<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BARRISTER INFORMATION SYSTEMS CORP.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
BARRISTER INFORMATION SYSTEMS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 3, 1998
The Annual Meeting of Shareholders of Barrister Information Systems Corporation
(the "Company") will be held at the Buffalo and Erie County Public Library
Auditorium, Clinton and Ellicott Streets, Buffalo, New York, on September 3,
1998 at 10:00 a.m., local time, for the following purposes:
1. To elect three (3) Class I directors to hold office
until the Year 2000 annual meeting and until their
successors have been elected and qualified.
2. To ratify the appointment of KPMG Peat Marwick LLP as
the Company's independent auditors for the current
fiscal year.
3. To transact such other business as may properly come
before the meeting.
The close of business on July 8, 1998 has been fixed as the record date for
determining the shareholders entitled to notice of, and to vote at, the Annual
Meeting.
By order of the Board of Directors,
Mark C. Donadio
Secretary
July 10, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.
<PAGE> 3
BARRISTER INFORMATION SYSTEMS CORPORATION
465 MAIN STREET
BUFFALO, NEW YORK 14203
(716) 845-5010
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
SEPTEMBER 3, 1998
GENERAL
This Proxy Statement and accompanying form of proxy have been mailed on or about
July 15, 1998, to all holders of record on July 8, 1998 of Common Stock, par
value $.24 per share ("Common Stock") of Barrister Information Systems
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held on September 3, 1998 and at any
adjournment or postponements thereof.
Shares represented by an effective proxy in the accompanying form, unless
contrary instructions are specified in the proxy, will be voted FOR each of the
proposals set forth in the accompanying Notice of Annual Meeting of
Shareholders. Any proxy may be revoked at any time before it is voted. A
shareholder may revoke his/her proxy by executing another proxy at a later date,
by notifying the Secretary of the Company in writing of his/her revocation, or
by attending and voting at the Annual Meeting. Revocation is effective only upon
receipt of notice by the Secretary.
The Company will bear the cost of soliciting proxies by the Board of Directors.
The Board of Directors may use the services of the Company's executive officers
and certain directors to solicit proxies from shareholders in person and by
mail, telegram and telephone, and the Company may reimburse them for reasonable
out-of-pocket expenses incurred by them in so doing. In addition, the Company
will request brokers, nominees and others to forward proxy materials to their
principals and to obtain authority to execute proxies. The Company will
reimburse such brokers, nominees and others for their reasonable out-of-pocket
and clerical expenses incurred by them in so doing.
The securities entitled to vote at the Annual Meeting are shares of Common
Stock. Each share of Common Stock is entitled to one vote. The close of business
on July 8, 1998 has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting and any
adjournment or postponement thereof. At that date 8,223,737 shares of Common
Stock were outstanding.
PRINCIPAL SHAREHOLDERS
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of June 15, 1998 with
respect to the beneficial ownership of the Company's Common Stock by all persons
or groups (as such terms are used in Section 13(d)(3) of the Securities Exchange
Act of 1934) known by the Company to be beneficial owners of more than 5% of its
outstanding common stock.
2
<PAGE> 4
<TABLE>
<CAPTION>
======================================= ====================================== ======================================
NAME AND ADDRESS COMMON PERCENT
OF STOCK OF
BENEFICIAL OWNER(1) COMMON STOCK(2)
======================================= ====================================== ======================================
<S> <C> <C>
Henry P. Semmelhack 1,809,389 (3) 21.22
761 Willardshire Blvd.
Orchard Park, NY 14127
- --------------------------------------- -------------------------------------- --------------------------------------
First Carolina Investors, Inc. 1,598,100 (4) 19.43
1130 East 3rd Street, Suite 410
Charlotte, NC 28204
- --------------------------------------- -------------------------------------- --------------------------------------
James D. Morgan 898,163 (5) 10.79
34 Ironwood Court
East Amherst, NY 14051
- --------------------------------------- -------------------------------------- --------------------------------------
Richard E. McPherson 875,352 (6) 10.53
304 Burroughs Drive
Amherst, NY 14226
======================================= ====================================== ======================================
</TABLE>
(1) The beneficial ownership information presented is based upon
information furnished by each person or contained in filings with the
Securities and Exchange Commission. Pursuant to Rule 13d-3 of the
Regulations under the Securities Exchange Act of 1934, as amended,
beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the vote) and/or sole or
shared investment power (including the power to dispose or to direct
the disposition) with respect to a security whether through any
contract, arrangement, understanding, relationship or otherwise. Except
as otherwise indicated, the named person has sole voting and investment
power with respect to the Common Stock set forth opposite his name.
