<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
INTERFACE SYSTEMS, INC.
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(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)(4) 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:
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(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
INTERFACE SYSTEMS, INC.
5855 Interface Drive
Ann Arbor, Michigan 48103
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 18, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Interface
Systems, Inc., a Delaware corporation, will be held at Weber's Inn, 3050 Jackson
Road, Ann Arbor, Michigan on Friday, April 18, 1997 at 2:30 p.m. local time, for
the following purposes:
1. To elect seven directors who will serve until the Annual Meeting of
Stockholders in 1998.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on March 12, 1997 are
entitled to notice of, and to vote at, the Annual Meeting. You are cordially
invited to attend. However, whether you expect to be present at the meeting or
not, please execute and return the enclosed proxy which is solicited by the
Board of Directors. The proxy is revocable and will not affect your right to
vote in person if you attend.
By Order of the Board of Directors,
ROBERT A. NERO
ROBERT A. NERO, President
Ann Arbor, Michigan
March 21, 1997
<PAGE> 3
INTERFACE SYSTEMS, INC.
PROXY STATEMENT
1997 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Interface Systems, Inc. (the "Company"), to
be used at the Annual Meeting of Stockholders of the Company to be held on
Friday, April 18, 1997, or at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders and in this
Proxy Statement. Any stockholder giving a proxy in the accompanying form may
revoke it at any time prior to its exercise. The expense of solicitation of
proxies will be borne by the Company. This Proxy Statement and form of proxy are
being first sent to or given to stockholders of the Company on or about March
21, 1997. The mailing address of the Company's principal executive offices is
5855 Interface Drive, Ann Arbor, Michigan 48103.
Only stockholders of record at the close of business on March 12, 1997 will
be entitled to vote at the meeting or any adjournment thereof. Each holder of
the issued and outstanding 4,535,879 shares of Common Stock, $.10 par value per
share (the "Common Stock"), is entitled to one vote for each share held of
record. Ten days before the Annual Meeting a complete list of stockholders
entitled to vote at the meeting will be open to examination by any stockholder
for any purpose germane to the meeting during ordinary business hours at the
Company's principal offices.
Shares represented by a proxy in the accompanying form, unless previously
revoked, will be voted at the meeting if the proxy, properly executed, is
received by the Company before the close of business on April 17, 1997. Shares
represented by a proxy received after that time will be voted if the proxy is
received by the Company in sufficient time to permit the necessary examination
and tabulation of the proxy before a vote is taken. Shares represented by a duly
executed proxy which does not indicate how it is to be voted will be voted "for"
the election of management's nominees for directors. Stockholders who execute a
proxy in the accompanying form may nevertheless revoke the proxy at any time
before it is exercised by notice to the Company and may vote in person if they
attend the Annual Meeting or any adjournment thereof.
Abstentions and votes withheld from directors are counted for the purpose
of determining whether a quorum is present at the Annual Meeting. For the
purposes of determining the vote with respect to the election of directors, only
those "for" or "against" are counted. Broker non-votes will have no effect.
<PAGE> 4
MATTERS TO COME BEFORE THE MEETING
I. ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall be
elected annually, to serve until the Company's 1998 Annual Meeting, and until
the election or qualification of their successors, or until their resignation or
removal. All of the nominees are currently directors of the Company. If, as a
result of circumstances not now known or foreseen, any of such nominees shall be
unavailable to serve as a director, proxies will be voted for the election of
such other person or persons as management may select.
Directors will be elected by a plurality of the votes of the shares present
in person or represented by proxy entitled to vote at the meeting. PROXIES WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED BELOW UNLESS THE SPECIFICATION
IS MARKED ON THE PROXY INDICATING THAT AUTHORITY TO DO SO IS WITHHELD.
Except as discussed below, each director has been engaged or employed in
the principal occupation reflected in the table for more than five years. Mr.
