<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996.
Or
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
--------------
, 19 .
---------------- ----
Commission file number : 0-20937
-----------------------
Phoenix International Ltd., Inc.
(Exact name of registrant as specified in its charter)
Florida 59-3171810
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
900 Winderley Place, Suite 140, Maitland, Florida 32751
(Address of principal executive offices)
(407) 667-0033
(Registrant's telephone number including area code)
N/A
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. (1) Yes X No (2) Yes No X
--- --- --- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 13, 1996
Common Stock, $0.01 par value 3,832,987
(No. of Shares)
================================================================================
<PAGE> 2
PHOENIX INTERNATIONAL LTD., INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June
30, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Operations
for the Three Months and Six Months ended June
30, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows
for the Six Months ended June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements
6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security
Holders 15
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES
</TABLE>
EXHIBIT INDEX
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PHOENIX INTERNATIONAL LTD., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 139,815 $ 425,931
Accounts receivable, net of allowance for doubtful accounts of $10,000 585,881 328,693
Unbilled accounts receivable 148,205 108,320
Interest receivable, related party 157,071 105,001
Prepaid expenses and other current assets 379,430 174,339
Deferred tax asset 237,770 390,769
----------- -----------
Total current assets 1,648,172 1,533,053
Property and equipment:
Computer equipment and purchased software 601,904 522,571
Furniture, office equipment and leasehold improvements 246,368 245,762
----------- -----------
848,272 768,333
Accumulated depreciation and amortization (280,222) (191,826)
----------- -----------
Total property and equipment 568,050 576,507
Capitalized software development costs, net of accumulated
amortization of $246,951 and $107,647 at June 30, 1996 and
December 31, 1995, respectively 1,542,286 1,118,729
----------- -----------
Total assets $ 3,758,508 $ 3,228,289
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 452,652 $ 264,274
Accrued expenses 406,236 279,521
Notes payable to Bank 247,031 -
Note payable, related party 35,203 35,203
Payable to vendor 140,000 140,000
Deferred revenue 2,349,622 3,077,393
----------- -----------
Total current liabilities 3,630,744 3,796,391
Shareholders' equity (deficit):
Class A through E common stock, 3,162,599 and 2,992,330
issued June 30, 1996 and December 31, 1995, respectively 1,854,420 1,671,190
Additional paid-in capital 2,506,410 2,368,470
Stock subscription receivable (1,436,804) (1,318,524)
Accumulated deficit (2,796,262) (3,289,238)
----------- -----------
Total shareholders' equity (deficit) 127,764 (568,102)
----------- -----------
Total liabilities and shareholders' equity (deficit) $ 3,758,508 $ 3,228,289
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
<PAGE> 4
PHOENIX INTERNATIONAL LTD., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ---------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
License fees and other $1,277,805 $2,802,782 $2,405,412 $2,802,782
Implementation, customer and software
support and other service fees 823,902 397,070 1,477,625 487,815
---------- ---------- ---------- ----------
Total revenues 2,101,707 3,199,852 3,883,037 3,290,597
Expenses:
Cost of license fees and other 150,241 176,122 281,270 176,122
Cost of implementation, customer and
software support and other service fees 497,333 276,259 954,529 499,081
Sales and marketing 213,823 237,263 482,641 462,102
General and administrative 479,134 305,731 837,394 592,803
Product development 363,878 149,438 682,945 209,710
---------- ---------- ---------- ----------
Total expenses 1,704,409 1,144,813 3,218,779 1,939,818
Other income (expense):
Interest income 28,245 32,958 56,892 62,565
Interest expense (14,975) (5,533) (16,056) (12,123)
Other income - - - 75,270
---------- ---------- ---------- ----------
Income before income taxes 410,568 2,082,464 705,094 1,476,491
Income tax expense 59,118 255,999 212,118 255,999
---------- ---------- ---------- ----------
Net income $ 351,450 $1,826,465 $ 492,976 $1,220,492
========== ========== ========== ==========
Net income per share $ 0.10 $ 0.57 $ 0.14 $ 0.38
Weighted average shares outstanding 3,385,939 3,231,943 3,346,991 3,207,895
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements of operations.
4
<PAGE> 5
PHOENIX INTERNATIONAL LTD., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 492,976 $1,220,492
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 227,700 66,838
Stock and stock options issued for compensation -- 2,500
Deferred taxes 152,999 68,101
Changes in operating assets and liabilities:
Accounts receivable (257,188) (377,015)
Unbilled accounts receivable (39,885) (148,470)
Interest receivable, related party (52,070) (49,540)
Prepaid expenses and other current assets (205,091) (25,724)
Accounts payable 188,378 281,256
Accrued expenses 126,715 (30,899)
Deferred revenue (727,771) (685,007)
--------- ---------
Net cash provided by (used in) operating
activities (93,237) 322,532
Cash flows from investing activities:
Purchases of property and equipment (79,939) (220,550)
Capitalized software development costs (562,861) (672,156)
--------- ---------
Net cash used in investing activities (642,800) (892,706)
Cash flows from financing activities:
Proceeds from short-term debt 247,031 21,254
Net proceeds from issuance of common stock 202,890 197,510
Payment on short-term debt -- (260,000)
Cash payments for stock subscription receivable -- 34,290
--------- ---------
Net cash provided by (used in) financing
activities 449,921 (6,946)
Net decrease in cash and cash equivalents (286,116) (577,120)
Cash and cash equivalents at beginning of the period 425,931 605,309
--------- ---------
Cash and cash equivalents at end of the period $ 139,815 $ 28,189
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements of cash flows.
5
<PAGE> 6
PHOENIX INTERNATIONAL LTD., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include all adjustments, consisting only of normal recurring accruals, which the
Company considers necessary for a fair presentation of the financial position
and the results of operations for the interim periods presented. The condensed
consolidated financial statements have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission. Accordingly,
certain information and footnote disclosures usually found in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
"Selected Consolidated and Financial Operating Data" included in the Company's
Registration Statement (the "Registration Statement") on Form S-1 (Registration
Number 33-03355), as amended, declared effective by the Securities and Exchange
Commission on July 1, 1996.
2. COMMON STOCK SPLIT
On May 6, 1996, the Board of Directors approved a 2.321-for-one share
split of the Company's capital stock (classes A through E). In addition, the
Company amended its articles of incorporation effective May 8 to reduce the par
value of each of the Company's capital stock (Classes A through E) in accordance
with the stock split and to increase the number of authorized shares of Class A
Common Stock to 1,500,000 shares. All share and per share amounts related to
common stock have been retroactively restated to reflect the stock split for all
periods presented.
3. NET INCOME PER SHARE
Net income per share is based on the weighted average number of common
shares outstanding and dilutive common stock equivalents outstanding, using the
treasury stock method, during the periods presented. Pursuant to Securities and
Exchange Commission Staff Accounting Bulletin No. 83, common stock issued for
consideration below the public offering price and stock options issued with
exercise prices below the public offering price during the twelve-month period
preceding the initial filing and through the effective date of the Registration
Statement have been included in the calculation of weighted average shares
outstanding, using the treasury stock method, as if they were outstanding for
all periods presented through March 31, 1996.
4. SUBSEQUENT EVENTS - INITIAL PUBLIC OFFERING
On July 1, 1996, the Company's initial public offering of 670,000
shares of common stock was declared effective by the Securities and Exchange
Commission. On July 8, 1996, the Company completed the initial public offering,
issued the common stock and received net proceeds of approximately $6.4 million
(after deducting underwriting discounts of $0.6 million and estimated offering
costs of $1.1 million). On July 8, 1996 the Company received
6
<PAGE> 7
$1,319,000 plus accrued interest of $159,000 from its Chairman and CEO, Mr.
Yusefzadeh, for payment of stock subscriptions receivable due from Mr.
Yusefzadeh and his affiliate out of the proceeds of shares sold by Mr.
Yusefzadeh and his affiliate in the initial public offering. The shares issued
and proceeds received are not reflected in the accompanying financial statements
at June 30, 1996 since the offering was not completed until July.
On July 9, 1996 the Company used $294,000 of the net proceeds to repay
debt and accrued interest. The Company repaid debt and accrued interest of
$248,000 to retire its bank term and line of credit loans. The Company also
repaid $46,000 to Mr. Yusefzadeh for a equipment loan including accrued
interest. The remainder of the net proceeds are currently bearing interest in a
bank money market fund consisting of investment grade, interest bearing
securities.
On the July 8, 1996, all outstanding shares of the Company's capital
stock (Classes A through E Common Stock) converted into Common Stock, $0.01 par
value, on a share for share basis as approved on June 12, 1996 by the
shareholders of the Company. This recapitalization will not change total
shareholders' equity (deficit) and is not reflected in the accompanying
financial statements.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The following discussion contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward-looking statements, and the
Company's operating performance each quarter is subject to various risks and
uncertainties that are discussed in detail in the Company's filings with the
Securities and Exchange Commission, including the "Risk Factors" section in the
Company's Registration Statement (the "Registration Statement") on Form S-1
(Registration Number 33-03355), as amended, declared effective by the Securities
and Exchange Commission on July 1, 1996
OVERVIEW
Phoenix designs, develops, markets and supports highly adaptable,
enterprise-wide client/server application software for the financial services
industry, with a primary focus on middle market banks. Phoenix was founded in
January 1993 and made its initial nondevelopment stage product shipments in June
1995. During its development stage, the Company's business focused primarily on
the development of its software and marketing of the Phoenix System to certain
development stage customers.
The Company's revenues are derived from two primary sources: (i)
license fees for software products and other revenues and commissions from the
sale and delivery of software and hardware products of third party vendors; and
(ii) fees for a full range of services complementing its products, including
implementation, conversion and installation services, training, interface
services for tying the Phoenix System to third-party application software, and
customer and software support services. License fees for the Company's software
products are charged separately from fees for the Company's services and are
recognized upon delivery, when no significant vendor obligations remain and
collection of the resulting receivables is deemed probable. Revenues for
implementation, conversion, installation, training and interface services are
recognized when the services are performed. Service revenues for ongoing
customer and software support and product updates provide recurring revenues as
they are recognized ratably over each year of the license agreement, the term of
which is typically five years.
Future operating results will depend on many factors, including,
without limitation, the demand for the Company's products, the level of product
and price competition, the Company's success in expanding its direct sales
force and indirect distribution channels, the mix of direct and indirect sales,
the mix of foreign and domestic sales, the ability of the Company to develop
and market new products, the ability of the Company to control operating
expenses, changes in Company strategy, personnel changes, changes in
legislation and regulation, foreign currency exchange rates and general
economic factors.
8
<PAGE> 9
Results of Operations
Three Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995
Revenues. Total revenues were $2.1 million and $3.2 million for the
quarters ended June 30, 1996 and 1995, respectively. Revenues from license fees
and other decreased $1.5 million or 54.4% to $1.3 million for the quarter ended
June 30, 1996 from $2.8 million in the quarter ended June 30, 1995. Phoenix
first recognized revenue from licensing of its software upon introduction of its
initial nondevelopmental stage product in June 1995. Revenues from license fees
and other of $2.8 million in the quarter ended June 30, 1995 included license
fees of $2.1 million from a single foreign customer and from the recognition of
revenue from the backlog of customers with whom Phoenix had signed contracts
while the Phoenix System was under development. Revenues from implementation,
customer and software support and other service fees increased $427,000 or
107.5% to $824,000 in the quarter ended June 30, 1996 from $397,000 in the
quarter ended June 30, 1995.
Expenses. Cost of license fees and other was $150,000 and $176,000 in
the quarters ended June 30, 1996 and 1995, respectively. These costs consisted
of amortization of capitalized software development costs and third party
software royalties which relate to software which is sold and installed with the
Company's products. Amortization of software development costs increased in the
quarter ended June 30, 1996 compared to the quarter ended June 30, 1995 because:
(i) amortization costs were only first recorded in June 1995 after general
release of Phoenix Banking System; and (ii) the amount of monthly amortization
increased as additional software development costs have been capitalized. Third
party software royalties decreased in the quarter ended June 30, 1996 from the
quarter ended June 30, 1995 due to lower sales of third party software licenses.
Cost of implementation, customer and software support and other service
fees consists primarily of personnel related costs incurred in providing
implementation, conversion and installation services, training and customer
support. Cost of implementation, customer and software support and other
service fees increased $221,000 or 80.0% to $497,000 in the quarter ended June
30, 1996 from $276,000 in the quarter ended June 30, 1995 as a result of
additional personnel costs related to the increase in the number of
installations of the Phoenix System.
Sales and marketing expenses decreased $23,000 or 9.9% to $214,000 in
the quarter ended June 30, 1996 from $237,000 in the quarter ended June 30,
1995. The Company currently expects to materially increase its sales and
marketing activities and expenses during the remainder of 1996 as a result of an
expansion of sales and marketing staffing.
General and administration expenses increased $173,000 or 56.7% to
$479,000 in the quarter ended June 30, 1996 from $306,000 in the quarter ended
June 30, 1995. The increase was primarily the result of increased personnel
costs and other expenses.
Product development expenses increased $214,000 or 143.5% to $364,000
in the quarter ended June 30, 1996 from $149,000 in the quarter ended June 30,
1995. As the Company continued to expand and enhance the Phoenix System,
product development expenses increased
9
<PAGE> 10
as a result of: (i) an increase in "Product Development Expenditures"
(consisting of the sum of product development expense and capitalized software
development costs) from $517,000 in the quarter ended June 30, 1995 to $613,000
in the quarter ended June 30, 1996; and (ii) a decrease in the capitalization
of Product Development Expenditures from $367,000 in the quarter ended June 30,
1995 to $250,000 in the quarter ended June 30, 1996.
Other Income (Expense). Interest income, consisting primarily of
interest accrued on a related party stock subscriptions receivable, was $28,000
and $33,000 in the quarters ended June 30, 1996 and 1995, respectively. Interest
expense increased to $15,000 in the quarter ended June 30, 1996 compared to
$6,000 in the quarter ended June 30, 1995 as a result of increased interest from
bank equipment and line of credit loans in the quarter ended June 30, 1996.
Income Tax Expense. Income tax expense was $59,000 and $256,000 in the
quarters ended June 30, 1996 and 1995, respectively. These income tax expenses
represent withholding taxes which relate to the license of Company products to
foreign customers and which are contractually payable by those customers. The
Company has a net operating loss carry forward and tax credits that should limit
the Company's United States income tax liability during the remainder of 1996.
Net Income. Net income decreased $1.5 million or 80.8% to $351,000 in
the quarter ended June 30, 1996 from $1.8 million in the quarter ended June 30,
1995 as a result of the decrease in license fees revenue and increased expenses.
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995
General. The Company changed its fiscal year end to December 31 during
1995. However, the six months ended June 30, 1995 includes operating results
for the month of January 1995 which were included in Fiscal 1994 financial
statements.
Revenues. Total revenues were $3.9 million and $3.3 million for the
six months ended June 30, 1996 and 1995, respectively. Revenues from license
fees and other decreased $397,000 or 14.2% to $ 2.4 million for the six months
ended June 30, 1996 from $2.8 million in the six months ended June 30, 1995.
Phoenix first recognized revenue from licensing of its software upon
introduction of its initial nondevelopmental stage product in June 1995.
Revenues from license fees and other of $2.8 million in the six months ended
June 30, 1995 included license fees of $2.1 million from a single foreign
customer and from the recognition of revenue from the backlog of customers with
whom Phoenix had signed contracts while the Phoenix System was under
development. Revenues from implementation, support and other service fees
increased $990,000 or 202.9% to $1.5 million in the six months ended June 30,
1996 from $488,000 in the six months ended June 30, 1995 due to increased
implementation and support fees.
Expenses. Cost of license fees and other was $281,000 and $176,000 in
the six months ended June 30, 1996 and 1995, respectively. These costs
consisted of amortization of capitalized software development costs and third
party software royalties which relate to software which is sold and installed
with the Company's products. Amortization of software development costs
10
<PAGE> 11
increased in the six months ended June 30, 1996 compared to the six months
ended June 30, 1995 because: (i) amortization costs were only first recorded
in June 1995 after general release of the Phoenix Banking System; and (ii) the
amount of monthly amortization increased as additional software development
costs have been capitalized. Third party software royalties decreased in the
six months ended June 30, 1996 from the six months ended June 30, 1995 due to
lower sales of third party software licenses.
