<PAGE>
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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CHOICETEL COMMUNICATIONS, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- -------------------------------------------------------------------------------
(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:
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2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE>
CHOICETEL COMMUNICATIONS, INC.
9724 10th Avenue North
Plymouth, Minnesota 55441
(612) 544-1260
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 1999
TO THE SHAREHOLDERS OF
CHOICETEL COMMUNICATIONS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Choicetel Communications, Inc., a Minnesota corporation (the "Company"), will
be held on Wednesday, May 25, 1999, at 3:30 p.m. (Minneapolis time), at the
Conference Center in the offices of Robins, Kaplan, Miller & Ciresi L.L.P.,
2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota 55402, for the
following purposes:
1. To elect six directors of the Company for the coming year.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Holders of record of the Company's Common Stock at the close of business
on April 23, 1999 are entitled to notice of and to vote at the Annual Meeting
or any adjournment thereof.
Each of you is invited to attend the Annual Meeting in person if
possible. Whether or not you plan to attend in person, please mark, date and
sign the enclosed proxy, and mail it promptly. A return envelope is enclosed
for your convenience.
By Order of the Board of Directors
Melvin Graf, SECRETARY
May 5, 1999
- -------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN THE PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
<PAGE>
CHOICETEL COMMUNICATIONS, INC.
9724 10th Avenue North
Plymouth, Minnesota 55441
(612) 544-1260
-------------------
PROXY STATEMENT
-------------------
SOLICITATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Choicetel Communications, Inc., a Minnesota corporation (the
"Company"), for use at the Annual Meeting of Shareholders ("Annual Meeting")
to be held on May 25, 1999, and any adjournment thereof. This Proxy Statement
and the accompanying form of proxy are being mailed to shareholders on or
about May 5, 1999.
The expense of the solicitation of proxies for the Annual Meeting,
including the cost of mailing, has been or will be borne by the Company.
Arrangements will be made with brokerage houses and other custodian nominees
and fiduciaries to send proxies and proxy materials to their principals, and
the Company will reimburse them for their expense in so doing. In addition to
solicitation by mail, proxies may be solicited by telephone, telegraph or
personally.
VOTING AND REVOCATION OF PROXY
Only shareholders of record at the close of business on April 23, 1999
(the "Record Date") will be entitled to vote at the Annual Meeting. On the
Record Date, there were 2,915,006 shares of Common Stock outstanding. Holders
of record of the Company's Common Stock on the Record Date are entitled to
notice of and to vote at the Annual Meeting. Each share of Common Stock
entitles the holder thereof to one vote upon each matter to be presented at
the Annual Meeting.
Each proxy returned to the Company will be voted in accordance with the
instructions indicated thereon. If no instructions are indicated, the shares
will be voted FOR the election of the nominees for the Board of Directors
named in this Proxy Statement. While the Board of Directors knows of no other
matters to be presented at the Annual Meeting or any adjournment thereof, all
proxies returned to the Company will be voted on any such matter in
accordance with the judgment of the proxy holders.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by
(a) giving written notice of such revocation to the Secretary of the Company,
(b) giving another written proxy bearing a later date, or (c) attending the
Annual Meeting and voting in person (although attendance at the Annual
Meeting will not in and of itself constitute a revocation of a proxy).
A quorum, consisting of a majority of the shares of Common Stock
entitled to vote at the Annual Meeting, must be present in person or by proxy
before action may be taken at the Annual Meeting. If an executed proxy is
returned and the shareholder has abstained from voting on any matter, the
shares represented by such proxy will be considered present at the meeting
for purposes of determining a quorum and for purposes of calculating the
vote, but will not be considered to have been voted in favor of such matter.
If an executed proxy is returned by a broker holding shares in "street name"
which indicates that the broker does not have discretionary authority as to
certain shares to vote on one or more matters, such shares will be considered
present at the meeting for purposes of determining a quorum, but will not be
considered to be represented at the meeting for purposes of calculating the
vote with respect to such matter.
ELECTION OF DIRECTORS
<PAGE>
(PROPOSAL 1)
The business and affairs of the Company are managed under the direction
of its Board of Directors. Each director is elected for a term of one year or
until his or her successor is elected.
