CSI COMPUTER SPECIALISTS, INC.
904 Wind River Lane, Suite 100
Gaithersburg, Maryland 20878
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of CSI
COMPUTER SPECIALISTS, INC. (the "Company") for 1998 will be held at The
Gaithersburg Hilton, 620 Perry Parkway, Gaithersburg, Maryland 20877, on Monday,
July 27, 1998, at 10:00 a.m., local time, for the following purposes:
1. To elect four directors of the Company to hold office as specified
in the accompanying Proxy Statement; and
2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on June 22, 1998 will
be entitled to notice of, and to vote at, the annual meeting or any adjournment
or postponement thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
DONALD C. WEYMER
Secretary
Dated: June 26, 1998
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
<PAGE>
CSI COMPUTER SPECIALISTS, INC.
904 Wind River Lane, Suite 100
Gaithersburg, Maryland 20878
----------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On July 27, 1998
----------------------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CSI Computer Specialists, Inc. (the
"Company") for use at the annual meeting of shareholders of the Company for 1998
(the "Annual Meeting"). The Annual Meeting will be held at The Gaithersburg
Hilton, 620 Perry Parkway, Gaithersburg, Maryland 20877, on Monday, July 27,
1998, at 10:00 a.m., local time, for the purposes set forth in the accompanying
Notice of Annual Meeting.
On or about June 26, 1998, the Company first mailed this Proxy Statement
and the accompanying Notice of Annual Meeting and form of proxy, together with
its Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997,
which includes audited financial statements of the Company, to shareholders
entitled to vote at the Annual Meeting.
The Company will pay the costs of all proxy solicitation. In addition to
the solicitation of proxies by use of the mails, officers and other employees of
the Company may solicit proxies by personal interview, telephone and telegram.
None of these individuals will receive compensation for such services, which
will be performed in addition to their regular duties. The Company has made
arrangements with brokerage firms, banks, nominees and other fiduciaries to
forward proxy solicitation materials for shares held of record by them to the
beneficial owners of such shares and to obtain the proxies of such beneficial
holders. The Company will reimburse such persons for postage and reasonable
out-of-pocket expenses incurred in forwarding such materials and obtaining
proxies.
<PAGE>
A list of the shareholders entitled to vote at the Annual Meeting will be
open to the examination of any shareholder, for any purpose germane to the
meeting, for ten days prior to the meeting at the Company's principal executive
offices located at 904 Wind River Lane, Suite 100, Gaithersburg, Maryland 20878.
Voting and Revocability of Proxies
A proxy for use at the Annual Meeting and a return envelope are enclosed.
Shares of the Company's common stock, par value $0.001 per share (the "Common
Stock"), represented by a properly executed proxy and delivered pursuant to this
solicitation, and not later revoked, will be voted at the Annual Meeting in
accordance with the instructions indicated in such proxy. If no instructions are
given, the proxy will be voted "FOR" each of the proposals set forth in this
Proxy Statement. If any other matter or business is properly brought before the
Annual Meeting or any adjournment or postponement thereof, the persons named in
the proxy are authorized to vote the proxy in accordance with their judgment and
discretion. The Board of Directors of the Company (the "Board") is not aware of
any such matter or business to be presented for consideration.
A shareholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by any one of the following three actions: (i)
giving written notice of revocation to the Secretary of the Company; (ii)
properly submitting to the Company a duly executed proxy bearing a later date;
or (iii) voting in person at the Annual Meeting. All written notices of
revocation should be addressed as follows: CSI Computer Specialists, Inc., 904
Wind River Lane, Suite 100, Gaithersburg, Maryland 20878, Attention: Corporate
Secretary.
Voting Procedure
All holders of record of Common Stock at the close of business on June 22,
1998 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting and at any and all adjournments or postponements thereof. Each holder of
Common Stock is entitled to one vote at the Annual Meeting for each share held
by such shareholder. As of the Record Date, there were 4,029,714 shares of
Common Stock outstanding.
The presence, in person or by proxy, of the holders of one-third of the
outstanding shares of Common Stock entitled to vote is necessary to constitute a
quorum for the transaction of business at the Annual Meeting. Votes cast in
person or by proxy, abstentions and broker non-votes (i.e., shares held by a
broker or nominee which are represented at the Annual Meeting, but with respect
to which such broker or nominee is not empowered to vote on a particular
proposal) will be tabulated by the inspectors of election and will be considered
in the determination of whether a quorum is present at the Annual Meeting. The
vote required to approve the proposal to elect directors at the Annual Meeting
is the affirmative vote of a plurality of the votes cast with respect thereto.
