<PAGE>
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:
/ / 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 Section 240.14a-11(c) or
Section240.14a-12
CONTINENTAL INFORMATION SYSTEMS CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rule 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>
CONTINENTAL INFORMATION
SYSTEMS CORPORATION
September 25, 2000
Dear Stockholder:
We will be holding the 2000 Annual Meeting of Continental Information
Systems Corporation's stockholders on Thursday, October 26, 2000, at 9:00 a.m.
local time at the Downtown Athletic Club, 19 West Street, New York, NY 10004.
Enclosed with this letter is a Notice of the Annual Meeting, a Proxy
Statement, a Proxy Card, and a return envelope. Both the Notice of Annual
Meeting and the Proxy Statement provide details of the business that we will
conduct at the Annual Meeting and other information about Continental
Information Systems Corporation.
Whether or not you plan to attend the Annual Meeting, please sign, date and
promptly return the Proxy Card in the enclosed prepaid return envelope. Your
shares will be voted at the Annual Meeting in accordance with your proxy
instructions. Of course, if you attend the Annual Meeting you may vote in
person.
On behalf of the Board of Directors and the employees of the Company, I
cordially invite you to attend the Annual Meeting. If you plan to attend the
meeting, please mark the appropriate box on the enclosed Proxy Card.
Sincerely,
James P. Hassett
Chairman of the Board of Directors
YOUR VOTE IS IMPORTANT.
Please Sign, Date and Return Your Proxy Card Before the Annual Meeting.
<PAGE>
CONTINENTAL INFORMATION
SYSTEMS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 26, 2000
We will hold the 2000 Annual Meeting of Stockholders of Continental
Information Systems Corporation at the Downtown Athletic Club, on Thursday,
October 26, 2000 at 9:00 a.m. At the Annual Meeting, we will ask you to:
1. Elect six (6) Directors.
2. Ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as the Company's independent auditors for the
fiscal year ending May 31, 2001.
3. Transact any other business that is properly presented at the Annual
Meeting.
You will be able to vote your shares at the Annual Meeting if you were a
stockholder of record at the close of business on September 8, 2000.
<TABLE>
<S> <C>
By Order of the Board of Directors,
MICHAEL L. ROSEN,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
New York, New York
September 25, 2000
YOUR VOTE AT THE ANNUAL MEETING IS IMPORTANT.
PLEASE INDICATE YOUR VOTE ON THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE AS SOON
AS POSSIBLE, EVEN IF YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING, YOU WILL BE ABLE TO REVOKE YOUR PROXY AND VOTE IN
PERSON.
<PAGE>
CONTINENTAL INFORMATION SYSTEMS CORPORATION
PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 26, 2000
September 25, 2000
PROXY STATEMENT FOR ANNUAL MEETING
This Proxy Statement provides information that you should read before you
vote on the proposals that will be presented to you at the 2000 Annual Meeting
of the Company's stockholders. The 2000 Annual Meeting will be held on Thursday,
October 26, 2000 at 9:00 a.m. at the Downtown Athletic Club, 19 West Street, New
York, NY 10004.
This Proxy Statement provides detailed information about the Annual Meeting,
the proposals on which you will be asked to vote at the Annual Meeting, and
other relevant information.
On September 25, 2000, we began mailing information to people who, according
to our records, owned shares of the Company's common stock at the close of
business on September 8, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
INFORMATION ABOUT THE 2000 ANNUAL MEETING, VOTING AND THIS
PROXY STATEMENT........................................... 1
PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING............. 3
1 -- ELECTION OF DIRECTORS.................................. 3
2 -- RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT AUDITORS...................................... 3
STOCK OWNERSHIP............................................. 4
THE BOARD OF DIRECTORS...................................... 6
EXECUTIVE OFFICERS AND COMPENSATION......................... 9
OTHER INFORMATION........................................... 13
</TABLE>
<PAGE>
INFORMATION ABOUT THE 2000 ANNUAL MEETING, VOTING AND THIS PROXY STATEMENT
THE ANNUAL MEETING
The 2000 Annual Meeting will be held on Thursday, October 26, 2000 at
9:00 a.m. at the Downtown Athletic Club, 19 West Street, New York, NY 10004.
THIS PROXY SOLICITATION
PURPOSE. We are sending you this Proxy Statement because the Company's
Board of Directors is seeking a proxy to vote your shares at the Annual Meeting.
