UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20509
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
[x] Definitive Proxy Statement COMMISSION ONLY (AS PERMITTED
[_] Definitive Additional Materials PERMITTED BY RULE 14A-6(E((2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
TELTRONICS, INC.
------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-----------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
TELTRONICS LOGO
2150 WHITFIELD INDUSTRIAL WAY
SARASOTA, FLORIDA 34243
Dear Stockholders:
It is my pleasure to invite you to attend the 1999 Annual Meeting of
Stockholders to be held at the principal executive offices of the Company,
2150 Whitfield Industrial Way, Sarasota, Florida 34243 at 10:00 a.m. on
June 4, 1999. The doors will open at 9:30 a.m.
Your vote is important. To be sure your shares are voted at the Annual
Meeting, even if you are unable to attend in person, please sign and return
the enclosed proxy card(s) as promptly as possible. This will not prevent
you from voting your shares in person if you do attend.
The Annual Meeting of Stockholders will be held to consider and take
action with regard to the election of four directors, the ratification of the
selection of the Company's auditors and any other business that may properly
come before the Annual Meeting.
Complete details are included in the accompanying proxy statement.
Ewen R. Cameron
President and Chief Executive Officer
Sarasota, Florida
May 7, 1999
<PAGE>
TELTRONICS LOGO
2150 WHITFIELD INDUSTRIAL WAY
SARASOTA, FLORIDA 34243
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF TELTRONICS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Teltronics, Inc. will be held at the principal offices of the Company,
2150 Whitfield Industrial Way, Sarasota, Florida 34243 on June 4, 1999 at
10:00 a.m., to consider and take action with regard to the following:
1. The election of four (4) directors of the Company to serve until
the next Annual Meeting of the Stockholders and the election or appointment
and qualification of their successors.
2. The ratification of the selection of Ernst & Young LLP, independent
certified public accountants, as auditors of the Company for the current
fiscal year.
3. The transaction of such other business as may properly come before
the Annual Meeting or any adjournments thereof.
FURTHER NOTICE IS HEREBY GIVEN that the stock transfer books of the
Company will not be closed, but only stockholders of record at the close of
business on May 7, 1999 will be entitled to notice of and to vote at the
Annual Meeting.
STOCKHOLDERS WHO WILL BE UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON
MAY ATTEND THE MEETING BY PROXY. SUCH STOCKHOLDERS ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
ENCLOSED.
By Order of the Board of Directors
Mark E. Scott
Vice President-Finance and Secretary
May 7, 1999
<PAGE>
TELTRONICS, INC.
2150 WHITFIELD INDUSTRIAL WAY
SARASOTA, FLORIDA 34243
MAY 7, 1999
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
1999
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Teltronics, Inc. ("Company") of proxies for
use at the Annual Meeting of Stockholders to be held at the principal
executive offices of the Company at 2150 Whitfield Industrial Way,
Sarasota, Florida 34243 on June 4, 1999 at 10:00 a.m., and at any
adjournment thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Stockholders. In addition to solicitation by mail,
solicitations may be made by personal interview, telephone, telegram or
other electronic means by Directors, officers and other regular employees
of the Company. The cost of this proxy solicitation will be borne by the
Company. The Company will also reimburse persons holding stock for others
in their names or those of their nominees for their reasonable expenses in
sending proxy material to their principals and obtaining their proxies.
The Company will use the services of American Securities Transfer & Trust,
Inc., 938 Quail Street, Suite 101, Lakewood, Colorado 80215 to aid in
solicitation of proxies at an anticipated fee of $565 plus reasonable
expenses. It is contemplated that this Proxy Statement will be first sent
to Stockholders on or about May 12, 1999.
If the enclosed proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the instructions
contained therein. Any proxy given pursuant to this solicitation may be
revoked by the stockholder at any time prior to its use, by the stockholder
voting in person at the meeting, by submitting a proxy bearing a date
subsequent to the date on the proxy to be revoked or by written notice to
the Secretary of the Company.
