14)     Represents  options to  purchase  10,000  shares of Common  Stock at an
         exercise  price of $1.4062  per share and  options to  purchase  10,000
         shares of Common Stock at an exercise price of $1.62 per share, granted
         under the 1996 Plan.  These options vest as to 25% of the shares on the
         first  anniversary  of the date of grant and as to an additional 25% of
         the shares on the second, third and fourth anniversaries of the date of
         grant.  The  options  become  fully  vested in the event of a change in
         control of the Company.

                                       8


(15)     Represents  options to  purchase  15,000  shares of Common  Stock at an
         exercise  price of $3.4375 per share,  options to purchase 3,000 shares
         of Common Stock at an exercise  price of $1.25 per share and options to
         purchase  5,000 shares of Common Stock at an exercise  price of $.78125
         per share, granted under the 1998 Plan. These options vest as to 25% of
         the shares on the first  anniversary  of the date of grant and as to an
         additional  25%  of  the  shares  on  the  second,   third  and  fourth
         anniversaries  of the date of grant. The options become fully vested in
         the event of a change in control of the Company.

STOCK OPTIONS GRANTED

         The following tables set forth further information  regarding the grant
of options to the Named Executives of the Company in 2002. No stock appreciation
rights were granted to any Named Executive during 2002.


                                                                                              Potential Realizable Value at
                                                                                                 Assumed Annual Rates of
                                                                                              Stock Price Appreciation for
                                              Indivisual Grants                                        Option Term
                           ---------------------------------------------------------------------------------------------------
                                                 % of Total
                               Number of           Options
                              Securities         Granted to
                              Underlying          Employees     Exercise or
                            Options Granted       in Fiscal      Base Price    Expiration
Name                              (#)               Year         ($/Sh) (1)       Date                  5%              10%
------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Margaret E. Grayson            150,000              8.85            $.69        04/01/12              $65,091        $164,952
                               150,000              8.85            $.25        07/23/12              $23,584         $59,765

Christopher T. Brook            50,000              2.95            $.69        04/01/12              $21,697         $54,984
                                50,000              2.95            $.25        07/23/12               $7,861         $19,922

Douglas M. Hurt                 50,000              2.95            $.69        04/01/12              $21,697         $54,984
                                50,000              2.95            $.25        07/23/12               $7,861         $19,922

Mandy J. Schuyler               50,000              2.95            $.69        04/01/12              $21,697         $54,984
                                50,000              2.95            $.25        07/23/12               $7,861         $19,922

Merle B. Miller                 50,000              2.95            $.69        04/01/12              $21,697         $54,984
                                50,000              2.95            $.25        07/23/12               $7,861         $19,922

(1) Represents fair market value on date of grant.



                                       9


AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND DECEMBER 31, 2002
OPTION VALUES

         The  following  table  summarizes  the value  realized upon exercise of
outstanding  stock options and the value of the outstanding  options held by the
Named Executives at December 31, 2002.


                                                                       Number of
                                                                 Securities Underlying          Value of
                                                                      Unexercised              Unexercised
                                                                      Options at              In-the-Money
                              Shares                                 December 31,              Options at
                             Acquired                                  2002 (#)               December 31,
                                on                 Value             Exercisable/             2002 ($) (1)
          Name             Exercise (#)        Realized ($)          Unexercisable            Exercisable/
          ----             ------------        -------------         -------------           Unexercisable
                                                                                             -------------
                                                                                       
Margaret E. Grayson              0                  0               807,500/422,500                0/0

Christopher T. Brook             0                  0               81,200/131,200                 0/0

Douglas M. Hurt                  0                  0               25,000/125,000                 0/0

Mandy J. Schuyler                0                  0                8,750/135,000                 0/0

Merle B. Miller                  0                  0               16,500/126,500                 0/0

(1) Based on the closing sales price of $.14 on Tuesday, December 31, 2002.


