SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
ACI TELECENTRICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
ACI TELECENTRICS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
APRIL 30, 1997
TO THE SHAREHOLDERS OF ACI TELECENTRICS, INC.:
The 1997 Annual Meeting of Shareholders of ACI Telecentrics, Inc. will
be held at the Minneapolis Hilton, 1001 Marquette Avenue, Minneapolis, Minnesota
at 3:30 p.m. on Wednesday, April 30, 1997, for the following purposes:
1. To set the number of members of the Board of Directors at
seven (7).
2. To elect members of the Board of Directors.
3. To ratify the appointment of the Company's independent
auditors for the year ending December 31, 1997.
4. To approve an increase in the number of shares reserved under
the Company's 1996 Stock Option Plan from 280,000 to 430,000.
5. To take action on any other business that may properly come
before the meeting or any adjournment thereof.
Accompanying this Notice of Annual Meeting is a Proxy Statement, form
of Proxy and the Company's 1996 Annual Report to Shareholders.
Only shareholders of record as shown on the books of the Company at the
close of business on March 5, 1997 will be entitled to vote at the 1997 Annual
Meeting or any adjournment thereof. Each shareholder is entitled to one vote per
share on all matters to be voted on at the meeting.
You are cordially invited to attend the 1997 Annual Meeting. Whether or
not you plan to attend the 1997 Annual Meeting, please sign, date and mail the
enclosed form of Proxy in the return envelope provided as soon as possible. The
Proxy is revocable and will not affect your right to vote in person in the event
you attend the meeting. The prompt return of proxies will help your Company
avoid the unnecessary expense of further requests for proxies.
BY ORDER OF THE BOARD OF DIRECTORS,
Rick N. Diamond, Chief Executive Officer
Dated: March 17, 1997 Gary B. Cohen, President
Minneapolis, Minnesota
ACI TELECENTRICS, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
APRIL 30, 1997
The accompanying Proxy is solicited by the Board of Directors of ACI
Telecentrics, Inc. (the "Company") for use at the 1997 Annual Meeting of
Shareholders of the Company to be held on Wednesday, April 30, 1997, at the
location and for the purposes set forth in the Notice of Annual Meeting, and at
any adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly,
and mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to the beneficial owners of stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a Proxy may revoke it any time prior to its use
at the 1997 Annual Meeting by giving written notice of such revocation to the
Secretary or any other officer of the Company or by filing a later dated written
Proxy with an officer of the Company. Personal attendance at the 1997 Annual
Meeting is not, by itself, sufficient to revoke a Proxy unless written notice of
the revocation or a later dated Proxy is delivered to an officer before the
revoked or superseded Proxy is used at the 1997 Annual Meeting. Proxies will be
voted as directed therein. Proxies which are signed by shareholders but which
lack specific instruction with respect to any proposal will be voted in favor of
such proposal as set forth in the Notice of Meeting or, with respect to the
election of directors, in favor of the number and slate of directors proposed by
the Board of Directors and listed herein.
The presence at the Annual Meeting in person or by proxy of the holders
of a majority of the outstanding shares of the Company's Common Stock entitled
to vote shall constitute a quorum for the transaction of business. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder of the shares and a lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote shall be deemed present at the meeting for purposes of determining
a quorum but shall not be deemed to be represented at the meeting for purposes
of calculating the vote required for approval of such matter. If a shareholder
abstains from voting as to any matter, then the shares held by such shareholder
shall be deemed present at the meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such matter, but shall not
be deemed to have been voted in favor of such matter. An abstention as to any
proposal will therefore have the same effect as a vote against the proposal.
The mailing address of the principal executive office of the Company is
3100 West Lake Street, Suite 300, Minneapolis, Minnesota 55416. The Company
expects that this Proxy Statement, the related Proxy and Notice of Meeting will
first be mailed to shareholders on or about March 17, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed March 5, 1997 as the
record date for determining shareholders entitled to vote at the 1997 Annual
Meeting. Persons who were not shareholders on such date will not be allowed to
vote at the 1997 Annual Meeting. At the close of business on March 5, 1997,
there were 5,706,528 shares of the Company's Common Stock, no par value, issued
and outstanding. The Common Stock is the only outstanding class of capital stock
of the Company. Each share of Common Stock is entitled to one vote on each
matter to be voted upon at the 1997 Annual Meeting. Holders of Common Stock are
not entitled to cumulative voting rights.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT SHAREHOLDINGS
The following table provides information as of March 5, 1997 concerning
the beneficial ownership of the Company's Common Stock by (i) the persons known
by the Company to own more than 5% of the Company's outstanding Common Stock,
(ii) each director of the Company, (iii) the named executive officers in the
Summary Compensation Table, and (iv) all directors and executive officers as a
group. Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock owned by
them.
