SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
PRISM SOFTWARE CORPORATION
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(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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.
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1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTE:
Where any item, other than Item 4, calls for information with respect to any
matter to be acted upon at the meeting or, if no meeting is being held, by
written authorization or consent, such item need be answered only with respect
to proposals to be made by the registrant. Registrants and acquirees that meet
the definition of "small business issuer" under Rule 12b-2 of the Exchange Act
shall refer to the disclosure items in Regulation S-B and not Regulation S-K .
If there is no comparable disclosure item in Regulation S-B, small business
issuers need not provide the information requested. Small business issuers shall
provide the financial information in Item 310 of Regulation S-B in lieu of any
financial statements required by Item 1 of Rule 14c-101.
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PRISM SOFTWARE CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2005
April 21, 2005
TO OUR STOCKHOLDERS:
The 2005 annual meeting of stockholders of Prism Software Corporation
will be held at the Company's offices at 15500-C Rockfield Blvd., Irvine,
California on Tuesday, June 14, 2005, beginning at 11:00 a.m. local time. At the
meeting, the stockholders of the company will act on the following:
(1) To elect three directors for a one-year term.
(2) Ratify the selection of Independent Auditors, Cacciamatta
Accountancy Corporation.
(3) Any other matters that properly come before the meeting.
All holders of record of shares of Prism's common and preferred stock
at the close of business on May 2, 2005 are entitled to vote at the meeting
or any postponements or adjournments of the meeting.
By order of the Board of Directors,
/s/ Conrad von Bibra
--------------------
Conrad von Bibra
SECRETARY
1
INFORMATION STATEMENT
WE ARE NOT ASKING FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
_________________________
This Information Statement contains information related to the annual meeting of
stockholders of Prism Software Corporation to be held on Tuesday, June 14, 2005,
beginning at 11:00 a.m., at the company offices. Proxies are NOT being solicited
by the Company. The approximate date on which this Information Statement is
first sent to security holders is May 13, 2005.
VOTING INFORMATION
With respect to the election of directors, the persons receiving a plurality of
the votes cast by the shares entitled to vote for the position being filled
shall be elected. On any other item that should come before the meeting, the
matter shall be decided by a majority of the votes cast by the shares entitled
to vote at the meeting.
The By-Laws of the Company require for a quorum the presence of a majority at
the meeting in person or by proxy of the holders of shares of capital stock of
the Company entitled to vote.
Since the current members of the Board of Directors own, in the aggregate, more
than 50% of the outstanding shares, a quorum is available without the Company
incurring the expense of soliciting proxies. All holders of record of Prism's
common and preferred stock at the close of business on May 2, 2005 are
entitled to vote at the meeting.
ELECTION OF DIRECTORS
The affirmative vote of a plurality of the votes cast at the meeting is required
for the election of the directors. Members of the Board of Directors holding
more than 50% of the outstanding shares have announced their intention to vote
for the three nominees identified in this Information Statement. Accordingly,
the three will be re-elected to the Board of Directors.
The Board of Directors does not have standing audit, nomination, or compensation
committees. The Board met eight times in 2004 and all three directors nominated
below attended each meeting, except the first one in January 2004, which was
held before David Ayres was elected to the Board.
NOMINEES
Three directors are to be elected at the Annual Meeting, each to hold office
until the next annual meeting and until his successor is elected and qualified.
The following table sets forth certain information furnished to the Company
regarding the persons who are nominees for election as directors of the Company.
Name Age Position
- ---- --- --------
Carl S. von Bibra 43 Chairman and Director
David Ayres 50 President and Director
Conrad von Bibra 75 Secretary and Director
2
Carl S. von Bibra has served the Company as a director and Chairman since
October 31, 2003. From March 1993 through May 1994, Mr. von Bibra was a board
member of ADcom Information Services, Inc. and, since December 1992, has been
corporate secretary of OCI Communication, Inc. Mr. von Bibra received his
engineering degree from Stanford University. Carl von Bibra is the son of Conrad
von Bibra and is a private investor.
