<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange 
    Act of 1934 for the Fiscal Year ended December 31, 1997
      
                                       or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the transition period from __________ to __________

                        COMMISSION FILE NUMBER: 0-20937

                        PHOENIX INTERNATIONAL LTD., INC.
                   (Exact name of registrant in its charter)

<TABLE>
<S>                                                                  <C>
                               Florida                                             59-3171810
(State or other jurisdiction of incorporation or organization)        (I.R.S. Employer Identification No.)

            500 International Parkway, Heathrow, Florida                              32746
              (Address of principal executive offices)                             (Zip Code)

        (Registrant's telephone number, including area code):                    (407) 548-5100

     Securities registered pursuant to Section 12(b) of the Act:

                                None                                                  None
                        (Title of each class)                      (Name of each exchange on which registered)
</TABLE>

     Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, $0.01 Par Value Per Share
                                (Title of class)

Indicate by check mark whether the Registrant: (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days. Yes X   No 
                                      ---    --- 

Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

The estimated aggregate market value of the voting stock held by non-affiliates
of the Registrant, based upon the closing sale price of Common Stock on March
13, 1998, as reported on the Nasdaq Stock Market's National Market, was
approximately $111,852,000. As of March 13, 1998, the Registrant had
outstanding 5,557,879 shares of Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 1997 Annual Report to Shareholders of the Registrant are
incorporated by reference in Part II of this Form 10-K, and portions of the
Proxy Statement for the Registrant's 1998 Annual Meeting of Shareholders to be
held on May 8, 1998 are incorporated by reference in Part III of this Form
10-K.

<PAGE>   2

                               INDEX OF FORM 10-K

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<CAPTION>


                                                                                                               Page
                                                                                                               ----
PART I

<S>               <C>                                                                                          <C>
Item 1.           Business.....................................................................................   3

Item 2.           Properties...................................................................................  21

Item 3.           Legal Proceedings............................................................................  21

Item 4.           Submission of Matters to a Vote of Security Holders..........................................  21

PART II

Item 5.           Market for Registrant's Common Equity and Related Stockholder Matters........................  22

Item 6.           Selected Financial Data......................................................................  22

Item 7.           Management's Discussion and Analysis of Financial Condition and Results of Operations........  22

Item 8.           Financial Statements and Supplementary Data..................................................  22

Item 9.           Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.........  22

PART III

Item 10.          Directors and Executive Officers of the Registrant...........................................  22

Item 11.          Executive Compensation.......................................................................  25

Item 12.          Security Ownership of Certain Beneficial Owners and Management...............................  25

Item 13.          Certain Relationships and Related Transactions...............................................  26

PART IV

Item 14.          Exhibits, Financial Statement Schedules and Reports on Form 8-K..............................  26
</TABLE>


                                       2
<PAGE>   3


                                     PART I

ITEM 1.        BUSINESS

         This Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended. These statements
appear in a number of places in this Report and include all statements that are
not historical statements of fact regarding the intent, belief or current
expectations of the Company, its directors or its officers with respect to,
among other things: (i) the Company's financing plans; (ii) trends affecting
the Company's financial condition or results of operations; (iii) the Company's
growth strategy and operating strategy (including, but not limited to, the
Company's development and implementation of the Phoenix System and its other
products); and (iv) the declaration and payment of dividends. The words "may,"
"would," "could," "will," "expect," "estimate," "anticipate," "believe,"
"intend," "plans" and similar expressions and variations thereof are intended
to identify forward-looking statements. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, many of which are beyond the Company's ability to
control, and that actual results may differ materially from those projected in
the forward-looking statements as a result of various factors discussed herein
and those factors discussed in detail in the Company's filings with the
Securities and Exchange Commission, including the "Risk Factors" section of the
Company's Registration Statement on Form S-1 (Registration Number 333-31415),
as declared effective by the Securities and Exchange Commission on August 13,
1997.

GENERAL

         The Company is a leading provider of highly adaptable, enterprise-wide
client/server application software to the financial services industry. The
Company's primary market focus in the United States is on middle market
financial institutions and internationally is on those retail-oriented
institutions located within Africa, Asia-Pacific, Europe, Central and South
America and the Middle East that have up to 300 branches and/or one million
accounts ("Tier 2 Banks"). Phoenix has combined (i) its management's extensive
experience with banking and banking software systems, (ii) input from a
consortium of financial institutions ("the U.S. Bank Partners") concerning bank
operational and flexibility needs, and (iii) recent advances in client/server
technology to design and develop an innovative new banking software system, the
Phoenix System. To address the increasingly sophisticated needs of its
customers, the Company intends to continue to introduce enhancements to
existing products, such as the widespread release of Version 2.0 of the Phoenix
System scheduled for the second quarter of 1998, and develop new products in
order to provide improved performance, additional flexibility and increased
functionality.

         The Phoenix System, through its client/server technology, addresses
many of the deficiencies of the mainframe and mid-range legacy computer systems
on which most banks currently operate by allowing financial institutions to
integrate data into a comprehensive management information network. Like legacy
systems, the Phoenix System supports core areas of bank data processing,
including system administration, account processing of loans and deposits,
nightly processing, general ledger, budgeting, teller functions and holding
company accounting. Unlike legacy systems, the Phoenix System is a fully
integrated system that provides significant advantages in three critical areas:
(i) customer relationship management; (ii) management decision support; and
(iii) financial product development. In addition, the Phoenix System is
flexible and scalable, it stores dates and performs calculations using codes
written in four-digit years, hence, it is year 2000 compliant, and it allows
financial institutions to take advantage of emerging technologies easily and
less costly through its open architecture technology and advanced software
systems (i.e. Internet banking and Intranets). The Company also offers trade
finance 



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and global payments software products as part of its international banking
software applications.

         As of December 31, 1997, the Phoenix System supported the core
processing needs of 39 institutions worldwide.

         The Company's Chairman of the Board and Chief Executive Officer,
Bahram Yusefzadeh, has over 28 years of experience in the banking software
industry. In addition, the Company's senior management team has over 120 years
of experience in the retail banking and software industries and 45 years of
trade finance and wholesale banking experience. In the 1970s, Mr. Yusefzadeh
co-founded Nu-Comp Systems, Inc. and led the development of one of the first
integrated legacy core banking systems, the Liberty Banking System, which at
one time was used by over 260 banks. Mr. Yusefzadeh founded Phoenix for the
purpose of developing and marketing a new generation of integrated banking
software applications using client/server technology that would replace less
flexible and technologically dated legacy systems. The Phoenix System's
development was the result of a joint effort among the Company's management,
Hewlett-Packard Company ("Hewlett-Packard") and the U.S. Bank Partners. In
addition, the U.S. Bank Partners provided a substantial portion of the
Company's initial capital and continues to contribute to the Company's
strategic planning and product development.

INDUSTRY BACKGROUND

         Since the 1970s, financial institutions have used legacy computer
systems which were originally developed for large mainframe and mid-range
computer environments. These legacy computer systems, which the Company
believes currently account for roughly 85-90% of the installed base of core
applications software systems used by the financial services industry, were
designed to process transactions rather than to support management
decision-making and did not interface with other applications across the
enterprise. Today, the competitive landscape has changed dramatically and banks
now compete directly with diversified non-bank financial service providers. In
order to stay competitive, these institutions now face an increased need for
detailed, easily accessible information about their institutions and customers
in order to develop and market profitable products and services more
effectively and to expand customer relationships.

         In response to this changing environment, the industry has developed
software that allows data to be extracted from legacy systems and transported
to personal computer application systems. However, such modified legacy systems
generally are written for mainframes and mid-range computers, are difficult and
expensive to maintain and support, require substantial training costs and are
limited in their ability to interact with other information systems. In
addition, many of these modified legacy systems do not yet resolve the year
2000 data rollover problem because these systems generally store dates and
process data using codes which are written only in two-digit years. Information
systems that do not adequately address year 2000 data rollover may produce
inaccurate information and may even become inoperable at the turn of the
century. Although some modified legacy systems offer graphical user interfaces
for ease of use and have introduced database technologies to provide increased
data storage and more flexible access to data, these systems generally are
limited because they are based on decades-old architecture which does not
permit full integration of data. Without full integration of data, the
information provided by these modified legacy systems generally is neither
complete nor readily accessible, and, thus, Phoenix believes that financial
institutions using legacy systems are at a competitive disadvantage.

         In the 1990s, the emergence of client/server computing is making
possible the development of powerful applications which are capable of
addressing enterprise-wide business problems in a flexible and cost-effective
manner. The client/server model consists of personal computer workstation
"clients" 



                                       4
<PAGE>   5

connected on enterprise-wide networks to "servers" that provide data storage
and update capabilities. The client/server architecture allocates processing
tasks between the client and the server to allow the client to handle the user
interface and local data manipulation and to allow the server to perform
computing intensive functions. Because of this allocation, a client/server
system is scalable such that responsiveness and capacity can be increased by
upgrading the server or replacing it with a more powerful model. Furthermore,
the client/server architecture design minimizes network traffic. Client/server
systems also offer the level of data integrity and security that financial
institutions require because access to information can be controlled by
server-based relational database management systems. In addition, the
development of the Microsoft Windows NT operating system in the mid-90s has
increased the cost-competitiveness of client/server systems.

         Phoenix believes that very few financial institutions have fully
realized the benefits offered by client/server technology due to the small
number of vendors currently offering true client/server applications to such
institutions. However, management believes that due to the recent and rapid
developments in banking software technology, an increasing number of U.S. and
international financial institutions are recognizing the aged and outdated
functionality of their current software and hardware systems and are evaluating
the data processing alternatives available to improve performance and increase
flexibility and functionality. In addition, the Company believes that an
increasing number of financial institutions are considering replacements for
their existing modified legacy systems because many of these systems do not yet
readily accommodate year 2000 data rollover.

THE PHOENIX SOLUTION

         The Phoenix System allows financial institutions to integrate data
into a comprehensive management information network that is readily accessible
throughout the entire institution, flexible with shared information and easily
interfaced. The Company believes that the Phoenix System is easy to use and
simple to learn, which enables a financial institution to provide higher
quality customer service with reduced operating and training costs. Unlike
legacy systems, the Phoenix System is a fully integrated system that provides
significant advantages in three critical areas: (i) customer relationship
management; (ii) management decision support; and (iii) financial product
development. The Phoenix System's open architecture also allows financial
institutions to take advantage of emerging technologies.

         Customer Relationship Management. The Phoenix System places a
structural emphasis on managing customer relationships, which allows an
institution to pursue a more personalized and profitable approach to its
products and services. The Relationship Information Management ("RIM") module
integrates a customer's account data, transaction activity, financial data from
third party financial applications, marketing information, relationships with
other customers and other accounts, financial statements and other types of
information required to view a customer's total relationship record. The RIM
module benefits an institution by providing its management with critical
assistance in managing, tracking and analyzing the financial condition,
profitability, creditworthiness and overall relationships with customers and
related groups of customers.

         Management Decision Support. The Phoenix System is focused on
providing an institution's executives with the following real-time
capabilities: (i) a fully integrated general ledger; (ii) a broad suite of
standard reports augmented by an ad hoc reporting capability; (iii) an
integrated set of budgeting templates; and (iv) customer and account
profitability analysis. Through its Executive Information System ("EIS"), the
Phoenix System allows senior executives to track performance and business
trends and to model the effect of business strategies and changes in market
conditions on their financial institution. In addition, the EIS provides an
institution with statistical measures of product penetration, profitability and
performance.



                                       5
<PAGE>   6

         Financial Product Development. The Phoenix System provides the
capability to quickly develop, deliver and process financial products and
services that can be as simple or as sophisticated as an institution's
customers and competition demand. New financial products can be developed
rapidly and do not typically require programming or the support of technical
personnel. In addition, the Phoenix System allows institutions to analyze the
profitability of individual loans and customer relationships, as well as broad
categories of customers, and to perform "what if" calculations to model the
financial impact of new products and services based upon information maintained
on the Phoenix System.