Cost of implementation, customer and software support and other service
fees consists primarily of personnel related costs incurred in providing
implementation, conversion and installation services, training and customer
support. Cost of implementation, customer and software support and other
service fees increased $456,000 or 91.3% from $499,000 in the six months ended
June 30, 1995 to $955,000 in the six months ended June 30, 1996 as a result of
additional personnel costs related to the increase in the number of
installations of the Phoenix System.
Sales and marketing expenses increased $21,000 or 4.4% to $483,000 in
the six months ended June 30, 1996 from $462,000 in the six months ended June
30, 1995. The Company currently expects to materially increase its sales and
marketing activities and expenses during the remainder of 1996 as a result of an
expansion of sales and marketing staffing.
General and administrative expenses increased $245,000 or 41.3% to
$837,000 in the six months ended June 30, 1996 from $593,000 in the six months
ended June 30, 1995. The increase was primarily the result of increased
personnel costs and other expenses.
Product development expenses increased $453,000 or 216.1% to $663,000
in the six months ended June 30, 1996 from $210,000 in the six months ended June
30, 1995. As the Company continued to expand and enhance the Phoenix System,
product development expenses increased as a result of: (i) an increase in
Product Development Expenditures from $882,000 in the six months ended June 30,
1995 to $1.2 million in the six months ended June 30, 1996; and (ii) a decrease
in the capitalization of Product Development Expenditures from $672,000 in the
six months ended June 30, 1995 to $563,000 in the six months ended June 30,
1996.
Other Income (Expense). Interest income, consisting primarily of
interest accrued on a related party stock subscriptions receivable, was $57,000
and $63,000 in the six months ended June 30, 1996 and 1995, respectively.
Interest expense increased to $16,000 in the six months ended June 30, 1996
compared to $12,000 in the six months ended June 30, 1995 as a result of
increased interest from bank equipment and line of credit loans in the six
months ended June 30, 1996. Other income of $75,000 in the six months ended
June 30, 1995 consisted principally of the fair market value of computer
equipment given to Phoenix by a computer company to enable Phoenix to develop
and test the Phoenix System on such company's equipment.
Income Tax Expense. Income tax expense was $212,000 and $256,000 in
the six months ended June 30, 1996 and 1995, respectively. These income tax
expenses represent withholding taxes which relate to the license of Company
products to foreign customers and which are contractually payable by those
customers. The Company has a net operating loss carry forward
11
<PAGE> 12
and tax credits that should limit the Company's United States income tax
liability during the remainder of 1996.
Net Income. Net income decreased $728,000 or 59.6% to $493,000 in the
six months ended June 30, 1996 from $1.2 million in the six months ended June
30, 1995 as a result of the decrease in license fees revenue and increased
expenses.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $140,000 and $426,000 at June 30, 1996
and December 31, 1995, respectively. For the six months ended June 30, 1996,
cash used by operations was $93,000. Investing activities used cash of
$643,000, including $563,000 for capitalized software development costs.
Financing activities provided $450,000 in cash, including $203,000 in proceeds
from the exercise of stock options and $247,000 from bank financing.
Working capital increased to a deficit of $2.0 million at June 30, 1996
from a deficit of $2.3 million at December 31, 1995. Excluding deferred revenue
and deferred tax assets, which represent advance payments for license fees and
services, adjusted working capital was $129,000 at June 30, 1996 and $423,000 at
December 31, 1995.
At June 30, 1996 the Company had $97,000 outstanding under a $250,000
equipment term loan facility and $150,000 outstanding under a $750,000 line of
credit loan facility with its bank.
On July 8, 1996 the Company received net proceeds from the sale of
670,000 shares of common stock in its initial public offering of $6.4 million
after deducting underwriting discounts and estimated offering expenses payable
by the Company. On July 9, 1996, the Company received $1,319,000 plus accrued
interest of $159,000 from its Chairman and Chief Executive Officer, Mr. Bahram
Yusefzadeh, for payment of stock subscriptions receivable due from Mr.
Yusefzadeh and his affiliate out of the proceeds of shares sold by Mr.
Yusefzadeh and his affiliate in the initial public offering.
On July 9, the Company used approximately $294,000 of the net proceeds
to repay debt and accrued interest. The Company repaid debt and accrued
interest of $248,000 to retire its bank term and line of credit loans. The
Company also repaid $46,000 to Mr. Yusefzadeh for an equipment loan including
accrued interest. The remainder of the net proceeds currently bears interest in
a bank money market fund consisting of investment grade, interest bearing
securities.
The Company believes that the net proceeds from its initial public
offering, together with its current cash balances and cash flow from operations,
will be sufficient to meet its working capital, capital expenditure and
capitalized software development requirements for the next 12 months. Cash
flows from operating activities are dependent on continued advance payments from
customers, and there is no assurance that the Company will continue to receive
these payments from customers or that it will continue to receive these payments
in advance on the same terms as it has in the past. The Company anticipates
that its operating and investing activities may use cash in the future,
particularly from growth in operations and development
12
<PAGE> 13
activities. Consequently, any such future growth may require the Company to
obtain additional equity or debt financing.
13
<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
As previously disclosed in the Registration Statement, as amended, all
shares of the Company's Class A Common Stock, Class B Common Stock, Class C
Common Stock, Class D Common Stock and Class E Common Stock were converted
automatically on a one-for-one basis into shares of Common Stock on July 8,
1996. On July 8, 1996, the Company filed with the Florida Secretary of State
Amended and Restated Articles of Incorporation (the "Articles"). Under the
Articles, the Board of Directors has authority to issue 20,000,000 shares of
Common Stock, par value $0.01 per share, and 10,000,000 shares of preferred
stock, par value $1.00 per share, in one or more classes or series and, within
certain limitations, to determine the voting rights (including the right to vote
as a series on particular matters), preferences as to dividends and in
liquidation, and conversion and other rights of such series.
Under the Articles, holders of Common Stock are entitled to receive
such dividends as may be legally declared by the Board of Directors. However,
the Company does not expect to pay dividends in the foreseeable future. Each
shareholder is entitled to one vote per share on all matters to be voted upon
and is not entitled to cumulate votes for the election of directors. Holders of
Common Stock do not have preemptive, redemption or conversion rights and, upon
liquidation, dissolution or winding up of the Company, are entitled to share
ratably in the net assets of the Company available for distribution to common
shareholders. The rights, preferences and privileges of holders of Common Stock
are subject to any classes or series of preferred stock that the Company may
issue in the future.
The Articles authorize the Board of Directors, without further action
by the holders of the Common Stock, to provide for the issuance of shares of the
preferred stock in one or more classes or series and to fix the designations,
powers, preferences and relative, participating, optional and other rights,
qualifications, limitations and restrictions thereof, including the dividend
rate, conversion rights, voting rights, redemption price and liquidation
preference, and to fix the number of shares to be included in any such classes
or series. Any preferred stock so issued may rank senior to the Common Stock
with respect to the payment of dividends or amounts upon liquidation,
dissolution or winding-up, or both. In addition, any such shares of preferred
stock may have class or series voting rights.
Item 3. Defaults upon Senior Securities
None.
14
<PAGE> 15
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Company was held on June
12, 1996, for the following purposes: (i) electing a board of directors; (ii)
approving an Amendment (the "Articles Amendment") to the Amended and Restated
Articles of Incorporation; (iii) approving Amended and Restated Articles of
Incorporation which would become effective upon the closing of the Company's
initial public offering; (iv) approving Amended and Restated Bylaws which would
become effective upon the closing of the Company's initial public offering; (v)
approving the Phoenix International Ltd., Inc. 1996 Director Stock Option Plan
(the "Director Plan"); (vi) approving an Amendment (the "March Amendment") to
the Phoenix International Ltd., Inc. 1995 Stock Option Plan, dated March 18,
1995; and (vii) approving an Amendment (the "October Amendment") to the Phoenix
International Ltd., Inc. 1995 Stock Option Plan, dated October 22, 1995. Proxies
for the meeting were solicited pursuant to Florida Business Corporation Act, and
there was no solicitation in opposition to management's solicitations. The
Company was not subject to the proxy requirements of the Securities and Exchange
Act of 1934 at that time.
Management's nominees for director were elected with the number of
votes for and withheld as indicated below:
<TABLE>
<CAPTION>
Name of Nominee Class For(1) Withheld
--------------- ----- ------ --------
<S> <C> <C> <C>
Bahram Yusefzadeh III 1,993,220 97,570
Ralph H. Reichard III 1,993,220 97,570
Ronald E. Fenton III 1,993,220 97,570
William E. Hess I 1,993,220 97,570
James C. Holly III 1,993,220 97,570
Paul A. Jones II 1,993,220 97,570
J. Michael Murphy II 1,993,220 97,570
Glenn W. Sturm II 1,993,220 97,570
O. Jay Tomson I 1,993,220 97,570
</TABLE>
- ----------------
(1) Only holders of Class A Common Stock, Class B Common Stock and Class C
Common Stock were permitted to vote in the election of directors.
15
<PAGE> 16
Also, the shareholders approved the following matters with the number
of votes for, against and withheld as indicated below:
<TABLE>
<CAPTION>
For Against Withheld
--- ------- --------
<S> <C> <C> <C>
Articles Amendment(1) 1,993,220 0 97,570
Amended and Restated Articles
of Incorporation 2,887,232 0 117,293
Amended and Restated Bylaws 2,887,232 0 117,293
Director Plan(1) 1,993,220 0 97,570
March Amendment(1) 1,993,220 0 97,570
October Amendment(1) 1,993,220 0 97,570
</TABLE>
- --------------
(1) Only holders of Class A Common Stock, Class B Common Stock and Class C
Common Stock were permitted to vote on these matters.
As permitted by the Company's Amended and Restated Bylaws, the
directors unanimously elected Jack C. Blaine and Ruann Ernst to the Board of
Directors on July 8, 1996. Both directors will be Class I directors, and their
terms will expire in 1997.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C>
3.1 Amended and Restated Articles of Incorporation, as filed with the
Secretary of State of the State of Florida on July 8, 1996.
3.2 Amended and Restated Bylaws, effective July 8, 1996.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
Articles of Incorporation and Amended and Restated Bylaws defining the
rights of the holders of Common Stock of the Company.
10.1 Employment Agreement by and between the Company and Harold C.
Boughton, dated June 3, 1996.
10.2 Employment Agreement by and between the Company and Raju M.
Shivdasani, dated July 15, 1996.
11.1 Statement re Computation of Earnings Per Share.
27.1 Financial Data Schedule (for SEC use only).
</TABLE>
16
<PAGE> 17
b) Reports on Form 8-K
None.
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934,the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
PHOENIX INTERNATIONAL LTD., INC.
August 14, 1996 /s/ Bahram Yusefzadeh
- ---------------------- ---------------------------------
Date Chairman of the Board and Chief
Executive Officer
August 14, 1996 /s/ Clay E. Scarborough
- ---------------------- ----------------------------------
Date Senior Vice President and Chief
Financial Officer
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Page
--- ----------- ----
<S> <C> <C>
3.1 Amended and Restated Articles of Incorporation, as filed with the Secretary of State of the
State of Florida on July 8, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2 Amended and Restated Bylaws, effective July 8, 1996 . . . . . . . . . . . . . . . . . . . . .
4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated Articles of Incorporation
and Amended and Restated Bylaws defining the rights of the holders of Common Stock of the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1 Employment Agreement by and between the Company and Harold C. Boughton, dated June 3, 1996 .
10.2 Employment Agreement by and between the Company and Raju M. Shivdasani, dated July 15, 1996 .
11.1 Statement re Computation of Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . .
27.1 Financial Data Schedule (for SEC used only) . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PHOENIX INTERNATIONAL LTD., INC.
These Amended and Restated Articles of Incorporation of Phoenix
International Ltd., Inc., a Florida corporation (the "Corporation"), are hereby
adopted pursuant to Sections 607.1003 and 607.1007 of the Florida Business
Corporation Act (the "Act").
ARTICLE I
NAME AND PRINCIPAL OFFICE
The name of the Corporation is "Phoenix International Ltd., Inc." The
principal office of the Corporation is 900 Winderley Place, Suite 140,
Maitland, Florida 32751.
ARTICLE II
CAPITAL STOCK
The aggregate number of shares of capital stock which the Corporation
shall have authority to issue is twenty million (20,000,000) shares of voting
common stock, par value $0.01 per share (the "Common Stock").
In addition to the Common Stock, the Corporation shall have the
authority, exercisable by its Board of Directors, to issue ten million
(10,000,000) shares of preferred stock, par value $0.01 per share (the
"Preferred Stock"), any part or all of such shares of Preferred Stock may be
established and designated from time to time by the Board of Directors by
filing an amendment to these Amended and Restated Articles of Incorporation,
which is effective without shareholder action, in accordance with the
appropriate provisions of the Act, and any amendment or supplement thereto (a
"Preferred Stock Designation"), in such series and with such preferences,
limitations, and relative rights as may be determined by the Board of
Directors. The number of authorized shares of Preferred Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of a majority of the votes of the Common Stock, without a
vote of the holders of the shares of Preferred Stock, or of any series thereof,
unless a vote of any such holders is required by law or pursuant to the
Preferred Stock Designation or Preferred Stock Designations establishing the
series of Preferred Stock.
<PAGE> 2
ARTICLE III
DIRECTORS
The Corporation shall have not more than eleven directors, and the
number of directors shall be set by the Board of Directors as set forth in the
Corporation's Bylaws. The Board of Directors shall be divided into three
classes to be known as Class I, Class II, and Class III, which shall be as
nearly equal in number as possible. Except in case of death, resignation,
disqualification, or removal for cause, each director shall serve for a term
ending on the date of the third annual meeting of shareholders following the
annual meeting at which the director was elected; provided, however, that each
initial director in Class I shall hold office until the first annual meeting of
shareholders after his election; each initial director in Class II shall hold
office until the second annual meeting of shareholders after his election; and
each initial director in Class III shall hold office until the third annual
meeting of shareholders after his election. Despite the expiration of a
director's term, he shall continue to serve until his successor, if there is to
be any, has been elected and has qualified. In the event of any increase or
decrease in the authorized number of directors, the newly created or eliminated
directorships resulting from such an increase or decrease shall be apportioned
among the three classes of directors so that the three classes remain as nearly
equal in size as possible; provided, however, that there shall be no
classification of additional directors elected by the Board of Directors until
the next meeting of shareholders called for the purposes of electing directors,
at which meeting the terms of all such additional directors shall expire, and
such additional directors positions, if they are to be continued, shall be
apportioned among the classes of directors and nominees therefor shall be
submitted to the shareholders for their vote.
No director may be removed from the Board of Directors except
by the shareholders for cause. Any vacancy occurring on the Board of
Directors, including a vacancy resulting from an increase in the number of
directors, may only be filled by the affirmative vote of the remaining
directors even if the remaining directors constitute less than a quorum of the
Board of Directors.
ARTICLE IV
LIMITATION ON DIRECTOR LIABILITY
No director of the Corporation shall be personally liable for monetary
damages to the Corporation or any other person for any statement, vote,
decision or failure to act, regarding corporate management or policy by a
director, unless the director breached or failed to perform his duties as a
director and the director's breach of, or failure to perform, those duties
constitute:
(i) a violation of criminal law, unless the
director had reasonable cause to believe his conduct was lawful or had
no reasonable cause to believe his conduct was unlawful;
(ii) a transaction from which the director received an
improper personal benefit;
2
<PAGE> 3
(iii) a circumstance under which the liability provisions
of Section 607.0834 of the Act are applicable;
(iv) in a proceeding by or in the right of the Corporation
to procure a judgement in its favor or by or in the right of a
shareholder, conscious disregard or willful misconduct for the best
interests of the Corporation; or
(v) in a proceeding by or in the right of someone other
than the Corporation or a shareholder, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or
in a manner exhibiting wanton and willful disregard of human rights,
safety or property.
If at any time the Act shall have been amended to authorize the
further elimination or limitation of the liability of a director, then the
liability of each director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Act, as so amended, without further action
by the shareholders, unless the provisions of the Act, as amended, require
further action by the shareholders. Any repeal or modification of the
foregoing provisions of this Article Four shall not adversely affect the
elimination or limitation of liability or alleged liability pursuant hereto of
any director of the Corporation for or with respect to any alleged act or
omission of the director occurring prior to such a repeal or modification.
