UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-12
CTI GROUP (HOLDINGS) INC.
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(Name of Registrant as Specified in Its Charter)
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[CTI GRAPHIC OMITTED]
333 North Alabama St., Suite 240
Indianapolis, IN 46204
(317) 262-4666
Dear Stockholder:
You are cordially invited to attend the 2003 Annual Meeting of
Stockholders (the "Annual Meeting") of CTI Group (Holdings) Inc., a Delaware
corporation ("CTIG"), which will be held on December 18, 2003, at 11:00 a.m.
(U.S. Eastern Standard Time - Indiana Local Time) at the Market Tower Conference
Center, 10 West Market Street, Indianapolis, Indiana 46204, located on the 3rd
Floor, or any postponement or adjournment of the Annual Meeting.
At the Annual Meeting, you will be asked to: (i) elect one Class I
director and two Class III directors; (ii) ratify the appointment of
PricewaterhouseCoopers LLP, as the independent accountants of CTIG; and (iii)
act upon such other matters as may properly come before the Annual Meeting or
any postponement or adjournment of the Annual Meeting.
The official notice of the Annual Meeting, a proxy statement, a form of proxy,
CTIG's annual report and CTIG's quarterly report on Form 10-QSB for the third
quarter of fiscal 2003 are enclosed. Please give this information your careful
attention.
Whether or not you expect to attend the Annual Meeting in person, it is
important that your shares be voted at the Annual Meeting. I urge you to specify
your choices by marking the enclosed proxy and returning it promptly.
Sincerely,
Harold Garrison
Chairman of the Board of Directors of
CTI Group (Holdings) Inc.
Date: November 25, 2003
[CTI GRAPHIC OMITTED]
333 North Alabama St., Suite 240
Indianapolis, IN 46204
(317) 262-4666
NOTICE OF 2003 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 18, 2003
To the Stockholders of CTI Group (Holdings) Inc.:
NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of Stockholders
(the "Annual Meeting") of CTI Group (Holdings) Inc., a Delaware corporation
("CTIG"), will be held on December 18, 2003, at 11:00 a.m. (U.S. Eastern
Standard Time - Indiana Local Time) at the Market Tower Conference Center, 10
West Market Street, Indianapolis, Indiana 46204, located on the 3rd Floor, for
the following purposes:
(i) to elect one Class I director and two Class III directors
named in the accompanying proxy statement;
(ii) to consider and act upon a proposal to ratify the appointment
of PricewaterhouseCoopers LLP, as the independent accountants
of CTIG; and
(iii) to act upon such other matters as may properly come before the
Annual Meeting or any adjournment or postponement of the
Annual Meeting.
The board of directors is not aware of any other business to come
before the Annual Meeting.
The board of directors recommends that you vote "FOR" (i) the election
of each of the nominees for the board of directors specified in the enclosed
proxy statement; and (ii) the ratification of the appointment of CTIG's
independent accountants.
By resolution of the board of directors, only stockholders of record of
CTIG's Class A Common Stock and Class B Common Stock at the close of business on
October 22, 2003 are entitled to the notice of and to vote at the Annual Meeting
and any adjournment or postponement of the Annual Meeting. A list of CTIG's
stockholders of record at the close of business on October 22, 2003 will be
available for examination by any stockholder, for any purpose germane to the
Annual Meeting, for a period of 10 days prior to the Annual Meeting during
ordinary business hours at our offices located at 333 North Alabama St., Suite
240, Indianapolis, IN 46204. Such list of stockholders will also be available
for examination by any stockholder at the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN
IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE DATE, SIGN AND RETURN
THE ENCLOSED PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AS
SOON AS POSSIBLE IN THE ACCOMPANYING SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. IF YOU DO ATTEND THE ANNUAL MEETING,
YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
By Order of the Board of Directors,
Manfred Hanuschek
Chief Financial Officer and Secretary
Indianapolis, Indiana
November 25, 2003
[CTI GRAPHIC OMITTED]
333 North Alabama St., Suite 240
Indianapolis, IN 46204
(317) 262-4666
PROXY STATEMENT
2003 ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION
Date, Time, Place and Purposes of 2003 Annual Meeting of Stockholders
The board of directors of CTI Group (Holdings) Inc. solicits your proxy
for use at the 2003 Annual Meeting of Stockholders (the "Annual Meeting") to be
held on December 18, 2003 at 11:00 a.m. (U.S. Eastern Standard Time - Indiana
Local Time) at the Market Tower Conference Center, 10 West Market Street,
Indianapolis, Indiana 46204, located on the 3rd Floor, for the following
purposes:
(i) to elect one Class I director and two Class III directors
named in the accompanying proxy statement;
(ii) to consider and act upon a proposal to ratify the appointment
of PricewaterhouseCoopers LLP, as the independent accountants
of CTIG; and
(iii) to act upon such other matters as may properly come before the
Annual Meeting or any adjournment or postponement of the
Annual Meeting.
References in this proxy statement to "CTIG," the "Company," "we,"
"us," and "our" mean CTI Group (Holdings) Inc. and its subsidiaries unless the
context of the description indicates otherwise.
The notice of the Annual Meeting, this proxy statement, the enclosed
form of proxy and the annual report are first being mailed to our stockholders
on or about November 25, 2003.
Record Date and Shares Entitled to Vote
Our board of directors fixed the close of business on October 22, 2003
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting. Accordingly, only
holders of record of our Class A and Class B Common Stock at the close of
business on the Record Date are entitled to notice of and to vote at the Annual
Meeting, as indicated herein. At the close of business on the Record Date, (i)
26,549,206 shares of Class A Common Stock were issued and outstanding; (ii)
2,833,334 shares of Class B Common Stock were issued and outstanding; and (iii)
140,250 shares of Class A Common Stock constituted our treasury stock, which
will not be voted at the Annual Meeting.
Quorum and Voting Rights
In order for a quorum to be present at the Annual Meeting, a majority
of the outstanding shares of our Class A and Class B Common Stock at the close
of business on the Record Date must be present in person or represented by proxy
at the Annual Meeting. All such shares that are present in person or represented
by proxy at the Annual Meeting will be counted in determining whether a quorum
is present, including abstentions and broker non-votes. A broker non-vote occurs
when shares held of record by a broker are not voted with respect to the
proposal because the broker does not have discretionary voting power with
respect to that proposal and has not received voting instructions from the
beneficial owner.
Each share of our Class A or Class B Common Stock entitles its holder
to one vote on each proposal. Directors are elected (Proposal One) by a
plurality of the votes of the shares of our Class A and Class B Common Stock,
voting as one class, outstanding at the close of business on the Record Date,
which are present in person or represented by proxy at the Annual Meeting. Under
Delaware law, an abstention or a broker non-vote will have no legal effect on
the election of directors. Therefore, three nominees receiving the most "FOR"
votes will be elected as our directors. The ratification of the appointment of
PricewaterhouseCoopers LLP as our independent accountants (Proposal Two) and the
approval of any other business matters properly brought before the Annual
Meeting, or any adjournment or postponement of the Annual Meeting, will require
the affirmative vote of the majority of the shares of our Class A and Class B
Common Stock, voting as one class, outstanding at the close of business on the
Record Date that are present in person or represented by proxy at the Annual
Meeting. Under Delaware law, an abstention, but not the broker non-vote, on any
proposal, other than the election of directors, will have the same legal effect
as an "against" vote. A broker non-vote will not count as a vote against any
proposal at the Annual Meeting.
Solicitation of Proxies
This proxy statement is furnished to you in connection with the
solicitation of proxies on behalf of our board of directors for use at the
Annual Meeting. The accompanying form of proxy has been prepared at the
direction of the board of directors and is sent to you at the request of the
board of directors. Our board of directors designated the proxies named in the
form of proxy. We will bear all costs of soliciting proxies, including the cost
of printing and mailing this proxy statement. In addition to the solicitation by
mail, our directors, officers and employees may solicit proxies from
stockholders in person or by telephone. Those directors, officers and employees
will not receive additional compensation for that solicitation but may be
reimbursed for their out-of-pocket expenses. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries for the
solicitation of votes from beneficial owners of shares held of record by such
persons or entities. We will reimburse those custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses.
A form of proxy is enclosed. If properly executed and received in time
for voting, and not revoked, the enclosed proxy will be voted in accordance with
its instructions. If no directions to the contrary are indicated, the persons
named in the enclosed proxy will vote all your shares of Class A and Class B
Common Stock "FOR": (i) the election of one nominee for Class I director and two
nominees for Class III directors named in the proxy statement; (ii) the
ratification of the appointment of PricewaterhouseCoopers LLP, as our
independent accountants; and (iii) the approval of any other business matters
which may properly come before the Annual Meeting or any adjournment or
postponement of the Annual Meeting.
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The enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Annual Meeting:
(i) matters to be presented at the Annual Meeting which we did not have notice
on or prior to the close of business on November 18, 2003; (ii) approval of the
minutes of the prior annual meeting of stockholders, if such approval does not
amount to ratification of the action taken at that prior annual meeting; (iii)
any proposal omitted from this proxy statement and form of proxy pursuant to
Rules 14a-8 or 14a-9 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and (iv) matters incident to the conduct of the Annual Meeting.
