-----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, B91sMlzLDYCH8pzJhyq5GBr5iXw3908q7HjE0dnwmptCFOBJlJqaqS1i48UElH2t jFnd/tOGIbI9SH6XwvQraQ== 0000910680-05-000164.txt : 20050228 0000910680-05-000164.hdr.sgml : 20050228 20050228164202 ACCESSION NUMBER: 0000910680-05-000164 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050408 FILED AS OF DATE: 20050228 DATE AS OF CHANGE: 20050228 EFFECTIVENESS DATE: 20050228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOLT INFORMATION SCIENCES, INC. CENTRAL INDEX KEY: 0000103872 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 135658129 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09232 FILM NUMBER: 05646157 BUSINESS ADDRESS: STREET 1: 560 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-2928 BUSINESS PHONE: 2127042400 MAIL ADDRESS: STREET 1: 560 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-2928 FORMER COMPANY: FORMER CONFORMED NAME: VOLT INFORMATION SCIENCES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VOLT TECHNICAL CORP DATE OF NAME CHANGE: 19680913 DEF 14A 1 def14a040805.txt DEFINITIVE PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 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 toss.240.14a-11(c) orss.240.14a-12 Volt Information Sciences, 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)(1) 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 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: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: VOLT INFORMATION SCIENCES, INC. 560 Lexington Avenue New York, New York 10022-2928 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS April 8, 2005 TO THE SHAREHOLDERS OF VOLT INFORMATION SCIENCES, INC. The Annual Meeting of Shareholders of Volt Information Sciences, Inc. (the "Company") will be held at the First Floor Atrium, Volt Corporate Park, 2401 N. Glassell Street, Orange, CA 92865, on Friday, April 8, 2005, at 10:00 a.m., Pacific time, to consider the following: 1. The election of three Class II directors to serve until the 2007 Annual Meeting of Shareholders and until their respective successors are elected and qualified; 2. A proposal to ratify the action of the Board of Directors in appointing Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending October 30, 2005; and 3. Such other business as may properly come before the meeting or any adjournments or postponements thereof. Only shareholders of record at the close of business on February 22, 2005 will be entitled to notice of, and to vote at, the meeting and any adjournments or postponements thereof. You are cordially invited to attend the meeting. Whether or not you plan to be present, kindly fill out and sign the enclosed Proxy exactly as your name appears on the Proxy, and mail it promptly in order that your vote can be recorded. A return envelope is enclosed for your convenience and requires no postage if mailed within the United States. The giving of this Proxy will not affect your right to vote in person in the event that you find it convenient to attend the meeting. By Order of the Board of Directors Jerome Shaw, Secretary New York, New York February 28, 2005 VOLT INFORMATION SCIENCES, INC. 560 Lexington Avenue New York, New York 10022-2928 PROXY STATEMENT For ANNUAL MEETING OF SHAREHOLDERS This Proxy Statement, to be mailed on or about February 28, 2005, is furnished in connection with the solicitation by the Board of Directors of Volt Information Sciences, Inc., a New York corporation (the "Company" or "Volt"), of Proxies in the accompanying form ("Proxy" or "Proxies") for use at the Annual Meeting of Shareholders of the Company to be held on April 8, 2005 and at any adjournments or postponements thereof (the "Annual Meeting"). Only holders of record of the Company's Common Stock (the "Common Stock") as of the close of business on February 22, 2005 are entitled to notice of, and to vote at, the Annual Meeting. As of the close of business on that date, there were issued and outstanding 15,323,505 shares of Common Stock of the Company. Each issued and outstanding share of Common Stock on that date is entitled to one vote upon each matter to be acted upon at the Annual Meeting. The presence, in person or by proxy, of at least 35% of the total issued and outstanding shares of Common Stock entitled to vote at the Annual Meeting will constitute a quorum for the transaction of business at the Annual Meeting. All Proxies received will be voted in accordance with the specifications made thereon. Proxies received without specification on a matter will be voted as follows on that matter: (a) for the election of all nominees named herein to serve as directors, and (b) in favor of the proposal to ratify the appointment of Ernst & Young LLP ("Ernst & Young") as the Company's independent registered public accounting firm for the Company's fiscal year ending October 30, 2005 ("fiscal 2005"). Management does not intend to bring before the Annual Meeting any matters other than those specifically described above and knows of no other matters to come before the Annual Meeting. If any other matters or motions come before the Annual Meeting, it is the intention of the persons named in the accompanying form of Proxy to vote Proxies in accordance with their judgment on those matters or motions, including any matter dealing with the conduct of the Annual Meeting. Proxies may be revoked at any time prior to their exercise by written notification to the Secretary of the Company at the Company's principal executive offices located at 560 Lexington Avenue, New York, New York 10022-2928, by voting at the Annual Meeting or by submitting a later dated proxy. The Company maintains a Savings Plan (the "Savings Plan") in which separate accounts are maintained for Common Stock held under the Employee Stock Ownership Plan (the "ESOP Account") and 401(k) Plan (the "401(k) Account") features of the Savings Plan. Subaccounts are maintained for each participant under the ESOP Account and 401(k) Account. Separate Proxies are being transmitted to each employee of the Company who is a participant in the Savings Plan. Shares held in a participant's subaccounts will be voted by the trustee of the Savings Plan as directed by the participant in a signed Proxy for Savings Plan participants which is timely returned to the Savings Plan's trustee or its designee. Shares as to which the Savings Plan trustee does not receive a timely direction will be voted by the trustee as directed by the administrator of the Savings Plan in such manner as the Savings Plan administrator deems proper in its fiduciary capacity for the benefit of the Savings Plan and its participants. A plurality of votes cast at the Annual Meeting in person or by proxy is required for the election of each nominee to serve as a director. The affirmative vote of a majority of votes cast at the Annual Meeting in person or by proxy is required to ratify the selection of Ernst & Young as the Company's independent registered public accounting firm for fiscal 2005. Votes withheld, in the case of the election of directors, and abstentions and any broker non-votes with respect to the ratification of independent registered public accounting firm, are not considered votes cast with respect to that matter and, consequently, will have no effect on the vote on that matter, but are counted in determining a quorum. