<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:
<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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
PHOENIX INFORMATION SYSTEMS CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
PHOENIX INFORMATION SYSTEMS CORP.
100 SECOND AVENUE SOUTH, SUITE 1100
ST. PETERSBURG, FLORIDA 33701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 11, 1997 AT 1:30 P.M.
To the Shareholders of Phoenix Information Systems Corp.
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Phoenix Information Systems Corp., a Delaware corporation (the
"Company" or "Phoenix"), will be held at the St. Petersburg Bayfront Hilton, 333
First Street South in St. Petersburg, FL, on November 11, 1997 at the hour of
1:30 P.M. local time for the following purposes:
(1) To elect seven Directors of the Company for the
coming year;
(2) To consider and vote upon the ratification of BDO
Seidman, LLP to perform the audit for the fiscal year
ending March 31, 1998; and
(3) To transact such other business as may properly come
before the Meeting.
Only shareholders of record at the close of business on October 16, 1997 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
By Order of the Board of Directors
Paul W. Henry, Secretary
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD. YOU ARE INVITED TO ATTEND THE MEETING IN PERSON, BUT
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU
MAY, IF YOU PREFER, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
PHOENIX INFORMATION SYSTEMS CORP.
100 SECOND AVENUE SOUTH, SUITE 1100
ST. PETERSBURG, FL 33701
(813) 894-8021
PROXY STATEMENT
This Proxy Statement and the accompanying proxy of Phoenix Information
Systems Corp. (APhoenix@ or the ACompany@) are furnished by the Board of
Directors of the Company in connection with the solicitation of proxies for use
at the Annual Meeting of Stockholders (the "Meeting") referred to in the
foregoing notice. It is contemplated that this Proxy Statement (which includes
Phoenix's Form 10-K, excluding exhibits, for its fiscal year ended March 31,
1997 in Exhibit A), together with the accompanying form of proxy will be mailed
together to shareholders on or about October 17, 1997.
The record date for the determination of shareholders entitled to
notice of and to vote at the Meeting is October 16, 1997. As of September 30,
1997, there were issued and outstanding 49,867,200 shares of Common Stock, par
value $.01 per share. The presence, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding and entitled to vote at the
Meeting is necessary to constitute a quorum. In deciding all questions, a
shareholder shall be entitled to one vote, in person or by proxy, for each share
held in his name on the record date. In proposal No. 1, directors will be
elected by a plurality of the votes cast at the Meeting. Proposal No. 2 and all
other proposals that may come before the meeting will be decided by a majority
of the votes cast at the Meeting.
All proxies received pursuant to this solicitation will be voted
(unless revoked) at the Annual Meeting of November 11, 1997 or any adjournment
thereof in the manner directed by a shareholder and, if no direction is made,
will be voted for the election of each of the management nominees for director
in Proposal No. 1 and in favor of Proposal No. 2. If any other matters are
properly presented at the meeting for action, which is not now anticipated, the
proxy holders will vote the proxies (which confer authority to such holders to
vote on such matters) in accordance with their best judgment. A proxy given by a
shareholder may nevertheless be revoked at any time before it is voted by
communicating such revocation in writing to the transfer agent, American Stock
Transfer & Trust Company, at 40 Wall Street, New York, New York 10005 or by
executing and delivering a later-dated proxy. Furthermore, any person who has
executed a proxy but is present at the Meeting may vote in person instead of by
proxy; thereby canceling any proxy previously given, whether or not written
revocation of such proxy has been given.
As of the date of this Proxy Statement, the Board of Directors knows of
no matters other than the foregoing that will be presented at the Meeting. If
any other business should properly come before the Meeting, the accompanying
form of proxy will be voted in accordance with the judgment of the persons named
therein, and discretionary authority to do so is included in the proxies. All
expenses in connection with the solicitation of this proxy will be paid by the
Company. In addition to solicitation by mail, officers, directors and regular
employees of the Company who will receive no extra compensation for their
services, may solicit proxies by telephone, telegraph or personal calls.
