Canterbury Corporate Services, Inc.
1600 Medford Plaza, Route 70 and Hartford Road
Medford, New Jersey 08055
P R O X Y S T A T E M E N T
Proxies, in the form enclosed with this Proxy Statement, are solicited
by the Board of Directors of Canterbury Corporate Services, Inc. for the
Annual Meeting of Stockholders to be held on June 12, 1997 at 10:00 a.m. at
The Mansion on Main Street, Plaza 3000 at Main Street, Voorhees, New Jersey.
Shareholders of record as of the close of business on April 17, 1997
will be entitled to vote at the meeting and any adjournment thereof. As of
that date, 15,674,044 shares of common stock of the Corporation were
outstanding and entitled to one vote each. Execution of a proxy will not in
any way affect a shareholder's right to attend the meeting and vote in person.
Any shareholder submitting a proxy has the right to revoke it at any time
before it is exercised.
Any proxies that are sent in by shareholders may be revoked prior to June
12, 1997 at 10:00 a.m. by mail or other deliveries in writing, or by voice
vote if the shareholder attends the Annual Meeting.
The persons named as attorneys in the proxies are either Officers or
Directors of the Corporation. With respect to the election of a Board of
Directors, shares represented by proxies in the enclosed form, which are
received, will be voted as stated below under "Election of Directors." Where
a choice has been specified on the proxy with respect to the proposal, the
shares represented by the proxy will be voted in accordance with the
specification and will be votes FOR that proposal if no specification is
indicated.
Under Pennsylvania law, the presence of shareholders entitled to cast at
least a majority of the votes that all shareholders are entitled to cast on a
particular matter to be acted upon at a meeting, shall constitute a quorum for
purposes of consideration and action on a matter. Only shareholders
indicating an affirmative or negative decision on a matter are treated as
voting, so that abstentions, broker non-votes or mere absence or failure to
vote is not equivalent to a negative decision and will not count toward a
quorum, and if a quorum is otherwise present, effect the outcome of a vote. A
broker non-vote occurs when a broker submits a proxy but does not have
authority to vote a customer's shares on one or more matters. The affirmative
vote of the holders of a majority of shares of common stock entitled to vote
at the annual meeting is required for approval of each of the actions proposed
to be taken at the Annual Meeting. In the event a shareholders' meeting is
called for the election of Directors and is adjourned for lack of a quorum and
another shareholders' meeting is called, those shareholders entitled to vote
who attend the adjourned meeting, although less than a quorum as fixed under
Pennsylvania law or in the by-laws, shall nevertheless constitute a quorum for
the purpose of electing Directors. If a meeting called to vote upon an other
matter than the election of Directors has been adjourned for at least 15 days
because of the absence of a quorum, those shareholders entitled to vote who
attend such meeting, although less than a quorum as fixed under Pennsylvania
law or in the by-laws shall nevertheless constitute a quorum for purpose of
acting upon any matter set forth in the notice of meeting, if the notice
actually states that those shareholders who attend the adjourned meeting shall
nevertheless constitute a quorum for the purpose upon acting on the matter,
then the vote would be binding.
No other matters are expected to be presented to the meeting. If any
other matter should be presented at the meeting upon which it is proper to
take a vote, shares represented by all proxies received will be voted with
respect thereto in accordance with the judgment of the persons named as
proxies.
An Annual Report containing summary financial statements is enclosed
with, but not as a part of, this Proxy Statement. Form 10-K report for the
fiscal year ended November 30, 1996 as filed with the SEC, including complete
financial statements audited by Ernst & Young, L.L.P., as well as the
Company's Form 10-Q report for the period ended February 28, 1997 are
available upon request.
The first date that this Proxy Statement and Proxy Material were sent to
the shareholders was May 1, 1997.
