SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. )
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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MICROS-TO-MAINFRAMES, INC.
(Name of Registrant as Specified In Its Quarter)
MICROS-TO-MAINFRAMES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or 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:
<PAGE>
[ ] 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>
MICROS-TO-MAINFRAMES, INC.
614 Corporate Way
Valley Cottage, New York 10989
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of MICROS-TO-MAINFRAMES, INC.:
Notice is hereby given that the Fiscal 1997 Annual Meeting of Shareholders
(the "Annual Meeting") of Micros-to-Mainframes, Inc. (the "Company"),
a New York corporation, will be held on March 31, 1998, at 614 Corporate
Way, Valley Cottage, New York at the hour of 10:00 a.m., for the following
purposes:
1. To elect five (5) Directors of the Company to serve for the ensuing
year and/or until their successors are elected and qualify; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 2, 1998
as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting.
By Order of the Board of Directors
Frank T. Wong, Secretary
Valley Cottage, New York
March 3, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD, AND RETURN IT TO THE
COMPANY. THE PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED, AND
SHAREHOLDERS EXECUTING PROXIES MAY ATTEND THE MEETING AND VOTE
THERE IN PERSON SHOULD THEY SO DESIRE.
<PAGE>
MICROS-TO-MAINFRAMES, INC.
614 Corporate Way
Valley Cottage, New York 10989
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by Micros-To-Mainframes, Inc. (the "Company")
to be voted at the Fiscal 1997 Annual Meeting of the Shareholders
(the "Annual Meeting") to be held at 614 Corporate Way, Valley Cottage,
New York on March 31, 1998 at 10:00 a.m., and at any and all adjournments
thereof. This Proxy Statement and accompanying Notice of Meeting and form
of proxy are to be first mailed on or about March 3, 1998 to the holders
of record of the Company's common stock, $.001 par value per share
("Common Stock) as of the close of business on March 2, 1998. At the close
of business on March 2, 1998, there were issued and outstanding and
entitled to vote 4,450,374 Common Stock. Each share of Common Stock is
entitled to one vote on each matter which may properly come before the
Meeting. All expenses of this solicitation will be paid for by the Company,
which solicitation will be made by use of the mails or by personal contacts
by the officers of the Company. The affirmative vote of the plurality of
the votes cast by the holders of Common Stock present in person or by proxy
at the Annual Meeting and entitled to vote, voting together as a single class,
is required for the election of Directors. The affirmative vote of the
majority of the votes cast by the holders of Common Stock present in person
or by proxy at the Annual Meeting and entitled to vote, voting together as a
single class, is required to adopt each other proposal to be acted on at the
Annual Meeting.
Common Stock represented by a valid unrevoked proxy will be voted at
the Annual Meeting and any adjournment thereof as specified therein by the
person giving the proxy. If no specification is made, the Common Stock
represented by such proxy will be voted in favor of each Director for
re-election. Shares represented by proxies which are marked "Abstain" for
any matter, and proxies which are marked to deny discretionary authority
on all other matters will not be included in the vote totals and therefore
will have no effect on the vote. In addition, where brokers are prohibited
from exercising discretionary authority for beneficial owners who have not
provided voting instructions (commonly referred to as "broker non-votes"),
those shares will not be included in the vote totals. A proxy may be revoked
by the person executing the same. at any time before the authority thereby
granted is exercised, upon written notice of revocation received by the
Company's Secretary, by, executing and delivering a later dated proxy or by
attending the Annual Meeting and voting in person.
A list of shareholders entitled to vote at the Annual Meeting will
be open to examination by any shareholders, for any purpose germane to the
Annual Meeting, at the offices of the Company, 614 Corporate Way, Valley
Cottage, New York 10989, during ordinary business hours for ten (10)days
prior to the Annual Meeting. Such list shall also be available during
the Meeting.
<PAGE>
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
Proposal 1. Election of Five (5) Nominees As Directors
At the Annual Meeting, five (5) Directors are to be elected for the
ensuing year and until their successors are duly elected and qualify. If,
at the time of election, any of the nominees should be unavailable for
election, a circumstance which is not expected by the Company, it is intended
that the proxies will be voted for such substitute nominee as may be selected
by the Company. The proxies cannot be voted for more than five Directors at
the Annual Meeting.