         Emerging Technologies. The Phoenix System operates on an integrated
"open systems" environment that uses a graphical user interface, modern
relational database technology and nonproprietary hardware and software
components. The core applications of the Phoenix System include: (i) deposit
and loan processing which can be tailored to an institution's products and
services; (ii) a self-balancing multi-currency general ledger system that
supports both batch and on-line memo post transaction processing functions;
(iii) full on-line transaction processing capabilities which permit users to
post on-line transactions to any account in the Phoenix System; (iv) a
comprehensive set of controls for maintaining account and transaction
safeguards, enhancing system security and tracking employee actions for audit
purposes; and (v) integrated connections to an interactive on-line help system.
Furthermore, the Phoenix System resolves the year 2000 data rollover problem
that many legacy systems face because it stores all dates with four-digit
years, performs all calculations to four digits and incorporates both front-end
and back-end system code which has four-digit year support for dates.

         To address the increasingly sophisticated needs of its customers, the
Company intends to continue to enhance its current products and services and to
develop and introduce additional products and services that keep pace with
technological developments and emerging industry standards. For example, the
Company has developed an enhancement to the Phoenix System that will allow the
Company's client institutions to provide customized on-line home and commercial
banking services through the Internet, and offers complementary enterprise-wide
integrated Intranet and custom database driven Internet web site services. The
Company also plans to deliver additional features, products and services such
as cash management and automated loan kiosk systems to enable its customers to
take advantage of alternate channels of electronic commerce. Consistent with
the Company's original plan, Phoenix designed its software to incorporate
numerous international features, such as multi-currency capabilities and a
language-independent engine. Phoenix has acquired additional international
capabilities, such as a trade finance system and global payments system, and
intends to continue to incorporate additional international functionality and
to integrate new technologies. See "-- Product Development and New Products."

 STRATEGY

         The Company's primary objective is to advance its position as a
leading supplier of enterprise-wide client/server application software for the
financial services industry worldwide by pursuing the following strategies:

         Maintain Technology Leadership and Enhance Product Functionality. The
Company believes that the Phoenix System is the most advanced client/server
computing solution for financial institutions. Phoenix intends to maintain its
leadership position by continuing to integrate new technologies, add new
applications, enhance existing applications and expand functionality. From its
initial public offering in July 1996 through December 31, 1997, the Company
developed two major releases of the Phoenix 



                                       6
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System, including Version 2.0, which include numerous system enhancements;
introduced and installed the NT Version; implemented an enterprise-wide
integrated Intranet system; and installed custom database-driven Internet web
sites in client institutions. The Company intends to continue to commit
substantial resources to maintain and extend its technological leadership.

         Expand Domestic Distribution. The Company plans to continue to expand
its domestic distribution by increasing its direct sales and implementation
forces in key geographic locations and by seeking additional strategic sales
and marketing relationships. From its initial public offering in July 1996
through December 31, 1997, the Company increased its direct sales and
implementation forces from 30 to 60 persons and entered into agreements with
five strategic marketing organizations to broaden its domestic distribution
efforts. The Company intends to continue focusing its direct sales efforts in
the U.S. on middle market financial institutions with asset sizes ranging from
$100 million to $2 billion, which the Company believes are technologically
sophisticated, seek software applications that support their strategic
objectives and have the resources to finance and use advanced technological
solutions effectively. The Company plans to establish additional arrangements
whereby other organizations will market the Phoenix System primarily to smaller
financial institutions within specified territories. In addition, many
financial institutions that have elected not to maintain in-house core
processing systems use service bureau organizations to handle their core
processing and other functions and, thus, the Company intends to form strategic
relationships with several small to medium size service bureaus that are
looking to replace their current legacy systems with open system alternatives.

         Expand International Distribution. The Company plans to continue to
expand its global distribution and market penetration by increasing its
international direct sales and implementation forces, by enlarging its
international offices, by opening additional sales and marketing offices in
strategically located cities worldwide, by leveraging its strategic alliances
with its VARs and agents and by seeking additional strategic sales, marketing
and distribution relationships. From its initial public offering in July 1996
through December 31, 1997, the Company more than doubled its direct
international sales and implementation forces from 6 to 17 persons and opened a
sales and marketing office in London, England to focus on direct sales of the
Company's products in the United Kingdom and Europe. In addition, Phoenix has
maintained or entered into agreements with Unisys Corporation ("Unisys"),
Computer Systems Associates (Nigeria) Limited ("CSA"), International Turnkey
Systems ("ITS") and Siemens Nixdorf Informationssysteme AG ("SNI") to increase
global distribution efforts to cover countries in Africa, Asia-Pacific, Europe,
Latin America/Caribbean and the Middle East and has established local
representation arrangements in Russia, Turkey, Greece and Ireland. Phoenix
intends to continue focusing its direct sales efforts on Tier 2 Banks which the
Company believes are seeking technology as a means to offer a broader array of
financial products and services to meet the sophisticated demands of the
international market. Consistent with the Company's original plan, Phoenix
designed its software to incorporate numerous international features, such as
multi-currency capabilities and a language-independent engine. Phoenix has
acquired additional international capabilities, such as a trade finance system,
and has acquired rights to license from AFA Systems International the
"Musketeer" treasury and risk management client/server system to Phoenix
customers. The combination of Phoenix's retail, trade finance and treasury
offerings allows Phoenix to market an integrated "universal" banking system.
Phoenix intends to continue to incorporate additional international
functionality and to integrate new technologies.

         Leverage Existing Customer Base. The Company intends to continue to
leverage its implemented customer base by (i) maximizing recurring revenues
from its customers, (ii) offering complementary products and services to
existing customers and licensing additional subsidiaries of existing bank
holding companies, (iii) obtaining favorable references from existing customers
in the course of developing new customer relationships, and (iv) consulting
with existing customers in the 



                                       7
<PAGE>   8

development of new products and product enhancements. Phoenix generates
recurring revenues by signing its customers generally to five-year license
agreements and by charging annual service fees for the term of the license. As
the asset size of an institution increases or as branches are added, or as
added-revenue producing products and services are delivered by the Company,
customers pay additional incremental license fees and increased annual service
fees over the life of the license agreement. The Company's disaster recovery,
networking support, bank-wide integrated Intranet, custom database-driven
Internet web site services and its licensed ATM and telephone banking systems
are added-revenue producing services and products that generate additional
license fees and recurring revenues. The Company plans to continue to develop
and provide new added-revenue products and services, as well as enhancements to
existing products and services. The Company also intends to continue involving
its customers in its marketing and product development efforts, obtaining
references from existing customers to new bank customers and receiving valuable
guidance and support in the development of new technologies.

         Broaden Primary Markets. The Phoenix System runs on a UNIX operating
system platform and in a Microsoft Windows NT environment. The Company believes
that the NT Version, which was completed in the first quarter of 1997, will be
attractive to a wide group of institutions because of the lower overall costs
related to operating in a Microsoft Windows NT environment. The Company
believes that as Microsoft expands its marketing of the Windows NT product and
enhances the capabilities of this product, more financial institutions,
regardless of asset size, will choose to use the Windows NT operating system
rather than the UNIX operating platform. The Company intends to take advantage
of improvements made to both UNIX and NT operating systems to expand the
processing and functionality capabilities of the Phoenix System to address the
needs of financial institutions with larger asset sizes or more complex branch
networks than the Company's current primary markets. In addition, the Company
intends to capitalize on its strategic relationships with VARs and agents to
more rapidly expand the processing capabilities and functionality of the
Phoenix System to address the specific needs of financial institutions with
larger asset sizes or more complex branch networks.

         Pursue Complementary Acquisitions. Phoenix intends to pursue strategic
acquisitions of providers of complementary technologies, products and services
in order to more rapidly (i) optimize the package of software applications and
solutions offered by the Company, (ii) expand the Company's customer base by
converting the customers of the acquired companies to the Phoenix System, (iii)
maximize existing channels of distribution and add new channels of
distribution, and (iv) add experienced personnel with specialized knowledge of
the domestic and international financial services industries. The Company
believes such strategic acquisitions will permit Phoenix to enter new markets,
increase market penetration, expand its expertise, strengthen its strategic
relationships, provide outsourcing alternatives and obtain and develop
additional products and applications to meet the demands of its customers both
in the U.S. and internationally. Phoenix also intends to invest in companies
with complementary technologies and products in order to enhance the
functionality of the Phoenix System.

THE PHOENIX  SYSTEM

         The Phoenix System allows financial institutions to integrate data
into a comprehensive management information network that is readily accessible
throughout the entire institution, flexible with shared information and easily
interfaced. The Phoenix System gives financial institution personnel immediate
access to a broad range of customer information including balances,
transactions, personal financial statements, contact history, photo
identification, signature verification, related accounts and demographic data.
The Company believes that the Phoenix System is easy to use and simple to
learn, which enables a financial institution to provide higher quality customer
service with reduced operating 



                                       8
<PAGE>   9

and training costs. In addition, the Company intends to continue to develop and
introduce new products and enhancements to existing products, such as Version
2.0 of the Phoenix System, in order to provide improved performance, additional
flexibility and increased functionality to its customers. The following are
some of the important capabilities included in the Phoenix System:

         Customer Relationship Management. The Phoenix System places a
structural emphasis on managing customer relationships which allows an
institution to pursue a more personalized and profitable approach to its
products and services. The Relationship Information Management ("RIM") module
integrates a customer's account data, transactional activity, financial data
from third party financial applications, marketing information, relationships
with other customers and other accounts, financial statements and other types
of information required to view a customer's total relationship record. The RIM
module benefits an institution by providing its management with critical
assistance in managing, tracking and analyzing the financial condition,
profitability, creditworthiness and overall relationships with customers and
related groups of customers. The customer relationship management features
include:

   -     Marketing and Other Personal Information. The RIM module tracks a
         range of personal information, such as employment history,
         homeownership status, other credit providers and other bank accounts.

   -     On-line Financial Statements and Portfolios. The RIM module maintains
         information regarding a customer's assets, liabilities, income and
         expenses in a unified file.

   -     Extensive Customer Relationship Tracking.  The RIM module can track 
         relationships between customers, groups of customers and accounts.

   -     Customer-Based Statements. Combined customer statements can be
         customized to contain an unlimited number of accounts and each
         statement can be configured to show only summary information or both
         summary information and detailed account information.

   -     Integrated Signature, Photograph and Document Imaging. The RIM module
         maintains on-line images of a customer's signature card and personal
         photograph and can store and display images including images of loan
         collateral and other assets, Social Security cards and drivers'
         licenses.

   -     Flexible Inquiry Capability. The Phoenix System enables users to
         progress through increasingly detailed levels of display data which
         allows for thorough and quick research of customer inquiries, without
         having to enter arcane codes or search through voluminous printed
         reports.

   -     Third Party Information. The Phoenix System is able to integrate data
         from third party software services, including information on
         brokerage, insurance and credit card accounts, with existing RIM
         information.

         Management Decision Support. The Phoenix System is focused on
providing an institution's executives with the following real-time
capabilities: (i) a fully integrated general ledger; (ii) a broad suite of
standard reports augmented by an ad hoc reporting capability; (iii) an
integrated set of budgeting templates; and (iv) customer and account
profitability analysis. Through the Phoenix EIS, the Phoenix System allows
senior executives to track performance and model the effect of business



                                       9
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strategies and changes in market conditions on their financial institution.
Unlike the reporting facilities of legacy systems, the Phoenix EIS draws upon
real-time data to present financial institutions with graphical displays that
highlight important business trends and facilitate rapid interpretation and
analysis. Recent enhancements to the Phoenix System have made the EIS more
user-friendly and efficient, making it a more attractive feature for an
institution's management. The EIS takes into account both the relationship of a
particular indicator to other related categories of information, as well as the
trends for that indicator over time. In addition, the EIS provides an
institution with statistical measures of product penetration, profitability and
performance.

