- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than 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 ss.240.14a-11(c) or ss.240.14a-12
---------------------------
COMPUTER TELEPHONE CORP.
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each Class of Securities to which transaction applies:
2) Aggregate Number of Securities to which transaction applies:
3) Per unit price or the 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:
---------------------------
Copies of all communications to:
LEONARD R. GLASS, ESQ.
Cole, Schotz, Meisel, Forman & Leonard, P.A.
25 Main Street, Post Office Box 800
Hackensack, New Jersey 07602-0800
(201) 489-3000
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<PAGE>
PRELIMINARY COPY
COMPUTER TELEPHONE CORP.
360 Second Avenue
Waltham, MA 02154
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Computer Telephone Corp.
Notice is hereby given that the Annual Meeting of Stockholders of Computer
Telephone Corp. (the "Company") will be held at the offices of the Company, 360
Second Avenue, Waltham, Massachusetts 02154 on Monday, August 21, 1995 at 9:30
a.m., local time, for the following purposes, all of which are more completely
set forth in the accompanying Proxy Statement:
1. To elect as directors the four (4) persons listed in the accompanying
Proxy Statement;
2. To amend the Company's Amended Restated Articles of Organization to
increase the authorized shares of common stock from 8,600,000 shares
to 25,000,000 shares;
3. To ratify the selection of Ernst & Young as the independent
accountants of the Company for the fiscal year ending March 31, 1996;
and
4. To consider and transact any other business that may lawfully come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on July 12, 1995 as
the record date for the determination of stockholders entitled to vote at the
Meeting and to receive notice thereof. Accordingly, only stockholders of record
on such date will be entitled to vote at the meeting. The stock transfer books
of the Company will not be closed.
Please sign the enclosed proxy and return it in the enclosed envelope.
July , 1995 By Order of the Board of Directors
Mailed at Boston,
Massachusetts
Robert J. Fabbricatore, Chairman
IMPORTANT
STOCKHOLDERS ARE REQUESTED TO DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY SO
THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT
THE PRESENCE OF A QUORUM MAY BE ASSURED, A POSTAGE-PAID ENVELOPE IS PROVIDED FOR
MAILING IN THE UNITED STATES. YOU ARE ENTITLED TO REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS EXERCISED BY WRITTEN NOTICE TO THE COMPANY. ALSO, IF YOU ATTEND THE
MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE USED.
<PAGE>
PRELIMINARY COPY
PROXY STATEMENT
1995 ANNUAL MEETING OF STOCKHOLDERS OF
COMPUTER TELEPHONE CORP.
TO BE HELD AUGUST 21, 1995
Approximate Date of Mailing to Stockholders:
July , 1995
TIME AND PLACE OF MEETING
This Proxy Statement is furnished to stockholders by the Board of
Directors of Computer Telephone Corp., a Massachusetts Corporation (the
"Company"), for solicitation of Proxies for use at the 1995 Annual Meeting of
Stockholders to be held on August 21, 1995 at 9:30 a.m., and at all adjournments
thereof, for the purposes set forth in the attached Notice of Annual Meeting.
The Company's principal executive offices are located at 360 Second
Avenue, Waltham, Massachusetts, 02154 (617-466-8080).
Proxies in the form enclosed are solicited on behalf of the Board of
Directors. Any stockholder giving a proxy in such form has the power to revoke
it at any time before it is exercised by filing a later proxy with the Company,
by attending the meeting and voting in person, or by notifying the Company of
the revocation in writing to its Clerk at 360 Second Avenue, Waltham, MA 02154.
Any such proxy, if received in time for voting and not revoked, will be voted at
the meeting in accordance with the directions of the stockholder. Any proxy
which fails to specify a choice with respect to the matters to be acted upon
will be voted for the proposals.