Abstentions and broker non-votes with respect to any proposal will not
constitute votes cast and, as a result, will have no effect on the outcome of
the vote on such proposal.
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<PAGE>
ELECTION OF DIRECTORS
In 1995, the Board was divided into three classes, with each class to serve
a staggered three-year term. The initial terms of Class I directors expired at
the annual meeting of shareholders for 1995 and thereafter such terms shall
expire on each three-year anniversary of such date; the initial terms of Class
II directors expired at the annual meeting of shareholders for 1996 and
thereafter such terms shall expire on each three-year anniversary of such date;
and the initial terms of Class III directors expired at the annual meeting of
shareholders for 1997 and thereafter such terms shall expire on each three-year
anniversary of such date. Each director shall hold office for the term elected
and until the director's successor is elected and qualified or until his earlier
resignation or removal.
Herbert H. Derian and David A. Chappell are Class I directors; William F.
Pershin and C.A. Miller, III are Class II directors; and Donald C. Weymer is the
sole Class III director.
Messrs. Derian, Chappell, Weymer and Pershin each has been nominated to
stand for reelection at the Annual Meeting to hold office for the term indicated
below and until each of their successors is elected and qualified. Mr. Derian,
who became a Class I director in 1997, and Mr. Chappell, who became a Class I
director in 1998, each has been nominated to stand for reelection because his
term expires at the Annual Meeting. If reelected, Messrs. Derian and Chappell
each would hold office until the annual meeting of shareholders to be held in
2001. Mr. Weymer, who became a Class III director in 1995, has been nominated to
stand for reelection because the Company did not hold an annual meeting of
shareholders in 1997 for his reelection and his term has been held over since
1997. If reelected, Mr. Weymer would hold office for the remainder of the term
for Class III directors, which expires at the annual meeting of shareholders to
be held in 2000. Mr. Pershin, who became a Class II director in 1995, has been
nominated to stand for reelection because the Company did not hold an annual
meeting of shareholders in 1996 for his reelection and his term has been held
over since 1996. If reelected, Mr. Pershin would hold office for the remainder
of the term for Class II directors, which expires at the annual meeting of
shareholders to be held in 1999.
Mr. Miller, who became a Class II director in 1998, is not standing for
reelection at the Annual Meeting because his term does not expire until the
annual meeting of shareholders to be held in 1999 and until his successor is
elected and qualified.
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<PAGE>
Approval of the nominees requires the affirmative vote of a plurality of
the votes cast for the election of directors at the Annual Meeting. Proxies
received by the Board will be voted "FOR" each of the nominees, unless
shareholders specify a contrary choice in their proxy. Should any of the
nominees become unable to serve for any reason, the Board may designate one or
more substitute nominees. In such event, the persons named in the enclosed proxy
will vote for the election of such substitute nominee or nominees, or may reduce
the number of directors on the Board. It is not anticipated that any nominee
will be unable or unwilling to serve as a director of the Company.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF THE DIRECTORS STANDING FOR ELECTION AT THE ANNUAL MEETING.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
Below are summaries of the backgrounds, business experiences and
descriptions of the principal occupations of the director nominees, incumbent
directors and executive officers of the Company.
Nominees for Election to Terms Expiring 2001
- --------------------------------------------------------------------------------
Herbert H. Derian age 68
- --------------------------------------------------------------------------------
Herbert H. Derian has served as a director of the Company since January
1997. Since 1985, Mr. Derian has been the president and a director of Cintronix,
Inc., a wholly-owned subsidiary of the Company. Prior to 1985, Mr. Derian held a
number of management positions with computer design and software development
companies, where he also served on committees to develop industry standards and
produce strategic plans for corporate development.
- --------------------------------------------------------------------------------
David A. Chappell age 43
- --------------------------------------------------------------------------------
David A. Chappell has served as a director of the Company since March
1998. Since 1984, Mr. Chappell has been an insurance agent with Northwestern
Mutual, where he concentrates on providing services to executives of large
commercial and service businesses. He also has served as a consultant and an
account representative with Jacksonville Specialty Advertising since 1996, where
his responsibilities have included forming catalog programs for a number of
national accounts. In addition, Mr. Chappell is a member of the Million Dollar
Round Table.
