SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional
Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
IFS INTERNATIONAL, INC.
(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:
=======================================================================
-----------------------------------------------------------------------
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:____________________________________________________________
Copies of all communications to:
MICHAEL D. DiGIOVANNA, Esq.
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
(212) 599-0500
Fax: (212) 972-9487
<PAGE>
IFS INTERNATIONAL, INC.
300 Jordan Road
Troy, New York 12180
--------------------
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON OCTOBER 28, 1997
-------------------
To the Stockholders of IFS INTERNATIONAL, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of IFS INTERNATIONAL, INC., a Delaware corporation (the"Company"),
will be held at 300 Jordan Road, Troy, New York, on Tuesday, October 28, 1997 at
the hour of 10:00 a.m., for the following purposes:
1) To elect eight Directors of the Company for the ensuing year;
2) To ratify the selection of Urbach Kahn & Werlin PC as the
Company's independent auditors for the fiscal year ending
April 30, 1998; and
3) To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on September 8, 1997
are entitled to notice of and to vote at the Meeting or any adjournment thereof.
/s/ CARMEN A. PASCUITO
-----------------------------
CARMEN A. PASCUITO, Secretary
Troy, New York
October 7, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND PROMPTLY
RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. ANY
STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING BY GIVING
WRITTEN NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY
ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE>
IFS INTERNATIONAL, INC.
300 Jordan Road
Troy, NY 12180
-----------
PROXY STATEMENT
-----------
This Proxy Statement is being mailed on or about October 8, 1997 to all
stockholders of record at the close of business on September 8, 1997 in
connection with the solicitation by the Board of Directors of IFS International,
Inc. (the "Company") of Proxies for the Annual Meeting of Stockholders
(the"Meeting") to be held on October 28, 1997. Proxies will be solicited by
mail, and all expenses of preparing and soliciting such proxies will be paid by
the Company. All Proxies duly executed and received by the persons designated as
proxy therein will be voted on all matters presented at the Meeting in
accordance with the specifications given therein by the person executing such
Proxy or, in the absence of specified instructions, will be voted for the named
nominees to the Company's Board of Directors and in favor of the proposal to
ratify the selection of Urbach Kahn & Werlin PC as the Company's independent
auditors. The Company's Board of Directors does not know of any other matter
that may be brought before the Meeting but, in the event that any other matter
should come before the Meeting, or any nominee should not be available for
election, the persons named as proxy will have authority to vote all Proxies not
marked to the contrary in their discretion as they deem advisable. Any
stockholder may revoke his Proxy at any time before the Meeting by written
notice to such effect received by the Company at the address set forth above,
Attn: Corporate Secretary, by delivery of a subsequently dated Proxy or by
attending the Meeting and voting in person.
The total number of shares of the Company's Common Stock and Series A
Convertible Preferred Stock (the "Preferred Stock") outstanding as of September
8, 1997 was 1,093,358 and 1,380,000 shares, respectively. The Common Stock and
Preferred Stock are the only classes of securities of the Company entitled to
vote, each share being entitled to one non-cumulative vote. Only stockholders of
record as of the close of business on September 8, 1997 will be entitled to
vote. A majority of the aggregate number of shares of Common Stock and Preferred
Stock outstanding and entitled to vote, or 1,236,680 shares, must be present at
the Meeting in person or by proxy in order to constitute a quorum for the
transaction of business. Abstentions and broker nonvotes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Assuming the presence of a quorum, a plurality of the aggregate
votes cast by the holders of Common Stock and Preferred Stock is required for
the election of the named nominees to the Board of Directors. A vote of a
majority of the shares of Common Stock present and voting, in person or by
proxy, at the Meeting and a vote of a majority of the shares of Preferred Stock
present and voting, in person or by proxy, at the Meeting is required to pass
upon each of the others matters presented. Abstentions will be counted in
tabulations of the votes cast on the proposal to ratify the selection of the
Company's independent auditors, whereas broker nonvotes will not be counted for
purposes of determining whether a proposal has been approved. "Broker nonvotes"
are proxies received from brokers who, in the absence of specific voting
instructions from beneficial owners of shares held in brokerage name, have
declined to vote such shares in those instances where discretionary voting by
brokers is permitted.