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND NOMINEES The following table sets forth information, as of February 15, 2005 (except as described in the footnotes to the following table), with respect to the beneficial ownership of Common Stock, the Company's only class of voting or equity securities, by (a) each person who is known to the Company to own beneficially more than five percent of the outstanding shares of Common Stock, (b) each of the executive officers named in the Summary Compensation Table contained under "Executive Compensation", (c) each of the directors of the Company, including nominees to serve as directors, and (d) executive officers and directors as a group:
Name and Address Amount and Nature of of Beneficial Owner Beneficial Ownership (1) Percent of Class (2) - ------------------- ------------------------ -------------------- William Shaw 3,540,780 (3) (4) 23.0% 560 Lexington Avenue New York, NY 10022-2928 Jerome Shaw 3,201,674 (3) (5) 20.8% 2401 N. Glassell Street Orange, CA 92665 Dimensional Fund Advisors Inc. 1,303,200 (6) 8.5% 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 Barclays Global Investors, NA 859,749 (7) 5.6% 45 Fremont Street San Francisco, CA 94105 Thomas Daley 29,662 (3) * James J. Groberg 30,884 (3) * Steven A. Shaw 333,306 (3)(8) 2.1% Howard B. Weinreich 41,169 (3) * Lloyd Frank 10,529 (9) * Bruce G. Goodman 157,787 (10) 1.0% Mark N. Kaplan 10,500 (3) * William H. Turner 1,000 * Theresa A. Havell 4,000 * All executive officers and directors as a 7,387,629 (11) 47.5% group (15 persons, including the foregoing)
- -------------------------------------------- (1) Except as noted, the named beneficial owners have sole voting and dispositive power with respect to their beneficially owned shares. Shares beneficially owned include shares held in the executive officer's ESOP Account and 401(k) Account. 2 (2) Asterisk indicates less than 1%. Shares reflected as owned by a person that are not outstanding but that are issuable upon exercise of the portion of options held by such person that are exercisable on or within 60 days after February 15, 2005 are considered outstanding for the purpose of computing the percentage of outstanding Common Stock that would be owned by that person if the options were exercised, but (except for the calculation of the beneficial ownership by all executive officers and directors as a group) are not considered outstanding for the purpose of computing the percentage of outstanding Common Stock owned by any other person. (3) Includes the following shares issuable upon the exercise of the portion of options granted by the Company that are exercisable on or within 60 days after February 15, 2005: William Shaw, 45,000 shares; Jerome Shaw, 45,000 shares; Thomas Daley, 17,250 shares; James J. Groberg, 29,300 shares; Steven A. Shaw, 36,000 shares; Howard B. Weinreich, 18,500 shares; and Mark N. Kaplan, 7,500 shares. (4) Includes (i) 1,500,000 shares owned by Mr. Shaw as trustee under a trust for his benefit and (ii) 3,833 shares held by a family foundation of which Mr. Shaw and two other members of his family are trustees as to which Mr. Shaw disclaims beneficial ownership. (5) Includes (i) 1,636,230 shares owned by Mr. Shaw and his wife as trustees of a revocable trust for their benefit or as community property, as to which shares they may be deemed to have shared voting and investment power (pursuant to the terms of the trust, Mr. Shaw may demand that the shares in trust be transferred to him at any time), (ii) 1,250,000 shares owned by Mr. Shaw as trustee under two trusts, one for his benefit and the other for the benefit of one of his children, (iii) 236,250 shares owned by Mr. Shaw and his wife as trustees of a trust for the benefit of one of their children, as to which shares Mr. and Mrs. Shaw may be deemed to have shared voting and investment power (the inclusion of which 236,250 shares is not an admission of beneficial ownership of those shares by Mr. Shaw) and (iv) 6,750 shares owned by Mr. Shaw's wife as to which shares Mr. Shaw disclaims beneficial ownership. (6) Based on information as of December 31, 2004 contained in a Schedule 13G amendment dated February 9, 2005 which indicates that Dimensional Fund Advisors Inc., an investment advisor, has sole voting and/or investment power as to these shares which are owned by investment funds as to which it furnishes investment advice or serves as investment manager, but as to which it disclaims beneficial ownership. (7) Based on information as of December 31, 2004 contained in a Schedule 13G dated February 14, 2005 which indicates that Barclays Global Investors, NA, a bank, has sole voting power over 502,437 shares and has sole dispositive power over 551,708 shares and Barclays Global Fund Advisors, an investment advisor, has sole voting and dispositive power over an additional 308,041 shares. (8) Includes 9,298 shares held by Mr. Shaw as trustee of trusts for the benefit of two of his nephews, as to which Mr. Shaw disclaims beneficial ownership. (9) Includes 2,529 shares owned by Mr. Frank's wife, as to which Mr. Frank disclaims beneficial ownership. (10) Includes (i) 400 shares owned by Mr. Goodman as custodian for his children, (ii) 1,000 shares owned by Mr. Goodman as trustee of an irrevocable trust for the benefit of his children, (iii) 124,215 and 8,913 shares owned by Mr. Goodman's wife, individually, and as custodian for one of her children, respectively, (iv) 8,513 shares owned by Mr. Goodman's wife as custodian for their child and (v) 3,833 shares held by a family foundation of which Mr. Goodman's wife and two other members of her family are trustees as to all of which shares Mr. Goodman disclaims beneficial ownership. (11) Includes (i) 221,850 shares issuable upon the exercise of the portion of options granted by the Company that are exercisable on or within 60 days after February 15, 2005 and (ii) the shares described in footnotes 4, 5, 8, 9 and 10. 