<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
NETWORK SIX, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
DOROTHY M. CIPOLLA
------------------------------------------------
(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 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:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
May 28, 1997
Dear Stockholder:
The annual meeting of the stockholders of Network Six, Inc. will be held on
Wednesday, June 25, 1997 at 3:00 p.m. at the Radisson Airport Hotel, 2081 Post
Road, Warwick, Rhode Island, 02886.
Please sign and return the enclosed proxy at your earliest convenience
indicating on the bottom of the proxy if you plan to attend the meeting in
person.
The following material is enclosed for your review and action:
. Notice of the Annual Meeting
. Proxy Statement
. Proxy
. Return Envelope
. Annual Report
We hope to see you at the annual meeting. Thank you for your support of
Network Six, Inc.
Sincerely,
Kenneth C. Kirsch
Chairman, President and Chief
Executive Officer
KCK/pab
Enclosures
legal/96
<PAGE>
NETWORK SIX, INC.
475 KILVERT STREET
WARWICK, RI 02886
(401) 732-9000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1997
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Network
Six, Inc., (the "Company"), will be held at 3:00 p.m. local time on June 25,
1997, at the Radisson Airport Hotel, 2081 Post Road, Warwick, Rhode Island,
for the following purposes:
1. To elect the following Directors of the Company: Dana H. Gaebe,
Kenneth C. Kirsch, Nicholas R. Supron, and Clifton C. Dutton.
2. To modify the 1993 employee incentive stock option plan to provide for
the reservation of 75,000 additional shares of the Company's authorized but
unissued Common Stock for employee stock options.
3. To consider and act upon any other matters which may properly come
before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 14, 1997 as
the record date for the determination of stockholders entitled to notice of
and to vote at the meeting and at any adjournments thereof.
IF YOU ARE UNABLE TO ATTEND THE MEETING, YOU ARE REQUESTED TO COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED.
By Order of the Board of Directors,
Kenneth C. Kirsch
Chairman, President and Chief
Executive Officer
Warwick, Rhode Island
May 28, 1997
<PAGE>
NETWORK SIX, INC.
PROXY STATEMENT
FOR THE
1997 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of the Common Stock and the
holder of the Series A Convertible Preferred Stock ("Convertible Preferred
Stock") of Network Six, Inc. (the "Company") in connection with the
solicitation on behalf of the Board of Directors of the Company of proxies to
be used in voting at the Annual Meeting of Stockholders to be held on June 25,
1997, and any adjournments thereof (the "Meeting").
The enclosed proxy is for use at the Meeting if the stockholder will not be
able to attend in person. Any stockholder who executes a proxy may revoke it
at any time before it is voted by delivering to the Secretary of the Company
either an instrument revoking the proxy or a duly executed proxy bearing a
later date. A proxy may also be revoked by any stockholder present at the
Meeting who expresses a desire to vote his shares in person. All shares
represented by valid proxies received pursuant to this solicitation and not
revoked before they are exercised will be voted in the manner specified
therein. If no specification is made the proxies will be voted:
1. To elect the following Directors of the Company: Dana H. Gaebe, Kenneth
C. Kirsch, Nicholas R. Supron, and Clifton C. Dutton.
2. To modify the 1993 employee incentive stock option plan to provide for
the reservation of 75,000 additional shares of the Company's authorized but
unissued Common Stock for employee stock options.
3. To consider and act upon any other matters which may properly come
before the Meeting or any adjournment thereof.
Only the holders of Common Stock and Convertible Preferred Stock of record at
the close of business on May 14, 1997 will be entitled to vote at the Meeting.
On April 30, 1997, 721,192 shares of Common Stock and 714,285.71 shares of
Convertible Preferred Stock were outstanding. The Preferred Stock converts four
shares into one common share. Each common share is entitled to one vote on each
matter to be voted upon at the Meeting. Each four preferred shares is entitled
to one vote on each matter to be voted upon at the Meeting. A majority of shares
entitled to vote is required to be represented at the Meeting to constitute a
quorum for the holding of the Meeting. The failure of a quorum to be represented
at the Meeting will necessitate adjournment and will subject the Company to
additional expense.
The Notice of Annual Meeting of Stockholders, this Proxy Statement and the
accompanying proxy were first mailed to stockholders on or about May 28, 1997.
PROPOSAL 1
The first proposal for stockholder consideration is election of the nominees
as Directors of Network Six, Inc. to serve until the next annual meeting of
the Company.
