<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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Advanced Systems International, 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[ADVANCED SYSTEMS INTERNATIONAL LOGO]
October 6, 2000
To our Shareholders:
Your Board of Directors cordially invites you to attend our 2000 Annual
Shareholders Meeting. We will hold the meeting on November 8, 2000 at 10:00 a.m.
EDT, at the offices of Jaffe, Raitt, Heuer & Weiss, Professional Corporation,
One Woodward Avenue, Suite 2400, Detroit, Michigan 48226. You will find a Notice
of Meeting inside this booklet that identifies the proposals for your
action--the election of seven directors, and the approval of a proposed
amendment to the Advanced Systems International, Inc. Articles of Incorporation
to increase the number of authorized shares of common stock from 20,000,000 to
30,000,000.
- At the meeting, we will present a report on 1999 operating results and on
other matters of current interest to our shareholders.
- We will provide refreshments immediately after the meeting. Please also
take this opportunity to meet our directors, officers and employees, and
your fellow shareholders, or renew prior acquaintances.
YOUR VOTE IS IMPORTANT. We encourage you to read this Proxy Statement and
sign and return your voting (proxy) form in the enclosed envelope as soon as
possible, so that your shares will be represented at the meeting.
Sincerely,
/s/ Gerald A. Pesut
Gerald A. Pesut
President and Chairman of the Board of Directors
<PAGE> 3
NOTICE OF ANNUAL SHAREHOLDERS MEETING
The Advanced Systems International, Inc. 2000 Annual Shareholders Meeting
will be held at the offices of Jaffe, Raitt, Heuer & Weiss Professional
Corporation, One Woodward Avenue, Suite 2400, Detroit, Michigan 48226, on
November 8, 2000, at 10:00 a.m. EDT for the following purposes:
1. To elect seven directors,
2. To approve a proposed amendment to the AdSys Articles of Incorporation
to increase the number of authorized shares of common stock from
20,000,000 to 30,000,000, and
3. Transact any other business appropriate to the meeting.
RECORD DATE
The Board of Directors has fixed the close of business on October 6, 2000,
as the record date for the purpose of determining which shareholders are
entitled to notice of and to vote at the meeting. A list of shareholders
entitled to vote at the meeting will be available during business hours for ten
days prior to the meeting at our offices, 25300 Telegraph Road, Suite 455,
Southfield, Michigan, for examination by any shareholder for any purpose germane
to the meeting.
By Order of the Board of Directors
/s/ Robert C. Demerell
Robert C. DeMerell
Secretary
October 6, 2000
<PAGE> 4
PROXY STATEMENT--VOTING INFORMATION
YOUR VOTE IS VERY IMPORTANT
Whether or not you plan to attend our Annual Shareholders Meeting, please
take the time to vote by completing and mailing the enclosed voting (proxy) form
as soon as possible. We have included a postage-prepaid envelope for your
convenience.
If you sign, date and mail your voting (proxy) form without indicating how
you want to vote, your voting (proxy) form will be voted as recommended by the
Board of Directors.
REVOKING YOUR PROXY
If you later wish to revoke your proxy, you may do so by: (1) sending a
written statement to that effect to AdSys' Secretary, (2) submitting a properly
signed proxy with a later date, or (3) voting in person at the annual meeting.
VOTING INFORMATION
- NUMBER OF SHARES OUTSTANDING. At the close of business on the record
date, October 6, 2000, there were 14,686,541 shares of AdSys common stock
outstanding and entitled to vote at the annual meeting.
- VOTE REQUIRED TO ELECT DIRECTORS. The seven nominees receiving the
highest number of votes will be elected. Shareholders who do not wish
their shares to be voted for a particular nominee may so indicate in the
space provided on the voting (proxy) form. Abstentions and broker
non-votes (i.e., when a broker does not have authority to vote on a
matter) will have no effect on the vote.
- VOTE REQUIRED TO ADOPT THE AMENDMENT TO THE ADVANCED SYSTEMS
INTERNATIONAL, INC. ARTICLES OF INCORPORATION. The proposed Amendment to
the AdSys Articles of Incorporation will be approved if the holders of a
majority of the shares of common stock present or represented and
entitled to vote at the Annual Meeting vote FOR the proposed Amendment.
