December 3, 1998
Dear Shareholder:
As you are probably aware by now, a dissident group headed by Walter Anderson,
is seeking to gain control of Total-Tel's Board of Directors at the December
10th Annual Meeting. YOUR BOARD OF DIRECTORS URGES YOU TO SIGN MANAGEMENT'S
WHITE PROXY CARD AND DISREGARD ANY BLUE PROXY CARD YOU MAY HAVE RECEIVED.
In the Dissident's most recent letter to shareholders, Mr. Anderson and his
attack dogs resort to a campaign of mud slinging and unwarranted innuendo
against Total-Tel's management. We will not stoop to this level of unproductive
accusations while there are more important issues at hand.
Total-Tel's management is committed to running the Company in the best interest
of the shareholders as evidenced by the following:
Revenues have increased over 1000% from 1993 through 1998 to well in excess
of $125 million.
Our 1998 net sales, and gross margins as reported to date have reflected a
continued increase.
Since January 1996, Total-Tel's stock has outpaced the NASDAQ Composite as
well as its peer group by more than 400%.
$1000 invested in January 1993 would be worth approximately $15,000 today.
The Company's success has not gone unnoticed by the likes of Money Magazine, The
New Jersey Business Technology Council and most importantly, by you, the
ultimate owners of Total-Tel.
The Dissidents contend that the Company's stock price "continues to languish
while the great bull market roars on." A recent overview of the industry
prepared for the Company indicates that the market prices for stocks of
comparable publicly traded long distance providers are universally lower than
their 52-week highs, most having fallen far more than the Company's stock. One
of Mr. Anderson's companies, U.S. Wats, is similarly off, currently trading at
less than $1.75 per share. Interestingly, Esprit Telecom Group, PLC, a company
which overwhelmingly rejected Mr. Anderson as part of its Board, suffered an
even greater drop in its stock price from its July 1998 high and has only
started to recover from its October 1998 low following Mr. Anderson's removal by
Esprit's Board as confirmed by its shareholders.
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Mr. Anderson's disruptive campaign has caused Total-Tel's management to
unnecessarily spend time and shareholder money addressing his charges rather
than concentrating on running the business. Notwithstanding the disruptions, the
Company has continued to attract highly qualified and experienced
telecommunications industry operating personnel. The Company's record of
compliance in a highly regulated industry is superb - a testament to the
disciplines enforced at all levels of operations and to the competence of our
chosen professional advisors. For those of you who attend the Meeting, it will
be my privilege to introduce you to our management team and professionals.
I urge you to VOTE MANAGEMENT'S WHITE PROXY CARD TODAY and disregard Mr.
Anderson's blue proxy card. If you have any questions or concerns please do not
hesitate to call me at (973) 785-7222. With your help, we can put this behind us
and get back to business.
On Behalf of the Board of Directors,
Sincerely,
Warren H. Feldman
Chairman and
Chief Executive Officer
IMPORTANT VOTING INFORMATION
1. TO SUPPORT MANAGEMENT'S SLATE OF DIRECTORS PLEASE SIGN, DATE AND RETURN THE
WHITE PROXY CARD TODAY IN THE ENCLOSED RETURN ENVELOPE.
2. If your shares are held in your own name, please sign, date and return the
enclosed WHITE proxy card in the postage paid envelope provided with this
letter. If your shares are held in the name of a brokerage firm, bank or
other institution, please sign, date and return the WHITE proxy card to such
brokerage firm, bank or other institution in the envelope provided by that
firm.
3. Even if you have already sent in a blue proxy it is not too late change your
vote. Voting your WHITE proxy card today revokes any blue proxy cards you may
have previously returned.
If you have any questions or require any assistance in voting your shares,
please call toll free:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
1-800-223-2064
