<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COPYTELE, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
COPYTELE, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 23, 1997
TO THE SHAREHOLDERS OF COPYTELE, INC.
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of CopyTele, Inc., a Delaware corporation (the
"Company"), to be held at the Fox Hollow, Woodbury, New York, on Wednesday,
July 23, 1997, at 10:30 A.M., for the following purposes:
(1) To elect five directors.
(2) To act on a proposed amendment to the Certificate of
Incorporation to increase the authorized Common Stock of the Company from
120,000,000 shares of Common Stock, par value $.01 per share, to
240,000,000 shares of Common Stock, par value $.01 per share.
(3) To ratify the selection of Arthur Andersen LLP, independent
public accountants, as independent auditors of the Company for the fiscal
year ending October 31, 1997.
(4) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors by resolution has fixed the close of business on
June 16, 1997 as the record date for the determination of shareholders entitled
to notice of, and to vote at, the Annual Meeting and at any adjournment thereof
and only holders of record of Common Stock at the close of business on such
date will be entitled to notice of, and to vote at, the Annual Meeting.
Please complete, date, sign and promptly mail the enclosed proxy so that
your shares may be represented at the Annual Meeting if you are unable to
attend and vote in person.
By Order of the Board of Directors,
/s/ Anne Rotondo
ANNE ROTONDO
Secretary
Huntington Station, New York
June 23, 1997
<PAGE>
COPYTELE, INC.
900 WALT WHITMAN ROAD
HUNTINGTON STATION, NEW YORK 11746
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
JULY 23, 1997
------------------------
This Proxy Statement is furnished to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of CopyTele, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Shareholders to be held on Wednesday, July 23, 1997, and at any adjournments
thereof (the "Annual Meeting"). This Proxy Statement and the accompanying form
of proxy are first being sent to shareholders on or about June 23, 1997.
Record Date
The Board of Directors has fixed the close of business on June 16, 1997
as the record date (the "Record Date") for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting. Each such
shareholder will be entitled to one vote for each share of Common Stock held on
all matters to come before the Annual Meeting and may vote in person or by
proxy authorized in writing. At the Record Date, there were __________ shares
of Common Stock issued and outstanding.
Matters to Be Considered
At the Annual Meeting, shareholders will be asked to consider and vote
upon the election of five directors, to approve a proposed amendment to the
Company's Certificate of Incorporation to increase the authorized Common Stock
of the Company from 120,000,000 shares of Common Stock to 240,000,000 shares of
Common Stock, and to ratify the selection of Arthur Andersen LLP as the
Company's independent auditors for fiscal year 1997. The Board of Directors
knows of no matters that are to be brought before the Annual Meeting other than
as set forth in the Notice of Annual Meeting. If any other matters properly
come before the Annual Meeting, the persons named in the enclosed form of proxy
or their substitutes will vote in accordance with their best judgment on such
matters.
Required Votes
The affirmative vote of a plurality of the shares of Common Stock present
in person or represented by proxy at the Annual Meeting and entitled to vote on
such matter is required for the election of directors, assuming a quorum is
present. Only shares of Common Stock that are voted in favor of a nominee will
be counted toward that nominee's achievement of a plurality. Shares of Common
Stock held by shareholders present in person at the Annual Meeting that are not
voted for a nominee or shares held by shareholders represented at the Annual
Meeting by proxy from which authority to vote for a nominee has been properly
withheld (including broker nonvotes) will not be counted toward that nominee's
achievement of a plurality.
Assuming a quorum is present, the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote on such
matter at the Annual Meeting is required for approval of the proposed amendment
to the Company's Certificate of Incorporation and the affirmative vote of the
holders of a majority of the shares of Common Stock present in person or
represented by proxy and entitled to vote on such matter at the Annual Meeting
is required for ratification of the selection of Arthur Andersen LLP as the
Company's independent auditors for fiscal year 1997. With respect to an
abstention, the shares will be considered present and entitled to vote at the
Annual Meeting and they will have the same effect as votes against the matter.
