-----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, HAsJtNehm0MFPOJxwK5pVW7WnHixW01joheF7Ba7K1afmxgsZBp1pBD0XyXmcfsx tAnHMPk4e+Jmz45y+nBiMw== 0000040542-97-000004.txt : 19970623 0000040542-97-000004.hdr.sgml : 19970623 ACCESSION NUMBER: 0000040542-97-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970620 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEVON GROUP INC CENTRAL INDEX KEY: 0000040542 STANDARD INDUSTRIAL CLASSIFICATION: SERVICE INDUSTRIES FOR THE PRINTING TRADE [2790] IRS NUMBER: 030212800 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14850 FILM NUMBER: 97627306 BUSINESS ADDRESS: STREET 1: 281 TRESSER BLVD STREET 2: STE 501 CITY: STAMFORD STATE: CT ZIP: 06901-3227 BUSINESS PHONE: 2039641444 MAIL ADDRESS: STREET 1: 281 TRESSER BLVD STREET 2: STE 501 CITY: STAMFORD STATE: CT ZIP: 06901-3227 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL EDUCATIONAL SERVICES CORP DATE OF NAME CHANGE: 19760810 DEF 14A 1 PROXY FOR 3/31/97 DEVON GROUP, INC. 281 Tresser Boulevard, Suite 501, Stamford, Connecticut 06901-3227 June 19, 1997 Dear Stockholder: You are cordially invited to attend our Annual Meeting of Stockholders which will be held on Thursday, July 24, 1997, at 10:00 A.M. (local time) at The Rockefeller Center Club, 30 Rockefeller Plaza, The Radio City Suite, 64th Floor, New York, New York. Enclosed is the official Notice of Annual Meeting together with the Proxy Statement, your Proxy Card, and the 1997 Annual Report to Stockholders. As always, we look forward to our Annual Meeting as an opportunity to report on the Company's performance for the past fiscal year and to offer some comments on its outlook for the future. In addition, we welcome your comments and suggestions which in the past have often proved beneficial. If it is convenient for you to do so, we hope you will attend the meeting. If you cannot, please complete, sign, date, and return the enclosed Proxy Card in the envelope provided at your earliest convenience to ensure that your shares will be represented. Sincerely, Marne Obernauer, Jr. Chairman of the Board DEVON GROUP, INC. 281 Tresser Boulevard, Suite 501 Stamford, Connecticut 06901-3227 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held on July 24, 1997 NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual Meeting") of Devon Group, Inc., a Delaware corporation (the "Corporation"), will be held at The Rockefeller Center Club, 30 Rockefeller Plaza, The Radio City Suite, 64th Floor, New York, New York, on July 24, 1997, at 10:00 A.M., local time, for the following purposes: 1. to elect a Board of seven (7) directors for the ensuing year and until their respective successors have been duly elected and qualified; 2. to ratify the selection of the firm of KPMG Peat Marwick LLP as auditors for the Corporation for the fiscal year ending March 31, 1998; and 3. to transact such other business as may properly be brought before the meeting or any adjournments thereof. The Board of Directors has fixed the close of business on June 6, 1997, as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. Accordingly, only stockholders of record on that date will be entitled to vote. A list of such stockholders will be available at the time and place of the Annual Meeting and, during the ten (10) days prior to the Annual Meeting, at the Corporation's office at 281 Tresser Boulevard, Suite 501, Stamford, Connecticut. Please vote, sign, date, and return the enclosed Proxy Card in the accompanying envelope at your earliest convenience. If you return your Proxy Card, you may nevertheless attend the Annual Meeting and vote your shares in person. By Order of the Board of Directors, Robert A. Frasco Secretary Stamford, Connecticut June 19, 1997 TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE VOTE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED PROXY CARD FOR WHICH A STAMPED RETURN ENVELOPE IS PROVIDED. DEVON GROUP, INC. 281 Tresser Boulevard, Suite 501 Stamford, Connecticut 06901-3227 PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS JULY 24, 