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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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IMPORTANT INFORMATION
SKIRITAI Capital LLC plans to file a proxy statement with the Securities and
Exchange Commission relating to a solicitation of proxies from the stockholders
of Cotelligent, Inc. ("Cotelligent") in connection with the 2002 Annual Meeting
of Stockholders of Cotelligent. SECURITY HOLDERS ARE ADVISED TO READ THAT PROXY
STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. The proxy statement, along with any other relevant documents, will
be available for free at www.sec.gov. You may also obtain a free copy of the
proxy statement, when it becomes available, by contacting SKIRITAI Capital LLC
at (415) 921-7896, or by sending an email to rsilvestri@SKIRITAI.com.
Information regarding the names, affiliation and interests of persons who may be
deemed to be participants in the solicitation of proxies of Cotelligent's
stockholders is set forth below.
INFORMATION REGARDING PARTICIPANTS
The following persons may be deemed to be participants in the solicitation of
proxies referred to above: (i) SKIRITAI Capital LLC; (ii) Russell Silvestri;
(iii) James Glockner; and (iv) Lyron Bentovim.
SKIRITAI Capital LLC, Russell Silvestri, and James Glockner have direct
beneficial ownership of shares of common stock of Cotelligent. Russell Silvestri
and Lyron Bentovim may be deemed to have indirect beneficial ownership of shares
of common stock of Cotelligent held by SKIRITAI Capital LLC by virtue of being
the Managing Partner and Managing Director, respectively, of SKIRITAI Capital
LLC. Quantified information relating to the security holdings of persons who may
be deemed to be participants in the solicitation of Cotelligent's stockholders
may be found in the Schedule 13D filed by SKIRITAI Capital LLC, Russell
Silvestri and James Glockner on May 20, 2002.
SKIRITAI Capital LLC
655 Montgomery Street
Suite 1438
San Francisco, California 94111
May 15, 2002
VIA MESSENGER AND OVERNIGHT COURIER
Cotelligent, Inc.
44 Montgomery Street, Suite 4050
San Francisco, California 94104
Attention: Secretary
RE: STOCKHOLDER NOTICE OF PROPOSAL TO TERMINATE RIGHTS AGREEMENT
Dear Secretary:
The undersigned stockholders of Cotelligent, Inc., a Delaware
corporation (the "Company"), hereby notify the Company, pursuant to Section 4 of
Article I of the Company's Amended and Restated Bylaws (the "Bylaws"), that the
undersigned intend to present the following proposal (the "Proposal") at the
2002 Annual Meeting of Stockholders of the Company (the "Annual Meeting"), and
may (but shall not be required by virtue of this stockholder notice) solicit
proxies from one or more stockholders of the Company authorizing the undersigned
to vote in favor of the Proposal at the Annual Meeting:
"WHEREAS, Cotelligent, Inc., a Delaware corporation, 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
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thereof and not adopt any new or similar plan without stockholder
approval."
Pursuant to Section 4 of Article I of the Bylaws, the undersigned
hereby sets forth the following in support of the Proposal:
(a) The text of the Proposal that the undersigned intends to
present at the Annual Meeting is set forth above and on Annex
A hereto.
(b) The reasons why the undersigned favors the Proposal are set
forth in Annex A hereto.
(c) The names and addresses of the undersigned stockholders that
intend to present the Proposal at the Annual Meeting are as
follows:
Russell Silvestri
c/o SKIRITAI Capital LLC
655 Montgomery Street
Suite 1438
San Francisco, California 94111
SKIRITAI Capital LLC
655 Montgomery Street
Suite 1438
San Francisco, California 94111
(d) As of the record date for the Annual Meeting (the "Record
Date"), Russell Silvestri was the beneficial owner of an
aggregate of 582,000 shares of common stock, par value $.01
per share, of the Company ("Common Stock") entitled to vote at
the Annual Meeting. As evidenced by the broker's statement
attached hereto as Annex B, as of the Record Date, such shares
of Common Stock were held by Russell Silvestri and his direct
investment account through a "street name" holder of record.
