PRELIMINARY MATERIALS - FOR SEC USE ONLY
PRELIMINARY COPIES
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or
section 240.14a-12
AUTOINFO, INC.
(Name of Registrant as Specified in its Charter)
AUTOINFO, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(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 Rule 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
_______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
[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 _________________________________________
2) Form, Schedule or Registration Statement No.:
________ Schedule A _____________________________________
3) Filing Party:
________ AutoInfo, Inc. _________________________________
4) Date Filed:
________ June 20, 1995 __________________________________
<PAGE>
PRELIMINARY MATERIALS - FOR SEC USE ONLY
AUTOINFO, INC.
1600 Route 208
Fair Lawn, New Jersey 07410
(201) 703-0500
REVOCATION OF CONSENT STATEMENT
BY BOARD OF DIRECTORS IN
OPPOSITION TO THE PARTIES WHO REFER TO
THEMSELVES AS THE AUTOINFO STOCKHOLDERS COMMITTEE
June __, 1995
Dear Fellow Stockholders:
This Revocation of Consent Statement is furnished by the
Board of Directors (the "Board") of AutoInfo, Inc., a Delaware
corporation (the "Company"), to the holders of outstanding shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock"),
in connection with the Board's opposition to the solicitation (the
"Steel Partners Solicitation") by (i) Mr. Warren G. Lichtenstein, the
29-year-old founder and Chairman of the Board of Steel Partners, Ltd., a
New York corporation ("Partners") (Partners is the general partner of
the general partner of Steel Partners II, L.P., a Delaware Limited
Partnership ("Steel")), (ii) Mr. Lawrence Butler, the 32-year-old co-
founder and President of Partners and (iii) Mr. Jack L. Howard, a 33-
year-old limited partner of the general partner of Steel (Messrs.
Lichtenstein, Butler and Howard, who refer to themselves as the
"AutoInfo Stockholders Committee", are referred to herein, collectively,
as the "Steel Partners Parties"), of written stockholder consents to (i)
remove, without cause, all of the current members of the Board, (ii)
elect to the Board a slate of six nominees designated by the Steel
Partners Parties (the "Steel Partners Nominees") and (iii) amend the
Company's By-laws 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 percent of the Company's assets at the time of such
transaction, will be subject to the approval of a majority of the
Company's stockholders. This Statement and the enclosed GREEN
Revocation of Consent Card are first being mailed to stockholders on or
about June __, 1995.
THE BOARD UNANIMOUSLY OPPOSES THE STEEL PARTNERS PARTIES
SOLICITATION. THE BOARD URGES YOU NOT TO SIGN ANY WHITE CONSENT CARD
SENT TO YOU BY THE STEEL PARTNERS PARTIES.
IF YOU PREVIOUSLY SIGNED AND RETURNED THE WHITE CONSENT CARD
TO THE STEEL PARTNERS PARTIES YOU HAVE EVERY RIGHT TO CHANGE YOUR MIND.
WHETHER OR NOT YOU HAVE SIGNED THE WHITE CONSENT CARD, THE BOARD URGES
YOU TO SIGN, DATE AND MAIL THE ENCLOSED GREEN REVOCATION OF CONSENT CARD
IN THE POSTAGE-PAID ENVELOPE PROVIDED. REGARDLESS OF THE NUMBER OF
SHARES YOU OWN, YOUR REVOCATION OF CONSENT IS IMPORTANT. PLEASE ACT
TODAY!
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IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR
OTHER NOMINEE, WE URGE YOU TO CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND DIRECT HIM OR HER TO EXECUTE A GREEN REVOCATION OF CONSENT
CARD, VOTING AS RECOMMENDED BY AUTOINFO'S BOARD OF DIRECTORS, ON YOUR
BEHALF. YOU SHOULD ALSO SIGN, DATE AND MAIL YOUR GREEN REVOCATION OF
CONSENT CARD WHEN YOU RECEIVE IT IN THE MAIL. PLEASE DO SO AT ONCE.
If you have any questions about giving your revocation of
consent or require assistance, please call:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550 (Collect)
or
CALL TOLL FREE (800) 326-3066
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The Board is soliciting against the Steel Partners Solicitation.
Consider these facts:
The current Board believes that it has a successful track record in
enhancing shareholder value. For example, the current Board recently
recommended, and successfully consummated, with the approval of
approximately 98% of the votes cast by stockholders in a stockholder
vote relating to the approval of such transaction , the sale of the
principal portion of the Company's operating businesses to a
subsidiary of Automatic Data Processing, Inc., ADP Claims Solutions
Group, Inc. ("ADP Solutions"), for a purchase price of $30,350,000
(the "Proceeds") and a taxable gain of approximately $21,000,000 (the
"ADP Transaction"). The operations of the businesses sold were
started by the Company at the time of its inception in 1976 and were
expanded through a series of acquisitions and through internal
growth.
With an average tenure in office of approximately 13 years, the
present Board directed the Company through the majority of the period
the Company has been in business. Additionally, five Board members
(Andrew Gaspar, Scott Zecher, Robert Fagenson, Jason Bacher and
Howard Nusbaum) have been with the Company since its initial public
offering in 1986.
The current Board is working closely with management of the Company
to implement a plan to best utilize the Proceeds. As always, the
primary focus is on enhancing value for all the Company's
stockholders. The options being considered by the current Board
include potential acquisitions, redemptions of Common Stock and the
payment of a substantial portion of the Proceeds as a dividend to
stockholders. The Board has fixed no deadline by which any of these
actions would be taken.
The Steel Partners Nominees have stated their intention to rescind
the Shareholder Rights Plan (the "Plan") adopted by the current Board
on March 30, 1995. The Board's purpose in adopting the Plan was and
is to protect the interests of the Company's stockholders from
abusive takeover tactics, including attempts to acquire control of
the Company at an inadequate price, without paying any "control
premium" to the Company's stockholders. Although the Plan may
discourage certain tender offers and other attempts to change control
of the Company, making it more difficult to remove the current board
and incumbent management, on balance, in the Board's opinion, the
Plan is important to ensure that any change in control transaction
effected with respect to the Company would only be effected in a
manner in which the interests of all the Company's stockholders are
fairly and adequately represented. The Plan does not block any
stockholder, or any other person, from suggesting proposals which
would have the effect of enhancing stockholder value. Steel already
owns 14.9% of the Company's outstanding Common Stock. Any rescission
of the Plan would permit Steel to acquire additional shares of Common
Stock without Board approval and would thereby facilitate the ability
of Steel to acquire effective control of the Company without paying a
"control premium" to you and all other stockholders.
