Notice of Annual Meeting of the Shareholders
to be Held
August 30, 2000
at
Ramada Inn
225 Lordship Boulevard
Stratford, Connecticut 06615
To The Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the shareholders
of DCI Telecommunications, Inc. (the "Company") will be held at the
Ramada Inn, Stratford, Connecticut on August 30, 2000 at 9:00 a.m.
local time to hear a report on the condition of the Company from the
Chief Executive Officer of the Company and to vote on the following
proposals recommended by the Board of Directors for approval:
(1) To elect three directors to serve until the next Annual Meeting of
shareholders;
(2) To ratify the selection of Feldman Sherb Horowitz & Co., P.C., as
the Company's independent public auditors for the coming year; and,
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on July 12,
2000 as the record date for the determination of shareholders entitled
to notice of and to vote at the meeting. Only holders of the Company's
common stock at the close of business on the record date are entitled
to vote at the meeting.
Adoption of the proposals will require the affirmative vote of a
majority of the Common Stock voting on the proposal.
You are cordially invited to attend the meeting in person.
However, whether you plan to attend or not, we urge you to complete,
date, sign, and return the enclosed proxy promptly in order that as
many shares as possible may be represented at the meeting.
A copy of the Company's Annual Report to Shareholders is enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
_______________________________________
John J. Adams, President/CEO
Stratford, Connecticut
June 30, 2000
<PAGE>
DCI Telecommunications
611 Access Road
Stratford, CT 06615
Annual Meeting - August 30, 2000
June 30, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
shareholders of DCI Telecommunications, Inc. to be held on Wednesday
August 30, 2000 at 9:00 a.m., at the Ramada Inn, Stratford,
Connecticut.
In addition to the specific matters to be voted on at the meeting,
there will be a report on the Company's business and an opportunity for
shareholders to ask questions. I hope you will be able to join us. If
you are unable to attend, I strongly urge you to complete your enclosed
proxy. Your vote is very important.
Sincerely,
John J. Adams
President/CEO
<PAGE>
DCI Telecommunications, Inc.
Proxy Statement for Annual Meeting of Shareholders
Information concerning Solicitation and Voting
General
The enclosed Proxy is solicited on behalf of DCI
Telecommunications, Inc. (the "Company") for use at the Annual Meeting
of shareholders to be held Thursday, August 30, 2000 at 9:00 a.m. local
time and at any adjournment thereof for the purposes set forth herein
and in accompanying Notice of Annual Meeting of shareholders. The
Annual Meeting will be held at the Ramada Inn, Stratford, Connecticut.
These proxy solicitation materials are being mailed on or about
August 1, 2000 together with the Company's Annual Report to all
shareholders entitled to vote at the meeting.
Record Date and Principal Shareholders
Holders of record of Common Stock at the close of business on July
12, 2000 are entitled to notice of and to vote at the meeting. There
are no other outstanding voting securities of the Company. At the
record date, 33,775,644 shares of the Company's Common Stock were
issued and outstanding. Each shareholder is entitled to one vote for
each share of common stock held. The following table sets forth, as of
the most recent practical date (July 12, 2000), those persons known to
the Company to be the beneficial owners of more than 5% of the
Company's Common Stock:
Amount and Nature Percent of
Name of Beneficial Ownership Class
Joseph J. Murphy 2,623,4821 (1) 7.77%
IXC Communications
Services, Inc. 4,250,000 12.58%
Donnie Gross 1,743,033 5.16%
Steve Gross 1,743,033 5.16%
1) Includes 1,050,727 shares which the beneficial owner, 455,090
shares which Grace Murphy, the beneficial owner's spouse, and 93,600
shares which Joseph J. Murphy III, the beneficial owner's son, have the
right to acquire pursuant to options which are exerciseable within
sixty days.
<PAGE>
Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 (the "34
Act") requires officers and directors, and persons who own more than
10% of a registered class of the equity securities of a company which
is registered under the 34 Act, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than 10% shareholders are
required by certain regulations to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, the Company believes that during its most recent fiscal year or
prior fiscal years, all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by
the person giving it at any time before its use by delivering to the
Company a written notice of revocation or duly executed proxy bearing a
later date or by attending the meeting and voting in person.
Voting and Solicitation
In accordance with the Company's by-laws, directors shall be
elected by the affirmative vote a plurality of the votes cast in person
or by proxy by the holders of shares entitled to vote in election at
the Annual Meeting of shareholders, and the ratification of Feldman
Sherb Horowitz & Co., P.C. as independent auditors shall be by the
affirmative vote of the majority of the shares voting on the proposal
in person or by proxy at the Annual Meeting; in each case, provided a
quorum is present. Thus, abstentions and broker non-votes will not be
included in vote totals and will have no effect on the outcome of the
vote. No shareholder shall be entitled to cumulate votes.