Proxies not marked to the contrary will be voted "For" the election
of the following six persons, all of whom are standing for re-election to the
Board of Directors:
Name Age Position(s) Year First Became a Director
Howard Pavony 47 Chairman of the Board of 1986
Directors
Steven H. Rothman 49 Chief Executive Officer, 1986
President and a Director
Ramon Mota 36 Vice President-Technology 1996
and a Director
William Lerner* 64 Director 1995
Arnold J. Wasserman* 60 Director -
___________
* Member of the Audit Committee and Compensation Committee.
Howard Pavony served as the Company's Co-Chief Executive Officer,
President and a Director since the Company's inception in May 1986 and has
served as Chairman of the Board of Directors since September 1996. He has
also served as Vice President of MTM Advanced Technology, Inc. since 1986.
From 1977 until 1986, Mr Pavony was employed by Data Research Associates
("DRA"), a computer hardware and accessories company, rising to the positions
of Vice President of Sales and member of the Executive Board of DRA.
Steven H. Rothman served as the Company's Co-Chief Executive Officer,
Vice President, and a Director since the Company's inception in May 1986 and
has served as Chief Executive Officer, President and Director since September
1996. Mr. Rothman was the Company's Secretary from May 1986 to September
1995. He has also served as President of MTM Advanced Technology, Inc.
since 1986. From 1976 until 1986, Mr. Rothman was employed by DRA, rising
to the positions of Director of Marketing and member of the Executive Board.
<PAGE>
Ramon Mota has served as a Director of the Company since May 6,
1996. He joined the Company in October 1991, acting as a technical
salesperson for the Company and was promoted to Director of Technology in
June 1992. He became Vice President-Technology of the Company in April 1993.
He also has been Co-President of Data.Com since May 1996. Prior thereto,
from 1989 until September 1991, Mr. Mota served as an engineer with Multitech
System, Inc. a modem manufacturing and data communications company.
William Lerner has served as a Director of the Company since
September 1995 and is the Chairman of the Audit and Compensation Committees.
Mr. Lerner has been engaged in the private practice of corporate and
securities law in New York and Pennsylvania since 1991. From 1990 to
1991, Mr. Lerner was Vice President and general counsel to Hon Development
Company, a California real estate development company. From 1986 to 1990,
Mr. Lerner was a Vice President and general counsel of The Geneva Companies,
a California based business valuation and mergers and acquisitions firm
specializing in privately owned middle-market companies. Mr. Lerner
previously served as the Director of Compliance with the American Stock
Exchange and as a Branch Chief, Enforcement Attorney for the Securities and
Exchange Commission. Mr. Lerner serves asa director of Helm; of Seitel,
Inc., a New York Stock Exchange listed company engaged in several
facets of the oil and gas business; and of Rent-Way, Inc., a NASDAQ listed
company engaged in the rent-to-own business.
Arnold J. Wasserman has, for the past 25 years, been a principal of P & A
Associates, a leasing/consulting firm. Prior to that, he held positions
with IBM and Litton Industries. Mr.Wasserman has consulted with major
corporations in the areas of marketing, advertising and sales. He is a
director of On-Sight Sourcing, Inc. and Stratasys, Inc., both publicly
traded companies. Mr. Wasserman will be named to the Audit Committee and
the Compensation Committee.
All directors hold office until the next annual meeting of shareholders
or until their successors are elected and qualify. Officers are elected
annually by, and serve at the discretion of, the Board of Directors.
The Company has two standing committees, the Audit Committee and the
Compensation Committee. The Audit Committee and the Compensation Committee
were each composed of Messrs. Farley and Lerner. The duties of the Audit
Committee include recommending the engagement of independent public
accountants, reviewing and considering actions of Management in matters
relating to audit functions, reviewing with independent public accountants
the scope and results of their audit engagement, reviewing reports from
various regulatory authorities, reviewing the system of internal controls
and procedures of the Company and reviewing the effectiveness of
procedures intended to prevent violations of law and regulations. Among
the duties of the Compensation Committee are to recommend to the Board
remuneration for officers of the Company, to determine the number and
issuance of options, to review any compensation and incentive program
for executive officers of the Company and to monitor the performance of any
pension or profit sharing programs of the Company.