Percentages have been calculated on the basis of 8,223,737 Common Stock
shares outstanding, plus, as appropriate, shares deemed outstanding
pursuant to Rule 13d-3(d)(1).
(2) The percent of Common Stock beneficially owned is equivalent to each
person's or group's percentage of the aggregate number of votes
attributable to outstanding Common Stock.
(3) Includes 179,000 shares of Common Stock and Warrants to purchase 22,500
shares of Common Stock owned by Mr. Semmelhack's wife. Mr. Semmelhack
disclaims any beneficial ownership of such shares. Includes options to
purchase 111,000 shares of Common Stock and Warrants to purchase
168,750 shares of Common Stock.
(4) On March 20, 1998, First Carolina Investors, Inc. purchased 1,598,000
shares in a private sale.
(5) Includes 207 shares held in trust by Mr. Morgan for the benefit of his
children. Mr. Morgan disclaims any beneficial ownership of such shares
held in trust. Includes non-qualified options to purchase 10,000 shares
of Common Stock and Warrants to purchase 90,000 shares of Common Stock.
(6) Includes Warrants to purchase 90,000 shares of Common Stock.
3
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of the
Company as of June 15, 1998 by each director and by all directors and officers
as a group.
<TABLE>
<CAPTION>
NAME OF COMMON PERCENT OF
BENEFICIAL OWNER(1) STOCK COMMON STOCK
- ------------------- ------------- ------------
<S> <C> <C>
Henry P. Semmelhack 1,809,389(2) 21.22
James D. Morgan 898,163(3) 10.79
Richard E. McPherson 875,352(4) 10.53
Richard P. Beyer 251,813(5) 3.03
Brent D. Baird 2,500 0.03
All officers and directors
as a group (9 persons) 4,090,342(6) 45.92
</TABLE>
(1) The beneficial ownership information presented is based upon
information furnished by each person or contained in filings with the
Securities and Exchange Commission. Pursuant to Rule 13d-3 of the
Regulations under the Securities Exchange Act of 1934, as amended,
beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the vote) and/or sole or
shared investment power (including the power to dispose or to direct
the disposition) with respect to a security whether through any
contract, arrangement, understanding, relationship or otherwise.
Except as otherwise indicated, the named person has sole voting and
investment power with respect to the Common Stock set forth opposite
his name. Percentages have been calculated on the basis of 8,223,737
Common Stock shares outstanding, plus, as appropriate, shares deemed
outstanding pursuant to Rule 13d-3(d)(1).
(2) Includes 179,000 shares of Common Stock and Warrants to purchase
22,500 shares of Common Stock owned by Mr. Semmelhack's wife. Mr.
Semmelhack disclaims any beneficial ownership of such shares. Includes
options to purchase 111,000 shares of Common Stock and Warrants to
purchase 168,750 shares of Common Stock.
(3) Includes 207 shares held in trust by Mr. Morgan for the benefit of his
children. Mr. Morgan disclaims any beneficial ownership of such shares
held in trust. Includes non-qualified options to purchase 10,000
shares of Common Stock and Warrants to purchase 90,000 shares of
Common Stock.
(4) Amount includes Warrants to purchase 90,000 shares of Common Stock.
(5) Amount includes options to purchase 73,000 shares of Common Stock and
Warrants to purchase 11,250 shares of Common Stock.