The four Directors are elected by the affirmative vote of a majority of the
Common Stock entitled to vote thereon, represented by person or proxy, at the
Annual Meeting when a quorum is present. The holders of the Convertible
Preferred Stock are entitled to vote as a class for the election of two
Directors. The preferred holders have elected not to have a representative on
the Board of Directors at this time.
Each of the nominees for Director is presently a Director of the Company.
Each has consented to being named a nominee in this Proxy Statement and has
agreed to serve as a Director if elected at the Meeting. The Board of
Directors has no reason to believe that any of the nominees will be
unavailable for election. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL
NOMINEES FOR ELECTION AS DIRECTORS.
<PAGE>
NOMINEES
The following sets forth, as of the date hereof, information concerning the
four nominees for election as Directors of the Company.
CLIFTON C. DUTTON. Mr. Dutton, 36, has been a Director of the Company since
March 1997. Mr. Dutton is President and CEO of Distributed Data Systems, a
privately held technology management and software development firm based in
Providence, Rhode Island. Mr. Dutton founded Distributed Data Systems in 1993.
Previously, he held technical management positions with TSS, Ltd., GTECH
Corporation and General Dynamics.
DANA H. GAEBE. Mr. Gaebe, 53, has been a Director of the Company since
February 1976. A partner in the law firm of Gaebe & Kezirian in Providence,
Rhode Island, Mr. Gaebe has been engaged in the private practice of law since
July 1969.
KENNETH C. KIRSCH. Mr. Kirsch, 43, has been President of the Company since
December 1995, Chief Executive Officer since April 3, 1996 and was elected
Chairman in January 1996 by the Board of Directors. From August 1995 until
December 1995, he served as Vice President of Sales and Marketing for the
Company. From February 1994 until August 1995, Mr. Kirsch was Vice Chairman
and Chief Operating Officer of VideoBridge International Corp., a
videoconferencing services company. From May 1983 until February 1994, Mr.
Kirsch held a number of senior management positions at GTECH Corporation, the
leading supplier of on-line lottery systems to state and federal governments
worldwide.
NICHOLAS R. SUPRON. Mr. Supron, 41, is Senior Vice President, Worldwide
Operations, for GTECH Corporation. He has been with GTECH since 1984, earlier
serving as Vice President, Latin America Sales and Operations, Director of
Marketing, Director of Product Management, and Senior Business Consultant. Mr.
Supron previously worked for Tenneco, Inc., General Motors, and Brown and Root.
CERTAIN BOARD INFORMATION
Since last year's annual meeting of stockholders on June 12, 1996, the Board
of Directors has held a total of five meetings. All Directors attended all of
such meetings or approved all the actions of the Board of Directors and
attended all meetings of Board committees of which they were members.
The Board of Directors has two committees: (i) the Audit Committee and (ii)
the Compensation and Option Committee.
The Audit Committee is authorized by the Board to review, with the Company's
independent public accountants, the annual financial statements of the Company
prior to publication; to review the work of, and approve non-audit services
performed by, such independent accountants; and to make annual recommendations
to the Board for the appointment of independent public accountants for the
ensuing year. The Audit Committee also reviews the effectiveness of the
financial and accounting functions, organization, operations and management of
the Company. During 1996, its members were Messrs. Gaebe and Supron. The Audit
Committee held one meeting in 1997 to review the Company's 1996 financial
statements and to consider other financial and accounting matters. The Audit
Committee also held one meeting in early 1995 to review the 1995 financial
statements.
The Compensation and Option Committee reviews and recommends to the Board of
Directors the compensation and benefits of all officers of the Company. The
Compensation and Option Committee also administers the Company's bonus and
stock option plans. Its current members are Messrs. Supron and Gaebe. It held
three meetings since last year's annual meeting of stockholders.
The Board has no nominating committee, as the Board as a whole reviews
qualifications and recommends to the stockholders the election of Directors of
the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gaebe, a member of the Compensation and Option Committee, is a partner in
a law firm that provides legal services to the Company. See "Certain Business
Relationships."
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following Report of the Compensation and Option
Committee and Performance Graph shall not be incorporated by reference into
any such filings.
2
<PAGE>
REPORT OF THE COMPENSATION AND OPTION COMMITTEE
The Compensation Committee was established by the Board of Directors on
October 13, 1993 and was given final decision-making authority with respect to
stock options on March 23, 1994.