<PAGE>
The Board of Directors held six meetings during the year ended March 31, 1997
"Fiscal 1997". The Compensation Committee held one meeting, and the Audit
Committee held one meeting during Fiscal 1997. Each incumbent Director
attended at least 75% of the Board meetings held by the Company during the
time he served on the Board and of the meetings of Committees on which
such Director served.
DIRECTOR FEES
The Company's independent directors receive an annual fee of $9,000 payable
quarterly in advance. In addition, each independent director receives $1,500
for attendance in person at each Board meeting and $250 for participating in
each telephonic board meeting held. Each independent director also received
ten-year options to purchase 2,500 shares of Common Stock, exercisable,
beginning September 16, 1995, at $7.00 per share. See "1993 Employee Stock
Option Plan" below, for the terms of stock options granted to the Company's
directors. Members of the Audit Committee and Compensation Committee are
appointed annually and serve at the discretion of the Board of Directors.
Each member of each committee will receive $1,000 for each meeting attended
in excess of five committee meetings of such committee per year.
Management-Directors currently receive no cash compensation for serving on
the Board of Directors other than reimbursement of reasonable expenses
incurred in attending meetings. Certain of the Company's directors have
received stock options from the Company. See "Stock Option Plans" below.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 2, 1998, certain information
concerning the beneficial ownership (as such term is defined in Rule 13d-3
under the Securities Exchange Act of 1934) of Common Stock by (i) each person
known by the Company to be the owner of more than 5% of the outstanding
Common Stock, (ii) each Director, (iii) each executive officer named in the
Summary Compensation Table below and (iv) all Directors and executive
officers as a group:
<TABLE>
<CAPTION>
Number of Percentage of Outstanding
Name Shares (1) Common Stock
<S> <C> <C>
Steven H. Rothman 1,158,625 (2) (3) 25.6%
Howard Pavony 1,157,500 (2)(4) 25.6%
Ramon Mota 20,065 (2) *
William Lerner 5,000 (2) *
423 East Beau Street
Washington, PA 15301
All Directors and executive
officers as a group
(4 persons) 2,341,190 (2)(3)(4) 52.6%
</TABLE>
<PAGE>
- ------------------------
*Represents less than 1%.
(1) Unless otherwise indicated the Company believes that all persons
named in the table have sole voting and investment power with respect
to all shares of the Company's common stock beneficially owned by them.
A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days from the date hereof upon
the exercise of options. Each beneficial owner's percentage ownership
determined by assuming that options that are held by such person (but
not those held by any other person) and which are exercisable within 60
days from the date hereof have been exercised.
(2) Includes options held by Steven Rothman and Howard Pavony each to
purchase 80,000 shares of the Company's common stock, options to purchase
20,000 shares held by Ramon Mota and options to purchase 5,000 shares
held by Mr. Lerner which are currently exercisable. Does not include
options held by each of Messrs. Pavony and Rothman to purchase 30,000
shares and by Mr. Mota to purchase 10,000 shares, none of which are
currently exercisable.
(3) Includes 1,125 shares held by the wife of Mr. Rothman. Also includes an
aggregate of 169,139 shares of the Company's common stock held in trust
for Mr. Rothman's three children. Mr.Rothman disclaims beneficial
ownership of all of such shares.
(4) Includes an aggregate of 164,044 shares held in trust for Mr. Pavony's
two children. Mr.Pavony disclaims beneficial ownership of all of such
shares.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation awarded to, earned by,
or paid for all services rendered to the Company during the three fiscal years
ended March 31, 1997 by certain executive officers of the Company. No other
executive officers received compensation in excess of $100,000 during such
years.
