<PAGE> 1
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
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
SYNCRONYS SOFTCORP
- --------------------------------------------------------------------------------
(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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
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<PAGE> 2
[LOGO SYNCRONYS SOFTCORP]
To Our Shareholders:
The past year was marked by both great accomplishment and some setbacks for
Syncronys. Over the past few months, Syncronys has assessed and built upon its
considerable strengths as well as addressed its past shortcomings. Today, I
believe the company is poised for strong growth with: two new products recently
launched into distribution; expanded, experienced management and R & D teams; a
strong financial position; and a full pipeline of innovative new products slated
for introduction by Christmas.
FISCAL 1996 RESULTS
Following our recall last December of SoftRAM95 after discovering it contained a
technical defect, Syncronys was without any product sales or revenues through
fiscal year end while we recapitalized and built a strong infrastructure. As a
result, for the 1996 fiscal year ended June 30, Syncronys posted a net loss of
$10.7 million, or $0.77 per share, on revenues of $12.7 million before product
recall returns compared with net income of $692,000, or $0.05 per share, on
revenues of $3.5 million in the previous fiscal year.
Fiscal 1996 was also negatively impacted by nonrecurring charges totalling $12.3
million for the costs associated with the recall of SoftRAM95. The nonrecurring
charge also includes the associated costs of litigation - all of which has now
been preliminarily or fully settled. The Company's June 30 financial position
remains strong with $10 million in cash and cash equivalents, and a current
ratio of 1.5 to one.
STRATEGIES FOR GROWTH
Having built a solid infrastructure over the past six months, our strategy for
the next year is to rapidly rebuild our revenues and earnings power through an
exciting array of new software products that will be aggressively marketed.
Syncronys has a renewed focus on product development and marketing to accelerate
the successful introduction of powerful software products in the productivity
category that address vast consumer markets.
To do so, we: (1) are seeking to acquire or license innovative software
technology in an advanced development phase -- and have already announced three
strategic alliances and our recent acquisition of Veritas; (2) have dedicated
increased resources to the development of creative new proprietary technology;
and (3) have redoubled our commitment to quality control including the
establishment of a Technology Advisory Panel of leading U.S. computer science
experts.
POSITIONED FOR MARKET LEADERSHIP
Syncronys is well positioned to again become a market leader in the computer
software industry -- one of the fastest-growing and evolving industries in human
history. While the past year was a turbulent one, we have emerged stronger and
more determined. I am confident that the year ahead for Syncronys is one of
tremendous opportunity and growth.
On behalf of the entire Syncronys staff, I thank you for your continued
confidence and support.
/s/ Rainer Poertner
- --------------------
Rainer Poertner
Chief Executive Officer
October 25, 1996
<PAGE> 3
SYNCRONYS SOFTCORP
3958 INCE BOULEVARD
CULVER CITY, CALIFORNIA 90232
(310) 842-9203
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 26, 1996
TO THE SHAREHOLDERS OF SYNCRONYS SOFTCORP:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Syncronys
Softcorp, a Nevada corporation (the "Company"), will be held at the Red Lion
Hotel, 6161 Centinela Avenue, Culver City, California 90230, on Tuesday,
November 26, 1996, at 9AM, Pacific Time, and at any and all adjournments
thereof, for the purpose of considering and acting upon the following matters:
1. The election of four (4) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified;
2. The ratification of the appointment of KPMG Peat Marwick LLP as the
Company's independent auditors;
3. The approval of an amendment to the Company's 1995 Stock Option Plan
(the "Plan") to increase the total number of shares which may be issued upon the
exercise of options granted under the Plan from 1,200,000 to 2,000,000; and
4. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of the $.0001 par value common stock of the Company of
record at the close of business on October 25, 1996, will be entitled to notice
of and to vote at the Meeting or at any adjournment or adjournments thereof. The
proxies are being solicited by the Board of Directors of the Company.
