<PAGE>
[CABLETRON LOGO APPEARS HERE]
35 Industrial Way
Rochester, New Hampshire 03866
June 17, 1997
Dear Stockholder:
We cordially invite you to attend our 1997 Annual Meeting of Stockholders on
July 10, 1997 at Cabletron Systems, Inc., Training Facility, Pease
International Tradeport, Newington, New Hampshire.
At this meeting you are being asked to elect two Class II directors.
Your Board of Directors recommends that you vote in favor of this proposal.
You should read with care the proxy statement which describes the nominees and
presents other important information. Please complete, sign and return your
proxy promptly in the enclosed envelope.
We hope that you will join us on July 10, 1997.
Sincerely,
/s/ S. Robert Levine /s/ Craig R. Benson
S. Robert Levine Craig R. Benson
President and Chief Executive Chairman of the Board and Chief
Officer Operating Officer
<PAGE>
[CABLETRON LOGO APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 10, 1997
Notice is hereby given that the Annual Meeting of Stockholders of Cabletron
Systems, Inc. will be held at Cabletron Systems, Inc., Training Facility,
Pease International Tradeport, Newington, New Hampshire 03801, on July 10,
1997 at 10:00 a.m., Eastern Time, for the following purposes:
1. To elect two Class II directors to serve until the 2000 Annual Meeting
of Stockholders.
2. To transact such other business as may properly come before the
meeting and any and all adjourned sessions thereof.
Only stockholders of record at the close of business on June 12, 1997 are
entitled to notice of and to vote at the Annual Meeting of Stockholders and
any and all adjourned sessions thereof.
By order of the Board of Directors,
MICHAEL D. MYEROW, Secretary
Rochester, New Hampshire
June 17, 1997
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON.
<PAGE>
CABLETRON SYSTEMS, INC.
35 INDUSTRIAL WAY
ROCHESTER, NEW HAMPSHIRE 03866
ANNUAL MEETING OF STOCKHOLDERS
JULY 10, 1997
PROXY STATEMENT
The enclosed form of proxy is solicited on behalf of the Board of Directors
of Cabletron Systems, Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Meeting") to be held at Cabletron Systems, Inc., Training
Facility, Pease International Tradeport, Newington, New Hampshire 03801, on
July 10, 1997, at 10:00 a.m., and at any and all adjourned sessions thereof. A
proxy may be revoked by a stockholder, at any time before it is voted, (i) by
returning to the Company another properly signed proxy representing such
shares and bearing a later date, (ii) by otherwise delivering a written
revocation to the Secretary of the Company or (iii) by attending the Meeting
or any adjourned session thereof and voting the shares covered by the proxy in
person. Shares represented by the enclosed form of proxy properly executed and
returned, and not revoked, will be voted at the Meeting. In the absence of
contrary instructions, the persons named as proxies will vote in accordance
with the intentions stated below.
The expense of soliciting proxies will be borne by the Company. Officers and
regular employees of the Company (who will receive no compensation therefor in
addition to their regular salaries) may communicate directly or by mail,
telephone, or other communication methods with stockholders to solicit
proxies. The Company will also reimburse brokers and other persons for their
reasonable charges and expenses in forwarding soliciting materials to their
principals.
The holders of record of shares of Common Stock, $.01 par value (the "Common
Stock"), of the Company at the close of business on June 12, 1997 are entitled
to receive notice of and to vote at the Meeting. As of that date the Company
had issued and outstanding 157,643,121 shares of Common Stock. Each such share
of Common Stock is entitled to one vote on each matter to come before the
Meeting.
It is expected that this Proxy Statement and the enclosed form of proxy will
be mailed to stockholders commencing on or about June 17, 1997.
The Company's Annual Report to Stockholders, including consolidated
financial statements for the year ended February 28, 1997, is being mailed to
the Company's stockholders with this Proxy Statement.