-4-
<PAGE>
Nominee for Election to Term Expiring 2000
- --------------------------------------------------------------------------------
Donald C. Weymer age 53
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Donald C. Weymer has served as Chief Executive Officer and Chairman of the
Board of the Company since December 1988. Since March 1994, Mr. Weymer has
served as Secretary of the Company. From March 1994 through October 1995, Mr.
Weymer served as Chief Financial Officer of the Company. In 1991, Mr. Weymer
founded Interactive Systems, Inc. ("ISI"), a Virginia corporation which provides
data processing, outsourcing, timesharing and fundraising assistance to agencies
of the federal government, non-profit organizations and commercial clients.
Since 1991, Mr. Weymer has served as the chief executive officer and president
of ISI.
Nominee for Election to Term Expiring 1999
- --------------------------------------------------------------------------------
William F. Pershin age 43
- --------------------------------------------------------------------------------
William F. Pershin has been the President and a director of the Company
since December 1988 and the Chief Accounting Officer of the Company since March
1994. Prior to joining the Company, Mr. Pershin co-founded Executive Computer
Maintenance, Inc., where he served as vice president and as a member of the
board of directors for seven years.
Incumbent Director -- Term Expiring 1999
- --------------------------------------------------------------------------------
C.A. Miller, III age 58
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C.A. Miller, III has served as a director of the Company since March 1998.
Mr. Miller serves as Vice President of Information Systems of Southern States
Cooperative, Inc. ("Southern States"), a national farm cooperative based in
Richmond, Virginia. Southern States, with over 300 retail outlets, had sales of
over $1.2 billion in 1997.
Executive Officer Who Is Not Also A Director
- --------------------------------------------------------------------------------
James D. Boccabella age 44
- --------------------------------------------------------------------------------
James D. Boccabella joined the Company as Chief Financial Officer in August
1995 with over twenty years of experience in public accounting. Mr. Boccabella
owned and operated his own public accounting practice for seven years prior to
joining the Company. During that time, he provided accounting services to a
variety of companies in the construction, real estate and other service
industries. Mr. Boccabella is a Certified Public Accountant and a Certified
Financial Planner.
-5-
<PAGE>
BOARD OF DIRECTORS -- COMPENSATION AND COMMITTEES
During 1997, the Board held one meeting, which was attended by all of the
directors.
Each director who is not also an officer of the Company (an "outside
director") receives an annual fee of $5,000. Each outside director also receives
a grant of options to purchase 7,500 shares of Common Stock under the Company's
1994 Stock Option and Appreciation Rights Plan (the "Stock Option Plan").
Directors who are also officers of the Company receive no annual fee for their
service as directors. All directors, however, are reimbursed for expenses
incurred in attending meetings.
The Board had no standing committees during 1997. Currently, the Audit
Committee is the only standing committee of the Board. The Board and the Audit
Committee each has access to outside consultants and experts as needed in
connection with their deliberations.
The Audit Committee, which was designated by the Board in March 1998, is
composed of the Company's two outside directors, C.A. Miller, III and David A.
Chappell. The function of the Audit Committee is to recommend the engagement of
independent public accountants to the Board, review with the Company's
independent public accountants the plans and results of audit engagements,
approve professional services provided by the independent public accountants,
review the independence of the public accountants, consider the range of fees
for professional services provided by the independent public accountants and
review the adequacy of the Company's internal accounting controls. The Board has
not yet appointed an accounting firm to audit the accounts of the Company for
the fiscal year ending December 31, 1998.
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<PAGE>
BENEFICIAL OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
The following table sets forth, as of the Record Date, information
regarding beneficial ownership of shares of Common Stock by (i) each director of
the Company, (ii) each executive officer of the Company, (iii) each beneficial
owner of more than 5% of the Common Stock, and (iv) all directors and executive
officers of the Company as a group. Unless otherwise noted below, each person
named in the table has sole voting power and sole investment power with respect
to each of the shares beneficially owned by such person.