With respect to broker non-votes, the shares will not be considered entitled to
vote at the Annual Meeting for such matter and the broker non-votes will have
the practical effect of reducing the number of affirmative votes required to
achieve a majority vote for such matter by reducing the total number of shares
from which the majority is calculated.
1
<PAGE>
Voting and Revocation of Proxies
Shareholders are requested to complete, date, sign and promptly return
the accompanying form of proxy in the enclosed envelope. Common Stock
represented by properly executed proxies received by the Company and not
revoked will be voted at the Annual Meeting in accordance with the instructions
contained therein. If instructions are not given, proxies will be voted FOR the
election of each nominee for election as a director named herein, FOR the
approval of the proposed amendment to the Company's Certificate of
Incorporation, and FOR the ratification of the selection of Arthur Andersen LLP
as the Company's independent auditors for fiscal year 1997.
Any proxy signed and returned by a shareholder may be revoked at any time
before it is voted by filing with the Secretary of the Company written notice
of such revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not in and of itself constitute revocation of a proxy.
Proxy Solicitation
The Company will bear the costs of solicitations of proxies for the
Annual Meeting. In addition to solicitation by mail, directors, officers and
regular employees of the Company may solicit proxies from shareholders by
telephone, telegram, personal interview or otherwise. Such directors, officers
and employees will not receive additional compensation, but may be reimbursed
for out-of-pocket expenses in connection with such solicitation. Brokers,
nominees, fiduciaries and other custodians have been requested to forward
soliciting material to the beneficial owners of Common Stock held of record by
them, and such custodians will be reimbursed for their reasonable expenses.
ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting by the holders of
Common Stock, each to serve until the next Annual Meeting of Shareholders and
until his successor shall be elected and shall qualify. All of the nominees at
present are available for election as members of the Board of Directors. If for
any reason a nominee becomes unavailable for election, the proxies solicited by
the Board of Directors will be voted for a substitute nominee selected by the
Board of Directors. Information regarding the nominees is as follows:
<TABLE>
<CAPTION>
Position with the Company
Name and Principal Occupation Age Director Since
- ---- ------------------------- --- --------------
<S> <C> <C> <C>
Denis A. Krusos............................. Director, Chairman of the Board and 69 1982
Chief Executive Officer
Frank J. DiSanto............................ Director and President 72 1982
Gerald J. Bentivegna........................ Director, Vice President-Finance 47 1995
and Chief Financial Officer
</TABLE>
<TABLE>
<S> <C> <C> <C>
John E. Gillies............................. Director 70 1992
John R. Shonnard............................ Director 81 1988
</TABLE>
Mr. Krusos has been a Director, Chairman of the Board and Chief Executive
Officer of the Company since November 1982. He holds an M.S.E.E. degree from
Newark College of Engineering, a B.E.E. degree from City College of New York
and a Juris Doctor from St. John's University and is a member of the New York
bar.
Mr. DiSanto has been a Director and President of the Company since
November 1982. He holds a B.E.E. degree from Polytechnic Institute of Brooklyn
and an M.E.E. degree from New York University.
Mr. Bentivegna has been Vice President-Finance and Chief Financial
Officer of the Company since September 1994 and was elected a Director in July
1995. Prior to joining the Company, Mr. Bentivegna was employed at Marino
Industries Corp. for approximately 10 years, where he served as Controller,
Treasurer and Chief Financial Officer. He holds an M.B.A. degree from Long
Island University and a B.B.A. from Dowling College.
2
<PAGE>
Mr. Gillies has been a Director of the Company since January 1992. He has
been an attorney for over forty years and formerly served as a Village Justice
and as a Village Attorney of the Incorporated Village of Farmingdale. He is
also Honorary President of St. Mary's Children and Family Services, a
not-for-profit child care agency for which he has served in various capacities
for over thirty years.