All shareholders, whether or not they expect to attend the Annual
Meeting of Shareholders in person, are urged to sign and date the enclosed Proxy
and return it promptly in the enclosed postage-paid envelope which requires no
additional postage if mailed in the United States. The giving of a proxy will
not affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Daniel G. Taylor
- --------------------
DANIEL G. TAYLOR
CHAIRMAN OF THE BOARD
Culver City, California
October 25, 1996
<PAGE> 4
SYNCRONYS SOFTCORP
3958 INCE BOULEVARD
CULVER CITY, CALIFORNIA 90232
(310) 842-9203
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 26, 1996
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Syncronys Softcorp, a Nevada corporation (the "Company"), for use
at the Company's Annual Meeting of Shareholders to be held at the Red Lion
Hotel, 6161 Centinela Avenue, Culver City, California 90230, on Tuesday,
November 26, 1996, at 9AM, Pacific Time, and at any and all adjournments
thereof. It is anticipated that this Proxy Statement and the accompanying Proxy
will be mailed to the Company's shareholders on or about October 28, 1996.
Any person signing and returning the enclosed Proxy may revoke it at
any time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to the shareholders, will be borne by the Company. It is anticipated
that solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers and
employees to solicit proxies personally or by telephone, without additional
salary or compensation to them. Brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the proxy soliciting materials to the
beneficial owners of the Company's shares held out of record by such persons,
and the Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
The Company's Annual Report of Form 10-KSB for the fiscal year ended June 30,
1996, is being simultaneously mailed to the Company's shareholders, but does not
constitute part of these proxy soliciting materials.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of October 15, 1996, the stock
ownership of each person known by the Company to be the beneficial owner of five
percent or more of the Company's Common Stock, each named Executive Officer and
Director individually and all Executive Officers and Directors of the Company as
a group, in each case on a fully diluted basis including shares underlying stock
options. Each person listed holds sole voting and investment power with respect
to the shares shown, other than Wendell Brown who has agreed that his shares
will be voted in the same proportion as Rainer Poertner's.
The Company does not know of any existing agreements, the operation of which may
at subsequent date result in a change in control of the Company.
<TABLE>
<CAPTION>
Name of Address of Amount and Nature of Percent
Beneficial Owner Beneficial Owner Beneficial Ownership of Class
---------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Rainer Poertner c/o Syncronys Softcorp (*) 2,599,965 (1) 16.4%
Wendell Brown c/o Syncronys Softcorp (*) 1,725,000 (2) 10.9%
Daniel G. Taylor c/o Syncronys Softcorp (*) 6,625,035 (3) 41.8%
Lloyd I. Baron c/o Syncronys Softcorp (*) 15,000 (4) 0.1%
Jon D. Sawyer c/o Syncronys Softcorp (*) 15,000 (5) 0.1%
Mobius Capital Corp. Continental Building 6,475,035 40.8%
3rd Floor
25 Church Street
Hamilton, HMLX Bermuda
All Executive Officers and c/o Syncronys Softcorp (*) 11,670,000 (1) (2) 73.6%
Directors as a Group (3) (4)
(11 Persons) (5) (6)
</TABLE>
(*) 3958 Ince Boulevard, Culver City, CA 90232
(1) Includes 150,000 shares underlying stock options held by Mr. Poertner, all
of which are fully vested.
(2) Includes 150,000 shares underlying stock options held by Mr. Brown, all of
which are fully vested.
(3) Includes 6,475,035 shares held by Mobius Capital Corp. in which Mr. Taylor
has an indirect beneficial interest and includes 150,000 shares underlying
stock options held by Mr. Taylor, all of which are fully vested.
(4) Includes 15,000 shares underlying stock options held by Mr. Baron, all of
which are fully vested.
(5) Includes 15,000 shares underlying stock options held by Mr. Sawyer, all of
which are fully vested.
(6) Includes 690,000 shares underlying stock options held by other officers of
the Company, which vest in varying intervals through 1999.
