-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MY/IeUbF5idxUuBKPvIglykTNuDWxs25laPn1EvsjkU2gSkxLy9qSHgy28srBYXr uIiTVoYeGikmYQ0VqINRUA== 0001058809-98-000022.txt : 19980812 0001058809-98-000022.hdr.sgml : 19980812 ACCESSION NUMBER: 0001058809-98-000022 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980810 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANTERBURY INFORMATION TECHNOLOGY INC CENTRAL INDEX KEY: 0000794927 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 232170505 STATE OF INCORPORATION: PA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-15588 FILM NUMBER: 98681473 BUSINESS ADDRESS: STREET 1: 1600 MEDFORD PLZ STREET 2: RTE 70 & HARTFORD RD CITY: MEDFORD STATE: NJ ZIP: 08055 BUSINESS PHONE: 6099530044 MAIL ADDRESS: STREET 1: 1600 MEDFORD PLZ CITY: MEDFORD STATE: NJ ZIP: 08055 FORMER COMPANY: FORMER CONFORMED NAME: CANTERBURY CORPORATE SERVICES INC DATE OF NAME CHANGE: 19940323 FORMER COMPANY: FORMER CONFORMED NAME: CANTERBURY EDUCATIONAL SERVICES INC /PA/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CANTERBURY PRESS INC DATE OF NAME CHANGE: 19870615 DEF 14A 1 NOTICE AND PROXY STATEMENT SCHEDULE 14A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (As Amended) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14A-11(c) or (S) Section 240.14a-12. CANTERBURY INFORMATION TECHNOLOGY, INC. - ----------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) - ----------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(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 (Set forth the amount on which the filing fee is calculated and state how it was determined): - ----------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - ----------------------------------------------------------------- (5) Total fee paid: - ----------------------------------------------------------------- [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid:______________________________________ (2) Form, Schedule or Registration Statement No._________________ (3) Filing Party:________________________________________________ (4) Date Filed:__________________________________________________ Canterbury Information Technology, 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 Information Technology, Inc. for the Annual Meeting of Stockholders to be held on September 9, 1998 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 July 17, 1998 will be entitled to vote at the meeting and any adjournment thereof. As of that date, 6,146,242 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 September 9, 1998 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, 1997 as filed with the SEC, including complete financial statements audited by Ernst & Young, LLP, as well as the Company's Form 10-Q report for the period ended May 31, 1998 are available upon request. The first date that this Proxy Statement and Proxy Material were sent to the shareholders was July 28, 1998. 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 - ---------------------- Director Name Age Since Principal Occupation - --------------------------------------------------------------------- Stanton M. Pikus 58 1981 President,Chief Executive Officer, and Chairman of the Board of Directors Kevin J. McAndrew 40 1990 Executive Vice President, Chief Operating Officer, Chief Financial Officer, Treasurer Jean Zwerlein Pikus 45 1984 Vice President - Operations, Secretary Alan B. Manin* 61 1981 President, Atlantis Stephen M. Vineberg* 57 1988 President, CMQ, Inc. Paul L. Shapiro* 47 1992 Manager, McKesson Drug Co. Frank A. Cappiello* 72 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, 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). He is currently the President of Atlantis, a company which provides motivational training to employees of Fortune 1000 companies. 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: Corporate Officers Amount of 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 33,334* 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 33,334* shares of Canterbury Information Technology, Inc. restricted common stock at $1.41* per share. Mr. Cappiello also received 33,334* five year stock options exercisable at $2.25* per share for his services, as well as his membership on the Board for the next two years. *Theses numbers reflect the 1 for 3 reverse stock split effective April 14, 1998. EXECUTIVE CASH COMPENSATION - --------------------------- The following table sets forth a summary of cash compensation paid by the Company with respect to services rendered in fiscal 1995, 1996 and 1997 to the Executive Officers of the Company who received at least $100,000 in total annual compensation. Summary Compensation Table --------------------------
