<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Vodavi Technology, Inc.
-----------------------
(Name of Issuer)
Common Stock
------------
(Title of Class of Securities)
92857V 10 2
-----------
(CUSIP Number)
Steven A. Sherman
4757 E. Greenway Road, Suite 103-187, Phoenix, Arizona 85032
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 31, 1999
---------------
(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 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).
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 2 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Steven A. Sherman
###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 419,080 (Incudes 86,830 shares held by Sherman Capital
Group L.L.C. of which Mr. Sherman is the managing member.)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
137,500 (Includes 137,500 shares held by Sherman Capital
Partners L.L.C. of which Mr. Sherman is the managing
member.)
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 419,080 (Includes 86,830 shares held by Sherman Capital
Group L.L.C of which Mr. Sherman is the managing member.)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
137,500 (Includes 137,500 shares held by Sherman Capital
Partners L.L.C. of which Mr. Sherman is the managing
members.)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
556,580 (Includes 86,830 shares held by Sherman Capital Group L.L.C. of
which Mr. Sherman is the managing member and 137,500 shares held by
Sherman Capital Partners L.L.C. of which Mr. Sherman is the managing
member.)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
12.6%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 3 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sherman Capital Group L.L.C
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Arizona
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 86,830
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 86,830
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
86,830
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO (Limited Liability Company)
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 4 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sherman Capital Partners L.L.C
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Arizona
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 137,500
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 137,500
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
137,500
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.2%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO (Limited Liability Company)
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 5 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fereydoun Taslimi
###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 61,491
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 61,491
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
61,491
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
1.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 6 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nahid Loudermilk
###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 61,491
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 61,491
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
61,491
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
1.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 7 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael Mittel
###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 113,979
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 113,979
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
113,979
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.6%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 92857V 10 2 PAGE 8 OF 14 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Noor Research Corporation
58-2203194
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO (Donation)
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Georgia
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 17,000
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 17,000
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
17,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO (Non-Profit Corporation)
- ------------------------------------------------------------------------------
* 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>
- ------------------------------ -------------------------------
CUSIP NO. 92857V 10 2 Page 9 of 14 Pages
- ------------------------------ -------------------------------
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
(a)-(c) and (f). This statement is filed jointly pursuant to Rule
13d-(1)(k) by a group of investors consisting of Steven A. Sherman ("Sherman"),
Sherman Capital Group L.L.C. ("Sherman Capital Group"), Sherman Capital
Partners, L.L.C. ("Sherman Capital Partners"), Fereydoun Taslimi ("Taslimi"),
Nahid Loudermilk ("Loudermilk"), Michael Mittel ("Mittel") and Noor Research
Corporation ("Noor") collectively hereinafter referred to as the "Reporting
Persons." A copy of the joint filing agreement among the Reporting Persons is
attached as Annex B.
The respective business or residential addresses of each of the
individual Reporting Persons are as follows:
Reporting Person Address
---------------- -------
Sherman 4757 E. Greenway Road
Suite 103-187
Phoenix, Arizona 85032
Taslimi 4015 Holcomb Bridge Road
Suite 350-868
Norcross, Georgia 30092
Loudermilk 4015 Holcomb Bridge Road
Suite 350-868
Norcross, Georgia 30092
Mittel 6135 Rivercliffe Drive
Atlanta, Georgia 30328
The principal occupation of each of the individual Reporting Persons
and the name and address where such employment is conducted are as follows:
Reporting Person Occupation, Company Name and Address
---------------- ------------------------------------
Sherman Non-Executive Chairman and Chief Executive
Officer Novatel Wireless, Inc., 4757 E.
Greenway Road, Suite 103-187, Phoenix,
Arizona 85032
Taslimi Self-Employed. (See above address for
Taslimi).
Loudermilk Self-Employed. (See above address for
Loudermilk).
Mittel Self-Employed. (See above address for
Mittel).
Each of the individual Reporting Persons are a citizen of the United
States.