As of the date hereof, Russell Silvestri is the beneficial
owner of an aggregate of 656,000 shares of Common Stock. As
evidenced by the broker's statement attached hereto as Annex
B, as of the date hereof, such shares of Common Stock are held
through a "street name" holder of record by Russell
Silvestri's direct investment account and SKIRITAI Capital
LLC, a Delaware limited liability company of which Russell
Silvestri is the Managing Partner.
As of the Record Date, SKIRITAI Capital LLC was the beneficial
owner of no shares of Common Stock entitled to vote at the
Annual Meeting. As of the date hereof, SKIRITAI Capital LLC is
the beneficial owner of an aggregate of 626,000 shares of
Common Stock. As evidenced by the
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broker's statement attached hereto as Annex B, as of the date
hereof, such shares of Common Stock are held by SKIRITAI
Capital LLC through a "street name" holder of record.
(e) SKIRITAI Capital LLC has no material interest in the Proposal
other than as a stockholder of the Company.
The undersigned believe that this stockholder notice complies in all
respects with the applicable provisions of the Bylaws and applicable law. If the
Company determines that this notice is incomplete or otherwise deficient in any
respect, the undersigned request that the Company contact the undersigned
immediately so that any alleged deficiencies may be addressed promptly.
Please acknowledge receipt of this letter by signing and dating the
enclosed copy of this letter and returning the same to the undersigned in the
enclosed envelope.
Very truly yours,
SKIRITAI Capital LLC
/s/ Lyron Bentovim
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Lyron Bentovim
Managing Director
Russell Silvestri
/s/ Russell Silvestri
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RECEIPT ACKNOWLEDGED ON MAY ___, 2002
COTELLIGENT, INC.
By:
----------------------------------
Name:
Title:
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ANNEX A
STOCKHOLDER PROPOSAL TO TERMINATE RIGHTS AGREEMENT
Text of the Proposal
WHEREAS, Cotelligent, Inc., a Delaware corporation, 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.
Reasons that SKIRITAI Capital LLC and Russell Silvestri Favor the Proposal
As set forth more fully in the letter to the Company attached hereto as
Annex C, the Company's common stock price per share has continuously declined
from a high of $5.72 on June 30, 2000 to the current price of $0.52 on May 14,
2002.
We believe this is an appropriate time for the Board of Directors of
the Company to eliminate the Company's Rights Agreement, commonly know as a
poison pill. We do not share the view of the Board of Directors that our Company
should have put a poison pill into effect without stockholder approval.
We believe the Company should liquidate or sell its assets to maximize
stockholder value. A Rights Plan is an impediment to that goal. We believe that
the Rights Plan may be unjustifiably deterring third parties who would otherwise
be interested in acquiring the Company from submitting proposals to do so.
While management and the Board of Directors should have appropriate
tools to ensure that all stockholders benefit from any proposal to buy the
Company, we do not believe that the future possibility of an unsolicited bid
justifies the unilateral implementation of a poison pill.
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The effect of poison pills 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 states that "The stock-returns evidence suggests that the effect of
poison pills to deter prospective hostile takeover bids outweighs the beneficial
effects that might come from increased bargaining leverage of the target
management." 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 poison pills.
Material Interests of SKIRITAI Capital LLC and Russell Silvestri in the Proposal
Neither SKIRITAI Capital LLC nor Russell Silvestri has any material interest in
the Proposal other than as a stockholder of the Company.
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ANNEX B
EVIDENCE OF OWNERSHIP OF SHARES AND
RIGHT TO VOTE AT THE ANNUAL MEETING
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BANC OF AMERICA SECURITIES LLC
WORKING APPRAISAL BY ASSET CLASS
Russ Silvestri IRA 04/24/02
DATE TAX SHARES/ BROKER UNIT CURRENT PCT TOTAL MARKET UNREALIZED PCT OF
OPENED TERM FACE COST PRICE G/L COST VALUE GAIN/LOSS ASSETS
CGZT COTELLIGENT GROUP INC.