Name & Securities All Principal Position Year Salary($) Bonus($) Other Annual Restricted Underlying LTIP Other Compen- Compensation($) Stock Awards($) Options/SAR(#)* Payouts(S) sation($) - --------------------------------------------------------------------------------------------------------------------- Stanton Pikus 1997 $195,000 $ - $ - $ - 33,334 $ - $ - President, 1996 195,000 - - - 16,667 - - 1995 199,148 - - - 0 - 26,120 Kevin McAndrew 1997 $120,000 - - - 25,001 - - Chief Operating 1996 120,000 - - - 16,667 - - Officer, 1995 127,111 - - - 0 - 11,307
(1) No other Executive Officers received in excess of $100,000 in total annual compensation for the three year period. *Theses numbers reflect the 1 for 3 reverse stock split effective April 14, 1998. OPTION GRANTS - ------------- The following Executive Officers were granted five year stock options during fiscal 1997 pursuant to the 1995 Stock Incentive Plan. Stock Option Stock Option Percentage of Name Amount* Price* Total Options Granted - ------------------------------------------------------------------- Jean Z. Pikus 8,334 $2.250 6,667 $3.561 7.81% Kevin J. McAndrew 16,667 $2.250 8,334 $3.561 13.01% Stanton M. Pikus 33,334 $2.250 17.35% *Theses numbers reflect the 1 for 3 reverse stock split effective April 14, 1998. AGGREGATED OPTION EXERCISES IN 1997 AND FISCAL YEAR-END 1997 OPTION VALUES - -------------------------------------------------------------------------- The following table provides information on option exercises in fiscal 1997 by the Executive Officers and on the Executive Officers' unexercised options at November 30, 1997. Included are options granted under the 1987 Employee Stock Option Plan and the 1995 Stock Incentive Plan.
Shares acquired Number of Securities Underlying Value of Unexercised In-The-Money on Value Unexercised Options at Year-End 1997(#) Options at Year-End 1997(#) Name Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable - --------------------------------------------------------------------------------------------------------------------- Stanton M. Pikus 0 - 66,668* 0 $28,101 0 Kevin J. McAndrew 0 - 91,669* 0 $14,051 0 Jean Z. Pikus 0 - 33,335* 0 $ 7,026 0
*Theses numbers reflect the 1 for 3 reverse stock split effective April 14, 1998. 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 1997, the Company entered into an amended 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 one year 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 at the same terms. The Company also has an amended 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 1997 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. 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 at the same terms. 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. The following Directors received five-year stock options at market value during the fiscal year. Name Stock Option Amount* Stock Option Price* - --------------------------------------------------------------- Frank A. Cappiello 33,334 $2.250 Alan Manin 3,334 $2.250 Paul Shapiro 8,334 $2.250 2,500 $3.561 Stephen Vineberg 8,334 $2.250 2,500 $3.561 *Theses numbers reflect the 1 for 3 reverse stock split effective April 14, 1998. The Company had 28 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 86% 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 an industry index, Nasdaq Non-Financial Stocks. The comparison assumes $100.00 was invested on November 30, 1993 in the Company's common stock, the Nasdaq Stock Market (US) and the Nasdaq Non-Financial Stocks. COMPARISON OF CUMULATIVE TOTAL RETURN KEY: --*-- Nasdaq National Market (US) ==*== Nasdaq Non-Financial --#-- Canterbury D 550 - --*-- ==*== O 500 - L 450 - -=*=- -=*=- L 400 - -=*=- A 350 - -=*=- R 300 - -=*=- S 250 - -=*=- 200 - -=*=- 150 - 100 - -=*#=- --#-- --#-- 50 - --#----#-- --#----#----#-- --#----#----#-- 0 - ------------------------------------------------------ Years 1993 1994 1995 1996 1996 1997 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 - ----------------------------------------------------------- Name Shares Beneficially Owned % Owned of on April 17, 1997* Company's Shares - ----------------------------------------------------------------- Stanton