PHOENIX INTERNATIONAL LTD INC
PRE 14A, 1997-03-25
PREPACKAGED SOFTWARE
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<PAGE>   1
 
                                  SCHEDULE 14A
                                 (RULE 14A-101)
 
                    INFORMATION REQUIRED IN PROXY STATEMENT
 
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
 
Filed by the Registrant [X]
 
Filed by a Party other than the Registrant [ ]
 
Check the appropriate box:
 
<TABLE>
<S>                                            <C>
[X]  Preliminary Proxy Statement               [ ]  Confidential, for Use of the Commission
                                                    Only (as permitted by Rule 14a-6(e)(2))
[ ]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
 
                        PHOENIX INTERNATIONAL LTD., INC.
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
[X]  No fee required.
 
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
     (1)  Title of each class of securities to which transaction applies:
 
     (2)  Aggregate number of securities to which transaction applies:
 
     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
          filing fee is calculated and state how it was determined):
 
     (4)  Proposed maximum aggregate value of transaction:
 
     (5)  Total fee paid:
 
[ ]  Fee paid previously with preliminary materials:
 
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.
 
     (1)  Amount Previously Paid:
 
     (2)  Form, Schedule or Registration Statement No.:
 
     (3)  Filing Party:
 
     (4)  Date Filed:
<PAGE>   2
 
                        PHOENIX INTERNATIONAL LTD., INC.
                           500 INTERNATIONAL PARKWAY
                            HEATHROW, FLORIDA 32746
 
                                 April 4, 1997
 
TO OUR SHAREHOLDERS:
 
     You are cordially invited to attend the 1997 Annual Meeting of Shareholders
(the "Annual Meeting") of Phoenix International Ltd., Inc. (the "Company"). The
Annual Meeting will be held at the Company's Corporate Headquarters located at
500 International Parkway, Heathrow, Florida 32746 on Friday, May 16, 1997, at
10:00 a.m., local time. The attached Notice of Annual Meeting and Proxy
Statement describe the formal business expected to be transacted at the Annual
Meeting. In addition to the specific matters to be acted upon, there also will
be a report on the operations of the Company, and directors and officers of the
Company will be present to respond to your questions.
 
     Included with the Proxy Statement is a copy of the Company's Annual Report
to Shareholders. We encourage you to read the Annual Report. It includes the
Company's audited financial statements for the year ended December 31, 1996 as
well as information on the Company's operations, markets, products and services.
 
     Please use this opportunity to take part in the affairs of the Company by
voting on the business to come before this Annual Meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO MARK, SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. Returning the proxy
does NOT deprive you of your right to attend the Annual Meeting and to vote your
shares in person for the matters acted upon at the Annual Meeting.
 
     We look forward to seeing you at the Annual Meeting.
 
                                          Sincerely,
 
                                          Bahram Yusefzadeh
                                          Chairman of the Board of Directors
                                          and Chief Executive Officer
<PAGE>   3
 
                        PHOENIX INTERNATIONAL LTD., INC.
                           500 INTERNATIONAL PARKWAY
                            HEATHROW, FLORIDA 32746
 
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                       TO BE HELD ON FRIDAY, MAY 16, 1997
 
TO OUR SHAREHOLDERS:
 
     NOTICE IS HEREBY GIVEN THAT the 1997 Annual Meeting of Shareholders (the
"Annual Meeting") of Phoenix International Ltd., Inc., a Florida corporation
(the "Company"), will be held at the Company's Corporate Headquarters located at
500 International Parkway, Heathrow, Florida 32746 on Friday, May 16, 1997, at
10:00 a.m., local time, for the following purposes:
 
          1. to elect three Class I directors to serve for three-year terms;
 
          2. to consider and act upon the proposal to amend the Company's 1995
     Stock Option Plan, effective as of October 21, 1995, to increase the shares
     reserved for issuance thereunder from 250,000 to 500,000;
 
          3. to consider and take action on the proposal to amend the Amended
     and Restated Articles of Incorporation to increase the authorized capital
     stock; and
 
          4. to transact such other business as may properly come before the
     Annual Meeting or any adjournment thereof.
 
     Only shareholders of record at the close of business on March 24, 1997 are
entitled to notice of, and to vote at, the Annual Meeting and at any
continuation or adjournment thereof. In accordance with the Florida Business
Corporation Act (the "Florida Law"), a list of shareholders entitled to vote at
the Annual Meeting shall be open to the examination of any shareholder, his
agent or attorney for any purpose germane to the Annual Meeting upon written
notice, all as provided by the Florida Law, during regular business hours at the
Company's Corporate Headquarters located at 500 International Parkway, Heathrow,
Florida 32746, from May 6, 1997 to May 16, 1997, and the list shall be available
for inspection at the Annual Meeting by any shareholder that is present.
 
                                              By Order of the Board of
                                              Directors,
 
                                              GLENN W. STURM
                                              General Counsel and Secretary
 
Heathrow, Florida
April 4, 1997
 
     WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE AS PROMPTLY AS POSSIBLE.
<PAGE>   4
                                                        [PRELIMINARY COPY]


 
                        PHOENIX INTERNATIONAL LTD., INC.
                           500 INTERNATIONAL PARKWAY
                            HEATHROW, FLORIDA 32746
 
                     PROXY STATEMENT FOR ANNUAL MEETING OF
                SHAREHOLDERS TO BE HELD ON FRIDAY, MAY 16, 1997
 
     This Proxy Statement and the accompanying Notice of Annual Meeting and
Proxy Card are being furnished to the shareholders of Phoenix International
Ltd., Inc., a Florida corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors (the "Board") of the Company
for use at the 1997 Annual Meeting of Shareholders (the "Annual Meeting"). The
Annual Meeting will be held on Friday, May 16, 1997 at 10:00 a.m., local time,
at the Company's Corporate Headquarters located at 500 International Parkway,
Heathrow, Florida 32746.
 
VOTING RIGHTS AND VOTES REQUIRED
 
     All shareholders of record of the Company's common stock, par value $0.01
per share (the "Common Stock"), on March 24, 1997, the record date, will be
entitled to vote at the Annual Meeting or any continuation or adjournment
thereof. At the close of business on the record date, the Company had 3,862,721
shares of Common Stock outstanding and entitled to vote. A majority of the
outstanding shares of Common Stock will constitute a quorum for the transaction
of business at the Annual Meeting. Each holder of record of Common Stock on the
record date is entitled to one vote for each share of Common Stock so held on
each matter to be voted upon at the Annual Meeting. This Proxy Statement and the
accompanying Notice of Annual Meeting, Proxy Card and the Company's Annual
Report to Shareholders were first mailed to the shareholders on or about April
4, 1997.
 
     The three directors to be elected at the Annual Meeting will be elected by
the affirmative vote of the holders of a plurality of the shares of Common Stock
represented at the Annual Meeting in person or by proxy. Because the directors
will be elected by a plurality vote (i.e., the three persons receiving the
highest number of favorable votes will be elected) and assuming such election is
uncontested, votes withheld from any one or more nominees will not have any
effect on the outcome of the election of directors.
 
     Approval and ratification of the amendment to the Company's 1995 Stock
Option Plan, effective as of October 21, 1995 (the "October Plan"), and actions
with respect to any other matter that may properly come before the Annual
Meeting (other than the approval of the proposal to amend the Amended and
Restated Articles of Incorporation as described below) will require the
affirmative vote of the holders of a majority of the shares of Common Stock
represented at the Annual Meeting in person or by proxy and entitled to vote on
the matter. The affirmative vote of the holders of a majority of the shares of
Common Stock outstanding will be required to approve the amendment to the
Amended and Restated Articles of Incorporation. Abstentions will be counted in
determining the total number of shares present and entitled to vote on each such
proposal. Accordingly, although not counted as a vote "for" or "against" a
proposal, an abstention on any such proposal will have the same effect as a vote
"against" that proposal.
 
APPOINTMENT AND REVOCATION OF PROXIES
 
     The Board has designated Bahram Yusefzadeh and Ralph H. Reichard, and each
or either of them, as proxies to vote the shares of Common Stock solicited on
its behalf. If the Proxy Card is executed and returned, it may nevertheless be
revoked at any time before it has been exercised by: (i) giving written notice
to the Secretary of the Company; (ii) delivery of a properly completed later
dated proxy; or (iii) attending the Annual Meeting and voting in person. Such
notice or later proxy will not affect a vote on any matter taken prior to the
receipt thereof by the Company or its transfer agent. The mere presence at the
Annual Meeting of the shareholder who has appointed a proxy will not revoke the
prior appointment. If not revoked, the proxy will be voted at the Annual Meeting
in accordance with the instructions indicated on the Proxy Card by the
shareholder or, if no instructions are indicated, will be voted FOR the slate of
directors described herein, FOR
<PAGE>   5
 
the proposal to amend the Company's October Plan, FOR the proposal to amend the
Amended and Restated Articles of Incorporation, and as to any other matter that
may be properly brought before the Annual Meeting, in accordance with the
judgment of the proxy holders.
 
EXPENSES OF SOLICITATION
 
     The expense of soliciting proxies will be borne by the Company. The Company
does not expect to pay any compensation for the solicitation of proxies but may
reimburse brokers and other persons holding stock in their names, or in the
names of nominees, for their expenses for sending proxy material to principals
and obtaining their proxies. Certain directors, officers and other employees of
the Company, without additional compensation, may use their personal efforts, by
personal interview, telephone, facsimile or otherwise, to obtain proxies in
addition to solicitation by mail.
 