The cost of soliciting proxies, which is estimated to be $2,000,
will be borne by the Company. Proxies may be solicited by certain of
the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone, telegram or
letter. Also, the Company has engaged Morrow & Co. to provide certain
services in connection with the solicitation of the proxies.
Deadline for Receipt of Shareholder Proposals
Proposals of shareholders of the Company which are intended to be
presented by such shareholders at next year's Annual Meeting must be
received by the Company by no later than March 23, 2001 in order that
they may be considered for inclusion in the proxy statement and form of
proxy relating to that meeting.
<PAGE>
PROPOSAL NO. 1
NOMINATIONS FOR ELECTION AS DIRECTORS
Nominees
A Board of three directors is to be elected at the meeting.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's three nominees named below. In the
event that any nominee of the Company is unable or declines to serve as
a director at the time of the Annual Meeting, the proxies will be voted
for any nominee who shall be designated by the present Board of
directors to fill the vacancy or the Board may elect to fill such
vacancy at a later date. The Company is not aware of any nominee who
will be unable or decline to serve as a director. The term of office
of each person elected as a director will continue until the next
Annual Meeting of shareholders or until a successor has been elected
and qualified.
The names of the nominees, and certain information about them, are
set forth below.
Director Amount and Nature Percent of
Name Age Since of Beneficial Ownership(b) Class
John J. Adams(a) 60 1995 500,574 1.4%
President and CEO of DCI Telecommunications, Inc. Prior to his
current position, Mr. Adams served as Vice President of Marketing for
DCI from 1997 to 1999. Mr. Adams was formerly vice president for R&D
Scientific Corp. from 1993 to 1997 and founder and president of
Validation Services Corp. from 1993 to 1997. Mr. Adams was previously
president of Prevent Chemicals, Ltd., a publicly traded manufacturer of
specialty chemicals.
Joseph J. Murphy 62 1995 2,623,482 7.7%
Chairman of DCI Telecommunications, Inc. Mr. Murphy served as
DCI's President and CEO since its inception to 1999. Prior to that he
was executive vice president and chief financial officer from 1979 to
1990, and a member of the Board of Directors (1980 to 1984) of Aquarion
Company, a New York Stock Exchange Company. Formerly, he was chief
financial officer for Connecticut Energy Corp. from 1971 to 1979, a
member of Price Waterhous from 1964 to 1967 and an officer in the
United States Marine Corps from 1961 to 1964. He was a member of the
Board of Directors of Boys/Girls Club of Bridgeport and served on the
Economic advisory board for Fairfield University and Sudden Infant Death
Syndrome (SIDS) for Fairfield County. He was also a member of the
FBI/Marine Corps Association.
Clifford Postelnik 56 1999 200,000 0.6%
Director of Sales and Marketing, Corzon, Inc. Mr. Postelnik served
as Director of Sales and Marketing for Fone.com in 1999. Mr. Postelnik
was previously with Edge Communications in 1997 after a 30-year career
in bilateral carrier contract negotiations and marketing to the tour
and travel industry, airlines and hotels in Europe, Africa and the
Orient.
<PAGE>
All directors and executive officers as a group 3,324,056 (b) 9.84%
Notes:
(a) Executive officer of Registrant. Executive officers serve annual
terms.
(b) Included in shares owned above are shares which the beneficial
owner has the right to acquire from options within sixty days as
follows: J. Adams, 494,574 shares; J. Murphy, 1,050,727 shares; and C.
Postelnik, 200,000 shares. Shares beneficially owned directly or
indirectly.
The Board of directors urges shareholders to vote "FOR" each of the
nominees for directors set forth above.
_____________________________
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF CERTIFIED PUBLIC AUDITORS
The Board of Directors of the Company has selected Feldman Sherb
Horowitz & Co., P.C. as its independent public auditors for the fiscal
year ending March 31, 2000. In accordance with a resolution of the
Board of Directors, this selection is being presented to shareholders
for ratification at the Annual Meeting.
If the foregoing proposal is not approved by the shareholders or
if, prior to the 2000 Meeting, Feldman Sherb Horowitz & Co., P.C. shall
decline to act or otherwise become incapable of acting, or if its
employment shall be otherwise discontinued by the Board of Directors,
then the Board of Directors will appoint other independent public
auditors whose employment for any period subsequent to the 2000 Annual
Meeting will be subject to ratification by the shareholders at the
meeting.
The Company has been advised that representatives of Feldman Sherb
Horowitz & Co., P.C. will be present at the meeting. Feldman Sherb
Horowitz & Co., P.C. audited the Company's financial statements for the
years ended March 31, 2000.
The Board of Directors recommends a vote "FOR" ratification of the
selection of Feldman Sherb Horowitz & Co., P.C. as independent
auditors.
_____________________________
<PAGE>
Board Meetings
The Board of Directors of the Company held 14 meetings during the
period April 1, 1999 to March 31, 2000. All of the then incumbent
directors attended all such meetings except for Carter Hills. Mr.