M. Pikus 558,248(2) 9.08% Kevin J. McAndrew 186,306(3) 3.03% Jean Zwerlein Pikus (1) 89,808(4) 1.46% Alan B. Manin 134,057(5) 2.18% Stephen M. Vineberg 41,965(6) .68% Paul L. Shapiro 34,003(7) .55% Frank A. Cappiello 151,669(8) 2.47% Ronald Stella 3,334(9) .05% Kevin Tull 4,167 .07% Alan McGaffin 99,412 1.62% ---------- ----- TOTAL 1,302,969 21.20% ========== ===== (1) Wife of Stanton M. Pikus, deemed to have beneficial interest in the 558, 248(2)*owned by husband. (2) Included are 16,667* stock options exercisable at $10.875* per share; 16,667* stock options exercisable at $3.093* per share; 33,334* stock options exercisable at $2.25* per share; and 50,000 stock options exercisable at $1.375. (3) Included are 33,334* stock options exercisable at $8.25* per share; 16,667* stock options exercisable at $10.875*; 8,334* stock options exercisable at $3.561* per share; 16,667* stock options exercisable at $3.093* per share; 16,667* stock options exercisable at $2.25* per share; and 35,000 stock options exercisable at $1.375. (4) Included are 10,000* stock options exercisable at $10.875* per share; 6,667* stock options exercisable at $3.561* per share; 8,334* stock options exercisable at $3.093* per share; 8,334* stock options exercisable at $2.25* per share; and 20,000 stock options exercisable at $1.375 per share. (5) Included are 3,334* stock options exercisable at $10.875* per share; 3,334* stock options exercisable at $3.093* per share; 3,334* stock options exercisable at $2.25* per share; and 10,000 stock options exercisable at $1.375 per share. (6) Included are 2,500* stock options exercisable at $8.25* per share; 2,500* stock options exercisable at $9.375* per share; 2,500* stock options exercisable at $3.561* per share; 3,334* stock options exercisable at $8.43* per share; 834* stock options exercisable at $8.25* per share; 3,334* stock options exercisable at $3.093* per share; 8,334* stock options exercisable at $2.25* per share; and 10,000 stock options exercisable at $1.375 per share. (7) Included are 2,500* stock options exercisable at $8.25* per share; 2,500* stock options exercisable at $9.375* per share; 834* stock options exercisable at $8.25* per share; 2,500* stock options exercisable at $3.561* per share; 3,334* stock options exercisable at $8.43* per share; 3,334* stock options exercisable at $3.093* per share; 8,334* stock options exercisable at $2.25* per share; and 10,000 stock options exercisable at $1.375 per share. (8) Included are 33,334* stock options exercisable at $6.00* per share; 3,334* stock options exercisable at $3.093* per share; 33,334* stock options exercisable at $2.25* per share; and 20,000 stock options exercisable at $1.375 per share. (See related transactions) (9) Included are 3,334* stock options exercisable at $3.00* per share. * Theses numbers reflect the 1 for 3 reverse stock split effective April 14, 1998. 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 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS - -------------- ------------------------------------------------------ The Board of Directors, upon recommendation of the Audit Committee, has selected Ernst & Young, LLP, as independent accountants for Canterbury Information Technology, Inc. for the fiscal year ending November 30, 1998. Ernst & Young, LLP has been the independent public accountants for Canterbury since 1984. Representatives of Ernst & Young, LLP are expected to be present at the Meeting and will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If the appointment of Ernst & Young, LLP is not ratified, the Board of Directors will reconsider its selection of auditors. 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. 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, 1997 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 Information Technology, 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 1998 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 and FOR the proposal to ratify and approval of the appointment of independent accountants. Respectfully submitted, By: /s/ Jean Zwerlein Pikus Jean Zwerlein Pikus Vice President and Secretary Dated: July 28, 1998 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. EX-99.1 2 PROXY CARD CANTERBURY INFORMATION TECHNOLOGY, INC. PROXY FOR ANNUAL MEETING FISCAL 1997 Please sign and return immediately KNOW ALL MEN BY THESE PRESENTS that I, the undersigned being a stockholder