David Ayres joined the Company in May 2002. He has over fifteen years of
experience in the printer industry, and over twenty years in senior management
positions. Prior to joining the Company he was CEO of an industry-leading
supplier to the OEM printer market. He was also Senior Product Group Manager for
Canon in their Canon Computers Systems division. He has served as President of
the Company since January 23, 2004 and as a director since February 13, 2004.
Conrad von Bibra was born and raised in Los Angeles, graduating from Stanford
University with a degree in chemical engineering. From 1962 to 1984, he served
as President of Exeter Oil Company Ltd., a drilling and production company whose
stock was listed on the American Stock Exchange in 1981. He is now a private
investor. He is the father of Carl S. von Bibra. He became a director and
Secretary of the Company on October 31, 2003.
OFFICERS
The following table sets forth information about the officers of the Company:
Name Age Position
- ---- --- --------
Carl S. von Bibra 43 Chairman and Director
David Ayres 50 President and Director
Conrad von Bibra 75 Secretary and Director
Michael Cheever 36 Treasurer
(For biographical information about Carl von Bibra, David Ayres and Conrad von
Bibra, see "Nominees", above)
Michael Cheever joined the Company in October 1993 and became an officer on
October 31, 2003. He has over fourteen years of accounting experience and
formerly worked for the accounting firm of Deloitte & Touche LLP.
DIRECTORS' COMPENSATION
The members of the Board of Directors do not receive any cash compensation for
their service as directors, but are eligible for reimbursement of their expenses
incurred in connection with attendance at Board meetings in accordance with
Company policy.
AUDIT COMMITTEE
The Company does not have an Audit Committee. This function is fulfilled by the
Board of Directors.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires that directors and officers of the
Company and persons who beneficially own more than 10% of the Common Stock file
with the SEC initial reports of beneficial ownership and reports of changes in
beneficial ownership of the Common Stock of the Company. Directors, officers and
greater than 10% beneficial owners are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
3
The Company received copies of Section 16(a) forms filed by the following
officers, directors or 10% beneficial owners during 2004: David Ayres (Forms 3
and 4) and Michael Cheever (Form 3). Based solely on its review of the copies of
the Section 16(a) forms received by it, and on representations from certain
reporting persons, the Company believes that, during the last fiscal year, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with.
CODE OF ETHICS
The Company adopted a Code of Ethics for its officers and other personnel during
2004.
EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth certain compensation awarded or paid by the
Company to its executive officers during the fiscal years ended December 31,
2004, December 31, 2003 and December 31, 2002. No other executive officer's
total annual salary and bonus for services to the Company exceeded $100,000.
LONG-TERM COMPENSATION
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ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------- -------------------------- ----------
OTHER ALL
ANNUAL OTHER
COMPEN- STOCK SECURITIES COMPEN-
NAME AND FISCAL SALARY BONUS SATION AWARDS UNDERLYING SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) OPTIONS (#) ($)
- --------------------- -------- ---------- --------- --------- --------- ----------- ---------
David Ayres 2004 $139,063 $ 0 $ 0 $ 0 0 $ 0
President 2003 $137,551 $ 0 $ 0 $ 0 500,000 $ 0
2002 $ 89,640 $ 0 $ 0 $ 0 0 $ 0
Michael Cheever 2004 $ 63,250 $ 0 $ 0 $ 0 0 $ 0
Treasurer 2003 $ 66,054 $ 0 $ 0 $ 0 100,000 $ 0
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to the number of shares of the Company's
Common Stock acquired upon the exercise of options during the fiscal year ended
December 31, 2004, the value realized therefor, the number of unexercised
options at December 31, 2004 and the value of unexercised in-the-money options
at December 31, 2004 for the Company's executive officers in the Summary
Compensation Table above. The Company's executive officers did not hold any
stock appreciation rights ("SARs") during the fiscal year ended December 31,
2004.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON OPTIONS AT FISCAL OPTIONS AT FISCAL
EXERCISE (#) VALUE YEAR-END (#) YEAR-END ($)
NAME REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------- ------------- -------------- ------------------------- -------------------------
David Ayres 0 $0 500,000/0 $0/$0
Michael Cheever 0 $0 240,000/0 $0/$0
EMPLOYMENT AGREEMENTS
There are currently no employment agreements between the Company and any of its
directors, officers or significant employees.