Nero was appointed President of the Company in January 1997. Prior to that time,
he was from 1994 to 1996, President of Bell & Howell PSC and, from 1989 to 1994,
Vice President of Legent Corp. Mr. Graber retired in 1994, prior to which time
he was Chairman and Chief Executive Officer of Applied Dynamics International
for at least the five years preceding the date of his retirement. Mr. Semple has
been an attorney with Dykema Gossett PLLC for 32 years and Chairman of such law
firm since January 1, 1996. Dykema Gossett provides legal services to the
Company. Mr. David Seigle retired in November 1991 and, in 1996, became the
President of Technology Edge, Inc. Prior to his retirement in 1991, Mr. Seigle
was Vice President of File Net Corporation, a manufacturer of document image
processors. David C. Seigle and Robert A. Seigle are first cousins.
The following table sets forth information regarding all nominees for
election, all persons named in the summary compensation table and all executive
officers and directors as a group. Except as otherwise noted, each person
indicated below exercises sole voting and investment power with respect to the
shares of the Company's Common Stock owned by him.
<TABLE>
<CAPTION>
MARCH 3, 1997
-----------------------
FIRST ELECTED SHARES PERCENT
OR BENEFICIALLY OF
NAME AND AGE PRINCIPAL OCCUPATION APPOINTED DIRECTOR OWNED(1) CLASS(1)
------------ -------------------- ------------------ ------------ --------
<S> <C> <C> <C> <C>
Garnel F. Graber, 65........ Retired 1974 61,454(2) 1.4%
Robert A. Nero, 51.......... President and Chief Executive 1997 -- *
Officer of the Company
George W. Perrett, 59....... Secretary and Vice President of 1985 65,947(3) 1.5%
Operations of the Company;
President of I.G.K. Industries,
Inc., a subsidiary of the Company
David O. Schupp, 60......... Vice President and Treasurer of the 1969 61,102(4) 1.4%
Company
David C. Seigle, 57(5)...... President, Technology Edge, Inc., a 1969 7,700 *
VAR reseller
Robert A. Seigle, 69........ President of Concord Personnel, 1969 86,010 1.9%
Inc., a personnel recruiting
company
Lloyd A. Semple, 57......... Attorney, and Chairman, Dykema 1996 2,700 *
Gossett PLLC, a Detroit, Michigan
law firm
All executive officers and directors as a group (7 persons)(1)(2)(3)................. 284,913 7.0%
Carl L. Bixby............... Former Chief Executive Officer -- 30,505 *
</TABLE>
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* Less than one percent.
2
<PAGE> 5
(1) Includes shares which the following directors have a right to acquire
within 60 days pursuant to the exercise of stock options: Mr. Graber --
11,500 shares; Mr. Perrett -- 37,500 shares; Mr. Schupp -- 15,000 shares;
Mr. David Seigle -- 7,700 shares; Mr. Robert Seigle -- 13,200 shares and
Mr. Semple -- 1,700 shares. For purposes of computing the individual
percentages, the shares which can be acquired upon the exercise of options
within 60 days were added to the shares owned beneficially of record by
such persons on March 3, 1997 and to the shares outstanding on that date.
(2) Includes 7,500 shares of Common Stock owned by Mr. Graber's wife and 552
shares of the Common Stock owned jointly by Mr. Graber and his son. Mr.
Graber has voting power with respect to the 552 shares of Common Stock. Mr.
Graber also serves on the board of directors of Nematron Corporation.
(3) Includes 16,969 shares held by the George W. Perrett, Jr. Trust, of which
Mr. Perrett is a Trustee and a beneficiary. Does not include 750 shares
owned by Mr. Perrett's children, as to which Mr. Perrett disclaims
beneficial ownership.
(4) Includes 45,602 shares held by the David O. Schupp Revocable Trust of which
Mr. Schupp is the Trustee and beneficiary.
(5) Mr. Seigle serves on the board of directors of Imagematrix Corporation.
MEETINGS AND COMMITTEES OF THE BOARD
During the Company's fiscal year ended September 30, 1996, the Board of
Directors held eight meetings and the Compensation Committee and Audit Committee
each met twice. The Compensation Committee is responsible for recommending
salaries and other compensation arrangements for officers of the Company and
performing such functions as may be delegated to it under the provisions of any
bonus, stock option or other compensation plan adopted by the Company. The
Compensation Committee currently consists of four directors who are not
employees of the Company (i.e., Messrs. Handelman, Horst, Robert Seigle and
David Seigle).