Abstentions are treated as shares present or represented at the Annual
Meeting which are voted against the proposed Amendment. Broker non-votes
will have no effect on the vote.
OTHER BUSINESS
The Board knows of no other matters to be presented for shareholder action
at the meeting. If other matters are properly brought before the meeting, the
persons named in the accompanying proxy card intend to vote the shares according
to their best judgment.
1
<PAGE> 5
ELECTION OF DIRECTORS
The first matter to be considered at the Annual Meeting will be the
election of AdSys Directors. We propose that persons nominated to the Board by
management fill these positions. Each director shall be elected by a plurality
of the votes cast at the Annual Meeting. Therefore, if a quorum is present,
abstentions and broker non-votes will have no effect on the election of
directors. AdSys' transfer agent will tabulate the proxies. The Inspector of
Elections appointed at the Annual Meeting will then combine the proxy votes with
the votes cast at the Annual Meeting. In the absence of directions to the
contrary, proxies will be voted in favor of the election of the seven nominees
below.
If any of the nominees becomes unavailable, your shares will be voted for a
Board-approved substitute, or the Board may reduce the number of Directors.
Management has no present knowledge that any of the persons named will be
unavailable to serve. In any event, the enclosed proxy can only be voted for the
seven nominees named in this Proxy Statement or their substitutes.
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED BELOW. PROXIES
SOLICITED BY THE BOARD WILL BE VOTED "FOR" THE NOMINEES UNLESS INSTRUCTIONS TO
WITHHOLD OR TO THE CONTRARY ARE GIVEN.
Gerald A. Pesut
Alexander D. Henry
Mark O'Donoghue
John V. Williams
Carlos E. Bravo
Daniel J. Dorman
Craig S. Whiting
2
<PAGE> 6
BOARD INFORMATION
The AdSys Board held two regular meetings and one special meeting during
1999. AdSys maintains a standing Compensation Committee and Audit Committee of
the Board of Directors. In addition, between formal meetings, the Directors met
in informal Board sessions on numerous occasions to discuss various aspects of
AdSys' business.
AUDIT COMMITTEE
- Participates with management to select and recommend to the Board the
outside auditors.
- Reviews with management and the outside auditors the scope of the
proposed audit.
- Reviews the annual audit with management and the outside auditors before
final figures are published.
- Reviews with management the periodic examinations made by supervising
authorities and any replies required in connection with the examinations.
- Reviews (quarterly) the role and scope of the work performed by the
internal auditor.
- Reviews programs and procedures with management to avoid conflicts of
interest and any other aspects of business ethics.
- The Audit Committee met three times in 1999.
- The Members of the Audit Committee are Mark O'Donoghue, Alexander D.
Henry and Daniel J. Dorman
COMPENSATION COMMITTEE
- Oversee the administration of compensation and benefit programs.
- Recommends compensation of officers.
- The Compensation Committee met 3 times in 1999, and took action by
written consent once in 1999.
- John V. Williams is the only member of the Compensation Committee.
DIRECTOR COMPENSATION
We compensate our directors for their services as directors solely via
stock options. Upon joining the board, each director receives a one-time grant
of an option to acquire 100,000 shares at the market price on the date of grant.
Each year, each director also receives a grant of an option to acquire 33,000
shares at the market price on the grant date. These options vest monthly over
three years starting on the grant date.
3
<PAGE> 7
PROPOSAL TO INCREASE THE AMOUNT OF AUTHORIZED COMMON STOCK
The second matter to be considered at the Annual Meeting will be the
approval of a proposal to amend the AdSys Articles of Incorporation to increase
the authorized number of shares of AdSys common stock from 20,000,000 to
30,000,000.
Presently, there are 14,686,541 shares of AdSys common stock issued and
outstanding. In addition, fully vested options and warrants to purchase
3,463,557 shares are currently outstanding. We have granted options for
2,036,443 shares, which will vest over the next three years. If all outstanding
options currently issued were to vest, we would have obligations to issue shares
exceeding that which we are authorized to issue. The AdSys Board proposes this
amendment to ensure there will be a sufficient number of shares of common stock
available for issuance when it may be in the best interests of AdSys and the
shareholders to do so. Other than as may be needed to honor exercises of
options, AdSys has no present plans for the issuance or sale of the shares
sought to be authorized. If the proposal to amend the AdSys Articles of
Incorporation is approved, the AdSys Board may generally issue the additional
authorized shares of AdSys common stock without further shareholder approval.