Our board of directors is not currently aware of any matters that will
be brought before the Annual Meeting (other than procedural matters) that are
not referred to in the enclosed notice of the Annual Meeting. However, if any
additional matters are properly brought before the Annual Meeting, the persons
named in the enclosed proxy will vote the proxy cards in their discretion in
accordance with their best judgment and in the manner they believe to be in our
best interests.
Revocation of Proxies
Sending in the signed proxy will not affect the stockholder's right to
deliver a subsequent proxy or attend the Annual Meeting and vote in person
because the proxy is revocable. A stockholder may revoke the proxy at any time
before it is voted by giving written notice of revocation to Manfred Hanuschek,
our Chief Financial Officer and Secretary. Upon giving the written notice of
revocation, a stockholder may duly execute a later dated proxy relating to the
same shares or attend the Annual Meeting and vote in person. Attendance of the
Annual Meeting will not in itself constitute a revocation of the proxy. Before
the taking of the vote at the Annual Meeting, any written notice of revocation
and a subsequent proxy should be sent to CTI Group (Holdings) Inc., 333 North
Alabama St. Suite 240, Indianapolis, IN 46204, attention: Manfred Hanuschek or
hand delivered to Manfred Hanuschek.
3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of November 11, 2003 with
respect to the beneficial ownership of our Class A and Class B Common Stock by:
(i) each person who is known to us to be the beneficial owner of more than five
percent of our outstanding Class A or Class B Common Stock; (ii) each of our
directors and nominees for election as a director; (iii) our Chief Executive
Officer and each other executive officer whose total annual salary and bonus for
the fiscal year 2002 exceeded $100,000; and (iv) all of our directors and
executive officers as a group. As of November 11, 2003, 26,549,206 shares of our
Class A Common Stock and 2,833,334 shares of our Class B Common Stock were
outstanding. As of November 11, 2003, our treasury stock consisted of 140,250
shares of our Class A Common Stock.
The securities "beneficially owned" by an individual, as shown in the
table below, are determined in accordance with the definition of "beneficial
ownership" set forth in the regulations of the Securities and Exchange
Commission. Accordingly, beneficially-owned securities may include securities
owned by or for, among others, the spouse and/or minor children of the
individual and any other relative who has the same home as such individual, as
well as other securities as to which the individual has or shares voting or
investment power or has the right to acquire under outstanding stock options,
warrants or convertible debentures within 60 days after November 11, 2003.
Shares subject to stock options, warrants or convertible debentures, which an
individual has the right to acquire within 60 days after November 11, 2003, are
deemed to be outstanding for the purpose of computing the percentage of
outstanding shares of the class owned only by such individual or any group
including such individual. Beneficial ownership may be disclaimed as to some of
the securities.
Amount and Nature Amount and Nature
of Beneficial of Beneficial
Name and Address** Ownership of Class Percent Ownership of Class Percent
of Beneficial Owner A Common Stock of Class B Common Stock of Class
- ------------------------------------------ ------------------- --------- -------------------- ----------
Harold D. Garrison, Chairman 1,545,817 (1) 5.8% 177,178 (2) 6.3%
Michael H. Leeds, Vice-Chairman 28,125 (3) * -- --
Rupert D. Armitage, Director 524,344 (4) 2.0% -- --
John Birbeck, Director 34,688 (5) * -- --
Thomas W. Grein, Director 4,688 (6) * -- --
Salah N. Osseiran, Director 15,778,134 (7) 59.4% 2,371,244 (8) 83.7%
Bradley Houlberg, President and Chief 140,000 (9) * -- --
Executive Officer
Manfred Hanuschek, Chief Financial Officer 18,750 (10) * -- --
and Secretary
William Miller, Chief Operating Officer 55,550 (11) * 5,892 *
Adrian Burt, UK Managing Director 119,216 (12) * -- --
All directors and executive officers as a 18,249,312 (13) 67.8% 2,554,314 90.2%
group (10 persons)
- ----------------------------
* Less than 1%.
** The business address of our directors and executive officers is CTI
Group (Holdings) Inc., 333 North Alabama Street, Suite 240,
Indianapolis, Indiana 46204.
(1) Includes 502,980 shares of our Class A Common Stock held by Mr.
Garrison directly, 591,927 of our Class A Common Stock owned by Sunset,
LLC, of which Mr. Garrison is the Managing Member, 422,785 shares of
our Class A Common Stock owned by HDG Investments, LLC, of which Mr.
Garrison is the sole member, and an exercisable option to purchase
28,125 shares of our Class A Common Stock.
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(2) Includes 14,732 shares of our Class B Common Stock held by Mr. Garrison
directly, 94,762 shares of our Class B Common Stock owned by Sunset,
LLC, of which Mr. Garrison is the Managing Member, and 67,684 shares of
our Class B Common Stock owned by HDG Investments, LLC, of which Mr.
Garrison is the sole member.
(3) Represents an exercisable option to purchase 28,125 shares of our Class
A Common Stock.
(4) Includes exercisable options to purchase 58,125 shares of our Class A
Common Stock, 85,000 shares owned by Mr. Armitage's spouse and 100,000
shares owned by Ambit Research Ltd., of which Mr. Armitage is the
Managing Director.
(5) Includes an exercisable option to purchase 4,688 shares of our Class A
Common Stock.
(6) Represents an exercisable option to purchase 4,688 shares of our Class
A Common Stock.
(7) Includes 45,000 shares of our Class A Common Stock owned by Salsel
Corporation Limited, 13,204,366 shares of our Class A Common Stock
owned by Hawazen (BVI) Corp., 2,525,643 shares of our Class A Common
Stock owned by Fairford Holdings Limited and an exercisable option to
purchase 3,125 shares of our Class A Common Stock. Salah N. Osseiran
Trust, a revocable trust, of which Mr. Osseiran is the grantor and sole
beneficiary, is the sole stockholder of Salsel Corporation Limited,
Hawazen (BVI) Corp. and Fairford Holdings Limited. Mr. Osseiran is the
Managing Director of Salsel Corporation Limited, Hawazen (BVI) Corp.
and Fairford Holdings Limited.
(8) Includes 2,113,902 shares of our Class B Common Stock owned by Hawazen
(BVI) Corp. and 257,342 shares of our Class B Common Stock owned by
Fairford Holdings Limited. Salah N. Osseiran Trust, a revocable trust,
of which Mr. Osseiran is the grantor and sole beneficiary, is the sole
stockholder of Hawazen (BVI) Corp. and Fairford Holdings Limited. Mr.
Osseiran is the Managing Director of Hawazen (BVI) Corp. and Fairford
Holdings Limited.
(9) Represents an exercisable option to purchase 140,000 shares of our
Class A Common Stock.
(10) Represents exercisable options to purchase 18,750 shares of our Class A
Common Stock.
(11) Includes exercisable options to purchase 18,750 shares of our Class A
Common Stock.
(12) Includes exercisable options to purchase 68,750 shares of our Class A
Common Stock.
(13) Excludes 578,709 shares of Class A Common Stock held directly or
indirectly by Stephen Bartkiw, who resigned as our director as of March
7, 2003.
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PROPOSAL ONE - ELECTION OF DIRECTORS
Directors and Nominees for Election to the Board of Directors
On February 12, 2001, we consummated a merger (the "Merger") with
Centillion Data Systems, Inc. ("Centillion"). Pursuant to the terms of the
Merger, our Certificate of Incorporation was amended (the "Certificate of
Incorporation") to divide our board of directors into three classes: Class I,
Class II and Class III having staggered terms of office. Directors of each class
of our board of directors serve for a term of three years and until their
successors have been elected and qualified, except in the event of their earlier
resignation or removal. Our Certificate of Incorporation provides that after
July 1, 2003, holders of Class A and Class B Common Stock, voting as one class,
have the right to elect Class I, II and III directors.
As of June 11, 2002, Mr. Johns, our former Class III director, resigned
from our board of directors and Messrs. Armitage and Birbeck constituted our
Class III directors. In accordance with our Certificate of Incorporation, as of
September 4, 2002, Mr. Osseiran was elected as a Class I director by the
majority of our Class I and II directors remaining in office voting as a group.
Mr. Osseiran previously served as our Class I director from February 12, 2001
until his resignation on September 6, 2001. As of March 7, 2003, Steve Bartkiw,
our former Class I director, resigned from our board of directors and Messrs.
Garrison and Osseiran constituted our Class I directors.
Position Held Director Term
Name in CTIG Class Since Expires
----------------- ------------- ----- --------- -------
Nominees
Salah N. Osseiran Director I 2002 2004
Rupert Armitage Director III 1995 2006
John Birbeck Director III 2001 2006
Directors Remaining in Office
Harold Garrison Chairman I 2001 2004
Michael Leeds Vice Chairman II 2001 2005
Thomas Grein Director II 2001 2005
Our board of directors nominated the nominees named above, who
currently serve as our directors. The nominees have indicated their willingness
to continue serving as directors. We have no reason to believe that any of the
nominees will be disqualified or unable to serve if elected. It is not expected
that any of the nominees will be unable to serve, but, if any nominee should be
unable to serve, the shares represented by the enclosed proxy will be voted
"for" a substitute nominee selected by our board of directors. There is no
family relationship between any of our directors, nominees or executive
officers. None of our directors or executive officers is a party to any
arrangement or understanding with any other person with respect to nominations
of directors.
