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
Filed by the registrant | |
Filed by a party other than the registrant |X|
Check the appropriate box:
|X| Preliminary proxy statement
| | Definitive proxy statement
| | Definitive additional materials
| | Soliciting material pursuant to Rule 14a-11(c) or
Rule 14(a)-12
AUTOINFO, INC.
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(Name of Registrant as Specified in Charter)
AUTOINFO STOCKHOLDERS COMMITTEE
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(Name of Person(s) filing Proxy Statement)
Payment of filing fee (check the appropriate box):
| | $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
|X| $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
| | 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:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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(4) Proposed maximum aggregate value of transaction:
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1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
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|X| 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:
$500
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(2) Form, schedule or registration statement no.:
Schedule 14A
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(3) Filing party:
AutoInfo Stockholders Committee
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(4) Date filed:
June 1, 1995
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PRELIMINARY MATERIALS - FOR SEC USE ONLY
CONSENT STATEMENT TO STOCKHOLDERS
OF
AUTOINFO, INC.
BY
THE AUTOINFO STOCKHOLDERS COMMITTEE
TO THE STOCKHOLDERS OF AUTOINFO, INC.
THIS CONSENT STATEMENT is hereby given and furnished to you by the
AutoInfo Stockholders Committee (the "AutoInfo Stockholders Committee") in
connection with the solicitation by the AutoInfo Stockholders Committee of
written consents from the holders of common stock, $.01 par value (the "Common
Stock") of AutoInfo, Inc. (the "Company") to take action without a stockholders'
meeting as permitted by the By-laws of the Company and the Delaware General
Corporation Law.
For the reasons described below, the AutoInfo Stockholders Committee is
asking holders of the Common Stock to consent to the following proposed
corporate actions:
(1) Remove all of the incumbent members of the Company's Board of
Directors (Scott Zecher, Jason Bacher, Robert Fagenson, Andrew Gaspar, Howard
Nusbaum and Jerome Stengel) without cause, including the removal, without cause,
of any person or persons elected to the Board of Directors by the Directors to
fill any vacancy or newly created directorship;
(2) Elect the AutoInfo Stockholders Committee's nominees (Warren G.
Lichtenstein, Lawrence Butler, Jack L. Howard, Marshall D. Butler, Jan R.
Sussman and James S. Benenson, Jr.) to the Company's Board of Directors; and
(3) Amend the Bylaws pursuant to Section 109 of Delaware General
Corporation Law ("DGCL") to provide that any acquisition by the Company, whether
by stock purchase, merger, asset acquisition or other similar type transaction,
where the consideration to be paid by the Company is more than fifty (50)
percent of the Company's assets at the time of such transaction, will be subject
to approval by a majority of the Company's stockholders. See The Background of
the Solicitation and the Plans of the AutoInfo Stockholders Committee.
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In furtherance of its objectives, the AutoInfo Stockholders Committee
is requesting each holder of Common Stock to mark each "Consent" box on the
enclosed WHITE Consent Card, to date and sign the WHITE Consent Card and return
the WHITE Consent Card in the enclosed envelope.
The proposed corporate actions may be adopted by consent of the holders
of a majority of the shares of Common Stock outstanding at the close of business
on May 31, 1995, which is the record date set by the Company for this Consent
solicitation (the "Record Date"). See The Consent Procedure. This Consent
Statement and the related WHITE Consent Card are first being sent or given on or
about June __, 1995, to holders of record of Common Stock on the Record Date.
On the Record Date, the AutoInfo Stockholders Committee was the
beneficial owner of an aggregate of 1,105,400 shares of Common Stock which
represented approximately 14.3% of the issued and outstanding shares of Common
Stock.
THE AUTOINFO STOCKHOLDERS COMMITTEE BELIEVES THAT THE PLAN OUTLINED
ABOVE AND DESCRIBED FURTHER HEREIN WILL DELIVER MAXIMUM VALUE FOR YOUR SHARES OF
COMMON STOCK, ALTHOUGH THERE CAN BE NO ASSURANCES THAT THE PLAN WILL RESULT IN
MAXIMUM VALUE; TO CARRY OUT THE PLAN THE AUTOINFO STOCKHOLDERS COMMITTEE'S
NOMINEES BELIEVE THAT THE INCUMBENT MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS
MUST BE REPLACED. REPRESENTATION BY THE AUTOINFO STOCKHOLDERS COMMITTEE'S
NOMINEES AND AMENDMENT TO THE BYLAWS CAN BE ACHIEVED ONLY IF ALL OF THE PROPOSED
CORPORATE ACTIONS ARE ADOPTED. ACCORDINGLY YOU ARE URGED TO CONSENT TO THE
REMOVAL OF THE INCUMBENT MEMBERS OF THE BOARD OF DIRECTORS, TO THE ELECTION OF
THE AUTOINFO STOCKHOLDERS COMMITTEE'S NOMINEES (MESSRS. LICHTENSTEIN, BUTLER,
HOWARD, BUTLER, SUSSMAN AND BENENSON) AND TO THE AMENDMENT TO THE BYLAWS BY
MARKING, SIGNING, DATING AND RETURNING PROMPTLY THE ENCLOSED WHITE CONSENT CARD
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
Because a Consent to corporate action is effective only if executed by
holders of record of a majority of the total number of shares outstanding on the
Record Date, the failure to execute a consent has the same effect as a
withholding of Consent for any proposal.
If your shares of Common Stock are held in the name of a brokerage
firm, bank nominee or other institution, only such entity can execute a Consent
with respect to your shares. Accordingly, please mark, date, and sign the
enclosed WHITE Consent Card and return it to your broker or bank.
