-----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, KqnwKCJyZFEzXcK9tipi8unSGtGP73ojbeqdUfNb+nmJInif2gYzgjaWBssMOzHf FX1tBaBByQHxT9dvlL+qUw== 0001058809-99-000024.txt : 19990906 0001058809-99-000024.hdr.sgml : 19990906 ACCESSION NUMBER: 0001058809-99-000024 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981130 FILED AS OF DATE: 19990903 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: 99706109 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, enclosed with this Proxy Statement, are requested by the Board of Directors of Canterbury Information Technology, Inc. for the Annual Meeting of Stockholders. The meeting is to be held on October 7, 1999 at 10:00 a.m. at The Mansion on Main Street, Plaza 3000 at the Mansion at Main Street, Voorhees, New Jersey. Stockholders of record as of the close of business on August 5, 1999 will be entitled to vote at the meeting and any adjournment of that meeting. As of that date, 8,702,296 shares of common stock of Canterbury were outstanding and entitled to one vote each. Execution of a proxy will not in any way affect a stockholder'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 stockholders may be revoked before October 7, 1999 at 10:00 a.m. by mail or other deliveries in writing, or by voice vote if the shareholder attends the Annual Meeting in person. The people named as attorneys in the proxies are either Officers or Directors of Canterbury. 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 explained below under the heading Election of Directors. Where a choice has been specified on the proxy with respect to a proposal, the shares represented by the proxy will be voted in accordance with the choice selected and will be votes FOR that proposal if no specification is indicated. Under Pennsylvania law, the presence of stockholders entitled to cast at least a majority of the votes that all stockholders are entitled to cast on a particular matter to be acted upon at a meeting, constitutes a quorum for purposes of consideration and action on a matter. Only stockholders indicating affirmative or negative decision on a matter are treated as voting. 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. If a stockholders' meeting is called for the election of Directors and is adjourned for lack of a quorum and another stockholders' meeting is called, those stockholders entitled to vote who attend the adjourned meeting, although less than a quorum as fixed under Pennsylvania law or in the by-laws, shall be a quorum for the purpose of electing Directors. If a meeting called to vote upon any other matter than the election of Directors has been adjourned for at least 15 days because of the absence of a quorum, those stockholders entitled to vote who attend such meeting, although less than a quorum as fixed under Pennsylvania law or in the by-laws shall still constitute a quorum for purpose of acting upon any matter set forth in the notice of meeting. If the notice actually states that those stockholders who attend the adjourned meeting shall nevertheless constitute a quorum for the purpose upon acting on the matter, then the vote would be binding. Canterbury is not aware of any other matters to be presented at the meeting. If any other matters are presented at the meeting upon which it is proper to take a vote, shares represented by all proxies received will be voted by and in 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, 1998 as filed with the SEC, including complete financial statements audited by Ernst & Young, LLP, as well as Canterbury's Form 10-Q report for the period ended May 31, 1999 are available upon request. The first date that this Proxy Statement and proxy material were sent to the stockholders was September 3, 1999. 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. NOMINEES FOR DIRECTORS Director Name Age Since Principal Occupation - --------------------------------------------------------------------- Stanton M. Pikus 59 1981 President, Chief Executive Officer,and Chairman of the Board of Directors Kevin J. McAndrew 41 1990 Executive Vice President, Chief Operating Officer, Chief Financial Officer, Treasurer Jean Zwerlein Pikus 46 1984 Vice President-Operations, Secretary Alan B. Manin* 62 1981 President, Atlantis Stephen M. Vineberg* 58 1988 President, CMQ, Inc. Paul L. Shapiro* 48 1992 Manager, McKesson Drug Co. Frank A. Cappiello* 73 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 Canterbury (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. KEVIN J. McANDREW, CPA, Chief Operating Officer since December, 1993; Executive Vice President and Chief Financial Officer of Canterbury 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. She 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). ALAN B. MANIN, Director of Canterbury since its inception. He is currently the President of Atlantis, a company which provides motivational training to employees of Fortune 1000 companies. He is a graduate of Temple University (B.S., 1960; M.Ed., 1966) and a founder of Canterbury (1981). He was a 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); and President, Chief Operating Officer and founder of Health Careers Academy, a federally accredited (National Association of Trade and Technical Schools) vocational school (1974-1979). 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., that provides 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. Before 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 purchased key-man life insurance policies on its corporate officers payable to Canterbury. The amount and beneficiary of the key-man life insurance policies are as follows: Amount of Corporate Officers Policy Beneficiary - ------------------------------------------------------------- Stanton M. Pikus $1,000,000 Company Kevin J. McAndrew $1,000,000 Company Jean Z. Pikus $ 500,000 Company Frank A. Cappiello was granted 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. EXECUTIVE CASH COMPENSATION The following table is a summary of cash compensation paid by Canterbury for services rendered in fiscal 1996, 1997 and 1998 to the Chief Executive Officer and each of the other four most highly-compensated Officers of Canterbury who received at least $100,000 in total annual compensation. Summary Compensation Table Name & Restricted Securities Principal Other Annual Stock Underlying LTIP All Other Position Year Salary($) Bonus($) Compensation($) Awards($) Options/SAR(#) Payouts($) Compensation($) - ------------------------------------------------------------------------------------------------------------ Stanton Pikus 1998 $202,500 $ - $ - $- $- $- $- President, 1997 195,000 - - - - - - 1996 195,000 - - - - - - Kevin McAndrew 1998 $127,788 - - - - - - Chief Operating 1997 120,000 - - - - - - Officer, 1996 120,000 - - - - - -
(1) No other Executive Officers received in excess of $100,000 in total annual compensation for the three-year period. OPTION GRANTS The following Executive Officers were granted five-year stock options during fiscal 1998 from the 1995 Stock Incentive Plan. Percentage of Total Options Stock Option Stock Option Granted in Name Amount Price Fiscal 1998 - --------------------------------------------------------------- Jean Z. Pikus 20,000 $1.375 18.93% Kevin J. McAndrew 35,000 $1.375 10.81% Stanton M. Pikus 50,000 $1.375 27.04% The following Executive Officers were granted five-year stock options after fiscal 1998 from the 1995 Stock Incentive Plan. Percentage of Total Options Stock Option Stock Option Granted in Name Amount Price Fiscal 1999 - --------------------------------------------------------------- Jean Z. Pikus 45,000 $.531 11.61% Kevin J. McAndrew 75,000 $.531 19.35% Stanton M. Pikus 100,000 $.531 25.81% AGGREGATED OPTION EXERCISES IN 1998 AND FISCAL YEAR-END 1998 OPTION VALUES The following table provides information on option exercises in fiscal 1998 by the Executive Officers and on the Executive Officers' unexercised options at November 30, 1998. Included are options granted under the 1987 Employee Stock Option Plan and the 1995 Stock Incentive Plan. Shares Number of Securities underlying Value of Unexercised In-The-Money Acquired on Value Unexercised Options at Year-End 1998(#) Options at Year-End 1998(#) Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable Stanton M. Pikus 0 - 100,001 0 0 0 Kevin J. McAndrew 0 - 110,002 0 0 0 Jean Z. Pikus 0 - 43,335 0 0 0
The following table provides information on option exercises after fiscal 1998 by the Executive Officers and on the Executive Officers' unexercised options as of July 30, 1999. Included are options granted under the 1995 Stock Incentive Plan. Shares Number of Securities underlying Value of Unexercised In-The-Money Acquired on Value Unexercised Options at Year-End 1998(#) Options at Year-End 1998(#) Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable Stanton M. Pikus 0 - 200,001 0 $109,400 0 Kevin J. McAndrew 0 - 151,668 0 $82,050 0 Jean Z. Pikus 0 - 88,335 0 $49,230 0