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Salah Osseiran, if elected, will hold office until the 2004 annual
meeting of stockholders and until his successor has been elected and qualified.
Rupert Armitage and John Birbeck, if elected, will hold office until the 2006
annual meeting of stockholders and until their respective successors have been
elected and qualified.
The following table sets forth information regarding the business
experience of our current members of the board of directors during the past five
years.
Name and Age (1) Business Experience During Past Five Years
---------------- ------------------------------------------
Harold D. Garrison (55) Mr. Garrison became our director and Chairman on February 12, 2001 in
Chairman connection with the Merger. Mr. Garrison served as Chairman of Centillion
from 1988 until the Merger in 2001. He has also been serving as Chairman
and Chief Executive Officer of Mansur Group since 1982 and served as
Chairman of Xila Communications, Inc. from 1983 to 1999. Mr. Garrison
currently serves as Chairman of Xila Communications, LLC and is the
Managing Member of Sunset, LLC.
Michael H. Leeds (56) Mr. Leeds became our director and Vice-Chairman on February 12, 2001 in
Director and Vice-Chairman connection with the Merger. Mr. Leeds served as a member of the executive
committee of the board of directors of Centillion from 1987 until the Merger in
2001. Since 1997, he has been the Managing Partner of the Boca Raton,
Florida office of the law firm Blank Rome LLP, which is our legal advisor.
Rupert D. Armitage (56) Mr. Armitage, a citizen of the United Kingdom, has been our director since
Director November, 1995. He is a founding member, Chairman and Managing Director
of two software-related companies in the United Kingdom: Ambit Research
Ltd. formed in 1987 and Information from Data Ltd. formed in 1993.
John Birbeck (48) Mr. Birbeck, a citizen of the United Kingdom, has served as our director
Director since June, 2001. In 1997, Mr. Birbeck founded Network Achemy Ltd. From
1997 until 2001, Mr. Birbeck served as director of Network Achemy Ltd.
From 2000 until 2001, Mr. Birbeck served as director of Avaya
Communications. Since 2001, Mr. Birbeck has been working as a consultant
advising new technology start-up companies in the United Kingdom. Mr.
Birbeck also was a founder of Seer Ltd. in 2000 and serves as its
director.
Thomas W. Grein (51) Mr. Grein became our director on February 12, 2001 in connection with the
Director Merger. Mr. Grein served as director of Centillion from October, 1999
until the Merger in 2001. Mr. Grein has been Vice-President and Treasurer
of Eli Lilly and Company, a pharmaceutical company, since January, 2000.
He served as Executive Director of Investor Relations and Assistant
Treasurer from 1994 to 1998 and Executive Director of Finance from 1998 to
2000 in Eli Lilly and Company. Mr. Grein is also a member of the board of
directors of the Walther Cancer Foundation.
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Name and Age (1) Business Experience During Past Five Years
---------------- ------------------------------------------
Salah N. Osseiran (47) Mr. Osseiran, a Lebanese citizen, has been director of Centillion since
Director 1987. Mr. Osseiran became our director on February 12, 2001, in connection
with the Merger, and served until his resignation on September 6, 2001.
As of September 4, 2002, Mr. Osseiran was elected as our Class I director
by the majority of our Class I and Class II directors remaining in office
voting as a group. Mr. Osserian has been the President and Chief
Executive Officer of Business Projects Company ("BPC"), a Lebanese company
located in Beirut, since 1995. BPC owns a bottled water company operating
in Lebanon and interests in the other business activities in the Middle
East. Mr. Osseiran has also been since 1995 the Managing Director of the
holding companies: Salsel Corporation Limited, Hawazen (BVI) Corp. and
Fairford Holdings Limited.
- --------------------------
(1) As of the Record Date.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
NOMINEES FOR DIRECTOR.
Board of Directors and Committees of the Board
Currently, our board of directors has an executive committee and an
audit committee. In fiscal year 2002, our board of directors held six meetings,
the executive committee held two meetings and the audit committee held four
meetings. No director attended fewer than 75% of the aggregate of the total
number of the board meetings and the total number of meetings held by all
committees of the board on which the director served, except for Mr. Grein whose
absences were excused by the board. Mr. Grein presided at all audit committee
meetings in 2002. There are no material proceedings to which any of our
directors, officers, affiliates or more than five percent holders of our Common
Stock is a party adverse to us or has a material interest adverse to us.
The following is a description of the committees of our board of
directors.
Executive Committee
The executive committee consists of Harold Garrison, Michael Leeds and
Rupert Armitage. The executive committee is authorized to exercise all the
powers and authority of our board of directors in the management of our business
and affairs to the fullest extent permitted under the Delaware General
Corporation Law. The executive committee determines the compensation and terms
of employment of our executive officers and makes initial determinations and
recommendations for the issuance of options to our directors and employees.
Audit Committee
In fiscal year 2002, the audit committee consisted of three directors.
From January 1, 2002 through June 11, 2002, Messrs. Armitage, Grein and Leeds
served on the audit committee. Mr. Leeds resigned from the audit committee on
June 12, 2002. The board of directors appointed Steve Bartkiw as a member of the
audit committee as of June 12, 2002. From June 12, 2002 through March 6, 2003,
Messrs. Armitage, Grein and Bartkiw constituted our audit committee. Mr. Bartkiw
resigned from our board of directors as of March 7, 2003. Since March 7, 2003,
Messrs. Armitage and Grein have been serving as members of our audit committee.
Mr. Grein serves as our audit committee's chairman and financial expert. All
8
members of the audit committee are independent, as that term is defined in Rule
4200(a)(14) of the NASD's listing standards in effect on the date hereof. Our
audit committee is authorized to: (i) hire our independent accountants; (ii)
review our systems of accounting; (iii) discuss with our accountants the results
of the audit; (iv) conduct independent reviews of our systems of accounting; and
(v) make reports to the board with respect to its findings. On April 29, 2002,
the board of directors adopted the audit committee charter, a copy of which was
filed with the Securities and Exchange Commission on May 6, 2002, as Appendix I
to the proxy statement for our 2002 Annual Meeting of Stockholders.
Audit Committee Report
The audit committee meets with management and the independent
accountants throughout the year. The audit committee meets with the independent
accountants to discuss their observations and findings in connection with the
review of our quarterly financial statements and audit of the year end financial
statements. On February 24, 2003, the audit committee met with management to
review and discuss the 2002 audited financial statements. The audit committee
also conducted discussions with the independent accountants,
PricewaterhouseCoopers LLP, regarding the matters required to be discussed by
the Statement on Auditing Standards No. 61. As required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," the audit committee discussed with and received the required
written disclosures and confirming letter from PricewaterhouseCoopers LLP
regarding its independence and discussed with PricewaterhouseCoopers LLP its
independence. Based upon the review and discussions referred to above, the audit
committee recommended to the board of directors that the audited financial
statements be included in the annual report on Form 10-KSB for the fiscal year
ended December 31, 2002.
This audit committee report will not be deemed incorporated by
reference in any document previously or subsequently filed with the Securities
and Exchange Commission that incorporates by reference all or any portion of
this proxy statement except to the extent that CTIG specifically requests that
this report be specifically incorporated by reference.
Date: February 24, 2003
The Audit Committee:
Rupert Armitage
Thomas Grein
Compensation of Directors
The compensation paid to non-employee members of the board of directors
is as follows:
(i) $5,000 plus reasonable expenses for attendance at annual
meetings;
(ii) $3,000 plus reasonable expenses for attendance at quarterly
meetings;
(iii) $1,500 plus reasonable expenses for attendance at special and
audit committee meetings; and
(iv) $2,500 plus reasonable expenses for attendance at executive
committee meetings.
In addition, the Chairman receives $5,000 per month plus reasonable
expenses and the Vice-Chairman receives $4,000 per month plus reasonable
expenses.
9
During the fiscal year ended December 31, 2002, Messrs. Garrison,
Leeds, Armitage, Bartkiw, Birbeck, Grein, Osseiran and Johns earned non-employee
2002 director fees for their services on the board of directors of $79,500,
$70,000, $23,500, $18,500, $21,000, $9,500, $3,000 and $4,500, respectively,
plus expenses. Total cash reimbursed out of pocket director expenses amounted to
approximately $96,000 in 2002.
For the nine months ended September 30, 2003, Messrs. Garrison, Leeds,
Armitage, Bartkiw, Birbeck, Grein, and Osseiran earned non-employee 2003
director fees for their services on the board of directors of $61,500, $51,500,
$16,000, $4,000, $23,500, $4,500 and $9,000, respectively, plus expenses. Total
cash reimbursed out of pocket director expenses amounted to approximately
$36,000 for the nine months ended September 30, 2003.
In 2002, Mr. Johns received accumulated payroll compensation through
January 31, 2002 of $28,469, as well as automobile and living allowance of
$2,225. Mr. Johns also received in 2002 a $500,000 severance payment and was
paid $20,269 for claimed unused vacation. Mr. Johns also received $8,502 of
relocation expenses and reimbursement of expenses for the early termination of
the lease and $100,000 on account of board and other fees that Mr. Johns would
have earned after June 11, 2002, the date of his resignation as a member of our
board of directors, if he had continued to serve for the balance of his term as
our director.