                     PROPOSAL NO. 1: ELECTION OF DIRECTORS
 
     At the Annual Meeting, the shareholders will elect three Class I directors
to hold office for three-year terms or until successors have been elected and
qualified or until any such director's earlier resignation or removal. Each
nominee is presently available for election and is a member of the Board. If any
nominee should become unavailable, which is not now anticipated, the persons
voting the accompanying proxy may in their discretion vote for a substitute. The
following table sets forth the name and age of each person nominated for
election as a director; the principal occupation, business or employment of the
nominee during the last five years, all other positions with the Company now
held by the nominee and the name of any publicly-traded corporation of which the
nominee is a director; and the date on which the nominee first became a director
of the Company.
 
     THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE NOMINATED
DIRECTORS.
 
<TABLE>
<CAPTION>
                                              POSITIONS WITH THE COMPANY;
                                             PRINCIPAL OCCUPATIONS DURING                DIRECTOR OF
                                                PAST FIVE YEARS; OTHER                       THE
NAME (AGE)                                           DIRECTORSHIPS                      COMPANY SINCE
- ----------                                   ----------------------------               -------------
<S>                              <C>                                                    <C>
Ruann F. Ernst (50)............  General Manager -- Financial Services Business Unit        1996
                                 of Hewlett-Packard Company since 1995; Marketing
                                 Manager for financial industry and process, retail
                                 and oil and gas industries for Hewlett-Packard
                                 Company from 1993 to 1995; Director of Strategic
                                 Business for Hewlett-Packard's multiuser Unix product
                                 line from 1991 to 1993.

William C. Hess (60)...........  President of Iowa Savings Bank since 1984; chairman        1993
                                 of the board of Sac City State Bank since 1981;
                                 director of Audubon State Bank, Iowa Savings Bank,
                                 Perry State Bank, Raccoon Valley State Bank and Home
                                 State Bank; past director of Shazam, Inc., the Iowa
                                 Bankers Mortgage Association, and Iowa Bankers
                                 Association; past member of the board of directors of
                                 the Iowa Department of Banking.

O. Jay Tomson (60).............  Chairman of the Board of the Company from August 1993      1993
                                 to February 1994; chairman of the board and chief
                                 executive officer of First Citizens National Bank
                                 since 1974; chairman of the board of First Citizens
                                 Financial Corporation since 1977; director of Seilon,
                                 Inc.; member of the Board of Directors of the Federal
                                 Reserve Bank of Chicago from 1980 to 1986; former
                                 director and president of Shazam, Inc.
</TABLE>
 
                                        2
<PAGE>   6
 
DIRECTOR COMPENSATION
 
     In June 1996, the Company adopted and the shareholders approved the Phoenix
International Ltd., Inc. 1996 Director Stock Option Plan (the "1996 Director
Plan"). The 1996 Director Plan provides for the granting of non-qualified stock
options to the directors of the Company. The 1996 Director Plan authorizes the
issuance of up to 99,000 shares of Common Stock pursuant to options having an
exercise price equal to the fair market value of the Common Stock on the date of
grant. The 1996 Director Plan contains provisions providing for adjustment of
the number of shares available for option and subject to unexercised options in
the event of stock splits, dividends payable in Common Stock, business
combinations or certain other events affecting the Common Stock. The Board
administers the 1996 Director Plan subject to certain limitations.
 
     The 1996 Director Plan provides for the grant of options to purchase 2,000
shares to each director of the Company on the date of such director's election
to the Board and on the anniversary date of such election and 1,000 shares of
Common Stock to each non-employee director of the Company on the date of such
director's election to a committee of the Board at an exercise price equal to
the fair market value of the Common Stock on the date the options are granted.
Each option shall be exercisable in full beginning six months after the date of
grant and shall expire five years after the date of grant, unless canceled
sooner as a result of termination of service or death, unless such option is
fully exercised prior to the end of the option period. As of February 28, 1997,
options to acquire 30,000 shares of Common Stock were outstanding under the 1996
Director Plan.
 
     In addition, the Company has paid all travel expenses and reimbursed the
directors for their out of pocket expenses related to their services as
directors. Directors do not receive cash fees for their services as directors of
the Company.
 
BOARD MEETINGS AND COMMITTEES
 
     The Board met or acted by written consent nine times during the fiscal year
ended December 31, 1996. Standing committees of the Board currently include: an
Executive Committee, an Audit Committee, and a Compensation and Stock Option
Committee. Each director attended at least 75% of all Board and relevant
committee meetings during the year ended December 31, 1996, except that Ms.
Ernst attended one of three meetings subsequent to her appointment to the Board
in July 1996.
 
     Messrs. Fenton, Holly, Reichard and Yusefzadeh are presently the members of
the Executive Committee. The Executive Committee met or acted by written consent
four times during the year ended December 31, 1996. The Executive Committee is
vested with all the powers of the Board, except that the Executive Committee
cannot take action to: (i) approve or recommend to shareholders actions or
proposals required by the Florida Business Corporation Act (the "Florida Law")
to be approved by the shareholders; (ii) fill vacancies on the Board or any
committee thereof; (iii) adopt, amend or repeal the Amended and Restated Bylaws
(the "Bylaws"); (iv) authorize or approve the reacquisition of shares; (v)
authorize or approve the issuance or sale or contract for the sale of shares, or
determine the designation and relative rights, preferences and limitations of a
voting group; and (vi) take any other action not permitted to be delegated to a
committee under the Florida Law or the Bylaws.
 
     The Executive Committee also acts as the nominating committee of the Board.
The Executive Committee recommends qualified candidates for election as officers
and directors of the Company. Shareholders who wish to recommend candidates for
consideration by the Board may do so by writing to the Secretary of the Company,
which notice must be received by the Company not less than 90 days prior to the
anniversary of the previous year's annual meeting and must provide the
candidate's name, biographical data and qualifications in accordance with the
Bylaws.
 
     Messrs. Fenton (Chairman), Holly, Murphy and Sturm are presently the
members of the Audit Committee. The Audit Committee met once during the year
ended December 31, 1996. The principal functions of the Audit Committee are
reviewing the Company's internal controls and the objectivity of its financial
reporting, making recommendations regarding the Company's employment of
independent auditors and reviewing the annual audit with the auditors.
 
                                        3
<PAGE>   7
 
     Messrs. Fenton, Holly (Chairman) and Yusefzadeh (non-voting member) are
presently the members of the Compensation and Stock Option Committee. Neither
Mr. Fenton nor Mr. Holly has been an officer or an employee of the Company at
any time. The Compensation and Stock Option Committee met or acted by written
consent four times during the year ended December 31, 1996. The functions of the
Compensation and Stock Option Committee are to review and set the compensation
of the Company's Chief Executive Officer and certain of its most highly
compensated officers, including salaries, bonuses and other incentive plans,
stock options and other forms of compensation, and to administer the Phoenix
International Ltd., Inc. 1995 Employee Stock Option Plan, effective as of March
18, 1995 (the "March Plan"), and the October Plan. Mr. Yusefzadeh does not vote
on any matter placed before the Compensation and Stock Option Committee. See
"Report of the Compensation and Stock Option Committee on Executive
Compensation."
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The following table sets forth certain information, as of February 28, 1997
with respect to the beneficial ownership of the Common Stock by: (i) each
director; (ii) each executive officer named in the Summary Compensation Table;
(iii) each shareholder known by the Company to be a beneficial owner of more
than 5% of the Common Stock; and (iv) all executive officers and directors as a
group. Unless otherwise indicated, each of the shareholders listed below
exercises sole voting and dispositive power over the shares.
 
<TABLE>
<CAPTION>
                                                                 SHARES BENEFICIALLY
                                                                        OWNED
                                                              -------------------------
NAME                                                           NUMBER        PERCENT(1)
- ----                                                          ---------      ----------
<S>                                                           <C>            <C>
Bahram Yusefzadeh(2)........................................  1,095,416         28.0
SAFECO Corporation(3).......................................    313,300          8.1
SAFECO Asset Management Company(4)..........................    213,300          5.5
Yusefzadeh Family Limited Partnership(5)....................    236,861          6.1
Ronald E. Fenton(6).........................................    225,071          5.8
BancSecurity Corporation(7).................................    204,293          5.3
James C. Holly(8)...........................................    202,120          5.2
Ralph H. Reichard(9)........................................    150,966          3.8
Michael R. Newes(10)........................................    146,909          3.8
William C. Hess(11).........................................    134,735          3.5
Paul A. Jones(12)...........................................     69,943          1.8
O. Jay Tomson(13)...........................................     55,431          1.4
Glenn W. Sturm(14)..........................................     41,232          1.1
Gerald P. Nissen(15)........................................     36,101         *
J. Michael Murphy(16).......................................     34,849         *
Clay E. Scarborough(17).....................................     23,231         *
Jack A. Blaine(18)..........................................      2,000         *
Ruann F. Ernst(18)..........................................      2,000         *
All directors and executive officers as a group (17
  persons)..................................................  2,322,211         55.4
</TABLE>
 
