SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 14a-11 or Rule 14a-12
Infosafe Systems, Inc.
(Name of Registrant as Specified in Its Charter)
Infosafe Systems, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
__X__ No fee required.
_____ 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 0-11:1
___________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
__X__ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing of 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:
___________________________________________________________________
_____________________________
1. Set forth the amount on which the filing fee is calculated and
state how it was determined.
INFOSAFE SYSTEMS, INC.
805 Third Avenue
9th Floor
New York, New York 10022
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held January 28, 1998
To the Stockholders of
Infosafe Systems, Inc.
Notice is hereby given that the 1998 Annual Meeting (the
"Meeting") of the Stockholders of Infosafe Systems, Inc.(the "Company")
will be held on January 28, 1998 at 10:00 a.m., Eastern Time, at the
offices of the Company, 805 Third Avenue, 9th Floor, New York, New York
10022. The Meeting is called for the following purposes:
1. To elect a board of five directors;
2. To approve and ratify the appointment of Richard A. Eisner &
Company, LLP as the independent auditors of the Company; and
3. To consider and take action upon such other matters as may
properly come before the meeting or any adjournment or adjournments
thereof.
The close of business on December 22, 1997 has been fixed as the
record date for the determination of stockholders entitled to notice
of, and to vote at, the Meeting.
All stockholders are cordially invited to attend the Meeting.
Whether or not you expect to attend, you are respectfully requested by
the Board of Directors to sign, date and return the enclosed proxy
promptly. Stockholders who execute proxies retain the right to revoke
them at any time prior to the voting thereof. A return envelope which
requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors
/s/ Arthur R. Medici
Arthur R. Medici,
President and Chief Executive Officer
Dated: January 5, 1998
INFOSAFE SYSTEMS, INC.
805 Third Avenue
9th Floor
New York, New York 10022
PROXY STATEMENT
1998 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Infosafe Systems,
Inc. (the "Company") for the 1998 Annual Meeting of Stockholders to be
held at the offices of the Company, 805 Third Avenue, 9th Floor, New
York, New York 10022 on January 28, 1998, at 10:00 a.m., Eastern Time,
and for any adjournment or adjournments thereof, for the purpose set
forth in the accompanying Notice of Annual Meeting of Stockholders.
Any Stockholder giving such a proxy has the power to revoke it at any
time before it is voted. Written notice of such revocation should be
forwarded directly to the Secretary of the Company, at the above stated
address. Attendance at the meeting will not have the effect of
revoking the proxy unless such written notice is given.
If the enclosed proxy is properly executed and returned, the
shares represented thereby will be voted in accordance with the
directions thereon and otherwise in accordance with the judgment of the
persons designated as proxies. Any proxy on which no direction is
specified will be voted in favor of the actions described in this Proxy
Statement and for the election of the nominees set forth under the
caption "Election of Directors."
The approximate date on which this Proxy Statement and the
accompanying form of proxy will first be mailed or given to the
Company's stockholders is January 5, 1998.
Your vote is important. Accordingly, you are urged to sign
and return the accompanying proxy card whether or not you plan to
attend the meeting. If you do attend, you may vote by ballot at the
meeting, thereby canceling any proxy previously given.
VOTING SECURITIES
Only holders of shares of Class A Common Stock, $.01 par
value per share ("Class A Common Stock"), Class B Common Stock, $.01
par value per share ("Class B Common Stock"), Class E-1 Common Stock,
$.01 par value per share ("Class E-1 Common Stock") and Class E-2
Common Stock, $.01 par value per share ("Class E-2 Common Stock"), of
record at the close of business on December 22, 1997 are entitled to
vote at the meeting. A majority in interest of the outstanding Class A
Common Stock, Class B Common Stock, Class E-1 Common Stock and Class E-
2 Common Stock represented at the meeting in person or by proxy shall
constitute a quorum. The affirmative vote of a plurality of the Class
A Common Stock, Class B Common Stock, Class E-1 Common Stock and Class
E-2 Common Stock so represented is necessary to elect the nominees for
election as directors and the affirmative vote of a majority of the
Class A Common Stock, Class B Common Stock, Class E-1 Common Stock and
Class E-2 Common Stock so represented, excluding broker non-votes, is
necessary to approve and ratify the appointment of Richard A. Eisner &
Co., independent certified public accountants as the independent
auditors of the Company. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business. If a stockholder, present in person or by
proxy, abstains on any matter, the stockholder's shares will not be
voted on such matter. Thus, an abstention from voting on any matter
has the same legal effect as a vote "against" the matter even though
the stockholder may interpret such action differently. Except for
determining the presence or absence of quorum for the transaction of
business, broker non-votes are not counted for any purpose in
determining whether a matter has been approved.