Beneficial Ownership
--------------------
Number Percent of
Name and Address of Beneficial Owner of Shares Outstanding Shares
- ------------------------------------ --------- ------------------
Donald C. Weymer ........................ 1,060,000 25.7%
1013 Parrs Ridge Road
Spencerville, Maryland 20868
William F. Pershin ...................... 640,000 15.5%
11616 Morning Star Drive
Germantown, Maryland 20876
Herbert H. Derian ....................... 235,294(1) 5.7%
1305 Eva Gude Drive
Crownsville, Maryland 21032
David A. Chappell ....................... 5,450 *
650-D Ponte Vedra Boulevard
Ponte Vedra Beach, Florida 32082
C.A. Miller, III ........................ 15,000 *
3003 Water Creek Court #1-A
Midlothian, Virginia 23112
James D. Boccabella ..................... 25,000(2) *
P.O. Box 399
Olney, Maryland 20830
All Directors and Executive Officers .... 1,745,450 42.4%
as a Group (six persons)
- ----------
* Less than 1%.
(1) All shares are owned by Mr. Derian's spouse. Mr. Derian disclaims
beneficial ownership with respect to the shares owned by his spouse, who
has the sole power to vote and dispose of such shares.
(2) Consists of stock options granted to Mr. Boccabella under the Stock Option
Plan that have vested.
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<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and related rules of the Securities and Exchange Commission
(the "SEC") require the Company's directors and executive officers and persons
who own more than 10% of a registered class of the Company's equity securities
to file with the SEC and The Nasdaq Stock Market initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Related rules of the SEC also require such persons to furnish
the Company with copies of all reports filed pursuant to Section 16(a). Based
solely upon the Company's review of the copies of the reports received or
written representations from certain reporting persons, the Company believes
that all Section 16(a) filing requirements applicable to its directors, officers
and shareholders owning more than 10% of the Common Stock were complied with
during the fiscal year ended December 31, 1997.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the executive officer compensation paid or
accrued by the Company during the three fiscal years ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Annual Compensation Compensation Awards
--------------------------------- -------------------
Number of
Other Securities
Name and Annual Underlying
Principal Position Year Salary Bonus Compensation Options
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Donald C. Weymer 1997 $178,464 $ 0 $ 0 0
Chairman of the Board, Chief 1996 163,404 9,600 0 0
Executive Officer and Secretary 1995 155,625 33,100 0 0
- -------------------------------------------------------------------------------------------------
William F. Pershin 1997 142,974 0 0 0
President, Chief Accounting 1996 136,168 0 0 0
Officer and Director 1995 129,688 0 0 0
- -------------------------------------------------------------------------------------------------
James D. Boccabella 1997 101,333 0 0 0
Chief Financial Officer 1996 96,842 0 0 0
1995 39,400 0 18,355(1) 25,000(2)
- -------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Consists of payments by the Company to Mr. Boccabella for accounting and
management consulting services provided to the Company by Mr. Boccabella
prior to his employment with the Company.
(2) Options were awarded to Mr. Boccabella under the Stock Option Plan for
accounting and management services rendered to the Company.
-8-
<PAGE>
Employment Agreements
The Company entered into employment agreements with Donald C. Weymer and
William F. Pershin in 1994 (the "Weymer Employment Agreement" and the "Pershin
Employment Agreement," respectively) and with James D. Boccabella in 1995 (the
"Boccabella Employment Agreement").
The Weymer Employment Agreement, pursuant to which Mr. Weymer agreed to
serve as Chairman of the Board and Chief Executive Officer of the Company,
provides for an initial base salary of $150,000 per annum, subject to certain
annual cost of living increases, and for the payment of bonuses under certain
circumstances. Under the terms of the Weymer Employment Agreement, Mr. Weymer
generally is entitled to participate in the employee benefit plans maintained by
the Company from time to time and to receive an automobile allowance of up to
$750 per month. The Weymer Employment Agreement is for an initial period
expiring on December 31, 1999, and thereafter is automatically renewable for
successive one-year terms, unless the Company or Mr. Weymer elects not to renew
such Agreement by providing the other party with prior written notice or unless
such Agreement is otherwise terminated as described below.
The Company has the right to terminate the Weymer Employment Agreement,
prior to the expiration of its term, in the event of Mr. Weymer's death or
disability or for "cause" (as described in such Agreement). The Weymer
Employment Agreement also may be terminated by the Company at its discretion or
by Mr. Weymer in the event that the Board removes him as an officer of the
Company, that he is not reelected to, or is removed from, the Board or that the
Company violates any provision of such Agreement; provided, however, that if
such Agreement is terminated for any one of such reasons, the Company shall be
obligated to pay Mr. Weymer a severance amount equal to the aggregate amount of
salary in effect at the time of termination that would have been payable during
the remainder of his employment term. In addition, Mr. Weymer has the right to
terminate the Weymer Employment Agreement in the event of a change in the
ownership or effective control of the Company (a "change in control"), as
defined in Section 280G of the Internal Revenue Code of 1996, as amended (the
"Code"). If Mr. Weymer terminates the Weymer Employment Agreement as a result of
a change in control, the Company is required to pay Mr. Weymer an amount equal
to three times his average total compensation for the two prior fiscal years,
less the amount, if necessary, sufficient to exclude such payment from falling
within the "excess parachute payment" provisions of Section 280G of the Code.