Proposal No. 1 - ELECTION OF DIRECTORS
- -------------- ---------------------
Seven Directors are to be elected at the Meeting, each to serve until the
next Annual Meeting and until his or her successor shall have been elected and
qualified. Each of the nominees named in the following pages is presently a
member of the Board of Directors. In case any of the nominees should become
unavailable for election, for any reason not presently known or contemplated,
the persons named on the proxy card will have discretionary authority to vote
pursuant to the proxy for a substitute.
NOMINEES FOR DIRECTORS
- ----------------------
Name Age Director Since Principal Occupation
- ---------------- --- -------------- ---------------------------
Stanton M. Pikus 56 1981 President, Chief Executive
Officer, and Chairman of the
Board of Directors
Kevin J. McAndrew 39 1990 Executive Vice President,
Chief Operating Officer,
Chief Financial Officer,
Treasurer
Jean Zwerlein Pikus 43 1984 Vice President - Operations,
Secretary
Alan B. Manin 60 1981 Vice President - Marketing
Stephen M. Vineberg* 53 1988 President, CMQ, Inc.
Paul L. Shapiro* 46 1992 Manager, McKesson Drug Co.
Frank A. Cappiello* 71 1995 Mutual Fund Money Manager,
Closed-End Fund Advisors, Inc.
* Independent Directors
BIOGRAPHIES OF THE NOMINEES FOR DIRECTORS
STANTON M. PIKUS, President, Chief Executive Officer and Chairman of the
Board of Directors, was a founder of the Company (1981). He graduated from
The Wharton School of the University of Pennsylvania (B.S., Economics and
Accounting) in 1962. From 1968 until 1984 he had been President and majority
stockholder of Brown, Bailey and Pikus, Inc., a mergers and acquisitions
consulting firm that had completed more than twenty transactions. In addition,
Mr. Pikus has been retained in the past by various small to medium-sized
public companies in the capacity of an independent financial consultant. Since
1984, Mr. Pikus has devoted 100% of his time to the Company.
KEVIN J. McANDREW, CPA, Chief Operating Officer since December, 1993;
Executive Vice President and Chief Financial Officer of the Company since June
21, 1987; Treasurer since January, 1988; and Director since 1990. He is a
graduate of the University of Delaware (B.S. Accounting, 1980) and has been a
Certified Public Accountant since 1982. From 1980 to 1983 he was an Auditor
with the public accounting firm of Coopers & Lybrand in Philadelphia. From
1984 to 1986 Mr. McAndrew was employed as a Controller for a New Jersey based
division of Allied Signal, Inc.
JEAN ZWERLEIN PIKUS, Vice President of Human Resources and Operations,
Secretary, and Director since December 1, 1984, was employed by J. B.
Lippincott Company, a publishing company, from 1974 to 1983, where she was
Assistant Personnel Manager and also created its word processing center, and
was responsible for the day-to-day control of word processing and graphic
services. In 1984, Ms. Pikus graduated from The Wharton School of the
University of Pennsylvania (B.S., Accounting and Management, cum laude). Ms.
Pikus is the wife of the President, Stanton M. Pikus.
ALAN B. MANIN, Vice President of Marketing and Director of the Company
since its inception, is a graduate of Temple University (B.S., 1960; M.Ed.,
1966); a former teacher and Department Chairman in the Philadelphia School
System (1960-1966); a former Vice President and Director of Education for
Evelyn Wood Reading Dynamics (1966-1972); a former Director of Northeast
Preparatory School (1973); President, Chief Operating Officer and founder of
Health Careers Academy, a federally accredited (National Association of Trade
and Technical Schools) vocational school (1974-1979); and a founder of the
Company (1981).
STEPHEN M. VINEBERG, a Director since 1988, is currently the President
and Chief Executive Officer of CMQ, Inc. Previously he was a Vice President
of Fidelity Bank, Philadelphia, where he was Chief Operating Officer of the
Data Processing, Systems and Programming Divisions. Mr. Vineberg also
directed a wholly-owned subsidiary of the bank that developed and marketed
computer software, operated a service bureau and coordinated all electronic
funds transfer activities.
