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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
[ ] 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 Rule 14a-11(c) or Rule 14a-12
FLEXIINTERNATIONAL SOFTWARE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than 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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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FLEXIINTERNATIONAL SOFTWARE, INC.
Two Enterprise Drive
Shelton, Connecticut 06484
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, APRIL 30, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
FlexiInternational Software, Inc. (the "Company") will be held on Thursday,
April 30, 1998, at the principal offices of the Company, Two Enterprise Drive,
Shelton, Connecticut 06484 at 10:00 a.m., local time, to consider and act upon
the following matters:
1. To elect two Class I Directors to serve for the ensuing three years.
2. To ratify the selection of Price Waterhouse LLP as the Company's
independent accountants for the current fiscal year.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on March 11, 1998 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. A
list of the Company's stockholders is open for examination by any stockholder at
the principal offices of the Company, Two Enterprise Drive, Shelton, Connecticut
06484 and will be available at the meeting.
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997, which contains financial statements and other information of
interest to stockholders, accompanies this Notice and the enclosed Proxy
Statement.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
JOHN K. P. STONE, III, ESQ.
Assistant Secretary
Shelton, Connecticut
April 3, 1998
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WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
THE PROXY IS MAILED IN THE UNITED STATES.
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FLEXIINTERNATIONAL SOFTWARE, INC.
Two Enterprise Drive
Shelton, Connecticut 06484
Proxy Statement for the Annual Meeting of Stockholders
to be held on April 30, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FlexiInternational Software, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on April
30,1998 and at any adjournments of that meeting (the "Annual Meeting"). All
proxies will be voted in accordance with the stockholders' instructions, and if
no choice is specified, the proxies will be voted in favor of the matters set
forth in the accompanying Notice of Meeting. Any proxy may be revoked by a
stockholder at any time before its exercise by delivery of a written revocation
or a subsequently dated proxy to the Treasurer of the Company or by voting in
person at the Annual Meeting.
THE NOTICE OF MEETING, THIS PROXY STATEMENT, THE ENCLOSED PROXY CARD AND
THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1997
ARE BEING MAILED TO STOCKHOLDERS ON OR ABOUT APRIL 3, 1998. THE COMPANY WILL,
UPON WRITTEN REQUEST OF ANY STOCKHOLDER, FURNISH WITHOUT CHARGE A COPY OF ITS
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT EXHIBITS. PLEASE ADDRESS ALL
SUCH REQUESTS TO THE COMPANY, ATTENTION OF MS. JENNIFER V. CHENG, TREASURER,
FLEXIINTERNATIONAL SOFTWARE, INC., TWO ENTERPRISE DRIVE, SHELTON, CONNECTICUT
06484. EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST AND PAYMENT OF AN
APPROPRIATE PROCESSING FEE.
VOTING SECURITIES AND VOTES REQUIRED
At the close of business on March 11, 1998, the record date for the
determination of stockholders entitled to vote at the Annual Meeting, there were
outstanding and entitled to vote an aggregate of 16,497,378 shares of common
stock, $.01 par value per share, of the Company (the "Common Stock").
Stockholders are entitled to one vote per share.
Shares of Common Stock represented in person or by proxy (including shares
which abstain or do not vote for any reason with respect to one or more of the
matters presented for stockholder approval) will be counted for purposes of
determining whether a quorum is present at the Annual Meeting. The affirmative
vote of the holders of a plurality of the votes cast by the stockholders
entitled to vote at the Annual Meeting is required for election of directors.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and will also not
be counted as votes cast or shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the voting on a matter
that requires the affirmative vote of a certain percentage of the votes cast or
shares voting on a matter.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 31, 1998,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each executive officer of the Company named in the Summary Compensation Table
set forth under the caption "Executive Compensation" below and (iv) all
directors and executive officers of the Company as a group. The address of
Stefan R. Bothe, Jennifer V. Cheng and James W. Schenck is c/o
FlexiInternational Software, Inc., Two Enterprise Drive, Shelton, CT 06484.