Name (and Address of 5% Number of Shares Percent
Owner) or Identity of Group Beneficially Owned(1) of Class
- --------------------------- ------------------ --------
Rick N. Diamond 2,100,000(2) 36%
Gary B. Cohen 2,100,000(3) 36%
Dana Olson 112,000(4) 1.9%
Seymour Levy 3,000(5) *
Phillip T. Levin 3,000(6) *
James W. Lupient 2,000(7) *
Douglas W. Franchot 2,000(8) *
Thomas F. Madison 1,500(9) *
All Executive Officers 4,329,900 74.3%
and Directors as a Group
(11 Individuals)
- ---------------------
* Less than 1%
(1) Under the rules of the Securities and Exchange Commission, shares not
actually outstanding are nevertheless deemed to be beneficially owned
by a person if such person has the right to acquire the shares within
60 days. Pursuant to such SEC rules, shares deemed beneficially owned
by virtue of a person's right to acquire them are also treated as
outstanding when calculating the percent of class owned by such person
and when determining the percentage owned by a group.
(2) Includes 525,000 shares held by the Rick A. Diamond Term Trust U/A
dated 2/3/97.
(3) Includes 525,000 shares held by the Cohen Term Trust U/A dated 2/3/97.
(4) Includes 112,000 shares which may be purchased by Mr. Olson upon
exercise of a currently exercisable option.
(5) Includes 2,000 shares which may be purchased by Mr. Levy upon exercise
of a currently exercisable option.
(6) Includes 2,000 shares which may be purchased by Mr. Levin upon exercise
of a currently exercisable option.
(7) Includes 2,000 shares which may be purchased by Mr. Lupient upon
exercise of a currently exercisable option.
(8) Includes 2,000 shares which may be purchased by Mr. Franchot upon
exercise of a currently exercisable option.
(9) Includes 1,500 shares which may be purchased by Mr. Madison upon
exercise of a currently exercisable option.
ELECTION OF DIRECTORS
(Proposals #1 and #2)
The Bylaws of the Company provide that the number of directors shall be
the number set by the shareholders, which shall be not less than one. The Board
of Directors unanimously recommends that the number of directors be set at seven
and that seven directors be elected. Unless otherwise instructed, the Proxies
will be so voted.
Under applicable Minnesota law, approval of the proposal to set the
number of directors at seven and the election of the nominees to the Board of
Directors require the affirmative vote of the holders of the greater of (1) a
majority of the voting power of the shares represented in person or by proxy at
the Annual Meeting with authority to vote on such matter, or (2) a majority of
the voting power of the minimum number of shares that would constitute a quorum
for the transaction of business at the Annual Meeting.
In the absence of other instruction, the Proxies will be voted for each
of the individuals listed below. If elected, such individuals shall serve until
the next annual meeting of shareholders and until their successors shall be duly
elected and shall qualify. All of the nominees are members of the present Board
of Directors. If, prior to the 1997 Annual Meeting of Shareholders, it should
become known that any one of the following individuals will be unable to serve
as a director after the 1997 Annual Meeting by reason of death, incapacity or
other unexpected occurrence, the Proxies will be voted for such substitute
nominee(s) as is selected by the Board of Directors. Alternatively, the Proxies
may, at the Board's discretion, be voted for such fewer number of nominees as
results from such death, incapacity or other unexpected occurrence. The Board of
Directors has no reason to believe that any of the following nominees will be
unable to serve.
BUSINESS EXPERIENCE OF THE DIRECTOR NOMINEES
RICK N. DIAMOND is co-founder of the Company and has served as the
Chief Executive Officer and a director of the Company since its inception in
1987. Mr. Diamond holds a B.A. degree from the University of Wisconsin and J.D.
degree from Washington University in St. Louis, Missouri. Prior to and since
founding the Company, he has been active in community and business affairs.
GARY B. COHEN is co-founder of the Company and has served as the
Company's President and as a director since its inception in 1987. Mr. Cohen
holds a B.S. degree from the University of Minnesota. Prior to and since
founding the Company, he has been active in community and business affairs.
SEYMOUR LEVY has served as President of Sy Levy & Associates, Inc., a
management and organizational consulting firm since 1974.
