SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
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)
August 17, 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 6 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Steven A. Sherman
###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 419,080
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 137,500
REPORTING -------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
419,080
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10 SHARED DISPOSITIVE POWER
137,500
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
556,580
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.8%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
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CUSIP NO. 92857V 10 2 Page 3 of 6 Pages
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Item 1. Security and Issuer
This statement relates to shares of common stock (the "Common Stock")
of Vodavi Technology, Inc., a Delaware corporation, with principal executive
offices located at 8300 East Raintree Drive, Scottsdale, Arizona 85260. All
securities reported in this Schedule 13D reflect the 1-for-2 reverse stock split
effected by the Issuer on July 18, 1995.
Item 2. Identity and Background
The following information is provided with respect to the person filing
this statement.
(a) Name: Steven A. Sherman.
(b) Business address: 4757 E. Greenway Road, Suite 103-187,
Phoenix, Arizona 85032
(c) Principal Occupation; Address where such employment is
conducted: The Reporting Person is also the non-executive
Chairman of the Board of NovAtel Wireless, Inc., 4757 E.
Greenway Road, Suite 103-187, Phoenix, Arizona 85032.
(d) During the last five years the reporting person has not been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five years, the reporting person was not a
party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as the result of which the
reporting person was or is subject to a judgment, decree or
final judgment enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws.
(f) The reporting person is a citizen of the United States of
America.
Item 3. Source and Amount of Funds or Other Consideration
The Reporting Person founded the Issuer in April 1994 and acquired
200,000 of the shares of Common Stock reported in this Schedule 13D in exchange
for shares of Vodavi Communication Systems, Inc. ("VCS"), in a transaction in
which the Issuer was formed as the holding company of VCS. In May 1995, the
Reporting Person acquired an additional 25,000 shares of Common Stock from
Sherman Capital Group L.L.C. ("Sherman Capital Group"), of which the Reporting
Person is the managing member. In September 1995, the Reporting Person also
acquired 32,250 shares of Common Stock issued pursuant to a 1-for-6 exchange for
warrants held by the Reporting Person, of which 4,000 of such shares are held by
the Reporting Person as custodian for certain of his minor children. The
Reporting Person has previously filed a Schedule 13G with respect to such
shares.
Sherman Capital Group acquired 197,500 shares of Common Stock in April
1994 in exchange for shares of VCS. In June 1994, November 1994, and May 1995,
Sherman Capital Group transferred 134,000, 13,500, and 25,000 of such shares,
respectively, in separate private transactions. In March 1995, Sherman Capital
Group acquired an additional 5,580 shares of Common Stock from Sherman
Investment Group L.L.C. In September 1995, Sherman Capital Group also acquired
56,250 shares of Common Stock issued pursuant to a 1-for-6 exchange for warrants
held by Sherman Capital Group. The Schedule 13G previously filed by the
Reporting Person reflected the Reporting Person's beneficial ownership of the
86,830 shares of Common Stock held by Sherman Capital Group as of December 31,
1995.
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CUSIP NO. 92857V 10 2 Page 4 of 6 Pages
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On January 27, 1997, Sherman Capital Partners L.L.C. ("Sherman Capital
Partners"), of which the Reporting Person is a managing member, acquired an
aggregate of 137,500 shares of Common Stock for an aggregate purchase price of
$592,500 in two private transactions.
As a managing member of Sherman Capital Group and Sherman Capital
Partners, the Reporting Person disclaims beneficial ownership of all shares held
by Sherman Capital Group and Sherman Capital Partners except to the extent that
his individual interest in such shares arises from his respective interest in
each such entity.
Item 4. Purpose of Transaction
The sole purpose of all of the acquisitions by the Reporting Person,
Sherman Capital Group, and Sherman Capital Partners as described herein was for
investment purposes. Except as described below 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, or Sherman
Capital Partners is a party.
On August 17, 1998, the Reporting Person wrote to Vodavi's Board of
Directors to request that Vodavi permit him or his agent to inspect Vodavi's
stock records. As referenced in his letter, the Reporting Person's request is
stated as a demand to inspect stock records in accordance with the Delaware
General Corporation Law.