- ---------------
 
   * Indicates less than 1%.
 (1) For purposes of this table, a person or group of persons is deemed to have
     "beneficial ownership" of any shares that such person or group has the
     right to acquire within 60 days after February 28, 1997 or with respect to
     which such person otherwise has or shares voting or investment power. For
     purposes of computing the percentages of outstanding shares held by each
     person or group of persons on a given date, shares which such person or
     group has the right to acquire within 60 days after such date are deemed to
     be outstanding for purposes of computing the percentage for such person or
     group but are not deemed to be outstanding for the purpose of computing the
     percentage of any other person or group.
 (2) Mr. Yusefzadeh's address is c/o Phoenix International Ltd., Inc., 500
     International Parkway, Heathrow, Florida 32746. Includes: (i) 812,184
     shares held in his name; (ii) 236,861 held by the Yusefzadeh Family Limited
     Partnership (the "Yusefzadeh Partnership") of which Mr. Yusefzadeh is the
     general partner; (iii) options to acquire 44,139 and 2,000 shares that are
     currently exercisable at exercise prices
 
                                        4
<PAGE>   8
 
     of $4.74 and $12.00, respectively, per share; and (iv) 232 shares held by
     his daughter. Mr. Yusefzadeh disclaims beneficial ownership with respect to
     his daughter's shares.
 (3) As reported by SAFECO Corporation ("Safeco") in a Statement on Schedule 13G
     filed with the Securities and Exchange Commission (the "Commission"). In
     its Statement on Schedule 13G, Safeco reports that it is a holding company
     for SAFECO Asset Management Company ("Safeco Management"), a registered
     investment advisor to several investment companies. As a result of its
     ownership of Safeco Management, Safeco may be deemed to be the beneficial
     owner of the shares of the Company's Common Stock managed by Safeco
     Management. Safeco specifically disclaims ownership over these shares of
     Common Stock. Safeco's address is SAFECO Plaza, Seattle, Washington 98185.
 (4) As reported by Safeco Management in a Statement on Schedule 13G filed with
     the Commission. As a result of its role as an investment advisor, Safeco
     Management may be deemed to be the beneficial owner of the shares of the
     Company's Common Stock held on behalf of its clients. Safeco Management
     specifically disclaims ownership over these shares of Common Stock. SAFECO
     Management's address is SAFECO Plaza, Seattle, Washington 98185.
 (5) The Yusefzadeh Partnership's address is c/o Bahram Yusefzadeh, Phoenix
     International Ltd., Inc. 500 International Parkway, Heathrow, Florida
     32746. The Yusefzadeh Partnership disclaims beneficial ownership with
     respect to all shares held by Mr. Yusefzadeh other than through the
     Yusefzadeh Partnership.
 (6) Mr. Fenton's address is c/o Security Bank, 11 North First Avenue,
     Marshalltown, Iowa 50158. Includes: (i) 11,940 shares held by Mr. Fenton
     and his wife, as joint tenants; (ii) 3,838 shares held by his individual
     retirement account; (iii) options to acquire 2,000 and 3,000 shares that
     are currently exercisable at exercise prices of $12.00 and $15.25,
     respectively, per share; and (iv) 204,293 shares held in the name of
     BancSecurity Corporation. Mr. Fenton is the president, chief executive
     officer and a director of BancSecurity Corporation. Mr. Fenton disclaims
     beneficial ownership of the shares held by BancSecurity Corporation.
 (7) BancSecurity Corporation's address is 11 North First Avenue, Marshalltown,
     Iowa 50158. BancSecurity Corporation disclaims beneficial ownership with
     respect to Mr. Fenton's shares.
 (8) Mr. Holly's address is 86 North Main Street, Porterville, California 93258.
     Includes: (i) 11,062 shares held in his name; (ii) options to acquire 2,000
     and 3,000 shares that are currently exercisable at exercise prices of
     $12.00 and $15.25, respectively, per share; and (iii) 186,058 shares held
     in the name of Bank of the Sierra. Mr. Holly is the president, chief
     executive officer and a director of Bank of the Sierra. Mr. Holly disclaims
     beneficial ownership of the shares held by Bank of the Sierra.
 (9) Includes: (i) 6,969 shares held in Mr. Reichard's name; (ii) 16,262 shares
     held by his individual retirement account; (iii) options to acquire 96,410
     and 2,000 shares that are currently exercisable at exercise prices of $4.30
     and $12.00, respectively, per share; and (iv) 29,325 shares held by his
     wife. Mr. Reichard disclaims beneficial ownership with respect to his
     wife's shares.
(10) Includes: (i) 106,952 shares held in Mr. Newes' name; (ii) 26,019 shares
     held by his individual retirement account; and (iii) options to acquire
     13,938 shares that are currently exercisable at an exercise price of $4.30
     per share.
(11) Includes: (i) 25,196 shares held in Mr. Hess' name; (ii) 5,111 shares held
     by his individual retirement account; (iii) options to acquire 9,292 and
     2,000 shares held in his name that are currently exercisable at exercise
     prices of $4.30 and $12.00, respectively, per share; (iv) 84,286 shares
     held in the name of Community Grain Corporation, of which he is secretary
     and treasurer and over which he shares voting and dispositive power; (v)
     2,950 shares held in the name of Dallas Investment Company, of which he is
     president and director; (vi) 2,950 shares held in the name of Perry
     Investment Company, of which he is president, director and chairman; and
     (vii) 2,950 shares held in the name of Sac City Limited, of which he is
     president, secretary, treasurer and a director. Mr. Hess is the president
     of Iowa Savings Bank and chairman of the board of Sac City Sate Bank. Mr.
     Hess disclaims beneficial ownership of the shares of Common Stock described
     in clauses (iv)-(vii) above.
(12) Includes: (i) options to acquire 9,292 and 2,000 shares held by Mr. Jones
     that are currently exercisable at exercise prices of $4.30 and $12.00,
     respectively, per share; and (ii) 58,651 shares held in the name of
 
                                        5
<PAGE>   9
 
     Cummins-American Corporation. Mr. Jones is a director of Cummins-American
     Corporation, and he and his immediate family control 94% of the voting
     stock of Cummins-American Corporation. Mr. Jones disclaims beneficial
     ownership of the shares held by Cummins-American Corporation.
(13) Includes: (i) 11,000 shares held in Mr. Tomson's name; (ii) options to
     acquire 2,000 shares that are currently exercisable at an exercise price of
     $12.00 per share; (iii) 34,431 shares held in the name of the First
     Citizens National Bank Charitable Foundation; and (iv) 8,000 shares held in
     the name of Kanabec Credit Corporation. Mr. Tomson is a director of the
     First Citizens National Bank Charitable Foundation and owns a controlling
     interest in Kanabec Credit Corporation. Mr. Tomson disclaims beneficial
     ownership of the shares held by these entities.
(14) Includes: (i) 11,616 shares held in Mr. Sturm's name; (ii) options to
     acquire 11,616, 2,000 and 1,000 shares that are currently exercisable at
     exercise prices of $4.30, $12.00 and $15.25, respectively, per share; and
     (iii) options to acquire 15,000 shares from Mr. Yusefzadeh that are
     currently exercisable at an exercise price of $17.00 per share.
(15) Includes: (i) 2,323 shares held in Mr. Nissen's name; and (ii) options to
     acquire 33,778 shares that are currently exercisable at exercise prices
     ranging from $4.30 to $12.00 per share.
(16) Includes: (i) 22,567 shares held in the name of Murphy Family Partners; and
     (ii) options to acquire 9,292, 2,000 and 1,000 shares that are currently
     exercisable at exercise prices of $4.30, $12.00 and $15.25, respectively,
     per share. Mr. Murphy is the trust protector of Murphy Family Partners and
     exercises sole voting and dispositive power over the shares held by Murphy
     Family Partners.
(17) Includes options to acquire 23,231 shares that are currently exercisable at
     an exercise price of $6.46 per share.
(18) Includes options to acquire 2,000 shares that are currently exercisable at
     an exercise price of $12.75 per share.
 
EXECUTIVE COMPENSATION
 
     The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years indicated to the Company's Chief
Executive Officer and the four most highly compensated executive officers whose
total salary and bonus exceeded $100,000 (collectively, the "Named Executive
Officers") during the year ended December 31, 1996. The Company did not grant
any stock appreciation rights or make any long-term incentive plan payouts
during the periods shown.
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                                LONG-TERM
                                                                              COMPENSATION
                                            ANNUAL COMPENSATION                  AWARDS
                                  ----------------------------------------   ---------------
                                                                 OTHER         SECURITIES
                                                                 ANNUAL        UNDERLYING         ALL OTHER
                        YEAR(1)   SALARY ($)   BONUS ($)(2)   COMPENSATION   OPTIONS/SARS(3)   COMPENSATION ($)
                        -------   ----------   ------------   ------------   ---------------   ----------------
<S>                     <C>       <C>          <C>            <C>            <C>               <C>
Bahram Yusefzadeh.....   1996      196,544       100,000         10,656(4)        2,000             10,871(5)
  Chairman of the
     Board               1995      194,795        19,000             --          78,985              7,538(6)
  and Chief Executive    1994      160,000        30,000(7)          --          22,567              5,847(8)
  Officer

Ralph H. Reichard.....   1996      150,000        80,000             --           2,000              1,777(9)
  President and Chief    1995      140,000            --             --          90,601                 --
  Operating Officer      1994           --            --             --          58,078                 --

Michael R. Newes......   1996      110,000        15,819(10)         --              --                 --
  Senior Vice
     President           1995      107,436        36,474(11)         --          18,584                 --
  of Worldwide           1994      100,000         4,000(12)         --          45,797                400(13)
  Marketing