DILUTIVE EFFECT
There will be no dilutive effect on existing shareholders on approval of
this proposal. If the AdSys Board subsequently decides to issue any or all of
the additional 10,000,000 authorized shares of common stock, it could have a
dilutive effect on AdSys' per share earnings, and on the percentage ownership of
our existing shareholders in AdSys. In order to avoid the dilutive effects that
may be caused by the issuance of the additional authorized shares, AdSys
shareholders would need to acquire additional shares of common stock in order to
maintain their ownership percentage in AdSys.
ANTI-TAKEOVER EFFECT
The ability of the AdSys Board to issue the additional authorized shares of
common stock for a variety of corporate purposes could make it more difficult or
discourage an attempt to obtain control of AdSys by means of proxy contest,
tender offer, merger, or otherwise. The AdSys Board is not proposing this
increase in the authorized number of shares of common stock with the intention
of discouraging takeover attempts, nor does the AdSys Board have any knowledge
of an existing attempt to take control of AdSys. However, in the event that a
takeover attempt is made against AdSys, the AdSys Board could issue the
additional authorized shares to discourage the attempt.
The shares represented by your voting (proxy) form will be voted, unless
otherwise directed or the authority to vote is withheld, FOR approval of the
proposed amendment to the AdSys Articles of Incorporation to increase the
authorized number of shares of common stock from 20,000,000 to 30,000,000.
4
<PAGE> 8
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding each of the directors
and executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- --------------
<S> <C> <C> <C>
Gerald A. Pesut........................ 60 Chairman, President, CEO July 1997
John V. Williams....................... 55 Director August 1998
Alexander D. Henry..................... 52 Director July 1997
Mark O'Donoghue........................ 34 Director August 1998
Carlos E. Bravo........................ 41 Director July 1999
Daniel J. Dorman....................... 37 Director May 2000
Craig S. Whiting....................... 43 Director May 2000
Robert C. DeMerell..................... 32 CFO, Secretary,
Treasurer and Controller
William Mottram........................ 51 Vice President--Sales and
Marketing
James Hopp............................. 54 Vice President--Operations
</TABLE>
GERALD A. PESUT, CHAIRMAN, PRESIDENT & CEO. Mr. Pesut has extensive general
management experience in leading start up, growth and turnaround organizations.
From 1993 to 1996, Mr. Pesut served as President and chief executive officer of
Distributed Systems Division Inc., a subsidiary of Storage Technology
Corporation, where he managed the $240 million integrator of midrange and
network systems with 500 employees. From 1991 to 1993, Mr. Pesut served as
President of the $55 million assembly integration and warehousing division of
Storage Technology Corporation. Mr. Pesut also previously held a number of
senior management positions in the technology industry. Mr. Pesut is a graduate
of the York University Accelerated MBA program.
JOHN V. WILLIAMS, DIRECTOR. Mr. Williams has 35 years of experience in
sales, sales management and business management. His career has included both
domestic and international responsibilities. Mr. Williams has served in various
positions with Storage Technology Corporation (1972-1980 and 1990-1997),
retiring in 1997 after serving as its Senior Executive Vice President. Mr.
Williams has also held positions at GriD Systems (1982-1990), Magnuson Computer
Systems (1980-1982) and Memorex (1970-1973). Mr. Williams is currently
consulting to international corporations with his new company, the CSO Forum.
ALEXANDER D. HENRY, DIRECTOR. Since 1993, Mr. Henry has been a principal of
Hampton Equity Management, Inc., which organizes financing for computer software
developers and other emerging companies, including tax-assisted and seed-capital
financing. From 1991 to 1993, Mr. Henry managed tax-assisted and other real
estate finance offerings with LOM &Associates, a subdivision of Loewen, Ondaatje
and McCutcheon. Prior to 1991, Mr. Henry was a principal and promoter of
syndications of tax-sheltered investment vehicles, commercial real estate and
mortgage investments. From 1978 to 1981, Mr. Henry practiced as a Chartered
Accountant with Touche Ross & Co. in Toronto, Ontario. Mr. Henry serves as a
director of several companies, including MusicMusicMusic Inc., an e-commerce
company, and Jax Mold & Machine, Inc., which provides molds to the tire and
rubber industry using high-technology methods.
