UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c)or Section
240.14a-12
PACIFIC SOFTWORKS,INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed per Exchange Act Rules 14a-6(i)(4) and 0-11.
[_] 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.
PACIFIC SOFTWORKS, INC.
Notice of Annual Meeting of Stockholders
To Be Held May 26, 2000
To The Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of Pacific Softworks, Inc. (the "Company"), a California
corporation, will be held on May 26, 2000 at 10:00 a.m., local time, at the
Company's office located at 703 Rancho Conejo Boulevard, Newbury
Park, California 91320, for the following purposes:
1. To elect three directors to serve for a one year term expiring on the
date on which the Annual Meeting of Stockholders is held in the year 2001.
2. To change the name of the corporation from Pacific Softworks, Inc. to
PASW, Inc.
3. To ratify and approve the appointment of Merdinger, Fruchter, Rosen
& Corso, P.C. as the independent public accountants of the Company for
the fiscal year ending December 31, 2000.
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 10, 2000
are entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting,
you are urged to complete, sign and return the enclosed proxy
card as promptly as possible in the postage-prepaid envelope enclosed for
that purpose. Any stockholder attending the Annual Meeting may vote in
person even if he or she returned a proxy.
By Order of the Board of Directors
William E. Sliney
President
Newbury Park, California
April 15, 2000
YOUR VOTE IS IMPORTANT
To assure your representation at the Annual Meeting, you are requested
to complete, sign and date the enclosed proxy as promptly as possible and
return it in the enclosed envelope, which requires no
postage if mailed in the United States.
PACIFIC SOFTWORKS, INC.
PROXY STATEMENT
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Pacific Softworks, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held May 26, 2000 at 10:00 a.m., local time, or at any
adjournment or postponement thereof, for the purposes set forth in this
Proxy Statement. The Annual Meeting will be held at the Company's office
located at 703 Rancho Conejo Boulevard, Newbury Park, California 91320. The
Company's telephone number at that location is (805) 499-7722.
These proxy solicitation materials were mailed on or about April 15,
2000 to all stockholders entitled to vote at the Annual Meeting.
Record Date and Voting Securities
Only stockholders of record at the close of business on April 10, 2000
are entitled to notice of and to vote at the Annual Meeting. As of March
31, 2000, 4,500,900 shares of the Company's Common Stock were issued
and outstanding. No shares of the Company's Preferred Stock were
outstanding.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to American
Securities Transfer & Trust, Inc. 12039 West Alameda Parkway,
Suite Z-2, Lakewood, Colorado 80228, a written notice of revocation or a
duly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person. The mere presence at the Annual Meeting of
the stockholder who has appointed a proxy will not revoke the prior
appointment. If not revoked, the proxy will be voted at the Annual Meeting
in accordance with the instructions indicated on the proxy card, or if no
instructions are indicated, will be voted FOR the slate of directors
described herein, FOR Proposal Two, FOR Proposal Three and as to any
other matter that may properly be brought before the Annual Meeting, in
accordance with the judgment of the proxy holders.
Voting and Solicitation
Each stockholder is entitled to one vote for each share of Common
Stock on all matters presented at the Annual Meeting,except that in the election
of directors each shareholder may cumulate his or her votes and give any one
nominee a number of votes equal to the number of directors to be elected
multiplied by the number of shares which the shareholder is entitled to
vote at the meeting, or to distribute the votes on the same principal
among as many candidates as the shareholder may choose, if (i) the name of the
candidate for whom such votes are cast has been properly placed in nomination
prior to the voting, and (ii) any shareholder has given notice at the meeting
prior to voting of that shareholder's intention to cumulate his or her votes.
Voting instructions are included on the proxy or voting
instruction card.
This solicitation of proxies is made by the Company, and all costs
associated with soliciting proxies will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other
persons representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners. Proxies may be
solicited by certain of the Company's directors, officers and regular
employees, without additional compensation, personally or by telephone,
facsimile or telegram.