RELATED TRANSACTIONS

         In July and August 2002, the Company closed on approximately $1,188,000
in a private placement of 8% Secured Convertible Notes with detachable warrants,
due 180 days after issuance with an additional  180-day  extension  available at
the option of the  Company or the note  holders.  The note  holders  may convert
their notes at any time into the  Company's  Common Stock at a conversion  price
equal to the  greater  of $0.25 per share or 60% of the  average  closing  sales
price of the Company's Common Stock for the five trading day period  immediately
preceding the Company's receipt of the note holders  notification of conversion.
Detachable five year warrants,  exercisable at $0.50 per share,  are included to
provide  100%  warrant  coverage  to the  note  holders.  In  January  2003,  in
connection  with its efforts to raise capital,  the Company agreed to adjust the
exercise  price of the  warrants  from $0.50 per share to $0.15 per  share.  Ms.
Grayson,  Mr. Heiden and General Odom  participated in the private  placement of
the notes in the amounts of $25,000,  $25,000 and  $10,000,  respectively.  Each
immediately  converted his or her notes into Common Stock.  Neither Ms. Grayson,
Mr. Heiden nor General Odom has exercised the warrants attached to the notes.


                                       10


EQUITY COMPENSATION PLAN INFORMATION

         The following  table provides  information as of December 31, 2002 with
respect to the shares of the Company's Common Stock that may be issued under the
Company's existing equity compensation plans.


                                                              (A)                (B)                 (C)
                                                          --------------------------------------------------------
                                                                                                   Number of
                                                                                                   Securities
                                                                                                   Remaining
                                                                                              Available for Future
                                                           Number of                            Issuance Under
                                                          Securities to                             Equity
                                                            be Issued                            Compensation
                                                          upon Exercise                        Plans (Excluding
                                                               of         Weighted Average        Securities
                                                           Outstanding    Exercise Price of      Reflected in
Plan Category                                              Options (2)    Outstanding Options      Column A)
-------------                                             --------------------------------------------------------
                                                                                           
Equity Compensation Plans Approved by Shareholders(1)       4,526,857          $1.23                3,965,687

Equity Compensation Plans Not Approved by Shareholders          -                -                       -
                                                          --------------------------------------------------------
           Total                                            4,526,857          $1.23                3,965,687

(1) Consists of the Company's 1995 Non-statutory Stock Option Plan, 1996 Incentive Stock Plan, 1998 Incentive Stock Plan and
    2001 Employee Stock Purchase Plan.

(2) Excludes purchase rights accruing under the Company's 2001 Employee Stock Purchase Plan which has a shareholder
    approved reserve of 2,500,000 shares.  Under the purchase plan, each eligible employee may purchase shares of
    Common Stock in quarterly intervals.



REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

         In June 1996, the Board established the Compensation  Committee,  which
makes recommendations concerning the compensation arrangements for all directors
and executive  officers.  In 2002, the Compensation  Committee  consisted of Mr.
Heiden,  Mr. McManus and General Odom.  Mr.  McManus  resigned from the Board of
Directors effective March 31, 2003. The Compensation Committee met once in 2002.

         Compensation for executive  officers  currently  consists  primarily of
base salary,  cash and stock bonuses and grants of stock options pursuant to the
Company's  stock option plans.  Base salaries are  determined by evaluating  the
responsibilities  of the  position  and  the  experience  and  knowledge  of the
individual.  Bonuses and annual salary  adjustments,  if any, are  determined by
evaluating  performance  taking into account such factors as  achievement of the
Company's strategic goals, assumption of additional responsibilities, attainment
of specific  individual  objectives,  and the compensation  paid to other senior
executives in the Company's industry.  The Compensation  Committee believes that
stock ownership by management is especially beneficial in aligning the interests
of management and shareholders in the Company.

         Grants of Company  stock  options are intended to align the interest of
executives,  key  employees  and  others  with the  long-term  interests  of the
Company's  shareholders and to encourage  executives and key employees to remain
with the Company. The Board initially  authorized the Compensation  Committee to
grant stock options to key employees and others under the Company's stock option
plans.  Currently,  the Board is administering  the Company's stock option plans
and Ms. Grayson recommends to the Board levels of stock option grants based upon
the same factors as those used for bonus and salary adjustments.