The principal duties of the Compensation and Option Committee are to: (i)
establish the executive compensation policies of the Company; (ii) oversee the
design and administration of executive officer compensation programs; (iii)
approve specific compensation decisions with respect to executive officers and
(iv) administer stock option programs. The Compensation and Option Committee
offers the following report concerning compensation.
Guiding Principles. The Company applies a consistent philosophy to
compensation for all employees, including senior management. In all cases, the
Company is committed to maximizing stockholder value and as part of that
commitment seeks to align the financial interests of all its employees,
including its executive officers, with those of its stockholders. The Company
provides executive compensation that is designed to attract and retain highly
qualified and seasoned executive officers from the systems integration
industry. To ensure that compensation is competitive, the Company compares its
pay practices with those of comparable companies. The Compensation and Option
Committee administers an executive compensation program that has been crafted
in accordance with these guiding principles. It consists of two elements:
annual compensation and long-term stock compensation.
Annual Compensation. Total annual compensation is comprised of two parts:
base salary and annual incentive bonus. Both parts are targeted to provide
compensation equivalent to that provided by a range of similar companies.
Total compensation also reflects the executive's experience, sustained
performance and corporate or operating unit performance. Annual incentive
bonuses increase or decrease both with Company and individual performance and
with achievement of annual financial goals established by the Company.
Long-Term Stock Compensation. The Company's long-term stock compensation
includes stock option programs and stock purchase plans. These programs
provide for the retention of key employees as well as the alignment of
employees' and stockholders' financial interests since a substantial portion
of potential compensation is realized only through increases in stock price.
CEO Compensation. Generally, the Company compensates its Chief Executive
Officer in accordance with the same guiding principles applied to its
compensation of other executive officers and employees. Kenneth C. Kirsch, the
company's Chief Executive Officer, received a base salary of $90,000 and an
incentive bonus of $30,000 in 1996. The incentive bonus was a minimum
guaranteed amount. Mr. Kirsch's compensation increased primarily due his
promotion to Chairman, President and CEO. In addition, he was only with the
Company for a partial year in 1995. The Committee considers the annual
compensation paid to Mr. Kirsch to be appropriate and consistent with the
compensation received by similarly situated CEOs.
The Compensation and Option
Committee
Dana H. Gaebe
Nicholas R. Supron
3
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table discloses compensation received by the persons serving
as the Company's Chief Executive Officer (the "Named Executive Officer") for
each of the three years ended December 31, 1996.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION
------------------------- OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUSES($) SARS(#) COMPENSATION ($)
- --------------------------- ---- --------- ---------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Kenneth C. Kirsch(1).... 1996 $90,000 $30,000 25,000 -0-
Chairman, President and 1995 $25,594 $ 7,869 3,825 -0-
Chief Executive Officer 1994 -0- -0- -0- -0-
Robert E. Radican(2).... 1996 $15,000 $ 0 -0- $141,620
Chairman and Chief 1995 $62,981 $ 0 -0- $ 3,179
Executive Officer 1994 $80,000 $69,182 -0- $ 6,944
</TABLE>
- --------
(1) Served as Vice President Sales and Marketing from August 14, 1995 to
December 12, 1995. Appointed President on December 12, 1995, Chairman of
the Board in January 1996, and Chief Executive Officer in April 1996.
(2) Served as Chairman and Chief Executive Officer from December 12, 1995 to
February 15, 1996. Other compensation includes deferred compensation and
car allowance payments made to Mr. Radican.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants during the year
ended December 31, 1996 to the Named Executive Officer.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS/SARS APPRECIATION FOR
GRANTED TO EXERCISE OPTION TERM (3)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED (#) (1) FISCAL YEAR (2) ($/SHARE) DATE 5% 10%
---- --------------- --------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth C. Kirsch....... 12,500 8.2% $1.50 12/10/06 $ 30,542 $ 48,633
Kenneth C. Kirsch....... 12,500 8.2% $2.00 12/10/06 $ 40,722 $ 64,844
Robert E. Radican....... 0 0 0 0 0 0
</TABLE>
- --------
(1) The $2.00 options vest immediately upon grant, the $1.50 options vest over
three years; the exercise price of $1.50 per share was at market price,
the $2.00 option price was above the market price of the Company's Common
Stock on the date of grant.
(2) The Company granted options to purchase 152,550 shares to employees during
the year ended December 31, 1996.