In 2001, the board of directors engaged a compensation consulting firm
to develop, among other items, compensation guidelines and recommendations for
granting of options to our directors and officers. Such recommendations
identified a structure whereby options were to be granted at the fair market
value on the date of grant and vest ratably over four years. The compensation
consulting firm recommended (i) first year grants for directors to be for the
purchase of 12,500 shares and second and third year grants to be for the
purchase of 6,250 shares of our Class A Common Stock And (ii) Executive
Committee members additional first year grants for directors to be for the
purchase of 62,500 shares and second and third year grants to be for the
purchase of 31,250 shares of our Class A Common Stock. Executive Committee
members consist of Messrs. Garrison, Leeds and Armitage.
On September 4, 2002, Messrs. Garrison, Leeds, Armitage, Bartkiw,
Birbeck, Grein and Osseiran were granted options to purchase 112,500, 112,500,
112,500, 112,500, 18,750, 18,750 and 12,500 shares of our Class A Common Stock,
respectively. The options become exercisable in four equal annual installments
beginning on the first anniversary of the grant date.
On November 5, 2003, Messrs. Garrison, Leeds, Armitage, Birbeck, Grein
and Osseiran were granted options to purchase 37,500, 37,500, 37,500, 6,250,
6,250 and 6,250 shares of our Class A Common Stock, respectively. The options
become exercisable in four equal annual installments beginning on the first
anniversary of the grant date.
In 2002, we paid approximately $1,600 to Mr. Birbeck for the consulting
services provided to CTI Data Solutions Ltd., our subsidiary. During the nine
month period ended September 30, 2003 CTI Data Solutions Ltd., our subsidiary,
paid Seer Ltd. approximately $8,000 for sales software and licensing and sales
consulting services. Mr. Birbeck was a founder of Seer Ltd. and serves as its
director.
10
Executive Officers
The following table sets forth information regarding the business
experience of our executive officers during the past five years:
Business Experience During
Name and Position Age (1) Past Five Years
- ----------------------------------------------- ---------- -------------------------------------------------------------
Bradley Houlberg 43 Mr. Houlberg has been our President and Chief Executive
President and Chief Executive Officer Officer since January, 2002. Mr. Houlberg was Executive
Vice-President for Alltel Information Services from 1997 to
2001. Mr. Houlberg was with Convergys from 1989 to 1997 with
his last position as Managing Director.
Manfred Hanuschek 42 Mr. Hanuschek has been our Chief Financial Officer since
Chief Financial Officer and Secretary June, 2000 and our Secretary since February, 2002. Mr.
Hanuschek was Chief Financial Officer with ICC Technologies,
Inc. from 1994 to 1998. From April, 1999 to July, 1999, Mr.
Hanuschek was employed by us. Mr. Hanuschek was Senior
Vice-President and Chief Financial Officer of IGI, Inc. from
July, 1999 to June, 2000.
William Miller 45 Mr. Miller has been our Chief Operating Officer since
Chief Operating Officer February, 2001. Since 1996, Mr. Miller had been Senior
Vice-President and General Manager of the Communications
Division of Centillion, which merged with us on February
12, 2001.
Adrian Burt 33 Mr. Burt has been the Managing Director of CTI Data
UK Managing Director Solutions, Ltd., our subsidiary, since 1998. From 1995
until 1997, Mr. Burt was the Marketing Manager for Vocalis
Group plc. From 1997 to 1998, Mr. Burt worked at Databit
Limited/Siemens plc as Marketing Manager.
- ----------------------------
(1) As of the Record Date.
Executive Compensation
The following table sets forth information regarding compensation,
including payments from our subsidiaries, to or accrued for our Chief Executive
Officer and other executive officers whose total annual salary and bonus for the
fiscal year ended December 31, 2002 exceeded $100,000.
11
Summary Compensation Table
--------------------------
Long-Term
Compensation
--------------
Annual Compensation Awards
---------------------------------------- --------------
Other Annual Securities All Other
Name and Compensation Underlying Compensation
Principal Position Year Salary Bonus (4) Options (6)
- -------------------------------- ---- ------------ -------------- ------------- ----------- --------------
Bradley Houlberg, President and
Chief Executive Officer (1) 2002 $ 253,557 $ 61,875 (7) $ 118,361 560,000 $ 967
Manfred Hanuschek, Chief
Financial Officer and Secretary (2) 2002 $ 175,000 $ 35,625 (7) $ 43,504 75,000 $ 5,500
2001 $ 175,000 $ 68,750 (3) $ 6,000 -- $ 4,000
2000 $ 94,972 -- $ 3,500 -- --
William Miller
Chief Operating Officer (5) 2002 $ 175,000 $ 23,625 (7) $ 6,858 75,000 $ 5,500
2001 $ 175,000 $ 128,750 (3) $ 5,500 -- $ 3,773
2000 $ 139,809 $ 36,741 -- -- $ 7,983
Adrian Burt, 2002 $ 150,312 $ 23,875 (7) $ 15,031 75,000 $ 4,924
UK Managing Director 2001 $ 135,334 $ 32,850 (3) $ 12,083 -- $ 5,413
2000 $ 79,750 -- $ 10,730 --
- -------------------
(1) Mr. Houlberg was employed as our President and Chief Executive Officer as
of January 28, 2002. Mr. Johns resigned as our President and Chief
Executive Officer in September, 2001. Mr. Johns continued to serve as our
President and Chief Executive Officer until November 16, 2001 and as our
employee until the appointment of Bradley Houlberg as our President and
Chief Executive Officer as of January 28, 2002. See, "-- Compensation of
Directors" and "-- Certain Relationships and Related Transactions"
regarding compensation received by Mr. Johns in 2002.
(2) Mr. Hanuschek was employed as our Chief Financial Officer as of June 12,
2000.
(3) Includes year 2001 performance bonus paid in April 2002 of $68,750 paid
to Mr. Hanuschek and Mr. Miller and $32,850 paid to Mr. Burt.
(4) Includes relocation expense, annual automobile allowance and club
membership dues reimbursed or paid by us. In fiscal year 2002, we paid
the following amounts as automobile allowance and reimbursed club dues to
Messrs. Houlberg, Hanuschek, Miller and Burt: Mr. Houlberg $5,500 and
$3,861, respectively; Mr. Hanuschek $6,000 and $3,003, respectively; Mr.
Miller - $6,000 and $858, respectively, and Mr. Burt - $15,031 and $0,
respectively. Included in Mr. Houlberg's other annual compensation is
$104,000 advance for expenses due to his required relocation to
Indianapolis, Indiana. In the event that the entire $104,000 is not
utilized, it is to be reimbursed to us. Also included in Mr. Houlberg's
other annual compensation is a payment of $5,000 to cover legal costs.
Mr. Hanuschek's other annual compensation includes $34,501 of relocation
expense reimbursement and relocation expenses paid directly by us in
connection with Mr. Hanuschek's required relocation to Indianapolis,
Indiana.
(5) Mr. Miller's compensation includes amounts earned as an employee of
Centillion through February 12, 2001
13
(6) Employer's matching contribution under our 401(k) Plan for Messrs.
Houlberg, Hanuschek and Miller. Mr. Burt's other compensation is employer
match under a defined contribution plan in the UK.
(7) Includes actual year 2002 bonus which was approved by the Board and paid
in June 2003.
The following table sets forth certain information regarding stock
option grants made by us to each of the executive officers named in the Summary
Compensation Table above:
Option Grants in Fiscal Year 2002
---------------------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees
Options in Fiscal Expiration
Name Granted Year Exercise Price Date
- -------------------------------------------------------------------------------------------------
Bradley Houlberg
President and Chief Executive Officer 560,000 (1) 70% $0.49 02/28/2012
Manfred Hanuschek
Chief Financial Officer and Secretary 50,000 (1) 7% $0.49 02/28/2012
25,000 (2) 3% $0.25 09/04/2012
William Miller
Chief Operating Officer 50,000 (1) 7% $0.49 02/28/2012
25,000 (2) 3% $0.25 09/04/2012
Adrian Burt
UK Managing Director 50,000 (1) 7% $0.49 02/28/2012
25,000 (2) 3% $0.25 09/04/2012
- --------------------
(1) The option becomes exercisable in four equal annual installments
beginning on the first anniversary of February 28, 2002, the grant date.
(2) The option becomes exercisable in four equal annual installments
beginning on the first anniversary of September 4, 2002, the grant date.
On November 5, 2003 Messrs. Burt, Hanuschek, Houlberg and Miller were
granted options to purchase 25,000, 25,000, 280,000 and 25,000 shares of our
Class A Common Stock, respectively. The options become exercisable in four equal
annual installments beginning on the first anniversary of the grant date.
The following table sets forth certain information regarding stock
options exercised during fiscal year 2002 by each of the executive officers
named in the Summary Compensation Table above:
13
Aggregated Option Exercises in Fiscal Year 2002
and Fiscal Year-End Option Values
------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options at
Shares Options at FY-End FY-End
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable (1)
- -------------------------------------- ------------ --------- ---------------------- ------------------------
Bradley Houlberg
President and Chief Executive Officer -- -- 0/560,000 $0/$0
Manfred Hanuschek,
Chief Financial Officer and Secretary -- -- 0/75,000 $0/$0
William Miller
Chief Operating Officer -- -- 0/75,000 $0/$0
Adrian Burt,
UK Managing Director -- -- 50,000/75,000 $0/$0
(1) Calculation based upon the closing market price of $0.20 per share of our
Class A Common Stock on December 31, 2002. On November 18, 2003, the closing
market price of our Class A Common Stock was $0.17 per share.