ELECTION OF DIRECTORS
The Board of Directors has voted to fix the number of directors at five. The
Company's Restated Certificate of Incorporation, as amended, and by-laws
provide for the classification of the Board of Directors into three classes,
as nearly equal in number as possible, with the term of office of one class
expiring each year. Unless otherwise instructed, the enclosed proxy will be
voted to elect the persons named below as Class II directors for a term of
three years expiring at the 2000 Annual Meeting of Stockholders and until
their successor is duly elected and qualified. If either of the nominees shall
be unavailable as a candidate at the Annual Meeting, votes pursuant to the
proxy will be voted either for a substitute nominee designated by the Board of
Directors or, in the absence of such designation, in such other manner as the
directors may in their discretion determine. Alternatively, in such a
situation, the Board of Directors may take action to fix the number of
directors for the ensuing year at three or four, depending on the number of
nominees named herein who are then able to serve. The Board of Directors does
not anticipate that any nominee will become unavailable as a candidate. The
nominees as Class II directors, and the incumbent Class I and Class III
directors are as follows:
1
<PAGE>
NOMINEES AS CLASS II DIRECTORS
TERMS EXPIRE 2000
S. Robert Levine, 39
Director since 1983
Mr. Levine founded the Company in March 1983 and has been President, Chief
Executive Officer and a director of the Company since that date.
Donald F. McGuinness, 64
Director since 1989
Member of the Incentive Compensation Committee and Audit Committee
Mr. McGuinness has been Chairman, President and Chief Executive Officer of
Electronic Designs, Inc., a semiconductor memory company, since November 1987.
From December 1983 until January 1987, Mr. McGuinness was Executive Vice
President and Chief Operating Officer of Sprague Electric Company, an
electronic components manufacturer.
CLASS I DIRECTOR
TERM EXPIRES 1999
Michael D. Myerow, 48
Director since 1989
Member of the Incentive Compensation Committee
Mr. Myerow has been a partner in the Franklin, Massachusetts law firm of
Myerow & Poirier since June 1987. He joined the firm in June 1986. From
September 1979 to March 1986, Mr. Myerow was General Counsel of Exeter
Equities, Inc., a consulting firm.
CLASS III DIRECTORS
TERMS EXPIRE 1998
Craig R. Benson, 42
Director since 1984
Mr. Benson was Director of Operations of the Company from November 1984
until April 1989, when he became Chairman, Chief Operating Officer and
Treasurer.
Paul R. Duncan, 56
Director since 1989
Member of the Incentive Compensation Committee and Audit Committee
Mr. Duncan is Executive Vice President and President, Specialty Business
Group since October 1995 and had been Executive Vice President and Chief
Financial Officer from May 1985 to October 1995 and a director since February
1989 of Reebok International Ltd., a manufacturer of athletic footwear and
apparel. Mr. Duncan is also a director of BGS Systems, Inc., a computer
software company.
2
<PAGE>
BENEFICIAL OWNERSHIP
The following table sets forth the amount of Common Stock of the Company
beneficially owned (as determined under the rules of the SEC), directly or
indirectly, as of June 12, 1997, by (i) each director, each of the chief
executive officer and all other executive officers of the Company in fiscal
1997, and by all directors and officers as a group and (ii) each person who is
known to the Company to beneficially own more than 5% of the outstanding
shares of Common Stock of the Company and the percentage of the class
outstanding represented by each such amount.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT OF
NAME OWNED CLASS
------------------ ----------
<S> <C> <C>
S. Robert Levine (1)+.................... 14,654,904(2) 9.3%
Craig R. Benson (1)+..................... 19,266,166(3) 12.2
Paul R. Duncan+.......................... 53,334(4) *
Donald F. McGuinness+.................... 89,200(4) *
Michael D. Myerow+....................... 445,550(4)(5) *
Christopher J. Oliver.................... 1,803,424 1.1
David J. Kirkpatrick..................... 7,675(4) *
All directors and officers as group (7
persons)................................ 36,320,253 23.0
Putnam Investments, Inc. ................ 11,267,116(6) 7.1%
One P.O. Box Square
Boston, MA 02109
</TABLE>
- ---------------------
* Less than 1%
+ Director of the Company
(1) Mr. Levine's and Mr. Benson's address is c/o Cabletron Systems, Inc., 35
Industrial Way, Rochester, New Hampshire 03866.
(2) Includes (I) 463,100 shares held in the Levine Family Charitable Trust and
(ii) 2,373,693 shares as to which Mr. Levine has voting control only.
(3) Includes 1,400 shares held in the Benson Family Charitable Trust.
(4) Includes options held by Messrs. Duncan, McGuinness, Myerow and
Kirkpatrick exercisable with respect to 50,000, 71,000, 58,000 and 7,000
shares, respectively.