ARTICLE V
ACTION BY WRITTEN CONSENT
All actions by the shareholders shall be taken at a meeting, with
prior notice which complies with the notice provisions of the Corporation's
Bylaws, and with a vote of the holders of the outstanding stock of each voting
group entitled to vote thereon.
ARTICLE VI
SPECIAL MEETING OF SHAREHOLDERS
A special meeting of shareholders, for any purpose or purposes, may be
called only by the Executive Committee of the Board of Directors or by the
Chief Executive Officer of the Corporation. In addition, the Secretary shall
call a special meeting when requested in writing by the holders of at least 50%
of all of the shares entitled to vote at a meeting. Such written shareholder
request shall comply with the notice provisions of the Corporation's Bylaws.
3
<PAGE> 4
ARTICLE VII
VOTING PROVISIONS
The affirmative vote of at least 66 2/3% of the directors is required
for the following actions by the Corporation to be submitted to a vote of the
shareholders:
(i) sale of substantially all of the assets of the
Corporation;
(ii) liquidation of the Corporation;
(iii) the merger, consolidation or reorganization of the
Corporation, unless the shareholders of the Corporation own at least a
majority of the combined voting power of the corporation resulting from
such merger, consolidation or reorganization; or
(iv) any increase in the number of directors above eleven
directors;
provided, further, that the affirmative vote of 66 2/3% of the holders of the
Common Stock is required for shareholder approval of any action outlined in the
clauses above.
ARTICLE VIII
AMENDMENTS
These Amended and Restated Articles of Incorporation may only be
altered, amended or repealed by the affirmative vote of the holders of 66 2/3%
of the outstanding stock entitled to vote thereon.
4
<PAGE> 5
These Amended and Restated Articles of Incorporation contain certain
amendments requiring shareholder approval. The following voting groups were
entitled to vote on these Amended and Restated Articles of Incorporation as
follows:
Voting Group Designation
<TABLE>
<CAPTION>
Number of Shares Number of Shares Number of Shares
Class Entitled to Vote Voted in Favor Voted Against
----- ---------------- -------------- -------------
<S> <C> <C> <C>
Class A Stock 600,000 600,000 0
Class B Stock 220,000 178,000 0
Class C Stock 80,000 80,000 0
Class D Stock 10,000 10,000 0
Class E Stock 383,836 374,836 0
--------- --------- -
Totals 1,293,836 1,242,836 0
</TABLE>
The number of shares cast for these Amended and Restated Articles of
Incorporation by the shareholders in each voting group was sufficient for
approval by that voting group. These Amended and Restated Articles of
Incorporation were adopted by the shareholders at the annual meeting of
shareholder held on June 12, 1996.
IN WITNESS WHEREOF, the undersigned has executed these Amended and
Restated Articles of Incorporation this 8th day of July, 1996.
/s/ Bahram Yusefzadeh
----------------------------------------------
BAHRAM YUSEFZADEH, Chief Executive Officer
5
<PAGE> 1
EXHIBIT 3.2
AMENDED AND RESTATED BYLAWS
OF
PHOENIX INTERNATIONAL LTD., INC.
EFFECTIVE AS OF: JULY 8, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - Shareholders' Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Place of Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Annual Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3. Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 6. Voting, Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7. Fixing of Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8. Shareholders' List for Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9. Nominations of Directors and Shareholder Proposals. . . . . . . . . . . . . . . . . . . . . 3
Section 10. Voting Trust Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III -Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1. General Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2. Number and Tenure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3. Vacancies and Removal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. Place of Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6. Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 7. Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 8. Notice, Waiver by Attendance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. Quorum and Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 10. Manner of Acting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 11. Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 12. Executive Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 13. Action Without a Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 14. Conference Call Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 15. Chairman of the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV - Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1. Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3. Tenure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5. Chief Executive Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6. President. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7. Chief Financial Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8. The Senior Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 9. Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 10. Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11. Assistant Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V - Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1. Form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2. Rights of Corporation with Respect to Registered Owners. . . . . . . . . . . . . . . . . . 12
Section 3. Transfers of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4. Duty of Corporation to Register Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5. Lost, Stolen or Destroyed Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6. Section 607.0902 of the Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI - Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII - Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII - Annual Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX - Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1. Indemnification of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2. Indemnification of Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4. Determination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5. Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6. Non-Exclusivity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8. Information to Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9. Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 10. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 11. Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12. Continuing Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 13. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 14. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 15. Additional Indemnifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 16. Changes in the Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE X - NOTICES AND WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2. Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE XI - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1. Execution of Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2. Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3. Proxies in Respect of Stock or Other Securities of Other Corporations. . . . . . . . . . 18
ARTICLE XII - Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED BYLAWS
OF
PHOENIX INTERNATIONAL LTD., INC.
EFFECTIVE AS OF: July 8, 1996
- -------------------------------------------------------------------------------
References in these Bylaws to "Articles of Incorporation" are to the
Amended and Restated Articles of Incorporation of Phoenix International Ltd.,
Inc., a Florida corporation (the "Corporation"), as amended and restated from
time to time.
All of these Bylaws are subject to contrary provisions, if any, of the
Articles of Incorporation (including provisions designating the preferences,
limitations, and relative rights of any class or series of shares), the Florida
Business Corporation Act (the "Act"), and other applicable law, as in effect on
and after the effective date of these Bylaws. References in these Bylaws to
"Sections" shall refer to sections of the Bylaws, unless otherwise indicated.
- -------------------------------------------------------------------------------
ARTICLE I
OFFICES
The address of the registered office of the Corporation is c/o
CT Corporation System, 1200 South Pine Island Road, City of Plantation, Florida
33324. The name of the registered agent at that address is CT Corporation
System. The Corporation may have other offices at such places within or
without the State of Florida as the Board of Directors may from time to time
designate or the business of the Corporation may require or make desirable.
ARTICLE II
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETING. The Board of Directors may
designate any place within or without the State of Florida as the place of
meeting for any annual or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place within or without the State of Florida as the
place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the
principal office of the Corporation in the State of Florida.
<PAGE> 6
SECTION 2. ANNUAL MEETING. An annual meeting of the
shareholders shall be held on such day, and at such time and place as the Board
of Directors shall determine, at which time the shareholders shall elect a
Board of Directors and transact such other business as may be properly brought
before the meeting.
SECTION 3. SPECIAL MEETINGS. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by the
Act or the Articles of Incorporation, may be called only by the Executive
Committee or the Chief Executive Officer. In addition, the Secretary shall
call a special meeting when requested in writing by shareholders owning at
least 50% of all shares entitled to vote at the meeting. Such written
shareholder request shall comply with the notice provisions of Section 9
hereof.
SECTION 4. NOTICE. Except as otherwise provided by the
Act or the Articles of Incorporation, written notice stating the place, day,
and hour of each meeting of the shareholders, whether annual or special, shall
be delivered, either personally or by first-class mail, to each shareholder of
record entitled to vote at such meeting, not less than ten nor more than 60
days before the meeting. If the notice is mailed at least 30 days before the
date of the meeting, it may be done by a class of United States mail other than
first class. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to a shareholder at his address
as it appears on the records of the Corporation. Notice of any special meeting
of shareholders shall state the purpose or purposes for which the meeting is
called. Notice of any meeting of shareholders shall not be required to be
given to any shareholder who, in person or by his attorney thereunto
authorized, either before or after such meeting, shall waive such notice.
Attendance of a shareholder at a meeting, either in person or by proxy, shall
itself constitute waiver of notice and waiver of any and all objections to the
place and time of the meeting and manner in which it has been called or
convened, except when a shareholder attends a meeting solely for the purpose of
stating, at the beginning of the meeting, any such objections to the
transaction of business. Notice of the time and place of any adjourned meeting
need not be given otherwise than by the announcement at the meeting at which
adjournment is taken. If, however, after the adjournment of any meeting the
Board of Directors fixes a new record date for the adjourned meeting, a notice
of the adjourned meeting shall be given in compliance with this Section 4 to
each shareholder of record entitled to vote on the new record date.
SECTION 5. QUORUM. The holders of a majority of the
stock issued, outstanding and entitled to vote, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders and shall be sufficient for the transaction of business, except as
otherwise provided by law or the Articles of Incorporation. If, however, such
majority shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote thereat, present in person or
by proxy, shall have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until the requisite
amount of voting stock shall be present. At such adjourned meeting at which a
quorum shall be present in person or by proxy, any business may be transacted
that might have been transacted at the meeting originally called. Once a share
is represented for any purpose at a meeting, it is deemed present for quorum
purposes for the remainder of the meeting and for any adjourned meeting unless
a new record date is or must be set for that adjourned meeting.
2
<PAGE> 7
SECTION 6. VOTING, PROXIES. At every meeting of the
shareholders, any shareholder having the right to vote shall be entitled to
vote in person or by proxy, but no proxy shall be voted after eleven months
from its date, unless the proxy provides for a longer period. Each holder of
Common Stock shall have one vote for each share of Common Stock registered in
his name on the books of the Corporation. If a quorum is present, the
affirmative vote of a majority of the shares represented shall be the act of
the shareholders, except as otherwise provided by law, the Articles of
Incorporation or these Bylaws.
SECTION 7. FIXING OF RECORD DATE. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of dividends, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case
to be not less than ten nor more than 60 days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of dividends, the date on which notice of the
meeting is mailed, or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section 7, such
determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date, which it must do if the meeting is adjourned
to a date more than one hundred twenty days after the date fixed for the
original meeting.
SECTION 8. SHAREHOLDERS' LIST FOR MEETING. After fixing
a record date for a meeting, the Corporation shall prepare an alphabetical list
of the names of all its shareholders who are entitled to notice of the
shareholders' meeting, arranged by voting group with the address of, and the
number and class and series, if any, of shares held by, each. The
shareholders' list shall be available for inspection by any shareholder for a
period of ten days prior to the meeting, or such shorter time as exists between
the record date and the meeting, and continuing through the meeting at the
Corporation's principal office or at such other place as may be permitted by
the Act. Subject to any limitations provided by the Act, a shareholder or his
agent or attorney shall be entitled on written demand to inspect the list
during regular business hours and at such shareholder's expense, during the
period it is available for inspection. Refusal or failure to comply with
requirements of this Section 8 shall not affect the validity of any action
taken at a shareholders' meeting, unless otherwise provided by the Act.
SECTION 9. NOMINATIONS OF DIRECTORS AND SHAREHOLDER
PROPOSALS.
(a) Nominations by the Board of Directors. The Executive
Committee of the Board of Directors shall have exclusive jurisdiction over the
selection of the management nominees for election from time to time as
directors.
(b) Nominations by Shareholders. Only persons who are
nominated by, or at the direction of, the Executive Committee or by a
shareholder who has given timely written notice to the Secretary prior to the
meeting at which directors are to be elected will be eligible
3
<PAGE> 8
for election as directors of the Corporation. For notice of shareholder
nominations to be timely, such notice must be received by the Corporation not
less than 90 days prior to the first anniversary of the previous year's annual
meeting. Such notification shall contain the following information:
(i) the name, age and business and
residence addresses of each proposed nominee;
(ii) the principal business or occupation
of each proposed nominee during the last five years;
(iii) with respect to each proposed
nominee, any affiliation with or material interest in the
Corporation or any transaction involving the Corporation, and
any affiliation with or material interest in any person or
entity having an interest materially adverse to the
Corporation;
(iv) the name and residence address of
the notifying shareholder; and
(v) the number of shares of common stock
of the Corporation owned by the notifying shareholder.
(c) Shareholder Proposals. At annual and special
meetings only such business may be conducted as has been brought before the
meeting by, or at the direction of, the Chairman of the Board or by a
shareholder who has given timely written notice to the Secretary of the
Corporation of such shareholder's intention to bring such business before such
meeting. For notice of business to be conducted at an annual or special meeting
to be timely, such notice must be received by the Corporation, in the case of an
annual meeting, not less than 90 days prior to the first anniversary of the
previous year's annual meeting or, in the case of a special meeting, not less
than 90 days prior to the date of the meeting as set forth in the written
request to the Corporation provided pursuant to Section 3 hereof. Such
notification shall contain the following information:
(i) a brief description of the business
desired to brought before the annual meeting and the reasons
for conducting such business at the annual meeting;
(ii) the name and address, as they appear
on the Corporation's books, of the shareholder proposing such
business;
(iii) the class and number of shares of
the Corporation's capital stock that are beneficially owned by
such shareholder; and
(iv) any material interest of such
shareholder in such business.
4
<PAGE> 9
(d) Certain Procedures. The Chairman of the Board, or
his designee, at any meeting of shareholders at which one or more directors are
to be elected may disregard any nomination not made in accordance with this
Section 9, and upon the instructions of the Chairman of the Board, or his
designee, the vote tellers shall disregard all votes cast for such nominees.
In addition, the Chairman of the Board, or his designee, at any annual or
special meeting of shareholders may disregard any shareholder proposals not
made in accordance with this Section 9. The Chairman of the Board, of his
designee, for good cause shown and with proper regard for the orderly conduct
of business at the meeting, may waive in whole or in part the operation of this
Section 9.
(e) Section 14 of the Exchange Act. Notwithstanding
anything to the contrary in this Section 9, any shareholder requesting that a
proposal be included in the Corporation's proxy statement must also meet all of
the requirements of Section 14 of the Securities Exchange Act of 1934 and
Regulation 14A thereunder.
SECTION 10. VOTING TRUST AGREEMENTS.
(a) Any number of shareholders of the Corporation may
create a voting trust for the purpose of conferring on a trustee or trustees
the right to vote or otherwise represent their shares. Any such agreement
shall be in writing, shall not exceed ten years in duration, and shall specify
the terms and conditions of the voting trust.
(b) On the transfer of such shares in trust, voting trust
certificates shall be issued by the trustee or trustees to the transferring
shareholders. Such trustee or trustees shall keep a record of the holders of
the voting trust certificates evidencing a beneficial interest in the voting
trust, giving the names and addresses of all such holders, and the number and
class of shares in respect of which the voting trust certificates held by each
are issued, and shall deposit a copy of such record with the Corporation at its
registered office.
(c) The counterpart of the voting trust agreement and the
copy of such record so deposited with the Corporation shall be subject to the
same right of inspection by shareholders of the Corporation, in person or by
attorney, as are the books and records of the Corporation, and such documents
shall be subject to examination by any holder of record voting trust
certificates either in person or by agent or attorney, at any reasonable time
for any reason.
(d) At any time before the expiration of a voting trust
agreement, as originally fixed, or as extended one or more times under this
Section 10, one or more holders of voting trust certificates may, by agreement
in writing, extend the duration of a voting trust agreement nominating the same
or substitute trustee or trustees, for an additional period not to exceed ten
years. Such extension agreement shall not affect the rights or obligations of
persons not parties to the agreement, and such persons shall be entitled to
remove their shares from the trust upon any such extension and to have their
share certificates promptly reissued to them. The extension agreement shall be
executed in the manner specified in clause (a) above and shall be subject to
all other provisions of this Section 10.
5
<PAGE> 10
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. Except as may be otherwise
provided by any legal agreement among shareholders, all corporate powers shall
be exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of, the Board of Directors.
In addition to the powers and authority expressly conferred by these Bylaws,
the Board of Directors may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by law, or by any legal agreement
among shareholders, or by the Articles of Incorporation or by these Bylaws
directed or required to be exercised or done by the shareholders.
SECTION 2. NUMBER AND TENURE.
(a) Number. Except as otherwise provided in the Articles
of Incorporation, the Board of Directors shall consist of a maximum of eleven
members. The Board of Directors shall have the authority to change the number
of directors by resolution so long as the number of directors does not exceed
eleven.
(b) Election and Term of Office Generally. The Board of
Directors shall be divided into three classes to be known as Class I, Class II,
and Class III, which shall be as nearly equal in number as possible. Except in
case of death, resignation, disqualification, or removal for cause, each
director shall serve for a term ending on the date of the third annual meeting
of shareholders following the annual meeting at which the director was elected;
provided, however, that each initial director in Class I shall hold office
until the first annual meeting of shareholders after his election; each initial
director in Class II shall hold office until the second annual meeting of
shareholders after his election; and each initial director in Class III shall
hold office until the third annual meeting of shareholders after his election.