1997 The accompanying proxy, first being mailed to stockholders on or about June 19, 1997, is solicited by the Board of Directors of Devon Group, Inc., a Delaware corporation (the "Corporation"), for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held on July 24, 1997, and at any adjournments thereof, notice of which is attached hereto. Shares represented by a duly executed Proxy Card in the form enclosed herewith received by the Corporation prior to the Annual Meeting will be voted at the Annual Meeting in accordance with the choices specified by the stockholder. If no choice is specified, the shares will be voted FOR the election of the nominees for director named below and FOR the proposal referred to in item 2 in the Notice of Annual Meeting of Stockholders and described in this Proxy Statement. Any stockholder may revoke a proxy at any time prior to its exercise by delivering a later dated proxy or a written notice of revocation to the Secretary of the Corporation at the address of the Corporation set forth above or by voting in person at the Annual Meeting. If a stockholder does not plan to attend the Annual Meeting, any proxy or notice should be returned for receipt by the Corporation not later than the close of business on July 18, 1997, the Friday preceding the Annual Meeting. The persons named as proxies on the Proxy Card are officers of the Corporation. The cost of solicitation will be borne by the Corporation, including expenses in connection with preparing, assembling, and mailing this Proxy Statement. Such solicitation will be made by mail and may also be made by the Corporation's officers or employees personally or by telephone or telecopy. In addition, the Corporation has engaged the services of Morrow & Co. to assist in the distribution of proxies for a fee of approximately $1,500 plus expenses. The Board of Directors has fixed the close of business on June 6, 1997, as the record date for the Annual Meeting. On that date the Corporation had outstanding 7,283,817 shares of Common Stock. Only holders of Common Stock of record at the close of business on June 6, 1997, will be entitled to vote at the Annual Meeting or any adjournments thereof, and each stockholder will be entitled to one vote for each share held, which may be given in person or by proxy authorized in writing. No business other than that set forth in this Proxy Statement and the accompanying Notice of Annual Meeting is expected to come before the Annual Meeting. However, should any other matters requiring a vote of stockholders arise, including a question of adjourning the Annual Meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interest of the Corporation. The mailing address of the Corporation's principal executive office is 281 Tresser Boulevard, Suite 501, Stamford, Connecticut 06901-3227. PRINCIPAL HOLDERS OF VOTING SECURITIES The following table sets forth the holdings of those persons known to the Corporation to own beneficially 5% or more of the Corporation's Common Stock as of May 23, 1997. Unless otherwise indicated, the named person has sole voting and dispositive power with respect to the shares beneficially owned. This information is based in part on records of the Corporation and in part on information received from the respective security holders.
Name and Address Number of Percent of Beneficial Owner Shares Owned of Class First Pacific Advisors, Inc................1,017,400 13.97 11400 West Olympic Boulevard Los Angeles, California 90064 Marne Obernauer, Jr. (1).....................857,999 11.78 c/o Devon Group, Inc. 450 Park Avenue New York, New York 10022 Fidelity Management & Research Company.......630,600 8.66 82 Devonshire Street Boston, Massachusetts 02109 Neumeier Investment Counsel..................629,800 8.65 26435 Carmel Rancho Boulevard Carmel, California 93923 (1) Includes an aggregate of 12,000 shares held by Mr. Obernauer, Jr. as trustee, for trusts created for the benefit of his two sons, a niece, and a nephew, over which Mr. Obernauer, Jr. has voting and investment power.