Sherman Capital Group and Sherman Capital Partners are both Arizona
limited liability companies with their principal places of business located at
4757 E. Greenway Road, Suite 103-187, Phoenix, Arizona 85032. Sherman is the
managing member and a principal of both Sherman Capital Group and Sherman
Capital Partners. Information with respect to Sherman's principal occupation and
business address is set forth above.
<PAGE>
- ---------------------------- --------------------------------
CUSIP NO. 92857V 10 2 Page 10 of 14 Pages
- ---------------------------- --------------------------------
Noor is a Georgia non-profit corporation, organized and existing for
charitable purposes, with its executive offices and principal business address
located at 4015 Holcomb Bridge Road, Suite 350-868, Norcross, Georgia 30092.
Pursuant to General Instruction C of Schedule 13D, the names, business
addresses, principal occupations and citizenship of the executive officers and
directors of Noor are set forth in Annex A attached hereto and are incorporated
herein by reference.
(d) and (e) During the last five years, each Reporting Person and, to
the knowledge of Sherman Capital Group, Sherman Capital Partners and Noor, their
respective executive officers and managing members or directors, as appropriate,
have not (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws on finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration
Sherman 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, Sherman acquired an
additional 25,000 shares of Common Stock from Sherman Capital Group, of which
Sherman is the managing member. In September 1995, Sherman also acquired 32,250
shares of Common Stock issued pursuant to a 1-for-6 exchange for warrants held
by Sherman, of which 4,000 of such shares are held by Sherman as custodian for
certain of his minor children.
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.
On January 27, 1997, Sherman Capital Partners, of which Sherman 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, Sherman 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.
In 1995, each of Taslimi, Loudermilk and Mittel acquired all of their
respective shares of Vodavi Common Stock reported herein in exchange for shares
of Enhanced Systems, Inc. capital stock, pursuant to a Plan of Reorganization
dated, as of May 9, 1995, among the Issuer, VOD, Inc., Enhanced Systems, Inc.,
Mittel, Taslimi, Loudermilk, Scott Kelly, and Earl Alexander, as amended by
letter amendment dated May 22, 1995 (the "Plan of Reorganization"). The Plan of
Reorganization is incorporated herein by reference to the Plan of Reorganization
previously filed with the Securities and Exchange Commission by the Issuer as an
exhibit to the Issuer's Registration Statement on Form S-1 (No. 33-95926) which
became effective on October 6, 1995.
Noor acquired the 17,000 shares of Vodavi Common Stock reported herein
pursuant to a donation.
<PAGE>
- ----------------------------- -------------------------------
CUSIP NO. 92857V 10 2 Page 11 of 14 Pages
- ----------------------------- -------------------------------
Item 4. Purpose of Transaction
Each of the Reporting Persons is a previous shareholder of the Issuer.
Their respective acquisitions of Common Stock were originally made for
investment purposes.
Over the course of time, certain of the Reporting Persons individually
have expressed to the Issuer's senior management their serious concerns with
many aspects of the Issuer's affairs, including among other things the
composition of the Issuer's Board of Directors, the ability of management to
identify and redirect the company into growth sectors of the communications
industry and the financial performance of the Issuer's Common Stock.
Based upon the above concerns, the Reporting Persons have discussed
generally, and intend to discuss from time to time, with representatives of the
Issuer, other selected shareholders and third parties, a broad range of ideas
that the Reporting Persons believe may enhance shareholder value. Certain of the
ideas discussed might, if effected, result in the acquisition by persons of
additional securities of the Issuer, an extraordinary corporate transaction such
as a sale, merger, re-capitalization or reorganization of the Issuer, or a sale
or transfer of a material amount of the assets of the Issuer, or a change in the
Board of Directors or management of the Issuer.
In order to facilitate additional discussions with representatives of
the Issuer, other shareholders and third parties regarding ideas that the
Reporting Persons believe may enhance shareholder value, the Reporting Persons
entered into a Voting Agreement on March 31 1999 (the "Voting Agreement").
