<PAGE> 1
COGNITRONICS CORPORATION
3 Corporate Drive
Danbury, Connecticut 06810-4130
Notice of Annual Meeting of Stockholders
May 8, 1997
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Cognitronics
Corporation (the"Company") will be held at the offices of the Company, at 3
Corporate Drive, Danbury, Connecticut on May 8, 1997, at 10:00 a.m., for the
following purposes:
1. To elect seven directors to the Board of Directors.
2. To approve the selection of Ernst & Young LLP as independent auditors for
the Company for the year ending December 31, 1997.
3. To conduct such other business as may properly come before the meeting,
including any adjournment thereof.
Only holders of Common Stock of the Company of record at the close of business
on March 27, 1997 will be entitled to vote at the meeting or any adjournment
thereof.
A proxy statement and proxy are enclosed.
Harold F. Mayer
Secretary
April 4, 1997
YOUR VOTE IS IMPORTANT
You are urged to sign, date and promptly return your proxy in the enclosed
envelope.
<PAGE> 2
COGNITRONICS CORPORATION
April 4, 1997
Annual Meeting of Stockholders
May 8, 1997
PROXY STATEMENT
This proxy statement is furnished to the stockholders of Cognitronics
Corporation (the "Company") in connection with the solicitation of proxies for
the Annual Meeting of Stockholders to be held at the offices of the Company at
3 Corporate Drive, Danbury, Connecticut on May 8, 1997, at 10:00 a.m. and any
adjournment thereof (the "Annual Meeting"). The address of the Company's
principal office is 3 Corporate Drive, Danbury, Connecticut 06810-4130.
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. Execution of the proxy will not affect a stockholder's right to attend
the Annual Meeting and vote in person, and stockholders giving proxies may
revoke them at any time before they are exercised by a written revocation or by
a duly exercised proxy bearing a later date delivered to the Secretary of the
Company. Proxies in the form enclosed, unless previously revoked, will be voted
at the Annual Meeting as set forth in the proxies or, if no choice is indicated,
in favor of each of the proposals outlined below. Should any matter other than
those indicated herein properly come before the Annual Meeting for a vote
(including any adjournment), the persons designated as proxies will vote thereon
in accordance with their best judgment. If any proposal has not received
sufficient votes for approval at the Annual Meeting, management will consider
one or more adjournments to permit additional voting on the proposal.
The owners of Common Stock have all voting rights with respect to
matters to come before the Annual Meeting. Each share of Common Stock is
entitled to one vote. At the close of business on March 27, 1997, there were
outstanding and entitled to vote 3,485,633 shares of Common Stock. Only
holders of Common Stock of record at the close of business on March 27, 1997
will be entitled to vote at the Annual Meeting.
Security Ownership
The following table sets forth information as to ownership of the Common
Stock of the Company as of March 1, 1997 with respect to (i) current
directors and nominees for directors of the Company; (ii) those executive
officers listed on the Summary Compensation Table; (iii) all current directors
and officers as a group; and (iv) beneficial owners of more than 5%.
<PAGE> 3
Shares Percent of
Name of Beneficially Shares
Beneficial Owner Owned Outstanding
---------------- ------------ -----------
Edward S. Davis............................ 5,626(c) (a)
Brian J. Kelley............................ 240,942(b) 6.9%
Jack Meehan................................ 1,831(c) (a)
William A. Merritt......................... 4,871(c) (a)
Timothy P. Murphy.......................... 5,701(c) (a)
David H. Shepard........................... 3,714(d) (a)
Roy A. Strutt.............................. 117,017(b) 3.4%
Kenneth G. Brix............................ 47,532(b) 1.4%
Michael N. Keefe........................... 49,530(b)(e) 1.4%
Garrett Sullivan........................... 55,939(b) 1.6%
All current directors and officers as a
group, including those listed above,
consisting of 12 persons................... 603,693(b)(c)(f) 17.3%
(a) The percentage of shares beneficially owned does not exceed one percent.