ELECTION OF DIRECTORS Seven directors, all of whom are presently directors of the Corporation, are to be elected at the Annual Meeting, to serve until the 1998 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified. The persons named as proxies in the accompanying Proxy Card, who have been designated by management, intend to vote, unless otherwise instructed in such Proxy Card, FOR the nominees listed below; that is, for the election of Messrs. Obernauer, Jr., Blank, Dinzole, Gisel, Harrington, Obernauer, and Palmer. If any of these nominees should be unable to serve, the proxies will vote for the election of such other person or persons as shall be determined in accordance with their best judgment. Information Pertaining to Nominees The following table sets forth the name and the age of each nominee, the principal occupation of each nominee during the past five years, and any other directorships held by each nominee in any company subject to the reporting requirements of the Securities Exchange Act of 1934 or in any company registered as an investment company under the Investment Company Act of 1940. Director Principal Occupation and Nominees Age Since Other Directorships Held Marne Obernauer, Jr....54 1977 Chairman of the Board of Directors and Chief Executive Officer of the Corporation since June 1986; Mr. Obernauer, Jr. is the son of Mr. Obernauer. Robert S. Blank........56 1992 Partner of Whitcom Partners since January 1973; a director of Toll Brothers, Inc. John W. Dinzole........69 1969 President and Chief Operating Officer of the Corporation since June 1986; Chairman of Black Dot Graphics, Inc. (a subsidiary of the Corporation) since October 1992; Chairman and Chief Executive Officer of Black Dot Graphics, Inc. from 1969 to October 1992. William G. Gisel.......81 1982 Retired Chairman, President, and Chief Executive Officer of Bell Aerospace Textron, a division of Textron Inc. Thomas J. Harrington...57 1990 President and Chief Executive Officer of Spectrum Capital, Ltd. since July 1985. Marne Obernauer........78 1971 Chairman of the Executive Committee of the Board of Directors of the Corporation since June 1986; Chairman of the Board of Directors of BDH Inc., the parent of Beverage Distributors Corporation, a former division of the Corporation, since June 1986. Edward L. Palmer.......79 1982 Retired Chairman of the Executive Committee and Director of Citicorp and Citibank, N.A.; a director of Holmes Protection Group, Inc., Lanxide Corporation, and SunResorts Ltd., N.V. The Board of Directors recommends that stockholders vote FOR the election of each of the seven nominees. Operation of the Board of Directors The Board of Directors of the Corporation held four meetings in fiscal 1997. Each director attended at least 75 percent of all regular meetings of the Board of Directors and meetings held by all committees of the Board on which he served during fiscal 1997. Each director who is not also an employee of the Corporation receives an annual director's fee of $20,000. In addition, for each day that a meeting of the Board of Directors or any committee thereof is held, each director receives a fee of $1,000 for attendance at such meeting, and an additonal $250 for each meeting in excess of one held on the same day. The members of the Corporation's Audit Committee are Messrs. Harrington, Blank, and Gisel. The principal functions of the Audit Committee are to ascertain the existence of an effective accounting, budgeting, and internal control system, to review both the independent and internal audit functions, and to be available to meet with the independent auditors to resolve problems, if any, that may arise in connection with audits or otherwise. The Audit Committee held three meetings during fiscal 1997. The members of the Corporation's Compensation Committee are Messrs. Gisel, Blank, and Palmer. The principal functions of the Compensation Committee are to fix the compensation of senior officers of the Corporation and subsidiaries and to establish, modify, and maintain the retirement, incentive, and stock option plans of the Corporation and its subsidiaries. The Compensation Committee held two meetings during fiscal 1997. The members of the Corporation's Executive Committee are Messrs. Obernauer, Harrington, and Obernauer, Jr. The principal functions of the Executive Committee are to act on behalf of the Board of Directors with respect to such matters as the Board of Directors may specifically designate and to have such powers as the Board of Directors may specifically delegate from time to time. The Executive Committee did not meet during fiscal 1997. The Corporation has no Nominating Committee. The following table sets forth the amount and percentage of Common Stock of the Corporation beneficially owned as of May 23, 1997, by the Chief Executive Officer and the other four most highly compensated executive officers (the "Named Executives"), and by each director and all directors and executive officers as a group. Unless otherwise indicated, the named individuals have sole voting and dispositive power with respect to the shares of Common Stock.