DOUGLAS W. FRANCHOT has served as President of Wood, Franchot Inc., an
executive search consulting company since August 1985.
PHILLIP T. LEVIN has served as a director and officer of Metacom, a
distributor of audio cassettes, since he co-founded it in 1970. Mr. Levin has
also served as Chairman of the Board of Directors of Zomax Optical Media, Inc.,
a manufacturer of compact discs, since April 1996.
JAMES W. LUPIENT has served as Chief Executive Officer of Lupient
Automotive Group, which owns and operates twenty-three automobile franchises in
sixteen locations in Minnesota and Wisconsin, since January 1986. Mr. Lupient
serves on the Board of Directors of the Greater Minneapolis Chamber of Commerce,
the Better Business Bureau, North Memorial Medical Center, the St. Louis Park
Rotary Foundation and Firstar Bank.
THOMAS F. MADISON has served as Chairman of Communications Holdings,
Inc., a distributor of communication equipment since December 1996. Mr. Madison
has served as President and CEO of MLM Partners, a venture capital firm since
January 1993. From February 1994 to September 1994, Mr. Madison served as Vice
Chair and Office of the CEO of Minnesota Mutual Insurance. From July 1988 to
December 1992, Mr. Madison served as President - US WEST Communications Markets.
Current Positions with the Company
Name and Age and Principal Occupations and other Director
of Director Information for the Past Five Years Since
- ------------ ----------------------------------- --------
Rick N. Diamond Chairman of the Board, Chief Executive 1987
Officer and Secretary of the Company since
1987.
Gary B. Cohen President and Director of the Company since 1987
1987.
Seymour Levy Director 1996
Douglas W. Franchot Director 1996
Phillip T. Levin Director 1996
James W. Lupient Director 1996
Thomas F. Madison Director 1996
BOARD AND COMMITTEE MEETINGS
Subsequent to its Initial Public Offering on October 21, 1996, the
Board of Directors held one formal meeting. The Company's Board of Directors has
two standing committees, the Audit Committee and the Compensation Committee.
The Audit Committee was formed on December 3, 1996, and the members are
James W. Lupient, Thomas F. Madison and Douglas W. Franchot. This committee
reviews the selection and work of the Company's independent auditors and the
adequacy of internal controls for compliance with corporate policies and
directives. The Audit Committee did not meet during 1996.
The Compensation Committee was formed on December 3, 1996, and the
members are Seymour Levy, Phillip T. Levin and Douglas W. Franchot. This
committee will recommend to the Board of Directors from time to time the
salaries to be paid to executive officers of the Company and any plan for
additional compensation it deems appropriate. In addition, this committee is
vested with the same authority as the Board of Directors with respect to the
granting of options and the administration of the Company's 1996 Stock Option
Plan. The Compensation Committee did not meet during 1996.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation paid or accrued during each of the Company's last two fiscal years
to the Chief Executive Officer, and the two other most highly compensated
executive officers of the company whose salary and bonus exceeded $100,000 in
the last fiscal year. No other executive officer's total annual salary and bonus
exceeded $100,000 based on salary and bonus earned during fiscal year 1996.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------
Awards Payouts
----------------------------------
Annual Compensation Restricted LTIP
Name and Principal Fiscal ---------------------------------- Stock Payouts
Position Year Salary ($) Bonus ($) Other ($) Awards ($) Options# ($)
- ------------------- ------ ---------- --------- --------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Rick N. Diamond, 1996 158,333 -- 17,935(1) -- -- --
Chief Executive 1995 115,625 -- 12,415(2) -- -- --
Officer
Gary B. Cohen, 1996 158,333 -- 19,672(1) -- -- --
President 1995 115,625 -- 7,447(2) -- -- --
Dana Olson 1996 87,575 19,485 -- -- 140,000 --
1995 78,875 -- -- -- --
</TABLE>
(1) Other compensation reported represents (a) the premiums paid by the
company for life insurance for the benefit of such officer (b) value of
personal use portion of company provided automobile (c) and other
miscellaneous income. The dollar value of each such benefit for the
year ended December 31, 1996 is: R. Diamond (a) $11,545, (b) $2,340,
(c) $4,050; G. Cohen (a) $10,960, (b) $8,712, (c) $0; D. Olson (a) $0
(b) $0, (c) $0.
(2) Represent premiums paid by the Company for life insurance for the
benefit of such officer.