NUMBER OF
SHARES PERCENTAGE OF
BENEFICIALLY COMMON STOCK
BENEFICIAL OWNER OWNED(1) OUTSTANDING(1)
---------------- ------------ --------------
Entities affiliated with Menlo Ventures(2).................. 2,710,016 16.4%
3000 Sand Hill Road, Building 4, Suite 100
Menlo Park, CA 94025
Thomas H. Bredt(2).......................................... 2,710,016 16.4%
3000 Sand Hill Road, Building 4, Suite 100
Menlo Park, CA 94025
Furman Selz SBIC, L.P. and affiliates(3).................... 2,004,380 12.2%
230 Park Avenue
New York, NY 10169
James W. Schenck(4)......................................... 1,212,499 7.4%
William Blair Capital Partners V, L.P. ..................... 1,167,790 7.1%
227 West Monroe Street
Chicago, IL 60606
Primus Capital Fund III Limited Partnership................. 1,137,773 6.9%
Suite 2700, 1375 East Ninth Street
Cleveland, OH 44114
Stefan R. Bothe(5).......................................... 1,091,250 6.6%
Amerindo Investment Advisors, Inc. and affiliates(6)........ 977,000 5.9%
One Embarcadero Center, Suite 2300
San Francisco, CA 94111
Jennifer V. Cheng (7)....................................... 851,250 5.2%
John B. Landry.............................................. 45,000 *
A. David Tory............................................... 1,900 *
Maureen M. Okerstrom(8)..................................... 17,475 *
Mark J. Berlingeri(9)....................................... 3,750 *
All directors and executive officers as a group (9
persons)(10).............................................. 5,940,140 36.0%
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* Less than 1%
(1) The number of shares beneficially owned by each stockholder is determined
under rules promulgated by the Securities and Exchange Commission, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares as
to which the individual or entity has sole or shared voting power or
investment power and any shares as to which the individual or entity has the
right to acquire beneficial ownership within 60 days after January 31, 1998
through the exercise of any stock option, warrant or other right (and any
reference in these footnotes to shares subject to stock options refers only
to such options). The inclusion herein of such shares, however, does not
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of such shares.
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(2) Consists of 2,669,969 shares held by Menlo Ventures VI, L.P. ("MV-VI") and
40,047 shares held by Menlo Entrepreneurs Fund VI, L.P. ("MEF-VI"). MV
Management VI, L.P. ("MVM") is a general partner of MV-VI and MEF-VI. Mr.
Bredt, a director of the Company, is a general partner of MVM. Mr. Bredt
disclaims beneficial ownership of the shares held by MV-VI and MEF-VI,
except to the extent of his pecuniary interests therein.
(3) Beneficial ownership as reported on Schedule 13G filed with the Securities
and Exchange Commission in February 1998. Includes 96,700 shares held by
entities affiliated with ING Bank N.V. ("ING"). The sole general partner of
Furman Selz SBIC, L.P. is an indirect subsidiary of ING through various
controlled intermediate entities.
(4) Includes 75,000 shares subject to options held by Mr. Schenck which are
exercisable within 60 days after January 31, 1998.
(5) Includes 187,500 shares subject to options held by Mr. Bothe which are
exercisable within 60 days after January 31, 1998. Excludes 776,250 shares
held by Ms. Cheng, Mr. Bothe's wife, as to which shares Mr. Bothe disclaims
beneficial ownership.
(6) Beneficial ownership as reported on Schedule 13D filed with the Securities
and Exchange Commission in February 1998. Consists of 765,000 shares held by
Amerindo Investment Advisors, Inc., a California corporation ("Amerindo
USA"), and 212,000 shares held by Amerindo Investment Advisors, Inc., a
Panama corporation ("Amerindo Panama"). Voting and investment power with
respect to all such shares is shared by Alberto W. Vilar and Gary A. Tanaka,
sole directors and stockholders of both Amerindo USA and Amerindo Panama.
Messrs. Vilar and Tanaka disclaim beneficial ownership of all such shares.
(7) Includes 75,000 shares subject to options held by Ms. Cheng which are
exercisable within 60 days after January 31, 1998. Excludes 903,750 shares
held by Mr. Bothe, Ms. Cheng's husband, as to which shares Ms. Cheng
disclaims beneficial ownership.