Option holders have five years from the date of grant to exercise any or all of their options, and upon leaving Canterbury 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, Canterbury entered into an amended employment agreement with the President. The term of the agreement is five years and provides 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 Canterbury's 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 Canterbury during his employment and for a period of one year after his employment with Canterbury 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. For the year ended November 30, 1998, the President waived his rights to receive any performance bonus earned. As a subsequent matter, in fiscal 1999 the President's employment contract was extended from 2001 to 2003 to provide continuity of senior management as well as consideration for his waiver of contractual bonus opportunity and salary increases in fiscal 1998. Canterbury also amended the employment agreement with its Executive Vice President and Chief Operating Officer during fiscal 1997. The term of the agreement is five years and provides 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 Canterbury's profitability. A bonus of $30,000 will be earned if the consolidated income before income taxes of Canterbury's 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. As a subsequent matter, in fiscal 1999 the Executive Vice President's employment contract was extended from 2001 to 2003 to provide continuity of senior management as well as consideration for his waiver of contractual bonus opportunity and salary increases in fiscal 1998. 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 Canterbury (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 1998 fiscal year. Stock Option Stock Option Name Amount Price ----------------------------------------------------- Stanton M. Pikus 50,000 $1.375 Kevin J. McAndrew 35,000 $1.375 Jean Z. Pikus 20,000 $1.375 Frank A. Cappiello 20,000 $1.375 Alan Manin 10,000 $1.375 Paul Shapiro 10,000 $1.375 Stephen Vineberg 10,000 $1.375 As a subsequent event in fiscal 1999 the following Directors received five-year stock options at market value. Stock Option Stock Option Name Amount Price ----------------------------------------------------- Stanton M. Pikus 100,000 $.531 Kevin J. McAndrew 75,000 $.531 Jean Z. Pikus 45,000 $.531 Frank A. Cappiello 35,000 $.531 Alan Manin 17,500 $.531 Paul Shapiro 17,500 $.531 Stephen Vineberg 17,500 $.531 The Company had 11 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 100% of said meetings. PERFORMANCE GRAPH The following graph demonstrates a comparison of Canterbury's stockholder returns at each fiscal year end as of November 30 with shareholder returns on a broad market index, the Nasdaq Stock Market (US), and a industry index, Nasdaq Non-Financial Stocks. The comparison assumes $100.00 was invested on November 30, 1993 in the Company's common stock, the Nasdaq Stock Market (US) and the Nasdaq Non-Financial Stocks. COMPARISON OF CUMULATIVE TOTAL RETURN D 300| | ++++++ O 250| ++++ ===== | ++=+= == L 200| +=+ | +=+=+=+= L 150| +=+= | +=+=+=+=+= A 100|+=*+=+=+=+= **** | **** ****** ** R 50| ***** ** | ************* S 0| ****** |_________________________________________________*** 1993 1994 1995 1996 1997 1998 Y E A R S KEY: + - Nasdaq National (US) = - Nasdaq Non-Financial * - Canterbury THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ENTIRE SLATE OF NOMINEES IN PROPOSAL NO. 1. A majority vote of over 50% will be necessary to carry this proposal. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS Shares Beneficially % Owned of Name Owned on August 5, 1999 Company's Shares*** - --------------------------------------------------------------- Stanton M. Pikus(a) 633,249(1) 6.56% Kevin J. McAndrew 211,305(2) 2.19% Jean Zwerlein Pikus (b) 124,808(3) 1.29% Alan B. Manin 148,223(4) 1.53% Stephen M. Vineberg 56,965(5) .59% Paul L. Shapiro 49,003(6) .51% Frank A. Cappiello 186,669(7) 1.93% Glen Hukins 11,667(8) .12% Gregory Lantz 11,667(9) .12% Alan McGaffin(c) 313,524(10) 3.25% - --------------------- --------- ------- All Officers, Directors and 5% Stockholders as a group (10 in number) 1,747,080 18.09% ========= ===== *** These percentages are calculated using total outstanding shares and total options exercisable. (a) Husband of Jean Z. Pikus, deemed to have beneficial interest