         Financial Product Development. The Phoenix System provides the
capability to quickly develop, deliver and process financial products and
services that can be as simple or as sophisticated as an institution's
customers and competition demand. Because all financial product development is
parameter-driven, institutions can design products and services by simply
selecting product features from a variety of options. New financial products
can be developed rapidly and do not require programming or the support of
technical personnel. In addition, the Phoenix System allows institutions to
analyze the profitability of individual loans and customer relationships, as
well as broad categories of customers, and to perform "what if" calculations to
model the financial impact of new products and services based upon information
maintained on the Phoenix System.

         Emerging Technologies. The Phoenix System operates in an integrated
"open systems" environment that uses a graphical user interface, modern
relational database technology and nonproprietary hardware and software
components. The Phoenix System divides core processing functions among seven
discrete, but fully integrated, software modules: (i) system administration;
(ii) account processing; (iii) nightly processing; (iv) teller system; (v)
holding company financial statements; (vi) EIS; and (vii) budgeting. The core
applications of the Phoenix System include: (a) deposit and loan processing
which can be customized to implement an analysis-based approach tailored to an
institution's products and services; (b) a self-balancing multi-currency
general ledger system that supports both batch and on-line memo post
transaction processing functions; (c) full on-line transaction processing
capabilities which permit users to post on-line transactions to any account in
the Phoenix System; (d) a comprehensive set of controls for restricting access
to different levels of information, for limiting transactional amounts that
employees are permitted to post to accounts and for tracking employee actions
for audit purposes; and (e) integrated connections to an interactive on-line
help system. Furthermore, the Phoenix System resolves the year 2000 data
rollover problem because it stores all dates with four-digit years, all
calculations are performed to four digits, and all system code has four-digit
year support for dates.

         To address the increasingly sophisticated needs of its customers, the
Company intends to continue to enhance its current products and to develop and
introduce additional products that keep pace with technological developments
and emerging industry standards. For example, the Company has developed an
enhancement to the Phoenix System that will allow the Company's client
institutions to provide customized on-line banking services through the
Internet, and offers complementary enterprise-wide integrated Intranet and
custom database driven Internet web site services to its customers. The Company
also plans to deliver additional features, products and services such as
automated loan and mortgage kiosk systems, to enable its customers to take
advantage of emerging channels of distribution. See "-- Product Development and
New Products."

         In addition, in order to increase the appeal of the Phoenix System in
the international market, Phoenix has developed and/or is developing the
following core international applications:

    -    Multi-language enhancements. Phoenix has designed a unique language
         independent engine 



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         that will allow the Company's core product to be rapidly localized 
         into any single-byte character set language. This engine was used to 
         implement a Spanish version of the Phoenix System which the Company
         released in the third quarter of 1996.

    -    Trade finance processing. Phoenix currently offers Phoenix 
         TradeWind(TM), a stand-alone trade finance software system, which
         performs back-office processing for all types of trade finance
         functions. The Company plans to deliver an integrated version of
         Phoenix TradeWind(TM), called Phoenix Trade Finance, as part of the
         Phoenix System in 1998.

    -    Global payments system. Phoenix also currently offers Trade Centre, a
         stand-alone global payments software system, which provides for data
         capture and automated processing for customer and financial
         institution payments to retail-oriented international financial
         institutions with more than 300 branches and/or one million accounts
         ("Tier 1 Banks"). The Company is studying the feasibility of
         integrating Trade Centre into the Phoenix System for use by Tier 2
         Banks.

    -    Multi-currency enhancements. Phoenix has designed a multi-currency
         enhancement to the Phoenix System which supports the world currencies
         formatted in accordance with the standards established by the
         International Standards Organization. The Company plans to release
         this enhancement during the second quarter of 1998 as part of the
         widespread release of Version 2.0 of the Phoenix System.

         Phoenix intends to develop additional international functionality as 
it enters new countries which require additional functionality. The Company is
forming a separate international development group to focus on these
requirements.

TECHNOLOGY

         Phoenix has partnered with leading hardware manufacturers,  and tools 
and relational database vendors in the client/server community, such as
Hewlett-Packard, Centura Software Corporation and Sybase, Inc. ("Sybase") to
produce software based on leading-edge technological developments. Using these
tools, the Company has created a product that enables the Company's customers
to utilize what the Company believes is the most current technology in the
financial services software industry.

         Centralized Relational Database Management System ("RDBMS"). An 
advantage of the Phoenix System as compared to legacy or modified legacy
systems is that the Phoenix System stores and maintains data in a relational
database rather than in a proprietary file format. As a result, this data can
be easily accessed and integrated by many different third-party query and
report writing tools which are currently available commercially. In addition,
with a structured query language ("SQL") relational database, it is easy to
expand and change the structures of the tables and manipulate data stored and
maintained in the Phoenix System.

         The Phoenix System, TradeWind(TM), and TradeCentre use a relational  
database technology provided by Sybase. Sybase System 11.0 has been integrated
into the NT Version and the Company currently anticipates it will move its
current customers from Sybase System 10.0 to Sybase's System 11.0 on the UNIX
version of the Phoenix System in the second quarter of 1998. The Phoenix
System, TradeWind(TM) and TradeCentre can run on platforms from
Hewlett-Packard, International Business Machines Corp. ("IBM"), NCR Corporation
("NCR"), Sun Microsystems, Inc. ("Sun"), Unisys and all others which are UNIX
or Microsoft Windows NT compliant.



                                      11
<PAGE>   12


         In addition, in conjunction with Microsoft Corporation, the Company is
developing a version of the Phoenix System to run on Microsoft's SQL
Server(TM). Phoenix currently anticipates delivering the Microsoft NT SQL
Server version to a customer in the second quarter of 1998.

         Replication and Distributed Data Processing. Phoenix has leveraged the
open architecture of the Phoenix System to implement an advanced distributed
database for support of its off-line teller system. The off-line teller system
uses a local database on each branch server to maintain normal processing in
the event of hardware or network failure at the central server. Off-line
branches are supported using Centura's SQL Base for either Novell NetWare or
Microsoft Windows NT.

         Open Protocols for Data Communication. Phoenix uses the industry
standard TCP/IP protocol for communicating with the relational database server
and either IPX/SPX or TCP/IP for communicating with the local area network file
server. This allows the Company's customers implementing either Windows NT or
Novell Netware networks to implement a broad array of local area network and
wide are a network topologies and configurations. In addition, customers that
have an existing network infrastructure in place that supports TCP/IP do not
have to reinvest in new technology simply to run the Company's products.

         32-bit Application Support. Version 2.0 of the Phoenix System, which
the Company intends to release on a widespread basis to its customers by the
end of the second quarter of 1998, is a native 32-bit application which will
enable the Company's customers to take further advantage of the latest client
operating systems from Microsoft (Windows 95 and Windows NT Workstation). These
systems offer the Company's customers substantial benefits in the areas of
fault tolerance, ability to support more complex transaction processing,
enhanced performance and advanced security.

TARGET MARKETS

         The United States Market. Phoenix currently divides commercial banks
and savings institutions in the United States market into three groups based on
asset-size: (i) institutions with assets less than $150 million (approximately
8,400 institutions); (ii) institutions with assets between $150 million and $2
billion (approximately 2,700 institutions) and (iii) institutions with assets
over $2 billion (approximately 300 institutions). The Company primarily focuses
its direct sales efforts in the U.S. on middle market financial institutions
which the Company defines as commercial banks and savings institutions with
asset sizes ranging between $100 million and $2 billion. The Company estimates
that each year approximately 20% of banks evaluate data processing alternatives
because their current contracts expire. Management believes that recently an
increasing number of institutions have renewed their service contracts for
shorter periods in order to maintain the flexibility to change software
companies due to rapid developments in banking software technology. Moreover,
the Company believes that an increasing number of institutions are evaluating
data processing alternatives due to, among other things, the acquisition of
their software providers and servicers by other software companies, the
inability of many of their current systems to readily accommodate the year 2000
data rollover and the age of their current software and hardware solutions. The
Phoenix System runs on a UNIX operating system platform and in a Microsoft
Windows NT environment. The Company believes that the NT Version is attractive
to a wide group of institutions because of the lower overall costs (including
hardware) related to operating in a Microsoft Windows NT environment.
Furthermore, as Microsoft expands its marketing of the Windows NT product and
enhances the capabilities of this product, the Company believes that more
financial institutions, regardless of asset size, will choose to use the
Windows NT operating system rather than the UNIX operating platform. The
Company intends to take advantage of improvements made to both UNIX and NT
operating systems to expand the 



                                      12
<PAGE>   13

capabilities of the Phoenix System to address the needs of institutions with
larger numbers of branches, accounts and transactions to process.

         The International Market. Phoenix currently divides international
financial institutions into two groups based upon the number of branches and
accounts: (i) Tier 1 Banks; and (ii) Tier 2 Banks. The Company primarily
focuses its sales and marketing efforts on Tier 2 Banks located in countries
within Africa, Asia-Pacific, Europe, Latin America/Caribbean and the Middle
East. Phoenix believes that there are approximately 4,000 Tier 2 Banks in this
international market that are prospects for the Phoenix System. The Company
believes the international market offers significant opportunity because
economic expansion and other market factors have increased the demand for
sophisticated wholesale and retail banking services. Sophisticated
international financial institutions offer a broad array of financial products
and services and demand technology that is open, powerful and economical. The
Company also believes that these technology-minded institutions are looking for
software solutions that will last at least 10 to 15 years and, therefore, these
institutions can appreciate the flexibility and functionality of client/server
technology. Furthermore, management believes that a significant number of
international financial institutions have accepted, to a greater degree than
institutions located in the United States, that technology should be used as a
competitive tool and not just as a service delivery vehicle.

SALES AND MARKETING

         The Company markets its software and services directly through its
sales and marketing personnel and through VARs and agents that are involved in
providing products and services to the financial services industry. As of
February 28, 1998, the Company's sales and marketing department, including
administrative staff, consisted of 18 individuals. In addition, the Company has
established non-exclusive local representation relationships with agents
located in Russia, Turkey, Greece and Ireland who introduce potential customers
for the Phoenix System to the Company's sales personnel.

         The Company's direct sales and marketing personnel and consultants are
experienced in the sales process for banking software products and generate
leads through a marketing program which includes direct mail, networking,
telemarketing, seminars and trade shows, and provide white papers and other
sales support literature and ongoing customer communications. Phoenix also
actively markets its products and services through its Internet web site from
which prospects can read or download product information, access online product
presentations, and register to receive information by mail. In addition, the
Phoenix A.P. Limited acquisition was initiated by Priority Solutions personnel
contacting the Company after their review of the Company's web site. The
Company believes that an increasing number of future customers will initially
learn about the Company and its products and services through its Internet web
site.

         The Company's direct sales and marketing force is complemented,
particularly in the international market, by various indirect distribution
channels, including a growing network of VARs and agents. Some VARs and agents
also provide implementation, training, support and other services to the
end-user. In all cases, the Phoenix System software remains the sole property
of the Company, and if the Company terminates its relationship with any VAR or
agent, customers sold by that VAR or agent will continue to pay support fees to
the Company. The Company intends to expand its network for indirect
distribution primarily on anon-exclusive basis and anticipates that the
percentage of its total revenues derived from indirect sales will increase in
the future.

