SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant: [ ]
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential. For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CAPITOL MULTIMEDIA, 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>
[LETTERHEAD
CAPITOL MULTIMEDIA, INC.]
July 14, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Capitol Multimedia, Inc., a Delaware corporation, to be held at the Company's
corporate offices at 200 Baker Avenue, Suite 300, Concord, Massachusetts, at
10:00 a.m. on Thursday, August 21, 1997.
The items to be considered at the meeting are detailed in this proxy statement.
Also enclosed is a copy of Capitol's fiscal 1997 Annual Report.
It is important that your shares be represented whether or not you are able to
attend personally. Please ensure that your views are considered by completing,
signing and returning the enclosed proxy card promptly.
Sincerely,
/s/ Luda Kopeikina
------------------
Luda Kopeikina
President
<PAGE>
[LOGO]
CAPITOL MULTIMEDIA, INC.
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
August 21, 1997
To the Stockholders of
Capitol Multimedia, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of Capitol
Multimedia, Inc. ("the Company") will be held at the Company's corporate offices
at 200 Baker Avenue, Suite 300, Concord, Massachusetts 01742 on Thursday, August
21, 1997 at 10:00 a.m. for the following purposes:
1. To elect seven directors to hold office until the later of the next Annual
Meeting of Stockholders and the election and qualification of their
successors or their earlier resignation or removal.
2. To ratify and approve an Amendment to the Company's Amended and Restated
1992 Non-Qualified Stock Option Plan for Non-Employee Directors increasing
the number of authorized shares of Common Stock issuable under the Plan
from 300,000 to 600,000.
3. To ratify and approve an Amendment to the Company's Amended and Restated
1991 Non-Qualified Employee Stock Option Plan increasing the number of
authorized shares of Common Stock issuable under the Plan from 1,500,000 to
3,000,000.
4. To ratify and approve a Certificate of Amendment to the Company's
Certificate of Incorporation changing the Company's name to Celerity
Solutions, Inc.
5. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
Only stockholders of record at the close of business on July 10, 1997 are
entitled to notice of and to vote at the Meeting and any adjournment thereof.
By Order of the Board of Directors,
/s/ Edward Terino
--------------------------------
Edward Terino
Secretary
Concord, Massachusetts
July 14, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, AND SIGN
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
CAPITOL MULTIMEDIA, INC.
PROXY STATEMENT
GENERAL
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of Capitol Multimedia, Inc. for use at the Annual Meeting
of Stockholders of the Company to be held at 10:00 a.m. on Thursday, August 21,
1997, and any adjournments thereof. Copies of this statement and form of proxy
are expected to be first provided to stockholders on or about July 14, 1997. The
Company's 1997 Annual Report to Stockholders will be mailed concurrently with
the proxy material.
RECORD DATE AND OUTSTANDING SHARES
Only stockholders of record at the close of business on July 10, 1997 ("the
Record Date") will be entitled to notice of and to vote at the Meeting. On the
Record Date there were 6,032,065 shares of the Company's Common Stock, $.10 par
value per share, outstanding. Each share of Common Stock outstanding is entitled
to one vote on all matters. There is no other class of voting securities
outstanding.
QUORUM AND VOTING OF SHARES
The presence at the Meeting, in person or by proxy, of holders of at least a
majority of the shares entitled to vote at the Meeting shall constitute a quorum
for the purpose of conducting business. In the election of directors,
stockholders entitled to vote do not have cumulative voting rights. Abstentions
and broker non-votes are counted for the purpose of determining the presence or
absence of a quorum. The effect of abstentions and broker non-votes, except for
the election of directors will not be included in the vote for or against items
acted upon.
If the enclosed proxy is properly executed and returned prior to voting at the
Meeting, the shares represented thereby will be voted in accordance with the
instructions given. In the absence of instructions, the shares will be voted in
accordance with the recommendations of the Board of Directors set forth herein.
The Board of Directors is not aware, as of the date hereof, of any matters to be
voted upon at the Meeting other than those stated in this Proxy Statement and
the accompanying Notice of 1997 Annual Meeting of Stockholders. If, however, any
other matters are properly presented at the Meeting or any adjournments thereof,
it is the intention of the persons named in the accompanying proxy to vote the
shares of Common Stock represented thereby in accordance with their best
judgment pursuant to discretionary authority granted in the proxy.
Any proxy submitted by a stockholder may be revoked at any time before it is
voted by giving written notice of revocation or delivering a duly executed proxy
bearing a later date to the Secretary at the corporate offices, or by attending
the Meeting and voting in person.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. The Company may
also reimburse brokerage firms, and other persons representing beneficial owners
of shares, for their expenses in forwarding solicitation materials to such
beneficial owners. In addition, the Company's directors, officers and regular
employees, without receiving any additional compensation, may solicit proxies
personally or by telephone or facsimile.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the holdings
of the parties who were known, based on filings with the Securities and Exchange
Commission and the records of the Company's transfer agent as of June 16, 1997
to be the beneficial owners of more than 5% of the outstanding Common Stock of
the Company. The parties named below have sole voting power and sole investment
power with respect to the shares beneficially owned except as noted below.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Common Stock
---------------- -------------------- ------------
<S> <C> <C>
Paul Carr 735,812(1) 12.20%
270 Bridge Street, Dedham, MA 02026
Luda Kopekina 401,500(2)(3) 6.59%
200 Baker Avenue, Suite 300, Concord, MA 01742
Igor Razboff 387,500(2)(4) 6.37%
200 Baker Avenue, Suite 300 Concord, MA 01742
Dale DeSharone 337,500 5.60%
53 Hill Street, Concord, MA 01742
Robert I. Bogin 311,163(5) 4.95%
8221 Windsor View Terrace, Potomac, MD 20854
</TABLE>
(1) Acquired in connection with the Company's purchase of the stock of Client
Server Technologies, Inc. (CSTI) on March 31, 1997 (see "Transactions with
Beneficial Owners, Directors, and Executive Officers").