Only Stockholders of record on the Record Date are entitled to execute
Consents. The AutoInfo Stockholders Committee believes that as of the close of
business on the Record Date,
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there were 7,732,252 shares of Common Stock of the Company issued and
outstanding and entitled to vote. Holders of Common Stock are entitled to one
vote for each share of Common Stock held of record.
The principal executive offices of the Company are located at 1600
Route 208, Fair Lawn, New Jersey 07410, and its phone number is (201) 703-0500.
IMPORTANT
Carefully review the Consent Statement and the enclosed materials. YOUR
CONSENT IS IMPORTANT. No matter how many or how few shares you own, please vote
FOR the removal of the incumbent members of the Company's Board of Directors,
the election of the AutoInfo Stockholders Committee's nominees for director and
the amendment to the Bylaws by so indicating and by signing, marking, dating and
mailing the enclosed WHITE Consent Card promptly.
If you own shares of the Company but your stock certificate is held for
you by a brokerage firm, bank or other institution, it is very likely that the
stock certificate is actually in the name of such brokerage firm, bank or other
institution. If so, only such entity can execute a WHITE Consent and vote your
shares of Common Stock. The brokerage firm, bank, or other institution holding
the shares for you is required to forward consent materials to you and solicit
your instructions with respect to the granting of consents; it cannot vote your
shares unless it receives your specific instructions.
If you have any questions about giving your Consent or require
assistance in voting your shares, please call:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (Collect)
or
CALL TOLL FREE (800) 322-2885
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THE AUTOINFO STOCKHOLDERS COMMITTEE AND ITS SLATE
The AutoInfo Stockholders Committee is composed of Warren G.
Lichtenstein, Lawrence Butler and Jack L. Howard. The members of the Committee,
along with Marshall D. Butler, Jan R. Sussman and James Benenson, Jr.,
constitute its slate (the "Slate") for election to the Company's Board of
Directors. Biographical data on the Slate is set forth below.
Warren G. Lichtenstein (29) is one of the AutoInfo Stockholders
Committee's nominees for director. Mr. Lichtenstein has been Chairman and a
director of WGL Capital Corp., a general partner of Steel Partners, L.P., a
Delaware limited partnership (a private investment partnership), since 1990. Mr.
Lichtenstein has been Chairman and a director of Steel Partners, Ltd.
("Partners"), the general partner of Steel Partners Associates, L.P.
("Associates"), which is the general partner of Steel Partners II, L.P.
("Steel"), since 1993. For information regarding Steel, Partners and Associates,
see below under "Other Participants, Certain Agreements and Related Additional
Information." Mr. Lichtenstein was the acquisition/risk arbitrage analyst at
Ballantrae Partners, L.P., a private investment partnership formed to invest in
risk arbitrage, special situations and undervalued companies, from 1988 to 1990.
Mr. Lichtenstein is a director of the following publicly held companies: Alpha
Technologies Group, Inc., SL Industries, Inc., Gateway Industries, Inc.,
Saratoga Beverage Group. As of the Record Date, Mr. Lichtenstein beneficially
owned 1,100,100 shares of the Common Stock of the Company, 1,100,000 of which
are beneficially owned by Steel. The business address of Mr. Lichtenstein is 750
Lexington Avenue, 27th Floor, New York, New York 10022. For information
regarding Mr. Lichtenstein's beneficial purchases and sales of shares of the
Common Stock of the Company during the past two years, all of which were made by
Steel, see Appendix A.
Lawrence Butler (33) is one of the AutoInfo Stockholders Committee's
nominees for director. Mr. Butler co-founded Steel Partners, L.P. with Warren
Lichtenstein in 1990. As a director and President of Camelia Group, Inc., a
co-General Partner of Steel Partners, L.P., Mr. Butler has been active in the
day-to-day management of Steel Partners, L.P. since its inception. Mr. Butler
has been President and a director of Partners, the general partner of
Associates, which is the general partner of Steel, since 1993. Mr. Butler is
President, Chief Executive Officer and a director of Alpha Technologies Group,
Inc., a publicly held company. For information regarding Steel, Partners and
Associates, see below under "Other Participants, Certain Agreement and Related
Additional Information." As of the Record Date, Mr. Butler beneficially owned
1,100,000 shares of the Common Stock of the Company, all of which are
beneficially owned by Steel. The business address of Mr. Butler is 750 Lexington
Avenue, 27th Floor, New York, New York 10022. For information regarding Mr.
Butler's beneficial purchases and sales of shares of the Common Stock of the
Company during the past two years, all of which were made by Steel, see Appendix
A. Mr. Butler is the son of Marshall Butler.
Jack L. Howard (33) is one of the AutoInfo Stockholders Committee's
nominees for director. Mr. Howard has been a limited partner of Associates since
1993, a principal of the Mutual Securities, Inc. (a division of Cowles Sabol &
Co.) since 1989 and has been in the securities business since 1984, specializing
in locating, researching and accumulating grossly
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undervalued securities. Mr. Howard is a director of the following publicly held
companies: Inventors Insurance Group, Inc., Gateway Industries, Inc. The
business address of Mr. Howard is 2927 Montecito Avenue, Santa Rosa, California
95404. As of the Record Date, Mr. Howard beneficially owned 5,300 shares of the
Common Stock of the Company. For information regarding Mr. Howard's purchases
and sales of shares of the Common Stock of the Company during the past two
years, see Appendix A.