         In the United States market, Phoenix has established marketing agency
agreements with The NetComm Group, Inc. ("NetComm"), ISC Financial Systems,
Inc. ("ISC"), Advanced Financial 



                                      13
<PAGE>   14

Systems, Inc. ("AFS") and ERAS JV ("ERAS") whereby NetComm, ISC, AFS and ERAS
market the Phoenix System to certain financial institutions within their
respective territories. NetComm, ISC and AFS have nonexclusive rights to market
the Phoenix System within their territories, which include Colorado, Idaho,
Indiana, Kentucky, Michigan, Montana, North Dakota, Ohio, western Pennsylvania,
South Dakota, Utah, West Virginia and Wyoming. ERAS has non-exclusive rights to
market the Phoenix System within its territory, which consists of five counties
in southeastern Florida. Phoenix also has signed an agreement with Servers
On-line, a start-up service bureau in the northeastern U.S., whereby Servers
On-line has licensed to use the Phoenix System to provide bank processing
services.

         In the international market, Unisys exclusively markets the Phoenix
System to financial institutions in Central and South America; CSA exclusively
markets the Phoenix System to financial institutions in certain countries of
Africa and non-exclusively markets the Phoenix System to institutions in the
Republic of South Africa; ITS exclusively markets the Phoenix System to
financial institutions in certain countries in the Middle East; and SNI
non-exclusively markets, sublicenses and distributes the Phoenix System to
financial institutions located in those countries in Africa, Asia-Pacific,
Europe and the Middle East that are not a part of ITS' and CSA's exclusive
territories. Unisys has guaranteed a minimum number of sublicenses and each of
ITS and CSA has guaranteed a minimum dollar amount of sales to retain its
exclusive rights in their respective territories. 

PRODUCT PRICING

         The Company prices the Phoenix System and related services in two
components: (i) license fees for software products and other revenues and
commissions from the sale and delivery of software and hardware products of
third party vendors; and (ii) fees for a full range of services complementing
its products, including implementation, programming services, conversion
training and installation services, interface services for tying the Phoenix
System to third-party applications, customer and software support services,
disaster recovery services and Internet/Intranet consulting services. When a
customer enters into a license agreement with the Company, which generally is
non-cancelable for an initial period of five years, the license agreement
includes a service agreement for the same term. Implementation, conversion,
training and installation fees and interface fees are paid at the beginning of
the license agreement or when the service is performed. Customer and software
support fees are earned over the life of the license agreement. In the event
that a customer fails to pay its service fees, the license reverts to the
Company. Unless either party cancels or fails to renew a license contract after
the initial term, the license is perpetual, and the service fees are recurring
revenue.

         In the United States, license fees are based on the asset size of the
institution. Internationally, each institution is charged a base license fee
and an incremental license fee determined by the number of branches for such
financial institution. Implementation, programming services, conversion,
training and interface fees vary based on the complexity of a particular
project. Customer and software support fees are paid annually or quarterly and
are generally calculated as a percentage of the total license fees. As the
asset size of the institution increases or as branches are added, customers pay
an additional incremental license fee and increased service fees over the life
of the license agreement.

         The Company's VARs and agents license the Company's products at a
discount for relicensing or are paid a commission by the Company. Under many of
these agreements, it is anticipated that primary responsibility for
implementation and training services will shift to the VARs and agents after a
certain number of installations are completed successfully with Company
supervision. Under these relicensing arrangements, the VARs and agents will
retain a greater percentage of the implementation, conversion and training
service fees as more of the responsibility for these services is transitioned
to the VAR or agent. The Company believes, however, that the difference in the
margins obtained from direct 



                                      14
<PAGE>   15

and indirect sales should not have a material adverse effect on the Company's
business, operating results and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"-- Implementation and Training Services."

IMPLEMENTATION AND TRAINING SERVICES

         The Company provides comprehensive implementation services to
customers converting to the Phoenix System. Phoenix assigns each customer an
implementation team of experts which works with the customer through all phases
of the project, including project management, data conversion, software
installation and network certification, education and training and consulting.
Each implementation team can work on multiple projects at the same time. As of
February 28, 1998, the Company had 59 people assigned to the implementation and
training department. The Company intends to hire additional people and add
resources as necessary.

         Project Management and Coordination. Phoenix provides extensive
project planning and coordination as part of the implementation process.
Phoenix assigns a full-time project manager who guides the customer through the
installation process and to coordinate all conversion and implementation
activities.

         Data Conversion. Application analysts and conversion programmers map
and convert a bank's current account data to the Phoenix System. Data
conversion activities include data mapping, program development, extensive
testing, detailed data auditing and a complete trial conversion prior to the
final implementation date.

         Software Installation and Network Certification. Phoenix provides
network engineers to install software and certify the customer's network prior
to installation of the Phoenix System. This on-site service ensures that all
hardware and software is installed correctly and that the proper network
security is in place.

         Education and Training. Phoenix offers a comprehensive education and
training program to customers. The Company offers training classes for product
set-up at the Company's headquarters in Florida. Phoenix also provides hands-on
application training services at the customer site prior to installation.
Additional on-site training for ancillary products is available upon request.

         Consulting/Development Services. The Company's consultants are
available to work closely with customers. These consulting services generally
consist of assisting customers who are planning large implementations, who are
engaged in operational reorganizations or who wish to customize the Phoenix
System to their unique needs, including customer specified programming
features, reports or regulatory requirements.

         Fees for project management and coordination, data conversion, and
software installation, network certification and basic education and consulting
are included in the cost of implementation. Generally, the Company charges
additional fees for education and consulting requested by customers.

         The Company's arrangements with its VARs and agents provide for the
transition of primary responsibility for implementation services to the VAR or
agent. To date, no VAR or agent has had primary responsibility for
installation, training or conversion of new customers. To ensure quality
control, the Company plans to educate its VARs and agents by controlling the
first installation and thereafter diminishing its direct involvement in
implementation, training and conversion services. By the end of the first few
installations, it is anticipated that the VAR or agent will assume direct



                                      15
<PAGE>   16

responsibility for substantially all of these services; however, Phoenix
intends to continue to provide the resources and support needed to maintain
customer satisfaction and quality assurances.

CUSTOMER SERVICE AND SUPPORT

         The Company believes that maintaining a high level of support and
service is imperative to customer satisfaction because of the critical nature
of the Phoenix System to a bank's day-to-day operations. The Company's customer
service and support personnel assist banks in the use of the Phoenix System and
with the maintenance of their network and technology infrastructures. As of
February 28, 1998, the Company had 25 people in its technology services group
that primarily provide customer service and support. Customer service and
support personnel provide service 24 hours a day, seven days a week, and have
pagers, cellular phones and laptop computers which enable them to answer a
customer's question from any location. The Company has an ongoing training
program which is designed to enable its existing and future VARs and agents to
provide the first line of customer support.

         Product Support Services. Phoenix delivers product support services
through all traditional avenues, including telephone, Internet, electronic mail
and facsimile. Due to the unique nature of client/server computing systems,
many critical customer support activities can also be performed through high
speed telecommunication lines connected directly to a customer's location.
Phoenix support personnel have the ability to connect quickly to a server at a
customer site and to perform work as if they were physically at the customer's
site. Using this approach, Phoenix is able to offer effective and direct
support to its customers without the traditional expense associated with
on-site visits.

         Networking Support Services. Phoenix offers a full range of networking
support services upon request. Phoenix performs on-site network certification
for all customers during their initial software installation, and network
engineers are available for ongoing support by telephone. Networking support
and on-site consulting are available upon request for an additional fee.

         Internet/Intranet Services. Phoenix also offers Internet Consulting
Service ("ICS"), which provides both Internet and Intranet services to client
institutions. ICS allows client institutions to establish a presence on the
World Wide Web through home pages and web sites. ICS can also provide client
institutions with the services to create an internal web environment, known as
an Intranet, which enables the institution to improve productivity without
additional hardware and infrastructure costs.

         Disaster Recovery Service. Phoenix also offers a disaster recovery
service that provides customers with assistance in reestablishing the Phoenix
System's processing capacity within 24 hours if a disaster occurs. The disaster
recovery service is a separate five-year contract which has an initial
implementation fee and annual service fees. This added-cost service satisfies
current United States bank regulatory obligations to maintain and annually test
a disaster recovery plan and allows Phoenix to generate additional recurring
revenue from its implemented customer base.

         SupportNet. Phoenix also administers SupportNet, part of the Company's
World Wide Web site, which provides an additional vehicle of support for client
banks. SupportNet is a free service which allows users with Internet access to
obtain support through features such as (i) an online discussion forum, (ii)
online support documents for the Phoenix System, (iii) online software bug
recording, (iv) online enhancement requests and (v) online file transfers from
the Company.



                                      16
<PAGE>   17


PRODUCT DEVELOPMENT AND NEW PRODUCTS

         Phoenix was founded in January 1993 for the purpose of developing and
marketing a new generation of integrated banking software applications that
would replace less flexible and technologically dated legacy systems. From the
Company's inception through December 31, 1997, product development expenditures
(the total of product development expense and capitalized software development
costs) represented approximately 36% of the Company's aggregate revenues.
Hewlett-Packard provided developmental-stage assistance to the Company by
supplying computer hardware to the Company for development and testing of the
Company's products. Early in the Company's history, each of the U.S. Bank
Partners participated in the Company's joint application development program
under which end-users were involved in product development and testing. The
joint application development program helped reduce the development cycle by
increasing the efficiency with which design problems were identified and
corrected. The U.S. Bank Partners continues to contribute to plans for new
products and enhancements as part of the Phoenix User Group ("PUG").

         Phoenix believes that its future success will depend in large part on
its ability to maintain and enhance its current product and service offerings
and to develop, acquire or integrate and introduce new products and features
that will keep pace with technological advances and satisfy evolving customer
requirements. As of February 28, 1998, the technology services group consisted
of 77 individuals in addition to 25 customer service and support personnel.
Phoenix develops and adjusts product direction in response to two core trend
areas: (i) developments within the financial services industry and (ii)
developments within the technology arena.

         Product Development Cycle. Phoenix develops plans for new products and
enhancements following extensive discussions with the PUG, which consists of
all current domestic and international users of the Phoenix System and from
specific requests from new customers. The PUG meets approximately twice a year
with the Company to offer recommendations and to help prioritize product
development and enhancement projects. In addition, Phoenix adapts and augments
the Phoenix System on a country-by-country basis as it signs bank contracts in
new countries. Moreover, the Company's product development personnel
continually develop new product ideas and enhancements. Once a product idea has
been formalized, the Company uses an internal review process to: (i) determine
whether to develop the product or enhancement; (ii) set a development schedule
and (iii) develop a budget for the product or enhancement.

         Development Methodology. Development tools, such as 4GL programming
tools, enable rapid prototyping and have dramatically reduced development
cycles. Enhancements developed in client/server environments take significantly
less time to complete than in a legacy system environment. Phoenix believes
that the efficiencies of its product architecture and development methodology
allow it to move products from planning to delivery more quickly than its
legacy system-based competitors.

         Product Plans. The Company's product development efforts are currently
focused on enhancing the functionality of the Phoenix System so that it will be
attractive to a broader range of customers both in the U.S. and abroad. Phoenix
believes that it will be able to improve its competitive position by
successfully completing, licensing, acquiring or delivering to client
institutions (in Version 2.0 or otherwise) the following new products and
enhancements, among others, primarily during 1998:

    -    Multi-currency enhancements. Phoenix has designed multi-currency
         enhancement to the Phoenix System which will support the world
         currencies formatted in accordance with the standards established by
         the International Standards Organization.



                                      17
<PAGE>   18

    -    Trade finance processing. Phoenix is developing the interfaces to the
         customer account and general ledger modules of the Phoenix System
         which are required to integrate TradeWind(TM), a trade finance
         software system, into the Phoenix System for eventual delivery to the
         international market.

    -    International treasury system. Phoenix has signed an agreement with
         AFA Systems International to license the "Musketeeer" international
         treasury software and risk management client/server system, which can
         be interfaced with and integrated into the Phoenix System for delivery
         to the international market. Phoenix believes that such enhancements
         will broaden the array of features that can be offered to and increase
         the Company's success in marketing to international institutions.