VOTING RIGHTS AND VOTE REQUIRED
As of July 12, 1995 (the "Record Date"), the Company had outstanding and
entitled to vote 3,119,483 shares of Class 1 Common Stock (the "Common Stock").
There is no other class of Common Stock of the Company outstanding. Only
stockholders of record at the close of business on the Record Date are entitled
to vote at the Annual Meeting. Each outstanding share entitles the record holder
to one (1) vote on the matters to be voted upon at the meeting. The stock
transfer books will not be closed for the purposes of such vote.
The holders of a majority of interest of all Common Stock issued,
outstanding and entitled to vote at a stockholders' meeting, present in person
or by proxy, constitute a quorum pursuant to the Company's By-Laws. In the
absence of a quorum, the Annual Meeting may be postponed from time to time until
stockholders holding the requisite amount are present or represented by proxy.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as of the Record Date
with respect to the Common Stock beneficially owned by each Director and
Executive Officer of the Company, by all of
<PAGE>
the Directors and Officers of the Company as a group, and by each person known
by the management of the Company to own beneficially more than five (5%) percent
of the outstanding shares of the Common Stock. Based upon the information
furnished by the beneficial owners of the Common Stock listed below, the Company
believes that each such stockholder exercises sole voting and investment power
with respect to the shares beneficially owned.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percent of
Name of Beneficial Owner Owned Class
- ---------------------------------------------------------------- ----------------------- --------------------
<S> <C> <C>
Robert J. Fabbricatore (1)(2)...................................... 1,089,093 34.9%
Philip J. Richer (1)(3)............................................ 153,326 4.8
Steven P. Milton (1)............................................... 130,311 4.2
John D. Pittenger (1).............................................. 72,863 2.3
Richard J. Santagati (1)......................................... .. 25,000 0.8
Alphonse M. Lucchese (1)(4)........................................ 21,875 0.7
All Officers and Directors as a Group
(six persons) (5)(6)............................................... 1,492,468 46.1%
<FN>
- --------------------
(1) The address of each person is c/o Computer Telephone Corp., 360 Second
Avenue, Waltham, MA 02154.
(2) Includes 16,667 shares owned of record by Mr. Fabbricatore as trustee of a
trust for his children.
(3) Includes 92,750 shares issuable upon exercise of the vested portion of
stock options at exercise prices ranging from $1.60 to $3.30 per share.
(4) Includes 21,875 shares issuable upon exercise of the vested portion of
stock options at exercise prices ranging from $1.35 to $3.30 per share.
(5) Includes the shares described in footnotes (2) through (4) above.
(6) Does not include 27,564 shares held by the Company's Employee Stock
Purchase Plan of which Messrs. Richer and Pittenger are trustees
(exclusive of 1,856 shares held for the account of Mr. Pittenger which are
included in his respective holdings above).
</FN>
</TABLE>
PROPOSAL 1:
ELECTION OF DIRECTORS
Unless the authority to do so is withheld, the enclosed Proxy will be
voted for the election of the Nominees named below to hold office until the next
Annual Meeting of the Stockholders and until their successors shall be duly
elected and qualified. In the event any of the Nominees should be unwilling or
unable to serve as a Director, the Proxy will be voted for such substitute
Nominee as the
2
<PAGE>
Board of Directors may designate or in the absence of such designation in
accordance with the best judgment of the person or persons acting under the
Proxy. Management is not aware of any nominee who is unable or will decline to
serve as a Director.
The following table sets forth the name and age of each Nominee, the
period during which he has served as Director and the other capacities in which
he currently services the Company:
<TABLE>
<CAPTION>
Period Other Capacities in
Served as which Currently
Name Age Director Serving
- ---- --- -------- --------------
<S> <C> <C> <C>
Robert J. Fabbricatore (1) 52 Since 1980 Chairman, President
and Chief Executive
Officer
Philip J. Richer (1) 59 Since 1989 Vice Chairman and
Executive Vice
President
Richard J. Santagati (1)(2) 49 Since 1991 None
Alphonse M. Lucchese (1)(2) 60 Since 1993 None
<FN>
- --------------------
(1) Current member of the Stock Option Committee and the General Compensation Committee.