Marshall D. Butler (68) is one of the AutoInfo Stockholders Committee's
nominees for director. Mr. Butler has been Chairman of the Board of Alpha
Technologies Group, Inc. since September 1994, and Chairman of the Board since
April 1993. Mr. Butler is currently a director a Kyocera Corporation, a
diversified Japanese high technology manufacturing company and AVX/Kyocera, a
manufacturer of ceramic capacitors and a subsidiary of Kyocera Corporation. Mr.
Butler served as Chief Executive Officer of AVX/Kyocera until his resignation in
April 1993. From 1973 to 1990, Mr. Butler was Chairman of the Board, Chief
Executive Officer and a director of AVX Corporation. Mr. Butler has been a
director of Mass Mutual Corporate Investors and Mass Mutual Participation
Investors since 1989. Prior to such time, he served as a director of MGM/UA Home
Entertainment, a home video, pay television and ancillary marketing business,
from 1985 to 1989, and as a director of Computer Memories Incorporated, which
manufactured computer disk drives, from 1984 to 1989. Mr. Butler is the father
of Lawrence Butler.
Jan R. Sussman (43) is one of the AutoInfo Stockholders Committee's
nominees for director. Mr. Sussman has been the President of Carefree Capital
Co., a venture capital investment company, since he founded it in 1992. Mr.
Sussman was the President of Coinmach Industries, a coin laundry service company
operating 62,000 washers and dryers, from 1980 to 1994.
James Benenson, Jr. (59) is one of the AutoInfo Stockholders
Committee's nominees for director. Mr. Benenson has been the Chairman of the
Board and President of James Benenson & Co., Inc., a manufacturer of a variety
of industrial products, since 1968. He has been Chairman of the Board of Bowline
Corp. since 1974. He has been Chairman of the Board and President of Vesper
Corp., since 1978 and Chairman of the Board and President of Arrowhead Holdings
Corp., since 1983.
For further information concerning the plans of the AutoInfo
Stockholders Committee and its Slate, see The Background of the Solicitation and
the Plans of the AutoInfo Stockholders Committee.
The AutoInfo Stockholders Committee, together, beneficially owned
1,105,400 shares of Common Stock as of the Record Date, representing 14.3% of
the issued and outstanding shares of Common Stock.
Each of the nominees has consented to serve as a director and, if
elected, intends to discharge his duties as director of the Company in
compliance with all applicable legal requirements, including the general
fiduciary obligations imposed upon corporate directors. None
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of the nominees failed to file on a timely basis any reports relating to their
holdings of Common Stock required by Section 16(a) of the Securities Exchange
Act of 1934, as amended, and the Rules and Regulations promulgated thereunder
(the "Exchange Act"), during the most recent fiscal year or prior fiscal year.
Steel failed to file on a timely basis one report required by Section 16(a) of
the Exchange Act during the most recent fiscal year.
THE BACKGROUND OF THE SOLICITATION AND
THE PLANS OF THE AUTOINFO STOCKHOLDERS COMMITTEE
The AutoInfo Stockholders Committee is soliciting Consents to elect a
Slate of candidates to replace all of the present members of the Board of
Directors of the Company. On May 31, 1995, pursuant to Article I, Section 7 of
the Company's Bylaws, Steel delivered written notice to the Board of the
Company, announcing its intent to seek written consents as set forth in this
Consent Statement. The Board thereupon established May 31, 1995 as the Record
Date for this Consent solicitation. See The Consent Procedure.
The AutoInfo Stockholders Committee was formed in response to two
events, the Company's proposal to sell a substantial portion of its assets to
ADP Claims Solutions Group, Inc. (the "ADP Asset Sale"), and the Company's
adoption of a Shareholder Rights Plan on March 30, 1995, commonly called a
"poison pill" plan. On March 30, 1995, the stockholders of AutoInfo approved the
ADP Asset Sale and since the closing of the transaction in early April, the
Company's principal asset has been the cash and net proceeds derived from that
transaction, which are estimated by the Company to be approximately $29,000,000.
In addition, the Company will also retain two small businesses, its Insurance
Inspection Services and Long Distance Services businesses. The Company has
announced its intent to use the net proceeds from the ADP Asset Sale to expand
these businesses and to acquire additional operating businesses. To date, the
Company has not identified any such businesses, nor has it made any commitment
to submit any proposed transactions to its stockholders for their approval. The
AutoInfo Stockholders Committee believes that the adoption of the Shareholder
Rights Plan by the Board, for which stockholder approval was neither required
under DGCL nor sought by the Company, was not in the best interests of the
Company Stockholders.
The Company has taken certain additional actions which the AutoInfo
Stockholders Committee believes are not in the best interests of stockholders.
The Company has entered into supplemental employment agreements (the
"Supplemental Employment Agreements") with Scott Zecher, President and Chief
Operating Officer, and William Wunderlich, Treasurer and Chief Financial
Officer. The Supplemental Employment Agreements, which were briefly described in
the Company's Revocation of Consent Statement by Board of Directors in
Opposition to the Parties who Refer to Themselves as the AutoInfo Stockholders
Committee (the "Consent Revocation"), have not been made publicly available, but
are required to be filed by the Company as an exhibit to certain documents to be
filed with the Securities and Exchange Commission, including with the Company's
next Quarterly Report on Form 10-Q. The Supplemental Employment Agreements
provide, among other things, that upon a Change of Control of the Company, with
the definition of such event not yet being publicly disclosed, that Messrs.
Zecher
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and Wunderlich will be entitled to receive salary and benefits commensurate with
prior amounts and an annual bonus at least equal to such person's average annual
bonus during the three year period prior to the change in control, for a period
of three years in the case of Mr. Zecher and two years in the case of Mr.