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Prior to March 30, 1995, Steel orally requested that the current
Board of Directors permit it to acquire additional shares of the
Company's Common Stock without becoming subject to Section 203 of the
Delaware General Corporation Law. This law generally provides that
if a stockholder acquires 15% or more of a corporation's outstanding
stock (unless such acquisition was made with the prior approval of
the board of directors of the corporation), any business combination
transaction between that corporation and the interested stockholder
must be approved by the holders of two thirds of the outstanding
stock of the corporation which is not owned by the interested
stockholder. Although the Steel Partners Nominees have not disclosed
any intention to effect a business combination transaction between
the Company and some other entity which Steel and/or the partners of
Steel control, if the Steel Partners Nominees succeed in obtaining
control of the Company through the Steel Partners Solicitation, Steel
will be able to effect a business combination with an entity
controlled by Steel and/or the partners of Steel without affording
stockholders of the Company the protection of Section 203.
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CERTAIN LITIGATION
On June 14, 1995, the Company commenced an action in
Delaware Federal Court alleging that Steel Partners, Ryback Management
Corporation ("Ryback") and certain individuals affiliated with those
entities had violated the Federal Securities laws in connection with
their acquisition of Common Stock and the Steel Partners' Solicitation.
The Company's complaint alleges, among other matters, that
Steel Partners violated Sections 13(d) and 14(a) of the Securities and
Exchange Act of 1934 by, among other things, filing false and misleading
Schedules 13D that failed to disclose Steel Partners' original intent --
from at least the summer of 1994 -- to attempt to take control of the
Company and that Steel Partners had been acting in concert with Ryback
in its surreptitious takeover attempt. The complaint alleges, among
other matters, that Ryback has violated the Federal Securities laws by
(i) fraudulently certifying, in January 1995, that it had no intent to
influence control of the Company when, in fact, Ryback was working with
Steel Partners in support of its takeover plans, and (ii) failing to
file a Schedule 13D disclosing the full extent of its holdings in the
Company or its actions in support of Steel Partners' takeover attempt.
The Company's complaint seeks, among other things, to have
the Delaware Federal Court enjoin Steel Partners' Solicitation and to
require the defendants to file corrected disclosure documents. The
Company has sought expedited treatment of its lawsuit.
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<PAGE>
SETTLEMENT WITH RYBACK
On June 22, 1995, the Company entered into a Settlement Agreement
between the Company, Ryback, Eric C. Ryback and Lawrence Callahan
(the "Settlement Agreement"; Ryback together with Eric C. Ryback
and Lawrence Callahan, collectively, the "Ryback Defendants").
The Settlement provides that, for a period of five (5) years,
Ryback Management, the holder of approximately 14.8% of the
Company's outstanding shares, will vote such shares on all matters
in accordance with the recommendation of the Board, unless, as a
result of the recommendation, the Board's "outside directors" (as
such term is hereinafter defined) would not continue to constitute
a majority, in which case, the shares would be voted in the same
proportion as the vote of other stockholders. The terms of the
Settlement Agreement would prohibit Ryback from giving its consent
to the Steel Partners Solicitation. The Settlement Agreement also
provides for the dismissal of the Company's litigation against the
Ryback Defendants and for mutual releases from the Company to the
Ryback Defendants and from the Ryback Defendants to the Company.
For a more detailed description of the provisions of the
Settlement Agreement see - Terms of Ryback Settlement Agreement.
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<PAGE>
THE CONSENT PROCEDURE
The record date for determination of the stockholders of the
Company entitled to execute, withhold or revoke consents relating to the
Steel Partners Solicitation is the close of business on May 31, 1995
(the "Record Date"). Under Delaware law, unrevoked consents from the
holders of record of a majority of the outstanding shares of Common
Stock on the Record Date are necessary for the Company's stockholders to
effectively act by written consent to (i) remove without cause all of
the members of the current Board, (ii) elect the Steel Partners Nominees
and (iii) amend the Company's By-laws 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 percent of the Company's assets at the
time of such transaction, will be subject to the approval of a majority
of the Company's stockholders. As of the Record Date, there were
7,732,252 shares of Common Stock outstanding, each entitled to one vote
per share.
Under Section 228 of the General Corporation Law of the
State of Delaware, consents must be delivered within 60 days of the
earliest dated consent delivered to the Company. The earliest dated
consent was delivered by the Steel Partners Parties to the Company on
May 31, 1995. Accordingly, any consent dated or delivered to the
Company after July 29, 1995 will not be valid.
A stockholder may revoke any previously signed consent by
signing, dating and returning a GREEN Revocation of Consent Card. A
consent may also be revoked by delivery of a written revocation of
consent to the Steel Partners Parties. Stockholders are urged, however,
to deliver all revocations of consents to D.F. King & Co., Inc., at 77
Water Street, 20th Floor, New York, N.Y. 10005. The Company requests
that if a revocation is instead delivered to the Steel Partners Parties,
a photostatic copy of the revocation also be delivered to the Company,
c/o D.F. King & Co., Inc. at the address set forth above, so that the
Company will be aware of all revocations. Any revocation of consent may
itself be revoked at any time by signing, dating and returning a
subsequently dated white consent card sent to you by the Steel Partners
Parties to the Steel Partners Parties, or by delivery of a written
revocation of such revocation of consent to the Company or the Steel
Partners Parties.
Section 7 of Article 1 of the Company's By-laws establishes
a mechanism to ensure that consent solicitations are conducted in a fair
and orderly manner. As contemplated by Section 7 of Article 1, the
Company will retain an independent inspector of elections in connection
with the Steel Partners Solicitation.
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<PAGE>
INFORMATION REGARDING THE CURRENT DIRECTORS AND EXECUTIVE OFFICERS
ANDREW GASPAR, age 47, was named Chairman of the Board on
March 29, 1995. Mr. Gaspar has, since March 1991, been President of the
general partner of R.S. Lauder, Gaspar & Co. and Vice-Chairman of The
Central European Development Corporation, venture capital firms
conducting business in the United States and Eastern Europe. Prior
thereto, Mr. Gaspar was a Managing Director of E.M. Warburg Pincus &
Co., a venture banking and investment advisory firm, a position he held
from 1982 through March 1991. He holds a B.S. degree from Columbia
University, an M.S. degree from Northeastern University and an M.B.A.
degree from Harvard Business School. He has been a director of the
Company since 1978.
JASON BACHER, age 56, has been Chairman of the Board and the
Chief Executive Officer of the Company from its inception in 1976
through March 29, 1995. Mr. Bacher has been associated with the
automobile salvage industry since 1961 as a principal of Bacher Tire
Company, Inc., an automobile recycler located in the New York
metropolitan area. In connection with the sale by the Company of a
principal portion of its business to ADP Solutions on April 1, 1995, Mr.