Employment Agreements
Bradley Houlberg
We entered into an employment agreement with Bradley Houlberg as of
January 28, 2002. Pursuant to the agreement, Mr. Houlberg agreed to serve as our
President and Chief Executive Officer for an initial period of three years,
unless sooner terminated in accordance with the agreement, at the end of which
the agreement will automatically renew for successive periods of one year. Mr.
Houlberg's annual salary should be not less than $275,000. Our board of
directors reviews Mr. Houlberg's salary at least annually to determine if an
increase is appropriate, which increase is in the sole discretion of the board.
For each calendar year of Mr. Houlberg's employment during which he meets the
objectives pursuant to our annual incentive plan, we will pay Mr. Houlberg a
bonus of between 22.5% ("Threshold Bonus") and 90% of his salary. Such bonus is
in lieu of any cash bonuses provided by us to our employees and senior
executives. A bonus of 45% of Mr. Houlberg's salary constitutes a "Target
Bonus." Under the agreement, Mr. Houlberg is entitled to (i) reimbursement of
specified expenses related, among other matters, to the move of his family to
Indianapolis, Indiana and transportation as well as (ii) all normal and usual
benefits provided by us to our senior executives.
We are obligated to grant to Mr. Houlberg no later than the earlier of
(i) 30 days after the commencement of his employment or (ii) on the adoption by
the board of the incentive plan, a stock option to purchase shares of our Class
A Common Stock equal to 2% of our outstanding Class A Common Stock on a
fully-diluted basis on the date of grant (the "Original Grant Date") pursuant to
our Stock Option and Restricted Stock Plan (the "Plan"). See "-- Amended and
Restated Stock Option and Restricted Stock Plan" for the terms of the Plan. At
the end of each year commencing after December 31, 2002 and ending on December
31, 2004 that Mr. Houlberg continues to be employed as our Chief Executive
Officer and President, we are obligated to grant to Mr. Houlberg an additional
stock option to purchase shares of our Class A Common Stock equal to 1% of our
outstanding Class A Common Stock on a fully diluted basis on the Original Grant
Date pursuant to the Plan. Each option expires on the tenth anniversary of its
14
date of grant and vests annually over 4 years (1/4 per year on yearly
anniversaries) from its date of grant. The exercise price per share for each
option is the fair market value of our Class A Common Stock on the date of
grant. Each option is otherwise subject to all of the terms and conditions set
forth in the Plan.
The agreement prohibits Mr. Houlberg from divulging confidential
information regarding our business, except as his duties may require or as
authorized by our board or executive committee. Under the agreement, Mr.
Houlberg cannot, during the term of the agreement and for a period of one year
after the termination of the agreement, engage in any business or perform any
actions in competition with our company worldwide.
If Mr. Houlberg's employment terminates for any reason, we will pay him
as severance pay all accrued and unpaid salary and benefits through the date of
termination of his employment ("Termination Date") and unpaid business expenses.
If Mr. Houlberg's employment terminates upon his death or disability or upon a
change of control, we will pay Mr. Houlberg as additional severance pay (i) an
amount equal to his annual salary payable over twelve months plus (ii) a Target
Bonus payable pursuant to the incentive plan for such year, and we will pay for
the cost to continue Mr. Houlberg's participation in our health and
hospitalization plans for twelve months after the Termination Date.
If Mr. Houlberg's employment terminates pursuant to the majority vote
of our board or executive committee or pursuant to Mr. Houlberg's decision to
terminate the agreement due to a decrease in his salary, a material decrease in
his benefits or a material change in his responsibilities that causes Mr.
Houlberg to be of reduced stature, we will pay Mr. Houlberg as additional
severance pay (i) an amount equal to his annual salary payable over twelve
months plus (ii) a Threshold Bonus payable pursuant to the incentive plan for
such year, and we will pay for the cost to continue Mr. Houlberg's participation
in our health and hospitalization plans for twelve months after the Termination
Date.
If Mr. Houlberg's employment terminates because Mr. Houlberg's
performance of his duties is unsatisfactory or we become aware that Mr. Houlberg
was subject to certain disqualifications prior to the effective date of the
agreement, we will pay Mr. Houlberg as additional severance pay an amount equal
to his annual salary over twelve months.
We can also terminate Mr. Houlberg's employment for cause. Pursuant to
the agreement, the term "cause" means Mr. Houlberg's material failure to observe
any of the terms or provisions of the agreement or a breach of his
representations in the agreement; dishonesty; fraudulent misrepresentation; an
act of moral turpitude; continued neglect, willful misconduct or gross
negligence in connection with the performance of his duties; Mr. Houlberg's
willful failure to follow the reasonable directions of our board or executive
committee, which failure, if curable, is not cured within 30 days after notice
to Mr. Houlberg, or which failure, if cured, recurs; Mr. Houlberg's conduct that
may adversely affect our business, goodwill or good name; conviction of a crime;
misappropriation of funds; or deliberate and premeditated acts against our
interests.
If Mr. Houlberg's employment terminates (i) upon the majority vote of
our board or executive committee; (ii) upon Mr. Houlberg's death or disability;
(iii) upon a change of control; (iv) upon a decrease in Mr. Houlberg's salary, a
material decrease in his benefits or a material change in his responsibilities
that causes Mr. Houlberg to be of reduced stature; or (v) pursuant to notice of
termination given by either party under the agreement, Mr. Houlberg will have 90
days following the Termination Date to exercise all vested options.
If Mr. Houlberg's employment terminates (i) pursuant to Mr. Houlberg's
voluntary resignation; (ii) for cause; (iii) due to Mr. Houlberg's
disqualifications that occurred prior to the effective date of the agreement; or
(iv) because Mr. Houlberg's performance of his duties is unsatisfactory, all his
vested options terminate on the Termination Date.
15
If Mr. Houlberg's employment terminates upon a change of control, all
his unvested options will immediately vest on the Termination Date. If Mr.
Houlberg's employment terminates for any reason other than upon the change of
control, all his unvested options will terminate on the Termination Date.
Manfred Hanuschek
We entered into an employment agreement with Manfred Hanuschek as of
May 30, 2000, which was amended as of January 18, 2002. The following is the
description of the terms and conditions of the amended agreement. Pursuant to
the agreement, Mr. Hanuschek agreed to serve as our Chief Financial Officer for
an initial period of three years, commencing on January 18, 2002, unless sooner
terminated in accordance with the agreement, at the end of which the agreement
will automatically renew for successive periods of one year. Mr. Hanuschek's
annual base salary should be not less than $175,000. In addition to the salary,
Mr. Hanuschek may receive cash bonuses, as determined by our president or board,
in his or its sole discretion. Under the agreement, Mr. Hanuschek is entitled to
reimbursement of specified expenses and to participation in any savings, 401(k),
pension, group medical and other similar plans, which we may adopt. Under the
agreement, Mr. Hanuschek is entitled to reimbursement of relocation expenses
related to his required relocation to Indianapolis, Indiana.
The agreement can be terminated upon a six months notice of termination
sent by either party to the agreement prior to the end of the initial three-year
term or successive one-year terms, in such event, the agreement will terminate
at the end of the respective initial three-year term or successive one-year
term. Mr. Hanuschek will be entitled to a severance payment equal to half of his
then current annual salary, and Mr. Hanuschek will be entitled to continued
group medical and dental benefits and automobile allowance for a six-month
period following termination of employment.
Mr. Hanuschek can terminate the agreement in the event of a change of
control or change of management and is entitled to (i) a severance payment equal
to his then current annual salary, payable over a twelve-month period after the
termination date; and (ii) continued group medical and dental benefits over the
twelve-month period.
We can terminate Mr. Hanuschek's employment for cause at any time.
Pursuant to the agreement, the term "cause" means that Mr. Hanuschek (i)
materially fails to perform his duties under the agreement (other than the
failure due to Mr. Hanuschek's physical or mental illness); (ii) commits an act
of dishonesty or breach of trust, or acts in a manner which is inimical or
injurious to our business or interests; (iii) violates or breaches any of the
provisions of the agreement and fails to cure such breach within 30 days after
the receipt of written notice identifying the breach; (iv) intentionally acts or
fails to act, which results directly in gain to or personal enrichment of Mr.
Hanuschek and injury to us; or (v) is indicted for or convicted of a felony or
any crime involving larceny, embezzlement or moral turpitude.
The agreement prohibits Mr. Hanuschek from divulging confidential
information regarding our business except with our prior written consent or
except in the proper course of his employment. During Mr. Hanuschek's employment
and for a period of six months after the termination of the agreement and, so
long as the required severance payment continues to be made, Mr. Hanuschek
cannot, except with our prior written consent, engage in any business or perform
any actions in competition with our company.
William Miller
CTI Data Solutions (USA) Inc., our subsidiary ("CTI"), entered into an
employment agreement with William Miller as of February 12, 2001. Pursuant to
the agreement, Mr. Miller agreed to serve as Chief Operating Officer for an
16
initial period of three years, unless sooner terminated in accordance with the
agreement, at the end of which the agreement will automatically renew for
successive periods of one year. Mr. Miller's annual base salary should be not
less than $175,000. In addition to his salary, Mr. Miller may also receive cash
bonuses in the sole discretion of CTI's president or board. Under the agreement,
Mr. Miller is entitled to reimbursement of specified expenses and to
participation in any savings, 401(k), pension, group medical and other similar
plans, which CTI may adopt.