Mr. Shonnard has been a Director of the Company since January 1988. He
had been a research consultant to the Company from August 1983 until his
retirement in May 1988. Mr. Shonnard was engaged in development engineering in
the communications field for over fifty years. Mr. Shonnard has held numerous
patents in the communications field.
Certain Relationships and Related Transactions
In fiscal 1996, Peri D. Krusos, Denis Z. Krusos and Daniel A. DiSanto
exercised warrants to purchase 185,710, 185,710 and 12,930 shares of Common
Stock, respectively, at the weighted average exercise price of $2.83 per share
of the Company's Common Stock. Each exercise price represented the fair market
value of such stock on the date of issuance of these warrants, subsequently
adjusted for the two-for-one stock splits declared by the Company in February
1991 and May 1996 and the anti-dilution provisions of the warrants. The
warrants were issued in fiscal 1990 and 1991 in conjunction with sales of
Common Stock by the Company to the foregoing individuals. Peri D. Krusos and
Denis Z. Krusos are the daughter and son, respectively, of Denis A. Krusos and
Daniel A. DiSanto is the son of Frank J. DiSanto.
As of June 6, 1997, after adjustments for the two-for-one stock split
declared in May 1996, Peri D. Krusos, Denis Z. Krusos and Daniel A. DiSanto
each held warrants to purchase 73,000 shares of Common Stock, all of which are
exercisable.
Board Committees, Functions and Attendance
The Company has an Audit Committee consisting of Messrs. Denis A. Krusos,
John E. Gillies and John R. Shonnard. The primary functions of this committee
are to review the internal controls and financial statements of the Company,
recommend independent public accountants to the Board of Directors and review
the results of the independent public accountants' audits.
The Company has a Stock Option Committee consisting of Mr. John E.
Gillies and Mr. John R. Shonnard which administers the CopyTele, Inc. 1993
Stock Option Plan, as amended (the "1993 Plan").
The Company currently has no other standing, nominating or compensation
committees of the Board of Directors or committees performing similar
functions.
Four (4) meetings of the Board of Directors, one (1) meeting of the Audit
Committee and six (6) meetings of the Stock Option Committee were held during
the fiscal year ended October 31, 1996. During such year, each director
attended at least 75% of the aggregate number of meetings of the Board of
Directors and committee on which he served while a member thereof.
3
<PAGE>
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth certain information with respect to the
Common Stock beneficially owned as of June 6, 1997 by (a) each person who is
known by the management of the Company to be the beneficial owner of more than
5% of the Common Stock, (b) each director or executive officer of the Company
and (c) all directors and executive officers as a group:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Percent
Name and Address of Beneficial Owner Ownership(1)(2) of Class
- ------------------------------------ -------------------- --------
<S> <C> <C>
Denis A. Krusos..................................... 6,748,040 11.27%
900 Walt Whitman Road
Huntington Station, NY 11746
Frank J. DiSanto.................................... 6,472,960(3) 10.84%
900 Walt Whitman Road
Huntington Station, NY 11746
Frank W. Trischetta................................. 328,000 .56%
900 Walt Whitman Road
Huntington Station, NY 11746
Gerald J. Bentivegna................................ 151,000 .26%
900 Walt Whitman Road
Huntington Station, NY 11746
John E. Gillies..................................... 121,000 .21%
3925 Nassau Point Road
Cutchogue, NY 11935
John R. Shonnard.................................... 287,200(4) .50%
3925 Nassau Point Road
Cutchogue, NY 11935
All Directors and Executive Officers
as a Group (6 persons).............................. 14,108,200(3)(4) 22.56%
</TABLE>
- -----------
(1) A beneficial owner of a security includes any person who directly or
indirectly has or shares voting power and/or investment power with
respect to such security or has the right to obtain such voting power
and/or investment power within sixty (60) days. Except as otherwise
noted, each designated beneficial owner in this report has sole voting
power and investment power with respect to the shares of the Company's
common stock beneficially owned by such person.
