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SUPPLEMENT TO PROXY STATEMENT
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PRECIS SMART CARD SYSTEMS, INC.
2500 SOUTH MCGEE DRIVE, SUITE 147
NORMAN, OKLAHOMA 73072
TELEPHONE: (405) 292-4900
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 29, 2000
(POSTPONED AND RESCHEDULED FROM NOVEMBER 14, 2000)
We at Precis Smart Card Systems, Inc. are distributing this Supplement
to Proxy Statement to you and other holders of our common stock at the close
of business on October 6, 2000. This Supplement amends and supplements the
Proxy Statement, dated October 3, 2000, related to the Annual Meeting of the
holders of our common stock to be held on November 29, 2000. The Annual
Meeting has been rescheduled and changed to 2:00 p.m. on November 29th, 2000
to be held in our offices at Suite 147, 2500 South McGee Drive, Norman,
Oklahoma.
One of the matters, identified as Proposal One in the Proxy Statement,
to be considered by our shareholders at the Annual Meeting is approval of the
Agreement and Plan of Merger, dated March 21, 2000, as amended. This
agreement is amongst us, Precis-Foresight Acquisition, Inc. (our wholly-owned
subsidiary) and Foresight, Inc. and its shareholders Paul A. Kruger and Mark
R. Kidd, providing for the merger of Foresight into Precis-Foresight with
result that Foresight will become our wholly-owned subsidiary. Under the
terms of this agreement, Paul A. Kruger, John Simonelli and Mark R. Kidd will
become members of our board of directors, which will increase our board to
seven members. Until all of the shares of Precis common stock have been
delivered as required under the terms of the agreement (approximately until
April 30, 2004) in the event of the resignation or death of Messrs. Kruger,
Simonelli or Kidd, a person designated by Mr. Kruger (or his successors in
interest in the event he is deceased) will be named as a director to fill the
vacancy created by the resignation or death. It has come to our attention
that Paul A. Kruger and Lyle W. Miller are executive officers and directors
and Mr. Kidd is a director of Palweb Corporation, a publicly held development
stage company engaged in the manufacturing and marketing of plastic pallets
and the design, manufacture and sale of large plastic injection molding
machines and systems plastic pallets. Palweb Corporation is the parent of
PaceCo Financial Services, Inc.
SALE OF CERTAIN ASSETS OF PACECO FINANCIAL SERVICES, INC.
On April 3, 2000, PaceCo Financial Services became a wholly-owned
subsidiary of PalWeb Corporation pursuant to merger. PaceCo Financial
Services is engaged in the business of making consumer and small business
loans and is regulated as an "investment certificate issuer" by the
Oklahoma Department of Securities. In connection with an examination of
PaceCo Financial Services in March 1999, the Oklahoma Department of
Securities determined that certain of PaceCo Financial Services' activities,
including the ownership of real estate and the ownership of equity
securities, were no longer going to be allowed and did not comply with the
provisions of the Oklahoma Securities Act relating to the permissible
activities of investment certificate issuers. As a result of such
determination, PaceCo Financial Services ceased making any new investments
not permissible to investment certificate issuers. Since that time PaceCo
Financial Services and the Oklahoma Department of Securities have been
negotiating an agreed order for the redemption or repayment of the investment
certificates (passbook savings accounts and time certificates) through the
sale of certain assets of PaceCo. PaceCo Financial Services' ability to fund
repayment of the $6,700,000 outstanding investment certificates is
substantially dependent on PaceCo Financial Services' ability to sell
40,250,000 shares of PalWeb Corporation common stock. PalWeb Corporation
estimates that these shares must be sold for at least $0.12 per share in
order to provide sufficient funds to redeem or
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repay the holders of the outstanding investment certificates in full. If this
cannot be achieved, PaceCo Financial Services will not have sufficient assets
to redeem the investment certificates resulting in losses to the holders. On
October 23, 2000, the PalWeb Corporation common stock had a closing best bid
price of $0.02 per share.