of Canterbury Information Technology, Inc., Medford, New Jersey do hereby constitute and appoint Stanton M. Pikus and Kevin J. McAndrew, or either one of them (with full power to act alone), my true and lawful attorney(s) with full power of substitution to attend the Annual Meeting of Stockholders of said Corporation to be held at The Mansion on Main Street, Plaza 3000 at Main Street, Voorhees, New Jersey on September 9, 1998 at 10:00 a.m. or any and all adjournment thereof, and to vote all stock owned by me or standing in my name, place and stead on the proposals specified in the notice of meeting dated July 28, 1998 or any and all adjournments thereof, with all the power I possess if I were personally present, hereby ratifying and confirming all that my said proxy or proxies may be in my name, place and stead as follows: IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE 1. Election of Directors* To elect seven (7) Directors, each for a term of one (1) year or until the next Annual Meeting: Stanton M. Pikus, Kevin J. McAndrew, Jean Zwerlein Pikus, Alan B. Manin, Stephen M. Vineberg, Paul L. Shapiro and Frank A. Cappiello It is specifically directed that this Proxy be voted: FOR ALL NOMINEES [ ] WITHHOLD ALL NOMINEES [ ] INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below: 2. Proposal to ratify Ernst & Young, LLP, as the Company's Independent Public Auditors. IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ] *In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. IF NO DESIGNATIONS ARE MADE IN THE SPACES PROVIDED ABOVE, THIS PROXY WILL BE VOTED "IN FAVOR OF" THE ABOVE PROPOSALS. The shares represented by a properly executed Proxy will be voted as directed. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS; IT MAY BE REVOKED PRIOR TO ITS EXERCISE. _______________________________________(L.S.) DATE: _______, 1998 (Print Name) _______________________________________(L.S.) DATE: _______, 1998 (Signature of Stockholder) NOTE: ALL JOINT OWNERS MUST SIGN INDIVIDUALLY. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR CUSTODIAN, PLEASE GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. EX-99.2 3 NOTICE OF ANNUAL MEETING NOTICE OF ANNUAL MEETING OF STOCKHOLDERS September 9, 1998 To the Stockholders Canterbury Information Technology, Inc. July 28, 1998 The Fiscal 1997 Annual Meeting of Stockholders of Canterbury Information Technology, Inc. (the "Company") will be held at The Mansion on Main Street, Voorhees, New Jersey on September 9, 1998 at 10:00 a.m. (Eastern Standard Time) for the following purposes: 1. To elect seven (7) Directors for the ensuing year, and until their successors are duly elected and qualified (Proposal No.1); 2. To ratify the appointment of Ernst & Young, LLP, as the Company's independent public accountants for the fiscal year ending November 30, 1998 (Proposal No. 2); 3. To transact any other business as may properly be brought before the meeting, or any adjournment thereof. Only stockholders of record as of the close of business on July 17, 1998 (record date) are eligible to vote at this Annual Meeting of Stockholders or any adjournment thereof. However, so that we may be sure your vote will be counted, we invite you to sign and date this proxy card and return it as soon as possible in the envelope provided. If you attend the meeting, you may revoke your proxy and vote in person. STOCKHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO VOTE, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED SELF-ADDRESSED ENVELOPE, WHICH DOES NOT REQUIRE ANY UNITED STATES POSTAGE. By order of the Board of Directors, By: /s/Jean Z. Pikus Jean Zwerlein Pikus Vice President and Secretary July 28, 1998, Medford, NJ A copy of the Annual Report of the Company for the fiscal year ended November 30, 1997 is enclosed herewith. The Company's 10-K Report for the fiscal year ended November 30, 1997, as well as the 10-Q Report for the three months ended May 31, 1998 are available free of charge upon written request to: Canterbury Information Technology, Inc., 1600 Medford Plaza, Medford, New Jersey 08055. CANTERBURY INFORMATION TECHNOLOGY, INC. 1600 Medford Plaza, Route 70 & Hartford Road Medford, New Jersey 08055 EX-99.3 4 1997 ANNUAL REPORT CANTERBURY INFORMATION TECHNOLOGY, INC. ANNUAL REPORT 1997 Dear Fellow Stockholders In fiscal 1997, Canterbury recorded the final charges and reserves associated with the reengineering of its business. Although, these