(8) Includes 12,975 shares subject to options held by Ms. Okerstrom which are
exercisable within 60 days after January 31, 1998.
(9) Consists of shares subject to options held by Mr. Berlingeri which are
exercisable within 60 days after January 31, 1998.
(10) Includes an aggregate of 360,225 shares subject to options which are
exercisable within 60 days after January 31, 1998 and 2,710,016 shares held
by affiliates of Menlo Ventures.
ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of three
classes, with members of each class holding office for overlapping three-year
terms. The persons named in the enclosed proxy will vote to elect Stefan R.
Bothe and Thomas H. Bredt as Class I Directors, unless authority to vote for the
election of either or both of them is withheld by marking the proxy to that
effect. Both of the nominees have indicated their willingness to serve, if
elected, but if either or both of the nominees should be unable or unwilling to
serve, proxies may be voted for substitute nominee(s) designated by the Board of
Directors.
Set forth below are each director's name, age, positions with the Company,
principal occupation, business experience during at least the past five years,
the names of other publicly held corporations of which such person is a director
and the year during which each such person first became a director of the
Company.
NOMINEES
Class I Directors (Terms expire at 2001 Annual Meeting)
STEFAN R. BOTHE, age 49, has served as Chairman of the Board and Chief
Executive Officer of the Company since March 1993. From November 1991 to
February 1993, Mr. Bothe was President and Chief Executive Officer of DSI Group
N.V., a Dutch-based international software company. From 1989 to 1991, Mr. Bothe
was President and Chief Executive Officer of GEAC Computer Corporation Limited
("GEAC"), a software company. Prior to joining GEAC, Mr. Bothe was President of
the Application Products Division of
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Computer Associates International, Inc. ("Computer Associates"), one of the
largest software companies in the industry. While at Computer Associates, Mr.
Bothe held numerous senior management positions, including President of the
International Division, President of the Micro Products Division and Senior Vice
President of Marketing.
THOMAS H. BREDT, age 57, has served on the Board of Directors of the
Company since February 1994. Since 1986, Mr. Bredt has been a general partner or
managing member of a number of Menlo Ventures' funds, including MV Management
VI, L.P., a general partner of both Menlo Ventures VI, L.P. and Menlo
Entrepreneurs Fund VI, L.P., venture capital investment firms and stockholders
of the Company. Mr. Bredt is also a director of Red Brick Systems, Inc.,
Clarify, Inc. and Interlink Computer Sciences, Inc.
CONTINUING MEMBERS OF THE BOARD OF DIRECTORS
Class II Director (Term expires at 1999 Annual Meeting)
JENNIFER V. CHENG, age 48, has served as President of the Company and as a
director of the Company since the Company's inception in 1990, and Chief
Operating Officer of the Company since March 1998. Since 1984, Ms. Cheng has
been a General Partner and owner of Cheng Management Company, an investment
partnership specializing in investments in emerging growth companies, including
many technology companies. Prior to forming Cheng Management Company, Ms. Cheng
served with several major financial organizations, including Morgan Stanley &
Co., Inc., as an emerging growth stock analyst, Mutual Life Insurance Company of
New York, as Director of Equity Investments, and Donaldson, Lufkin & Jenrette
Securities Corporation, as Research Analyst.
Class III Directors (Terms expire at 2000 Annual Meeting)
JOHN B. LANDRY, age 50, has served on the Board of Directors of the Company
since October 1995. Since June 1995, Mr. Landry has been Strategic Technology
Consultant to senior management of IBM Corporation. In addition, since October
1995, he has been Chairman of the Board of Narrative Communications Corporation,
a provider of interactive streaming technology for the distribution of
multimedia over the Internet. From 1990 to 1995, Mr. Landry was Senior Vice
President and Chief Technology Officer of Lotus Development Corporation, a
provider of software products and services. Mr. Landry is also a director of
Epicon, Inc. and MCK Communications Corp.