(b) Of the shares of Common Stock shown above as beneficially owned, the number
of shares with respect to which the following persons had a right to
acquire beneficial ownership within 60 days were: Brian J. Kelly -152,823,
Roy A. Strutt - 41,485, Kenneth G. Brix -21,532, Michael N. Keefe - 21,214,
Garrett Sullivan - 25,810 and all current directors and officers as a
group - 278,387. Other than shares as to which he had a right to acquire
beneficial ownership, or as noted below, each person held sole voting and
sole investment power with respect to the shares shown above.
(c) Does not include deferred compensation in the form of deferred shares of
Common Stock held on the books and records of the Company in the following
amounts: Edward S. Davis - 7,642 shares, Jack Meehan - 7,642 shares,
William A. Merritt - 3,881 shares, Timothy P. Murphy - 7,642 shares and
all current officers and directors as a group - 26,807 shares.
(d) With respect to 2,965 of the shares, voting and investment power is shared
with Mr. Shepard's spouse.
(e) With respect to 2,015 of the shares, voting and investment power is shared
with Mr. Keefe's spouse.
(f) With respect to 15,454 of the shares, voting and investment power is shared
with the spouses of the beneficial owners.
1. ELECTION OF DIRECTORS
At the Annual Meeting, seven directors are to be elected, to serve for the
ensuing year and until their respective successors are elected and qualified.
Proxies in the accompanying form will be voted for the election of the nominees
listed below unless instructions are given on the proxy to withhold authority to
vote for one or more of the nominees. In the event that one or more of such
persons becomes unavailable for election as a director, which is not
<PAGE> 4
anticipated, the shares represented by the accompanying proxy will be voted for
one or more substitutes approved by management, or the size of the Board of
Directors will be reduced.
Information Concerning Nominees
The following table sets forth with respect to each nominee: (1) his name and
age, all positions and offices with the Company currently held by him, and his
principal occupation over the last five years (including other directorships and
business experience) and (2) the period during which he has served as a director
of the Company.
Name, Age, Positions, Principal Occupation, Director
Directorships and Business Experience Since
------------------------------------------- --------
Edward S. Davis, 65, is a partner with the New York law firm of 1981
Hughes Hubbard & Reed LLP. He is a director of Hillenbrand
Industries, Inc.
Brian J. Kelley, 45, has been President and Chief Executive 1994
Officer of the Company since January 1994. Prior to that he
was Executive Vice President of TIE/Communications, Inc. from
1991 to 1994, President of CTG, Inc., a subsidiary of
TIE/Canada, Inc. from 1990 to 1991 and President of TIE/
National Accounts, Inc. from 1986 to 1990.
Jack Meehan, 47, has been President and Chief Executive Officer 1991
of Aztec East Inc. since 1983.
William A. Merritt, 60, has been President of Integrated 1994
Communications Systems, Corp. since 1992 and is also Vice
President and General Counsel of Seaboard Properties, Inc.
He was President of Wiltel Communications Systems, Inc. from
1990 to 1992, prior to which he was Executive Vice President
of TIE/Communications, Inc. for more than five years. He is
a director of The Treasurers Fund, Inc.
Timothy P. Murphy, 69, was Vice President, Investor Relations and 1985
Financial Administration of GTE Corporation from 1987 to 1992,
Vice President, Financial Administration from 1984 to 1986 and
Vice President and Controller from 1976 to 1984.
David H. Shepard, 73, was Chairman of the Board of the Company 1962
from 1987 to 1992 and also from 1978 to 1984. He was Senior
Vice President and Chief Scientific Officer of the Company
from 1990 through 1991. He was Chief Executive Officer from
1984 to 1989. He was President from 1984 through 1986 and
also from 1962 to 1978. He has been Chairman of Cognitronics
Imaging Systems, Inc. since 1994 and was President from 1992
to 1994.
Roy A. Strutt, 40, has been Vice President, European Operations 1995
of the Company since July 1994. Since 1992, he has been
Managing Director of Dacon Electronics Plc, which was acquired
by the Company in November 1992. He was Director of Sales and
Operations at Dacon Electronics Plc from 1990 to 1992, prior
<PAGE> 5
to which he was Managing Director of Automatic Answering Ltd.
for four years.