(6) Amount includes options to purchase 301,500 shares of Common Stock,
Warrants to purchase 382,500 shares of Common Stock and includes
19,000 shares of Common Stock held by Mr. Donadio's wife to which he
disclaims any beneficial ownership. Except as indicated in Footnotes 2
and 3 above, and this Footnote, members of the group have sole voting
and investment power with respect to all shares indicated.
4
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
TERM OF OFFICE
The Company's Certificate of Incorporation and By-Laws provide that the Company
shall have not less than 6 and not more than 15 directors, and that the Board of
Directors shall be divided into two classes, as nearly equal in number as
possible (but with not less than three directors in each class or such lesser
number as may be permitted by law), as determined by the Board of Directors;
each year the directors in one class will be elected to serve terms of two
years. If, prior to election, the size of the Board of Directors has been
increased to nine or a greater number, or the Board may be otherwise divided
into three classes under applicable law, at the next succeeding annual meeting
of shareholders, the Board of Directors will be divided into three classes, as
equal in number as possible with the following staggered terms: the class of
directors whose term under the two-class board was not to expire until the
annual meeting next succeeding the creation of the three-class board shall
complete the term for which such class of directors was originally elected; one
class of directors shall be elected to serve a two-year term; and one class of
directors shall be elected to serve a three-year term. Each year the directors
in one class will be elected to serve terms of three years.
At the annual meeting of shareholders, in accordance with the Company's
Certificate of Incorporation and By-laws which relate to corporate governance,
at least three persons are to be elected to the Board of Directors of the
Company as Class I directors to hold office until the 2000 annual meeting of
shareholders and until their successors are elected and qualified.
Three directors are proposed for election at the annual meeting, and it is
intended that shares represented by properly executed proxies will be voted, in
the absence of contrary instructions, in favor of the election of the following
named nominees: Class I directors: Franklyn S. Barry Jr., Richard E. McPherson
and Brent D. Baird. The Directors approved the nominations by Resolution of the
Board of Directors on June 12, 1998.
The persons named in the enclosed proxy intend to vote the shares represented by
proxies for the Board of Directors nominees unless authority to vote for such
persons is withheld. If any of those nominated should not continue to be
available for election, it is intended that the shares represented by the
proxies will be voted for such other person or persons as the Board shall
designate. No circumstances are presently known which would render any nominee
named herein unavailable for election.
NOMINEES FOR DIRECTOR
DIRECTORS TO HOLD OFFICE UNTIL 2000 (CLASS I)
Franklyn S. Barry, Jr. - Age 58 Director since 1991
Mr. Barry is President and Chief Executive Officer of Hemex, Inc., a privately
owned developer and manufacturer of medical devices. He was President of Ingram
Software, Inc. (a distributor of microcomputer software and supplies) from 1985
to 1987, and a founder and Chief Executive Officer of its predecessor, Software
Distribution Services, Inc. from 1983 to 1985. He has been a Director of
Merchants Mutual Insurance Company (a property and casualty underwriter) since
1981, and was a Director of Merchants Insurance Group, Inc. from 1986 to 1994.
Richard E. McPherson - Age 65 Director since 1982
Mr. McPherson served as a Vice President of the Company since its incorporation
in 1982 until 1995 when he retired. He was one of the founders of Comptek
Research, Inc. ("Comptek") (a manufacturer and marketer of computer systems for
the defense industry) and served as Vice President of that company prior to
April 1982.
5
<PAGE> 7
Brent D. Baird - Age 59 Director since 1998
Mr. Baird is a private investor. He is Chairman of the Board of First Carolina
Investors, Inc., a closed-end, non-diversified management investment company,
which owns 19% of Barrister's Common Stock. Mr. Baird is also director of
Exolon-ESK, Inc., Merchants Group, Inc., M&T Bank Corporation, Todd Shipyards
Corporation and Oglebay Norton Company.
DIRECTORS CONTINUING IN OFFICE UNTIL 1999 (CLASS II)
Henry P. Semmelhack - Age 61 Director since 1982
Mr. Semmelhack has served as the Company's Chairman of the Board of Directors,
Chief Executive Officer and President since its incorporation in 1982. He was
one of the founders of Comptek and currently serves as a Director of Comptek.