<PAGE> 6
ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors consists of up
to five members. The Board of Directors recommends the election as Directors of
the four (4) nominees listed below to hold office until the next Annual Meeting
of Shareholders and until their successors are elected and qualified or until
their earlier death, resignation or removal. Each of these nominees are members
of the present Board of Directors nominated for reelection. One member, Wendell
Brown, has decided not to stand for re-election. As such, the Board going
forward consists of only four (4) members. The persons named as "Proxies" in the
enclosed form of Proxy will vote the shares represented by all valid returned
proxies in accordance with the specifications of the shareholders returning such
proxies. If at the time of the Meeting any of the nominees named below should be
unable to serve, which event is not expected to occur, the discretionary
authority provided in the Proxy will be exercised to vote for such substitute
nominee or nominees, if any, as shall be designated by the Board of Directors.
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company presently held,
and the period during which each person has served as Director.
<TABLE>
<CAPTION>
Positions and Offices Held and
Name Age Term as Director
- ---- --- ----------------
<S> <C> <C>
Daniel G. Taylor 38 Chairman of the Board, Executive Vice
President of Marketing, Secretary and
a Director since May 1995
Rainer Poertner 48 Chief Executive Officer, President
and a Director since May 1995
Lloyd I. Baron 49 Director since October 1995
Jon D. Sawyer 50 Director since October 1995
</TABLE>
The Company's Directors hold office until the next Annual Meeting of
Shareholders and until their successors have been elected and qualified. The
Officers of the company are elected by the Board of Directors at the first
meeting after each Annual Meeting of Shareholders, and hold office until they
shall resign or have been removed from office. The date of the next Annual
Meeting of Shareholders will be determined by the Company's Board of Directors
in accordance with Nevada law. The Company has no audit, compensation or
nominating committee.
Set forth below are the names and ages of all Directors, nominees for
Director and Executive Officers of the Company, all positions and offices with
the Company held by each such person, the period during which he has served as
such, and the principal occupations and employment of such persons during at
least the last five years.
<PAGE> 7
Daniel G. Taylor (38) has served as Secretary and a Director of the Company
since May 8, 1995, and as Chairman of the Board and Executive Vice President of
Marketing since July 1, 1995. He also served as Chief Executive Officer from May
8, 1995 until June 30, 1995. Mr. Taylor was President and a Director of Autoship
Systems Corporation from 1993 to December of 1995. From February 1995 until its
merger with the Company on May 8, 1995, he also served as Chief Executive
Officer and a Director of Seamless Software Corporation. From 1988 to 1992, Mr.
Taylor was engaged with Cineplex Odeon Corporation with the head office in
Toronto, Ontario, and on assignment with its UK subsidiary in London, England.
Mr. Taylor was in the development side of the business, culminating in his
appointment as Vice President of Development. Prior to joining Cineplex, he was
a senior litigation associate for five years with the Toronto- based law firm of
Fasken Campbell Godfrey where he participated in a broad variety of corporate
and commercial litigation including corporate takeovers, shareholder actions and
asset purchases. Mr. Taylor received his law degree from Osgoode Hall in 1982.
Rainer Poertner (49) has served as President and a Director of the Company since
May 8, 1995, and as Chief Executive Officer since July 1, 1995. He co-founded
Seamless Software Corporation ("Seamless") and served as a Director and as
President of Seamless from its inception in May 1993 until its merger with the
Company on May 8, 1995. Mr. Poertner has over 15 years of business experience in
the international business community. After having held several positions in the
European and US entertainment industries, he founded Hybrid Arts, Inc. in 1986
by arranging venture financing for ADAP - the first Direct-To-Disk Digital
Recording System. After arranging Hybrid Arts' sale in 1991, Mr. Poertner became
CEO of Hydra Systems, Inc. which developed and marketed ANDOR - a fully
functional Macintosh CPU on a PC peripheral card. Hydra Systems subsequently
sold the technology and the inherent rights to a company in Seoul, Korea in 1992
as part of a Chapter 7 voluntary liquidation. Mr. Poertner received degrees in
economics from the University of Frankfurt in 1975 and the Klinger Business
School in 1973.