Shareholders will be asked at the Annual Meeting to elect six directors.
The Board has nominated the six individuals named below to serve as directors
of the Company. Unless authority is withheld, all proxies received in
response to this solicitation will be voted FOR the election of the nominees
named below. Each of the nominees named below, except Mr. Johnson, is
currently a director of the Company and has served continuously as a director
since the year indicated. Each of the nominees, except Mr. Johnson, was
elected by the shareholders at the 1998 Annual Meeting. All nominees have
indicated a willingness to serve if elected. If any nominee becomes unable to
serve prior to the Annual Meeting, the proxies received in response to this
solicitation will be voted for a replacement nominee selected in accordance
with the best judgment of the proxy holders named therein.
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITIONS WITH COMPANY AGE SINCE
- ---- ---------------------- --- --------
<S> <C> <C> <C>
Gary S. Kohler Chairman of the Board of Directors 42 1989
Jeffrey R. Paletz President and Director 43 1989
Melvin Graf Executive Vice President, Secretary and a Director 43 1989
Robert A. Hegstrom Director 56 1997
Michael Wigley Director 45 1998
Greg Johnson Director 43 1999
</TABLE>
SHAREHOLDER APPROVAL
The affirmative vote of a plurality of the shares of Common Stock
represented at the Annual Meeting either in person or by proxy, assuming a
quorum is present, is required for the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS AS SET FORTH IN PROPOSAL
1.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
DIRECTORS AND NOMINEES
All of the nominees for election to the Company's Board of Directors are
presently serving as directors of the Company. The following discussion sets
forth certain information concerning the directors and nominees of the
Company.
GARY S. KOHLER is a founder and has served as the Chairman of the Board
of Directors for the Company since its inception in 1989. Mr. Kohler is a
managing director of Second Avenue Capital Management, a money management
company, which he joined in December 1998. Prior to that he served as
President of Kohler Capital Management from October 1997 through November
1998. From July to October 1997, Mr. Kohler was a partner in Tarmachan
Holdings, Inc. From 1984 through June 1997, Mr. Kohler was Vice President and
Portfolio Manager at Okabena Company. Mr. Kohler serves on the boards of
Destron Fearing, Inc., a publicly traded identification products company, and
a number of private companies, including Emerald First Financial, Northwest
Mortgage Services, Made in the Shades, Inc., and Health EZ, Inc. Mr. Kohler
has an M.B.A. degree from Cornell University and a B.A. degree from the
University of Minnesota. Mr. Kohler is the brother of Jack S. Kohler.
JEFFREY R. PALETZ is a founder of the Company, has been a director since
its inception and has been President since 1993, overseeing all operations of
the Company. Prior to founding the Company in 1989, Mr. Paletz was employed
for 13 years at Sportsman's Guide, a mail order retailer, where he oversaw
the computer data operations. Mr. Paletz has a B.S. degree in Business from
the University of Minnesota.
<PAGE>
MELVIN GRAF is a founder of the Company, has been a director since its
inception and has been Executive Vice President and Secretary since 1993,
overseeing all marketing and leasing activities. Mr. Graf served as President
of the Company until 1993. Prior to founding the Company in 1989, Mr. Graf
was President of Network Travel, a Minneapolis travel agency, for five years.
Mr. Graf has a B.S. degree in Business from the University of Minnesota.
ROBERT A. HEGSTROM became a director of the Company in June 1997. In
January 1997, Mr. Hegstrom joined Northwest Services, Inc. as Chairman,
President and Chief Executive Officer. Prior to that, he was a private
investor for two years and, from October 1979 to January 1995, he was
Executive Vice President of Green Tree Financial Corporation. Mr. Hegstrom is
also a director of Beacon Bank.
MICHAEL WIGLEY became a director of the Company in January 1998. Since
1989 Mr. Wigley has been President and Chief Executive Officer of Great
Plains Companies, Inc., a diversified holding company. Mr. Wigley has an
M.B.A. from Harvard Business School, a M.S. from Stanford University and a
B.S. degree from the University of Minnesota. Mr. Wigley serves on the board
of Children's Broadcasting Company, and is a regent of Luther College.