Gerald P. Nissen......   1996      113,333        30,000                         18,485                 --
  Senior Vice
     President           1995      100,833            --             --          43,094                 --
  of Technology
     Services            1994           --                           --              --                 --
</TABLE>
 
                                        6
<PAGE>   10
 
<TABLE>
<CAPTION>
                                                                                LONG-TERM
                                                                              COMPENSATION
                                            ANNUAL COMPENSATION                  AWARDS
                                  ----------------------------------------   ---------------
                                                                 OTHER         SECURITIES
                                                                 ANNUAL        UNDERLYING         ALL OTHER
                        YEAR(1)   SALARY ($)   BONUS ($)(2)   COMPENSATION   OPTIONS/SARS(3)   COMPENSATION ($)
                        -------   ----------   ------------   ------------   ---------------   ----------------
<S>                      <C>        <C>           <C>            <C>             <C>                    <C>
Clay E. Scarborough...   1996       85,500        42,000         26,850(14)      46,462                 --
  Senior Vice President  1995           --            --             --              --                 --
   and Chief Financial   1994           --            --             --              --                 --
     Officer                                      
</TABLE>
 
- ---------------
 
 (1) During 1995, the Company changed its fiscal year end from January 31 to
     December 31. Accordingly, the information reported for 1995 is for the
     eleven months ended December 31, 1995 and the information reported for 1994
     is for the twelve months ended January 31, 1995.
 (2) Bonuses for each year include amounts earned for that year, even if paid in
     the subsequent year, and exclude bonuses paid during that year but earned
     for a prior year.
 (3) All figures in this column reflect options to purchase shares of Common
     Stock.
 (4) Represents automobile lease payments paid by the Company for Mr.
     Yusefzadeh.
 (5) Includes $6,076 for long-term disability premiums paid by the Company,
     $1,584 for term life insurance paid by the Company for Mr. Yusefzadeh's
     beneficiaries and $3,211 for health insurance premiums paid by the Company
     for Mr. Yusefzadeh's dependents.
 (6) Includes $2,887 for long-term disability premiums paid by the Company,
     $1,824 for term life insurance premiums paid by the Company for Mr.
     Yusefzadeh's beneficiaries and $2,827 for health insurance premiums paid by
     the Company for Mr. Yusefzadeh's dependents.
 (7) Represents a bonus approved by the Board as reimbursement for expenses
     incurred by Mr. Yusefzadeh for expenses related to the start-up of the
     Company.
 (8) Includes $3,803 for health insurance premiums paid by the Company, $1,644
     for life insurance premiums paid by the Company for Mr. Yusefzadeh's
     beneficiaries and $400 for Mr. Yusefzadeh's imputed cost of excess life
     insurance.
 (9) Represents health insurance premiums paid by the Company for Mr. Reichard's
     dependent.
(10) Reflects an incentive-based commission of which $10,725 was earned and paid
     in 1996 and $5,094 was earned in 1996 and paid in 1997.
(11) Reflects an incentive-based commission paid for fiscal 1995.
(12) Reflects a bonus earned in fiscal 1994 but paid in fiscal 1995.
(13) Represents imputed cost of excess life insurance.
(14) Represents a relocation allowance grossed up for taxes.
 
                                        7
<PAGE>   11
 
OPTION GRANTS IN LAST FISCAL YEAR
 
     The following table sets forth information concerning each grant of stock
options to each of the Named Executive Officers during year ended December 31,
1996.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 
<TABLE>
<CAPTION>
                                               INDIVIDUAL GRANTS
                              ---------------------------------------------------
                                              PERCENT OF                             POTENTIAL REALIZABLE VALUE
                               NUMBER OF        TOTAL                                 AT ASSUMED ANNUAL RATES
                              SECURITIES       OPTIONS      EXERCISE                OF STOCK PRICE APPRECIATION
                              UNDERLYING      GRANTED TO    OR BASE                      FOR OPTION TERM(1)
                                OPTIONS      EMPLOYEES IN    PRICE     EXPIRATION   ----------------------------
                              GRANTED(#)     FISCAL YEAR     ($/Sh)       DATE         5%($)           10%($)
                              -----------    ------------   --------   ----------   -----------      -----------
<S>                           <C>            <C>            <C>        <C>          <C>              <C>
Bahram Yusefzadeh...........     2,000(2)         0.8%       $12.00       2001         $  6,624         $ 14,664
Ralph H. Reichard...........     2,000(2)         0.8         12.00       2001            6,624           14,664
Michael R. Newes............        --             --            --         --               --               --
Gerald P. Nissen............     3,485(3)         1.3          6.46       2003            7,675           17,489
                                15,000(4)         5.8         12.00       2006          113,184          286,866
Clay E. Scarborough.........    46,462(5)        17.9          6.46       2006          188,731          478,340
</TABLE>
 
- ---------------
 
(1) The 5% and 10% assumed annual rates of compounded stock price appreciation
    are mandated by rules of the Commission. There can be no assurance provided
    to any executive officer or any other holder of the Company's securities
    that the actual stock price appreciation over the term will be at the
    assumed 5% and 10% levels or at any other defined level. Unless the market
    price of the Common Stock appreciates over the option term, no value will be
    realized from the option grants made to the Named Executive Officers.
(2) Options were granted at the fair market value of the Common Stock on the
    date of grant as determined by the Board. Represents director stock options
    that are fully vested.
(3) Options were granted at the fair market value of the Common Stock on the
    date of grant as determined by the Board. Represents incentive stock options
    which were granted on March 6, 1996 and vest ratably on each of March 6,
    1996, 1997 and 1998.
(4) Options were granted at the fair market value of the Common Stock on the
    date of grant as determined by the Board. Represents incentive stock options
    which were granted on June 28, 1996 and vest ratably on each of February 1,
    1997, 1998, 1999 and 2000.
(5) Options were granted at the fair market value of the Common Stock on the
    date of grant as determined by the Board. Represents incentive stock options
    which were granted on March 6, 1996 and vest ratably on each of March 6,
    1996, 1997, 1998 and 1999.
 
                                        8
<PAGE>   12
 
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
 
     The following table sets forth the number of options exercised and the
value realized on such exercises during the year ended December 31, 1996 and the
value of options held by the Named Executive Officers as of December 31, 1996.
 
             AGGREGATE OPTION/SAR EXERCISE IN LAST FISCAL YEAR AND
                         FISCAL YEAR-END OPTION VALUES
 
<TABLE>
<CAPTION>
                                                              NUMBER OF UNEXERCISED         VALUE OF UNEXERCISED
                                                              SECURITIES UNDERLYING             IN-THE-MONEY
                                                             OPTIONS AT FISCAL YEAR           OPTIONS AT FISCAL
                                SHARES                               END(#)                    YEAR END($)(1)
                               ACQUIRED         VALUE      ---------------------------   ---------------------------
           NAME             ON EXERCISE(#)   REALIZED($)   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
           ----             --------------   -----------   -----------   -------------   -----------   -------------
<S>                         <C>              <C>           <C>           <C>             <C>           <C>
Bahram Yusefzadeh.........          --              --       28,716         52,269        $344,849       $654,147
Ralph H. Reichard.........          --              --       72,274         55,174         920,230        714,755
Michael R. Newes..........      45,797        $487,424       11,615          6,969         150,360         90,217
Gerald P. Nissen..........          --              --       18,702         40,553         239,605        404,545
Clay E. Scarborough.......          --              --       11,616         34,846         125,374        376,100
</TABLE>
 
- ---------------
 
(1) The closing price of the Common Stock on The Nasdaq Stock Market's National
    Market on December 31, 1996 was $17.25 per share.
 
EMPLOYMENT AGREEMENTS
 
     Effective December 28, 1995, Bahram Yusefzadeh and the Company entered into
an employment agreement (the "Yusefzadeh Agreement") pursuant to which he serves
as the Company's Chairman of the Board and Chief Executive Officer. Mr.
Yusefzadeh's current annual base salary is $210,800, plus incentive compensation
as determined by the Compensation and Stock Option Committee based upon
achievement of targeted levels of performance and such other criteria as such
Committee shall establish from time to time, and an additional bonus as
determined by such Committee. In addition, the Yusefzadeh Agreement provides for
Mr. Yusefzadeh to receive health insurance for himself and his dependents, long
term disability insurance, civic and social club dues and use of an automobile
owned or leased by the Company. If Mr. Yusefzadeh's employment is terminated by
the Company in breach of the Yusefzadeh Agreement or if Mr. Yusefzadeh
terminates the Yusefzadeh Agreement within certain dates after a change in
control (as defined therein), the Company must pay Mr. Yusefzadeh one-twelfth of
his annual base salary and bonus for each of the 36 consecutive 30-day periods
following the termination and must continue Mr. Yusefzadeh's life and health
insurance until he reaches age 65. In such case of termination, Mr. Yusefzadeh's
outstanding options to purchase Common Stock would vest and become immediately
exercisable. The Yusefzadeh Agreement has a term of three years and renews daily
until either party fixes the remaining term at three years by giving written
notice.
 
