-----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, LAL7vRbsoJcAvdtfDzK/VBJa/h17fKah5OojR4WSJkPVkXw4OXFYOeDJNEOWJbF4 cmuybBSxceq7c20MPtezmg== 0000950123-96-003562.txt : 19981222 0000950123-96-003562.hdr.sgml : 19981222 ACCESSION NUMBER: 0000950123-96-003562 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960626 FILED AS OF DATE: 19960712 DATE AS OF CHANGE: 19981221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREY ADVERTISING INC /DE/ CENTRAL INDEX KEY: 0000043952 STANDARD INDUSTRIAL CLASSIFICATION: 7311 IRS NUMBER: 130802840 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-07898 FILM NUMBER: 96593789 BUSINESS ADDRESS: STREET 1: 777 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2125462000 MAIL ADDRESS: STREET 1: 777 THIRD AVE STREET 2: 777 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 DEF 14A 1 DEFINITIVE PROXY MATERIAL 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant / / Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) /X/ Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
GREY ADVERTISING 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the 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: 2 GREY GREY ADVERTISING INC. 777 THIRD AVENUE NEW YORK, NEW YORK 10017 ------------------------ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS JULY 26, 1996 To the Stockholders of GREY ADVERTISING INC. The Annual Meeting of Stockholders of Grey Advertising Inc. ("Company") will be held at the Company's Toronto office, 1881 Yonge Street, Toronto, Ontario, Canada, on July 26, 1996 at 8:00 A.M., local time, for the following purposes: (1) To elect one director to hold office for a three year term. (2) To consider and take action on a proposal to ratify the selection of Ernst & Young as independent auditors for the Company for 1996. (3) To transact such other business as may properly come before the meeting. Holders of record of the Company's Common Stock and Limited Duration Class B Common Stock at the close of business on July 1, 1996, and holders of the Company's Preferred Stock, will be entitled to vote at the meeting. By Order of the Board of Directors STEVEN G. FELSHER Secretary New York, New York July 11, 1996 PLEASE SPECIFY YOUR CHOICES, DATE AND SIGN THE ENCLOSED PROXIES AND MAIL THEM PROMPTLY IN THE ENCLOSED ENVELOPE. 3 GREY ADVERTISING INC. 777 THIRD AVENUE NEW YORK, NEW YORK 10017 (212) 546-2000 --------------------- PROXY STATEMENT --------------------- ANNUAL MEETING OF STOCKHOLDERS JULY 26, 1996 This Proxy Statement is being mailed to stockholders on or about July 12, 1996 in connection with the solicitation of proxies by the Board of Directors of Grey Advertising Inc. ("Company") for the Annual Meeting of Stockholders to be held at the Company's Toronto office, 1881 Yonge Street, Toronto, Ontario, Canada on July 26, 1996 at 8:00 A.M., local time, and at any and all adjournments thereof, for the purposes set forth in the Notice of Annual Meeting of Stockholders. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time prior to its exercise. A stockholder may effect revocation of a proxy by delivering written notice to the Secretary of the Company, by giving a later-dated proxy or by attending the meeting and voting in person. All properly executed, unrevoked proxies will be voted as specified. Unless contrary directions are given, proxies will be voted for the election of the nominee for director proposed by the Board of Directors and in favor of the proposals set forth in the notice. Shares represented by executed proxies received by the Company will be counted for a quorum regardless of how or whether such shares are voted on any particular matter. Where nominee stockholders of record do not vote on specific issues because they did not receive instructions, such "non-votes" will not be treated as votes cast or shares present for such issues. The affirmative vote of the holders of a plurality of the votes cast is required in the election of directors. The vote required to approve each of the other matters to be voted on at the meeting, as well as the effect of abstentions and broker non-votes, is set forth in the sections describing each such matter. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY STOCKHOLDER A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 ("10-K"). STOCKHOLDERS DESIRING TO OBTAIN A COPY OF THE 10-K SHOULD ADDRESS WRITTEN REQUESTS TO MS. ILENE P. MEISELES, ASSISTANT SECRETARY, GREY ADVERTISING INC., 777 THIRD AVENUE, NEW YORK, NEW YORK 10017. VOTING SECURITIES Holders of record of the Company's Common Stock and Limited Duration Class B Common Stock ("Class B Stock") at the close of business on July 1, 1996, and holders of the Company's Preferred Stock, will be entitled to vote at the meeting. On July 1, 1996, the Company had outstanding 887,542 shares of Common Stock and 302,579 shares of Class B Stock. The Company also has outstanding and entitled to vote at the 4 meeting 20,000 shares of its Series I Preferred Stock, and 5,000 shares each of its Series II Preferred Stock and Series III Preferred Stock. At the meeting, each share of Common Stock will be entitled to one vote; each share of Class B Stock will be entitled to ten votes; and each share of Preferred Stock will be entitled to eleven votes. To the knowledge of the Board of Directors, as of the record date no stockholder owned of record or beneficially more than 5% of the Company's outstanding shares of Common Stock, Class B Stock or Preferred Stock except as indicated below:
AMOUNT OF SHARES AND NATURE NAME AND ADDRESS OF OF BENEFICIAL OR PERCENTAGE TITLE OF CLASS RECORD OR BENEFICIAL OWNER RECORD OWNERSHIP OF CLASS - - ---------------------------- ------------------------------------ ---------------- ---------- Common Stock................ Edward H. Meyer, as Voting Trustee 173,783(a) 19.6 under a Voting Trust Agreement, dated as of February 24, 1986, and as subsequently amended ("Voting Trust Agreement"), among the Voting Trustee, the Company and the Beneficiaries of the Voting Trust Agreement 777 Third Avenue New York, New York 10017 Edward H. Meyer 156,665(b) 16.7 777 Third Avenue New York, New York 10017 The committee administering the 50,477(c) 5.7 Company's Employee Stock Ownership Plan 777 Third Avenue New York, New York 10017 Quest Advisory Corp. 74,762(d) 8.4 1414 Avenue of the Americas New York, New York 10019 Southeastern Asset Management, Inc. 62,711(e) 7.1 6075 Poplar Avenue, Suite 900 Memphis, Tennessee 38119 Tweedy Browne Company L.P. 51,930(f) 5.9 52 Vanderbilt Avenue New York, New York 10017 T. Rowe Price Associates, Inc. 53,765(g) 6.1 100 E. Pratt Street Baltimore, Maryland 21202 All executive officers and directors 289,295(h) 30.6 as a group
2 5