(3) The dollar amounts are the result of calculations at assumed rates of
appreciation from the exercise price until the expiration date of the
options and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock prices.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
No options were exercised by Named Executive Officers in 1996.
4
<PAGE>
BOARD COMPENSATION
Directors receive $500 per meeting attended and are reimbursed for out-of-
pocket expenses incurred for attendance at meetings. On May 17, 1995, the
stockholders approved a non-employee stock option plan. Each director will be
awarded an option to purchase 1,250 shares of common stock, each year in
January, for a maximum of option to purchase 3,750 shares per director.
EMPLOYMENT AGREEMENTS
The Company is party to a two-year employment agreement with Mr. Kirsch
expiring December 31, 1998 which provides for an annual base salary of $160,000,
a discretionary incentive bonus, health insurance, car allowance and term life
insurance. As part of the new agreement, Mr. Kirsch is required to purchase
annually a minimum of $25,000 (and a maximum of $100,000) of the Company's
Common Stock. The agreement may only be terminated by the Company upon the
employee's death or disability or upon a reasonable determination by the Board
of Directors that the employee is not adequately performing his duties under the
agreement. The agreement also provides that Mr. Kirsch may not compete with the
Company in the United States or its territories for a period from one to two
years following termination of his employment depending on the nature of the
termination. The agreement provides for a severance payment of up to $160,000,
based on the remaining term of the employment contract, if Mr. Kirsch is
terminated or, at Mr. Kirsch's option, upon the change of control of the
Company.
CERTAIN BUSINESS RELATIONSHIPS
The law firm of Gaebe and Kezirian, of which Mr. Gaebe is a partner, provides
legal services to the Company on an ongoing basis. Mr. Gaebe is a director of
the Company. During the year ended December 31, 1996, the Company paid
$211,270 to Gaebe & Kezirian for legal services.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of the Company's Common
Stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission. Officers, directors and greater than 10% stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal year ended
December 31, 1996, all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% stockholders were satisfied,
except that Robert E. Radican inadvertently failed to file a Form 3 Initial
Statement of Ownership of Securities and a Form 4 Statement of Changes of
Beneficial Ownership of Securities, relating to Mr. Radican assuming the
functions of Chairman of the Board and Chief Executive Officer in December 1995
and to the purchase of an aggregate of 1,000 shares of Common Stock in January
1996, on a timely basis.
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The Company's outstanding voting securities consist of its Common Stock and
Convertible Preferred Stock, which vote together as a single class on most
matters. The following table sets forth certain information, as of December
31, 1996, concerning beneficial ownership of the Company's voting securities
by (i) each person who is known by the Company to be the beneficial owner of
more than 5% of such voting securities, (ii) each director of the Company, and
(iii) the Named Executive Officers, (iv) all directors and executive officers
of the Company as a group. The Company believes that the beneficial owners of
the voting securities listed below, based on information furnished by such
owners, have sole voting and investment power with respect to such shares,
5
<PAGE>
subject to community property laws where applicable and the information
contained in the footnotes to the table below.
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED COMMON STOCK
STOCK BENEFICIALLY BENEFICIALLY PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNED (1) OWNED(1) VOTING STOCK
------------------------ --------------------- ------------ -------------
<S> <C> <C> <C>
Saugatuck Capital Company
Limited..................... 714,286 0 20.0
One Canterbury Green
Stamford, CT 06901
Dana H. Gaebe (2)............ -0- 2,559 *
Clifton C. Dutton (3)........ -0- 0 *
Nicholas R. Supron (4)....... -0- 1,250 *
Kenneth C. Kirsch (5) (6).... -0- 25,250 2.8
James J. Trainor (7)......... -0- 2,500 *
Robert E. Radican (5)(8)..... -0- 31,900 3.6
Executive Officers and
Directors as a Group
(6 persons)................. -0- 63,459 7.0
</TABLE>
- --------
* Less than one percent
(1) Includes shares issuable upon the exercise of options that were
exercisable as of December 31, 1996 or became exercisable within 60 days
of that date. The Convertible Preferred Stock converts each four shares into
one share of Common Stock.
(2) The business address for Mr. Gaebe is 128 Dorrance Street, Providence,
Rhode Island 02903.
(3) The business address for Mr. Dutton is 144 Waterman Street, Providence, RI
02906.
