SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COTELLIGENT, INC.
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(Name of Registrant as Specified In Its Charter)
SKIRITAI CAPITAL LLC
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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May [__], 2002
Dear Fellow Cotelligent, Inc. Stockholder:
WE DO NOT BELIEVE THAT COTELLIGENT IS A VIABLE COMMERCIAL ENTERPRISE.
We do not believe that Cotelligent is a viable commercial enterprise as
it has been and is currently being operated by the company's existing board of
directors and management team. Under the direction of Cotelligent's board of
directors and management team:
- the company's common stock has consistently under-performed
the Russell 2000 Index and the NASDAQ Composite Index,
managing a negative 97% return for stockholders from March
31, 1997 to December 31, 2001 - versus a positive 42% return
for the Russell 2000 Index and a positive 60% return for the
NASDAQ Composite Index over the same period;
- the company's common stock has managed to trade at a
significant discount to the underlying cash value of the
company (for example, Cotelligent common stock had a per share
market price of $0.43 on March 28, 2002 compared to an
estimated cash value per share of $1.48);
- the company's common stock price per share has continuously
declined from a high of $5.72 on June 30, 2000, the date upon
which Cotelligent disposed of its IT staffing business, to the
current price of $0.51 on May 20, 2002.
- the company has continued to deplete its most valuable asset -
its cash reserves and other liquid assets - in pursuit of a
vague strategic plan that the company's board of directors and
management team cannot consistently articulate and routinely
fail to execute; and
- the company has displayed a strident disregard for the best
interests of the company's stockholders by failing to take
appropriate and obvious steps to maximize the value of your
investment in the company.
During three separate meetings that we have held with members of
Cotelligent's board of directors and senior management over a period of only 18
weeks, Cotelligent's management described three different strategic plans for
the company. During each of these meetings, we suggested to James R. Lavelle,
Cotelligent's Chairman of the Board and Chief Executive Officer, that the
interests of the company's stockholders would be best served by pursuing a sale,
liquidation or recapitalization of the company. Mr. Lavelle adamantly refused to
consider any alternatives where a third party or the Cotelligent stockholders
would get HIS cash.
OUR OBJECTIVE - MAXIMIZE THE VALUE OF YOUR INVESTMENT IN COTELLIGENT BY SELLING,
LIQUIDATING OR RECAPITALIZING THE COMPANY AS PROMPTLY AS PRACTICABLE.
In light of Cotelligent's poor performance and the inability or
unwillingness of the company's existing board of directors and management team
to develop and execute a viable strategic plan for the company, our objective is
to urge Cotelligent's board of directors and management team to immediately
pursue a sale, liquidation or recapitalization of the company. We strongly
believe that such a strategy will maximize the value of your investment in the
company as quickly as possible, and prevent the further unnecessary depletion of
the company's most valuable asset - its cash reserves and other liquid assets.
We have determined to pursue our objective because we believe that
Cotelligent's existing board of directors and management team are pursuing a
flawed strategic plan that will continue to erode the value of your investment
in the company, while serving only to benefit the company's management team with
ongoing and unwarranted compensation and other perquisites.
OUR PLAN - ELECT OUR REPRESENTATIVE TO COTELLIGENT'S BOARD OF DIRECTORS AND URGE
THE COMPANY'S BOARD OF DIRECTORS TO TERMINATE THE COMPANY'S STOCKHOLDER RIGHTS
PLAN.
We have a simple plan to achieve our objective - unlock the underlying
value of Cotelligent's most valuable asset - its cash reserves and other liquid
assets - by selling, liquidating or recapitalizing the company as promptly as
practicable. We believe that we can take two important steps toward our
objective by:
- electing our representative, Russell Silvestri, as a Class I
director on Cotelligent's board of directors, thereby enabling
us to apply greater pressure on the company's board of
directors to maximize the value of your investment in the
company by selling, liquidating or recapitalizing the company
as promptly as practicable; and
- adopting a stockholder resolution recommending that the
company's board of directors terminate the company's
stockholder rights plan by redeeming the rights outstanding
under the plan, which we believe are discouraging third
parties from pursuing an acquisition of the company and
depressing the trading price of the company's common stock. We
further believe that eliminating the company's stockholder
rights plan may encourage third parties to purchase the
company at a premium to its current market value.
We need your assistance to accomplish our objective and maximize the
value of your investment in the company. We are asking you to sign and date the
enclosed WHITE proxy card, voting FOR our director nominee and our stockholder
proposal, and return it promptly in the enclosed postage-paid envelope.
RISKS OF THE STATUS QUO - STAYING THE COURSE WILL FURTHER ERODE THE VALUE OF
YOUR INVESTMENT IN COTELLIGENT.
The time for change at Cotelligent is now. If the
company is permitted to continue on its current course, we believe that:
- the company will continue to fail in its efforts to execute
the current strategic plan envisioned by the company's
existing board of directors and management team;
- the company will continue to deplete its sole remaining
valuable assets - its cash reserves and other liquid assets;
and
- the value of your investment in the company will continue to
decline over time.
We need your assistance to prevent Cotelligent from suffering these
consequences of the status quo. Your vote is extremely important. Whether or not
you plan to attend Cotelligent's 2002 Annual Meeting of Stockholders, we urge
you to sign and date the enclosed WHITE proxy card, voting FOR our director
nominee and our stockholder proposal, and return it promptly in the enclosed
postage-paid envelope.
If you have any questions or require any assistance in completing or
delivering your proxy, please call us at (415) 921-7896 or send us an e-mail at
rsilvestri@SKIRITAI.com.
Sincerely,
SKIRITAI Capital LLC
/s/ Russell Silvestri
------------------------------------
Russell Silvestri
Managing Partner
-2-
ANNUAL MEETING OF STOCKHOLDERS
OF COTELLIGENT, INC.
JUNE 11, 2002
PROXY STATEMENT OF SKIRITAI CAPITAL LLC
This proxy statement is being furnished to you, and the enclosed WHITE
proxy card is being solicited from you, the stockholders of Cotelligent, Inc.
("Cotelligent" or the "company"), by SKIRITAI Capital LLC ("SKIRITAI" or "we")
for use only at the 2002 Annual Meeting of Stockholders of Cotelligent (the
"2002 Annual Meeting"), and at any adjournments, postponements or rescheduling
thereof. The 2002 Annual Meeting will be held at the Grand Hyatt Hotel located
at 345 Stockton Street in San Francisco, California on the 11th day of June,
2002 at 9:00 a.m. Pacific Daylight Saving Time.
We are soliciting proxies to take the following actions at the 2002
Annual Meeting:
(1) to elect our representative, Russell Silvestri, as a Class I
director on Cotelligent's board of directors to serve for a
three-year term expiring at Cotelligent's 2005 Annual Meeting
of Stockholders and until his successor is duly elected and
qualified;
(2) to adopt the following resolution of the stockholders of
Cotelligent:
"WHEREAS, Cotelligent, Inc., a Delaware corporation (the
"Company"), is a party to that certain Rights Agreement,
dated as of September 24, 1997 (the "Rights Agreement"),
between the Company and BankBoston, a national banking
association, as the same may have been amended from time to
time.
WHEREAS, the stockholders of the Company have determined that
the Rights Agreement is not in the best interests of the
stockholders of the Company.