This Proxy Statement is intended to assist you in deciding how to vote your
shares. On September 25, 2000, we began mailing this Proxy Statement to all
people who, according to our stockholder records, owned shares of the Company's
common stock at the close of business on September 8, 2000.
COSTS. The Company is paying the cost of requesting these proxies. The
Company's directors, officers and employees may request proxies in person or by
telephone, mail, telecopy or letter. The Company will reimburse brokers and
other nominees their reasonable out-of-pocket expenses for forwarding proxy
materials to beneficial owners of stock.
VOTING YOUR SHARES
You have one vote for each share of the Company's common stock that you
owned of record at the close of business on September 8, 2000. The number of
shares you owned on that date is listed on the enclosed Proxy Card and is the
number of shares you may vote at the Annual Meeting
You may vote your shares at the Annual Meeting either in person or by proxy.
To vote in person, you must attend the Annual Meeting and submit a ballot.
Ballots for voting in person will be available at the Annual Meeting. To vote by
proxy, you must complete and return the enclosed Proxy Card. By completing and
returning the Proxy Card, you will be directing the persons designated on the
Proxy Card to vote your shares at the Annual Meeting in accordance with the
instructions you give on the Proxy Card.
If you decide to vote by proxy, your Proxy Card will be valid only if you
sign, date and return it before the Annual Meeting. IF YOU COMPLETE THE PROXY
CARD EXCEPT FOR THE VOTING INSTRUCTIONS, THEN YOUR SHARES WILL BE VOTED FOR THE
PROPOSED ELECTION OF DIRECTORS AND FOR RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT ACCOUNTANTS OF CONTINENTAL
INFORMATION SYSTEMS CORPORATION FOR THE 2001 FISCAL YEAR.
1
<PAGE>
REVOKING YOUR PROXY
If you decide to change your vote, you may revoke your proxy at any time
before it is voted. You may revoke your proxy in any one of three ways:
(1) You may notify the Secretary of the Company in writing that you wish to
revoke your proxy.
(2) You may submit a proxy dated later than your original proxy.
(3) You may attend the Annual Meeting and submit a ballot. Merely attending the
Annual Meeting will not by itself revoke a proxy; you must obtain a ballot
and vote your shares to revoke the proxy.
VOTE REQUIRED FOR APPROVAL
PROPOSAL 1: ELECTION OF SIX DIRECTORS.
The six (6) nominees for director who receive the most votes will be
elected. If you do not vote for a particular nominee, or you indicate "withhold
authority to vote" for a particular nominee on your Proxy Card, your vote will
not count either for or against the nominee.
PROPOSAL 2: RATIFICATION OF SELECTION OF AUDITOR.
The affirmative vote of a majority of the votes cast at the Annual Meeting
is required to ratify the selection of independent auditors. So, if you abstain
from voting, it has the same effect as if you voted against this proposal.
OTHER INFORMATION.
SHARES HELD WITH A BROKER. If you hold your shares with a broker and you do
not tell your broker how to vote, your broker has the authority to vote on each
of the proposals scheduled to be presented at this year's meeting.
QUORUM. On the record date for the Annual Meeting, September 8, 2000,
6,576,244 shares were issued and outstanding. A "quorum" must be present at the
Annual Meeting in order to transact business. A quorum will be present if
3,288,123 shares are represented at the Annual Meeting, either in person or by
proxy. If a quorum is not present, a vote cannot occur. In deciding whether a
quorum is present, abstentions will be counted as shares that are represented at
the Annual Meeting.
OTHER BUSINESS. The Board of Directors knows of no other business that may
be presented at the Annual Meeting. If any other business is properly presented
at the Annual Meeting, the persons named on the enclosed Proxy Card will vote,
or otherwise act, in accordance with their judgment on such matters.
ADDITIONAL INFORMATION ABOUT THE COMPANY
The Continental Information Systems Corporation Annual Report to
Stockholders for the fiscal year ended May 31, 2000, including consolidated
financial statements, is being mailed to all stockholders entitled to vote at
the Annual Meeting together with this Proxy Statement. The Annual Report does
not constitute a part of the proxy solicitation material. The Annual Report
tells you how to get additional information about the Company.