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Compensation
- --------------------------------------------------------------------------------------------------
Name and Principal
Position Year Salary($) Bonus($) Other Annual Shares Underlying
Compensation($) Optrions(#)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Howard Pavony 1997 $185,417 $20,000 (1) 50,000
Chairman of the 1996 $165,000 $20,000 (1) 10,000
Board of Directors 1995 $165,000 $20,000 (1) -
Steven H. Rothman 1997 $185,417 $20,000 (1) 50,000
Chief Executive 1996 $165,000 $20,000 (1) 10,000
Officer and President 1995 $165,000 $20,000 (1) -
Ramon Mota 1997 $105,000 $9,000 (1) 5,000
Vice President 1996 $ 95,000 $10,500 (1) -
-Technology 1995 - - -
</TABLE>
- -----------
(1) The above compensation figures do not include the cost to the
Company of the use of automobiles leased by the Company, the cost to the
Company of benefits, including premiums for life and health insurance and
any other personal benefits provided by the Company to such persons in
connection with the Company's business.
OPTION GRANTS IN LAST FISCAL YEAR
The table below includes the number of stock options granted to
the executive officers named in the Summary Compensation Table during
the year ended March 31, 1997, exercise information and potential
realizable value.
<PAGE>
<TABLE>
<CAPTION>
Individual Grants
----------------- Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to for Option Term
Options Employees in Exercise Expiration ---------------------
Name Granted(#) Fiscal Year Price($/sh) Date 5%($) 10%($)
- ------ ---------- ----------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Steven H. Rothman 50,000 31.6% $4.43 8/31/2001 0 $30,000
Howard Pavony 50,000 31.6% $4.43 8/31/2001 0 $30,000
Ramon Mota 5,000 3.1 $2.50 11/30/2001 $7,450 $12,650
</TABLE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-The-Money
Shares Options Options
Acquired at FY-End(#) at FY-End($)
on Exer- Value Exercisable/ Exercisable/
Name cise (#) Realized Unexercisable Unexercisable
---- -------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Steven H. Rothman -0- -0- 70,000/40,000 -
Howard Pavony -0- -0- 70,000/40,000 -
Ramon Mota -0- -0- 18,750/6250 $28,200/3,150
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into identical five-year employment agreements
with its Chairman of the Board of Directors and its Chief Executive
Officer and President, Howard Pavony and Steven H. Rothman, respectively.
The agreements provide that Messrs. Pavony and Rothman shall devote all of
their business time to the Company, each in consideration of an annual salary
of $200,000 for the five-year period commencing on September 1, 1996 plus, on
each anniversary of the commencement date, a cumulative annual cost of living
increase equal to the greater of (i) the percentage increase indicated by the
Consumer Price Index for all urban consumers for the year then ended; and
$10,000; provided the Board of Directors does not freeze all executive
employee salaries for economic reasons. Messrs. Pavony and Rothman shall
each be entitled to an annual bonus based upon the performance of the Company
and determined at the discretion of the Board of Directors upon the
recommendation of the Compensation Committee.
On April 1, 1996, the Company and Mr. Mota entered into a three-year
employment agreement providing for a base salary of $98,000 in the first
year, $105,000 in the second year and $115,000 in the third year; a bonus
depending upon the earnings generated by the Advanced Technology Group;
grants of five-year options to purchase up to 5,000 shares of Common Stock
in each of the first two years of the term; and a $300 to $400/month car
allowance. The Company further agreed to use its best efforts to designate
Mr. Mota as a member of the Board from and after the next annual meeting of
the Company's shareholders through the initial term of his employment
withthe Company.
STOCK OPTION PLANS
The Company has established a 1993 Stock Option Plan (the "1993 Plan"),
which was approved by the Board of Directors on May 10, 1993 and a 1996
Stock Option Plan (the "1996 Plan"), which was approved by the Board of
Directors on April 1, 1996 and ratified by the Shareholders at the Annual
Meeting on August 20, 1996.
Pursuant to the 1993 Plan, as of March 31, 1997, the Company has granted
<PAGE>
an aggregate of 250,000 stock options. Of these, 202,500 are exercisable as
of March 31, 1997, and 27,500 have been exercised as of March 31, 1997.