Previously he served as Comptek's Chairman of the Board, Chief Executive Officer
and President. Mr. Semmelhack is also a Director of Merchants Group, Inc.
James D. Morgan - Age 61 Director since 1982
Mr. Morgan is currently Vice President and Chief Scientist of Comptek. He served
as Vice President of Product Engineering of the Company from 1982 to 1990. He
was one of the founders of Comptek and currently serves as a Director of that
company.
Richard P. Beyer - Age 51 Director since 1982
Mr. Beyer became Vice President Finance and Treasurer of the Company in 1982
following its incorporation. He previously was Vice President Finance and
Treasurer of Comptek.
Warren E. Emblidge, Jr. - Age 54 Director since 1993
Mr. Emblidge has been President of S.J. McCullagh, Inc., an importer, roaster
and distributor of coffee and related products, from 1986 to present. From 1987
to 1988 he was Chairman of Joseph Malecki Corporation, a meat processor for the
retail trade. Between 1989 - 1992, he was President and founder of Juiceables,
Inc., a bag-in-box distributor and President and co-founder of GR8 Nutrition,
Inc., a producer of specialty powdered foods for the geriatric and dental
markets. Previously Mr. Emblidge served in various executive positions at
Goldome FSB/Buffalo Savings Bank, including Executive Vice President of Goldome
Realty Credit Corporation, President of Goldome Corporation and Group Vice
President of Buffalo Savings Bank.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF THE COMMON
STOCK OF THE COMPANY PRESENT OR REPRESENTED AT THE MEETING IS REQUIRED TO ELECT
DIRECTORS. AN AFFIRMATIVE VOTE IS RECOMMENDED BY MANAGEMENT.
6
<PAGE> 8
INFORMATION ABOUT MANAGEMENT
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of 6 meetings during the
fiscal year ended March 31, 1998. The Company has two committees: the Audit
Committee and the Compensation Committee.
The Audit Committee consisted of directors Morgan, Barry and Emblidge and met
one time during the fiscal year ended March 31, 1998. The Audit Committee's
functions include recommending to the Board of Directors the engagement of the
Company's independent certified public accountants, reviewing with such
accountants the plan for and results of their auditing engagement and the
independence of such accountants.
The Compensation Committee consisted of directors Barry, Morgan and Emblidge and
met one time during the fiscal year ended March 31, 1998. The Compensation
Committee reviews and makes recommendations with respect to compensation of
officers and key employees and administers the Company's Stock Incentive Plan.
Mr. Morgan was appointed by the Board of Directors to both the Audit and
Compensation Committees on June 27, 1991. Mr. Barry was appointed by the Board
of Directors to both the Audit and Compensation Committees on October 9, 1991.
Mr. Emblidge was appointed by the Board of Directors to both the Audit and
Compensation Committees on September 1, 1993. Mr. Baird was appointed by the
Board of Directors to be a director of the Company and to both the Audit and
Compensation Committees on April 27, 1998. Mr. Morgan, Mr. Barry, Mr. Emblidge
and Mr. Baird are not officers or employees of the Company.
During the fiscal year ended March 31, 1998, no director attended fewer than
100% of the aggregate of all meetings of the Board of Directors and the
committees, if any, on which the director served for the fiscal year, except for
Mr. Emblidge and Mr. Page who attended all meetings except one.
COMPENSATION AND RELATED MATTERS
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the Board
of Directors or its Committees. Directors who are not employees receive a $4,000
annual retainer, payable semiannually plus a fee of $500 for each Board and
Committee meeting attended with a $500 maximum per day.