(2) Current member of the Audit Committee
</FN>
</TABLE>
Mr. Fabbricatore, a founder of the Company and a Director since its
inception in 1980, became Chairman of the Board of Directors in March 1983 and
President in October 1993. Mr. Fabbricatore also served as Treasurer of the
Company from April 1987 until May 1988. Prior to April 1, 1986, Mr. Fabbricatore
did not devote a substantial portion of his time to the Company's business.
Mr. Richer joined the Company as Vice President in July 1989 and became a
Director and Vice Chairman of the Company in August 1989 and Executive Vice
President in August 1994. Prior to joining the Company, Mr. Richer served as
director of Sales Channel Management for New England Telephone Company. During
his career with New England Telephone, Mr. Richer served in a variety of other
management positions. In addition, Mr. Richer was formerly Data Communications
Superintendent for New England Telephone and performed numerous sales and sales
management functions.
Mr. Santagati became a director of the Company in September 1991. He is
the President of Merrimack College in North Andover, Massachusetts. Mr.
Santagati was a partner of Lighthouse Management, Inc., a private investment
firm located in Boston, Massachusetts from 1991 to 1993 and
3
<PAGE>
the Chief Executive Officer of Artel Communications Corp., a publicly held data
communications firm located in Hudson, Massachusetts from 1991 to February 1994.
He was the Chief Executive Officer and a member of the Executive Committee of
Gaston & Snow, a Boston, Massachusetts based law firm, from 1986 to 1991. From
1983 to 1986, Mr. Santagati was employed by NYNEX Corp., first as Vice President
of Marketing, and then as President and Chairman of NYNEX Business Information
Systems Co. From 1977 to 1983, Mr. Santagati held a number of executive level
positions with New England Telephone, including Vice President of Marketing and
Assistant Vice President of Sales. Mr. Santagati is a member of the Board of
Trustees of Lawrence General Hospital, and is Chairman of the Board of Lawrence
General Hospital Foundation. He is also a Director of ESP, Inc. a communications
company.
Mr. Lucchese became a Director of the Company in August 1993. Since July
1, 1994, Mr. Lucchese has been Chairman, Chief Executive Officer and President
of Davox Corp., a Westford, Massachusetts manufacturer of predictive dialing
systems. From April 1987 to June 1994, he was the President and Chief Executive
Officer of Iris Graphics, Inc., located in Bedford, Massachusetts, which is
engaged in the manufacture of high performance, high quality color printers.
From 1984 to 1987 Mr. Lucchese was Vice President of Xyvision, Inc., a
manufacturer of computer integrated publishing systems. From 1983 to 1984 he was
Vice President, Sales and Marketing for Davox Corp. From 1977 to 1983, Mr.
Lucchese was employed by Raytheon Data Systems where he was the Vice President
and General Manager of Northeast Operations.
All Directors are elected to hold office until the next Annual Meeting of
the Stockholders and until their successors are elected and qualified. Each
person nominated for election as a Director has agreed to serve as such, if
elected. There are no arrangements or understandings between any of the
Directors of the Company and any other person pursuant to which such person was
selected as a Director of the Company.
During the fiscal year ended March 31, 1995, the Board of Directors held
four (4) meetings. All Directors participated in all of such meetings.
Committees of the Board
Stock Option Committee. The Board of Directors has a Stock Option
Committee which consists of all members of the Board and administers the
Company's stock benefits plans. The Stock Option Committee took action on three
occasions during the fiscal year ended March 31, 1995.
Compensation Committee. The Compensation Committee of the Board of
Directors consists of all the members of the Board and acts upon the
compensation of such persons as are determined by the Board of Directors. During
the fiscal year ended March 31, 1995, the General Compensation Committee held
two meetings.