NOW, THEREFORE, BE IT RESOLVED, that the stockholders of the
Company urge and recommend that the Board of Directors of the
Company order the redemption of, and take all other action
necessary or appropriate to redeem, all Rights (as defined in
the Rights Agreement) issued and outstanding under the Rights
Agreement pursuant to the terms and conditions thereof, and by
so doing, cause the termination of all rights to exercise the
Rights thereunder pursuant to the terms and conditions
thereof, and not adopt any new or similar plan without
stockholder approval."
(3) to transact such other business as may properly come before
the 2002 Annual Meeting or any adjournments, postponements or
rescheduling thereof.
Only Cotelligent stockholders of record as of the close of business on
April 24, 2002 are entitled to receive notice of and to vote at the 2002 Annual
Meeting.
YOUR VOTE IS EXTREMELY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
2002 ANNUAL MEETING, WE URGE YOU TO SIGN AND DATE THE ENCLOSED WHITE PROXY CARD,
VOTING FOR OUR DIRECTOR NOMINEE AND OUR STOCKHOLDER PROPOSAL, AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR LATEST-DATED PROXY IS THE
ONLY ONE THAT WILL BE COUNTED, SO YOU MAY RETURN THE WHITE PROXY CARD EVEN IF
YOU HAVE ALREADY RETURNED A PROXY THAT YOU RECEIVED FROM COTELLIGENT. WE URGE
YOU NOT TO RETURN ANY PROXY THAT YOU RECEIVE FROM COTELLIGENT.
This proxy statement is dated May [__], 2002. This proxy statement and
the enclosed WHITE proxy card were first sent or given to stockholders of
Cotelligent on or about May [__], 2002.
-1-
INTRODUCTION
THE 2002 ANNUAL MEETING OF STOCKHOLDERS OF COTELLIGENT
According to Cotelligent's proxy statement for the 2002 Annual Meeting,
filed with the Securities and Exchange Commission on May 10, 2002, one person
will be elected as a Class I director on Cotelligent's board of directors to
serve for a three-year term expiring at Cotelligent's 2005 Annual Meeting of
Stockholders and until his or her successor is duly elected and qualified.
Cotelligent is not proposing any other matters for consideration at the
2002 Annual Meeting.
ELECTION OF DIRECTORS - ELECT OUR DIRECTOR NOMINEE
In accordance with Cotelligent's Amended and Restated Bylaws, we have
provided written notice to the Secretary of Cotelligent of our intent to
nominate our representative, Russell Silvestri, for election as a Class I
director on Cotelligent's board of directors at the 2002 Annual Meeting. We are
soliciting your proxy to vote FOR the election of our director nominee as a
Class I director on Cotelligent's board of directors at the 2002 Annual Meeting
to serve for a three-year term expiring at Cotelligent's 2005 Annual Meeting of
Stockholders and until his successor is duly elected and qualified.
We believe that electing our director nominee to the company's board of
directors will enable us to apply greater pressure on the company's board of
directors to maximize the value of your investment in the company by selling,
liquidating or recapitalizing the company as promptly as practicable.
For more information regarding our director nominee, see "Election of
Directors - Elect Our Director Nominee" and "Information about the Participants
in Our Solicitation of Proxies."
OUR STOCKHOLDER PROPOSAL - ADOPT A STOCKHOLDER RESOLUTION RECOMMENDING THAT THE
COTELLIGENT BOARD OF DIRECTORS TERMINATE COTELLIGENT'S STOCKHOLDER RIGHTS PLAN
In accordance with Cotelligent's Amended and Restated Bylaws, we have
provided written notice to the Secretary of Cotelligent of our intent to propose
the adoption of a stockholder resolution at the 2002 Annual Meeting. Our
proposed stockholder resolution recommends that the company's board of directors
terminate the company's stockholder rights plan by redeeming the rights
outstanding under the plan, and not adopt any new or similar plan without
stockholder approval.
We are soliciting your proxy to vote FOR our stockholder proposal to
adopt a stockholder resolution recommending that the company's board of
directors terminate the company's stockholder rights plan by redeeming the
rights outstanding under the plan, and not adopt any new or similar plan without
stockholder approval.
We believe that the company's stockholder rights plan and the rights
outstanding under the plan are discouraging third parties from pursuing an
acquisition of the company and depressing the trading price of the company's
common stock. We further believe that eliminating the company' stockholder
rights plan may encourage third parties to purchase the company at a premium to
its current market value.
For more information regarding our stockholder proposal, see "Our
Stockholder Proposal - Adopt a Stockholder Resolution Recommending that the
Cotelligent Board of Directors Terminate the Cotelligent Stockholder Rights
Plan."
-2-
YOUR VOTE IS EXTREMELY IMPORTANT!
PLEASE RETURN OUR WHITE PROXY CARD TODAY AND VOTE FOR OUR DIRECTOR
NOMINEE AND OUR STOCKHOLDER PROPOSAL
WHETHER OR NOT YOU PLAN TO ATTEND THE 2002 ANNUAL MEETING, WE URGE YOU
TO SIGN AND DATE THE ENCLOSED WHITE PROXY CARD, VOTING FOR OUR DIRECTOR NOMINEE
AND OUR STOCKHOLDER PROPOSAL, AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOUR LATEST-DATED PROXY IS THE ONLY ONE THAT WILL BE
COUNTED, SO YOU MAY RETURN THE WHITE PROXY CARD EVEN IF YOU HAVE ALREADY
RETURNED A PROXY THAT YOU RECEIVED FROM COTELLIGENT. WE URGE YOU NOT TO RETURN
ANY PROXY THAT YOU RECEIVE FROM COTELLIGENT.
If you have any questions about this proxy statement or how to vote FOR
our director nominee or our stockholder proposal by returning the enclosed WHITE
proxy card, please contact us at:
SKIRITAI CAPITAL LLC
655 MONTGOMERY STREET
SUITE 1438
SAN FRANCISCO, CA 94111
(415) 921-7896
E-MAIL: RSILVESTRI@SKIRITAI.COM
-3-
OUR OBJECTIVE AND OUR PLAN
WE DO NOT BELIEVE THAT COTELLIGENT IS A VIABLE COMMERCIAL ENTERPRISE.
We do not believe that Cotelligent is a viable commercial enterprise as
it has been and is currently being operated by the company's existing board of
directors and management team. Under the direction of Cotelligent's board of
directors and management team:
- the company's common stock has consistently under-performed
the Russell 2000 Index and the NASDAQ Composite Index,
managing a negative 97% return for stockholders from March 31,
1997 to December 31, 2001 - versus a positive 42% return for
the Russell 2000 Index and a positive 60% return for the
NASDAQ Composite Index over the same period;
- the company's common stock has managed to trade at a
significant discount to the underlying cash value of the
company (for example, Cotelligent common stock had a per share
market price of $0.43 on March 28, 2002 compared to an
estimated cash value per share of $1.48);
- the company's common stock price per share has continuously
declined from a high of $5.72 on June 30, 2000, the date upon
which Cotelligent disposed of its IT staffing business, to the
current price of $0.51 on May 20, 2002.
- the company has continued to deplete its most valuable asset -
its cash reserves and other liquid assets - in pursuit of a
vague strategic plan that the company's board of directors and
management team cannot consistently articulate and routinely
fail to execute; and
- the company has displayed a strident disregard for the best
interests of the company's stockholders by failing to take
appropriate and obvious steps to maximize the value of your
investment in the company.