Wunderlich. Such agreements also provide for Messrs. Zecher and Wunderlich to
receive certain severance payments and benefits in the event their employment is
terminated by the Company or by such executive, under certain circumstances. The
Company has also entered into a Promissory Note and Security and Pledge
Agreement with Mr. Zecher pursuant to which the Company lent Mr. Zecher
$446,796.64 in connection with Mr. Zecher's exercise of options to acquire
216,799 shares (the "Shares") of the Common Stock. The Note is non-interest
bearing and is secured solely by the Shares. The effect of the acquisition of
the Shares by Mr. Zecher is to increase shares held by executive officers and
directors of the Company from 8.9% to 11.7%, through 100% Company financing.
The AutoInfo Stockholders Committee is seeking the removal of all of
the current Board, the election of its Slate and the amendment to the Bylaws so
that it can implement its plans for the Company, with the approval of a majority
of the Company's stockholders, which are outlined below. The AutoInfo
Stockholders Committee is committed to using its best efforts immediately upon
its election to rescind or nullify the Shareholder Rights Plan adopted on March
30, 1995 by the Board, without the consent of the Company's stockholders. The
AutoInfo Stockholders Committee believes that (i) the "poison pill" plan
needlessly diminishes the likelihood of independent stockholder action and
principally functions as protection for current management and (ii) without such
plan, outside parties would be encouraged to implement strategies or suggest
proposals whereby stockholder value would be maximized. In addition, the
AutoInfo Stockholders Committee believes that its Slate, whose members have
substantial experience in the finance and banking, operations and manufacturing,
and service business areas, is highly qualified to seek acquisition candidates
for the Company, as evidenced by each of their outstanding track records, and
the Slate is committed to using its best efforts to promptly seek suitable
acquisition candidates designed to maximize stockholder value.
Certain of such acquisitions by the Company, as described below, would
be subject to approval by a majority of the Company's stockholders. The AutoInfo
Stockholders Committee is seeking to amend the Bylaws to provide that any
acquisition by the Company, whether by stock purchase, merger, asset acquisition
or other similar type transaction, where the consideration to be delivered by
the Company is more than fifty (50) percent of the Company's assets at the time
of such transaction, will be subject to approval by a majority of the Company's
stockholders, so that the Company's stockholders will have the ultimate
determination of the Company's destiny. The Bylaws would be amended to provide
as follows:
ARTICLE IV
BUSINESS COMBINATIONS
Prior to the consummation by the Company of any stock purchase, merger,
asset acquisition or other similar type transaction where the
consideration to be delivered by the Company is more than fifty (50)
percent of the Company's assets at the time of such transaction (a
"Business Combination"), the Company shall submit such Business
Combination to its stockholders for
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approval regardless of whether the Business Combination is of a type
which normally would require such stockholder approval under the DGCL.
In the event that the holders of a majority of the outstanding Common
Stock present at a duly called stockholders meeting vote for the
approval of the Business Combination or act by consent in lieu of a
stockholders' meeting, the Corporation shall be authorized to
consummate the Business Combination.
Such amendment to the Bylaws would insure that the Company's
stockholders have the opportunity to vote on such described transactions. The
AutoInfo Stockholders Committee believes that it is unclear whether stockholders
would have the legal right to vote under DGCL on transactions involving the
transfer of more than fifty (50%) percent of the Company's assets. The proposed
Bylaw amendment will clarify the rights of stockholders to vote on such
transactions.
The Slate has further pledged that in the event it is unable to locate
suitable acquisition candidates, or the acquisition candidates it locates are
not approved by a majority of the Company's stockholders, the Slate may, but is
not obligated to, declare a stock dividend or, alternatively, undertake a stock
repurchase program that will allow the distribution of some or all of the
Company's available cash to its stockholders. No deadline has been set for the
occurrence of any of the above-described events. The Slate does not intend to
utilize the net proceeds from the ADP Asset Sale to expand the Company's
Insurance Inspection Services and Long Distance Services businesses. In the
event the Slate distributes substantially all of the Company's cash, it may seek
to liquidate the Company or sell its remaining assets.
In implementing its plans for the Company, the Slate is committed to
acting on behalf of and fairly representing the Company's stockholders and to
that end, has pledged to increase the size of the Board to allow for
representation on the Board of the designees of all stockholders, or groups of
stockholders, which hold at least 10% of the outstanding Common Stock, and to
cause the election of such designees, provided that at no time shall the Slate
not control a majority of the seats on the Board. To the best of the AutoInfo
Stockholders Committee's knowledge, other than Steel, which holds 14.3% of the
Common Stock, Ryback Management Corporation is the only stockholder with greater
than 10% of the Company's Common Stock, with 11.7% of the Common Stock. See
Appendix B.
No assurance can be given that the AutoInfo Stockholders Committee or
the Slate will be able to implement any of the foregoing plans or produce any
favorable financial results. Neither the Slate nor the AutoInfo Stockholders
Committee has identified any potential acquisition candidates and no assurance
can be given that either will be able to do so. The Slate and the AutoInfo
Stockholders Committee could, however, in the future, based upon an evaluation
of the Company's operations and future plans, decide to pursue another course of
action. It is not currently contemplated that any of the AutoInfo Stockholders
Committee's nominees for director, or any of their affiliates will have any
interest in any transaction with the Company other than in their capacity as a
director or stockholder of the Company.