The Board of Directors has fixed the close of business on May 7, 1999
as the record date for determining the holders of voting stock entitled to
notice of and to vote at the Annual Meeting. On May 3, 1999, the Company
had outstanding and entitled to vote at the Annual Meeting a total of
3,604,522 shares of Common Stock. Each outstanding share of Common Stock
is entitled to one vote on all matters to be brought before the Annual
Meeting. On May 3, 1999, the Company had outstanding and entitled to vote
at the Annual Meeting a total of 100,000 shares of Series A Preferred Stock
entitled to four hundred votes per share and 25,000 shares of Series B
Preferred Stock entitled to one vote per share of Common Stock into which
the Series B Preferred Stock is convertible as of the record date on all
matters to be brought before the Annual Meeting.
On May 3, 1999, the closing price for the Company's $.001 par value
Common Stock as reported on NASDAQ was $6.50.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors is proposing the election of four (4)
Directors to hold office until the election and qualification of their
successors at the next Annual Meeting of Stockholders. Unless the proxy
directs otherwise, the persons named in the enclosed form of proxy will
vote for the election of the four nominees named below. If any of the
nominees should be unable to serve as a Director, or for good reason will
not serve, the proxy will be voted in accordance with the best judgment of
the person or persons acting under it. It is not anticipated that any of
the nominees will be unable to serve. In the case of a vacancy, the Board
of Directors may elect another Director as a replacement or may leave the
vacancy unfilled. Decisions regarding
1
<PAGE>
the election of new Directors during the year normally are based upon
considerations such as the size of the Board and the need to obtain fresh
perspectives or to replace particular skills or experience of former
Directors. The nominees for Directors, their ages, their principal
occupations during at least the past five years, their positions and
offices with the Company and, as applicable, the date each was first
elected a Director of the Company or its predecessors are as follows:
<TABLE>
<CAPTION>
FIRST ELECTED
DIRECTOR
POSITION WITH OF THE COMPANY
NAME AGE THE COMPANY OR PREDECESSOR
---- --- ------------- --------------
<S> <C> <C> <C>
Ewen R. Cameron 46 President, Chief 1994
Executive Officer,
Assistant Secretary,
and Director
Norman R. Dobiesz 51 Senior Vice President 1991
Business Development
and Director
Carl S. Levine 52 Director 1988
Gregory G. Barr 41 ------ ----
</TABLE>
EWEN R. CAMERON has served as President and Chief Executive Officer
since July 1993 and a Director since June 1994. Prior to that, Mr. Cameron
served as Managing Director of SRH plc, a European telecommunications and
computer maintenance company from 1989 to 1992. From January 1978 to
December 1989, Mr. Cameron served as Managing Director of Systems
Reliability Europe SA/NV, a wholly owned subsidiary of SRH plc based in
Brussels, Belgium. Mr. Cameron has spent the last 25 years in the computer
and telecommunications industry.
NORMAN R. DOBIESZ has served as a Director of the Company since
October 25, 1991 and is the Company's Senior Vice President, Business
Development. Mr. Dobiesz has developed substantial financial and general
management experience as a principal stockholder and executive of a group
of privately held companies controlled by Mr. Dobiesz. Mr. Dobiesz is a
principal stockholder of the Company.
CARL S. LEVINE has served as a Director of the Company since July 27,
1988. Mr. Levine is an attorney who has been engaged in private practice
in New York, New York from 1977 to 1981, and in Garden City, New York from
1981 to June 1985. Mr. Levine is presently the senior partner in the law
firm of Carl S. Levine & Associates, Roslyn, New York. He specializes
primarily in the practice of energy, environmental and tax law. Prior to
entering private practice, Mr. Levine was employed as counsel for New York
Regional Office of the United States Department of Energy.
GREGORY G. BARR is currently Senior Vice President and Senior Loan
Officer of Atlantic States Bank, Fort Myers, Florida. Prior to that, Mr.