Management does not intend to use specially engaged employees or paid solicitors
for such solicitation, although it reserves the right to do so. Management
intends to solicit proxies which are held of record by brokers, dealers, banks,
or voting trustees, or their nominees, and may pay the reasonable expenses of
such record holders for completing the mailing of solicitation materials to
persons for whom they hold the shares. All solicitation expenses will be borne
by the Company.
2
<PAGE> 4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Management recommends that you vote in favor of
the nominees named to the Board of Directors.
Directors will be elected by a
plurality of the votes cast at the Meeting.
Seven directors are to be elected at the meeting for terms of one year
each and until their successors shall be elected and qualified. It is intended
that votes will be cast pursuant to such proxy for the election of the seven
persons whose names are first set forth below unless authority to vote for one
or more of the nominees is withheld by the enclosed proxy, in which case it is
intended that votes will be cast for those nominees, if any, with respect to
whom authority has not been withheld. All of the nominees are now members of the
Board of Directors. Robert P. Gordon, Frank A. Cappiello, Robert J. Conrads, W.
James Peet and Paul W. Henry were re-elected as directors by the shareholders at
the Company's last Annual Meeting, which was held on November 20, 1996.
Subsequent to the Company's Annual Meeting of Shareholders, Delbert F. Bloss and
Yu Yan'en were elected as directors of the Company. In the event that any of the
nominees should become unable or unwilling to serve as a director, a contingency
which the Management has no reason to expect, it is intended that the proxy be
voted, unless authority is withheld, for the election of such person, if any, as
shall be designated by the Board of Directors. The Company's 1997 Annual Report
on Form 10-K for its fiscal year ended March 31, 1997 sets forth additional
information concerning each director of the Company named in the table below,
each of which has been nominated to continue as a director of the Company.
<TABLE>
<CAPTION>
Term First
of Became Principal
Name Age Office Director Occupation
- ---- --- ------ -------- ----------
<S> <C> <C> <C> <C>
Robert P. Gordon 47 (1) 1991 Chairman of the
Board of the Company
Delbert F. Bloss 53 (1) 1997 Chief Executive
Officer of the Company
Frank A. Cappiello 71 (1) 1993 President of
McCullough, Andrews
& Cappiello, Inc.
Robert J. Conrads 50 (1) 1995 Managing Partner,
Voyager
Capital Group, LLC
Yu Yan'en 60 (1) 1996 President of China
Southern Airlines
Paul W. Henry 50 (1) 1992 Secretary and Director
of the Company
W. James Peet 42 (1) 1995 The Chatterjee Group
- -------------
</TABLE>
(1) Directors are elected at the annual meeting of shareholders and hold
office until the following annual meeting.
3
<PAGE> 5
ROBERT P. GORDON, age 47, has been an officer and director of the
Company since March 1991. Mr. Gordon has been Chairman and Chief Executive
Officer of Heaven International of America, Inc. (formerly known as Harvest
International of America, Inc.), which has been engaged in the development of
global tourism and trade in China and the United States since July 1989. Mr.
Gordon founded Phoenix Systems Group, Inc. ("PSG") in 1987 and serves as its
Chairman. Mr. Gordon has also been an executive officer, director and the
beneficial owner of both TeleServices International Group Inc., a teleservices
systems and services company that specializes in effectively handling inbound
toll-free calls for major organizations and its wholly-owned subsidiary Visitors
Services International Inc., an operating company that is engaged in the
business of providing reservation sales and automated reservations and
informational services in support of the special needs of convention and
visitors bureaus since September 1996 and November 1992, respectively.
DELBERT F. BLOSS, age 53, has been Chief Executive Officer of the
Company since February 10, 1997 and President and a Director of the Company
since March 21, 1997. Prior to joining Phoenix, Mr. Bloss had been President of
the Airlines Systems Division of Unisys Corporation where he was responsible for
all product, services, and operations support relating to the airline industry.
From 1983 through 1995, Mr. Bloss was President of The Forge Group, a consulting
firm he formed that specializes in airline reservations systems, where he
developed airline industry strategies for the firm's primary client, Siemens AG.