Despite the expiration of a director's term, he shall continue to serve until
his successor, if there is to be any, has been elected and has qualified. In
the event of any increase or decrease in the authorized number of directors,
the newly created or eliminated directorships resulting from such an increase
or decrease shall be apportioned among the three classes of directors so that
the three classes remain as nearly equal in size as possible; provided,
however, that there shall be no classification of additional directors elected
by the Board of Directors until the next meeting of shareholders called for the
purposes of electing directors, at which meeting the terms of all such
additional directors shall expire, and such additional directors positions, if
they are to be continued, shall be apportioned among the classes of directors
and nominees therefor shall be submitted to the shareholders for their vote.
SECTION 3. VACANCIES AND REMOVAL.
(a) Vacancies. Any vacancy occurring on the Board of
Directors, including a vacancy resulting from an increase in the number of
directors, may only be filled by the affirmative vote of the remaining
directors, even if the remaining directors constitute less than
6
<PAGE> 11
a quorum of the Board of Directors. A director elected to fill a vacancy
shall hold office only until the next election of directors by the
shareholders.
(b) Removal. At a meeting of the shareholders called
expressly for the purpose of removing a director, a director may be removed
only for cause if the number of votes cast to remove the director exceeds the
number of votes cast not to remove such director. If any removed director is a
member of any committee of the Board of Directors, he shall cease to be a
member of that committee when he ceases to be a director.
SECTION 4. PLACE OF MEETING. The Board of Directors may
hold its meetings at such place or places within or without the State of
Florida as it may from time to time determine.
SECTION 5. COMPENSATION. Directors may be allowed such
compensation for attendance at regular or special meetings of the Board of
Directors and at any special meeting of standing committees thereof as may from
time to time be determined by resolution of the Board of Directors.
SECTION 6. REGULAR MEETINGS. A regular annual meeting
of the Board of Directors shall be held without other notice than as provided
in these Bylaws immediately after, and at the same place as, the annual meeting
of shareholders. The Board of Directors may provide, by resolution, the time
and place within or without the State of Florida, for the holding of additional
regular meetings without other notice than such resolution.
SECTION 7. SPECIAL MEETINGS. Special meetings of the
Board of Directors may be called by the Chairman of the Board or the Chief
Executive Officer on any notice by first-class mail, overnight courier,
telephone, telecopier, electronic communication, or personal delivery to each
director and shall be called by the Chairman of the Board or the Chief
Executive Officer in like manner and on like notice on the written request of
any two or more directors. Any such special meeting shall be held at such time
and place as shall be stated in the notice of the meeting. The notice need not
describe the purpose of the special meeting.
SECTION 8. NOTICE, WAIVER BY ATTENDANCE. No notice of a
meeting of the Board of Directors need be given to any director who signs a
waiver of notice either before or after the meeting. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and a
waiver of any and all objections to the place of the meeting, the time of the
meeting, or the manner in which it has been called or convened, except when a
director states, at the beginning of the meeting (or promptly upon arrival at
the meeting), any objection to the transaction of business because the meeting
is not lawfully called or convened.
SECTION 9. QUORUM AND VOTING. At all meetings of the
Board of Directors, the presence of a majority of the directors shall
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority of the directors present at any meeting may adjourn from
time to time until a quorum is present. Notice of the time and place of any
adjourned meeting need only be given by announcement at the meeting at which
adjournment is taken. Except as set forth in the Articles of Incorporation,
the act of a majority of the
7
<PAGE> 12
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors. A director who is present at a meeting when corporate
action is taken is deemed to have assented to the action unless he objects at
the beginning of the meeting (or promptly upon his arrival) to holding such
meeting or transacting specified business at the meeting, or he votes against
or abstains from voting on the action taken.
SECTION 10. MANNER OF ACTING. Notwithstanding any
provision in these Bylaws to the contrary, no contract or other transaction
between the Corporation and any one or more of its directors or between the
Corporation and any other corporation, firm, association or other entity, in
which one or more of its directors are directors or officers or are financially
interested, shall be void or voidable solely: (i) because of such relationship
or interest; (ii) because such director or directors are present at the meeting
of the Board of Directors or committee thereof which authorizes, approves or
ratifies such contracts or transactions; or (iii) because the presence of such
director or directors are counted for the purpose of determining the presences
of a quorum of directors if: (A) the facts of such relationship or interest
are disclosed or known to the Board of Directors or committee, and the Board of
Directors or the committee in good faith authorizes, approves, or ratifies the
contract or transaction by the affirmative vote or written consent of a
majority of disinterested directors or (B) the facts of such relationship or
interest are disclosed or known to the holders of the shares entitled to vote
thereon and the holders of a majority of such shares authorize, approve or
ratify such contract or transaction by vote or written consent with the shares
of the interested director not entitled to vote thereon. An interested
director may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or committee thereof which authorizes, approves or
ratifies such contract or transaction, but shall not be counted in determining
whether the Corporation shall award any contract or engage in any transaction
in which the director is an interest person, which determination may only be
authorized by a majority of disinterested directors or by a solely
disinterested director, even though such directors or director may be less than
a quorum.
SECTION 11. COMMITTEES. In furtherance and not in
limitation of the powers conferred by the Act, the Board of Directors by
resolution adopted by a majority of the full Board of Directors may designate
from among its members one or more other committees each of which, to the
extent provided in such resolution or in the Articles of Incorporation or these
Bylaws, shall have authority to exercise all the powers of the Board of
Directors which may be lawfully delegated and not inconsistent with these
Bylaws or the Act, at any time and when the Board of Directors is not in
session. The committee shall elect a chairman, and a majority of the entire
committee shall constitute a quorum; and the act of a majority of members
present at a meeting at which a quorum is present shall be the act of the
committee provided all members of the committee have had notice of such meeting
or waived such notice.
SECTION 12. EXECUTIVE COMMITTEE. The Board of Directors
by resolution adopted by a majority of the entire Board of Directors may
designate two or more directors to constitute an Executive Committee. The
Executive Committee, when the Board of Directors is not in session, shall have
and exercise all of the authority of the Board of Directors in the management
of the Corporation except as may be limited by the resolution appointing the
Executive Committee or by the Act.
8
<PAGE> 13
SECTION 13. ACTION WITHOUT A MEETING. Any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if written consent
thereto is signed by all members of the Board of Directors or of such
committee, as the case may be, and such written consent is filed with the
minutes of the proceedings of the Board of Directors or committee. Such
consent shall have the same effect as a unanimous vote.
SECTION 14. CONFERENCE CALL MEETINGS. Members of the
Board of Directors, or any committee designated by such Board, may participate
in a meeting of such Board or committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this Section 14 shall constitute presence in person at such meeting.
SECTION 15. CHAIRMAN OF THE BOARD. The Board of
Directors shall elect at its annual meeting one of its members to serve as
Chairman of the Board. The Chairman shall preside at all meetings of the Board
of Directors and at all meetings of shareholders.
ARTICLE IV
OFFICERS
SECTION 1. GENERALLY. The Board of Directors at its
first meeting after each annual meeting shall elect a Chairman of the Board,
who shall be elected by the Board from its own number, a Chief Executive
Officer ("CEO"), a President, a Chief Financial Officer, one or more Senior
Vice Presidents, a Treasurer, a Secretary and such other officers as it shall
deem necessary. Any person may hold two or more offices.
SECTION 2. COMPENSATION. The compensation of the CEO,
President and other executive officers of the Corporation shall be fixed by the
compensation committee (the "Compensation Committee") of the Board of
Directors. The non-employee members of the Executive Committee shall
constitute the compensation committee of the Corporation and the stock option
committee pursuant to any stock option plan of the Corporation. The
compensation of all non-executive officers shall be fixed by the CEO, and the
CEO shall report annually to the Board of Directors on the compensation of all
non-executive officers.
SECTION 3. TENURE. Each officer of the Corporation
shall hold office for the term for which he is elected or appointed, and until
his successor has been duly elected or appointed and has qualified, or until
his earlier resignation, removal from office or death. Any officer or agent
may be removed by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby. In addition, the CEO may
remove any officer or agent of the Corporation, except for the President or
chief financial officer, without the approval of the Board of Directors,
whenever in his judgment the best interests of the Corporation will be served
thereby. Removal shall be without prejudice to the contract rights, if any, of
the person so removed.
9
<PAGE> 14
SECTION 4. VACANCIES. The Board of Directors may fill
any vacancy in the office of CEO, President or the Chief Financial Officer,
however occurring, for the unexpired portion of the term. The CEO shall have
the power to fill any other office, however occurring, for the unexpired
portion of the term.
SECTION 5. CHIEF EXECUTIVE OFFICER. The CEO shall be
appointed by the Board of Directors and have direct control over the affairs,
property and business of the Corporation, supervise the formation of corporate
policies and long-range plans for the Corporation and shall perform such other
duties as may be assigned to him from time to time by the Board of Directors or
by these Bylaws. The CEO shall have the power to appoint and remove such
employees as the business may require and shall have general supervision over
all officers of the Corporation. The CEO shall have the authority to sign,
execute and acknowledge on behalf of the Corporation, all contracts, deeds,
mortgages, bonds, stock certificates for its shares, leases and all other
instruments necessary or proper to be executed in the course of the
Corporation's regular business, or which, may be authorized by resolution of
the Board of Directors from time to time or by these Bylaws. In the event of
the incapacity or inability to act of the CEO, or upon his request, the
President may act in his place, subject to the authority of the Board of
Directors. The CEO may remove any officer of the Corporation, except for the
President and the Chief Financial Officer.
SECTION 6. PRESIDENT. The President shall be the chief
operating officer of the Corporation. Subject to the direction and control of
the Board of Directors and the CEO, he shall supervise and conduct the day-to-
day operations of the Corporation; and, in general, he shall discharge all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors or the CEO. In the event of the CEO's
incapacity or inability to act, the President shall preside at the meetings of
the shareholders or of the Board of Directors. The President shall have the
authority to sign, execute and acknowledge on behalf of the Corporation, all
contracts, deeds, mortgages, bonds, stock certificates for its shares, leases
and all other instruments necessary or proper to be executed in the course of
the Corporation's regular business, or which, may be authorized by resolution
of the Board of Directors from time to time or by these Bylaws. In the event
of the incapacity or inability to act as the President, or upon his request,
the CEO may act in his place, subject to the authority of the Board of
Directors.
SECTION 7. CHIEF FINANCIAL OFFICER. The Chief Financial
Officer shall be the principal accounting and financial officer of the Company.
The Chief Financial Officer shall: (a) have charge of and be responsible for
the maintenance of adequate books of account for the Corporation; (b) have
charge and custody of all funds and securities of the Corporation, and be
responsible therefor and for the receipt and disbursement thereof; and (c)
perform all the duties incident to the office of Chief Financial Officer and
such other duties as from time to time may be assigned to him by the CEO, the
President or the Board of Directors. To the extent authorized by the
Corporation's policies, as such policies are in effect from time to time, the
Chief Financial Officer shall have the authority to sign, execute and
acknowledge on behalf of the Corporation, all contracts, deeds, mortgages,
bonds, stock certificates for its shares, leases and all other instruments
necessary or proper to be executed in the course of the Corporation's
10
<PAGE> 15
regular business, or which, may be authorized by resolution of the Board of
Directors from time to time or by these Bylaws.
SECTION 8. THE SENIOR VICE PRESIDENTS. The Senior Vice
President (or in the event there be more than one Senior Vice President, each
of the Senior Vice Presidents) shall assist the President in the discharge of
his duties as the President may direct and shall perform such other duties as
from time to time may be assigned to him by the CEO, the President or the Board
of Directors. To the extent authorized by the Corporation's policies, as such
policies are in effect from time to time, the Senior Vice President (or in the
event there be more than one Senior Vice President, the Senior Vice Presidents)
shall have the authority to sign, execute and acknowledge on behalf of the
Corporation, all contracts, deeds, mortgages, bonds, stock certificates for its
shares, leases and all other instruments necessary or proper to be executed in
the course of the Corporation's regular business, or which, may be authorized
by resolution of the Board of Directors from time to time or by these Bylaws.
SECTION 9. TREASURER. The Treasurer shall assist the
Chief Financial Officer in the discharge of his duties as the Chief Financial
Officer may direct and shall perform such other duties as from time to time may
be assigned to him by the CEO, President or Chief Financial Officer.
SECTION 10. SECRETARY. The Secretary shall: (a) attend
and keep the minutes of the shareholders' meetings and of the Board of
Directors' meetings in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions of these
Bylaws and as required by law; (c) be custodian of the corporate records and of
the seal of the Corporation and see that the seal of the Corporation is affixed
to all documents the execution of which on behalf of the Corporation under its
seal is duly authorized; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the CEO, the President, the Chief Financial Officer or a Senior Vice
President certificates for shares of the Corporation the issuance of which
shall have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation; and (g) in
general, perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the CEO, President or the
Board of Directors.
SECTION 11. ASSISTANT OFFICERS. The Assistant
Secretaries, when authorized by the Board of Directors, may sign with the CEO,
the President, the Chief Financial Officer or a Senior Vice President
certificates for shares of the Corporation the issuance of which shall have
been authorized by resolution of the Board of Directors. The Assistant Vice
Presidents and Assistant Secretaries, in general, shall perform such duties as
shall be assigned by the Senior Vice President or Secretary, respectively, or
by the CEO, President, Chief Financial Officer or the Board of Directors.
11
<PAGE> 16
ARTICLE V
CAPITAL STOCK
SECTION 1. FORM. The interest of each shareholder shall
be evidenced by a certificate representing shares of stock of the Corporation,
which shall be in such form as the Board of Directors may from time to time
adopt and shall be numbered and shall be entered in the books of the
Corporation as they are issued. Each certificate shall exhibit the name of the
Corporation, the holder's name, the number of shares and class of shares and
series, if any, represented thereby, a statement that the Corporation is
organized under the laws of the State of Florida, and the par value of each
share or a statement that the shares are without par value. Each certificate
shall be signed by the CEO or the President and the Secretary or an Assistant
Secretary and may be sealed with the seal of the Corporation or a facsimile
thereof. In case any officer who signed, or whose facsimile signature has been
placed upon, such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer at the date of its issuance.
SECTION 2. RIGHTS OF CORPORATION WITH RESPECT TO
REGISTERED OWNERS. Prior to due presentation for transfer of registration of
its shares, the Corporation may treat the registered owner of the shares (or
the beneficial owner of the shares to the extent of any rights granted by a
nominee certificate on file with the Corporation pursuant to any procedure that
may be established by the Corporation in accordance with the Act) as the person
exclusively entitled to vote the shares, to receive any dividend or other
distribution with respect to the shares, and for all other purposes; and the
Corporation shall not be bound to recognize any equitable or other claim to or
interest in the shares on the part of any other person, whether or not it has
express or other notice of such a claim or interest, except as otherwise
provided by law.
SECTION 3. TRANSFERS OF SHARES. Transfers of shares
shall be made upon the books of the Corporation kept by the Corporation or by
the transfer agent designated to transfer the shares, only upon direction of
the person named in the certificate or by an attorney lawfully constituted in
writing. Before a new certificate is issued, the old certificate shall be
surrendered for cancellation or, in the case of a certificate alleged to have
been lost, stolen, or destroyed, the provisions of these Bylaws shall have been
complied with.
SECTION 4. DUTY OF CORPORATION TO REGISTER TRANSFER.
Notwithstanding any of the provisions of Section 3 of this Article V, the
Corporation is under a duty to register the transfer of its shares only if:
(a) the share certificate is endorsed by the appropriate person or persons; (b)
reasonable assurance is given that each required endorsement is genuine and
effective; (c) the Corporation has no duty to inquire into adverse claims or
has discharged any such duty; (d) any applicable law relating to the collection
of taxes has been complied with; (e) the transfer is in fact rightful or is to
a bona fide purchaser; and (f) the transfer is in compliance with applicable
provisions of any transfer restrictions of which the Corporation shall have
notice.
12
<PAGE> 17
SECTION 5. LOST, STOLEN OR DESTROYED CERTIFICATES. Any
person claiming a certificate of stock to be lost, stolen or destroyed shall
make an affidavit or affirmation of the fact in such manner as the Board of
Directors may require and shall, if the Board of Directors so requires, give
the Corporation a bond of indemnity in the form and amount and with one or more
sureties satisfactory to the Board of Directors, whereupon an appropriate new
certificate may be issued in lieu of the one alleged to have been lost, stolen
or destroyed.