For 24 months after Mr. Weymer's termination following a change in control, he
shall continue to be covered by the Company's life, medical, health and dental
plans, at the Company's expense.
The Pershin Employment Agreement, pursuant to which Mr. Pershin agreed
to serve as President of the Company, provides for an initial base salary of
$125,000 per annum, subject to certain annual cost of living increases, and for
the payment of bonuses, at the discretion of the Board. Under the terms of the
Pershin Employment Agreement, Mr. Pershin generally is entitled to participate
in the employee benefit plans maintained from time to time by the Company and to
receive an automobile allowance of up to $600 per month. The Pershin Employment
Agreement is for an initial period expiring on April 7, 1999, and thereafter is
automatically renewable for successive one-year terms, unless the Company or Mr.
Pershin elects not to renew such Agreement by providing the other party with
prior written notice or unless such Agreement is otherwise terminated as
described below.
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<PAGE>
The Company has the right to terminate the Pershin Employment Agreement,
prior to the expiration of its term, in the event of Mr. Pershin's death or
disability or for "just cause" (as defined in such Agreement). The Pershin
Employment Agreement also may be terminated by the Company at its discretion or
by Mr. Pershin in the event that the Board removes him as an officer of the
Company or that he is not reelected to the Board; provided, however, that if
such Agreement is terminated for any one of such reasons, the Company shall be
obligated to pay Mr. Pershin a severance amount equal to the aggregate amount of
salary in effect at the time of termination that would have been payable during
the remainder of his employment term.
The Boccabella Employment Agreement, pursuant to which Mr. Boccabella
agreed to serve as Chief Financial Officer of the Company, provides for an
initial base salary of $89,500 and for the payment of bonuses, at the discretion
of the Board. Under the terms of the Boccabella Employment Agreement, Mr.
Boccabella generally is entitled to participate in the employee benefit plans
maintained from time to time by the Company. The Boccabella Employment Agreement
is for an initial period expiring on August 1, 1998, and thereafter is
automatically renewable for successive one-year terms, unless the Company or Mr.
Boccabella elects not to renew such Agreement by providing the other party with
prior written notice or unless such Agreement is otherwise terminated as
described below.
The Company has the right to terminate the Boccabella Employment Agreement,
prior to the expiration of its term, in the event of Mr. Boccabella's death or
disability or for "just cause" (as defined in such Agreement). The Boccabella
Employment Agreement also may be terminated by the Company at its discretion or
by Mr. Boccabella in the event that the Company breaches a material term of such
Agreement; provided, however, that if such Agreement is terminated for any one
of such reasons, the Company shall be obligated to pay Mr. Boccabella a
severance amount equal to one-half of his monthly salary then in effect.
The Weymer Employment Agreement, the Pershin Employment Agreement and the
Boccabella Employment Agreement each contains certain confidentiality,
non-competition and non-solicitation provisions that are operative during the
term of the Agreement and for specified periods after termination thereof.
Incentive Compensation Plan
In May 1994, the Board and the shareholders of the Company adopted the Plan
for Incentive Compensation of Donald C. Weymer (the "Incentive Plan"). Under the
Incentive Plan, Mr. Weymer was granted an option (the "Option") to purchase up
to an aggregate of 200,000 shares of Common Stock at an exercise price of $1.95
per share. The Option expires in May 2004. Mr. Weymer's right to purchase
100,000 shares shall vest and become exercisable upon the close of any fiscal
year during which the Company realizes earnings, before interest and taxes, of
at least $1.4 million, and his right to purchase the remaining 100,000 shares
shall vest and become exercisable upon the close of any fiscal year during which
the Company realizes earnings, before interest and taxes, of at least $2.5
million.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company provides computer maintenance services to ISI pursuant to
maintenance agreements. ISI is wholly-owned by Donald C. Weymer, Chairman of the
Board, Chief Executive Officer and Secretary of the Company, as well as a holder
of approximately 26% of the Company's Common Stock. In addition, Mr. Weymer is
the chief executive officer of ISI. During the fiscal year ended December 31,
1997, approximately $705,000 (including equipment sales of $362,000) of the
Company's revenues were generated by services rendered and equipment sold to ISI
by the Company. Management believes that its transactions with ISI are on terms
no less favorable than those that could have been obtained in comparable
transactions with unaffiliated parties.