02/14/02 ST 15,000.00 MONT 0.40000 0.50000 25.00 6,000.00 7,500.00 1,500.00 1.20
02/19/02 ST 5,000.00 MONT 0.35000 0.50000 42.86 1,750.00 2,500.00 750.00 0.40
03/28/02 ST 10,000.00 MONT 0.48000 0.50000 4.17 4,800.00 5,000.00 200.00 0.80
--------- ------- ------- ----- -------- -------- -------- ----
30,000.00 0.41833 0.50000 19.52 12,550.00 15,000.00 2,450.00 2.41
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BANC OF AMERICA SECURITIES LLC
WORKING APPRAISAL BY ASSET CLASS
Russ Silvestri 04/24/02
DATE TAX SHARES/ BROKER UNIT CURRENT PCT TOTAL MARKET UNREALIZED PCT OF
OPENED TERM FACE COST PRICE G/L COST VALUE GAIN/LOSS ASSETS
CGZT COTELLIGENT GROUP INC.
01/03/02 ST 15,000.00 MONT 0.33003 0.50000 51.50 4,950.50 7,500.00 2,549.50 0.44
01/18/02 ST 15,000.00 MONT 0.40333 0.50000 23.97 6,050.00 7,500.00 1,450.00 0.44
01/22/02 ST 10,000.00 MONT 0.35500 0.50000 40.85 3,550.00 5,000.00 1,450.00 0.30
01/24/02 ST 65,000.00 MONT 0.40850 0.50000 22.40 26,552.50 32,500.00 5,947.50 1.92
01/25/02 ST 20,000.00 MONT 0.34000 0.50000 47.06 6,800.00 10,000.00 3,200.00 0.59
01/28/02 ST 50,000.00 MONT 0.34200 0.50000 46.20 17,100.00 25,000.00 7,900.00 1.48
01/29/02 ST 5,000.00 MONT 0.33000 0.50000 53.52 1,650.00 2,500.00 850.00 0.15
01/31/02 ST 20,000.00 MONT 0.33000 0.50000 51.52 6,600.00 10,000.00 3,400.00 0.59
02/07/02 ST 5,000.00 MONT 0.32000 0.50000 56.25 1,600.00 2,500.00 900.00 0.15
02/08/02 ST 25,000.00 MONT 0.31000 0.50000 61.29 7,750.00 12,500.00 4,750.00 0.74
02/28/02 ST 5,000.00 CANT 0.40300 0.50000 24.07 2,015.00 2,500.00 485.00 0.15
03/22/02 ST 125,000.00 MONT 0.49800 0.50000 0.40 62,250.00 62,500.00 250.00 3.69
03/26/02 ST 25,000.00 HRZG 0.40060 0.50000 24.81 10,015.00 12,500.00 2,485.00 0.74
03/27/02 ST 77,000.00 HRZG 0.41239 0.50000 21.24 31,754.40 38,500.00 6,745.60 2.27
03/28/02 ST 90,000.00 HERZ 0.42687 0.50000 17.13 38,418.00 45,000.00 6,582.00 2.66
---------- ------- ------- ----- ---------- ---------- --------- -----
552,000.00 0.41133 0.50000 21.56 227,055.40 276,000.00 48,944.60 16.31
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BANC OF AMERICA SECURITIES LLC
WORKING APPRAISAL BY ASSET CLASS
Skiritai Capital LLC 05/15/02
DATE TAX SHARES/ BROKER UNIT CURRENT PCT TOTAL MARKET UNREALIZED PCT OF
OPENED TERM FACE COST PRICE G/L COST VALUE GAIN/LOSS ASSETS
CGZT COTELLIGENT GROUP INC.