2
<PAGE>
PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING
1 -- ELECTION OF DIRECTORS
Nominees for election to the Board of Directors are:
Michael Bruck
James P. Hassett
George H. Heilborn
Mark W. Jaindl
Michael L. Rosen
Paul M. Solomon
Each Director will be elected to serve for a one-year term, or thereafter
until his replacement is elected. Each of the nominees is currently a member of
the Board of Directors and has consented to serve as a director if re-elected.
At the Annual Meeting, the persons named in the enclosed Proxy Card will vote to
elect the directors listed above, unless the enclosed Proxy Card is marked
otherwise. If a nominee cannot serve for any reason, the Board of Directors may
designate a substitute nominee or nominees. If a substitute is nominated, the
persons named on the enclosed proxy card will vote all valid proxies for the
election of the substitute nominee or nominees. The Board of Directors may also
decide to leave the Board seat or seats open until a suitable candidate or
candidates are located, or it may decide to reduce the size of the Board.
Proxies at the Annual Meeting may not be voted for more than six directors. More
information about each of the nominees is available in the section of this Proxy
Statement entitled "The Board of Directors" which begins on page 6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE DIRECTORS.
2 -- RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS
The Board of Directors is seeking ratification of its appointment of
PricewaterhouseCoopers LLP as its independent auditors for the fiscal year
ending May 31, 2001, as recommended by the Audit Committee. If a majority of
stockholders voting at the Annual Meeting should not approve the selection of
PricewaterhouseCoopers LLP, the selection of independent auditors may be
reconsidered by the Board of Directors.
PricewaterhouseCoopers LLP is currently the Company's independent auditors.
A representative of PricewaterhouseCoopers LLP is expected to attend the Annual
Meeting and be available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP.
3
<PAGE>
STOCK OWNERSHIP
There were 6,576,244 shares of common stock of the Company outstanding on
September 8, 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 8, 2000, certain information
regarding the ownership of Common Stock of (i) each person known by the Company
to be the beneficial owner of more than five percent of the outstanding Common
Stock; (ii) each of the directors, nominees for director and named executive
officers of the Company; and (iii) all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OWNED (1) PERCENT OWNED
------------------------------------ ---------------- -------------
<S> <C> <C>
Oscar Gruss & Son Incorporated, et al. (Group).............. 1,782,169(2) 27.10%
74 Broad Street
New York, New York 10004
The Chase Manhattan Corporation and its wholly owned 596,978(3) 9.08%
Subsidiaries................................................
270 Park Avenue
New York, New York 10017
Frederick John Jaindl....................................... 592,034(4) 9.00%
Jaindl Farms
3150 Coffeetown Road
Orefield, Pennsylvania 18069
DIRECTORS AND EXECUTIVE OFFICERS
James P. Hassett............................................ 375,500(5) 5.71%
George H. Heilborn.......................................... 9,337(6) *
Michael L. Rosen............................................ 882,165(2)(7) 13.41%
Michael "Mickey" Rosen...................................... 6,100(8) *
Paul M. Solomon............................................. 79,000(9) 1.20%
Jonah M. Meer............................................... 100,000(10) 1.52%
Mark W. Jaindl.............................................. 58,300 *
Michael Bruck............................................... 16,300 *
All directors and executive officers as a group (7 1,526,702(11) 23.22%
persons)....................................................
</TABLE>
------------------------
* Percentage is less than 1% of the total number of outstanding shares of
the Company.
(1) Except as otherwise indicated, each party has sole voting and investment
power of the shares beneficially owned.
(2) In an Amendment No. 7 to Schedule 13D filed with the Commission in
October 1998, and as updated by certain of the reporting persons through
September 8, 2000, the record date of this proxy statement, Oscar Gruss &
Son Incorporated (554,890 shares), together with thirteen other persons,
reported beneficial ownership of a total of 1,684,503 shares of Common
Stock as a group as follows: Emanuel Gruss (363,699 shares); Riane Gruss
(100,000 shares); Hermann Merkin (216,690 shares); Michael L. Rosen (33,135
shares); Daniel Goldberg (50,000 shares); Emanuel Gruss and Brenda Hirsch
as trustees for the benefit of Oren Arthur Gruss Hirsch (49,685 shares),
Howard Rosen and Shirley Rosen (5,000 shares), Jonathan Oscar Gruss Hirsch
4
<PAGE>
(45,597 shares) and Leni Gruss Hirsch (25,833 shares); Emanuel Gruss and
Leslie Gruss as trustees for the benefit of Ripton Philip Gruss Rosen
(65,381 shares) and Morgan Alfred Gruss Rosen (61,293 shares); Leslie Gruss
(69,800 shares); Michael Shaoul (33,500 shares); and Frank Davis (10,000
shares). Michael L. Rosen also beneficially owns 97,666 shares of Common
Stock issuable upon exercise of stock options that are currently
exercisable. Each reporting person has the sole power to vote and dispose
of the shares such person beneficially owns.