AMOUNT OF SHARES AND NATURE NAME AND ADDRESS OF OF BENEFICIAL OR PERCENTAGE TITLE OF CLASS RECORD OR BENEFICIAL OWNER RECORD OWNERSHIP OF CLASS - - ---------------------------- ------------------------------------ ---------------- ---------- Class B Stock............... Edward H. Meyer, as Voting Trustee 178,149(a) 58.9 under the Voting Trust Agreement 777 Third Avenue New York, New York 10017 Edward H. Meyer 135,499(b) 41.3 777 Third Avenue New York, New York 10017 The committee administering the 56,944(c) 18.8 Company's Employee Stock Ownership Plan 777 Third Avenue New York, New York 10017 All executive officers and directors 263,139(h) 80.2 as a group Series I, Series II and Series III Preferred Stock..................... Edward H. Meyer 30,000(i) 100 777 Third Avenue New York, New York 10017
- - ------------ (a) Represents voting power only and includes certain shares subject to a voting agreement pursuant to which shares owned by an executive officer of the Company will be voted in the same manner as the Voting Trustee votes. Does not include shares issuable upon exercise of options which are contractually bound to be deposited pursuant to the Voting Trust Agreement. In general, investment power over the shares deposited in the voting trust established pursuant to the Voting Trust Agreement is retained by the several beneficiaries of the Voting Trust Agreement. (See "Employment Agreements and Other Transactions" below.) (b) Includes shares of Common Stock and of Class B Stock, as the case may be, issuable upon conversion of the Company's 8 1/2% Convertible Subordinated Debentures owned by Mr. Meyer, and shares of Common Stock issuable upon exercise of stock options which are currently exercisable (after giving effect to the assumed conversion and exercise thereof) and Mr. Meyer's beneficial interest in shares of Common Stock and Class B Stock deposited by him pursuant to the Voting Trust Agreement as to which he retains investment power. Does not include shares of Common Stock (5.7% of such class) and Class B Stock (18.8%) held in the Company's Employee Stock Ownership Plan as to which Mr. Meyer exercises shared voting power by virtue of his membership on the committee charged with its administration. Does not include shares of Common Stock and Class B Stock held in trust for Mr. Meyer's children which have been deposited with the Voting Trust under the Voting Trust Agreement, or shares of Common Stock or of Class B Stock as to which Mr. Meyer exercises voting power by virtue of being the Voting Trustee under the Voting Trust Agreement. (c) The committee which administers the Company's Employee Stock Ownership Plan exercises voting power over shares held in such plan, and is comprised of Mr. Meyer and Steven G. Felsher. 3 6 (d) Information based on the Company's understanding of publicly-filed material. Quest Advisory Corp., a registered investor advisor, which, on behalf of its clients, has been a long-term investor in the Company, has sole dispositive and voting power with respect to the shares listed. (e) Information based on the Company's understanding of publicly-filed material. Southeastern Asset Management, Inc., a registered investment advisor, which, together with a related entity, on behalf of its clients, has been a long-term investor in the Company, has sole or shared dispositive and voting power with respect to the shares listed, except with respect to 4,400 such shares as to which it exercises no voting authority. (f) Information based on the Company's understanding of publicly-filed material. Tweedy Browne Company L.P., a registered investment advisor, which together with related entities, on behalf of its clients, has been a long-term investor in the Company, has sole or shared dispositive and voting power with respect to the shares listed. (g) Information based on the Company's understanding of publicly-filed material. T. Rowe Price Associates, Inc., a registered investment advisor, which together with a related entity, on behalf of its clients, has been a long-term investor in the Company, has sole dispositive power with respect to the shares listed. (h) Includes shares of Common Stock (5.7% of such class) and of Class B Stock (18.8%), as the case may be, as to which certain executive officers exercise shared voting power by virtue of their membership on the committee administering the Company's Employee Stock Ownership Plan. Includes shares of Common Stock and Class B Stock as to which the Voting Trustee (Mr. Meyer) under the Voting Trust Agreement exercises voting power. Includes shares of Common Stock and of Class B Stock issuable upon conversion of the Company's 8 1/2% Convertible Subordinated Debentures owned by Mr. Meyer and shares of Common Stock and of Class B Stock issuable upon exercise of stock options which are exercisable by beneficiaries under the Voting Trust Agreement, who are obliged, under the terms of the Voting Trust Agreement, to deposit shares in the Voting Trust acquired subsequent to the execution of the Voting Trust Agreement, after giving effect to the assumed conversion and exercise thereof. Does not include shares of Common Stock and Class B Stock issuable to beneficiaries under the Voting Trust Agreement upon exercise of stock options which are not presently exercisable. (i) Represents 20,000 of Series I Preferred Stock, and 5,000 shares of each of the Company's Series II and Series III Preferred Stock, of which classes Mr. Meyer owns 100% of the outstanding shares. 4 7 ELECTION OF DIRECTOR The Board of Directors presently consists of four members, one of whom is elected by the holders of the Series I Preferred Stock, voting as a class, and three of whom, divided into three classes, are elected by the holders of the Common Stock, the Class B Stock and the Preferred Stock voting together. At each Annual Meeting of Stockholders, directors of one class are elected to serve for a three-year term or until the election of their successors. Mark N. Kaplan has been nominated to be elected at the meeting to serve as a director until the Annual Meeting of Stockholders to be held in 1999. Mr. Kaplan is currently serving on the Board. The Company's Restated Certificate of Incorporation provides for cumulative voting for elections of directors. Therefore, if more than one director is being elected at a meeting, each stockholder is entitled to cast as many votes as shall equal the number of votes represented by the shares owned by such stockholder multiplied by the number of directors to be elected and such stockholder may cast all of such votes for a single nominee for director, or may distribute them among the number of nominees, as the stockholder determines. Information relating to Mr. Kaplan and to the directors not standing for election who will continue in office following the meeting is set forth below. Each person listed below is currently a director of the Company.