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid to the Chief Executive
Officer for services rendered to the Company in all capacities during the fiscal
years ended March 31, 1998, 1997 and, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Other Securities
Name and Annual Restricted Underlying LTIP All Other
Principal Salary Bonus Compen- Stock Options/ Payouts Compen-
Position Year ($) ($) sation ($) Award (s) SARs (#) ($) sation
- ------------ ---- --- --- ---------- ---------- -------- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Henry P. Semmelhack 1998 138,659 - - - - - -
Chief Executive 1997 105,019 - - - - - -
Officer
1996 74,024 - - - - - -
</TABLE>
7
<PAGE> 9
AGGREGATED OPTION EXERCISE TABLE
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options/SARs at FY-End (#) at FY-End ($)
-------------------------- -------------
Shares Acquired Value
Name On Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Henry P. Semmelhack 0 0 105,000 12,000 $86,063 $9,900
Chief Executive
Officer
</TABLE>
The amount reported in the compensation table above does not include
expenditures made by the Company for an automobile and insurance benefits. These
benefits did not exceed the lesser of $25,000 or 10% of the compensation
reported in the table above. No other officer of the Company earned more than
$100,000 during the fiscal year ended March 31, 1998.
RETIREMENT SAVINGS PLAN
The Company established a defined contribution plan effective April 1, 1986 to
be known as the Barrister Information Systems Corporation Retirement Savings
Plan (the "Savings Plan"). The Savings Plan is intended to meet the requirements
of Section 401(k) of the Code. All employees who are at least twenty-one years
of age and who complete one year of service in which they are credited with at
least 1,000 hours of service are eligible to join the Savings Plan. Under the
Savings Plan employees are permitted to contribute up to the lesser of 15% of
their compensation or $10,000.
Contributions under the Savings Plan are made by the Company only with respect
to those participants who agree to contribute a portion of their compensation
from the Company. Initial contributions under the Savings Plan commenced on
April 1, 1986.
A participant at all times is 100% vested in the total contributions made by the
participant and the Company. Distributions are made under the Savings Plan only
upon retirement, death, disability, termination of employment or in the case of
certain hardships.
All contributions under the Savings Plan are placed into individual accounts for
each participant. Each year the Company contributes, on behalf of each
participant, an amount equal to 20% of the first 4% of compensation contributed
by each participant.
1989 STOCK INCENTIVE PLAN
The Company's qualified Incentive Stock Option Plan as approved by its sole
shareholder in April 1982, (the "Prior Plan") provides for the grant of options
to key employees of the Company, including officers to purchase shares of Common
Stock of the Company.
At the direction of the Board, a new 1989 Stock Incentive Plan (the "Plan") was
proposed to give to the Company greater flexibility in providing to key
employees and directors compensation other than cash compensation through grants
of non-qualified stock options ("Non-Qualified Stock Options"), restricted stock
("Restricted Stock"), incentive stock options ("Incentive Stock Options"), stock
bonuses, and cash bonuses or loans, the latter two features being limited to
sums needed (and as limited in the Plan) to assist an eligible grantee in
meeting the tax payment obligations associated with the issuance or exercise of
a Non-Qualified Stock Option, Restricted Stock or stock bonus. The Compensation
Committee of the Board of Directors administers the Plan, subject to the
approval of the Board of Directors. The Plan is designed to qualify as an
"incentive stock option plan" under Section 422A of the Code.
The Plan carried over in full effect all of the incentive stock options granted
under the Company's Prior Plan. The Plan also presently authorizes 900,000
shares of Common Stock to be available for the grant of options and/or
restricted stock and/or a stock bonus under the Plan. The Plan was approved by
the
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<PAGE> 10
shareholders on August 14, 1990, and, as amended, on October 9, 1991, October 4,
1994 and October 3, 1997.
The option exercise price must be at least 100% of the fair market value per
share of the Company's Common Stock, as determined by the Board of Directors on
the date of grant. The exercise price may be paid in cash or with previously
owned shares of Common Stock or both. The options are exercisable commencing
after a minimum period determined by the Board of Directors and not more than
ten years after the date of grant. The exercise price of options granted to
employees possessing more than 10% of the combined voting power of all classes
of capital stock on the effective date of the grant must be not less than 110%
of fair market value on the date of grant, and the options may not be exercised
more than five years after the date of grant.
The Plan provides for the issuance of Restricted Stock which enables
non-employee directors (who do not administer the Plan) as well as otherwise
eligible employees and directors to receive Restricted Stock partially or
entirely in lieu of or in addition to cash compensation.
