SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
GP STRATEGIES CORPORATION
(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):
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:
GP STRATEGIES LETTERHEAD
May 3, 1999
Dear Stockholder:
The 1999 Annual Meeting of Stockholders of GP Strategies Corporation will be
held on June 3, 1999 at 10:00 a..m. in the Park Avenue Room of the Hotel
Inter-Continental New York, and we look forward to your attending either in
person or by proxy. The Notice of Annual Meeting, the Proxy Statement and the
Proxy Card from the Board of Directors are enclosed.
At this year's Annual Meeting, the agenda includes the annual election of
directors. The Board of Directors recommends that you vote FOR the election of
the slate of nominees for directors.
Martin M. Pollak, the co-founder, Executive Vice President and Treasurer of the
Company, is retiring and will not be standing for re-election. Martin has
provided GP Strategies with invaluable service since the Company's inception. In
1964 Martin was instrumental in obtaining the rights to the "soft contact lens".
In 1981 he became President and Chief Executive Officer of International Hydron
Corporation, a public subsidiary of GP Strategies, and served as its leader
until the company was sold in 1987 to SmithKline Beecham for $155 million.
Martin was also the Chairman of General Physics Corporation before it became a
wholly-owned subsidiary of the Company. After 40 years of dedicated service, we
wish him the best in the years ahead.
Please refer to the Proxy Statement for detailed information on the election of
directors.
Sincerely yours,
Jerome I. Feldman
President and Chief Executive
Officer
GP STRATEGIES CORPORATION
9 West 57th Street
Suite 4170
New York, New York 10019
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 3, 1999
To the Stockholders:
The Annual Meeting of Stockholders of GP Strategies Corporation (the
"Company") will be held in the Park Avenue Room of the Hotel Inter-Continental
New York, 111 East 48th Street, New York, New York on the 3rd day of June 1999,
at 10:00 a.m. local time, for the following purposes:
1. To elect nine Directors to serve until the next Annual Meeting and until
their respective successors are elected and qualify.
2. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only stockholders of record as of the close of business on April 16, 1999 are
entitled to receive notice of and to vote at the meeting. A list of such
stockholders shall be open to the examination of any stockholder during ordinary
business hours, for a period of ten days prior to the meeting, at the principal
executive offices of the Company, 9 West 57th Street, Suite 4170, New York, New
York.
By Order of the Board of
Directors
Lydia M. DeSantis
Secretary
New York, New York
May 3, 1999
If you do not expect to be present at the meeting, please fill in, date and
sign the enclosed Proxy and return it promptly in the enclosed return envelope.
GP STRATEGIES CORPORATION
9 West 57th Street
Suite 4170
New York, New York 10019
---------------
New York, New York
May 3, 1999
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of the Board of Directors
of GP Strategies Corporation, a Delaware corporation (the "Company"), for use
only at the Annual Meeting of Stockholders (the "Annual Meeting") to be held in
the Park Avenue Room of the Hotel Inter-Continental New York, 111 East 48th
Street, New York, New York, on the 3rd day of June, 1999 at 10:00 a.m., local
time, and at any adjournments thereof. The approximate date on which this Proxy
Statement and the accompanying Proxy were first given or sent to security
holders was May 3, 1999.
Each Proxy executed and returned by a stockholder may be revoked at any time
thereafter, by written notice to that effect to the Company, attention of the
Secretary, prior to the Annual Meeting, or to the Chairman or the Inspectors of
Election, at the Annual Meeting, or by the execution and return of a later-dated
Proxy, except as to any matter voted upon prior to such revocation.
The Proxies in the accompanying form will be voted in accordance with the
specifications made and where no specifications are given, such Proxies will be
voted FOR the nine nominees for election as directors named herein. In the
discretion of the proxy holders, the Proxies will also be voted FOR or AGAINST
such other matters as may properly come before the meeting. The management of
the Company is not aware that any other matters are to be presented for action
at the meeting. Although it is intended that the Proxies will be voted for the
nominees named herein, the holders of the Proxies reserve discretion to cast
votes for individuals other than such nominees in the event of the
unavailability of any such nominee. The Company has no reason to believe that
any of the nominees will become unavailable for election. The Proxies may not be
voted for a greater number of persons than the number of nominees named. The
election of directors will be determined by a plurality of the votes of the
shares of Common Stock and Class B Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote on the election of directors.
Accordingly, in the case of shares that are present or represented at the Annual
Meeting for quorum purposes, not voting such shares for a particular nominee for
director, including by withholding authority on the Proxy, will not operate to
prevent the election of such nominee if he or she otherwise receives a plurality
of the votes.