During three separate meetings that we have held with members of
Cotelligent's board of directors and senior management over a period of only 18
weeks, Cotelligent's management described three different strategic plans for
the company. During each of these meetings, we suggested to James R. Lavelle,
Cotelligent's Chairman of the Board and Chief Executive Officer, that the
interests of the company's stockholders would be best served by pursuing a sale,
liquidation or recapitalization of the company. Mr. Lavelle adamantly refused to
consider any alternative where a third party or the Cotelligent stockholders
would get HIS cash.
We do not believe that Cotelligent can survive or grow under the
guidance and direction of a board of directors and a management team that cannot
clearly articulate or successfully execute a viable strategic plan for the
company.
OUR OBJECTIVE - MAXIMIZE THE VALUE OF YOUR INVESTMENT IN COTELLIGENT BY SELLING,
LIQUIDATING OR RECAPITALIZING THE COMPANY AS PROMPTLY AS PRACTICABLE.
In light of Cotelligent's poor performance and the inability or
unwillingness of the company's existing board of directors and management team
to develop and execute a viable strategic plan for the company, our objective is
to urge Cotelligent's board of directors and management team to immediately
pursue a sale, liquidation or recapitalization of the company. We strongly
believe that such a strategy will maximize the value of your investment in the
company as quickly as possible, and prevent the further unnecessary depletion of
the company's most valuable asset - its cash reserves and other liquid assets.
We have determined to pursue our objective because we believe that
Cotelligent's existing board of directors and management team are pursuing a
flawed strategic plan that will continue to erode the value of your investment
in the company, while serving only to benefit the company's management team with
ongoing and unwarranted compensation and other perquisites.
-4-
OUR PLAN - ELECT OUR REPRESENTATIVE TO COTELLIGENT'S BOARD OF DIRECTORS AND URGE
THE COMPANY'S BOARD OF DIRECTORS TO TERMINATE THE COMPANY'S STOCKHOLDER RIGHTS
PLAN.
We have a simple plan to achieve our objective - unlock the underlying
value of Cotelligent's most valuable asset - its cash reserves and other liquid
assets - by selling, liquidating or recapitalizing the company as promptly as
practicable. We believe that we can take two important steps toward our
objective by:
- electing our representative, Russell Silvestri, as a Class I
director on Cotelligent's board of directors, thereby enabling
us to apply greater pressure on the company's board of
directors to maximize the value of your investment in the
company by selling, liquidating or recapitalizing the company
as promptly as practicable; and
- adopting a stockholder resolution recommending that the
company's board of directors terminate the company's
stockholder rights plan by redeeming the rights outstanding
under the plan, which we believe are discouraging third
parties from pursuing an acquisition of the company and
depressing the trading price of the company's common stock. We
further believe that eliminating the company's stockholder
rights plan may encourage third parties to purchase the
company at a premium to its current market value.
WE NEED YOUR ASSISTANCE TO ACCOMPLISH OUR OBJECTIVE AND MAXIMIZE THE
VALUE OF YOUR INVESTMENT IN THE COMPANY. WE ARE ASKING YOU TO SIGN AND DATE THE
ENCLOSED WHITE PROXY CARD, VOTING FOR OUR DIRECTOR NOMINEE AND OUR STOCKHOLDER
PROPOSAL, AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
-5-
ELECTION OF DIRECTORS
ELECT OUR DIRECTOR NOMINEE
The Cotelligent board of directors currently consists of three classes,
Class I, Class II, and Class III, each containing one director. According to
Cotelligent's proxy statement for the 2002 Annual Meeting, filed with the
Securities and Exchange Commission on May 10, 2002, only the Class I director
will be elected at the 2002 Annual Meeting. The Class I director elected will
serve a three-year term expiring at Cotelligent's 2005 Annual Meeting of
Stockholders and until his or her successor is duly elected and qualified.
In accordance with Cotelligent's Amended and Restated Bylaws, we have
provided written notice to the Secretary of Cotelligent of our intent to
nominate our representative, Russell Silvestri, for election as a Class I
director on Cotelligent's board of directors at the 2002 Annual Meeting to serve
for a three-year term expiring at Cotelligent's 2005 Annual Meeting of
Stockholders and until his successor is duly elected and qualified.
INFORMATION ABOUT OUR DIRECTOR NOMINEE
The table below provides certain information about our director nominee
that may be important to you. Additional information regarding our director
nominee and the other participants in our solicitation of proxies in connection
with the 2002 Annual Meeting can be found in Annex A to this proxy statement.
Our director nominee has furnished the information about him that is provided in
this proxy statement.
Present Principal Occupation and
Name & Address Age Five Year Business Experience
------------------------------- --- ---------------------------------------------------------------------
Russell Silvestri 40 Mr. Silvestri has served as Managing Partner of SKIRITAI Capital LLC
655 Montgomery Street, since April of 2002. From October of 2000 to March of 2001, he was
Suite 1438 Managing Director of Focus Capital LLC. From October of 1999 to
San Francisco, California 94111 October of 2000, he competed as an athlete in the Olympics. From
February of 1989 to October of 1999, he served as a Managing Director
of Robertson Stephens.
Mr. Silvestri holds a Bachelor of Science in Business from the
University of Southern California.
No corporation or organization identified in the preceding table is an
affiliate of Cotelligent. The present principal occupation of our director
nominee is the first occupation described in his biography.
Our director nominee has entered into a letter agreement with us
pursuant to which we have agreed to pay his out-of-pocket expenses and/or losses
that arise from investigating or defending any claim brought against him with
respect to actions taken in connection with the solicitation of proxies to which
this proxy statement relates, other than claims resulting from his bad faith,
willful misconduct or gross negligence.
Our director nominee, if elected, will be entitled to receive
compensation customarily paid by Cotelligent to its independent directors, which
is described in Cotelligent's proxy statement for the 2002 Annual Meeting, filed
with the Securities and Exchange Commission on May 10, 2002.
We have no reason to believe that our director nominee will be
disqualified or unwilling or unable to serve as a Cotelligent director if
elected. We reserve the right, however, to nominate substitute persons if
Cotelligent makes or announces any changes to its Bylaws or takes or announces
any other
-6-
action that has, or if consummated would have, the effect of disqualifying our
director nominee as a director of Cotelligent. In addition, if any additional
directorships are to be voted upon at the 2002 Annual Meeting, we reserve the
right to nominate additional persons to fill the added positions on the
Cotelligent board of directors. Shares represented by proxies given to us will
be voted for any of our substitute or additional director nominees.
If there is a quorum present in person or represented by proxy at the
2002 Annual Meeting, the Class I director will be elected to Cotelligent's board
of directors by a plurality of the votes of Cotelligent common stock cast at the
2002 Annual Meeting and entitled to vote on the election of directors. This
means that the nominee receiving the greatest number of votes cast and entitled
to vote at the 2002 Annual Meeting will be elected as a Class I director on
Cotelligent's board of directors and that broker non-votes will not be counted
in the election.
OUR RECOMMENDATION
We are soliciting your proxy to vote FOR the election of our director
nominee as a Class I director on Cotelligent's board of directors at the 2002
Annual Meeting to serve for a three-year term expiring at Cotelligent's 2005
Annual Meeting of Stockholders and until his successor is duly elected and
qualified. Our director nominee has consented to serve as a director of
Cotelligent if elected and to be named in this proxy statement and in our other
soliciting materials as our director nominee.