(2) Includes 337,500 shares held jointly by Mr. Razboff and Ms. Kopeikina, who
are married to one another.
(3) Includes options granted to purchase 64,000 shares of Common Stock pursuant
to the Company's Non-Qualified Employee Stock Option Plan.
(4) Includes options granted to purchase 50,000 shares of Common Stock pursuant
to the Company's Non-Qualified Employees Stock Option Plan.
(5) Also includes options granted to purchase 250,000 shares of Common Stock
pursuant to the Company's Non-Qualified Employee Stock Option Plan.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the holdings
of the Company beneficially owned by each director, nominee for director, and
executive officer, and by all directors and executive officers as a group as of
June 16, 1997. Each of the persons named has sole voting power and sole
investment power with respect to the shares beneficially owned, unless otherwise
indicated.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Common Stock
---------------- -------------------- ------------
<S> <C> <C>
Paul Carr 735,812(1) 12.20%
270 Bridge Street, Dedham, MA 02026
Luda Kopeikina 401,500(2)(3) 6.59%
200 Baker Avenue, Suite 300, Concord, MA 01742
Igor Razboff 387,500(2)(4) 6.37%
200 Baker Avenue, Suite 300 Concord, MA 01742
Robert I. Bogin 311,163(5) 4.95%
8221 Windsor View Terrace, Potomac, MD 20854
Bernard M. Frank 181,675(6) 2.98%
666 Fifth Avenue, 13th Floor, New York, NY 10103
Nico B.M. Letschert 135,000(7) 2.21%
1801 Clint Morre Road, Boca Raton, FL 33487
Philip R. Redmond 40,000(8) .66%
75 Cambridge Pkwy, Suite W401, Cambridge, MA 02142
Craig J. Cox 22,500(9) .37%
4215 Lakeway Boulevard, Austin, TX 78734
Edward Terino 19,000(10) .31%
200 Baker Avenue, Suite 300, Concord, MA 01742
All Directors & Executive Officers as a Group (9 persons) 1,896,650 28.41%
</TABLE>
(1) Acquired in connection with the Company's acquisition of CSTI on March 31,
1997. (See "Transactions with Beneficial Owners, Directors, and Executive
Offices).
(2) Includes 337,500 shares held jointly by Mr. Razboff and Ms. Kopeikina who
are married to on another.
(3) Includes options granted to purchase 64,000 shares of Common Stock pursuant
to the Company's Non-Qualified Employee Stock Options Plan.
(4) Includes options granted to purchase 50,000 shares of Common Stock pursuant
to the Company's Non-Qualified Employee Stock Option Plan.
(5) Also includes options granted to purchase 250,000 shares of Common Stock
pursuant to the Company's Non-Qualified Employee Stock Option Plan.
(6) Includes options granted to purchase 67,500 shares of Common Stock pursuant
to the Company's Non-Qualified Stock Option Plan for Non-Employee
Directors.
(7) Includes warrants to purchase 80,000 shares of Common Stock. Includes
options granted to purchase 55,000 shares of Common Stock pursuant to the
Company's Non-Qualified Stock Option Plan for Non-Employee Directors.
4
<PAGE>
(8) Includes options granted to purchase 10,000 and 30,000 shares of Common
Stock pursuant to a consulting agreement and the Company's Non-Qualified
Stock Option Plan for Non-Employee Directors, respectively.
(9) Includes options granted to purchase 7,500 and 15, 000 shares of Common
Stock pursuant to a consulting agreement and the Company's Non-Qualified
Stock Option Plan for Non-Employee Directors, respectively.
(10) Includes options granted to purchase 15,000 shares of Common Stock pursuant
to the Company's Non-Qualified Employee Stock Option Plan.
PROPOSAL ONE: ELECTION OF DIRECTORS
IDENTIFICATION OF NOMINEES
The Board of Directors has nominated seven directors to serve until the 1998
Annual Meeting of Stockholders and until their successors have been elected and
qualified, or until their earlier resignation or removal from office.
The nominees for election as directors are as follows:
Name Position Age Director Since
- ---- -------- --- --------------
Robert Donaldson Nominee for Director 65 New Nominee
Luda Kopeikina Nominee for Director, President 43 New Nominee
Nico B.M. Letschert Director 42 1993
Igor R. Razboff Director 42 1995
Philip R. Redmond Director 47 1995
Richard Santagati Nominee for Director 53 New Nominee
Alan F. White Nominee for Director 60 New Nominee
THE BOARD OF DIRECTORS RECOMMENDS STOCKHOLDERS VOTE "FOR" THE NOMINEES TO THE
BOARD OF DIRECTORS.
Pursuant to underwriting and placement agreements, Noble Investment Co. has the
right to designate one nominee for election to the Board of Directors through
April 7, 1998. Noble Investment Co. has named its past President, Nico B. M.
Letschert, as its nominee.
In addition to the Noble Investment Co. nominee, the Board of Directors has
nominated six directors for election. Under the bylaws of the Company, the Board
of Directors is entitled to fill, until the next Annual Meeting of Stockholders,
any vacancy existing on the Board following the Annual Meeting of Stockholders.
A plurality of the votes cast at the Annual Meeting in person or by proxy shall
elect said nominees as directors of the Company. The Company is not aware of any
reason why any of the nominees, if elected, would be unable to serve as a
director.
PRINCIPAL OCCUPATIONS AND DIRECTORSHIPS HELD BY NOMINEES
Robert Donaldson is a retired senior sales and marketing executive with 30 plus
years experience, both domestic and international, in the information technology
industry. For the past twenty years, Mr. Donaldson was an executive with Groupe
Bull of France, formerly known as Honeywell Information Systems. He served as
Vice President and General Manager in the Federal Systems Division, Corporate
Communications and International Account Management. In these roles, he improved
and rebuilt large organizations while significantly improving growth and profit.
Prior to his career at Groupe Bull, Mr. Donaldson held executive marketing
positions at Bell and Howell Electronics and Xerox Data Systems.