in the 124,808 owned by wife and 2,001 shares of Canterbury common stock in the name of Matthew Zane Pikus with Stanton M. Pikus as custodian. (b) Wife of Stanton M. Pikus, deemed to have beneficial interest in the 633,249 owned by husband. (c) Husband of Pamela McGaffin, deemed to have beneficial interest in 5,000 stock options exercisable at $.531 owned by wife. Listed below is a table delineating the Stock Options included in the shares beneficially owned. Name of Individual Options Date Granted Exercise Price (1) Stanton M. Pikus 16,667 10/29/96 $3.09 33,334 01/13/97 $2.25 50,000 05/18/98 $1.38 100,000 12/04/98 $.53 (2) Kevin J. McAndrew,CPA 16,667 10/29/96 $3.09 16,667 01/13/97 $2.25 8,334 10/16/97 $3.56 35,000 05/18/98 $1.38 75,000 12/04/98 $.53 (3) Jean Zwerlein Pikus 8,334 10/29/96 $3.09 8,334 01/13/97 $2.25 6,667 10/16/97 $3.56 20,000 05/18/98 $1.38 45,000 12/04/98 $.53 (4) Alan Manin 3,334 10/29/96 $3.09 3,334 01/13/97 $2.25 10,000 05/18/98 $1.38 17,500 12/04/98 $.53 (5) Stephen Vineberg 2,500 08/16/94 $8.25 834 05/11/95 $8.25 3,334 07/24/95 $8.43 3,334 10/29/96 $3.09 8,334 01/13/97 $2.25 2,500 10/16/97 $3.56 10,000 05/18/98 $1.38 17,500 12/04/98 $.53 (6) Paul Shapiro 2,500 08/16/94 $8.25 834 05/11/95 $8.25 3,334 07/24/95 $8.43 3,334 10/29/96 $3.09 8,334 01/13/97 $2.25 2,500 10/16/97 $3.56 10,000 05/18/98 $1.38 17,500 12/04/98 $.53 (7) Frank A. Cappiello 33,334* 01/30/95* $6.00* 3,334 10/29/96 $3.09 33,334 01/13/97 $2.25 20,000 05/18/98 $1.38 35,000 12/04/98 $.53 (8) Glen Hukins 1,667 10/29/96 $3.09 10,000 12/04/98 $.53 (9) Gregory Lantz 1,667 10/29/96 $3.09 10,000 12/04/98 $.53 (10) Alan McGaffin 20,000 12/04/98 $.53 * Frank Cappiello's options are not part of the 1987 Employee Stock Option Plan, but also convert to restricted common stock. Mr. Cappiello has five years from the date of grant to exercise these options. Section 16(a) of the Securities Exchange Act of 1934 requires Canterbury's executive officers, directors, and affiliates file initial reports of ownership and reports of changes of ownership of Canterbury's common stock with the Securities and Exchange Commission. These executive officers, directors, and affiliates are required to furnish Canterbury with copies of all Section 16(a) forms that they file. Based solely on Canterbury's review of Securities and Exchange Commission Forms 3, 4, and 5 submitted to Canterbury, and written representations from these officers, directors, and affiliates that no other reports were required, the Company notes that all required forms were filed. 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, 1999. 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 Canterbury. In addition to the use of the mails, proxies may be solicited by regular employees of Canterbury, either personally or by telephone or telegraph. Canterbury 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 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. Respectfully submitted, By: /s/ Jean Zwerlein Pikus Jean Zwerlein Pikus Vice President and Secretary Dated: August 5, 1999 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 ANNUAL REPORT CANTERBURY INFORMATION TECHNOLOGY INC. 1998 ANNUAL REPORT CANTERBURY INFORMATION TECHNOLOGY, INC. NASDAQ NATIONAL MARKET: CITI Dear Fellow Stockholders In fiscal 1998, Canterbury reported a profitable year, earning ten cents per share. This profitability was expected since we reported in 1997 that we had recorded the final charges and reserves associated with the reengineering of our Company and its subsidiaries. In fiscal 1998, Canterbury's net cash provided by continuing operations was positive for the fourth consecutive year. For the fiscal years ending November 30, 1995, 1996, 1997 and 1998, Canterbury reported total cash flow from continuing operations in excess of $4,800,000. This figure is net of dollars spent to expand CALC/Canterbury's technical training and consulting division and to begin to develop CALC Web University, which is projected to begin offering training courses over the Internet by the fourth quarter of fiscal 1999. As of the close of fiscal 1998, Canterbury's net worth was $16,599,786 and our total assets were $25,700,415. Our bank term debt, which had been $8,300,000 as a result of our purchase of CALC/Canterbury Corp. in June of 1994 had been reduced to $1,221,000 as of November 30, 1998. (As of August 1, 1999 our bank term debt had been further reduced to $385,125.) Subsequent events: * In