TERM NO. OF SHARES OF PERCENT OF OFFICE VOTING STOCK VOTES CAST DIRECTOR WILL OWNED BY VOTING NAME(A) AGE OCCUPATION(B) SINCE EXPIRE BENEFICIALLY(C) SHARES - - -------------------------- ---- ------------------ -------- ------ ---------------- ---------- Mark N. Kaplan............ 66 Partner, Skadden, 1973 1996 2,200(e) --(f) Arps, Slate, Meagher & Flom, law firm(d) Edward H. Meyer........... 69 Chairman of the 1961 1997 574,911(g) 70.8% Board, President and Chief Executive Officer Richard R. Shinn.......... 78 Retired Chairman 1990 --(h) 1,000(i) --(f) of Metropolitan Life Insurance Company John Shannon.............. 59 President, 1991 1998 1,000 --(f) Grey-International
- - --------------- (a) There is no family relationship between any director and any other director or executive officer of the Company. (b) The positions of Messrs. Meyer and Shannon are with the Company, and each has served the Company for more than the past five years. Mr. Kaplan also serves on the boards of directors of American Biltrite Inc., Congoleum, Inc., Diagnostic/Retrieval Systems, Inc., Movie Fone Inc., REFAC Technology Development Corporation and Volt Information Sciences, Inc. 5 8 Mr. Meyer is also a director of Bowne & Co., Inc., Ethan Allen Interiors, Inc., Harman International Industries, Inc. and The May Department Stores Company. Mr. Meyer also serves as director or trustee of thirty-six mutual funds advised by Merrill Lynch Asset Management, Inc. or its wholly-owned subsidiary, Fund Asset Management, Inc. Mr. Shinn is a director of Union Texas Petroleum, Inc. (c) Represents beneficial interests in shares of the Company's Common Stock, Class B Stock, and Series I, II and III Preferred Stock. (See "Voting Securities" above.) Information is as of the record date. (d) Skadden, Arps, Slate, Meagher & Flom, a law firm in which Mr. Kaplan is a partner, has provided certain legal services to the Company in 1995 and 1996. (e) Mr. Kaplan owns 1,100 shares of each of Common Stock and Class B Stock. (f) Represents less than 1.0% of the votes entitled to be cast. (g) Mr. Meyer beneficially owns 104,553 shares of Common Stock and 110,053 shares of Class B Stock, as to which he, as the Voting Trustee under the Voting Trust Agreement, exercises voting power, and 20,000 shares of the Series I Preferred Stock, and 5,000 shares of each of the Series II and of the Series III Preferred Stock, representing approximately 11.8%, 36.4%, 100%, 100% and 100% of each class, respectively. Also includes shares held pursuant to the Voting Trust Agreement, as to which Mr. Meyer, as the Voting Trustee, exercises voting power, and shares of Common Stock and Class B Stock held in the Company's Employee Stock Ownership Plan as to which Mr. Meyer exercises shared voting power by virtue of his membership on the committee charged with its administration. Also includes shares of Common Stock (2.9%) and Class B Stock (8.4%) issuable on conversion of the Company's 8 1/2% Convertible Subordinated Debentures owned by Mr. Meyer after giving effect to the assumed conversion thereof and shares of Common Stock (3%) issuable upon exercise of currently exercisable stock options owned by Mr. Meyer, after giving effect to the assumed exercise thereof. Does not include 7,500 shares of each of the Common Stock and the Class B Stock held in trust for Mr. Meyer's children, as to which Mr. Meyer, as the Voting Trustee under the Voting Trust Agreement, exercises voting power. (h) Mr. Shinn had been elected by the holder of the Series I Preferred Stock and serves until the election of his successor. (i) Mr. Shinn owns 1,000 shares of Common Stock. The Board of Directors has no reason to believe Mr. Kaplan will, for any reason, be unable to serve as a director. If, however, Mr. Kaplan becomes unavailable to serve, for any reason, it is the intention of the persons named in the enclosed form of proxy, unless otherwise instructed by stockholders, to vote such proxy for the election of such other person as the Board of Directors may in its discretion recommend. Directors who are not employees of the Company receive a fee of $4,500 per quarter and a fee of $3,000 for each meeting of the Board attended. Directors who are also employees receive no remuneration for serving on the Board. Under a separate agreement with the Company, Mr. Kaplan has elected to have payment of his director's fees deferred until he retires from the Board. During 1995, the Board met four times. Each director attended at least 75% of the meetings of the Board. The Audit Committee, which is comprised of Messrs. Kaplan and Shinn, reviews the services of the Company's independent auditors, the preparation of the Company's financial statements and the maintenance of internal controls by the Company. Messrs. Kaplan and Shinn also comprise the Company's Compensation Committee, which is charged with overseeing matters relating to senior executive compensation. The Company does not have a standing nominating committee. Members of the Audit Committee and the 6 9 Compensation Committee receive $1,000 for each meeting of each such committee which does not fall on the same day as a meeting of the Board. REMUNERATION OF MANAGEMENT SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION The following table provides certain summary information concerning compensation paid or accrued by the Company to or on behalf of its Chief Executive Officer and each of the four other most highly compensated executive officers of the Company with respect to the three most recently completed fiscal years of the Company, except as indicated below:
LONG TERM COMPENSATION --------------------------------------- ANNUAL COMPENSATION ALL ------------------------------- REST. STOCK OTHER NAME AND POSITION YEAR SALARY(3) BONUS(3) STOCK($)(1) OPTIONS(#) COMP.(2) - - ---------------------------- ---- ----------- --------- ----------- ---------- ---------- Edward H. Meyer............. 1995 $ 2,058,333 $ 591,667 -0- 40,000 $1,278,954 Chairman, President and 1994 1,725,000 400,833 -0- -0- 1,058,160 Chief Executive Officer 1993.. 1,700,000 300,000 -0- -0- 928,487 Robert L. Berenson.......... 1995 $ 485,000 $ 200,000 -0- 5,000 $ 310,838 President, Grey-N.Y. 1994 485,000 180,000 -0- -0- 277,113 1993 442,500 150,000 -0- -0- 336,530 Barbara S. Feigin........... 1995 $ 376,000 $ 150,000 -0- 2,000 $ 181,085 Executive Vice President 1994 342,250 130,000 -0- -0- 175,989 1993 331,000 125,000 -0- -0- 260,006 Stephen A. Novick........... 1995 $ 737,500 $ 125,000 -0- 3,500 $ 385,439 Executive Vice President 1994 667,500 95,000 -0- -0- 400,638 1993 635,000 85,000 -0- -0- 411,530 John Shannon................ 1995 $ 476,500 $ 201,500 -0- 2,000 $ 49,889 President, 1994 473,616 168,300 -0- -0- 56,031 Grey-International 1993 407,000 165,000 -0- -0- 52,139