Luda Kopeikina has been President of the Company since September, 1996. Prior to
joining the Company, Ms. Kopeikina was Vice President for General Electric
Corporation for the prior six years. She held several positions at GE including:
Vice President of Business Development and Sourcing; Vice President of Customer
Service for
5
<PAGE>
GE Information Services; and Executive Manager, Corporate Business Development.
While at GE Corporate, Ms. Kopeikina led successful initiatives with several GE
businesses to reengineer their operations for faster cycle time and inventory
reductions. Prior to her joining GE, Ms. Kopeikina held several software
management positions at Intermetrics, Inc. and GTE Laboratories, Inc. Ms.
Kopeikina holds a Master's Degree in Computer Science from St. Petersburg
University, Russia, and a Master's Degree from MIT's Sloan School of Management
as a Sloan Fellow. Ms. Kopeikina is married to Mr. Razboff.
Nico B.M. Letschert is Chief Executive Officer of Noesis Capital Corp. which
specializes in corporate finance and money management. He previously served as
President of Noble Investment Co. of Palm Beach, Florida, an investment banking
firm. During the four years prior to his founding Noble Investment Co. in 1984,
Mr. Letschert was a manager, market maker and registered representative with
several local and national brokerage firms. From the early 1970s until leaving
the Netherlands in 1979, Mr. Letschert worked for a specialist firm and a
private bank, was a member of the Amsterdam Stock Exchange, and was employed in
the Amsterdam office of E.F. Hutton. He was educated at the Dutch Institute for
Banking and Finance. His credentials include registration with the NASD as a
principal and the Certified Financial Planner (CFP) designation. Mr. Letschert
is currently a director of WaterMarc Food Management Co., and Futuremedia PLC.
Igor R. Razboff is Vice President of CUC Software, a division of CUC
International, Inc. Mr. Razboff was Chief Executive Officer of the Company until
April 25, 1997. He resigned from his CEO position to facilitate the transition
of the Company's multimedia production capability to CUC Software as a result of
the sale of selected multimedia assets. Before joining the Company in February
1995, Mr. Razboff was the President and Chief Executive Officer of Animation
Magic, Inc. He served as the President of Business Link International, Inc. from
1991 to 1992. Prior to 1991, Mr. Razboff held several managerial positions at
Prime Computer, Inc., Computervision Corporation and AT&T Bell Laboratories. Mr.
Razboff holds a Master's Degree and a Ph.D. in mathematics from the State
University of St. Petersburg, Russia.
Philip R. Redmond is the Chairman and a Principal of Vannevar Management, Inc.,
a management consulting firm. Prior to co-founding Vannevar, Mr. Redmond was a
principal at two international strategy consulting firms, Boston Consulting
Group and LEK/Alcar. He ran the Information Technology practice and marketing in
North America for LEK. Mr. Redmond was also a director and manager in licensing,
acquisitions/divestitures, and international business at Spinnaker Software,
Inc. Prior to joining Spinnaker, he founded and was CEO of a real estate
investment firm. Mr. Redmond's educational background includes an undergraduate
degree in mathematics from Brown University and an MBA from the Harvard Business
School.
Richard Santagati is currently the President of Merrimack College, located in
North Andover, Massachusetts. He has held this position since June, 1995 and was
acting President from March, 1994. Prior to his position at Merrimack College,
Mr. Santagati was Chairman and Chief Executive Officer of Artel Communications
Corporation, a high technology company where he was responsible for growing
revenues significantly over a period of three years prior to its merger with
Chipcom Corporation. Prior to his position at Artel, he was a partner at
Lighthouse Capital Management, Inc., an investment management firm, and was the
Chief Executive Officer at Gaston & Snow, a national law firm. Mr. Santagati has
also held several senior executive positions at NYNEX, including President and
Chairman of NYNEX Business Information Systems and Vice President of Marketing
for NYNEX Corporation. He is currently a Director on the Corporate Boards of
Computer Telephone Corporation and ESP, Inc. Mr. Santagati holds a Bachelor's
Degree from Merrimack College and a Master's Degree from MIT's Sloan School of
Management.
Alan F. White is Senior Associate Dean at the Massachusetts Institute of
Technology Alfred P. Sloan School of Management. He has been associated with MIT
for the past 24 years and has held several positions at MIT including Director
of the Alfred P. Sloan Fellows Program, and Director of Executive Education.
Prior to his positions there, Mr. White worked in the printing industry in sales
and operations; worked in government service in Asia; and served as Executive
Assistant to the President and Director of the Center for Cross Cultural
Training and Research at the University of Hawaii. Mr. White completed numerous
consulting assignments in the areas of management development and business
development for such companies as British Petroleum, and CitiBank. He
6
<PAGE>
currently holds Board seats for several organizations including: Kenan Systems;
Management Sciences for Health; and the Advisory Board of the Japan Management
Institute. Mr. White holds an undergraduate degree from the University of Miami
(Ohio) and a Masters in Management from MIT.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held eight meetings during fiscal year 1997. Each
incumbent director attended 100% of the aggregate of all meetings of the Board
of Directors and committees on which he served. The standing committees of the
Board of Directors are the Compensation Committee, the Audit Committee and the
Nominating Committee.
Compensation Committee. The Compensation Committee determines the compensation
of the President and Chief Executive Officer and administers the Company's
Non-Qualified Employee Stock Option Plan. The Committee's current members are
non-employee directors Craig J. Cox, Bernard M. Frank and Nico B.M. Letschert.
The Committee met five times during fiscal year 1997.
Audit Committee. The Audit Committee recommends the appointment of the Company's
independent accountants and reviews and approves the results, findings, and
recommendations of audits performed by the independent accountants. The
Committee also reviews matters relating to corporate practices, regulatory and
financial reporting, accounting procedures and policies, financial and
accounting internal controls, and transactions involving potential conflicts of
interest. The Committee's current members are Craig J. Cox, Igor Razboff and
Philip R. Redmond. The Committee met once during fiscal year 1997.