charges and reserves caused us to report a book loss for the year, they were necessary. They also permitted us to enter fiscal 1998 with no "overhang" of potential "write-offs" resulting from our previous business segment. In fiscal 1997, Canterbury's net cash provided by continuing operations was positive for the third consecutive year. For the fiscal years ending November 30, 1995, 1996 and 1997, Canterbury reported cash flow from continuing operations in excess of $4,400,000. In fiscal 1997, Canterbury reduced its term debt with Chase Bank from $2,800,000 to less than $1,500,000. This term debt was $8,300,000 in June of 1994 as a result of the purchase of CALC/Canterbury Corp., our largest subsidiary. To review Canterbury's progress from the end of our fiscal year to the present date, please read the Subsequent Events section which follows. The Canterbury Management Team and Canterbury Board of Directors will continue to explore every opportunity to attempt to increase shareholder value. Respectfully submitted, /s/Stanton M. Pikus /s/Kevin J. McAndrew Stanton M. Pikus Kevin J. McAndrew President Executive Vice President June 10, 1998 Medford, NJ 08055 Subsequent Events - ----------------- December 1, 1997 Kevin J. McAndrew, Chief Operating Officer of Canterbury Information Technology, Inc. (NASDAQ National Market: CITI) announced today that CALC/Canterbury Corp., a wholly owned subsidiary of Canterbury, has commenced a major expansion into the technical training market. Mr. McAndrew was quoted as saying, "For some time CALC/Canterbury has been a Microsoft Certified Technical Education Center (CTEC) and a Lotus Authorized Education Center (LAEC), but until this time has focused primarily on end user or application training. From this time forward, CALC/Canterbury will commit a substantial amount of its capital resources to the technical training segment of the software training market." February 27, 1998 Canterbury Information Technology, Inc. (NASDAQ - CITI) - announced today that Chase Bank and Canterbury have agreed to extend the current banking relationship through December 31, 1998. April 8, 1998 Stanton M. Pikus, President, was quoted as saying, "Our Board of Directors, faced with the possibility of losing our NASDAQ National Market listing because of NASDAQ's minimum stock price listing requirements, has voted to reverse split our common stock on a one for three basis. Accordingly, the stock symbol will be changed to CITI. The split and the stock symbol change will take effect on April 14, 1998. This unanimous action by our Board of Directors will reduce our issued and outstanding shares from 18,199,000 to 6,066,000. It will also reduce the number of shares in our 'float' -- those shares that are freely tradeable in the stock market -- from approximately 12,000,000 shares to approximately 4,000,000 shares." April 15, 1998 Canterbury Reports Profitable First Quarter - - Expects Trend To Continue: Canterbury Information Technology, Inc. (NASDAQ - CITI) - announced today that for the three months ended February 28, 1998 revenues were $2,783,904 versus $2,822,275 in 1997. Income from continuing operations was $150,016 in 1998 versus $90,719 in 1997. Earnings per share was $.03 in 1998 versus $.02 in 1997, reflecting the one for three reverse split on April 14, 1998. June 30, 1998 Medford, New Jersey, since the end of fiscal 1997, Canterbury has reduced its bank term debt by an additional $200,000. The $8,300,000 of bank-term debt incurred in June of 1994 at the acquisition of CALC/Canterbury Corp. has been reduced to $1,300,000 as of this date. Report of Independent Auditors The Board of Directors and Stockholders Canterbury Information Technology, Inc. We have audited the accompanying consolidated balance sheets of Canterbury Information Technology, Inc. as of November 30, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended November 30, 1997. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provided a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Canterbury Information Technology, Inc. at November 30, 1997 and 1996, and the consolidated results of its operations and cash flows for each of the three years in the period ended November 30, 1997, in conformity with generally accepted accounting principles. Ernst & Young LLP Philadelphia, Pennsylvania February 27, 1998 Financial Information as of November 30, 1997 Cash and cash equivalents $ 295,936 Accounts receivable, net 1,332,518 Prepaid and other current assets 1,194,873 Deferred income tax benefit and refundable taxes 2,896,000 ------------- Total current assets 5,719,327 Property and equipment net 2,503,277 Goodwill, net 8,916,221 Other non-current assets 8,648,276 ------------- Total assets $ 25,787,101 ============= Accounts payable and accrued expenses $ 1,380,161 Unearned tuition income 828,469 Current portion, long-term debt 872,616 ------------- Total current liabilities 3,081,246 Long-term debt and deferred tax liability 7,101,456 Stockholders' equity Total stockholders' equity $ 15,604,399 ------------- Total liabilities and stockholders' equity $ 25,787,101 ============= Years ended November 30, 1997 and 1996 1997 1996 ---- ---- Net revenues $12,423,452 $12,717,692 Costs and expenses 7,104,803 5,854,993 ----------- ----------- Gross profit 5,318,649 6,862,699 Selling 2,032,510 2,149,563 General and administrative 4,318,455 3,996,020 Total operating expenses 6,350,965 6,145,583 Other (income) expenses Interest income 607,178 326,485 Interest expense (490,552) (682,251) Other (517,956) 374,575 --------- --------- Total other income (expenses) (401,330) 18,809 Income (loss) before income taxes and discontinued operations (1,433,646) 735,925 Provision/(benefit) for income taxes (501,776) 312,768 --------- --------- Income from continuing operations (931,870) 423,157 Discontinued operations Loss from discontinued operations less applicable income taxes benefits of ($298,224) and ($762,417) (1,536,047) (1,031,761) Gain on sale of discontinued operations (less applicable income taxes provision of $1,681,649) - 2,275,172 ----------- ------------- Net income (loss) $(2,467,917) $ 1,666,568 =========== ============= Please refer to Canterbury Information Technology, Inc. financial statements in the November 30, 1997 Form 10-K Report, audited by Ernst & Young, LLP, for footnotes, schedules and further information. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES Working capital at November 30, 1997 was $2,638,000, an increase of $667,000 over the previous year. During 1997 the Company and its primary lender, Chase Manhattan Bank, agreed to formally end the banking relationship between them by December 31, 1997. Throughout the year, the Company attempted to replace the bank with a suitable lender. No acceptable alternative was found. In February, 1998 the Company and Chase agreed to extend their banking relationship until December 31, 1998. The Company has agreed to make scheduled term debt payments totaling $700,000 in fiscal 1998. The Company and Chase agreed that all defaults under the previous agreements were permanently waived and the Company would again use its best efforts to replace Chase during 1998. Management believes that positive cash flow contributions from the Company's operating subsidiaries will be sufficient to cover cash flow requirements for fiscal 1998. There was no material commitment for capital expenditures as of November 30, 1997. Inflation was not a significant factor in the Company's financial statements. Cash flow from continuing operations for the year ended November 30, 1997 was $544,000. This was the third consecutive year of positive cash from continuing operations. During the year, the Company reduced its long term bank debt by $2,439,000. For the past three years, the reduction in long term debt totals $7,663,000. As with most organizations, the Company relies heavily on technology to deliver its goods and services. As the turn of the century approaches, the Company is preparing all of its computer systems to be Year 2000 compliant. A company-wide taskforce has been identified to review all software applications, operating systems and proprietary programs to ensure that they do not malfunction as a result of the Year 2000. In this process, the Company plans to replace and/or upgrade all systems that do not currently meet the required standards. The current cost of this effort is still being evaluated. As part of this upgrade process, the Company expects to benefit from many of the technology advances found in the newest Year 2000 software releases. RESULTS OF OPERATIONS Fiscal 1997 Compared to Fiscal 1996 Revenues - -------- Revenues decreased by $295,000 (2%) in fiscal 1997 over fiscal 1996. This slight reduction was due to the re-engineering of the sales department in the software training area of the Company. As previously discussed, new information technology