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Common Stock issued and
outstanding on the record date. All shares represented at the meeting,
whether in person or by a general or limited proxy, will be counted for the
purpose of establishing a quorum.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions (including "Withheld"), the
Company believes that abstentions should be counted for purposes of
determining both (i) the presence or absence of a quorum for the
transaction of business and (ii) the total number of shares present and
entitled to vote ("Votes Cast") with respect to a proposal (other than the
election of directors). In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions in this manner.
Accordingly, abstentions will have the same effect as a vote against the
proposal.
Under current California case law, while broker non-votes (i.e. the
votes of shares held of record by brokers as to which the underlying
beneficial owners have given no voting instructions) should be counted for
purposes of determining the presence or absence of a quorum for the
transaction of business, broker non-votes should not be counted for
purposes of determining the number of Votes Cast with respect to the
particular proposal on which the broker has expressly not voted.
Accordingly, the Company intends to treat broker non-votes in this
manner. Thus, a broker non-vote will make a quorum more readily
obtainable, but the broker non-vote will not otherwise affect the outcome
of the voting on a proposal.
Stockholder Nominations and Proposals
The Company's Bylaws provide that nominations for the election of
directors and business proposed to be brought before any stockholder
meeting may be made by the board of directors or proxy committee
appointed by the board of directors or by any stockholder entitled to vote
in the election of directors generally if such nomination or business
proposed is otherwise proper business before such meeting. However, any
such stockholder may nominate one or more persons for election as
directors at a meeting or propose business to be brought before a meeting,
or both, only if such stockholder has given timely notice in proper written
form of their intent to make such nomination or nominations or to propose
such business.
To be timely, such stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the corporation not less than
one hundred twenty (120) calendar days in advance of the date specified in
the corporation's proxy statement released to stockholders in connection
with the previous year's annual meeting of stockholders; provided,
however, that in the event that no annual meeting was held in the previous
year or the date of the annual meeting has been changed by more than
thirty (30) days from the date contemplated at the time of the previous
year's proxy statement, notice by the stockholder to be timely must be so
received a reasonable time before the solicitation is made.
In the notice, the stockholder must provide (i) the name and address of the
stockholder who intends to make the nominations or propose the business
and, as the case may be, of the person or persons to be nominated or of the
business to be proposed, (ii) a representation that the stockholder is a
holder of record of stock of the Company entitled to vote at such meeting
and, if applicable, intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice, (iii) if applicable, a
description of all arrangements or understandings between the stockholder
and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made
by the stockholder, (iv) such other information regarding each nominee or
each matter of business to be proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had the nominee
been nominated, or intended to be nominated, or the matter been proposed,
or intended to be proposed by the board of directors, and, (v) if applicable,
the consent of each nominee to serve as director of the corporation if so
elected.
Deadlines for Submission of Stockholder Proposals for 2001 Annual Meeting
Stockholders of the Company are entitled to present proposals for
consideration at forthcoming stockholder meetings provided that they
comply with the proxy rules promulgated by the Securities and Exchange
Commission and the Bylaws of the Company. Stockholders wishing to
present a proposal at the Company's 2001 Annual Stockholder Meeting
must submit such proposal to the Company by January 15, 2001 if they
wish for it to be eligible for inclusion in the proxy statement and form of
proxy relating to that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
Three directors are to be elected at the Annual Meeting. Each director
elected at the Annual Meeting will serve until the 2001 Annual Meeting
and until his successor is elected and qualified.