Pursuant to Notice to Depositors dated October 10, 2000, PaceCo
Financial Services notified the holders passbook savings accounts and time
certificates that, at current market values, the net assets of PaceCo
Financial Services are inadequate to redeem time certificates and to honor
passbook savings account withdrawals. This notice indicates that holders may
sustain approximate losses of 60% or more of their accounts which total
approximately $6,700,000.
If Paceco Financial Services and PalWeb Corporation are unsuccessful
in negotiating an agreement with the Oklahoma Department of Securities, the
Administrator of the Department may take enforcement actions against PaceCo
Financial Services and its officers, directors and employees, including
Messrs. Kruger and Kidd. As of August 25, 2000, the Oklahoma Department of
Securities had not indicated to PaceCo Financial Services an intention to
pursue enforcement remedies; however, enforcement actions could occur in the
future.
We want to point out that PalWeb Corporation and PaceCo Financial
Services do not have any financial or business relationships with us or
Foresight. However, Mark R. Kidd, who serves as our Chief Financial Officer
and Controller and Secretary, serves as a director of PalWeb Corporation and
President of PaceCo Financial Services. In addition, Lyle W. Miller, who
serves as one of our directors, serves as Vice President of Marketing and one
of the directors of PalWeb Corporation.
ADDITIONAL INFORMATION ABOUT CERTAIN EXECUTIVE OFFICER, DIRECTOR AND NOMINEE
DIRECTORS
Upon completion of the merger-acquisition of Foresight, Mr. Kruger
will become a member of our board of directors and has designated John
Simonelli and Mark R. Kidd to also serve as directors. Until all of the
shares of our common stock have been delivered as required under the terms of
the merger agreement (approximately until April 30, 2004) in the event of the
resignation or death of Messrs. Kruger, Simonelli or Kidd, a person
designated by Mr. Kruger (or his successors in interest in the event he is
deceased) will be named as a director to fill the vacancy created by the
resignation or death. The following is a brief description of the business
background of Messrs. Kruger, Kidd, and Simonelli, as well as Lyle W. Miller,
who is currently serving as one of our directors:
PAUL A. KRUGER, age 46, has more than 25 years experience with the
financial services industry. Beginning in 1980 until February 1996 Mr. Kruger
was employed by United Bank Club Association, Inc. and served as President
and Chief Executive Officer. During this period, United Bank Club Association
grew to more than 350 employees with operational and sales branches in
Michigan, Florida, Arizona, Texas and Mexico providing financial enhancement
services to more than 2,000 institutions serving more than six million
customers in the United States, Puerto Rico, U.S. Virgin Islands and Mexico.
Mr. Kruger founded Priority OnLine-tm- which developed NetBranch-tm-, a
proprietary Internet banking application currently in use by the second
largest bank headquartered and controlled in Oklahoma. Mr. Kruger holds a
Bachelor of Business Administration/Accounting received from Cameron
University and a Juris Doctorate from the Oklahoma City University School of
Law.
In 1997, Mr. Kruger became the Chairman of the Board of Directors of
Paceco Financial Services. His responsibilities and contributions to Paceco
Financial Services include assisting in the development, implementation and
execution of strategic planning. Mr. Kruger also currently holds managing
officer positions in both Hildalgo, L.C. and Onward, L.L.C, two
privately-held companies. Mr. Kruger became a director of PalWeb Corporation,
on July 9, 1999 and became President on January 22, 2000. In 1999 Mr. Kruger
became Chairman of Foresight, Inc.
John Simonelli, age 54, will become one of our directors upon
completion of the merger-acquisition of Foresight. In August 1999, Mr.
Simonelli became our consultant and has provided corporate acquisition and
merger consulting services. From March 1994 until July 1999, Mr. Simonelli
was employed by Laboratory
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Specialists of America, Inc. and served as Chairman of the Board, Chief
Executive Officer and Secretary, and a Director until December 7, 1998.
Laboratory Specialists of America, Inc. is engaged in forensic drug testing
and was formerly publicly-held until acquired by The Kroll-O'Gara Company by
merger. Mr. Simonelli served as a Director, Chief Executive Officer and
Secretary of Vantage Capital Resources, Inc. from March 1996 until its merger
with The Vialink Company (formerly Applied Intelligence Group, Inc.) and
thereafter served as a Director and Vice President of The Vialink Company
until October 14, 1996.