The AutoInfo Stockholders Committee had previously anticipated
commencing a Consent solicitation regarding the above-stated proposals on May 1,
1995 and in connection therewith had
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(i) delivered a signed Consent to the Company on April 13, 1995 and (ii)
demanded a list of the Company's stockholders from the Company. Under ss. 228 of
DGCL, Consents must be delivered within 60 days of the earliest dated Consent
delivered to the Company. Due to delays in obtaining the stockholders list, the
AutoInfo Stockholders Committee decided not to solicit Consents pursuant to the
prior Consent solicitation and to commence a new Consent solicitation. By letter
dated May 31, 1995, the AutoInfo Stockholders Committee advised the Company that
the prior Consent was withdrawn. The prior Consent solicitation was only
distributed to members of the AutoInfo Stockholders Committee due to the fact
that the AutoInfo Stockholders Committee lacked a stockholders list. The
AutoInfo Stockholders Committee had engaged in discussions with the Company in
an attempt to avoid the necessity of this Consent solicitation. In the course of
these discussions, four meetings were held between approximately April 12, 1995
and April 28, 1995. The following parties were present at all or some of the
meetings: on behalf of the AutoInfo Stockholders Committee--Warren Lichtenstein,
Marshall D. Butler and Lawrence Butler, on behalf of the Company--Scott Zecher
and Andrew Gaspar. During the course of the discussions, the issues discussed
included the terms of a standstill agreement for members of the AutoInfo
Stockholders Committee, the size of the Board, including Board representation
for the AutoInfo Stockholders Committee and the powers of minority directors,
the redemption of the poison pill, the aggregate amount of Company funds to be
spent on acquisitions and other such transactions without requiring stockholder
and/or supermajority board approval, and a right of first refusal by the Company
on the Common Stock beneficially held by members of the AutoInfo Stockholders
Committee. To date, those discussions have not been successful and no agreements
or understandings of any kind have been reached.
On June 14, 1995, the Company commenced litigation in the United States
District Court for the District of Delaware against Steel, each of the members
of the AutoInfo Stockholders Committee, Marshall D. Butler, Ryback Management
Corporation, Eric E. Ryback and Lawrence Callahan. The Complaint alleges, among
other things, violations of Sections 13(d), 13(g) and 14(a) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, stemming from Steel's allegedly acting in concert with the other
defendants to obtain control of the board of directors of the Company and the
failure of Steel and the other defendants to disclose such actions in compliance
with applicable securities laws. The complaint seeks, among other things, to
enjoin the AutoInfo Stockholders Committee from commencing the Consent
Solicitation and delivering the Consent Statement to the Company's stockholders.
The AutoInfo Stockholders Committee believes it has complied with the securities
laws and intends to vigorously defend itself against the claims brought by the
Company.
If the AutoInfo Stockholders Committee's nominees are elected, they
will evaluate the Company's current officers and make such employment decisions
as they believe are required. The AutoInfo Stockholders Committee is not aware
of any employment agreement or material agreement to which the Company is a
party, the termination or terms of which would be adversely affected by the
election of the Slate or the implementation of the plans of the Committee,
except for the Supplemental Employment Agreements which may be affected by the
election of the Slate if the election of the slate were to constitute a Change
of Control of the Company under the Supplemental Employment Agreements. Based on
the most recent publicly
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available information, the AutoInfo Stockholders Committee estimates that if the
election of the AutoInfo Stockholders Committee's slate were to constitute a
Change of Control, the maximum severance payments to Messrs. Zecher and
Wunderlich under the Supplemental Employment Agreements would be approximately
$627,000 and $220,500, respectively.
THE CONSENT PROCEDURE
Under the DGCL, directors of a corporation without a classified board
or whose certificate of incorporation does not otherwise provide may be removed
with or without cause by the holders of a majority of the outstanding shares
entitled to vote in the election of directors. In addition, unless the
corporation's certificate of incorporation otherwise provides, the DGCL permits
stockholders' action without a meeting of stockholders and without prior notice
if a consent or consents in writing, setting forth the action so taken, is
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to take such action at a meeting at
which all shares entitled to vote thereon were present. Under the applicable
provision of the DGCL, such action is effective when written consents from
holders of record of the minimum number of shares of common stock necessary to
authorize the action (here a majority of the outstanding shares) are executed
and delivered to the corporation within 60 days of the earliest dated consent
delivered in accordance with the DGCL to the corporation. The Company does not
have a classified board. In addition, Article II, Section 5 of the Company's
Bylaws provides that any or all of the directors may be removed for cause or
without cause by the stockholders and Article I, Section 7 of the Company's
Bylaws provides that whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken for or in connection with any corporate
action, the meeting and vote of stockholders may be dispensed with if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding Common Stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted; provided that prompt
notice be given to all stockholders of the taking of such action without a
meeting and by less than unanimous written consent who have not consented in
writing. Consequently, directors can be removed by a majority of the
stockholders acting without a meeting and without prior notice. A Record Date
for determining stockholders entitled to consent in this Consent Solicitation
was established, pursuant to Article I, Section 7 of the Bylaws, of May 31,
1995. The AutoInfo Stockholders Committee is mailing this Consent Statement to
the holders of the shares of Common Stock outstanding on the Record Date.
If the action described herein is taken pursuant to the consent
procedure, the AutoInfo Stockholders Committee will cause the Company to give
prompt notice thereof pursuant to Section 228(d) of the DGCL to stockholders who
have not executed consents to the action taken.
The Consents being solicited by the AutoInfo Stockholders Committee
will only be effective for sixty days after the earliest dated Consent is first
delivered to the Company pursuant to ss. 228 of DGCL.