3 ELECTION OF DIRECTORS The Company's Board of Directors presently consists of seven directors, divided into two classes. The terms of office of Class I and Class II directors expire at the 2006 and 2005 Annual Meetings of Shareholders, respectively. At each annual meeting, directors are chosen to succeed those in the class whose term expires at that annual meeting to serve for a term of two years each and until their respective successors are elected and qualified. Each of the present directors of the Company was elected by the Company's shareholders. Unless otherwise directed, persons named in the enclosed Proxy intend to cast all votes pursuant to Proxies received for the election of William Shaw, William H. Turner and Theresa A. Havell as Class II directors to serve until the 2007 Annual Meeting of Shareholders and, in each case, until his or her respective successor is elected and qualified (those persons are referred to in this Proxy Statement as the "nominees"). Each nominee has indicated his or her availability to serve as a director. In the event that any of the nominees should become unavailable or unable to serve for any reason, the holders of the Proxies have discretionary authority to vote for one or more alternate nominees who will be designated by the Board of Directors. A plurality of the votes cast at the Annual Meeting in person or by proxy is required for the election of each nominee. Votes withheld will have no effect on the outcome of the election of directors. Background of Nominees and Continuing Directors Nominees (Class II) WILLIAM SHAW, 80, a founder of the Company, has been President, Chairman of the Board and Chief Executive Officer of the Company since its formation and has been employed in executive capacities by the Company and its predecessors since 1950. He has served as a director of the Company since its formation in 1957. WILLIAM H. TURNER, 65, has been a director of the Company since August 1998. He has been acting Dean at Stony Brook University School of Business since February 2004. He has also been the Senior Partner of Summus Ltd., a consulting firm, since October 2002. From September 1999 until his retirement in September 2002, and, from August 1997 to August 1999, he was President of PNC Bank, New Jersey. From October 1996 to July 1997, he was President and Chief Executive Officer of Franklin Electronic Publishers, Inc. (a designer and developer of hand-held electronic information products) and, from February 1991 to September 1996, he was Vice Chairman of The Chase Manhattan Bank and its predecessor, Chemical Banking Corporation. He is also a director of Standard Motor Products, Inc., Franklin Electronic Publishers, Inc. and New Jersey Resources Corp. THERESA A. HAVELL, 58, has been a director of the Company since April 2004. She has been President and Chief Executive Officer of Havell Capital Management LLC (a money management company) since 1996. Prior to 1996 Ms. Havell was a Partner, Member of Executive Committee, Director and Chief Investment Officer of the Fixed Income Group of NeubergerBerman. 4 Directors Whose Term of Office Continues After the Annual Meeting (Class I) LLOYD FRANK, 79, has been a director of the Company since March 2000. He has been Counsel to the law firm of Jenkens & Gilchrist Parker Chapin LLP since January 2005 and, from January 1977 until that time, was a partner in that firm (and its predecessor, Parker Chapin LLP). Mr. Frank is also a director of Park Electrochemical Corp. and Dryclean USA, Inc. BRUCE G. GOODMAN, 56, has been a director of the Company since May 2000. He has been a partner of the law firm of Hinckley, Allen & Snyder LLP since April 1995. MARK N. KAPLAN, 75, has been a director of the Company since April 1991. He has been of counsel to the law firm of Skadden, Arps, Slate, Meagher & Flom LLP since 1999 and, from October 1979 until that time, was a partner in that firm. Mr. Kaplan is also a director of DRS Technologies, Inc., Refac Technology Development Corporation, Autobytel Inc., American Biltrite, Inc. and Congoleum Corporation. STEVEN A. SHAW, 45, has been a Senior Vice President of the Company since November 2000 and a Vice President of the Company since April 1997. He has been employed by the Company in various capacities since November 1995. He has served as a director of the Company since August 1998. William Shaw and Jerome Shaw are brothers. Steven A. Shaw is the son of Jerome Shaw. Bruce G. Goodman is the son-in-law of William Shaw. There are no other family relationships among the directors or executive officers of the Company. Messrs. William Shaw and Jerome Shaw are parties to employment agreements with the Company. See "Executive Remuneration - Employment and Termination Agreements." Corporate Governance The Company's business and affairs are managed and under the direction of the Board of Directors. Members of the Board of Directors are kept informed of the Company's business through discussions with the Company's Chief Executive Officer and other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. The Company has an Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee. The Board of Directors met ten times during the past fiscal year. Each incumbent director attended at least 75% of the meetings of the Board of Directors and Committees on which he served which were held during the fiscal year. Independent Directors; Executive Sessions of the Board The Board of Directors has determined that Lloyd Frank, Theresa A. Havell, Mark N. Kaplan and William H. Turner meet the current independence requirements under the listing standards of the New York Stock Exchange. The Board of Directors made these determinations based primarily upon a review of the responses of directors to questions regarding employment and compensation history, affiliations and family and other relationships and on discussions with them. The Company has held regular executive sessions of the non-management directors. In accordance with the listing standards of the New York Stock Exchange, these sessions are intended to promote open discussion among non-management directors. Mark N. Kaplan has been chosen to preside at these sessions. 5 Shareholder Communications with the Board of Directors Shareholders may communicate directly with the Board of Directors by sending communications to the Board of Directors, c/o Howard B. Weinreich, General Counsel & Senior Vice President, Volt Information Sciences, Inc., 560 Lexington Avenue, New York, NY 10022-2928. Mr. Weinreich will forward all such communications directly to the Board of Directors. Code of Business Conduct and Corporate Governance Guidelines The Company has a Code of Business Conduct and Ethics and corporate governance guidelines. Copies of the Company's Code of Business Conduct and Ethics and other significant corporate policies are available at the Company's website: www.volt.com, in the Investor Information section. Compliance with New York Stock Exchange Corporate Governance Guidelines The Chief Executive Officer of the Company will certify to the New York Stock Exchange, on which the Company's Common Stock is listed, that, as of the date of his certification, he is unaware of any violation by the Company of the New York Stock Exchange's corporate governance listing standards. Audit Committee The Audit Committee presently consists of Theresa A. Havell, Mark N. Kaplan and William H. Turner, each of whom is financially literate and meets the current independence requirements for audit committee membership under the rules of the Securities and Exchange Commission and the