OTHER MATTERS
Independent Accountants
Moore Stephens, P.C. has acted as the Company's independent accountants
since 1994. Representatives of Moore Stephens, P.C. are expected to be present
at the Annual Meeting and will be afforded the opportunity to make a statement
if they so desire and to respond to appropriate questions.
Proposals at the Company's Annual Meeting to be Held in 1999
Under the rules of the SEC, shareholders who intend to submit proposals for
consideration at the Company's annual meeting of shareholders to be held in 1999
must submit such proposals to the Company no later than February 12, 1999, in
order to be considered for inclusion in the proxy statement and form of proxy to
be distributed by the Board in connection with that meeting. Shareholder
proposals should be submitted to Donald C. Weymer, Secretary, CSI Computer
Specialists, Inc., 904 Wind River Lane, Suite 100, Gaithersburg, Maryland 20878.
Notwithstanding the aforementioned SEC requirement, under the Company's
By-laws (the "By-laws"), a shareholder must follow certain other procedures to
nominate persons for election as directors or to propose other business to be
considered at an annual meeting of shareholders. Shareholders who desire to
nominate persons for election as directors must comply with the following
procedures. The Secretary of the Company must receive notice of any such
proposal no later than the close of business on the last day of the eighth month
after the immediately preceding annual meeting of shareholders. Such notice must
set forth (a) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated; (b) a representation
that the shareholder is a holder of record of Common Stock entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of all
arrangements and understandings between the shareholder and each nominee or any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (d) such other
information regarding each nominee proposed by such shareholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the SEC had the nominee been nominated, or intended to be nominated, by the
Board; and (e) the originally executed consent of each nominee to serve as a
director of the Company if so elected.
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<PAGE>
Shareholders who desire to propose other business for consideration at an
annual meeting of shareholders generally must comply with the following
procedures. The Board or the Secretary of the Company must receive notice of any
such proposal no later than the close of business on the fifth day following the
date on which notice of the meeting is first given to shareholders. Such notice
must set forth (a) the name and address of the shareholder who intends to make
the proposal; (b) the number of shares of Common Stock that the shareholder
holds of record; (c) the text of the proposal to be presented at the meeting;
and (d) a statement in support of the proposal.
The presiding officer of the annual meeting shall have the power to declare
that any proposal not meeting the foregoing and any other applicable
requirements imposed by the By-laws shall be disregarded. A copy of the By-laws
may be obtained without charge on written request to Donald C. Weymer,
Secretary, CSI Computer Specialists, Inc., 904 Wind River Lane, Suite 100,
Gaithersburg, Maryland 20878.
BY ORDER OF THE BOARD OF DIRECTORS,
DONALD C. WEYMER
Secretary
Dated: June 26, 1998
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING ARE REMINDED TO
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE.
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<PAGE>
CSI COMPUTER SPECIALISTS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 27, 1998 THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints Donald C. Weymer and William F. Pershin,
and each of them, as proxies, with full power of substitution in each, to vote
all shares of common stock, par value $0.001 per share, of CSI Computer
Specialists, Inc. (the "Company"), which the undersigned is entitled to vote at
the annual meeting of shareholders of the Company to be held on July 27, 1998,
at 10:00 a.m., local time, and at any adjournment or postponement thereof, on
all matters set forth herein.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN,
WILL BE VOTED "FOR" EACH OF THE MATTERS STATED.
1. ELECTION OF DIRECTORS:
Nominees: Donald C. Weymer, William F. Pershin, Herbert H. Derian, and
David A. Chappell
[ ] FOR [ ] WITHHELD
[ ] INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.
2. GRANT AUTHORITY to vote upon such other matters as may properly come before
the meeting, including any adjournment or postponement of the meeting, as the
proxies determine to be in the best interest of the Company:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated: ___________________________, 1998
________________________________________
________________________________________
Signature of Shareholder(s)
IMPORTANT: Please mark this Proxy, date, sign exactly as your name(s) appear(s),
and return in the enclosed envelope. If shares are held jointly,
signature need only include one name. Trustees and others signing in
a representative capacity should so indicate.