The Audit Committee also consists of the four directors listed above who
are not employees of the Company. The Audit Committee has authority to recommend
to the Board the independent public accountants to serve as auditors, review
with the independent auditors the annual audit plan, the financial statements,
the auditors' report and their evaluation and recommendations concerning the
Company's internal controls.
During the fiscal year ended September 30, 1996, each director attended 75%
or more of all Board meetings and 75% or more of the meetings held by all
committees of the Board on which such director served.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report their ownership of the Company's
Common Stock and any changes in that ownership to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Specific due
dates for these reports have been established and the Company is required to
report in this proxy statement any failure to file by these dates. No person
required to file under these rules failed to file any such required report. In
making this statement, the Company has relied on the written representations of
its directors and officers and copies of the reports that have been filed with
the Commission.
DIRECTOR COMPENSATION
Non-employee directors are paid an annual retainer of $4,000 and a fee of
$1,000 per meeting for attendance at regular Board meetings and $500 per meeting
for attendance at committee meetings not held in conjunction with a regular
Board meeting. Travel and lodging expenses incurred by directors residing
outside of the metropolitan Detroit area in order to attend meetings of the
Board are paid by the Company.
3
<PAGE> 6
As additional consideration for their services to the Company, on April 24,
1987 nonemployee directors, Garnel Graber, David Seigle and Robert Seigle, were
each granted options to purchase 5,000 shares of the Company's Common Stock at
the fair market value of $7.75 per share. After adjustment for the Company's
stock dividends and stock split, Messrs. Graber, David Seigle and Robert Seigle
each currently hold options to acquire 5,500 shares at $7.05 per share. The
options are exercisable for a ten-year period from the date of grant or until
the grantee ceases to serve on the Board, whichever is earlier.
On March 26, 1993, pursuant to the Company's 1993 Stock Plan for
Non-Employee Directors, Messrs. Graber, David and Robert Seigle were each
granted options to purchase 6,000 shares of the Company's Common Stock at the
fair market value of $5.25 per share. The options are exercisable in three equal
annual installments, beginning March 23, 1994. The options are exercisable for a
ten-year period from the date of grant or until the grantee ceases to serve on
the Board, whichever is earlier.
On January 11, 1996, Messrs. Graber, David and Robert Seigle were each
granted Subsequent Options to purchase 5,100 shares of the Company's Common
Stock an exercise price of $11.00 per share. The Subsequent Options will become
exercisable in three equal annual installments, beginning January 11, 1997. The
options are exercisable for a ten-year period from the date of grant or until
the grantee ceases to serve on the Board, whichever is earlier.
On February 21, 1996, Mr. Semple was granted an Initial Option to purchase
5,100 shares of the Company's Common Stock an exercise price of $17.875 per
share, exercisable in three equal annual installments, beginning February 21,
1997. The options are exercisable for a ten-year period from the date of grant
or until the grantee ceases to serve on the Board, whichever is earlier.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the Company as
well as other compensation paid or accrued during the Company's last three
fiscal years ended September 30, 1996 to the Chief Executive Officer and the
three most highly compensated executive officers of the Company in all
capacities in which they served:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
-----------------------------
ANNUAL SECURITIES
COMPENSATION(1) UNDERLYING
NAME AND ------------------- STOCK ALL OTHER
PRINCIPAL OCCUPATION FISCAL YEAR SALARY BONUS OPTIONS COMPENSATION(2)
-------------------- ----------- ------ ----- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Garnel F. Graber(3)................... 1996 $ 45,200 $ -- 5,100 $--
Carl L. Bixby(4)...................... 1996 $237,259 $ -- -- 18,314
Former Chief Executive 1995 185,380 7,248 -- 20,043
Officer and President 1994 165,375 47,978 -- 17,166
George W. Perrett, Jr................. 1996 89,000 -- -- 9,560
Secretary and Director 1995 85,000 3,624 -- 15,164
1994 85,000 38,150 -- 7,389
David O. Schupp....................... 1996 89,901 -- -- 9,773
Vice President, 1995 86,008 7,248 -- 16,321
Treasurer and Director 1994 82,688 74,326 -- 10,901
</TABLE>
- ------------------
(1) Includes compensation deferred at the election of the executive in the
category and year earned.