PAUL L. SHAPIRO, a Director since December, 1992 has worked for McKesson
Drug Company for the past 15 years. From 1973 through 1975 he was Director of
the Pennsylvania Security Officers' Training Academy. In 1973, he graduated
from York College of Pennsylvania with a B.S. Degree in Police Administration.
FRANK A. CAPPIELLO, a Director since April, 1995 is President of an
investment counseling firm: McCullough, Andrews & Cappiello, Inc., providing
management of more than $1 billion of assets. He is Chairman of three no-load
mutual funds; Founder and Principal of Closed-End Fund Advisors, Inc.;
publisher of Cappiello's Closed-End Fund Digest; author of several books and
a regular panelist on "Wall Street Week with Louis Rukeyser." For more than
12 years Mr. Cappiello was Chief Investment Officer for an insurance holding
company with overall responsibility for managing assets of $800 million.
Prior to that, he was the Research Director of a major stock brokerage firm.
He is a graduate of the University of Notre Dame and Harvard University's
Graduate School of Business Administration.
RELATED TRANSACTIONS
- --------------------
Please be advised that the present Officers and Directors have the
following relationships and related transactions with the Company.
In early 1993, the Company agreed to purchase and restructure the key-man
life insurance policies for its Corporate Officers. The amount and
beneficiary of the key-man life insurance policies are as follows:
Amount of
Corporate Officers Policy Beneficiary
- ------------------ --------- -----------
Stanton M. Pikus $1,000,000 Company
Kevin J. McAndrew $1,000,000 Company
Jean Z. Pikus $ 500,000 Company
Frank A. Cappiello was granted 100,000 options on January 30, 1995 which
are not part of the 1987 Employee Stock Option Plan. The options convert to
restricted common stock and Mr. Cappiello has five years from the date of
grant to exercise these options.
In January, 1997 Mr. Cappiello purchased 100,000 shares of Canterbury
Corporate Services, Inc. restricted common stock at $.47 per share. Mr.
Cappiello also received 100,000 five year stock options exercisable at $.75
per share for his services, as well as his membership on the Board for the
next two years.
EXECUTIVE CASH COMPENSATION
- ---------------------------
The following table sets forth a summary of cash compensation paid by the
Company with respect to services rendered in fiscal 1994, 1995 and 1996 to the
Chief Executive Officer and each of the other four most highly-compensated
Officers of the Company who received at least $100,000 in total annual
compensation.
Summary Compensation Table
--------------------------
Other Restrct. Securities Stock
Name & Annual Stock Underlying LTIP Option
Principal Bonus Comp. Award(s) Options/ Payout Exercise
Position (1) Yr. Sal.($) ($) ($) ($) SARs (#) ($) Comp. ($)
- ------------ ---- ------- ----- ------- -------- ---------- ------ ---------
Stanton M. 1996 $195,000 $ - $ - $ - $ - $ - $ -
Pikus,
President 1995 199,148 - - - - - 26,120
1994 149,580 - - - - - 40,794
Kevin 1996 $120,000 $ - $ - $ - $ - $ - $ -
McAndrew,
Executive 1995 127,111 - - - - - 11,307
Vice
President 1994 90,234 18,000 - - - - 31,687
(1) No other Executive Officers received in excess of $100,000 in total annual
compensation for the three year period.
OPTION GRANTS
- -------------
The following individuals were granted five year stock options
exercisable at $1.03 per share pursuant to the 1995 Stock Incentive Plan to
Executive Officers during Fiscal 1996:
Name Stock Option Amount
----------- -------------------
Alan Manin 10,000
Jean Z. Pikus 25,000
Kevin J. McAndrew 50,000
Stanton M. Pikus 50,000
AGGREGATED OPTION EXERCISES IN 1996
AND FISCAL YEAR-END 1995 OPTION VALUES
- --------------------------------------
The following table provides information on option exercises in fiscal
1996 by the Executive Officers and on the Executive Officers' unexercised
options at November 30, 1996. Included are options granted under the 1987
Employee Stock Option Plan and the 1995 Stock Incentive Plan.