GREG JOHNSON was nominated to become a director of the Company in March
1999. Mr. Johnson has been President of Global Corporation since 1997 and has
worked for Global since 1990. Prior to that, Mr. Johnson was President and
Chief Financial Officer of Simitar Entertainment, Inc. Mr. Johnson has a B.A.
degree from the University of Saint Thomas.
BOARD COMMITTEES AND ACTIONS
During calendar year 1998, the Board of Directors met four times and
each director attended all meetings. The Board of Directors has two standing
committees, a Compensation Committee and an Audit Committee which were
appointed in January, 1998. Each committee met once during 1998.
The Compensation Committee reviews and make recommendations to the Board
of Directors regarding salaries, compensation and benefits of executive
officers of the Company and administers the Company's 1997 Long-Term
Incentive and Stock Option Plan. The Committee members are Robert A.
Hegstrom, Gary S. Kohler and Jeffrey R. Paletz.
The Audit Committee is responsible for recommending the appointment of a
firm of independent public accountants to audit the books and records of the
Company and its subsidiaries, reviews the internal and external financial
reporting of the Company and the scope of the independent audit. The
Committee members are Michael Wigley, Robert A. Hegstrom and Gary S. Kohler.
The Board of Directors acts as the nominating committee. See
"Information Concerning directors and Nominees - Nomination of Directors"
DIRECTOR COMPENSATION
No cash compensation is paid to the Company's directors. Independent,
non-employee directors completing one year on the board (Mr. Hegstrom and Mr.
Wigley) will receive an option to purchase $75,000 of Common Stock, valued as
of the date of grant if re-elected by the shareholders. The options are
pursuant to the Company's 1997 Long-Term Incentive and Stock Option Plan, are
exercisable upon grant and have five-year term and an exercise price equal to
the fair market value of the Common Stock as of the date of grant. No options
will be issued to employee directors for their service as directors.
NOMINATION OF DIRECTORS
The Board of Directors acts as the nominating committee for selecting
the Board's nominees for election as directors. The Board does not intend to
consider nominees recommended by shareholders. Directors of the Company are
elected annually to serve until the next annual meeting of shareholders or
until their successors are duly elected. The Company knows of no arrangements
or understandings between a director or nominee and any other person pursuant
to which he has been selected as a director or nominee. The only family
relationship between any of the nominees, directors or executive officers of
the Company is between Gary S. Kohler and Jack S. Kohler, who are brothers.
EXECUTIVE OFFICERS
<PAGE>
The following discussion sets forth information about the executive
officers of the Company who are not directors.
<TABLE>
<CAPTION>
OFFICER
NAME POSITIONS WITH COMPANY AGE SINCE
- ---- ---------------------- --- -------
<S> <C> <C> <C>
Jack S. Kohler Vice President and Chief Financial Officer 44 1993
</TABLE>
JACK S. KOHLER has been Vice President and Chief Financial Officer of
the Company since 1993. Prior to joining the Company, Mr. Kohler was employed
for 13 years in various management and accounting positions at Cargill, Inc.
Mr. Kohler has a B.S. degree in Accounting from the University of Minnesota.
Mr. Kohler is the brother of Gary S. Kohler.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table and accompanying footnotes set forth certain summary
information, relating to the three years ended December 31, 1998, with
respect to the Company's Chief Executive Officer.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS/SARS(#) COMPENSATIONS
- -------------------- --------------------------------------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey R. Paletz, 1998 $86,398 $ 0 -- -- --
President 1997 77,350 15,476 -- -- --
1996 70,000 10,000 -- -- --
</TABLE>
AGREEMENTS WITH EXECUTIVES
The Company has employment agreements with Jeffrey R. Paletz, Melvin
Graf and Jack S. Kohler effective April 15, 1997 all of which provide for an
initial term expiring in April 1999, with automatic one-year renewals. The
agreements provide an annual base salary of $77,380, $70,000, and $63,600,
respectively and the right to receive additional compensation in the form of
salary, bonus and other benefits as the Board of Directors shall determine in
its sole discretion. The agreements prohibit each officer from competing
against the Company for a period of one year after employment ceases and from
communicating with a Site Provider until six months following expiration of
the Site Agreement. In the event of termination of the officer's employment,
except a termination for cause, the terminated officer is entitled to receive
full compensation and benefits for a six-month period.