Bonus.
-----

         Bonus  compensation  of the Chief  Executive  Officer  and other  Named
Executives is tied to certain performance goals reasonably established from time
to time by the Company. On March 7, 2002 the Board of Directors  determined that
no performance bonuses would be paid for the year ended December 31, 2002.

Section 162(m).
--------------

         Section  162(m)  of the  Internal  Revenue  Code of  1986,  as  amended
("Code"),  imposes a limitation  on the  deductibility  of  nonperformance-based
compensation in excess of $1 million paid to the Named Executives. Currently, no
executive  officer of the Company is paid  compensation  in excess of $1 million
per year and it is not  anticipated  that any executive  officer will be paid in


                                       11


excess of $1 million in 2003. The Company's  1998 Incentive  Stock Plan and 1996
Incentive  Stock Plan  provide  for awards that can be made in  compliance  with
Section 162(m).

                                   SUBMITTED BY THE COMPENSATION
                                   COMMITTEE OF THE BOARD OF DIRECTORS

                                   Heidi B. Heiden
                                   William E. Odom

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         In 2002,  the Company's  Compensation  Committee  consisted of Heidi B.
Heiden,  James T. McManus and William E. Odom.  Mr.  McManus  resigned  from the
Board of Directors effective March 31, 2003.

         The  Company  has  adopted  a  policy   providing   that  all  material
transactions (other than compensation  arrangements that must be approved by the
Compensation  Committee)  between the Company and its  directors,  officers  and
other affiliates (i) must be approved by a majority of the disinterested members
of the Board or a committee  thereof  (following  disclosure to the Board of the
material facts of the  relationship  and the  transaction),  and (ii) must be on
terms no less  favorable to the Company than can be obtained  from  unaffiliated
third parties.

         In July and August 2002, the Company closed on approximately $1,188,000
in a private placement of 8% Secured Convertible Notes with detachable warrants,
due 180 days after issuance with an additional  180-day  extension  available at
the option of the  Company or the note  holders.  The note  holders  may convert
their notes at any time into the  Company's  Common Stock at a conversion  price
equal to the  greater  of $0.25 per share or 60% of the  average  closing  sales
price of the Company's Common Stock for the five trading day period  immediately
preceding the Company's receipt of the note holders  notification of conversion.
Detachable five year warrants,  exercisable at $0.50 per share,  are included to
provide  100%  warrant  coverage  to the  note  holders.  In  January  2003,  in
connection  with its efforts to raise capital,  the Company agreed to adjust the
exercise  price of the  warrants  from $0.50 per share to $0.15 per  share.  Ms.
Grayson,  Mr. Heiden and General Odom  participated in the private  placement of
notes in the  amounts  of  $25,000,  $25,000  and  $10,000,  respectively.  Each
immediately  converted his or her notes into Common Stock.  Neither Ms. Grayson,
Mr. Heiden nor General Odom has exercised the warrants attached to the notes.

STOCK PERFORMANCE GRAPH

         The following  graph compares the change in the Company's  total return
on its  Common  Stock  with (i) the  change  in the  total  return  on the stock
included in the CRSP Total Return  Index for the Nasdaq Stock Market  (U.S.) and
(ii) the change in the total return on the stocks included in the Company's peer
group.  The  companies in the peer group are Check Point  Software  Technologies
Ltd., RSA Security,  Inc., Cylink  Corporation and SafeNet,  Inc. SafeNet,  Inc.
acquired Cylink Corporation on February 6, 2003.

         These  comparisons  assume an  investment  of $100 made on December 31,
1997 and  compare  relative  values  on an annual  basis  for the  years  ending
December 31, 1998,  1999,  2000,  2001 and 2002.  All of these total returns are
computed  assuming the  reinvestment  of dividends at the  frequency  with which
dividends were paid during this period. The Common Stock price performance shown
below should not be viewed as being indicative of future performance.