A list of stockholders entitled to vote at the Meeting will be available at
the Company's offices, 300 Jordan Road, Troy, New York for a period of ten days
prior to the Meeting and at the Meeting itself for examination by any
stockholder.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Common Stock and Preferred Stock as of September 8, 1997 by (i)
each stockholder known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock and Preferred Stock, (ii) each director of the
Company, (iii) each Named Officer (as in hereinafter defined), (iv) and all
directors and executive officers as a group. Except as otherwise indicated, the
Company believes that the beneficial owners of the Common Stock and Preferred
Stock listed below, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.
<TABLE>
<CAPTION>
Name and Address of Number Of Shares Percentage
Beneficial Owner Title of Class Beneficially Owned of Class
--------------------------------------------------- -------------- ------------------ ----------
<S> <C> <C> <C>
Frank Pascuito...................................... Common 327,911(1) 26.7%
Rensselaer Technology Park
300 Jordan Road
Troy, NY 12180
Charles J. Caserta.................................. Common 324,933(2) 26.5%
Rensselaer Technology Park
300 Jordan Road
Troy, NY 12180
Simon J. Theobald................................... Common 45,499(3) 4.0%
Little Elms, 12 Green Lane,
Croxley Green, Rickmansworth,
Hertfordshire, WD3 3HR England
Jerald Tishkoff..................................... Common 56,170(4) 5.1%
2620 S. Green
University Heights, Ohio 44122
Arnold Wells........................................ Common 10,500(5) 1.0%
1100 Madison Avenue
New York, NY 10028
John P. Singleton................................... Common 10,000(5) 0.9%
4331 Rosecliff Drive Preferred 11,000 0.8%
Charlotte, NC 28277
DuWayne J. Peterson................................. Common 10,000(5) 0.9%
225 South Lake Ave.
Pasadena, Ca. 91101
David L. Hodge...................................... Common 0(6) 0.0%
10063 NW 48th Court
Coral Springs, Fl. 33076
All directors and executive officers as a group (8
persons) ...............................................Common 786,794(7) 54.2%
Preferred 11,000 0.8%
- --------
(1) Includes 120,835 shares issuable upon exercise of stock options.
(2) Includes 125,813 shares issuable upon exercise of stock options.
(3) Includes 45,260 shares issuable upon exercise of stock options.
(4) Includes 14,170 shares issuable upon exercise of stock options.
(5) Includes 10,000 shares issuable upon exercise of stock options.
(6) If Mr. Hodge is elected to the Board of Directors, the Company intends to
grant him options to purchase 10,000 shares of Common Stock.
(7) Includes 355,900 shares issuable upon exercise of stock options.
</TABLE>
2
<PAGE>
ELECTION OF DIRECTORS
Seven directors are to be elected at the Meeting to serve for a term of one
year or until their respective successors are elected and qualified.
Information Concerning Nominees
The following table sets forth the positions and offices presently held with
the Company by each nominee, his age and his tenure as a director:
<TABLE>
<CAPTION>
Positions Presently Held Director
Name Age with the Company Since
- ------------------- --- ---------------------------------------------- --------
<S> <C> <C> <C>
Frank A. Pascuito..........41 Chairman of the Board, Chief Executive Officer 1989
and Director
Charles J. Caserta.........41 President and Director 1989
Simon J. Theobald .........33 Director and Managing Director of EMEA 1994
Jerald Tishkoff ..........60 Director 1994
Arnold Wells .............78 Director 1986
John P. Singleton..........60 Director 1997
DuWayne J. Peterson........65 Director 1997
David L. Hodge.............58 Director 1997
</TABLE>
Frank A. Pascuito has been the Chief Executive Officer and Chairman of
the Board of the Company since 1989. Mr. Pascuito co-founded the Company's
predecessor company, IFS International, Inc.(formerly named Avant-Garde Computer
Systems, Inc.), a New York corporation engaged in the development and marketing
of software (the "Predecessor"), In 1981 and served as its President until
November 1987 and as its Vice President of Product Planning until 1989. Prior to
1981, he was employed by NCR Corporation's ATM software development team. As a
consultant to NCR in 1979, he assisted in the development and performed the
installation of the first on-line/off-line ATM system for NCR in the United
States. Mr. Pascuito has over ten years of operating and marketing experience in
EFT system design, sales and service. Mr. Pascuito is a graduate of the State
University of New York at Potsdam with a B.S. degree in Computer Science. He is
active in several area organizations dealing with technology, software, and
world trade.