4
STOCK OPTION PLANS
1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan provides for the issuance of options to
employees, directors, officers, and advisors of the Company to acquire up to
630,000 shares of the Company's common stock. Options issued under this plan are
generally granted at estimated market value, vest at varying rates and expire
within ten years from the date of grant or within 90 days after termination of
employment. As of December 31, 2004, options for 65,000 shares of Common Stock
were reserved for issuance upon exercise of outstanding options. Except as to
options previously granted and outstanding under it, the 1993 Stock Option Plan
terminated on February 1, 2003.
The Company did not grant any options to its executive officers under its 1993
Stock Option Plan during the fiscal year ended December 31, 2004 or during the
fiscal year ended December 31, 2003.
2000 NONSTATUTORY STOCK OPTION PLAN
The Company's 2000 Nonstatutory Stock Option Plan provides for the issuance of
options to employees, directors, officers and advisors of the Company to acquire
up to 3,000,000 shares of common stock. Options issued under this plan are
generally exercisable at 85% of the market value on the date of grant, vest over
three years and expire within ten years from the date of grant or within 90 days
after termination of employment. As of December 31, 2004, none of the options
available for grant under the 2000 Nonstatutory Stock Option Plan had been
exercised, 1,520,000 shares of Common Stock were reserved for issuance upon
exercise of outstanding options and 1,480,000 shares of Common Stock remained
available for grant thereunder. Except as to options previously granted and
outstanding under it, the 2000 Nonstatutory Stock Option Plan will terminate on
May 4, 2010.
The Company did not grant any options to its executive officers under its 2000
Nonstatutory Stock Option Plan during the fiscal year ended December 31, 2004.
The Company granted options to purchase 600,000 shares of its Common Stock to
its executive officers under this plan during the fiscal year ended December 31,
2003.
E. TED DANIELS OPTIONS
In December 2004, as part of the Company's settlement with E. Ted Daniels, its
previous President, the Company granted Mr. Daniels non-qualified options to
purchase 1) 1,400,000 shares of the Company's Common Stock and 2) potential
additional shares of Common Stock equal to 4% of new shares of Common Stock
issued through December 15, 2005 (with certain limitations). As of December 31,
2004, none of these options available for grant had been exercised, 1,400,000
shares of Common Stock were reserved for issuance upon exercise of such
outstanding options, and the exercise price was $0.01 per share. These options
will terminate on December 15, 2008.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
The following table sets forth information regarding the beneficial ownership of
the Common Stock of the Company as of March 22, 2005, by (i) each person known
by the Company to beneficially own 5% or more of the outstanding Common Stock of
the Company; (ii) each of the Company's directors; (iii) each of the Company's
Executive Officers; and (iv) all directors and Executive Officers of the Company
as a group. The percentage column of common stock beneficially owned shows the
percent each person would own if he exercised all of his conversion or option
privileges and all of the others did not.
COMMON PERCENTAGE OF
STOCK TOTAL NUMBER SHARES OF
PERCENTAGE EQUIVALENTS OF SHARES COMMON STOCK
NAME AND ADDRESS OUTSTANDING OF SHARES OF OPTIONS BENEFICIALLY BENEFICIALLY
OF BENEFICIAL OWNER COMMON STOCK OUTSTANDING OR NOTES OWNED (1) OWNED (1)
- -------------------------------------------------------------------------------------------------------------------------------
David Ayres
c/o Prism Software Corporation
15500-C Rockfield Blvd.
Irvine, CA 92618 615,000 * 500,000 1,115,000 1%
Carl S. von Bibra
1637 Spruce Street
South Pasadena, CA 91030 33,607,500 24% 33,607,500 67,215,000 38%
The Conrad von Bibra Revocable
Trust
1415 Milan Ave.
South Pasadena, CA 91030 60,880,856 43% 60,880,856 121,761,712 60%
Michael Cheever
c/o Prism Software Corporation
15500-C Rockfield Blvd.