- - --------------- (1) As at December 31, 1995, Mr. Novick owned 5,000 shares issued under the Company's Restricted Stock Plan as to which restrictions lapsed the next day and, which had there been no such restrictions, would have had an aggregate net value of $757,500 on such date. All shares of restricted stock are entitled to dividends on the same basis as other shares of Common Stock. (2) All Other Compensation includes: (i) contributions of $25,492, $14,600 and $14,600 in 1993, 1994 and 1995, respectively, to the Company's qualified defined contribution plans on behalf of the named executives other than Mr. Shannon, who, as a United Kingdom resident, participated in local pension programs to which he contributed funds out of his salary compensation; (ii) amounts shown for Mr. Shannon represent deferred compensation pursuant to a subsidiary-sponsored program for United Kingdom executives; (iii) respective insurance premium expense coverage or reimbursement of $54,787, $52,795 and $53,404; $16,038, $17,513 and $16,946; $6,038, $6,038 and $16,547; $99,046, $25,800 and $25,883 in 1993, 1994 and 1995, respectively, for Messrs. Meyer, Berenson and Novick, and Ms. Feigin, of which amount for Ms. Feigin included in 1993 the total premiums due under a long-term supplemental insurance policy; (iv) accruals in the respective amounts of $161,058, $186,275 and $180,000 for Mr. Meyer in 1993, 1994 and 1995, respectively, and $10,468, $9,726 and $11,310 for Ms. Feigin in 1993, 7 10 1994 and 1995, respectively, generally in respect of amounts which would have been allocated to Mr. Meyer's and Ms. Feigin's accounts under the Company's qualified defined contribution programs for such years but for certain limitations determined under the federal tax laws; (v) respective allocations under the Company's Senior Management Incentive Plan ("SMIP") in respect of 1993, 1994 and 1995, respectively, for Messrs. Berenson, Meyer and Novick, and Ms. Feigin, of $140,000, $145,000 and $179,292; $687,150, $815,100 and $1,030,950; $150,000, $180,000 and $154,292; and $90,000, $125,000 and $129,292; such 1993 amounts further include $55,000, $30,000 and $35,000 for Messrs. Berenson and Novick, and Ms. Feigin, respectively, accrued in 1992 as an advance allocation to the five year SMIP begun in 1993; and (vi) $100,000 for each of 1993, 1994 and 1995, and $200,000 for each of 1993, 1994 and 1995, of loan forgiveness in respect of Messrs. Berenson's and Novick's indebtedness to the Company. Does not include distributions of $382,500 in 1994 and $155,000 in 1995 made to Mr. Shannon in accordance with the terms of a subsidiary-sponsored deferred compensation program in the United Kingdom, which amounts had vested previously in Mr. Shannon and related to prior years. (3) Includes amounts paid into a deferred compensation trust on Mr. Meyer's behalf in 1995. (See "Employment Agreement and Transactions.") AGGREGATED OPTIONS EXERCISED IN 1995 AND STOCK OPTION VALUES AS AT DECEMBER 31, 1995(1)
NUMBER OF VALUE OF UNEXERCISED UNEXERCISED OPTIONS IN-THE-MONEY DECEMBER 31, 1995 OPTIONS ----------------- DECEMBER 31, 1995 SHARES ------------------- ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/ NAME ON EXERCISE REALIZED(2) UNEXERCISABLE UNEXERCISABLE - - ------------------------------------ ----------- ----------- ----------------- ------------------- Edward H. Meyer..................... -- -- 26,666/13,334 $1,359,966/$680,034 Robert L. Berenson.................. 1,000 $ 96,000 0/ 5,000 0/$255,000 Barbara S. Feigin................... 334 36,907 0/ 2,000 0/$102,000 Stephen A. Novick................... 1,000 95,000 5,000/ 3,500 $290,000/$178,500 John Shannon........................ 1,000 102,000 0/ 2,000 0/$102,000
- - --------------- (1) All options relate to shares of Common Stock. (2) "Value Realized" represents the market price of the Common Stock on the date of exercise less the exercise price payable. 8 11 OPTION GRANTS IN LAST FISCAL YEAR(1)
INDIVIDUAL GRANTS -------------------------------------------------------------- GRANT DATE % OF TOTAL VALUE(2) NUMBER OF SHARES OPTIONS GRANTED EXERCISE -------------- UNDERLYING TO EMPLOYEES PRICE GRANT DATE NAME OPTIONS GRANTED IN 1995 ($/SHARE) EXP. DATE PRESENT VALUE - - ----------------------------- ----------------- ---------------- ---------- ---------- -------------- Edward H. Meyer.............. 40,000 48.0 $ 148.50 1/5/04 $2,050,000 Robert L. Berenson........... 5,000 6.0 148.50 1/5/05 267,450 Barbara S. Feigin............ 2,000 2.4 148.50 1/5/05 106,980 Stephen A. Novick............ 3,500 4.2 148.50 1/5/05 187,215 John Shannon................. 2,000 2.4 148.50 1/5/05 106,980
- - --------------- (1) Options granted to acquire Common Stock at market price on the date of grant under the Grey Advertising Inc. 1994 Stock Incentive Plan. The options are generally exercisable at a rate of one-third per year beginning on the initial exercise date, which for Messrs. Berenson, Novick and Shannon, and Ms. Feigin, is January 5, 2000, and January 5, 1995 for Mr. Meyer. (2) Amounts based on the modified Black-Scholes option pricing model with the following assumptions: exercise price equal to fair market value on the date of grant, ten year option term (nine year option term in the case of Mr. Meyer), interest rate of 7.95% and a dividend rate of 2.33%. There is no assurance that the value realized by an optionee will be at or near the value estimated by this pricing model. Should the stock price not rise above the option price the optionees will realize no gain. 9 12 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee is comprised of the Company's outside directors. The Committee is responsible for the establishment of the goals of the Company's compensation practices and the implementation of the compensation programs that further these goals. The Compensation Committee reviews regularly the development of the Company's operations, its revenue and profit performance, its prospects for growth, the general trends in the advertising agency industry and the particular needs of the Company. The Compensation Committee reviews and approves allocations under several long-term deferred and current compensation programs which have been developed over the years. These programs, which have utilized both cash and stock awards, are designed to foster a strong commitment by the Company's senior executives to the interests of the Company's stockholders, clients and business by rewarding excellent performance with current compensation, enhancing motivation for continued profit performance, encouraging a strong community of interests with the Company's stockholders through share awards and fostering the long-term retention of key management personnel