FRANK A. CAPPIELLO, age 71, has been a Director of the Company since
November 1993. Mr. Cappiello is President of an investment counseling firm:
McCullough, Andrews & Cappiello, Inc., providing asset management services to
funds in excess of $1 billion. He is Chairman of three No-Load Mutual Funds;
Founder and Principal of Closed-End Fund Advisors, Inc.; publisher of
Cappiello's Closed-End Fund Digest; author of several books and a regular
panelist on "Wall Street Week with Louis Rukeyser." For more than 12 years, Mr.
Cappiello was Chief Investment Officer for an insurance holding company with
overall responsibility for managing assets of $800 million. Prior to that, he
was the Research Director of a major stock brokerage firm.
ROBERT J. CONRADS, age 50, has been a Director of the Company since
March 1995 and is currently Managing Partner of Voyager Capital Group, LLC.
Since March 1, 1996, Mr. Conrads has served on the Board of Directors of
Visitors Services International Inc. From 1994 until January 1997, Mr. Conrads
served as Executive Vice President, Chief Financial Officer and member of the
Supervisory Board of Indigo, N.V., and President of Indigo America, Inc. From
1987 to 1993, Mr. Conrads was Managing Director of The First Boston Corporation
and headed that firm's Investment Banking Technology Group based in New York.
Prior to entering the investment banking industry, Mr. Conrads was with McKinsey
& Co. for twelve years where he was a Director.
YU YAN'EN, age 60, has been a Director of the Company since November
1996. Since January 1993, Captain Yu has served as President of China Southern
Airlines, the largest domestic airline in China and the Company's joint venture
partner. From March 1983 to December 1992, Captain Yu served as the Director
General of CAAC Guangzhou Administration Bureau. From March 1980 to February
1983, he also served as the Director General of CAAC Heilongjiang Provincial
Administration Bureau.
PAUL W. HENRY, age 50, has been Secretary and a Director of the Company
and PSG since April 1992. Mr. Henry has also served on the Board of Directors of
both Visitors Services International Inc. since March 1, 1996 and TeleServices
International Group Inc. since September 26, 1996. During the past ten years,
Mr. Henry has been an independent financial consultant. From 1991 to 1992, he
was retained by Essex Investment Management Company, an institutional money
management firm. From 1988 to 1991, Mr. Henry was retained by the Caithness
Corporation, a natural resources development company. From 1988 to 1989 he was
an advisor to International Veronex Resources.
4
<PAGE> 6
W. JAMES PEET, age 42, has been a Director for the Company since March
1995 and has worked at The Chatterjee Group, a New York based investment group
directed by Mr. Purnendu Chatterjee, since 1991. Mr. Chatterjee, Mr. George
Soros, and affiliates of Quantum Industrial Holdings, Ltd. recently acquired a
significant equity interest in the Company. Prior to his association with The
Chatterjee Group, Mr. Peet was at McKinsey & Company where, as a core member of
the electronics and technology practices, he focused on projects involving
product and marketing strategies for manufacturers of computers, semiconductors,
software and other electronic-related products. Mr. Peet has also been involved
with entrepreneurial activities in technology and real estate.
Eight meetings of the Board of Directors were held during fiscal 1997.
W. James Peet and Yu Yan'en did not attend at least 75% of all Board meetings.
In 1995, the Company established a Compensation Committee comprised of
Frank Cappiello, as Chairman, Robert Conrads and W. James Peet as full members
and Robert P. Gordon as an ex officio member. The duties of the Compensation
Committee include reviewing and acting upon recommendations from Management with
respect to compensation levels of employees of the Company and to oversee the
stock option plans of the Company. During the fiscal year ended March 31, 1997,
the Board of Directors continued to oversee this function in lieu of committee
meetings, with the exception of one meeting held in January 1997 which was not
attended by W. James Peet.
The Company has a Special Committee to administer the grant of
securities under its Consulting and Services Compensation Agreement dated
February 25, 1994. The members include Robert P. Gordon, Frank Cappiello and
Paul W. Henry. During the fiscal year ended March 31, 1997, the Board of
Directors continued to administer the grant of securities under this plan.
