-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kDpfKuIcADRHxmAjeHDmZALdpQI1Y3UKSTag6J5j77RDNbxCyGN7OYaShvncGlbE GhcqW1u6kmZqiHI9AV1/5g== 0000921895-95-000047.txt : 19950619 0000921895-95-000047.hdr.sgml : 19950619 ACCESSION NUMBER: 0000921895-95-000047 CONFORMED SUBMISSION TYPE: PRRN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950616 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AUTOINFO INC CENTRAL INDEX KEY: 0000351017 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 132867481 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: PRRN14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14786 FILM NUMBER: 95547451 BUSINESS ADDRESS: STREET 1: 1600 ROUTE 208 CITY: FAIR LAWN STATE: NJ ZIP: 07410 BUSINESS PHONE: 2017030500 MAIL ADDRESS: STREET 1: 1600 ROUTE 208 CITY: FAIR LAWN STATE: NJ ZIP: 07410 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AUTOINFO STOCKHOLDERS COMMITTEE ET AL CENTRAL INDEX KEY: 0000943925 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] FILING VALUES: FORM TYPE: PRRN14A BUSINESS ADDRESS: STREET 1: 750 LEXINGTON AVE STREET 2: 27TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 MAIL ADDRESS: STREET 1: 40 STEEL PARTNERS II L P STREET 2: 750 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10022 PRRN14A 1 REVISED SCHEDULE 14A SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the registrant | | Filed by a party other than the registrant |X| Check the appropriate box: |X| Preliminary proxy statement | | Definitive proxy statement | | Definitive additional materials | | Soliciting material pursuant to Rule 14a-11(c) or Rule 14(a)-12 AUTOINFO, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Charter) AUTOINFO STOCKHOLDERS COMMITTEE - -------------------------------------------------------------------------------- (Name of Person(s) filing Proxy Statement) Payment of filing fee (check the appropriate box): | | $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). |X| $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). | | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - -------------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:1 - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- - ----------- 1 Set forth the amount on which the filing fee is calculated and state how it was determined. |X| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: $500 - -------------------------------------------------------------------------------- (2) Form, schedule or registration statement no.: Schedule 14A - -------------------------------------------------------------------------------- (3) Filing party: AutoInfo Stockholders Committee - -------------------------------------------------------------------------------- (4) Date filed: June 1, 1995 - -------------------------------------------------------------------------------- -2- PRELIMINARY MATERIALS - FOR SEC USE ONLY CONSENT STATEMENT TO STOCKHOLDERS OF AUTOINFO, INC. BY THE AUTOINFO STOCKHOLDERS COMMITTEE TO THE STOCKHOLDERS OF AUTOINFO, INC. THIS CONSENT STATEMENT is hereby given and furnished to you by the AutoInfo Stockholders Committee (the "AutoInfo Stockholders Committee") in connection with the solicitation by the AutoInfo Stockholders Committee of written consents from the holders of common stock, $.01 par value (the "Common Stock") of AutoInfo, Inc. (the "Company") to take action without a stockholders' meeting as permitted by the By-laws of the Company and the Delaware General Corporation Law. For the reasons described below, the AutoInfo Stockholders Committee is asking holders of the Common Stock to consent to the following proposed corporate actions: (1) Remove all of the incumbent members of the Company's Board of Directors (Scott Zecher, Jason Bacher, Robert Fagenson, Andrew Gaspar, Howard Nusbaum and Jerome Stengel) without cause, including the removal, without cause, of any person or persons elected to the Board of Directors by the Directors to fill any vacancy or newly created directorship; (2) Elect the AutoInfo Stockholders Committee's nominees (Warren G. Lichtenstein, Lawrence Butler, Jack L. Howard, Marshall D. Butler, Jan R. Sussman and James S. Benenson, Jr.) to the Company's Board of Directors; and (3) Amend the Bylaws pursuant to Section 109 of Delaware General Corporation Law ("DGCL") to provide that any acquisition by the Company, whether by stock purchase, merger, asset acquisition or other similar type transaction, where the consideration to be paid by the Company is more than fifty (50) percent of the Company's assets at the time of such transaction, will be subject to approval by a majority of the Company's stockholders. See The Background of the Solicitation and the Plans of the AutoInfo Stockholders Committee. In furtherance of its objectives, the AutoInfo Stockholders Committee is requesting each holder of Common Stock to mark each "Consent" box on the enclosed WHITE Consent Card, to date and sign the WHITE Consent Card and return the WHITE Consent Card in the enclosed envelope. The proposed corporate actions may be adopted by consent of the holders of a majority of the shares of Common Stock outstanding at the close of business on May 31, 1995, which is the record date set by the Company for this Consent solicitation (the "Record Date"). See The Consent Procedure. This Consent Statement and the related WHITE Consent Card are first being sent or given on or about June __, 1995, to holders of record of Common Stock on the Record Date. On the Record Date, the AutoInfo Stockholders Committee was the beneficial owner of an aggregate of 1,105,400 shares of Common Stock which represented approximately 14.3% of the issued and outstanding shares of Common Stock. THE AUTOINFO STOCKHOLDERS COMMITTEE BELIEVES THAT THE PLAN OUTLINED ABOVE AND DESCRIBED FURTHER HEREIN WILL DELIVER MAXIMUM VALUE FOR YOUR SHARES OF COMMON STOCK, ALTHOUGH THERE CAN BE NO ASSURANCES THAT THE PLAN WILL RESULT IN MAXIMUM VALUE; TO CARRY OUT THE PLAN THE AUTOINFO STOCKHOLDERS COMMITTEE'S NOMINEES BELIEVE THAT THE INCUMBENT MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS MUST BE REPLACED. REPRESENTATION BY THE AUTOINFO STOCKHOLDERS COMMITTEE'S NOMINEES AND AMENDMENT TO THE BYLAWS CAN BE ACHIEVED ONLY IF ALL OF THE PROPOSED CORPORATE ACTIONS ARE ADOPTED. ACCORDINGLY YOU ARE URGED TO CONSENT TO THE REMOVAL