If the agreement terminates upon a six months notice of termination
sent by either party to the agreement prior to the end of the initial three-year
term or successive one-year terms, Mr. Miller will be entitled to a severance
payment equal to half of his then current annual salary payable over a six-month
period after the termination date. Mr. Miller can terminate the agreement in the
event of our change of control and is entitled to a severance payment equal to
his then current annual salary, payable over a twelve-month period after the
termination date.
CTI can terminate Mr. Miller's employment for cause at any time.
Pursuant to the agreement, the term "cause" means that Mr. Miller (i) fails to
diligently perform his duties under the agreement (other than the failure due to
Mr. Miller's physical or mental illness); (ii) commits an act of dishonesty or
breach of trust, or acts in a manner which is inimical or injurious to our
business or interests; (iii) violates or breaches any of the provisions of the
agreement and fails to cure such breach within 30 days after the receipt of
written notice identifying the breach; (iv) intentionally acts or fails to act,
which results directly in gain to or personal enrichment of Mr. Miller and
injury to CTI; or (v) is indicted for or convicted of a felony or any crime
involving larceny, embezzlement or moral turpitude.
The agreement prohibits Mr. Miller from divulging confidential
information regarding CTI's business, except with CTI's prior written consent or
except in the proper course of his employment. During Mr. Miller's employment
and for a period of six months after the termination of the agreement, Mr.
Miller cannot, except with CTI's prior written consent, engage in any business
in competition with CTI and, for a period of one year after the termination of
his employment, Mr. Miller cannot solicit any person in competition with CTI's
business.
Adrian Burt
CTI Data Solutions Ltd., our United Kingdom subsidiary ("CTI Ltd."),
entered into an executive service agreement with Adrian Burt as of February 1,
2002, pursuant to which Mr. Burt agreed to serve as Managing Director. Mr.
Burt's employment commenced in February, 1998. Previous service with Databit
Limited/Siemens plc from August 1, 1997 counts as part of Mr. Burt's continuous
service with CTI Ltd.
CTI Ltd. will pay Mr. Burt an annual salary of 90,000 UK pounds. The
salary will be reviewed annually in the light of CTI Ltd.'s performance and Mr.
Burt's contribution to it. CTI Ltd. will pay Mr. Burt guaranteed commission of
10,000 UK pounds per annum. Mr. Burt will be eligible to participate in such
management bonus programs of the holding company as may be agreed with CTI Ltd.
from time to time. Mr. Burt will also be entitled to reimbursement of specified
expenses and to membership of such private medical care or pension scheme as CTI
Ltd. may from time to time provide.
Mr. Burt's employment will continue until terminated in accordance with
the agreement. If the employment is terminated pursuant to a notice of
termination delivered by either party, CTI Ltd. will pay Mr. Burt an amount
equivalent to an additional six months salary and six months guaranteed
commission. Mr. Burt's employment will in any event terminate without further
notice on his 65th birthday.
CTI Ltd. can terminate Mr. Burt's employment, without any further
payment or compensation, if Mr. Burt (i) commits an act of gross misconduct,
including without limitation, dishonesty; (ii) commits any material breach of
any term of the agreement, which either cannot be remedied or is not remedied
17
within 30 days after notice specifying the breach; (iii) is adjudged bankrupt or
makes any arrangement or composition with his creditors generally; (iv) is
convicted of any criminal offence; (v) becomes of unsound mind or otherwise
unable to perform his duties due to problems of mental health; (vi) is
disqualified from acting as a director in any company or otherwise than with the
consent of CTI Ltd. resigns as a director of CTI Ltd. and/or any group company;
(vii) is, in the reasonable opinion of the board, incapable of properly
performing his duties under the agreement; or (viii) without reasonable cause,
willfully neglects or refuses to discharge his duties.
Under the agreement, Mr. Burt is prohibited from disclosing the
confidential information of CTI Ltd. during the term of the agreement and after
the termination of the agreement. Mr. Burt cannot, during the term of the
agreement and for a period of six months after the termination of the agreement,
engage in a business or perform any actions in competition with CTI Ltd.
Amended and Restated Stock Option and Restricted Stock Plan
Our stockholders approved the Amended and Restated Stock Option and
Restricted Stock Plan (the "Plan") at our 2002 Annual Meeting of Stockholders
held on May 30, 2002. The purpose of the Plan is to promote our interests by
providing incentives to (i) our designated officers and other employees or those
of our subsidiaries; (ii) members of our board of directors; and (iii)
independent contractors and consultants who perform services for us and thus to
enable us to attract and retain the foregoing eligible participants in the Plan
(individually, the "Participant" and, collectively, the "Participants") and to
encourage them to acquire or increase the proprietary interest in us.
Our board of directors or committee of the board comprised of at least
two members (collectively, the "Committee") will administer and interpret the
Plan. Each committee member must meet the definition of a "non-employee
director" within the meaning of Rule 16b-3(b)(3) of the Exchange Act. The
Committee has the sole authority to determine the persons eligible to receive
grants, the type, size and terms of grants, the time when grants will be made,
the duration of any exercise or restriction period, any restrictions on resale
applicable to the shares of the Common Stock to be issued or transferred
pursuant to the grants and any other matters arising under the Plan.
Grants under the Plan include: (i) incentive stock options; (ii)
nonqualified stock options; and (iii) restricted stock grants (i.e., grants of
shares of our Common Stock pursuant to an incentive or long range compensation
plan, program or contract approved by the Committee, as described below).
The Plan also provides for special grants of nonqualified stock options
to purchase up to 30,000 shares of the Common Stock vesting over a three-year
period for our non-employee members of the board of directors who serve on the
committee of the board of directors administering the Plan ("Director's
Grants"). A non-employee director who serves on the Committee may receive a
Director's Grant at the start of and in consideration for that director's
service to us as a Committee member. Director's Grants may be awarded only in
the sole discretion of the board of directors. Upon a change of control, a sale
or exchange of our assets, our dissolution, liquidation, merger or
consolidation, in which we are not the surviving corporation, vesting
restrictions imposed under any Director's Grant immediately lapse.
Only officers and other employees are eligible to receive incentive
stock options. All Participants in the Plan are eligible to receive nonqualified
stock options and restricted stock grants. The maximum number of shares of the
Common Stock that may be subject to grants awarded to any single individual
under the Plan is 4,000,000 shares of the Common Stock, except in the case of a
Director's Grant, which cannot exceed 30,000 shares of the Common Stock during
any three-year period.
18
If any change is made to our Common Stock as a result of a merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination of shares, or exchange of shares, or any other change in capital
structure without receipt of consideration and this change does not result in
the termination of all outstanding grants, the Committee will preserve the value
of outstanding grants, by adjusting the maximum number and class of shares
issuable under the Plan and the number and class of shares, or the exercise
price of each outstanding option.
The exercise price of an incentive stock option will be the higher of
the fair market value or the book value of a share of our Common Stock on the
date of the grant. If the Participant owns Common Stock representing more than
10% of the total combined voting power of all classes of our stock or the stock
of our subsidiaries, the exercise price per share in the case of an incentive
stock option will not be less than 110% of the fair market value of a share of
our Common Stock on the date of the grant and the option of such Participant
will not be exercisable after the expiration of five years from the date of the
grant. The exercise price of a stock option is payable in full at the time of
exercise in cash or, with the consent of the Committee, shares of our Common
Stock already owned by the Participant and having a fair market value on the
date of exercise equal to the exercise price, or a combination of cash and
shares.
Unless the Participant is the holder of 10% of the total combined
voting power of our stock or the stock of our subsidiaries, the Participant may
exercise options during a period of ten years from the date of the grant,
subject to the Committee's determination of the exercise period of the
Participant's stock options. However, the Participant's exercise period may
terminate earlier if we terminate his or her employment relationship with us or
if he or she dies or becomes disabled.
The aggregate fair market value of the Common Stock, determined as of
the date of the grant, with respect to which incentive stock options are
exercisable for the first time by the Participant during any calendar year under
the Plan and under our other stock option plan, if any, cannot exceed $100,000.
The board of directors may amend or terminate the Plan at any time.
However, amendments that materially increase the benefits accruing to the
Participants under the Plan, increase the aggregate number of shares of our
Common Stock that may be issued or transferred under the Plan, modify the
requirements as to eligibility for participation in the Plan or modify the
provisions for determining the fair market value of a share of our Common Stock
require stockholder approval.
In the event of a change of control (as defined in the Plan), the
Participant may immediately exercise all outstanding stock options. All
restrictions on the transfer of the shares of restricted stock will lapse upon
the occurrence of the change of control, provided such shares have not been
forfeited. Upon a sale or exchange of all or substantially all of our assets or
upon our dissolution, liquidation, merger or consolidation where we are not the
surviving corporation, the Participant will have the right to exercise in full
any grants, including Director's Grants, not previously exercised, subject to
certain conditions. We will not grant incentive stock options after the
expiration of 10 years from January 11, 1995.
Certain Relationships and Related Transactions
As part of the Merger, Anthony Johns, former director and former
President and Chief Executive Officer, received options to purchase 300,000
shares of our Class A Common Stock at an exercise price of $1.09 per share. Mr.