We believe that it is in the best interest of the stockholders of
Cotelligent to elect our director nominee as a Class I director on Cotelligent's
board of directors at the 2002 Annual Meeting. We believe that electing our
director nominee to the company's board of directors will enable us to apply
greater pressure on the company's board of directors to maximize the value of
your investment in the company by selling, liquidating or recapitalizing the
company as promptly as practicable. Accordingly, we strongly recommend that you
vote FOR the election of our director nominee.
Your vote is extremely important regardless of the number of shares you
own. Whether or not you plan to attend the 2002 Annual Meeting, please sign and
date the enclosed WHITE proxy card, voting FOR our director nominee, and return
it promptly in the enclosed, postage-paid envelope. If you return our WHITE
proxy card, we will vote all of your shares of Cotelligent common stock FOR our
director nominee to serve as Class I director on Cotelligent's board of
directors, unless you appropriately indicate otherwise.
-7-
OUR STOCKHOLDER PROPOSAL
ADOPT A STOCKHOLDER RESOLUTION
RECOMMENDING THAT THE COTELLIGENT BOARD OF DIRECTORS TERMINATE COTELLIGENT'S
STOCKHOLDER RIGHTS PLAN
In accordance with Cotelligent's Amended and Restated Bylaws, we
provided written notice to the Secretary of Cotelligent of our intent to propose
the following stockholder resolution for adoption by the company's stockholders
at the 2002 Annual Meeting:
"WHEREAS, Cotelligent, Inc., a Delaware corporation (the "Company"),
is a party to that certain Rights Agreement, dated as of September 24,
1997 (the "Rights Agreement"), between the Company and BankBoston, a
national banking association, as the same may have been amended from
time to time.
WHEREAS, the stockholders of the Company have determined that the
Rights Agreement is not in the best interests of the stockholders of
the Company.
NOW, THEREFORE, BE IT RESOLVED, that the stockholders of the Company
urge and recommend that the Board of Directors of the Company order the
redemption of, and take all other action necessary or appropriate to
redeem, all Rights (as defined in the Rights Agreement) issued and
outstanding under the Rights Agreement pursuant to the terms and
conditions thereof, and by so doing, cause the termination of all
rights to exercise the Rights thereunder pursuant to the terms and
conditions thereof and not adopt any new or similar plan without
stockholder approval."
INFORMATION ABOUT THE COTELLIGENT STOCKHOLDER RIGHTS PLAN
Pursuant to the company's stockholder rights plan, each share of
Cotelligent common stock currently has attached to it one right issued under
the plan that entitles its holder to purchase one one-ten thousandth of a
share of Cotelligent's Series A Junior Participating Preferred Stock at a
price of $90 under certain circumstances.
The rights under the plan become exercisable on the earlier of:
- the close of business on the 10th day following the date (the
"Stock Acquisition Date") of a public announcement that, with
certain exceptions, a third party has acquired 20% or more of
Cotelligent's outstanding common stock (as defined in the
stockholder rights plan); or
- on the close of business on such date as may be fixed by the
board of directors of the company, which date shall not be
more than 65 days following the commencement of a tender or an
exchange offer that would result in a person or group
beneficially owning 20% or more of Cotelligent's outstanding
common stock.
Once the rights under the plan become exercisable, if the company is
a party to a merger in which the company is the surviving entity, or engages
in certain other transactions specified in the rights plan, such as a third
party acquiring 20% or more of the company's common stock in a transaction not
favored by the board of directors of the company, each right under the plan
will be exercisable for that number of shares of the company's common stock
(or, in certain circumstances, cash, property or other securities of the
company) which, at the time of the triggering transaction, would have a market
value equal to twice the exercise price of the right.
In addition, once the rights under the plan become exercisable, if
the company is a party to a merger or other business combination in which the
company is not the surviving entity or engages in certain other transactions,
specified in the stockholder rights plan, each right will be exercisable for
that number of
-8-
shares of the acquirer's common stock which, at the time of consummation of the
triggering transaction, would have a market value equal to twice the exercise
price of the right.
The rights under the plan cease to be exercisable after the earliest
of:
- the close of business on September 24, 2007;
- the time of their redemption by the company; or
- certain acquisition transactions favored by the board of
directors.
At any time until ten days following the Stock Acquisition Date,
Cotelligent may redeem the rights under the plan in whole, but not in part, at
a price of $.01 per right under the plan. The ten day redemption period may be
extended by the board of directors so long as the rights under the plan are
still redeemable.
OUR RECOMMENDATION
We believe that it is in the best interests of the stockholders of
Cotelligent to eliminate the company's stockholder rights plan.
The effect of stockholder rights plans generally on the value of
companies' stock has been the subject of extensive research. A 1986 study by the
Office of the Chief Economist of the U.S. Securities and Exchange Commission on
the economics of rights plans found, based on empirical evidence, that
stockholder rights plans are harmful to target shareholders, on net. A 1992
study by Professor John Pound of Harvard University's Corporate Research
Project and Lilli A. Gordon of the Gordon Group found a correlation between
high corporate performance and the absence of stockholder rights plans.(1)
We believe that Cotelligent's stockholder rights plan is discouraging
third parties from pursuing an acquisition of the company and depressing the
trading price of the company's common stock. We further believe that eliminating
the company's stockholder rights plan may encourage third parties to purchase
the company at a premium to its current market value.
Cotelligent's common stock price per share has continuously declined
from a high of $5.72 on June 30, 2000, the date upon which Cotelligent disposed
of its IT staffing business, to the current price of $0.51 on May 20, 2002.
In adopting Cotelligent's stockholder rights plan, the company's board
of directors acted on its own initiative, with neither prior stockholder
approval nor subsequent ratification. We do not share the apparent view of the
company's board of directors that Cotelligent should have adopted a stockholder
rights plan without stockholder approval. While the company's board of directors
and management team should have appropriate tools to ensure that all
stockholders benefit from any proposal to acquire Cotelligent, we do not believe
that the future possibility of an unsolicited bid justifies the unilateral
implementation or continued existence of a stockholder rights plan.
We believe that the company's stockholder rights plan serves the
interest of management, to the detriment of the stockholders, by permitting the
company's board of directors to reject tender offers and other takeover attempts
without presentation to the stockholders. That is, the company's board of
directors has the ability to act for its own motives, even when an offer could
be attractive to some or all of the company's
----------
(1) Permission to cite these studies was neither sought nor obtained.
-9-
stockholders. It is our view that continuation of the company's stockholder
rights plan serves the interest of management in perpetuating itself, reduces
management's accountability to the stockholders and damages stockholder value.
In light of these adverse effects of the stockholder rights plan, and the fact
that it was adopted without stockholder approval or ratification, we are
proposing that the company's board of directors terminate the company's
stockholder rights plan by redeeming the rights outstanding under the plan.
For the foregoing reasons, we strongly recommend that you vote FOR our
stockholder proposal to adopt a stockholder resolution recommending that
Cotelligent's board of directors terminate the company's stockholder rights
plan.
Assuming the existence of a quorum at the 2002 Annual Meeting, our
proposed stockholder resolution will be adopted only if approved by a
majority of the votes of Cotelligent common stock cast at the 2002 Annual
Meeting and entitled to vote.