The Plan also provides for a Tandem Award which contemplates the granting of
shares of both Restricted Stock and a Non-Qualified Stock Option. Under this
feature, a recipient would elect to either exercise the Non-Qualified Stock
Option or allow the Restricted Stock to vest depending on which form of
incentive provided the best return. Exercise of a Non-Qualified Stock Option
cancels the related Restricted Stock and vesting of the Restricted Stock cancels
the related Non-Qualified Stock Option.
The Plan also includes a "reload" feature, under which an optionee who uses
shares of the Company's Common Stock to pay the purchase price upon an exercise
of Options, as permitted by the Plan, may be awarded an equal number of new
options upon tendering of the stock of the same type as the stock which is
surrendered in connection with such payment. This feature, which facilitates
cash-less exercises, also can encourage share ownership and retention by
optionees. There are no minimum or maximum amounts of stock that can be used
under the reload feature except that the amount is limited to the aggregate
number of shares of Common Stock of the Plan. The reload right may be exercised
at any time during the life of the grant of the option. The Committee of the
Board of Directors that administers the Plan has the authority to determine that
if payment of the exercise price with Common Stock is approved, an additional
number of Options of the same nature may be granted at such price and upon such
terms as the Committee shall establish.
The Plan also includes provisions permitting brokers to assist holders of
options in exercising options on behalf of the optionee subject to certain
restrictions as provided in the Plan.
At March 31, 1998, options covering an aggregate of 772,203 shares were
outstanding and 78,899 shares were available for issuance in connection with
further options and awards. 501,232 options were exercisable. 266,000 options
were granted, 3,500 options were cancelled and 15,066 options were exercised
during the last fiscal year.
CERTAIN TRANSACTIONS
Prior to March 31, 1997, the Company had a term note in the amount of $2,500,000
with BIS Partners, L.P. ("BIS Partners"), a limited partnership composed of
private investors. BIS Partners had also provided the Company with a working
capital loan of $500,000, which has been paid off. The term note is secured by
Company assets and receivables. Partners in BIS Partners, L.P. include Company
officers Semmelhack and Beyer and Company directors McPherson and Morgan. On
March 31, 1997, the Company renegotiated the terms of its loan agreement with
BIS Partners, L.P., extending the repayment schedule through the year 2004 and
agreeing to an interest rate of prime plus 3.5%. On March 31, 1998, the balance
of the term note was $1,389,000. In March, 1998, BIS partners provided the
Company a demand loan of $100,000 which bears interest at the prime rate plus
3.5% amd expires March 31, 2002.
On August 31, 1995, BIS Partners forgave $450,000 of the term debt owed by the
Company. At the same time, 450,000 Warrants were issued to BIS Partners to
purchase up to 450,000 shares of Company Common Stock. The price per share for
purchase of the Common Stock upon exercise of the Warrant is
9
<PAGE> 11
$1-15/16, the closing price of the Common Stock on August 31, 1995. The Warrants
expire on August 31, 2005. No Warrants have been exercised.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to approval of the shareholders, the Board of Directors, upon the
recommendation of the Audit Committee, has selected KPMG Peat Marwick LLP ("Peat
Marwick"), independent public accountants, to audit the financial statements of
the Company for the fiscal year ending March 31, 1999. Peat Marwick has audited
the Company's financial statements for each of the Company's fiscal years since
the Company's formation in 1982. One or more representatives of Peat Marwick
will be present at the Annual Meeting and will have the opportunity to make a
statement and/or respond to appropriate questions that may be raised by
shareholders.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF THE COMMON
STOCK OF THE COMPANY PRESENT OR REPRESENTED AT THE MEETING IS REQUIRED TO
APPROVE THE RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS. AN
AFFIRMATIVE VOTE IS RECOMMENDED BY MANAGEMENT.