Pursuant to the Voting Agreement, Taslimi, Loudermilk, Mittel and Noor have
agreed to vote certain of their shares of Common Stock at the election of
directors and all other matters in the manner directed by Sherman. The Voting
Agreement will terminate on October 1, 1999 unless terminated earlier by the
parties. The description of the Voting Agreement set forth herein does not
purport to be complete and is qualified in its entirety by the provisions of the
Voting Agreement which is filed herewith as Exhibit 3 and incorporated herein by
reference.
Except as described in this Item 4, there are no plans or proposals
required to be described in sub-sections (a) through (j) of this Item 4 to which
the Reporting Persons are a party. However, the Reporting Persons intend to
review continually their position in the securities of the Issuer and may,
depending upon an evaluation of the Issuer'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 their position in the
Issuer's securities.
Item 5. Interest in Securities of the Issuer
(a) The aggregate number of shares and the percentage of all shares
owned by each of the Reporting Persons is as follows:
<TABLE>
<CAPTION>
Reporting Person Number of Shares Percent of Class
---------------- ---------------- ----------------
<S> <C> <C>
Sherman 556,580(1) 12.6%
Taslimi 61,491 1.4%
Loudermilk 61,491 1.4%
Mittel 113,979 2.6%
Sherman Capital Group 86,850 2.0%
Sherman Capital Partners 137,500 3.2%
Noor 17,000 0.4%
------- -----
Total 810,541 18.3%
</TABLE>
(1) The number of shares and percentage shown includes (i) an aggregate
of 4,000 shares held by Sherman as custodian for certain of his minor
children, (ii) 75,000 shares of Common Stock underlying a currently
exercisable option which vested on October 20, 1998, (iii) 86,830
shares of Common Stock held by Sherman Capital Group, of which Sherman
is the managing member and (iv) 137,500 shares of Common Stock held by
Sherman Capital Partners, of which Sherman is the managing member.
Sherman disclaims beneficial ownership of all shares held by Sherman
<PAGE>
- ---------------------------- -------------------------------
CUSIP NO. 92857V 10 2 Page 12 of 14 Pages
- ---------------------------- -------------------------------
Capital Group and Sherman Capital Partners except to the extent that
his individual interest in such shares arises from his interest in
such entities.
(b) Except as described below with regard to Sherman, each of the
Reporting Persons has sole voting and disposition powers with respect
to all of the shares owned by such Reporting Person.
Number Percent
of Shares of Class
--------- --------
Sole Power to Vote Securities: 419,080(1) 9.5%
Shared Power to Vote Securities: 137,500(2) 3.1%
Sole Power to Dispose of Securities: 419,080(1) 9.5%
Shared Power to Dispose of Securities: 137,500(2) 3.1%
(1) The number of shares and percentage shown includes (i) an
aggregate of 4,000 shares held by Sherman as custodian for certain of
his minor children, (ii) 75,000 shares of Common Stock underlying a
currently exercisable option which vested on October 20, 1998 and
(iii) 86,830 shares of Common Stock held by Sherman Capital Group, of
which Sherman is the managing member. Sherman 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.
(2) Sherman is a managing member of Sherman Capital Partners, which
holds 137,500 shares of Common Stock. Sherman 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) Except for the open-market sales of Vodavi Common Stock by Taslimi and
Mittel described below, there have been no other transactions by any
of the Reporting Persons with respect to the Common Stock during the
60 days preceding the date of this Amendment No. 3 to Schedule 13D.