Irvine, CA 92618 20,000 * 240,000 260,000 *
All Directors and
Executive Officers of the Company
as a Group (4 persons) 95,123,356 67% 95,228,356 190,351,712 80%
* Less than 0.5%
(1) Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally
includes voting or investment power with respect to
securities. Shares of Common Stock subject to securities
currently convertible or convertible within 60 days after
March 22, 2005, are deemed to be outstanding in calculating
the percentage ownership of a person or group but are not
deemed to be outstanding as to any other person or group.
Unless noted otherwise, and subject to community property laws
where applicable, the persons named in the table above have
sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them. Currently
there are 300,000,000 shares of Common Stock authorized, of
which 141,591,534 shares are issued and outstanding.
6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CERTAIN NOTES
For the fiscal year ended December 31, 2003 the Company borrowed approximately
$1,381,000 from the Conrad von Bibra Revocable Trust ("Conrad von Bibra"). As of
December 31, 2004, all such debt is subject to the terms of a March 2003 Loan
Agreement, a March 2003 Credit Agreement, a March 2003 Security Agreement and a
December 2004 Long-Term Loan Agreement. Such debt is due on March 1, 2007, bears
simple interest at the rate of 5% per annum, is convertible into shares of
Common Stock at the option of the holder (subject to limitations on the number
of shares) and is secured by the Company's assets.
For the fiscal year ended December 31, 2004, the Company borrowed approximately
$1,950,000 from Conrad von Bibra. As of December 31, 2004, all such debt is
subject to the terms of the March 2003 Security Agreement and the December 2004
Long-Term Loan Agreement. Such debt is due on March 1, 2007, bears simple
interest at the rate of 5% per annum and is secured by the Company's assets.
In addition, all other debt borrowed from Conrad von Bibra and Carl von Bibra
prior to the fiscal year ended December 31, 2003 is subject to the terms of the
March 2003 Loan Agreement, the March 2003 Security Agreement and the December
2004 Long-Term Loan Agreement
The December 2004 Long-Term Loan Agreement includes a provision to reduce the
annual interest rate on all debt owed to Conrad and Carl von Bibra from 8% to 5%
retroactive to March 2003. This resulted in a gain to the Company of
approximately $385,000 for the fiscal year ended December 31, 2004.
During the fiscal year ended December 31, 2004, the Company made principal
payments of approximately $35,000 to Conrad von Bibra and approximately $95,000
to Carl von Bibra. In connection with such payments, Conrad von Bibra forgave
approximately $11,000 of accrued interest owed by the Company, and Carl von
Bibra forgave approximately $30,000 of additional principal and approximately
$128,000 of accrued interest owed by the Company.
No commissions were paid in connection with any of these transactions. Conrad
von Bibra and Carl von Bibra are affiliates of the Company by virtue of their
beneficial ownership of more than 5% of the Company's outstanding Common Stock.
The Company believes that such transactions were exempt from the registration
requirements of the Securities Act of 1933, as amended, by virtue of Section
4(2) thereof or Regulation D promulgated thereunder, as a transaction by an
issuer not involving a public offering.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
For the fiscal years ended December 31 2003 and December 31, 2004, the Company
incurred Audit Fees with its principal accountant of approximately $38,400 and
approximately $60,000, respectively. The Company incurred no other fees with its
principal accountant in either of the two fiscal years referenced.
The Company has no audit committee. The Board of Directors' policy is to
pre-approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, audit-related
services, tax services and other services. Pre-approval would generally be
provided for up to one year and any pre-approval would be detailed as to the
particular service or category of services, and would be subject to a specific
budget. The independent auditors and management are required to periodically
report to the Board of Directors regarding the extent of services provided by
the independent auditors in accordance with this pre-approval, and the fees for
the services performed to date. The Board of Directors may also pre-approve
particular services on a case-by-case basis.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Cacciamatta Accountancy Corporation as
independent auditors for the year ending December 31, 2005, subject to
ratification by the stockholders at the Annual Meeting. Representatives of
Cacciamatta Accountancy Corporation, LLP will be invited to attend the Annual
Meeting, and if they attend will be afforded an opportunity to make a statement
if they desire to do so, and will be available to respond to appropriate
questions by shareholders.
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