OPTION GRANTS DURING 1996 FISCAL YEAR
The following table provides information regarding stock options
granted during fiscal 1996 to the named executive officers in the Summary
Compensation Table. The Company has not granted any stock appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------------
Percent of Total Exercise or
Options Options granted Base Price Expiration
Name Granted in Fiscal Year Per Share(1) Date
- ---- ---------- ---------------- ------------ ----------
<S> <C> <C> <C> <C>
Rick N. Diamond -0- -- -- --
Gary B. Cohen -0- -- -- --
Dana Olson 112,000(2) 42.1% $4.20 06/29/06
Dana Olson 28,000(3) 10.5% $5.00 10/20/06
</TABLE>
- ------------------
(1) All of these options were granted pursuant to the Company's 1996 Stock
Option Plan.
(2) Option was granted on June 30, 1996 and is exercisable immediately.
(3) Option was granted on October 21, 1996 and becomes exercisable with
respect to 5,600 shares on each of October 21, 1997, 1998, 1999, 2000
and 2001.
OPTION EXERCISES DURING 1996 FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table provides information as to options exercised by the
named executive officer in the Summary Compensation Table during fiscal 1996 and
the number and value of options at December 31, 1996. The Company does not have
any outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options at
Options at December 31, 1996(1) December 31, 1996(2)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------------- -------------------------
<S> <C> <C>
Rick N. Diamond -- -- -- --
Gary B. Cohen -- -- -- --
Dana Olson 112,000 28,000 $215,600 $31,500
</TABLE>
- ------------------
(1) Includes options exercisable within 60 days of fiscal year end.
(2) Value is calculated on the basis of the difference between the option
exercise price and $6.125, the closing sale price for the Company's
Common Stock at December 31, 1996 as quoted by the Nasdaq SmallCap
Market, multiplied by the number of shares of Common Stock underlying
the option.
COMPENSATION TO DIRECTORS
Members of the Board of Directors receive a per-meeting payment of
$250. In addition, the Board of Directors has granted to each director a
nonqualified option to purchase 3,000 shares of Common Stock which become
exercisable to the extent of 50% of the shares immediately and 25% of the shares
on the first and second anniversary of the grant.
In addition, Mssrs. Levy, Lupient, Franchot and Levin were granted an
additional 1,000 share option each for past service to the company prior to
being elected directors. These options have the same vesting schedule as the
director options.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Each of Mr. Diamond and Mr. Cohen has entered into an employment
agreement with the Company providing for a two-year term with a minimum annual
base salary of $175,000 and for 24 months' continuation of base salary and
health benefits if employment is terminated by the Company for any reason during
the initial two-year term of the agreement. If employment is terminated by
either party following the initial two-year term, Mr. Diamond and Mr. Cohen will
receive 12 months salary and health benefits. These agreements require each of
Mr. Diamond and Mr. Cohen to vote his shares for election of the other to serve
on the Company's Board of Directors. Each of these agreements includes strict
confidentiality protections and prohibits each of Mr. Diamond and Mr. Cohen from
competing with the Company for a period equal to the period during which the
Company is obligated to make severance payments.
Buy/Sell Agreements. Each of Mr. Diamond and Mr. Cohen has entered into
a Buy/Sell Agreement with the Company and each other. This Agreement gives each
of Mr. Diamond and Mr. Cohen the option to purchase shares of the Company's
stock from the other in the event the other dies, attempts a voluntary sale of
stock, or is subject to a possible involuntary transfer of the stock. In
addition, this Agreement requires each of Mr. Diamond and Mr. Cohen to maintain
life insurance on each other and to use the proceeds thereof to purchase shares
from the decedent's estate at fair market value. The Company has an option to
purchase any shares not purchased by Mr. Diamond or Mr. Cohen, as the case may
be. In all instances, purchase options are at fair market value, as measured by
the average market price of the Company's publicly traded common stock over a
period of 90 days prior to the event giving rise to an option.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
the Company believes that, during fiscal year 1996, all officers, directors and
greater than ten-percent beneficial owners complied with the applicable filing
requirements.