The Board currently consists of Glenn P. Russell, Wayne T. Grau, Reuben
Sandler, Ph.D. and two vacancies. Mr. Russell, Mr. Grau and Dr. Sandler
have been nominated for re-election by the Board. We have provided
below information on each of the nominees.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the nominees named below. In the event that any such
nominee is unable or declines to serve as a director at
the time of the Annual Meeting, the proxies will be voted for a nominee
who shall be designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received
by them in such a manner as will assure the election of as many of the
nominees listed below as possible, and, in such event, the specific nominees
to be voted for will be determined by the proxy holders. The Company is
not aware of any nominee who will be unable or will decline to serve as a
director. Each director elected at this Annual Meeting will serve until the
term expires or until such director's successor has been duly elected and
qualified.
Vote Required
The nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors. An
abstention will have the same effect as a vote withheld for the
election of directors, and pursuant to California law, a broker nonvote will
not be treated as voting in person or by proxy on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
NOMINEES LISTED BELOW.
The names of the directors, certain information about them and their
ages as of December 31, 1999 are set forth below:
Director Term
Name of Director Age Position(s) With the Company since Expires
Glenn P. Russell 45 Chairman 1992 2000
Wayne T. Grau(1) 51 Director 1999 2000
Reuben Sandler Ph.D.(1) 63 Director 1999 2000
(1) Member of the Audit Committee and Compensation Committee.
Nominees for Director
Glenn P. Russell. Mr. Russell has been our chairman since 1992. He
also served as president and chief executive officer from 1992 to December
1999. Before 1992 he had various sales and marketing positions
at IBM, Unisys and Network Research Corporation, a predecessor of
Pacific Softworks. Mr. Russell is also an officer and director of Luke
Systems International, a distributor of electronic components. Luke
Systems International is controlled by Mr. Russell's spouse. Mr. Russell
devotes substantially all of his time to Pacific Softworks. Mr. Russell was
educated in the United Kingdom.
Wayne T. Grau. Mr. Grau has been a director of Pacific Softworks
since January 1999. He has been the president and chief executive officer
of Fielding Electric, Inc. since 1981. He is currently a member of the Los
Angeles Chapter membership committee of the National Electrical
Contractors Association, a trustee for the Joint Apprenticeship Training
Committee and a trustee for the Los Angeles Electrical Training Trust.
Reuben Sandler, Ph.D. Dr. Sandler has been a director of Pacific
Softworks since January 1999. He was the president and chief information
officer for MediVox, Inc., a medical software development
company, from June 1997 through March 1999. Since March 1999, he has
been President and Chief Executive Officer of Intelligent Optical Systems,
Inc. From 1989 to 1996, he was an executive vice
president for R&D Laboratories, Inc. Dr. Sandler received a Ph.D. from
the University of Chicago and is the author of four books on mathematics.
He currently serves on the boards of directors of MediVox, Inc. and
Alliance Medical Corporation and is an advisor to the board of directors of
R&D Laboratories, Inc.
Board Meetings and Committees
The Board of Directors of the Company held a total of 13 meetings
during the fiscal year ended December 31, 1999. The committees of the
Board of Directors include an Audit Committee and a Compensation
Committee.
The Audit Committee of the Board of Directors, which was appointed
in February 1999, consists of Messrs. Grau and Sandler and held no
meetings during the last fiscal year. The Audit Committee makes
recommendations to the Board of Directors regarding the selection of
independent auditors, reviews the results and scope of audit and other
services provided by the independent auditors and reviews the accounting
principles and auditing practices and procedures to be used in the
Company's financial statements.
The Compensation Committee of the Board of Directors, which was
appointed in February 1999,consists of Messrs. Grau and Sandler. The
Compensation Committee held one meeting during the last fiscal year. The
Compensation Committee reviews and makes recommendations to the
Board of Directors regarding the compensation of officers and other
managerial employees.
No director attended fewer than 75% of the sum of the total number of
meetings of the Board of Directors and committees thereof upon which
that director served, held subsequent to becoming a director
or appointment to such committee.
Director Compensation
Our directors receive $200 for attending meetings of the board of
directors. We also reimburse our directors for actual and reasonable out of
pocket expenses incurred when attending board of directors and
committee meetings. Directors who are not employees are eligible to
participate in the 1998 equity incentive program. Each of our
non-employee directors received options to purchase 15,000 shares of
common stock following his election to the board of directors in January
1999.