(2) Includes 2,097,180 shares, 1,927,180 shares, 149,000 shares,
120,000 shares, 157,600 shares, 328,000 shares and 4,778,960
shares as to which Denis A. Krusos, Frank J. DiSanto, Gerald J.
Bentivegna, John E. Gillies, John R. Shonnard, Frank W. Trischetta and
all directors and executive officers as a group, respectively, have the
right to acquire within 60 days upon exercise of options granted pursuant
to the CopyTele, Inc. Stock Option Plan adopted in 1987 and/or the 1993
Plan.
(3) Includes 2,000,000 shares of Common Stock held in the Frank J. DiSanto
Revocable Living Trust. Mr. DiSanto is the trustee and has sole voting
and investment power of the trust.
(4) Includes 129,600 shares of the Company's common stock, all of which are
held in a revocable trust by the Wells Fargo Bank (successor of the First
Interstate Bank), as trustee of such trust. Mr. Shonnard and his wife,
Janet L. Shonnard, are the beneficiaries of such trust and, under
certain circumstances, may exercise the voting power and investment
power of the trust jointly.
4
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Messrs. Denis A. Krusos, Chairman of the Board, Chief Executive Officer
and Director, Frank J. DiSanto, President and Director, Frank W. Trischetta,
Senior Vice President - Marketing and Sales, and Gerald J. Bentivegna, Vice
President - Finance, Chief Financial Officer and Director, are the executive
officers of the Company. While there are no formal agreements, Denis A. Krusos
and Frank J. DiSanto waived any and all rights to receive salary and related
pension benefits for an undetermined period of time commencing November 1,
1985. As a result, Mr. Krusos received no salary or bonus during the last three
fiscal years. Except for Mr. Trischetta, no other executive officer received a
salary or bonus in excess of $100,000 during the fiscal year ended October 31,
1996. The following is compensation information regarding Mr. Krusos and Mr.
Trischetta for the fiscal years ended October 31, 1996, 1995 and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation Awards
------------------------------------------
Name and Fiscal Securities Annual
Principal Position Year Ended Underlying Options (#) Compensation
------------------ ---------- ---------------------- ------------
<S> <C> <C> <C>
Denis A. Krusos.......................... 10/31/96 575,000 -
Chairman of the Board, 10/31/95 900,000 -
Chief Executive Officer and Director 10/31/94 200,000 -
Frank W. Trischetta...................... 10/31/96 155,000 $117,600
Senior Vice President -
Marketing and Sales
</TABLE>
The following is information regarding stock options granted to Mr. Krusos and
Mr. Trischetta pursuant to the 1993 Plan during the fiscal year ended October
31, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to Exercise for Option Term
Option Granted Employees in Price Expiration --------------------------
Name (#) (1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- -------------- -------------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Denis A. Krusos........ 18,890 .41% $5.2938(2) 3/20/01 $ 16,026 $ 46,410
181,110 3.96% $4.8125(3) 3/20/06 $ 548,139 $1,389,093
200,000 4.37% $4.8125(3) 4/21/06 $ 605,311 $1,533,977
175,000 3.82% $6.3750(3) 9/18/06 $ 701,611 $1,778,019
Frank W. Trischetta..... 20,778 .45% $4.8125(2) 3/20/06 $ 62,886 $ 159,365
29,222 .64% $4.8125(3) 3/20/06 $ 88,442 $ 224,129
70,000 1.53% $4.8125(3) 4/21/06 $ 211,859 $ 536,892
35,000 .76% $6.3750(3) 9/18/06 $ 140,322 $ 355,604
</TABLE>
- ------------
(1) The options are exercisable in whole or in part commencing one year
following the date of grant unless otherwise accelerated. The options
are not issued in tandem with stock appreciation or similar rights and
are not transferable other than by will or the laws of descent and
distribution. The options terminate upon termination of employment,
except that in the case of death, disability or termination for
reasons other than cause, options may be exercised for certain periods
of time thereafter as set forth in the 1993 Plan.