Barr was employed as Senior Vice President, Senior Lender for SouthTrust
Bank. From 1987 to 1997 Mr. Barr was employed by Barnett Bank, Inc. as
Senior Vice President and Commercial Banking Manager for Manatee County.
Mr. Barr has experience in Commercial Banking, Finance, Accounting and
Capital Markets transactions. He is a graduate of Salem State College,
Salem, Massachusetts holding a Bachelor of Science in accounting. Mr. Barr
has not previously served as a Director of the Company.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of all of the Company's outstanding voting securities
by each person owning five percent (5%) or more of such shares, by each
director, by each executive officer listed in the Summary Compensation
Table below, and by all directors and officers as a group as of March 31,
1999. Unless otherwise indicated, it is assumed that all shares are
directly owned and that the holders thereof have sole voting and investment
power with respect thereto.
<TABLE>
<CAPTION>
AMOUNT AND
TITLE NATURE OF
NAME OF BENEFICIAL OF BENEFICIAL PERCENTAGE
OWNER AND ADDRESS CLASS OWNERSHIP (1) OF CLASS (1)
- ------------------ ----- ------------- ------------
DIRECTORS AND OFFICERS
<S> <C> <C> <C>
Norman R. Dobiesz (2)(3)(4) Common Stock 1,432,097 39.7% (11)
2150 Whitfield Industrial Way Series A
Sarasota, Florida 34243 Preferred Stock 100,000 100%
Carl S. Levine (2) Common Stock 2,240 (5)(6)(11)
1800 Northern Blvd.
Roslyn, New York 11576
Ewen R. Cameron (2)(4) Common Stock 3,360 (5)(7)(11)
2150 Whitfield Industrial Way
Sarasota, Florida 34243
William L. Hutchison (4) Common Stock 0 (8)
2150 Whitfield Industrial Way
Sarasota, Florida 34243
Gregory G. Barr Common Stock 0 0
13525 Bell Tower Drive
Fort Myers, Florida 33907
Sirrom Capital Corporation Series B
500 Church Street, Suite 200 Preferred Stock 25,000 100%
Nashville, Tennessee 37219
Mark E. Scott (4) Common Stock 0 (9)
2150 Whitfield Industrial Way
Sarasota, Florida 34243
Robert B. Ramey (4) Common Stock 1,800 (10)
2150 Whitfield Industrial Way
Sarasota, Florida 34243
All Directors and Officers Common Stock 1,439,497 39.9%
as a Group (8 persons)
GREATER THAN 5% OWNERSHIP
Shared Resource Exchange Common Stock 668,226 18.5%
3480 Lotus Drive
Plano, Texas 75075
</TABLE>
_____________________________
3
<PAGE>
(1) Does not include (i) an aggregate of 1,250,000 shares of Common Stock
which may be issued upon exercise of incentive stock options
previously granted or which could be granted under the Company's 1995
Incentive Stock Option Plan; (ii) possible issuance of up to
1,799,091 shares of Common Stock subject to adjustment, which may be
issued upon: (a) conversion of the Series B Preferred Stock, and (b)
the exercise of 890,000 Warrants issued to Sirrom Capital exercisable
at a price of $2.75 per share, subject to adjustment.
(2) Director of the Company.
(3) Includes 56,000 shares owned by virtue of 100% ownership of H & N
Management Co., Inc. ("H&N"), 1,295,000 shares owned by virtue of 100%
ownership of W&D Consultants, Inc., and 4,455 shares owned by virtue
of 67% ownership of Whitfield Capital of Sarasota, Inc. Excludes:
(i) 100,000 shares of Series A Preferred Stock owned by Mr. Dobiesz.
Each share is entitled to 400 votes and is not entitled to any
dividends, and (ii) 30,000 shares which may be issued upon exercise of
incentive stock options by Mr. Dobiesz.
(4) Executive Officer of the Company named in the Executive Compensation
Table below.
(5) Beneficially owns less than 1% of the Company's outstanding Common
Stock.