SECTION 6. SECTION 607.0902 OF THE ACT. Pursuant to
Section 607.0902(10) of the Act, control shares acquired in a control-share
acquisition with respect to which no acquiring person's statement has been
filed with the Corporation may, at any time during the period ending 60 days
after the last acquisition of control shares by the acquiring person, be
subject to redemption by the Corporation at the fair value thereof pursuant to
procedures adopted by the Corporation in accordance with these Bylaws and the
Act.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st day
of December in each year, or on such other date as may be established by the
Board of Directors of the Corporation.
ARTICLE VII
SEAL
The corporate seal shall be in such form as the Board of
Directors may from time to time determine.
ARTICLE VIII
ANNUAL STATEMENTS
No later than one hundred twenty days after the close of each
fiscal year, or within such additional time thereafter as is reasonably
necessary to enable the Corporation to prepare its financial statements if, for
reasons beyond the Corporation's control, it is unable to prepare its financial
statements within the prescribed period, the Corporation shall mail annual
financial statements to each shareholder. Such financial statements shall
contain the content and be in the form required by Section 607.1620 of the Act,
as such provision may be amended from time to time.
ARTICLE IX
INDEMNIFICATION
SECTION 1. INDEMNIFICATION OF DIRECTORS. The
Corporation shall indemnify and hold harmless any person (an "Indemnified
Person") who was or is a party, or is threatened
13
<PAGE> 18
to be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
any action or suit by or in the right of the Corporation) because he is or was
a director of the Corporation, against expenses (including, but not limited to,
attorneys' fees and disbursements, court costs and expert witness fees), and
against any judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with the action, suit or proceeding,
if he acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful; provided, however, that in any case, no indemnification shall be
made for any expenses, judgments, fines and amounts paid in settlement to or on
behalf of any director if a judgment or other final adjudication establishes
that his actions, or omissions to act, were material to the cause of action so
adjudicated and constitute:
(a) a violation of the criminal law, unless the director had
reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful;
(b) a transaction from which the director derived an improper
personal benefit;
(c) a circumstance under which the liability provisions of
Section 607.0834 of the Act (dealing with unlawful distributions) are
applicable; or
(d) willful misconduct or a conscious disregard for the best
interests of the Corporation in a proceeding by or in the right of the
Corporation to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder.
SECTION 2. INDEMNIFICATION OF OTHERS. The Board of
Directors shall have the power to cause the Corporation to provide to officers,
employees and agents of the Corporation all or any part of the right to
indemnification and other rights of the type provided under this Article IX
(subject to the conditions, limitations and obligations specified therein) upon
a resolution to that effect identifying such officers, employees or agents (by
position or name) and specifying the particular rights provided, which may be
different for each of the persons identified. Each officer, employee or agent
of the Corporation so identified shall be an "Indemnified Person" for the
purposes of the provisions of this Article IX.
SECTION 3. SUBSIDIARIES. The Board of Directors shall
have the power to cause the Corporation to provide to any director, officer,
employee or agent of the Corporation who also is or was a director, officer,
trustee, general partner, employee or agent of a Subsidiary (as defined below),
all or any part of the right to indemnification and other rights of the type
provided under Sections 1, 5 and 11 of this Article IX (subject to the
conditions, limitations and obligations specified therein), with regard to
amounts actually and reasonably incurred by such person because he is or was a
director, officer, trustee, general partner, employee or agent of the
Subsidiary. The Board of Directors shall exercise such power, if at all,
through a resolution identifying the person or persons to be indemnified (by
position or name) and the Subsidiary (by name or other classification), and
specifying the particular rights provided, which may be different for each of
the persons identified. Each person so identified shall be an "Indemnified
14
<PAGE> 19
Person" for purposes of the provisions of this Article IX. As used in this
Article IX, "Subsidiary" shall mean (a) another corporation, joint venture,
trust, partnership or unincorporated business association more than 20% of the
voting capital stock or other voting equity interest of which was, at or after
the time the circumstances giving rise to such action, suit or proceeding
arose, owned, directly or indirectly, by the Corporation, or (b) a nonprofit
corporation that received its principal financial support from the Corporation
or its Subsidiaries.
SECTION 4. DETERMINATION. Notwithstanding any judgment,
order, settlement, conviction or plea in any action, suit or proceeding of the
kind referred to in Section 1 of this Article IX, an Indemnified Person shall
be entitled to indemnification as provided in such Section 1 unless a
determination that such Indemnified Person is not entitled to such
indemnification shall be made:
(a) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action,
suit or proceeding;
(b) if such a quorum is not obtainable or, even if
obtainable, by majority vote of a committee duly designated by the
Board of Directors (in which directors who are parties may
participate) consisting solely of two or more directors not at the
time parties to the proceeding;
(c) by independent legal counsel:
(i) selected by the Board of Directors prescribed
in paragraph (a) or the committee prescribed in paragraph (b);
or
(ii) if a quorum of the directors cannot be
obtained for paragraph (a) and the committee cannot be
designated under paragraph (b), selected by majority vote of
the full Board of Directors (in which directors who are
parties may participate); or
(d) by the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such action, suit,
or proceeding or, if no such quorum is obtainable, by a majority vote
of shareholders who were not parties to such proceeding.
Notwithstanding any determination pursuant to the preceding sentence,
if such determination shall have been made at a time that the members
of the Board of Directors, so serving when the events upon which such
Indemnified Person's liability has been based occurred, no longer
constitute a majority of the members of the Board of Directors, then
subject to any requirements of the Act, such Indemnified Person shall
nonetheless be entitled to indemnification as set forth in Section 1
of this Article IX, unless the Corporation shall carry the burden of
proving, in an action before any court of competent jurisdiction, that
such Indemnified Person is not entitled to such indemnification.
SECTION 5. ADVANCES. Expenses (including, but not
limited to, attorneys' fees and disbursements, court costs, and expert witness
fees) incurred by the Indemnified Person in
15
<PAGE> 20
defending any action, suit or proceeding of the kind described in Section 1 of
this Article IX (or in Section 2 or 3 of this Article IX, if the Board of
Directors has specified that advancement of expenses be made available to such
Indemnified Person) shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as set forth herein. The
Corporation shall promptly pay the amount of such expenses to the Indemnified
Person, but in no event later than ten days following the Indemnified Person's
delivery to the Corporation of a written request for an advance pursuant to
this Section 5, together with a reasonable accounting of such expenses;
provided, however, that the Indemnified Person shall furnish the Corporation a
written affirmation of his good faith belief that he is entitled to
indemnification for such amounts under this Article IX and a written
undertaking and agreement to repay to the Corporation any advances made
pursuant to this Section 5 if it shall be determined that the Indemnified
Person is not entitled to be indemnified by the Corporation for such amounts.
The Corporation shall make the advances contemplated by this Section 5
regardless of the Indemnified Person's financial ability to make repayment.
Any advances and undertakings to repay pursuant to this Section 5 shall be
unsecured and interest-free.
SECTION 6. NON-EXCLUSIVITY. Subject to any applicable
limitation imposed by the Act or the Articles of Incorporation, the
indemnification and advancement of expenses provided by or granted pursuant to
this Article IX shall not be deemed exclusive of any other rights to which a
person seeking indemnification or advancement of expenses may be entitled under
resolution, or agreement specifically or in general terms approved or ratified
by the affirmative vote of holders of a majority of the shares entitled to be
cast thereon.
SECTION 7. INSURANCE. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Section 7.
SECTION 8. INFORMATION TO SHAREHOLDERS. If any expenses
or other amounts are paid by way of indemnification, otherwise than by court
order or action by the shareholders or by an insurance carrier pursuant to
insurance maintained by the Corporation, the Corporation shall, not later than
the time of delivery to shareholders of written notice of the next annual
meeting of shareholders, unless such meeting is held within three months from
the date of such payment, and, in any event, within fifteen months from the
date of such payment, deliver either personally or by mail to each shareholder
of record at the time entitled to vote for the election of Directors, a
statement specifying the persons paid, the amounts paid, and the nature and
status at the time of such payment of the litigation or threatened litigation.
SECTION 9. SECURITY. The Corporation may designate
certain of its assets as collateral, provide self-insurance or otherwise secure
its obligations under this Article IX, or under any indemnification agreement
or plan of indemnification adopted and entered into in accordance with the
provisions of this Article IX, as the Board of Directors deems appropriate.
16
<PAGE> 21
SECTION 10. AMENDMENT. Any amendment to this Article IX
that limits or otherwise adversely affects the right of indemnification,
advancement of expenses, or other rights of any Indemnified Person hereunder
shall, as to such Indemnified Person, apply only to claims, actions, suits, or
proceedings based on actions, events or omissions (collectively,
"Post-Amendment Events") occurring after such amendment and after delivery of
notice of such amendment to the Indemnified Person so affected. Any
Indemnified Person shall, as to any claim, action, suit or proceeding based on
actions, events or omissions occurring prior to the date of receipt of such
notice, be entitled to the right of indemnification, advancement of expenses
and other rights under this Article IX to the same extent as if such provisions
had continued as part of these Bylaws without such amendment. This Section 10
cannot be altered, amended or repealed in a manner effective as to any
Indemnified Person (except as to Post-Amendment Events) without the prior
written consent of such Indemnified Person.
SECTION 11. AGREEMENTS. The provisions of this Article
IX shall be deemed to constitute an agreement between the Corporation and each
person entitled to indemnification hereunder. In addition to the rights
provided in this Article IX, the Corporation shall have the power, upon
authorization by the Board of Directors, to enter into an agreement or
agreements providing to any person who is or was a director, officer, employee
or agent of the Corporation indemnification rights substantially similar to
those provided in this Article IX.
SECTION 12. CONTINUING BENEFITS. The indemnification and
advancement of expenses provided by or granted pursuant to this Article IX
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.
SECTION 13. SUCCESSORS. For purposes of this Article IX,
the term "Corporation" shall include any corporation, joint venture, trust,
partnership or unincorporated business association that is the successor to all
or substantially all of the business or assets of this Corporation, as a result
of merger, consolidation, sale, liquidation or otherwise, and any such
successor shall be liable to the persons indemnified under this Article IX on
the same terms and conditions and to the same extent as this Corporation.
SECTION 14. SEVERABILITY. Each of the Sections of this
Article IX, and each of the clauses set forth herein, shall be deemed separate
and independent, and should any part of any such Section or clause be declared
invalid or unenforceable by any court of competent jurisdiction, such
invalidity or unenforceability shall in no way render invalid or unenforceable
any other part thereof or any separate Section or clause of this Article IX
that is not declared invalid or unenforceable.
SECTION 15. ADDITIONAL INDEMNIFICATIONS. In addition to
the specific indemnification rights set forth herein, the Corporation shall
indemnify each of its directors and such of its officers as have been appointed
by the Board of Directors to the full extent permitted by action of the Board
of Directors without shareholder approval under the Act or other laws of the
State of Florida as in effect from time to time.
17
<PAGE> 22
SECTION 16. CHANGES IN THE ACT. The Board of Directors
of the Corporation may amend any Section of this Article IX without shareholder
approval such that each Section of this Article IX will be in conformity with
the Act at all times.
ARTICLE X
NOTICES AND WAIVER OF NOTICE
SECTION 1. NOTICES. Except as otherwise provided in
these Bylaws, whenever under the provisions of these Bylaws notice is required
to be given to any shareholder, director or officer, such notice shall be given
either by personal notice, telephone, telecopier, or electronic communication,
or by overnight courier or mail by depositing the same in the post office or
letter box in a postpaid sealed envelope, addressed to such shareholder,
officer or director at such address as appears on the books of the Corporation,
and such notice shall be deemed to be given at the time when the same shall be
thus sent or mailed.
SECTION 2. WAIVER OF NOTICE. Whenever any notice
whatsoever is required to be given by law, by the Articles of Incorporation or
by these Bylaws, a waiver thereof, in writing, signed by the person or persons
entitled to such notice given before or after the time stated therein, which
shall include a waiver given by telephone, telecopier, or electronic
communication, shall be deemed equivalent thereto. No notice of any meeting
need be given to any person who shall attend such meeting.
ARTICLE XI
MISCELLANEOUS
SECTION 1. EXECUTION OF DOCUMENTS. The Board shall
designate the officers, employees, and agents of the Corporation who shall have
power to execute and deliver deeds, contracts, mortgages, bonds, debentures,
checks, and documents for and in the name of the Corporation, and may authorize
such officers, employees, and agents to delegate such power (including
authority to redelegate) by written instrument to other officers, employees, or
agents of the Corporation. Unless so designated or expressly authorized by
these Bylaws, no officer or agent or employee shall have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit
or to render it liable pecuniarily for any purpose or any amount.
SECTION 2. DEPOSITS. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation or otherwise as the Board or the Treasurer, or any other officer of
the Corporation to whom power in this respect shall have been given by the
Board, shall select.
SECTION 3. PROXIES IN RESPECT OF STOCK OR OTHER
SECURITIES OF OTHER CORPORATIONS. The Board shall designate the officers of
the Corporation who shall have authority to appoint from time to time agents of
the Corporation to exercise in the name and on behalf of the Corporation the
powers and rights which the Corporation may have as the holder
18
<PAGE> 23
of stock or other securities in any other corporation, and to vote or consent
in respect of such stock or securities. Such designated officers may instruct
the agents so appointed as to the manner of exercising such powers and rights,
and such designated officers may execute or cause to be executed in the name
and on behalf of the Corporation and under its corporate seal or otherwise such
written proxies, powers of attorney, or other instruments as they may deem
necessary or proper in order that the Corporation may exercise such powers and
rights.
ARTICLE XII
AMENDMENTS
These Bylaws may be adopted, altered, amended or repealed, and
new Bylaws may be adopted, by the Board of Directors or the shareholders.
Action by the Board of Directors with respect to these Bylaws shall be taken by
an affirmative vote of a majority of all directors then holding office. Action
by the shareholders with respect to these Bylaws shall be taken by the
affirmative vote of 66-2/3% of the votes of the Common Stock then entitled to
vote at an annual or special meeting of the shareholders.
19
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
BY AND BETWEEN
PHOENIX INTERNATIONAL LTD., INC.
AND
HAROLD BOUGHTON
DATED: June 3, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Employment ............................................................. 1
2. Term ................................................................... 1
3. Compensation and Benefits .............................................. 2
4. Termination ............................................................ 2
5. Trade Secrets, Non-Competition, Non-Solicitation, and Related Matters .. 4
6. Successors; Binding Agreement .......................................... 7
7. Fees and Expenses ...................................................... 7
8. Notice ................................................................. 7
9. Settlement of Claims ................................................... 7
10. Modification and Waiver ................................................ 8
11. Governing Law .......................................................... 8
12. Severability ........................................................... 8
13. Entire Agreement ....................................................... 8
14. Headings ............................................................... 8
15. Counterparts ........................................................... 8
16. Definitions ............................................................ 8
</TABLE>
i
<PAGE> 3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made by and between
PHOENIX INTERNATIONAL LTD., INC., a Florida corporation (the "Company"), and
HAROLD BOUGHTON, an individual resident of Florida (the "Employee"), as of this
3rd day of June, 1996.
The Company presently employs the Employee as its Senior Vice President of
National Sales. The Chief Executive Officer ("CEO") of the Company recognizes
that the Employee's contribution to the growth and success of the Company is
substantial. The CEO desires to provide for the continued employment of the
Employee and to make certain changes in the Employee's employment arrangements
which the CEO has determined will reinforce and encourage the continued
dedication of the Employee to the Company and will promote the best interests
of the Company and its stockholders. The Employee is willing to continue to
serve the Company on the terms and conditions herein provided.
Certain terms used in this Agreement are defined in Section 16. Certain
provisions and definitions in this document reflect the agreements of the
parties in the Stockholders Agreement.
In consideration of the foregoing, the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree that on the Effective Date:
1. Employment. The Company shall continue to employ the Employee, and the
Employee shall continue to serve the Company, as Senior Vice President of
National Sales upon the terms and conditions set forth herein. The Employee
shall have such authority and responsibilities as are consistent with his
position and which may be set forth in this Agreement, in the Bylaws or
assigned by the CEO or President of the Company (the "President") from time to
time. The Employee shall devote his full business time, attention, skill and
efforts to the performance of his duties hereunder, except during periods of
illness or periods of vacation and leaves of absence consistent with Company
policy. The Employee may devote reasonable periods of time to perform
charitable and other community activities and to manage his personal
investments; provided, however, that such activities do not materially
interfere with the performance of his duties hereunder and are not in conflict
or competitive with, or adverse to, the interests of the Company.