BONUS PROGRAM
In 1997, the Company implemented its Incentive Compensation Plan to
provide an opportunity for executive officers and other Company employees to
receive a bonus based on individual and Company performance. The maximum
bonus that may be received by any executive officer is 40% of annual salary.
The bonus opportunity for Jeffrey R. Paletz, the Company's President, depends
on the Company's realizing targeted earnings per share. The bonus
opportunities for other executive officers depend on the success rate for new
installations of payphones and the number of completed acquisitions. The
bonus opportunity for other Company employees is discretionary and not
subject to specific criteria.
<PAGE>
STOCK OPTION PLAN
Under the terms of the Company's 1997 Long-Term Incentive and Stock
Option Plan (the "Stock Option Plan"), all of the directors, officers, other
employees and consultants of the Company are eligible to receive options to
purchase shares of the Company's Common Stock as part of their compensation
package.
The Board of Directors adopted the Stock Option Plan on April 17, 1997,
and the shareholders approved it on April 18, 1997. The Stock Option Plan
provides for the grant both of incentive stock options intended to qualify
for preferential tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended, and nonqualified stock options that do not qualify for
such treatment. The exercise price of incentive stock options must equal or
exceed the fair market value of the Common Stock at the time of grant. The
exercise price of non-qualified stock options must equal or exceed 85% of the
fair market value of the Common Stock at the time of grant. The Stock Option
Plan also provides for grants of stock appreciation rights, restricted stock
awards and performance awards and allows for the grant of restoration options.
The Compensation Committee of the Board of Directors administers the
Stock Option Plan, subject to approval of the Board. A total of 100,000
shares of Common Stock are reserved for issuance under the Stock Option Plan.
Incentive stock options may be granted under the Stock Option Plan only to
full and part-time employees. Directors who are not employees, and
consultants and independent contractors to the Company are eligible to
receive options which do not qualify as incentive stock options, as well as
other awards. In determining the persons to whom options and awards shall be
granted, and the number of shares subject to each, the Board of Directors may
take into account the nature of services rendered to the Company, and such
other factors as the Board of Directors in its discretion shall deem relevant.
The Board of Directors may amend or discontinue the Stock Option Plan at
any time but may not, without shareholder approval, make any revisions or
amendments to the Stock Option Plan that increase the number of shares
subject to the Stock Option Plan, decrease the minimum exercise price, extend
the maximum exercise term, or modify eligibility requirements. The Board of
Directors may not alter or impair any award granted under the Stock Option
Plan without the consent of the holder of the award. The Stock Option Plan
will expire April 15, 2007.
Pursuant to the terms of the Stock Option Plan, appropriate adjustments
to the Stock Option Plan and outstanding options will be made in the event of
changes in the Common Stock through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, or other change in corporate
structure.
<PAGE>
The following table sets forth certain information regarding stock options
granted to the executive officers named in the Summary Compensation Table during
the Company's 1998 fiscal year.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------- POTENTIAL REALIZABLE VALUE
VALUE AT ASSUMED ANNUAL
PERCENT OF TOTAL RATES OF STOCK PRICE
OPTIONS OPTIONS GRANTED EXERCISE APPRECIATION FOR OPTION
NAME GRANTED TO EMPLOYEES IN PRICE EXPIRATION TERM (1)
(#) 1998 ($/SHARE) DATE 5% ($) 10% ($)
------- ---------------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Jeff Paletz 0 0 0 0 0 0
</TABLE>
(1) Represents the potential net realizable value of each grant of options
assuming that the market price of the underlying Common Stock appreciates in
value from fair market value on date of grant to the end of the option period
at the indicated rates.
The following table sets forth certain information regarding the number
and value of unexercised stock options held by the executive officers named
in the Summary Compensation Table as of the end of the Company's fiscal year
ended December 31, 1998
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT YEAR-END (#) AT YEAR-END ($)(1)
SHARES ----------------------- ------------------
ACQUIRED ON VALUE EXERCISABLE / EXERCISABLE /
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Jeff Paletz 0 0 0 0
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions and recommendations regarding compensation paid to the
Company's executive officers in 1998 were made by the Board of Directors,
with employee directors abstaining from voting on his own compensation. In
January 1998 a Compensation Committee was appointed consisting of Robert
Hegstrom and Gary Kohler, each of whom is a non-employee director of the
Company, and Jeffrey R. Paletz, President of the Company.