Lloyd I Baron, Ph.D. (49) was elected a Director of the Company on October 16,
1995 by the Company's Board of Directors to fill one of two vacancies created by
the expansion of the board from three to five members. Dr. Baron has been
working in the field of international business and enterprise development for
over 25 years. During this period he has served as advisor to private and public
sector organizations throughout North America as well as in Asia, Africa, the
Caribbean and Latin America. In 1985, he founded Horizon Pacific International
("HPI") and since has been its managing director, creating a diverse and highly
regarded team of consultants that specialize in facilitating the creation of
joint ventures between emerging Asian enterprises and their counterparts in
America. Under Dr. Baron's leadership, HPI has over the last five years focused
on the internationalization of the delivery of advanced medical services. With
his guidance, a large network of world class teaching hospitals have been linked
to exploit the rapidly expanding market demands from newly industrializing
economies in the Pacific rim. Dr. Baron is a graduate of Michigan University,
M.A. economics, and McGill University, Ph.D. economics.
Jon D. Sawyer (50) was elected a Director of the Company on October 16, 1995 by
the Company's Board of Directors to fill one of two vacancies created by the
expansion of the board from three to five members. He has been engaged in the
private practice of law specializing in securities and corporate law since 1979,
and has worked with the firm of Jon D. Sawyer P.C. since January 1993. From 1976
until 1979 he served as a trial attorney with the Denver Regional Office of the
Securities and Exchange Commission. Mr. Sawyer received his law degree from the
University of Wyoming in 1974. He served as securities and corporate counsel for
the Company from its inception in 1986 until 1988, and from March 1995 to
October 15, 1995.
<PAGE> 8
David F. Gatto (35) has served as Chief Operating Officer of the Company since
July 8, 1996. Mr. Gatto most recently served as Executive Vice President of L.A.
Gear, Inc., from September of 1991 to June of 1996, where he was responsible for
the overall supervision of the company's sales, merchandising and operations
function. Prior to joining L.A. Gear, from August of 1988 to September of 1991
Mr. Gatto served as a manager at the L/E/K Partnership, an international
management consulting firm which specializes in developing strategic plans for
Fortune 500 and emerging growth companies. Earlier, he was a consultant with
Bain & Company's San Francisco and London offices. Mr. Gatto holds a Master of
Science Degree in Management from M.I.T.'s Sloan School of Management (1988) and
a Bachelor of Sciences Degree in Nuclear Engineering and Industrial Engineering
from the University of California, Berkeley (1984).
Barbara Velline (31) has served as Chief Financial Officer of the Company since
December 1995. She also served as Vice President of Finance and Controller from
September through December 1995. From January of 1987 to April of 1990, Ms.
Velline was an auditor for Price Waterhouse in Los Angeles. From April 1990 to
August 1994, Ms. Velline was a manager at Pioneer Electronics (USA) Inc.. In
August 1994, Ms. Velline relocated with her family to Piemonte, Italy. Ms.
Velline received her Bachelor of Sciences Degree in Business Administration/
Accounting from the University of Southern California in December of 1986. Ms
Velline was certified as a public accountant by the State of California in 1992.
Wendell Brown (35) has served as a Director of the Company since May 8, 1995,
and as Vice President of Technology since June 1, 1995. Mr. Brown co-founded
Seamless Software Corporation with Rainer Poertner in May 1993 and served as a
Director until February 1995. Prior, from 1990 to 1993, Mr. Brown was an
independent consultant. From 1989 to 1990, Mr. Brown was President of Hydra
Systems Inc. which subsequently filed for Chapter 7 voluntary liquidation in
1992. From 1986 to 1989, Mr. Brown was Vice President of Research and
Development of Amtel Video Inc., a developer of advanced video and audio
products, which he also co-founded. Mr. Brown has also served as President and
co-founder of Hippopotamus Software, as an engineering manager at Imagic Corp.,
as a Hughes Fellow at Hughes Aircraft Company Ground Systems Group and as a
software developer with Chrysler Corporation. Mr. Brown attended Cornell
University. Mr. Brown has decided not to stand for re-election to the Board. As
well, after completion of certain projects, Mr. Brown will make the transition
from his current position to head the Company's development think tank on a
consulting basis, at which time his employment agreement with the Company will
terminate.