Your vote is extremely important regardless of the number of shares you
own. Whether or not you plan to attend the 2002 Annual Meeting, please sign and
date the enclosed WHITE proxy card, voting FOR our stockholder proposal, and
return it promptly in the enclosed, postage-paid envelope. If you return the
WHITE proxy card, we will vote all of your shares of Cotelligent common stock
FOR our stockholder proposal to adopt a stockholder resolution recommending that
the Cotelligent board of directors terminate the company's stockholder rights
plan, unless you appropriately indicate otherwise.
-10-
INFORMATION ABOUT VOTING PROCEDURES
FOR THE 2002 ANNUAL MEETING
WHO CAN VOTE?
You are eligible to vote, in person or by a proxy, on the matters to be
considered at the 2002 Annual Meeting only if you owned Cotelligent common stock
on the record date for the 2002 Annual Meeting, the close of business on April
24, 2002. Even if you sold your shares of Cotelligent common stock after the
record date for the 2002 Annual Meeting, you retained the right to vote in
person or by proxy on the matters to be considered at the 2002 Annual Meeting.
It is important that you grant a proxy regarding shares of Cotelligent common
stock you held on the record date for the 2002 Annual Meeting, or vote those
shares in person at the 2002 Annual Meeting, even if you no longer own those
shares.
Based upon Cotelligent's proxy statement for the 2002 Annual Meeting
filed with the Securities and Exchange Commission on May 10, 2002, 14,900,891
shares of Cotelligent common stock were outstanding on the record date for the
2002 Annual Meeting. A list of such stockholders will be open to the examination
of any stockholder, for any purpose germane to the 2002 Annual Meeting, during
ordinary business hours, for a period of ten days prior to the 2002 Annual
Meeting, at the principal executive offices of the company located at 44
Montgomery Street, Suite 4050, San Francisco, California 94104.
HOW MANY VOTES DO I HAVE?
With respect to each matter to be considered at the 2002 Annual
Meeting, each stockholder of Cotelligent will have one vote for each share of
Cotelligent common stock held by such stockholder on the record date for the
2002 Annual Meeting. Shares of Cotelligent common stock held by the company will
not be voted on any matters considered at the 2002 Annual Meeting.
HOW DO I VOTE?
If you were the record holder of your shares of Cotelligent common
stock on the record date for the 2002 Annual Meeting, you may attend the 2002
Annual Meeting and vote in person. In lieu of attending the 2002 Annual Meeting
and voting in person, you may vote by returning a proxy for the 2002 Annual
Meeting.
If you are not the record holder of your shares of Cotelligent common
stock, please refer to the discussion following the question "How do I vote if I
am not the record holder of my shares?"
HOW DO I VOTE BY PROXY?
To vote by proxy, you should complete, sign and date the enclosed WHITE
proxy card and return it promptly in the enclosed postage-paid envelope. To be
able to vote your shares of Cotelligent common stock in accordance with your
instructions at the 2002 Annual Meeting, we must receive your proxy as soon as
possible but in any event prior to the stockholder vote at the meeting.
In addition, you may vote your shares of Cotelligent common stock
without returning the enclosed WHITE proxy card to us if you vote in person at
the 2002 Annual Meeting, return a proxy to the Secretary of Cotelligent or, in
some cases, if you provide appropriate instructions to the record holder of your
shares of Cotelligent common stock
HOW DO I VOTE IF I AM NOT THE RECORD HOLDER OF MY SHARES?
If your shares of Cotelligent common stock are held in the name of a
brokerage firm, bank nominee or other institution, only it can return a proxy
for the 2002 Annual Meeting with respect to your shares of Cotelligent common
stock. You may have received either a blank, executed proxy card (which you can
complete and send directly to us), or an instruction card (which you can
complete and return to
-11-
the record holder to direct its voting of your shares), from the brokerage firm,
bank nominee or other institution holding your shares of Cotelligent common
stock. If the brokerage firm, bank nominee or other institution holding your
shares of Cotelligent common stock has not sent you either a blank, executed
proxy card or an instruction card, you should contact the brokerage firm, bank
nominee or other institution holding your shares of Cotelligent common stock
directly to provide it with instructions. If you need assistance, please call us
at (415) 921-7896 or send us an e-mail at rsilvestri@SKIRITAI.com.
If you do not have record ownership of your shares of Cotelligent
common stock and want to vote in person at the 2002 Annual Meeting, you may
obtain a document called a "legal proxy" from the brokerage firm, bank nominee
or other institution holding your shares of Cotelligent common stock and bring
it to the 2002 Annual Meeting. If you need assistance, please call us at (415)
921-7896 or send us an e-mail at rsilvestri@SKIRITAI.com.
IF I PLAN TO ATTEND THE 2002 ANNUAL MEETING, SHOULD I STILL SUBMIT A PROXY?
Whether or not you plan to attend the 2002 Annual Meeting, we urge you
to return a proxy. Returning the enclosed WHITE proxy card will not affect your
right to attend the 2002 Annual Meeting and vote in person.
HOW WILL MY SHARES BE VOTED?
If you return the enclosed WHITE proxy card, your shares of Cotelligent
common stock will be voted as you direct. If you return the enclosed WHITE proxy
card to us without instructions, we will vote all of your shares of Cotelligent
common stock:
- FOR the election of our director nominee to serve as a Class I
director on Cotelligent's board of directors for a three-year
term expiring at Cotelligent's 2005 Annual Meeting of
Stockholders of Cotelligent and until his successor is duly
elected and qualified; and
- FOR our stockholder proposal to adopt a stockholder resolution
recommending that Cotelligent's board of directors terminate
the company's stockholder rights plan by redeeming the rights
outstanding under the plan.
- FOR granting our representatives discretionary authority to
vote your shares of Cotelligent common stock in accordance
with their discretion on matters not described in this proxy
statement that may arise at the 2002 Annual Meeting.
Unless your proxy specifies otherwise, we will presume that it relates
to all of your shares of Cotelligent common stock held of record as of the
record date for the 2002 Annual Meeting.
WHAT VOTE IS REQUIRED TO ELECT OUR DIRECTOR NOMINEE?
Conducting business at the 2002 Annual Meeting requires a quorum. The
presence, in person or by proxy, of the holders of a majority of the shares of
Cotelligent common stock entitled to vote at the 2002 Annual Meeting will
constitute a quorum for the transaction of business at the meeting. Abstentions
and broker non-votes will be counted for purposes of determining the presence or
absence of a quorum at the 2002 Annual Meeting. Assuming the existence of a
quorum at the 2002 Annual Meeting, the nominee receiving a plurality of the
votes of the shares of Cotelligent common stock present in person or represented
by proxy at the 2002 Annual Meeting and entitled to vote on the election of
directors will be elected as a director.
While there is no definitive statutory or case law authority in
Delaware as to the proper treatment of abstentions and broker non-votes, the
company intends to apply the principles set forth herein. With regard to the
election of directors, only shares that are voted in favor of the director
nominee will be counted towards achievement of a plurality. Votes that are
withheld and broker non-votes, if any, will have no effect on the outcome of the
election of the directors.
-12-
Brokers will not have discretion to vote shares held in street name
without instructions from the beneficial owner of the shares with respect to the
election of directors. Stockholders do not have the right to cumulate their
votes.
WHAT VOTE IS REQUIRED TO APPROVE OUR STOCKHOLDER PROPOSAL?