17,500 options have been canceled to date and are available for regrant
under the 1993 Plan. Messrs. Pavony and Rothman each hold five-year
incentive stock options to purchase up to 50,000 shares of Common Stock at
$3.375 per share and 10,000 shares of the Common Stock at $6.125 per share.
Mr. Mota holds incentive stock options to purchase up to 20,000 shares of
Common Stock at $1.25 per share and 5,000 shares of Common Stock at $3.375
per share. Mr. Wong holds incentive stock options to purchase 5,000 shares
of Common Stock at $3.375 per share and 10,000 shares of Common Stock at
$5.125 per share. Mr. Lerner holds options to purchase up to 2,500 shares
of Common Stock at $7.00 per share and 2,500 shares of Common Stock at
$4.0625 per share.
Pursuant to the 1996 Plan, as of March 31, 1997, the Company has granted
an aggregate of 145,000 stock options. None of these are exercisable as
of March 31, 1997. Messrs. Pavony and Rothman each hold incentive stock
options to purchase up to 50,000 shares of Common Stock at $4.43 per share.
Mr. Mota holds incentive stock options to purchase up to 5,000 shares of Common
Stock at $2.50 per share.
SUMMARY OF THE PLANS
Both the 1993 Plan and the 1996 Plan (each, a "Plan"), provide for the
grant of options to qualified employees (including officers and directors)
of the Company. and its subsidiaries,independent contractors, consultants
and certain other individuals to purchase shares of Common Stock. Each
Plan must be administered by the Board of Directors or a committee of at least
two disinterested members of the Board of Directors (the "Compensation
Committee"). The Board or the Compensation Committee has complete discretion
to select the optionee and to establish the terms and conditions of each
option, subject to the provisions of the respective Plan. The exercise
price of options may not be less than 100% of the fair market value of the
Common Stock as of the date of grant (110% of the fair market value if the
grant is an Incentive Option to an employee who owns more than 10% of the
outstanding Common Stock). Options may not be exercised more than 10 years
after the date of grant. An option may be exercised by tendering payment of
the purchase price to the Company or, at the discretion of the Board of
Directors or Compensation Committee, by delivery of shares of Common Stock
having a fair market value equal to the exercise price or through a cashless
exercise involving the cancellation of a portion of the shares underlying the
options ("Option Shares") having a fair market value equal to the exercise
price of the Option Shares issued. Options granted under a Plan are not
transferable and may be exercised only by the respective grantees during
their lifetimes or by their heirs, executors or administrators in the event
of death. Option Shares that are canceled or terminated may later be
re-granted. The number of options outstanding and the exercise price
thereof are subject to adjustment in the case of certain transactions such
as mergers, recapitalizations, stock splits or stock dividends.
The 1993 Plan provides for the grant of options to purchase up to an
aggregate of 250,000 Option Shares. Options granted under the 1993 Plan
<PAGE>
may or may not be "incentive stock options" as defined in Section 422 of the
Code ("ISOs"), and non-qualified stock options ("NQSOs") may be granted in
tandem with Stock Depreciation Rights ("SARs") or Stock Depreciation Rights,
depending upon the terms established by the Board or the Compensation
Committee at the time of grant.
The 1996 Plan provides for the grant of options to purchase up to an
aggregate of 350,000 Option Shares. Options granted under the 1996 Plan may
be ISOs or NQSOs and may be granted in tandem with SARs, depending upon the
terms established by the Board or the Compensation Committee at the time of
grant.
COMPENSATION COMMITTEE REPORTS ON EXECUTIVE COMPENSATION
It is the responsibility of the Compensation Committee of the Board of
Directors to administer the Company's incentive plans, to review the
compensation levels and performance of management and to recommend
compensation changes to the Board of Directors. The Compensation Committee
was established and its members were appointed on September 15, 1995.
Prior to that date, the Board of Directors was responsible for the duties now
performed by the Compensation Committee. The reports of each are set forth
below.
REPORT BY COMPENSATION COMMITTEE
Philosophy.