Charles J. Caserta has been the President and a director of the Company
since 1989. Mr. Caserta co-founded the Predecessor in 1981 and served as its
Chairman until November 1987 and as its Vice President of Sales until 1989. Mr.
Caserta has over ten years of consulting and marketing experience in EFT system
design, sales and service. Mr. Caserta is a graduate of Villanova University
with a B.A. degree in English.
Simon J. Theobald has been a director of the Company since December
1994 and was the Director of Sales and Marketing of the European Division based
in London between 1992 and July 1997 and has been Managing Director of EMEA
(Europe, Middle East, Africa) since July 1997. From 1986 to April 1992, he was
employed by Applied Communications Inc., a subsidiary of Transaction Systems
Architects, Inc. Mr. Theobald has more than fifteen years experience in the
electronic funds transfer industry. Mr. Theobald is a graduate of De-Havilland
College with a degree in computer studies and technology.
3
<PAGE>
Jerald Tishkoff has been a director of the Company since May 1994. Mr.
Tishkoff also serves as a consultant to the Company. Since 1991, Mr. Tishkoff
has been Director of Marketing and a member of the Board of Directors of Allen
Technologies, Inc., a private company that provides interactive television
networks to schools and hospitals. Between 1967 and 1991, he was Director of
Marketing of Wells National Services, a provider of interactive television
networks to hospitals. He serves on the Advisory Board of the Jewish Federation,
a charitable organization. He is a graduate of Western Reserve University of
Cleveland with a B.B.A. degree and attended Western Reserve University Law
School.
Arnold Wells has been a director of the Company since 1986. Since 1976,
Mr. Wells has been a private investor and consultant in the health and
communications fields. Mr. Wells organized Wells Television (subsequently named
Wells National Services). In 1978, Mr. Wells formed WellsArt Limited, a company
which is engaged in the publishing and licensing work of prominent artists. Mr.
Wells is a graduate of Western Reserve University with a B.A. degree.
John P. Singleton has been a director of the Company since April 1997.
In July 1997 he was appointed Chairman of its Executive Committee. He is
presently President and CEO of Singleton & Associates, a holding company for
financial services companies. Mr. Singleton was General Manager, Business
Development of IBM/Integrated Systems Solution Corporation from 1992-1996.
Between 1982-1992, he held several positions with Security Pacific Corporation
ranging from Senior Vice President Central Information Group to Vice Chairman
and Chief Operating Officer and member of the Office of the Chairman. Mr.
Singleton is a graduate of Arizona State University with a B.S. degree in
Business Management.
DuWayne J. Peterson has been a director of the Company since July 1997.
Mr. Peterson is President of DuWayne Peterson Associates, a consulting firm
specializing in the effective management of information technology. Prior to
forming his firm in 1991, he held the position of Executive Vice President,
Operations, Systems and Telecommunications at Merrill Lynch. Mr. Peterson holds
a B.S. degree from M.I.T. and an MBA from UCLA.
David L. Hodge has been a director of the Company since September 1997.
Mr. Hodge is presently Vice President, Product Development within the Cable
and Broadband Solutions Group of Cincinnati Bell Information Systems (CBIS).