Assuming the existence of a quorum at the 2002 Annual Meeting, our
proposed stockholder resolution will be adopted only if approved by a majority
of the votes of Cotelligent common stock cast at the 2002 Annual Meeting and
entitled to vote.
Although there is no definitive statutory or case law authority in
Delaware on the subject, we believe that votes that are withheld and broker
non-votes, if any, will have no effect on the outcome of the adoption of our
stockholder proposal.
WHAT SHOULD I DO IF I RECEIVE A PROXY CARD FROM THE INCUMBENT BOARD OF DIRECTORS
OF COTELLIGENT?
The incumbent board of directors of Cotelligent is also soliciting
proxies for the 2002 Annual Meeting. If you return a proxy to us by signing,
dating and returning the enclosed WHITE proxy card, please do not return any
proxy card sent to you by the company's incumbent board of directors or follow
any voting instructions provided by Cotelligent unless you intend to change your
vote, because only your latest-dated proxy will be counted.
If you have already returned a proxy card to Cotelligent, you may
revoke it and provide your support for our director nominee and our stockholder
proposal by signing and dating the enclosed WHITE proxy card, voting FOR our
director nominee and stockholder proposal, and returning it in the enclosed,
postage-paid envelope.
WHAT IF I WANT TO REVOKE MY PROXY?
Each proxy executed and returned by a Cotelligent stockholder may be
revoked at any time thereafter by sending written notice to that effect to the
Secretary of the company before the 2002 Annual Meeting, or to the company's
Secretary or the Inspector of Election at the 2002 Annual Meeting, or by signing
and returning a later-dated proxy.
If you choose to revoke a proxy by giving written notice or a
later-dated proxy to the Secretary of Cotelligent, we would appreciate if you
would assist us in representing the interests of stockholders on an informed
basis by sending us a copy of your revocation of proxy or by calling us at (415)
921-7896 or sending us an e-mail at rsilvestri@SKIRITAI.com. Remember, your
latest-dated proxy is the only one that counts.
HOW CAN I RECEIVE MORE INFORMATION?
If you have any questions about voting either in person or by proxy on
the matters to be considered at the 2002 Annual Meeting, or if you require
assistance, please call us at (415) 921-7896 or send us an e-mail at
rsilvestri@SKIRITAI.com.
-13-
INFORMATION ABOUT OUR SOLICITATION OF PROXIES
AND RELATED EXPENSES
The solicitation of proxies to which this proxy statement relates is
being made by (i) SKIRITAI Capital LLC, (ii) our director nominee, Russell
Silvestri, (iii) Lyron Bentovim, and (iv) James Glockner. The participants in
our proxy solicitation may solicit proxies in person and by mail, press release,
advertisements in newspapers, magazines and/or trade publications, telephone,
telecopier, telegraph, electronic mail, Internet (World Wide Web) publication,
television, radio and newspapers. None of the participants in our proxy
solicitation has or will receive compensation for soliciting proxies in
connection with the 2002 Annual Meeting.
The participants in our proxy solicitation will ask banks, brokers,
custodians, nominees, other institutional holders and other fiduciaries to
forward all soliciting materials to the beneficial owners of the shares of
Cotelligent common stock that those institutions hold of record. We will
reimburse those institutions for reasonable expenses that they incur in
connection with forwarding our materials.
The entire expense of our proxy solicitation is being borne by SKIRITAI
Capital LLC. We may, particularly if our nominee is elected to Cotelligent's
board of directors, seek reimbursement of our expenses from Cotelligent. We do
not intend to seek stockholder approval of any such reimbursement.
Costs related to our solicitation of proxies include expenditures for
printing, postage, legal services and other related items. Total expenditures
are expected to be approximately $[_________]. Total payment of costs to date in
furtherance of our proxy solicitation is approximately $5,000.
INFORMATION ABOUT THE PARTICIPANTS
IN OUR SOLICITATION OF PROXIES
Information related to the participants in our proxy solicitation,
including their beneficial ownership of Cotelligent common stock, is set forth
in Annex A to this proxy statement and is incorporated into this proxy statement
by reference. Except as set forth in Annex A, none of the participants in our
proxy solicitation is a party to any commercial dealing with Cotelligent or its
subsidiaries that is required to be disclosed in this proxy statement by
applicable federal securities laws. Information in this proxy statement about
each participant in our proxy solicitation was provided by that participant.
-14-
INFORMATION ABOUT COTELLIGENT
GENERAL
Based upon Cotelligent's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on May 15, 2002, the mailing address of the
principal executive offices of Cotelligent is 44 Montgomery Street, Suite 4050,
San Francisco, California 94104.
Except as otherwise noted herein, the information in this proxy
statement concerning Cotelligent has been taken from or is based upon documents
and records on file with the Securities and Exchange Commission and other
publicly available information disclosed by Cotelligent. Although we do not have
any knowledge indicating that any statement contained herein is untrue, we do
not take any responsibility for the accuracy or completeness of statements taken
from public documents and records that were not prepared by us or on our behalf,
or for any failure by Cotelligent to disclose events that may affect the
significance or accuracy of such information.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF COTELLIGENT COMMON STOCK
The following table sets forth certain information, based solely upon
Cotelligent's proxy statement for the 2002 Annual Meeting filed with the
Securities and Exchange Commission on May 10, 2002, as to the beneficial
ownership of the company's common stock as of the close of business on April 24,
2002 by (i) each person known to the company to beneficially own more than 5% of
the outstanding shares of Cotelligent common stock, (ii) each of the company's
directors, (iii) each named executive officer and each officer named in the
Summary Compensation Table in the company's proxy statement for the 2002 Annual
Meeting filed with the Securities and Exchange Commission on May 10, 2002, and
(iv) all executive officers and directors of the company as a group. All persons
listed have an address c/o the company's principal executive offices and have
sole voting and investment power with respect to their shares unless otherwise
indicated.
NUMBER OF SHARES PERCENT OF CLASS
NAME BENEFICIALLY OWNED (ROUNDED)
----------------------------------------------------------------------- ------------------ ----------------
James R. Lavelle (1)................................................... 1,305,308 8.1%
Daniel E. Jackson (2).................................................. 1,099,473 6.9%
FMR Corp. (3).......................................................... 1,000,000 6.7%
Anthony M. Frank (4)................................................... 174,656 1.2%
Edward E. Faber (5).................................................... 146,356 1.0%
Curtis J. Parker (6)................................................... 84,117 *
Debra J. Richardson (7)................................................ 5,000 *
All Executive Officers and Directors as a Group (6 Persons) (8)........ 2,814,910 15.9%
----------
* Less than 1%
(1) Includes 400,000 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
(2) Includes 250,000 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
(3) The address of the stockholder is 82 Devonshire Street, Boston
Massachusetts 02109. Data obtained from the stockholder's Schedule 13G,
filed with the Securities and Exchange Commission on February 14, 2002.
-15-
(4) Includes 102,500 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
(5) Includes 102,500 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
(6) Includes 78,125 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
(7) Includes 5,000 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
(8) Includes 938,125 shares issuable upon exercise of options exercisable
within 60 days of April 24, 2002.