The Compensation Committee believes that maximizing shareholder value is
the most important measure of success, and achieving this depends on the
coordinated efforts of individual employees working as a team toward defined
common performance goals. The objectives of the Company's compensation
program are to align executive compensation with shareholder value, to
reward individual and team effort and performance furthering the Company's
business goals and to attract, retain and reward employees who will contribute
to the long-term success of the Company.
The total direct compensation package for the Company's executives,
including the Chairman of the Board of Directors and the Chief Executive
Officer and President, is made up of three elements: (i) a competitive
base salary; (d) attractive short-term incentives to executives to earn
additional bonus income based on operating results; and (iii) the grant of
stock options, from time to time, to executives in an effort to provide a
closer identification of the executives' interests with those of the Company
and its shareholders by giving them an opportunity to acquire a proprietary
interest in the Company by means of the purchase of Common Stock.
Salary
The salaries of the Company's executive officers for Fiscal 1997 were
fixed by the Compensation Committee. The Compensation Committee believes
that the basic philosophy regarding salaries to be followed is to consider
<PAGE>
increases based upon a favorable evaluation of individual performance
relative to individual goals, the functioning of the executive's team
within the corporate structure, success in furthering the corporate
strategy and goals, and individual management skills, responsibilities and
anticipated workload. The Compensation Committee also considers
demonstrated loyalty and commitment to the Company and the competitive
alaries offered by similar companies to attract executives. Merit
increases for executives are to be subject to the same budgetary guidelines
as apply to an other employees of the Company. In those cases where an
executive has entered into an employment agreement, the base salary is
determined pursuant to the terms of the agreement, and renewals of contracts
win be considered on the basis of the performance of the individual, the
performance of the Company and the compensation philosophy of the Company.
Chairman of the Board of Directors and Chief Executive Officer and President
Each, the Chairman of the Board of Directors and Chief Executive Officer
and President have an employment agreement, as described above, which
terminate in September 2001.
Bonuses
Bonus incentives are structured so that if the Company achieves its target
goals, the incentive bonuses for the executives could be a significant
percentage of base salary. This policy is designed to further motivate
individuals to improve performance. Bonuses were awarded during Fiscal 1997
to the Chairman of the Board of Directors and the Chief Executive Officer and
President in the amount of $20,000 each and to Mr. Mota in the amount of
$9,000.
Stock Options
Executives are eligible for annual stock option grants under the employee
stock option plans applicable, from time to time, to employees generally.
The number of options granted to any individual depends on individual
performance, salary level and competitive data, and the impact that such
employee's productivity may make to shareholder value over time. In addition,
in determining the number of stock options granted to each executive, the
Compensation Committee reviews the unvested options of each executive to
determine the future benefits potentially available to the executive. The
number of options granted will depend in part on the total number of unvested
options deemed necessary to provide an incentive to that individual to make a
long term commitment to remain with the Company. By giving to executives an
equity interest in the Company, the value of which depends upon stock
performance, the policy seeks to further align management and shareholder
interests.
During Fiscal 1997, the Company granted to each of Messrs. Pavony and
Rothman options pursuant to the 1996 Plan to purchase 50,000 shares of
Common Stock at an exercise price of $4.43 per share. The Company granted
Mr. Mota options pursuant to the 1996 Plan to purchase 5,000 shares of
Common Stock at $2.50 per share.
Respectfully Submitted,
<PAGE>
The Compensation Committee:
William Lerner, Chairman
Joseph J. Farley
PERFORMANCE GRAPH
The graph below compares the cumulative shareholder return of the Company
with the cumulative return on the S&P 500 Stock Index and a Peer Group Index
and a Peer Group Index assuming a $100 investment made on October 27, 1993,
when public trading of the Company's common stock commenced. Cumulative
return data presented assumes reinvestment of dividends. The stock performance
shown on the graph below is not necessarily indicative of future price
performance.