Myles Lawrence (49) has served as Vice President of Engineering of the Company
since August 12, 1996. Previously, he held various managerial positions with
Micro Design International, from 1992 to August 1996, most recently Director of
Technical Services in which he managed all technical departments including sales
engineering, product management, corporate MIS, and technical support. Prior to
Micro Design, Mr. Lawrence served as a Vice President of Product Development at
AutoScan Systems from 1990 to 1992, and Director of Product Development at
Integrated Computer Graphics from 1989 to 1990. His earlier experience includes
Application Engineering Manager ant Intergraph Corporation; Application Engineer
with General Electric's CALMA Division; and CAD/CAM Manager with Parsons
Corporation. Mr. Lawrence received his Bachelor of Sciences Degree in
Engineering from Merrimack College in 1969.
John Shaw (39) has served as Vice President of Corporate Communications of the
Company since August 1, 1996. Previously, he served as a Vice President in the
investor relations practice of Sitrick and Company, from August 1995 to July
1996, where his account management responsibilities included Syncronys. Previous
to Sitrick and Company, Mr. Shaw served as an Account Group Supervisor at the
Financial Relations Board, from February 1992 to August 1995. Prior, he worked
as a business journalist including on-air with a CBS affiliate and as a print
journalist with Gannett News. From 1981 to 1985, Mr. Shaw worked as a
stockbroker with E.F. Hutton. He also served as a Captain and Communications
Officer in the United States Marine Corps from 1978 to 1982. Mr. Shaw holds a
Masters Degree in Management from Webster College (1981) and a Bachelor of Arts
Degree in Psychology from the University of Arizona (1978).
<PAGE> 9
Jon Jackson (26) has served as Vice President of Sales of the Company since
October 2, 1996. Prior to joining the Company, Mr. Jackson served as the Buyer
of Application Software at Computer City from September 1995 to October 1996. He
also served as Retail Product Manager for Tech Data Corporation from August 1994
to September 1995 and as a Buyer for Macy's Inc. from January of 1990 to July of
1993. Mr. Jackson pursued a continuing education opportunity from July 1993 to
August 1994 and previously attended Bob Jones University.
There are no family relationships among the executive officers and
directors.
The Company's Board of Directors held eleven (11) meetings during the
fiscal year ended June 30, 1996. Each Director attended at least 75% of the
aggregate number of meetings held by the Board of Directors during the time each
such Director was a member of the Board.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely on a review of Forms 3 and 4, and amendments thereto
furnished to the Company during its most recent fiscal year; Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year; and certain written representations, the Company believes that all
required reports were filed on a timely basis during the last fiscal year.
<PAGE> 10
EXECUTIVE COMPENSATION
The following summary compensation table sets forth information
regarding executive compensation for the Company's Chief Executive Officer and
other highly compensated Executive Officers for the years ended June 30, 1996
and 1995. No executive officer received compensation in excess of $100,000 for
the year ended June 30, 1995:
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Options/
Fiscal SARs
Year Salary (Number)
---- ------ --------
<S> <C> <C> <C>
Rainer Poertner, 1995 $ 71,000 150,000
Chief Executive 1996 187,500 -0-
Officer & President
Daniel G. Taylor 1995 $ 61,000 150,000
Executive Vice 1996 150,000 -0-
President of Marketing
Wendell Brown 1995 $ 12,000 150,000
Vice President of 1996 146,000 -0-
Technology
</TABLE>
The Company has entered into employment agreements with Rainer Poertner
(May 8, 1995), Daniel G. Taylor (May 8, 1995), and Wendell Brown (June 1, 1995).