OTHER MATTERS TO BE VOTED UPON
AT THE 2002 ANNUAL MEETING
Cotelligent has disclosed in its proxy statement for the 2002 Annual
Meeting filed with the Securities and Exchange Commission on May 10, 2002 that,
in addition to electing a Class I director to serve for a three-year term
expiring at Cotelligent's 2005 Annual Meeting of Stockholders and until his
successor is duly elected and qualified, Cotelligent stockholders will be asked
at the 2002 Annual Meeting to vote upon any other business as may properly come
before the meeting or any adjournments thereof. If you return a WHITE proxy
card, our representatives will be entitled to vote your shares of Cotelligent
common stock in accordance with their discretion on matters not described in
this proxy statement that may arise at the 2002 Annual Meeting, unless you
appropriately indicate otherwise.
FUTURE STOCKHOLDER PROPOSALS
Stockholders who intend to present proposals at Cotelligent's 2003
Annual Meeting (the "2003 Annual Meeting") under SEC Rule 14a-8 must insure that
such proposals are received by Cotelligent's Secretary not later than January
14, 2003. Such proposals must meet the requirements of the Securities and
Exchange Commission to be eligible for inclusion in the company's 2003 proxy
materials. In order for a proposal submitted outside of Rule 14a-8 to be
considered "timely" within the meaning of Securities and Exchange Commission
Rule 14a-4(c), such proposal must comply with the advance notice provisions of
Cotelligent's Amended and Restated Bylaws. The amendment and restatement of
Cotelligent's Bylaws to include these advance notice provisions was adopted on
May 8, 2002 and publicly disclosed in the company's Current Report on Form 8-K
which was filed with the Securities and Exchange Commission on May 9, 2002.
The advance notice provisions of Cotelligent's Amended and Restated
Bylaws require that, in order to be properly brought before the 2003 Annual
Meeting, a stockholder's notice of the matter the stockholder wishes to present
must be delivered to the company's Secretary not less than 90 nor more than 120
days prior to the first anniversary of the date of the 2002 Annual Meeting. As a
result, any notice given by or on behalf of a stockholder pursuant to these
provisions of Cotelligent's Amended and Restated Bylaws must be received by the
Secretary of the company no earlier than February 11, 2003 nor later than March
13, 2003. For the upcoming 2002 Annual Meeting, pursuant to the advance notice
provisions of Cotelligent's Amended and Restated Bylaws, written notice of
stockholder nominees or any other stockholder proposals to be presented at the
2002 Annual Meeting must be delivered to the Secretary of the company at 44
Montgomery Street, Suite 4050, San Francisco, California 94114, no later than
May 20, 2002.
-16-
ANNEX A
INFORMATION ABOUT THE PARTICIPANTS
IN OUR SOLICITATION OF PROXIES
The following persons are participants in our solicitation of proxies
in connection with the 2002 Annual Meeting: (i) SKIRITAI Capital LLC; (ii) our
director nominee, Russell Silvestri; (iii) Lyron Bentovim, and (iv) James
Glockner.
SKIRITAI Capital LLC is a Delaware limited liability company formed to
engage in the business of acquiring, holding and disposing of investments in
various companies. The address of SKIRITAI Capital LLC's principal executive
offices is 655 Montgomery Street, Suite 1438, San Francisco, CA 94111.
OCCUPATIONS
The present principal occupation or employment of our director nominee
is described in our proxy statement under the heading "Election of Directors -
Elect our Director Nominee." The present principal occupation of Lyron Bentovim
is Managing Director of SKIRITAI Capital LLC. The business address of our
director nominee and Lyron Bentovim is 655 Montgomery Street, Suite 1438, San
Francisco, CA 94111. The present principal occupation of James Glockner is
Managing Partner of Structured Funding LLC, a California limited liability
company formed for the purpose of investing in various companies. The principal
business address of Structured Funding LLC is 2860 Laguna Street, San Francisco,
California 94123.
SECURITY OWNERSHIP
The participants in our proxy solicitation and their associates may be
deemed to have beneficial ownership of Cotelligent common stock as set forth
below.
Amount of Beneficial
Name Ownership Percent of Class
------------------------------------------------ -------------------- ----------------
SKIRITAI Capital LLC............................ 626,000 (1) 4.2
Russell Silvestri (2)........................... 30,000 (3) 0.2
James Glockner.................................. 122,000 0.8
Lyron Bentovim (4)............................. 0 ---
----------
(1) SKIRITAI Capital LLC beneficially owns 626,000 shares of Cotelligent
common stock. Banc of America Securities LLC is the record holder of
those 626,000 shares. SKIRITAI Capital LLC has sole, direct beneficial
ownership of its shares and options. It exercises sole voting and
investment power with respect to its shares.
(2) As Managing Partner of SKIRITAI Capital LLC, Russell Silvestri may also
be deemed to beneficially own the 626,000 shares of Cotelligent common
stock held by SKIRITAI Capital LLC. Filing of this statement shall not
be construed as an admission of such beneficial ownership for purposes
of Sections 13(d) or 13(g) of the Securities Exchange Act.
(3) Mr. Silvestri holds 30,000 shares of the Cotelligent common stock
through his direct investment account and shares voting and dispositive
power over such shares with his spouse, Elizabeth Silvestri.
(4) As Managing Director of SKIRITAI Capital LLC, Lyron Bentovim may also
be deemed to beneficially own the 626,000 shares of Cotelligent held by
SKIRITAI Capital LLC. Filing of this
-17-
statement shall not be construed as an admission of such beneficial
ownership for purposes of Sections 13(d) or 13(g) of the Securities
Exchange Act.
No participant in our solicitation of proxies and no associate of any
participant (within the meaning of the federal proxy rules) beneficially owns
any securities of Cotelligent other than common stock (and the accompanying
Rights under Cotelligent's stockholder rights plan). No participant in our
solicitation of proxies beneficially owns any securities of any parent or
subsidiary of Cotelligent. No Participant has record but not beneficial
ownership with respect to any securities of Cotelligent.
TRANSACTIONS IN COTELLIGENT SECURITIES
Other than the transactions described below, no participant in our
solicitation of proxies has purchased or sold any securities of Cotelligent in
the past two years. Purchases of Cotelligent common stock may have been funded,
at any given time, by margin loans made by brokerage firms in the ordinary
course of business.
SHARES OF COTELLIGENT COMMON STOCK PURCHASED BY SKIRITAI CAPITAL LLC:
DATE NUMBER OF SHARES
---- ----------------
05/10/02 15,000.00
05/13/02 25,000.00
SHARES OF COTELLIGENT COMMON STOCK PURCHASED BY RUSSELL SILVESTRI:
DATE NUMBER OF SHARES
---- ----------------
01/03/02 15,000.00
01/18/02 15,000.00
01/22/02 10,000.00
01/24/02 65,000.00
01/25/02 20,000.00
01/28/02 50,000.00
01/29/02 5,000.00
01/31/02 20,000.00
02/07/02 5,000.00
02/08/02 25,000.00
02/28/02 5,000.00
03/22/02 125,000.00
03/26/02 25,000.00
03/27/02 77,000.00
03/28/02 90,000.00
04/30/02 3,000.00
05/02/02 10,000.00
05/03/02 16,000.00
05/08/02 5,000.00
Mr. Silvestri contributed the above listed shares of Cotelligent common
stock to SKIRITAI Capital LLC as part of the capital contribution he made on May
10, 2002 as its Managing Partner.