Audit Committee. The Audit Committee is comprised of Messrs. Santagati and
Lucchese. During the fiscal year ended March 31, 1995, the Audit Committee held
three meetings.
The Board of Directors does not have a nominating committee.
4
<PAGE>
All members of the committees of the Board of Directors attended all of
their respective committee meetings.
Executive Officers
The following table sets forth the name and age of each executive officer
of the Company and the office and period during which he has held such office.
<TABLE>
<CAPTION>
Period
Served as
Name Age Office Officer
- -------------------- --- ----------------- -------
<S> <C> <C> <C>
Robert J. Fabbricatore 52 Chairman, President and Chief Since 1980
Executive Officer
Philip J. Richer 59 Vice Chairman and Since 1989
Executive Vice President
Steven P. Milton 41 Vice President-Sales and Since 1994
Marketing
John D. Pittenger 41 Vice President-Finance, Since 1989
Treasurer, Clerk and Chief
Financial Officer
</TABLE>
Currently, there is no fixed term of office for any executive officer.
Each person selected to become an executive officer has consented to act as such
and there are no arrangements or understandings between the executive officers
or any other persons pursuant to which he or she was or is to be selected as an
officer.
Mr. Milton has been employed by the Company since 1984 and has served as
Vice President-Sales and Marketing since August 1994. Prior to that, he held
various positions within the Company including Branch Manager, District Manager
and Regional Manager.
Mr. Pittenger has served as Treasurer, Chief Financial Officer and Clerk
since August 1989. He was elected to also serve as Vice President-Finance in
September 1991. For the nine years prior to August 1989, Mr. Pittenger was the
Chief Financial Officer of Comm-Tract Corp., a company which designs, engineers
and installs voice and data communications systems.
For a description of the business backgrounds of Messrs. Fabbricatore and
Richer see "Nominees for Directors".
5
<PAGE>
Executive Compensation
The following table provides certain summary information concerning the
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the other executive officers of the Company
whose remuneration exceeded $100,000 (collectively, the "named executive
officers") for services rendered in all capacities for the Company for the
fiscal years ended March 31, 1993, 1994 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
All Other
Long Term Compensation
Annual Compensation Compensation ($)(3)
----------------------------------------------- --------------- -------------
Name and Principal Other Annual Awards, Options
Position Year Salary ($)(1) Bonus($)(2) Compensation ($) (#)
- ----------------------- ------ ------------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Fabbricatore 1995 240,000 60,000 1,500 35,385 11,636
Chairman, President and 1994 265,000 35,000 7,500 45,454 11,432
Chief Executive Officer 1993 396,000
Philip J. Richer 1995 100,000 24,000 4,800 46,750 3,470
Vice Chairman and 1994 100,000 18,400 4,800 50,000 1,860
Vice President-Sales 1993 100,000 26,995 4,800
Steven P. Milton 1995 100,000 52,000 5,200 36,200 4,440
Vice President-Sales and
Marketing
John D. Pittenger 1995 83,600 26,000 1,200 17,000 3,228
Vice President-Finance, 1994 80,000 24,000 1,200 45,000 1,940
Treasurer, Chief 1993 80,000 16,800 4,800
<FN>
(1) For the fiscal year ended March 31, 1995, Messrs. Fabbricatore, Richer, Milton and Pittenger's salaries included pre-tax
Clerk contributions made by such officers to the Computer Telephone Corp. 401(k) Savings Plan.
(2) Includes bonuses accrued for Messrs. Fabbricatore, Richer, Milton and Pittenger for the fiscal year ended March 31, 1995
in the amounts of $15,000, $6,000, $10,000 and $8,000 respectively, which were paid during the first quarter of Fiscal
1996.