(4) The business address for Mr. Supron is 55 Technology Way, W. Greenwich, RI
02817.
(5) The business address of Mr. Kirsch and Mr. Radican is 475 Kilvert Street,
Warwick, Rhode Island 02886.
(6) Includes the 25,000 shares issuable upon the exercise of stock options
that were exercisable as of December 31, 1996 or became exercisable within
60 days of that date. These shares are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned by
such person individually and by the group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person.
(7) The business address for Mr. Trainor is 217 A Street, N.E., Washington,
D.C. 20002. On March 21, 1997, Mr. Trainor resigned from the Board of
Directors.
(8) The indicated ownership is as of 6/24/96 and is based solely on a Form 4
provided to the Company. It includes 19,750 shares owned by Mr. Radican's
wife.
BACKGROUND OF OFFICERS AND DIRECTORS OTHER THAN NOMINEES
DONNA GUIDO, Vice President Information Systems. Ms. Guido, 41, joined the
Company in 1986 as a Consultant, later to become an application development
manager and project manager. Prior to joining the Company, Mrs. Guido was a
project manager at Blue Cross of Rhode Island.
DOROTHY M. CIPOLLA, Chief Financial Officer and Treasurer. Mrs. Cipolla, 41,
joined Network Six in 1994 as the Controller and became Chief Financial
Officer in January of 1996. Prior to joining Network Six, Mrs. Cipolla was a
consultant at Ernst and Whinney, a project manager for Kendall Company and a
controller at Garelick Farms and Bird Machine Company. Mrs. Cipolla is a
Certified Public Accountant.
6
<PAGE>
PERFORMANCE GRAPH
The following graph demonstrates the performance of the cumulative total
return to stockholders of the Company's Common Stock during the previous five
years in comparison to the cumulative total return on the NASDAQ Stock Market
(US) and the NASDAQ Computer and Data Processing Services Stocks Index.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
NETWORK SIX, INC. $100.00 $1,857.14 $2,971.43 $2,400.00 $714.29 $128.57
NASDAQ TOTAL RETURN INDEX FOR NASDAQ
COMPUTER & DATA PROCESSING SERVICES STOCKS $100.000 $ 107.59 $ 113.87 $ 138.24 $210.53 $259.99
NASDAQ TOTAL RETURN INDEX FOR THE NASDAQ
STOCK MARKET (US) $100.00 $ 116.38 $ 133.59 $ 130.59 $184.67 $227.16
</TABLE>
PROPOSAL 2
The second proposal for stockholder consideration is to amend the Company's
1993 Incentive Stock Option Plan (the "Incentive Plan") to provide for the
reservation of 75,000 additional shares of the Company's authorized but
unissued common stock for employee stock options.
The competition for personnel in the Human Services Systems Integration
industry is intense, and the supply of senior personnel and project managers
is limited. The Company believes that it must offer more than ordinary income
compensation packages to attract and retain qualified employees. Talented
professionals in the industry today seek some form of ownership in their
employers as part of a two-way commitment between the individual and the
employer. The Company considers additional stock options an important part of
its plan to hire and retain talented employees.
DESCRIPTION OF PLAN
The Incentive Plan was effective as of April 7, 1993. The aggregate amount
of stock which currently may be purchased pursuant to options granted under
the Incentive Plan is 125,000 shares. As of April 30, 1997, options to
purchase 105,606 shares of common stock had been granted pursuant to the
Incentive Plan.
7
<PAGE>
The Incentive Plan authorizes the Company to issue stock options from time
to time to persons who on the date of grant are full-time employees of the
Company. The aggregate fair market value of stock, determined at the time of
grant of options, for which any single employee may be granted options in any
calendar year may not exceed $100,000.
Options granted under the Incentive Plan are not transferable by the holder,
except upon death by will or the laws of descent and distribution. The
exercise price of options granted under the Incentive Plan may not be less
than the fair market value of the stock on the date of grant of the option.
The exercise price of options granted to any person then owning more than 10
percent of the voting power of all classes of the Company's stock may not be
less than 110 percent of the fair market value of the stock on the date of
grant of the option. Options are fully vested on the grant date or vest over 3
years. No option granted under the Incentive Plan may be exercisable after the
expiration of 10 years from the date of grant. No option granted to a person
then owning more than 10 percent of the voting power of all classes of the
Company's stock may be exercisable after the expiration of five years from the
date of grant.