The initial term under these agreements is through June 30, 2000, but unless
either party gives the other written notification 60 days prior to termination
of the initial term or any renewal thereof, the agreements will be extended for
an additional four year term. Nevertheless, these executive officers may
voluntarily terminate their employment with the Company at any time. After
completion of certain projects, Mr. Brown will make the transition from his
current position to head the Company's development think tank on a consulting
basis, at which point his employment agreement will terminate. The agreement
with Mr. Poertner provides for an annualized base salary of $187,500 and
$239,000 for FY 1996 and 1997, respectively, with increases of $39,000 each year
thereafter. The agreement with Mr. Taylor provides for an annualized base salary
of $150,000 and $185,000 for FY 1996 and 1997, respectively, with increases of
$30,000 each year thereafter. The agreement with Mr. Brown provides for an
annualized base salary of $146,000 and $185,000 during FY 1996 and 1997,
respectively, with increases of $30,000 each year thereafter. In addition, all
three agreements provide for bonuses to be paid from time to time in amounts to
be determined by the Company's Board of Directors, and for car allowances of
$500 per month. Each of these agreements provides that during the term of the
individual's employment by the Company, and for a period of two years following
the termination of such employment, they will hold in confidence all knowledge
and information of a confidential nature with respect to the Company's business,
and will not engage in any business, directly or indirectly, under any corporate
or trade name used by the Company without the Company's prior consent.
In addition, at June 30, 1996 the following officers and a former
officer of the company had outstanding loans to the company in the amounts set
forth below in the form of a demand note which bears interest at the rate of
prime plus 2%: Rainer Poertner ($45,000), Daniel G Taylor ($34,500), Wendell
Brown ($34,500) and Kevin P. O'Neill ($34,500).
<PAGE> 11
STOCK OPTION PLAN
In May 1995, the Board of Directors adopted a Stock Option Plan (the
"Plan") which was approved by the Company's shareholders on November 28, 1995.
The Plan allows the Board to grant stock options from time to time to employees,
directors and consultants to the Company. The Board has the power to determine
at the time the option is granted whether the option will be an Incentive Stock
Option (an option which qualifies under Section 422 of the Internal Revenue Code
of 1986) or an option which is not an Incentive Stock Option. Incentive Stock
Options will only be granted to persons who are employees or officers of the
Company. Vesting provisions are determined by the Board at the time options are
granted. The Board has approved an increase in the total number of options to be
granted under the plan from 1,200,000 to 2,000,000 (subject to adjustment in the
event of certain recapitalizations, stock splits, reorganizations and similar
transactions). This increase in total number of options to be granted under the
plan must be approved by the Company's Shareholders. The option price must be
satisfied by the payment of cash. The Board of Directors may amend the Plan at
any time, provided that the Board may not amend the Plan to materially increase
the benefits accruing to participants under the Plan, or materially change the
eligible classes of participants without shareholder approval.
No options were granted to the Company's Chief Executive Officer or
named Executive Officers during fiscal 1996. During fiscal 1996, the Company
granted non-qualified stock options to purchase an aggregate number of 145,000
shares of Common Stock to other employees, outside directors and consultants to
the Company with the exercise prices equal to the fair market value on the date
of grant with vesting provisions at varying intervals through 1999.
DIRECTOR'S COMPENSATION
Compensation is not provided for directors of the Company who are
employee directors. However, the Company granted each of its two outside
directors 15,000 non-qualified stock options on November 7, 1995. These options
were granted at an exercise price of $6.50 which was equal to the fair market
value on the date of grant and were fully vested on the date of grant. In
addition, Directors are entitled to receive reimbursement for reasonable
out-of-pocket expenses incurred in attending meetings of the Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SALE OF AUTOSHIP SUBSIDIARY
On January 15, 1996 the Company entered into an agreement with a
British Columbia company (the "Purchaser") to sell the shares in its wholly
owned subsidiary, Autoship Systems Corporation ("Autoship"). This agreement, as
amended February 26, 1996, provides for a purchase price of approximately
$440,000 which is comprised of the forgiveness of an approximately $220,000 note
payable due the purchaser and cash payments over time of approximately $220,000.
The transaction closed on February 29, 1996 and was approved by a committee of
the Company's Board of Directors upon their evaluation of a fairness opinion
issued by an independent investment firm which reviewed and evaluated the
agreement and amendment.