(2) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of each of the named executive officers under the
Company's 401(k) Plan with respect to each of the fiscal years ended
September 30, 1996, 1995 and 1994, respectively, as follows: Mr. Bixby
$8,613, $9,196, and $13,860; Mr. Perrett $4,080, $9,684, and $7,389; and Mr.
Schupp $4,128, $10,676, and $9,421; (ii) the
4
<PAGE> 7
dollar value of any life insurance premiums paid by the Company in the
fiscal years ended September 30, 1996, 1995 and 1994, respectively, with
respect to term life insurance for the benefit of each of the named
executives as follows: Mr. Bixby $3,071, $4,217, and $3,306 and Mr. Schupp
$1,480, $1,480 and 1,480 and (iii) a car allowance paid by the Company in
the fiscal years ended September 30, 1996 and 1995, respectively, as
follows, for Mr. Bixby, $6,630 and $6,630, Mr. Perrett, $5,480 and $5,480
and Mr. Schupp, $4,165 and $4,165.
(3) Mr. Graber was appointed acting Chief Executive Officer of the Company in
June 1996, to hold office until a new Chief Executive Officer of the Company
was appointed. Mr. Nero was appointed as President and Chief Executive
Officer of the Company in January 1997.
(4) Mr. Bixby resigned as Chief Executive Officer of the Company in June 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR ("FY")-END OPTION/SAR VALUES
The following table provides information with respect to the named
executive officers concerning the exercise of options during 1996 and
unexercised options held as of the end of the Company's last fiscal year,
September 30, 1996. All options were granted under the Company's 1992 Stock
Option Plan or the now terminated 1982 Stock Option Plan.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES VALUE UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON REALIZED OPTIONS AT FY-END(#) IN-THE-MONEY OPTIONS
NAME EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Carl L. Bixby.................. 6,000 13,872 -0- -0-
George W. Perrett.............. 478 3,155 37,500/15,000 6,748/13,125
David O. Schupp................ -0- -0- 5,500/15,000 6,748/13,125
</TABLE>
- ------------------
(1) The dollar values in these columns are calculated by determining the
difference between the fair market value (on the date of exercise, in the
case of exercised options, or at the fiscal year end, in the case of
exercisable options) of the securities underlying the options and the
exercise price of the option. At the Company's 1996 fiscal year end
(September 30, 1996) and on March 3, 1997, the fair market value (i.e., the
closing price of the Common Stock as reported on The Nasdaq Stock Market) of
the Common Stock was $5.625 and $4.625, respectively. The dollar values in
this table as well as all other tables contained in this proxy are
calculated on a pre-tax basis.
EMPLOYMENT AND TERMINATION ARRANGEMENTS
The Company has entered into a Release and Settlement Agreement with Mr.
Carl Bixby dated as of June 20, 1996. The Agreement provides, among other
things, that Mr. Bixby would resign as Chief Executive Officer and President of
the Company in June 1996 and would provide consulting services to the Company
for a period of 24 months beginning July 1, 1996 at a rate of $16,000 a month.
Mr. Bixby has also agreed not to use or disclose the Company's confidential
information and, until July 1, 1998, not to engage in any business which is in
substantial and direct competition with the Company. Further, the Agreement
provides for the release by Mr. Bixby of certain past and future claims against
the Company.
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS
1. THE EXECUTIVE LOAN PROGRAM
In October 1995, the Board of Directors of the Company adopted the
Interface Systems, Inc. Executive Loan Program (the "Executive Loan Program")
which provides for the making of loans to the executive officers of the Company
to enable such officers to purchase shares of the Company's common stock on the
open market or in privately negotiated sales.
5
<PAGE> 8
The Executive Loan Program was adopted to encourage key executives in
acquiring and maintaining a significant equity interest in the Company's Common
Stock thereby aligning their interests with the interests of the Company's
stockholders. The following summarizes the principal features of the Executive
Loan Program.
All senior executives of the company are eligible to participate in the
Executive Loan Program. The maximum amount of any loan or loans outstanding to
any one executive cannot exceed Five Hundred Thousand Dollars ($500,000).