Bacher joined ADP Solutions.
SCOTT ZECHER, age 36, joined the Company in January 1984,
and was named its President and Chief Operating Officer in January 1993.
Prior to becoming President, he held the position of Executive Vice
President and Chief Financial Officer. He became a director of the
Company in 1989. From 1980 to 1984, he was with the accounting firm of
KPMG Peat Marwick. Mr. Zecher is a Certified Public Accountant with a
B.A. degree in Accounting and Economics from the City University of New
York at Queens College.
ROBERT FAGENSON, age 46, has been an officer and director of
Fagenson & Co., Inc., a registered broker-dealer, for more than five
years. Mr. Fagenson is a member of the Board of Directors of the New
York Stock Exchange. Since April 1983, Mr. Fagenson has also served as
the Secretary and a director of Starr Securities, Inc., a registered
broker-dealer, which was the underwriter of the Company's initial public
offering in May 1986. Mr. Fagenson has been a director of the Company
since June 1986. Mr. Fagenson is also a director of Healthy Planets
Products, Inc., Microtel Franchise and Development Corp. and Rentway,
Inc. Mr. Fagenson has a B.S. degree in Business Administration from
Syracuse University.
HOWARD NUSBAUM, age 47, has been a director of the Company
from its inception in 1976. Mr. Nusbaum, who earned a B.A. degree from
Brooklyn College, has been a consultant to the automobile recycling
industry since 1976.
JEROME STENGEL, age 58, has been a Vice President, Treasurer
and Chief Financial Officer of Genovese Drug Stores, Inc., an American
Stock Exchange company, for more than five years. Mr. Stengel is a
Certified Public Accountant with a B.B.A. degree from the City
University of New York. He has been a director of the Company since
1987.
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<PAGE>
WILLIAM WUNDERLICH, age 47, joined the Company in October
1992 as its Vice President-Finance and became Chief Financial Officer in
January 1993. From 1990 to 1992, he served as Vice President of
Goldstein Affiliates, Inc., a public insurance adjusting company. From
1981 to 1990 he served as Executive Vice President, Chief Financial
Officer and a Director of Novo Corporation, a manufacturer of consumer
products. Mr. Wunderlich is a Certified Public Accountant with a B.A.
degree in Accounting and Economics from the City University of New York
at Queens College.
BOARD OF DIRECTOR MEETINGS
During the year ended May 31, 1995, the Board held ten
meetings. Each of the current members of the Board attended at least
75% of such meetings.
BOARD OF DIRECTOR COMMITTEES
The Board maintains an Audit Committee and a Compensation
Committee, both of which are comprised of Messrs. Fagenson, Gaspar and
Stengel, all of whom are non-employee directors. The Audit Committee
approves the selection of the Company's auditors and meets and interacts
with the auditors to discuss questions in regard to the Company's
financial reporting. The Compensation Committee evaluates the
performance of the Company's executive employees and determines the
salaries and other compensation payable to such persons. During the
last full fiscal year, the Compensation Committee met twice and the
Audit Committee met once, with all members present at each respective
Committee meeting.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The Summary Compensation Table below includes, for each of
the fiscal years ended May 31, 1995, 1994 and 1993, individual
compensation for services to the Company and its subsidiaries paid to:
(1) the Chief Executive Officer, and (2) the other most highly paid
executive officers of the Company during the fiscal year ended May 31,
1995 whose salary and bonus exceeded $100,000 (together, the "Named
Executives").
Annual Long-Term All
Name and Principal Compensation Compensation Other
Position Year Salary Bonus Options Compensation(1)
Jason Bacher(2) 1995 $125,000 $182,854(3) $4,300
Chairman of the 1994 $135,417 $ 45,000 75,000 $4,063
Board and 1993 $125,000 $ 18,166 -- $3,750
Chief Executive
Officer
Scott Zecher 1995 $145,000 $235,000(3) 80,000 $4,230
President and 1994 $144,000 $ 65,000 -- $3,240
Chief Operating 1993 $134,500 $ 37,000 100,000 $2,690
Officer
William Wunderlich 1995 $103,333 $ 80,000(3) 40,000 $5,500
Treasurer and 1994 $ 91,250 $ 19,000 35,000 $3,068
Chief Financial 1993 $ 55,624 $ 2,000 50,000 $1,063
Officer
_________________________
(1) Represents amounts contributed to the Company's 401(k) deferred
compensation plan.
(2) Mr. Bacher resigned as Chairman of the Board and Chief Executive
Officer on March 29, 1995.
(3) Includes a one-time bonus relating to the ADP Transaction in the
amount of $100,000 to Jason Bacher, $150,000 to Scott Zecher and
$50,000 to William Wunderlich.
Employment Agreements
Messrs. Zecher and Wunderlich are employed by the Company
pursuant to employment agreements which expire in April 1998 and April
1997, respectively. These agreements provide for minimum annual
compensation of $150,000 and $120,000, respectively, and provide for
annual review by the Board of Directors.
The Company has entered into supplemental employment
agreements (the "Supplemental Employment Agreements") with Messrs.
Zecher and Wunderlich (the "Covered Executives"), which provide that if
there is a Change in Control of the Company (as defined therein) during
the Protected Period (described below), the terms of the Supplemental
Employment Agreements will supersede the Covered Executives' existing
employment agreements and will govern the terms of the Covered
Executives' employment following the Change in Control for a three-year
term, in the case of Mr. Zecher, and a two-year term, in the case of Mr.
Wunderlich (the "Employment Term"). For these purposes, the Protected
Period is a three-year period which commenced on April 10, 1995 and is
automatically extended for one year on April 10, 1996 and each April 10
thereafter, unless the Company otherwise notifies the
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Covered Executive at least 90 days prior thereto. The
Supplemental Employment Agreements provide that during the Employment
Term the Covered Executives will remain employed in their capacities
with the Company as of the Change in Control and will continue to
receive an annual salary (the "Base Salary") and benefits at least equal
to that which they received prior to the Change in Control and an annual
bonus at least equal to the Covered Executive's average annual bonus
during the three years prior to the Change in Control. The Supplemental
Employment Agreements provide that if, during the Employment Term, the
Covered Executive's employment is terminated by the Company other than
for Cause or Disability or by the Executive either for Good Reason or
during the 60-day Window Period commencing on the anniversary of the
Change in Control (as each of the foregoing terms are defined in the
applicable Supplemental Employment Agreement), the Covered Executive
would receive a severance payment equal to the sum of his Base Salary
and the higher of his annual bonus for the then most recent year or his
average annual bonus during the three years preceding the Change in
Control (the "Highest Annual Bonus") multiplied by two, in the case of
Mr. Zecher, and one and one-half, in the case of Mr. Wunderlich. In
addition, the restrictions on any stock-related incentive awards held by
the Covered Executive would lapse and he would be entitled to continued
coverage under the Company's life, health and disability benefits for
two years following termination of his employment (three years in the
case of Mr. Zecher) or until he receives similar benefits from a new
employer. If Mr. Zecher's employment is terminated (as described above)
prior to April 10, 1996, he would receive severance equal to three
(rather than two) times his Base Salary and Highest Annual Bonus. If
Mr. Wunderlich's employment is terminated (as described above) prior to
October 10, 1995, he would receive severance equal to two (rather than
one and one-half) times his Base Salary and Highest Annual Bonus. Mr.