(3) All Other Compensation includes 50% matching contributions in the amounts of $3,520, $3,470, $4,440 and $3,228 accrued
on behalf of Messrs. Fabbricatore, Richer, Milton and Pittenger, respectively, to the Computer Telephone Corp. 401(k)
Savings Plan. Also included is the actuarial benefit in the amount of $8,116 on the "split-dollar" life insurance policy
for the benefit of Mr. Fabbricatore.
</FN>
</TABLE>
6
<PAGE>
The following table contains information concerning the stock option
grants under the Computer Telephone Corp. 1993 Stock Option Plan to the named
executive officers made during the fiscal year ended March 31, 1995. The Company
made no grants of stock appreciation rights during the fiscal year ended March
31, 1995.
OPTION GRANTS IN FISCAL YEAR ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option Term
Number of % of Total
Securities Options Exercise
Underlying Granted to Price $
Options Employees in per Share Expiration
Name Granted (#) Fiscal Year (4) Date 5% ($) 10% ($)
- ------------------------- -------------- -------------- ----------- ------------ -------------------- ---------------
<S> <C> <C> <C> <C>
Robert J. Fabbricatore 24,200 (1) 5.8% $4.54 10/04/99
11,185 (2) 2.7% $8.94 03/17/00
Philip J. Richer 24,200 (1) 5.8% $3.30 10/04/99
4,000 (2) 1.0% $8.125 03/17/00
18,550 (3) 4.5% (3) (3)
Steven P. Milton 24,200 (1) 5.8% $4.125 10/04/99
12,000 (2) 2.9% $8.125 03/17/00
John D. Pittenger 5,000 (1) 1.2% $4.125 10/04/99
12,000 (2) 2.9% $8.125 03/17/00
<FN>
(1) These options were granted on October 4, 1994 and have a maximum term of
five years subject to earlier termination in the event of the optionee's
cessation of employment with the Company. These options, which were
initially exercisable in five equal annual installments commencing at the
date of grant, were made exercisable in full in October 1994.
(2) Each option becomes exercisable in four equal annual installments
beginning one year after the date of grant, so long as employment with the
Company continues. These options were granted on March 17, 1995 and have a
maximum term of five years subject to earlier termination in the event of
the optionee's cessation of employment with the Company.
(3) These options are a result of the March 10, 1995 stock dividend. They
become exercisable under the same terms as the original options on which
they were issued. They have exercise prices ranging from $1.60 to $3.30
per share and expiration dates ranging from April 10, 1995 to October 4,
1999.
(4) The exercise price may be paid in cash or in shares of Common Stock valued
at fair market value on the exercise date.
</FN>
</TABLE>
7
<PAGE>
The following table sets forth information concerning option exercises and
option holdings for the fiscal year ended March 31, 1995 with respect to the
named executive officers. The Company had no outstanding stock appreciation
rights at March 31, 1995.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Value
Realized
(Market
price at
exercise Value of Unexercised in-the-
Shares less Number of Securities Underlying money options at FY End (Market
acquired on exercise Unexercised Options at Fiscal price of shares at FY-End
exercise (#) price) ($) Year ($10.625) less exercise price)
------------ ---------- ------------------------------ -------------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Fabbricatore 164,200 (1) 1,639,706 - 11,185 - $18,847
Philip J. Richer 40,000 (1) 460,000 92,750 4,000 $730,644 $10,000
Steven P. Milton 104,200 1,075,125 - 12,000 - $30,000
(1)(2)
John D. Pittenger 50,000 (1) 564,375 - 12,000 - $30,000
<FN>
(1) On January 20, 1995, Messrs. Fabbricatore, Richer, Milton, and Pittenger
exercised options on a pre stock dividend basis to purchase 164,200,
40,000, 104,200 and 50,000 shares of Class 1 Common Stock, respectively,
through the delivery of 42,740, 5,925, 7,954 and 8,194 shares of Class 1
Common Stock of the Company, respectively. The market price of the Class 1
Common Stock on January 20, 1995 was $13.50 per share.