    -    Secondary marketing and other enhancements. Significant enhancements
         for the United States market are focused on the loan processing area,
         such as investor reporting for secondary mortgage marketing including
         reports required by the Federal Home Loan Mortgage Corporation and
         Federal National Mortgage Association. Phoenix is also developing
         modules that permit the processing of dealer loans and accounting for
         non-accrual loans. Phoenix believes that such enhancements will
         broaden the appeal of the Phoenix System for larger institutions.

    -    ATM system. Phoenix has signed a Software License and Development
         Agreement with MultiSoft, a company located in Ecuador, that gives
         Phoenix worldwide rights to license and use MultiSoft's NT-based
         client/server ATM system. The Company has delivered and intends to
         continue to enhance the Phoenix ATM system which will allow its
         customers to support their own ATM network and to connect to regional
         and national ATM networks.

    -    Telephone banking system. The Company plans to continue to develop an
         NT-based client/server telephone banking system licensed from
         MultiSoft. The Phoenix automated voice response banking system allows
         the Company's client institutions to offer customized telephone
         banking services through which callers can perform fund transfers,
         make balance and other inquiries and initiate service requests via
         e-mail.

    -    Cash management system. Phoenix has acquired exclusive rights to a
         cash management system that was originally developed by one of its
         international customers. Phoenix plans to deliver a highly integrated
         version of this cash management system in 1999 which will allow the
         Company's customers to provide online cash management services to
         their retail and commercial customers.

    -    Loan pricing and credit scoring system. Phoenix has formed a
         relationship (including a minimal equity investment by Phoenix) with
         Integrated Financial Services, Inc., an Atlanta-based software and
         services company, whereby Phoenix acquired non-exclusive marketing
         rights to CreditPak. CreditPak, which the Company plans to interface
         with the Phoenix System, is an NT-based commercial credit analysis,
         loan pricing software package that enables lenders to consider the
         total financial relationship of the borrower and the bank.

    -    Automated loans and mortgages. Phoenix has acquired an equity
         interest in Dyad Corporation ("Dyad"), a company located in Norcross,
         Georgia which is in the process of developing automated loan and
         mortgage products, including associated software, hardware and
         documentation. In addition, Phoenix has obtained the rights to market,
         sell and license Dyad's 



                                      18
<PAGE>   19

         products, non-exclusively in the United States and exclusively abroad.
         These products are expected to enable financial institutions and their
         lenders to provide automated loan and mortgage processing from an
         ATM-styled kiosk based upon information supplied by the applicant and
         electronic verification of such information and credit investigation
         of the applicant's history and ratings, which are obtained
         automatically. See Item 13, "Certain Relationships and Related
         Transactions."

    -    Microsoft SQL Server(TM). Phoenix is developing a version of the
         Phoenix System to run on the Microsoft SQL Server. Phoenix currently
         anticipates delivering this version to a customer in the second
         quarter of 1998.

    -    International Capabilities. Phoenix is developing enhancements for
         the international market including, Turkish language support, large
         digit support, interbranch accounting and electronic bill payment
         functionality.

    -    Larger Bank Processing. Phoenix is continuing to develop a variety of 
         enhancements to benchmark and process larger banks.

         These potential new enhancements and products are subject to
significant technical risks, including delays in the development, introduction,
production or implementation of the new enhancements or products, failure to
achieve market acceptance and undetected errors or failures.

COMPETITION

         The financial services software market is intensely competitive,
rapidly evolving and subject to rapid technological change. Competitors vary in
size and in the scope and breadth of the products and services offered. Phoenix
encounters competition in the U.S. from a number of sources, including Fiserv,
Inc., Bisys, Inc., Marshall & Ilsley Corp., East Point Technology, Inc., a
division of Marshall & Ilsley Corp. ("East Point"), Electronic Data Systems
Corp., Jack Henry & Associates, Inc., ALLTEL Information Services, Inc.,
Prologic Corporation, The Kirchman Corporation and Open Solutions, Inc.
("OSI"), all of which offer core retail software systems or outsourcing
alternatives to the financial institutions industry. Of these competitors, the
Company believes that only East Point and OSI offer true client/server
solutions. In the international arena, the Company competes with several global
players, including Fiserv, Inc., Midas-Kapiti International, Inc., ACT/Kindle
Banking Systems ("ACT/Kindle"), Sanchez Computer Associates, Inc., Prologic
Corporation and Financial Network Services ("FNS"). In addition, there are
smaller, regional competitors in the countries which the Company targets
internationally. The Company expects additional competition from other
established and emerging companies as the client/server application software
market continues to develop and expand.

         In general, Phoenix competes on the basis of: (i) product
architecture, including distributed computing capability, access to commercial
SQL databases and ease of customization and integrations with other
applications; (ii) functionality, including the breadth and depth of features
and functions and ease of use; (iii) service and support, including the range
and quality of technical support, training, implementation and consulting
services and the capability to provide these on a global basis; (iv) management
expertise, including management's banking software experience and financial
services industry knowledge; and (v) product pricing in relation to performance
and support. Management believes that the Phoenix System is a market leader in
the areas of product architecture and management expertise and that the Company
competes favorably in the areas of functionality, service and support and
product pricing.



                                      19
<PAGE>   20

         Financial institutions have two fundamental alternatives for obtaining
data processing capabilities: (i) inhouse applications, either those that are
developed internally or those that are purchased from third party vendors; and
(ii) outsourcing, either as a part of a total outsourcing solution or where a
third party acts as a service bureau. Until the introduction of client/server
technology, the only in-house processing systems offered were proprietary
legacy systems running on mainframe or mid-range computer hardware. In the
United States market, client/server application software has only recently been
made available to financial institutions, but it is gaining market acceptance
and market share. In the international market, there are a number of
client/server alternatives available, as well as traditional legacy systems.

         The Company believes that none of its current competitors offers
application software that provides the level of flexibility and functionality
featured in the Company's customer relationship management, customer
profitability analysis or executive information modules. The Company expects
additional competition from other established and emerging companies as the
client/server market continues to develop and expand. In addition, competition
could increase as a result of software industry consolidations, including
particularly the acquisition of any of the client/server based retail banking
system providers by one of the larger service providers to the financial
services industry. For example, East Point, a provider of client/server
technology, was acquired by Marshall & Ilsley Corp., one of Phoenix's largest
competitors in the U.S. in August 1996.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

         Phoenix relies primarily on a combination of copyright and trademark
laws, trade secrets, confidentiality procedures and contractual provisions to
protect its proprietary rights. Phoenix seeks to protect its software,
documentation and other written materials under trade secret and copyright
laws, which afford only limited protection. The Company's license agreements
contain provisions which limit the number of users, state that title remains
with the Company, protect confidentiality, permit the termination of license
for misuse or abuse and require licensees to notify the Company of
infringements on the Company's property and rights. Phoenix presently has no
patents or patent application spending and has no trademark or copyright
registrations. Despite the Company's efforts to protect its proprietary rights,
unauthorized parties may attempt to copy aspects of the Company's products or
to obtain and use information that the Company regards as proprietary. Policing
unauthorized use of the Company's products is difficult, particularly overseas,
and while the Company is unable to determine the extent to which piracy of its
software products exists, software piracy can be expected to be a persistent
problem. In addition, the laws of some foreign countries do not protect the
Company's proprietary rights to as great of an extent as do the laws of the
United States. Nevertheless, the Company believes that due to the rapid pace of
technological change in the information technology and software industries,
factors such as the technological and creative skills of its employees, new
product developments, frequent product enhancements and the timeliness and
quality of support services are more important to establishing and maintaining
a competitive advantage in the industry.

         Phoenix does not believe that any of its products infringe upon the
proprietary rights of third parties. There can be no assurance, however, that
third parties will not claim infringement by the Company with respect to
current or future products. The Company expects that software product
developers will be increasingly subject to infringement claims as the number of
products and competitors in the Company's industry segment grows and the
functionality of products in different industry segments overlaps. Any such
claims, with or without merit, could be time-consuming, result in costly
litigation, cause product shipment delays or require Phoenix to enter into
royalty or licensing agreements. Such royalty or licensing agreements, if
required, may not be available on terms acceptable 



                                      20
<PAGE>   21

to the Company or at all, which could have a material adverse effect upon the
Company's business, operating results and financial conditions.


EMPLOYEES

         As of February 28, 1998, Phoenix had a total of 216 employees and
contract workers, of which 102 were engaged in product development and support,
59 were in implementation and training, 18 were in sales and marketing, 14 were
in finance and administration, 8 were in executive management, and 15 were
engaged in product development and support, sales and marketing and general
business operations at Phoenix A.P. Limited. All of the Company's senior and
executive officers who were employed by the Company as of the date of this
report have entered into employment agreements with the Company. None of the
Company's employees is represented by a labor union. The Company has not
experienced any work stoppages and considers its relations with its employees
to be satisfactory.

FACILITIES

         In March 1997 the Company moved its principal administrative, sales,
marketing, support and product development facility to a commercial building in
Heathrow, Florida. The Company currently leases approximately 48,000 square
feet of space in this building. The lease for this property is for a term of
ten years and expires on April 1, 2007. The Company has entered into
negotiations for additional space of approximately 22,500 square feet in a
nearby building to meet its anticipated needs for additional space.

ITEM 2.        PROPERTIES

         See the information provided in Item 1 above entitled "Business --
Facilities" for information with respect to the Company's facilities.


ITEM 3.        LEGAL PROCEEDINGS

         The Company is not a party to, nor is any of its property subject to, 
any material legal proceedings, other than routine litigation incidental to its
business.


ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of the Company's security holders
during the fourth quarter of the year ended December 31, 1997.



                                      21
<PAGE>   22


                                    PART II

ITEM 5.        MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
               MATTERS.

         The information required in Item 5 is incorporated herein by reference
from the Company's 1997 Annual Report to Shareholders, included in this Form
10-K as Exhibit 13.1 (the "Annual Report").


ITEM 6.        SELECTED FINANCIAL DATA

         The information required in Item 6 is incorporated herein by reference
from the Annual Report.


ITEM 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
               RESULTS OF OPERATIONS

         The information required in Item 7 is incorporated herein by reference
from the Annual Report.


ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information required in Item 8 is incorporated herein by reference
from the Annual Report.


ITEM 9.        CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS IN ACCOUNTING AND 
               FINANCIAL DISCLOSURES

         N/A.



                                    PART III

         Certain information required by Part III is omitted from this Report
in that the Registrant will file a definitive Proxy Statement pursuant to
Regulation 14A (the "Proxy Statement") not later than 120 days after the end of
the financial year covered by this Report, and certain information included
therein is incorporated herein by reference.


ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS AND DIRECTORS

         The executive officers and directors of the Company and their ages as
of March 13, 1998 are as follows:



                                      22
<PAGE>   23

<TABLE>
<CAPTION>
NAME                                  AGE       CLASS(1)    POSITION
----                                  ---       --------    --------

<S>  <C>                              <C>       <C>         <C>
     Bahram Yusefzadeh(2)(3)......     51         III       Chairman of the Board and Chief Executive Officer
     Raju M. Shivdasani...........     47         III       President, Chief Operating Officer and Director
     Clay E. Scarborough..........     43          --       Senior Vice President and Chief Financial Officer
     Michael R. Newes.............     51          --       Senior Vice President, International Marketing
     Harold C. Boughton...........     46          --       Senior Vice President, USA Business Development
     Daniel P. Baker..............     35          --       Senior Vice President, Research and Development
     Ruann F. Ernst(2)............     51           I       Director
     Ronald E. Fenton(3)(4).......     69         III       Director
     William C. Hess(4)...........     61           I       Director
     James C. Holly(2)(3).........     56         III       Director
     Paul A. Jones(2).............     43          II       Director
     J. Michael Murphy(3).........     57          II       Director
     Glenn W. Sturm(4)............     44          II       Director
     O. Jay Tomson................     61           I       Director
</TABLE>


-------------

(1)      Class I term expires in 2000; Class II term expires in 1998; and Class 
         III term expires in 1999.
(2)      Member of Compensation and Stock Option Committee. Mr. Holly is the 
         Chairman of the Compensation and Stock Option Committee, and Mr. 
         Yusefzadeh is
         a non-voting member of the Compensation and Stock Option Committee.
(3)      Member of the Executive Committee. Mr. Yusefzadeh is the Chairman of 
         the Executive Committee.
(4)      Member of Audit Committee. Mr. Fenton is the Chairman of the Audit 
         Committee.


