Proxy Statement
Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant (x)
Filed by a Party other than the Registrant( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule
240.14a-12
Network Systems 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):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
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.
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registration statement number, or the Form or Schedule and the date of
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4) Date Filed: _____________________________________
NETWORK SYSTEMS INTERNATIONAL, INC.
200 North Elm Street
Greensboro, North Carolina 27401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 4, 1997
TO THE STOCKHOLDERS OF NETWORK SYSTEMS INTERNATIONAL, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of Network Systems International, Inc., a Nevada corporation (the
"Company"), will be held on March 4, 1997, at 11:00 A.M. local time at
200 North Elm Street, Greensboro, North Carolina for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of Pender Newkirk & Company as independent
auditors of the Company for its fiscal year ending September 30, 1997.
3. To ratify adoption of a plan to set aside certain incentive based
shares of common stock for key employees of the Company.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on
January 13, 1997, as the record date for the determination of
stockholders entitled to notice of and to vote at this Annual Meeting
and at any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ William C. Ray
William C. Ray
Secretary
Greensboro, North Carolina
February 4, 1997
ALL STOCKHOLDERS are cordially invited to attend the meeting in
person. Whether or not you expect to attend the meeting, please
complete, date, sign and return the enclosed proxy as promptly as
possible in order to ensure your representation at the meeting. A
return envelope (which is postage prepaid if mailed in the United
States) is enclosed for that purpose. Even if you have given your
proxy, you may still vote in person if you attend the meeting. Please
note, however, that if your shares are held of record by a broker,
bank or other nominee and you wish to vote at the meeting, you must
obtain from the record holder a proxy issued in your name.
NETWORK SYSTEMS INTERNATIONAL, INC.
200 North Elm Street
Greensboro, North Carolina 27401
(910) 271-8400
___________________________
PROXY STATEMENT
___________________________
For Annual Meeting of Stockholders
March 4, 1997
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of
Directors of Network Systems International, Inc., a Nevada
corporation, (the "Company"), for use at the Annual Meeting of
Stockholders to be held on March 4, 1997, at 11:00 A.M. local time
(the "Annual Meeting"), or at any adjournment or postponement thereof,
for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at 200 North Elm
Street , Greensboro, North Carolina 27401. The Company intends to
mail this proxy statement and accompanying proxy card on or about
February 4, 1997, to all stockholders entitled to vote at the Annual
Meeting. Holders of the Company's common stock, par value $.001 per
share (the "Common Stock") are entitled to one vote per share on the
matters to be considered at this Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of
proxies, including preparation, assembly, printing and mailing of this
proxy statement, the proxy and any additional information furnished to
stockholders. Copies of solicitation materials will be furnished to
banks, brokerage houses, fiduciaries and custodians holding in their
names shares of Common Stock beneficially owned by others to forward
to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of
forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone,
telegram or personal solicitation by directors, officers or other
regular employees of the Company. No additional compensation will be
paid to directors, officers or other regular employees for such
services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business
on January 13, 1997 will be entitled to notice of and to vote at the
Annual Meeting. At the close of business on January 13, 1997 the
Company had outstanding and entitled to vote 5,806,176 shares of
Common Stock.
Each holder of record of Common Stock on such date will be
entitled to one vote for each share held on all matters to be voted
upon at the Annual Meeting.
All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative
and negative votes, abstentions and broker non-votes. Abstentions
will be counted towards the votes cast on proposals presented to the
stockholders and will have the same effect as negative votes.
Abstentions and broker non-votes are counted towards a quorum, but are
not counted for any purpose in determining whether a matter has been
approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the
power to revoke it at any time before it is voted. It may be revoked
by filing with the Secretary of the Company at the Company's principal
executive office, 200 North Elm Street, Greensboro, North Carolina
27401, a written notice of revocation or a duly executed proxy bearing
a later date, or it may be revoked by attending the meeting and voting
in person. Attendance at the meeting will not, by itself, revoke a
proxy.