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UNDER THE DGCL, ONLY HOLDERS OF RECORD ON THE RECORD DATE ARE ELIGIBLE
TO GIVE THEIR CONSENT TO THE ACTION PROPOSED ABOVE. ANYONE OWNING SHARES
BENEFICIALLY (BUT NOT OF RECORD), SUCH AS A PERSON WHOSE OWNERSHIP OF SHARES IS
THROUGH A BROKER, BANK OR OTHER FINANCIAL INSTITUTION, SHOULD CONTACT THAT
BROKER, BANK OR FINANCIAL INSTITUTION WITH INSTRUCTIONS TO EXECUTE THE WHITE
CONSENT CARD ON HIS OR HER BEHALF OR TO HAVE THE BROKER, BANK OR FINANCIAL
INSTITUTION'S NOMINEE EXECUTE THE WHITE CONSENT CARD.
Subject to the conditions referred to above, the AutoInfo Stockholders
Committee will deliver the written Consents to the Company when unrevoked
consents representing at least a majority of the outstanding Common Stock have
been received by it.
An executed consent card may be revoked at any time before expiration
by marking, dating, signing and delivering a written revocation before the time
that the action authorized by the executed Consent becomes effective. A
revocation may be in any written form validly signed by the record holder as
long as it clearly states that the Consent previously given is no longer
effective. The delivery of a subsequently dated consent card which is properly
completed will constitute a revocation of any earlier consent. The revocation
may be delivered either to the AutoInfo Stockholders Committee or to the Company
at its principal executive offices at 1600 Route 208, Fair Lawn, New Jersey
07410 or any other address provided by the Company. Although a revocation is
effective if delivered to the Company, the AutoInfo Stockholders Committee
requests that either the original or photostatic copies of all revocations of
Consents be mailed or delivered to it at the address set forth above, so that it
will be aware of all revocations and can more accurately determine if and when
Consents to the action described herein have been received from the holders of
record on the Record Date of a majority of the shares of Common Stock,
outstanding.
ABSTAINING FROM GIVING A CONSENT OR NOT RETURNING A SIGNED CONSENT WILL
HAVE THE SAME EFFECT AS WITHHOLDING CONSENT TO THE PROPOSED ACTION. THE AUTOINFO
STOCKHOLDERS COMMITTEE URGES EACH STOCKHOLDER TO ENSURE THAT THE RECORD HOLDER
OF HIS OR HER SHARES SIGNS, DATES AND RETURNS THE ENCLOSED WHITE CONSENT CARD AS
SOON AS POSSIBLE.
OTHER PARTICIPANTS, CERTAIN AGREEMENTS AND RELATED
ADDITIONAL INFORMATION
The costs of the AutoInfo Stockholders Committee will be borne by
Steel, a Delaware limited partnership. The AutoInfo Stockholders Committee
presently intends to seek reimbursement from the Company for its reasonable
expenses in connection with this Consent solicitation and does not expect to
submit such matter to a vote of security holders, unless required by law.
-11-
<PAGE>
The general partner of Steel is Associates, a Delaware limited
partnership. The general partner of Associates is Partners, a New York
corporation. The principal business of Steel is investing in the securities of
micro-cap companies. The principal business address of Steel, Associates and
Partners is 750 Lexington Avenue, 27th Floor, New York, New York 10022. The
executive officers and directors of Partners are as follows: Warren G.
Lichtenstein is Chairman of the Board, Secretary and a Director and Lawrence
Butler is President, Treasurer and a Director. As of the Record Date, Steel was
the owner of 1,100,000 shares of the Common Stock of the Company. Neither
Associates nor Partners beneficially owned any shares of the Common Stock of the
Company on the Record Date, except by virtue of their role in Steel. For
information regarding Steel's purchases and sales of shares of the Common Stock
of the Company during the past two years, see Appendix A.
The Board of Directors of the Company has a single class of directors.
At each annual meeting of Stockholders, the directors are elected to a one-year
term. The slate of nominees proposed by the AutoInfo Stockholders Committee, if
elected, would serve as directors for the term expiring in 1995 or until the due
election and qualification of their successors. The AutoInfo Stockholders
Committee has no reason to believe any of its nominees will be disqualified or
unable or unwilling to serve if elected. The AutoInfo Stockholders Committee has
agreed to indemnify Marshall D. Butler, Jan R. Sussman and James S. Benenson,
Jr., members of the Slate, and to reimburse each of them for their reasonable
out-of-pocket expenses for each of their efforts in connection with the
solicitation.
Except as described herein and in the attachments hereto, no member of
the AutoInfo Stockholders Committee, the slate of nominees or any of their
associates, (i) has engaged in or has a direct or indirect interest in any
transaction or series of transactions since the beginning of the Company's last
fiscal year or in any currently proposed transaction, to which the Company or
any of its subsidiaries is a party where the amount involved was in excess of
$60,000, (ii) is the beneficial or record owner of any securities of the Company
or any parent or subsidiary thereof, (iii) is the record owner of any securities
of the Company of which it may not be deemed to be the beneficial owner, (iv)
has been within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company, (v)
has any arrangements or understandings with any nominee pursuant to which such
nominee was selected as a nominee and there exist no such agreements or
understandings between any nominee and any other person, or (vi) has any
agreement or understanding with respect to future employment by the Company or
any arrangement or understanding with respect to any future transactions to
which the Company will or may be a party.
See Appendix B for information regarding persons who beneficially own
more than 5% of the Common Stock and the ownership of the Common Stock by the
management of the Company.
-12-
<PAGE>
SOLICITATION EXPENSES
Consents may be solicited by members of the Committee and by its Slate
by mail, telephone, telegraph and personal solicitation. Banks, brokerage houses
and other custodians, nominees and fiduciaries will be requested to forward
consent solicitation material to the beneficial owners of the Common Stock that
such institutions hold of record. The AutoInfo Stockholders Committee will
reimburse such institutions for their reasonable out-of-pocket expenses.