         Bahram Yusefzadeh. Mr. Yusefzadeh, the Company's founder, Chairman of
the Board and Chief Executive Officer of Phoenix, has over 28 years of
experience in the banking software industry. In 1969, he co-founded Nu-Comp
Systems, Inc. ("Nu-Comp"), where he developed the Liberty Banking System and
served as Nu-Comp's president and chief executive officer. Mr. Yusefzadeh
became chairman of the board of Broadway & Seymour, Inc. ("Broadway & Seymour")
upon its acquisition of Nu-Comp in June 1986 and remained in that position
until November 1986. From 1986 to 1992, he worked for The Kirchman Corporation
("Kirchman"), first as president of the product and marketing strategies
division, and later as president of both the independent banking group and the
outsourcing division. Mr. Yusefzadeh currently serves as a member of the
Executive Committee and as a non-voting member of the Compensation and Stock
Option Committee.

         Raju M. Shivdasani. Mr. Shivdasani joined the Company in July 1996 as
a Senior Vice President and as Division President of International Sales. In
January 1998, Mr. Shivdasani assumed the position of President and Chief
Operating Officer and was appointed a Director of the Company. From 1990 to
1996, he worked for Fiserv, Inc. where he served as group executive vice
president of the bank services sector and president of CBS Worldwide, a banking
software division. Mr. Shivdasani has over 26 years of experience working for
companies in the banking software, service bureau and data center services
industries.



                                      23
<PAGE>   24


         Clay E. Scarborough. Mr. Scarborough joined the Company in March 1996
as a Senior Vice President and Chief Financial Officer. From 1995 to 1996, he
served as chief financial officer and senior vice president of Medifax, Inc., a
health industry services company. From 1992 to 1995, he was chief financial
officer and vice president of administration for A.D.A.M. Software, Inc., a
multimedia software publishing company. In 1991, Mr. Scarborough served as vice
president of finance at Gerber Alley Healthcare, a hospital information systems
software company. From 1986 to 1991, Mr. Scarborough was employed by Digital
Communication Associates, a publicly traded data communications technology
company where he last served as Director of Finance. Mr. Scarborough holds an
M.B.A. from the Harvard Graduate School of Business Administration and is a
certified public accountant.

         Michael R. Newes. Mr. Newes joined the Company in 1993 and serves as
Senior Vice President, International Marketing. From 1990 to 1993, he was a
senior vice president for OKRA Marketing Corporation ("OKRA"), a financial
institutions database software marketing company. He worked with Mr. Yusefzadeh
at both Nu-Comp and Kirchman and has nearly 25 years of experience in
marketing, sales and customer support for technology companies.

         Harold C. Boughton. Mr. Boughton joined the Company in May 1996 as
Senior Vice President, USA Business Development and is responsible for all
domestic sales and marketing activities. From 1992 to 1996, Mr. Boughton worked
for Fiserv, Inc., first as national sales manager for the CBS Service Bureau
and later as national sales manager for InformEnt. From 1990 to 1992 he served
as regional sales manager and national sales manager for DCR Technologies, an
optical storage technology company.

         Daniel P. Baker. Mr. Baker joined the Company in February 1998 as
Senior Vice President, Research and Development and is responsible for domestic
and international product development and quality assurance of the Phoenix
System and Phoenix ancillary products. From 1995 to 1998, Mr. Baker served as
Senior Vice President, Information Technology Division and Director of Market
Systems Strategy at the John H. Harland Company. From 1993 to 1995, he worked
for Fiserv Inc., where he served as Vice President of Technology Services.
Prior to Fiserv, Mr. Baker served over 13 years in the banking industry.

         Ruann F. Ernst. Ms. Ernst has been a director of the Company since
1996 and currently serves as a member of the Compensation and Stock Option
Committee. Ms. Ernst has worked for Hewlett-Packard for more than 13 years.
From 1995 to 1997, she served as General Manager of the financial services
business unit of Hewlett-Packard's Computer Systems Organization. From 1991 to
1993, she served as Director of Strategic Business for Hewlett-Packard's
multi-user UNIX product line. In 1993, Ms. Ernst assumed the position of
Marketing Manager for Hewlett-Packard for the financial industry worldwide as
well as U.S. responsibility for process, retail and oil and gas industries.


         Ronald E. Fenton. Mr. Fenton has been a director of Phoenix since
1993, currently serves as a member of the Executive Committee and is the
Chairman of the Audit Committee. He has served as the president, the chief
executive officer and a director of BancSecurity Corporation since 1982 and the
president, chief executive officer and director of Security Bank since 1976.
Mr. Fenton is the chairman of the board of Story County Bank & Trust, Story
City, Iowa and is the chairman of the board of Security Bank Jasper-Poweshiek,
Kellogg, Iowa. He is also a director, executive committee member and former
chairman of the board of Shazam, Inc. ("Shazam"), a regional electronic funds
transfer network.



                                      24
<PAGE>   25


         William C. Hess. Mr. Hess has been a director of the Company since
1993 and currently serves as a member of the Audit Committee. Since 1984, he
has been the president of Iowa Savings Bank, and since 1981, he has been
chairman of the board of Sac City State Bank. He is also a director of Audubon
State Bank, Iowa Savings Bank, Perry State Bank, Raccoon Valley State Bank and
Home State Bank. Mr. Hess is a past director of Shazam, a past director of the
Iowa Bankers Mortgage Association and Iowa Bankers Association and a past
member of the member of the board of directors of the Iowa Department of
Banking.

         James C. Holly. Mr. Holly has been a director of Phoenix since 1993,
currently serves as a member of the Executive Committee and is Chairman of the
Compensation and Stock Option Committee. Since 1977, he has served as
president, chief executive officer and director of Bank of the Sierra. He is
also the current president of the California Independent Bankers Association.
Mr. Holly holds an M.B.A. from the University of Wisconsin and was a
commissioned officer in the United States Army (Armor).

         Paul A. Jones. Mr. Jones has been director of the Company since 1995
and currently serves as a member of the Compensation and Stock Option
Committee. He is the president, chief executive officer and a director of
Glenview State Bank and was the president of such bank from 1986 to 1996. Mr.
Jones is a director of Cummins-American Corp. and Cummins-Allison Corp.

         J. Michael Murphy. Mr. Murphy has been a director of Phoenix since
1993 and currently serves as a member of the Executive Committee. Since 1977,
he has served as president of Drum Service Co. of Florida, which in February
1998 merged into Palex, Inc. Since 1988 he has been a director of Lochaven
Federal Savings and Loan Association, Orlando Florida and served as chairman of
the board from 1995-1996. He is a past chairman of the National Trade
Association of Container Reconditioners and was chairman of the board of the
International Confederation of Drum Reconditioners from 1990 to 1993. Mr.
Murphy holds an M.B.A. from the Harvard Graduate School of Business
Administration.

         Glenn W. Sturm. Mr. Sturm has been a director of the Company since
1996 and currently serves as a member of the Audit Committee. Since 1992, Mr.
Sturm has been a partner in the law firm of Nelson Mullins Riley & Scarborough,
L.L.P., where he serves on such firm's executive committee.

         O. Jay Tomson. Mr. Tomson has been a director of the Company since
1993 and was Chairman of the Board of the Company from August 1993 to February
1994. Since 1974, he has served as chairman and chief executive officer of
First Citizens National Bank, and since 1977, he has been chairman of the board
of First Citizens Financial Corporation. Mr. Tomson was a member of the Board
of Directors of the Federal Reserve Bank of Chicago from 1980 to 1986. He is a
former director and president of Shazam.


ITEM 11.       EXECUTIVE COMPENSATION

         The information required by Item 11 is incorporated by reference from
the Proxy Statement.


ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by Item 12 is incorporated by reference from
the Proxy Statement.



                                      25
<PAGE>   26



ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by Item 13 is incorporated by reference from
the Proxy Statement.


                                    PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1)   Financial Statements

         The consolidated financial statements of the Company as of December
31, 1997 and 1996 and for each of the years in the three-year period ending
December 31, 1997, together with the report of Ernst & Young LLP, dated January
28, 1998, appearing in the Company's 1997 Annual Report to Shareholders,
included as Exhibit 13.1 to this Form 10-K, are incorporated herein by
reference.

(a)(2)   Financial Statement Schedules

         Financial statement schedules are omitted because they are either: (i)
not applicable or not required; or (ii) the information required is contained
in the consolidated financial statements or the notes thereto.


(b)      Exhibits

2.1      Agreement of Merger and Amalgamation Proposal by and among the
         Company, Hampton Resources Limited, PSL Acquisition Limited, Brian Lee
         Thomas and Elizabeth Carolyn Swanston, dated May 15, 1997
         (incorporated by reference to Exhibit 2.1 of the Company's Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on May 29, 1997, File No. 0-20937).

3.1      Amended and Restated Articles of Incorporation as amended by the
         Articles of Amendment to Amended and Restated Articles of
         Incorporation as filed with the Secretary of State of Florida on May
         28, 1997 (incorporated by reference to Exhibit 3.1 of the Company's
         Registration Statement on Form S-1 (Registration No. 333-31415), as
         declared effective by the Securities and Exchange Commission on August
         13, 1997 (the "1997 Registration Statement")).

3.2      Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 
         of the Company's Form 10-Q dated August 14, 1996, File No. 0-20937
         (the "Second Quarter 1996 10-Q")).

4.1      See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated 
         Articles of Incorporation and Amended and Restated Bylaws defining the
         rights of the holders of Common Stock of the Company.

10.1     Phoenix International Ltd., Inc. 1995 Employee Stock Option Plan,
         effective as of March 18, 1995 (incorporated by reference to Exhibit
         10.12 of the Company's Registration Statement on 



                                      26
<PAGE>   27

         Form S-1 (Registration No. 33-03355), as declared effective by the
         Securities and Exchange Commission on July 1, 1996 (the "1996
         Registration Statement").*

10.2     Amendment, dated May 24, 1996, to the Phoenix International Ltd., Inc. 
         1995 Employee Stock Option Plan, effective March 18, 1995
         (incorporated by reference to Exhibit 10.43 of the 1996 Registration
         Statement).*

10.3     Phoenix International Ltd., Inc. 1995 Employee Stock Option Plan, 
         effective as of October 21, 1995 (the "October Plan") (incorporated by
         reference to Exhibit 10.13 of the 1996 Registration Statement).*

10.4     Amendment, dated May 24, 1996, to the October  Plan (incorporated by 
         reference to Exhibit 10.44 of the 1996 Registration Statement).*

10.5     Second Amendment, dated as of January 24, 1997, to the October Plan
         (incorporated by reference to Exhibit 4.1 of the Company's
         Registration Statement on Form S-8, as filed with the Securities and
         Exchange Commission on December 31, 1996 and as amended by the
         Company's Registration Statement on Form S-8, as filed July 3, 1997
         (the "Form S-8").*

10.6     Revised Form of Stock Option Agreement for the October Plan 
         (incorporated by reference to Exhibit 10.45 of the 1996 Registration
         Statement).*

10.7     Phoenix International Ltd., Inc. 1996 Director Stock Option Plan 
         (incorporated by reference to Exhibit 10.46 of the 1996 Registration
         Statement).*

10.8     Form of Stock Option Agreement under the Phoenix International Ltd., 
         Inc. 1996 Director Stock Option Plan (incorporated by reference to
         Exhibit 4.7 of the Form S-8).*

10.9     Form of the Company's Director Indemnity Agreement (incorporated by 
         reference to Exhibit 10.47 of the 1996 Registration Statement).

