NETWORK SYSTEMS INTERNATIONAL, INC.
200 North Elm Street
Greensboro, NC 27401
INFORMATION STATEMENT PURSUANT TO SECTION 14(F) of
THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 14F-1
NOTICE OF CHANGE IN THE MAJORITY
OF THE BOARD OF DIRECTORS
AUGUST 5, 2000
This Information Statement is being furnished to all holders
of record at the close of business on August 4, 2000 of the
common stock, par value $.001 per share ("Common Stock"), of
Network Systems International, Inc., a Nevada corporation
("Company"), in accordance with the requirements of Section 14(f)
of the Securities Exchange Act of 1934 ("Exchange Act") and SEC
Rule 14f-1.
No vote or other action by the Company's stockholders is
required in response to this Information Statement. Proxies are
not being solicited.
INTRODUCTION
The Company is providing notice that, effective upon the
expiration of the ten-day period beginning on the later of the
date of the filing of this Information Statement with the
Securities and Exchange Commission ("SEC") pursuant to Rule 14f-1
or the date of mailing of this Information Statement to the
Company's stockholders, Robbie M. Efird will resign as a director
of the Company. Herbert Tabin became a new director of the
Company on July 24, 2000, by the appointment of Mr. Efird to
fill one of the vacancies created by the recent resignations of
Christopher N. Baker, Joseph M. Brower, Carlton Joseph Mertens
and Olin H. Broadway, Jr. The resignations of Messrs. Efird,
Baker, Brower, Mertens and Broadway and the appointment of Mr.
Tabin are occurring pursuant to a Stock Purchase Agreement and a
related agreement discussed below under "Stock Purchase and
Related Agreements". Pursuant to such agreements, on July 10,
2000, Mr. Efird, E.W. Miller, Jr., David F. Christian and James
W. Moseley sold 2,700,00 shares ("Purchased Shares") of the
Company's outstanding Common Stock to Mr. Tabin and agreed to
resign from the Company. However, they are to continue in their
current capacities as officers of the Company's wholly-owned
subsidiaries, Network Systems International of North Carolina, Inc.
and Vercom Software, Inc.
Because of the change in the composition of the Board, the
sale of the Purchased Shares and the issuance of 1,666,667 shares
of new common stock for $1,000,000 purchased by investors located
by Mr. Tabin, there has been a change in control of the Company.
As of August 4, 2000, the Company had issued and outstanding
9,489,171 shares of Common Stock, the Company's only class of
voting securities that would be entitled to vote for directors at
a stockholders meeting if one were to be held. Each share of
Common Stock is entitled to one vote.
Please read this Information Statement carefully. It
describes the terms of the Stock Purchase Agreement and the
related agreement and contains certain biographical and other
information concerning the executive officers and directors of
the Company. Additional information about the Stock Purchase
Agreement and the related agreement is contained in the Company's
Current Report on Form 8-K ("Form 8-K") dated July 10, 2000,
which was filed with the SEC on July 10, 2000. The Form 8-K and
the accompanying exhibits may be inspected without charge at the
public reference section of the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of this material
also may be obtained from the SEC at prescribed rates. The SEC
also maintains a website that contains reports, proxy and
information statements and other information regarding public
companies that file reports with the SEC. Copies of the Form 8-K
may be obtained from the SEC's website at http://www.sec.gov.
STOCK PURCHASE AND RELATED AGREEMENTS
On July 10, 2000, Messrs. Efird, Miller, Christian and
Moseley, shareholders of the Company (collectively the "Sellers")
entered into a stock purchase agreement ("Stock Purchase
Agreement") with Mr. Tabin (the "Purchaser") pursuant to which
the Sellers agreed to sell to the Purchaser an aggregate of
2,700,000 shares of Common Stock at a price of approximately
$0.56 per share. In connection with the execution of the
Purchase Agreement, the Company entered into a separate agreement
with Millennium Holdings Group, Inc. ("MHG") pursuant to which
the Company would sell 1,666,667 common shares of the Company to
seven investors who are not related to either the Purchaser or
MHG. Pursuant to the Stock Purchase Agreement, among other
things, Messrs. Efird, Baker, Brower, Mertens and Broadway agreed
to resign as directors and appoint new directors designated by
the Purchaser of the shares. The Purchaser has initially
designated Mr. Tabin for appointment to the board of directors of
the Company.
The sale of shares contemplated by the Stock Purchase
Agreement was consummated on July 25, 2000, and on that date, the
Company issued 1,666,667 shares of its common stock to seven
investors located by MHG ("Investors").
The following table lists the Sellers and the number of
shares sold by each:
Name of Seller Number of Shares Sold
Robbie Efird 1,900,000
E.W. Miller, Jr. 600,000
David F. Christian 100,000
James W. Moseley 100,000
TOTAL 2,700,000
The Purchaser of all 2,700,000 common shares sold was Herbert Tabin.