(5) Includes a total of 375,000 shares held in two trusts for the benefit of
the children of Messrs. Benson and Levine, respectively. Mr. Myerow is the
sole trustee of each trust. Excludes 6,600 shares held by Mr. Myerow's
spouse as custodian for their children, as to which shares Mr. Myerow
disclaims beneficial ownership.
(6) Based upon information contained in Schedule 13G filed with Securities and
Exchange Commission for Putnam Investments, Inc. on January 28, 1997.
3
<PAGE>
BOARD OF DIRECTORS AND COMMITTEE ORGANIZATION
During the Company's fiscal year ended February 28, 1997, the Board of
Directors of the Company held a total of twelve meetings. The Company has a
standing Audit Committee and a standing Incentive Compensation Committee. No
director attended fewer than 75% of the Board of Directors meetings or
meetings of committees of the board on which he served.
The Audit Committee, which held one meeting during fiscal 1997, reviews with
management and the Company's independent public accountants the Company's
financial statements, the accounting principles applied in their preparation,
the scope of the audit, any comments made by the independent public
accountants upon the financial condition of the Company and its accounting
controls and procedures, and such other matters as the Committee deems
appropriate. In addition, the Committee reviews with management such matters
relating to compliance with corporate policies as the Committee deems
appropriate. Messrs. Duncan and McGuinness, neither of whom is an executive
officer or employee of the Company, currently serve on the Audit Committee.
The Incentive Compensation Committee of the Board of Directors acted
pursuant to written consent on 62 occasions and held one committee meeting
during the fiscal year ended February 28, 1997. In general, the function of
the Incentive Compensation Committee is to review the operation of the
Company's 1989 Equity Incentive Plan and related programs of the Company.
Messrs. Duncan, McGuinness and Myerow, none of whom is an executive officer or
employee of the Company, currently serve on the Incentive Compensation
Committee. In order to comply with certain provisions of the Securities
Exchange Act of 1934 and the Internal Revenue Code of 1986, Mr. Myerow does
not participate in the administration of the 1989 Equity Incentive Plan and
related programs of the Company in connection with awards to named executive
officers of the Company.
DIRECTOR COMPENSATION
For their services to the Company, non-employee directors receive an annual
retainer of $10,000, plus $750 for each Board and committee meeting attended
during the year. Directors who are employed by the Company do not receive
compensation for attendance at Board or committee meetings. Outside directors
are reimbursed for any expenses attendant to Board membership.
Pursuant to the Company's Directors' Option Plan, Messrs. Duncan, McGuinness
and Myerow were initially granted options to purchase 100,000, 150,000 and
190,000 shares, respectively, of Common Stock upon the consummation of the
Company's initial public offering in 1989. Subsequent to 1989, under this Plan
each non-employee director has been automatically granted an option to
purchase 25,000 additional shares of Common Stock on the day after the date of
each Meeting of Stockholders of the Company and similar grants will be made to
each eligible director after this year's Annual Meeting. Options under the
Directors' Option Plan are granted at their fair market value on the date of
grant, vest over a period of three years and expire six years from the grant
date.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table below discloses the compensation received by the
Company's Chief Executive Officer and the Company's three other executive
officers for the fiscal years ended February 28, 1997, February 29, 1996 and
February 28, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- -----------------
SHARES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) OPTIONS
- --------------------------- ---- ------------ -------- -----------------
<S> <C> <C> <C> <C>
S. Robert Levine 1997 51,039 0 0
President and 1996 52,200 0 0
Chief Executive Officer 1995 52,000 0 0
Craig R. Benson 1997 52,000 0 0
Chairman and 1996 52,000 0 0
Chief Operating Officer 1995 52,000 0 0
Christopher J. Oliver 1997 275,000 0 0
Director of Engineering and 1996 275,000 0 0
Manufacturing 1995 275,000 0 0
David J. Kirkpatrick 1997 213,421 80,000 30,000
Director of Finance and 1996 174,952 65,000 20,000
Chief Financial Officer 1995 161,682 60,000 5,000
</TABLE>
- ---------------------
(1) Amounts shown include cash and non-cash compensation earned and received
by executive officers as well as amounts earned but deferred by certain
executive officers at their election pursuant to the Cabletron Systems,
Inc. 401(k) Saving and Investment Plan.