Zecher's Supplemental Employment Agreement also provides that if he is
subject to excise taxes under Section 4999 of the Internal Revenue Code
on any payments or benefits triggered by a Change in Control, he will be
entitled to receive an additional amount such that after the payment of
all applicable taxes he will retain an amount equal to that which he
would have retained absent the excise taxes. In the event that the
Steel Partners' solicitation is successful and the current directors are
removed and replaced with the Steel Partners Nominees, a Change in
Control will be deemed to have occurred under the terms of the
Supplemental Employment Agreements. In connection with the Supplemental
Employment Agreements, the Company also approved the creation and
funding of a so-called Rabbi Trust which is a form of a
grantor trust under which the assets of the trust remain subject to
the satisfaction of the general claims of the Company's creditors,
to provide for the payment of all benefits payable under the
Supplemental Employment Agreements.
The Supplemental Employment Agreements were entered into on
April 10, 1995, after Steel acquired 14.9% of the Company's Common
Stock. In the opinion of the Board, it was necessary and desirable to
enter into the Supplemental Employment Agreements and to implement the
Rabbi Trust and the funding thereof so that the Covered Executives would
concentrate on performing their duties and promoting the best interests
of the Company and its stockholders without being concerned about the
possibility of a Change in Control. In the opinion of the Board of
Directors, the provisions of the Supplemental Employment Agreements and
implementing the Rabbi Trust and the funding thereof would not have any
significant impact on the decision of any person or entity relating to
whether or not to acquire the Company or effect a Change in Control,
although a person or entity interested in acquiring, or effecting a
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Change in Control, of the Company may view the provisions of the
Supplemental Employment Agreement and the funding of the Rabbi Trust as
making it more difficult to consummate an acquisition, or effect a Change
in Control, of the Company. In addition, in the opinion of the Board
of Directors, entering into the Supplemental Employment Agreements and
implementing the Rabbi Trust and the funding thereof would not have an
adverse impact on the Company's ability to execute its business strategy
in pursuing value for the benefit of all stockholders.
Restricted Stock Grants
In November 1987, the Company issued 410,000 shares of
Common Stock pursuant to restricted stock bonus grants to key
executives, directors and consultants. In January 1994, the Company
issued 15,000 shares of Common Stock pursuant to a restricted stock
bonus grant to a non-employee director. Such shares vest ratably over a
period of 30 years. The unvested portion is subject, upon the
occurrence of certain events, to either forfeiture or accelerated
vesting.
401(k) Cash or Deferred Compensation
The Company maintains a tax-qualified 401(k) cash or
deferred compensation plan that covers all employees who have completed
30 days of service with the Company and have attained age 21.
Participants are permitted, within the limitations imposed by the
Internal Revenue Code, to make pre-tax contributions to the plan
pursuant to salary reduction agreements. The Company makes a 50%
matching cash contribution on up to a 6% contribution by the employee.
In addition, the Company may, in its discretion, make additional
contributions as permitted by the Internal Revenue Code. The
contributions of the participants and the Company are held in separate
accounts. Participants' contributions are always fully vested. The
Company's contributions vest proportionally over a five-year period
commencing on the employee's date of employment.
Stock Option Plans
In February 1986, the Company's stockholders approved the
AutoInfo 1985 Stock Option Plan (the "1985 Plan") which provides that a
total of 555,000 shares of Common Stock are subject to options granted
thereunder. In November 1986, the Company's stockholders approved the
AutoInfo 1986 Stock Option Plan (the "1986 Plan") which provides that a
total of 637,500 shares of Common Stock are subject to options granted
thereunder. In October 1989, the Company's stockholders approved the
AutoInfo 1989 Stock Plan (the "1989 Plan") which provides that a total
of 300,000 shares of Common Stock are subject to options granted
thereunder. In November 1992, the Company's stockholders approved the
AutoInfo 1992 Stock Option Plan (the "1992 Plan") which provides that a
total of 350,000 shares of Common Stock are subject to options granted
thereunder. (The 1985 Plan, 1986 Plan, 1989 Plan and 1992 Plan are
sometimes collectively referred to herein as the "Option Plans".)
Under the Option Plans, the Company may grant options to
purchase Common Stock to its officers, key employees, directors, and, in
the case of the 1985 and 1992 Plans, to
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non-employees performing
services for the Company. Payment of the option exercise price is to be
made (i) in cash, (ii) by delivery of Common Stock already owned by and
in the possession of the option holder, or (iii) if so provided for in
the option being exercised, by delivery of the option holder's
promissory note in favor of the Company. If an option granted under an
Option Plan expires, terminates or is canceled without being exercised
in full, the unpurchased shares subject to such option will again be
available for options to be granted under such Plan. Options may be
granted in the form of incentive stock options ("Incentive Options") or
options which do
not qualify for the favorable tax treatment of Incentive
Options which are known as non-qualified options.
The Option Plans are administered by a committee of the
Board of Directors consisting of Messrs. Fagenson, Gaspar and Stengel,
who are ineligible to participate in the Option Plans.
No options may be exercised more than ten years from the
date of grant, and no options may be granted after December 16, 1996,
December 31, 1996, December 31, 1999 and December 31, 2002 under the
1985 Plan, 1986 Plan, 1989 Plan, and 1992 Plan, respectively.
The option price of each Incentive Option granted under the
Option Plans shall be not less than 100% of the fair market value of the
Common Stock as of the date the option is granted (110% of the fair
market value if the grant is to an employee holding 10% or more of the
Company's outstanding Common Stock). Options other than Incentive
Options may be granted at an exercise price as determined by the Board.
The exercise prices of such non-qualified options must be at least 85%
of the fair market value of the underlying shares of Common Stock at the
date of grant. Options granted are not transferable and are subject to
various other conditions and restrictions. All Incentive Options
granted before December 31, 1986 must be exercised in the order in which
they were granted regardless of the difference in the exercise prices.