(2) See "Transactions with Management and Related Transactions."
(3) All shares and amounts, as necessary, have been adjusted to reflect the
25% Common Stock dividend effected in March 1995.
</FN>
</TABLE>
Directors' Compensation
Directors of the Company who are employees do not receive remuneration for
services as directors. Directors who are not employees receive an annual
retainer of $4,250 and are paid a fee of $750 per meeting for each meeting
attended.
Transactions with Management and Related Transactions
The Company leases from trusts, of which Robert J. Fabbricatore, the
Company's Chairman and Chief Executive Officer, is a beneficiary, office space
in Springfield, Massachusetts and southern New Hampshire at an aggregate annual
rental of approximately $164,000. Through June 30, 1994, the Company leased
office space in Waltham, Massachusetts and Meriden, Connecticut from a company
of which Mr. Fabbricatore is a principal, at an aggregate rental of
approximately $49,000. Effective July 1, 1994, the Company began subleasing part
of its Waltham facility to a company controlled by Mr. Fabbricatore. Sublease
income totalled $55,181 for the fiscal year ended March 31, 1995. The Company
also contracts, with Comm-Tract Corp., a company in which Mr. Fabbricatore is
the controlling stockholder, for the installation of telephone lines and for the
service and maintenance and equipment marketed by the Company. During the fiscal
year ended March 31, 1995, the Company paid $868 for such services and purchased
inventory and equipment from Comm-Tract Corp. for $67,755. The Company believes
that such payments for services, inventory and equipment and
8
<PAGE>
lease rentals are comparable to the cost for such services, inventory and
equipment and for rentals of similar facilities which the Company would be
required to pay to unaffiliated individuals in arms-length transactions.
At March 31, 1994, Mr. Fabbricatore was indebted to the Company in the
amount of $263,680. During the fiscal year ended March 31, 1995, the Company
made cash advances of $90,573 to Mr. Fabbricatore and $179,596 was credited to
his account, leaving an outstanding balance of $174,657 at March 31, 1995. These
advances are payable on demand and bear interest at eight (8%) percent per
annum.
In connection with the exercise of stock options, Steven P. Milton, Vice
President - Sales and Marketing, was advanced the sum of $135,825 by the
Company. The loan is payable on demand and bears interest at 8.0% per annum.
Board Recommendation
The Board of Directors recommends that the stockholders vote FOR the
election of the nominees named above. Unless instructed to the contrary, the
enclosed proxy will be voted for the election of such nominees. Election of
directors shall be determined by a plurality of the votes cast by stockholders
entitled to vote at the election. Since the members of the Board of Directors
own approximately 37.7% of the outstanding shares of Common Stock, election of
such nominees is probable.
PROPOSAL 2:
AMENDMENT TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF
COMMON STOCK
The Board of Directors has adopted and recommends to the stockholders for
approval, an Amendment ("Amendment") to Article 3 of the Company's Amended
Restated Articles of Organization ("Articles") to increase the number of shares
of Common Stock which the Company is authorized to have outstanding to
25,000,000 shares.
The Company's current Articles authorize the Company to have outstanding
up to 8,600,000 shares of Class I Common Stock and up to 1,000,000 shares of
Preferred Stock. The Board of Directors believes it to be in the best interest
of the Company to increase the number of authorized shares of Common Stock to
insure that an ample number of such shares are available for issuance if such
issuance becomes desirable.
The additional shares of Common Stock that would be authorized by the
proposed Amendment would be issuable in the discretion of the Board of
Directors, normally without further stockholder action, for possible future
financing and acquisition transactions, Common Stock dividends or splits,
issuance pursuant to the Employee Stock Purchase Plan and the Employees' Stock
Bonus Plan and other proper corporate purposes. The Board of Directors
9
<PAGE>
does not have any current plans to issue any shares of Common Stock that would
be authorized by the Amendment. Stockholder approval of the Amendment will give
the Company greater financial flexibility by permitting such shares to be issued
without the delay of a special stockholders meeting. Any such delay may deprive
the Company of the flexibility the Board of Directors considers important in
facilitating the effective use of the shares.