2. Term. Unless earlier terminated as provided herein, the Employee's
employment under this Agreement shall be for a continuing term (the "Term") of
one year, which shall be extended automatically (without further action of the
Company or the Employee) each day for an additional day so that the remaining
term shall continue to be one year; provided, however, that either party may at
any time, by written notice to the other, fix the Term to a finite term of one
year, without further automatic extension, commencing with the date of such
notice. Notwithstanding the foregoing, the Term of employment hereunder will
end on the date that the Employee attains the age of 65.
<PAGE> 4
3. Compensation and Benefits
a. Effective June 3, 1996, the Company shall pay the Employee a salary at
a rate of not less than $100,000 per annum in accordance with the salary
payment practices of the Company. The CEO and President shall review the
Employee's salary at least annually (on May 1, 1997, for the first review) and
may increase the Employee's base salary if they determine in their sole
discretion that an increase is appropriate.
b. The Employee may participate in a bonus program and, prior to the
Initial Public Offering, shall be eligible to receive annual payments of the
Bonus Amount and, upon completion of the Initial Public Offering, shall be
eligible to receive quarterly payments of the Bonus Amount based upon
achievement of targeted levels of performance and such other criteria as the
CEO and President shall establish from time to time pursuant to the bonus
program. In addition, the Employee shall participate in a commission plan
established annually by the CEO and President.
c. The Employee shall participate in the Plan and be eligible for the
grant of stock options, restricted stock and other awards thereunder.
d. The Employee shall continue to participate in all retirement, welfare,
deferred compensation, life and health insurance, and other benefit plans or
programs of the Company now or hereafter applicable to the Employee or
applicable generally to employees of the Company.
e. The Company shall continue to reimburse the Employee for travel and
other expenses related to the Employee's duties which are incurred and
accounted for in accordance with the historic practices of the Company.
4. Termination.
a. The Employee's employment under this Agreement may be terminated prior
to the end of the Term only as follows:
(i) upon the death of the Employee;
(ii) by the Company due to the Disability of the Employee upon
delivery of a Notice of Termination to the Employee; and
(iii) by the Company for Cause upon delivery of a Notice of
Termination to the Employee.
b. If the Employee's employment with the Company shall be terminated
during the Term (i) by reason of the Employee's death, or (ii) by the Company
for Disability or Cause,
2
<PAGE> 5
the Company shall pay to the Employee (or in the case of his death, the
Employee's estate) within 15 days after the Termination Date, a lump sum cash
payment equal to the Accrued Compensation and, if such termination is other
than by the Company for Cause, the Pro Rata Bonus and the Pro Rata Commission.
c. If the Employee's employment with the Company shall be terminated by
the Company for any reason within one year after a Change in Control or by the
Employee with Adequate Justification, in addition to other rights and remedies
available in law or equity, the Employee shall be entitled to the following:
(i) the Company shall pay the Employee in cash
within 15 days of the Termination Date an amount equal to
all Accrued Compensation, the Pro Rata Bonus and the Pro
Rata Commission;
(ii) the Company shall pay to the Employee in
cash at the end of each of the 12 consecutive 30-day
periods following the Termination Date an amount equal to
one-twelfth of the sum of the Base Amount, the Bonus Amount
and the Commission Amount.
(iii) for the period from the Termination Date
through the date that is 12 months from the Termination
Date (the "Continuation Period"), the Company shall at its
expense continue on behalf of the Employee the life
insurance, disability, medical, dental and hospitalization
benefits provided (x) to the Employee at any time during
the 90-day period prior to the Change in Control or at any
time thereafter or (y) to other similarly situated
employees who continue in the employ of the Company during
the Continuation Period. The coverage and benefits
(including deductibles and costs) provided in this Section
4(c)(iii) during the Continuation Period shall be no less
favorable to the Employee than the most favorable of such
coverages and benefits during any of the periods referred
to in clauses (x) and (y) above. The Company's obligation
hereunder with respect to the foregoing benefits shall be
limited to the extent that the Employee obtains any such
benefits pursuant to a subsequent employer's benefit plans,
in which case the Company may reduce the coverage of any
benefits it is required to provide the Employee hereunder
as long as the aggregate coverages and benefits of the
combined benefit plans is no less favorable to the Employee
than the coverages and benefits required to be provided
hereunder. This subsection (iii) shall not be interpreted
so as to limit any benefits to which the Employee may be
entitled under any of the Company's employee benefit plans,
programs or practices following the Employee's termination
of employment, including without limitation, retiree
medical and life insurance benefits; and
3
<PAGE> 6
(iv) the restrictions on any outstanding
incentive awards (including stock options) granted to the
Employee under the Plan or under any other incentive plan
or arrangement shall lapse and such incentive award shall
become 100% vested, all stock options and stock
appreciation rights granted to the Employee shall become
immediately exercisable and shall become 100% vested, and
all stock options granted to the Employee shall become 100%
vested.
d. If the Company terminates the Employee without Cause, the Company shall
pay to the Employee in cash at the end of each of the six consecutive 30-day
periods following the Termination Date an amount equal to one-twelfth of the
sum of the Base Amount, the Bonus Amount and the Commission Amount.
e. The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise, and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment
except as provided in Section 4(c)(iii).
f. The severance pay and benefits provided for in this Section 4 shall be
in lieu of any other severance or termination pay to which the Employee may be
entitled under any Company severance or termination plan, program, practice or
arrangement. The Employee's entitlement to any other compensation or benefits
shall be determined in accordance with the Company's employee benefit plans and
other applicable programs, policies and practices then in effect.
g. In the event that the Employee is a director of the Company or any of
its affiliates and his employment hereunder is terminated for any reason, the
Employee shall, and does hereby, tender his resignation as a director of the
Company and any of its affiliates effective as of the Termination Date.
5. Trade Secrets, Non-Competition, Non-Solicitation, and Related Matters.
a. The Employee shall not, at any time, either during the Term of his
employment or after the Termination Date, use or disclose any Trade Secrets of
the Company, except in fulfillment of his duties as the Employee during his
employment, for so long as the pertinent information or data remain Trade
Secrets, whether or not the Trade Secrets are in written or tangible form.
b. The Employee agrees to maintain in strict confidence and, except as
necessary to perform his duties for the Company, not to use or disclose any
Confidential Business Information for so long as the pertinent data or
information remains Confidential Business Information.
4
<PAGE> 7
c. Upon termination of employment, the Employee shall leave with the
Company all business records relating to the Company and its affiliates
including, without limitation, all contracts, calendars, and other materials or
business records, its business or customers, including all physical,
electronic, and computer copies thereof, whether or not the Employee prepared
such materials or records himself. Upon such termination, the Employee shall
retain no copies of any such materials, provided, however, the Employee may
remove and retain all personal items and materials.
d. The Employee may disclose Trade Secrets or Confidential Business
Information pursuant to any order or legal process requiring him (in his legal
counsel's reasonable opinion) to do so; provided, however, that the Employee
shall first have notified the Company of the request or order to so disclose
the Trade Secrets or Confidential Business Information in sufficient time to
allow the Company to seek an appropriate protective order.
e. If the Employee is terminated for any reason or if the Employee resigns
without Adequate Justification, then for a period of one year following the
Termination Date, the Employee shall not (without the prior written consent of
the Company) compete with the Company or any of its affiliates in any way,
including, but not limited to, (i) serving as an officer of, director of,
employee of, or consultant to, (ii) directly or indirectly, forming, or (iii)
directly or indirectly, acquiring more than a 5% investment in, a Competing
Business in the Territory; provided, however, that (A) if the Employee is
terminated without Cause, then the non-compete period under this Section 5(e)
shall be for a period of six months following the Termination date or (B) if
the Employee is terminated, for any reason after a Change in Control or resigns
with Adequate Justification, then there shall not be a non-compete period under
this Section 5(e).
f. If the Employee is terminated for any reason or if the Employee resigns
without Adequate Justification, then for a period of one year following the
Termination Date, the Employee shall not (except on behalf of or with the prior
written consent of the Company) either directly or indirectly, on the
Employee's own behalf or in the service or on behalf of others, (i) solicit,
divert, or appropriate to or for a Competing Business, or (ii) attempt to
solicit, divert, or appropriate to or for a Competing Business, any person or
entity that was a customer or a prospective customer of the Company or any of
its affiliates on the Termination Date and is located in the Territory;
provided, however, that (A) if the Employee is terminated without Cause, then
the non-solicit period under this Section 5(f) shall be for a period of six
months following the Termination Date or (B) if the Employee is terminated for
any reason after a Change in Control or resigns with Adequate Justification,
then there shall not be a non-solicit period under this Section 5(f).
g. If the Employee is terminated for any reason or if the Employee resigns
without Adequate Justification, then for a period of one year following the
Termination Date, the Employee will not, either directly or indirectly, on the
Employee's own behalf or in the service or on behalf of others, (i) solicit,
divert, or hire away, or (ii) attempt to solicit, divert, or hire
5
<PAGE> 8
away, to any business located in the Territory, any employee of or consultant
to the Company or any of its affiliates engaged or experienced in the Business,
regardless of whether the employee or consultant is full-time or temporary, the
employment or engagement is pursuant to written agreement, or the employment is
for a determined period or is at will; provided, however, that (A) if the
Employee is terminated without Cause, then the non-solicit period under this
Section 5(g) shall be for a period of six months following the Termination Date
or (B) if the Employee is terminated for any reason after a Change in Control
or resigns with Adequate Justification, then there shall not be a non-solicit
period under this Section 5(g).
h. The Employee acknowledges and agrees that great loss and irreparable
damage would be suffered by the Company if the Employee should breach or
violate any of the terms or provisions of the covenants and agreements set
forth in this Section 5. The Employee further acknowledges and agrees that
each of these covenants and agreements is reasonably necessary to protect and
preserve the interests of the Company. The parties agree that money damages
for any breach of clauses (a) through (g) of this Section 5 will be
insufficient to compensate for any breaches thereof, and that the Employee or
any of the Employee's affiliates, as the case may be, will, to the extent
permitted by law, waive in any proceeding initiated to enforce such provisions
any claim or defense that an adequate remedy at law exists. The existence of
any claim, demand, action, or cause of action against the Company, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of any of the covenants or agreements in this
Agreement; provided, however, that nothing in this Agreement shall be deemed to
deny the Employee the right to defend against this enforcement on the basis
that the Company has no right to its enforcement under the terms of this
Agreement.
i. The Employee acknowledges and agrees that: (i) the covenants and
agreements contained in clauses (a) through (g) of this Section 5 are the
essence of this Agreement; (ii) that the Employee has received good, adequate
and valuable consideration for each of these covenants; (iii) each of these
covenants is reasonable and necessary to protect and preserve the interests and
properties of the Company; (iv) the Company is and will be engaged in and
throughout the Territory in the Business; (v) a Competing Business could be
engaged in from any place in the Territory; and (vi) the Company has a
legitimate business interest in restricting the Employee's activities
throughout the Territory. The Employee also acknowledges and agrees that: (i)
irreparable loss and damage will be suffered by the Company should the Employee
breach any of these covenants and agreements; (ii) each of these covenants and
agreements in clauses (a) through (g) of this Section 5 is separate, distinct
and severable not only from the other covenants and agreements but also from
the remaining provisions of this Agreement; and (iii) the unenforceability of
any covenants or agreements shall not affect the validity or enforceability of
any of the other covenants or agreements or any other provision or provisions
of this Agreement. The Employee acknowledges and agrees that if any of the
provisions of clauses (a) through (g) of this Section 5 shall ever be deemed to
exceed the time, activity, or geographic limitations permitted by applicable
law, then such provisions shall be and hereby are reformed to the maximum time,
activity, or geographical limitations permitted by applicable law.
6
<PAGE> 9
j. The Employee and the Company hereby agree that they will negotiate in
good faith to amend this Agreement from time to time to modify the terms of
this Section 5, the definition of the term "Territory," and the definition of
the term "Business," to reflect changes in the Company's business and affairs
so that the scope of the limitations placed on the Employee's activities by
this Section 5 accomplishes the parties' intent in relation to the then current
facts and circumstances. Any such amendment shall be effective only when
completed in writing and signed by the Employee and the Company.
6. Successors; Binding Agreement
a. This Agreement shall be binding upon and shall inure to the benefit of
the Company, its Successors and Assigns and the Company shall require any
Successors and Assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place.
b. Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Employee, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Employee's legal personal representative.
7. Fees and Expenses. The Company shall pay all legal fees and related
expenses (including but not limited to the costs of experts, accountants and
counsel) incurred by the Employee as they become due as a result of (a) the
termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of employment) and (b)
the Employee seeking to obtain or enforce any right or benefit provided by this
Agreement; provided, however, that the circumstances set forth in clauses (a)
and (b) above occurred on or after a Change in Control.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other; provided, however, that all notices to the Company shall be
directed to the attention of the CEO with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received
on the date of delivery thereof.
9. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Employee or others. The Company may, however,
withhold from any benefits payable under this Agreement
7
<PAGE> 10
all federal, state, city, or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
10. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Employee and the Company. No waiver by
any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of Florida.
12. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
13. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
14. Headings. The headings of Sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
16. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
a. "Accrued Compensation" shall mean an amount which shall include all
amounts earned or accrued through the Termination Date but not paid as of the
Termination Date including (i) base salary, (ii) reimbursement for reasonable
and necessary expenses incurred by the Employee on behalf of the Company during
the period ending on the Termination Date, and (iii) bonuses and incentive
compensation (other than the Pro Rata Bonus and the Pro Rata Commission).
b. "Adequate Justification" shall mean the occurrence within one year
after a Change in Control of any of the following events or conditions: (I) a
material failure of the Company to comply with the terms of this Agreement,
(ii) any relocation of the Employee
8
<PAGE> 11
outside a 30-mile radius from the executive offices occupied by the Employee
prior to the Change in Control that is not approved by members of the Incumbent
Board (as defined in Section 16(I)), or (iii) other than as provided for
herein, any substantial diminution in the Employee's authority or the
Employee's responsibilities that is not approved by members of the Incumbent
Board.
c. "Base Amount" shall mean the greater of the Employee's annual base
salary (i) at the rate in effect on the Termination Date or (ii) at the highest
rate in effect at any time during the 90-day period prior to the Change in
Control, and shall include all amounts of his base salary that are deferred
under the qualified and non-qualified employee benefit plans of the Company or
any other agreement or arrangement.
d. "Bonus Amount" shall mean the most recent annual bonus paid or payable
to the Employee prior to the Termination Date or the annual bonus paid or
payable for the full fiscal year ended prior to the fiscal year during which a
Change in Control occurred (or, in each case, such lesser period for which
annual bonuses were paid or payable to the Employee).
e. "Business" shall mean the development, marketing or implementation of
core retail banking software directly or through a software service bureau to
the banking and financial industry, and any other related business which the
Company or any of its affiliates is engaged in as of the Termination Date.
f. "Bylaws" shall mean the Amended and Restated Bylaws of the Company, as
amended, supplemented or otherwise modified from time to time.
g. The termination of the Employee's employment shall be for "Cause" if it
is the result of:
(i) the commission or omission of an act by the
Employee of a willful or negligent act which causes harm to
the Company;
(ii) the conviction of the Employee for the
commission or perpetration by the Employee of any felony or
any act of fraud;
(iii) the failure of the Employee to devote his
full time and attention to the business as provided in
Section 1; or
(iv) the failure of the Employee to perform his
duties hereunder in a manner satisfactory to the CEO and
President, as determined in their sole discretion;
provided, however, that the Employee shall have 30 days to
cure such failure after receiving notice from the Company.
The Company shall be obligated to provide only one notice
to Employee pursuant to this Section 16(g)(iv).