The Purchaser is wholly owned by Dr. Lloyd Baron, an outside member of
the Company's Board of Directors who is not part of the committee of the
Company's Board of Directors which approved this transaction. In March 1995, the
Purchaser sold the Company an 80% interest in Autoship for consideration of
approximately $245,000, comprised mainly of an approximately $220,000 note
payable. Also in March 1995, the remaining 20% interest in Autoship was
purchased from an unaffiliated third party for approximately $120,000 in a
convertible debenture which was subsequently converted to common stock. In March
1995, Daniel G. Taylor, currently an officer and director of the Company, and
Kevin O'Neill, a former officer of the Company , had an interest in the
Purchaser. These interests were subsequently acquired by Dr. Baron.
<PAGE> 12
The Company believes that this transaction is in the best interests of
the Company and its shareholders. Autoship is not a strategic part of the
Company's business nor has it been a significant source of revenues, profits or
cash for the Company. During the first eight month period of FY 1996 Autoship
contributed approximately 3.8% of the Company's revenues and 1.3% of the
Company's losses, and generated a net use of cash of approximately $14,000.
Moreover, the Company believes that this transaction will improve its financial
condition via the forgiveness of debt and the cash receipts over time.
MERGER WITH SEAMLESS SOFTWARE CORPORATION
On May 8, 1995, the Company completed a merger with Seamless in which
the Company was the surviving corporation. The Company issued a total of
10,500,000 shares (approximately 90%) of its common stock to the shareholders of
Seamless.
The 10,500,000 shares issued in the merger with Seamless were
issued to the following shareholders of Seamless in the amounts set forth below:
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Rainer Poertner 2,449,965
Wendell Brown 1,575,000
Mobius Capital Corp.(1) 6,475,035
----------
10,500,000
</TABLE>
TRANSACTIONS INVOLVING SEAMLESS
Since its incorporation in May 1993, Seamless issued 500 shares of its
common stock to each of its two founders, Rainer Poertner and Wendell Brown, for
a cash consideration of $500 each, or a total of $1,000. During February 1995,
Messrs. Poertner and Brown sold 267 and 350 shares of their stock, respectively,
to Mobius Capital Corp.
During the period from Seamless' inception through December 31, 1994, a
company affiliated by the common ownership of Rainer Poertner manufactured
Seamless' software product (MacAccess). This same company also purchased this
product from Seamless and distributed it to software distributors and retailers.
Seamless' sales to this affiliated company totaled $107,545 for the period from
May 23, 1993 to December 31, 1994. During this same period of time, the
affiliated company charged Seamless $57,553 for manufacturing costs for this
product. During the first quarter of calendar 1995, the affiliated company
discontinued its operations and Seamless took over full responsibility for
manufacturing and marketing its products. All balances due and owing between
these parties have been settled.
- --------
(1) Daniel G. Taylor, an executive officer and director of the Company, has an
indirect beneficial interest in the 6,475,035 shares held by Mobius Capital
Corp.
<PAGE> 13
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The independent accounting firm of KPMG Peat Marwick LLP audited the
financial statements of the Company for the years ended June 30, 1995 and 1996,
and has been selected in such capacity for the current fiscal year. At the
direction of the Board of Directors, this appointment is being presented to the
shareholders for ratification or rejection at the Annual Meeting of
Shareholders. If the shareholders do not ratify the appointment of KPMG Peat
Marwick LLP, the appointment of auditors will be reconsidered by the Board of
Directors.
It is expected that representatives of KPMG Peat Marwick LLP will be
present at the meeting and will be given an opportunity to make a statement and
to respond to appropriate questions from shareholders.
APPROVAL OF AMENDMENT TO STOCK OPTION PLAN
DESCRIPTION OF THE PLAN
In November 1995, the Company's Shareholders ratified the adoption of
the Company's 1995 Stock Option Plan (the "Plan"). The Plan allows the Board to
grant stock options from time to time to employees, directors and consultants to
the Company. The Board has the power to determine at the time the option is
granted whether the option will be an Incentive Stock Option (an option which
qualifies under Section 422 of the Internal Revenue Code of 1986) or an option
which is not an Incentive Stock Option. Incentive Stock Options will only be
granted to persons who are employees or officers of the Company. Vesting
provisions are determined by the Board at the time options are granted. The
total number of shares of Common Stock subject to options under the Plan may not
exceed 1,200,000, subject to adjustment in the event of certain
recapitalizations, stock splits, reorganizations and similar transactions. The
option price must be satisfied by the payment of cash. The Board of Directors
may amend the Plan at any time, provided that the Board may not amend the Plan
to materially increase the benefits accruing to participants under the Plan, or
materially change the eligible classes of participants without shareholder
approval.