(2) The exercise price of these options was equal to 110% of the fair
market value of the underlying Common Stock on the date of grant for
Mr. Krusos and 100% of the fair market value of the underlying Common
Stock on the date of grant for Mr. Trischetta (fair market value being
defined in the 1993 Plan as the last
5
<PAGE>
sales price of the Company's Common Stock on NASDAQ-NMS on the date of
grant). These options were intended as incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
(3) The exercise price of these options was equal to the fair market value
of the underlying Common Stock on the date of grant. These options are
nonqualified options.
The following is information regarding stock option exercises during fiscal
1996 by Mr. Krusos and Mr. Trischetta and the values of their options as of
October 31, 1996:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Options Money Options at Fiscal
at Fiscal Year End (#) Year End ($) (2)
Shares Acquired Value Realized ----------------------------- ---------------------------
Name on Exercise (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Denis A. Krusos........ 1,099,820 $ 3,191,225 1,597,180 175,000 $1,472,300 $136,719
Frank W. Trischetta.... 142,000 $ 290,750 208,000 155,000 $ 783,875 $308,594
</TABLE>
- ------------
(1) Such value was determined by applying the net difference between the
selling price of the stock sold on day of exercise and the exercise
price for the options to the number of options exercised. The exercise
price of these options was equal to the fair market value of the
underlying Common Stock as defined in the applicable plan.
(2) Such value was determined by applying the net difference between the
last sales price of the Company's Common Stock on October 31, 1996 and
the exercise price for the options to the number of unexercised
in-the-money options held. The exercise price of these options was at
least equal to the fair market value of the underlying Common Stock as
defined in the 1993 Plan.
There is no present arrangement for the compensation of directors for services
in that capacity. Upon the approval of the amendment of the 1993 Plan by the
Company's shareholders on July 24, 1996, each nonemployee director elected at
the 1996 Annual Meeting of Shareholders received nonqualified stock options to
purchase 40,000 shares of Common Stock and such nonemployee directors will
receive nonqualified stock options to purchase 40,000 shares of Common Stock
each subsequent year that such director is elected to the Board of Directors. In
addition, any future nonemployee director elected to the Board of Directors will
receive nonqualified stock options to purchase 20,000 shares of Common Stock
upon his initial election to the Board of Directors and 40,000 each subsequent
year that such director is elected to the Board of Directors.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION*
Since the Company is a development stage enterprise, it has not had
any revenues to support its operations since its inception. In view of the fact
that the Company's executive officers, with the exception of Gerald J.
Bentivegna and Frank W. Trischetta, have waived all salary and related pension
benefits for fiscal year 1996, the Board of Directors did not adopt any policy
with respect to the payment of cash compensation to the executive officers of
the Company for such period. At such time as the executive officers of the
Company, other than Mr. Bentivegna and Mr. Trischetta, withdraw their waivers,
it is contemplated that the Board of Directors will develop and adopt a
compensation policy for its executive officers generally, including the
Company's Chief Executive Officer. Although a salary was paid to each of Mr.
Bentivegna and Mr. Trischetta in fiscal year 1996, such compensation was not
part of an overall compensation policy, was determined solely by the Company's
Chief Executive Officer, and was not specifically related to corporate
performance.
6
<PAGE>
Generally, options under the 1993 Plan are granted as an inducement in
respect of future performance. During fiscal year 1996, options were granted to
Denis A. Krusos, Frank J. DiSanto, Gerald J. Bentivegna and Frank W. Trischetta
for 575,000, 575,000, 125,000 and 155,000 shares of Common Stock, respectively,
under the 1993 Plan. In granting such options, the Stock Option Committee,
which is comprised solely of nonemployee directors of the Company, did not take
into account the number of shares of Common Stock owned by such persons. The
1993 Plan also provides for the granting of stock appreciation rights, although
no stock appreciation rights have been granted under the 1993 Plan. The Board
of Directors believes that the 1993 Plan has been, and will continue to be,
effective in attracting and retaining executives and employees.