In 1995, the Company established an Audit Committee comprised of Robert
Conrads, Chairman, Frank Cappiello and W. James Peet as members. The Audit
Committee has the power to (i) select the independent certified public
accountant, (ii) satisfy itself on behalf of the Board that the external and
internal auditing procedures assure reliable and informative accounting and
financial reporting, (iii) have meetings with management, or with the auditors,
or with both management and auditors, to review the scope of the auditor's
examination, audit reports and the Corporation's internal auditing procedures
and reviews, (iv) monitor policies established to prohibit unethical,
questionable, or illegal activities by those associated with the Corporation;
and (v) review the compensation paid to the auditors through annual audit and
non-audit fees and the effect on the independence on the auditors in relation
thereto, and it may exercise the powers and authority of the Board of Directors
to implement changes in connection with the foregoing or, at its option, may
make recommendations to the entire Board of Directors for its approval. After
Coopers & Lybrand ("C&L") notified the Company that the client-auditor
relationship between the Company and C&L had ceased, the Audit Committee met
twice regarding the appointment of a new auditing firm and recommended to the
full Board the appointment of BDO Seidman, LLP as auditors for the Company.
For additional information regarding officers and directors,
compensation of officers and directors, security ownership of Management and
others and certain transactions, reference is made to Items 10, 11, 12 and 13 of
the Company's Form 10-K for its fiscal year ended March 31, 1997, a copy of
which is annexed hereto as Exhibit A, which Items are incorporated by reference
herein.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership
5
<PAGE> 7
with the Securities and Exchange Commission (the "Commission"). Officers,
directors and greater than ten percent stockholders are required by the
Commission's regulations to furnish the Company with copies of all Section 16(a)
forms they file.
All forms were filed on time.
CONFLICTS OF INTEREST
Certain of the Company's directors are employees of or have interests
in other companies. Accordingly, possible conflicts of interest may arise in the
future in connection with the performance of their duties. Such potential
conflicts of interest may include, among other things, time, effort and
corporate opportunity. As no policy has been established by the Company for the
resolution of any such conflicts, the Company may be adversely affected should
they choose to place their other business interests before that of the Company.
LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION
As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation provides that a director of the Company will not be
personally liable to the Company or its Stockholders for monetary damages for
breach of the fiduciary duty of care as a director, except under certain
circumstances including breach of the director's duty of loyalty to the Company
or its Stockholders or any transaction from which the director derived an
improper personal benefit.
The Company's Certificate of Incorporation provides that the Company
shall indemnify in the manner and to the extent permitted by law, any person (or
that person's testator or intestate successor) made or threatened to be made a
party to any action or proceeding, whether domestic or foreign, civil or
criminal, judicial or administrative, or federal or state, by reason of the fact
that the person was a director or officer of the corporation or served any other
corporation in any capacity at the request of the corporation, in the manner and
to the extent permitted by law. The Company has entered into employment
agreements with various officers and directors of the Company to provide
indemnification for them as more fully described under AEmployment Contracts@ in
Item 10 of the Company's Form 10-K for its fiscal year ended March 31, 1997
included in Exhibit A to this Proxy Statement.
The Company currently has director and officer liability insurance in
the amount of $5,000,000. No assurances can be given that such insurance will be
maintained by the Company due to the high cost of such coverage.
The Company has been advised that it is the position of the Securities
and Exchange Commission that insofar as the foregoing provisions may be invoked
to disclaim liability for damages arising under the Securities Laws, that such
provisions are against public policy as expressed in the Securities Laws and are
therefore unenforceable.
6
<PAGE> 8
PROPOSAL NO. 2
PROPOSAL TO RATIFY AND CONFIRM
INDEPENDENT ACCOUNTANTS
Management recommends that you vote in favor
of this Proposal. This Proposition will be decided
by a majority of the votes cast at the meeting of
Stockholders by the holders of shares entitled to vote thereon.
The Company's independent accountants are selected annually by the
Board of Directors. BDO Seidman, LLP Certified Public Accountants, served as the
Company's independent accountants for fiscal 1997, and the Board of Directors
has selected BDO Seidman, LLP as its independent accountants to audit the
Company's books for fiscal 1998, subject to shareholder ratification. It is
anticipated that BDO Seidman, LLP will have a representative at the Annual
Meeting to make statements if they desire to do so and to respond to appropriate
questions from shareholders.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business which will be presented for consideration at
the Annual Meeting.