MARK O'DONOGHUE, DIRECTOR. Since 1997, Mr. O'Donoghue has served as Chief
Executive Officer of Temple Securities Ltd., a full service investment dealer.
From 1993 to 1997, he was a Trust Officer and Investment Advisor to Temple Trust
Company Ltd. Mr. O'Donoghue holds a Canadian Chartered Accountant designation
and formerly practiced as an accountant with Ernst & Young.
CARLOS E. BRAVO, DIRECTOR. Until 1999, Mr. Bravo served as an officer and
Vice President of USinternetworking Inc., a pioneer in Internet-based
outsourcing of leading business applications for monthly fees. From 1997 to
1998, Mr. Bravo was a principal of IIT Inc., a global information technology
consulting and systems integration company, which became USinternetworking Inc.
From 1995 to 1997, Mr. Bravo was the co-founder, principal and Vice President of
Comdisco Inc.'s Systems Integration Business unit. From 1989 to 1995, Mr. Bravo
was founder, Chairman and CEO of Bravo International Corporation, a manufacturer
of toys and sporting goods. Mr. Bravo also was a co-founder and COO of Amcotech,
Inc., a manufacturer of
5
<PAGE> 9
consumer and industrial products, and has held positions at General Electric and
Snap-on Tools. Mr. Bravo attended the University of Florida and Northwestern
University and holds advanced degrees in Aerospace Engineering, Applied
Mathematics and Business.
DANIEL J. DORMAN, DIRECTOR. Mr. Dorman has extensive experience in finding,
structuring, financing and acquiring middle market businesses and facilitating
strategic initiatives for high growth technology companies. Currently, he is
Chairman and President of D.J. Dorman & Co., Inc., a private merchant banking
firm; President of Princeton Capital Fund, L.L.C., a $30 million private equity
fund; Chairman of Kux Manufacturing Company, a leader in building graphics;
Chairman of The Rental Equipment Group, L.L.C., a consolidator of rental
equipment companies in the Southeast and Southwest U.S.; Director of Health
Media, Inc., a leader in the development of health and behavior-change products
and an officer or director of several other privately-held companies. Mr. Dorman
received his B.A. in Business Administration/Finance from Ferris State
University.
CRAIG S. WHITING, DIRECTOR. Mr. Whiting is a private investor. From 1992 to
2000, he was with Weiss, Peck & Greer LLC. As a Managing Director he made
private equity investments and served on boards of directors of companies in a
variety of industries. From 1983-1991, Mr. Whiting was an investment banker with
Credit Suisse First Boston. Mr. Whiting earned a B.A. from Boston College and
his M.B.A. from Columbia University.
ROBERT C. DEMERELL, CHIEF FINANCIAL OFFICER, SECRETARY, TREASURER AND
CONTROLLER. From 1995 to late 1997, Mr. DeMerell served as Controller at FAME
Information Services, Inc., where he developed and implemented financial
controls as that company grew from $5 million to $25 million in annual sales
over a two-year period and established operations in the U.K. and Asia. From
1992 to 1994, Mr. DeMerell worked as an auditor for Ernst & Young, concentrating
on small business auditing. Mr. DeMerell earned his B.A. in economics from the
University of Michigan and his M.B.A. from the University of Notre Dame. He is
also a Certified Public Accountant.
WILLIAM MOTTRAM, VICE PRESIDENT -- SALES AND MARKETING. From 1996 until he
joined AdSys in 1999, Mr. Mottram served as Vice President, Sales for Epic Data
Corp., and was responsible for sales and marketing worldwide. From 1973 to 1978,
Mr. Mottram also served as Vice President of Midrange Marketing and Director of
Connectivity Marketing for Storage Technology, Inc. Mr. Mottram has also held
several other positions at firms servicing the scientific computing and
enterprise resource management markets. Mr. Mottram holds a B.S. in electrical
engineering from Paisley College of Technology, Scotland, and an M.B.A. from
Pepperdine University, California.