Option Grants in Fiscal Year 1995
Shown below is information on grants of stock options
pursuant to the Company's Stock Option Plans during the fiscal year
ended May 31, 1995, to the Named Executives who are reflected in the
Summary Compensation Table.
Individual Gains in Fiscal 1995
Percentage of Total
Options Granted to Exercise
Options Employees in Price Per Expiration
Name Granted Fiscal Year Share(1) Date
Jason Bacher 0 0 -- --
Scott Zecher 80,000 29.63% $4.125 4/10/05
William Wunderlich 40,000 4.81% $4.125 4/10/05
Potential Realized Values
at Assumed Annual
Rates of Stock Price
Appreciation for Option Term(1)
Name 5% 10%
Jason Bacher -- --
Scott Zecher $158,668 $448,123
William Wunderlich $79,334 $224,081
- -13-
<PAGE>
(1) Based on the closing price on NASDAQ/NMS on the date.
Aggregate Options Exercised in Fiscal Year 1995 and Fiscal Year-End
Option Values
Shown below is information with respect to (i) options exercised by the
Named Executives pursuant to the Option Plans during Fiscal 1995 and
(ii) unexercised options granted
in Fiscal 1995 and prior years under the Option Plans to the
Named Executives and held by them at May 31, 1995.
Number of Unexercised
Shares Options at 5/31/95
Acquired on Value Exercisable/
Name Exercise Realized Unexercisable
Jason Bacher 0 0 0/75,000
Scott Zecher 216,799 330,480 0/113,333
William Wunderlich 0 0 45,000/80,000
Values of
Unexercised In-the-Money
Options at 5/31/95 (1)
Exercisable/
Name Unexercisable
Jason Bacher $0/$0
Scott Zecher $0/$4167
William Wunderlich $16,667/$8,333
(1) Based on the closing price as quoted on NASDAQ/NMS on the date.
Director Compensation
The Company pays each non-employee director a fee of $750
for each meeting attended by such director.
Compensation Committee Interlocks and Insider Participation
During the Company's last fiscal year, Messrs. Fagenson,
Gaspar and Stengel served on the Compensation Committee of the Board of
Directors. Other than in their capacities as directors of the Company,
none of Messrs. Fagenson, Gaspar or Stengel were employed by the Company
during such times.
Board Compensation Committee Report on Executive Compensation
TO THE BOARD OF DIRECTORS:
Compensation Policies Applicable to Executive Officers
The purpose of the Company's executive compensation program
is to attract, retain and motivate qualified executives to manage the
business of the Company so as to maximize profits and shareholder value.
Executive compensation in the aggregate is made up principally of the
executive's annual base salary, a bonus which may be awarded by the
Company's Compensation Committee and awards of Company stock or stock
options under the Company's Stock Option Plans. The Company's
Compensation Committee annually considers
- -14-
<PAGE>
and makes recommendations to
the Board of Directors as to executive compensation including changes in
base salary, bonuses and awards of Company stock or stock options.
Consistent with the above-noted purpose of the executive
compensation program, it is the policy of the Compensation Committee, in
recommending the aggregate annual compensation of the executive officers
of the Company, to consider overall performance of the Company, the
performance of the division of the Company for which the executive has
responsibility and the individual contribution and
performance of the executive. The performance of the Company and of the
division for which the executive has responsibility are significant
factors in determining aggregate compensation although they are not
necessarily determinative. While shareholders' total return is
important and is considered by the Compensation Committee, it is subject
to the vagaries of the public market place and the Company's
compensation program focuses on the Company's strategic plans, corporate
performance measures, and specific corporate goals which should lead to
a favorable stock price. The corporate performance measures which the
Compensation Committee considers include sales, earnings, return on
equity and comparisons of sales and earnings with prior years and with
budgets.
The Compensation Committee does not rely on any fixed
formulae or specific numerical criteria in determining an executive's
aggregate compensation. It considers both corporate and personal
performance criteria, competitive compensation levels, the economic
environment and changes in the cost of living as well as the
recommendations of management. The Compensation Committee then
exercises business judgment based on all of these criteria and the
purposes of the executive compensation program.
Compensation of the Chief Executive Officer
Mr. Bacher's base salary of $125,000 for 1995 (which
constituted a ten-month proration of his $150,000 base salary) was based
principally on his rights under his four-year employment agreement with
the Company dated January 1, 1994, which was terminated on March 29,
1995 in connection with the ADP Transaction. In addition, Mr. Bacher
received a bonus of $182,854 which the Committee granted to him in
recognition of the Company's performance in 1995 under his leadership,
including his role in consummating the Company's transaction with ADP
Solutions.
Respectfully submitted,
AutoInfo, Inc. Compensation Committee
(Robert Fagenson, Andrew Gaspar and
Jerome Stengel)
Certain Relationships and Related Transactions
On April 28, 1995 the Company entered into a Promissory Note
and Security and Pledge Agreement with Scott Zecher, its President,
Chief Operating Officer and a Director, pursuant to which the Company
lent to Mr. Zecher, consistent with the Company's past practice,
- -15-
<PAGE>
the sum
of $466,796.64, in connection with Mr. Zecher's exercise of options to
acquire 216,799 shares of the Company's Common Stock (the "Shares")
under the Company's 1985 and 1986 Stock Option Plans. The Note, which
is non-interest bearing, is secured by the Shares and is payable on the
earlier of May 31, 1996 or out of the proceeds of the underlying
collateral. As a result of such exercise, the percentage of outstanding
shares of common stock owned by executive officers and directors of the
Company increased from approximately 8.7% to approximately 11.5%. This
increase may discourage Steel and/or any other interested party from
instituting a take-over attempt with regard to the Company.
The purpose of the Company granting an interest free loan for the
purpose of exercising in-the-money stock options is the same as the
purpose of the Company for granting stock options to key employees and
officers; namely, to encourage such key employees and officers to
acquire an increased personal interest in the success and progress of
the Company. The granting of the stock options provides the key
employee or officer with the potential to benefit from the success and
growth of the Company and the interest free loan enables such key
employee or officer to actually realize the benefit when the stock
option becomes in-the-money.
Total Return Comparison
The following graph sets forth a five-year comparison of
total returns for: (1) the Company; (2) a Company selected Peer Group
(comprised of Data Transmission Network Corp., INCOMNET, Inc., Triad
Systems Corporation and Policy Management Systems Corporation); and (3)
the NASDAQ -- US CRSP Total Return Index.
The following table is represented as a graph in the printed copy:
AutoInfo, Inc. Peer Group NASDAQ US
5/90 100 100 100
5/91 119 126 114
5/92 92 160 133
5/93 81 109 160
5/94 86 120 168
5/95 78 162 196
- -16-
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who own more
than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC"). Officers, directors and
greater than ten-percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished
to the Company, or written representations that no Forms 5 were
required, the Company believes that all Section 16(a) filing
requirements applicable to its officers and directors were complied
with.