STOCKHOLDER PROPOSAL
Proposals of stockholders that are intended to be presented at
the Company's 1997 Annual Meeting of Stockholders must be received by
the Secretary of the Company not later than February 15, 1997 in order
to be included in the proposals presented at the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
There are six nominees for the ten Board positions presently
authorized in the Company's Bylaws, subject to confirmation by the
Company. Each director to be elected will hold office until the next
annual meeting of stockholders and until his successor is elected and
has qualified, or until such director's earlier death, resignation or
removal.
Shares represented by executed proxies will be voted, if
authority to do so has not been withheld, for the election of the six
nominees listed below. In the event any nominee should be unavailable
for election as a result of an unexpected occurrence, such shares will
be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if
elected, and management has no reason to believe that any nominee will
be unable to serve.
Directors are elected by a plurality of the votes present in
person or represented by proxy and entitled to vote.
The Board of Directors recommends a vote FOR proposal 1.
Nominees
<TABLE>
The names of the nominees, and certain information about them (including their term of service), are set forth below:
<CAPTION>
Director
Name of Nominee Age Principal Occupation Since
<S> <C> <C> <C>
Robbie M. Efird 33 Chairman of the Board, President 1986
and Chief Executive Officer,
Network Systems International, Inc.
E.W. "Sonny" Miller, Jr. 54 Senior Vice President 1985
Network Systems International, Inc.
David F. Christian 42 Vice President 1990
Network Systems International, Inc.
James W. Moseley 51 Vice President 1992
Network Systems International, Inc.
David P. Reynolds 48 Independent Consultant Nominee
Rick Tuberosa 33 President, CEO and Chairman of the Nominee
Board, Palm State Equities, Inc.
</TABLE>
Robbie M. Efird has served as a director of the Company and its
predecessors since March,1986. In addition, Mr. Efird has served as
Chairman of the Board, President and Chief Operating Officer of the
Company since June, 1994. Mr. Efird created the original design
module for the Company's proprietary software in 1986 and has
continuously directed design activities of the Company since that
time. Mr. Efird is a magna cum laude graduate of the DeVry Institute.
E.W. "Sonny" Miller, Jr. has served as a director of the
Company and its predecessors since 1985 and has held various positions
as a member of the executive staff of the Company since that time.
Currently, Mr. Miller serves as Senior Vice President and heads the
Company's marketing efforts.
David F. Christian has served as a director of the Company
since 1990. Mr. Christian has served in several positions as a member
of the executive staff of the Company and currently serves as Product
Manager for the Company's net customerlink (net po+) under the
Company's recent corporate reorganization structure.
James W. Moseley has served as a director of the Company since
1993. Mr. Moseley currently serves as Product Manager for the
Company's net proplan and net scheduler. Prior to joining Network,
Mr. Moseley served as MIS Director of the Automotive Business Unit of
Guilford Mills, Inc. and as a programmer/analyst at the Navy's
Commander-in-Chief Atlantic Fleet Headquarters.
David P. Reynolds: Mr. Reynolds served as President of the
automotive group with Collins and Aikman from 1973 until 1991 and
thereafter as President of worldwide automotive operations and Senior
Vice-President of corporate affairs for Guilford Mills, Inc. from 1991
through 1993. Since that time, Mr. Reynolds has owned and operated an
independent consulting service providing management and manufacturing
advisory reports to Boards of Directors of major manufacturing
entities and to IBM's customer focus groups.
Rick Tuberosa: From 1989 to present, Mr. Tuberosa has been
employed by Palm State Equities, Inc. He currently serves as
President, CEO and Chairman of the Board. Prior to 1989 Mr. Tuberosa
represented E.F. Hutton, Shearson Lehman Hutton, Raymond James
Financial and First Investors Corporation. Mr. Tuberosa has extensive
knowledge of the financial markets. In 1996 Mr. Tuberosa was selected
as an Honored Member of the Cambridge Who's Who Registry of Business
Leaders.