CHANGE OF CONTROL
As a result of the actions described above under the
captions "Introduction" and "Stock Purchase and Related
Agreements", designees of the Purchaser will constitute the
Board, and the Purchasers will be able to control the voting of a
significant block of the Company's voting shares. As a result of
the transactions consummated on July 25, 2000, pursuant to the
Stock Purchase Agreement and the related agreement, the Purchaser
may be deemed to own beneficially an aggregate of 4,366,667
shares of Common Stock, or approximately 46% of the 9,489,171
outstanding shares of the Company's common stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANGAGEMENT
The following table sets forth the number of shares of
Common Stock beneficially owned as of the date of this
Information Statement by (1) those persons or groups known to the
Company who beneficially own more than 5% of the Company's Common
Stock, (2) each current director and each person who has been
designated to serve as a director by the Purchaser ("New
Director"), (3) each executive officer whose compensation
exceeded $100,000 in the fiscal year ended September 30, 1999,
(4) all current directors and executive officers as a group, and
(5) all New Directors and other persons who will serve as
executive officers of the Company after the New Directors take
office ("New Officers") as a group. The information is
determined in accordance with Rule 13d-3 promulgated under the
Exchange Act based upon information furnished by the persons
listed or contained in filings made by them with the SEC. Except
as indicated below, the stockholders listed possess sole voting
and investment power with respect to their shares. This table
reflects the consummation on July 25, 2000, of the sale of
2,700,000 shares of common stock by the Sellers to the Purchaser.
Except as otherwise indicated in the table below, the business
address of each of the persons listed is c/o Network Systems
International, Inc., 200 North Elm Street, Greensboro, NC
27401.
Name and Address Amount and Percent
of Beneficial Owner Nature of of Class (1)
Beneficial
Ownership
Robbie M. Efird (2) 811,491 8.6
E.W. Miller, Jr.(3) 861,183 9.1
David Christian 794,623 8.4
James W. Moseley 479,622 5.1
Name and Address of Amount and Percent
Beneficial Owner Nature of of Class(1)
Beneficial
Ownership
The Purchaser (Herbert Tabin) 2,700,000 28.5
6413 Congress Avenue, Suite 240
Boca Raton, FL 33487
All current directors and 3,511,491 37.0
executive officers
as a group (2 persons)
All New Directors and New 2,700,000 28.5
Officers as a group
(1 person)
(1) Unless otherwise noted and subject to community property laws
where applicable, the Company believes that each of the
stockholders named in the table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
Applicable percentages are based on 9,489,171 shares outstanding
as of August 4, 2000, adjusted as required by rules promulgated
by the Securities and Exchange Commission.
(2) Includes 19,500 shares of common stock of the Company
beneficially held by Mr. Efird on behalf of his minor son.
(3) Includes 1,562 shares of common stock of the Company held by
Mr. Miller's wife.
Effective upon the expiration of the ten-day period
beginning on the later of the date of the filing of this
Information Statement with the SEC pursuant to Rule 14f-1 or the
date of mailing of this Information Statement to the Company's
stockholders, Mr. Efird will resign as a director of the Company.
Mr. Tabin was appointed as a new director to fill one of the
vacancies on July 24, 2000. The following table sets forth
information regarding the Company's current executive officers
and directors and the proposed executive officers and directors
of the Company. If any proposed director listed in the table
below should become unavailable for any reason, which the
Purchaser does not anticipate, the directors will vote for any
substitute nominee or nominees who may be selected by the
Purchaser prior to the date the new directors take office.
Current Executive Officers and Directors
Name Age Positions
Robbie M. Efird 36 Chairman of the Board
and Chief Executive Officer
Herbert Tabin 32 President and Director
Herbert Tabin is a founder of International Internet, Inc.
and has served as Vice President and a Director of the Company
since February, 1998. Prior to starting the Company, Mr. Tabin
was a Vice President of Marketing with LBI Group, Inc., a
merchant banking and venture capital group from April 1995 to
December 1996. Mr. Tabin received a Bachelor of Science in
Business Economics from the State University of New York in 1989
and has been involved in financial consulting and investment
counseling since 1989.
During the year ended September 30, 1999, the Board held 5
regularly scheduled and/or specially called meetings. The
Board's audit and compensation committee held one formal meeting
during the year ended September 30, 1999. The Board's executive
committee held four meetings during the year ended September 30,
1999.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act, as amended, required the
Company's officers, directors and persons who beneficially own
more than ten percent of the Company's Common Stock to file
reports of ownership and changes in ownership with the SEC.
There reporting persons also are required to furnish the Company
with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on its review of the copies of
such forms furnished to it and representations that no other
reports were required, the Company believes that all Section
16(a) reporting requirements were complied with by the Company's
officers and directors during the year ended September 30, 1999.
EXECUTIVE COMPENSATION
The following table sets forth information concerning
compensation for services in all capacities awarded to, earned by
or paid to the Company's Chairman of the Board and the Company's
President in the year ended September 30, 1999. There were no
executive officers whose compensation exceeded $100,000 in the
year ended September 30, 1999:
SUMMARY COMPENSATION TABLE
Annual Compensation
Other
Name and Principal Position Year ($)Salary ($)Bonus Compensation
Robbie M. Efird 1999 167,456 0 6,970
(CEO)
Christopher N. Baker 1999 138,505 0 60,996
(Former President)
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the transactions described in this Information
Statement, no information is required to be reported under this
item.
Dated: August 5, 2000
By: /s/ Herbert Tabin
Herbert Tabin