The following table, together with the accompanying
footnotes, sets forth information, as of June 1, 1995, regarding stock
ownership of all persons known by the Company to own beneficially 5% or
more of the Company's outstanding Common Stock, all directors and
nominees, and all directors and officers of the Company as a group.
Name of Shares of Common Stock Percentage
Beneficial Owner Beneficially Owned (1) of Ownership
(i) Directors:
Jason Bacher 331,272(2) 4.3%(5)
Robert Fagenson 30,750(3) *(5)
Andrew Gaspar 45,000 *
Howard Nusbaum 171,531 2.2%
Jerome Stengel 30,000 *
Scott Zecher 331,746 4.3%
All executive officers and
directors as a group (7 persons) 985,299(4) 12.6%(6)
- -17-
<PAGE>
(ii) 5% Stockholders:
Ashford Capital Management, Inc. (7)
P.O. Box 4172
Greenville, DE 19807 403,200 5.2%
Dimensional Fund Advisors, Inc. (7)
1299 Ocean Ave.
Santa Monica, CA 90401 391,100 5.1%
Irving B. Harris (7)
2 North LaSalle Street
Suite 505
Chicago, IL 60602 568,333(8) 7.4%
Ryback Management Corporation (7)
7711 Corondelet Ave.
St. Louis, MO 63105 903,350 14.8%
Steel Partners II L.P. (9)
750 Lexington Ave.
New York, NY 10022 1,100,000 14.2%
_________________________
* 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) Includes 25,000 shares subject to currently exercisable options.
(3) Includes (i) 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.
(4) Includes 99,250 shares subject to currently exercisable options or
warrants.
(5) Assumes that all currently exercisable options or warrants owned by
this individual have been exercised.
(6) Assumes that all currently exercisable options or warrants owned by
members of the group have been exercised.
(7) Information with respect to this stockholder has been derived from
information provided by this stockholder to the Company in
connection with the Settlement Agreement.
(8) Includes 273,333 shares subject to currently exercisable warrants
(9) Information with respect to this stockholder has been derived from
the Schedule 13D filed by such stockholder with the SEC.
- -18-
<PAGE>
SOLICITATION OF REVOCATIONS
Cost and Method
The cost of the solicitation of revocations of consent will
be borne by the Company. The Company estimates that the total
expenditures with such solicitation (including the fees and expenses of
the Company's attorneys and public relations firm and advertising,
printing, mailing, travel and other costs, but excluding salaries and
wages of officers and employees and the fees and expenses of D.F. King &
Co., Inc. described below) will be approximately $250,000, of which
approximately $35,000 has been spent to date. In addition to
solicitation by mail, directors, officers and other employees of the
Company may, without additional
compensation, solicit revocations by mail, in person, by
telecommunication or by other electronic means.
The Company has retained D.F. King & Co., Inc., at an
estimated fee of $25,000, plus reasonable out-of-pocket expenses, to
assist in the solicitation of revocations. Approximately 40 persons
will be utilized by such firm in its efforts. The Company will
reimburse brokerage houses, banks, custodians and other nominees and
fiduciaries for out-of-pocket expenses incurred in forwarding the
Company's consent revocation materials to, and obtaining instructions
relating to such materials from, beneficial owners of Common Stock.
The Company has also agreed to indemnify D.F. King & Co.,
Inc. against certain liabilities and expenses in connection with its
engagement, including certain liabilities under the federal securities
laws.
Participants in the Solicitation
Under applicable regulations of the SEC, each member of the
Board may be deemed to be "participants" in the Company's solicitation
of revocations of consent. The business address of each participant is
as follows: Mr. Jason Bacher, 48 Magnolia Lane, Roslyn Heights, New
York 11577; Mr. Robert Fagenson, Fagenson & Co., Inc., 19 Rector Street,
16th Floor, New York, New York 10006; Mr. Andrew Gaspar, R.S. Lauder,
Gasper and Co. L.P., 767 Fifth Avenue, Suite 4200, New York, New York
10153; Mr. Howard Nusbaum, 43 Heritage Lane, Stamford, Connecticut
06903; Mr. Jerome Stengel, Genovese Drug Stores, Inc., 80 Marcus Drive,
Melville, New York 11747; and Mr. Scott Zecher, AutoInfo, Inc., 1600
Route 208, Fair Lawn, New Jersey 07410.
Schedule A hereto sets forth transactions in the Company's
securities by the "participants" listed above during the last two years.
Information about the present Capital Stock ownership of these
participants is provided in "Beneficial Ownership of Common Stock".
Except as set forth in this Revocation of Consent Statement,
(i) no participant referred to above is, or was within the past year, a
party to any contract, arrangement or understanding with any person with
respect to any of the Company's securities, and (ii) neither any of the
participants referred to above nor any of their respective associates
has any arrangement or understanding with any person with respect to any
future employment by the
- -19-
<PAGE>
Company or its affiliates, or with respect to
any future transaction as to which the Company or any of its affiliates
will or may be a party.
Background of Solicitation
On April 13, 1995, Steel delivered to the Company a signed
consent relating to the Steel Partners Solicitation and demanded that
the Company provide Steel with a list of the Company's Stockholders. On
May 1, 1995, Steel commenced litigation against the Company in Delaware
Chancery Court to compel the Company to deliver to Steel the Company's
stockholder list (the "Steel Lawsuit"). On May 10, 1995, the Company
made a filing with the Delaware Chancery Court seeking to dismiss the
Steel Lawsuit on the grounds that Steel did not provide the Company with
a sworn statement that it intended to utilize the stockholders' list for
a legitimate purpose and thus, under Delaware law, the Company was not
required to deliver to Steel a copy of the Company's stockholder list.
On or about May 16, 1995, Steel withdrew the Steel Lawsuit and
submitted a new request for a stockholders list together with the
requisite sworn statement. The Company then provided Steel with a list
of the Company's stockholders.
On May 31, 1995, Steel, by letter to the Company, (i) withdrew the
consent delivered to the Company on April 13, 1995 and (ii) delivered a
new consent relating to the Steel Partners Solicitation.
In April and May of 1995, in response to the Steel Partner Parties
filing preliminary and definitive proxy statements with the United
States Securities and Exchange (the "SEC"), the Company filed
preliminary and definitive Revocation of Consent Statements with the
SEC. However, the Company did not mail the definitive Revocation of
Consent Statement to the Company's stockholders since it determined that
it should not mail its definitive Revocation of Consent Statement until
the Steel Partner Parties mailed their proxy statement. As noted above,
the Steel Partner Parties withdrew the original consent solicitation
and, to the Company's knowledge, did not mail their original definitive
proxy statement to the Company's stockholders.