19
Johns subsequently agreed to cancel an option to purchase 200,000 shares of our
Class A Common Stock. The remaining options to purchase 100,000 shares of our
Class A Common Stock expired in April, 2002. These options were issued to
compensate Mr. Johns for his forfeiture of funds under a profit-sharing
agreement with us. In addition, prior to the Merger, a number of our former
officers and directors also had options to purchase an aggregate of 200,000
shares of our Class A Common Stock, which accelerated and vested as a result of
the Merger. Outstanding options were cancelled within ninety days that the
directors or officers ceased to be affiliated with us.
Mr. Johns was provided with reimbursement for housing in Indianapolis.
We rented a house for our visiting employees, one of whom was Mr. Johns, from an
entity affiliated with Mr. Garrison, our Chairman, and such costs amounted to
approximately $15,000 in 2001. We incurred director's fees and expenses and we
made certain severance payments to Mr. Johns, upon his resignation as our
President and Chief Executive Officer. See "-- Compensation of Directors."
The Board engaged in 2003, Mr. Dahl as an advisor to the board. Mr.
Dahl also serves as Chairman of a subsidiary of Fairford Holdings Limited. Mr.
Osseiran, our director, is the managing director of Fairford Holdings Limited.
Mr. Dahl earned fees of $9,000 and expenses of $2,008 for the nine months ended
September 30, 2003.
On February 12, 2001, Centillion consummated the Merger with us.
Pursuant to the terms of the Merger, all of the outstanding shares of Centillion
were exchanged for 17,698,253 shares of our Class A Common Stock and 2,833,334
shares of our Class B Common Stock. Messrs. Garrison and Osseiran, our
directors, and Mr. Miller, our Chief Operating Officer, hold directly or
indirectly, 2,554,314 shares of our Class B Common Stock.
Centillion's patents, its right to enforce its patents and its current
and future patent enforcement actions and claims, were transferred to a limited
liability company that is wholly owned by us ("Tracking LLC"). We and the
holders of Class B Common Stock have certain rights to convert Class B Common
Stock into Class A Common Stock based on the value of the Tracking LLC. The
conversion of Class B Common Stock to Class A Common Stock would result in a
materially significant dilution to Class A Common Stock, based on the fair value
of the Tracking LLC and the relatively low fair market value of our Class A
Common Stock.
The former Centillion businesses that were not related to the billing
business were transferred in 2001 and 2000 prior to the Merger to a limited
liability company, CDS Holdings, LLC ("CDS"), along with other additional assets
in exchange for a promissory note (the "Promissory Note"). The former Centillion
stockholders or directors, which include Messrs. Garrison, Leeds and Osseiran,
are affiliated with CDS. The fair value of the Promissory Note amounted to
approximately $10,500,000 at the time of issuance. We believe the current value
of the Promissory Note is less than $500,000. We will issue additional shares of
Class A Common Stock to the former Centillion stockholders for principal
payments, at a per share value of 88% of the of the average market value of
Class A Common Stock at the time of payment. If the Promissory Note is not fully
paid in five years from the date of the Merger, it is to be appraised, and
shares of our Class A Common Stock are to be issued for the appraised value at
88% of the average market price at the time of exchange.
We incurred $32,817 and $39,929 in charges from CDS related to certain
patent enforcement activities for the fiscal years ended December 31, 2002 and
2001, respectively. We did not incur further patent enforcement charges from CDS
in 2003. Our telephone services are provided by Xila Communications LLC,
("Xila") which is an entity owned by CDS. We incurred $147,797 and $144,884 in
telephone expense for the fiscal years ended December 31, 2002 and 2001,
respectively. We incurred telephone service charges of $111,530 for the nine
month period ended September 30, 2003. We provided billing solutions to this
20
entity for the fiscal years ended December 31, 2002 and 2001 and the revenues
recorded amounted to $6,956 and $7,658, respectively. At December 31, 2002 and
September 30, 2003, we had a receivable from this entity of $876 and $1,320,
respectively. We recorded $4,083 in revenues associated with providing billing
solutions to Xila for the nine month period ended September 30, 2003.
We lease 20,003 square feet of office space for our corporate
headquarters located at 333 North Alabama Street, Indianapolis, Indiana. The
landlord is an entity in which Messrs. Garrison and Osseiran, our directors and
stockholders, have an ownership interest. We incurred $370,492 and $362,594 in
lease expense for the fiscal years ended December 31, 2002 and 2001,
respectively. We incurred $289,464 in lease expenses for the nine month period
ended September 30, 2003. We also paid $237,155 in leasehold improvements to the
same landlord in connection with the relocation to the new office space in 2001.
The lease expires in November 2003. We are currently in negotiations with the
landlord on extensions to its lease on terms that we believe will be more
advantageous to us. In the interim the landlord has allowed us to continue to
occupy the space on a month-to-month basis at the current existing lease
structure.
We incurred legal expenses of $859,289 and $3,089,026 for the fiscal
years ended December 31, 2002 and 2001, respectively, to a law firm of which Mr.
Leeds, our director, is a partner. Such expenses relate primarily to fees and
expenses associated with patent enforcement activities and general corporate
issues. We incurred legal expenses of $127,049 for the nine month period ended
September 30, 2003.
Prior to the merger, we provided certain administrative and accounting
services to our former subsidiaries and investees during the fiscal year ended
December 31, 2001, which amounted to approximately $59,000. At December 31, 2001
and 2002, we had a receivable from these entities of approximately $21,000 and
$0, respectively.
At December 31, 2000, we had an outstanding note receivable from former
CTI Group (Holdings) Inc., the entity that existed prior to the Merger, of
$562,911. This note was secured by the accounts receivable of the former CTI
Group (Holdings) Inc. payable upon the effective date of the Merger. On February
12, 2001, this obligation was repaid in connection with the Merger.
On January 28, 2002, we entered into an employment agreement with Mr.
Houlberg, our President and Chief Executive Officer. In connection with Mr.
Houlberg's employment agreement, he received an advance in the amount of
$104,000 to cover qualified relocation costs associated with his required
relocation to Indianapolis, Indiana. We estimated actual relocation costs
incurred, as of December 31, 2002, amounted to $85,000. Mr. Houlberg is required
to return to us any amounts advanced in excess of actual qualified relocation
costs incurred. We also agreed to reimburse Mr. Houlberg $5,000 for his legal
expenses related to his employment agreement with us. We recorded a $24,000
advance receivable from Mr. Houlberg as of December 31, 2002.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive
officers and beneficial owners of more than 10% of our Class A Common Stock
(collectively, "Insiders") to file reports of ownership and changes in their
ownership of our Class A Common Stock with the Securities and Exchange
Commission. The regulations of the Securities and Exchange Commission require
Insiders to furnish us with copies of all Section 16(a) reports they file. Based
solely on our review of the copies of such reports received by us, we believe
that the Insiders complied with all applicable Section 16(a) filing requirements
for fiscal year 2002.
21
PROPOSAL TWO -
RATIFICATION OF APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT ACCOUNTANTS
General Information
PricewaterhouseCoopers LLP currently serves as our principal
accountants and independent accountants and conducted the audit of our accounts
for the fiscal year 2002. Our audit committee, appointed PricewaterhouseCoopers
LLP to serve as our principal accountants and independent accountants for the
fiscal year 2003.
Selection of a company's independent accountants is not required to be
submitted to a vote of the stockholders for ratification. However, the audit
committee is submitting this matter to the stockholders as a matter of good
corporate practice. If the stockholders fail to ratify the selection, the audit
committee will reconsider whether to retain PricewaterhouseCoopers LLP and may
retain that firm or another without re-submitting the matter to our
stockholders. Even if the appointment is ratified, the audit committee may, in
its discretion, direct the appointment of different independent accountants at
any time during the year if it determines that such change would be in our best
interests and in the best interests of our stockholders.
Representatives of PricewaterhouseCoopers LLP are expected to attend
the Annual Meeting. Therefore, representatives of PricewaterhouseCoopers LLP
will be available to make a statement and to respond to questions at the Annual
Meeting.
Change in Accountants
The independent auditing firm of Deloitte & Touche LLP audited our
financial statements for the fiscal years ended March 31, 2000 and 1999. Because
Centillion is the successor company of the Merger for accounting purposes,
Centillion's accountants, Olive LLP, replaced Deloitte & Touche LLP as of April
27, 2001. Our decision to change accountants was the result of the Merger and it
was approved by our board of directors.
Deloitte & Touche LLP's reports on our financial statements for the
fiscal years ended March 31, 2000 and 1999 did not contain an adverse opinion or
a disclaimer of opinion and were not modified as to uncertainty, audit scope or
accounting principles, except that such reports included an explanatory
paragraph identifying certain matters that raised substantial doubt about our
ability to continue as a going concern.
During our fiscal years ended March 31, 2000 and 1999 and subsequent
interim period preceding Deloitte & Touche LLP's dismissal, there were no
disagreements on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure as well as no reportable
events as described in the rules of the Securities and Exchange Commission.
Olive LLP was not consulted on our behalf regarding the application of
accounting principles to a specific transaction or the type of audit opinion
that might be rendered on our financial statements.