With certain exceptions, Section 162(m) ("Section 162(m)") of the
Internal Revenue Code of 1986, as amended, denies a deduction to the Company
for compensation paid to certain executive officers in excess of $1 million per
executive per taxable year (including any deduction with respect to the
exercise of a nonqualified option or right or the disqualifying disposition of
stock purchases pursuant to an incentive option). The Company believes that
options (provided such options are granted at fair market value) and rights
granted under the 1993 Plan should qualify for the performance-based
compensation exemption to Section 162(m).
This Report has been prepared by the Board of Directors.
Denis A. Krusos John R. Shonnard
Frank J. DiSanto John E. Gillies
Gerald J. Bentivegna
- ----------------
* The disclosure contained in the Report of the Board of Directors on
Executive Compensation and the Performance Graph which follows this
section is not incorporated by reference into any prior filings by the
Company under the Securities Act or the Exchange Act that incorporated
future filings or portions thereof (including this Proxy Statement).
7
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a graph showing the five-year cumulative total
return for (i) the Common Stock, (ii) the NASDAQ Stock Market U.S. Index, a
broad market index covering shares of common stock of domestic companies that
are listed on NASDAQ, and (iii) the NASDAQ Electronic Component Stock Index, a
group of companies that are engaged in the manufacture of electronic components
and related accessories with a Standard Industrial Classification code of 367
and listed on NASDAQ.
The Board of Directors recognizes that the market price of stock is
influenced by many factors, only one of which is Company performance. The stock
price performance shown on the graph is not necessarily indicative of future
price performance.
Comparison of 5 Year
Cumulative Total Return(1)
[GRAPHIC OMITTED]
Fiscal Year Ended October 31
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CopyTele, Inc............................... $100 104 94 41 70 119
Nasdaq Stock Market U.S. (2)................ $100 113 145 146 197 232
NASDAQ Electronic Components (2)............ $100 140 240 265 532 649
</TABLE>
- -------------------
(1) The comparison of total return on investment for each fiscal year
ended October 31 assumes that $100 was invested on November 1, 1991 in
each of the Company, the NASDA Stock Market U.S. Index and the NASDAQ
Electronic Component Index with investment weighted on the basis of
market capitalization and all dividends reinvested. In addition, the
total returns account for the Company's two-for-one stock splits
declared in February 1991 and May 1996.
(2) The total returns for each NASDAQ index are based on information
provided by NASDAQ, which had been prepared by the Center for Research
in Securities Prices at the University of Chicago.
8
<PAGE>
INCREASE IN AUTHORIZED COMMON STOCK
At a meeting of the Board of Directors of the Company held May 12,
1997, the Board of Directors voted to submit to the shareholders a proposal to
amend the Certificate of Incorporation of the Company to increase the authorized
Common Stock of the Company from one hundred twenty million (120,000,000) shares
of Common Stock to two hundred forty million (240,000,000) shares of Common
Stock. No shares of Common Stock of the Company have any preemptive rights.
Of the shares presently authorized, ____________ shares of Common
Stock were outstanding on June 16, 1997. The Board of Directors believes that
the authorized number of shares of Common Stock should be increased to provide
sufficient shares for such corporate purposes as may be determined by the Board
of Directors, including flexibility for possible future financings; facilitating
broader ownership of the Company's Common Stock by effecting a stock split or
issuing a stock dividend; for use in conjunction with possible acquisitions; or
for any other proper corporate purpose. The Company at present has no
commitments, agreements or undertakings to issue any such additional shares.
The Board of Directors considers the authorization of additional shares of
Common Stock advisable to ensure prompt availability of shares for issuance
should the occasion arise. If required by law or regulation, the Company will
seek shareholder approval prior to any issuance of shares.