through extended vesting periods. These goals are particularly important, and not readily subject to a short-term formula approach, in the advertising industry where compensation is heavily negotiated and where there is great demand for talented people, thus resulting in a high potential for executive turnover. The Compensation Committee believes that the programs adopted by Grey have been helpful in retaining the Company's executive officers who average more than 20 years of service with the Company. This stability, which is not prevalent in the advertising agency business, has, in the judgment of the Compensation Committee, been important in enabling the Company to achieve its performance over the last 20 years. Over such 20-year period, and as through the record date, the Company's stock price has had an annual compounded return before dividends of approximately 20%. The Company's executive officers, as disclosed in this proxy statement, own a substantial interest in the Company's stock, a significant portion of which was acquired over many years through a number of the Company's stock programs. This indicates the importance which the Company places on management having the same interests as stockholders generally. In recent years, a significant portion of the executives' total compensation has been provided through payment of discretionary annual bonuses and through allocations under the Company's Senior Management Incentive Plan ("SMIP"). The total amounts paid or allocated, as the case may be, are related to overall corporate operating performance and have trended upwards in better years. In granting annual bonuses, the Compensation Committee considers the executives' relative contribution to the Company's overall success, the need for executives to believe they are compensated competitively, the need for bonuses to be scaled to reflect seniority and contribution, and other relevant factors. The Committee increased Mr. Meyer's bonus by almost $200,000 in 1995 to reflect his instrumental personal involvement in a number of major new business wins from significant global accounts and his very important contribution to the Company's record profit performance in 1995. In 1995, the Committee also approved the grant of a number of stock options to Mr. Meyer and other senior and key executives of the Company. The Committee believes the grant of such options is an appropriate form of compensation to reward and motivate executives, and to align their interests with the Company's stockholders. The Committee also believes that significant grants should not be given annually and the size of the award to Mr. Meyer reflected, in part, that Mr. Meyer had not been granted stock options since 1984. In approving an 18% salary increase for Mr. Meyer in 1995, the Committee recognized that he had not a salary increase since 1990 except for a modest cost-of-living adjustment in 1994. 10 13 In reviewing Mr. Meyer's compensation elements, the Compensation Committee also considered that Mr. Meyer has been employed by the Company since 1956 and has served as Chief Executive Officer since 1971, and that the Company's continued strong and steady growth is importantly attributed to Mr. Meyer's leadership. The Committee also considered Mr. Meyer's long-term contributions in creating value for the Company and its stockholders by establishing and maintaining many significant client relationships, and by overseeing the Company's expansion into new disciplines and parts of the world. Overall, it is the generalized view of the Committee that under Mr. Meyer's direction the Company has been and is well organized, and managed for long-term, stable growth. Under SMIP, as approved at the 1994 stockholders meeting, participants are credited with compensation in an aggregate amount equal to 12% of the Company's pre-tax operating earnings for each year from 1993 through 1997. Because of Mr. Meyer's senior position and his substantial interest in the equity of the Company, the Compensation Committee, as agreed in prior years, awarded Mr. Meyer with respect to 1995 an amount corresponding to 15% of the aggregate amount credited for 1995 under SMIP. Effective in 1994, the tax law was amended to deny tax deductions to publicly-held corporations for annual compensation paid to certain executive officers in excess of $1,000,000, subject to certain exceptions. The Committee believes the Company should take appropriate steps to be in a position to preserve the tax deductibility of compensation payments, to the extent such steps are consistent with providing competitive compensation to its executives and the Company otherwise satisfies the requirements of the tax law. Thus, to satisfy the requirements of the tax law, the Company secured the approval of the stockholders at the 1994 annual meeting of the 1994 Stock Incentive Plan which is designed to comply with such tax laws. In addition, and for the same purpose, during 1995, as discussed below, the Company and Mr. Meyer entered into arrangements intended to ensure continued compliance in the future. Mark N. Kaplan Richard R. Shinn SENIOR EXECUTIVE OFFICER POST-EMPLOYMENT COMPENSATION PLAN The Senior Executive Officer Post-Employment Compensation Plan provides that certain qualified officers of the Company and its subsidiaries will be entitled upon retirement at or after the age of 60 to a lifetime supplemental pension of a maximum of $50,000 per year. Persons who are executive vice presidents of the Company, or more senior, or are designated senior executive officers of certain of the Company's subsidiaries, and who have met certain age and length of service requirements, and have been designated by the Board of Directors of the Company, are participants under the plan. In addition, a surviving spouse of a recipient of a pension under the plan is entitled to an annual pension equal to a maximum of $25,000 for the shorter of such spouse's life and 20 years. Each of the named executives (other than Mr. Shannon) were participants under the plan. In addition, the Company has certain understandings whereby certain additional pension amounts may be paid to Messrs. Berenson and Novick and Ms. Feigin. EMPLOYMENT AGREEMENTS AND OTHER TRANSACTIONS Messrs. Meyer and Novick and Ms. Feigin have employment agreements with the Company. The Company had an employment agreement with Mr. Berenson providing for his continued employment with the 11 14 Company through December 31, 1995 at a minimum annual salary of $485,000 per year. The Company will be executing an agreement extending the understandings with Mr. Berenson on mutually satisfactory terms. In addition, the understandings with Mr. Berenson provided that the Company would advance him a compensatory loan in an amount not to