(6) Does not include up to 50,000 shares which may be issued upon exercise
of incentive stock options by Mr. Levine.
(7) Does not include up to 530,000 shares which may be issued upon
exercise of incentive stock options by Mr. Cameron.
(8) Does not include up to 50,000 shares which may be issued upon exercise
of incentive stock options by Mr. Hutchison.
(9) Does not include up to 30,000 shares which may be issued upon exercise
of incentive stock options by Mr. Scott.
(10) Does not include up to 20,000 shares which may be issued upon exercise
of incentive stock options by Mr. Ramey.
(11) Does not include 5% minority ownership in ISI.
CHANGE OF CONTROL. The holders of the Series B Preferred Stock have the
right to elect a majority of the Board of Directors of the Company if and
whenever four quarterly dividends (whether or not consecutive) payable on
the Series B Preferred Stock shall be in arrears.
BOARD OF DIRECTORS MEETINGS
The Board of Directors has no standing committees other than its Audit
Committee. The Board of Directors exercises supervision over nominating
and compensation matters directly. Subject to review by the Board, the
Audit Committee of the Board of Directors reviews the annual financial
statements and the scope of the annual audit with the Company's independent
accountants, is available to discuss with the auditors any other audit-
related matters arising during the year and reviews the Company's internal
audit function. The members of the Boards Audit Committee during 1998 were
Ewen Cameron, Carl S. Levine and Craig Macnab, formerly a Director.
From January 1 to December 31, 1998, the Board of Directors held five
(5) formal meetings; and the Board of Directors took action by unanimous
written consent six (6) times during that period.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
paid or accrued by the Company during the years indicated to the Chief
Executive Officer and its other highest paid executive officers whose total
salary and bonus exceeded $100,000 for the year ended December 31, 1998
(collectively, the "Named Officers").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
OTHER
ANNUAL
NAME AND COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION (1)
- ------------------ ---- ------ ----- ----------
<S> <C> <C> <C> <C>
Ewen R. Cameron 1998 $287,532 (2) $ --- ---
President & CEO 1997 253,284 (2) --- ---
1996 248,272 --- ---
William L. Hutchison 1998 $191,638 $ --- ---
Executive Vice Presi- 1997 184,800 --- ---
dent & COO 1996 33,277 (3) --- ---
Norman R. Dobiesz 1998 $287,209 (2) $ --- ---
Senior Vice President 1997 253,173 (2) --- ---
Business Development 1996 248,434 --- ---
Mark E. Scott 1998 $108,530 $7,000 ---
Vice President Finance 1997 59,181 (4) --- ---
Robert B. Ramey 1998 $107,376 $7,000 ---
Vice President Manu- 1997 102,320 --- ---
facturing Operations 1996 88,474 --- ---
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
AWARDS PAYOUTS
----------------------------- --------
SECURITIES ALL
RESTRICTED UNDERLYING OTHER
NAME AND STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL POSITION YEAR AWARDS SARS(#) PAYOUTS SATION
<S> <C> <C> <C> <C> <C>
Ewen R. Cameron 1998 --- --- --- ---
President & CEO 1997 --- --- --- ---
1996 --- 500,000 --- ---
William L. Hutchison 1998 --- --- --- $ 7,828
Executive Vice Presi- 1997 --- 30,000 --- 14,451
dent & COO 1996 --- 20,000 --- 7,721
Norman R. Dobiesz 1998 --- --- --- ---
Senior Vice President 1997 --- --- --- ---
Business Development 1996 --- --- --- ---
Mark E. Scott 1998 --- --- --- $14,879
Vice President Finance 1997 --- 30,000 --- ---
Robert B. Ramey 1998 --- --- --- ---
Vice President Manu- 1997 --- --- --- ---
facturing Operations 1996 --- --- --- ---
</TABLE>
_______________________
(1) Certain personal benefits that aggregate less than ten percent (10%)
of the total cash compensation of any of the executive officers or
which cannot be readily ascertained are not included.