A. DAVID TORY, age 55, has served on the Board of Directors of the Company
since September 1997. Since September 1995, Mr. Tory has been an independent
consultant. From November 1988 to September 1995, he was President and Chief
Executive Officer of The Open Software Foundation, a non-profit consortium of
major computer hardware and software companies and user organizations. Mr. Tory
is also a director of ASI Solutions Incorporated.
BOARD AND COMMITTEE MEETINGS
In September 1997, the Board of Directors established a Compensation
Committee composed of Messrs. Bredt and Landry, which makes recommendations
concerning salaries and incentive compensation for employees of and consultants
to the Company and administers and grants stock options pursuant to the
Company's stock option plans, and an Audit Committee composed of Messrs. Landry
and Tory, which reviews the results and scope of the audit and other services
provided by the Company's independent public accountants. The Compensation
Committee and Audit Committee did not meet during 1997. The Board of Directors
met 11 times during 1997. Each of the Company's current directors was present
for at least 75% of such meetings.
DIRECTORS' COMPENSATION
Pursuant to the Company's 1997 Director Stock Option Plan (the "Director
Plan"), on the effective date of the Company's initial public offering in
December 1997, Messrs. Bredt, Landry and Tory each received an option to
purchase 7,500 shares of Common Stock at $11.00 per share, and will receive at
the Annual Meeting an option to purchase 5,250 shares of Common Stock at the
closing price of the Common Stock on the
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Nasdaq National Market on that day. Under the Director Plan, each nonemployee
director receives an option to purchase 7,500 shares of Common Stock when
initially elected to the Board of Directors, and each continuing nonemployee
director receives an option to purchase 5,250 shares of Common Stock on the date
of each annual meeting of stockholders after his or her election. All options
granted under the Director Plan are exercisable at the closing price of the
Common Stock on the Nasdaq National Market on the date of grant (other than the
options granted in connection with the initial public offering, which were
granted at the initial public offering price), and vest one year from the date
of grant so long as the optionee remains a director of the Company. In addition,
the Company reimburses nonemployee directors for their out-of-pocket expenses in
connection with their attendance at Board of Directors and committee meetings.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the total compensation paid or accrued for
the two fiscal years ended December 31, 1997 and 1996 for the Company's Chief
Executive Officer and its four other most highly compensated executive officers
in 1997 who were serving as executive officers on December 31, 1997 (the Chief
Executive Officer and such other executive officers are hereinafter referred to
as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
-----------------
ANNUAL COMPENSATION AWARDS
------------------------------------- -----------------
NAME AND OTHER ANNUAL SECURITIES UNDER-
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) LYING OPTIONS(2)
- ------------------ ---- ------ ----- --------------- -----------------
Stefan R. Bothe..................... 1997 $200,000 $ 40,000 -- --
Chairman of the Board and 1996 $165,000 $ 57,750 -- 150,000
Chief Executive Officer
Jennifer V. Cheng................... 1997 $150,000 $ 40,000 -- --
President and Chief Operating 1996 $115,000 $ 28,750 -- --
Officer
James W. Schenck.................... 1997 $165,000 -- -- --
Executive Vice President, 1996 $150,000 -- $40,000 75,000
Research and Development
Maureen M. Okerstrom (3)............ 1997 $109,167 $253,384(4) -- 76,125
Vice President, Sales
Mark J. Berlingeri (5).............. 1997 $119,359 $ 44,882 $36,222 26,250
Vice President, Client Services
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(1) Consists of reimbursement of expenses related to relocation and, for Mr.
Berlingeri, a car allowance of $3,500.
(2) Represents the number of shares covered by options to purchase shares of the
Company's Common Stock granted during the fiscal year listed. The Company
has never granted any stock appreciation rights.
(3) Ms. Okerstrom became Vice President, Sales in August 1997.
(4) Includes $184,606 in sales commissions.
(5) Mr. Berlingeri joined the Company as Vice President, Client Services in
February 1997.