PROPOSED AMENDMENT
In August 1996, the Board approved an amendment to the Plan (which was
again amended and approved by the Board in October 1996), subject to shareholder
approval, which increases the number of shares under the plan from 1,200,000 to
2,000,000. The Board believes that the amendment is necessary in order for the
Company to have sufficient flexibility in providing for the acquisition of an
equity interest in the Company by employees, officers, directors and
consultants, thus providing additional incentives and motivation toward superior
Company performance. Additionally, the Board believes the amendment to the Plan
enables the Company sufficient flexibility to attract and retain the services of
key employees, officers, directors and consultants upon whose judgment, interest
and special effort the successful conduct of its operations is largely
dependent.
As of October 15, 1996, there are stock options granted under the Plan
to purchase up to 1,553,000 shares of Common Stock. Of these options, options to
purchase 353,000 shares of the Company's Common Stock, $.0001 par value, are
contingent upon the approval of the amendment to the Plan.
VOTE REQUIRED: BOARD OF DIRECTORS RECOMMENDATION
Approval of the amendment to the Plan requires the affirmative vote of
a majority of the shares of the Company's Common Stock, $.0001 par value,
represented at the Annual Meeting of Shareholders. The Board of Directors
recommends a vote FOR approval of the amendment to the Plan.
<PAGE> 14
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was
not aware of any other matter to be presented at the Meeting other than as set
forth herein. However, if any other matters are properly brought before the
Meeting, the shares represented by valid proxies will be voted with respect to
such matters in accordance with the judgment of the persons voting them. A
majority vote of the shares represented at the meeting is necessary to approve
any such matters.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the fiscal year ending
June 30, 1996 accompanies this Proxy Statement.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held November 1997 must be received at the
offices of the Company, 3958 Ince Boulevard, Culver City, California 90232, no
later than September 5, 1997, in order to be included in the Company's proxy
statement and proxy relating to that meeting.
/s/ Daniel G. Taylor
- ---------------------------
DANIEL G. TAYLOR
CHAIRMAN OF THE BOARD
Culver City, California
October 25, 1996
<PAGE> 15
PROXY
SYNCRONYS SOFTCORP
The undersigned hereby appoints Lloyd I. Baron, Rainer Poertner, Jon D.
Sawyer and Daniel G. Taylor as proxyholders, each with the power to appoint
his substitute; hereby authorizes them or any one of them to represent and
vote as designated below all the shares of common stock of Syncronys Softcorp
held of record by the undersigned on October 25, 1996 at the Annual Meeting of
Shareholders to be held November 26, 1996 or any adjournment thereof, and
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement, each dated October 25, 1996.
<TABLE>
<S> <C> <C>
1. Election of Directors / / FOR all nominees listed / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
Lloyd I. Baron, Rainer Poertner, Jon D. Sawyer, Daniel G. Taylor
(To withhold authority for any individual nominee, strike a line through his
name above.)
2. Ratification of appointment of KPMG Peat Marwick LLP as independent
accountants for current fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of an amendment to the Syncronys Softcorp 1995 Stock Option
Plan, (the "PLAN"), to increase the total number of shares which may be
issued upon the exercise of options granted under the "PLAN" from
1,200,000 to 2,000,000 shares.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxyholders are authorized to vote upon such
other business as may properly come before the meeting.
(Please sign and date this Proxy on the reverse side)
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted FOR proposals 1, 2, and 3.
This Proxy is solicited on behalf of the Board of Directors of
Syncronys Softcorp.
Dated ______________________, 1996
Signature: _______________________
Signature: _______________________
Please sign exactly as name appears.
When shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer.
If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