listing standards of the New York Stock Exchange. The Board of Directors has determined that Mark N. Kaplan is an "audit committee financial expert". This determination is based on Mr. Kaplan's relevant experience as Chief Executive Officer of an investment banking firm, Chief Operating Officer of a public company, former Chairman of the Audit Committee of The City of New York and as Co-Chair of the Audit Advisory Committee of the Board of Education of The City of New York. The Audit Committee provides assistance to the Company's directors in fulfilling the Board's oversight responsibility as to the Company's accounting, auditing and financial reporting practices and as to the quality and integrity of the publicly distributed financial reports of the Company. The specific functions and responsibilities of the Audit Committee are set forth in a written charter of the Audit Committee adopted by the Board of Directors, which gives the Audit Committee sole authority to retain and dismiss the independent registered public accounting firm, including pre-approval of all audit services, and periodic reviews of the performance and independence from management of the independent registered public accounting firm, and grants the Audit Committee the authority to fulfill its obligations under Securities and Exchange Commission and New York Stock Exchange requirements. Mark N. Kaplan, Chairman of the Audit Committee, has been designated by the Audit Committee to approve non-audit services to be performed by the independent registered public accounting firm. The Audit Committee reviews and reassesses its charter annually and recommends any changes to the Board of Directors for approval. A report of the Audit Committee appears under the caption "Audit Committee Report," below. The Audit Committee met twelve times during the past fiscal year. Compensation Committee The Company's Compensation Committee consists of Lloyd Frank, Theresa A. Havell, Mark N. Kaplan and William H. Turner, each of whom meets the independence requirements for compensation committee membership under the listing standards of the New York Stock Exchange. Mr. Turner serves as chair of the Compensation Committee. The Compensation Committee met three times during the past fiscal year. The responsibilities of the Compensation Committee are set forth in a written charter adopted by the Board of Directors which gives the Compensation Committee authority to approve and evaluate the director and officer compensation plans, policies and programs of the Company; and prepare an annual 6 report on executive compensation for inclusion in the Company's proxy statement for its annual meeting of shareholders. A copy of the Compensation Committee's charter is available at the Company's website: www.volt.com, in the Investor Information section. Nominating/Corporate Governance Committee The Company's Nominating/Corporate Governance Committee consists of Lloyd Frank, Theresa A. Havell, Mark N. Kaplan and William H. Turner, each of whom meets the independence requirements for Nominating/Corporate Governance Committee membership under the listing standards of the New York Stock Exchange. Ms. Havell serves as chair of the Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee met once during the past fiscal year. The responsibilities of the Nominating/Corporate Governance Committee include: identifying, evaluating and recommending to the Board prospective nominees for Director; reviewing the Company's corporate governance policies and making recommendations to the Board from time to time regarding matters of corporate governance; and reviewing the performance of the Board and its members. The Nominating/Corporate Governance Committee has not established a formal process to identify and evaluate prospective nominees for Director. Copies of the Company's Nominating/Corporate Governance Committee Charter and Corporate Governance Guidelines are available at the Company's website: www.volt.com, in the Investor Information section. Stockholders may submit names of qualified candidates for director, along with detailed information on their backgrounds, to the Company's Secretary for referral to the Nominating/Corporate Governance Committee for consideration. Audit Committee Report Management has the primary responsibility for the Company's financial reporting process, including its financial statements, while the Board is responsible for overseeing the Company's accounting, auditing and financial reporting practices and the Company's independent registered public accounting firm has the responsibility for the examination of the Company's annual financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States. In assisting the Board in fulfilling its oversight responsibility with respect to the Company's year ended October 31, 2004, the Audit Committee: o Reviewed and discussed the audited financial statements for the fiscal year ended October 31, 2004 with management and Ernst & Young, the Company's independent registered public accounting firm; o Discussed with Ernst & Young the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, relating to the conduct of the audit; and o Received the written disclosures and a letter from Ernst & Young stating that Ernst & Young were independent certified public accountants with respect to the Company within the meaning of the Federal Securities Laws and the Rules and Regulations thereunder, including the independence rules adopted by the Securities and Exchange Commission pursuant to the Sarbanes Oxley Act of 2002; and Rule 3600T of the Public Company Accounting Oversight Board, which designates as interim independence standards Rule 101 of the American Institute of Certified Public Accountants Code of Professional Conduct and Standards Nos. 1, 2 and 3 of the Independence Standards Board. The Audit Committee also discussed Ernst & Young's independence with Ernst & Young and considered whether the provision of non-audit services rendered by Ernst & Young was compatible with maintaining its independence under Securities and Exchange Commission rules governing the independence of a company's outside auditors (see "Ratification of the Selection of Auditors"). 7 Based on the foregoing review and discussions, the Audit Committee recommended to the Board that the Company's audited financial statements for the fiscal year ended October 31, 2004 be included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for that year. Respectfully, Mark N. Kaplan, Chair Theresa A. Havell William H. Turner EXECUTIVE REMUNERATION Summary Compensation Table The following table sets forth information concerning the compensation during the fiscal years ended October 31, 2004 ("fiscal 2004"), November 2, 2003 ("fiscal 2003") and November 3, 2002 ("fiscal 2002") of the Company's Chief Executive Officer and each of the four other executive officers of the Company serving as executive officers of the Company at the end of fiscal 2004 who received the highest regular cash compensation during fiscal 2004 for services rendered in all capacities to the Company and its subsidiaries (the "Named Executive Officers"): Summary Compensation Table