                                       12


THE GRAPH OMITTED CONTAINS THE FOLLOWING PLOT POINTS:


SOURCES:  NASDAQ                              DEC. 1997   DEC. 1998   DEC. 1999   DEC. 2000   DEC. 2001   DEC. 2002
                                                                                              
V-ONE CORPORATION                                   $100         $85        $168         $18         $41          $5
NASDAQ TOTAL RETURN  INDEX                          $100        $141        $262        $158        $375        $182
PEER GROUP (4 COMPANIES)                            $100         $82        $293        $328        $110         $77



EMPLOYMENT AGREEMENTS

         The Company  originally  entered into an employment  agreement with Ms.
Grayson in July 1999 when she was the Company's  Senior Vice President and Chief
Financial Officer.  In November 2000, the Board of Directors elected Ms. Grayson
President and Chief Executive Officer and extended her employment agreement. The
employment  agreement  has a  one-year  term and is  automatically  renewed  for
additional   one-year  terms  on  the  anniversary   date  and  each  successive
anniversary  date  thereafter.  However,  either the Company or Ms.  Grayson may
serve written notice of an intention not to renew not less than 90 days prior to
the expiration of the then current term, in which case the employment  agreement
terminates on such  termination  date.  Effective July 15, 2002,  Ms.  Grayson's
employment  agreement  was amended to reduce her base  salary  from  $300,000 to
$200,000 plus 2% of the Company's gross revenues.  Ms.  Grayson's base salary is
subject to  periodic  review by the Board and may be  increased  at the  Board's
discretion.  Under the employment agreement,  Ms. Grayson is eligible for a cash
bonus if the Company  meets  certain  performance  objectives as outlined in the
Report of the Compensation  Committee on Executive  Compensation.  In June 2002,
Ms.  Grayson  assumed the  responsibilities  of Principal  Financial  Officer in
addition to those of President and Chief Executive Officer.

         If the Company  terminates Ms.  Grayson's  employment for cause, she is
not entitled to any severance  payment.  Ms.  Grayson is deemed to be terminated
for cause if, in the  reasonable  determination  of the Board,  she, among other
things,  is  convicted  of  a  felony  or a  crime  involving  moral  turpitude,
participates  in a  fraud  against  the  Company,  or  willfully  discloses  the
Company's  trade  secrets  or  other  confidential  information  to  any  of its
competitors.  If the Company terminates Ms. Grayson's  employment other than for
cause (or fails to renew the  employment  agreement  other than for cause),  Ms.
Grayson  receives  a  severance  payment  equal to one  year's  salary  plus any
projected  bonus that would have been paid  during  that year,  and all  options
previously granted become immediately exercisable.

         In June 1996,  the Company  entered into an employment  agreement  with
Jieh-Shan  Wang,  who then held the position of Senior Vice  President and Chief
Technical Officer. In 2000, Dr. Wang's title was changed to Chief Scientist, his


                                       13

base salary was reduced to $100,000 and his weekly work  schedule was reduced to
thirty hours.  Dr. Wang's employment  agreement was terminated on July 16, 2002.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the Exchange Act  requires the  Company's  directors,
executive  officers  and persons who own more than 10% of the  Company's  Common
Stock to file initial  reports of ownership  and reports of changes in ownership
with the SEC.  Directors,  executive  officers and greater than 10% shareholders
(collectively,  "Reporting  Persons") are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.

         Based  solely on review of the  copies of such  forms  provided  to the
Company  and  written  representations  by the  Reporting  Persons,  the Company
believes  that,  for the year ended  December 31, 2002, all Section 16(a) filing
requirements applicable to the Reporting Persons were met.

                             AUDIT COMMITTEE REPORT

         The following is the report of the Audit  Committee with respect to the
Company's unaudited financial  statements for the fiscal year ended December 31,
2002,  which  include the balance  sheets of the Company as of December 31, 2002
and 2001,  and the related  statements of operations,  changes in  stockholders'
equity and cash flows for the years in the period ended December 31, 2002,  2001
and 2000 and the notes thereto.  The audit of the Company's financial statements
at December 31, 2002 is in progress but will not be completed in time to include
audited  financial  statements  and a  Report  of  Independent  Auditors  in the
Company's  Annual Report on Form 10-K.  When the audit is completed and a Report
of Independent Auditors is issued, the Company expects to file an amended Annual
Report on Form 10-K.  The  information  contained  in this  report  shall not be
deemed to be  "soliciting  material"  or to be "filed" with the  Securities  and
Exchange  Commission,  nor shall such  information be  incorporated by reference
into any future  filing under the  Securities  Act of 1933,  as amended,  or the
Securities  Exchange  Act of 1934,  as  amended,  except to the extent  that the
company specifically incorporates it by reference in such filing.