Loans under the program bear interest at a rate equal to the greater of the
Applicable Federal Rate for the month in which the loan was issued or the
interest rate paid by the Company on its corporate borrowings but shall not
exceed the maximum rate permitted by law. Such interest is payable annually.
Loans under the Program are required to be secured by collateral. Collateral can
include, any other things, a pledge or common stock of the Company owned by the
executive or a security interest in the real or other personal property of the
executive. The Company has the right to offset from the amounts owed by the
Company to the executive against any amount of the loan that remains unpaid.
The Program is administered by Lloyd Semple or such other individual or
entity selected by the Company's Board of Directors. The Administrator shall
have the power to make all determinations needed in connection with the
Executive Loan Program, to adopt forms of loan documents, to exercise all rights
and powers allocated to the Company and to do anything else which is helpful or
necessary to the proper operation of the Executive Loan Program.
On February 21, 1996, the Company made a loans under the Executive Loan
Program to George Perrett and David O. Schupp, in the principal amounts of
$55,000 and $80,000, respectively. Each such loan bears interest at a rate of
5.50%. Mr. Perrett's and Mr. Schupp's loans are secured by shares of Common
Stock of the Company owned by Mr. Perrett and shares of Common Stock of the
Company, and other public company common stock, owned by Mr. Schupp,
respectively. As of February 28, 1997, $55,000 and $50,000 in principal amount
were outstanding under Mr. Perrett's and Mr. Schupp's loans, respectively.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION TO STOCKHOLDERS
The Company's Compensation Committee currently consists of four directors
who are not employees of the Company (Milton Handelman, G. Paul Horst, David C.
Seigle, and Robert A. Seigle).
COMPENSATION PHILOSOPHY
The Company's compensation policy is designed to provide competitive
compensation which rewards individual achievement and performance while
encouraging above average corporate performance. As part of the Company's
policy, the Company does not enter into contracts with its executive officers.
The elements of compensation are base salary, bonus and stock option awards.
BASE SALARY
The Committee reviews the base salary of each executive officer annually.
The base salary for each officer is determined after the committee reviews
competitive executive compensation data and evaluations of each officer's duties
and performance, submitted by the chief executive officer. The base compensation
for the chief executive officer is established by a determination of the same
factors.
BONUS
The Company's bonus policy is designed to encourage increased profitability
and, thus, is based on a formula linked to the Company's earnings per share
performance. In 1996, the executive officers, including the chief executive
officer, were eligible for a bonus of $500 to $1,000 per $.01 per share of
operating net earnings. In addition, the chief executive officer was eligible
for a bonus of $2,000 for each $.01 up to $.55 per share of
6
<PAGE> 9
operating net earnings and was eligible for a bonus of $4,000 for each $.01 over
$.55 per share of operating net earnings. No bonuses were paid to the executive
officers of the Company in 1996.
STOCK OPTIONS
The Company's stock option plan is designed to retain key employees and
motivate officers to improve the Company's performance. No options were granted
to any of the Company's executive officers in fiscal 1996.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company has reviewed the Internal Revenue Code and related regulations
of the Internal Revenue Service which restrict deductibility of executive
compensation paid to any of its most highly compensated executive officers at
the end of any fiscal year to the extent such compensation exceeds $1,000,000 in
any year. The Committee does not believe that the Company's current compensation
program for executive officers is likely to result in payments to any executive
officer in the 1996 fiscal year which would be subject to the restriction on
deductibility, and therefore concluded that no further action with respect to
qualifying such compensation for deductibility was necessary at this time. The
Committee will continue to evaluate the advisability of qualifying future
executive compensation programs for deductibility under the Internal Revenue
Code.
The Committee continually reviews the compensation policies established for
the Company's executive officers but is not obligated to modify such policies
from year to year.
Milton Handelman
G. Paul Horst
David A. Seigle
Robert A. Seigle
March 14, 1997
7
<PAGE> 10
STOCK PRICE PERFORMANCE GRAPH
The following graph provides a comparison with the stated indices of the
cumulative five-year total stockholder return on the Company's Common Stock. All
dividends are assumed to be have been reinvested over the five year period. The
indices used are the Center for Research in Securities Prices Total Return Index
for the NASDAQ Stock Market (U.S. Companies) and the published index relating to
the NASDAQ Computer Manufacturer Stocks.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD INTERFACE NASDAQ (U.S. NASDAQ
(FISCAL YEAR COVERED) SYSTEMS, INC. COMPANIES) (COMPUTER
MFGRS.)