PROPOSAL TWO
APPROVAL OF THE AMENDMENT TO THE
RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
In 1999 we refined our strategic focus in order to enhance our
positioning and flexibility in the rapidly growing market for
Internetworking technology and to improve the utilization of our assets and
competencies. Key elements of our business strategy involve the
segregation of our core technology into separate business units and
identifying strategic investment opportunities and/or associations with
other operating companies. In conjunction with this strategy the Board of
the Company has approved, subject to stockholder approval, to change the
name of the Company from Pacific Softworks, Inc. to PASW, Inc.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
AMENDMENT TO ARTICLE 1 OF THE RESTATED CERTIFICATE OF INCORPORATION OF
PACIFIC SOFTWORKS, INC. TO CHANGE THE NAME OF THE CORPORATION TO PASW, INC.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Merdinger,
Fruchter, Rosen & Corso, P.C., independent public accountants, to audit
the financial statements of the Company for the year ending December 31,
2000 and recommends that the stockholders ratify this selection.
Merdinger, Fruchter, Rosen & Corso, P.C. has audited the Company's
financial statements since the year ending December 31, 1992.
In the event of a negative vote on such ratification, the Board of
Directors will reconsider its selection. Representatives of Merdinger,
Fruchter, Rosen & Corso, P.C. are expected to be available at the Annual
Meeting with the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF MERDINGER, FRUCHTER, ROSEN & CORSO,
P.C. AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
OTHER EXECUTIVE OFFICERS
Other than Mr. Russell who is also a director of the Company and for
whom biographical information is provided above, the names of the
executive officers of the Company together with certain biographical
information for each of them is set forth below:
Name Age Position
William E. Sliney 61 President and Chief Financial Officer
Mark Sewell 38 Vice President -- Business Development
Sandra J. Garcia 37 Vice President -- Sales
Joseph Lechman 32 Secretary
William E. Sliney. Mr. Sliney has been our President since December 1999
and Chief Financial Officer since April 1999. Before joining us, Mr. Sliney
was the Chief Financial Officer for Legacy Software Inc. from 1995 to
1998. From 1993 to 1994, Mr. Sliney was Chief Executive Officer for
Gumps. Mr. Sliney received his masters in business administration from the
University of California at Los Angeles
Mark Sewell. Mr. Sewell, previously a resident of the United Kingdom,
was the general manager for our European operations from 1996 to 1999
and our Vice President - Business Development commencing in 1999. For
over two years prior to 1996, he was the business and support manager for
the Asia Pacific region of PictureTel, Inc. He received his masters degree in
electrical and electronic engineering from the University of Canterbury.
Sandra J. Garcia. Ms. Garcia joined us in 1993 as our regional sales
manager and became vice president -- North American sales in 1996 and
vice president sales in 1999. Ms. Garcia graduated with a degree in
business administration from Santa Barbara College.
Joseph Lechman. Mr. Lechman has been our secretary since March 1999.
He is a principal in the law firm of Gose & Lechman and has been racticing
law in Ventura County, California since 1991. Mr. Lechman received his
bachelor of arts degree in business administration from California State
University at Fullerton. He received his juris doctorate from Pepperdine
University School of Law and obtained a masters of law in taxation from
the New York University School of Law. He was admitted to the State Bar
of California in 1990.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth the compensation earned for services
rendered to Pacific Softworks in all capacities for the three most recently
completed years by our Chief Executive Officer and our other most highly
compensated executive officers whose salary and bonus during the year
ended December 31, 1999 exceeded $100,000. These individuals are
referred to as the "Named Executive Officers" here and elsewhere in this
proxy statement.