5
<PAGE>
OPTION TABLES
The following table below sets forth, for applicable executive officers in
the Summary Compensation Table, information regarding individual grants of
options made in the last fiscal year, and their potential realizable values.
OPTION GRANTS IN THE FISCAL YEAR ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER % OF RATES OF STOCK
OF SHARES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO PER SHARE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 5 %($) 10 %($)
- ---- ----------- ------------- ------------ ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
David J. Kirkpatrick 30,000(1) 1% $30.375 10/18/06 $ 573,080 $ 1,452,298
</TABLE>
- ---------------------
(1) The option is exercisable in annual increments of 4,000 shares over the
next five years.
(2) These potential realizable values are based on assumed rates of
appreciation required by applicable regulations of the Securities and
Exchange Commission. The potential realizable values stated are not
discounted to present value.
The following table below depicts option exercise activity in the last
fiscal year and fiscal year-end option values with respect to applicable
executive officers named in the Summary Compensation Table. The fair market
value of the Company's Common Stock on the New York Stock Exchange at February
28, 1997 was $30.00 per share.
AGGREGATE OPTION EXERCISES IN THE FISCAL YEAR ENDED FEBRUARY 28, 1997
AND FEBRUARY 28, 1997 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES AT 2/28/97 AT 2/28/97
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
David J. Kirkpatrick 24,000 $442,670 7,000/64,000 $21,399/$203,061
</TABLE>
6
<PAGE>
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the Board of
Directors. The Board's Incentive Compensation Committee, comprised of the
Company's three outside directors, Messrs. Duncan, McGuinness and Myerow,
determines the recipients and terms of all grants of stock-based incentive
awards under the Company's 1989 Equity Incentive Plan except for grants of
stock-based incentive awards to named executive officers, in which case only
Messrs. Duncan and McGuinness participate in determining the recipients and
terms of such grants.
The Company's executive compensation program is designed to retain and
reward executives who are capable of leading the Company in achieving its
business objectives in the competitive and rapidly changing computer
networking industry. This report is submitted by the Board of Directors and
addresses the Company's compensation policies for fiscal 1997 as they affected
the Company's executive officers.
Section 162(m) of the Internal Revenue Code of 1986 limits to $1 million the
deductible portion a public company may claim in any year for compensation to
the chief executive officer and the four other most highly compensated
executive officers unless conditions related to such compensation are
satisfied. Executive officer compensation in fiscal 1997 was not impacted by
section 162 (m) because compensation levels were below the threshold
established by that statute, and the Board does not expect 162(m) to impact
executive compensation in the foreseeable future.
In determining the Company's executive compensation program the Board has
drawn a distinction between Mr. Levine, the Company's President and Chief
Executive Officer, and Mr. Benson, the Company's Chairman and Chief Operating
Officer, on the one hand, and the Company's other executive officers on the
other.
Compensation for Messrs. Levine and Benson
Mr. Levine and Mr. Benson currently own 21.5% of the Company's outstanding
Common Stock. As the Company's principal stockholders, Messrs. Levine and
Benson have participated very directly in the increase in value of the
Company's Common Stock since its initial public offering. Accordingly, the
Board of Directors has determined that their cash compensation may remain low,
both absolutely and in relation to their contributions to the Company's
growth. Therefore, Messrs. Levine's and Benson's salaries have not increased
since the Company's initial public offering. The relatively low salary levels
of Messrs. Levine and Benson are not determined by comparison to other
companies in the industry or to the Company's corporate performance. Rather,
the Board of Directors has determined that it is in the best interest of the
Company that Messrs. Levine's and Benson's primary form of compensation for
their leadership of the Company be derived from sales and increases in value
of their Common Stock.
The Board of Directors believes the leadership of Messrs. Levine and Benson
has been crucial to the Company's outstanding growth record. The Company's
overall compensation program for Messrs. Levine and Benson may change in the
future as their respective shareholdings decrease to levels at which sales of
their existing holdings do not adequately compensate them for their job
performance. In particular, cash compensation levels for Messrs. Levine and
Benson may, in the future, be based much more directly upon corporate
performance, individual contribution and compensation levels for competitive
positions in the industry, as is the case for the Company's other executive
officers. In addition, the Incentive Compensation Committee may determine that
it is in the best interests of the Company and its stockholders to include
Messrs. Levine and Benson in the Company's stock-based incentive program.