OF THE INCUMBENT MEMBERS OF THE BOARD OF DIRECTORS, TO THE ELECTION OF THE AUTOINFO STOCKHOLDERS COMMITTEE'S NOMINEES (MESSRS. LICHTENSTEIN, BUTLER, HOWARD, BUTLER, SUSSMAN AND BENENSON) AND TO THE AMENDMENT TO THE BYLAWS BY MARKING, SIGNING, DATING AND RETURNING PROMPTLY THE ENCLOSED WHITE CONSENT CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. Because a Consent to corporate action is effective only if executed by holders of record of a majority of the total number of shares outstanding on the Record Date, the failure to execute a consent has the same effect as a withholding of Consent for any proposal. If your shares of Common Stock are held in the name of a brokerage firm, bank nominee or other institution, only such entity can execute a Consent with respect to your shares. Accordingly, please mark, date, and sign the enclosed WHITE Consent Card and return it to your broker or bank. Only Stockholders of record on the Record Date are entitled to execute Consents. The AutoInfo Stockholders Committee believes that as of the close of business on the Record Date, -2- there were 7,732,252 shares of Common Stock of the Company issued and outstanding and entitled to vote. Holders of Common Stock are entitled to one vote for each share of Common Stock held of record. The principal executive offices of the Company are located at 1600 Route 208, Fair Lawn, New Jersey 07410, and its phone number is (201) 703-0500. IMPORTANT Carefully review the Consent Statement and the enclosed materials. YOUR CONSENT IS IMPORTANT. No matter how many or how few shares you own, please vote FOR the removal of the incumbent members of the Company's Board of Directors, the election of the AutoInfo Stockholders Committee's nominees for director and the amendment to the Bylaws by so indicating and by signing, marking, dating and mailing the enclosed WHITE Consent Card promptly. If you own shares of the Company but your stock certificate is held for you by a brokerage firm, bank or other institution, it is very likely that the stock certificate is actually in the name of such brokerage firm, bank or other institution. If so, only such entity can execute a WHITE Consent and vote your shares of Common Stock. The brokerage firm, bank, or other institution holding the shares for you is required to forward consent materials to you and solicit your instructions with respect to the granting of consents; it cannot vote your shares unless it receives your specific instructions. If you have any questions about giving your Consent or require assistance in voting your shares, please call: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, NY 10010 (212) 929-5500 (Collect) or CALL TOLL FREE (800) 322-2885 -3- THE AUTOINFO STOCKHOLDERS COMMITTEE AND ITS SLATE The AutoInfo Stockholders Committee is composed of Warren G. Lichtenstein, Lawrence Butler and Jack L. Howard. The members of the Committee, along with Marshall D. Butler, Jan R. Sussman and James Benenson, Jr., constitute its slate (the "Slate") for election to the Company's Board of Directors. Biographical data on the Slate is set forth below. Warren G. Lichtenstein (29) is one of the AutoInfo Stockholders Committee's nominees for director. Mr. Lichtenstein has been Chairman and a director of WGL Capital Corp., a general partner of Steel Partners, L.P., a Delaware limited partnership (a private investment partnership), since 1990. Mr. Lichtenstein has been Chairman and a director of Steel Partners, Ltd. ("Partners"), the general partner of Steel Partners Associates, L.P. ("Associates"), which is the general partner of Steel Partners II, L.P. ("Steel"), since 1993. For information regarding Steel, Partners and Associates, see below under "Other Participants, Certain Agreements and Related Additional Information." Mr. Lichtenstein was the acquisition/risk arbitrage analyst at Ballantrae Partners, L.P., a private investment partnership formed to invest in risk arbitrage, special situations and undervalued companies, from 1988 to 1990. Mr. Lichtenstein is a director of the following publicly held companies: Alpha Technologies Group, Inc., SL Industries, Inc., Gateway Industries, Inc., Saratoga Beverage Group. As of the Record Date, Mr. Lichtenstein beneficially owned 1,100,100 shares of the Common Stock of the Company, 1,100,000 of which are beneficially owned by Steel. The business address of Mr. Lichtenstein is 750 Lexington Avenue, 27th Floor, New York, New York 10022. For information regarding Mr. Lichtenstein's beneficial purchases and sales of shares of the Common Stock of the Company during the past two years, all of which were made by Steel, see Appendix A. Lawrence Butler (33) is one of the AutoInfo Stockholders Committee's nominees for director. Mr. Butler co-founded Steel Partners, L.P. with Warren Lichtenstein in 1990. As a director and President of Camelia Group, Inc., a co-General Partner of Steel Partners, L.P., Mr. Butler has been active in the day-to-day management of Steel Partners, L.P. since its inception. Mr. Butler has been President and a director of Partners, the general partner of Associates, which is the general partner of Steel, since 1993. Mr. Butler is President, Chief Executive Officer and a director of Alpha Technologies Group, Inc., a publicly held company. For information regarding Steel, Partners and Associates, see below under "Other Participants, Certain Agreement and Related Additional Information." As of the Record Date, Mr. Butler beneficially owned 1,100,000 shares of the Common Stock of the Company, all of which are beneficially owned by Steel. The business address of Mr. Butler is 750 Lexington Avenue, 27th Floor, New York, New York 10022. For information regarding Mr. Butler's beneficial purchases and sales of shares of the Common Stock of the Company during the past two years, all of which were made by Steel, see Appendix A. Mr. Butler is the son of Marshall Butler. Jack L. Howard (33) is one of the AutoInfo Stockholders Committee's nominees for director. Mr. Howard has been a limited partner of Associates since 1993, a principal of the Mutual Securities, Inc. (a division of Cowles Sabol & Co.) since 1989 and has been in the securities business since 1984, specializing in locating, researching and accumulating grossly -4- undervalued securities. Mr. Howard is a director of the