The foregoing nominees are all members of the Board of Directors and each was
elected at the 1996 Annual Meeting of Stockholders.
Voting Procedure
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum at the
Annual Meeting. To be elected, a nominee must receive the affirmative vote
of the holders of a plurality of the outstanding shares of Common Stock entitled
to vote and represented at the Annual Meeting. Shares represented at the
meeting by proxy which are not voted because the stockholder has elected to
abstain or has withheld authority will be counted in determining the presence of
a quorum but will not be counted as for the election of the director or
directors. Shares represented at the meeting by proxy for which the proxy card
has been left blank will be counted as for the election of each director.
Executive Compensation
The following tables and notes set forth the compensation paid or
accrued by the Company during the fiscal years ended December 31, 1996, 1995 and
1994 to its five most highly compensated executive officers whose aggregate cash
compensation exceeded $100,000 for services rendered to the Company in 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation Awards
-------------------- --------------------
(a) (b) (c) (d) (e) (f) (g)
Restricted Options/ All Other
Salary Bonus Stock SARs Comp.
Name and Principal Position Year $ $(1) $(2) # $(3)
- --------------------------- ---- ------ ----- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brian J. Kelley 1996 205,769 62,330 22,283 3,963
President and Chief Executive Officer 1995 200,000 85,000 127,500 2,838
1994 188,462 48,750 243,419 1,804
Roy A. Strutt 1996 126,980 81,473 10,000 12,545
Vice President, European Operations 1995 122,548 100,000 54,188 10,579
and Managing Director, Dacon 1994 110,349 19,851 32,000 10,238
Electronics Plc
Kenneth G. Brix 1996 120,112 14,750 9,032 2,347
Vice President, Sales 1995 121,811 20,000 54,188 833
1994 89,267 14,625 21,538 1,071
Michael N. Keefe 1996 93,669 22,000 8,714 2,288
Vice President, Engineering 1995 86,100 30,000 54,188 833
1994 74,100 14,625 21,333 1,441
Garrett Sullivan 1996 94,433 18,500 8,810 2,428
Treasurer and Chief Financial Officer 1995 90,250 24,000 54,188 1,895
1994 90,250 14,625 26,124 1,765
</TABLE>
<PAGE> 6
(1) In 1994, these amounts represent the fair market value of a one-time stock
bonus, except that the amount reported for Mr. Strutt also includes a cash
bonus of $5,226.
(2) On June 30, 1995, the Compensation Committee awarded restricted shares of
Common Stock under the terms of the Restricted Stock Plan, as follows: Mr.
Kelley - 40,000 shares and Messrs Strutt, Brix, Keefe and Sullivan - 17,000
shares each. The value of the shares on the award date is reflected in the
table above. The shares vest 20% annually beginning June 30, 1997, subject
to accelerated vesting if established performance-based targets are
achieved in the years ending December 31, 1995, 1996, 1997 and 1998,
provided the officer remains employed by the Company until the vesting date
(except that if the officer is terminated prior to the vesting date by
reason of a change in control, all restricted shares shall become vested
immediately). Dividends will be paid on the restricted shares. Upon the
achievement of certain established targets for the year ended December 31,
1995, shares vested on that date, as follows: Mr. Kelley - 12,000 shares
and Messrs. Strutt, Brix, Keefe and Sullivan - 5,100 shares each. No
shares vested in 1996. The number of shares and value of the aggregate
restricted stock holdings at December 31, 1996 are: Mr. Kelley - 28,000
shares, $98,000 and Messrs. Strutt, Brix, Keefe and Sullivan - each 11,900
shares, $41,650.
(3) These amounts represent (a) the Company's matching contributions up to 1.5%
of eligible compensation to the Company's 401(k) Retirement Plan, (b)
pension contributions and (c) term life insurance premiums paid by the
Company for the benefit of the officers' beneficiaries, in the following
amounts: Mr. Kelley $2,375 in matching contributions and $1,588 in
insurance premiums, Mr. Strutt $12,545 in pension contributions, Mr. Brix
$1,442 in matching contributions and $905 in insurance premiums, Mr. Keefe
$1,590 in matching contributions and $698 in insurance premiums and Mr.