(3) As reported to the Company in a Schedule 13G filed with the Commission in
February 1999.
(4) As reported to the Company in a Schedule 13D filed with the Commission in
January 2000, and as updated through September 8, 2000, the record date of
this proxy statement.
(5) Includes shares of Common Stock issuable upon exercise of stock options
that are currently exercisable (6,000) and that are exercisable within
60 days (3,000 shares).
(6) Includes shares of Common Stock issuable upon exercise of stock options
that are currently exercisable (6,337) and that are exercisable within
60 days (3,000 shares).
(7) The shares held by Michael L. Rosen are also included in the aggregate
number of shares set forth in Note 2. Includes 69,800 shares of Common
Stock owned by Michael L. Rosen's spouse and 126,674 shares held by his
minor children, as to which Michael L. Rosen disclaims beneficial
ownership. Includes 554,890 shares of Common Stock beneficially owned by
Oscar Gruss & Son Incorporated, as to which Michael L. Rosen disclaims
beneficial ownership. Includes shares of Common Stock issuable upon
exercise of stock options that are currently exercisable (97,666 shares).
(8) Includes 100 shares of Common Stock owned by Michael "Mickey" Rosen's son.
(9) Includes shares of Common Stock issuable upon exercise of stock options
that are currently exercisable (12,000 shares) and that are exercisable
within 60 days (3,000 shares).
(10) Includes 75,000 shares of Common Stock issuable upon exercise of stock
options that are currently exercisable.
(11) Includes 554,890 shares of Common Stock beneficially owned by Oscar
Gruss & Son Incorporated, as to which Michael L. Rosen disclaims beneficial
ownership. Includes shares of Common Stock issuable upon the exercise of
stock options that are currently exercisable (197,003 shares) and that are
exercisable within 60 days, as of the date hereof (9,000 shares).
5
<PAGE>
THE BOARD OF DIRECTORS
MEMBERSHIP
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS
DIRECTOR AGE SINCE EXPERIENCE DURING THE PAST FIVE YEARS
-------- ------------------- -------- ------------------------------------------------------
<S> <C> <C> <C>
Michael Bruck............... 43 2000 Mr. Bruck is chairman of Convey.com, Inc., an
Internet-based application service provider based in
New York, N.Y. From 1983 to 1999, Mr. Bruck worked for
the Intel Corporation in a variety of management
positions. In 1997, Mr. Bruck served as an observer on
the board of Geocities. From 1989 to 1992, he was
Technical Assistant to Dr. Andrew S. Grove, Intel's
President and CEO
James P. Hassett............ 69 1995 Mr. Hassett is a private consultant and investor. From
1989 to 1994, Mr. Hassett served as the court
appointed Trustee for the Company before it emerged
from bankruptcy, and since then he has served as
Trustee for the Liquidating Estate under the Company's
Plan of Reorganization. From May through July 1996,
Mr. Hassett served as a consultant to the Bankruptcy
Court, the Debtor and Creditors Committee of Nelco,
Ltd. Mr. Hassett also served as the court appointed
adviser to the Creditors' Committee for ICS
Cybernetics, Inc., and subsequently as
Person-in-Control from 1988 through 1995.
George H. Heilborn.......... 65 1997 Mr. Heilborn is the President of G.H. Heilborn and
Co., Inc. of Hackensack, N.J., which is involved in
consulting and financial advisory services for the
leasing and high technology industries. He has been in
his current business since 1992. From 1963 to 1992,
Mr. Heilborn was the founder, President and Chief
Executive Officer of Information Processing Systems,
Inc. of Hackensack, N.J., a company specializing in
the leasing of medium-and large-scale computer systems
to major corporations.