Long-Term Compensation ------------ Securities Annual Compensation Underlying All Other Principal Position Year Salary (1) Bonus Options Compensation (2) - ------------------ ---- ---------- --------- -------------------- ---------------- William Shaw, 2004 $432,231 -- -- $ 2,911 President and 2003 413,462 -- -- 2,906 Chief Executive Officer 2002 400,000 -- -- 2,605 Jerome Shaw, 2004 432,231 -- -- 3,191 Executive Vice President 2003 413,462 -- -- 2,989 2002 400,000 -- -- 2,605 James J. Groberg, 2004 345,202 -- -- 365 Senior Vice President and 2003 338,385 -- -- 365 Chief Financial Officer 2002 330,000 -- -- 203 Thomas Daley, 2004 249,995 $ 81,585(3) 2,823 Senior Vice President 2003 249,995 33,327(3) 5,000 2,651 2002 249,995 22,586(3) -- 2,355 Howard B. Weinreich, 2004 274,792 170,000(4) 3,440 Senior Vice President and 2003 258,819 -- 5,000 2,583 General Counsel 2002 252,600 -- -- 2,655
- ---------- (1) Includes compensation deferred under the Company's deferred compensation plan and under Section 401(k) of the Internal Revenue Code of 1986, as amended. (2) Amounts in fiscal 2004 include (i) premiums under the Company's group life insurance policy ($730 for each of William Shaw and Jerome Shaw and $365 for each of James J. Groberg, Thomas Daley and Howard B. Weinreich) and (ii) the Company's contribution under the 401(k) Plan feature of the Savings Plan ($2,181 for William Shaw, $2,461 for Jerome Shaw; $2,458 for Thomas Daley; and 8 $3,075 for Howard B. Weinreich). (3) Based on combined pre-tax income of divisions for which Mr. Daley has management responsibility. (4) A substantial portion of this amount is related to services in connection with the sale of the Company's real estate during fiscal 2004. Option Grants in Last Fiscal Year No options were granted by the Company during fiscal 2004 to the Named Executive Officers. Stock Option Exercises and Fiscal Year-End Values The following table sets forth certain information concerning shares of Common Stock of the Company subject to unexercised options held at October 31, 2004 by the Named Executive Officers:
Number of Shares Shares Underlying Unexercised Deemed Options at Fiscal Year-End Value of In-the-Money Acquired Value ------------------------------ Options at Fiscal Year-End Name On Exercise Realized (Exercisable / Unexercisable) (Exercisable / Unexercisable) - ---- ----------- -------- ------------------------------ ----------------------------- William Shaw -- -- 45,000 / -- $163,499 / -- Jerome Shaw -- -- 45,000 / -- $493,502 / -- James J. Groberg 200 $2,577 32,300 / 3,000 $276,223 / $21,713 Thomas Daley -- -- 17,250 / 4,000 $158,051 / $42,080 Howard B. Weinreich -- -- 17,500 / 4,500 $150,330 / $78,639
Compensation of Directors Each director of the Company who is not an officer or employee of the Company receives a director's fee at the annual rate of $45,000 ($50,000 in the case of Mark N. Kaplan in view of his additional responsibilities as Chair of the Audit Committee) (each increased from $40,000 effective the third fiscal quarter of Fiscal 2004), and is also reimbursed for out-of-pocket expenses related to his services. Mark N. Kaplan holds an option to purchase 7,500 shares of the Company's Common Stock at an exercise price of $40.03 which expires on January 25, 2008. Employment and Termination Agreements The Company is a party to employment agreements dated as of May 1, 1987 with William Shaw and Jerome Shaw. These agreements, as amended, provide for the employment of each in his present executive capacity at an annual base salary which is presently $450,000 (subject to increases and additional compensation, including bonuses, from time to time, at the discretion of the Board of Directors). The employment term under each employment agreement continues until the April 30 which is five years next following the giving by either the Company or the executive of notice to terminate such employment. The agreements also provide for service thereafter for the remainder of the executive's life as a consultant to the Company for annual consulting fees equal to 75% for the first ten years of the consulting period, and 50% for the remainder of the consulting period, of his base salary as in effect immediately prior to the commencement of the consulting period. Upon the death of the executive, the Company will pay to his beneficiary a death benefit equal to three times his annual base salary at the date of death if his death shall have occurred while employed as an executive, 2.25 times his annual base salary at the end of his employment as an executive if his death shall have occurred during the first ten years of the consulting period or 1.5 times his annual base salary at the end of his employment as an executive if his death shall have occurred during the remainder of the consulting period. Each employment agreement permits the executive to accelerate the commencement of the consulting period if a "change in control", as defined in the agreements, of the Company shall occur or if the Company's 9 office where the executive presently performs his principal services shall be relocated to a different geographical area. Under their employment agreements, William Shaw and Jerome Shaw are prohibited from engaging in any business competitive with the Company, competing with the Company for its customers or encouraging employees of the Company to leave their employment. These restrictions apply for the duration of the respective agreements and for one year thereafter if the executive's employment shall have been terminated by the Company "for cause," as defined in the agreement. William Shaw and Jerome Shaw will not be bound by these restrictions after a "change in control," as defined in the agreement, of the Company shall have occurred if, during their respective consulting periods, they shall elect to terminate their respective employment agreements and thereby relinquish any further payments or other benefits thereunder. Compensation Committee Interlocks and Insider Participation in Compensation Decisions Since 2004, decisions regarding the cash compensation of the Company's chief executive officer and executive officers who are directors have been made by the Compensation Committee. However, since August 1996, all decisions regarding the granting of stock options have been made by the entire Board of Directors. Accordingly, William Shaw and Steven A. Shaw, executive officers and directors of the Company, and Theresa A. Havell, Lloyd Frank, Bruce G. Goodman, Mark N. Kaplan, and William H. Turner, the remaining directors of the Company, would have participated in deliberations of the Company's Board of Directors concerning stock option grants to executive officers during the year ended October 31, 2004, if there had been any. Each