goods and services are being introduced to our customers. This strategy of becoming a more complete provider of information technology services required the restructuring of the existing sales force. This has caused, in the short term, some revenue degradation due to the recruiting, hiring and training process of the sales staff. The Company believes that this current investment will provide long-term benefits to the customers and hence, revenues. Costs and Expenses - ------------------ Costs and expenses increased by $1,250,000 (21%) in fiscal 1997 over the previous year. This increase was caused by various factors. Rent expense increased by $423,000 due to the Company establishing lease termination reserves, increasing the number of classrooms for computer training, as well as reserving for the relocation of CALC/Canterbury and MSI/Canterbury into customized office and classroom space in Parsippany, New Jersey. Subcontract labor for CALC/Canterbury increased by $212,000 for two reasons. First, there was a significant increase in technical training classes offered in 1997, which resulted in the need for more consultants to train these high-end courses. Secondly, there was approximately $75,000 spent for programming a new operational accounting system which will allow for both Year 2000 compliance and increased reporting and processing capabilities. Over $300,000 of the increase in 1997 was attributed to the acquisition of ATM/Canterbury in May, 1997, as well as ProSoft/Canterbury operating for a full year in 1997 versus 1996. Selling expense decreased by $117,000 (5%) in fiscal 1997 over fiscal 1996 due to lower commission expense and a reduction in sales personnel through the first nine months of fiscal 1997. General and administrative expense increased by $322,000 (8%) in fiscal 1997 over fiscal 1996. Increased legal fees associated with the settlement and restructuring of the Chase banking relationship as well as higher consulting fees for the corporate office caused this increase. The Company believes that both these expenses are non-recurring. During 1997, the Company allocated $235,000 of corporate expenses to discontinued operations. Interest income for fiscal 1997 increased by $281,000 (86%) over fiscal 1996 due to the payments from the note receivable generated by the sale of Landscape Maintenance Services, Inc. in November, 1996. Interest expense decreased by $192,000 (28%) in fiscal 1997 versus fiscal 1996. The reduction in outstanding borrowings on the term loan is the major cause for this reduction. Other expenses of $518,000 in fiscal 1997 were due primarily to a $450,000 charge representing the difference between the unpaid balance of a note receivable and the estimated current value of the collateral supporting the note. Corporate Information --------------------- BOARD OF DIRECTORS - ------------------ Stanton M. Pikus Kevin J. McAndrew Jean Zwerlein Pikus Alan Manin Stephen M. Vineberg Paul L. Shapiro Frank A. Cappiello EXECUTIVE OFFICERS - ------------------ Stanton M. Pikus: President, Chief Executive Officer Kevin J. McAndrew, CPA: Executive Vice President, Chief Operating Officer, Chief Financial Officer, Treasurer Jean Zwerlein Pikus: Vice President, Operations; Secretary CORPORATE HEADQUARTERS - ---------------------- 1600 Medford Plaza, Medford, New Jersey 08055; (609) 953-0044; (Fax) 609-953-0062 TRANSFER AGENT - -------------- American Stock Transfer Trust & Company 6201 Fifteenth Avenue, Brooklyn, New York 11219 AUDITORS - -------- Ernst & Young, LLP 2 Commerce Square, 2001 Market St., Suite 4000, Philadelphia, PA 19103 SEC FORM 10-K - ------------- The Company's annual report to the Securities and Exchange Commission on Form 10-K and other financial information such as interim and annual reports to stockholders are available, without charge to stockholders, upon written request to: Canterbury Information Technology, Inc. 1600 Medford Plaza, Medford, New Jersey 08055 (609) 953-0044 Fax (609) 953-0062 Web site: canterburyciti.com CANTERBURY WEB SITES Corporate....................canterburyciti.com CALC/Canterbury Corp.........calctrain.com ATM/Canterbury Corp..........atmcan.com ProSoft/Canterbury Corp......prosoftweb.com MSI/Canterbury Corp..........msitrain.com CANTERBURY INFORMATION TECHNOLOGY, INC. 1600 Medford Plaza, Medford, New Jersey 08055 (609) 953-0044 Fax (609) 953-0062 www.canterburyciti.com (Nasdaq: CITI) -----END PRIVACY-ENHANCED MESSAGE-----