The Committee is responsible for assuring that compensation for
executives is consistent with the Company's compensation philosophy. The
Committee also administers and makes grants under the Company's stock option
plans with respect to the Company's executive officers.
The Company's executive compensation program is based on a
pay-for-performance philosophy. Under the Company's program, an executive's
compensation consists of three components: base salary, an annual incentive
(bonus) payment, and long-term incentives (principally stock options). Base
salaries generally are set at levels competitive with base salaries for
comparable positions in the marketplace. In addition, base salaries reflect
the executive's individual job responsibilities, his or her sustained
performance in fulfilling those responsibilities and the impact of such
performance on the business results of the Company. Base salaries for
executive officers of the Company are set forth in their respective
employment agreements
The Company's long-term incentives are in the form of stock options to
be granted under the terms of the Stock Option Plan discussed under "Summary
Compensation Table" above. The objectives of these awards is to advance the
longer term interests of the Company and its shareholders, complement
incentives tied to annual performance, and align the interests of executives
more closely with those of
<PAGE>
shareholders. The Company also believes that the entrepreneurial character of
its executives makes the long-term incentives provided by its stock option
program especially significant in the motivation and retention of its
executives.
The Committee believes that the Company's executives are focused on the
attainment of a sustained high rate of growth and profitability for the
benefit of the Company and its shareholders, and that the Company's
compensation program, with its emphasis on performance-based and long-term
incentive compensation, serves to reinforce this focus.
CERTAIN TRANSACTIONS
The Company has an arrangement with Gary S. Kohler, the Company's
Chairman of the Board, pursuant to which Mr. Kohler advises the Company's
management on an as-needed basis. The consulting fees paid to Mr. Kohler for
rendering this service for the year ended December 31, 1998, totaled $34,800.
Currently, the monthly fee paid for Mr. Kohler's consulting services is
$2,400.
It is the Company's policy that it not engage in any material
transactions with officers, directors or beneficial holders of 5% or more of
the Company's Common Stock, or affiliates of such persons, unless the terms
of any such transaction are no less favorable to the Company than those that
could be obtained from unaffiliated third parties and are approved by a
majority of the Company's independent directors who do not have an interest
in the transaction and who have had access, at the Company's expense, to the
Company's or independent legal counsel. Further, the Company will not make
loans to officers and directors, or their affiliates, for the purpose of
purchasing securities from the Company.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of December 31, 1998,
regarding the beneficial ownership of shares of Common Stock of the Company
by each director and executive officer of the Company, by all directors and
executive officers of the Company as a group, and by each shareholder known
by the Company to own beneficially more than five percent (5%) of the
outstanding shares of the Company's Common Stock. Unless otherwise noted,
each person or group identified possesses sole voting and investment power
with respect to such shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) OUTSTANDING SHARES (2)
- ------------------------------------ ---------------------- ----------------------
<S> <C> <C>
Perkins Capital Management, Inc. (3) 217,500 7.5%
730 East Lake Street
Wayzata, MN 55391-1769
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS:
Gary S. Kohler (4)(6).............................. 1,032,784 35.4%
Jeffrey R. Paletz................................. 347,358 11.9%
Melvin Graf (5) 213,334 7.3%
Jack S. Kohler (6)................................. 277,500 9.5%
Robert A. Hegstrom(7).............................. 25,000 .9%
Michael Wigley(7) ................................. 30,000 1.0%
Greg Johnson ................................. ------ ----
All directors, nominees and executive officers as a
group (7 persons) 1,725,976 58.4%
</TABLE>
<PAGE>
(1) Each person has sole voting power and sole dispositive power with
respect to all outstanding shares, except as otherwise noted or disclosed
by the beneficial owners in the Schedule 13G filing described at footnote
3 below.
(2) Based on 2,915,006 shares outstanding at April 23, 1999. Such amount
does not include 270,000 shares of common stock issuable upon exercise of
stock options. Each figure showing the percentage of outstanding shares
owned beneficially has been calculated by treating as outstanding and
owned the shares which could be purchased by the indicated person(s)
within 60 days upon the exercise of existing stock options or warrants.