executive officer who is also a director would not participate in deliberations as to his own stock options. During the Company's fiscal year ended October 31, 2004, Jenkens & Gilchrist Parker Chapin LLP, of which firm Lloyd Frank is counsel, provided legal services to the Company, and that firm has been retained to provide legal services to the Company during fiscal 2005. During the Company's fiscal year ended October 31, 2004, Hinckley, Allen & Snyder LLP, of which firm Bruce G. Goodman is a partner, provided legal services to the Company, and that firm has been retained to provide legal services to the Company during fiscal 2005. The Company rents to a corporation primarily owned by Steven A. Shaw, a Senior Vice President and Director of the Company, approximately 2,600 square feet of space in the Company's El Segundo, California facility, which the Company does not require for its own use, on a month-to-month basis currently at a rental of $1,750 per month. Based on the nature of the premises and a 2004 survey conducted for the Company, the Company believes the rent is the fair market rental for such space. Report With Respect to Executive Compensation Determinations The following report with respect to the Company's compensation policies applicable to the determination of the compensation of the Company's executive officers for fiscal 2004 is presented by the Compensation Committee. Executive Compensation. Compensation of executive officers is comprised of salary as a base compensation, bonuses as a means of short-term compensation and stock options to foster long-term incentive. All determinations as to the compensation of an executive officer who is also a member of the Board are made on an individual basis by the Compensation Committee after consultation with senior management, except that determinations as to the grant of stock options are made by the entire Board of Directors. An executive officer who is also a member of the Board does not participate in the Board's determination of his stock option grants. In making its decisions as to base salary, the Compensation Committee gives effect to the executive's performance and responsibilities, inflationary trends, competitive market 10 conditions and other subjective factors, without ascribing specific weights to these factors. Bonuses are based upon the Company's, a segment's or a division's performance, as well as the executive's overall performance, contribution toward the Company's profitability, meeting corporate objectives and, in certain instances, meeting specific corporate goals or completing specific programs or projects. The compensation (salary and bonuses) of executive officers who are not members of the Board is determined by senior management utilizing similar subjective criteria. The Company has utilized stock options as the primary method of providing long-term incentive compensation to key employees, including executive officers, of the Company and its subsidiaries. The Board believes that stock options foster the interest of key employees in seeking long-term growth for the Company, as well as linking their interests with the overall interest of shareholders. In determining when to grant options and the size of the award to any particular executive, the Board of Directors takes into consideration factors such as the executive's position, level of responsibility, value to the Company, objectives, accomplishments and performance, the incentive and objectives intended to be provided, when the last prior option was granted to the individual, the individual's other compensation and the recommendation of senior management. No one factor is given special weight, but decisions are made based on an overall assessment of each individual. Chief Executive Officer Compensation. The annual compensation of William Shaw, the Company's Chief Executive Officer, is fixed under the terms of his Employment Agreement with the Company (discussed under "Executive Remuneration - -- Employment and Termination Agreements," above), subject to increases and additional compensation, including bonus, from time to time, at the discretion of the Board of Directors. In determining whether to increase Mr. Shaw's base salary or award bonuses or other additional compensation, the Board uses similar criteria as it does for other executive officers who are directors. The annual compensation of Mr. Shaw was increased by $30,000 during fiscal 2004. Certain Tax Legislation. Section 162(m) of the Internal Revenue Code of 1986 ("Section 162(m)") precludes a public company from taking a federal income tax deduction for annual compensation in excess of $1,000,000 paid to the Company's chief executive officer or any of its four other most highly compensated executive officers. Certain "performance based compensation" is excluded from the deduction limitation. All of the fiscal 2004 compensation of its executive officers is tax deductible. Options previously granted by the Board are not deemed "performance based compensation" under Section 162(m). Therefore, the difference between the market value of the Company's Common Stock underlying those stock options at the date of their exercise and the exercise price of the options will be taken into account in determining whether the $1,000,000 Section 162(m) limitation is exceeded. Respectfully, William H. Turner, Chair Lloyd Frank Theresa A. Havell, Mark N. Kaplan Shareholder Return Performance Graph The Company's Common Stock has been listed on the New York Stock Exchange since May 7, 1997. The following graph compares the cumulative total shareholder return to holders of the Company's Common Stock with (a) the New York Stock Exchange Stock Market Index and (b) securities of companies traded on the New York Stock Exchange having market capitalizations that are within 5% of the market capitalization of the Company's Common Stock as at the end of the Company's latest fiscal year-end (this peer group has been historically selected by the Company because the Company has operated in five, four since the sale of Autologic, diverse business segments). The comparison assumes $100 was invested on October 29, 1999 in the Company's Common Stock and in each of the comparison 11 groups, and assumes reinvestment of dividends (the Company paid no dividends during the periods): [GRAPHIC OMITTED]
1999 2000 2001 2002 2003 2004 ---- ---- ---- ---- ---- ---- VOLT INFORMATION SCIENCES, INC. $100.00 $110.13 $57.47 $68.10 $88.61 $147.09 PEER GROUP INDEX $100.00 $123.12 $79.34 $63.95 $87.98 $101.26 NEW YORK STOCK EXCHANGE INDEX $100.00 $108.15 $90.30 $79.55 $96.84 $108.02