Compensation for Executive Officers other than Messrs. Levine and Benson
The compensation program for the Company's executive officers other than
Messrs. Levine and Benson is based on the philosophy that cash compensation
should vary with the performance of the Company and any long-term incentive
should closely align the officers' interests with the interests of
7
<PAGE>
the Company's stockholders. Additionally, the Company is committed to
providing an executive compensation program that attracts and retains highly
qualified executives.
Compensation for the executive officers other than Messrs. Levine and Benson
consists of base salary, an incentive cash bonus segment and a stock-based
incentive bonus segment. In setting base salary levels, the Board of Directors
reviews compensation for competitive positions in the industry and the
historical compensation levels of the executives. Increases in annual salaries
year-to-year are based upon corporate performance and merit ratings measured
by actual individual performance (against targeted performance) and various
subjective performance criteria. The Board does not formally weigh these
factors. Incentive cash bonuses are based on the Company's meeting or
exceeding certain specified financial targets. In fiscal 1997, the Company
exceeded its targets and thus Mr. Kirkpatrick was awarded a bonus of $80,000,
paid in quarterly installments.
The Company seeks to provide long-term compensation through its stock-based
incentive compensation program. Stock options are granted to aid in the
retention of key employees, including eligible named executives, and to align
the interests of key employees with those of stockholders. Stock options are
granted at a price equal to the fair market value on the date of grant. Stock
options typically are granted on an annual basis and become exercisable over a
five-year period. They are granted to key employees, including the named
executive officers, based on current performance, anticipated future
contribution based on that performance, ability to contribute to the
achievement of the Company's strategic goals and objectives, taking into
account awards generally made to persons in competitive positions in the
industry, as well as the individual's current level of Company stock holding.
The size of the award is also determined based upon these factors. In fiscal
1997, stock options for key employees, including eligible named executive
officers, were granted upon recommendation of the management and approval of
the Incentive Compensation Committee.
Consistent with the parameters of the Company's stock-based incentive
compensation program, Mr. Oliver, in light of his significant stockholdings in
the Company and the resulting alignment of his interests with those of the
Company's stockholders, has not been awarded options or other stock-based
incentives. Mr. Kirkpatrick, in contrast, has been awarded significant stock-
based incentives. Details on stock options granted to the named executive
officers are provided in the table entitled "Option Grants in the Fiscal Year
Ended February 28, 1997." Current levels of stock ownership are provided in
the table entitled "Beneficial Ownership."
The Company maintains a broad-based, qualified employee stock purchase plan
to encourage employee ownership of Cabletron stock. Participation in the Plan
is generally open to all employees after six months of continuous employment.
This plan allows participants to buy Cabletron stock at a discount to the
market price with up to 10% of their salaries, subject to a maximum dollar
value.
Compensation Committee Interlocks and Insider Participation
During fiscal 1997, the law firm of Myerow & Poirier, of which Mr. Myerow is
a partner, from time to time provided legal services to the Company, for which
the Company paid such firm a total of approximately $263,700. The Company
expects to continue to retain the services of this firm from time to time
during fiscal 1998.
With respect to the above matters, the Board of Directors, including members
of its Incentive Compensation Committee in such capacity, submits this report.
BOARD OF DIRECTORS
Craig R Benson
S. Robert Levine
Michael D. Myerow*
Paul R. Duncan*
Donald F. McGuinness*
- ---------------------
* Member of Incentive Compensation Committee
8
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
The graph below compares cumulative total shareholder returns for the
Company for the preceding five fiscal years with the S&P 500 Index and the S&P
Communication-Equipment/ Manufacturer Index. The graph assumes the investment
of $100 at the commencement of the measurement period with dividends
reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN FROM FEBRUARY 29, 1992 THROUGH FEBRUARY
28, 1997
CABLETRON SYSTEMS, INC., S&P 500 INDEX AND S&P
COMMUNICATION-EQUIPMENT/MANUFACTURER INDEX
[GRAPH APPEARS HERE]
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
2/92 2/93 2/94 2/95 2/96 2/97
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Cabletron Systems, Inc. $100 $129 $206 $163 $309 $248
S&P 500 Index $100 $111 $120 $129 $173 $219
S&P Communication-Equipment/Manufacturer Index $100 $102 $ 99 $111 $185 $205
</TABLE>
Each of the Report of the Board of Directors on Executive Compensation and
the Performance Graph set forth above shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise to deemed filed under such
Acts.