(3) Reflects information included on Schedule 13G dated February 2, 1999
filed with the Securities and Exchange Commission.
(4) Includes 40,000 shares held by Gary S. Kohler as custodian for the
benefit of his children. Mr. Kohler disclaims beneficial ownership of
such shares.
(5) Included 13,334 shares held by Mr. Graf's spouse. Mr. Graf disclaims
beneficial ownership of such shares.
(6) Includes 200,000 shares currently owned by Gary S. Kohler, who has
granted Jack S. Kohler an option to purchase such shares.
(7) Includes options to acquire 20,000 shares from the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors, executive officers and any persons holding more
than 10% of the outstanding Common Stock of the Company are required to file
with the Securities and Exchange Commission reports concerning their initial
ownership of Common Stock and any subsequent changes in such ownership. The
Company believes that during 1997 the filing requirements were satisfied on a
timely basis by all such persons. In making this disclosure, the Company has
relied solely on written representations of its directors, officers and
beneficial owners of more than 10% of the Common Stock and copies of the
reports they have filed with the Securities and Exchange Commission and
furnished to the Company.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed the firm of Schechter Dokken Kanter
Andrews & Selcer, Ltd., independent public accountants, to audit the
financial statements of the Company and its subsidiaries for the fiscal year
ending December 31, 1999.
A representative of that firm is expected to be present at the Annual
Meeting and will have an opportunity to make a statement if he or she so
desires. The representative is expected to be available to respond to
appropriate questions from shareholders.
PROPOSALS OF SHAREHOLDERS
Any shareholder wishing to have a proposal considered for inclusion in
the Company's proxy solicitation materials for the Annual Meeting of
Shareholders to be held in 2000 must set forth such proposal in writing and
file it with the Secretary of the Company no later than December 31, 1999.
OTHER BUSINESS
At the date of this Proxy Statement, management knows of no other
business that may properly come before the Annual Meeting. However, if any
other matters properly come before the meeting, the persons named in the
enclosed form of proxy will vote the proxies received in response to this
solicitation in accordance with their best judgment on such matters.
FINANCIAL INFORMATION
The Company's 1998 Annual Report to Shareholders for the year ended
December 31, 1998, including consolidated financial statements accompanies
this Proxy Statement. The Annual Report is not to be regarded as proxy
soliciting material or as a communication by means of which any solicitation
is to be made.
Directors By Order of the Board of Directors
<PAGE>
May 5, 1999 Melvin Graf, SECRETARY
<PAGE>
PROXY
CHOICETEL COMMUNICATIONS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 25, 1999
The undersigned, revoking all prior proxies, hereby appoints Jeffrey R.
Paletz and Jack S. Kohler, or either of them, as proxy or proxies, with full
power of substitution and revocation, to vote all shares of Common Stock of
ChoiceTel Communications, Inc. (the "Company") of record in the name of the
undersigned at the close of business on April 23, 1999, at the Annual Meeting
of Shareholders to be held on Wednesday, May 25, 1999, or at any adjournment
thereof, upon the following matters:
1. Election of the following nominees as directors:
GARY S. KOHLER, JEFFREY R. PALETZ, MELVIN GRAF,
ROBERT A. HEGSTROM, GREG JOHNSON, MICHAEL WIGLEY
[_] FOR ALL NOMINEES [_] WITHHOLD FOR ALL NOMINEES
[_] FOR ALL NOMINEES EXCEPT THE FOLLOWING:
(Write the name(s) of the nominee(s) withheld in the space provided
below.)
- ----------------------------------------------------------------------------
(CONTINUED ON OTHER SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
2. In their discretion the Proxies are authorized to vote upon such matters
as may properly come before the meeting.
Please mark, date, sign, and mail this proxy promptly in the enclosed
envelope.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR Proposal 1. The Board of Directors recommends a vote FOR Proposal 1.
Please sign your name exactly as it appears below. In the case of shares
owned in joint tenancy or as tenants in common, all should sign. Fiduciaries
should indicate their title and authority.
Dated: ____________________________, 1999.
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Signature(s)