     On December 28, 1995, Ralph Reichard and the Company entered into an
employment agreement (the "Reichard Agreement") pursuant to which he serves as
the Chief Operating Officer and President of the Company. Mr. Reichard's current
annual base salary is $155,000, plus incentive compensation as determined by the
Compensation and Stock Option Committee based upon achievement of targeted
levels of performance and such other criteria as such Committee shall establish
from time to time, and an additional bonus as determined by such Committee. In
addition, the Reichard Agreement provides for Mr. Reichard to receive health
insurance for himself and his dependents, civic and social club dues and use of
an automobile owned or leased by the Company. If Mr. Reichard's employment is
terminated by the Company in breach of the Reichard Agreement or if Mr. Reichard
terminates the Reichard Agreement within certain dates after a change in control
(as defined therein), the Company must pay Mr. Reichard one-twelfth of his
annual base salary and bonus for each of the 36 consecutive 30-day periods
following the termination and must continue Mr. Reichard's life and health
insurance until he reaches age 65. In such case of termination, Mr. Reichard's
outstanding options to purchase Common Stock would vest and become immediately
exercisable. The
 
                                        9
<PAGE>   13
 
Reichard Agreement has a term of three years and renews daily until either party
fixes the remaining term at three years by giving written notice.
 
     The Company has entered into employment agreements with Messrs. Boughton,
Newes, Nissen, Scarborough and Shivdasani and Ms. Soifer (collectively, the
"Other Agreements"). Generally the Other Agreements provide for a minimum base
salary per year, and a bonus as determined by the Chief Executive Officer and
President based upon achievement of targeted levels of performance and such
other criteria as they shall establish from time to time. The agreements for
Messrs. Boughton, Newes and Shivdasani contain provisions for commission
compensation paid in accordance with a commission plan established each year by
the Chief Executive Officer and President. The Other Agreements contain a
provision that provides that the employee will receive insurance. Each of the
Other Agreements, except for Mr. Scarborough's, have a term of one year and
renews daily until either party fixes the remaining term at one year by giving
written notice. The term of Mr. Scarborough's agreement is 18 months. If the
employee's employment is terminated by the Company for any reason within one
year after a change in control or if the employee terminates the agreement with
adequate justification, the Company must pay the employee one-twelfth of his
annual base salary and bonus for each of 36 consecutive 30-day periods following
the termination.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The Compensation and Stock Option Committee of the Board was formed on
March 18, 1995. The members of the Compensation and Stock Option Committee are
Messrs. Fenton and Holly (Chairman), and Mr. Yusefzadeh is a non-voting member.
Neither Mr. Fenton nor Mr. Holly has been an officer or employee of the Company
at any time.
 
     Transactions with Ronald E. Fenton and Affiliates.  Ronald E. Fenton, the
president, chief executive officer and a director of BancSecurity Corporation
("BancSecurity"), is a director of the Company, Chairman of the Audit Committee
and a member of the Compensation and Stock Option Committee and the Executive
Committee. In February 1996, the Company licensed the Phoenix Retail Banking
System (the "Phoenix System") to BancSecurity. During the year ended December
31, 1996, the Company recognized revenues from BancSecurity of approximately
$521,000 and received from BancSecurity an aggregate of approximately $514,000
(not including taxes or reimbursable expenses) pursuant to its licensing
arrangement with the Company. Pursuant to the U.S. Bank Partners' Discount
Program (as defined hereafter), BancSecurity was given a discount with an
aggregate value of approximately $299,000 on its license and service fees. See
"Certain Transactions." As of February 28, 1997, Mr. Fenton held outstanding
options to purchase 2,000 and 3,000 shares of Common Stock that are currently
exercisable at exercise prices of $12.00 and $15.25, respectively, per share.
 
     Transactions with James C. Holly and Affiliates.  James C. Holly, the
president, chief executive officer and director of Bank of the Sierra, is a
director of the Company, Chairman of the Compensation and Stock Option Committee
and a member of the Audit Committee and the Executive Committee. In March 1994,
the Company licensed the Phoenix System to Bank of the Sierra. Pursuant to the
U.S. Bank Partners' Discount Program and because Bank of the Sierra was the
second commercial installation site for the Phoenix System, Bank of the Sierra
was given a discount with an aggregate value of approximately $354,000 on the
customer and software support fees. During the year ended December 31, 1996, the
Company recognized revenues from Bank of the Sierra of approximately $50,000 and
received from Bank of the Sierra an aggregate of approximately $122,000 (not
including taxes and reimbursable expenses) pursuant to its licensing arrangement
with Bank of the Sierra. See "Certain Transactions." As of February 28, 1997,
Mr. Holly held outstanding options to purchase 2,000 and 3,000 shares of Common
Stock that are currently exercisable at exercise prices of $12.00 and $15.25,
respectively, per share.
 
     Transactions with Bahram Yusefzadeh.  Pursuant to a rights offering to the
Company's shareholders, officers and directors in 1994 and pursuant to exercises
of options to purchase the capital stock of the Company, Mr. Yusefzadeh and an
affiliate of Mr. Yusefzadeh were issued shares of capital stock of the Company
in exchange for promissory notes which bore interest at a rate of 7.92% per year
and were unsecured. The principal and interest on the notes were due and payable
upon the consummation of the Company's initial
 
                                       10
<PAGE>   14
 
public offering in July 1996. In July 1996, Mr. Yusefzadeh and his affiliate
paid the Company approximately $1,319,000, plus accrued interest of
approximately $159,000, to repay such notes in full. In January 1994, 
Mr. Yusefzadeh loaned an aggregate of $35,203 to the Company to finance the 
Company's purchase of certain office equipment. The loan was secured by such 
office equipment and was payable on demand with interest payable at 12% per 
annum. In July 1996, the Company repaid to Mr. Yusefzadeh the loan and accrued 
interest of approximately $46,000 from the proceeds of the Company's initial 
public offering.
 
     In May 1996, Mr. Yusefzadeh unconditionally guaranteed the Company's
obligations under a line of credit and term loan. The Company paid off the line
of credit and term loan from the proceeds of the initial public offering. In
addition, Mr. Yusefzadeh personally guaranteed the office lease for the
Company's former headquarters in Maitland, Florida (which lease terminates on
March 31, 1997) and certain other leases for general office equipment. As of
February 28, 1997, Mr. Yusefzadeh held outstanding options to acquire 44,139 and
2,000 shares that are currently exercisable at exercise prices of $4.74 and
$12.00, respectively, per share.
 
CERTAIN TRANSACTIONS
 
     As an incentive to provide initial capital for the Company, the Company
agreed to give certain pricing discounts to a consortium of financial
institutions (the "U.S. Bank Partners") on their initial contract with the
Company if they licensed the Phoenix System for use in their banks (the "U.S.
Bank Partners' Discount Program"). Pursuant to the U.S. Bank Partners' Discount
Program, the Company agreed to provide two types of discounts: (i) a credit
against the initial license fee equal to the amount of each U.S. Bank Partner's
investment in the Company's capital stock; and (ii) a 15% credit on the first
five years of customer and software support fees. The Company has offered
discounts on license fees totalling $855,000 in connection with the U.S. Bank
Partner's investment in the Company's capital stock since its inception.
Discounts of $450,000 were used in 1996 and discounts of $300,000 were used in
1995, leaving a balance of $105,000 of available discounts at December 31, 1996
and as of February 28, 1997. The following are a list of transactions where
discounts have been given pursuant to the U.S. Bank Partners' Discount Program
to U.S. Bank Partners that have an affiliate serving as a member of the Board.
See "-- Compensation Committee Interlocks and Insider Participation" for a
discussion of the transactions with BancSecurity and Bank of the Sierra.
 
     In February 1994, the Company licensed the Phoenix System to First
Citizens Financial Corporation ("FCFC"). Pursuant to the U.S. Bank Partners'
Discount Program and because FCFC agreed for one of its banks to serve as the
first commercial installation site of the Phoenix System, FCFC was given
pricing concessions with an aggregate value of approximately $477,000 on
license fees, implementation fees and customer and software support fees.
During the year ended December 31, 1996, the Company recognized revenues from
FCFC of approximately $314,000 and received from FCFC an aggregate of
approximately $203,000 (not including taxes or reimbursable expenses) pursuant
to its licensing arrangement with the Company. O. Jay Tomson, the chairman of
the board and chief executive officer of First Citizens National Bank, the
holding Company for FCFC, is a director of the Company. In January 1995, the
Company licensed the Phoenix System to Glenview State Bank. Pursuant to the
U.S. Bank Partners' Discount Program, Glenview State Bank was given a discount
with an aggregate value of approximately $164,000. During the year ended
December 31, 1996, the Company recognized revenues from Glenview State Bank of
approximately $776,000 and received from Glenview State Bank an aggregate of
approximately $430,000 (not including taxes or reimbursable expenses) pursuant
to its licensing arrangement with the Company. Paul A. Jones, the president
of Glenview State Bank, is a director of the Company. In December 1995, the
Company licensed the Phoenix System to Iowa Savings Bank. Pursuant to the U.S.
Bank Partners' Discount Program, Iowa Savings Bank was given a discount with
an aggregate value of approximately $123,000. During the year ended December
31, 1996, the Company recognized revenues from Iowa Savings Bank of
approximately $102,000 and received from Iowa Savings Bank an aggregate of
approximately $47,000 (not including taxes or reimbursable expenses) pursuant
to its licensing arrangement with the Company. William C. Hess, the president 
of Iowa Savings Bank, is a director of the Company.
 
     The transactions under the U.S. Bank Partners' Discount Program are on
terms more favorable to officers, directors and principal shareholders of the
Company than they could obtain in a transaction with an unaffiliated third
party. Each of the transactions under the U.S. Bank Partners' Discount Program
was approved by a majority of the independent directors of the Company, and any
additional contracts under that program will be approved by a majority of the
independent directors of the Company. All future transactions, except for
contracts pursuant to the U.S. Bank Partners' Discount Program, between the
Company and its officers, directors, principal shareholders and their affiliates
will be approved by a majority of independent directors of the Company and will
be on terms no less favorable to the Company than could be obtained from
unaffiliated third parties.
 
