SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Vodavi Technology, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
92857V 10 2
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(CUSIP Number)
Steven A. Sherman
4757 E. Greenway Road, Suite 103-187, Phoenix, Arizona 85032
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 3, 1998
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e),13d-1f or 13d-1(g), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP NO. 92857V 10 2 Page 2 of 3 Pages
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Other than as set forth below, there has been no material change in the
information set forth in response to the remainder of the cover page or to Items
1,2,3,5,6 and 7 of the Schedule 13D, as amended. Accordingly, those Items are
omitted from this Amendment No. 2.
Item 4. Purpose of Transaction
The original purpose of all of the acquisitions by the Reporting
Person, Sherman Capital Group L.L.C. and Sherman Capital Partners L.L.C. was for
investment purposes. On August 17, 1998, the Reporting Person wrote to the Board
of Directors of Vodavi Technology, Inc. (the "Company") to request that the
Company permit him or his agent to inspect the stock records of the Company. The
Reporting Person's request is stated as a demand to inspect stock records in
accordance with the Delaware General Corporation Law.
This Amendment No. 2 to Schedule 13D is being filed to report the
transmission of a letter containing a series of proposals, which are required to
be reported under paragraphs (a) and (d) of this Item 4, made by the Reporting
Person to the Chairman of the Board of Vodavi Technology, Inc. (the "Company")
on November 3, 1998 (but dated October 27, 1998). In the letter, which is
attached as Exhibit 1 to this Amendment No. 2 and by this reference incorporated
herein, the Reporting Person asks the Chairman of the Board to place on the
agenda for the November 16, 1998 meeting of the Company's Board of Directors all
of the proposals included in the letter. The proposals, in summary, are: (1)
that the Board appoint the Reporting Person to the Board; (2) that the Board
appoint a committee which is authorized to develop a three year business plan to
redirect Vodavi into growth sectors of the communications industry; (3) that the
Board begin a search for a new Chief Executive Officer and initiate other
management changes necessary to redirect the Company and add an additional
member to the Board who is capable of assisting the Board and management in
redirecting the Company; and (4) that the Company raise between $5 million and
$10 million in the form of equity or convertible debt. The Reporting Person has
indicated an interest in making a private investment of undetermined size in the
Company and in securing a financial institution to invest contemporaneously.
Except as described in this Item 4, there are no plans or proposals
required to be described in subsections (a) through (j) of this Item 4 to which
the Reporting Person, Sherman Capital Group L.L.C. or Sherman Capital Partners
is a party. However, the Reporting Person does intend to review continually the
Reporting Person's position in the securities of the Company and may, depending
upon an evaluation of the Company's business and prospects as well as upon
future developments and upon price, availability of shares and other factors,
determine to increase, decrease or eliminate the position in the Company's
securities.
<PAGE>
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CUSIP NO. 92857V 10 2 Page 3 of 3 Pages
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: November 3, 1998 /s/ Steven A. Sherman
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Steven A. Sherman
Exhibit 1
October 27, 1998
Mr. William J. Hinz
Chairman of the Board
Vodavi Technology, Inc.
8300 East Raintree Road
Scottsdale, Arizona 85260
Re: Agenda for November 16 Board Meeting
Dear Bill:
Thank you for your October 16th message. From your message I understand
that I will be considered for a Board seat. I am providing this memo to be
placed in your minutes to define my views. In an effort to depart from the
status quo and increase shareholders value, I propose the following:
1. That the Board, at its November 16th meeting, appoint me to the
Board.
2. I recommend a committee be appointed that is authorized to develop a
three year business plan to redirect Vodavi into strategies that will make us
into a leading communications company, that has amongst its core technologies,
Internet, wireless and other fast growing segments.
3. That the Board begin a search for a new CEO and initiate other
management changes necessary to accomplish the above and add an additional
member to our Board who is capable of assisting the Board and management in this
regard.
4. I suggest that Vodavi raise $5 million to $10 million in the form of
equity or convertible debt. This capital raising will give us a broader
distribution of our stock, create better liquidity in the market for
shareholders and give us the resources necessary to grow. I have indicated an
interest in making a substantial portion of this investment and in securing
other investors to complete the rest.
Very truly yours,
/s/ Steven A. Sherman