The principal executive offices of the Company are located at
805 Third Avenue, 9th Floor, New York, New York 10022.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of November 10, 1997,
certain information concerning the beneficial ownership of the
Company's Class A Common Stock, Class B Common Stock, Class E-1 Common
Stock and Class E-2 Common Stock by (I) each stockholder known by the
Company to own beneficially 5% or more of the outstanding Class A
Common Stock, Class B Common Stock, Class E-1 Common Stock and E-2
Common Stock of the Company; (ii) each director; (iii) each person
named in the Executive Compensation Table; and (iv) all executive
officers and directors of the Company as a group. Each share of Class
B Common Stock is entitled to six votes per share and each share of
Class A Common Stock, Class E-1 Common Stock and E-2 Common Stock is
entitled to one vote per share.
<TABLE>
<CAPTION>
Class A Class B Class E
Common Stock (1) Common Stock Common Stock
----------------- ------------------ ----------------
Number of Number of Number of % of Vote
of Beneficial Owner Shares % Shares % Shares % of all Classes
- -------------------------- ----------- --- ------------- ---- --------- ---- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas H. Lipscomb (4)(10) 100,000 (2) 2.1 813,126 (3) 59.2 820,264 30.0 36.7
Arthur R. Medici 116,666 (6) 2.5 70,000 (6) 5.1 270,000 9.9 4.4
Alan N. Alpern (4)(10) 50,000 (2) 1.1 153,582 (5) 9.9 210,340 6.4 6.4
Charles C. Johnson (7) 20,000 * - * - * *
Stanley Bielak (8) 10,000 * - * - * *
Robert S. Christie (8) 10,000 * - * - * *
Neil Freeman (8) 10,000 * - * - * *
All executive officers
and directors as a group
(7 persons) 316,666 6.5 1,036,700 75.5 1,300,964 47.6 47.5
- ----------------------
*Less than one percent
</TABLE>
(1) Except as otherwise noted, each individual or entity has sole
voting and investment power over the securities listed and the
address of each beneficial owner is c/o the Company. Includes
each holder's Escrow Shares as that term is defined in Note 9
below.
(2) Represents immediately exercisable options.
(3) Includes 427,409 Class B Escrow Shares. Mr. Lipscomb has granted
options to purchase 16,875 shares of Class A Common Stock issuable
upon conversion of the shares of Class B Common Stock beneficially
owned by him, including the right to receive 16,875 Class E
Shares, to two individuals and one entity (the "Lipscomb
Options").
(4) Includes 94,591 Escrow Shares. Also includes 25,978 shares of
Class B Common Stock owned by Mr. Alpern's wife, as to which Mr.
Alpern disclaims beneficial ownership, including 18,217 Escrow
Shares.
(5) Excludes 16,000 options to purchase Class A Common Stock not
presently exercisable.
(6) Mr. Medici holds options to purchase 116,666 Class A Shares, which
are immediately exercisable. Mr. Medici also holds 70,000 shares
of Class B Common Stock, which may be canceled if certain
operating performance criteria are not achieved.
(7) Includes 20,000 shares available upon exercise of immediately
exercisable options. Excludes options to purchase 20,000 shares
of Class A Common Stock not exercisable within 60 days.