01/03/02 ST 15,000.00 STUP 0.33003 0.52000 57.56 4,950.50 7,800.00 2,849.50 0.59
01/18/02 ST 15,000.00 STUP 0.40333 0.52000 28.93 6,050.00 7,800.00 1,750.00 0.59
01/22/02 ST 10,000.00 STUP 0.35500 0.52000 46.48 3,550.00 5,200.00 1,650.00 0.40
01/24/02 ST 65,000.00 STUP 0.40850 0.52000 27.29 26,552.50 33,800.00 7,247.50 2.57
01/25/02 ST 20,000.00 STUP 0.34000 0.52000 52.94 6,800.00 10,400.00 3,600.00 0.79
01/28/02 ST 50,000.00 STUP 0.34200 0.52000 52.05 17,100.00 26,000.00 8,900.00 1.98
01/29/02 ST 5,000.00 STUP 0.33000 0.52000 57.58 1,650.00 2,600.00 950.00 0.20
01/31/02 ST 20,000.00 STUP 0.33000 0.52000 57.58 6,600.00 10,400.00 3,800.00 0.79
02/07/02 ST 5,000.00 STUP 0.32000 0.52000 62.50 1,600.00 2,600.00 1,000.00 0.20
02/08/02 ST 25,000.00 STUP 0.31000 0.52000 67.74 7,750.00 13,000.00 5,250.00 0.99
02/28/02 ST 5,000.00 STUP 0.40300 0.52000 29.03 2,015.00 2,600.00 585.00 0.20
03/22/02 ST 125,000.00 STUP 0.49800 0.52000 4.42 62,250.00 65,000.00 2,750.00 4.95
03/26/02 ST 25,000.00 STUP 0.40060 0.52000 29.81 10,015.00 13,000.00 2,985.00 0.99
03/27/02 ST 77,000.00 STUP 0.41239 0.52000 26.09 31,754.40 40,040.00 8,285.60 3.05
03/28/02 ST 90,000.00 STUP 0.42687 0.52000 21.82 38,418.00 46,800.00 8,382.00 3.56
04/30/02 ST 3,000.00 STUP 0.51000 0.52000 1.96 1,530.00 1,560.00 30.00 0.12
05/02/02 ST 10,000.00 STUP 0.45150 0.52000 15.17 4,515.00 5,200.00 685.00 0.40
05/03/02 ST 16,000.00 STUP 0.45094 0.52000 15.32 7,215.00 8,320.00 1,105.00 0.63
05/08/02 ST 5,000.00 STUP 0.42300 0.52000 22.93 2,115.00 2,600.00 485.00 0.20
05/10/02 ST 15,000.00 MLCO 0.44430 0.52000 17.04 6,664.50 7,800.00 1,135.50 0.59
05/13/02 ST 25,000.00 MLCO 0.51060 0.52000 1.84 12,765.00 13,000.00 235.00 0.99
---------- ------- ------- ----- ---------- ---------- --------- -----
626,000.00 0.41831 0.52000 24.31 261,859.90 325,520.00 63,660.10 24.77
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BANC OF AMERICA SECURITIES LLC
WORKING APPRAISAL BY ASSET CLASS
Russ Silvestri IRA 05/15/02
DATE TAX SHARES/ BROKER UNIT CURRENT PCT TOTAL MARKET UNREALIZED PCT OF
OPENED TERM FACE COST PRICE G/L COST VALUE GAIN/LOSS ASSETS
CGZT COTELLIGENT GROUP INC.
02/14/02 ST 15,000.00 MONT 0.40000 0.52000 30.00 6,000.00 7,800.00 1,800.00 1.30
02/19/02 ST 5,000.00 MONT 0.35000 0.52000 48.57 1,750.00 2,600.00 850.00 0.43
03/28/02 ST 10,000.00 MONT 0.48000 0.52000 8.33 4,800.00 5,200.00 400.00 0.86
--------- ------- ------- ----- --------- --------- -------- ----
30,000.00 0.41833 0.52000 24.30 12,550.00 15,600.00 3,050.00 2.59
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ANNEX C
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SKIRITAI Capital LLC
655 Montgomery Street
Suite 1438
San Francisco, California 94111
May 15, 2002
VIA MESSENGER AND OVERNIGHT COURIER
Board of Directors
Cotelligent, Inc.