In response to the Steel Partner Parties filing new proxy
statement material with the SEC, the Company again filed new preliminary
and definitive Revocation of Consent Statements with the SEC.
In mid-April the Company initiated discussions with the Steel
Partner Parties in an attempt to avoid the necessity of a costly proxy
contest. Between April 20, 1995 and May 11, 1995, the Company met four
times with the Steel Partner Parties. The following parties were
present at all or some of the meetings: on behalf of the Steel Partner
Parties -- 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 Steel Partner Parties, the size
of the Board, including Board representation for the Steel Partner
Parties and the powers of minority directors, the redemption of the
poison pill, the aggregate amount of Company funds to be spent on
- -20-
<PAGE>
acquisitions and other such transactions without requiring stockholder
and/or super majority Board approval and a right of first refusal by the
Company on the Common Stock beneficially held by members of the Steel
Partner Parties. To date, these discussions have not been successful
and no agreements or understandings of any kind have been reached.
TERMS OF RYBACK SETTLEMENT AGREEMENT
Pursuant to the Settlement Agreement, Ryback agreed that
during the term of the Settlement Agreement, unless specifically
requested in writing in advance by the Board, Ryback will not, and
will cause its affiliates and associates (as such terms are used
within Rule 126-2 (as such rule is currently in effect) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
not to, alone or in concert with others (and neither Ryback nor
any affiliate or associate of Ryback will advise, assist or
encourage others to), directly or indirectly:
(i) by purchase or otherwise, acquire, or
agree to acquire, ownership (including, but not limited to,
beneficial ownership) of any shares of Common Stock of the Company
(the "Common Stock"), including securities convertible into Common
Stock, or direct or indirect rights or options to acquire such
ownership;
(ii) make any public announcement with respect
to, or submit any proposal for, the acquisition of beneficial
ownership of Common Stock (or securities convertible into Common
Stock or direct or indirect rights or options to acquire such
beneficial ownership), or for or with respect to any extraordinary
transaction or merger, consolidation, sale of substantial assets
or business combination involving the Company or any of its
affiliates,
(iii) make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined or used in
Regulation 14A under the Exchange Act (the "Exchange Act")) or
become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the Exchange Act) to
vote, or seek to advise or influence any person or entity with
respect to the voting of, any voting securities of the Company or
any of its affiliates;
(iv) form, join or in any way participate in a
"group" (as such term is used in Section 13d(3) of the Exchange
Act) to take any action otherwise prohibited by the terms of the
Settlement Agreement;
(v) initiate or propose any stockholder
proposals for submission to a vote of stockholders, whether by
action at a stockholder meeting or by written consent, with
respect to the Company or any of its affiliates or propose any
person for election to the Board of the Company or any of its
affiliates or propose the removal of any member of the Board of
the Company or any of its affiliates;
(vi) otherwise seek to control the management
or policies of the Company or any of its affiliates, including,
without limitation, taking any action to seek to obtain
representation on the Board of the Company or any of its
affiliates;
- -21-
<PAGE>
(vii) institute, prosecute or pursue against the
Company (or any of its officers, directors, representatives,
trustees, employees, attorneys, advisors, agents, affiliates or
associates) (a) any claim with respect to any action hereafter
duly approved the Board or (b) any claim on behalf of a class of
the Company's security holders;
(viii) disclose to any third party, or make
any filing under the Exchange Act (including, without limitation,
under Section 13(d) thereof) disclosing, any intention, plan or
arrangement inconsistent with the foregoing;
(ix) publicly oppose any duly authorized Board
action or recommendation;
(x) initiate any communication with any
customer or supplier of the Company or any other person which does
or is contemplating doing business or entering into a transaction
with the Company with a view interfering or otherwise adversely
affecting the relationship between the Company and or the
applicable customer, supplier or other person;
(xi) enter into any discussions, negotiations,
arrangements or understandings with any third party with respect
to any of the foregoing; or
(xii) request the Company (or its directors,
officers, employees or agents) to amend or waive any provision of
the Settlement Agreement or otherwise seek any modification to or
waiver of any of the agreements or obligations of Ryback, or any
of its affiliates or associates, under the Settlement Agreement.
The Settlement Agreement also provides that during the term of the
Settlement Agreement, Ryback will not and will cause its
associates and affiliates not to, transfer, assign, pledge, sell,
hypothecate or otherwise dispose (a "disposition") of any capital
stock of the Company owned by it, except if all of the following
conditions are satisfied with respect to such disposition:
(i) the applicable disposition together with all other
dispositions for the account of Ryback and its associates and
affiliates during the one month period immediately preceding the
date of such disposition does not exceed one percent of the
outstanding Common Stock, as shown on the most recent applicable
report or statement published by the Company;
(ii) such disposition shall be by means of a "broker's
transaction" within the meaning of rule 144(g) under the
Securities Act of 1933, as amended; and
(iii) with respect to any such disposition, the seller
shall instruct its broker that such broker shall make due inquiry
and shall not make the disposition to any person (including any
agent of such person) if Ryback and/or its affiliates or
associates or such broker knows, or has reason to believe, that
such person, together with such persons, affiliates and
associates, owns, collectively (with its associates and
affiliates), or, will own, collectively (with its associates and
affiliates), upon consummation of the disposition, 3% or more of
the outstanding Common Stock as shown on the most recent
applicable report or statement published by the Company.
- -22-
<PAGE>
Notwithstanding the foregoing, any disposition by the Lindner
Bulwark Fund after the second anniversary of this Agreement shall
not require satisfaction of the condition specified in clause (i)
of the immediately preceding paragraph.
The Settlement Agreement also provides that during the term
of the Settlement Agreement, with respect to each matter submitted
to the stockholders of the Company for a vote, whether at a
meeting or pursuant to any consent of stockholders, including,
without limitation, any matter submitted to the stockholders of
the Company relating to the election or removal of directors,
Ryback agrees to, and agrees to cause its affiliates and
associates to, vote (whether by proxy or otherwise) all shares of
Common Stock owned by Ryback and/or any of its affiliates and
associates in accordance with the applicable duly authorized
recommendation of the Board; provided, however, that, with respect
to any recommendation relating to the election or removal of
directors, if, assuming such recommendation were adopted by the
stockholders of the Company, less than a majority of all directors
constituting the Board would be "outside directors" (as such term
is hereinafter defined), Ryback and its associates and affiliates
shall vote their shares in the same proportion as the votes of all
other outstanding voting securities of the Company voting on such
applicable matter. As used in the Settlement Agreement, the term
"outside directors" refer to directors who are not also officers
or employees of the Company.