(8) Includes 10,000 shares issuable upon exercise of immediately
exercisable options. Excludes options to purchase 30,000 shares
of Class A Common Stock not exercisable within 60 days.
(9) In connection with a private placement completed in September 1993,
the present holders of the Class B Common Stock placed into
escrow, on a pro rata basis, an aggregate of 781,244 shares (the
"Escrow Shares"). Such stockholders will continue to vote the
Escrow Shares, although the Escrow Shares are not assignable or
transferable.
The Escrow Shares will be released to the stockholders in the
event that the Minimum Pretax Income equals at least $10.0 million
(subject to certain adjustments) for the twelve months ending
December 31, 1997; or the bid price of the Company's Class A
Common Stock averages in excess of $18.00 per share for 30
consecutive business days through January 1998. If none of the
applicable earnings or market price levels with respect to the
Escrow Shares set forth above have been met by May 1, 1998, the
Escrow Shares, as well as any dividends or other distributions
made with respect thereto, will be contributed to the capital of
the Company. If none of the applicable earnings or market price
levels with respect to the Class E Shares set forth above have
been met by March 31, 1999, the Class E Shares, as well as any
dividends or other distributions made with respect thereto, will
be redeemed by the Company for nominal consideration and canceled.
(10) Substantially all of the Class A Common Stock, Class B Common
Stock and Class E-1 Common Stock and Class E-2 Common Stock
beneficially owned by Thomas H. Lipscomb and Alan N. Alpern,
constituting 38.0% and 7.6% of the vote of all classes of common
stock of the Company, respectively (assuming the issuance of the
maximum number of Units issued in the Company's initial public
offering), have been deposited in a voting trust or are subject to
an irrevocable proxy for a term of three years. Pursuant to the
voting trust or irrevocable proxy, the shares will be voted at the
direction of a majority of the Company's non-management directors
and Mr. Medici, subject to certain exceptions, including certain
mergers and sale of all or substantially all of the Company's
assets. The shares deposited in the voting trust or irrevocable
proxy will be released from the voting trust or irrevocable proxy
on the sale of the shares.
ELECTION OF DIRECTORS
At the meeting, five directors will be elected by the
Stockholders to serve until the next Annual Meeting of Stockholders or
until their successors are elected and shall qualify. It is intended
that the accompanying proxy will be voted for the election, as
directors, of the five persons named below, unless the proxy contains
contrary instructions. The Company has no reason to believe that any
of the nominees will not be a candidate or will be unable to serve.
However, in the event that any of the nominees should become unable or
unwilling to serve as a director, the persons named in the proxy have
advised that they will vote for the election of such person or persons
as shall be designated by the Management.
The following sets forth the names and ages of the five
nominees for election to the Board of Directors, their respective
principal occupations or employments during the past five years and the
period during which each has served as a director of the Company.
Name Age Position
----------------------- --- ------------------------
Arthur R. Medici 48 Chief Executive Officer,
President and Director
Stanley Bielak 50 Director
Robert S. Christie 43 Director
Neal B. Freeman 57 Director
Charles C. Johnston 62 Director
Arthur R. Medici has been President, Chief Executive Officer,
and Director of the Company since November 1996. Previously, Mr.
Medici was President of the North American division of Derwent
Information, Ltd., a producer of international patent abstracts and
information formatted for print, CD-ROM and digital online delivery.
From November 1990 to August 1994, Mr. Medici was Senior Vice President
at Thomson & Thomson. Both companies are subsidiaries of The Thomson
Corporation's Intellectual Property Resources Group.
Stanley Bielak has been a Director of the Company since August
1997. Mr. Bielak is the founder and Chief Executive Officer of
Information Transport Associates Inc., a developer of middleware for
remote and mobile computing applications. From 1978 to 1982, he was a
co-founder and Chief Executive Officer of Conservation Controls Inc., a
manufacturer of microprocessor control used for commercial
refrigeration systems. A management expert, Mr. Bielak has served as
Chief Executive Officer of several companies, including Transportation
Management Systems Inc., Utilitrol Inc., Seed Software Inc. and Axiom
Software Inc.