     In March 1996 and as amended in December 1996, the Company and Unisys
Corporation ("Unisys") entered into a software license agreement, whereby Unisys
exclusively markets the Phoenix System to banks
 
                                       11
<PAGE>   15
 
in Central and South America, Mexico, the Caribbean and Bermuda. Under the
agreement, Unisys purchased $1,550,000 of licenses for resale in these
territories in 1996 and is committed to purchase $450,000 of licenses in 1997.
Unisys paid $633,000 in 1996 and $210,000 through February 28, 1997 pursuant to
the license purchases. Jack A. Blaine, Corporate Senior Vice President and
President, Pacific Asia Americas Group of Unisys, was a director of the Company
during 1996. Mr. Blaine decided not to stand for reelection and his term
terminates at the Annual Meeting.
 
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
 
     Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that might
incorporate this Proxy Statement or future filings with the Commission, in whole
or in part, the following report and the Stock Performance Chart which follows
shall not be deemed to be incorporated by reference into any such filing.
 
     The Compensation and Stock Option Committee (the "Committee") consists of
the following members of the Board: Ronald E. Fenton; James C. Holly (Chairman);
and Bahram Yusefzadeh (non-voting member). The Committee reviews and determines
the Company's executive compensation objectives and policies and administers the
March Plan and October Plan. The Committee reviews and sets the compensation of
the Company's Chief Executive Officer and certain other highly compensated
executive officers.
 
     The objectives of the Company's executive compensation program are to: (i)
attract, retain and motivate highly talented and productive executives; (ii)
provide incentives for superior performance by paying above-average
compensation; and (iii) align the interests of the executive officers with the
interests of the Company's shareholders by basing a significant portion of
compensation upon the Company's performance. The Company's executive
compensation program combines the following three components, in addition to the
benefit plans offered to all employees: base salary (including cash provided for
automobile allowances); annual bonus; and long-term incentive compensation
consisting of stock option grants. Each component of the Company's executive
compensation program serves a specific purpose in meeting the Company's
objectives.
 
     It is the Company's policy to set base salary levels, annual bonuses and
long-term incentive compensation above an average of select corporations to
which the Company compares its executive compensation. The Company selects such
corporations on the basis of a number of factors, such as their size and
complexity, the nature of their businesses, the regions in which they operate,
the structure of their compensation programs (including the extent to which they
rely on bonuses and other contingent compensation) and the availability of
compensating information. The corporations with which the Company compares its
compensation are not necessarily those included in the indices used to compare
the shareholder return in the Stock Performance Graph. Further, the corporations
selected for such comparison may vary from year to year based upon market
conditions and changes in both the Company's and the corporations' businesses
over time. The Company believes that above-average compensation levels are
necessary to attract and retain high caliber executives necessary for the
successful conduct of the Company's business.
 
     Base salary.  The Committee annually reviews the salaries of the Company's
executives. When setting base salary levels, in a manner consistent with the
objectives outlined above, the Committee considers competitive market conditions
for executive compensation, Company performance and individual performance.
 
     The measures of individual performance considered in setting 1996 salaries
included, to the extent applicable to an individual executive officer, a number
of quantitative and qualitative factors such as the Company's historical and
recent financial performance in the principal area of responsibility of the
officer (including such measures as gross margin, net income, sales, customer
count and market share), the individual's progress toward non-financial goals
within his area of responsibility, individual performance, experience and level
of responsibility and other contributions made to the Company's success. The
Committee has not found it practicable, nor has it attempted, to assign relative
weights to the specific factors used in determining base salary levels, and the
specific factors used may vary among individual officers. As is typical
 
                                       12
<PAGE>   16
 
for most corporations, payment of base salary is not conditioned upon the
achievement of any specific, pre-determined performance targets.
 
     Annual bonus.  The Company's cash bonus program seeks to motivate
executives to work effectively to achieve the Company's financial performance
objectives and to reward them when those objectives are met. Executives bonus
payments are based upon the overall profitability of the Company.
 
     Long-term incentive compensation.  The Company believes that option grants:
(i) align executives interests with shareholder interests by creating a direct
link between compensation and shareholder return; (ii) give executives a
significant, long-term interest in the Company's success; and (iii) help retain
key executives in a competitive market for executive talent.
 
     The March Plan and October Plan authorize the Committee to grant stock
options to executives. Option grants are made from time to time to executives
whose contributions have or will have a significant impact on the Company's
long-term performance. The Company's determination of whether option grants are
appropriate each year is based upon individual performance measures established
for each individual. Options are not necessarily granted to each executive
during each year. Generally, options granted to executive officers vest in equal
annual installments over a period of three to four years and expire ten years
from the date of grant.
 
     Benefits.  The Company believes that it must offer a competitive benefit
program to attract and retain key executives. During Fiscal 1996, the Company
provided medical and other benefits to its executive officers that are generally
available to the Company's other employees.
 
     Compensation of the Chief Executive Officer.  The Chief Executive Officer's
compensation plan includes the same elements and performance measures as the
plans of the Company's other executive officers. The Compensation and Stock
Option Committee believes that Mr. Yusefzadeh's total compensation reflects the
unique contributions that he makes to the Company's long-term strategic
performance as one of the leading innovators of the financial services
technology industry. Mr. Yusefzadeh's salary and bonus for the year ended
December 31, 1996 increased 1% and 426%, respectively, over his salary and bonus
for the previous fiscal year. The Committee believes that such increases are
appropriate based upon the Company's financial performance, including earnings
per share, revenue growth and cash flow from operations.
 
     Submitted by: James C. Holly (Chairman)
                   Ronald E. Fenton
                   Bahram Yusefzadeh (non-voting member)
 
                                       13
<PAGE>   17
 
STOCK PERFORMANCE GRAPH
 
     The chart below compares the cumulative total shareholder return on the
Common Stock with the cumulative total return on the Nasdaq (U.S. Companies)
Index and the Nasdaq Computer and Data Processing Services Index for the period
commencing July 2, 1996 (the first day of trading of the Common Stock as a
result of the Company's initial public offering) and ending December 31, 1996,
assuming an investment of $100 and the reinvestment of any dividends. The base
price for the Company's stock is the initial public offering price of $12.00 per
share. The comparisons in the graph below are based upon historical data and are
not indicative of, nor intended to forecast, future performance of the Common
Stock.
 
<TABLE>
<CAPTION>
                                                                                Nasdaq
                                         Phoenix In-                         (Computer &
         Measurement Period              ternational       Nasdaq (U.S.     Data Process-    
        (Fiscal Year Covered)             Ltd., Inc.        Companies)      ing Services)    
<S>                                    <C>               <C>               <C>               
07/02/96                                            100               100               100  
12/31/96                                            144               108               106               
</TABLE>
 
                                       14
<PAGE>   18
 
           PROPOSAL NO. 2: APPROVAL AND RATIFICATION OF THE ADOPTION
                      OF AN AMENDMENT TO THE OCTOBER PLAN
 
     On January 24, 1997, the Board approved an amendment to the October Plan to
increase the number of shares available for issuance as incentive stock options
or non-qualified options under the October Plan from 250,000 to 500,000. At the
Annual Meeting, the shareholders are being asked to approve and ratify such
increase in shares available for issuance under the October Plan. The Board
believes that the adoption of the amendment to the October Plan will foster good
employee relations and encourage and assist employees of the Company to acquire
an equity interest in the Company. In addition, the Board believes the adoption
of an amendment will help align employee interest with other shareholders and
help provide for the future financial security of the Company's employees. The
October Plan should thereby be helpful in attracting, retaining and motivating
employees. The details of the October Plan are described below. A copy of the
amendment to the October Plan is attached to this Proxy Statement as Exhibit A.
 
     THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE OCTOBER PLAN.
 
DESCRIPTION OF THE OCTOBER PLAN, AS AMENDED
 
     Effective October 21, 1995, the Board adopted, and the Company's
shareholders approved, the October Plan. The October Plan originally provided
for the issuance of 50,000 shares of the Common Stock upon the exercise of
options and upon awards of restricted stock of the Company. Effective May 24,
1996, the Board adopted and the shareholders approved an amendment to the
October Plan which increased the number of authorized shares to 250,000. As of
February 28, 1997, options to acquire approximately 230,083 shares were
outstanding. Of the Named Executive Officers, only Mr. Nissen holds options
under the October Plan to purchase 15,000 shares of Common Stock. No director
who is not also an executive officer of the Company holds options under the
October Plan.
 
     The purpose of the October Plan is to advance the interests of the Company,
its subsidiaries and its shareholders by affording certain employees of the
Company and its subsidiaries and other key persons an opportunity to acquire or
increase their proprietary interests in the Company. The objective of the
issuance of the options and restricted stock awards is to promote the growth and
profitability of the Company and its subsidiaries because the recipients of
options or restricted stock awards will have an additional incentive to achieve
the Company's objectives through participation in its success and growth and by
encouraging their continued association with or service to the Company. Persons
eligible to participate in the October Plan consist of all employees of the
Company or any subsidiary and other key persons whose participation in the
October Plan the Committee determines to be in the best interests of the
Company.
 