44 Montgomery Street
San Francisco, California 94104
Dear Ladies and Gentlemen:
As you may know, SKIRITAI Capital LLC is the beneficial holder of an aggregate
of 626,000 shares of common stock, par value $.01 per share ("Common Stock"), of
Cotelligent, Inc., a Delaware corporation ("Cotelligent" or the "Company").
These shares of Common Stock represent approximately 4.2 percent of the
Company's Common Stock, based upon the 14,900,891 shares of Common Stock issued
and outstanding as of April 24, 2002 as set forth in the Company's Proxy
Statement for its 2002 Annual Meeting of Stockholders to be held on June 11,
2002.
As a stockholder of Cotelligent, we are deeply concerned about the strategic
direction of the Company and the apparent inability of the Company's Board of
Directors and management team to develop and implement a strategic plan that
will maximize the value of the Company's assets for all of its stockholders. We
have met with members of Cotelligent's management team on three separate
occasions and, during each of these meetings, the Company's management described
a different strategic plan for the Company. If we are to accept the Company's
strategic plan as expressed in its Annual Report on Form 10-K/A for the fiscal
year ended December 31, 2001, as amended, Cotelligent currently intends to
pursue a strategy of providing "complete business solutions, specializing in
mobile business and Web services solutions." We believe, however, that such a
strategy is likely to fail in the current business environment due to the
Company's previous and ongoing failure to execute this strategic plan amid
competition from numerous larger industry participants, and many smaller
low-cost solutions providers, who are implementing similar strategies more
effectively. Moreover, recklessly pursuing such a strategic plan will continue
to deplete one of the Company's sole remaining valuable assets, its cash
reserves of approximately $23 million. We further believe that our concerns
regarding Cotelligent's current strategic plan are shared by the investment
community, as reflected in the continuously declining price of the Company's
Common Stock from a high of $5.72 on June 30, 2000 to the current price of $0.52
on May 14, 2002.
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In light of the foregoing, we do not believe that Cotelligent's Board of
Directors or its management team have the ability to develop or implement a
strategic plan that will create long term stockholder value in excess of the
current value of the Company's assets. Accordingly, we are strongly encouraging
the Company's Board of Directors to take immediate steps to consider and take
action that will maximize the value of the Company's assets in the near term.
Such steps could include the replacement of senior management, the dissolution
of the Company and the distribution of its residual cash reserves and other
assets to the Company's stockholders, or an immediate auction and sale of the
Company to the highest bidder.
We further note that Cotelligent has a so-called "poison pill" rights plan,
which we believe may be unjustifiably deterring third parties who would
otherwise be interested in acquiring the Company or its assets. Because we
believe that a sale of Cotelligent could be one method of maximizing the value
of the Company and its assets, we urge the Company's Board of Directors to
terminate the rights plan immediately. To bring this matter to the attention of
the Company's other stockholders, we are also delivering to the Company under
separate letter a stockholder proposal to terminate the Company's rights plan as
promptly as practicable, which we are requesting to have included in the
Company's proxy statement for its 2002 Annual Meeting of Stockholders.
We would like to remind the Company's Board of Directors that it has a fiduciary
responsibility to maximize the value of Cotelligent and its assets for all of
the Company's stockholders. We believe that, by pursuing the Company's current
strategic plan, the Board of Directors is failing to fulfill its fiduciary
obligations to the Company's stockholders. Accordingly, we urge Board of
Directors to consider the establishment of an independent committee of the Board
of Directors charged with the responsibility of considering the matters that we
have raised in this letter and, ultimately, with taking appropriate action to
maximize the value of the Company for the benefit of its stockholders.
We would also like to invite the Company's Board of Directors or any of its
members to meet with us to discuss the matters that we have raised in this
letter. We believe that such matters are of the utmost importance to the Company
and its stockholders and encourage the Board of Directors to
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afford them the critical importance they deserve under the present
circumstances. We look forward to hearing from you promptly.
Very truly yours,
SKIRITAI Capital LLC
/s/ Russell Silvestri
---------------------------
Russell Silvestri
Managing Partner
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