Common Stock Amount and Nature of Beneficial Percent Name Ownership of Class Robert S. Blank.............................. 45,000(1) * John W. Dinzole.............................. 160,500(2) 2.20 Howard A. Fiedler............................ 106,393(3) 1.46 Terence M. Flynn............................. 200,068(4) 2.75 William G. Gisel............................. 3,000 * Thomas J. Harrington......................... 14,000 * Bruce K. Koch................................ 8,000 * Marne Obernauer.............................. 300,000(5) 4.12 Marne Obernauer, Jr.......................... 857,999(6) 11.78 Edward L. Palmer............................. 87,874 1.21 Total of all Directors and Executive Officers (14 Individuals)............................ 1,887,743 25.92 * Less than 1% (1) Includes 5,000 shares held in a trust of which Mr. Blank is a beneficiary and a trustee. (2) Includes 160,500 shares held in a trust of which Mr. Dinzole is a beneficiary and the trustee. (3) Excludes 21,500 shares held by Mr. Fiedler's wife, in which Mr. Fiedler disclaims all beneficial interest. (4) Includes 169,559 shares held by a corporation of which Mr. Flynn is the sole shareholder. (5) Excludes 5,000 shares held by Mr. Obernauer's wife, in which Mr. Obernauer disclaims all beneficial interest. (6) Includes an aggregate of 12,000 shares held by Mr. Obernauer, Jr., as trustee, for trusts created for the benefit of his two sons, a niece, and a nephew, over which Mr. Obernauer, Jr. has voting and investment power.
Section 16(a) Beneficial Ownership Reporting Compliance A partnership in which Mr. Dinzole had a beneficial ownership, gifted 3,500 shares of Common Stock in March 1997, and Mr.Dinzole did not report such transfer on Form 5 on a timely basis. Mr. Dinzole informed the Corporation that he filed a Form 5 in June 1997 to report the transaction. REMUNERATION OF EXECUTIVE OFFICERS Compensation Committee Report As members of the Compensation Committee, it is our duty to set the base salary compensation for the executive officers and to administer the annual bonus plan of the Corporation (the "Corporate Bonus Plan") and the bonus plans of its subsidiaries (the "Subsidiary Bonus Plans"). As part of this process, we annually review the compensation levels of senior management, evaluate the performance of senior management, and consider management succession and related matters. We take into account how total compensation compares to compensation paid by similar companies as well as the Corporation's performance. The compensation policy of the Corporation for its key executives is established by the Compensation Committee. A significant portion of the annual compensation of such executives relates to and is contingent upon the performance of the Corporation. Under the various bonus plans, bonuses are paid based on the performance of the subsidiary to which the officer is assigned, or, in the case of Messrs. Obernauer, Jr., Dinzole, and Koch, the performance of the Corporation on a consolidated basis. For fiscal 1997 maximum annual bonus compensation amounted to 92.5% of base salary for executives in the Corporate Bonus Plan. Executives participating in the Subsidiary Bonus Plans are not subject to individual maximums. The maximum earned bonus that may be paid in any one year in any of the plans is 50% of a participant's base salary (not including carryovers). The remaining earned but unpaid bonus amount is paid to participants in equal installments at the end of each of the succeeding three fiscal years. In the case of a termination of employment, such carryover amounts may or may not be paid depending upon the circumstances of the termination. The Corporation's performance, or that of a subsidiary, for purposes of compensation decisions is measured under the annual bonus plan against goals established and approved by the Compensation Committee. The Corporate Bonus Plan goals specify targeted levels of return on equity, and Subsidiary Bonus Plan goals are based on targeted levels of income before interest and taxes combined with targets related to return on capital employed. Executives of the Corporation and its subsidiaries are also eligible to receive stock options under the Corporation's Non- Qualified Stock Option Plan (the "NSO Plan"), its 1993 Non-Qualified Stock Option Plan (the "1993 NSO Plan"), and its 1995 Non-Qualified Stock Option Plan (the "1995 NSO Plan"). The primary purposes of the NSO Plan, the 1993 NSO Plan, and the 1995 