Nominating Committee. The Nominating Committee recommends the nomination of the
Company's Board members for election by stockholders. The Committee defines
criteria for Board members, identifies and evaluates prospective members and
makes recommendations to the Board for ratification. The Committee was
established late in fiscal 1997, and did not meet in the fiscal year. The
Committee's current members are Nico B.M. Letschert, Philip Redmond and Igor
Razboff.
TRANSACTIONS WITH BENEFICIAL OWNERS, DIRECTORS, AND EXECUTIVE OFFICERS
Client Server Technologies, Inc.
On March 31, 1997, the Company acquired all of the outstanding stock of CSTI in
exchange for $1,250,881 in cash, the issuance of 1,200,000 unregistered shares
of the Company's common stock and the issuance of non-interest bearing
convertible, long-term notes totaling $1,945,000. Debt holders have the right to
convert a portion of the notes ($1 million) which comes due on December 31, 1998
into shares of common stock at a $3.00 per share conversion price.
Paul Carr, President of CSTI, owned approximately 61% of the stock of CSTI.
Sixteen (16) current and former employees of CSTI owned the remaining 39%. As a
consequence of the transaction, Paul Carr was issued 735,812 shares of the
Company's stock. In addition, Mr. Carr holds approximately 80% of the promissory
notes issued to CSTI stockholders. Repayment of the notes begins in fiscal 1999.
Mr. Carr's notes are secured with certain assets of CSTI. Mr. Carr has entered
into an employment agreement with the Company, (See "Employment Agreements").
Other Transactions
In June 1996 and pursuant to a consulting agreement, Philip R. Redmond, a
director of the Company, was granted an option to purchase 15,000 shares of
Common Stock at $4.66 per share, the market price of the Company's Common Stock
on the date of grant. The option vests in 5,000 increments in June 1996, 1997,
and 1998 and expires in September 1998.
7
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company with the Securities and Exchange Commission (SEC). Directors,
officers, and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports
filed.
Based solely on a review of Section 16(a) reports, all fiscal year 1997 forms
were filed on a timely basis.
COMPENSATION OF DIRECTORS
Under the terms of the Company's Amended and Restated 1992 Non-Qualified Stock
Option Plan for Non-Employee Directors ("the Director Plan"), each non-employee
director is granted an option to purchase 15,000 shares of common stock upon
initial election to the Company's Board of Directors and on the date of each
subsequent annual meeting of stockholders at which the director is elected or
re-elected to serve on the Board of Directors. The purchase price per share of
Common Stock for options granted pursuant to the Director Plan is equal to the
market price as defined by the Director Plan of the Company's Common Stock on
the date of grant. Options granted under the plan are exercisable for a five
year period from the date of grant. The options are exercisable for the five
year period regardless of whether or not the non-employee director remains on
the Board during the option period. In the event the option holder dies before
fully exercising any portion of an option then exercisable, such option may be
exercised by such holder's legal representatives at any time within the six (6)
month period following his or her death.
EXECUTIVE OFFICERS
Information Concerning Executive Officers
Executive officers of the Company are bound by employment agreements and serve
subject to the bylaws of the Company. (See "Employment Agreements").
Executive Officers and Key Employees
Luda Kopeikina, President - See information disclosed under "Principal
Occupations and Directorships Held by Nominee".
Paul Carr, President - CSTI since March 31, 1997, 45. Mr. Carr is the founder of
CSTI, which he started in 1993. From 1989 through 1993, he was President of the
Logistics Products Division of Ross Systems, Inc. From 1981 through 1989 Mr.
Carr was the President of Cardinal Data Corporation, an order management and
logistics application software company. From 1977 through 1981, he was a
consultant with R. Shriver Associates. Paul holds a Bachelor of Arts degree from
St. Michael's College and an MBA from the University of Virginia.
Edward Terino, Chief Financial Officer, Treasurer and Secretary since December,
1996, 43. From 1985 through 1996, Mr. Terino held various financial management
positions with Houghton Mifflin Company. From 1992 through 1996, he was Vice
President, Finance, Planning and Operations for the School Publishing Division
($300 million in sales). From 1985 through 1992, he held several corporate
finance positions including Corporate Controller and Director of Budgeting. From
1976 through 1985, Mr. Terino was a consultant with Deloitte & Touche
specializing in the areas of financial modeling and information technology. He
holds a Bachelor of Science degree from Northeastern University and a MBA from
Suffolk University.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation of the Company's executive officers
who earned greater than $100,000 during fiscal year 1997 ("Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Securities
Name and Fiscal Other Annual Underlying All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Options Compensation ($)
------------------ ---- ---------- --------- ---------------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert I. Bogin 1997 150,987 -- -- -- 280,286(1)
Former President & CEO 1996 167,500 32,000 -- 250,000 5,799
1995 167,500 -- -- -- 4,451
Igor Razboff 1997 153,842 -- -- -- 2,413(2)
Former CEO 1996 125,000 62,500 -- -- 700
1995 110,425 -- -- 50,000 --
Dale DeSharone 1997 130,000 -- -- -- 1,650(3)
Former Executive Producer & 1996 125,000 25,000 -- -- --
Director, New Products 1995 110,425 -- -- 50,000 --
Catherine F. Hoopes 1997 102,720 5,250 -- -- 72,891(4)
Former CFO 1996 96,000 19,000 -- 102,176 1,651
1995 82,785 8,278 -- -- 1,196
</TABLE>
(1) Includes $258,550 per separation agreement, $7,139 for company matching
401(k) contribution, $2,415 for life insurance, and $12,182 for earned,
unused vacation paid at termination.
(2) Includes $1,713 for company matching 401(k) contribution and $700 for life
insurance.
(3) $1,650 for company matching 401(k) contribution.
(4) Includes $61,250 per separation agreement, $5,283 for company matching
401(k) contribution and $240 for life insurance, and $6,058 for earned
vacation paid at termination.