Board Committees and Meetings
During the fiscal year ended September 30, 1996 the Board held
three meetings. The Board has an Audit Committee and an Executive
Committee.
The Audit Committee meets with the Company's independent
auditors at least annually to review the results of the annual audit
and discuss the financial statements; reviews financial and auditing
issues of the Company; recommends to the Board that the independent
auditors be retained; receives and considers the accountant's comments
as to controls, adequacy of staff and management performance and
procedures in connection with audit and financial controls and makes
recommendations to the Board. The Audit Committee consists of three
members.
The Board's Executive Committee meets semi-annually to discuss
the Company's progress in meeting the goals of its published business
plan and makes recommendations to the Board as to actions deemed
appropriate and necessary to fulfill the established goals. The
Committee consists of five members of the Board and the Company's
General Counsel and Secretary. The Committee met in June and August
of 1996 due to the Company's change in fiscal year end.
The Board intends to establish a Compensation Committee for the
1997 fiscal year. The Compensation Committee will review the annual
compensation of key employees of the Company and make recommendations
to the Board of Directors.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Pender Newkirk & Company as
the Company's independent auditors for the fiscal year ended September
30, 1997 and has further directed that management submit the selection
of independent auditors for ratification by the stockholders at the
Annual Meeting. Pender Newkirk & Company has audited the Company's
books and records since the Company went public in April of this year.
A representative of Pender Newkirk is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they
so desire and will be available to respond to appropriate questions.
During fiscal years 1994 and 1995 the accounting firm of Jones,
Jensen & Company of Salt Lake City, Utah, audited the books and
records of the Company while it was still considered a development
stage company operating under the name Aqua Australis, Inc. In April,
1996, the new Board of Directors of the Company appointed Pender
Newkirk as the new independent auditors for the newly named Network
Systems International, Inc. The change in accountant did not result
from any disagreements with Jones, Jensen on any matter of accounting
principal or practices, financial statement disclosures or auditing
scope of procedure, but was made effective by the Board of Directors
strictly as a matter of convenience. Additionally, Pender Newkirk has
expressed no adverse remarks in relation to the financial conclusions
of Jones, Jensen as shown in the audits for fiscal years 1994 and
1995. Jones, Jensen & Company filed a letter with the SEC dated April
30, 1996 confirming the above and a report of change was filed by the
Company with the SEC.
The board of directors recommends a vote FOR proposal 2.
PROPOSAL 3
Incentive Bonus Plan
The Board of Directors has resolved that 500,000 shares of
common stock of the Company should be issued and set aside as common
stock for purposes of establishing an incentive bonus plan for key
employees of the Company and issuing stock options to such employees.
The resolution would allow the stock to be issued to the corporation
as fully paid, non assessable common stock and held specifically and
only for the purposes stated above.
The Board of Directors recommends a vote FOR proposal 3.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
the ownership of the Company's Common Stock as of January 13, 1997 by:
(1) each nominee for director; (2) each of the executive officers
named in the Summary Compensation Table; (3) all executive officers
and directors of the Company as a group; and (4) all those known by
the Company to be beneficial owners of more than five percent of its
Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership <F1>
Beneficial Owner Number of Shares Percent of Total
<S> <C> <C>
Robbie M. Efird 2,184,193 37.62
E.W. "Sonny" Miller, Jr. 1,237,097 21.31
David F. Christian 715,698 12.33
James W. Moseley 475,698 8.19
William C. Ray 367,385 6.33
All Executive Officers and Directors as a Group (8 persons) 5,250,176 90.42
<FN>
<F1> This table is based upon information supplied by officers,
directors and principal stockholders. Unless otherwise noted and
subject to community property laws where applicable, the Company
believes that each of the stockholders named in this table has sole
voting and investment power with respect to the shares indicated as
beneficially owned. Applicable percentages are based on 5,806,176
shares outstanding as of January 13, 1997, adjusted as required by
rules promulgated by the Securities and Exchange Commission (SEC).