Neal B. Freeman has been a Director of the Company since June
1997. Mr. Freeman is Chairman and Chief Executive Officer of The
Blackwell Corporation, a Peabody award-winning television production
company he founded in 1981. He also founded and served for 12 years as
President and Chief Executive Officer of Jefferson Communications, Inc.
Robert S. Christie has been a Director of the Company since
March 1997. Mr. Christie, an operations executive with extensive
experience in the international real-time information industry and
higher education markets, was named President and Chief Executive
Officer of Thomson & Thomson Corporation, a trademark and copyright
services and information company, in November 1996. Prior to joining
Thomson & Thomson, he was President of the McGraw-Hill College Book
Company (1994-1996), and prior to that, Group Vice President for Equity
Information Services at Standard & Poor's Information Company (1990-
1994).
Charles C. Johnston has been a Director of the Company since
October 1996. Mr. Johnston is Chairman of ISI Systems ("ISI"), a
subsidiary of Teleglobe of Montreal. Previously he was founder, Chief
Executive Officer and President of ISI prior to its purchase by
Teleglobe in November 1989.
During Fiscal 1997, Thomas H. Lipscomb, Chairman of the Board
and former Chief Executive Officer, resigned as a Director and Chief
Executive Officer of the Company. Resignations from the Board of
Directors were also submitted by members William N. Walker, Frank
Schwab, Jr. and Alan N. Alpern.
All directors hold office until the next annual meeting of
stockholders and until their successors are duly elected and qualified.
Officers serve at the discretion of the Board of Directors, subject to
rights, if any, under contracts of employment.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the
aggregate compensation paid or accrued by the Company to its Chief
Executive Officer and to its executive officers (collectively, the
"Named Executive Officers") whose annual compensation exceeded $100,000
for the fiscal years ended July 31, 1997, July 31, 1996 and July 31,
1995, respectively :
Summary Compensation Table
Long Term
Annual Compensation Compensation
--------------------------------- ------------
Other
Name and Annual
Principal Position Year Salary Compensation Options (#)
- ------------------- ---- ----------- ------------ ------------
Arthur R. Medici 1997 102,000 -0- -0-
1996 n/a n/a n/a
1995 n/a n/a n/a
Thomas H. Lipscomb 1997 145,833 (1) -0- -0-
1996 175,000 -0- -0-
1995 177,917 -0- -0-
Alan N. Alpern 1997 -0- 125,000 (1) -0-
1996 -0- 125,000 -0-
1995 -0- 109,375 -0-
(1) Accrued compensation aggregating approximately $83,000 for
these two officers was earned during fiscal years ended July 31, 1996
and 1997, and was contributed to additional paid-in capital during
January 1997.
The following table sets forth the number and value of
unexercised in-the-money options at July 31, 1997 for the Named
Executive Officers named above.
Option/SAR Grants in Fiscal Year Ended July 31, 1997
% of Total
Options
Granted to
Employees Exercise
Base in Fiscal or Base
Options Year ended Price Expiration
Name Granted (#) July 31, 1997 ($/sh) Date
- ------------------ --------------- -------------- -------- ----------
Arthur R. Medici 350,000 74.5% 4.06 11/26/06
Thomas H. Lipscomb -0- -0- -0- --
Alan N. Alpern -0- -0- -0- --
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Options/SAR Value
Number of
Unexercised Value of
Options at Unexercised
Shares FY-End (#) In-the Money
Acquired on Value Exercisable/ Options/SARs
Name Exercise(#) Realized($) Unexercisable at FY-End ($)
- ------------------ ------------ ------------ --------------- -------------
Arthur R. Medici -0- -0- 350,000/116,667 -0-
Thomas H. Lipscomb -0- -0- 100,000/0 -0-
Alan N. Alpern -0- -0- 50,000/0 -0-
EMPLOYMENT AGREEMENTS
Effective November 26, 1996, the Company appointed Arthur R.