REVIEW WITH MANAGEMENT

         The Audit Committee has reviewed and discussed the Company's  unaudited
financial statements with management.

REVIEW AND DISCUSSIONS WITH INDEPENDENT AUDITORS

         The Company  expects that review and discussion  with Ernst & Young LLP
("E & Y"), the Company's  independent public accountants for 2002, regarding the
matters  required to be  discussed  by SAS 61  (Codification  of  Statements  on
Accounting  Standards) which include,  among other items, matters related to the
conduct  of the audit of the  Company's  financial  statements,  will occur upon
completion of the fiscal 2002 audit.

         The Company  expects  that the Audit  Committee  will  receive  written
disclosures and the letter from E & Y required by  Independence  Standards Board
Standard No. 1 (which relates to the accountant's  independence from the Company
and its related  entities) and will discuss with E & Y its independence from the
Company upon completion of the fiscal 2002 audit.

         The  Audit  Committee  has  adopted a charter  for the  Committee.  All
members of the Audit Committee are independent as defined under the NASD rules.

CONCLUSION

         Based on the  review  and  discussions  referred  to  above,  the Audit
Committee  recommended  to the  Company's  Board  that the  Company's  unaudited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2002.

                                            SUBMITTED BY THE AUDIT COMMITTEE OF
                                            THE BOARD OF DIRECTORS

                                            Molly G. Bayley
                                            Heidi B. Heiden
                                            Michael D. O'Dell
                                       14


                   INFORMATION CONCERNING INDEPENDENT AUDITORS

AUDIT FEES

         The Company's  independent  auditors for the fiscal year ended December
31,  2002 were E & Y. The  aggregate  fees  billed by E & Y for the fiscal  year
ended  December 31, 2002 were $95,000 for the annual audit and $59,661 for audit
related services.  Audit related services generally include fees for pension and
statutory audits,  business  acquisitions,  accounting  consultations,  internal
audits  and  SEC  reporting  obligations.  No fees  were  billed  for  non-audit
services,  which,  in the opinion of the Audit  Committee,  is  compatible  with
maintaining auditor independence.

         The audit of the Company's financial statements at December 31, 2002 is
in  progress  but will not be  completed  in time to include  audited  financial
statements and a Report of Independent  Auditors in the Company's  Annual Report
on Form 10-K.  When the audit is completed and a Report of Independent  Auditors
is issued, the Company expects to file an amended Annual Report on Form 10-K.

NO PROPOSAL TO APPROVE OR RATIFY INDEPENDENT AUDITORS

         Consistent with its cost containment efforts, the Company is seeking to
engage a new  independent  public  accounting  firm  better  suited to its size.
Because the Company contemplates that it may engage new independent auditors, it
is not seeking  approval  or  ratification  of the  appointment  of  independent
auditors for the fiscal year ended December 31, 2003 at the annual meeting.

         The  Company  does not  expect  representatives  of E & Y to attend the
annual meeting.

                  AMENDMENT OF THE CERTIFICATE OF INCORPORATION
                                  (PROPOSAL 2)

         The  Company is  currently  authorized  to issue  50,000,000  shares of
Common  Stock,  par value  $0.001 per  share,  of which,  as of April 10,  2003,
26,755,551  shares were issued and  outstanding,  7,685,626 shares were reserved
for issuance  upon exercise of options which have been granted or may be granted
pursuant to the stock  option  plans of the Company  and  2,500,000  shares were
reserved for issuance upon exercise of options which have been granted or may be
granted  pursuant  to the  stock  purchase  plan of the  Company.  In  addition,
5,862,040  shares of Common Stock are reserved for issuance  upon  conversion of
the Company's  outstanding  notes and preferred  stock and 2,586,204  shares are
reserved for issuance  upon the exercise of  outstanding  warrants.  Thus, as of
April 10, 2003, there were only  approximately  4,610,579 shares of Common Stock
that were unissued and not reserved for issuance.