following publicly held companies: Inventors Insurance Group, Inc., Gateway Industries, Inc. The business address of Mr. Howard is 2927 Montecito Avenue, Santa Rosa, California 95404. As of the Record Date, Mr. Howard beneficially owned 5,300 shares of the Common Stock of the Company. For information regarding Mr. Howard's purchases and sales of shares of the Common Stock of the Company during the past two years, see Appendix A. Marshall D. Butler (68) is one of the AutoInfo Stockholders Committee's nominees for director. Mr. Butler has been Chairman of the Board of Alpha Technologies Group, Inc. since September 1994, and Chairman of the Board since April 1993. Mr. Butler is currently a director a Kyocera Corporation, a diversified Japanese high technology manufacturing company and AVX/Kyocera, a manufacturer of ceramic capacitors and a subsidiary of Kyocera Corporation. Mr. Butler served as Chief Executive Officer of AVX/Kyocera until his resignation in April 1993. From 1973 to 1990, Mr. Butler was Chairman of the Board, Chief Executive Officer and a director of AVX Corporation. Mr. Butler has been a director of Mass Mutual Corporate Investors and Mass Mutual Participation Investors since 1989. Prior to such time, he served as a director of MGM/UA Home Entertainment, a home video, pay television and ancillary marketing business, from 1985 to 1989, and as a director of Computer Memories Incorporated, which manufactured computer disk drives, from 1984 to 1989. Mr. Butler is the father of Lawrence Butler. Jan R. Sussman (43) is one of the AutoInfo Stockholders Committee's nominees for director. Mr. Sussman has been the President of Carefree Capital Co., a venture capital investment company, since he founded it in 1992. Mr. Sussman was the President of Coinmach Industries, a coin laundry service company operating 62,000 washers and dryers, from 1980 to 1994. James Benenson, Jr. (59) is one of the AutoInfo Stockholders Committee's nominees for director. Mr. Benenson has been the Chairman of the Board and President of James Benenson & Co., Inc., a manufacturer of a variety of industrial products, since 1968. He has been Chairman of the Board of Bowline Corp. since 1974. He has been Chairman of the Board and President of Vesper Corp., since 1978 and Chairman of the Board and President of Arrowhead Holdings Corp., since 1983. For further information concerning the plans of the AutoInfo Stockholders Committee and its Slate, see The Background of the Solicitation and the Plans of the AutoInfo Stockholders Committee. The AutoInfo Stockholders Committee, together, beneficially owned 1,105,400 shares of Common Stock as of the Record Date, representing 14.3% of the issued and outstanding shares of Common Stock. Each of the nominees has consented to serve as a director and, if elected, intends to discharge his duties as director of the Company in compliance with all applicable legal requirements, including the general fiduciary obligations imposed upon corporate directors. None -5- of the nominees failed to file on a timely basis any reports relating to their holdings of Common Stock required by Section 16(a) of the Securities Exchange Act of 1934, as amended, and the Rules and Regulations promulgated thereunder (the "Exchange Act"), during the most recent fiscal year or prior fiscal year. Steel failed to file on a timely basis one report required by Section 16(a) of the Exchange Act during the most recent fiscal year. THE BACKGROUND OF THE SOLICITATION AND THE PLANS OF THE AUTOINFO STOCKHOLDERS COMMITTEE The AutoInfo Stockholders Committee is soliciting Consents to elect a Slate of candidates to replace all of the present members of the Board of Directors of the Company. On May 31, 1995, pursuant to Article I, Section 7 of the Company's Bylaws, Steel delivered written notice to the Board of the Company, announcing its intent to seek written consents as set forth in this Consent Statement. The Board thereupon established May 31, 1995 as the Record Date for this Consent solicitation. See The Consent Procedure. The AutoInfo Stockholders Committee was formed in response to two events, the Company's proposal to sell a substantial portion of its assets to ADP Claims Solutions Group, Inc. (the "ADP Asset Sale"), and the Company's adoption of a Shareholder Rights Plan on March 30, 1995, commonly called a "poison pill" plan. On March 30, 1995, the stockholders of AutoInfo approved the ADP Asset Sale and since the closing of the transaction in early April, the Company's principal asset has been the cash and net proceeds derived from that transaction, which are estimated by the Company to be approximately $29,000,000. In addition, the Company will also retain two small businesses, its Insurance Inspection Services and Long Distance Services businesses. The Company has announced its intent to use the net proceeds from the ADP Asset Sale to expand these businesses and to acquire additional operating businesses. To date, the Company has not identified any such businesses, nor has it made any commitment to submit any proposed transactions to its stockholders for their approval. The AutoInfo Stockholders Committee believes that the adoption of the Shareholder Rights Plan by the Board, for which stockholder approval was neither required under DGCL nor sought by the Company, was not in the best interests of the Company Stockholders. The Company has taken certain additional actions which the AutoInfo Stockholders Committee believes are not in the best interests of stockholders. The Company has entered into supplemental employment agreements (the "Supplemental Employment Agreements") with Scott Zecher, President and Chief Operating Officer, and William Wunderlich, Treasurer and Chief Financial Officer. The Supplemental Employment Agreements, which were briefly described in the Company's Revocation of Consent Statement by Board of Directors in Opposition to the Parties who Refer to Themselves as the AutoInfo Stockholders Committee (the "Consent Revocation"), have not been made publicly available, but are required to be filed by the Company as an exhibit to certain documents to be filed with the Securities and Exchange Commission, including with the Company's next Quarterly Report on Form 10-Q. The Supplemental Employment Agreements provide, among other things, that upon a Change