NSO Plan are: (a) to enable executives to acquire shares of the Corporation's Common Stock pursuant to the terms of these Plans, thereby increasing their personal involvement and interest in the Corporation; (b) to enable the Corporation to attract and retain the services of key employees necessary to the growth and development of the Corporation; and (c) to provide a means of rewarding outstanding performance. All of the Plans are administered by the Compensation Committee (the NSO Plan may also be administered by the Board of Directors), which is authorized to designate the optionees, exercise prices, exercise periods, and dates of grants. The exercise price may not be less than 100% of the fair market value of the Common Stock on the date of grant. In fiscal 1997, the Compensation Committee granted 155,000 options under the 1995 NSO Plan, all at $26.00 per share. Mr. Koch received stock options to acquire 25,000 shares of Common Stock, and Mr. Fiedler received stock options to acquire 15,000 shares of Common Stock. The Corporation also maintains insurance, Section 401(k), profit sharing, and other retirement plans for its employees. Mr. Obernauer, Jr.'s base salary for fiscal 1997 was based upon his continuing employment agreement with the Corporation entered into December 30, 1982 (the "Employment Agreement") which provides, among other things, for annual increases to be determined by the Board of Directors in its sole discretion. Mr. Obernauer, Jr.'s base salary was increased to $370,000 effective August 1, 1996. In granting the 5.7% increase ($20,000), the Compensation Committee considered such factors as salaries paid to other similarly situated CEOs and the Corporation's current performance trends. The perquisites and other benefits received by Mr. Obernauer, Jr. are provided pursuant to his Employment Agreement and are consistent with those provided other similarly situated CEOs. No member of the Compensation Committee is a former or current officer or employee of the Corporation or any of its subsidiaries. Compensation Committee William G. Gisel, Chairman Robert S. Blank Edward L. Palmer May 23, 1997 Summary Compensation Table Set forth below is information with respect to the remuneration paid by the Corporation and its subsidiaries during the fiscal years ended March 31, 1997, 1996, and 1995, to the Named Executives.
Annual Compensation Long Term Compensation Awards Payouts Securities Other Restricted Underlying Name and Annual Stock Options/ LTIP All Other Principal Fiscal Salary Bonus Compensation Award(s) SARs Payouts Compensation Position Year ($) ($) ($) (1) ($) (#) ($) ($) (3) Marne 1997 363,333 336,083 - - - - 4,187 Obernauer, 1996 338,333 338,333 - - - - 5,393 Jr. 1995 309,333 309,333 - - - - 7,371 Chairman and CEO John W. 1997 373,333 345,333 105,700(2) - - - 4,190 Dinzole 1996 350,000 350,000 105,700(2) - - - 7,784 President 1995 326,667 326,667 105,700(2) - - - 10,824 and COO Bruce K. 1997 224,000 207,200 - - 25,000 - 4,170 Koch 1996 212,333 212,333 - - 50,000 - 5,369 Exec. V.P. 1995 201,333 201,333 - - - - 7,337 Operations and Finance and CFO Howard A. 1997 200,000 - - - 15,000 - 4,236 Fiedler 1996 195,000 330,000 - - 50,000 - 7,787 CEO, Black 1995 190,000 300,000 - - - - 10,797 Dot Graphics, Inc. Terence M. 1997 241,525 118,773 70,000(2) - - - 6,628 Flynn 1996 221,813 115,000 70,000(2) - - - 6,428 President, 1995 209,463 115,400 70,000(2) - - - 5,828 Portal Publications, Ltd. (1)Perquisites do not exceed the lesser of either $50,000 or 10% of total salary and bonus. (2)Reflects amounts received pursuant to the Corporation's Executive Retirement Compensation Plan. (3)Includes amounts allocated during fiscal 1997 by the Corporation under subsidiary profit sharing and savings plans as follows: Messrs. Obernauer, Jr. $4,187, Dinzole $4,190, Koch $4,170, Fiedler $4,236, and Flynn $800. Also includes $5,828 of premiums paid by the Corporation for term life insurance on the life of Mr. Flynn.
Option Grants in Last Fiscal Year The following table sets forth for each of the Named Executives, the number of stock options granted during fiscal 1997 pursuant to the NSO Plan, 1993 NSO Plan, and the 1995 NSO Plan, the percentage of total grants to all employees represented by such grant, the per share exercise price, the expiration date, and the potential realizable value of each grant based on assumed annual rates of stock price appreciation of 5% and 10% compounded over the actual term of each option or grant.