9
<PAGE>
OPTIONS
The following table sets forth fiscal year 1997 option grants, and repricings,
to Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of Total
Options Granted To
Number of Securities
Underlying Employee During Exercise or Expiration
Name Options Granted Fiscal Year Base Price Date
---- --------------- ----------- ---------- ----
<S> <C> <C> <C> <C>
Luda Kopeikina(1) 64,000 6.15% $.83 3/30/02
64,000 6.15% $.83 9/30/02
64,000 6.15% $.83 9/30/03
64,000 6.15% $.83 9/30/04
64,000 6.15% $.83 9/30/05
Paul Carr(2) 250,000 24.03% $1.00 3/30/03
Edward Terino(3) 15,000 1.4% $1.46 12/15/01
20,000 1.9% $1.46 12/30/02
20,000 1.9% $1.46 12/30/03
20,000 1.9% $1.46 12/30/04
</TABLE>
(1) Options originally granted on September 18, 1996 at an exercise price of
$2.65 per share were repriced on March 31, 1997 at the current market price
as defined by the Plan. The repricing was designed to align the exercise
price of the options granted with the completion of several strategic
initiatives including the entry into the supply chain management software
market. Initial grant vested on March 31, 1997. Subsequent grants vest in
increments of 64,000 shares on each October 1st 1997, 1998, 1999, 2000.
(2) Options granted vest on March 31, 2000.
(3) Initial grant vested on date of hire. Subsequent grants vest in increments
of 20,000 shares on each December 31st 1997, 1998, 1999.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
The following table sets forth as of March 31, 1997, unexercised options and
corresponding option values for Executive Officers:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Options In-the-Money Options
Shares Acquired Value at March 31, 1997 At March 31, 1997
Name on Exercise Realized Exercisable / Unexercisable Exercisable / Unexercisable
---- ----------- -------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Robert I. Bogin -- -- 250,000/0 0/ 0
Igor R. Razboff -- -- 0/50,000 0/ 0
Dale R. DeSharone -- -- 0/50,000 0/ 0
Catherine K. Hoopes -- -- 102,176/0 0/ 0
Luda Kopeikina -- -- 64,000/256,000 $26,880/ $107,520
Paul Carr -- -- 0/250,000 0/ $62,500
Edward Terino -- -- 15,000/60,000 0/ 0
</TABLE>
10
<PAGE>
EMPLOYMENT AND SEPARATION AGREEMENTS
LUDA KOPEIKINA
In September, 1996, the Company entered into an employment agreement with Luda
Kopeikina, its President, effective through October 1, 2000. Under the
agreement, Ms. Kopeikina currently received an annual salary of $165,000. She is
eligible for fiscal year raises and annual bonuses as granted by the
Compensation Committee of the Board of Directors in their sole discretion. The
Company pays for Ms. Kopeikina's health insurance premiums under current medical
plans. In addition, during the term of the agreement, Ms. Kopeikina receives a
$6,000 annual automobile allowance. Pursuant to the agreement, the Company
granted Ms. Kopeikina non-qualified stock options under the 1991 Amended and
Restated Non-Qualified Stock Option Plan to purchase 320,000 shares of common
stock at $2.65 per share. In March 1997, these options were repriced at $.83 per
share. A total of 64,000 options vested on the effective date of the agreement.
The remaining options vest in increments of 64,000 shares on each October 1 of
1997, 1998, 1999 and 2000. All options are non transferable and expire five
years from their respective vesting date. Ms. Kopeikina can be dismissed at any
time for cause without entitlement to severance. At anytime during the first
year of the agreement, either the Company or the employee may terminate the
agreement without cause with 90 days notice. Following the first year of the
effective date of the agreement, the Company may terminate the agreement without
cause, with severance pay owed to Ms. Kopeikina in the amount of any outstanding
wages and benefits payable under the remaining term of the agreement and Ms.
Kopeikina may terminate her agreement with 90 days notice.
PAUL CARR
On March 31, 1997, in conjunction with the acquisition of CSTI, the Company
entered into an agreement with Paul Carr through March 31, 2000. Under the
agreement, Mr. Carr currently receives an annual salary of $185,000. He is
eligible for fiscal year raises and annual bonuses as granted by the
Compensation Committee of the Board of Directors. In addition, Mr. Carr was
granted a non-transferable, non-qualified stock option to purchase 250,000
shares of common stock at $1.00 per share pursuant to the 1991 Amended and
Restated Non-Qualified Employee Stock Option Plan. The option vests on March 31,
2000 and expires on March 30, 2003 or 60 days after termination of employment,
whichever occurs earlier. Mr. Carr can be dismissed for cause without
entitlement to severance and without cause with severance pay owed to Mr. Carr
in the amount equal to twelve (12) months salary.
EDWARD TERINO
On November 26, 1996, the Company entered into an employment agreement with
Edward Terino to serve as its Chief Financial Officer, Treasurer and Secretary
through December 31, 1999. Under the agreement, Mr. Terino currently receives an
annual salary of $130,000. He is eligible for fiscal year raises and annual
bonuses as granted by the Compensation Committee of the Board of Directors in
their sole discretion. The Company pays for Mr. Terino's health insurance
premiums under the current medical plans. In addition, the Company granted Mr.
Terino non-qualified stock options under the 1991 Amended and Restated
Non-Qualified Stock Option Plan to purchase 75,000 shares of common stock at
$1.46 per share. The options vest at follows: 15,000 on Mr. Terino's start date
(December 16, 1997); and 20,000 on December 31, 1997, 1998 and 1999,
respectively. These options expire five (5) years from their respective vesting
date. Mr. Terino can be dismissed at anytime for cause without entitlement to
severance. At any time during the first year of the agreement, either the
Company or Mr. Terino may terminate the agreement without cause with 90 days
notice. Following the first year of the effective date of the agreement, the
Company may terminate the agreement without cause with severance pay owed Mr.
Terino in the amount of wages and benefits due under the remaining term of the
agreement.