CERTAIN TRANSACTIONS
S CORPORATION DIVIDENDS. Prior to the Company's public offering, the
Company had elected to be treated for federal and certain state income tax
purposes as an S corporation under Subchapter S of the Internal Revenue Code of
1986, as amended (the "Code") and certain comparable state tax laws. As a
result, all of the Company's earnings prior to the public offering had been
attributed for federal and certain state income tax purposes directly to the
Company's shareholders, who were responsible for paying income taxes on these
earnings. Accordingly, the Company has declared and paid, a $250,000
distribution of its retained earnings as of December 31, 1995, to Mr. Diamond
and Mr. Cohen, who were the Company's sole shareholders prior to the public
offering. The Company elected to retain its 1996 earnings and to distribute to
Mr. Diamond and Mr. Cohen only the amount of pre-tax 1996 earnings necessary to
pay the applicable federal and state income taxes allocated to them on these
earnings. The Company declared this distribution of $384,436 based on a presumed
combined federal and state income tax rate of 45% for Mr. Diamond and Mr. Cohen,
and this distribution was paid in December, 1996.
STOCK OPTION VOTING AGREEMENT. Each holder of stock options under the
Company's 1996 Stock Option Plan has entered into a voting agreement which
grants to Mr. Diamond and Mr. Cohen (acting jointly) the voting rights for all
shares acquired pursuant to exercise of such options, until the earlier of five
years from date of exercise or until the holder sells such shares in the public
market. Shares sold into the public market will not thereafter be subject to the
voting agreement.
LOANS FROM SHAREHOLDERS. In December, 1995, each of Mr. Diamond and Mr.
Cohen loaned the Company the sum of $150,000. The Company paid interest on such
loans at the rate of 7.35% per annum and repaid the loans on July 31, 1996.
INDEPENDENT PUBLIC ACCOUNTANT
(Proposal #3)
The Board of Directors recommends that the shareholders ratify the
appointment of Deloitte & Touche, LLP, as independent auditors for the Company
for the year ending December 31, 1997. Deloitte & Touche, LLP served as
independent auditors for the Company's initial public offering of stock.
Representatives of Deloitte & Touche, LLP are expected to be present at the
Annual Meeting and will be given an opportunity to make a statement if so
desired and to respond to appropriate questions. The ratification of Deloitte &
Touche, LLP as independent auditors for the Company requires the affirmative
vote of a majority of the shares represented in person or by proxy at the Annual
Meeting.
APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES
RESERVED UNDER THE COMPANY'S 1996 STOCK OPTION PLAN
(PROPOSAL #4)
AMENDMENT
As of January 31, 1997, the Company had outstanding incentive and
nonqualified options for the purchase of an aggregate of 266,000 shares of the
Company's common stock granted under the Company's 1996 Stock Option Plan. In
order to provide sufficient shares for future options, the Board of Directors
proposes that the number of shares reserved under the 1996 Plan be increased
from 280,000 to 430,000 shares. The Board believes that granting fairly-priced
stock options to employees and directors is an effective means to promote the
future growth and development of the Company. Such options, among other things,
increase employees' and directors' proprietary interest in the Company's success
and enables the Company to attract and retain qualified personnel. The Board
therefore recommends that all shareholders vote in favor of increasing the
number of shares reserved under the 1996 Plan from 280,000 to 430,000.
A general description of the basic features of the 1996 Plan is
presented below, but such description is qualified in its entirety by reference
to the full text of the 1996 Plan, a copy of which may be obtained without
charge upon written request to Steven Kahn, the Company's Vice President and
Chief Financial Officer.
SUMMARY OF 1996 STOCK OPTION PLAN
On June 30, 1996, the Board of Directors adopted and shareholders of
the Company approved the 1996 Stock Option Plan (the "Option Plan") to provide
for the granting of stock options to employees, directors, consultants and
officers of the Company. The Option Plan permits the granting of incentive stock
options meeting the requirements of Section 422 of the Internal Revenue Code of
1986, as amended ("Incentive Options"), and also nonqualified stock options
("Nonqualified Options") which do not meet the requirements of Section 422. The
Company has reserved 280,000 shares of its Common Stock for issuance upon
exercise of options granted under the Option Plan, and at December 31, 1996, the
Company had granted options for 266,000 shares.
Incentive Options may not be granted at exercise prices less than the
fair market value of the Common Stock on the date of grant (or, for an option
granted to a person holding more than 10% of the Company's voting stock, at less
than 110% of fair market value) and the Company does not intend to grant any
Nonqualified Options at an exercise price less than 85% of fair market value on
the date of grant. Generally, an optionee who leaves the Company for reasons
other than death or termination for cause will have three months after
termination within which to exercise his or her options. Options may not be
transferred other than by will or the laws of descent and distribution and may
be exercised only by the optionee during his or her lifetime. Options which have
been granted to employees who terminate employment due to death may be exercised
until the normal expiration date of the option. The term of each option
(including Incentive Options granted to a person holding more than 10% of the
Company's voting stock) is fixed at the date of grant and generally will not
exceed five years. Options may be fully exercisable immediately or may become
exercisable in installments. The exercisability of all outstanding options
automatically accelerates if the Company dissolves, liquidates or merges or
consolidates with another corporation and is not the surviving corporation.