JAMES HOPP, VICE PRESIDENT -- OPERATIONS. Prior to joining AdSys in 2000,
Mr. Hopp served as Director of Sales Operations for the Enterprise Network
Services Division of Sprint and as the Vice President of Information Technology
Professional Service for Comdisco Inc., where he was responsible for managing
the service delivery organization and establishing a project management
practice. Mr. Hopp also served as a Senior Consultant, Information Technology
Practice, for Gemini Consulting and as Director of Telecommunications and
Systems Integration at Unisys Corporation. Mr. Hopp received is B.A. from
Aquinas College.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following tables provide certain summary information concerning
compensation and stock options for our Chief Executive Officer and all other
executive officers who earned more than $100,000 (salary and bonus) for all
services rendered in all capacities to AdSys during the year ended December 31,
1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
----------------------------------- --------------------------------------
NAME AND OTHER ANNUAL RESTRICTED
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK AWARD OPTIONS/SARS (#)
------------------ ---- ------ ----- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Gerald A. Pesut....... 1999 $200,000 $31,250 -0- -0- 33,000 director options
President and Chief
Executive Officer
Howard Tarnoff........ 1999 $145,000 $46,825 -0- -0- -0-
Vice President --
Marketing(1)
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
PERCENT OF TOTAL
OPTIONS/SARS
NUMBER OF SECURITIES GRANTED TO EXERCISE OF BASE
NAME AND UNDERLYING OPTIONS/ EMPLOYEES PRICE PER SHARE
PRINCIPAL POSITION SARS GRANTED IN FISCAL YEAR ($/SH) EXPIRATION DATE
------------------ -------------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Gerald A. Pesut................ 33,000 2.4% $1.00 July 15, 2009
President and Chief Executive
Officer
Howard Tarnoff(1).............. -0- -0- -0- -0-
Vice President -- Marketing(1)
</TABLE>
---------------
(1) Mr. Tarnoff left the Company in February, 2000.
AGGREGATED OPTION/SAR EXERCISED IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
NAME AND SHARES ACQUIRED OPTIONS/SARS AT FY-END OPTIONS/ARS AT FY-END
PRINCIPAL POSITION ON EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------ --------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald A. Pesut...... -0- -0- 666,000 (568,474 exercisable) $ 123,350.94
President and Chief
Executive Officer
Howard Tarnoff(1).... 30,217 $15,108.50 -0- -0-
Vice President --
Marketing(1)
</TABLE>
---------------
(1) Mr. Tarnoff left the Company in February, 2000.
7
<PAGE> 11
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN MAJOR SHAREHOLDERS
In general, "beneficial ownership" includes those shares a Director or
officer has the power to vote or transfer, and stock options that are
exercisable currently or within 60 days. The table below shows the beneficial
stock ownership of our Directors, Executive Officers and those shareholders who
hold more than 5% of our total outstanding shares as of August 31, 2000.
<TABLE>
<CAPTION>
OPTIONS TOTAL SHARES
NAME OF ISSUED SHARES EXERCISABLE BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED WITHIN 60 DAYS OWNED(1) OUTSTANDING(2)
---------------- ------------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Gerald A. Pesut........................ 250,000 603,069 853,069(3) 5.8%
25300 Telegraph Rd., Ste. 455
Southfield, MI 48034
Alexander D. Henry..................... 237,900 453,069 690,969(4) 4.7%
533 Davenport Rd
Toronto, ON Canada M5X 3R5
Mark O'Donoghue........................ -0- 89,181 89,181(5) *
Tropicana Bldg
Providenciales, Turks & Caicos Islands
British West Indies
John V. Williams....................... -0- 189,181 189,181(6) 1.3%
424 Clayton St
Denver, CO 80206
Carlos E. Bravo........................ -0- 92,169 92,169(7) *
1713 Skyhawk Ct
Daytona Beach, FL 32124
Daniel J. Dorman....................... -0- 16,667 16,667(8) *
1533 N. Woodward, Suite 175
Bloomfield Hills, MI 48304
Craig S. Whiting....................... 2,000 13,889 15,889(9) *
16 Settlers Trail
Darien, CT 06820
Temple Securities Ltd.................. 678,520 486,000 1,164,520(10) 7.9%
Tropicana Bldg
Providenciales, Turks & Caicos Islands
British West Indies
Princeton Capital Fund, L.L.C.......... 1,111,111 300,000 1,411,111(11) 9.6%
1533 N. Woodward, Suite 175
Bloomfield Hills, MI 48304
All Officers and Directors as a........ 489,900 1,464,125 1,947,125 13.26%
Group (7 persons)
</TABLE>
---------------
(FOOTNOTES ARE ON THE FOLLOWING PAGE)
8
<PAGE> 12
FOOTNOTES TO BENEFICIAL OWNERSHIP TABLE
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth in the
rules and regulations promulgated under the Exchange Act, and accordingly,
may include securities owned by and for among others the spouse and/or
minor children of an individual and any other relative who has the same
home as such individual, as well as other securities as to which the
individual has or shares voting or investment power or which such person
has the right to acquire within 60 days after the date of this filing
pursuant to the exercise of options, or otherwise. Beneficial ownership may
be disclaimed as to certain of the securities. This table has been prepared
based on 14,686,541 shares of common stock outstanding as of August 31,
2000, plus as to each person shares issuable under rights to acquire shares
included in that person's holdings.