<TABLE>
<CAPTION>
Name Date No. of Shares Sold Price per Share
---- --------------- ------------------ ---------------
<S> <C> <C> <C>
Taslimi 2/1/99 3,200 $ 3.00
Taslimi 2/3/99 800 $ 3.00
Taslimi 2/23/99 996 $3.125
Taslimi 2/23/99 3,000 $ 3.00
Taslimi 2/25/99 1,000 $3.125
Mittel 2/3/99 5,000 $ 3.00
Mittel 2/23/99 1,000 $3.125
Mittel 2/24/99 2,000 $ 3.00
Mittel 2/24/99 2,000 $3.125
</TABLE>
(d) Certain shares beneficially owned by Sherman 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
Other than the contracts, arrangements understandings or relationships
described below or previously reported by any of the Reporting Persons on a
Schedule 13D or any amendments thereto and the Voting Agreement (see description
in Item 4 above), which is filed herewith as Exhibit 2 and incorporated herein
by reference, there are no contracts, arrangements, understandings or
relationships between any of the Reporting Persons and any other person, or, to
the knowledge of Sherman Capital Group, Sherman Capital Partners and Noor, among
any of their respective executive officers and managing members or directors, as
appropriate, or
<PAGE>
- --------------------------------------- ---------------------------------
CUSIP NO. 92857V 10 2 Page 13 of 14 Pages
- --------------------------------------- ---------------------------------
between any of their executive officers and managing members or directors, as
appropriate and any other person, with respect to any securities of the Issuer.
In connection with the acquisition of the Vodavi Division of Executone
Information Systems, Inc. in April 1994, the Issuer, Vodavi Communications
Systems, Inc., a subsidiary of the Issuer ("VCS"), LG Electronics Inc. ("LGE"),
Sherman and Glenn R. Fitchet entered into a Stockholders' Agreement. The
Stockholders' Agreement provides that if at any time during the term of the
Stockholders' Agreement the Issuer issues shares of Common Stock in a public
offering or a private placement in an aggregate amount of 1% or more of the
Issuer'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, Sherman and
Mr. Fitchet have agreed to vote their shares of Common Stock to elect as
directors of the Issuer that number of persons designated by LGE that comprises
a percentage of the Board of Directors equal to LGE's then percentage of
ownership of the Issuer's Common Stock. In addition, as long as LGE owns 8% or
more of the outstanding Common Stock of the Issuer, those persons have agreed to
vote their shares in favor of election of at least one designee of LGE as a
director of the Issuer. 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 Issuer and the other parties to the
Stockholders' Agreement. Unless LGE consents in writing, no LGE designee may be
removed as a director of the Issuer, except for cause. The Stockholders'
Agreement also requires the Issuer to employ one of the LGE designees in a
position and at such salary as is mutually agreed upon by the Issuer 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
Exhibit 1 Stockholders' Agreement, incorporated herein by reference to
the Stockholders' Agreement filed as an exhibit to the
Issuer's Registration Statement on Form S-1 (No.33-95926).
Exhibit 2 Plan of Reorganization, incorporated herein by reference to
the Plan of Reorganization filed as an exhibit to the
Issuer's Registration Statement on Form S-1 (No 33-95926).
Exhibit 3 Voting Agreement by and between Sherman, Taslimi,
Loudermilk, Mittel and Noor, dated March 31, 1999.
<PAGE>
- ------------------------------ -------------------------------
CUSIP NO. 92857V 10 2 Page 14 of 14 Pages
- ------------------------------ -------------------------------
Signature
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Date: April 13, 1999 /s/ Steven A. Sherman
-----------------------
Steven A. Sherman
Date: April 13, 1999 /s/ Fereydoun Taslimi
-----------------------
Fereydoun Taslimi
Date: April 13, 1999 /s/ Nahid Loudermilk
-----------------------
Nahid Loudermilk
Date: April 13, 1999 /s/ Michael Mittel
-----------------------
Michael Mittel
Date: April 13, 1999 SHERMAN CAPITAL GROUP
L.L.C.
/s/ Steven A. Sherman
-----------------------
By: Steven A. Sherman
Its: Managing Member
Date: April 13, 1999 SHERMAN CAPITAL PARTNERS
L.L.C.
/s/ Steven A. Sherman
-----------------------
By: Steven A. Sherman
Its: Managing Member
Date: April 13, 1999 NOOR RESEARCH CORP.