of Control of the Company, with the definition of such event not yet being publicly disclosed, that Messrs. Zecher -6- and Wunderlich will be entitled to receive salary and benefits commensurate with prior amounts and an annual bonus at least equal to such person's average annual bonus during the three year period prior to the change in control, for a period of three years in the case of Mr. Zecher and two years in the case of Mr. Wunderlich. Such agreements also provide for Messrs. Zecher and Wunderlich to receive certain severance payments and benefits in the event their employment is terminated by the Company or by such executive, under certain circumstances. The Company has also entered into a Promissory Note and Security and Pledge Agreement with Mr. Zecher pursuant to which the Company lent Mr. Zecher $446,796.64 in connection with Mr. Zecher's exercise of options to acquire 216,799 shares (the "Shares") of the Common Stock. The Note is non-interest bearing and is secured solely by the Shares. The effect of the acquisition of the Shares by Mr. Zecher is to increase shares held by executive officers and directors of the Company from 8.9% to 11.7%, through 100% Company financing. The AutoInfo Stockholders Committee is seeking the removal of all of the current Board, the election of its Slate and the amendment to the Bylaws so that it can implement its plans for the Company, with the approval of a majority of the Company's stockholders, which are outlined below. The AutoInfo Stockholders Committee is committed to using its best efforts immediately upon its election to rescind or nullify the Shareholder Rights Plan adopted on March 30, 1995 by the Board, without the consent of the Company's stockholders. The AutoInfo Stockholders Committee believes that (i) the "poison pill" plan needlessly diminishes the likelihood of independent stockholder action and principally functions as protection for current management and (ii) without such plan, outside parties would be encouraged to implement strategies or suggest proposals whereby stockholder value would be maximized. In addition, the AutoInfo Stockholders Committee believes that its Slate, whose members have substantial experience in the finance and banking, operations and manufacturing, and service business areas, is highly qualified to seek acquisition candidates for the Company, as evidenced by each of their outstanding track records, and the Slate is committed to using its best efforts to promptly seek suitable acquisition candidates designed to maximize stockholder value. Certain of such acquisitions by the Company, as described below, would be subject to approval by a majority of the Company's stockholders. The AutoInfo Stockholders Committee is seeking to amend the Bylaws to provide that any acquisition by the Company, whether by stock purchase, merger, asset acquisition or other similar type transaction, where the consideration to be delivered by the Company is more than fifty (50) percent of the Company's assets at the time of such transaction, will be subject to approval by a majority of the Company's stockholders, so that the Company's stockholders will have the ultimate determination of the Company's destiny. The Bylaws would be amended to provide as follows: ARTICLE IV BUSINESS COMBINATIONS Prior to the consummation by the Company of any stock purchase, merger, asset acquisition or other similar type transaction where the consideration to be delivered by the Company is more than fifty (50) percent of the Company's assets at the time of such transaction (a "Business Combination"), the Company shall submit such Business Combination to its stockholders for -7- approval regardless of whether the Business Combination is of a type which normally would require such stockholder approval under the DGCL. In the event that the holders of a majority of the outstanding Common Stock present at a duly called stockholders meeting vote for the approval of the Business Combination or act by consent in lieu of a stockholders' meeting, the Corporation shall be authorized to consummate the Business Combination. Such amendment to the Bylaws would insure that the Company's stockholders have the opportunity to vote on such described transactions. The AutoInfo Stockholders Committee believes that it is unclear whether stockholders would have the legal right to vote under DGCL on transactions involving the transfer of more than fifty (50%) percent of the Company's assets. The proposed Bylaw amendment will clarify the rights of stockholders to vote on such transactions. The Slate has further pledged that in the event it is unable to locate suitable acquisition candidates, or the acquisition candidates it locates are not approved by a majority of the Company's stockholders, the Slate may, but is not obligated to, declare a stock dividend or, alternatively, undertake a stock repurchase program that will allow the distribution of some or all of the Company's available cash to its stockholders. No deadline has been set for the occurrence of any of the above-described events. The Slate does not intend to utilize the net proceeds from the ADP Asset Sale to expand the Company's Insurance Inspection Services and Long Distance Services businesses. In the event the Slate distributes substantially all of the Company's cash, it may seek to liquidate the Company or sell its remaining assets. In implementing its plans for the Company, the Slate is committed to acting on behalf of and fairly representing the Company's stockholders and to that end, has pledged to increase the size of the Board to allow for representation on the Board of the designees of all stockholders, or groups of stockholders, which hold at least 10% of the outstanding Common Stock, and to cause the election of such designees, provided that at no time shall the Slate not control a majority of the seats on the Board. To the best of the AutoInfo Stockholders Committee's knowledge, other than Steel, which holds 14.3% of the Common Stock, Ryback Management Corporation is the only stockholder with greater than 10% of the Company's Common Stock, with 11.7% of the Common Stock. See Appendix B. No assurance can be given that the AutoInfo Stockholders Committee or the Slate will be able to implement any of the foregoing plans or produce any favorable financial