     Options granted under the October Plan may be incentive stock options
("ISOs"), which are intended to meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified
options, which are not intended to meet such requirements ("Non-Qualified
Options"). ISOs must have terms of ten years or less from the date of grant and
the fair market value of grants of ISOs during any year on the date of grant may
not exceed $100,000. The October Plan is administered by the Compensation and
Stock Option Committee (the "Committee"), having the duties and authorities set
forth in such Plan in addition to any other authority granted by the Board. The
Committee has the full power and authority, in its discretion, subject to the
provisions of the October Plan, to interpret such Plan, to prescribe, amend, and
rescind rules and regulations relating to them, to determine the details and
provisions of each stock option agreement and restriction agreement, and to make
all other determinations necessary or advisable for the administration of such
Plan, including, without limitation, the amending or altering of such Plan and
any options or restricted stock awards granted thereunder, as may be required to
comply with or to conform to any federal, state, or local laws or regulations.
The Committee, in its discretion, selects the recipients of awards and the
number of shares or options granted thereunder and determines other matters such
as (i) vesting schedules, (ii) the exercise price of options (which cannot be
less than 100% of the fair market value of the Common Stock on the date of grant
for ISOs) and (iii) the duration of awards (which cannot exceed ten years from
the date of grant or modification of the option).
 
                                       15
<PAGE>   19
 
     Subject to shareholder approval, the aggregate number of shares of Common
Stock reserved for the issuance of options and restricted stock awards under the
October Plan will be 500,000 shares, subject to adjustment in accordance with
the October Plan. Any or all shares of Common Stock subject to the October Plan
may be issued in any combination of ISOs, Non-Qualified Options or restricted
stock awards, and the amount of Common Stock subject to the October Plan may be
increased from time to time, provided that the total number of shares of Common
Stock issuable pursuant to ISOs may not be increased to more than 500,000 (other
than pursuant to anti-dilution adjustments) without shareholder approval. Shares
subject to an option or issued as a restricted stock award may be either
authorized and unissued shares or shares issued and later reacquired by the
Company. The shares covered by any unexercised portion of an option that has
terminated for any reason, or any forfeited portion of a restricted stock award,
may again be optioned or awarded under the October Plan, and such shares shall
not be considered as having been optioned or issued in computing the number of
shares of Common Stock remaining available for options or restricted stock
awards under the October Plan.
 
CERTAIN FEDERAL INCOME TAX EFFECTS
 
     The following discussion of the federal income tax consequences of the
October Plan is intended to be a summary of applicable federal income tax law.
State and local tax consequences may differ.
 
     ISOs.  A participant is not taxed on the grant or exercise of an ISO. The
difference between the fair market value of the shares on the exercise date
will, however, be a preference item for purposes of the alternative minimum tax.
If a participant holds the shares acquired upon exercise of an ISO for at least
two years following grant and at least one year following exercise, the
participant's gain, if any, by a subsequent disposition of such shares will be
treated as long term capital gain for federal income tax purposes. The measure
of the gain is the difference between the proceeds received on disposition and
the participant's basis in the shares (which generally equals the exercise
price). If the participant disposes of stock acquired pursuant to exercise of an
ISO before satisfying the one and two year holding periods described above, the
participant will recognize both ordinary income and capital gain in the year of
disposition. The amount of the ordinary income will be the lesser of (i) the
amount realized on disposition less the participant's adjusted basis in the
stock (usually the option exercise price) or (ii) the difference between the
fair market value of the stock on the exercise date and the option price. The
balance of the consideration received on such disposition will be long term
capital gain if the stock had been held for at least one year following exercise
of the ISO. The Company is not entitled to an income tax deduction on the grant
or the exercise of an ISO or on the participant's disposition of the shares
after satisfying the holding period requirement described above. If the holding
periods are not satisfied, the Company will be entitled to an income tax
deduction in the year the participant disposes of the shares, in an amount equal
to the ordinary income recognized by the participant.
 
     Non-Qualified Options.  A participant is not taxed on the grant of a
Non-Qualified Option. Upon exercise, however, the participant recognizes
ordinary income equal to the difference between the exercise price and the fair
market value of the shares on the date of the exercise. The Company is entitled
to an income tax deduction in the year of exercise in the amount recognized by
the participant as ordinary income. Any gain on subsequent disposition of the
shares is long term capital gain if the shares are held for at least one year
following exercise. The Company does not receive an income tax deduction for
this gain.
 
     Restricted Stock.  Generally, and except as noted below, the grant of
restricted stock is not taxable at the time of the grant. Instead, at the time
restricted stock vests or becomes transferable, an employee will recognize
ordinary income equal to (i) the excess of the fair market value of such
restricted stock on the date the shares vest over (ii) the price, if any, paid
for such restricted stock. An employee may, however, elect to recognize income
as of the date of grant of the restricted stock, in an amount equal to (i) the
excess of the fair market value of the restricted stock on the date of grant
over (ii) the price, if any, paid for the restricted stock. If such an election
is made, no additional income will be recognized at the time the stock vests or
becomes transferable. In the event of a subsequent forfeiture of the shares, an
employee making such an election may be able to recognize a capital loss with
respect to the amount, if any, paid for such restricted stock, but only to the
extent such amount exceeds the amount realized by such employee on such
forfeiture. The employee will not be able to recognize a loss for tax purposes
with respect to the excess of fair market value over the
 
                                       16
<PAGE>   20
 
purchase price which was previously included in income. Dividends paid on the
shares of restricted stock before they vest will be taxed to the employee either
as additional compensation or, if the employee has made the election described
above, as dividend income.
 
                PROPOSAL NO. 3: APPROVAL OF THE AMENDMENT TO THE
                           ARTICLES OF INCORPORATION
                    INCREASING THE AUTHORIZED CAPITAL STOCK
 
     The Company's presently authorized capital stock consists of 30,000,000
shares, of which 20,000,000 are shares of Common Stock and 10,000,000 are shares
of preferred stock, par value $1.00 per share (the "Preferred Stock"). On
February 28, 1997, 3,862,721 shares of Common Stock were outstanding and 726,174
shares of Common Stock were reserved for issuance in connection with options,
warrants and convertible securities. No shares of Preferred Stock are currently
outstanding. Thus, as of such date, 15,411,105 shares of Common Stock and
10,000,000 shares of Preferred Stock remain unreserved and available for future
issuance.
 
     The Board has approved, and is recommending to the shareholders for
approval at the Annual Meeting, the amendment of Article II of the Company's
Amended and Restated Articles of Incorporation, (the "Articles of
Incorporation") to increase the number of shares of capital stock and Common
Stock that the Company is authorized to issue to 60,000,000 and 50,000,000,
respectively. The proposed amendment does not change the number of shares of
Preferred Stock that the Company is authorized to issue.
 
     The Board believes it is desirable to increase the authorized shares of
Common Stock for future use for acquisitions, financings, stock dividends or
other corporate purposes. Subject to rules of Nasdaq and Florida law applicable
to certain types of transactions, the Board generally will have the power to
issue such shares without shareholder approval. All newly authorized shares
would have the same rights as presently authorized shares, including the right
to cast one vote per share and to participate in dividends when and to the
extent declared and paid. Under the Articles of Incorporation, shareholders do
not have preemptive rights. Accordingly, the issuance of additional shares of
Common Stock might dilute, under certain circumstances, the ownership interest
and voting rights of shareholders.
 
     The issuance of additional shares of Common Stock by the Company also may
potentially have an antitakeover effect by making it more difficult to obtain
shareholder approval of various actions, such as a merger or removal of
management. Issuance of authorized shares of Preferred Stock could also make it
more difficult to obtain shareholder approval of such actions as a merger, bylaw
changes, removal of a director or amendments to the Articles of Incorporation,
particularly in light of the power of the Board to specify certain rights and
preferences of the Preferred Stock, such as voting rights, without shareholder
approval.
 
     The Company has in place certain other provisions which may have an
antitakeover effect. The Company's Board has been divided into three classes
serving staggered three-year terms. The Company's Bylaws restrict business
combinations with interested shareholders under certain circumstances and impose
higher voting requirements for the approval of certain transactions. In
addition, the Bylaws include a provision requiring that any shareholder who
wishes to make a nomination for director at an annual shareholders' meeting must
give written notice to the Company at least 90 days in advance of the meeting.
This requirement will afford the Board adequate time to consider the
qualifications of the proposed nominee and determine an appropriate response.
These provisions may discourage some persons from attempting to acquire control
of the Company by potentially lengthening the time required for a person to
acquire control of the Company through a proxy contest or the election of a
majority of the directors.
 
     Except for utilization in connection the those shares reserved for issuance
in connection with options, warrants or convertible securities, the Company
currently has no specific plans or arrangements for the use of the additional
shares of Common Stock, the authorization of which is sought hereby.
 
     The approval of the amendment to the Articles of Incorporation requires the
affirmative vote of a majority of the shares of Common Stock outstanding.
Article II of the Articles of Incorporation, as proposed to be amended, is
attached to this Proxy Statement as Exhibit B.
 
                                       17
<PAGE>   21
 
     THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED CAPITAL STOCK.
 
                         COMPLIANCE WITH SECTION 16(A)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
     Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who beneficially own more than 10% of a registered
class of the Company's equity securities to file reports of securities ownership
and changes in such ownership with the SEC and Nasdaq. Officers, directors and
greater than 10% beneficial owners also are required by rules promulgated by the
SEC to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to the Company
and written representations that no other reports were required, the Company
believes that, during Fiscal 1996, its executive officers, directors and greater
than 10% beneficial owners complied with all applicable Section 16(a) filing
requirements, except that one report covering one transaction was filed late by
each of Jack A. Blaine and Ruann F. Ernst. Mr. Blaine and Ms. Ernst have since
filed their respective forms.
 