Summary Compensation Table
Long-term
compensation
awards
Securities
Name and principal Year Annual compensation underlying all other
position Ended salary bonus options compensation
Glenn P. Russell (1) 1999 190,000 0 30,000 0
Chairman 1998 207,692 0 0 80,637
1997 215,384 0 0 343,757
William E. Sliney (2) 1999 87,087 0 312,000 0
President and 1998 0 0 0 0
Chief Financial 1997 0 0 0 0
Officer
Mark Sewell
Vice President - 1999 145,049 0 12,000 0
Business 1998 134,823 0 70,000 0
Development 1997 115,886 0 0 0
Sandre J. Garcia 1999 134,316 0 12,000 0
Vice President- 1998 120,443 0 70,000 0
Sales 1997 154,563 0 0 0
(1) Other compensation for Mr. Russell represents distributions which we
made to him in excess of his base salary while the Company was a
subchapter S Corporation. In February 1999, Pacific Softworks terminated
the subchapter S election and became subject to taxation at the corporate
level.
(2) Mr. Sliney commenced employment in April 1999. His annual salary is
$125,000.
Option Grants in Last Fiscal Year
The following table sets forth certain information with respect to stock
options granted to the Named Executive Officers in 1999. The figures
representing percentages of total options granted to employees in the fiscal
year 1999 are based on an aggregate of 628,000 options granted by us
during the year ended December 31, 1999 to our employees and
consultants, including the Named Executive Officers.
In the table potential realizable values are based on assumed rates of
appreciation over the term of the option from the date of grant. These
values are calculated assuming the fair market value of common stock on
the date of grant appreciates at the indicated annual rate compounded
annually for the entire term of the option and that the option is exercised
and sold on the last day of the term for the appreciated stock price. These
assumed rates are based on Securities and Exchange Commission
requirements and do not reflect our projections or estimates of future stock
price growth. Actual gains, if any, will depend on the future performance of
our common stock.
Unless otherwise indicated, the options in this table were granted under
the 1998 equity incentive program and have 5-year terms. The options vest
at the rate of 2% per month from the date of grant over a period of 36
months, after which they vest in full. All of the options have exercise
prices equal to the fair market value of our common stock on the date of
grant, except for the options issued to Mr. Russell which have an exercise
price equal to 110% of the fair market value of our common stock on the
date of grant, in accordance with the 1998 equity incentive program
provisions.
Option Grants During Year Ended December 31, 1999
Potential realizable
value at assumed
Percent of annual rates of
Number of total stock price
securities options appreciation for
underlying granted to option term
options employees in exercise expiration ---------------
Name granted fiscal year price date 5%($) 10%($)
Glenn P. Russell 30,000 5% $5.50 04/30/04 103,768 262,968
William E. Sliney 12,000 2% $5.00 04/30/04 37,734 95,625
William E. Sliney (1) 300,000 48% $5.75 12/01/04 476,586 1,053,130
Mark Sewell 12,000 2% $5.00 04/30/04 37,734 95,625
Sandra J. Garcia 12,000 2% $5.00 04/30/04 37,734 95,625
(1) Mr. Sliney's options provide for the purchase of Pacific Softworks
common stock at $5.75 per share (the fair market value at the date of
issuance) for a period of five years and are exercisable only if the closing
price of the Company's common stock is$10.00 per share or more for 15
consecutive days.
Aggregate Option Exercises in Last Fiscal Year
The following table summarizes the value of options held at December
31, 1999 by our Named Executive Officers. The value of unexercised
in-the-money options at December 31, 1999 figures in the
right-hand columns are based on the difference between the fair market
value of $5.69 per share at year-end and the per-share exercise price,
multiplied by the number of shares issued upon exercise of the option.