Mr. Hodge has been in this position since 1994. Prior to this position, he
served as Vice President of Precedent 2000 Development at CBIS. Mr. Hodge has
been with CBIS in various capacities since 1987. Mr Hodge holds a B.S. degree
from the United States Military Academy at West Point and a Master of Science
degree in mechanical engineering from New Mexico State University.
Pursuant to the terms of the underwriting agreement for the Company's
public offering in March 1997, the underwriter of such public offering ("the
Underwriter") has the right to nominate a member of the Board of Directors and
the Company will use its best efforts to have such nominee elected to the Board.
The Underwriter nominated and the Company elected John P. Singleton as a member
of the Board of Directors, effective April 7, 1997. The Underwriter has
nominated Mr. Singleton to be a member of the Board of Directors for election at
the Meeting.
4
<PAGE>
Identification of Executive Officers
(Excludes Executive Officers who are also Directors)
Name Age Position(s) Principal Occupation
- ---- --- ----------- --------------------
Carmen A. Pascuito 38 Controller and Secretary Carmen A. Pascuito has
been Secretary of the
Company since December
1996 and its Controller
since 1989. Mr.Pascuito
joined the Predecessor
in 1985 as a staff
accountant and became
its Controller in 1988.
Mr. Pascuito is a
graduate of Siena
College with a B.B.A.
degree in Accounting.
Frank A. Pascuito and Carmen A. Pascuito are brothers.
Executive officers are elected annually by the Company's Board of Directors
to hold office until the first meeting of the Company's Board of Directors
following the next annual meeting of stockholders and until their successors are
chosen and qualified.
Information Concerning the Board
The Board of Directors held nine meetings during the year ended April 30,
1997. All then incumbent directors attended all of such meetings.
The Compensation Committee of the Company's Board of Directors was formed
July 1, 1997. The Compensation Committee is currently composed of Messrs.
Caserta, Singleton, and Peterson. Members of the Compensation Committee will
review and recommend the compensation structure for management and key
employees. As of this date, the Compensation Committee has not held any
meetings.
The Audit Committee of the Company's Board of Directors was formed July 1,
1997. The Audit Committee is currently composed of Messrs. Tishkoff, Singleton,
and Peterson. The Audit Committee is charged with the review of the activities
of the Company's independent auditors (including but not limited to, fees,
services and scope of the audit). As of this date, the Audit Committee has not
held any meetings.
The Executive Committee of the Company's Board of Directors was formed July
1, 1997. The Executive Committee is currently composed of Messrs. Caserta,
Pascuito, Tishkoff, Singleton, and Peterson. The Executive Committee is charged
with making major business and operations decisions within the Company that do
not need full board approval. As of this date, the Executive Committee has not
held any meetings.
The Company does not have a nominating committee, charged with the search for
and recommendation to the Company's Board of Directors of potential nominees for
the Company's Board of Directors positions. These functions are performed by the
Company's Board of Directors as a whole.
5
<PAGE>
Reporting Delinquencies
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires the Company's officers and directors, and persons who own more than 10%
of the Company's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by regulations promulgated under the
Exchange Act to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the fiscal year
ended April 30, 1997, no officer, director or greater than 10% beneficial owner
was late with his filings other than Messrs. Frank A. Pascuito, Charles J.