January 1999, ATM/Canterbury Corp, a wholly owned subsidiary of Canterbury Information Technology, Inc., announced that Bank of America had signed a contract to purchase a corporate license for Master Trak software, including the Easy Imaging module. Master Trak is a barcode records management system developed by ATM/Canterbury. Using Master Trak to track the physical movement of loan files increases efficiencies, and allows for uniform internal help desk support within corporate record centers as well as entire organizations. * In April of 1994, Canterbury announced that it was initiating an aggressive acquisition search and that we would only consider profitable, well-managed companies that would add to the products and services we can offer or would match our existing expertise. Although we have not consummated an acquisition since 1997, we are now in the position to actively search for acquisition candidates in the information technology sector. * In May, 1999, Canterbury reported that its wholly owned subsidiary CALC/Canterbury Corp. planned to roll out its own Web-based training content to be delivered under the auspices of CALC Web University. Interactive online content is scheduled to be available as early as the fourth quarter of fiscal 1999. Through CALC Web University, the various Canterbury companies intend to design both technical and management based courses that can be can be available to anyone, anywhere in the world over the Internet. The Canterbury Management Team and Canterbury Board of Directors will continue to explore every viable opportunity to attempt to increase shareholder value. Respectfully submitted, Stanton M. Pikus Kevin J. McAndrew President Executive Vice President August 5, 1999 Medford, NJ 08055 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, 1998 and 1997, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended November 30, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements 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, 1998 and 1997, and the consolidated results of its operations and cash flows for each of the three years in the period ended November 30, 1998, in conformity with generally accepted accounting principles. Ernst & Young, LLP Philadelphia, Pennsylvania February 26, 1999 Summary Financial Information as of November 30, 1998 Cash and cash equivalents $ 287,274 Accounts receivable, net 1,141,544 Prepaid and other current assets 1,985,269 -------------- Total current assets 3,414,087 Property and equipment net 2,323,996 Goodwill, net 8,993,805 Deferred income tax benefit 2,712,919 Other non-current assets 8,255,608 -------------- Total assets $ 25,700,415 ============== Accounts payable and accrued expenses $ 588,843 Income taxes payable 63,217 Unearned tuition income 954,128 Current portion, long-term debt 1,738,565 -------------- Total current liabilities 3,344,753 Long-term debt and deferred tax liability 5,755,876 Stockholders' equity Total stockholders' equity $ 16,599,786 -------------- Total liabilities and stockholders' equity $ 25,700,415 ============== Years ended November 30, 1998 and 1997 1998 1997 ---- ---- Net revenues $12,122,879 $12,423,452 Costs and expenses 6,695,276 7,104,803 ------------- ----------- Gross profit 5,427,603 5,318,649 Selling 1,984,836 2,032,510 General and administrative 3,798,612 4,318,455 ------------- ----------- Total operating expenses 5,783,448 6,350,965 Other income (expenses) Interest income 861,424 607,178 Interest expense (394,925) (490,552) Other 470,849 (517,956) ------------ ----------- Total other income (expenses) 937,348 (401,330) Income (loss) before income taxes and discontinued operations 581,503 (1,433,646) Provision/(benefit) for income taxes - (501,776) Income (loss) from continuing operations 581,503 (931,870) ------------ ----------- Discontinued operations Loss from discontinued operations (less applicable income taxes benefit of $298,224) - (1,536,047) ------------- ----------- Net income (loss) $ 581,503 $(2,467,917) ============= =========== Please refer to Canterbury Information Technology, Inc. financial statements in the November 30, 1998 Form 10-K Report, audited by Ernst & Young, LLP, for footnotes, schedules and further information. Summary Financial Information as of November 30, 1998 Cautionary Statement When used in this Report and in other public statements, both oral and written, by the Company and Company officers, the word "estimates," "project," "intend," "believe," "anticipate," and