         In these circumstances, the Board of Directors determined that it would
be  advisable  and in the best  interest of the  Company to amend the  Company's
certificate  of  incorporation,   as  amended  and  restated   ("Certificate  of
Incorporation"),  to increase the number of authorized shares of Common Stock in
order to have additional  shares available for issuance to meet various business
needs as they may arise and to enhance the Company's  flexibility  in connection
with  possible  future  actions.  Those  business  needs and actions may include
additional financing,  stock dividends, stock splits, employee benefit programs,
corporate business combinations and other corporate purposes.  While the Company
currently has no arrangements, understandings or commitments with respect to the
issuance of any additional shares of Common Stock, it is considered advisable to
have sufficient  authorized and unissued shares available to enable the Company,
as the need may arise,  to move promptly to take advantage of market  conditions
and the  availability  of other  favorable  opportunities  without the delay and
expense involved in calling a special meeting of shareholders.  Unless otherwise
required by applicable law or regulation,  the additional shares of Common Stock
will be  issuable  without  further  authorization  by vote  or  consent  of the
shareholders  and on such terms and for such  consideration as may be determined
by the Board.

         Pursuant  to that  determination,  on  April  11,  2003,  the  Board of
Directors  unanimously approved and recommended that the Company's  shareholders
consider  and  approve  an  amendment  to  Article  IV  of  the  Certificate  of
Incorporation  of the Company to  increase  the number of  authorized  shares of
Common Stock of the Company from 50,000,000 shares to 75,000,000 shares.

         The authorization of additional shares of Common Stock pursuant to this
proposal  will have no dilutive  effect upon  proportionate  voting power of the
present  shareholders  of the  Company.  However,  to the extent that shares are
subsequently  issued in connection  with any  corporate  action to persons other
than the present shareholders, such issuance could have a dilutive effect on the
earnings per share and voting power of present shareholders.

         In addition, although the issuance of additional shares of Common Stock
in certain instances may have the effect of forestalling a hostile takeover, the
Board does not  intend nor does it view the  increase  in  authorized  shares of
Common  Stock as an  anti-takeover  measure.  The  Company  is not  aware of any


                                       15


proposed or contemplated transaction of this type, and the proposed amendment to
the  Certificate of  Incorporation  is not being  recommended in response to any
specific effort of which the Company is aware to obtain control of the Company.

         At the annual meeting,  the shareholders  will be asked to consider the
proposal  recommended  by the  Board of  Directors  to amend  Article  IV of the
Certificate  of  Incorporation.  As  proposed to be  amended,  paragraph  one of
Article IV would read as follows:

          The  Corporation  is  authorized  to issue two classes of shares to be
          designated Common Stock and Preferred Stock,  respectively.  The total
          number of shares of stock the  Corporation  shall  have  authority  to
          issue is  eighty-eight  million  three hundred  thirty-three  thousand
          three hundred thirty-three  (88,333,333) shares;  seventy-five million
          (75,000,000)  shares of  Common  Stock  with par  value of $0.001  per
          share, and thirteen million three hundred thirty-three  thousand three
          hundred  thirty-three  (13,333,333) shares of Preferred Stock with par
          value of $0.001 per share.

         If the  amendment is approved by the  Company's  shareholders,  it will
become  effective  upon the filing of a  Certificate  of Amendment in accordance
with the General Corporation Law of Delaware.

         THE BOARD OF DIRECTORS  RECOMMENDS  THAT YOU VOTE "FOR" THE PROPOSAL TO
AMEND THE  CERTIFICATE  OF  INCORPORATION  TO INCREASE THE NUMBER OF  AUTHORIZED
SHARES OF COMMON STOCK.