Comparison of Cumulative Total Return
Among Micros-To-Mainframes, Inc.,
the S&P SmallCap Index and the Peer Group Index
Indexed Returns
Company/Index At March 31:
-----------------------------
Oct. 27, 1993 1994 1995 1996 1997
MICROS-TO-MAINFRAMES 100 88.89 117.17 153.54 101.00
S&P 500 INDEX 100 94.65 99.64 130.47 140.88
PEER GROUP 100 113.04 79.88 123.72 103.32
The Company has constructed a Peer Group consisting of other computer
equipment resellers and packagers that also provide consulting services to
their clients, including Dataflex Corp., Glasgal Communications, Inc.,
Government Technology Services, Inc., Pomeroy Computer Res. Inc. and
Transnet Corp. The Company believes that these companies most closely
resemble the Company's business mix and that their performance is
representative of the industry.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at
the Annual Meeting except for the matters set forth in the Notice and as
described in this Proxy Statement. Unless otherwise directed, all shares
represented by Board of Directors' proxies will be voted in favor of the
proposals of the Board of Directors described in this Proxy Statement.
If any other matters come before the Annual Meeting, the person(s) named in
the accompanying proxy will vote on those matters according to their best
judgment.
<PAGE>
EXPENSES
The entire cost of preparing, assembling, printing and mailing this
Proxy Statement the enclosed proxy and other materials, and the cost of
soliciting proxies with respect to the Annual Meeting will be borne by the
Company. The Company will request banks and brokers to solicit their
customers who beneficially own shares listed of record in mines of
nominees and will reimburse those banks and brokers for the reasonable
out-of-pocket expenses of such solicitations. The original solicitation
of proxies by mail may be supplemented by telephone and telegram by Officers
and other regular employees of the Company, but no additional compensation
will be paid to such individuals.
COMPLIANCE WITH 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Officers, Directors and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, Directors and ten percent shareholders are required
by regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on the Company's copies of such forms received or
written representations from certain reporting persons that no Form 5's
were required for those persons, the Company believes that, during Fiscal
1997, all filing requirements applicable to its Officers, Directors and
greater than ten percent beneficial owners were complied with.
INCORPORATION BY REFERENCE
The financial information required to be included in this Proxy
Statement by Item 13 of Schedule 14A of the Proxy Rules is hereby
incorporated by this reference from the Company's Annual Report to
Shareholders mailed to shareholders with this Proxy Statement.
<PAGE>
SHAREHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
shareholders' meeting of the Company may seek to have the proposal included
in the Proxy Statement or form of proxy for such meeting unless that person
(a) is a record or beneficial owner of at least $1,000 in market value of
Common Stock, has held such Common Stock for at least one year at the time the
proposal was submitted, and such person shall continue to own such Common
throughout the date on which the meeting is held, (b) provides the Company in
writing with his name, address, the number of shares held by him and the
dates upon which he acquired such shares with documentary support for a claim
of beneficial ownership, (c) notifies the Company of his intention to appear
personally at the meeting or by a qualified representative under New York law
to present his proposal for action and (d) submits his proposal timely. A
proposal, to be included in the proxy Statement Company's next annual meeting
of shareholders, will be submitted timely only if the proposal has been
received at the Company's principal executive office no later than July 20,
1998. If the date of such meeting is changed by more than 30 calendar days
from the date such meeting is scheduled to be held this year, or if the
Proposal is to be presented at any meeting other than the next annual meeting
of shareholders, the proposal must be received a the Company's principal
executive office at a reasonable time before the solicitation of proxies for
such meeting is made.
Even if the foregoing requirements are satisfied, a person may submit
only one proposal with a supporting statement of not more than 500 words,
if requested by the proponent, for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may
be entitled to omit the proposal and any statement in support thereof from
its proxy statement and form of proxy.
By Order of the Board of Directors
Frank T. Wong, Secretary
Valley Cottage, New York
March 3, 1998
Copies of the Company's Annual Report on Form 10-K for the year
ended March 31, 1997, as filed with the Securities and Exchange Commission,
including the financial statements, can be obtained without charge by
shareholders (including beneficial owners of Common Stock) upon written
request to Frank T. Wong, the Company's Secretary, Micros-to-Mainframes, Inc.,
614 Corporate Way, Valley Cottage, New York, 10989. In addition, the
Company's EDGAR filings may be found on the Worldwide Web at www.sec.gov.