The term of the Settlement Agreement is for a period of five
years commencing on June 22, 1995.
The Settlement Agreement also contains other customary
provisions.
- -23-
<PAGE>
STOCKHOLDER PROPOSAL
Any stockholder who desires to present a proposal to be
considered at the Company's next annual meeting may do so, provided that
such stockholder satisfies the eligibility requirements established by
the SEC. To be considered for submission at the meeting, such proposal
must be received by the Company (addressed to the attention of the
Secretary) not later than May 31, 1995. To be submitted at the meeting,
any such proposal must be a proper subject for stockholder action under
the laws of the State of Delaware, and must otherwise conform to
applicable regulations of the SEC.
We appreciate your support and encouragement.
Andrew Gaspar Scott Zecher
Chairman of the Board President and Chief Operating Officer
- -24-
<PAGE>
IMPORTANT
YOUR VOTE IS IMPORTANT. REGARDLESS of the number of shares
of AutoInfo Common Stock you own, please vote as recommended by your
Board of Directors by signing, dating and promptly mailing your GREEN
CARD.
1. If your shares are registered in your own name, please
sign, date and mail the enclosed GREEN Revocation of Consent Card to
D.F. King & Co., Inc., in the postage-paid envelope provided.
2. If you have previously signed and returned a white
consent card to the Steel Partners Parties, you have every right to
change your mind. Remember, only your latest dated card will count.
You may revoke any white consent card already sent to the Steel Partners
Parties by signing, dating and mailing the enclosed GREEN Revocation of
Consent Card in the post-paid envelope provided.
3. If your shares are held in the name of a brokerage firm,
bank nominee or other institution, only it can sign a GREEN Revocation
of Consent Card with respect to your shares and only after receiving
your specific instructions. Accordingly, please sign, date and mail the
enclosed GREEN Revocation of Consent Card in the post-paid envelope
provided. To ensure that your shares are voted, you should also contact
the person responsible for your account and give instructions for a
GREEN Revocation of Consent Card to be issued representing your shares.
Please do so for each separate account you maintain.
4. After signing and dating the enclosed GREEN Revocation
of Consent Card, please do not sign or return any white consent card.
Please do not even vote "consent withheld" on the Steel Partners
Parties' white consent card even as a vote to protest.
If you have any questions about giving your revocation of
consent or require assistance, please call:
D. F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550 (Collect)
or
CALL TOLL FREE (800) 326-3066
- -25-
<PAGE>
SCHEDULE A
The following table sets forth all purchases and sales of
the Company's securities by the participants referred to above during
the two years. Unless otherwise indicated, all transactions are in the
public market.
Name Number of Shares of Capital Stock Purchased (or Sold) Date
Scott Zecher 216,799 shares acquired pursuant 4/28/95
to exercise of options
- -26-
<PAGE>
Preliminary Copy - For Use of the Commission Only
REVOCATION OF CONSENT
Solicited on Behalf of the Board of Directors of
AUTOINFO, INC.
IN OPPOSITION TO THE SOLICITATION OF THE AUTOINFO STOCKHOLDERS COMMITTEE
The undersigned, a holder of shares of Common Stock, par value
$.01 per share (the "Common Stock"), of AutoInfo, Inc. (the "Company"),
acting with respect to all the shares of Common Stock held by the
undersigned at the close of business on May 31, 1995, hereby acts as
follows concerning the proposals of the AutoInfo Stockholders Committee
set forth below:
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A "REVOCATION" TO
PROPOSAL NO. 1.
AUTOINFO STOCKHOLDERS COMMITTEE PROPOSAL NO. 1
Resolution 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.
[ ] REVOCATION
The undersigned hereby revokes any and all consents and proxies for
consents which the undersigned may have given for the AutoInfo
Stockholders Committee Proposal No. 1.
[ ] NON-REVOCATION
The undersigned does not revoke any consents or proxies for consents
which the undersigned may have given for the AutoInfo Stockholders
Committee Proposal No. 1.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A "REVOCATION" TO
PROPOSAL NO. 2.
AUTOINFO STOCKHOLDERS COMMITTEE PROPOSAL NO. 2
Resolution 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.
[ ] REVOCATION
The undersigned hereby revokes any and all consents and proxies for
consents which the undersigned may have given for the AutoInfo
Stockholders Committee Proposal No. 2.
[ ] NON-REVOCATION
The undersigned does not revoke any consents or proxies for consents
which the undersigned may have given for the AutoInfo Stockholders
Committee Proposal No. 2.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A "REVOCATION" TO
PROPOSAL NO. 3.
AUTOINFO STOCKHOLDERS COMMITTEE PROPOSAL NO. 3
Resolution 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.
[ ] REVOCATION
The undersigned hereby revokes any and all consents and proxies for
consents which the undersigned may have given for the AutoInfo
Stockholders Committee Proposal No. 3.
[ ] NON-REVOCATION
The undersigned does not revoke any consents or proxies for consents
which the undersigned may have given for the AutoInfo Stockholders
Committee Proposal No. 3.
Please indicate your opposition to the AutoInfo Stockholders
Committee proposals by marking the boxes for "Revocation" and signing,
dating and mailing this revocation card promptly, using the enclosed,
postage paid envelope. If you mark any of the boxes for "Non-
Revocation", any consent you may have given to that particular proposal
of the AutoInfo Stockholders Committee will not be revoked. If you need
additional revocation cards or assistance, call D. F. King & Co., Inc.,
toll free, at (800) 522-5001.
<PAGE>
Preliminary Copy - For Use of the Commission Only
UNLESS OTHERWISE INDICATED ABOVE, THIS REVOCATION CARD REVOKES ALL
PRIOR CONSENTS GIVEN WITH RESPECT TO ANY OR ALL OF THE PROPOSALS SET
FORTH HEREIN.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE CONSENT
STATEMENT OF THE COMPANY, DATED _________, 1995, IN OPPOSITION TO THE
SOLICITATION OF THE AUTOINFO STOCKHOLDERS COMMITTEE. UNLESS YOU SPECIFY
OTHERWISE, BY SIGNING AND DELIVERING THIS REVOCATION CARD TO THE
COMPANY, YOU WILL BE DEEMED TO HAVE REVOKED CONSENT TO ALL OF THE
PROPOSALS SET FORTH HEREIN.
Revocations of consents can only be given by a stockholder of record.
Date:______________________, 1995
__________________________
Signature (Title, if any)
__________________________
Signature, if held jointly
Please sign your name above exactly as it appears hereon and date
your card. When shares are registered in the name of more than one
person, the revocation card should be signed by all named holders. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporate name by president or authorized officer. If a partnership,
please sign in partnership name by authorized person.