The proposed Amendment would authorize the Board of Directors to issue an
additional 16,400,000 shares of Common Stock. Although it is possible that the
private placement of a block of Common Stock could be used as an anti-takeover
measure, the proposal to authorize additional Common Stock is made for the
reasons set forth above and not as an anti-takeover strategy.
Pursuant to the proposed Amendment, the class of 25,000,000 shares of
Common Stock will be designated as "Common Stock" and each currently outstanding
share of Class I Common Stock shall be redesignated as one share of Common Stock
and shall have the same rights and privileges.
The new shares when issued would have the same rights and privileges as
the shares of Class I Common Stock presently outstanding.
No stockholder of the Company has any preemptive right to subscribe for or
purchase any of the shares of Common Stock and, once authorized, such shares
would be available for issuance at such time and on such terms as the Board of
Directors may consider appropriate.
The proposed Amendment would amend Article 3 of the Articles to read as
follows:
3. The total number of shares and the par value, if any, of each class of
stock which the corporation is authorized to issue is as follows:
CLASS OF STOCK NUMBER OF SHARES PAR VALUE
-------------- ---------------- ---------
Preferred 1,000,000 $1.00
Common 25,000,000 $ .01
Board Recommendation
The approval of the proposed Amendment to the Amended Restated Articles of
Organization requires the affirmative vote of the holders of shares representing
a majority of the outstanding shares of Common Stock and entitled to vote.
10
<PAGE>
The Board of Directors recommends that stockholders vote for the Amendment
to the Amended Restated Articles of Organization. Unless instructed to the
contrary, the enclosed proxy will be voted in favor or the proposed Amendment.
Since the members of the Board of Directors own approximately 37.7% of the
outstanding shares of Common States, approval of the proposal is probable.
PROPOSAL 3:
RATIFICATION OF ERNST & YOUNG AS INDEPENDENT ACCOUNTANTS
The Board of Directors has concluded that the continued employment of
Ernst & Young as the Company's independent public accountants will be in the
Company's best interest and recommends that Ernst & Young be elected for the
fiscal year ending March 31, 1996.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.
Ernst & Young (and its predecessor Ernst & Whinney) has served as
independent public accountants for the Company continuously since January 1988.
The Company has been advised by Ernst & Young that neither the firm nor any of
its partners has any material direct or any indirect financial interest in the
Company.
Board Recommendation
The Board of Directors unanimously recommends that the Stockholders vote
FOR approval of the selection of Ernst & Young as independent public
accountants. Unless instructed to the contrary, the enclosed proxy will be voted
for the selection of such accountants. Approval of such selection will require
the affirmative votes of a majority of shares entitled to vote thereon present
in person or represented by proxy at the Annual Meeting when a quorum is
present. Since members of the Board of Directors own approximately 37.7% of the
outstanding shares of Common Stock, ratification of such selection is probable.
EXPENSE OF SOLICITATION
All costs connected with the solicitation of Proxies will be borne by the
Company. Brokers and other persons holding stock for the benefit of others will
be reimbursed for their expenses in forwarding Proxies and accompanying material
to the beneficial owners of such stock and obtaining their Proxies. Solicitation
will be made by mail, telephone, telegraph or otherwise, and some of the
Directors, officers and regular employees of the Company may assist in the
solicitation without additional compensation.