For almost a year, the price of Vodavi's stock has deteriorated even
though the stock market was quite strong during most of such period. The
Reporting person believes that the condition of Vodavi, the price of its stock
and the performance of its management are of interest to all of Vodavi's
stockholders, and he hopes to identify other stockholders with whom he can
discuss and share views regarding a broad range of ideas that he believes may
enhance stockholder value. Certain of the ideas, if effected, might result,
without limitation, in the formation of an agreement to act together for the
purpose of acquiring, holding, voting or disposing of Vodavi's common stock,
removing or replacing some of the officers and/or directors of Vodavi, or taking
other actions which participating stockholders believe may enhance stockholder
value.
Item 5. Interest in Securities of the Issuer
(a) The Reporting Person beneficially owns an aggregate of 556,580
shares, representing 12.8% of the Issuer's outstanding Common
Stock.
(b) Number Percent
of Shares of Class
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Sole Power to Vote Securities: 419,080(1)(2) 9.7%(1)
Shared Power to Vote Securities: 137,500(3) 3.1%(3)
Sole Power to Dispose of Securities: 419,080(1)(2) 9.7%(1)
Shared Power to Dispose of Securities: 137,500(3) 3.1%(3)
(1) The number of shares and percentage shown includes (i) an
aggregate of 4,000 shares held by the Reporting Person as custodian
for certain of his minor children, (ii) 75,000 shares of Common Stock
underlying an option which vests on October 20, 1998 and (iii) 86,830
shares of Common Stock held by Sherman Capital Group, of which the
Reporting Person is the managing member. The Reporting Person
disclaims beneficial ownership of all shares held by Sherman Capital
Group except to the extent that his individual interest in such shares
arises from his interest in such entity.
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CUSIP NO. 92857V 10 2 Page 5 of 6 Pages
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(2) The Reporting Person is a managing member of Sherman Capital
Partners, which holds 137,500 shares of Common Stock. The Reporting
Person disclaims beneficial ownership of all shares held by Sherman
Capital Partners except to the extent that his individual interest in
such shares arises from his interest in such entity.
(c) Not applicable.
(d) Certain shares beneficially owned by the Reporting Person are
held in the name of Steven A. Sherman as custodian for certain
of his minor children and in the name of Sherman Capital Group
and Sherman Capital Partners. As a result, such persons have
the right to receive dividends from their respective shares or
proceeds from the sales of their respective shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
In connection with the acquisition of the Vodavi Division of Executone
Information Systems, Inc. in April 1994, Vodavi Technology, Inc. ("the
Company"), Vodavi Communications Systems, Inc., a subsidiary of the Company
("VCS"), LG Electronics Inc. ("LGE"), the reporting person and Glenn R. Fitchet
entered into the Stockholders' Agreement. The Stockholders' Agreement provides
that if at any time during the term of the Stockholders' Agreement the Company
issues shares of Common Stock in a public offering or a private placement in an
aggregate amount of 1% or more of the Company's issued and outstanding Common
Stock, LGE has the right to purchase a sufficient number of shares being issued
as may be required to enable it to maintain the percentage of ownership of
Common Stock that it holds immediately prior to such sale or issuance. The
purchase price to LGE for such shares will be the public offering price per
share in the case of a public offering or the price per share paid by purchasers
in any private placement.
Also pursuant to the terms of the Stockholders' Agreement, the
reporting person and Mr. Fitchet have agreed to vote their shares of Common
Stock to elect as directors of the Company that number of persons designated by
LGE that comprises a percentage of ownership of the Company's Common Stock. In
addition, as long as LGE owns 8% or more of the outstanding Common Stock of the
Company, those persons have agreed to vote their shares in favor of election of
at least one designee of LGE as a director of the Company. All designees of LGE
to the Board of Directors must be executive officers or directors of LGE,
directors of any affiliate of LGE, or other persons reasonably acceptable to the
Company and the other parties to the Stockholders' Agreement. Unless LGE
consents in writing, no LGE designee may be removed as a director of the
Company, except for cause. The Stockholders' Agreement also requires the Company
to employ one of the LGE designees in a position and at such salary as is
mutually agreed upon by the Company and LGE. The Stockholders' Agreement also
establishes the Board of Directors of VCS at four directors, of which two must
be designees of LGE, and provides that unless LGE consents in writing, no LGE
designee to the Board of Directors of VCS may be removed, except for cause.
Item 7. Material to be Filed as Exhibits
No exhibits are filed with this report.
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CUSIP NO. 92857V 10 2 Page 6 of 6 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: September 22, 1998 /s/ Steven A. Sherman
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Steven A. Sherman
