To: JanyBlueEyes who wrote (940 ) 2/3/1998 6:47:00 PM From: David S. Read Replies (2) | Respond to
As I am in the business of rending public service (an altruist if I ever saw one), I offer the following analysis of the CCSI proxy as rendered by the Proxy Monitor, based in New York. As I don't want to type all day, and cannot do a cut & paste because I'm technologically challenged,here goes - the split, saying "although there's no guarantee of how the market will respond to the proposed split, TOM takes no exception to the enabling initiative". 2. to Revise the terms of Series A Pfd. stock - "We recommend a NAY ballot on this board-backed resolution, a vote AGAINST management. Those in charge at CCSI seek clearance to modify the terms of the company's Series A preferred stock. As of 12/26/97 record date for the company's forthcoming special meeting there were 1,380,000 shares of the Series A outstanding all of which were held by Ms. DARBY SIMPSON MacFARLANE, the company's Chairman and CEO. As a practical matter, the Series A shares are more of a stock incentive device than a true equity instrument. Under terms of the issue, each share of Series A preferred is convertible into .6521739 of a share of CCSI common if the company's earnings for two consecutive years exceeds $20million, or if its shares thrade on NASDAQ for at least $46.47 during a 30 day trading period. On January 13, 1998 CCSI shares closed at $12.625. If neither of these events occur by a given date, the company can redeem the shares at their nominal par value of $.01. Originally, the earnings and stock price targets were to be reached by December 31, 1996. WHEN IT BECAME OBVIOUS THAT NEITHER TARGET WOULD BE REACHED BY THAT DATE, THE PERIOD WAS EXTENDED TO DECEMBER 31, 1997 at Ms. MacFARLANE'S REQUEST. Later, a second extension was granted to Ms. Macfarlane, extending the deadline to December 31, 1998. The current proposal now seeks a THIRD extension, this time to December 31, 2000. In addition, it seeks to change the definition of "earnings" by allowing EXTRAORDINARY ITEMS to be counted in the earnings computation. In exchange for the relief requested, Ms. Macfarlane would agree to defer payment of a $262,000 note receivable from the company and to forego any options or discretionary bonuses for the current year. The terms of the Series A preferred set forth performance criteria that the company (under Ms. Macfarlane's stewardship) has consistently failed to meet. By repeatedly relaxing the performance criteria, what was once an incentive vehicle becomes nothing more than a stock giveaway. The somewhat illusory consideration offered by Ms. Macfarlane in exchange for the adjustment is hardly adequate. In the circumstances, TPM recommends rejection of the proposal."