IGOR R. RAZBOFF
In February 1995, the Company entered into a three year employment agreement
with Igor R. Razboff, former President and Chief Executive Officer of Animation
Magic, Inc., whereby Mr. Razboff served as the Company's
11
<PAGE>
Vice President, Consumer Production. In September, 1996, Mr. Razboff was
selected to serve as Chief Executive Officer of the Company. On April 25, 1997,
in conjunction with the sale of selected multimedia assets to Davidson , the
Company entered into a separation agreement with Mr. Razboff. Under the terms of
the separation agreement, Mr. Razboff received a lump sum payment of $138,173 as
consideration for fiscal 1997 bonus, unpaid fiscal 1998 salary through April 25,
1997, medical benefits , unpaid accrued and unused vacation, unused personal
allowance and for consulting services to be rendered to the Company over the
next twelve (12) months. The Board agreed to nominate Mr. Razboff as a Director
on the Company's Board for approval by stockholders at the 1997 Annual Meeting
of Stockholders. In addition, the Company granted Mr. Razboff options to
purchase 50,000 shares of common stock of the Company at the market price on the
date of the grant as defined by the 1991 Amended and Restated, Non-Qualified
Employee Stock Option Plan. The options vested immediately and expire in April,
2002.
DALE R. DESHARONE
In February 1995, the Company entered into an employment agreement with Dale R.
DeSharone, former Executive Producer and Vice President of Product Development
of Animation Magic, Inc., whereby Mr. DeSharone served as the Company's
Executive Producer and Director, New Products through March 1998. Under the
agreement, Mr. DeSharone received an annual salary of $130,000 during fiscal
1997. On April 17, 1997, in conjunction with the sale of selected multimedia
assets to Davidson , the Company entered into a separation agreement with Mr.
DeSharone. Under the terms of the separation agreement, Mr. DeSharone received a
lump sum payment of $130,000 as consideration for consulting services to be
rendered to the Company over the next six (6) months, unpaid fiscal 1998 salary,
accrued and unused vacation and other accrued and unused employee benefits.
ROBERT I. BOGIN
The Company entered into a separation agreement with Robert I. Bogin, its former
President and Chief Executive Officer, on October 28, 1996. Under the terms of
the separation agreement, Mr. Bogin's employment with the Company was terminated
on December 31, 1996. Following the termination date, Mr. Bogin received a lump
sum payment equal to $258,550 plus any amounts accrued with respect to unused
vacation time. In substitution for options previously granted (250,000 at $3.96
per share), Mr. Bogin was granted options to purchase 250,000 shares at $3.96
per share with the options fully exercisable on his termination date. The
separation payout and options were subject to Mr. Bogin's execution of a "waiver
letter" and contingent on Mr. Bogin fulfilling certain employment obligations
through December 31, 1996.
CATHERINE F. HOOPES
The Company entered into a separation agreement with Catherine F. Hoopes, its
former Chief Financial Officer, Treasurer and Secretary, on October 28, 1996.
Under the terms of the agreement, Ms. Hoopes employment with the Company was
terminated on February 28, 1997. Following the termination date, Ms. Hoopes
received a lump sum payment equal to $61,250 plus any amount accrued with
respect to unused vacation time. In substitution for options previously granted
(62,176 at $3.96 per share and 40,000 at $3.75 per share), Ms. Hoopes was
granted options to purchase the same number of shares at the same grant prices
with the options fully exercisable on her termination date. The separation
payout and options were subject to Ms. Hoopes' execution of a "waiver letter"
and contingent on Ms. Hoopes fulfilling certain employment obligations through
February 28, 1997.
PROPOSAL TWO: AMENDMENT TO THE AMENDED AND RESTATED 1992
NON-QUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Proposed Amendment
In June 1997, the Board of Directors adopted, subject to stockholder approval,
an amendment to the Director Plan which increases the number of authorized
shares of the Company's common stock issuable under the Director Plan from
300,000 to 600,000.
12
<PAGE>
There are currently outstanding options to purchase 220,000 shares granted under
the plan out of an aggregate 300,000 shares authorized for issuance to
non-employee directors. The nominees for the Board of Directors include six (6)
non-employee directors. Under the terms of the Director Plan, there are
insufficient shares authorized to address compensation of Board members who are
elected to the Board at the 1997 Annual Meeting of Stockholders. The Board of
Directors has approved the proposed increase in the number of options subject to
the plan in order to facilitate the addition of qualified candidates to the
Board of Directors who have experience in the commercial software markets that
are the focus of the Company's business following the acquisition of CSTI.
An affirmative vote by the holders of a majority of shares present or
represented and entitled to vote at the 1997 Annual Meeting of Stockholders in
person or by proxy and voting thereon shall approve the Amendment to the
Director Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED 1992 NON-QUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE
DIRECTORS.
General
The Amended and Restated 1992 Non-Qualified Stock Option Plan for Non-employee
Directors ("the Director Plan") was adopted by the Company's Board of Directors
on May 23, 1995 and approved by the Company's stockholders on September 7, 1995.
The description of the Director Plan set forth below is qualified in its
entirety by the terms and conditions of the Amended and Restated 1992
Non-Qualified Stock Option Plan for Non-Employee Directors.
The purpose of the Director Plan is to attract and retain highly qualified
non-employee directors by encouraging such directors of the Company to acquire a
proprietary stake in the Company and its future growth. There are 300,000 shares
of Common Stock authorized for issuance upon exercise of stock options granted
under the Director Plan. Should any options granted under the Director Plan not
be exercised, in whole or in part, in the time allowed for such exercise, the
shares of Stock relating to such lapsed options shall again be available for
issuance under the Director Plan.