-18-
SHARES OF COTELLIGENT COMMON STOCK PURCHASED BY RUSSELL SILVESTRI IRA:
DATE NUMBER OF SHARES
---- ----------------
02/14/02 15,000.00
02/18/02 5,000.00
03/28/02 10,000.00
Mr. Silvestri shares power to vote and dispose of such shares with his
spouse, Elizabeth Silvestri. Mrs. Silvestri's address is the same as that of Mr.
Silvestri.
SHARES OF COTELLIGENT COMMON STOCK PURCHASED BY JAMES GLOCKNER:
DATE NUMBER OF SHARES
---- ----------------
04/04/02 10,000.00
04/05/02 10,000.00
04/08/02 20,000.00
04/11/02 32,500.00
04/16/02 15,000.00
04/18/02 12,500.00
04/22/02 20,000.00
04/30/02 2,000.00
ARRANGEMENTS, INTERESTS AND TRANSACTIONS
Except as listed below, no participant in our solicitation of proxies
is, or was within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of Cotelligent,
including, but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies.
No participant in our solicitation of proxies, no associate of any
participant and no person who is a party to any arrangement or understanding
pursuant to which our director nominee is proposed to be elected has any
arrangement or understanding with any person with respect to any future
employment by Cotelligent or its affiliates or with respect to any future
transactions to which Cotelligent or any of its affiliates will or may be a
party.
SKIRITAI Capital LLC, SKIRITAI Capital LLC's Managing Director and
Managing Partner, and James Glockner, may have interests in the solicitation of
proxies in support of our director nominee from either direct or indirect
beneficial ownership of the common stock of Cotelligent. In addition, our
director nominee is expected to receive customary compensation from Cotelligent
in exchange for his services as a director, if elected.
There has been no transaction or series of similar transactions since
the beginning of Cotelligent's last completed fiscal year, and there is no
currently proposed transaction or series of similar proposed transactions, to
which Cotelligent or any of its subsidiaries was or is to be a party, in which
the amount involved exceeds $60,000 and in which any participant in our
solicitation of proxies or any associate of any participant had, or will have, a
direct or indirect material interest.
ADDITIONAL INFORMATION ABOUT OUR DIRECTOR NOMINEE
Our director nominee presently holds no positions with Cotelligent.
There is no arrangement or understanding between our director nominee
and any other person pursuant to which our director nominee was selected as a
nominee.
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There is no family relationship (within the meaning of the federal
securities laws) between our director nominee and any director of Cotelligent,
executive officer of Cotelligent or person nominated by Cotelligent to become a
director or executive officer.
There is, and has been, no legal or other proceeding involving our
director nominee that is required to be disclosed under the federal proxy rules.
Our director nominee (i) does not have any business relationship that
is required to be disclosed by the federal proxy rules, (ii) has not had any
such relationship since the beginning of Cotelligent's most recently completed
fiscal year, and (iii) has not, since the beginning of Cotelligent's last
completed fiscal year, been indebted to Cotelligent or any of its subsidiaries
in an amount that exceeds $60,000.
Neither our director nominee nor any associate of our director nominee
has received any compensation from Cotelligent as a director or executive
officer of Cotelligent. Had our director nominee been a director of Cotelligent
and a member of the compensation committee of Cotelligent's board of directors
during Cotelligent's last completed fiscal year, there would have been no
compensation committee interlocks within the meaning of the federal proxy rules.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our director nominee is currently not required to file reports related
to Cotelligent pursuant to Section 16(a) of the Securities Exchange Act of 1934,
as amended.
-20-
Name:____________________ Shares:___________________ Control:_________________
WHITE PROXY CARD
COTELLIGENT, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
JUNE 11, 2002 AT 9:00 A.M. (PACIFIC DAYLIGHT SAVINGS TIME)
THIS PROXY IS BEING SOLICITED BY SKIRITAI CAPITAL LLC AND NOT BY THE BOARD
OF DIRECTORS OF COTELLIGENT, INC.
This proxy is solicited on behalf of SKIRITAI Capital LLC for use only
at the 2002 Annual Meeting of stockholders (the "2002 Annual Meeting") to be
held at the Grand Hyatt Hotel located at 345 Stockton Street in San Francisco,
California on the 11th day of June, 2002 at 9:00 a.m., Pacific Daylight Savings
Time, and at any adjournments, postponements or rescheduling thereof.
The undersigned stockholder of Cotelligent, Inc. hereby appoints
Russell Silvestri and Lyron Bentovim, and each of them, as attorneys and
proxies, each with power of substitution and revocation, to represent the
undersigned at the 2002 Annual Meeting and at any adjournments, postponements or
rescheduling thereof, with authority to vote all shares held or owned by the
undersigned in accordance with the directions indicated herein.
Receipt of the proxy statement furnished by SKIRITAI Capital LLC in
connection with the 2002 Annual Meeting is hereby acknowledged.
This proxy, when properly executed, will cause your shares to be voted
as you direct. If you return this proxy, properly executed, without specifying a
choice, your shares will be voted
- FOR the director nominee named on the reverse side of this proxy;
- FOR the stockholder proposal identified on the reverse side of this
proxy; and
- FOR granting discretionary authority to the proxy holders.
SKIRITAI CAPITAL LLC RECOMMENDS A VOTE
[X] "FOR" THE MATTERS LISTED BELOW
ELECTION OF DIRECTORS ELECT OUR DIRECTOR NOMINEE AS A CLASS I DIRECTOR OF COTELLIGENT, INC.
NOMINEE: Russell Silvestri (three-year term)
[ ] FOR our nominee [ ] WITHHOLD AUTHORITY to vote for our nominee
OUR STOCKHOLDER PROPOSAL ADOPT THE FOLLOWING STOCKHOLDER RESOLUTION:
"WHEREAS, Cotelligent, Inc., a Delaware corporation (the "Company"),
is a party to that certain Rights Agreement, dated as of September
24, 1997 (the "Rights Agreement"), between the Company and
BankBoston, a national banking association, as the same may have
been amended from time to time.
WHEREAS, the stockholders of the Company have determined that the
Rights Agreement is not in the best interests of the stockholders
of the Company.
NOW, THEREFORE, BE IT RESOLVED, that the stockholders of the
Company recommend that the Board of Directors of the Company order
the redemption of, and take all other action necessary or
appropriate to redeem, all Rights (as defined in the Rights
Agreement) issued and outstanding under the Rights Agreement
pursuant to the terms and conditions thereof, and by so doing,
cause the termination of all rights to exercise the Rights
thereunder pursuant to the terms and conditions thereof, and not
adopt any new or similar plan without stockholder approval."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
DISCRETIONARY AUTHORITY GRANT THE PROXIES DISCRETIONARY AUTHORITY TO ACT ON OTHER MATTERS
BROUGHT BEFORE 2002 ANNUAL MEETING.
In their discretion, the proxies are authorized to vote upon such
other business as may properly be presented at the 2002 Annual
Meeting and at any adjournments, postponements or rescheduling
thereof, that is unknown to SKIRITAI Capital LLC and its
representatives a reasonable time before the commencement of the
solicitation of proxies by SKIRITAI Capital LLC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Date: __________________________, 2002
______________________________________
Signature*
______________________________________
Additional Signature (if held jointly)
______________________________________
Title
* Please sign exactly as your name appears on the reverse side of this proxy
card at the top, left-hand side of the page. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person. The signer hereby revokes all proxies previously given
by the signer to vote at the 2002 Annual Meeting of Stockholders of
Cotelligent, Inc., and any adjournments, postponements or rescheduling
thereof.