The entire expense of preparing and mailing this Consent Statement and
the total expen- ditures relating to the solicitation of Consents (including,
without limitation, costs, if any, related to advertising, printing, fees of
attorneys, financial advisors, solicitors, consultants, accountants, public
relations, transportation and litigation) will be borne by the AutoInfo
Stockholders Committee, with funds provided by Steel.
The AutoInfo Stockholders Committee has retained MacKenzie Partners,
Inc. ("MacKenzie Partners") to assist in the solicitation of Consents and for
related services. The AutoInfo Stockholders Committee has agreed to pay
MacKenzie Partners a fee estimated at $25,000 and has agreed to reimburse it for
its reasonable out-of-pocket expenses. Approximately 20 persons will be used by
MacKenzie Partners in its solicitation efforts.
The AutoInfo Stockholders Committee estimates that its total
expenditures relating to this Consent solicitation will be approximately
$25,000. Total cash expenditures to date relating to this Consent solicitation
have been approximately $5,000. In addition to the use of the mails, Consents
may be solicited by the AutoInfo Stockholders Committee and MacKenzie Partners,
Inc. by telephone, telegram and personal solicitation, for which no additional
compensation will be paid to those persons engaged in such solicitation.
61068.6
-13-
<PAGE>
APPENDIX A
Transactions in the Securities
of the Company Within the Past Two Years
The following table sets forth information with respect to all
purchases and sales of shares of Common Stock of the Company by Steel, Warren G.
Lichtenstein, Lawrence Butler and Jack L. Howard during the past two years. Each
of the transactions was effected on the open market, except where otherwise
noted.
STEEL PARTNERS II, L.P.
Number of Shares
Purchased (Sold) Price Per Share Date
- ---------------- --------------- ----
15,000 $3.34 2/1/95
55,000 3.41
10,000 3.28
47,500 3.37
100,000 3.46 2/2/95
20,000 3.47
5,000 3.53
2,000 3.28
15,000 3.34 2/3/95
62,300 3.28
10,000 3.34 2/6/95
5,000 3.28
50,000 3.41 2/7/95
12,000 3.34 2/8/95
10,000 3.41 2/9/95
5,000 3.41 2/13/95
5,000 3.34 2/14/95
253,000 3.50 2/15/95
7,500 3.34 2/16/95
5,000 3.47
13,000 3.41
3,800 3.34 2/24/95
10,000 3.73 3/3/95
358,900 3.50 3/16/95
10,000 3.53 5/24/95
7,500 3.53 5/25/95
2,500 3.53 5/26/95
26,000 3.54 6/1/95
-14-
<PAGE>
WARREN G. LICHTENSTEIN
Number of Shares
Purchased (Sold) Price Per Share Date
- ---------------- --------------- ----
100 $3.63 5/26/95
JACK HOWARD
Number of Shares
Purchased (Sold) Price Per Share Date
- ---------------- --------------- ----
400(1) $3.36 2/8/95
300(2) 3.39 2/9/95
4,600(2) 3.53 3/16/95
- --------
(1) Represents shares held of record by a trust for the benefit of Jack L.
Howard.
(2) Represents shares held of record by Mr. Howard in his IRA account.
-15-
<PAGE>
APPENDIX B
Security Ownership of Certain Beneficial Owners,
Directors and Executive Officers
The following table sets forth as of the Record Date, to the knowledge
of the AutoInfo Stockholders Committee based on information contained in the
Company's Revocation of Consent Statement By Board of Directors in Opposition to
the Parties who refer to themselves as the AutoInfo Stockholders Committee dated
May 15, 1995 and additional information known to the AutoInfo Stockholders
Committee, each person reported to own beneficially more than 5% of the
Company's outstanding Common Stock, each director and certain of the Company's
executive officers.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Ownership of the
Name and Address Company's Common
of Beneficial Owner Stock(1) Percent of Class(2)
---------------------------------------------- ------------------------- -----------------------
<S> <C> <C>
(i) 5% Stockholders:
Ashford Capital Management, Inc.(3)
P.O. Box 4172
Greenville, DE 19807 403,200 5.2%
Dimensional Fund Advisors, Inc.(3)
1299 Ocean Avenue
Santa Monica, CA 90401 391,100 5.1%
Irving B. Harris(3)
2 North LaSalle Street
Suite 505
Chicago, IL 60602 568,333(4) 7.4%
Ryback Management Corporation(3)
7711 Corondelet Avenue
St. Louis, MO 63105 903,350 11.7%
Steel Partners II, L.P.(5)
750 Lexington Avenue
New York, NY 10022 1,100,000 14.3%
(ii) Directors and Executive Officers:
Jason Bacher 331,272(6) 4.3%
Chairman of the Board,
Chief Executive Officer and Director
Robert Fagenson 30,750(7) *(8)
Director
Andrew Gaspar 45,000 *
Director
Howard Nusbaum 191,531 2.5%
Director
Jerome Stengel 30,000 *
Director
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Ownership of the
Name and Address Company's Common
of Beneficial Owner Stock(1) Percent of Class(2)
---------------------------------------------- ------------------------- -----------------------
<S> <C> <C>
Scott Zecher 331,746 4.3%
President, Chief Operating Officer
and Director
All executive officers and directors as a
group (7 persons) 1,005,299(9) 12.8%(10)
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated below, each director, executive officer and
each 5% Stockholder has sole voting and investment power with respect
to all shares beneficially owned.