Under the terms of the Director Plan, each non-employee director is granted an
option to purchase 15,000 shares of Common Stock upon initial election to the
Company's Board and on the date of each subsequent annual meeting of
stockholders at which the director is elected or re-elected to serve on the
Board of Directors. The purchase price per share of stock under options granted
pursuant to the Director Plan is equal to the market price of the stock as
defined by the Plan on the date of grant. Each option granted under the Director
Plan fully vests as of the date of grant and is exercisable for a five year
period from the date of grant. Pursuant to Rule 16b-3(c)(1) however, no option
granted under the Director Plan may be exercised during the six month period
immediately following the date of grant. If a holder dies before fully
exercising any portion of an option then exercisable, such option may be
exercised by such holder's legal representatives, at any time within the six (6)
month period following his or her death. Subject to the terms and conditions,
and within the limitations of the Director Plan, the members of the Board of
Directors who are not eligible to participate in the Director Plan may modify,
extend or renew outstanding options granted under the Director Plan and accept
the surrender and cancellation of outstanding options (to the extent not
theretofore exercised) and authorize the granting of new options in substitution
therefor or options as amended.
In the event of any reorganization, merger, consolidation, acquisition,
separation, recapitalization, split-up, combination, exchange of shares or stock
dividend of the stock or shares convertible into the stock or similar corporate
action, the number and class of shares of stock available pursuant to the
Director Plan and any options granted pursuant to the Director Plan, together
with the option prices, shall be adjusted by appropriate modifications to the
Director Plan and in any options outstanding pursuant to the Director Plan.
13
<PAGE>
The Company's Board of Directors may at any time suspend or discontinue the
Director Plan, but no amendment shall be authorized without stockholder approval
which (i) materially increases the benefits accruing to participants under the
Director Plan; (ii) materially increases the number of securities which may be
issued under the Director Plan, except as otherwise provided for in the Director
Plan; or (iii) materially modifies the requirements as to eligibility for
participation in the Director Plan. The Director Plan shall terminate in
September 2005 unless it shall have been sooner terminated by reason of there
having been granted and fully exercised options covering the entire 300,000
shares of stock subject to the Director Plan. Upon such termination, no further
options may be granted under the Director Plan.
A complete copy of the Director Plan is available to stockholders upon written
request made to the Company.
Federal Income Tax Consequences
Optionee -- An optionee will not recognize any taxable income at the time a
non-qualified stock option is granted. However, upon exercise of such, the
optionee will include in income an amount equal to the difference between the
fair market value of the shares on the date of exercise and the amount paid for
the stock upon exercise of the option. This amount will be treated as ordinary
income by the optionee and will be subject to income tax withholding by the
Company. Upon resale of the shares by the optionee, any subsequent appreciation
or depreciation in the value of the shares will be treated as a capital gain or
loss.
Company -- The Company will be entitled to a deduction in connection with the
exercise of a non-qualified stock option to the extent that the optionee
recognizes ordinary income and the Company withholds federal income taxes.
PROPOSAL THREE: AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
1991 NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN
Proposed Amendment
In June 1997, the Board of Directors adopted, subject to stockholder approval,
an amendment to the Amended and Restated 1991 Non-Qualified Employee Stock
Option Plan (the "Employee Plan") increasing the number of shares available
under the Employee Plan from 1,500,000 to 3,000,000 (the "Amendment"). The Board
believes that in order for the Company to continue to attract and retain
qualified employees and consultants, as well as attract and retain the
management and employees of companies acquired in the future, it must continue
to provide suitable incentive compensation, including stock options. It is
therefore necessary to increase the number of shares of Common Stock available
for issuance under the Employee Plan.
In addition to other conforming modifications, paragraph (a) of section three of
the Employee Plan, "Shares of Common Stock Subject to the Plan," would be
amended to increase the number of shares available for issuance under the
Employee Plan from 1,500,000 to 3,000,000.
An affirmative vote by the holders of a majority of shares present or
represented and entitled to vote at the 1997 Annual Meeting of Stockholders in
person or by proxy and voting thereon shall approve the Amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED 1991 NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN.
General
The Amended and Restated 1991 Non-Qualified Employee Stock Option Plan ("the
Employee Plan") was adopted by the Company's Board of Directors on July 20, 1993
and approved by the Company's stockholders on September
14
<PAGE>
28, 1993. The description of the Employee Plan set forth below is qualified in
its entirety by the terms and conditions of the Amended and Restated 1991
Non-Qualified Employee Stock Option Plan.
The purpose of the Employee Plan is to further promote the interests of the
Company by enhancing the Company's ability to attract, motivate and retain new
and existing employees and consultants and to encourage the highest level of
performance by providing these employees and consultants with a proprietary
interest in the Company's growth and financial success through grants of stock
options and shares of restricted stock.
There are 1,500,000 shares of Common Stock authorized for issuance upon exercise
of stock options granted under the Employee Plan. At June 16, 1997, options to
purchase 1,168,711 and 202,003 shares were outstanding and available for grant
under the Employee Plan, respectively. Should any options granted under the
Employee Plan not be exercised, in whole or in part, in the time allowed for
such exercise, the shares of Stock relating to such lapsed options shall again
be available for issuance under the Employee Plan.
The Employee Plan is administered by a committee which consists of at least two
persons, each of whom are members of the Company's Board of Directors and have
not been awarded an option or restricted stock pursuant to the Employee Plan
within one year prior to service on the committee. The committee has complete
authority to adopt, amend or rescind procedures relating to the Employee Plan.
The committee determines when Employee Plan awards are granted, selects
optionees and participants, determines the number of shares subject to each
Employee Plan award, and prescribes the terms of such awards.
The purchase price per share of stock under options pursuant to the Employee
Plan is equal to the market value of the stock on the date of grant as defined
by the Plan. Options shall terminate on the date the optionee ceases to be an
employee or consultant of the company in the event the optionee is terminated
for cause (as determined in the sole discretion of the committee). If terminated
other than for cause, options under the Employee Plan expire 90 days after
termination of the optionee. Options granted under the Employee Plan may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution, and are not
assignable by operation of law or subject to execution, attachment, or similar
process.
If the Company is the surviving corporation in a merger, consolidation, or other
reorganization, the holder of an option under the Employee Plan shall be
entitled to receive an option to purchase the same number of shares in the
surviving corporation that a holder of a corresponding number of shares will be
entitled to receive under the terms of the merger, consolidation, or other
reorganization. If the Company dissolves, sells substantially all of its assets,
is acquired in stock for stock or securities exchange, or is party to a merger,
consolidation, or other reorganization in which it is not the surviving
corporation, then each option granted under the Employee Plan shall be
exercisable in full for a period of sixty days commencing upon stockholder
approval (or Board of Directors approval, if stockholder action is not required)
of the transaction.