(2) The symbol * shown in this column indicates ownership of less than 1%.
(3) Consists of 250,000 shares owned of record by Pesut & Associates, a company
wholly owned by Mr. Pesut and 603,069 shares which Mr. Pesut has the right
to acquire pursuant to options. Does not include 62,931 shares under other
options that are not yet vested.
(4) Consists of 110,000 shares and 175,000 Units (resulting in the right to
acquire up to 350,000 shares pursuant to warrants) owned by Hampton Equity
Holdings Inc., and 127,900 shares owned by REVBEN Management Corporation,
affiliates of Mr. Henry, and 103,069 shares which Mr. Henry has the right
to acquire pursuant to options. Does not include 62,931 shares under
options issued to Mr. Henry which are not yet vested.
(5) Consists of 89,181 shares which Mr. O'Donoghue has the right to acquire
pursuant to options. Does not include 76,819 shares under options issued to
Mr. O'Donoghue which are not yet vested.
(6) Consists of 189,181 shares that Mr. Williams has the right to acquire
pursuant to options. Does not include 43,819 shares under options issued to
Mr. Williams which are not yet vested.
(7) Consists of 92,169 shares that Mr. Bravo has the right to acquire pursuant
to options. Does not include 288,125 shares under options issued to Mr.
Bravo which are not yet vested.
(8) Consists of 16,667 shares that Mr. Dorman has the right to acquire pursuant
to options. Does not include 83,333 options issued to Mr. Dorman which are
not yet vested. Does not include shares owned by Princeton Capital Fund,
L.L.C.
(9) Consists of 2,000 shares owned and 13,889 shares that Mr. Whiting may
acquire pursuant to options. Does not include 86,111 options issued to Mr.
Whiting which are not yet vested.
(10) Consists of 678,520 shares owned, and 476,000 shares which may be acquired
pursuant to warrants. Includes 10,000 vested options. Includes 1,387,740
shares held of record by Temple for various client accounts (no account
holds beneficial interests in excess of 5% of AdSys' common stock). The
principals of Temple are Hugh D. McLean, N. Gregory McNally, Mark
O'Donoghue and Christian Papachristou.
(11) Consists of 1,111,111 shares owned and 300,000 shares that may be acquired
pursuant to warrants.
9
<PAGE> 13
OTHER INFORMATION
ANNUAL REPORT ON FORM 10K-SB
AdSys will provide a copy of its 1999 Annual Report on SEC Form 10K-SB to
any shareholder who asks for it in writing, without charge. Please direct your
request to our Secretary, Robert C. DeMerell.
COMPLIANCE WITH SECTION 16 REPORTING
The rules of the Securities and Exchange Commission require that AdSys
disclose late filings of reports of stock ownership (and changes in stock
ownership) by its Directors, Executive Officers and beneficial owners of more
than 10% of AdSys common stock. Based solely on its review of the copies of such
reports received by it, and written representations from certain reporting
persons, AdSys believes that during the year ended December 31, 1999, its
Directors, Executive Officers and beneficial owners of more than 10% of AdSys
common stock have complied with all filing requirements applicable to them.