/s/ Fereydoun Taslimi
-----------------------
By:Fereydoun Taslimi
Its: Vice President
<PAGE>
ANNEX A
INFORMATION RELATING TO
EXECUTIVE OFFICERS AND DIRECTORS
OF NOOR RESEARCH CORPORATION
The following table sets forth the name, title and present principal
occupation or employment of each member of the Board of Directors and each
executive officer of Noor Research Corporation. The business address of each
such person is c/o Noor Research Corporation, 4015 Holcomb Bridge Road, Suite
350-868, Norcross, Georgia 30092. Each person listed is a citizen of the United
States.
<TABLE>
<CAPTION>
NAME OFFICE PRESENT PRINCIPAL OCCUPATION
---- ------ ----------------------------
<S> <C> <C>
N. Kalantari President Self-Employed.
Dr. J. Taba Secretary Physician with own private practice.
Fereydoun Taslimi Vice President Self-Employed.
Michael Mittel Director Self-Employed.
J. Tabatabai Director Self-Employed.
</TABLE>
<PAGE>
ANNEX B
JOINT FILING AGREEMENT
Steven A. Sherman, Sherman Capital Group L.L.C., Sherman Capital
Partners L.L.C., Fereydoun Taslimi, Nahid Loudermilk, Michael Mittel and Noor
Research Corp. each hereby agrees that this Amendment No. 3 to Schedule 13D
filed herewith and any amendments thereto relating to the acquisition of shares
of common stock and other securities of Vodavi Technology, Inc. is filed jointly
on behalf of such person.
Date: April 13, 1999 /s/ Steven A. Sherman
-----------------------
Steven A. Sherman
Date: April 13, 1999 /s/ Fereydoun Taslimi
-----------------------
Fereydoun Taslimi
Date: April 13, 1999 /s/ Nahid Loudermilk
-----------------------
Nahid Loudermilk
Date: April 13, 1999 /s/ Michael Mittel
-----------------------
Michael Mittel
Date: April 13, 1999 SHERMAN CAPITAL GROUP
L.L.C.
/s/ Steven A. Sherman
-----------------------
By: Steven A. Sherman
Its: Managing Member
Date: April 13, 1999 SHERMAN CAPITAL PARTNERS
L.L.C.
/s/ Steven A. Sherman
-----------------------
By: Steven A. Sherman
Its: Managing Member
Date: April 13, 1999 NOOR RESEARCH CORP.
/s/ Fereydoun Taslimi
-----------------------
By: Fereydoun Taslimi
Its: Vice President
<PAGE>
EXHIBIT 3
VOTING AGREEMENT
----------------
This Voting Agreement dated as of March 31, 1999 (the "Agreement") is by
and among Steven A. Sherman ("Sherman"), Fereydoun Taslimi ("Taslimi"), Nahid
Loudermilk ("Loudermilk") and Michael Mittel ("Mittel"), Noor Research Corp
(Noor). Taslimi, Loudermilk, Mittel and Noor are herein collectively referred
to as the "Taslimi Group Members."
RECITALS
--------
A. The parties hereto are the record or beneficial owners of or have
voting power with respect to the number of shares of Vodavi Technology, Inc.
(the "Company") common stock set forth opposite their name on the signature page
hereof.
B. Sherman and the Taslimi Group Members desire to enter into a voting
agreement as contemplated by Section 218(c) of the Delaware General Corporation
Law.
AGREEMENTS
----------
1. Voting.
------
a. Each Taslimi Group Member agrees to hold the shares of the
Company's common stock that such Taslimi Group Member currently owns, registered
in such Taslimi Group Member's name or beneficially owned by such Taslimi Group
Member or in which such Taslimi Group Member has voting power, and any all
other securities of the Company such Taslimi Group Member legally or
beneficially acquires after the date of this Agreement (hereinafter collectively
called the "Shares") subject to, and to vote the Shares in accordance with, the
provisions of this Agreement.
b. At each election of directors for the Company, the Taslimi Group
Members shall vote their Shares for the persons designated or as directed by
Sherman in writing. The Taslimi Group Members must also vote the Shares in all
other matters as directed by Sherman in writing.