results. Neither the Slate nor the AutoInfo Stockholders Committee has identified any potential acquisition candidates and no assurance can be given that either will be able to do so. The Slate and the AutoInfo Stockholders Committee could, however, in the future, based upon an evaluation of the Company's operations and future plans, decide to pursue another course of action. It is not currently contemplated that any of the AutoInfo Stockholders Committee's nominees for director, or any of their affiliates will have any interest in any transaction with the Company other than in their capacity as a director or stockholder of the Company. The AutoInfo Stockholders Committee had previously anticipated commencing a Consent solicitation regarding the above-stated proposals on May 1, 1995 and in connection therewith had -8- (i) delivered a signed Consent to the Company on April 13, 1995 and (ii) demanded a list of the Company's stockholders from the Company. Under ss. 228 of DGCL, Consents must be delivered within 60 days of the earliest dated Consent delivered to the Company. Due to delays in obtaining the stockholders list, the AutoInfo Stockholders Committee decided not to solicit Consents pursuant to the prior Consent solicitation and to commence a new Consent solicitation. By letter dated May 31, 1995, the AutoInfo Stockholders Committee advised the Company that the prior Consent was withdrawn. The prior Consent solicitation was only distributed to members of the AutoInfo Stockholders Committee due to the fact that the AutoInfo Stockholders Committee lacked a stockholders list. The AutoInfo Stockholders Committee had engaged in discussions with the Company in an attempt to avoid the necessity of this Consent solicitation. In the course of these discussions, four meetings were held between approximately April 12, 1995 and April 28, 1995. The following parties were present at all or some of the meetings: on behalf of the AutoInfo Stockholders Committee--Warren Lichtenstein, Marshall D. Butler and Lawrence Butler, on behalf of the Company--Scott Zecher and Andrew Gaspar. During the course of the discussions, the issues discussed included the terms of a standstill agreement for members of the AutoInfo Stockholders Committee, the size of the Board, including Board representation for the AutoInfo Stockholders Committee and the powers of minority directors, the redemption of the poison pill, the aggregate amount of Company funds to be spent on acquisitions and other such transactions without requiring stockholder and/or supermajority board approval, and a right of first refusal by the Company on the Common Stock beneficially held by members of the AutoInfo Stockholders Committee. To date, those discussions have not been successful and no agreements or understandings of any kind have been reached. On June 14, 1995, the Company commenced litigation in the United States District Court for the District of Delaware against Steel, each of the members of the AutoInfo Stockholders Committee, Marshall D. Butler, Ryback Management Corporation, Eric E. Ryback and Lawrence Callahan. The Complaint alleges, among other things, violations of Sections 13(d), 13(g) and 14(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, stemming from Steel's allegedly acting in concert with the other defendants to obtain control of the board of directors of the Company and the failure of Steel and the other defendants to disclose such actions in compliance with applicable securities laws. The complaint seeks, among other things, to enjoin the AutoInfo Stockholders Committee from commencing the Consent Solicitation and delivering the Consent Statement to the Company's stockholders. The AutoInfo Stockholders Committee believes it has complied with the securities laws and intends to vigorously defend itself against the claims brought by the Company. If the AutoInfo Stockholders Committee's nominees are elected, they will evaluate the Company's current officers and make such employment decisions as they believe are required. The AutoInfo Stockholders Committee is not aware of any employment agreement or material agreement to which the Company is a party, the termination or terms of which would be adversely affected by the election of the Slate or the implementation of the plans of the Committee, except for the Supplemental Employment Agreements which may be affected by the election of the Slate if the election of the slate were to constitute a Change of Control of the Company under the Supplemental Employment Agreements. Based on the most recent publicly -9- available information, the AutoInfo Stockholders Committee estimates that if the election of the AutoInfo Stockholders Committee's slate were to constitute a Change of Control, the maximum severance payments to Messrs. Zecher and Wunderlich under the Supplemental Employment Agreements would be approximately $627,000 and $220,500, respectively. THE CONSENT PROCEDURE Under the DGCL, directors of a corporation without a classified board or whose certificate of incorporation does not otherwise provide may be removed with or without cause by the holders of a majority of the outstanding shares entitled to vote in the election of directors. In addition, unless the corporation's certificate of incorporation otherwise provides, the DGCL permits stockholders' action without a meeting of stockholders and without prior notice if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to take such action at a meeting at which all shares entitled to vote thereon were present. Under the applicable provision of the DGCL, such action is effective when written consents from holders of record of the minimum number of shares of common stock necessary to authorize the action (here a majority of the outstanding shares) are executed and delivered to the corporation within 60 days of the earliest dated consent delivered in accordance with the DGCL to the corporation. The Company does not have a classified board. In addition, Article II, Section 5 of the Company's Bylaws provides that any or all of the directors may be removed for cause or without cause by the stockholders and Article I, Section 7 of the Company's Bylaws provides that whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, the meeting and vote of stockholders may be dispensed with