AVAILABILITY OF SECURITIES AND EXCHANGE COMMISSION'S
FORM 10-K
ATTACHED TO THIS PROXY STATEMENT IS THE COMPANY'S 1997 ANNUAL REPORT ON
FORM 10-K, EXCLUDING EXHIBITS, FOR ITS FISCAL YEAR ENDED MARCH 31, 1997. THE
COMPANY INCORPORATES BY REFERENCE THE FINANCIAL STATEMENTS AND OTHER INFORMATION
CONTAINED IN THE COMPANY'S 1997 ANNUAL REPORT. ADDITIONAL COPIES OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K (INCLUDING EXHIBITS WHERE SPECIFICALLY
REQUESTED) FOR THE FISCAL YEAR ENDED MARCH 31, 1997, AND FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WILL BE PROVIDED FREE OF CHARGE TO ANY
SHAREHOLDER UPON WRITTEN REQUEST TO PHOENIX INFORMATION SYSTEMS CORP., 100
SECOND AVENUE SOUTH, SUITE 1100, ST. PETERSBURG, FL 33701, ATT: CORPORATE
SECRETARY.
STOCKHOLDERS PROPOSALS FOR THE NEXT ANNUAL MEETING
Proposals of security holders intended to be presented at the next
Annual Meeting must be received by the Company for inclusion in the Company's
Proxy Statement and form of proxy relating to that meeting no later than June
20, 1998.
PHOENIX INFORMATION SYSTEMS CORP.
Dated: October 16, 1997 Paul W. Henry, Secretary
7
<PAGE> 9
Exhibit A
Phoenix Information Systems Corp, Form 10-K for fiscal ended March 31, 1997
<PAGE> 10
APPENDIX
Proxy Card
PHOENIX INFORMATION SYSTEMS CORP. - 1997 ANNUAL MEETING
To be held on November 11, 1997 at 1:30 P.M.
This Proxy is solicited on Behalf of the Board of Directors
The undersigned stockholder of Phoenix Information Systems Corp., a Delaware
corporation (the Company ), acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement, dated October 16, 1997 and hereby
constitutes and appoints Delbert Bloss and Peter J. Ford or either of them
acting singly in the absence of the other, with a power of substitution in
either of them, the proxies of the undersigned to vote with the same force and
effect as the undersigned all shares of Common Stock of the Company held by the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the St. Petersburg Bayfront Hilton located at 333 First Street South, St.
Petersburg, FL on November 11, 1997 at 1:30 P.M. local time and at any
adjournment or adjournments thereof, hereby revoking any proxy or proxies
heretofore given and ratifying and confirming all that said proxies may do or
cause to be done by virtue thereof with respect to the following matters:
1. The election of the seven directors nominated by the Board of
Directors.
FOR all nominees listed below (except WITHHOLD AUTHORITY to vote as
indicated below), please check here for all nominees listed below, please check
here
Robert P. Gordon, Delbert F. Bloss, Frank A. Cappiello, Yu Yan'en, Paul
W. Henry, Robert J. Conrads and W. James Peet
To withhold authority to vote for any individual nominee or nominees write such
nominees or nominees name(s) in the space provided below.
2. To ratify, adopt and approve the selection of BDO Seidman, LLP to
perform the audit for the fiscal year ending March 31, 1998.
Please check one box: FOR AGAINST ABSTAIN
3. In his discretion, the proxy is authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
adjournments thereof.
The Board of Directors favors a FOR designation for proposals 1 and 2. This
proxy when properly executed will be voted as directed. If no direction is
indicated, the proxy will be voted for the election of the seven named
individuals as director and in favor of Proposal No. 2.
Dated , 1997
--------------------------------------
(L.S.)
----------------------------------
(L.S.)
----------------------------------
Please sign your name exactly as it appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as it
appears hereon. When signing as joint tenants, all parties in the joint tenancy
must sign. When a proxy is given by a corporation, it should be signed by an
authorized officer and the corporate seal affixed. No postage is required if
returned in the enclosed envelope and mailed in the United States.
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