                              INDEPENDENT AUDITORS
 
     The Company selected the firm of Ernst & Young LLP to serve as the
independent auditors for the Company for the year ended December 31, 1996. That
firm has served as the auditors for the Company since 1993. Representatives of
Ernst & Young LLP are expected to be present at the Annual Meeting and will be
accorded the opportunity to make a statement, if they so desire, and to respond
to appropriate questions.
 
                                 OTHER MATTERS
 
     The Board knows of no amendment or variation of the matters referred to in
the Notice of the Annual Meeting and of no other business to be brought before
the Annual Meeting. However, if any amendment, variation or other matter is
properly brought before the Annual Meeting, it is the intention of the persons
designated as proxies to vote in accordance with their best judgment on such
matters. If any other matter should come before the Annual Meeting, action on
such matter will be approved if the number of votes cast in favor of the matter
exceeds the number opposed.
 
       SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
 
     Regulations of the Commission require Proxy Statements to disclose the date
by which shareholder proposals must be received by the Company in order to be
included in the Company's proxy materials for the next annual meeting. In
accordance with these regulations, shareholders are hereby notified that if they
wish a proposal to be included in the Company's Proxy Statement and form of
proxy relating to the 1998 annual meeting, a written copy of their proposal must
be received at the principal executive offices of the Company no later than
January 16, 1998. To ensure prompt receipt by the Company, proposals should be
sent certified mail return receipt requested. Proposals must comply with the
proxy rules relating to stockholder proposals in order to be included in the
Company's proxy materials.
 
                                 ANNUAL REPORT
 
     The Company's 1996 Annual Report to Shareholders is concurrently being
mailed to shareholders. The Annual Report contains consolidated financial
statements of the Company and the report thereon of Ernst & Young LLP,
independent auditors.
 
DATED: APRIL 4, 1997
 
     SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN PROVIDED.
YOUR PROMPT RESPONSE WILL BE APPRECIATED.
 
                                       18
<PAGE>   22
 
                                                                       EXHIBIT A
 
                            SECOND AMENDMENT TO THE
                        PHOENIX INTERNATIONAL LTD., INC.
 
            1995 STOCK OPTION PLAN, EFFECTIVE AS OF OCTOBER 21, 1995
 
     WHEREAS, the Board of Directors of Phoenix International Ltd., Inc., a
Florida corporation (the "Company"), adopted the Phoenix International Ltd.,
Inc. 1995 Stock Option Plan (the "October Plan"), effective as of October 21,
1995, and recommended that it be approved by the shareholders; and
 
     WHEREAS, the shareholders adopted the October Plan pursuant to written
consents dated on or before December 31, 1995; and
 
     WHEREAS, the purpose of the October Plan is to advance the interests of the
Company, its subsidiaries and its shareholders by affording certain employees of
the Company and its subsidiaries and other key persons an opportunity to acquire
or increase their proprietary interests in the Company; and
 
     WHEREAS, effective May 24, 1996, the Board of Directors approved and the
shareholders ratified certain amendments to the October Plan (the "First
Amendment"); and
 
     WHEREAS, on January 24, 1997, the Board of Directors approved the following
further amendment to the October Plan and recommended that such amendments be
approved by the shareholders;
 
     NOW, THEREFORE, the October Plan is hereby amended as follows:
 
          1. Defined Terms.  Initially capitalized terms used in this Amendment,
     which are not otherwise defined by this Amendment, are used with the same
     meaning ascribed to such terms in the October Plan.
 
        2. Amendment.
 
             a. The first paragraph of Section 4.1 of the October Plan is
        amended to read as follows:
 
                4.1 Limitations.  Subject to any antidilution adjustment
           pursuant to the provisions of Section 4.2 hereof, the maximum number
           of shares of Stock that may be issued hereunder shall be 500,000. Any
           or all shares of Stock subject to the Plan may be issued in any
           combination of Incentive Stock Options, non-Incentive Stock Options
           or Restricted Stock, and the amount of Stock subject to the Plan may
           be increased from time to time in accordance with Article VIII,
           provided that the total number of shares of Stock issuable pursuant
           to Incentive Stock Options may not be increased to more that 500,000
           (other than pursuant to antidilution adjustments) without shareholder
           approval. Shares subject to an Option or issued as an Award may be
           either authorized and unissued shares or shares issued and later
           acquired by the Company. The shares covered by any unexercised
           portion of an Option that has terminated for any reason (except as
           set forth in the following paragraph), or any forfeited portion of an
           Award, may again be optioned or awarded under the Plan, and such
           shares shall not be considered as having been optioned or issued in
           computing the number of shares of Stock remaining available for
           option or award hereunder.
 
          3. Effectiveness.  This Amendment shall not become effective unless
     and until such provisions are approved by at least a majority vote of the
     holders of the outstanding capital stock of the Company present, or
     represented, and entitled to vote on such matter at a meeting of
     shareholders duly called and convened within one year following the date
     hereof.
 
                                       A-1
<PAGE>   23
 
          4. Approval.  Except as hereinabove amended and modified, the October
     Plan is approved, ratified and affirmed without further modification or
     amendment.
 
     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as
of January 24, 1997, in accordance with the authority provided by the Board of
Directors.
 
                                          PHOENIX INTERNATIONAL LTD., INC.
 
                                          By:      /s/ BAHRAM YUSEFZADEH
                                            ------------------------------------
                                            Name: Bahram Yusefzadeh
                                            Title: Chief Executive Officer
 
                                       A-2
<PAGE>   24
 
                                                                       EXHIBIT B
 
                                   ARTICLE II
 
                                 CAPITAL STOCK
 
     The aggregate number of shares of capital stock which the Corporation shall
have authority to issue is fifty million (50,000,000) 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 $1.00 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.
 
                                       B-1
<PAGE>   25
                                                              APPENDIX
 
                                                              [PRELIMINARY COPY]
                       PROXY SOLICITED FOR ANNUAL MEETING
                               OF SHAREHOLDERS OF
                        PHOENIX INTERNATIONAL LTD., INC.
                            TO BE HELD MAY 16, 1997
 
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
 
   The undersigned hereby constitutes and appoints Bahram Yusefzadeh and Ralph
H. Reichard and each of them, his true and lawful agents and proxies with full
power of substitution in each, to represent and vote, as indicated below, all of
the shares of Common Stock of Phoenix International Ltd., Inc. ("Phoenix") that
the undersigned would be entitled to vote at the 1997 Annual Meeting of
Shareholders of Phoenix to be held at the Corporate Headquarters, 500
International Parkway, Heathrow, Florida on Friday, May 16, 1997 at 10:00 a.m.,
local time, and at any adjournment, upon the matters described in the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement,
receipt of which is acknowledged, and upon any other business that may properly
come before the meeting or any adjournment. Said proxies are directed to vote on
the matters described in the Notice of Annual Meeting of Shareholders and Proxy
Statement as follows, and otherwise in their discretion upon such other business
as may properly come before the meeting or any adjournment thereof.
 
   THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES TO THE BOARD OF DIRECTORS, FOR THE PROPOSAL TO AMEND THE
PHOENIX INTERNATIONAL LTD., INC. 1995 STOCK OPTION PLAN EFFECTIVE AS OF OCTOBER
21, 1995, FOR THE PROPOSAL TO AMEND THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION AND AS THE PROXY HOLDER MAY DETERMINE IN HIS DISCRETION WITH
REGARD TO ANY OTHER MATTER PROPERLY BROUGHT BEFORE THE MEETING.
 
   PLEASE MARK, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

1. ELECTION OF DIRECTORS:
 
  Class I Nominees (terms expire 2000):
 
       RUANN F. ERNST       WILLIAM C. HESS       O. JAY TOMSON
 
<TABLE>
  <C>  <S>                                                          <C>  <C>
  [ ]  FOR all nominees listed                                      [ ]  WITHHOLD AUTHORITY
       (except as marked to the contrary)                                to vote for all nominees voted
  (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE THAT NOMINEE'S NAME(S) IN THE SPACE PROVIDED
   BELOW.)
</TABLE>
 
2. PROPOSAL to amend the Phoenix International Ltd., Inc. 1995 Stock Option
   Plan, effective as of October 21, 1995.
 
                   [ ] FOR       [ ] AGAINST       [ ]ABSTAIN
 
3. PROPOSAL to amend the Amended and Restated Articles of Incorporation to
   increase the authorized capital stock.
 
                   [ ] FOR       [ ] AGAINST       [ ]ABSTAIN
 
4. IN THEIR DISCRETION, to act upon such other business as may properly come
   before the meeting or any adjournment thereof.
 
                                             Dated:
 
                                            -----------------------------------,
                                             1997
 
                                             -----------------------------------
                                                 Signature of Shareholder(s)
 
                                             -----------------------------------
                                                 Signature of Shareholder(s)
 
                                             Please sign exactly as name or
                                             names appear hereon. Where more
                                             than one owner is shown, each
                                             should sign. Persons signing in a
                                             fiduciary or representative
                                             capacity shall give full title. If
                                             a corporation, please sign in full
                                             corporate name by authorized
                                             officer. If a partnership, please
                                             sign in partnership name by
                                             authorized person.


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