VOTING SECURITIES
The Board of Directors has fixed the close of business on April 16, 1999 as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the Annual Meeting. The issued and outstanding stock of the
Company on April 16, 1999 consisted of 11,010,204 shares of Common Stock, each
entitled to one vote, and 356,250 shares of Class B Stock, each entitled to ten
votes. A quorum of the stockholders is constituted by the presence, in person or
by proxy, of holders of record of Common Stock and Class B Stock, representing a
majority of the number of votes entitled to be cast. The only difference in the
rights of the holders of Common Stock and the rights of holders of Class B Stock
is that the former class has one vote per share and the latter class has ten
votes per share. The Class B Stock is convertible at any time into shares of
Common Stock on a share for share basis at the option of the holders thereof.
PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of Common Stock and
Class B Stock beneficially owned as of March 15, 1999, by each person who is
known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock or Class B Stock.
Name and Address Amount and Nature
Title of of Beneficial of Beneficial Percent
Class Owner Ownership Of Class(1)
Class B Stock Jerome I. Feldman 631,250 95.3%
c/o GP Strategies shares(2)(3)
Corporation
9 West 57th Street
Suite 4170
New York, NY 10019
Class B Stock Martin M. Pollak 243,750 42.9%
c/o GP Strategies shares(3)(4)
Corporation
9 West 57th Street
Suite 4170
New York, NY 10019
Class B Stock Scott N. Greenberg 75,000 shares(5) 17.4%
c/o GP Strategies
Corporation
9 West 57th Street
Suite 4170
New York, NY 10019
Common Stock Jerome I. Feldman 813,418 6.9%
shares(3)(6)
Common Stock Martin M. Pollak 917,925 7.8%
shares(3)(7)
Common Stock Dimensional Fund 546,625 shares(8) 5.1%
Advisors
1299 Ocean Avenue
Santa Monica, CA
90401
Common Stock Oppenheimer Capital 730,820 shares(9) 6.7%
Oppenheimer Tower
World Financial
Center
New York, NY 10281
- ---------
(1)The percentage of class calculation for Common Stock assumes for each
beneficial owner that (i) all options are exercised in full and all shares of
Class B Stock are converted into Common Stock only by the named beneficial
owner and (ii) no other options are exercised and no other shares of Class B
Stock are converted by any other stockholder. The percentage of class
calculation for Class B Stock assumes for each beneficial owner that (i) all
options to purchase Class B Stock are exercised in full only by the named
beneficial owner, (ii) no other options to purchase Class B Stock are
exercised by any other stockholder, and (iii) no shares of Class B Stock are
converted into Common Stock by the named beneficial owner or any other
stockholder.
(2)Includes 306,250 shares of Class B Stock issuable upon exercise of currently
exercisable stock options held by Mr. Feldman. Certain of Mr. Feldman's
shares of Class B Stock are subject to certain restrictions.
(3)On December 29, 1998, Mr. Pollak granted certain rights of first refusal
with respect to his Class B Stock and options to purchase Class B Stock to
Mr. Feldman and his family, and Mr. Feldman granted certain tag-along rights
with respect to Class B Stock and options to purchase Class B Stock to Mr.
Pollak and his family. Certain of Mr. Feldman's shares of Class B Stock are
subject to certain restrictions.
(4)Includes 212,500 shares of Class B Stock issuable upon exercise of currently
exercisable stock options held by Mr. Pollak.
(5)Includes 75,000 shares of Class B Stock issuable upon exercise of currently
exercisable stock options held by Mr. Greenberg.
(6)Includes (i) 180,995 shares of Common Stock issuable upon exercise of
currently exercisable stock options held by Mr. Feldman, (ii) 1,173 shares of
Common Stock held by members of his family, (iii) 325,000 shares of Common
Stock issuable upon conversion of Class B Stock held by Mr. Feldman, and (iv)
306,250 shares of Common Stock issuable upon conversion of Class B Stock
issuable upon exercise of currently exercisable stock options held by Mr.
Feldman. Mr. Feldman disclaims beneficial ownership of the 1,173 shares of
Common Stock held by members of his family.
(7)Includes (i) 528,339 shares of Common Stock issuable upon exercise of
currently exercisable stock options held by Mr. Pollak, (ii) 6,132 shares of
Common Stock held by his wife, (iii) 1,618 shares of Common Stock held by a
foundation of which Mr. Pollak is a trustee, (iv) 31,250 shares of Common
Stock issuable upon conversion of Class B Stock held by Mr. Pollak, and (v)
212,500 shares of Common Stock issuable upon conversion of Class B Stock
issuable upon exercise of currently exercisable stock options held by Mr.