                                  ANNUAL REPORT

         A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,  WITHOUT  EXHIBITS,
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002  ACCOMPANIES  THIS PROXY  STATEMENT.
UPON  WRITTEN  REQUEST,  THE COMPANY WILL  PROVIDE TO ANY  SHAREHOLDER,  FREE OF
CHARGE,  A COPY OF ITS ANNUAL REPORT ON FORM 10-K,  WITHOUT  EXHIBITS,  AS FILED
WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION.  REQUESTS  FOR  COPIES  OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K SHOULD BE DIRECTED TO MERLE B. MILLER, VICE
PRESIDENT ADMINISTRATION, V-ONE CORPORATION, 20300 CENTURY BOULEVARD, SUITE 200,
GERMANTOWN, MARYLAND 20874.

                              SHAREHOLDER PROPOSALS

         Proposals of  shareholders  intended to be presented at the 2004 Annual
Meeting of  Shareholders  must be received by the Company no later than December
5, 2003 to be considered for inclusion in the Company's Proxy Statement and form
of proxy  relating to such meeting.  Proposals of  shareholders  received by the
Company after December 5, 2003 will be considered untimely.

                                  OTHER MATTERS

         As of the  date  of this  Proxy  Statement,  the  Company  knows  of no
business  other  than  that   described   herein  that  will  be  presented  for
consideration  at the annual  meeting.  If,  however,  any other  business shall
properly come before the annual  meeting,  the proxy holders  intend to vote the
proxies as determined by a majority of the Board.

                                    By Order of the Board of Directors


                                    /s/ Joseph D. Gallagher
                                    Joseph D. Gallagher
                                    Secretary

May 2, 2003

                                       16







                                                   Please date, sign and mail your
                                                   proxy card as soon as possible!

                                                          V-ONE Corporation
                                           Annual Meeting of Shareholders on June 5, 2003

                                                                               
/ X /   Please mark your votes as in this example.         Note to Preferred C Shareholders:
                                                           You may not vote on Proposal 1.

1.  Proposal One: Election of two directors:               For     Withhold Authority   FOR, except vote withheld from the
                                                                                        following nominee:

        Nominees:   Margaret E. Grayson
                    Michael D. O'Dell                      /  /         /  /            __________________________________

            For     Against     Abstain

            /  /     /  /         /  /                     2. Proposal Two: Amendment of the Company's Certificate of Incorporation,
                                                           as amended and restated, to increase the number of authorized  shares of
                                                           common stock of the Company from 50,000,000 shares to 75,000,000 shares.

           /  /     /  /         /  /                      3. In the  discretion  of such  proxies  on such  other  business  as may
                                                           properly come before the meeting or any adjournment thereof.


THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDER'S  SPECIFICATIONS  HEREON. IN
THE ABSENCE OF SUCH SPECIFICATIONS, THE PROXY WILL BE VOTED "FOR" THE PROPOSALS.

                                                                                Change of Address or    /  /
                                                                                Comments, mark here:



_________________________________               ___________________________________                 ________________, 2003
Signature of Shareholder                        Signature of Additional Shareholder                 Dated


Please sign your name exactly as it appears hereon. When signing as attorney, executor,  administrator,  trustee or guardian, please
give full title as such.  If a  corporation,  please sign in full  corporate  name by president or other  authorized  officer.  If a
partnership, please sign in partnership name by authorized person.





                                V-ONE CORPORATION

           Proxy for Annual Meeting of Shareholders on June 5, 2003

         This Proxy is Solicited on Behalf of the Board of Directors

      The undersigned  hereby appoints  Margaret E. Grayson and Merle B. Miller,
or either of them with full power of substitution,  as the lawful proxies of the
undersigned and hereby authorizes them to represent and to vote as designated on
the reverse all shares of common stock and preferred stock of V-ONE  Corporation
("Company") that the undersigned would be entitled to vote if personally present
at the Annual Meeting of  Shareholders of the Company to be held on June 5, 2003
and at any adjournment  thereof.  This Proxy,  when properly  executed,  will be
voted in the  manner  directed  herein  by the  undersigned  shareholder.  If no
direction  is given,  this  Proxy  will be voted FOR the  matters  listed on the
reverse. Whether or not you plan to attend the meeting, you are urged to execute
and return this Proxy which may be revoked at any time prior to its use.

                    (Continued and to be signed on other side.)