Caserta, Simon J. Theobald, Carmen A. Pascuito, Jerald Tishkoff, Arnold Wells,
and John P. Singleton who were late in filing their respective Form 3.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation paid or
accrued by the Company or its subsidiaries for services rendered during the
fiscal years ended April 30, 1997, 1996 and 1995 to the Company's Chief
Executive Officer and to any executive officer whose compensation exceeded
$100,000 during its fiscal year ended April 30, 1997:
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------------- -------------------------------------------------------
Other All
Annual Restricted Securities Other
Name and Fiscal Compen- Stock Underlying LTIP Compen-
Principal Position Year Salary Bonus sation Award(s) Option(s) Payouts sation
----------------------- ------ ------ ----- ------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank Pascuito........... 1997 $94,061(1) $50,305 $-0- $-0- 87,485 -0- $-0-
Chief Executive Officer 1996 $88,000(1) $-0- $-0- $-0- -0- -0- $-0-
1995 $88,000(1) $-0- $-0- $-0- -0- -0- $-0-
Charles Caserta.......... 1997 $102,132(2) $70,984 $-0- $-0- 92,463 -0- $-0-
President 1996 $90,794 (2) $-0- $-0- $-0- -0- -0- $-0-
1995 $88,000 (2) $-0- $-0- $-0- -0- -0- $-0-
Simon Theobald........... 1997 $183,790 $-0- $-0- $-0- 25,000 -0- $-0-
Managing Director 1996 $106,436 $-0- $-0- $-0- -0- -0- $-0-
of EMEA 1995 $167,356 $-0- $-0- $-0- -0- -0- $-0-
- --------
(1) Does not include accrued interest of $2,367, $5,706 and $5,336 for the fiscal years ended April 30, 1997, 1996, 1995,
respectively, for salaries earned but deferred. The interest rate on such deferred salaries was 12% per annum. See "Certain
Relationships and Related Transactions."
(2) Does not include accrued interest of $2,899, $6,862 and $6,637 for the fiscal years ended April 30, 1997, 1996, 1995,
respectively, for salaries earned but deferred. The interest rate on such deferred salaries was 12% per annum. See " Certain
Relationships and Related Transactions."
</TABLE>
6
<PAGE>
Set forth below with respect to the executive officers set forth in the Summary
Compensation Table (the "Named Officers") is further information concerning
options to purchase Common Stock under the Company's stock option plans, and
employment agreements.
The following table sets forth all grants of stock options to each of the
named executive officers of the Company during the fiscal year ended April 30,
1997.
<TABLE>
<CAPTION>
Option Grants in Fiscal Year Ended April 30, 1997
Number of
Shares % of Total
of Common Stock Options
Underlying Granted to
Options Employees in Per Share Expiration
Name Granted Fiscal Year Exercise Price Date
- ------- ----------------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
Frank A. Pascuito................2,776 1.2 % $3.50 12/01/06
Frank A. Pascuito...............75,000 33.3 % $5.00 1/01/07
Frank A. Pascuito................4,709 2.1 % $4.88 4/28/07
Frank A. Pascuito................5,000 2.2 % $6.75 4/07/07
Charles J. Caserta...............7,754 3.4 % $3.50 12/01/06
Charles J. Caserta...............4,709 2.1 % $4.88 4/28/07
Charles J. Caserta..............75,000 33.3 % $5.00 1/01/07
Charles J. Caserta...............5,000 2.2 % $6.75 4/07/07
Simon J. Theobald...............20,000 10.5 % $1.50 10/01/03
Simon J. Theobald................5,000 2.2 % $6.75 4/07/07
</TABLE>
The following table sets forth information as to options exercised by each of
the named executives during the fiscal year ended April 30, 1997 and the value
of in-the-money options held by such executives at April 30, 1997.
<TABLE>
<CAPTION>
Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
Number of Securities Value of Unexercised
Number of Shares Underlying Unexercised In-the-Money
of Common Stock Options as of April 30, 1997 Options as of April 30, 1997(1)
Acquired on ---------------------------- -------------------------------
Name Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
--------------------- ---------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank Pascuito,
Chief Executive Officer...4,978 $14,138 133,280 0 $90,635 $ 0
Charles Caserta,
President.................4,978 $14,138 133,280 0 $76,317 $ 0
Simon Theobald,
Director..................0 0 41,896 18,104 $92,302 $50,154
- --------
(1) Based on a market price of $4.27 per share at April 30, 1997.