Subject to the above limitations, options are granted pursuant to the
Incentive Plan containing provisions determined by the Board of Directors,
acting through the Compensation and Option Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESERVATION OF AN
ADDITIONAL 75,000 SHARES OF THE COMPANY'S COMMON STOCK FOR THE EMPLOYEE
INCENTIVE STOCK OPTION PLAN.
STOCKHOLDER PROPOSALS FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who wishes to present a proposal for consideration at the
Annual Meeting of Stockholders to be held in 1998 must submit such proposal in
accordance with the rules promulgated by the Securities and Exchange
Commission. In order for a proposal to be included in the Company's proxy
materials relating to the 1998 annual meeting, the stockholder must submit
such proposal in writing to the Company so that it is received not later than
December 21, 1997. Such proposals should be addressed to Secretary, Network
Six, Inc., 475 Kilvert Street, Warwick, Rhode Island, 02886.
OTHER MATTERS
The Board of Directors has no knowledge of any business to be presented for
consideration at the Meeting other than as described above. Should any such
other matters properly come before the Meeting or any adjournment thereof, the
persons named in the enclosed proxy will have discretionary authority to vote
such proxy in accordance with their best judgment on such other matters and
with respect to matters incident to the conduct of the Meeting.
A copy of the Company's 1996 Annual Report to Stockholders is being mailed
with this Proxy Statement. Additional copies of the Annual Report and the
Notice of Annual Meeting of Stockholders, Proxy Statement and accompanying
proxy may be obtained from the Company.
A list of stockholders of record entitled to be present and vote at the
Meeting will be available at the offices of the Company, 475 Kilvert Street,
Warwick, Rhode Island 02886, for inspection by the stockholders during regular
business hours from May 28, 1997 to the date of the Meeting and will be
available during the Meeting for inspection by stockholders who are present.
8
<PAGE>
In order to assure the presence of the necessary quorum at the Meeting,
please sign and mail the enclosed proxy promptly in the envelope provided. No
postage is required if mailed within the United States. The signing of the
proxy will not prevent your attending the Meeting and voting in person, should
you so desire.
By Order of the Board of Directors,
Kenneth C. Kirsch
Chairman, President and Chief
Executive Officer
May 28, 1997
9
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
FOR WITHHOLD FOR ALL EXCEPT
1) To elect the following Directors [_] [_] [_]
of the Company:
DANA H. GAEBE, KENNETH C. KIRSCH, NICHOLAS R. SUPRON AND CLIFTON C. DUTTON
If you do not wish your shares voted "For" a particular nominee, mark the "For
All Except" box, and strike a line through the nominee(s) name.
RECORD DATE SHARES:
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Please be sure to sign and date this Proxy. Date
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Stockholder sign here Co-owner sign here
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For Against Abstain
2. To modify the 1993 employee incentive [_] [_] [_]
stock option plan to provide for the
reservation of 75,000 additional
shares of the Company's authorized
but unissued common stock.
For Against Abstain
3. To consider and act upon any other [_] [_] [_]
matters which may properly come
before the meeting or any
adjournment thereof.
Mark box at right if comments or address [_]
change have been noted on the reverse
side of this card.
NETWORK SIX, INC.
Dear stockholder:
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and operation
of your Company that require your immediate attention and approval. These
are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, June
25, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Kenneth C. Kirsch
Network Six, Inc.
<PAGE>
NETWORK SIX, INC.
475 KILVERT STREET WARWICK, RI 02886
(401) 732-9000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1997
KNOW ALL MEN BY THESE PRESENTS, That I (we) the undersigned stockholder(s) in
NETWORK SIX, INC., do hereby appoint Kenneth C. Kirsch, Dorothy M. Cipolla and
Dana H. Gaebe, or any one of them, my (our) true and lawful Attorneys, with the
power of substitution for me (us) and in my (our) name, to vote at the meeting
of the stockholders of said Network Six, to be held at 3:00 p.m. local time on
June 25, 1997 at the Radisson Airport Hotel, 2081 Post Road, Warwick, Rhode
Island for the purposes listed on the reverse.
The Board of Directors has fixed the close of business May 14, 1997 as the
record date for the determination of stockholders entitled to notice of and to
vote at the meeting and at any adjournment thereof.
If you are unable to attend the meeting, you are requested to complete, sign,
date and return the accompanying proxy in the enclosed postage-paid envelope so
that your shares will be represented.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE
Please sign this proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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