Mark W. Jaindl.............. 40 2000 Mr. Jaindl has been the President and Chief Executive
Officer of American Bank since October 1997 and Vice
Chairman since June 1997. He served as Chief Financial
Officer of Jaindl Farms (agricultural products) and
Jaindl Land Company (real estate development) from May
1982 to October 1991 and again from June 1995 to
October 1997. Mr. Jaindl has been a director of
Massachusetts Fincorp, Inc., the parent of
Massachusetts Co-operative Bank, since April 2000. Mr.
Jaindl was Senior Vice President of Pure World, Inc.,
the holding company for Pure World Botanicals, Inc.,
from June 1992 until May 1995 and has continued to
serve as a director since October 1994. He was Senior
Vice President of Pure World Botanicals, Inc., a
botanical extract manufacturer, from December 1994
until June 1995 and has been a director since December
1994.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS
DIRECTOR AGE SINCE EXPERIENCE DURING THE PAST FIVE YEARS
-------- ------------------- -------- ------------------------------------------------------
<S> <C> <C> <C>
Michael L. Rosen............ 44 1995 President and Chief Executive Officer since July 18,
1997 and director since 1995. Mr. Rosen is also the
controlling stockholder and, since June 1996, the
Chief Executive Officer of Oscar Gruss & Son,
Incorporated, a member firm of the New York Stock
Exchange, Inc. Prior to 1996, Mr. Rosen operated a
variety of real estate development projects and
multi-family rental properties in which he still has
interests.
Paul M. Solomon............. 57 1994 Mr. Solomon is the principal of Exponential Business
Development Company of Syracuse, New York. He has held
this position since 1993. From 1991 to 1993, he was
Senior Vice President of GATX Logistics. From 1980 to
1991, he was Executive Vice President of Itel
Distribution Services. He has been a general partner
of PJE since 1964. He became a general partner and a
director of Northern Exposure this year.
</TABLE>
7
<PAGE>
BOARD ORGANIZATION AND MEETINGS
During the last fiscal year, the Board of Directors held a total of five
(5) meetings. All directors attended at least 75% of their scheduled Board
meetings and meetings held by Committees of which they were members.
The Board of Directors has an Audit Committee. The Audit Committee consists
of Messrs. Jaindl, Heilborn and Solomon. It oversees actions taken by the
Company's independent auditors, recommends the engagement of auditors and
reviews the Company's internal audits. During the last fiscal year, the Audit
Committee held one (1) meeting.
COMPENSATION OF DIRECTORS
FEES AND EXPENSES. In the fiscal year ended May 31, 2000, each director who
was not also an employee of the Company was paid an annual fee of $12,500, plus
$2,500 for services as chairman of each committee of the Board of which that
person was chairman. Each non-employee director also received attendance fees of
$1,500 for each meeting of the Board and $1,000 for each meeting of any
committee (other than telephonic meetings) that he attended, plus travel and
other expenses.
OPTION GRANTS TO DIRECTORS. Each non-employee director also receives
automatic grants of nonqualified stock options to purchase 3,000 shares of
common stock of the Company on the date of each annual meeting. The exercise
price per share is generally the fair market value of the common stock on the
date as of which the director is appointed, elected, or re-elected to the Board.
Options granted as of each annual meeting become fully exercisable on the day
before the next occurring annual meeting and can be exercised until the earlier
of five years after the date granted or one year after the director ceases for
any reason to be a member of the Board. During the fiscal year ended May 31,
2000, 13,280 nonqualified stock options had been granted to outside directors.
As of the date hereof, 30,337 of the options granted to the current directors
are exercisable.
DIRECTORS WHO ARE ALSO EMPLOYEES. Directors who are also employees of the
Company are not compensated for serving on the Board.
8
<PAGE>
EXECUTIVE OFFICERS AND COMPENSATION
EXECUTIVE OFFICERS
We set forth below certain information regarding the executive officers of
the Company, except for Mr. Rosen, whose information is set forth on page 7.
<TABLE>
<CAPTION>
NAME AGE POSITION AND INFORMATION
---- -------- --------------------------------------------------------
<S> <C> <C>
Jonah M. Meer........................ 45 Senior Vice President, Chief Financial Officer and Chief
Operating Officer since June 30, 1997. He is also a
director of T1Xpert.com Corp., a subsidiary of
Continental Information Systems Corp. He has also been
the Managing Director of jBroker, LLC since June 1999.