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Individual Grants Option Term Number of % of Total Securities Options Exercise Underlying Granted to or Base Options Employees Price Expiration 5% 10% Name Granted in Fiscal Year ($/Sh) Date ($) ($) Marne Obernauer, Jr. - - - - - - John W. Dinzole - - - - - - Bruce K. Koch 25,000 16.13% 26.00 7/30/02 221,062 501,515 Howard A. Fiedler 15,000 9.68% 26.00 7/30/02 132,637 300,909 Terence M. Flynn - - - - - -
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-end Option Values The following table sets forth for each of the Named Executives, any stock options exercised pursuant to the NSO Plan, 1993 NSO Plan, and 1995 NSO Plan, the net value realized upon exercise (closing price on the date of exercise minus exercise price), the number of options held at fiscal year-end, and the aggregate value of in-the-money options held at fiscal year-end (based on year-end closing price minus exercise price).
Number of Value of Unexercised Shares Acquired Value Unexercised Options In-the-Money Options on Exercise Realized at Fiscal Year-end at Fiscal Year-end Name (#) ($) (#) ($) (Exercisable/Unexercisable) (Exercisable/Unexercisable) Marne Obernauer, Jr. - - - - John W. Dinzole - - - - Bruce K. Koch - - 37,500/89,000 550,250/370,875 Howard A. Fiedler - - 24,000/76,000 228,375/270,375 Terence M. Flynn - - - -
Executive Retirement Compensation Plan The Corporation's Executive Retirement Compensation Plan (the "Retirement Plan") is a noncontributory and unfunded defined benefit plan which is not subject to the requirements of the Employee Retirement Income Security Act of 1974. Eligibility for and level of participation in the Retirement Plan is at the sole discretion of the Compensation Committee of the Board of Directors. Retirement contracts entered into with each participant in the Retirement Plan establish the amounts to be allocated annually to such participant's retirement compensation account. Such amounts are determined separately for each participant. Each retirement account accrues interest at the rate of 6% per annum and establishes the benefit levels which such participant will be eligible to receive upon retirement at age 65. Benefits are paid for the life of the participant if such participant shall have remained in the employ of the Corporation until age 65. Since the Retirement Plan is not funded, these allocated amounts are currently expensed but not paid. If a participant retires or dies or his retirement contract is otherwise terminated before he reaches age 65, a benefit equal to the value at such date of all allocations to his retirement compensation account becomes payable to the participant or his designated beneficiary in 120 monthly installments. The following table reflects amounts expensed (but not paid) by the Corporation during fiscal 1997, estimated annual benefits at March 31, 1997 (assuming employment until age 65 and based upon current bonus level, limited to 50% of salary), and credited years of service for each of the Named Executives: Estimated Years Fiscal 1997 Annual Benefits of Amounts Expensed at Age 65 Service Marne Obernauer, Jr.... $ 64,810 $229,277 23 John W. Dinzole........ 50,892 105,700 28 Howard A. Fiedler...... 33,964 70,000 28 Terence M. Flynn....... 34,322 70,000 27 Bruce K. Koch.......... - - 19 Total of all Named Executives $183,988 $474,977 As required by the Retirement Plan, Messrs. Dinzole and Flynn receive annual payments under the Retirement Plan in the amounts of $105,700 and $70,000, respectively. Executive Agreements The Corporation (or a subsidiary of the Corporation) has entered into separate employment agreements with each of Messrs. Obernauer, Jr., Dinzole, Fiedler, Flynn, and Koch. Set forth below is a description of the principal terms of the employment agreements with each Named Executive. The Corporation agrees to employ the Named Executive unless and until the Corporation shall give him written notice of termination at least one year prior to an anniversary date defined in the agreement. The Named Executive agrees to serve the Corporation in such executive capacities as may be determined by the Board of Directors and shall devote his full time to the affairs of the Corporation. The Named Executive receives a base compensation amount, which may be increased by the Board of Directors, and an incentive bonus in accordance with existing plans. The employment agreements for Messrs. Obernauer, Jr., Dinzole, and Flynn provide for their participation in the Corporation's Executive Retirement Compensation Plan. Each employment agreement gives the Named Executive the right to receive benefits under any other incentive, retirement, group life, health, or accident insurance, hospitalization, or other benefit plan which may