if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding Common Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted; provided that prompt notice be given to all stockholders of the taking of such action without a meeting and by less than unanimous written consent who have not consented in writing. Consequently, directors can be removed by a majority of the stockholders acting without a meeting and without prior notice. A Record Date for determining stockholders entitled to consent in this Consent Solicitation was established, pursuant to Article I, Section 7 of the Bylaws, of May 31, 1995. The AutoInfo Stockholders Committee is mailing this Consent Statement to the holders of the shares of Common Stock outstanding on the Record Date. If the action described herein is taken pursuant to the consent procedure, the AutoInfo Stockholders Committee will cause the Company to give prompt notice thereof pursuant to Section 228(d) of the DGCL to stockholders who have not executed consents to the action taken. The Consents being solicited by the AutoInfo Stockholders Committee will only be effective for sixty days after the earliest dated Consent is first delivered to the Company pursuant to ss. 228 of DGCL. -10- UNDER THE DGCL, ONLY HOLDERS OF RECORD ON THE RECORD DATE ARE ELIGIBLE TO GIVE THEIR CONSENT TO THE ACTION PROPOSED ABOVE. ANYONE OWNING SHARES BENEFICIALLY (BUT NOT OF RECORD), SUCH AS A PERSON WHOSE OWNERSHIP OF SHARES IS THROUGH A BROKER, BANK OR OTHER FINANCIAL INSTITUTION, SHOULD CONTACT THAT BROKER, BANK OR FINANCIAL INSTITUTION WITH INSTRUCTIONS TO EXECUTE THE WHITE CONSENT CARD ON HIS OR HER BEHALF OR TO HAVE THE BROKER, BANK OR FINANCIAL INSTITUTION'S NOMINEE EXECUTE THE WHITE CONSENT CARD. Subject to the conditions referred to above, the AutoInfo Stockholders Committee will deliver the written Consents to the Company when unrevoked consents representing at least a majority of the outstanding Common Stock have been received by it. An executed consent card may be revoked at any time before expiration by marking, dating, signing and delivering a written revocation before the time that the action authorized by the executed Consent becomes effective. A revocation may be in any written form validly signed by the record holder as long as it clearly states that the Consent previously given is no longer effective. The delivery of a subsequently dated consent card which is properly completed will constitute a revocation of any earlier consent. The revocation may be delivered either to the AutoInfo Stockholders Committee or to the Company at its principal executive offices at 1600 Route 208, Fair Lawn, New Jersey 07410 or any other address provided by the Company. Although a revocation is effective if delivered to the Company, the AutoInfo Stockholders Committee requests that either the original or photostatic copies of all revocations of Consents be mailed or delivered to it at the address set forth above, so that it will be aware of all revocations and can more accurately determine if and when Consents to the action described herein have been received from the holders of record on the Record Date of a majority of the shares of Common Stock, outstanding. ABSTAINING FROM GIVING A CONSENT OR NOT RETURNING A SIGNED CONSENT WILL HAVE THE SAME EFFECT AS WITHHOLDING CONSENT TO THE PROPOSED ACTION. THE AUTOINFO STOCKHOLDERS COMMITTEE URGES EACH STOCKHOLDER TO ENSURE THAT THE RECORD HOLDER OF HIS OR HER SHARES SIGNS, DATES AND RETURNS THE ENCLOSED WHITE CONSENT CARD AS SOON AS POSSIBLE. OTHER PARTICIPANTS, CERTAIN AGREEMENTS AND RELATED ADDITIONAL INFORMATION The costs of the AutoInfo Stockholders Committee will be borne by Steel, a Delaware limited partnership. The AutoInfo Stockholders Committee presently intends to seek reimbursement from the Company for its reasonable expenses in connection with this Consent solicitation and does not expect to submit such matter to a vote of security holders, unless required by law. -11- The general partner of Steel is Associates, a Delaware limited partnership. The general partner of Associates is Partners, a New York corporation. The principal business of Steel is investing in the securities of micro-cap companies. The principal business address of Steel, Associates and Partners is 750 Lexington Avenue, 27th Floor, New York, New York 10022. The executive officers and directors of Partners are as follows: Warren G. Lichtenstein is Chairman of the Board, Secretary and a Director and Lawrence Butler is President, Treasurer and a Director. As of the Record Date, Steel was the owner of 1,100,000 shares of the Common Stock of the Company. Neither Associates nor Partners beneficially owned any shares of the Common Stock of the Company on the Record Date, except by virtue of their role in Steel. For information regarding Steel's purchases and sales of shares of the Common Stock of the Company during the past two years, see Appendix A. The Board of Directors of the Company has a single class of directors. At each annual meeting of Stockholders, the directors are elected to a one-year term. The slate of nominees proposed by the AutoInfo Stockholders Committee, if elected, would serve as directors for the term expiring in 1995 or until the due election and qualification of their successors. The AutoInfo Stockholders Committee has no reason to believe any of its nominees will be disqualified or unable or unwilling to serve if elected. The AutoInfo Stockholders Committee has agreed to indemnify Marshall D. Butler, Jan R. Sussman and James S. Benenson, Jr., members of the Slate, and to reimburse each of them for their reasonable out-of-pocket expenses for each of their efforts in connection with the solicitation. Except as described herein and in the attachments hereto, no member of the AutoInfo Stockholders Committee, the slate of nominees or any of their associates, (i) has engaged in or has a direct or indirect interest in any transaction or series of transactions since the beginning of the Company's last fiscal year or in any currently proposed transaction, to which the Company or any of its subsidiaries is a party where the amount involved was in excess of $60,000, (ii) is the beneficial or record owner of any securities of the Company or any parent or subsidiary thereof, (iii) is the record owner of any securities of the