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Option Grants, Exercises and Year-End Values
The following table sets forth certain information regarding options
granted to the Named Executive Officers during the fiscal year ended December
31, 1997:
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
--------------------------------------------------------------- OF STOCK PRICE
PERCENT OF TOTAL EXERCISE APPRECIATION
NUMBER OF SECURITIES OPTIONS GRANTED PRICE FOR OPTION TERM(1)
UNDERLYING OPTIONS TO EMPLOYEES IN PER EXPIRATION --------------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
- ---- -------------------- ---------------- -------- ---------- ---------- ------------
Stefan R. Bothe......... -- -- -- -- -- --
Jennifer V. Cheng....... -- -- -- -- -- --
James W. Schenck........ -- -- -- -- -- --
Maureen M. Okerstrom.... 1,125 0.2% $4.00 1/1/07 $ 2,830 $ 7,172
75,000 16.1% $8.67 7/31/07 $408,939 $1,036,331
Mark J. Berlingeri...... 18,750 4.0% $4.00 2/24/07 $ 47,167 $ 119,531
7,500 1.6% $8.67 7/31/07 $ 40,894 $ 103,633
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(1) Amounts reported in these columns represent amounts that may be realized
upon exercise of each option immediately prior to the expiration of its term
assuming the specified compound rates of appreciation (5% and 10%) on the
market value of the Common Stock on the date of grant over the term of the
option. These numbers are calculated based on rules promulgated by the
Securities and Exchange Commission and do not reflect the Company's estimate
of future stock price growth. Actual gains, if any, on stock option exercise
and Common Stock holdings are dependent on the timing of such exercise and
the future performance of the Common Stock. There can be no assurance that
the rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals.
The following table sets forth, for each of the Named Executive Officers,
the number of shares acquired on exercise of options during the fiscal year
ended December 31, 1997, the aggregate dollar value realized upon such exercise
and the number and value of unexercised options held by each such officer on
December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISE
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE FISCAL YEAR-END FISCAL YEAR-END(2)
ON REALIZED ------------------------------ -------------------------
NAME EXERCISE (1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- -------- -------- ------------------------- -------------------------
Stefan R. Bothe............. -- -- 187,500/ -- $ 2,904,240/ --
Jennifer V. Cheng........... 37,500 $375,000 75,000/ -- $ 1,161,990/ --
James W. Schenck............ -- -- 75,000/ -- $ 1,161,500/ --
Maureen M. Okerstrom........ 4,500 $ 58,703 11,250/90,375 $157,995/$724,648
Mark J. Berlingeri.......... -- -- -- /26,250 $ -- /$301,875
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(1) Based on the fair market value of the Common Stock on the date of exercise,
less the option exercise price.
(2) Based on the fair market value of the Common Stock on December 31, 1997
($15.50 per share), less the option exercise price.
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SEVERANCE AGREEMENT
In February 1997, the Company entered into a severance agreement with Mr.
Berlingeri in connection with his joining the Company as Vice President of
Client Services. The agreement provides for severance pay of up to four months
of Mr. Berlingeri's base salary upon a termination of employment due to merger,
acquisition or sale of the Company or, in any event, termination of employment
prior to August 1998.
BOARD REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Company established a Compensation Committee of the Board of Directors
(the "Committee") in December 1997. The Committee, which currently consists of
Messrs. Bredt and Landry, is responsible for making recommendations concerning
salaries and incentive compensation for employees of the Company, including the
Company's Chief Executive Officer and other executive officers, and for
administering the Company's stock plans. During most of fiscal 1997, these
responsibilities were discharged by the Board of Directors. This report is
submitted by the Committee and members of the Board of Directors who
participated in deliberations concerning the Company's compensation policies for
fiscal 1997 as they applied to the Named Executive Officers.
The Company's compensation program is designed to achieve the following
objectives:
- Provide compensation that attracts, motivates and retains the best
talent and highest caliber people to serve the Company's customers and
achieve its strategic objectives;
- Recognize and reward individual performance and responsibility; and
- Align management's interest with the interests of the stockholders and
the success of the Company through long-term equity incentives.
Compensation Program
The Company's executive compensation program consists of base salary,
annual incentive compensation, long-term equity incentives in the form of stock
options and certain benefits, such as life and medical insurance and a 401(k)
savings plan, which are generally available to all employees of the Company.