Sullivan $1,646 in matching contributions and $782 in insurance premiums.
There are no cash values associated with the term life insurance
<PAGE> 7
Option Grants in 1996
<TABLE>
<CAPTIONS> Potential Realized Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
------------------------------------------------------------ ----------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
% of Total Market
Options Price on
Granted to Exercise Date of
Options Employees Price Grant Expiration
Name Granted (#) in 1996 ($/Sh) ($/Sh) Date 0%($) 5%($) 10%($)
- --------------- ----------- ---------- --------- --------- ---------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brian J. Kelley 20,000(1) 15.7% 3.63 12/16/01 0 20,030 44,262
2,823(2) 2.2% 3.72 4.38 9/30/97 1,849 2,467 3,084
Roy A. Strutt 10,000(1) 7.8% 3.63 12/16/01 0 10,015 22,131
Kenneth G.Brix 7,500(1) 5.9% 3.63 12/16/01 0 7,511 16,598
1,532(2) 1.2% 3.72 4.38 9/30/97 1,003 1,339 1,674
Michael N.Keefe 7,500(1) 5.9% 3.63 12/16/01 0 7,511 16,598
1,214(2) 1.0% 3.72 4.38 9/30/97 795 1,061 1,326
Garrett Sullivan 7,500(1) 5.9% 3.63 12/16/01 0 7,511 16,598
1,310(2) 1.0% 3.72 4.38 9/30/97 858 1,145 1,431
</TABLE>
(1) These options were granted under the Company's 1990 Stock Option Plan at an
exercise price equal to the closing market price on the date of grant.
Normally, options are granted in connection with the review of annual
compensation; however, the Compensation Committee may grant options at
other date at other dates at its discretion.
(2) These options were grante under the Company's 1967 Employee Stock Purchase
Plan and they expire one year after date of grant.
<PAGE> 8
Aggregate Option Exercises in 1996 and 1996 Year-end Options Values
(a) (b) (c) (d) (e)
- --------------------- ------------ ----------- ------------- ------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Value Year-end (#) Year-end ($)
Acquired on Realized on Exercisable/ Exercisable/
Name Exercise (#) Exercise ($) Unexercisable Unexercisable
Brian J. Kelley . . . 3,419 7,385 102,828 74,879
69,995 37,434
Roy A. Strutt . . . . 21,334 16,001
20,666 8,000
Kenneth G. Brix . . . 8,198 13,334
13,334 6,666
Michael N. Keefe . . 1,333 3,213 14,548 10,001
14,166 5,000
Garrett Sullivan . . 1,624 3,508 9,476 6,125
16,334 12,251
Pension Plans
In 1977, the Company adopted a non-contributory, defined benefit pension plan
covering substantially all employees in the United States. The Company's policy
is to fund accrued pension costs, which include normal costs and amortization of
the unfunded actuarial liability over twenty years.
In 1994, the Company amended the pension plan to eliminate future benefit
accruals after June 30, 1994. Accordingly, new employees are not eligible to
participate in the plan and the accrued pension benefit of earlier participants
will remain at the level earned based on service through June 30, 1994. At
January 1, 1996, the accrued annual pension benefits payable upon the retirement
of the officers identified in the Summary Compensation Table were: Brian J.
Kelley - $0; Michael N. Keefe - $6,319; Roy A. Strutt - $0; Garrett Sullivan -
$4,623; and Kenneth G. Brix - $0.
In 1991, the Company adopted a Supplemental Pension Plan for Officers. All
officers of the Company may participate in the plan providing they have been
employed on a full-time basis by the Company as an officer for at least ten
years immediately preceding their retirement. All benefits payable under the
plan are unfunded obligations of the Company and are to be made, as due, from
the general funds of the Company. In 1994, the Company terminated the plan
effective June 30, 1996; accordingly, officers who retire after that date will
not be entitled to receive benefits under the plan. None of the officers
identified in the Summary Compensation Table are eligible to receive benefits
under the plan upon retirement.