Company of which it may not be deemed to be the beneficial owner, (iv) has been within the past year, a party to any contract, arrangement or understanding with any person with respect to any securities of the Company, (v) has any arrangements or understandings with any nominee pursuant to which such nominee was selected as a nominee and there exist no such agreements or understandings between any nominee and any other person, or (vi) has any agreement or understanding with respect to future employment by the Company or any arrangement or understanding with respect to any future transactions to which the Company will or may be a party. See Appendix B for information regarding persons who beneficially own more than 5% of the Common Stock and the ownership of the Common Stock by the management of the Company. -12- SOLICITATION EXPENSES Consents may be solicited by members of the Committee and by its Slate by mail, telephone, telegraph and personal solicitation. Banks, brokerage houses and other custodians, nominees and fiduciaries will be requested to forward consent solicitation material to the beneficial owners of the Common Stock that such institutions hold of record. The AutoInfo Stockholders Committee will reimburse such institutions for their reasonable out-of-pocket expenses. The entire expense of preparing and mailing this Consent Statement and the total expen- ditures relating to the solicitation of Consents (including, without limitation, costs, if any, related to advertising, printing, fees of attorneys, financial advisors, solicitors, consultants, accountants, public relations, transportation and litigation) will be borne by the AutoInfo Stockholders Committee, with funds provided by Steel. The AutoInfo Stockholders Committee has retained MacKenzie Partners, Inc. ("MacKenzie Partners") to assist in the solicitation of Consents and for related services. The AutoInfo Stockholders Committee has agreed to pay MacKenzie Partners a fee estimated at $25,000 and has agreed to reimburse it for its reasonable out-of-pocket expenses. Approximately 20 persons will be used by MacKenzie Partners in its solicitation efforts. The AutoInfo Stockholders Committee estimates that its total expenditures relating to this Consent solicitation will be approximately $25,000. Total cash expenditures to date relating to this Consent solicitation have been approximately $5,000. In addition to the use of the mails, Consents may be solicited by the AutoInfo Stockholders Committee and MacKenzie Partners, Inc. by telephone, telegram and personal solicitation, for which no additional compensation will be paid to those persons engaged in such solicitation. 61068.6 -13- APPENDIX A Transactions in the Securities of the Company Within the Past Two Years The following table sets forth information with respect to all purchases and sales of shares of Common Stock of the Company by Steel, Warren G. Lichtenstein, Lawrence Butler and Jack L. Howard during the past two years. Each of the transactions was effected on the open market, except where otherwise noted. STEEL PARTNERS II, L.P. Number of Shares Purchased (Sold) Price Per Share Date - ---------------- --------------- ---- 15,000 $3.34 2/1/95 55,000 3.41 10,000 3.28 47,500 3.37 100,000 3.46 2/2/95 20,000 3.47 5,000 3.53 2,000 3.28 15,000 3.34 2/3/95 62,300 3.28 10,000 3.34 2/6/95 5,000 3.28 50,000 3.41 2/7/95 12,000 3.34 2/8/95 10,000 3.41 2/9/95 5,000 3.41 2/13/95 5,000 3.34 2/14/95 253,000 3.50 2/15/95 7,500 3.34 2/16/95 5,000 3.47 13,000 3.41 3,800 3.34 2/24/95 10,000 3.73 3/3/95 358,900 3.50 3/16/95 10,000 3.53 5/24/95 7,500 3.53 5/25/95 2,500 3.53 5/26/95 26,000 3.54 6/1/95 -14- WARREN G. LICHTENSTEIN Number of Shares Purchased (Sold) Price Per Share Date - ---------------- --------------- ---- 100 $3.63 5/26/95 JACK HOWARD Number of Shares Purchased (Sold) Price Per Share Date - ---------------- --------------- ---- 400(1) $3.36 2/8/95 300(2) 3.39 2/9/95 4,600(2) 3.53 3/16/95 - -------- (1) Represents shares held of record by a trust for the benefit of Jack L. Howard. (2) Represents shares held of record by Mr. Howard in his IRA account. -15- APPENDIX B Security Ownership of Certain Beneficial Owners, Directors and Executive Officers The following table sets forth as of the Record Date, to the knowledge of the AutoInfo Stockholders Committee based on information contained in the Company's Revocation of Consent Statement By Board of Directors in Opposition to the Parties who refer to themselves as the AutoInfo Stockholders Committee dated May 15, 1995 and additional information known to the AutoInfo Stockholders Committee, each person reported to own beneficially more than 5% of the Company's outstanding Common Stock, each director and certain of the Company's executive officers.
Amount and Nature of Beneficial Ownership of the Name and Address Company's Common of Beneficial Owner Stock(1) Percent of Class(2) ---------------------------------------------- ------------------------- ----------------------- (i) 5% Stockholders: Ashford Capital Management, Inc.(3) P.O. Box 4172 Greenville, DE 19807 403,200 5.2% Dimensional Fund Advisors, Inc.(3) 1299 Ocean Avenue Santa Monica, CA 90401 391,100 5.1% Irving B. Harris(3) 2 North LaSalle Street Suite 505 Chicago, IL 60602 568,333(4) 7.4% Ryback Management Corporation(3) 7711 Corondelet Avenue St. Louis, MO 63105 903,350 11.7% Steel Partners II, L.P.(5) 750 Lexington Avenue New York, NY 10022 1,100,000 14.3% (ii) Directors and Executive Officers: Jason Bacher 331,272(6) 4.3% Chairman of the Board, Chief Executive Officer and Director Robert Fagenson 30,750(7) *(8) Director Andrew Gaspar 45,000 * Director Howard Nusbaum 191,531 2.5% Director Jerome Stengel 30,000 * Director
-16-
Amount and Nature of Beneficial Ownership of the Name and Address Company's Common of Beneficial Owner Stock(1) Percent of Class(2) ---------------------------------------------- ------------------------- ----------------------- Scott Zecher 331,746 4.3% President, Chief Operating Officer and Director All executive officers and directors as a group (7 persons) 1,005,299(9) 12.8%(10)