Base Salary. Base salary compensation is generally set within the range of
salaries of executive officers with comparable qualifications, experience and
responsibilities at other companies in the same or similar businesses and of
comparable size and success. Salary is determined within this range by the
Company's financial performance and the individual's performance based on
predetermined non-financial objectives. Non-financial objectives include an
individual's contribution to the Company as a whole, including his or her
ability to motivate others, develop the skills necessary to grow as the Company
matures, recognize and pursue new business opportunities and initiate programs
to enhance the Company's growth and success.
Annual Incentives. Annual cash incentive compensation is designed to tie
annual awards to Company and individual executive performance. The Company
considers a number of factors in determining whether annual incentive awards
should be paid, including (i) achievement by the Company and/or specific
business units of approved budgets, new product introductions, progress in
development of new products and operating income and cash flow goals, and (ii)
achievement by the executives of their assigned objectives. In considering
individual performance, as contrasted to Company performance, the Committee
relies more on subjective evaluations of executive performance than on
quantitative data or objective criteria.
Long-Term Incentive Compensation. During fiscal 1997, long-term incentives
were provided in the form of options under the Company's 1992 Stock Option Plan,
which was replaced in December 1997 by the Company's 1997 Stock Incentive Plan.
The objectives of these plans are to align executive and stockholder long-term
interests by creating a strong and direct link between executive compensation
and stockholder return, and to enable executives to develop and maintain a
significant, long-term stock ownership position in the Company's Common Stock.
Stock options are generally granted at an option price equal to the fair market
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value of the Company's Common Stock on the date of grant and will only have
value if the Company's stock price increases. In selecting executives eligible
to receive option grants and determining the amount and frequency of such
grants, the Company evaluates a variety of factors, including (i) the job level
of the executive; (ii) option grants awarded by competitors to executives at a
comparable job level; (iii) past, current and prospective service to the Company
rendered, or to be rendered, by the executive; and (iv) the current equity
holding of the executive. During fiscal 1997, the Board of Directors approved
option grants for an aggregate of 132,375 shares of Common Stock to the
Company's executive officers. Mr. Bothe, Mr. Schenck and Ms. Cheng, the
Company's Chief Executive Officer, President and Executive Vice President,
Research and Development, respectively, were not granted stock options in fiscal
1997 in light of their already significant ownership of the Company's Common
Stock.
The Company's 1997 Employee Stock Purchase Plan was adopted by the Board of
Directors in December 1997. This plan, which will be available to virtually all
employees, including executive officers, allows participants to purchase shares
at a discount of 15% from fair market value at the beginning or end of the
applicable purchase period. No offerings were made under this plan during 1997.
Compensation of Chief Executive Officer
The Board of Directors determined the salary for fiscal 1997 for the
Company's Chief Executive Officer, Mr. Bothe, based primarily on subjective
factors, including his leadership skills and his contributions to the Company's
growth and overall performance over the past several years. Using these
criteria, the Board set Mr. Bothe's base salary for 1997 at $200,000. In
addition, the Board awarded Mr. Bothe a bonus for fiscal 1997 of $40,000. The
Board believes that Mr. Bothe's total compensation for fiscal 1997 was adequate
in light of the Company's achievements, which included the completion of the
Company's initial public offering, the Company's performance leading up to the
public offering and the Company's attaining profitability in the third and
fourth quarters of fiscal 1997. The Committee intends to assess Mr. Bothe's
compensation from time to time to assure that it remains competitive within the
accounting software industry.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of
the Internal Revenue Code of 1986, as amended, generally disallows tax
deductions to publicly traded corporations for compensation over one million
dollars to the corporation's chief executive officer or any of its other four
most highly compensated executive officers. Qualifying performance-based
compensation is not subject to this disallowance if certain requirements are
met. Although the Committee is considering the limitations on the deductibility
of executive compensation imposed by Section 162(m) in designing the Company's
executive compensation, the Committee believes that it is unlikely that such
limitation will affect the deductibility of the compensation to be paid to the
Company's executive officers in the near term. The Committee will, however,
continue to monitor the impact of Section 162(m) on the Company.