(2) Percentage of ownership is based on 7,732,252 outstanding shares of
Common Stock.
(3) Information with respect to this stockholder has been derived from the
Schedule 13G filed by such stockholder with the Securities and Exchange
Commission.
(4) Includes 273,333 shares subject to currently exercisable warrants.
(5) Based on Schedule 13D, as amended, filed with the Securities and
Exchange Commission.
(6) Includes 25,000 shares subject to currently exercisable options.
(7) Includes (1) 1,500 shares owned by the Fagenson & Co. Profit Sharing
Plan and Employee Pension Plan, of which Mr. Fagenson is a trustee, and
(ii) 29,250 shares issuable upon exercise of a Common Stock purchase
warrant held by Mr. Fagenson which is currently exercisable.
(8) Assumes that all currently exercisable options or warrants owned by
this individual have been exercised.
(9) Includes 99,250 shares subject to currently exercisable options or
warrants.
(10) Assumes that all currently exercisable options or warrants owned by
members of the group have been exercised.
-17-
<PAGE>
IMPORTANT
1. If your shares are kept at your brokerage firm or bank, and they are
registered in your brokerage firm's or your bank's name, please send back only
the AutoInfo Stockholders Committee enclosed WHITE Consent Card in the special
envelope provided.
2. If your shares are registered in your own names, please sign, date
and return the enclosed WHITE Card to MacKenzie Partners.
3. Time is critically short. Only your latest dated WHITE Consent Card
will count.
4. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can sign a WHITE Consent Card with respect
to your shares. Accordingly, please contact the person responsible for your
account and give instructions for a WHITE Consent Card to be signed representing
your shares.
If you have any questions about giving your consent or require
assistance in voting your shares, please call:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (Collect)
or
CALL TOLL FREE (800) 322-2885
-18-
<PAGE>
CONSENT CARD
CONSENT BY STOCKHOLDERS OF AUTOINFO, INC. TO ACTION WITHOUT A MEETING
THIS CONSENT IS SOLICITED BY THE AUTOINFO STOCKKOLDERS COMMITTEE
The undersigned, a stockholder of record of AutoInfo, Inc. (the
"Company" or the "Corporation") hereby consents, pursuant to Section 228 of the
Delaware General Corporation Law, with respect to all shares of Common Stock,
par value $.01 per share, of the Company which the undersigned is entitled to
vote in all capacities, to each of the following actions without a meeting,
without prior notice and without a vote:
RESOLVED, that all present directors of the Company, and any
other directors elected or appointed to the Board of Directors
of the Company prior to the effective date of these
resolutions in addition to or in lieu of the foregoing
individuals are hereby removed, without cause, as directors of
the Company; and it is further
- ---------- CONSENT ---------- CONSENT WITHHELD
INSTRUCTIONS: To consent or withhold consent to the removal of the foregoing
directors check the appropriate box above. To withhold consent to the removal of
any individual, check the "___ CONSENT" box above and write the name of such
individual in the following space.
RESOLVED, that Warren G. Lichtenstein,
Lawrence Butler, Jack L. Howard, Marshall D.
Butler, Jan R. Sussman and James Benenson,
Jr. are elected as directors of the Company
to fill the vacancies of the Board of
Directors occasioned by the foregoing removal
of directors, to serve in that capacity until
their successors are duly elected and
qualified; and it is further
- ---------- CONSENT ---------- CONSENT WITHHELD
INSTRUCTIONS: To consent or withhold consent to the election of
all candidates, check the appropriate box above. To withhold
<PAGE>
consent to the election of any candidate, check the "___ CONSENT" box above and
write the name of such candidate in the following space.
RESOLVED, that the Bylaws be amended, with subsequent Articles
to be renumbered as appropriate, by inserting the following
ARTICLE following ARTICLE III:
ARTICLE IV
BUSINESS COMBINATIONS
Prior to the consummation by the Corporation of any stock
purchase, merger, asset acquisition or other similar type
transaction where the consideration to be delivered by the
Corporation is more than fifty (50) percent of the
Corporation's assets at the time of such transaction (a
"Business Combination"), the Corporation shall submit such
Business Combination to its stockholders for approval
regardless of whether the Business Combination is of a type
which normally would require such stockholder approval under
the DGCL. In the event that the holders of a majority of the
outstanding Common Stock present at a duly called stockholders
meeting vote for the approval of the Business Combination or
act by consent in lieu of a stockholders' meeting, the
Corporation shall be authorized to consummate the Business
Combination.
- ---------- CONSENT ---------- CONSENT WITHHELD
If no box is marked with respect to each of the above
Resolutions, the undersigned will be deemed to consent to such Resolution except
that the undersigned will not be deemed to consent to the removal of any
director whose name is written in the space provided above.
(This Consent card is continued on the reverse side. Please mark, sign and date
this Consent card on the reverse side before returning the Consent card in the
enclosed envelope.)
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
shareholder action on the date set forth below.
Date:--------------------------------------------
-------------------------------------------------
Signature of Stockholder
-------------------------------------------------
Signature (if held jointly)
-------------------------------------------------
Name and Title of Representative
(if applicable)
IMPORTANT NOTE TO STOCKHOLDERS: Please sign
exactly as your shares are registered. Joint
owners should both sign. When signing as executor,
trustee, administrator, guardian, officer of a
corporation, attorney-in-fact or in any other
fiduciary or representative capacity, please give
your full name. This consent, when executed, will
vote all shares held in all capacities. Be sure to
date this Consent Card.
**THIS IS YOUR CONSENT CARD**
-3-