Number of Securities Value of Unexercised
Shares underlying In-The-Money Optns.
Acquired Value Unexercised Optns. at Year-End 1996(#)
on Realized at Yr.-End 1996(#)
Name Exercise(#) ($) Exercisable/ Exercisable/
Unexercisable Unexercisable
- ---------------- ----- -------- --------- ------------ ----------- --------
Stanton M. Pikus 0 - 100,000 0 0 0
Kevin J. McAndrew 0 - 225,000 0 0 0
Alan Manin 0 - 20,000 0 0 0
Jean Z. Pikus 0 - 75,000 0 0 0
Option holders have five years from the date of grant to exercise any or
all of their options, and upon leaving the Company the option holders must
exercise within 30 days or lose the options. These options exercise into
restricted shares of Company stock.
EMPLOYMENT CONTRACTS
- --------------------
During Fiscal 1996, the Company entered into an adjusted employment
agreement with the President. The term of the agreement is five years and
calls for a base salary of $195,000 which began on December 1, 1995 with
annual salary increases of $25,000 in the second and third years and to remain
at $245,000 for the last two years of the contract. Also included in the
agreement are future incentives based on Company performance. There is a
bonus opportunity of 5% on the first $500,000 of consolidated income before
taxes and bonus and 3% above $500,000. In conjunction with this contract, the
President agreed to a covenant not to compete with the Company during his
employment and for a period of two years after his employment with the Company
has terminated. For the year ended November 30, 1996 the President waived his
right to receive any performance bonus earned and in exchange his contract was
extended for one year through 2001.
The Company also has an adjusted employment agreement with its Executive
Vice President and Chief Operating Officer. The term of the agreement is five
years and calls for a base salary of $120,000 for Fiscal 1996 and increases of
$15,000 per year for the next four years. Also included in the agreement are
future incentives based on the Company's profitability. A bonus of $30,000
will be earned if the consolidated income before income taxes and bonus of the
Company exceeds $1,000,000. The bonus opportunity applies to each of the five
years of the contract. In conjunction with this contract, the Executive Vice
President agreed to a covenant not to compete with the Company during his
employment and for a period of two years after his employment with the Company
has terminated. For the year ended November 30, 1996, the Executive Vice
President waived his right to receive any performance bonus earned and in
exchange the contract was extended to 2001.
COMMITTEES OF THE BOARD
- -----------------------
The Board has established an Audit Committee, a Stock Option Committee
and a Compensation Committee. All three committees are currently composed
entirely of Independent Directors who are not Officers of the Company (Frank
A. Cappiello, Paul Shapiro and Stephen Vineberg).
DIRECTORS' REMUNERATION
- -----------------------
Directors receive no cash compensation for services as Directors. Frank
A. Cappiello, Paul Shapiro and Stephen Vineberg received 10,000 five-year
stock options at market value during the fiscal year.
The Company had 18 meetings of the Board of Directors during the last full
fiscal year. There was no incumbent who, during the last full fiscal year,
attended fewer than 78% of said meetings.
PERFORMANCE GRAPH
- -----------------
The following graph demonstrates a comparison of the Company's shareholder
returns at each fiscal year end as of November 30 with shareholder returns on
a broad market index, the NASDAQ Stock Market (US), and a industry index,
NASDAQ Non-Financial Stocks. The comparison assumes $100.00 was invested on
November 30, 1991 in the Company's common stock, the NASDAQ Stock Market (US)
and the NASDAQ Non-Financial Stocks.