Compensation of Directors
Directors who were not employees of the Company were entitled to payment of
(a) an annual fee of $3,000 and (b) $1,000 (maximum $5,000 per year) for each
Board meeting attended, of which there were four during 1996, and for each
meeting of a committee of the Board not held in conjunction with a Board
meeting, of which there was one in 1996. Directors may voluntarily defer the
<PAGE> 9
receipt of such fees to a future year. Fees may be paid in cash or an equivalent
value in shares of Common Stock of the Company. Directors are also entitled to
reimbursement of reasonable travel expenses.
Compensation Committee Interlock and Insider Participation
The Compensation Committee is composed of Messrs. Meehan, Merritt and Murphy.
In addition, Mr Davis was a member of the Compensation Committee until September
25, 1996. Mr. Davis is a partner in the law firm of Hughes Hubbard & Reed,
which serves as counsel to the Company.
Report of the Compensation Committee
The Compensation Committee (the "Committee") of the Board of Directors of the
Company under the direction of the Board of Directors have prepared the
following report for inclusion in this Proxy Statement. The information
provided in the report is in response to requirements adopted by the Securities
and Exchange Commission for reporting compensation matters to the Company's
stockholders.
The Committee annually reviews the performance contributions of the officers
of the Company (including the Chief Executive Officer) and makes adjustments to
all forms of compensation to those officers. In this capacity the Committee has
oversight capacity, reviews the structure and cost effectiveness and sets
performance objectives for the Company's various compensation programs. The
Committee also administers all compensation plans of the Company payable to
employees in securities of the Company. The Committee endorses the position
that stock ownership by management is beneficial in aligning management's and
stockholders' interests in the enhancement of stockholder value and has
increasingly used these elements in the Company's compensation packages for its
executive officers.
Compensation Philosophy
The Company's compensation programs are designed to serve the Company's goals
of long-term growth and to help achieve the Company's business objectives. The
Company seeks to integrate all pay programs with the Company's annual and long-
term business objectives and strategy and focus executive behavior on the
fulfillment of those objectives.
To that end the Company follows certain principles in its compensation of
executives:
The Company pays competitively.
The Company is committed to providing a pay program that helps attract,
motivate and retain the best people in the industry. To ensure that pay
remains competitive, the Company compares its pay practices with those
of comparable companies.
The Company pays for relative sustained performance.
Executive officers are rewarded based upon corporate performance and
individual performance. Corporate performance is evaluated by reviewing
the extent to which strategic and business plan goals are met, including
such factors as operating profit, performance relative to competitors
and timely new product introductions. Individual performance is
evaluated by reviewing organizational and management development
progress and the degree to which teamwork and Company values are
<PAGE> 10
fostered.
The Company seeks fairness in the administration of pay.
The Company applies its compensation philosophy Company-wide. The
Company tries to achieve a balance of the compensation paid to a
particular individual and the compensation paid to other executives
inside the Company, at its subsidiaries and at comparable companies.
To serve these objectives and maintain these principles the executive
compensation program of the Company is comprised of several elements, including
base salary, a cash or stock bonus, stock option, restricted stock and stock
purchase plans as well as certain welfare and retirement benefits.
By: COMPENSATION COMMITTEE
Jack Meehan
William A. Merritt
Timothy P. Murphy
Performance Graph
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the S&P 500 Index and the Media
General Communications Industry Group Index (the "MG Industry Group") for the
five years ended December 31, 1996.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
Cognitronics MG Industry S&P 500
Group
1991 100 100 100
1992 285 116 108
1993 71 149 118
1994 35 134 120
1995 111 170 165
1996 58 171 203
Other Information Concerning the Board or Its Committees
The Company's Board of Directors has four Committees - Audit, Compensation,
Executive and Nominating. The Audit Committee, of which Messrs. Davis, Meehan,
Merritt and Murphy are members, meets with the independent auditors and reviews
and reports to the Board of Directors on the scope and results of audits. The
Compensation Committee, of which Messrs. Meehan, Merritt and Murphy are members,
is charged with reviewing officers' compensation and administers the Company's
1967 Employee Stock Purchase Plan, 1990 Stock Option Plan and Restricted Stock
Plan. The Executive Committee, of which Messrs. Davis, Kelley and Murphy are
members, is authorized to consider and take action on matters in the absence of
a full Board of Directors meeting. The Nominating Committee is charged with
considering all nominations (including nominations by stockholders) to the Board
<PAGE> 11
of Directors of the Company. During 1996, the Committees met as follows: Audit
- - twice, Compensation - five times and Nominating - once; the Executive
Committee did not meet in 1996.