Each holder of stock options under the Option Plan is required to enter
into a voting agreement which grants to Mr. Diamond and Mr. Cohen (acting
jointly) the voting rights for all shares acquired pursuant to exercise of such
options, until the earlier of five years from date of exercise or until the
holder sells such shares in the public market. Shares sold into the public
market will not thereafter be subject to the voting agreement. See "Certain
Transactions".
VOTE REQUIRED. The Board of Directors recommends that the shareholders
approve the amendment to the 1996 Plan to increase the number of shares reserved
for issuance under the 1996 Plan from 280,000 to 430,000. Under applicable
Minnesota law, approval of the amendment to the 1996 Plan requires the
affirmative vote of the holders of the greater of (1) a majority of the voting
power of the shares represented in person or by proxy at the Annual Meeting with
authority to vote on such matter, or (2) a majority of the voting power of the
minimum number of shares that would constitute a quorum for the transaction of
business at the Annual Meeting.
OTHER BUSINESS
Management knows of no other matters to be presented at the 1997 Annual
Meeting. If any other matter properly comes before the 1997 Annual Meeting, the
appointees named in the proxies will vote the proxies in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1998 Annual Meeting must be received by the
Company by November 15, 1997 to be included in the Company's proxy statement and
related proxy for the 1998 Annual Meeting.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1996, including financial statements, accompanies this
Notice of Annual Meeting and Proxy Statement. No portion of the Annual Report is
incorporated herein or is to be considered proxy soliciting material.
FORM 10-KSB
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
BEING SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31,
1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS AND A LIST OF EXHIBITS TO SUCH FORM 10-KSB. THE COMPANY
WILL FURNISH TO ANY SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING
THE FORM 10-KSB UPON THE ADVANCE PAYMENT OF REASONABLE FEES. REQUESTS FOR A COPY
OF THE FORM 10-KSB AND/OR ANY EXHIBIT(S) SHOULD BE DIRECTED TO THE VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER OF ACI TELECENTRICS, INC., 3100 WEST LAKE
STREET, SUITE 300, MINNEAPOLIS, MINNESOTA 55416. YOUR REQUEST MUST CONTAIN A
REPRESENTATION THAT, AS OF MARCH 5, 1997, YOU WERE A BENEFICIAL OWNER OF SHARES
ENTITLED TO VOTE AT THE 1997 ANNUAL MEETING OF SHAREHOLDERS.
BY ORDER OF THE BOARD OF DIRECTORS
Rick N. Diamond, Chief Executive Officer
Gary B. Cohen, President
Dated: March 17, 1997
ACI TELECENTRICS, INC.
PROXY
FOR ANNUAL MEETING TO BE HELD APRIL 30, 1997
The undersigned hereby appoints RICK N. DIAMOND and GARY B. COHEN, and each of
them, with full power of substitution, his or her Proxies to represent and vote,
as designated below, all shares of the Common Stock of ACI Telecentrics, Inc.
registered in the name of the undersigned at the 1997 Annual Meeting of
Shareholders of the Company to be held at the Minneapolis Hilton, 1001 Marquette
Avenue, Minneapolis, Minnesota at 3:30 p.m., on Wednesday, April 30, 1997, and
at any adjournment thereof. The undersigned hereby revokes all proxies
previously granted with respect to such Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH PROPOSAL.
1. Set the number of directors at seven (7).
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Elect Directors.
Nominees: Rick N. Diamond Gary B. Cohen Seymour Levy
Douglas W. Franchot Phillip T. Levin James W. Lupient
Thomas F. Madison
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to
(except those whose names have vote for all nominees
been written on the line below) listed above.
___________________________________________________________________________
3. Ratify the appointment of Deloitte & Touche, LLP as the Company's
independent auditors for the year ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED ON REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
4. Approve an amendment to increase the number of shares reserved under the
Company's 1996 Stock Option Plan from 280,000 to 430,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Other Matters. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL SPECIFICALLY IDENTIFIED ABOVE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Date: ______________________________, 1997
__________________________________________
__________________________________________
PLEASE DATE AND SIGN ABOVE exactly as name
appears at the left, indicating, where
proper, official position or
representative capacity. For stock held in
joint tenancy, each joint owner should
sign.