exceed $500,000 to facilitate the purchase of a primary residence which would secure the loan. Such loan was to be repayable five years after it was made or upon termination of Mr. Berenson's employment with the Company under certain circumstances (with the Company having agreed to forgive 20% of the original amount thereof each December 31 on which Mr. Berenson was employed after the closing of the loan). During 1993, in lieu of making the loan to Mr. Berenson and forgiving it as contemplated, the Company assisted Mr. Berenson in securing a loan from a commercial bank by agreeing to amortize up to $100,000 per year for up to five years of the principal on the mortgage loan Mr. Berenson took from such bank. The Company's obligation to reimburse the bank is essentially parallel to the obligation it would have had to Mr. Berenson to forgive the loan his agreement contemplated being made to him and, therefore, it is considered the equivalent of a loan forgiveness. In addition, in early 1994, the Company loaned Mr. Berenson $50,000 which is forgivable by the Company assuming his continued employment through 1998, in early 1995 the Company loaned Mr. Berenson $125,000 which is to be repaid, together with accrued interest, in May 1998, and in early 1996 the Company loaned Mr. Berenson $200,000 which is to be repaid, together with accrued interest, in May 1999. In 1984, the Company entered into an employment agreement, which has been amended subsequently, with Mr. Meyer, which provides for Mr. Meyer's employment with the Company through December 31, 2002. The agreement also provides for a minimum annual salary of $2,300,000 for Mr. Meyer's services as Chief Executive Officer. If the Company terminates Mr. Meyer's full-time employment as Chief Executive Officer without cause (as defined in the agreement), or if Mr. Meyer effects such termination due to a change of control of the Company or other good reason specified in the agreement, Mr. Meyer will receive $3,000,000 in consideration of his employment. The agreement further provides that the Company will defray premiums on life insurance policies on Mr. Meyer's life payable to a beneficiary designated by him; the Company paid $38,539 in premiums in respect of these policies in 1995. The employment agreement also provides that Mr. Meyer may, for a period subsequent to his termination of full-time employment as Chief Executive Officer, provide the Company with consulting services at $10,000 per month. If the Company terminates Mr. Meyer's full-time employment as Chief Executive Officer without cause, or if Mr. Meyer effects such termination due to a change in control of the Company or for other good reason, Mr. Meyer will receive a lump sum payment equal to his then current aggregate remuneration multiplied by the greater of the number of years remaining in the term of the employment agreement and the number three. In addition, pursuant to an amendment dated April 22, 1996, if Mr. Meyer is required to pay an excise tax (imposed by Section 4999 of the Internal Revenue Code) on any "excess parachute payments" (as defined in Section 280G of the Internal Revenue Code) payable to him in connection with a change in control of the Company, then the Company is required to pay Mr. Meyer an amount which is intended to place him in the same after-tax financial position that he would have been in had he not incurred any such excise tax liability, subject to certain limitations if the change in control were to occur prior to January 1, 2000. In such event, Mr. Meyer will also have an option to sell to the Company each share of the Common Stock and the Class B Stock which he then owns at the per share market value of the Common Stock. Mr. Meyer's agreement also provides that, for the ten year period (subject to reduction or suspension in the event Mr. Meyer becomes disabled or is in breach of his agreement) following his termination of employment, the Company will, among other things, provide Mr. Meyer with an office, and related office staff and facilities, and the continued use of a car and driver. The Company has also agreed to reimburse Mr. Meyer for certain business expenses incurred by him following termination of his employment up to $100,000 per year during the first five years of such period and 12 15 $50,000 per year during the remainder of such period, with such amounts being adjusted for increases in the consumer price index until the date of termination of his employment. During such ten year period, Mr. Meyer has also been charged with the responsibility of overseeing a certain portion of the Company's charitable contributions and, thus, will see to the contribution to charities of $100,000 per year of the Company's funds during the first five years of the period and of $50,000 per year during the remainder of the period. In the first quarter of 1995, the Company and Mr. Meyer entered into an agreement extending the term of Mr. Meyer's employment agreement through the date hereinabove mentioned, and providing for the deferral of certain compensation otherwise payable to him and the payment of such deferred compensation into a trust, commonly referred to as a rabbi trust, established with United States Trust Company of New York. The purpose of the trust arrangement is to enhance the Company's ability to deduct compensation paid to Mr. Meyer without the application of Section 162(m) of the Internal Revenue Code ("Section") at such times as the monies are paid to Mr. Meyer from the trust. The Section, under certain circumstances, denies a tax deduction to an employer for certain compensation expenses in excess of $1,000,000 per year paid by a publicly held corporation to certain of its executives. For 1995, all of cash compensation payable to Mr. Meyer from and after March 15, 1995 was deferred and paid into the trust. In subsequent years, such compensation as shall be timely elected by Mr. Meyer shall be deferred and paid into the trust provided that no such election shall cause any compensation paid to Mr. Meyer to be non-deductible by reason of the Section. Amounts deferred and paid into the trust shall be paid to Mr. Meyer or to his estate, as the case may be, upon the expiration of Mr. Meyer's employment agreement, or the termination of his employment by reason of death or disability. For the purpose of the presentation of Mr. Meyer's compensation in the Summary Compensation Table hereinabove given, the amounts deferred and paid into the trust are deemed as having been paid to Mr. Meyer. In 1983, the Company sold and issued $3,025,000 principal amount of its 8 1/2% Convertible Subordinated Debentures, due December 10, 1996, to Mr. Meyer in consideration of a purchase price of equal amount, of which $25,000 was paid in cash and