Hills missed four meeting(s) during the period which he was appointed a
director.
Board of Directors Report on Executive Compensation
Executive Compensation Philosophy
The Company's executive compensation program has the objective of
aligning executive and shareholder interests in the context of an
emerging company which must attract and retain executives with
entrepreneurial talent and management ability. DCI is a young company
which seeks to increase shareholder value by growing and becoming
consistently profitable. The executive compensation program is
accordingly designed to conserve compensation expense and provide stock
incentives which motivate executives toward performance which enhances
shareholder value.
Executive Compensation Program
Each year, the Board of Directors recommends compensation
arrangements for officers, including the salaries, stock option award
levels and grants, and other matters of executive compensation.
DCI's executive compensation program in 2000 consisted of two
components: salary and stock options.
The primary comparison for CEO compensation is the
telecommunications comparison group of 10 investor-owned
telecommunications companies to which DCI compares its business
performance. The total compensation for the CEO will position him
below the median of this comparison group.
Salary ranges are set by periodic comparison to rates of pay for
comparable positions within the telecommunications industry for
corporate and telecommunications positions and the non-
telecommunications industries for non-telecommunications positions.
Individual salaries are generally considered for adjustment based on
external salary levels, individual performance and potential, and/or
changes in duties and responsibilities. The Company believes that
officer salaries are below the median of the salaries reported for
comparable positions.
CEO Compensation - 2000
Based on its members' individual business judgments and available
compensation data, the Board of Directors reviewed and approved the
level and form of compensation for the Chief Executive Officer in 2000.
<PAGE>
Mr. Adam's base salary as CEO of DCI is positioned below the
median among chief executives within the telecommunications comparison
group.
Shareholder Return Presentation
The following performance graph compares the yearly percentage
change in the Company's cumulative total shareholder return on its
Common Stock with the cumulative total return on the Russell 2000
Index, and the NASDAQ Telecommunications Index for the four years
commencing 1997 and ended 2000. Information for the stock price of
DCTC was not available for the year ended 1996.
GRAPH NOT INCLUDED IN ELECTRONIC FILING
Employment Agreements
The Company entered into an employment agreement dated August 15, 1998
with John J. Adams pursuant to which Mr. Adams renders services to the
Company as its Vice President and Chief Marketing Officer, for an
annual base salary of $90,000. The agreement carries a severance
package worth a minimum of two years salary.
Director Compensation
The Company's current policy is to compensate outside directors
through common stock option grants by the Company. Each director who
is not an employee of the Company or its subsidiaries is eligible to
receive stock options in the discretion of the Board of Directors. For
the 2000 fiscal year, Mr. Postelnik was granted options to purchase
200,000 shares of DCI stock at a price of $0.81 per share.
Executive Compensation
The following tables set forth for the fiscal year ended March 31,
2000, certain information regarding the total remuneration paid and
grants of options/SARs made to the chief executive officer and each of
the executive officers of the Company and its subsidiaries and who
received total cash compensation in excess of $100,000 during the
period. These amounts reflect total cash compensation paid by the
Company and its subsidiaries to these individuals during the fiscal
years March 31, 2000, 1999, and 1998.
<PAGE>
Summary Compensation Table
Long-Term Compensation
Awards Payouts
Securities
Annual Compensation Underlying All Other
Name and Salary Other Annual Options/SARs Compensation
Principal Positions Year ($) Compensation (#) ($)
Joseph J. Murphy 1998 115,000 172,727
Chairman 1999 126,000 590,727
and Director 2000 127,000 -
Larry Shatsoff 1998 63,000 154,545
Former Pres., COO 1999 90,000 759,545
and Director 2000 91,000 -
John J. Adams 1998 6,000 84,090
Pres., CEO, 1999 75,000 214,574
and Director 2000 76,000 -
Aggregated Options /SAR Exercised in Last Fiscal Year
and FY-End Option/SAR Values
Value of Unexercised
Number of In-the-Money
Unexercised Options/SARs Options/SARs at
at FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($) Unexercisable Unexercisable
-- -- -- -- --
Option/SAR Grants in Last Fiscal Year
% of Total Options/SARs
Options/SARs Granted to Employees Exercise or Base Expiration
Name Granted (#) in FiscalYear Price ($/Sh) Date
-- - - - - - - - -
<PAGE>
Other Matters
The Company knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, it is
the intention of the persons named in the enclosed proxy to vote the
shares they represent as the Board of Directors may recommend.
It is important that your shares be represented at the meeting,
regardless of the number of shares you hold. You are, therefore, urged
to execute and return, at your earliest convenience, the accompanying
proxy card in the stamped, self-addressed envelope which has been
enclosed.
By Order of the Board of Directors
____________________________
John J. Adams, President/CEO
Dated: July 25, 2000