MARK R. KIDD, age 33, became our Chief Financial Officer and
Controller and Secretary in August 1999 and serves as Executive Vice
President, Chief Financial Officer, Secretary and a Director of Foresight.
Mr. Kidd became a director of PalWeb Corporation on January 22, 2000. Mr.
Kidd began serving as President of PaceCo Financial Services and President of
UniFin, Inc. in March 1998. UniFin, Inc. is a privately-held company that
provides various financial services. From January 1997 until March 1998, he
served as Senior Vice President and Chief Financial Officer of Republic Bank
of Norman. From May 1988 through 1996, Mr. Kidd was employed by the public
accounting firm of Arthur Andersen LLP. Mr. Kidd is a Certified Public
Accountant and holds a B.B.A. in accounting from Southern Methodist
University.
LYLE W. MILLER, age 57, began serving as one of directors on November
29, 1999. Mr. Miller became a director of PalWeb Corporation and Vice
President of Marketing on January 22, 2000. For more than the past five
years, Mr. Miller has been the President and a Director of McMiller Holding
Company, Northern Leasing & Sales, Inc., and Northern Connections, Inc., each
a privately-held company engaged in the real estate business; a partner of
MahMill Acres, a privately-held real estate development partnership;
President and Director of Servco Incorporated, a privately-held sales
company; Lansing Ice & Gymnastic Center, Inc., a privately-held company
operating the Lansing Ice & Gymnastic Center; and Landings Restaurant, Inc.,
a privately-held company operating the Landings Restaurant. In addition, Mr.
Miller is a Director of Capitol Bancorp Limited, a publicly-held bank holding
company. Mr. Miller received a Bachelor of Business Administration from
Michigan State University.
REVOCATION OF PREVIOUSLY SUBMITTED PROXIES
If you previously executed and returned a Proxy, you may revoke the
previously returned Proxy by executing and returning the accompanying Proxy.
The shares of common stock represented by the Proxy will be voted at the
Annual Meeting. If you indicate on the Proxy a choice with respect to any
matter to be voted on, your shares will be voted in accordance with your
choice. Once given, you may revoke the Proxy by
- giving written notice of revocation to our Secretary at any time before
your Proxy is voted,
- executing another valid Proxy bearing a later date and delivering this
proxy to the Secretary of the Company prior to or at the Annual Meeting,
or
- attending the Annual Meeting and voting in person.
All information contained in this Supplement with respect to Precis
and Precis-Foresight Acquisition and Foresight was furnished by Precis and
Precis-Foresight Acquisition and Foresight, respectively, for inclusion in
this Supplement.
THIS PROXY STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF THESE TRANSACTIONS NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
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WHERE YOU CAN FIND MORE INFORMATION
We as well as PalWeb Corporation file annual and quarterly reports and
other reports and information with the Securities and Exchange Commission.
These reports and other information can be inspected and copied at, and
copies of these materials can be obtained at prescribed rates from, the
Public Reference Section of the Securities and Exchange Commission, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549-1004, and at its
regional offices at 7 World Trade Center, 13th Floor, New York, New York
10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
We distribute to our shareholders annual reports containing financial
statements audited by our independent public accountants and, upon request,
quarterly reports for the first three quarters of each fiscal year containing
unaudited financial information. In addition, the reports and other
information are filed through Electronic Data Gathering, Analysis and
Retrieval (known as "EDGAR") system and are publicly available on the
Securities and Exchange Commissions's site on the Internet, located at
http://www.sec.gov. We will provide without charge to you, upon written or
oral request, a copy of the reports and other information filed with the
Securities and Exchange Commission.
Any requests for copies of information, reports or other filings with
the Securities and Exchange Commission should be directed to Precis Smart
Card Systems, Inc. at 2500 South McGee Drive, Suite 147, Norman, Oklahoma
73072, telephone: (405) 292-4900.
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Your cooperation in giving this matter your immediate attention and in
returning your Proxy promptly will be appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
Mark R. Kidd, Corporate Secretary
October 24, 2000
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