Prior to joining the Company, Mr. Meer served as Senior
Vice President of Oppenheimer & Co., Inc., a registered
broker-dealer, from May 1996 until June 1997. From 1983
until April 1996, Mr. Meer served as a Vice President
and Treasurer of Oscar Gruss & Son Incorporated, a
registered broker-dealer.
Michael "Mickey" Rosen............... 46 President of T1Xpert.com Corp., a subsidiary of
Continental Information Systems, since August 1999. He
was a Managing Member of Kesher, LLC from January 1996
to August 1999. From January 1995 to June 1996, he was
President of W&D Securities, a member firm of the New
York Stock Exchange, Inc.
</TABLE>
9
<PAGE>
SUMMARY COMPENSATION TABLE
We have set forth below, for the periods indicated, certain summary
information concerning the cash and non-cash compensation earned by or awarded
to (i) the Company's Chief Executive Officer, and (ii) each of the two (2) most
highly compensated persons who were serving as executive officers at the end of
our fiscal year.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION YEAR ($) ($) ($) (#) ($)
------------------------------------ -------- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Rosen.................... 2000 $ 65,000 -- $2,400 --(1) --
President, Chief 1999 65,000 -- 1,854 25,000 --
Executive Officer and 1998 55,377 -- 8,750 -- --
Member of the Board
Jonah M. Meer....................... 2000 200,000 -- -- -- 25,000 --
Senior Vice President, 1999 200,000 100,000 -- -- --
Chief Operating Officer 1998 183,333 -- -- --
and Chief Financial Officer
Michael "Mickey" Rosen.............. 2000 198,878 -- -- --(1) --
President of T1Xpert.com Corp.
</TABLE>
------------------------
(1) Messrs. Michael L. Rosen and Michael "Mickey" Rosen were each granted
500,000 stock options in T1Xpert.com Corp., a subsidiary of the Company.
INFORMATION REGARDING OPTIONS GRANTED TO AND HELD BY THE NAMED EXECUTIVE
OFFICERS
We set forth below information concerning the grant and exercise of options
to purchase the Company's common stock during the fiscal year ended May 31, 2000
to each of the named executive officers.
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED IN FISCAL YEAR PRICE EXPIRATION GRANT DATE
NAME (#) 2000 ($/SHARE) DATE VALUE($)
---- ---------- -------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Michael L. Rosen............................ --(1) --(2) --(3) --(4) --(5)
Jonah M. Meer............................... -- -- -- -- --
Michael "Mickey" Rosen...................... --(1) --(2) --(3) --(4) --(5)
</TABLE>
------------------------
(1) Messrs. Michael L. Rosen and Michael "Mickey" Rosen were each granted
500,000 stock options in T1Xpert.com Corp., a subsidiary of the Company.
(2) Employees of Continental Information Systems and T1Xpert.com Corp. were
granted a total of 1,312,500 stock options in T1Xpert.com Corp. during
fiscal year 2000. Messrs. Michael L. Rosen and Michael "Mickey" Rosen were
each granted 38.10% of these stock options in T1Xpert.com Corp.
(3) The exercise price for T1Xpert.com Corp. options issued to Messrs. Michael
L. Rosen and Michael "Mickey" Rosen is $.0675.
10
<PAGE>
(4) The expiration date for T1Xpert.com Corp. options issued to Messrs. Michael
L. Rosen and Michael "Mickey" Rosen is August 9, 2009.
(5) There was no grant date value for the options in T1Xpert.com Corp.
OPTION EXERCISES IN FISCAL YEAR 2000 AND THE VALUE OF OPTIONS AT MAY 31, 2000
We set forth below information on option exercises during the fiscal year
ended May 31, 2000 by the named executive officers and the value of each of the
named executive officer's unexercised options to acquire the Company's common
stock at May 31, 2000.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
-------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED,
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS HELD AT
ACQUIRED FISCAL YEAR-END FISCAL YEAR-END
ON VALUE (#) ($)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Rosen................... -- -- 97,666(1) --(2) $0(3) $0(4)
Jonah M. Meer...................... -- -- 75,000 -- 0 0
Michael "Mickey" Rosen............. -- -- --(5) --(6) --(7) --(8)
</TABLE>
------------------------
(1) Michael L. Rosen also has 250,000 exercisable options in T1Xpert.com Corp.