10.10    Employment Agreement by and between the Company and Bahram Yusefzadeh, 
         dated December 28, 1995 (incorporated by reference to Exhibit 10.14 of
         the 1996 Registration Statement).*

10.11    First Amendment to Employment Agreement by and between the Company and 
         Bahram Yusefzadeh, dated May 22, 1996 (incorporated by reference to
         Exhibit 10.15 of the 1996 Registration Statement).*

10.12    Employment Agreement by and between the Company and Ralph Reichard, 
         dated December 18, 1995 (incorporated by reference to Exhibit 10.16 of
         the 1996 Registration Statement).*

10.13    First Amendment to Employment Agreement by and between the Company and 
         Ralph Reichard, dated May 22, 1996 (incorporated by reference to
         Exhibit 10.17 of the 1996 Registration Statement).*

10.14    Employment Agreement by and between the Company and Clay E. 
         Scarborough, dated May 23, 1996 (incorporated by reference to Exhibit
         10.18 of the 1996 Registration Statement).*



                                      27
<PAGE>   28


10.15    Employment Agreement by and between the Company and Michael R. Newes, 
         dated April 12, 1996 (incorporated by reference to Exhibit 10.19 of
         the 1996 Registration Statement).*

10.16    Employment Agreement by and between the Company and Harold C. 
         Boughton, dated June 3, 1996 (incorporated by reference to Exhibit
         10.1 of the Second Quarter 1996 10-Q).*

10.17    Employment Agreement by and between the Company and Raju M. 
         Shivdasani, dated July 15, 1996 (incorporated by reference to Exhibit
         10.2 of the Second Quarter 1996 10-Q).*

10.18    Form of Employee Confidentiality Agreement (incorporated by reference 
         to Exhibit 10.19 of the Company's Annual Report on Form 10-K for the
         year ended December 31, 1996, File No. O-20937) (the "1996 10-K")).

10.19    Form of Promissory Note for employee loans from the Company 
         (incorporated by reference to Exhibit 10.54 of the 1996 Registration
         Statement).

10.20    Form of Stock Pledge and Security Agreement for employee loans from 
         the Company (incorporated by reference to Exhibit 10.55 of the 1996
         Registration Statement).

10.21    OEM Software License Agreement, dated June 30, 1995, between the 
         Company and Gupta Corporation (incorporated by reference to Exhibit
         10.26 of the 1996 Registration Statement).+

10.22    Value Added Remarketer Agreement, dated October 13, 1993, between the 
         Company and Sybase, Inc. (incorporated by reference to Exhibit 10.27
         of the 1996 Registration Statement).+

10.23    Software License Agreement between the Company and Unisys Corporation, 
         dated March 16, 1996 (incorporated by reference to Exhibit 10.28 of
         the 1996 Registration Statement).+

10.24    First Amendment to Software License Agreement between the Company and 
         Unisys Corporation, dated December 27, 1996 (incorporated by reference
         to Exhibit 10.25 of the 1996 10-K).+

10.25    Second Amendment to Software License Agreement between the Company and 
         Unisys Corporation, dated June 30, 1997 (incorporated by reference to
         Exhibit 10.27 of the 1997 Registration Statement). +

10.26    General Agreement for Strategic Relationship between the Company and 
         Hewlett-Packard Company, dated April 30, 1993 (incorporated by
         reference to Exhibit 10.29 of the 1996 Registration Statement).+

10.27    Form of Software License Agreement (incorporated by reference to 
         Exhibit 10.30 of the 1996 Registration Statement).+

10.28    Form of International Software License Agreement (incorporated by 
         reference to Exhibit 10.31 of the 1996 Registration Statement).+

10.29    Form of Disaster Recovery Service Agreement (incorporated by reference 
         to Exhibit 10.32 of the 1996 Registration Statement).+



                                      28
<PAGE>   29


10.30    Form of Software Deposit Agreement (incorporated by reference to 
         Exhibit 10.33 of the 1996 Registration Statement).+

10.31    Form of Confidentiality and Non-Disclosure Agreement (incorporated by 
         reference to Exhibit 10.34 of the 1996 Registration Statement).

10.32    Form of Confidentiality Agreement (incorporated by reference to 
         Exhibit 10.35 of the 1996 Registration Statement).

10.33    Form of Mutual Non-Disclosure Agreement (incorporated by reference to 
         Exhibit 10.36 of the 1996 Registration Statement).

10.34    Form of Confidentiality/Non-Disclosure Agreement Remitting Access to
         System Documentation and Data Files for Data Conversion (incorporated
         by reference to Exhibit 10.37 of the 1996 Registration Statement).

10.35    Form of Phoenix International Ltd., Inc. Confidentiality Agreement 
         (incorporated by reference to Exhibit 10.38 of the 1996 Registration 
         Statement).

10.36    The Principal Financial Group Prototype for Savings Plans (401k), as 
         amended, and the Group Annuity Contract for the Company (incorporated
         by reference to Exhibit 10.41 of the 1996 Registration Statement).*

10.37    Remarketing Agreement and Support Authorization, dated as of April 22,
         1996, between the Company and Computer Systems Associates (Nigeria)
         Limited (incorporated by reference to Exhibit 10.42 of the 1996
         Registration Statement) (the "CSA Agreement").+

10.38    Lease Agreement, dated September 11, 1996, between the Company and 500
         International Parkway Development Company (incorporated by reference
         to Exhibit 10.1 of the Company's Form 10-Q, dated November 5, 1996,
         File No. 0-20937).

10.39    Cooperative Marketing Agreement, dated September 5, 1996, between the 
         Company and The Netcomm Group, Inc. (incorporated by reference to
         Exhibit 10.42 of the 1996 10-K).+

10.40    Cooperative Marketing Agreement, dated October 2, 1996, between the 
         Company and ISC Financial Systems, Inc. (incorporated by reference to
         Exhibit 10.43 of the 1996 10-K).+

10.41    Stock Purchase Agreement, dated March 5, 1997, between the Company and 
         Dyad Corporation (incorporated by reference to Exhibit 10.44 of the
         1996 10-K).+

10.42    License and Distribution Agreement, dated March 5, 1997, between the 
         Company and Dyad Corporation (incorporated by reference to Exhibit
         10.45 of the 1996 10-K).+

10.43    License and Marketing Agreement, dated November 26, 1997, between the 
         Company and Integrated Financial Services, Inc. (incorporated by
         reference to Exhibit 10.46 of the 1996 10-K).+

10.44    Form of Software License Agreement used in connection with the CSA 
         Agreement (incorporated by reference to Exhibit 10.47 of the 1996
         10-K).



                                      29
<PAGE>   30


10.45    Addendum to Lease Agreement, dated March 17, 1997, between the Company
         and 500 International Parkway Development Company (incorporated by
         reference to Exhibit 10.1 of the Company's Form 10-Q, dated May 8,
         1997, File No. 0-20937 (the "First Quarter 1997 10-Q")).

10.46    Cooperative Marketing Agreement, dated March 26, 1997, between the 
         Company and International Turnkey Systems (incorporated by reference
         to Exhibit 10.2 of the First Quarter 1997 10-Q). +

10.47    Cooperative Marketing Agreement, dated June 28, 1997, between the
         Company and Siemens Nixdorf Informationssyteme AG (incorporated by
         reference to Exhibit 10.49 of the 1997 Registration Statement). +

10.48    Cooperative Marketing Agreement, dated March 31, 1997, between the 
         Company and ERAS JV (incorporated by reference to Exhibit 10.50 of the
         1997 Registration Statement).+

10.49    Cooperative Marketing Agreement, dated April 16, 1997, between the 
         Company and Advanced Financial Systems, Inc. (incorporated by
         reference to Exhibit 10.51 of the 1997 Registration Statement).+

10.50    Software License and Development Agreement, dated December 31, 1997, 
         between the Company and Intercept Systems, Inc.

13.1     Registrant's 1997 Annual Report to Shareholders. Except for portions
         of said Annual Report incorporated herein by reference, the Annual
         Report is furnished for the information of the Commission and is not
         deemed filed herewith.

21.1     Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 
         of the 1997 Registration Statement.

23.1     Consent of Ernst & Young LLP.

24.1     Power of Attorney (contained on the signature page of this filing).

27.1     Financial Data Schedule (for Commission purposes only).

---------------
+        Confidential treatment previously granted for portions of such 
         exhibit.
*        This agreement is a compensatory plan or arrangement required to be 
         filed as an exhibit to this Form 10-K pursuant to Item 14(c).



                                      30
<PAGE>   31


                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereto duly authorized.

<TABLE>
<CAPTION>
                                          Phoenix International Ltd., Inc.

<S>                                       <C>
      March 17, 1998                      By: /s/ Bahram Yusefzadeh
---------------------------------         -------------------------------------------
Date                                            Bahram Yusefzadeh
                                                Chairman and Chief Executive Officer
</TABLE>



                               POWER OF ATTORNEY

         KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints jointly and severally, Bahram
Yusefzadeh and Raju M. Shivdasani, and each one of them, his attorneys-in-fact,
each with the power of substitution, for him in any and all capacities, to sign
any and all amendments to this Annual Report (Form 10-K) and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each said attorneys-in-fact, or his substitute or substitutes, may do or cause
to be done by virtue hereof.

         Pursuant to the requirements of the Securities Exchanges Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES                              TITLE                                   DATE
----------                              -----                                   ----

<S>                                     <C>                                     <C>
 /s/ Bahram Yusefzadeh                  Chairman of the Board and               March 17, 1998
-------------------------               Chief Executive Officer
     Bahram Yusefzadeh                  (principal executive officer)

 /s/ Clay E. Scarborough                Chief Financial Officer                 March 17, 1998
-------------------------               (principal financial and
     Clay E. Scarborough                and accounting officer)

 /s/ Raju M. Shivdasani                 President, Chief Operating              March 17, 1998
-------------------------               Officer and Director
     Raju M. Shivdasani                              

 
/s/ Ruann F. Ernst                      Director                                March 17, 1998
-------------------------           
    Ruann F. Ernst

/s/ Ronald E. Fenton                    Director                                March 17, 1998
-------------------------
    Ronald E. Fenton
</TABLE>



                                      31
<PAGE>   32

<TABLE>
<CAPTION>
SIGNATURES                             TITLE                                    DATE
----------                             -----                                    ----

<S>                                    <C>                                      <C>
 /s/ William C. Hess                   Director                                 March 17, 1998
-------------------------
     William C. Hess

 /s/ James C. Holly                    Director                                 March 17, 1998
-------------------------
     James C. Holly

 /s/ Paul A. Jones                     Director                                 March 17, 1998
-------------------------
     Paul A. Jones

 /s/ J. Michael Murphy                 Director                                 March 17, 1998
-------------------------
     J. Michael Murphy

 /s/ Glenn W. Sturm                    Director                                 March 17, 1998
-------------------------
     Glenn W. Sturm

 /s/ O. Jay Tomson                     Director                                 March 17, 1998
-------------------------
     O. Jay Tomson
</TABLE>



                                      32
<PAGE>   33


                                 EXHIBIT INDEX

EXHIBIT
NUMBER                                      DESCRIPTION

2.1               Agreement of Merger and Amalgamation Proposal by and among 
                  the Company, Hampton Resources Limited, PSL Acquisition
                  Limited, Brian Lee Thomas and Elizabeth Carolyn Swanston,
                  dated May 15, 1997 (incorporated by reference to Exhibit 2.1
                  of the Company's Current Report on Form 8-K, filed with the
                  Securities and Exchange Commission on May 29, 1997, File No.
                  0-20937).