COMPARISON OF CUMULATIVE TOTAL RETURN
N=Nasdaq National
D 600- NF=Nadsaq Financial
C=Canterbury
O 500- C
L 400- C NF,N
NF,N
L 300- C
NF,N NF,N,C
A 200- NF,N
R 100-NF,N,C C
S 0-
1991 1992 1993 1994 1995 1996
Y E A R S
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ENTIRE
SLATE OF NOMINEES IN PROPOSAL NO. 1.
A majority vote of over 50% will be necessary to carry this proposal.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
- -----------------------------------------------------------
Shares Beneficially % Owned of
Name Owned on April 17, 1997 Company's Shares
- ---------------- ------------------------- ----------------
Stanton M. Pikus 1,524,737(3) 9.73%
Kevin J. McAndrew 453,909(4) 2.90%
Jean Zwerlein Pikus(1) 209,416(5) 1.34%
Alan B. Manin 395,683(6) 2.52%
Roger E. Flax, Ph.D. 155,000(7) .99%
Stephen M. Vineberg 100,885(8) .64%
Paul L. Shapiro 72,000(9) .46%
Frank A. Cappiello 395,000(10) 2.52%
Virginia FitzPatrick 40,000(11) .26%
Edward Koenig (2) 423,544 2.72%
------------- -----
TOTAL 3,770,174 24.05%
============= ======
(1) Wife of Stanton M. Pikus, deemed to have beneficial interest in the
1,524,737 owned by husband,included are 50,000 stock options exercisable at
$3.63 per share; 50,000 stock options exercisable at $1.03 per share and
100,000 stock options exercisable at $.75 per share.
(2) As a result of the November, 1993 acquisition of Landscape Maintenance
Services, Inc., Edward Koenig and his immediate family received a total of
1,029,000 shares of Company common stock. In October, 1996 as part of the
litigation settlement with the Company, 150,000 shares were returned as part
of the settlement. Currently Mr. Koenig and his immediate family now own
879,000 (5.7%) of Company common stock.
(3) Included are 50,000 stock options exercisable at $3.63 per share;
50,000 stock options exercisable at $1.03 per share and 100,000 stock options
exercisable at $.75 per share.
(4) Included are 100,000 stock options exercisable at $2.75 per share;
50,000 stock options exercisable at $3.63; 25,000 stock options exercisable
at $2.50 per share; 50,000 stock options exercisable at $1.03 per share and
50,000 stock options exercisable at $.75 per share.
(5) Included are 30,000 stock options exercisable at $3.63 per share;
20,000 stock options exercisable at $2.50 per share; 25,000 stock options
exercisable at $1.03 per share and 25,000 stock options exercisable at $.75
per share.
(6) Included are 10,000 stock options exercisable at $3.63 per share;
10,000 stock options exercisable at $1.03 per share and 10,000 stock options
exercisable at $.75 per share.
(7) Included are 150,000 stock options exercisable at $4.00 per share.
(8) Included are 7,500 stock options exercisable at $2.75 per share; 7,500
stock options exercisable at $3.13 per share; 7,500 stock options exercisable
at $4.50 per share; 10,000 stock options exercisable at $2.81 per share; 2,500
stock options exercisable at $2.75 per share; 5,000 stock options exercisable
at $1.50 per share; 10,000 stock options exercisable at $1.03 per share and
25,000 stock options exercisable at $.75 per share.
(9) Included are 7,500 stock options exercisable at $2.75 per share; 7,500
stock options exercisable at $3.13 per share; 2,500 stock options exercisable
at $2.75 per share; 7,500 stock options exercisable at $4.50 per share; 10,000
stock options exercisable at $2.81 per share; 10,000 stock options exercisable
at $1.03 per share and 25,000 stock options exercisable at $.75 per share.
(10) Included are 100,000 stock options exercisable at $2.00 per share;
10,000 stock options exercisable at $1.03 per share and 100,000 stock options
exercisable at $.75 per share (see related transactions).