Thereafter, the Company may terminate the Employee, without
the Employee having a right to
9
<PAGE> 12
cure, if the Employee fails to perform his duties in a
manner satisfactory to the CEO and President, as
determined in their sole discretion.
h. "CEO" shall have the meaning set forth in the recitals.
i. A "Change in Control" shall mean the occurrence during the Term of any
of the following events after the Initial Public Offering:
(i) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934 (the "1934
Act")) immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under
the 1934 Act) of 40% or more of the combined voting power of the
Company's then outstanding Voting Securities; provided, however,
that in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an acquisition by (1) an
employee benefit plan (or a trust forming a part thereof)
maintained by (x) the Company or (y) any corporation or other
Person of which a majority of its voting power or its equity
securities or equity interest is owned directly or indirectly by
the Company (a "Subsidiary"), (2) the Company or any Subsidiary,
or (3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(ii) The individuals who, as of the date of the Initial Public
Offering, are members of the Board of Directors of the Company
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors; provided, however,
that if the election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of at
least a majority of the Incumbent Board, such new director shall,
for purposes of this Agreement, be considered as a member of the
Incumbent Board; provided, further, however, that no individual
shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an
actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the 1934 Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board of Directors (a "Proxy Contest")
including
10
<PAGE> 13
by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(iii) Approval by stockholders of the Company of:
(A) A merger, consolidation or reorganization involving
the Company, unless
(1) the stockholders of the Company, immediately
before such merger, consolidation or
reorganization, own, directly or indirectly,
immediately following such merger, consolidation
or reorganization, at least a majority of the
combined voting power of the outstanding voting
securities of the corporation resulting from such
merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the
same proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization, and
(2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement providing for such merger,
consolidation or reorganization constitute at
least a majority of the members of the board of
directors of the Surviving Corporation.
(A transaction described in clauses (1) and (2)
shall herein be referred to as a "Non-Control
Transaction").
(B) A complete liquidation or dissolution of the Company;
or
(C) An agreement for the sale or other disposition of all
or substantially all of the assets of the Company to
any Person (other than a transfer to a Subsidiary).
(iv) Notwithstanding anything contained in this Agreement to the
contrary, if the Employee's employment is terminated prior
to a Change in Control and the Employee reasonably
demonstrates that such termination (A) was at the request
of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control
and who effectuates a Change in Control (a "Third Party")
or (B) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually
occurs, then for all purposes of this
11
<PAGE> 14
Agreement, the date of a Change in Control with respect to
the Employee shall mean the date immediately prior to the
date of such termination of the Employee's employment.
j. "Commission Amount" shall mean the most recent annual commission paid
or payable to the Employee prior to the Termination Date or the annual
commission paid or payable for the full fiscal year ended prior to the fiscal
year during which a Change in Control occurred (or, in each case, such lesser
period for which annual commissions were paid or payable to the Employee).
k. "Competing Business" shall mean any business that, in whole or in part,
is the same or substantially the same as the Business.
l. "Confidential Business Information" shall mean any non-public
information of a competitively sensitive or personal nature, other than Trade
Secrets, acquired by the Employee, directly or indirectly, in connection with
the Employee's employment (including his employment with the Company prior to
the date of this Agreement), including (without limitation) oral and written
information concerning the Company or its affiliates relating to financial
position and results of operations (revenues, margins, assets, net income,
etc.), annual and long-range business plans, marketing plans and methods,
account invoices, oral or written customer information, and personnel
information. Confidential Business Information also includes information
recorded in manuals, memoranda, projections, minutes, plans, computer programs,
and records, whether or not legended or otherwise identified by the Company and
its affiliates as Confidential Business Information, as well as information
which is the subject of meetings and discussions and not so recorded; provided,
however, that Confidential Business Information shall not include information
that is generally available to the public, other than as a result of
disclosure, directly or indirectly, by the Employee, or was available to the
Employee on a non-confidential basis prior to its disclosure to the Employee.
m. "Continuation Period" shall have the meaning ascribed to it in Section
4(c)(iii).
n. "Disability" shall mean a physical or mental infirmity which impairs
the Employee's ability to substantially perform his duties with the Company for
a period of 180 consecutive days, as determined by an independent physician
selected with the approval of both the Company and the Employee.
o. "Effective Date" shall mean the date set forth in the recitals.
p. "Initial Public Offering" shall mean the closing of the first public
offering of the Company's common stock registered under the Securities Act of
1933.
12
<PAGE> 15
q. "Notice of Termination" shall mean a written notice of termination from
the Company or the Employee which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon, and
sets forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Employee's employment under the provision so
indicated.
r. "President" shall have the meaning ascribed to such term in Section 1.
s. "Plan" shall mean the 1995 Phoenix International Ltd., Inc. Employee
Stock Option Plan adopted by the Board of Directors on October 21, 1995.
t. "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number of days in the
fiscal year through the Termination Date and the denominator of which is 365.
u. "Pro Rata Commission" shall mean an amount equal to the Commission
Amount multiplied by a fraction the numerator of which is the number of days in
the fiscal year through the Termination Date and the denominator of which is
365.
v. "Stockholders Agreement" shall mean the Amended and Restated
Stockholders Agreement, dated August 31, 1995, by and among the Company and the
stockholders named therein, as amended, supplemented or otherwise modified from
time to time.
w. "Successors and Assigns" shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the Company
(including this Agreement), whether by operation of law or otherwise.
x. "Termination Date" shall mean, in the case of the Employee's death, his
date of death, and in all other cases, the date specified in the Notice of
Termination.
y. "Territory" shall mean that area specified on Exhibit A attached
hereto.
z. "Trade Secrets" shall mean any information, including but not limited
to technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing, a process, financial data,
financial plans, product plans, information on customers, or a list of actual
or potential customers or suppliers, which: (i) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
13
<PAGE> 16
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Employee has signed and sealed this Agreement, effective as of the date
first above written.
PHOENIX INTERNATIONAL LTD., INC.
ATTEST:
By: s/ Ralph Reichard By: /s/ Bahram Yusefzadeh
----------------------------- ----------------------------------
Name: Ralph Reichard Name: Bahram Yusefzadeh
Title: President & COO Title: Chairman & CEO
(CORPORATE SEAL)
EMPLOYEE
/s/ Harold Boughton
-----------------------------------
HAROLD BOUGHTON
14
<PAGE> 17
EXHIBIT A
"TERRITORY"
United States
<PAGE> 1
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
BY AND BETWEEN
PHOENIX INTERNATIONAL LTD., INC.
AND
RAJU M. SHIVDASANI
DATED: JULY 15, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Compensation and Benefits . . . . . . . . . . . . . . . . . . . . . . . 2
4. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Trade Secrets, Non-Competition, Non-Solicitation, and Related Matters. . 4
6. Successors; Binding Agreement . . . . . . . . . . . . . . . . . . . . . 7
7. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
9. Settlement of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10. Modification and Waiver . . . . . . . . . . . . . . . . . . . . . . . . 8
11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
13. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
14. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
16. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
i
<PAGE> 3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made by and between
PHOENIX INTERNATIONAL LTD., INC., a Florida corporation (the "Company"), and
RAJU M. SHIVDASANI, an individual resident of Florida (the "Employee"), as of
this 15th day of July, 1996.
The Company presently employs the Employee as its Corporate Senior Vice
President and Divisional President of International Sales. The Chief Executive
Officer ("CEO") of the Company recognizes that the Employee's contribution to
the growth and success of the Company is substantial. The CEO desires to
provide for the continued employment of the Employee and to make certain
changes in the Employee's employment arrangements which the CEO has determined
will reinforce and encourage the continued dedication of the Employee to the
Company and will promote the best interests of the Company and its
stockholders. The Employee is willing to continue to serve the Company on the
terms and conditions herein provided.
Certain terms used in this Agreement are defined in Section 16. Certain
provisions and definitions in this document reflect the agreements of the
parties in the Stockholders Agreement.
In consideration of the foregoing, the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree that on the Effective Date:
1. Employment. The Company shall continue to employ the Employee, and the
Employee shall continue to serve the Company, as Corporate Senior Vice
President and Division President of International Sales upon the terms and
conditions set forth herein. The Employee shall have such authority and
responsibilities as are consistent with his position and which may be set forth
in this Agreement, in the Bylaws or assigned by the CEO or President of the
Company (the "President") from time to time. The Employee shall devote his
full business time, attention, skill and efforts to the performance of his
duties hereunder, except during periods of illness or periods of vacation and
leaves of absence consistent with Company policy. The Employee may devote
reasonable periods of time to perform charitable and other community activities
and to manage his personal investments; provided, however, that such activities
do not materially interfere with the performance of his duties hereunder and
are not in conflict or competitive with, or adverse to, the interests of the
Company.
2. Term. Unless earlier terminated as provided herein, the Employee's
employment under this Agreement shall be for a continuing term (the "Term") of
one year, which shall be extended automatically (without further action of the
Company or the Employee) each day for an additional day so that the remaining
term shall continue to be one year; provided, however, that either party may at
any time, by written notice to the other, fix the Term to a finite term of one
year, without further automatic extension, commencing with the date of such
notice.
<PAGE> 4
Notwithstanding the foregoing, the Term of employment hereunder will end on the
date that the Employee attains the age of 65.
3. Compensation and Benefits
a. Effective July 15, 1996, the Company shall pay the Employee a salary at
a rate of not less than $100,000 per annum in accordance with the salary
payment practices of the Company. The CEO and President shall review the
Employee's salary at least annually (on May 1, 1997, for the first review) and
may increase the Employee's base salary if they determine in their sole
discretion that an increase is appropriate.
b. The Employee may participate in a bonus program and shall be eligible
to receive quarterly payments of the Bonus Amount based upon achievement of
targeted levels of performance and such other criteria as the CEO and President
shall establish from time to time pursuant to the bonus program. In addition,
the Employee shall participate in a commission plan established annually by the
CEO and President.
c. The Employee shall participate in the Plan and be eligible for the
grant of stock options, restricted stock and other awards thereunder.
d. The Employee shall continue to participate in all retirement, welfare,
deferred compensation, life and health insurance, and other benefit plans or
programs of the Company now or hereafter applicable to the Employee or
applicable generally to employees of the Company.
e. The Company shall continue to reimburse the Employee for travel and
other expenses related to the Employee's duties which are incurred and
accounted for in accordance with the historic practices of the Company.
4. Termination.
a. The Employee's employment under this Agreement may be terminated prior
to the end of the Term only as follows:
(i) upon the death of the Employee;
(ii) by the Company due to the Disability of the
Employee upon delivery of a Notice of Termination to the
Employee; and
(iii) by the Company for Cause upon delivery of
a Notice of Termination to the Employee.
b. If the Employee's employment with the Company shall be terminated
during the Term (i) by reason of the Employee's death, or (ii) by the Company
for Disability or Cause,
2
<PAGE> 5
the Company shall pay to the Employee (or in the case of his death, the
Employee's estate) within 15 days after the Termination Date, a lump sum cash
payment equal to the Accrued Compensation and, if such termination is other
than by the Company for Cause, the Pro Rata Bonus and the Pro Rata Commission.
c. If the Employee's employment with the Company shall be terminated by
the Company for any reason within one year after a Change in Control or by the
Employee with Adequate Justification, in addition to other rights and remedies
available in law or equity, the Employee shall be entitled to the following:
(i) the Company shall pay the Employee in cash within 15 days
of the Termination Date an amount equal to all Accrued
Compensation, the Pro Rata Bonus and the Pro Rata
Commission;
(ii) the Company shall pay to the Employee in cash at the end
of each of the 12 consecutive 30-day periods following the
Termination Date an amount equal to one-twelfth of the sum
of the Base Amount, the Bonus Amount and the Commission
Amount.
(iii) for the period from the Termination Date through the date
that is 12 months from the Termination Date (the
"Continuation Period"), the Company shall at its expense
continue on behalf of the Employee the life insurance,
disability, medical, dental and hospitalization benefits
provided (x) to the Employee at any time during the 90-day
period prior to the Change in Control or at any time
thereafter or (y) to other similarly situated employees who
continue in the employ of the Company during the
Continuation Period. The coverage and benefits (including
deductibles and costs) provided in this Section 4(c)(iii)
during the Continuation Period shall be no less favorable to
the Employee than the most favorable of such coverages and
benefits during any of the periods referred to in clauses
(x) and (y) above. The Company's obligation hereunder with
respect to the foregoing benefits shall be limited to the
extent that the Employee obtains any such benefits pursuant
to a subsequent employer's benefit plans, in which case the
Company may reduce the coverage of any benefits it is
required to provide the Employee hereunder as long as the
aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Employee than the
coverages and benefits required to be provided hereunder.
This subsection (iii) shall not be interpreted so as to
limit any benefits to which the Employee may be entitled
under any of the Company's employee benefit plans, programs
or practices following the Employee's termination of
employment, including without limitation, retiree medical
and life insurance benefits; and
3
<PAGE> 6
(iv) the restrictions on any outstanding incentive awards
(including stock options) granted to the Employee under the
Plan or under any other incentive plan or arrangement shall
lapse and such incentive award shall become 100% vested,
all stock options and stock appreciation rights granted to
the Employee shall become immediately exercisable and shall
become 100% vested, and all stock options granted to the
Employee shall become 100% vested.
d. If the Company terminates the Employee without Cause, the Company shall
pay to the Employee in cash at the end of each of the twelve consecutive 30-day
periods following the Termination Date an amount equal to one-twelfth of the
sum of the Base Amount, the Bonus Amount and the Commission Amount.
e. The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise, and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment
except as provided in Section 4(c)(iii).
f. The severance pay and benefits provided for in this Section 4 shall be
in lieu of any other severance or termination pay to which the Employee may be
entitled under any Company severance or termination plan, program, practice or
arrangement. The Employee's entitlement to any other compensation or benefits
shall be determined in accordance with the Company's employee benefit plans and
other applicable programs, policies and practices then in effect.
g. In the event that the Employee is a director of the Company or any of
its affiliates and his employment hereunder is terminated for any reason, the
Employee shall, and does hereby, tender his resignation as a director of the
Company and any of its affiliates effective as of the Termination Date.
5. Trade Secrets, Non-Competition, Non-Solicitation, and Related Matters.
a. The Employee shall not, at any time, either during the Term of his
employment or after the Termination Date, use or disclose any Trade Secrets of
the Company, except in fulfillment of his duties as the Employee during his
employment, for so long as the pertinent information or data remain Trade
Secrets, whether or not the Trade Secrets are in written or tangible form.
b. The Employee agrees to maintain in strict confidence and, except as
necessary to perform his duties for the Company, not to use or disclose any
Confidential Business Information for so long as the pertinent data or
information remains Confidential Business Information.