The Board of Directors recommends a vote FOR this proposal.
SELECTION OF AUDITORS
The shareholders are being asked to ratify the selection of Arthur
Andersen LLP as the independent auditors of the Company for the fiscal year
ending October 31, 1997. A representative of Arthur Andersen LLP will be
present at the Annual Meeting to answer questions and to make a statement if he
desires to do so.
The Board of Directors recommends a vote FOR this proposal.
SHAREHOLDER PROPOSALS
All proposals from shareholders to be considered at the next annual
meeting must be received by the Secretary of the Company, 900 Walt Whitman
Road, Huntington Station, New York 11746, not later than the close of business
February 20, 1998.
ANNUAL REPORT
A copy of the Annual Report of the Company, including financial
statements for the fiscal year ended October 31, 1996 accompanies this Proxy
Statement.
By Order of the Board of Directors,
/s/ Anne Rotondo
ANNE ROTONDO
Secretary
Huntington Station, New York
June 23, 1997
9
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
COPYTELE, INC.
Annual Meeting of Shareholders -- July 23, 1997
The undersigned shareholder of CopyTele, Inc., a Delaware corporation (the
"Company"), hereby appoints DENIS A. KRUSOS and FRANK J. DISANTO, or either of
them, with full power of substitution, as the proxy or proxies of the
undersigned at the Annual Meeting of Shareholders of the Company to be held at
the Fox Hollow, Woodbury, New York, on July 23, 1997, at 10:30 a.m., and any
adjournment(s) thereof, and to vote thereat all shares of Common Stock of the
Company which the undersigned would be entitled to vote if personally present in
accordance with the instructions on the reverse side of this Proxy.
The shares represented by this Proxy will be voted as specified on the reverse
side hereof, but if no specification is made, the proxies intend to vote FOR the
election of all nominees as directors, FOR the proposed amendment to the
Certificate of Incorporation to increase the number of authorized shares of the
Company's Common Stock to 240 million, and FOR the ratification of the selection
of auditors and, in the discretion of such proxies, for or against such other
matters as may properly come before said meeting or any adjournment(s) thereof.
(continued--to be dated and signed on reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your
votes as indicated /X/
in this example
Nominees: [Denis A. Krusos, Frank J. DiSanto, Gerald J. Bentivegna, John E.
Gillies, and John R. Shonnard]
(Instruction: To withhold authority to vote for any individual nominee,
mark FOR and write that nominee's name below.)
----------------------
1. Election of Directors
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
/ / / /
2. APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES TO 240 MILLION.
FOR AGAINST ABSTAIN
/ / / / / /
3. RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING OCTOBER 31, 1997.
FOR AGAINST ABSTAIN
/ / / / / /
4. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT(S) THEREOF.
FOR AGAINST ABSTAIN
/ / / / / /
Receipt is acknowledged of Notice of
said Meeting, Proxy Statement and
Annual Report for the fiscal year ended
October 31, 1996.
Dated:________________________ , 1997
_________________________________(Seal)
_________________________________(Seal)
Please sign here exactly as your name
appears at the left. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
title, as such. Each joint owner or
trustee should sign the proxy.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE.
COPYTELE, INC.
Annual Meeting of Shareholders
July 23, 1997--10:30 A.M.
To be held at:
FOX HOLLOW
7725 Jericho Turnpike
Woodbury, New York
(516) 921-1415
----------------
Long Island Expressway to Exit 44 North (which is Rt. 135 North) to Exit 14
East (which is Woodbury 25 East)
Northern State Parkway to Exit 36B North (which is Rt. 135 North) to Exit
14 East (which is Woodbury 25 East)
Belt Parkway to Southern State Parkway to Exit 28A North (which is Rt. 135
North) to Exit 14 East (which is Woodbury 25 East)
-------------------------------
At exit, make right turn onto Jericho Turnpike (25 East). Fox Hollow is on left
after first traffic light.