</FN>
</TABLE>
Compliance with the Reporting Requirements of Section 16(a)
Section 16(a) of the Securities and Exchange Act of 1934 (the
"1934 Act") requires the Company's directors and executive officers,
and persons who own more than ten percent of a registered class of the
Company's equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they
file. However, at the current time, the Company is not subject to
Section 16(a) regulations and therefore no forms were submitted to the
SEC by applicable parties. Therefore, all information relative to what
would have otherwise been submitted has been obtained by written
confirmation.
EXECUTIVE COMPENSATION
Compensation of Directors
The current directors of the Company receive no remuneration
for the services as members of the Board of Directors or for the
service on various committees of the Board. However, it is
anticipated that as additional and outside directors are elected, a
remuneration program will be developed whereby both cash consideration
is paid to outside directors and stock grants are awarded.
Compensation of Executive Officers
SUMMARY OF COMPENSATION
The following table shows for the fiscal years ended 1994, 1995
and 1996, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its other most highly compensated
executive officer at September 30, 1996 (the "Named Executive
Officers"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
Securities
Name and Principal Other Restricted Underlying LTIP All Other
Position Year Salary<F1> Bonus($) Annual Stock Options/ Payouts Compensation
Compensat Awards ($) SARs ($)
ion (#)
<S> <C> <C> <C>
Robbie M. Efird 1996 $113,541 $1,855<F3>
Chairman of the Board 1995<F2> N/A
President and Chief 1994<F2> N/A
Executive Officer
Acting CFO
$3,482<F3>
E.W. "Sonny" Miller, Jr. 1996 $108,445
Senior Vice President 1995<F2> N/A
Marketing/Sales 1994<F2> N/A
<FN>
<F1> The compensation shown in the table above reflects salary
amounts for the nine month period January 1, 1996 through September
30, 1996 due to the change in the Company's fiscal year end from
December 31 to September 30th.
<F2> The salary figures for calendar years 1994 and 1995 are not
shown since the salaries were paid by a subsidiary corporation of the
Company which operated as a Subchapter S corporation at the time such
salaries were paid.
<F3> Represents estimated value of personal use of Company owned
vehicle and Company paid long-term disability insurance premiums for
salary continuation purposes.
</FN>
</TABLE>
CERTAIN TRANSACTIONS
From January 1, 1996 through the present, there have been no
transactions involving in excess of $60,000.00, between the Company
and any current executive officer, director, 5% beneficial owner of
the Common Stock or member of the immediate family of any of the
foregoing persons, in which one of the foregoing individuals or
entities had a material interest except for the items identified in
"Executive Compensation" above.
The Company's policy is to enter into agreements with each of
its directors and executive officers providing for the indemnification
of such persons to the fullest extent permitted by law for any
liability they may incur by reason of their service as officers and/or
director of the Company.
The Company entered into 20 year employment agreements with
five of its officers calling for annual salaries totaling no less than
$195,000.
Prior to the reverse merger, Network Information Services, Inc.
declared dividends of $53,600. These dividends were offset against
stockholder loans in a non-cash transaction.
The Company has entered into an agreement with an underwriter
to promote the sale of a private placement preferred stock offering.
If successful, the Company expects to raise approximately one million
dollars from the offering.
OTHER MATTERS
The Board of Directors knows of no other matters that will be
presented for consideration at the Annual Meeting. If any other
matters are properly brought before the meeting, it is in the
intention of the persons named in the accompanying proxy to vote on
such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ William C. Ray
William C. Ray
Secretary
February 4, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-KSB FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 1996 IS AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO:
CORPORATE SECRETARY, NETWORK SYSTEMS INTERNATIONAL, INC., 200 NORTH
ELM STREET, GREENSBORO, NORTH CAROLINA 27401.