</TABLE>
7
<PAGE>
Employment Agreements
Frank A. Pascuito and Charles J. Caserta have entered into a three year
employment agreement with the Company, effective as of January 1, 1997, that
provide for their employment as Chairman of the Board and President,
respectively. Under their respective agreements, Messrs. Pascuito and Caserta
will each receive a base salary of $110,000 per year for each of the first two
years and an amount to be determined by the Board of Directors for the third
year. In addition, Messrs. Pascuito and Caserta each will be generally entitled
to commissions of 8% on revenues during any fiscal year in excess of $425,000
pursuant to licenses agreements generated by their respective sales efforts. The
Board of Directors may in its discretion grant bonuses to Messrs. Pascuito and
Caserta. Pursuant to these employment agreements and not pursuant to any option
plan, Messrs. Pascuito and Caserta also each received options to purchase 75,000
shares of Common Stock at an exercise price of $5.00 per share. Each agreement
contains a restrictive covenant requiring the executive not to compete with the
Company for the term of the agreement, for two years following termination for
cause or for one year if such executive's employment agreement is not renewed by
the Company. Each agreement provides for a car allowance.
Stock Option Plans
The Company has two option plans: the 1996 Stock Option Plan (the "1996
Plan") and the 1988 Stock Option Plan (the "1988 Plan").
The 1996 Plan provides for the granting of options which are intended to
qualify either as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422 of the Internal Revenue Code of 1986 or as options which
are not intended to meet the requirements of such section ("Nonstatutory Stock
Options"). The total number of shares of Common Stock reserved for issuance
under the 1996 Plan is 300,000. Options to purchase shares may be granted under
the 1996 Plan to persons who, in the case of Incentive Stock Options, are key
employees (including officers) of the Company or any subsidiary of the Company,
or, in the case of Nonstatutory Stock Options, are key employees (including
officers) or nonemployee directors of, or nonemployee consultants to, the
Company or any subsidiary of the Company.
The 1996 Plan provides for its administration by the Board of Directors or a
committee chosen by the Board of Directors, which has discretionary authority,
subject to certain restrictions, to determine the number of shares issued
pursuant to Incentive Stock Options and Nonstatutory Stock Options and the
individuals to whom, the times at which and the exercise price for which options
will be granted.
The exercise price of all Incentive Stock Options granted under the 1996 Plan
must be at least equal to the fair market value of such shares on the date of
the grant or, in the case of Incentive Stock Options granted to the holder of
more than 10% of the Company's Common Stock, at least 110% of the fair market
value of such shares on the date of the grant. The maximum exercise period for
which Incentive Stock Options may be granted is ten years from the date of grant
(five years in the case of an individual owning more than 10% of the Company's
Common Stock). The aggregate fair market value (determined at the date of the
option grant) of shares with respect to which Incentive Stock Options are
exercisable for the first time by the holder of the option during any calendar
year shall not exceed $100,000.
As of April 30, 1997, 35,000 options have been granted pursuant to the 1996
Plan.
The 1988 Plan provides for the issuance of options to purchase Common Stock
to key employees, officers, directors and consultants. As of April 30, 1997,
there were options outstanding to purchase 248,542 shares of Common Stock under
the 1988 Plan. All options are exercisable at prices ranging from $.66 to $4.88
per share and expire in various years between 1997 - 2006. As of April 30, 1997,
there were no options available for grant to purchase shares of Common Stock
under the 1988 Plan.
The exercise price of all future option grants will be at least 85% of the
fair market value of the Common Stock on the date of grant.
8
<PAGE>
Compensation of Directors
Directors who are not employed by the Company will be paid a fee of $6,000
per year plus $500 for each board of directors meeting attended. Directors will
also be paid $1,500 per year for each committee in which they are a member. All
directors are reimbursed for expenses incurred on behalf of the Company.
Certain Relationships and Related Transactions
Frank Pascuito deferred salaries for the five fiscal years ended April 30,
1995 in the aggregate amount of $60,765. Such deferred salaries bore interest at
the rate of 12% per annum until September 30, 1996, which interest aggregated
$31,013 as of such date and was also deferred. As of April 30, 1997, all
deferred salaries and interest have been paid.