3.1               Amended and Restated Articles of Incorporation as amended by 
                  the Articles of Amendment to Amended and Restated Articles of
                  Incorporation as filed with the Secretary of State of Florida
                  on May 28, 1997 (incorporated by reference to Exhibit 3.1 of
                  the Company's Registration Statement on Form S-1
                  (Registration No. 333-31415), as declared effective by the
                  Securities and Exchange Commission on August 13, 1997 (the
                  "1997 Registration Statement")).

3.2               Amended and Restated Bylaws (incorporated by reference to 
                  Exhibit 3.2 of the Company's Form 10-Q dated August 14, 1996,
                  File No. 0-20937 (the "Second Quarter 1996 10-Q")).

4.1               See Exhibits 3.1 and 3.2 for provisions of the Amended and 
                  Restated Articles of Incorporation and Amended and Restated
                  Bylaws defining the rights of the holders of Common Stock of
                  the Company.

10.1              Phoenix International Ltd., Inc. 1995 Employee Stock Option 
                  Plan, effective as of March 18, 1995 (incorporated by
                  reference to Exhibit 10.12 of the Company's Registration
                  Statement on Form S-1 (Registration No. 33-03355), as
                  declared effective by the Securities and Exchange Commission
                  on July 1, 1996 (the "1996 Registration Statement").*

10.2              Amendment, dated May 24, 1996, to the Phoenix International 
                  Ltd., Inc. 1995 Employee Stock Option Plan, effective March
                  18, 1995 (incorporated by reference to Exhibit 10.43 of the
                  1996 Registration Statement).*

10.3              Phoenix International Ltd., Inc. 1995 Employee Stock Option 
                  Plan, effective as of October 21, 1995 (the "October Plan")
                  (incorporated by reference to Exhibit 10.13 of the 1996
                  Registration Statement).*

10.4              Amendment, dated May 24, 1996, to the October Plan 
                  (incorporated by reference to Exhibit 10.44 of the 1996
                  Registration Statement).*

10.5              Second Amendment, dated as of January 24, 1997, to the 
                  October Plan (incorporated by reference to Exhibit 4.1 of the
                  Company's Registration Statement on Form S-8, as filed with
                  the Securities and Exchange Commission on December 31, 1996
                  and as amended by the Company's Registration Statement on
                  Form S-8, as filed July 3, 1997 (the "Form S-8").*

<PAGE>   34

10.6              Revised Form of Stock Option Agreement for the October Plan 
                  (incorporated by reference to Exhibit 10.45 of the 1996
                  Registration Statement).*

10.7              Phoenix International Ltd., Inc. 1996 Director Stock Option 
                  Plan (incorporated by reference to Exhibit 10.46 of the 1996
                  Registration Statement).*

10.8              Form of Stock Option Agreement under the Phoenix 
                  International Ltd., Inc. 1996 Director Stock Option Plan
                  (incorporated by reference to Exhibit 4.7 of the Form S-8).*

10.9              Form of the Company's Director Indemnity Agreement 
                  (incorporated by reference to Exhibit 10.47 of the 1996
                  Registration Statement).

10.10             Employment Agreement by and between the Company and Bahram 
                  Yusefzadeh, dated December 28, 1995 (incorporated by
                  reference to Exhibit 10.14 of the 1996 Registration
                  Statement).*

10.11             First Amendment to Employment Agreement by and between the 
                  Company and Bahram Yusefzadeh, dated May 22, 1996
                  (incorporated by reference to Exhibit 10.15 of the 1996
                  Registration Statement).*

10.12             Employment Agreement by and between the Company and Ralph 
                  Reichard, dated December 18, 1995 (incorporated by reference
                  to Exhibit 10.16 of the 1996 Registration Statement).*

10.13             First Amendment to Employment Agreement by and between the 
                  Company and Ralph Reichard, dated May 22, 1996 (incorporated
                  by reference to Exhibit 10.17 of the 1996 Registration
                  Statement).*

10.14             Employment Agreement by and between the Company and Clay E. 
                  Scarborough, dated May 23, 1996 (incorporated by reference to
                  Exhibit 10.18 of the 1996 Registration Statement).*

10.15             Employment Agreement by and between the Company and Michael 
                  R. Newes, dated April 12, 1996 (incorporated by reference to
                  Exhibit 10.19 of the 1996 Registration Statement).*

10.16             Employment Agreement by and between the Company and Harold C. 
                  Boughton, dated June 3, 1996 (incorporated by reference to
                  Exhibit 10.1 of the Second Quarter 1996 10-Q).*

10.17             Employment Agreement by and between the Company and Raju M. 
                  Shivdasani, dated July 15, 1996 (incorporated by reference to
                  Exhibit 10.2 of the Second Quarter 1996 10-Q).*

10.18             Form of Employee Confidentiality Agreement (incorporated by 
                  reference to Exhibit 10.19 of the Company's Annual Report on
                  Form 10-K for the year ended December 31, 1996, File No.
                  0-20937) (the "1996 10-K")).
<PAGE>   35


10.19             Form of Promissory Note for employee loans from the Company 
                  (incorporated by reference to Exhibit 10.54 of the 1996
                  Registration Statement).

10.20             Form of Stock Pledge and Security Agreement for employee 
                  loans from the Company (incorporated by reference to Exhibit
                  10.55 of the 1996 Registration Statement).

10.21             OEM Software License Agreement, dated June 30, 1995, between 
                  the Company and Gupta Corporation (incorporated by reference
                  to Exhibit 10.26 of the 1996 Registration Statement).+

10.22             Value Added Remarketer Agreement, dated October 13, 1993, 
                  between the Company and Sybase, Inc. (incorporated by
                  reference to Exhibit 10.27 of the 1996 Registration
                  Statement).+

10.23             Software License Agreement between the Company and Unisys 
                  Corporation, dated March 16, 1996 (incorporated by reference
                  to Exhibit 10.28 of the 1996 Registration Statement).+

10.24             First Amendment to Software License Agreement between the 
                  Company and Unisys Corporation, dated December 27, 1996
                  (incorporated by reference to Exhibit 10.25 of the 1996
                  10-K).+

10.25             Second Amendment to Software License Agreement between the 
                  Company and Unisys Corporation, dated June 30, 1997
                  (incorporated by reference to Exhibit 10.27 of the 1997
                  Registration Statement). +

10.26             General Agreement for Strategic Relationship between the 
                  Company and Hewlett-Packard Company, dated April 30, 1993
                  (incorporated by reference to Exhibit 10.29 of the 1996
                  Registration Statement).+

10.27             Form of Software License Agreement (incorporated by reference 
                  to Exhibit 10.30 of the 1996 Registration Statement).+

10.28             Form of International Software License Agreement 
                  (incorporated by reference to Exhibit 10.31 of the 1996
                  Registration Statement).+

10.29             Form of Disaster Recovery Service Agreement (incorporated by 
                  reference to Exhibit 10.32 of the 1996 Registration
                  Statement).+

10.30             Form of Software Deposit Agreement (incorporated by reference 
                  to Exhibit 10.33 of the 1996 Registration Statement).+

10.31             Form of Confidentiality and Non-Disclosure Agreement 
                  (incorporated by reference to Exhibit 10.34 of the 1996
                  Registration Statement).

10.32             Form of Confidentiality Agreement (incorporated by reference 
                  to Exhibit 10.35 of the 1996 Registration Statement).

<PAGE>   36

10.33             Form of Mutual Non-Disclosure Agreement (incorporated by 
                  reference to Exhibit 10.36 of the 1996 Registration 
                  Statement).

10.34             Form of Confidentiality/Non-Disclosure Agreement Remitting 
                  Access to System Documentation and Data Files for Data
                  Conversion (incorporated by reference to Exhibit 10.37 of the
                  1996 Registration Statement).

10.35             Form of Phoenix International Ltd., Inc. Confidentiality 
                  Agreement (incorporated by reference to Exhibit 10.38 of the
                  1996 Registration Statement).

10.36             The Principal Financial Group Prototype for Savings Plans 
                  (401k), as amended, and the Group Annuity Contract for the
                  Company (incorporated by reference to Exhibit 10.41 of the
                  1996 Registration Statement).*

10.37             Remarketing Agreement and Support Authorization, dated as of 
                  April 22, 1996, between the Company and Computer Systems
                  Associates (Nigeria) Limited (incorporated by reference to
                  Exhibit 10.42 of the 1996 Registration Statement) (the "CSA
                  Agreement").+

10.38             Lease Agreement, dated September 11, 1996, between the 
                  Company and 500 International Parkway Development Company
                  (incorporated by reference to Exhibit 10.1 of the Company's
                  Form 10-Q, dated November 5, 1996, File No. 0-20937).

10.39             Cooperative Marketing Agreement, dated September 5, 1996, 
                  between the Company and The Netcomm Group, Inc. (incorporated
                  by reference to Exhibit 10.42 of the 1996 10-K).+

10.40             Cooperative Marketing Agreement, dated October 2, 1996, 
                  between the Company and ISC Financial Systems, Inc.
                  (incorporated by reference to Exhibit 10.43 of the 1996
                  10-K).+

10.41             Stock Purchase Agreement, dated March 5, 1997, between the 
                  Company and Dyad Corporation (incorporated by reference to
                  Exhibit 10.44 of the 1996 10-K).+

10.42             License and Distribution Agreement, dated March 5, 1997, 
                  between the Company and Dyad Corporation (incorporated by
                  reference to Exhibit 10.45 of the 1996 10-K).+

10.43             License and Marketing Agreement, dated November 26, 1997, 
                  between the Company and Integrated Financial Services, Inc.
                  (incorporated by reference to Exhibit 10.46 of the 1996
                  10-K).+

10.44             Form of Software License Agreement used in connection with 
                  the CSA Agreement (incorporated by reference to Exhibit 10.47
                  of the 1996 10-K).

10.45             Addendum to Lease Agreement, dated March 17, 1997, between 
                  the Company and 500 International Parkway Development Company
                  (incorporated by reference to Exhibit 10.1 of the Company's
                  Form 10-Q, dated May 8, 1997, File No. 0-20937 (the "First
                  Quarter 1997 10-Q")).
<PAGE>   37

10.46             Cooperative Marketing Agreement, dated March 26, 1997, 
                  between the Company and International Turnkey Systems
                  (incorporated by reference to Exhibit 10.2 of the First
                  Quarter 1997 10-Q). +

10.47             Cooperative Marketing Agreement, dated June 28, 1997, between 
                  the Company and Siemens Nixdorf Informationssyteme AG
                  (incorporated by reference to Exhibit 10.49 of the 1997
                  Registration Statement). +

10.48             Cooperative Marketing Agreement, dated March 31, 1997, 
                  between the Company and ERAS JV (incorporated by reference to
                  Exhibit 10.50 of the 1997 Registration Statement).+

10.49             Cooperative Marketing Agreement, dated April 16, 1997, 
                  between the Company and Advanced Financial Systems, Inc.
                  (incorporated by reference to Exhibit 10.51 of the 1997
                  Registration Statement).+

10.50             Software License and Development Agreement, dated December
                  31, 1997, between the Company and Intercept Systems, Inc.

13.1              Registrant's 1997 Annual Report to Shareholders. Except for 
                  portions of said Annual Report incorporated herein by
                  reference, the Annual Report is furnished for the information
                  of the Commission and is not deemed filed herewith.

21.1              Subsidiaries of the Company (incorporated by reference to 
                  Exhibit 21.1 of the 1997 Registration Statement.

23.1              Consent of Ernst & Young LLP.

24.1              Power of Attorney (contained on the signature page of this 
                  filing).

27.1              Financial Data Schedule (for Commission purposes only).



---------------
+     Confidential treatment previously granted for portions of such exhibit.
*     This agreement is a compensatory plan or arrangement required to be filed 
      as an exhibit to this Form 10-K pursuant to Item 14(c).