the remainder by delivery of Mr. Meyer's long-term 9% full recourse promissory note in the principal amount of $3,000,000. The Debentures are convertible at any time into one share of Common Stock and one share of Class B Stock, at a current conversion price of $118.88, subject to adjustment upon the occurrence of certain events. During 1992, Mr. Meyer exercised certain stock options which had been granted to him in 1984, and, in connection therewith pursuant to the stock option agreement, issued to the Company his promissory note in the amount of $3,169,690, representing the exercise price in excess of the par value of the shares issued on exercise, which amount was paid in cash, and his promissory note in the amount of $2,339,998, representing the amount of tax required to be withheld in connection with such option exercise. The promissory notes are each full recourse, mature on December 22, 2001 and bear interest at the rate of 6.06% per year. Mr. Meyer is also indebted to the Company in the aggregate amount of $762,950 pursuant to long-term 9%, full recourse promissory notes delivered to the Company in 1981, 1982 and 1983 as part payment for Mr. Meyer's purchase of shares of Series 1, 2 and Series 3 Preferred Stock (collectively, "Original Preferred Stock"). In 1994, the Company and Mr. Meyer entered into an Exchange Agreement pursuant to which Mr. Meyer exchanged the Original Preferred Stock for a like number of shares of new Preferred Stock, designated Series I Preferred Stock, Series II Preferred Stock and Series III Preferred Stock (collectively, the "New Preferred Stock"). The terms of the New Preferred Stock are essentially the same as the Original Preferred Stock, except that the redemption date of the three series of new preferred stock is fixed at April 7, 2004 rather than on a date determined by reference to Mr. Meyer's termination of full-time employment with the Company as was the case with the Original Preferred Stock. The terms of the New Preferred Stock also give Mr. Meyer or his estate, as the case may be, the option to 13 16 require the Company to redeem his Preferred Stock for a period of 12 months following his (i) death, (ii) permanent disability or permanent mental disability, (iii) termination of full-time employment for good reason or (iv) termination of full-time employment by the Company without cause. Previously, Mr. Meyer had the option to require the Company to redeem his Preferred Stock only upon the termination of his full-time employment with the Company prior to his attainment of age 65. During 1994, the Company entered into an agreement with Mr. Novick pursuant to which his employment by the Company was continued at a minimum annual compensation of $775,000 per year. The agreement provides that Mr. Novick shall remain employed with the Company through 1998, and that, during the term of his agreement, he shall have an annual allocation pursuant to the SMIP of not less than $150,000 and an annual bonus of not less than $75,000. The agreement also provided for the Company to lend to Mr. Novick $600,000 to acquire a new residence intended to be used, in part, for business entertaining. This loan is forgivable in three annual installments of $200,000 at the end of each of 1996, 1997 and 1998, provided Mr. Novick is then still employed by the Company. In 1995, the Company forgave the last $200,000 of a compensatory loan in the original amount of $1,000,000 made to Mr. Novick pursuant to an earlier employment agreement and used to facilitate the financing of his purchase of a residence. Such advance was secured and would have been repayable had Mr. Novick left the Company's employ before December 31, 1995 (except one-fifth of the loan was forgiven each December 31 by the Company from 1991 through 1995 provided Mr. Novick was employed by the Company). In 1993, the Company entered into an employment agreement with Ms. Feigin providing for her continued employment by the Company at least through December 31, 1997, at a minimum annual compensation of $376,000 per year. The agreement also provides that the Company will pay for certain life and disability insurance coverages for Ms. Feigin. If Mr. Meyer had been terminated effective December 31, 1995 under circumstances which would have resulted in payment of the special severance detailed in the foregoing description of his agreement, the amount then payable to him would have been $29,434,681. Other than pursuant to the loans described above in connection with Mr. Meyer's securities, and Messrs. Berenson's and Novick's arrangements, no named executive is indebted to the Company for more than $60,000. Certain key employees of the Company, including the named executives and certain members of their immediate families ("Beneficiaries"), have entered into the Voting Trust Agreement, as amended in 1987 and 1994, pursuant to which the Beneficiaries have deposited the shares of Common Stock and Class B Stock owned by them into a voting trust. The Beneficiaries have also agreed to deposit into the voting trust shares of Common Stock or Class B Stock hereafter acquired by them. The trust was extended in 1994 and will continue until 2004. Mr. Meyer has been designated the sole Voting Trustee. Beneficiaries retain the sole authority to receive dividends and, in general, to dispose of their shares held in the voting trust. The Company has entered into indemnification agreements with each of the members of the Board of Directors providing, generally, for the fullest indemnification permitted by law. 14 17 PERFORMANCE GRAPH COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN FOR THE COMPANY, THE S&P 500 INDEX AND FIVE OTHER PUBLICLY-TRADED ADVERTISING AGENCIES
MEASUREMENT PERIOD GREY ADVER- PEER GROUP S&P 500 TO- (FISCAL YEAR COVERED) TISING INDEX TAL RETURN 1990 100.00 100.00 100.00 1991 96.92 148.30 130.47 1992 110.23 186.10 140.41 1993 153.46 199.64 154.56 1994 128.29 218.16 156.60 1995 170.55 293.67 216.45