(2) Michael L. Rosen also has 250,000 unexercisable options in T1Xpert.com Corp.
(3) Michael L. Rosen's exercisable options in T1Xpert.com Corp. have a value of
$0.
(4) Michael L. Rosen's unexercisable options in T1Xpert.com Corp. have a value
of $0.
(5) Michael "Mickey" Rosen has 250,000 exercisable options in T1Xpert.com Corp.
(6) Michael "Mickey" Rosen has 250,000 unexercisable options in T1Xpert.com
Corp.
(7) Michael "Mickey" Rosen's exercisable options in T1Xpert.com Corp. have a
value of $0.
(8) Michael "Mickey" Rosen's unexercisable options in T1Xpert.com Corp. have a
value of $0.
EMPLOYMENT ARRANGEMENTS
No named executive officer currently has an employment agreement with the
Company.
EMPLOYEE BENEFITS PROGRAMS
The Company has a 401(k) plan that matches employee pretax contributions on
a semi-monthly basis at the rate of 50% of the first 6% of eligible
compensation. In addition, the Company may make an annual discretionary
contribution, based on participants' eligible compensation, once a year, for all
employees with at least one year of service and who are on the payroll as of
December 31 of a given year. The Company made no discretionary contribution. The
vesting schedule for employer contributions is as follows: 10% after one
(1) year; 20% after two (2) years; 30% after three (3) years; 40% after four
(4) years; and 100% after five (5) years. Under the current tax code, employees
may elect to defer up to 15% of their compensation.
11
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
During the Company's 2000 fiscal year, decisions about executive
compensation were made by the Board of Directors. All of the Company's
directors, including those who are also employees of the Company, participate in
decisions regarding executive compensation (except that officers do not
participate in decisions regarding their own compensation).
The Board's principal compensation action in the fiscal year 2000 was to
create incentives for the key executives involved in the development of the
Company's T1Xpert.com Corp. subsidiary. The Board approved the creation of a
stock plan to provide options of T1Xpert.com Corp. stock.
Since his appointment to the position of Chief Executive Officer in 1997,
Michael L. Rosen's salary has been set at $65,000. In fiscal year 2000, the
Board of Directors determined that, in consideration of Mr. Rosen's
contributions and other business activities, it was appropriate to continue his
salary at that same level.
The Board of Directors determined it was appropriate to award Michael L.
Rosen 500,000 T1Xpert.com Corp. stock options in order to provide continued
incentives for him to dedicate his efforts to creation of shareholder value
through the T1Xpert.com Corp. project. The Board concluded that granting stock
options in the subsidiary would provide a more effective incentive than
additional options at the parent company level. The Board also awarded 500,000
T1Xpert.com Corp. stock options to Michael "Mickey" Rosen, the President of
T1Xpert.com Corp.
Other than decisions regarding senior executives described above, the Board
of Directors did not change executive salary levels from those in the 1999
fiscal year, nor did it award bonuses or options during the 2000 fiscal year.
Michael Bruck
James P. Hassett
George H. Heilborn
Mark W. Jaindl
Michael L. Rosen
Paul M. Solomon
12
<PAGE>
OTHER INFORMATION
RELATED PARTY TRANSACTIONS
The Company currently leases certain equipment with a total equipment cost
of approximately $67,000 to Oscar Gruss & Son Incorporated ("Oscar Gruss").
Oscar Gruss beneficially owns more than 5% of the Company's equity securities,
and the Company's President and Chief Executive Officer Michael L. Rosen is
Chief Executive Officer and a director of Oscar Gruss. The equipment is leased
under a three (3) year lease, which commenced August 1, 1999 and involves
monthly rental payments of $2,190. Lease rental payments to the Company during
the year totaled $26,285. The Company no longer enters into new leases of
equipment.