Stefan R. Bothe
Thomas H. Bredt
Jennifer V. Cheng
John B. Landry
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee of the Board of Directors
are Messrs. Bredt and Landry. No executive officer of the Company has served as
a director or member of the compensation committee (or other committee serving
an equivalent function) of any other entity, whose executive officers served as
a director of or member of the Compensation Committee of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of reports filed by persons required
to file reports ("Reporting Persons") with the Securities and Exchange
Commission under Section 16(a) of the Exchange Act, and written representations
from certain Reporting Persons, the Company believes that all but one filing
required
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to be made by Reporting Persons of the Company were timely filed. A report filed
on Form 4 by Mr. Tory for December 1997 was subsequently amended to include a
purchase of 1,900 shares of Common Stock inadvertently omitted from the original
report.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, at the recommendation of the Audit Committee, has
selected the firm of Price Waterhouse LLP ("Price Waterhouse") as the Company's
independent accountants for the current fiscal year. Although stockholder
ratification of the Board of Directors' selection of Price Waterhouse is not
required by law, the Board of Directors believes that it is advisable to give
stockholders the opportunity to ratify this selection. If this selection is not
approved at the Annual Meeting, the Board of Directors will reconsider its
selection of Price Waterhouse.
Representatives of Price Waterhouse, which served as the Company's
independent accountants for the year ended December 31, 1997, are expected to be
present at the Annual Meeting. They will have the opportunity to make a
statement if they desire to do so and will also be available to respond to
appropriate questions from stockholders.
OTHER MATTERS
Management does not know of any other matters which may come before the
Annual Meeting. However, if any other matters are properly presented to the
Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone and
personal interviews. Brokers, custodians and fiduciaries will be requested to
forward proxy soliciting material to the owners of shares held in their names
and the Company will reimburse them for out-of-pocket expenses incurred on
behalf of the Company.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Secretary of the Company at its
principal office in Shelton, Connecticut not later than December 4, 1998 for
inclusion in the proxy statement for that meeting.
By Order of the Board of Directors,
JOHN K. P. STONE, III, ESQ.
Assistant Secretary
April 3, 1998
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE ANNUAL MEETING.
WHETHER OR NOT STOCKHOLDERS PLAN TO ATTEND, STOCKHOLDERS ARE URGED TO COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.
STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY VOTE THEIR SHARES PERSONALLY EVEN
THOUGH THEY HAVE SENT IN THEIR PROXIES.
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PROXY FLEXIINTERNATIONAL SOFTWARE, INC. PROXY
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 30, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoint(s) Stefan R.
Bothe, Jennifer V. Cheng and John K. P. Stone, III, and each of them, with full
power of substitution, as proxies to represent and vote, as designated herein,
all shares of Common Stock of FlexiInternational Software, Inc. (the "Company")
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Stockholders of the Company to be held at the principal
offices of the Company at Two Enterprise Drive, Shelton, Connecticut 06484 on
Thursday, April, 30, 1998 at 10:00 a.m., local time, and at any adjournment
thereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
[X] PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE.
1. To elect the persons listed at right as Class I Directors:
FOR both WITHHOLD AUTHORITY to vote for
nominees both nominees
[ ] [ ]
Nominees: Stefan R. Bothe
Thomas H. Bredt
FOR both nominees except the following (to withhold
authority to vote for a nominee, write that nominee's
name below):
[ ] ________________________________
2. To ratify the selection of Price FOR AGAINST ABSTAIN
Waterhouse LLP as the Company's [ ] [ ] [ ]
independent accountants for the
current year.
IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
This proxy, when properly executed, will
be voted in the manner directed by the
undersigned stockholder(s). IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR BOTH OF THE DIRECTOR NOMINEES
AND PROPOSAL 2. Attendance of the
undersigned at the meeting or any
adjournment thereof will not be deemed to
revoke this proxy unless the undersigned
shall revoke this proxy in writing or
affirmatively indicate the intent to vote
in person.
SIGNATURE _______________ DATE _______ SIGNATURE _______________ DATE __________
if held jointly
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give title as such. If a corporation or a
partnership, please sign by authorized person.