(2) Does not include $25,000 earned in each year and accrued by each of
Messrs. Cameron and Dobiesz, but not paid during 1998 and 1997.
(3) William L. Hutchison was hired October 10, 1996. All other
compensation consists of relocation expenses.
(4) Mark E. Scott was hired May 1, 1997. All other compensation consists
of relocation expenses.
EMPLOYMENT AGREEMENTS
The Company entered into five (5) year employment agreements with Ewen
Cameron, President, Chief Executive Officer and Assistant Secretary, and
Norman R. Dobiesz, Senior Vice President, Business Development commencing
May 1, 1999. Both agreements were amendments and restatements of prior
agreements which the employees entered into with the Company as of January
1, 1995. Each employment agreement is renewable for an additional five (5)
year period at the employees' option and provides for a base annual salary
of $325,000 subject to annual increases of $25,000 per year. Either of the
Company or the employee may terminate the employment agreements upon the
occurrence of certain events. If the Company terminates the employment of
Mr. Cameron or Mr. Dobiesz, the terminated employee will be entitled to
severance equal to one year's base salary.
On October 14, 1996, the Company entered into a three (3) year
employment agreement with William L. Hutchison, the Company's Executive
Vice President, Chief Operating Officer and Assistant Secretary. The
employment agreement provides for an annual salary of $180,000 and is
terminable prior to expiration of its stated term upon the occurrence of
certain events. If Mr. Hutchison's employment agreement is terminated
prior to its scheduled expiration without cause or for failure to
adequately perform, in the Company's judgment, the services, duties and
responsibilities assigned by the Company, whether or not such failure is
intentional, Mr. Hutchison will be entitled to severance equal to six (6)
month's salary.
5
<PAGE>
On May 1, 1997, the Company entered into a one (1) year employment
agreement with Mark E. Scott, the Company's Vice President Finance,
Secretary and Treasurer. The agreement is renewable annually for an
additional year unless the Company or employee elect not to renew. This
agreement was amended June 23, 1998. The employment agreement provides for
an annual salary of $105,000 and is terminable prior to expiration of its
stated term upon the occurrence of certain events. If Mr. Scott's
employment agreement is terminated prior to its scheduled expiration
without cause, Mr. Scott will be entitled to a severance equal to six (6)
month's salary.
1995 INCENTIVE STOCK OPTION PLAN
The Company adopted an Incentive Stock Option Plan, as amended
("Plan") to enhance the Company's ability to retain the services of
outstanding personnel and encourage such employees to have a greater
financial investment in the Company. The Plan authorizes the Board of
Directors to grant incentive stock options under the Internal Revenue Code
of 1986, as amended, to key employees of the Company or its subsidiaries.
At the date of this Form 10-K there are approximately fifty employees
eligible to participate in the Plan. The Plan is administered by the Board
of Directors which has full power and authority to designate Participants,
to determine the terms and provisions of respective option agreements
(which need not be identical) and to interpret the provisions of the Plan.
The Plan became effective May 16, 1995, was amended July 30, 1996 and will
terminate August 8, 2005 unless earlier terminated by the Board of
Directors or extended by the Board with approval of the stockholders.
An aggregate of 1,250,000 shares of the Company's Common Stock may be
issued or transferred to grantees under the Plan. If there is a stock
split, stock dividend or other relevant change affecting the Company's
shares, appropriate adjustments will be made in the number of shares that
may be issued or transferred in the future and in the number of shares and
price of all outstanding grants made before such event. The option price
shall not be less than the fair market value of the Company's Common Stock
on the date of grant, unless the grantee is the holder of more than 10% of
the voting power of all classes of stock of the Company, in which case the
option price shall not be less than 110% of the fair market value of the
stock on the date of grant.