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors, and persons who beneficially own more than 10% of the Company's Common Stock, to file initial reports of ownership, and reports of changes of ownership, of the Company's equity securities with the Securities and Exchange Commission and furnish copies of those reports to the Company. Based solely upon a review of the copies of the reports furnished to the Company to date and representations that no reports were required, the Company believes that all reports required to be filed by such persons with respect to the Company's fiscal year ended October 31, 2004 were timely filed. RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors of the Company has, subject to shareholder ratification, selected Ernst & Young as the independent registered public accounting firm to audit the Company's financial statements for the fiscal year ending October 31, 2004. Ernst & Young did not render consulting services to the Company during the Company's 2004 fiscal year. Audit Fees Audit fees billed and expected to be billed by Ernst & Young for its audits of the annual financial statements of the Company and its subsidiaries for the years ended October 31, 2004 and November 2, 2003 and for its reviews of the financial statements included in Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission for those years were $748,110 and $641,700, respectively. 12 Audit-Related Fees The aggregate fees billed by Ernst & Young for assurance and related services that were reasonably related to the audit fees described under "Audit Fees" for the years ended October 31, 2004 and November 2, 2003 were $407,300 and $297,800, respectively. These assurance and related services included fees for audits of employee benefit plans and statutory audits. Tax Fees The aggregate fees billed by Ernst & Young for tax compliance, tax advice and tax planning for the years ended October 31, 2004 and November 2, 2003 were $220,000 and $229,800, respectively. Anticipated Attendance by Ernst & Young at the Annual Meeting Ernst & Young has indicated to the Company that it intends to have a representative present at the Annual Meeting who will have the opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions. Required Vote A resolution will be submitted to shareholders at the Annual Meeting for the ratification of the Board of Director's selection of Ernst & Young as the independent registered public accounting firm to audit the Company's financial statements for the fiscal year ending October 30, 2005. The affirmative vote of a majority of the votes cast at the Annual Meeting in person or by proxy will be required to adopt this resolution. The Board of Directors recommends a vote "FOR" this resolution. Abstentions and broker non-votes will have no effect on the outcome of the vote on this proposal. If the resolution selecting Ernst & Young LLP as the Company's independent registered public accounting firm is adopted by shareholders, the Board of Directors nevertheless retains the discretion to select different auditors should it then deem it in the Company's best interests. Any such future selection need not be submitted to a vote of shareholders. MISCELLANEOUS Cost of Soliciting Proxies The cost of solicitation of Proxies, including the cost of reimbursing banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding Proxy soliciting material to beneficial owners of Common Stock, will be borne by the Company. Proxies may be solicited without extra compensation by certain officers and regular employees of the Company by mail and, if determined to be necessary, by telephone, telegraph or personal interviews. Indemnification Insurance New York law permits a corporation to purchase insurance covering a corporation's obligation to indemnify directors and officers and also covering directors and officers individually, subject to certain limitations, in instances in which they may not otherwise be indemnified by the corporation. The Company maintains insurance policies from National Union Fire Insurance Company of Pittsburgh, PA, Federal Insurance Company and Continental Casualty Company covering reimbursement to the Company for any obligation it incurs as a result of indemnification of officers and directors and also covering indemnification for officers and directors individually in certain cases where additional exposure might exist. The policies expire May 1, 2005. The annual premium cost of the policies was $739,532. The Company is in the process of negotiating a renewal of these insurance policies. 13 Shareholder Proposals From time to time shareholders may present for consideration at meetings of shareholders proposals which may be proper subjects for inclusion in the proxy statement and form of proxy distributed in connection with such meetings. In order to be so included, such proposals must be submitted in writing on a timely basis. Shareholder proposals intended to be included in the Company's proxy statement and form of proxy to be used in connection with the Company's 2006 Annual Meeting of Shareholders must be received by the Company by October 31, 2005. Any such proposals, as well as any questions relating thereto, should be directed to the Secretary of the Company, 560 Lexington Avenue, New York, New York 10022-2928. The Company's by-laws, as amended, require shareholders who intend to nominate directors or propose business at any annual meeting to provide advance notice of such intended action, as well as certain additional information, to the Company. Such notice and information must be timely received by the Secretary of the Company at 560 Lexington Avenue, New York, New York 10022-2928 not less than 120 nor more than 150 days prior to the anniversary date of the notice of the annual meeting of shareholders held in the immediately preceding year. However, in the event the date of the annual meeting is changed by more than 30 days from the one year anniversary date of the date the annual meeting was held in such immediately preceding year and less than 130 days informal notice to shareholders or other public disclosure of the date of the annual meeting in the current year is given or made, advance notice of nominations or business proposed by a shareholder must be received by the Company not later than the close of business on the tenth calendar day following the date on which formal or informal notice or public disclosure of the date of the annual meeting is mailed or otherwise first publicly announced, whichever first occurs. Copies of the by-law provision are available upon request made to the Secretary of the Company. By Order of the Board of Directors Jerome Shaw, Secretary New York, New York February 28, 2005