Medici as President and Chief Executive Officer pursuant to a three-
year employment agreement ("Agreement"). The Agreement provides for
the Company to issue Mr. Medici 70,000 shares of Class B Common Stock,
135,000 Shares of Class E-1 Common Stock and 135,000 shares of Class E-
2 Common Stock, which cannot be transferred by Mr. Medici until August
1999 and will be canceled by the Company if his employment is
terminated prior to August 1999 ("Vesting Period"). The Company will
reflect compensation expense and an increase to additional paid in
capital aggregating $298,593 in connection with the issuance of such
shares over the Vesting Period, compensation expense and an increase in
additional paid in capital was $74,643 for the year ended July 31, 1997.
Effective January 1, 1992, and amended as of October 1994,
the Company entered into a consulting agreement with Alan N. Alpern
pursuant to which Mr. Alpern devotes more than half of his business
time to the Company as Chief Financial Officer. The agreement with
Mr. Alpern provides for annual compensation of $125,000 for 1997.
BOARD OF DIRECTORS
Committees
The Company has no standing audit, nominating or compensation
committees of the Board of Directors.
Meetings
During the last full fiscal year, the Board of Directors met
eight times. All directors attended all meetings.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's executive officers, directors and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in
ownership of common stock and other equity securities of the Company.
Such executive officers, directors and 10% or more beneficial owners
are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms filed by such reporting persons.
Based solely on the Company's review of such forms furnished
to the Company and written representations from certain reporting
persons, the Company believes that all filing requirements applicable
to the Company's executive officers, directors and 10% or more
beneficial owners were complied with by such persons, other than
Neal B. Freeman.
APPOINTMENT OF INDEPENDENT AUDITORS
The management of the Company recommends the appointment of
Richard A. Eisner & Company, LLP, independent certified public
accountants, as the Company's independent auditors for the fiscal year
ending July 31, 1998. Richard A. Eisner & Company, LLP has been the
Company's auditors for the past fiscal year and has no direct or
indirect financial interest in the Company. A representative of
Richard A. Eisner & Company, LLP is expected to be present at the
Annual Meeting of Stockholders with the opportunity to make a statement
if he or she desires to do so, and shall be available to respond to
appropriate questions.
GENERAL
The management of the Company does not know of any matters
other than those stated in this Proxy Statement which are to be
presented for action at the meeting. If any other matters should
properly come before the meeting, it is intended that proxies in the
accompanying form will be voted on any such other matters in accordance
with the judgment of the persons voting such proxies. Discretionary
authority to vote on such matters is conferred by such proxies upon the
persons voting them.
The Company will bear the cost of preparing, printing,
assembling and mailing the proxy, Proxy Statement and other material
which may be sent to Stockholders in connection with this solicitation.
It is contemplated that brokerage houses will forward the proxy
materials to beneficial owners at the request of the Company. In
addition to the solicitation of proxies by use of the mails, officers
and regular employees of the Company may solicit proxies without
additional compensation, by telephone or telegraph. The Company does
not expect to pay any compensation for the solicitation of proxies.
The Company will provide without charge to each person being
solicited by this Proxy Statement, on the written request of any such
person, a copy of the Annual Report of the Company on Form 10-KSB for
the year ended July 31, 1997 (as filed with the Securities and Exchange
Commission), including the financial statements thereto. All such
requests should be directed to Arthur R. Medici, President and Chief
Executive Officer, Infosafe Systems, Inc., 805 Third Avenue, 9th Floor,
New York, New York 10022.
STOCKHOLDER PROPOSALS
The Annual Meeting of Stockholders for the fiscal year
ending July 31, 1998 is expected to be held on or about December 17,
1998. All proposals intended to be presented at the Company's next
Annual Meeting of Stockholders must be received at the Company's
executive office no later than August 14, 1998, for inclusion in the
Proxy Statement and form of proxy related to that meeting.
By Order of the Board of Directors,
Arthur R. Medici,
President and Chief Executive Officer
Dated: January 5, 1998