(11) Included are 10,000 stock options exercisable at $2.81 per share and
10,000 stock options exercisable at $3.00 per share.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive Officers, Directors, and Affiliates to file initial
reports of ownership and reports of changes of ownership of the Company's
common stock with the Securities and Exchange Commission. These executive
Officers, Directors, and Affiliates are required to furnish the Company with
copies of all Section 16(a) forms that they file. Based solely on the
Company's review of Securities and Exchange Commission Forms 3, 4, and 5
submitted to the Company, and written representations from these Officers,
Directors, and Affiliates that no other reports were required, the Company
notes that all forms were filed in a timely fashion.
Proposal No. 2 - APPOINTMENT OF ACCOUNTANTS
- -------------- --------------------------
Subject to shareholder ratification, the Board of Directors has
reappointed the firm of Ernst & Young, LLP, Certified Public Accountants, as
independent auditors to make an examination of the accounts of the Company for
the year ending November 30, 1997. Ernst & Young audited Canterbury's books
for the fiscal years 1984 through 1996.
One or more members of this firm are expected to be present at the Annual
Meeting, and will have the opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2.
A majority vote of over 50% will be necessary to carry this proposal.
Proposal No. 3 - APPROVE THE NAME CHANGE OF THE COMPANY TO CANTERBURY
- -------------- INFORMATION TECHNOLOGY, INC. BY AMENDING ITS CERTIFICATE OF
INCORPORATION
-----------------------------------------------------------
The Company believes that the name of the Company should be changed by
amending its Certificate of Incorporation to Canterbury Information
Technology, Inc., to better describe the Company's current and future business
activities.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 3.
EXPENSES OF SOLICITATION
- ------------------------
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by regular
employees of the Company, either personally or by telephone or telegraph. The
Company does not expect to pay any compensation for the solicitation of
proxies, but may reimburse brokers and other persons holding shares in their
names or in the names of nominees for expenses in sending proxy materials to
beneficial owners and obtaining proxies from such owners.
OTHER MATTERS
- -------------
A copy of the Company's annual report to stockholders for the year ended
November 30, 1996 is enclosed herein.
This proxy contains forward looking statements. The actual results might
differ materially from those projected in the forward looking statements.
Additional information concerning factors that could cause actual results to
materially differ from those in forward looking statements is contained in
Canterbury Corporate Services, Inc.'s SEC filings, including periodic reports
under the Securities Exchange Act of 1934, as amended, copies of which are
available upon request from the Canterbury investor relations department.
The Board of Directors does not intend to bring any matters before the
meeting other than as stated in this proxy statement, and is not aware that
any other matters will be presented for action at the meeting. If any other
matters come before the meeting, the persons named in the enclosed form of
proxy will vote the proxy with respect thereto in accordance with their best
judgment, pursuant to the discretionary authority granted by the proxy. The
cost of preparing, assembling and mailing the proxy material will be borne by
the Company.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Meeting in accordance with the directions
given. In voting by proxy in regard to the election of seven Directors to
serve until the 1997 Annual Meeting of Stockholders, stockholders may vote in
favor of all nominees or withhold their votes as to all nominees or withhold
their votes as to specific nominees. With respect to other items to be voted
upon, stockholders may vote in favor of the item or against the item or may
abstain from voting. Stockholders should specify their choices on the
enclosed proxy. If no specific instructions are given with respect to the
matters to be acted upon, the shares represented by the proxy will be voted
FOR the election of all Directors, FOR the proposal to ratify and approval of
the appointment of independent accountants and FOR the proposal to change the
Company name to Canterbury Information Technology, Inc.
Respectfully submitted,
By: /s/ Jean Zwerlein Pikus
----------------------------
Jean Zwerlein Pikus
Vice President and Secretary
Dated: May 1, 1997
Stockholders who do not expect to be present at the meeting and who wish
to have their shares voted, are requested to make, date and sign the enclosed
proxy and return it in the enclosed envelope. No postage is required if it is
mailed in the United States.