The Company's peer group is comprised of Cordiant plc, The Interpublic Group of Companies, Inc., Omnicom Group, Inc., True North Communications, Inc. and WPP Group, plc. The graph assumes the initial investment of $100 on December 31, 1990 and the reinvestment of dividends thereafter. 15 18 RELATIONSHIP WITH INDEPENDENT AUDITORS The Board of Directors of the Company has selected its present auditors, the firm of Ernst & Young, as independent auditors to examine and report on the financial statements of the Company for the year ending December 31, 1996. Representatives of Ernst & Young are expected to be present at the meeting to make such statements as they deem appropriate and to respond to appropriate stockholder questions. The Board has determined that, although not required, it would be desirable to request from the stockholders an expression as to whether they concur in the foregoing selection. The Board recommends that stockholders vote to ratify such selection. If the holders of a majority of the votes represented at the meeting do not ratify the selection of Ernst & Young, the selection of independent auditors will be reconsidered by the Board. Abstentions will have the same effect as a negative vote, while broker non-votes will be disregarded and have no effect. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMMENDS A VOTE "FOR" THIS PROPOSAL. STOCKHOLDER PROPOSALS Any stockholder who wishes to submit a proposal to be presented at the 1997 Annual Meeting of stockholders must forward such proposal to the Secretary of the Company at the address of the Company which is given above, so that it is received by him no later than March 12, 1997. SOLICITATION OF PROXIES The solicitation of proxies will be conducted primarily by mail. However, employees of the Company may solicit proxies by telephone, telegraph or personal contact, but at no additional compensation. OTHER MATTERS The Board of Directors is not aware of any other matters which may be brought before the meeting. If other matters not known come before the meeting, the persons named in the accompanying form of proxy or their substitutes will vote such proxy in accordance with their best judgment. STEVEN G. FELSHER Secretary July 12, 1996 16 19 PROXY LIMITED DURATION CLASS B COMMON STOCK GREY ADVERTISING INC. PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 26, 1996 The undersigned stockholders(s) of Grey Advertising Inc. ("Company") hereby appoint(s) Edward H. Meyer and Steven G. Felsher, and each of them, the true and lawful proxies, agents and attorneys of the undersigned each with full power to act without the other and with full power of substitution and revocation, to represent and act for the undersigned, in the name, place and stead of the undersigned, and to vote all shares of the Company which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held at the Company's Toronto office, 1881 Yonge Street, Toronto, Ontario, Canada, on July 26, 1996 at 8:00 AM, local time, and at any and all adjournments thereof, on the following matters. THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS HEREIN, BUT WHERE SPECIFICATIONS ARE NOT INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEE FOR DIRECTOR AND IN FAVOR OF THE PROPOSAL REFERRED TO IN ITEM 2. If other matters not now known come before the meeting the persons named herein or their substitutes will vote such shares in accordance with their best judgment. The undersigned hereby ratifies and confirms all that said proxies, agents and attorneys, or either of them, or their substitutes, lawfully may do at the meeting and hereby revokes all proxies heretofore given by the undersigned to vote at said meeting or any and all adjournments thereof. If only one of said proxies, or his substitute, be present and vote at said meeting, or at any or all adjournments thereof, such person shall have and may exercise all powers hereby granted. (Continued on reverse side) - - -------------------------------------------------------------------------------- FOLD AND DETACH HERE 20 Please mark your votes as indicated in this example. [X] WITHHELD FOR FROM PROPOSAL NO. 1. The election of Mark N. Kaplan, as a director, [ ] [ ] to hold office until the Annual Meeting to be held in 1999 or until the election of his successor. FOR AGAINST ABSTAIN PROPOSAL NO. 2. A proposal to ratify the selection of [ ] [ ] [ ] Ernst & Young as independent auditors for the Company for 1996. 3. The transaction of such other business as may properly come before the meeting, and at any and all adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of the Meeting and Proxy Statement dated July 12, 1996. Signature(s) ___________________________________ (L.S.) Dated: July ____, 1996. Stockholder(s) should sign exactly as name appears above. - - ------------------------------------------------------------------------------- FOLD AND DETACH HERE 21 PROXY COMMON STOCK GREY ADVERTISING INC. PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 26, 1996 The undersigned stockholders(s) of Grey Advertising Inc. ("Company") hereby appoint(s) Edward H. Meyer and Steven G. Felsher, and each of them, the true and lawful proxies, agents and attorneys of the undersigned each with full power to act without the other and with full power of substitution and revocation, to represent and act for the undersigned, in the name, place and stead of the undersigned, and to vote all shares of the Company which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held at the Company's Toronto office, 1881 Yonge Street, Toronto, Ontario, Canada, on July 26, 1996 at 8:00 AM, local time, and at any and all adjournments thereof, on the following matters. THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS HEREIN, BUT WHERE SPECIFICATIONS ARE NOT INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEE FOR DIRECTOR AND IN FAVOR OF THE PROPOSAL REFERRED TO IN ITEM 2. If other matters not now known come before the meeting the persons named herein or their substitutes will vote such shares in accordance with their best judgment. The undersigned hereby ratifies and confirms all that said proxies, agents and attorneys, or either of them, or their substitutes, lawfully may do at the meeting and hereby revokes all proxies heretofore given by the undersigned to vote at said meeting or any and all adjournments thereof. If only one of said proxies, or his substitute, be present and vote at said meeting, or at any or all adjournments thereof, such person shall have and may exercise all powers hereby granted. (Continued on reverse side) - - -------------------------------------------------------------------------------- FOLD AND DETACH HERE 22 Please mark your votes as indicated in this example. [X] WITHHELD FOR FROM PROPOSAL NO. 1. The election of Mark N. Kaplan, as a director, [ ] [ ] to hold office until the Annual Meeting to be held in 1999 or until the election of his successor. FOR AGAINST ABSTAIN PROPOSAL NO. 2. A proposal to ratify the selection of [ ] [ ] [ ] Ernst & Young as independent auditors for the Company for 1996. 3. The transaction of such other business as may properly come before the meeting, and at any and all adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of the Meeting and Proxy Statement dated July 12, 1996. Signature(s) ___________________________________ (L.S.) Dated: July ____, 1996. Stockholder(s) should sign exactly as name appears above. - - ------------------------------------------------------------------------------- FOLD AND DETACH HERE -----END PRIVACY-ENHANCED MESSAGE-----