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 77.78 112.07 107.56
1993 109.26 146.79 112.87
1994 115.63 147.99 125.67
1995 148.93 204.41 222.76
1996 188.89 242.58 291.08
</TABLE>
8
<PAGE> 11
INDEPENDENT PUBLIC ACCOUNTANTS
BDO Seidman, independent public accountants, audited the financial
statements of the Company for the fiscal year ended September 30, 1996. It is
anticipated that the Board of Directors will select BDO Seidman to audit the
financial statements of the Company for the fiscal year ending September 30,
1997 at its meeting immediately following the Annual Meeting of Stockholders.
Representatives of BDO Seidman are expected to be present at the Annual Meeting
to be available to respond to questions from the Stockholders and, if they
desire, will have an opportunity to make any statement they consider
appropriate.
OTHER MATTERS AND STOCKHOLDER PROPOSALS
At the date of this Proxy Statement, management is not aware of any matters
to be presented for action at the meeting other than those described above.
However, if any other matters should come before the meeting, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their judgment on such matters.
Any proposals of stockholders to be presented at the 1998 Annual Meeting
which are eligible for inclusion in the Company's proxy statement for that
meeting under applicable rules of the Securities and Exchange Commission must be
received by the Company at the address of its principal offices set forth in
this Proxy Statement no later than November 22, 1997.
Stockholder proposals to be presented at the 1998 Annual Meeting which are
not to be included in the Company's Proxy Statement relating to that meeting
generally must be received by the Company not less than 60 days nor more than 90
days prior to the first anniversary of the preceding year's annual meeting. If
the meeting date has been advanced by more than 30 days or delayed by more than
60 days, then such proposal must be received by the Company not less than 60
days nor more than 90 days before the upcoming annual meeting or no later than
10 days after the day of the public announcement of the date of such meeting, in
accordance with the procedures set forth in the Company's Bylaws, in order to
properly be brought before the Annual or Special Meeting.
By Order of the Board of Directors,
ROBERT A. NERO
ROBERT A. NERO, President
Ann Arbor, Michigan
March 21, 1997
9
<PAGE> 12
<TABLE>
<S><C>
REVOCABLE PROXY
INTERFACE SYSTEMS, INC.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 1997
The undersigned hereby constitutes and appoints Robert A. Nero and David O. Schupp, or either of the, attorneys, agents and
proxies with power of substitution to vote all of the shares of Common Stock of Interface Systems, Inc. (them "Company") that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company, to be held at Weber's Inn, 3050 Jackson Road,
Ann Arbor, Michigan on April 18, 1997 at 2:30 p.m., local time, and at any adjournments thereof, upon the following matters:
1. Election of Directors: FOR WITHHOLD FOR ALL EXCEPT
/ / / / / /
Garnel F. Graber
Robert A. Nero
George W. Perrett
David O. Schupp
David C. Seigle
Robert A. Seigle
Lloyd A. Semple
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.
- ------------------------------------------------------------------------------------------------------------------------------------
2. In their discretion upon the transaction of such other business as may properly come before the meeting.
Shares represented by a duly executed proxy which does not indicate how it will be voted, will be voted FOR the election of the
Board's nominees. Discretionary authority is hereby conferred as to any other matters as may properly come before the meeting.
Please be sure to sign and date this Proxy in the box below.
Date
----------------------------------------------------------
- ----------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
- ------------------------------------------------------------------------------------------------------------------------------------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
INTERFACE SYSTEMS, INC.
The above signed acknowledges receipt of the Notice of Annual Meeting of Stockholders and the Proxy Statement dated March
21, 1997, and ratifies all that the proxy holders or either of them or their substitutes may lawfully do or cause to be done by
virtue hereof and revokes all former proxies.
Please sign exactly as your name(s) appear(s) on stock records. When signing as attorney, administrator, trustee, guardian
or corporate officer, please so indicate.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF INTERFACE SYSTEMS, INC.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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