4
<PAGE> 7
c. Upon termination of employment, the Employee shall leave with the
Company all business records relating to the Company and its affiliates
including, without limitation, all contracts, calendars, and other materials or
business records, its business or customers, including all physical,
electronic, and computer copies thereof, whether or not the Employee prepared
such materials or records himself. Upon such termination, the Employee shall
retain no copies of any such materials, provided, however, the Employee may
remove and retain all personal items and materials.
d. The Employee may disclose Trade Secrets or Confidential Business
Information pursuant to any order or legal process requiring him (in his legal
counsel's reasonable opinion) to do so; provided, however, that the Employee
shall first have notified the Company of the request or order to so disclose
the Trade Secrets or Confidential Business Information in sufficient time to
allow the Company to seek an appropriate protective order.
e. If the Employee is terminated for any reason or if the Employee resigns
without Adequate Justification, then for a period of one year following the
Termination Date, the Employee shall not (without the prior written consent of
the Company) compete with the Company or any of its affiliates in any way,
including, but not limited to, (i) serving as an officer of, director of,
employee of, or consultant to, (ii) directly or indirectly, forming, or (iii)
directly or indirectly, acquiring more than a 5% investment in, a Competing
Business in the Territory; provided, however, that (A) if the Employee is
terminated without Cause, then the non-compete period under this Section 5(e)
shall be for a period of six months following the Termination date or (B) if
the Employee is terminated, for any reason after a Change in Control or resigns
with Adequate Justification, then there shall not be a non-compete period under
this Section 5(e).
f. If the Employee is terminated for any reason or if the Employee resigns
without Adequate Justification, then for a period of one year following the
Termination Date, the Employee shall not (except on behalf of or with the prior
written consent of the Company) either directly or indirectly, on the
Employee's own behalf or in the service or on behalf of others, (i) solicit,
divert, or appropriate to or for a Competing Business, or (ii) attempt to
solicit, divert, or appropriate to or for a Competing Business, any person or
entity that was a customer or a prospective customer of the Company or any of
its affiliates on the Termination Date and is located in the Territory;
provided, however, that (A) if the Employee is terminated without Cause, then
the non-solicit period under this Section 5(f) shall be for a period of six
months following the Termination Date or (B) if the Employee is terminated for
any reason after a Change in Control or resigns with Adequate Justification,
then there shall not be a non-solicit period under this Section 5(f).
g. If the Employee is terminated for any reason or if the Employee resigns
without Adequate Justification, then for a period of one year following the
Termination Date, the Employee will not, either directly or indirectly, on the
Employee's own behalf or in the service or on behalf of others, (i) solicit,
divert, or hire away, or (ii) attempt to solicit, divert, or hire
5
<PAGE> 8
away, to any business located in the Territory, any employee of or consultant
to the Company or any of its affiliates engaged or experienced in the Business,
regardless of whether the employee or consultant is full-time or temporary, the
employment or engagement is pursuant to written agreement, or the employment is
for a determined period or is at will; provided, however, that (A) if the
Employee is terminated without Cause, then the non-solicit period under this
Section 5(g) shall be for a period of six months following the Termination Date
or (B) if the Employee is terminated for any reason after a Change in Control
or resigns with Adequate Justification, then there shall not be a non-solicit
period under this Section 5(g).
h. The Employee acknowledges and agrees that great loss and irreparable
damage would be suffered by the Company if the Employee should breach or
violate any of the terms or provisions of the covenants and agreements set
forth in this Section 5. The Employee further acknowledges and agrees that
each of these covenants and agreements is reasonably necessary to protect and
preserve the interests of the Company. The parties agree that money damages
for any breach of clauses (a) through (g) of this Section 5 will be
insufficient to compensate for any breaches thereof, and that the Employee or
any of the Employee's affiliates, as the case may be, will, to the extent
permitted by law, waive in any proceeding initiated to enforce such provisions
any claim or defense that an adequate remedy at law exists. The existence of
any claim, demand, action, or cause of action against the Company, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of any of the covenants or agreements in this
Agreement; provided, however, that nothing in this Agreement shall be deemed to
deny the Employee the right to defend against this enforcement on the basis
that the Company has no right to its enforcement under the terms of this
Agreement.
i. The Employee acknowledges and agrees that: (i) the covenants and
agreements contained in clauses (a) through (g) of this Section 5 are the
essence of this Agreement; (ii) that the Employee has received good, adequate
and valuable consideration for each of these covenants; (iii) each of these
covenants is reasonable and necessary to protect and preserve the interests and
properties of the Company; (iv) the Company is and will be engaged in and
throughout the Territory in the Business; (v) a Competing Business could be
engaged in from any place in the Territory; and (vi) the Company has a
legitimate business interest in restricting the Employee's activities
throughout the Territory. The Employee also acknowledges and agrees that: (i)
irreparable loss and damage will be suffered by the Company should the Employee
breach any of these covenants and agreements; (ii) each of these covenants and
agreements in clauses (a) through (g) of this Section 5 is separate, distinct
and severable not only from the other covenants and agreements but also from
the remaining provisions of this Agreement; and (iii) the unenforceability of
any covenants or agreements shall not affect the validity or enforceability of
any of the other covenants or agreements or any other provision or provisions
of this Agreement. The Employee acknowledges and agrees that if any of the
provisions of clauses (a) through (g) of this Section 5 shall ever be deemed to
exceed the time, activity, or geographic limitations permitted by applicable
law, then such provisions shall be and hereby are reformed to the maximum time,
activity, or geographical limitations permitted by applicable law.
6
<PAGE> 9
j. The Employee and the Company hereby agree that they will negotiate in
good faith to amend this Agreement from time to time to modify the terms of
this Section 5, the definition of the term "Territory," and the definition of
the term "Business," to reflect changes in the Company's business and affairs
so that the scope of the limitations placed on the Employee's activities by
this Section 5 accomplishes the parties' intent in relation to the then current
facts and circumstances. Any such amendment shall be effective only when
completed in writing and signed by the Employee and the Company.
6. Successors; Binding Agreement
a. This Agreement shall be binding upon and shall inure to the benefit of
the Company, its Successors and Assigns and the Company shall require any
Successors and Assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place.
b. Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Employee, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Employee's legal personal representative.
7. Fees and Expenses. The Company shall pay all legal fees and related
expenses (including but not limited to the costs of experts, accountants and
counsel) incurred by the Employee as they become due as a result of (a) the
termination of employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of employment) and (b)
the Employee seeking to obtain or enforce any right or benefit provided by this
Agreement; provided, however, that the circumstances set forth in clauses (a)
and (b) above occurred on or after a Change in Control.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other; provided, however, that all notices to the Company shall be
directed to the attention of the CEO with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received
on the date of delivery thereof.
9. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Employee or others. The Company may, however,
withhold from any benefits payable under this Agreement
7
<PAGE> 10
all federal, state, city, or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
10. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Employee and the Company. No waiver by
any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of Florida.
12. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
13. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
14. Headings. The headings of Sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
16. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
a. "Accrued Compensation" shall mean an amount which shall include all
amounts earned or accrued through the Termination Date but not paid as of the
Termination Date including (i) base salary, (ii) reimbursement for reasonable
and necessary expenses incurred by the Employee on behalf of the Company during
the period ending on the Termination Date, and (iii) bonuses and incentive
compensation (other than the Pro Rata Bonus and the Pro Rata Commission).
b. "Adequate Justification" shall mean the occurrence within one year
after a Change in Control of any of the following events or conditions: (I) a
material failure of the Company to comply with the terms of this Agreement,
(ii) any relocation of the Employee
8
<PAGE> 11
outside a 30-mile radius from the executive offices occupied by the Employee
prior to the Change in Control that is not approved by members of the Incumbent
Board (as defined in Section 16(I)), or (iii) other than as provided for
herein, any substantial diminution in the Employee's authority or the
Employee's responsibilities that is not approved by members of the Incumbent
Board.
c. "Base Amount" shall mean the greater of the Employee's annual base
salary (i) at the rate in effect on the Termination Date or (ii) at the highest
rate in effect at any time during the 90-day period prior to the Change in
Control, and shall include all amounts of his base salary that are deferred
under the qualified and non-qualified employee benefit plans of the Company or
any other agreement or arrangement.
d. "Bonus Amount" shall mean the most recent annual bonus paid or payable
to the Employee prior to the Termination Date or the annual bonus paid or
payable for the full fiscal year ended prior to the fiscal year during which a
Change in Control occurred (or, in each case, such lesser period for which
annual bonuses were paid or payable to the Employee).
e. "Business" shall mean the development, marketing or implementation of
core retail banking software directly or through a software service bureau to
the banking and financial industry, and any other related business which the
Company or any of its affiliates is engaged in as of the Termination Date.
f. "Bylaws" shall mean the Amended and Restated Bylaws of the Company, as
amended, supplemented or otherwise modified from time to time.
g. The termination of the Employee's employment shall be for "Cause" if it
is the result of:
(i) the commission or omission of an act by the
Employee of a willful or negligent act which causes harm to
the Company;
(ii) the conviction of the Employee for the
commission or perpetration by the Employee of any felony or
any act of fraud;
(iii) the failure of the Employee to devote his full time and
attention to the business as provided in Section 1; or
(iv) the failure of the Employee to perform his
duties hereunder in a manner satisfactory to the CEO and
President, as determined in their sole discretion;
provided, however, that the Employee shall have 30 days to
cure such failure after receiving notice from the Company.
The Company shall be obligated to provide only one notice
to Employee pursuant to this Section 16(g)(iv).
Thereafter, the Company may terminate the Employee, without
the Employee having a right to
9
<PAGE> 12
cure, if the Employee fails to perform his duties in a
manner satisfactory to the CEO and President, as
determined in their sole discretion.
h. "CEO" shall have the meaning set forth in the recitals.
i. A "Change in Control" shall mean the occurrence during the Term of any
of the following events after the Initial Public Offering:
(i) An acquisition (other than directly from
the Company) of any voting securities of the Company (the
"Voting Securities") by any "Person" (as the term person is
used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934 (the "1934 Act"))
immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of 40% or more of the combined voting
power of the Company's then outstanding Voting Securities;
provided, however, that in determining whether a Change in
Control has occurred, Voting Securities which are acquired
in a "Non-Control Acquisition" (as hereinafter defined)
shall not constitute an acquisition which would cause a
Change in Control. A "Non-Control Acquisition" shall mean
an acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (x) the Company or
(y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity
interest is owned directly or indirectly by the Company (a
"Subsidiary"), (2) the Company or any Subsidiary, or (3)
any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(ii) The individuals who, as of the date of the
Initial Public Offering, are members of the Board of
Directors of the Company (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board
of Directors; provided, however, that if the election, or
nomination for election by the Company's stockholders, of
any new director was approved by a vote of at least a
majority of the Incumbent Board, such new director shall,
for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent
Board if such individual initially assumed office as a
result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the 1934
Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the
Board of Directors (a "Proxy Contest") including
10
<PAGE> 13
by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(iii) Approval by stockholders of the Company of:
(A) A merger, consolidation or reorganization involving
the Company, unless
(1) the stockholders of the Company, immediately
before such merger, consolidation or
reorganization, own, directly or indirectly,
immediately following such merger, consolidation
or reorganization, at least a majority of the
combined voting power of the outstanding voting
securities of the corporation resulting from
such merger or consolidation or reorganization
(the "Surviving Corporation") in substantially
the same proportion as their ownership of the
Voting Securities immediately before such
merger, consolidation or reorganization, and
(2) the individuals who were members of the
Incumbent Board immediately prior to the
execution of the agreement providing for such
merger, consolidation or reorganization
constitute at least a majority of the members
of the board of directors of the Surviving
Corporation.
(A transaction described in clauses (1) and (2)
shall herein be referred to as a "Non-Control
Transaction").
(B) A complete liquidation or dissolution of the
Company; or
(C) An agreement for the sale or other disposition of
all or substantially all of the assets of the
Company to any Person (other than a transfer to a
Subsidiary).
(iv) Notwithstanding anything contained in this Agreement to
the contrary, if the Employee's employment is terminated
prior to a Change in Control and the Employee reasonably
demonstrates that such termination (A) was at the request
of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control
and who effectuates a Change in Control (a "Third Party")
or (B) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this
11
<PAGE> 14
Agreement, the date of a Change in Control with respect to
the Employee shall mean the date immediately prior to the
date of such termination of the Employee's employment.
j. "Commission Amount" shall mean the most recent annual commission paid
or payable to the Employee prior to the Termination Date or the annual
commission paid or payable for the full fiscal year ended prior to the fiscal
year during which a Change in Control occurred (or, in each case, such lesser
period for which annual commissions were paid or payable to the Employee).
k. "Competing Business" shall mean any business that, in whole or in part,
is the same or substantially the same as the Business.
l. "Confidential Business Information" shall mean any non-public
information of a competitively sensitive or personal nature, other than Trade
Secrets, acquired by the Employee, directly or indirectly, in connection with
the Employee's employment (including his employment with the Company prior to
the date of this Agreement), including (without limitation) oral and written
information concerning the Company or its affiliates relating to financial
position and results of operations (revenues, margins, assets, net income,
etc.), annual and long-range business plans, marketing plans and methods,
account invoices, oral or written customer information, and personnel
information. Confidential Business Information also includes information
recorded in manuals, memoranda, projections, minutes, plans, computer programs,
and records, whether or not legended or otherwise identified by the Company and
its affiliates as Confidential Business Information, as well as information
which is the subject of meetings and discussions and not so recorded; provided,
however, that Confidential Business Information shall not include information
that is generally available to the public, other than as a result of
disclosure, directly or indirectly, by the Employee, or was available to the
Employee on a non-confidential basis prior to its disclosure to the Employee.
m. "Continuation Period" shall have the meaning ascribed to it in Section
4(c)(iii).
n. "Disability" shall mean a physical or mental infirmity which impairs
the Employee's ability to substantially perform his duties with the Company for
a period of 180 consecutive days, as determined by an independent physician
selected with the approval of both the Company and the Employee.
o. "Effective Date" shall mean the date set forth in the recitals.
p. "Initial Public Offering" shall mean the closing of the first public
offering of the Company's common stock registered under the Securities Act of
1933.
12
<PAGE> 15
q. "Notice of Termination" shall mean a written notice of termination from
the Company or the Employee which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon, and
sets forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Employee's employment under the provision so
indicated.
r. "President" shall have the meaning ascribed to such term in Section 1.
s. "Plan" shall mean the 1995 Phoenix International Ltd., Inc. Employee
Stock Option Plan adopted by the Board of Directors on October 21, 1995.
t. "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number of days in the
fiscal year through the Termination Date and the denominator of which is 365.
u. "Pro Rata Commission" shall mean an amount equal to the Commission
Amount multiplied by a fraction the numerator of which is the number of days in
the fiscal year through the Termination Date and the denominator of which is
365.
v. "Stockholders Agreement" shall mean the Amended and Restated
Stockholders Agreement, dated August 31, 1995, by and among the Company and the
stockholders named therein, as amended, supplemented or otherwise modified from
time to time.
w. "Successors and Assigns" shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the Company
(including this Agreement), whether by operation of law or otherwise.
x. "Termination Date" shall mean, in the case of the Employee's death, his
date of death, and in all other cases, the date specified in the Notice of
Termination.
y. "Territory" shall mean that area specified on Exhibit A attached
hereto.
z. "Trade Secrets" shall mean any information, including but not limited
to technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing, a process, financial data,
financial plans, product plans, information on customers, or a list of actual
or potential customers or suppliers, which: (i) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
13
<PAGE> 16
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Employee has signed and sealed this Agreement, effective as of the date
first above written.
PHOENIX INTERNATIONAL LTD., INC.
ATTEST:
By: /s/ Ralph Reichard By: /s/ Bahram Yusefzadeh
----------------------------- ---------------------------------
Name: Ralph Reichard Name: Bahram Yusefzadeh
Title: President & COO Title: Chairman & CEO
(CORPORATE SEAL)
EMPLOYEE
/s/ RAJU M. SHIVDASANI
---------------------------------
RAJU M. SHIVDASANI
14
<PAGE> 17
EXHIBIT A
"TERRITORY"
United States
<PAGE> 1
EXHIBIT 11.1
PHOENIX INTERNATIONAL LTD., INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $ 351,450 $1,826,465 $ 492,976 $1,220,492
========== ========== ========== ==========
PRIMARY
Weighted average common stock outstanding 3,020,121 2,900,589 2,986,358 2,873,338
Effect of dilutive common stock equivalents
outstanding during the period (1) 365,818 101,594 245,753 104,797
Effect of common stock issued and stock
options granted during the 12-month period
preceding July 1, 1996 (3) -- 229,760 114,880 229,760
---------- ---------- ---------- ----------
Total common and common equivalent
shares 3,385,939 3,231,943 3,346,991 3,207,895
========== ========== ========== ==========
Primary net income per share $ 0.10 $ 0.57 $ 0.14 $ 0.38
========== ========== ========== ==========
FULLY DILUTED
Weighted average common stock outstanding 3,020,121 2,900,589 2,986,358 2,873,338
Effect of dilutive common stock equivalents
outstanding during the period (2) 411,638 101,594 294,030 104,797
Effect of common stock issued and stock
options granted during the 12-month period
preceding July 1, 1996 (3) -- 229,760 114,880 229,760
---------- ----------- ---------- ----------
Total common and common equivalent
shares 3,431,759 3,231,943 3,395,268 3,207,895
========== ========== ========== ==========
Fully diluted net income per share $ 0.10 $ 0.57 $ 0.14 $ 0.38
========== ========== ========== ==========
</TABLE>
- --------------------
(1) Based on the treasury stock method using average market price
(2) Based on the treasury stock method using the higher of the average or
period-end market price
(3) Pursuant to Securities and Exchange Commission
Staff Accounting Bulletin No. 83, common stock issued and stock
options granted at prices below the initial public offering price per
share during the 12-month period immediately preceding the initial
filing and through the effective date of the Registration Statement,
using the treasury stock method.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FROM FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 139,815
<SECURITIES> 0
<RECEIVABLES> 595,881
<ALLOWANCES> 10,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,648,172
<PP&E> 848,272
<DEPRECIATION> 280,222
<TOTAL-ASSETS> 3,758,508
<CURRENT-LIABILITIES> 3,630,744
<BONDS> 0
0
0
<COMMON> 1,854,420
<OTHER-SE> (1,726,656)
<TOTAL-LIABILITY-AND-EQUITY> 127,764
<SALES> 0
<TOTAL-REVENUES> 3,883,037
<CGS> 0
<TOTAL-COSTS> 1,236,058
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,056
<INCOME-PRETAX> 705,094
<INCOME-TAX> 212,118
<INCOME-CONTINUING> 492,976
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 492,976
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14
</TABLE>