Number of securities Value of unexercised
Number underlying unexercised in-the-money
of shares options at year end options at year end
acquired Value --------------------- -----------------------
Name upon exercise realized exercisable unexercisable exercisable unexercisable
Glenn P. Russell - - 4,800 25,200 912 4,788
William E. Sliney - - 1,920 310,080 1,325 213,955
Mark Sewell - - 71,920 10,080 312,125 6,955
Sandra J. Garcia - - 71,920 10,080 312,125 6,955
REPORT OF THE COMPENSATION COMMITTEE
Appointed in February 1999, the Compensation Committee is charged
with the responsibility of reviewing all aspects of the Company's executive
compensation programs and administering the Company's stock option
plans. The Compensation Committee held one meeting during 1999.
Compensation Philosophy
The Company's executive compensation policies are designed to attract
and retain qualified executives who will contribute to the Company's
long-term success, to reward executives for achieving the
Company's financial goals, and to link executive compensation and
stockholder interests through equity-based plans. The Committee believes
that strong financial performance, on a sustained basis, is the most certain
avenue through which the Company can positively affect long-term
stockholder return. Furthermore, the Committee believes that, in order to
attract and retain the most qualified executives in the industry, the
Company's compensation policies must be competitive with other
companies of comparable size and in similar industries and must reinforce
strategic performance objectives through the use of incentive compensation
programs. In order to provide incentive to executive officers, a portion of
their annual compensation is paid as a bonus. The amount of the bonus for
each person is determined on the basis of several indicators of corporate
performance as outlined below.
Compensation Plans
The following are the key components of the Company's executive
officer compensation:
Base Compensation. The Committee will establish base salaries for
executive officers based on its review of base salaries of executive officers
in companies of comparable size and in similar industries.
Bonus. The Company's executive bonus plan provides for incentive
compensation to some but not all Company's executive officers and other
key employees and will be determined by principally on certain
performance measures. The performance measures include worldwide
corporate performance and individual performance. Worldwide
performance is measured based on targets with respect to the Company's
revenue, days sales outstanding, return on products and other factors. The
Committee believes that these factors are indicative of overall corporate
performance and stockholder value. Individual performance is measured
based on goals related to each person's function within the organization.
Long-Term Incentive Compensation. The Company's option plans
provide for long-term incentive compensation for employees of the
Company, including executive officers. These awards give employees an
equity interest in the Company, thereby aligning the interests of executive
officers and stockholders and providing incentive to maximize stockholder
value.
The Compensation Committee
Wayne Grau Reuben Sandler, Ph.D.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended
or the Securities and Exchange Act of 1934, as amended (the "Exchange
Act") that might incorporate future filings, including this Proxy Statement,
in whole or in part, the preceding Compensation Committee Report on
Executive Compensation shall not be incorporated by reference into any
such filings, nor shall such Report be incorporated by reference into any
future filings.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of December 31, 1999 by:
- - each person who is known by Pacific Softworks to own beneficially
more than 5% of our outstanding common stock,
- - each of our executive officers and directors and
- - all executive officers and directors as a group.
Shares of common stock not outstanding but deemed beneficially
owned because an individual has the right to acquire the shares of common
stock within 60 days are treated as outstanding when determining
the amount and percentage of common stock owned by that individual and
by all directors and executive officers as a group. Each person has sole
voting and investment power with respect to the shares of
common stock shown.
Name and address Number of shares Percentage of
of beneficial owner Beneficially owned shares outstanding
Glenn P. Russell 3,006,000 68.2%
William E. Sliney 2,400 *
Mark Sewell 72,400 1.6%
Sandra J. Garcia 72,400 1.6%
Robert G.J.Burg II (1) 15,000 *
Wayne Grau 15,000 *
Reuben Sandler, Ph.D. 15,000 *
Joseph Lechman 2,400 *
All directors and executive
officers as a group
(8 persons) 3,200,600 73.4%
* Less than 1%.
(1) Mr. Burg resigned as a member of the board effective January 17,
2000.
The address of each officer and director is 703 Rancho Conejo
Boulevard, Newbury Park, California 91320.