be in effect at the Corporation. The Corporation is also obligated to supply an automobile to Messrs. Obernauer, Jr., Dinzole, and Flynn and to reimburse them for all business expenses incurred in connection with the performance of their duties. Each employment agreement may be terminated by the Corporation for any illness or incapacity of the Named Executive extending beyond a six-month period by giving him thirty days notice of termination at the expiration of the six-month period and at any time prior to his return to employment and performance of his full duties thereunder. Each employment agreement will also terminate upon the Named Executive's death, and the Corporation retains the right to terminate the Named Executive's employment for cause (as described therein) at any time. PERFORMANCE GRAPH The following line graph compares, over a five-year period, the cumulative return, calculated on a dividend reinvested basis, on a $100.00 investment on April 1, 1992 in the Corporation's Common Stock, the S & P 500 market index, and a Corporation-chosen peer group. The Corporation's fiscal year ends on March 31. 3/31/93 3/31/94 3/31/95 3/31/96 3/31/97 Devon Group, Inc. $256.14 $259.65 $407.02 $400.00 $414.04 S & P 500 $115.24 $116.95 $135.15 $178.55 $213.95 Peer Group* $111.81 $122.43 $121.75 $138.33 $143.95 *The companies that comprise the Corporation-chosen peer group are Banta Corporation, Cadmus Communications Corporation, R.R. Donnelley & Sons Company, Gibson Greetings, Inc., and Graphic Industries, Inc., all of which are engaged in businesses similar to that of the Corporation. RATIFICATION OF SELECTION OF AUDITORS The Board of Directors of the Corporation has selected KPMG Peat Marwick LLP as the firm of independent auditors to audit the accounts of the Corporation and its subsidiaries for the fiscal year ending March 31, 1998. This firm, which has acted as auditors for the Corporation since 1970, expects to have a representative at the Annual Meeting who will have the opportunity to make a statement, and who will be available to answer appropriate questions. If the stockholders do not ratify the selection of KPMG Peat Marwick LLP, the Board of Directors will reconsider its selection. A majority of the votes cast at the Annual Meeting will be required for ratification. The Board of Directors recommends that stockholders vote FOR the ratification of the selection of KPMG Peat Marwick LLP. STOCKHOLDERS' PROPOSALS The Corporation will consider including a stockholder's proposal for action at its 1998 Annual Meeting of Stockholders in the proxy material to be mailed to its stockholders in connection with that Meeting if such proposal is received at the principal office of the Corporation no later than February 20, 1998. In order to curtail controversy as to the date on which a proposal is received by the Corporation, it is suggested that proponents submit their proposals by certified mail, return receipt requested. There were no proposals received by the Corporation for the 1997 Annual Meeting. By Order of the Board of Directors, Robert A. Frasco Secretary June 19, 1997 DEVON GROUP, INC. 281 Tresser Boulevard, Suite 501 Stamford, Connecticut 06901-3227 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION The undersigned hereby appoints Robert H. Donovan, Robert A. Frasco, and Bruce K. Koch as Proxies, each with the power to appoint his substitute, and hereby authorizes each of them separately without the other to represent and to vote as designated below, all the shares of common stock of Devon Group, Inc. held of record by the undersigned on June 6, 1997, at the annual meeting of stockholders to be held at The Rockefeller Center Club, 30 Rockefeller Plaza, The Radio City Suite, 64th Floor, New York, New York, on July 24, 1997 at 10:00 A.M., local time, and at any adjournment thereof. (Continued and to be signed and dated on reverse side) THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND FOR ITEM 2. 1.ELECTION OF DIRECTORS Marne Obernauer, Jr., Robert S. Blank, John W. Dinzole, William G. Gisel, Thomas J. Harrington, Marne Obernauer, and Edward L. Palmer. FOR all nominees WITHHOLD listed(except as AUTHORITY marked to the to vote for all nominees Instruction: To contrary to the right) listed at right withhold authority to vote for any individual nominee write that nominee's name on the space provided below 2.Ratification of the selection of KPMG Peat Marwick LLP 3.Upon such other as auditors for the fiscal business as may year ending March 31, 1998 properly come before the meeting. For Against Abstain Please sign exactly as name appears hereon. 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. Dated: , 1997 Signature Signature if held jointly PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----