During 1996, the Board met four times, and each Director of the Company
attended 75% or more of the total number of meetings of the Board held during
the year and of the Committees of the Board on which he served.
Certain Relationships and Related Transactions
Indemnity Agreements between the Company and individual officers and
directors have been executed to allow those officers and directors to benefit
from the 1986 amendments to New York's indemnification statute. In accordance
with the provisions of these Indemnity Agreements, the Company has agreed,
subject to limitations, to indemnify and pay the reasonable expenses of officers
and directors adjudicated liable in any civil, criminal or other action or
proceeding, including any derivative action, for the acts or decisions made by
them in good faith while performing services for the Company. Such
indemnification would be made by the Company only if authorized by a court, by
the Board of Directors or by the stockholders, as specified in the Indemnity
Agreements, and any expenses or other amounts paid by way of indemnification,
otherwise than by court order or action of the stockholders, would be reported
to stockholders as provided by law. No indemnification by the Company would be
made to or on behalf of any officer or director if a judgment or other final
adjudication adverse to such officer or director established that his acts were
committed in bad faith or were the result of active and deliberate dishonesty
and were material to the cause of action so adjudicated, or that he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled. The Indemnity Agreements also obligate the Company to advance to
officers and directors funds to pay the reasonable expenses incurred from time
to time before any final determination of their rights to indemnification,
subject to repayment to the extent required by the indemnification terms.
The Company, following stockholder approval, amended its Certificate of
Incorporation in 1988 to limit the personal liability of directors to the
Company or its stockholders for certain breaches of duty as directors, as
permitted by New York law.
In October 1989, the Company purchased Directors' and Officers' Liability
Insurance covering directors and officers for amounts up to $3 million, which
was increased to $5 million in October 1990 and to $7.5 million in October 1992
and decreased to $3 million in December 1993.
The Company entered into an Employment Contract in January 1990 with David
H. Shepard, a director, under which Mr. Shepard was to continue as an officer
until September 1993 and provide consulting services thereafter until age 75.
Mr. Shepard elected to retire on December 31, 1991. In 1996, $25,980 was paid
to Mr. Shepard under the contract. Mr. Shepard is entitled to receive not less
than $27,989 per year for the remainder of his lifetime under the contract.
During 1996 and in the current year, the Company retained the law firm of
Hughes Hubbard & Reed LLP. Edward S. Davis, a director, is a partner of that
firm.
The Company has advanced to officers amounts required to be withheld for
income taxes related to stock awards under its Restricted Stock Plan and stock
bonuses. In connection therewith, during 1996 and at March 1, 1997, Brian J.
Kelley, President and a director, was indebted in the amount of $64,932 to the
Company, which indebtedness bears interest at the prime rate during the period
<PAGE> 12
outstanding.
Except as described above, no director or officer had any material interest
in any material transaction of the Company or any of its subsidiaries during the
period from January 1, 1996 to March 1, 1997 or any such proposed transaction,
nor had any of their associates.
Section 16(a) Beneficial Ownership Reporting Compliance
In accordance with Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors, officers and any person holding more than ten percent of
the Company's Common Stock are required to file reports of ownership and any
changes in ownership with the Securities and Exchange Commission, the American
Stock Exchange and the Company. The Company believes that all of these filing
requirements were satisfied during 1996 by its directors, officers and ten
percent holders, except that Mr. Shepard made late filings of three reports of
beneficial ownership with thirty-five transactions. The late reports were filed
immediately following discovery of the failure to file. In making these
statements, the Company has relied on the written representations of its
directors and officers and copies of reports they have filed with the Securities
and Exchange Commission.
Management recommends a vote FOR the election of the seven nominees to the Board
of Directors.
2. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP have been selected as independent auditors to audit the
Company's financial records for the year ending December 31, 1997, and
management recommends that the selection be approved by the stockholders.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so and
are expected to be available to answer appropriate questions. Ernst & Young LLP
have audited the Company's financial statements since 1962, and management
considers Ernst & Young LLP to be well qualified. Should the holders of a
majority of the shares represented at the Annual Meeting in person or by proxy
not approve the selection of Ernst & Young LLP, the Company will interpret that
vote as an
instruction to seek other auditors. Shares represented at the meeting by proxy
which are not voted because the stockholder has elected to abstain will be
counted in determining the presence of a quorum but will not be counted as for
the selection. Shares represented at the meeting by proxy for which the proxy
cards have been left blank will be counted as for the selection.
Management recommends a vote FOR the approval of the selection of Ernst & Young
LLP as Independent Auditors of the Company.
3. OTHER MATTERS
Proxies will be voted on such other business as may properly come before the
Annual Meeting, although as of the date of this proxy statement the only matters
which management intends to present or knows that others will present at the
meeting or any adjournment thereof are the matters listed in the accompanying
notice of meeting. As to other business, if any, which may properly come before
the meeting, it is intended that proxies in the enclosed form will be voted in
respect thereof in accordance with the judgment of the person or persons voting
such proxies.
<PAGE> 13
The entire cost of soliciting proxies will be borne by the Company. It is
intended to solicit proxies only by mail. To the extent necessary in order to
insure sufficient representation, officers and regular employees of the Company
may request the return of proxies in person, or by telegram or telephone.
Stockholder Proposals for the 1998 Annual Meeting of Stockholders
Any stockholder proposal intended to be presented at the 1998 Annual Meeting
of Stockholders of the Company must be received at the offices of the Company, 3
Corporate Drive, Danbury, Connecticut 06810-4130, on or before 5:00 p.m. on
December 5, 1997 whether or not the proposal is to be included in the Company's
proxy materials relating to the meeting. Any stockholder proposal for
nomination of a person for election to the Board of Directors at the 1998 Annual
Meeting must be so received on or before 5:00 p.m. on January 8, 1998. Timely
receipt of a stockholder proposal satisfies only one of the various requirements
for inclusion of such a proposal in the Company's proxy materials.
By Order of the Board of Directors
Harold F. Mayer
Secretary
Dated: April 4, 1997
<PAGE> 14
COGNITRONICS CORPORATION
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints B.J. Kelley, T.P. Murphy and
D.H. Shepard as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote
as designated on the reverse side all the shares of Common Stock
of Cognitronics Corporation held of record by the undersigned on
March 27, 1997 at the Annual Meeting of Stockholders to be held at
the offices of the Company at 3 Corporate Drive, Danbury,
Connecticut, on May 8, 1997 at 10:00 a.m., and any adjournment
thereof.
This Proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION
IS MADE, THIS PROXY WILL VOTED FOR PROPOSALS 1 AND 2.
COGNITRONICS CORPORATION
P.O. BOX 11257
NEW YORK, NY 10203-0257
(Continued and to be signed on reverse side)
<PAGE> 15
1. ELECTION OF DIRECTORS
FOR all nominees listed below ___
WITHHOLD AUTHORITY to vote for all nominees listed below ___
EXCEPTIONS ___
Nominees: E.S. Davis, B.J. Kelley, J. Meehan, W.A. Merritt, T.P.
Murphy, D.H. Shepard and R.A. Strutt
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, MARK THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT
NOMINEE'S NAME ABOVE.)
2. TO APPROVE THE SELECTION OF ERNST & YOUNG LLP as independent
auditors of the company.
FOR ___ AGAINST ___ ABSTAIN ___
3. In their discretion, the Proxies are authorized to vote such
other business as may properly come before the meeting,
including any adjournment thereof.
Change of Address and or Comments Mark Here ___
Please sign exactly as name appears at left. When shares are held
by joint tenants, each should sign. When signing as attorney, or
executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated: _________________________________, 1996
______________________________________________
Signature
______________________________________________
Signature if held jointly
Votes must be indicated (X) in Black or Blue ink.
Please mark, sign, date and return this Proxy promptly using the
enclosed envelope.