The Company's Board of Directors may at any time suspend or terminate the
Employee Plan or amend it in any respect provided however, that without the
approval of stockholders no amendment may (i) change the number of shares of
Common Stock subject to the Employee Plan, (ii) change the class of persons
eligible to receive options or restricted stock under the Employee Plan, or
(iii) materially increase the benefits accruing to participants under the
Employee Plan. No amendment, suspension, or termination of the Employee Plan
shall, without the consent of the participant, alter, terminate, impair, or
adversely affect any right or obligation under any option previously granted
under or made part of the Employee Plan. The Employee Plan shall terminate in
September 2003.
A complete copy of the Employee Plan is available to stockholders upon written
request made to the Company.
Federal Income Tax Consequences
Grant -- An optionee does not recognize any income tax and the Company is not
entitled to a deduction upon the grant of a non-qualified stock option. Exercise
- -- Generally, upon the exercise of a stock option the optionee will recognize
ordinary income in an amount equal to the excess of the fair market value of the
shares acquired over the exercise price. The Company is entitled to a deduction
in connection with the exercise of a non-qualified stock
15
<PAGE>
option to the extent that the optionee recognizes ordinary income and the
Company withholds federal income taxes.
PROPOSAL FOUR: APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
The Company has recently implemented several strategic initiatives, including
the consolidation of operations from Bethesda, Maryland to Concord,
Massachusetts; the entry and focus on the supply chain management segment of the
business software market through its acquisition of CSTI; and the sale of
selected multimedia assets to Davidson. Given these developments, the Company's
current name "Capitol Multimedia, Inc.", no longer fits the Company's business
and objectives.
In searching for a new name, the Company desired to reposition its identity for
the coming years and, in particular, for the changes that it currently
anticipates in the software industry.
Proposed Amendment
In June, 1997, the Board of Directors adopted a resolution, subject to
stockholders' approval, to change its Company name to "Celerity Solutions,
Inc.", effective September 1, 1997. "Celerity" means swiftness of action or
motion.
In addition to other conforming modifications, Article 1 of the Company's
Certificate of Incorporation would be amended to read: the name of the
Corporation (hereinafter called the "Corporation") is Celerity Solutions, Inc.
An affirmative action by the holders of a majority of shares represented and
entitled to vote at the 1997 Annual Meeting of Stockholders in person or by
proxy and voting thereon shall approve the Amendment to the Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual Meeting of
Stockholders must be received on or before March 31, 1998 to be considered for
inclusion in the Company's Proxy Statement and Form of Proxy relating to that
meeting. Proposals should be sent to Capitol Multimedia, Inc., Attention:
Corporate Secretary, 200 Baker Avenue, Suite 300, Concord, MA 01742.
By Order of the Board of Directors,
/s/ Edward Terino
- -----------------------------------
Edward Terino
Secretary
Concord, Massachusetts
July 14, 1997
16
<PAGE>
PROXY CAPITOL MULTIMEDIA, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 21, 1999
The undersigned hereby (a) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of Capitol Multimedia, Inc. ("Capitol Multimedia") to be
held on August 21, 1997, dated July 14, 1997; (b) appoints Luda Kopeikina and
Edward Terino, or either of them, as Proxies, each with the power to appoint a
substitute; (C) authorizes the Proxies to represent and vote, as designated on
the reverse, all the shares of Common Stock of Capitol Multimedia, Inc. held of
record by the undersigned on July 10, 1997, at such annual meeting and at any
adjournment(s) thereof; and (d) revokes any prior proxies heretofore given.
(To Be Signed on Reverse Side)
<PAGE>
A [X] Please mark your
votes as in this
example
THIS BOARD OF DIRECTORS A RECOMMENDS A VOTE "FOR" ALL THE FOLLOWING PROPOSALS.
For all nominees Withhold Authority
listed(except to vote for as
as noted below) nominees Listed
1. Election of the [ ] [ ]
following persons
to serve as
Directors of Capitol Multimedia, Inc. until the next annual meeting
(to withhold authority to vote for any individual nominee(s)
write name(s) below)
Nominees: Robert Donaldson
Luda Kopeikina
Nico B.M. Letschert
Igor Razboff
Philip R. Redmond
Richard Santagati
Alan F. White
FOR AGAINST ABSTAIN
2. Approval of Amendment to Capital [ ] [ ] [ ]
Multimedia, Inc. Amended and Restated 1992
Non-Qualified Stock Option Plan for
Non-Employee Directors increasing the number
of authorized shares of Common Stock issuable
under the Plan from 300,000 to 600,000
3. Approval of Amendment to Capitol [ ] [ ] [ ]
Multimedia's, Inc's Amended and Restated
Restated 1991 Non-Qualified Employee Stock
Option Plan increasing the number of
authorized shares of Common Stock issuable
under the Plan from 1,500,000 to 3,000,000.
4. Approval of Amendment to Capitol Multimedia, [ ] [ ] [ ]
Inc's Certificate of Incorporation
changing the name of the corporation to
Celerity Solutions, Inc.
5. In their discretion, the Proxies are [ ] [ ] [ ]
authorized to vote upon such other business
as may properly come before the meeting of
any adjournment(s) or postponement(s) thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS INDICATED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS AND, IN ACCORDANCE WITH
THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS AS SET FORTH WITHIN THIS PROXY.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ACCOMPANYING POSTPAID
ENVELOPE.
Signature _________________ _________________________ Dated _____________,1997
SIGNATURE IF HELD JOINTLY
IMPORTANT: Please date this proxy and sign exactly as you name appears thereon.
If stock is held jointly, all holders must execute this proxy. Executors,
administrators, trustees, guardians or others signing in a representative
capacity please so indicate when signing.