TRANSACTIONS WITH CERTAIN INTERESTED PARTIES
Temple Securities was granted 250,000 warrants as part of a 1 for 2
(warrants for dollars) arrangement that was entered into pursuant to a one-year
term loan for $1 million, $500,000 of which has been advanced at year-end. Mark
O'Donoghue, a member of the Board of Directors, is affiliated with Temple
Securities. There was a fee of 10% on advances for this transaction. Temple
Securities was granted 10,000 options at market price on February 26, 1999 as
compensation for a short-term, 60-day, loan of $170,000.
John V. Williams, a member of the Board of Directors, was granted 100,000
warrants as part of an arrangement that was entered into pursuant to a
short-term, 90 day, loan of $250,000, which was advanced in November 1999.
Prior to June 30, 2000, Mr. Bravo was engaged to consult with our
management team as to general and special information relating to marketing our
products, gathering and analyzing market and competitive data, and locating and
introducing us to sales and partnering opportunities. Mr. Bravo received an
option each quarter to acquire a number of our shares equal to $12,500 divided
by the then-market price for the shares, for a total of 47,294 options during
the term of his consulting engagement.
SHAREHOLDER PROPOSALS
An eligible shareholder who wants to have a qualified proposal considered
for inclusion in the proxy statement for the 2001 Annual Meeting of Shareholders
must notify AdSys' Secretary by delivering a copy of the proposal to AdSys'
offices no later than August 1, 2001.
EXPENSES OF SOLICITATION
AdSys pays the cost of preparing, assembling and mailing this
proxy-soliciting material. In addition to the use of the mail, proxies may be
solicited personally, by telephone or telegraph, or by AdSys officers and
employees without additional compensation. AdSys pays all costs of solicitation,
including certain expenses of brokers and nominees who mail proxy material to
their customers or principals.
By Order of the Board of Directors
/s/ Robert W. Demerell
Robert C. DeMerell
Secretary
Dated: October 6, 2000
SEE ENCLOSED VOTING (PROXY) FORM -- PLEASE SIGN AND MAIL PROMPTLY.
10
<PAGE> 14
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ADVANCED
SYSTEMS INTERNATIONAL, INC.
The undersigned hereby appoints Gerald A. Pesut and Robert C. DeMerell as
Proxies, each with power to appoint his substitute, and hereby authorizes each
of them to represent and to vote with respect to the matters set forth below and
in their discretion as to such other matters as may properly be brought before
the meeting or any adjournment thereof, all the shares of common stock of
Advanced Systems International, Inc. held of record by the undersigned at the
Annual Meeting of Shareholders to be held on November 8, 2000, or any
adjournment(s) thereof.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this Proxy
will be voted FOR the election of the below named individuals, and FOR approval
of the proposed amendment to the Advanced Systems International, Inc. Articles
of Incorporation to increase the number of authorized shares of common stock
from 20,000,000 to 30,000,000. The Board of Directors recommends a vote FOR each
of these proposals.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
1. ELECTION OF DIRECTORS
To elect seven Directors to serve for a term until the 2001 Annual
Meeting of Shareholders and until their successors are elected and have
qualified.
<TABLE>
<S> <C>
Nominees: Gerald A. Pesut
John V. Williams
Alexander D. Henry
Mark O' Donoghue
Carlos E. Bravo
Daniel J. Dorman
Craig S. Whiting
</TABLE>
[ ] FOR ALL NOMINEES [ ] WITHHOLD ALL NOMINEES [ ] ABSTAIN
[ ] FOR ALL NOMINEES, except vote withheld from the following nominee(s):
(type or print name(s) of nominees for whom vote is withheld)
2. APPROVAL OF ARTICLES AMENDMENT
To approve the proposed amendment to the Advanced Systems International,
Inc. Articles of Incorporation to increase the authorized shares of common stock
from 20,000,000 to 30,000,000.
[ ] FOR APPROVAL [ ] AGAINST APPROVAL [ ] ABSTAIN
When joint tenants hold shares, both should sign. When you sign as
attorney, executor, administrator, trustee or guardian or in other
representative capacity, please give your full title. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
--------------------------------------
Signature
--------------------------------------
Signature, if held jointly
Dated: ____________, 2000