On May 7, 2001, we engaged PricewaterhouseCoopers LLP as our
independent accountants to replace BKD LLP (formerly Olive LLP). Our audit
committee approved this decision to change accountants. Due to the Merger, our
board of directors adopted December 31, as our fiscal year which was
Centillion's fiscal year. PricewaterhouseCoopers LLP audited our financial
statements for the fiscal years ended December 31, 2001 and December 31, 2002.
BKD LLP's report for the fiscal year 2000 stated that BKD LLP audited the
financial statements of "CTI Group (Holdings) Inc., formerly Centillion Data
22
Systems, Inc." BKD LLP's report on our financial statements as a successor to
Centillion for the fiscal year ended December 31, 2000 did not contain an
adverse opinion or a disclaimer of opinion and was not modified as to
uncertainty, audit scope or accounting principles.
During the period of BKD LLP's engagement, there were no disagreements
with BKD LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure as well as no reportable
events as described in the rules of the Securities and Exchange Commission.
PricewaterhouseCoopers LLP was not consulted on our behalf regarding
the application of accounting principles to a specific transaction or the type
of audit opinion that might be rendered on our financial statements.
Audit Fees
The aggregate fees and out of pocket expenses billed by
PricewaterhouseCoopers LLP for professional services rendered for the audit of
our financial statements for the fiscal year ended December 31, 2002 and the
reviews of the financial statements included in our Forms 10-QSB for that fiscal
year were approximately $178,750.
Financial Information Systems Design and Implementation Fees
The aggregate fees and out of pocket expenses billed by
PricewaterhouseCoopers LLP for professional services rendered by it with respect
to financial information on systems design and implementation for the fiscal
year ended December 31, 2002 totaled $0.
All Other Fees
The aggregate fees and out of pocket expenses billed for services
rendered by PricewaterhouseCoopers LLP, other than for services covered under
"Audit Fees" and "Financial Information Systems Design and Implementation Fees",
totaled $11,196 for the fiscal year ended December 31, 2002.
Our audit committee considered the services provided by
PricewaterhouseCoopers LLP in addition to the services rendered by it in
exchange for audit fees, as discussed above, and determined that the provision
of such additional services is compatible with PricewaterhouseCoopers LLP
maintaining its independence.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT
ACCOUNTANTS.
23
OTHER MATTERS
As of the date of this proxy statement, our board of directors does not
know of any matters that will be presented for consideration at the Annual
Meeting other than as described in this proxy statement. If any other matters
should properly come before the Annual Meeting or any adjournment or
postponement of the Annual Meeting and be voted upon, the persons named as
proxies in the accompanying proxy will vote the proxy cards in their discretion
in accordance with their best judgment and in the manner they believe to be in
our best interests.
STOCKHOLDER PROPOSALS
The deadline for providing us with timely notice of any stockholder
proposal to be submitted outside of the Rule 14a-8 process for consideration at
our 2004 Annual Meeting of Stockholders (the "2004 Meeting") will be October 11,
2004. As to all such matters which we do not have notice on or prior to October
11, 2004 discretionary authority will be granted to the persons designated in
our proxy related to the 2004 Meeting to vote on such proposal.
In addition, Rule 14a-8 requirements applicable to inclusion of
stockholder proposals in our proxy materials related to the 2004 Meeting require
that a stockholder proposal regarding the 2004 Meeting must be submitted to us
at our office located at 333 North Alabama St., Suite 240, Indianapolis, IN
46204, by or on July 28, 2004 to receive consideration for inclusion in our
proxy materials for the 2004 Meeting. Any such proposal must also comply with
the proxy rules, including Rule 14a-8.
ANNUAL REPORT
THIS PROXY STATEMENT IS ACCOMPANIED BY OUR ANNUAL REPORT FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2002 INCLUDING OUR UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003. EACH PERSON SOLICITED
UNDER THIS PROXY STATEMENT CAN OBTAIN A COPY OF OUR ANNUAL REPORT ON FORM 10-KSB
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 AND OUR QUARTERLY REPORT ON FORM
10-QSB FOR OUR THIRD QUARTER ENDED SEPTEMBER 30, 2003 AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WITHOUT CHARGE, EXCEPT FOR THE EXHIBITS TO
SUCH REPORTS, BY SENDING A WRITTEN REQUEST TO CTI GROUP (HOLDINGS) INC., 333
NORTH ALABAMA ST., SUITE 240, INDIANAPOLIS, IN 46204, ATTN.: MANFRED HANUSCHEK,
CHIEF FINANCIAL OFFICER AND SECRETARY.
By Order of the Board of Directors
Manfred Hanuschek
Chief Financial Officer and Secretary
ANNUAL MEETING OF STOCKHOLDERS OF
CTI GROUP (HOLDINGS) INC.
December 18, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
| Please detach along perforated line and mail in the envelope provided. |
+ +
- ------------------------------------------------------------------------------------------------------------------------------------
[ ]
____________________________________________________________________________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES AND "FOR" PROPOSAL 2.
THE UNDERSIGNED DIRECTS THE PROXIES TO VOTE AS FOLLOWS:
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
___________________________________________________________________________________________________________________________________
|
1.To elect as director the following nominees | FOR AGAINST ABSTAIN
| 2. To consider and act upon a proposal [ ] [ ] [ ]
| to ratify the appointment of
NOMINEES: | PricewaterhouseCoopers LLP, as the
| independent accountants of CTIG.
[ ] FOR ALL NOMINEES o SALAH OSSEIRAN |
o RUPERT ARMITAGE | 3. In their discretion, to vote on any other business as may properly
o JOHN BIRBECK | come before the Annual Meeting or any adjournment or postponement
[ ] WITHHOLD AUTHORITY | of the Annual Meeting.
FOR ALL NOMINEES |
| The undersigned may revoke the proxy at any time before it is voted by
[ ] FOR ALL EXCEPT | giving written notice of revocation to Manfred Hanuschek, Chief
(See instructions below) | Financial Officer and Secretary of CTIG, at the address below. Upon
| giving the written notice of revocation, a stockholder may duly
| execute a later dated proxy relating to the same shares or attend the
| Annual Meeting and vote in person. Attendance of the Annual Meeting
| will not in itself constitute a revocation of the proxy. Before the
| taking of the vote at the Annual Meeting, any written notice of
| revocation and a subsequent proxy should be sent to CTI Group
| (Holdings) Inc., 333 North Alabama St. Suite 240, Indianapolis, IN
| 46204, attention: Manfred Hanuschek, or hand delivered to Manfred
| Hanuschek.
|
INSTRUCTION: To withhold authority to vote for | The undersigned hereby acknowledges receipt of the notice of the
- ----------- any individual nominee(s), mark | Annual Meeting, the proxy statement relating to the Annual Meeting,
"FOR ALL EXCEPT" and fill in the | 2002 annual report and quarterly report on Form 10-QSB for the third
circle next to each nominee you | quarter of fiscal 2003.
wish to withhold, as shown here: o |
___________________________________________________| YOUR VOTE IS IMPORTANT, PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE
| ENCLOSED ENVELOPE PROMPTLY. NO POSTAGE IS NECESSARY IF MAILED IN THE
| UNITED STATES.
|
|
|
|
|
|
___________________________________________________|
To change the address on your account, please |
check the box at right and indicate your new |
address in the address space above. Please [ ] |
note that changes to the registered name(s) |
on the account may not be submitted via |
this method. |
___________________________________________________|
---------------------- ---------- ---------------------- ----------
Signature of Stockholder | | Date: | | Signature of Stockholder | | Date: | |
---------------------- ---------- ---------------------- ----------
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
[ ] partnership, please sign in partnership name by authorized person. [ ]
[] [ ]
CTI GROUP (HOLDINGS) INC.
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 18, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harold Garrison and Michael Leeds, and each of them, as true and lawful attorneys-in-fact
and proxies of the undersigned, with full power of substitution in each for the undersigned, to appear at and represent the
undersigned in all matters coming before the annual meeting (the "Annual Meeting") of stockholders of CTI Group (Holdings) Inc.
("CTIG") to be held at the Market Tower Conference Center, 10 West Market Street, Indianapolis, Indiana 46204, located on the 3rd
floor, on December 18, 2003 at 11:00 a.m., U.S. Eastern Standard Time (Indiana Local Time), and any postponement or adjournment
thereof, and to vote all shares of CTIG's common stock that the undersigned is entitled to vote, with all the powers and authority
that the undersigned would possess if personally present at the Annual Meeting.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER SPECIFIED ON THE REVERSE SIDE BY THE UNDERSIGNED. IF NO
CONTRARY INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEES AND FOR PROPOSALS II AND III. IF ANY OTHER
BUSINESS IS PRESENTED AT THE ANNUAL MEETING, OR ANY ADJOURNMENT OR POSTPONEMENT OF THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT PRESENT, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT
THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT OF THE ANNUAL MEETING.
THE PROXIES PRESENT AND ACTING IN PERSON OR BY THEIR SUBSTITUTES (OR, IF ONLY ONE IS PRESENT AND ACTING, THEN THAT ONE) MAY
EXERCISE ALL THE POWERS CONFERRED BY THIS PROXY. DISCRETIONARY AUTHORITY IS CONFERRED BY THIS PROXY AS TO CERTAIN MATTERS DESCRIBED
IN THE ACCOMPANYING PROXY STATEMENT.
(Continued and to be signed on the reverse side)
[ ] 14475 [ ]