Options may be exercised solely by the Participant or his or her legal
representative during his or her employment with the Company, or any
subsidiary, or after his or her death by the person or persons entitled
thereto under his or her will or the laws of descent and distribution. In
the event of termination of employment for any reason other than death,
permanent disability as determined by the Board, or retirement with the
consent of the Company, Options may not be exercised by the Participant or
his or her legal representative and shall lapse effective upon the earlier
to occur of (i) notice of employment termination or (ii) last day of
employment with the Company or any Subsidiary.
During 1998, the Company issued options to purchase 50,000 shares to
non-executive employees. During 1998, the Company cancelled options
previously granted to non-executive employees to purchase 20,000 shares of
common stock. In each case, unless the recipient of a grant was the holder
of more than 10% of the Company's issued and outstanding Common Stock, the
fair market value of the Common Stock on the date of grant determined the
exercise price.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES OR BASE EXPIRATION
NAME GRANTED (#)(1) IN FISCAL YEAR (1) PRICE ($/SH) DATE
- ---- -------------- ------------------ ------------ ----------
<S> <C> <C> <C> <C>
None --- --- --- ---
</TABLE>
_________________
(1) Represents options only. No SARs have been granted.
6
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-ENDED($)
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Ewen R. Cameron 0 0 18,000/12,000 $8,220/$5,480
200,000/300,000 $0/$0 (1)
Norman R. Dobiesz 0 0 18,000/12,000 $5,340/$3,559
William L. Hutchison 0 0 12,000/18,000 $0/$0 (2)
4,000/16,000 $327/$1,306
Mark E. Scott 0 0 6,000/24,000 $490/$1,960
Robert B. Ramey 0 0 12,000/8,000 $980/$653
</TABLE>
_________________
(1) None of the options granted to Mr. Cameron in 1996 to purchase 500,000
shares were in-the-money at December 31, 1998 because they are
exercisable at $5.50 per share, a price greater than the fair market
value of the Company's Common Stock on such date.
(2) None of these options granted to Mr. Hutchison in 1996 to purchase
30,000 shares were in-the-money at December 31, 1998 because they are
exercisable at $3.50 per share, a price greater than the fair market
value of the Company's Common Stock on such date.
DIRECTOR COMPENSATION
On August 12, 1996 the Company adopted a policy to compensate members
of its Board of Directors in the amount of $2,500 for each meeting and
reimburse expenses for attending meetings of the Board or committees of the
Board of Directors.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on the
Company's common stock as compared to the cumulative total return for the
Nasdaq Stock Market Total Return Index - US Companies, and the Nasdaq Stock
Market - Telecommunications Stocks Index. The Stock Performance Graph
assumes $100 was invested in the stock or the index on December 31, 1994
and assumes no dividends.
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Teltronics, Inc. $100.00 $161.50 $107.70 $ 80.90 $ 52.00
NASDAQ Stock Market -
US Companies $100.00 $141.40 $173.90 $213.40 $300.00
NASDAQ Stock Market -
Telecommunications
Stock $100.00 $130.90 $133.90 $198.20 $323.70
</TABLE>
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A company owned by a Director and principal shareholder of the Company
rents offices from the Company and was billed $51,721 in 1998 and $19,280
in 1997. In addition, the Company provided the Company owned by the
Director with services and this company was billed $87,232 in 1997, and no
services were provided in 1998.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
No disagreements with accountants in any accounting and financial
disclosures occurred during the fiscal years ended December 31, 1998 and
1997. Accountants were changed during the fiscal year ended December 31,
1997 as previously disclosed and more fully described in the Form 8-K
report filed with the Securities and Exchange Commission on September 5,
1997.
SELECTION OF ERNST & YOUNG LLP
The Board of Directors has selected Ernst & Young LLP to act as
auditors of the Company for the current fiscal year. The Board of
Directors believes that it is desirable to engage their services for the
current fiscal year because Ernst & Young competently acted as the
Company's auditors for the last fiscal year. Representatives of Ernst &
Young are expected to attend the Annual Meeting and will have the
opportunity to make a statement if they desire and will be available to
respond to appropriate questions.