9
<PAGE>
QUORUM, REQUIRED VOTES, AND METHOD OF TABULATION
Consistent with state law and under the Company's by-laws, a majority of the
shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Votes cast by
proxy or in person at the Meeting will be counted by persons appointed by the
Company to act as election inspectors for the meeting.
The nominees for election as a director at the Meeting will be elected if
they receive a plurality of votes properly cast. The election inspectors will
count shares represented by proxies that withhold authority to vote for a
particular matter or that reflect abstentions and "broker non-votes" (i.e.,
shares represented at the meeting held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) only as shares that are
present and entitled to vote on the matter for purposes of determining the
presence of a quorum, but neither abstentions nor broker non-votes have any
effect on the outcome of voting on the matter.
CERTAIN TRANSACTIONS
See the discussion under the caption "Compensation Committee Interlocks and
Insider Participation" relating to Mr. Myerow.
During fiscal 1997 the Company purchased 200,000 shares, at an aggregate
cost of $200,000, of Vitts Corporation. Mr. Oliver, the Director of
Engineering and Manufacturing of the Company, owns approximately 80% of the
outstanding stock of Vitts Corporation.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors has selected the firm of KPMG Peat Marwick LLP,
independent auditors, as auditors for the Company for the fiscal year ending
February 28, 1998. A representative of KPMG Peat Marwick LLP is expected to be
present at the Meeting with the opportunity to make a statement if he or she
desires and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders submitted for consideration at the 1998 Annual
Meeting of Stockholders must be received by the Company not later than
February 7, 1998 in order to be considered for inclusion in the Company's
proxy materials for that meeting.
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of the Company's
outstanding Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the New York
Stock Exchange. Officers, directors and greater than ten percent stockholders
are required by SEC regulations to furnish the Company with all copies of
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the fiscal year
ended February 28, 1997, all filing requirements were timely satisfied except
that S. Robert Levine filed four reports late, including a Form 5 covering
fiscal year 1996, covering twenty-seven transactions and Christopher J. Oliver
filed two reports late covering two transactions.
10
<PAGE>
OTHER BUSINESS
The Board of Directors knows of no business to be brought before the Annual
Meeting which is not referred to in the accompanying Notice of Annual Meeting.
Should any such matters be presented, the persons named in the proxy shall
have the authority to take such action in regard to such matters as in their
judgment seems advisable.
11
<PAGE>
+++++++
[X] PLEASE MARK VOTES +
AS IN THIS EXAMPLE +
1. Election of Directors:
----------------------- Nominees as Class II
CABLETRON SYSTEMS, INC. Directors - Term Expires
----------------------- 2000 With- For All
For hold Except
S. Robert Levine [_] [_] [_]
Donald F. McGuinness
NOTE: If you do not wish your shares
voted "For" a particular nominee, mark
the "For All Except" box and strike a
line through the nominee's name. Your
shares will be voted for the remaining
nominee.
RECORD DATE SHARES:
---------------------
Please be sure to sign and date this Proxy. Date
- ---------------------------------------------------------------------
- ---Stockholder sign here-----------Co-owner sign here----------------
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [_]
DETACH CARD DETACH CARD
CABLETRON SYSTEMS, INC.
Dear Shareholder,
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 this proxy card to indicate how your shares
will 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, July 10, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Cabletron Systems, Inc.
<PAGE>
CABLETRON SYSTEMS, INC.
Proxy for the Meeting of Stockholders, July 10, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Craig R. Benson and S. Robert Levine, and each
of them, as attorneys and proxies, with full power of substitution, to represent
and to vote at the Annual Meeting of Stockholders of Cabletron Systems, Inc.
(the "Company") to be held at the Cabletron Systems Training Facility, Pease
International Tradeport, Newington, New Hampshire 03801, on July 10, 1997 at
10:00 a.m., and at any and all adjourned sessions thereof, all shares of Common
Stock of the Company which the undersigned could vote, if present, in such
manner as they determine on any matters which may properly come before the
meeting and to vote on the following, as specified below, on the reverse side
hereof.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN,
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR. THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES AND FOR THE MATTERS SPECIFIED
ON THE REVERSE HEREOF.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ----------------------------------- -----------------------------------
- ----------------------------------- -----------------------------------
- ----------------------------------- -----------------------------------