REVOCABLE PROXY [X]PLEASE MARK VOTES VOLT INFORMATION SCIENCES, INC. AS IN THIS EXAMPLE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL 1. Election of Directors: With- For All MEETING OF SHAREHOLDERS OF VOLT INFORMATION SCIENCES, INC. The election of the following to For hold Except serve as Class II directors: [ ] [ ] [ ] The undersigned hereby appoints WILLIAM SHAW ,JEROME SHAW, William Shaw William H. Turner and HOWARD B. WEINREICH jointly and severally, Proxies Therea A. Havell with full power of substitution, to vote on behalf of the undersigned at the Annual Meeting of Shareholders of VOLT INSTRUCTION: To withhold authority to vote for any individual INFORMATION SCIENCES, INC. to be held on April 8, 2005, C nominee, mark "For All Except" and write that nominee's name and at any adjournments or postponements thereof, as in the space provided below. indicated upon the following matters as described in the O Notice of Meeting and accompanying Proxy Statement related ------------------------------------------------------------- to such meeting, receipt of which is acknowledged, and M For Against Abstain with discretionary power upon such other business as may 2. The proposal to ratify the action of [ ] [ ] [ ] come before the meeting, according to the number of votes M the Board of Directors in appointing and as fully as the undersigned would be entitled to vote Ernst & Young LLP as the Company's if personally present, hereby revoking any prior Proxy or O independent registered public account- Proxies. ing firm for the fiscal year ending N October 30, 2005. The Board of Directors recommends a vote for the election of each nominee to serve as a director and for Proposal 2 set forth in this Proxy. Each properly executed Proxy will be voted in accordance with the specifications made above. If no specification is made, the shares represented by this Proxy will be voted FOR the ------------------------- election of all listed nominees and FOR Proposal 2. Please be sure to sign and date |Date | this Proxy. | | THE SUBMISSION OF THIS PROXY, IF EXECUTED ---------------------------------------------------------- PROPERLY, REVOKES ALL PRIOR PROXIES. | | | | | | --Shareholder sign above----Co-holder(if any) sign above--
- -------------------------------------------------------------------------------- Detach above card, sign, date and mail in postage paid envelope provided. VOLT INFORMATION SCIENCES, INC. - -------------------------------------------------------------------------------- NOTE: Please sign your name or names exactly as set forth hereon. For jointly owned shares, each owner should sign. If signing as attorney, executor, administrator, trustee or guardian, please indicate the capacity in which you are acting. Proxies executed by corporations should be signed by a duly authorized officer. PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY - -------------------------------------------------------------------------------- HAS YOUR ADDRESS CHANGED? - ----------------------------- - ----------------------------- - -----------------------------
REVOCABLE PROXY [X] PLEASE MARK VOTES VOLT INFORMATION SCIENCES, INC. AS IN THIS EXAMPLE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL 1. Election of Directors: With- For All MEETING OF SHAREHOLDERS OF VOLT INFORMATION SCIENCES, INC. The election of the following For hold Except to serve as Class II directors: [ ] [ ] [ ] The undersigned hereby appoints WILLIAM SHAW, JEROME SHAW William Shaw William H. Turner and HOWARD B. WEINREICH, jointly and severally, Proxies S Theresa A. Havell with full power of substitution, to vote on behalf of the undersigned at the Annual Meeting of Shareholders of VOLT A INSTRUCTION: To withhold authority to vote for any individual INFORMATION SCIENCES, INC. to be held on April 8, 2005, nominee, mark "For All Except" and write that nominee's name and at any adjournments or postponements thereof, as V in the space provided below indicated upon the following matters as described in the Notice of Meeting and accompanying Proxy Statement related I ------------------------------------------------------------- to such meeting, receipt of which is acknowledged, and with discretionary power upon such other business as may N come before the meeting, according to the number of votes 2. The proposal to ratify the action For Against Abstain and as fully as the undersigned would be entitled to vote G of the Board of Directors in [ ] [ ] [ ] if personally present, hereby revoking any prior Proxy or appointing Ernst & Young LLP as Proxies. S the Company's independent regis- tered public accounting firm for the fiscal year ending October 30, 2005. This Proxy also provides voting instructions to the trustee P of the Volt Information Sciences, Inc. Savings Plan. L The Board of Directors recommends a vote for the election of each nominee to serve as a director and for Proposal 2 set A forth in this Proxy. ------------------------ Please be sure to sign and date |Date | N Each properly executed Proxy will be voted in accordance with this Proxy. | | the specifications made above. If no specification is made, --------------------------------------------------------- the shares represented by this Proxy will be voted FOR the | | election of all listed nominees and FOR Proposal 2. | | | | THE SUBMISSION OF THIS PROXY, IF EXECUTED PROPERLY, --Shareholder sign above---Co-holder(if any) sign above-- REVOKES ALL PRIOR PROXIES.
- -------------------------------------------------------------------------------- Detach above card, sign, date and mail in postage paid envelope provided. VOLT INFORMATION SCIENCES, INC. - -------------------------------------------------------------------------------- NOTE: Please sign your name or names exactly as set forth hereon. For jointly owned shares, each owner should sign. If signing as attorney, executor, administrator, trustee or guardian, please indicate the capacity in which you are acting. Proxies executed by corporations should be signed by a duly authorized officer. PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY - -------------------------------------------------------------------------------- HAS YOUR ADDRESS CHANGED? - ----------------------------- - ----------------------------- - ----------------------------- MELLON Mellon HR Solutions March 1, 2005 To: Participants in the Volt Information Sciences, Inc. 401(k)plan Enclosed you will find the proxy solicitation materials from Volt Information Sciences, Inc. for its 2005 Annual Meeting of Shareholders to be held on April 8, 2005. As a participant in the plan, you are entitled to direct the Plan Trustee, Mellon Bank, N. A., to vote the shares of Volt Common Stock held for you in your investment plan account. The enclosed Proxy Statement will provide you with the background information for the questions on this year 's ballot. All proxy cards received by the Trustee by the close of business on April 5, 2005 will be voted according to your instructions. The Trustee shall vote shares of Volt Common Stock credited to a participant's account for which it has not timely received instructions from the participant as directed by the Plan Administrator who is the Plan Fiduciary. The Trustee shall vote shares of Volt Common Stock for which it receives proxy cards with no voting instructions as provided in the proxy materials. Please be assured that, except as otherwise required by law , Mellon Bank, N. A. will keep your vote in strict confidence. Sincerely, Mellon Bank, N. A. -----END PRIVACY-ENHANCED MESSAGE-----