In the event the stockholders fail to ratify the selection of Ernst &
Young LLP, the Board of Directors will consider it a direction to select
other auditors for the subsequent year. Even if the selection is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
new independent accounting firm at any time during the year, if the Board
feels that such a change would be in the best interests of the Company and
its stockholders.
Ratification of the selection of Ernst & Young LLP as the Company's
auditors for the coming fiscal year requires the affirmative vote of a
majority of the total votes cast by the holders of record of the shares
present and entitled to vote at the Annual Meeting, a quorum being present.
PROPOSALS OF STOCKHOLDERS FOR 2000 ANNUAL MEETING
If any stockholder wishes to propose an item of business for
consideration at next year's Annual Meeting of Stockholders, the proposal
must be in writing and received by the Secretary of the Company no later
than February 7, 2000.
OTHER BUSINESS
The Board of Directors knows of no other matters to be voted upon at
the Annual Meeting. If any other matters properly come before the Annual
Meeting or any adjournment thereof, it is the intention of the persons
named in the enclosed proxy to vote on such matters in accordance with
their own judgment.
8
<PAGE>
ADDITIONAL INFORMATION
Copies of the 1998 Annual Report of the Company have been mailed to
stockholders. Additional copies of the Annual Report, as well as this
Proxy Statement, Proxy Card(s), and Notice of Annual Meeting of
Stockholders, may be obtained upon written request from Mark E. Scott, Vice
President Finance, Secretary and Treasurer, Teltronics, Inc., 2150
Whitfield Industrial Way, Sarasota, Florida 34243.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K, EXCLUSIVE OF EXHIBITS, WILL BE FURNISHED WITHOUT
CHARGE TO STOCKHOLDERS, BENEFICIALLY OR OF RECORD ON MAY 7, 1999, UPON
WRITTEN REQUEST TO THE SECRETARY AT THE ADDRESS NOTED ABOVE.
BY ORDER OF THE BOARD OF DIRECTORS,
Mark E. Scott
Vice President-Finance and Secretary
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TELTRONICS, INC.
LOGO
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PROXY CARD TELTRONICS, INC.
2150 Whitfield Industrial Way
Sarasota, Florida 34243
Proxy Solicited by the Board of Directors for the Annual Meeting
of Stockholders June 4, 1999
Ewen R. Cameron, Norman R. Dobiesz and Mark E. Scott, or any of
them individually and each of them with power of substitution,
are hereby appointed Proxies of the undersigned to vote all
voting stock of Teltronics, Inc. owned on the record date by the
undersigned at the Annual Meeting of Stockholders to be held at
the principal executive offices of the Company at 2150 Whitfield
Industrial Way, Sarasota, Florida 34243, at 10 a.m. on Friday,
June 4, 1999, or any adjournment thereof, upon such business as
may properly come before the meeting, including the items below
as set forth in the Notice of Annual Meeting and the Proxy
Statement dated May 7, 1999.
Election of Directors, Nominees: E. R. Cameron, N. R. Dobiesz,
C. S. Levine and G. G. Barr.
(Shares cannot be voted unless this Proxy Card is signed and
returned, or other specific arrangements are made to have the
shares represented at the Annual Meeting.)
Teltronics' Directors recommend a vote FOR proposals 1 and 2.
SHARES WILL BE SO VOTED UNLESS OTHERWISE INDICATED.
Teltronics' Directors recommend a vote FOR proposals 1 and 2.
1. Election of Directors (see above)
2. Ratification of appointment of auditors (page 8)
Please complete reverse side
Teltronics, Inc. 1. [ ] For All (except as noted below)
Meeting Date: June 4, 1999 [ ] Withhold All
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name below.
_______________________________
Instructions: Please indicate your voting directions in the ballot
area below.
2. [ ] For [ ] Against [ ] Abstain
_______________________________
Signature/Date
____________________________
Signature/Date
Please sign exactly as name appears hereto. When shares are held
as joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give full
titles as such. If a corporation or partnership, please sign in
full corporate or partnership name by an authorized officer or
person.