similar expressions, are intended to identify forward-looking statements regarding events and financial trends that may affect the Company's future operating results and financial position. Such statements are subject to risks and uncertainties that could cause the Company's actual results and financial position to differ materially. Such factors include, among others: (1) the Company's success in attracting new business and success of its mergers and acquisitions program; (2) the competition in the industry in which the Company competes; (3) the Company's ability to obtain financing on satisfactory terms; (4) the sensitivity of the Company's business to general economic conditions; and (5) other economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices. The Company undertakes no obligations to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events. LIQUIDITY AND CAPITAL RESOURCES Working capital at November 30, 1998 was $69,000. This was a reduction of $2,569,000 from the previous year. Two significant factors caused this reduction. First, there was a reclassification of $2,700,000 of deferred income tax benefit from current to long term, to properly reflect the future utilization of net operating loss carryforwards. Secondly, based on the restructured loan agreement with Chase Bank, an additional $865,000 of bank debt has been classified as current. The Company's outstanding amounts owed under the term loan and credit line with Chase Bank were due and payable at December 31, 1998. The Company and its lender have agreed to an extension of these agreements through December 1, 1999 subject to satisfactory documentation of the terms and conditions as agreed. The Company will continue to use its best efforts to replace its primary lender prior to that time. Subsequent to November 30, 1998 the Company has paid $510,000 to reduce its term loan from $1,221,000 to $711,000 as of March 12, 1999. The Agreement calls for the Company to make additional payments in 1999 totaling $1,015,000 with the remaining balance of $2,470,000 due December 1, 1999. The term debt and the revolving credit line will accrue interest at prime plus 2.5% per annum. On March 10, 1999 the Company completed a Private Placement Offering with non-affiliates for the issuance of 1,000,000 shares of common stock and the issuance of 200,000 shares as a finders fee, all with registration rights. The Company has received proceeds of $600,000. The Company used $500,000 in proceeds to repay amounts under the term loan. The remaining amounts are intended to be used for further paydown of debt, general corporate purposes and for working capital. Management believes that positive cash flow contributions from the Company's operating subsidiaries will be sufficient to cover cash flow requirements for fiscal 1999. There was no material commitment for capital expenditures as of November 30, 1998. Inflation was not a significant factor in the Company's financial statements. Cash flow from continuing operations for the year ended November 30, 1998 was $406,125. This was the fourth consecutive year of positive cash from continuing operations. During the year, the Company reduced its long term bank debt by $549,000. For the past three years, the reduction in long term debt totals $5,395,000. General Description Of The Year 2000 Issue And The Nature And Effects Of The Year 2000 On Information Technology (IT) And Non-IT Systems The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's computer programs that have date-sensitive software or embedded chips may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business practices. The Company began addressing the Year 2000 Issue in 1997 on a decentralized basis at each of its subsidiaries. In 1998, the Company began monitoring progress on a corporate level. Based on assessments made since 1997, the Company determined that modifications to or in limited cases replacement of computer software and hardware was necessary to enable those systems to operate properly after December 31, 1999. The Company presently believes that with modifications to and replacement of existing software and hardware, the Year 2000 Issue can be mitigated. However, if such modifications and replacements are not made, or are not completed timely, the Year 2000 Issue may have a material impact on the operations of the Company. The Company's plan to resolve the Year 2000 Issue involves the following