c. Upon the request by Sherman, there shall be imprinted or
otherwise placed, on certificates representing the Shares the following
restrictive legend (the "Legend"):
"The Shares represented by this Certificate are subject to the
terms and conditions of a Voting Agreement, dated March 31, 1999,
which places certain restrictions on the voting of the Shares
represented hereby. Any person accepting any interest in such
Shares shall be deemed to agree to and shall become bound by all
the provisions of such agreement. A copy of such Voting Agreement
will be furnished to the record holder of this Certificate
without charge upon written request to Steven A. Sherman at 4757
E. Greenway Road, Suite 103-187, Phoenix, Arizona 85032."
<PAGE>
d. If any Taslimi Group Member transfers any of the Shares listed in
this agreement at any time during the term of this Agreement, those transferred
Shares will continue to be subject to the provisions and restrictions contained
in this Agreement, and any transferee of such Shares will be deemed to have
accepted and consented to be bound by the provisions and restrictions of this
Agreement as if such transferee had originally executed this Agreement as a
party to it.
2. Termination. This Agreement shall continue in full force and effect
-----------
from the date hereof until October 1, 1999, unless terminated earlier by any
party to this agreement by giving written notice to other parties hereto.
3. Entire Agreement. This Agreement sets forth the entire agreement of
----------------
the parties with respect to the subject matter hereof. This Agreement may not
be amended, modified or terminated, and no rights or provisions herein may be
waived, without the written agreement of the parties.
4. Governing Law; Binding Effect. Except as may be required by the
-----------------------------
Delaware General Corporation Law, this Agreement shall be construed under and
governed by the laws of the State of Arizona and shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
5. Notices. All communications or notices required or permitted under
-------
this Agreement will be in writing and are valid upon receipt if: delivered
personally; sent by certified mail, return receipt requested; sent by
telefacsimile with a copy by first-class U.S. mail; or sent by a nationally-
recognized overnight courier service. All the notices must be addressed to the
parties as follows:
If to Sherman: Steven A. Sherman
-------------
4757 E. Greenway Road
Suite 103-187
Phoenix, Arizona 85032
Fax:
If to Taslimi Group Members: 4015 Holcomb Bridge RD
---------------------------
Suite 350-868
Norcross, GA 30092
6. Enforcement. The parties acknowledge and agree that if there is any
-----------
breach of this Agreement, including, without limitation, any transfer of Shares
by the Taslimi Group Members contrary to the provisions of this Agreement,
remedies at law will be inadequate and each of the parties hereto shall be
entitled to specific performance of the obligations of the other parties hereto
and to such appropriate injunctive relief as may be granted by a court of
competent jurisdiction.
2
<PAGE>
7. Attorneys' Fees. In the event any party to this Agreement institutes
---------------
an action or proceeding to enforce any rights arising out of this Agreement, the
party prevailing in that action or proceeding will be paid for all its
reasonable costs, expenses and attorneys' fees by the non-prevailing party.
Those costs and fees will be determined by the court and not by a jury, and will
be included in any judgment entered in that action or proceeding.
8. Consideration. This document sets forth the entire consideration for
-------------
this Agreement. The consideration for this Agreement is contractual and not a
mere recital.
9. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10. Severability. If any provision of this Agreement is deemed to be
------------
invalid or inoperative for any reason, that provision shall be deemed modified
to the extent necessary to make it valid and operative, or if it cannot be so
modified, then severed, and the remainder of the Agreement shall continue in
full force and effect as if the Agreement had been signed with the invalid
portion so modified or eliminated.
11. Statutory Authority. This Agreement is established pursuant to
-------------------
Section 218(c) of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
/s/ Steven A, Sherman 556,580 shares of Company common stock
- -----------------------------
Steven A. Sherman
/s/ Fereydoun Taslimi 55,000 shares of Company common stock
- -----------------------------
Fereydoun Taslimi
/s/ Nahid Loudermilk 55,000 shares of Company common stock
- -----------------------------
Nahid Loudermilk
/s/ Michael Mittel 100,000 shares of Company common stock
- -----------------------------
Michael Mittel
/s/ Fereydoun Taslimi 17,000 shares of Company common stock
- ---------------------
Noor Research Corp
3