OTHER INFORMATION
DIRECTORS AND OFFICERS LIABILITY INSURANCE
The Company, pursuant to its by-laws, indemnifies its directors and officers as
permitted by law in connection with proceedings which might be instituted
against them by reason of their service for or on behalf of the Company. The
Company has purchased directors' and officers' liability insurance which
provides insurance and indemnification for the Company and its directors and
officers. Coverage is provided by the Reliance Insurance Company of
Philadelphia, Pennsylvania, and expires August 1, 1998. It is anticipated that
the Company will seek to renew coverage for directors' and officers' liability
insurance.
SHAREHOLDERS' PROPOSALS FOR FISCAL 1998 ANNUAL MEETING
Shareholders may submit proposals appropriate for shareholder action at the
Company's Annual Meeting consistent with regulations adopted by the Securities
and Exchange Commission. For such proposals to be considered for inclusion in
the proxy statement and formal proxy for the 1999 Annual Meeting, they must be
received by the Company no later than February 22, 1999. Proposals should be
directed to Mark C. Donadio, Secretary, Barrister Information Systems
Corporation, 465 Main Street, Suite 700, Buffalo, New York 14203.
OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the Annual
Meeting is that hereinabove set forth. If any other matter or matters are
properly brought before the Annual Meeting, or any adjournment or postponement
thereof, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy on such matters in accordance with their judgment.
10
<PAGE> 12
A COPY OF THE COMPANY'S FISCAL 1998 ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K WILL BE AVAILABLE AFTER JUNE 29, 1998, AND PROVIDED
WITHOUT CHARGE TO SHAREHOLDERS UPON WRITTEN REQUEST DIRECTED TO THE SECRETARY,
BARRISTER INFORMATION SYSTEMS CORPORATION, 465 MAIN STREET, SUITE 700, BUFFALO,
NEW YORK 14203.
By the Order of the Board of Directors,
Mark C. Donadio
Secretary
Dated: July 10, 1998
<PAGE> 13
BARRISTER INFORMATION SYSTEMS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, SEPTEMBER 3, 1998
The undersigned hereby appoints HENRY P. SEMMELHACK and MARK C. DONADIO
as proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side, all the shares
of Common Stock of Barrister Information Systems Corporation held of record by
the undersigned on July 8, 1998 at the Annual Meeting of Shareholders to be held
on September 3, 1998, or any adjournments thereof, upon the matters set forth in
the Proxy Statement and, in their judgment and discretion, upon such other
business as may properly come before the meeting. THIS PROXY WILL BE VOTED FOR
ELECTION OF THE DIRECTORS AND FOR ALL OTHER ITEMS, UNLESS A CONTRARY INSTRUCTION
IS GIVEN, IN WHICH CASE IT WILL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTION.
PLEASE FILL IN, DATE AND SIGN ON THE REVERSE SIDE AND RETURN
THIS PROXY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 14
PROXY BALLOT CARD
BARRISTER INFORMATION SYSTEMS CORPORATION
COMMON STOCK
[ ]
-------------------------------- --------------------------------
Account Number Common Stock
The Board of Directors recommends that you vote FOR the election of all the
nominees in Proposal 1 and FOR Proposal 2.
<TABLE>
<CAPTION>
*************************************************************************************************************************
1. ELECTION OF FOR all nominees WITHHOLD
DIRECTORS: listed below (except AUTHORITY to vote
as marked to the for all nominees listed
contrary below)
<S> <C> <C>
[ ] [ ]
Class I: Franklyn S. Barry Jr., Richard E. McPherson, Brent D. Baird
WITHHOLD AUTHORITY to vote for the following nominees only (write
name(s)):
*************************************************************************************************************************
2. RATIFICATION OF SELECTION OF KPMG PEAT MARWICK LLP, Independent auditors for
the current fiscal year ending March 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
*************************************************************************************************************************
</TABLE>
<TABLE>
<S> <C>
[ ] Please sign here exactly as name appears to left.
Dated: ______________________, 1998
[ ] -----------------------------------------------------
Signature of Shareholder
-----------------------------------------------------
Signature of Shareholder
Persons signing in a representative capacity should
indicate their capacity.
</TABLE>