four phases: assessment, remediation, testing, and implementation. To date, the Company has completed its assessment of all systems that could be significantly affected by the Year 2000. The assessment indicated that most of the Company's significant information technology systems could be affected, particularly the Company's registration/scheduling and accounting systems. The assessment also indicated that software and hardware (embedded chips) used in these applications were also at risk. The software developed and distributed by ATM/Canterbury is Y2K compliant. The Company's other training services are not at risk. Summary Financial Information as of November 30, 1998 (continued) Status Of Progress In Becoming Year 2000 Compliant, Including Timetable For Completion Of Each Remaining Phase The following estimates of completion percentages and dates are based on the Company's best estimates. However, there can be no guarantee that these dates can be achieved and actual results may differ. For its information technology exposures, to date the Company is approximately 95% complete on the remediation phase and completed its software reprogramming and replacement by June 30, 1999. Once software is reprogrammed or replaced for a system, the Company begins testing and implementation. These phases run concurrently for different systems. To date, the Company has completed 100% of its testing and has implemented 95% of its remediated systems. Completion of the testing phase for all significant operating systems was completed by April 30, 1999, with all remediated systems fully tested and implemented by September 1, 1999. Nature And Level Of Importance Of Third Parties And Their Exposure To The Year 2000 The Company has surveyed its significant vendors as to their Year 2000 compliance. Based on the nature of their responses, the Company does not need to develop contingency plans. Costs The Company has utilized and will continue to utilize both internal and external resources to reprogram, or replace, test, and implement the software and operating equipment for Year 2000 modifications. Many of the program fixes were completed in conjunction with other projects and had little incremental cost. The Company estimates that incremental costs relating to Year 2000 projects to date approximate $25,000. These costs have been expensed as incurred. The Company expects to spend less than $50,000 on Year 2000 projects in fiscal 1999. Year 2000 costs are difficult to estimate accurately and the projected cost could change due to unanticipated technical difficulties, project delays, and third party non-compliance, among other things. Risks Management of the Company believes that it has an effective program in place to resolve the Year 2000 Issue in a timely manner. As noted above, the Company has not yet completed all necessary phases of its Year 2000 plan. Because of the range of possible issues and the large number of variables involved, it is impossible to quantify the potential cost of problems should the Company or its trading partners not properly complete their Year 2000 plans and become Year 2000 compliant. Such costs and any failure of compliance efforts could have a material adverse effect on the Company. The Company believes that the most likely risks of serious Year 2000 business disruption are external in nature, including continuity of utility, telecommunication and transportation services, and the potential failure of the Company's customers due to their own non-compliance or the non-compliance of their business partners. In the event the Company does not properly complete its Year 2000 efforts or is affected by the disruption of outside services, the Company could be unable to take orders, distribute goods, invoice customers or collect payments. In addition, disruptions in the economy generally resulting from Year 2000 could have a material adverse effect on the Company. The Company could be subject to litigation for computer systems failure. The amount of potential liability and lost revenue cannot be reasonably estimated at this time. Contingency Plans The Company is currently in process of developing contingency plans to address the above Year 2000 risks as necessary. The Company plans to evaluate the status of completion of its Year 2000 efforts by September 1, 1999 and to determine what contingency plans are necessary at that time. In the normal course of business, the Company has contingency plans for disruption of business events and intends to augment those plans with specific Year 2000 considerations. RESULTS OF OPERATIONS Fiscal 1998 Compared to Fiscal 1997 Revenues Revenues decreased by $300,000 (2%) in fiscal 1998 over fiscal 1997. 