Charles Caserta deferred salaries for the five fiscal years ended April 30,
1995 in the aggregate amount of $62,439. Such deferred salaries bore interest at
the rate of 12% per annum until September 30, 1996, which interest aggregated
$34,464 as of such date and was also deferred. As of April 30, 1997, all
deferred salaries and interest have been paid.
Simon J. Theobald, Managing Director of EMEA, receives pursuant to an
agreement a base annual salary of $81,634 and a commission in the amount of 8%
of gross revenues of any licensing agreement for which he provides sales and
marketing services. For the fiscal year ended April 30, 1997, Mr. Theobald
earned $183,790 salaries and commissions.
In April, 1997, the Company entered into a consulting services agreement with
Jerald Tishkoff, a Director of the Company. Mr. Tishkoff provided management
consulting services and performed those duties ordinarily performed by the chief
operating officer of a software development company. Mr. Tishkoff is compensated
at a rate of $13,500 per month for services in addition to reimbursement for
personal expenses. For fiscal year 1997, Mr. Tishkoff was compensated
approximately $105,000, including services and expenses prior to the agreement.
In September 1996, the Company, as part of the Bridge Financing, sold to
unrelated third parties $500,000 principal amount of the Company's notes (the
"Notes") for $500,000 and warrants to purchase 100,000 shares of Common Stock
for $5,000. The Notes bore interest at 12% per annum and were due on the earlier
of March 24, 1998 or the closing of the Public Offering. The warrants are
exercisable at $2.50 per share, subject to adjustment, at any time until
September 24, 2001. The Bridge Financing was satisfied on February 21, 1997.
The Company believes that all transactions with officers were made on terms
no less favorable to the Company than those available from unaffiliated parties.
All future transactions between the Company and its officers, directors and 5%
shareholders will be on terms no less favorable than could be obtained by
independent third parties and will be approved by a majority of the independent
disinterested directors of the Company.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Urbach Kahn & Werlin PC to audit the
accounts of the Company for the fiscal year ending April 30, 1998. Such firm,
which has served as the Company's independent auditor since April 1993 has
reported to the Company that none of its members has any direct financial
interest or material indirect financial interest in the Company.
Unless instructed to the contrary, the persons named in the enclosed proxy
intend to vote the same in favor of the ratification of Urbach Kahn & Werlin PC
as the Company's independent auditors.
A representative of Urbach Kahn & Werlin PC is expected to attend the meeting
and will be afforded the opportunity to make a statement and/or respond to
appropriate questions from stockholders.
9
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1998 Annual
Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Exchange Act, must be
received by the Company's offices in Troy, New York by June 9, 1998 for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.
FORM 10-KSB
A copy of the Company's Form 10-KSB is available at no charge upon written
request to its Investor Relations department at 300 Jordan Road, Troy, NY 12180.
10
<PAGE>
IFS INTERNATIONAL, INC.
300 Jordan Road
Troy, New York 12180
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Frank A. Pascuito and Charles J. Caserta as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, and each of them, to represent and vote, as designated below, all the
shares of Common Stock and Series A Convertible Preferred Stock of IFS
International, Inc. (the "Company") held of record by the undersigned on
September 8, 1997 at the Annual Meeting of Stockholders to be held on October
28, 1997 or any adjournment thereof.
1. Election of Directors:
[ ]FOR all nominees listed below [ ]WITHHOLD AUTHORITY to vote for all nominees
(except as marked to the listed below
contrary below)
(Instruction: To withhold authority to vote for any individual nominee, strike
such nominee's name from the list below.)
Frank A. Pascuito Jerald Tishkoff Arnold Wells
Charles J. Caserta Simon J. Theobald John P. Singleton
DuWayne J. Peterson David L. Hodge
2. To ratify the selection of Urbach Kahn & Werlin PC as the Company's
independent auditors for the fiscal year ending April 30, 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To transact such other business as may properly come before the meeting.
If no direction is made, this proxy will be voted FOR Proposals 1 and 2.
<PAGE>
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly When shares are held by joint tenants, both should
as name appears below. 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 the President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
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Signature
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Signature if held jointly
Date:________________________, 1997