In the foregoing table, the common stock beneficially owned by Glenn
P. Russell's beneficial ownership includes 3,000,000 shares owned by the
Russell Trust of which Glenn Russell and Laura Russell, husband and wife,
are principal beneficiaries.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1996, Pacific Softworks agreed with a former officer, director
and principal stockholder to a buyout of his employment agreement and
Glenn P. Russell agreed to purchase all of that former
officer's shares of common stock of Pacific Softworks. Pacific Softworks
and that former officer also entered into a consulting agreement and that
former officer agreed not to compete with Pacific Softworks. Pacific
Softworks paid the former officer $ 257,143 and $314,286 for 1999 and
1998, respectively. As of December 31, 1999 the Company has satisfied its
obligations to the former officer in full.
In December 1998, Luke Systems International, a company controlled
by the spouse of Glenn P. Russell, loaned Pacific Softworks $100,000
interest free. In March 1999, Pacific Softworks repaid the loan.
During 1998 and a portion of 1999 Company subleased a portion of the
premises to Luke Systems International. The Company believes that the
terms of Luke's occupancy are favorable to the Company. This affiliated
company relocated to other premises before September 30, 1999.
At July 1, 1999 the Company owed a bank approximately $250,000 for
advances that were obtained under a line of credit. Glenn P. Russell has
provided our bank with his personal guarantee and the
Company has collateralized our accounts receivable as security for these
advances. This amount was repaid in August 1999.
During 1996, 1997 and 1998 we employed Glenn P. Russell's mother, a
resident of the United Kingdom, to perform various administrative and
managerial tasks for us within that country. We paid her $105,769 in
1998. She ceased to be our employee in the fall of 1998.
Pacific Softworks believes that the transactions described above, other
than the employment of the mother of Glenn P. Russell, were made on
terms no less favorable to Pacific Softworks than could have been obtained
from unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors
and executive officers, and persons who own more than 10 percent of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than
ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, during the year ended December 31, 1999, all
officers, directors and greater than ten percent beneficial owners listed in
the above table failed to comply with the following Section 16(a) filing
requirements: all parties failed to file a Form 3 reflecting their initial
statements of beneficial ownership of equity securities, and all parties failed
to file their annual statements on Form 5. As of February 29, 2000 all
delinquent forms had been filed by all parties.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting, it
is the intention of the persons named in the enclosed
Proxy to vote the shares they represent as the Board of Directors may
recommend.
BY ORDER OF THE BOARD OF DIRECTORS
William E. Sliney
President
Dated: April 15, 2000
PROXY
PACIFIC SOFTWORKS, INC.
703 RANCHO CONEJO BOULEVARD
NEWBURY PARK, CALIFORNIA 75081
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Glenn P. Russell and William E. Sliney,
with the power to appoint their substitute, and hereby authorizes them to
represent and to vote, as designated on the reverse side, all shares
of common stock of Pacific Softworks, Inc. (the "Company") held of
record by the undersigned on April 10, 2000 at the Annual Meeting of
Shareholders to be held on May 26, 2000 and any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY
WILL BE VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
[X] Please mark votes as in this example.
1. Election of Directors.
Nominees: (01)Glenn P. Russell, (02)Wayne Grau and (03) Reuben Sandler Ph.D.
FOR ALL NOMINEES [_] WITHHELD FROM ALL NOMINEES [_]
[_]_______________________________________
For all nominees except as noted above
2. To change the name of the corporation from Pacific Softworks, Inc. to
PASW, Inc.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Ratify the appointment of Merdinger, Fruchter, Rosen & Corso, P.C. as
independent auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
MARK HERE [_] FOR ADDRESS CHANGE AND NOTE AT LEFT
Please sign exactly as name appears hereon. Joint owners should each
sign. Executors, administrators, trustees, guardians or other fiduciaries should
give full title as such. If signing for a corporation, please sign in full
corporate name by a duly authorized officer.
Signature:________________________ Date:_______________
Signature:________________________ Date:_______________