- --------------- * Less than 1%. (1) Unless otherwise indicated below, each director, executive officer and each 5% Stockholder has sole voting and investment power with respect to all shares beneficially owned. (2) Percentage of ownership is based on 7,732,252 outstanding shares of Common Stock. (3) Information with respect to this stockholder has been derived from the Schedule 13G filed by such stockholder with the Securities and Exchange Commission. (4) Includes 273,333 shares subject to currently exercisable warrants. (5) Based on Schedule 13D, as amended, filed with the Securities and Exchange Commission. (6) Includes 25,000 shares subject to currently exercisable options. (7) Includes (1) 1,500 shares owned by the Fagenson & Co. Profit Sharing Plan and Employee Pension Plan, of which Mr. Fagenson is a trustee, and (ii) 29,250 shares issuable upon exercise of a Common Stock purchase warrant held by Mr. Fagenson which is currently exercisable. (8) Assumes that all currently exercisable options or warrants owned by this individual have been exercised. (9) Includes 99,250 shares subject to currently exercisable options or warrants. (10) Assumes that all currently exercisable options or warrants owned by members of the group have been exercised. -17- IMPORTANT 1. If your shares are kept at your brokerage firm or bank, and they are registered in your brokerage firm's or your bank's name, please send back only the AutoInfo Stockholders Committee enclosed WHITE Consent Card in the special envelope provided. 2. If your shares are registered in your own names, please sign, date and return the enclosed WHITE Card to MacKenzie Partners. 3. Time is critically short. Only your latest dated WHITE Consent Card will count. 4. If your shares are held in the name of a brokerage firm, bank nominee or other institution, only it can sign a WHITE Consent Card with respect to your shares. Accordingly, please contact the person responsible for your account and give instructions for a WHITE Consent Card to be signed representing your shares. If you have any questions about giving your consent or require assistance in voting your shares, please call: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, NY 10010 (212) 929-5500 (Collect) or CALL TOLL FREE (800) 322-2885 -18- CONSENT CARD CONSENT BY STOCKHOLDERS OF AUTOINFO, INC. TO ACTION WITHOUT A MEETING THIS CONSENT IS SOLICITED BY THE AUTOINFO STOCKKOLDERS COMMITTEE The undersigned, a stockholder of record of AutoInfo, Inc. (the "Company" or the "Corporation") hereby consents, pursuant to Section 228 of the Delaware General Corporation Law, with respect to all shares of Common Stock, par value $.01 per share, of the Company which the undersigned is entitled to vote in all capacities, to each of the following actions without a meeting, without prior notice and without a vote: RESOLVED, that all present directors of the Company, and any other directors elected or appointed to the Board of Directors of the Company prior to the effective date of these resolutions in addition to or in lieu of the foregoing individuals are hereby removed, without cause, as directors of the Company; and it is further - ---------- CONSENT ---------- CONSENT WITHHELD INSTRUCTIONS: To consent or withhold consent to the removal of the foregoing directors check the appropriate box above. To withhold consent to the removal of any individual, check the "___ CONSENT" box above and write the name of such individual in the following space. RESOLVED, that Warren G. Lichtenstein, Lawrence Butler, Jack L. Howard, Marshall D. Butler, Jan R. Sussman and James Benenson, Jr. are elected as directors of the Company to fill the vacancies of the Board of Directors occasioned by the foregoing removal of directors, to serve in that capacity until their successors are duly elected and qualified; and it is further - ---------- CONSENT ---------- CONSENT WITHHELD INSTRUCTIONS: To consent or withhold consent to the election of all candidates, check the appropriate box above. To withhold consent to the election of any candidate, check the "___ CONSENT" box above and write the name of such candidate in the following space. RESOLVED, that the Bylaws be amended, with subsequent Articles to be renumbered as appropriate, by inserting the following ARTICLE following ARTICLE III: ARTICLE IV BUSINESS COMBINATIONS Prior to the consummation by the Corporation of any stock purchase, merger, asset acquisition or other similar type transaction where the consideration to be delivered by the Corporation is more than fifty (50) percent of the Corporation's assets at the time of such transaction (a "Business Combination"), the Corporation shall submit such Business Combination to its stockholders for approval regardless of whether the Business Combination is of a type which normally would require such stockholder approval under the DGCL. In the event that the holders of a majority of the outstanding Common Stock present at a duly called stockholders meeting vote for the approval of the Business Combination or act by consent in lieu of a stockholders' meeting, the Corporation shall be authorized to consummate the Business Combination. - ---------- CONSENT ---------- CONSENT WITHHELD If no box is marked with respect to each of the above Resolutions, the undersigned will be deemed to consent to such Resolution except that the undersigned will not be deemed to consent to the removal of any director whose name is written in the space provided above. (This Consent card is continued on the reverse side. Please mark, sign and date this Consent card on the reverse side before returning the Consent card in the enclosed envelope.) -2- IN WITNESS WHEREOF, the undersigned has executed this shareholder action on the date set forth below. Date:-------------------------------------------- ------------------------------------------------- Signature of Stockholder ------------------------------------------------- Signature (if held jointly) ------------------------------------------------- Name and Title of Representative (if applicable) IMPORTANT NOTE TO STOCKHOLDERS: Please sign exactly as your shares are registered. Joint owners should both sign. When signing as executor, trustee, administrator, guardian, officer of a corporation, attorney-in-fact or in any other fiduciary or representative capacity, please give your full name. This consent, when executed, will vote all shares held in all capacities. Be sure to date this Consent Card. **THIS IS YOUR CONSENT CARD** -3- -----END PRIVACY-ENHANCED MESSAGE-----