PERFORMANCE GRAPH
The following line graph compares the percentage change in the total
cumulative stockholder return on the Company's Common Stock since May 31, 1995
with the cumulative total return on the NASDAQ Market Index and the capital
stocks of a peer group (the "Peer Group") of the following companies: Capital
Associates, Inc., Comdisco, Inc., Leasing Solutions, Inc., and PLM
International, Inc. Previous proxy statements included two additional companies,
AT&T Capital Corporation and LDI Corporation, in the Peer Group. However, they
have not been included in the Peer Group for this proxy statement because the
necessary information is no longer available for them, as they were acquired by
other companies during fiscal year ended May 31, 1997. The companies included in
the Peer Group reflect the line-of-business in which the Company was engaged
during the periods covered by the graph, rather than the line of business the
Company intends to pursue in the future (as disclosed in the Company's Annual
Report).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MAY-95 MAY-96 MAY-97 MAY-98 MAY-99 MAY-00
<S> <C> <C> <C> <C> <C> <C>
Continental Inform. 100 56.6 71.69 65.08 37.73 37.73
NASDAQ Stock Market 100 145.33 163.75 207.71 293.58 402.05
Peer Group 100 141.18 185.61 287.49 354.65 372.89
</TABLE>
THE FOREGOING GRAPH SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO
ANY FILING OF THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
13
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers, directors, and ten percent beneficial
owners of common stock are required to file reports of ownership and change of
ownership with the Securities and Exchange Commission under the Exchange Act. We
are not aware of any failure to timely file reports required by Section 16 of
the Exchange Act, except a director, James Hassett, inadvertently failed to
timely file a Form 4 with respect to a transaction and a granting of options.
Mr. Hassett reported his transaction on a Form 4 dated November 19, 1999.
INCORPORATION OF CERTAIN MATERIALS BY REFERENCE
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the securities laws that might incorporate future
filings, the Report on Executive Compensation and the Performance Graph included
in this Proxy Statement shall not be incorporated by reference into any such
filing.
PROPOSALS FOR THE 2001 ANNUAL MEETING OF STOCKHOLDERS
If you want to include a proposal in the Proxy Statement for the Company's
2001 Annual Meeting, send the proposal to Continental Information Systems
Corporation, Att.: Jonah M. Meer, Senior Vice President. Proposals must be
received on or before May 28, 2001 to be included in next year's Proxy
Statement. Please note that proposals must comply with all of the requirements
of Rule 14a-8 under the Securities Exchange Act of 1934, as well as the
requirements of the Company's certificate of incorporation and bylaws. The
Company will be able to use proxies given to it for next year's meeting to vote
for or against any shareholder proposal that is not included in the Proxy
Statement at the Company's discretion unless the proposal is submitted to the
Company on or before August 11, 2001.
<PAGE>
CONTINENTAL INFORMATION SYSTEMS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -- OCTOBER 26, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James P. Hassett and Michael L. Rosen
as Proxies, each with the power to appoint his substitute, and hereby authorizes
them, to represent and vote, as designated on the reverse side, all shares of
Common Stock of Continental Information Systems Corporation (the Company) held
of record by the undersigned on September 8, 2000, at the Annual Meeting of
Stockholders to be held on October 26, 2000 or any adjournment thereof.
(Continued on reverse side)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
CONTINENTAL INFORMATION SYSTEMS CORPORATION
OCTOBER 26, 2000
Please Detach and Mail in the Envelope Provided
___
| | Please mark your
A | X | votes as in this
|___| example.
WITHHOLD
FOR AUTHORITY
___ ___
1. Elect six (6) | | | | NOMINEES: Michael Bruck
Directors. |___| |___| James P. Hassett
George H. Heilborn
For, except vote withheld from the following Mark W. Jaindl
nominee(s). Michael L. Rosen
Paul M. Solomon
--------------------------------------------
FOR ABSTAIN AGAINST
2. Ratify the appointment by the Board of ___ ___ ___
Directors of PricewaterhouseCoopers | | | | | |
LLP as the Company's independent |___| |___| |___|
auditors for the fiscal year ending May 31, 2001.
3. Transact any other business that is properly presented at the Annual Meeting.
You will be able to vote your shares at the Annual Meeting if you were a
stockholder of record at the close of business on September 8, 2000.
IF YOU ATTEND THE MEETING, YOU WILL BE ABLE TO REVOKE YOUR PROXY AND VOTE IN
PERSON.
Date , 2000
--------------------------- ------------------------------ ----------
Signature Signature if held jointly
NOTE: Please sign exactly as your name appears on this proxy card. If stock is
held jointly, both should sign. When signing as attorney, executor,
trustee or guardian, please give your full title.