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 stagnation 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 decreased by $409,000 (6%) in fiscal 1998 over the previous year. This most significant cause of this decrease was the reduction in rent expense of $476,000 in 1998 versus 1997. The reduction was due primarily to the Company recognizing in 1997 costs associated with terminating certain leases for its management training company's facilities. During 1998, the Company mitigated these costs, in part, through subleasing of the facility which resulted in a change in estimate of the previously recognized costs. Selling expense decreased by $48,000 (2%) in fiscal 1998 over fiscal 1997 due to reduced marketing expenses related to CALC/Canterbury. During the year, the Company reduced the size and frequency of the catalog schedule mailing. This was accomplished by eliminating non-critical information contained in the publication due to the increased use of the Web site to research both class descriptions and dates. General and administrative expense decreased by $520,000 (12%) in fiscal 1998 over fiscal 1997. Decreased legal expenses of $145,000, consulting fees of $194,000 and general public company/corporate expenses of $42,000 comprise the bulk of the reduction. The Company believes that the reduced level of these expenses will continue into fiscal 1999. Interest income for fiscal 1998 increased by $254,000 (42%) over the prior year due to recognition of interest income on the portion of the Company's revolving credit facility with Chase Bank that was assumed by the owners of Landscape Maintenance Services. This income was not recognized in fiscal 1997. Interest expense decreased by $96,000 (19%) in fiscal 1998 versus fiscal 1997. The reduction in outstanding borrowings on the term loan is the major cause for this reduction. CORPORATE INFORMATION WEB SITES Corporate canterburyciti.com CALC/Canterbury Corp. calctrain.com ATM/Canterbury Corp. atmcan.com MSI/Canterbury Corp. msitrain.com 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 Street 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 And are available on the Internet directly from the Securities and Exchange Commission's Web site: edgar.com EX-99.2 3 PROXY CARD CANTERBURY INFORMATION TECHNOLOGY, INC. PROXY FOR ANNUAL MEETING FISCAL 1998 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 October 7, 1999 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 September 3, 1999 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 It is specifically directed that this Proxy be voted: FOR ALL NOMINEES [ ] WITHHOLD ALL NOMINEES [ ] 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 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. FOR [ ] 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: _______, 1999 (Print Name) ________________________________________(L.S.) DATE: _______, 1999 (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 Please date, sign and mail your proxy card back as soon as possible! Annual Meeting of Stockholders CANTERBURY INFORMATION TECHNOLOGY, INC. October 7, 1999 EX-99.3 4 NOTICE OF ANNUAL MEETING NOTICE OF ANNUAL MEETING OF STOCKHOLDERS October 7, 1999 To the Stockholders Canterbury Information Technology, Inc. September 3, 1999 The Fiscal 1998 Annual Meeting of Stockholders of Canterbury Information Technology, Inc. (the "Company") will be held at The Mansion on Main Street, Voorhees, New Jersey on October 7, 1999 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, 1999 (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 August 5, 1999 (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 September 3, 1999, Medford, NJ A copy of the Annual Report of the Company for the fiscal year ended November 30, 1998 is enclosed herewith. The Company's 10-K Report for the fiscal year ended November 30, 1998, as well as the 10-Q Report for the three months ended May 31, 1999 are available free of charge upon written request to: Canterbury Information Technology, Inc., 1600 Medford Plaza, Medford, New Jersey 08055, and are available on the Internet directly from the Securities and Exchange Commission's Web site: edgar.com -----END PRIVACY-ENHANCED MESSAGE-----