11
<PAGE>
STOCKHOLDERS' PROPOSALS
If a stockholder wishes to present a proposal to be voted on the 1996
Annual Meeting, the proponent must, at the time the proposal is submitted, be a
record or beneficial owner of at least one (1%) percent or One Thousand
($1,000.00) Dollars in market value of the class of securities entitled to vote
at the meeting and have held such securities for at least one (1) year, and such
stockholder must continue to own such securities through the date on which the
1996 Annual Meeting is held. The proposal, in order to be included in the
management proxy statement, must be received at the Company's executive offices
no later than March __, 1996. In order to remove any question as to the date on
which a proposal was received by the Board of Directors, it is suggested that
proposals be submitted by certified mail, return receipt requested.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Board of Directors knows of no other matters which may be presented at
the Meeting, but if other matters do properly come before the meeting, it is
intended that the persons named in the Proxy will vote according to their best
judgment.
Stockholders are requested to date, sign and return the Proxy in the
enclosed envelope, to which no postage need be affixed if mailed in the United
States. If you attend the Meeting, you may revoke your Proxy at that time and
vote in person if you so desire, otherwise your Proxy will be voted for you.
By Order of the Board of Directors
Robert J. Fabbricatore, Chairman
July , 1995
Waltham, Massachusetts
12
<PAGE>
[X] PLEASE MARK VOTES PRELIMINARY COPY
AS IN THIS EXAMPLE
(Left Column)
With- For All
For hold Except
(1) Election of the following nominees for the [ ] [ ] [ ]
Board of Directors to serve until the Annual
Meeting of Stockholders in 1996 and until
each successor is duly elected and
qualified.
ROBERT J. FABBRICATORE, RICHARD J. SANTAGATI,
ALPHONSE M. LUCCHESE AND PHILIP J. RICHER
Instruction: To withhold authority to vote for any individual nominee,
check the "For All Except" box and strike a line through the nominee's
name in the list above. Unless authority to vote for all foregoing
nominees is wittheld, this proxy will be deemed to confer authority to
vote for every nominee whose name is not struck.
RECORD DATE SHARES:
---------------
Please be sure to sign and date this Proxy. Date
- ------------------------------------------------------------------
- -----Stockholder sign here----------Co-owner sign here------------
(Right Column)
For Against Abstain
(2) Prosposal to approve an amdendment to the [ ] [ ] [ ]
Company's Amended Restated Articles of
Organization to increase the authorized
shares of Common Stock from 8,600,000 shares
to 25,000,000 shares.
(3) Ratify the selection of Ernst & Young LLP as [ ] [ ] [ ]
the independent accountants of the Company.
(4) In their discretion, on any other matters [ ] [ ] [ ]
which may properly come before the meeting
or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
COMPUTER TELEPHONE CORP.
Mark box at right if comments or address change have been [ ]
noted on the reverse side of this card.
DETACH CARD DETACH CARD
COMPUTER TELEPHONE CORP.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, August
21, 1995.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Computer Telephone Corp.
<PAGE>
PROXY PROXY
COMPUTER TELEPHONE CORP.
1995 ANNUAL MEETING OF STOCKHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Leonard R. Glass and John D. Pittenger and each
substitution, for and in the name of the undersigned, to act for the undersigned
and vote all stock the undersigned is entitled to vote at the 1995 Annual
Meeting of Stockholders of Computer Telephone Corp. to be held on Monday, August
21, 1995 at 9:30 a.m., local time, at the offices of the Company, 360 Second
Avenue, Waltham, Massachusetts, and at any and all adjournments thereof, on the
following matters:
The undersigned hereby acknowledges receipt of the Annual Report to Stockholders
for the Fiscal Year ended March 31, 1995, Proxy Statement and Notice of Annual
Meeting dated July __, 1995.
- --------------------------------------------------------------------------------
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
(Please sign exactly as your name appears on your stock certificate. If stock is
registered in more than one name, each holder should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your title as
such. If executed by a corporation or partnership, the Proxy should be signed in
full corporate or partnership name by a duly authorized officer or partner as
applicable.)
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------- ----------------------------------------
- -------------------------------------- ----------------------------------------
- -------------------------------------- -----------------------------------CTPCM