Pollak. Mr. Pollak disclaims beneficial ownership of the 6,132 shares of
Common Stock held by his wife and the 1,618 shares held by the foundation.
(8)Based on a Schedule 13G filed by Dimensional Fund Advisors Inc.
("Dimensional") with the Securities and Exchange Commission (the "SEC").
Dimensional has informed the Company that the shares reported on the 13G are
owned by advisory clients of Dimensional and that Dimensional disclaims
beneficial ownership of such shares.
(9) Based on a Schedule 13G filed by Oppenheimer Capital with the SEC.
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table sets forth, as of March 15, 1999, beneficial ownership
of shares of Common Stock and Class B Stock of the Company by each director,
each of the named executive officers and all directors and executive officers as
a group.
Total Number Total
Of Shares of Number of
Common Percent Shares of
Stock of Class B Stock Percent of Percent of
Beneficially Common Beneficially Class B Voting
Owned Stock(1) Owned Stock(2) Stock(3)
Jerome I. Feldman(4) 813,418(5) 6.9% 631,250(6) 95.3% 36.5%
Martin M. Pollak(4) 917,925(7) 7.8% 243,750(8) 42.9% 18.1%
Scott N. Greenberg(4) 157,913(9) 1.4% 75,000(10) 17.4% 5.4%
John C. McAuliffe 50,269(11)(12) * - - *
Sheldon L. Glashow(13) 6,095(11) * - - -
Roald Hoffmann(13) 18,360(11) * - - *
Bernard M. Kauderer(13) 6,095(11) * - - *
Ogden R. Reid(13) 9,250(11) * - - *
Herbert R.Silverman(14) 15,250(11) * - - *
Gordon Smale(14) 6,000(11) * - - *
Directors and Executive 2,000,665(15) 15.6% 950,000(16) 100% 40/4%
Officers as a Group
(9 persons)
- ------------------
* The number of shares owned is less than one percent of the outstanding shares
or voting stock.
(1) The percentage of class calculation for Common Stock assumes for each
beneficial owner and directors and executive officers as a group that (i)
all options are exercised in full and all shares of Class B Stock are
converted into Common Stock only by the named beneficial owner or members of
the group and (ii) no other options are exercised and no other shares of
Class B Stock are converted by any other stockholder.
(2) The percentage of class calculation for Class B Stock assumes for each
beneficial owner and directors and executive officers as a group that (i)
all options to purchase Class B Stock are exercised in full only by the
named beneficial owner or members of the group, (ii) no other options to
purchase Class B Stock are exercised by any other stockholder, and (iii) no
shares of Class B Stock are converted into Common Stock by the named
beneficial owner, members of the group, or any other stockholder.
(3) The percentage of voting stock calculation assumes for each beneficial owner
and directors and executive officers as a group that (i) all options are
exercised in full only by the named beneficial owner or members of the
group, (ii) no other options are exercised by any other stockholder, and
(iii) no shares of Class B Stock are converted into Common Stock by the
named beneficial owner, members of the group, or any other stockholder.
Based on the Common Stock and Class B Stock outstanding at March 15, 1999,
if no options are exercised and no shares of Class B Stock are converted
into Common Stock by Mr. Feldman, Mr. Pollak, or any other stockholder,
Messrs. Feldman and Pollak would own 22% and 3% of the voting stock,
respectively.
(4) Member of the Executive Committee.
(5) See footnotes 3 and 6 to Principal Stockholders table.
(6) See footnotes 2 and 3 to Principal Stockholders table.
(7) See footnotes 3 and 7 to Principal Stockholders table.
(8) See footnotes 3 and 4 to Principal Stockholders table.
(9) Includes (i) 70,875 shares of Common Stock issuable upon exercise of
currently exercisable stock options held by Mr. Greenberg and (ii) 75,000
shares of Common Stock issuable upon conversion of Class B Stock issuable
upon exercise of currently exercisable stock options held by Mr.
Greenberg.
(10)See footnote 5 to Principal Stockholders table.
(11)Includes 18,000 shares for Roald Hoffmann, 42,000 shares for John C.
McAuliffe, 9,000 shares for Ogden R. Reid, 14,000 shares for Herbert R.
Silverman, 6,000 shares for Bernard M. Kauderer, 6,000 shares for Sheldon L.
Glashow, and 6,000 shares for Gordon Smale, issuable upon exercise of
currently exercisable stock options.
(12)Includes 3,414 shares of Common Stock allocated to Mr. McAuliffe's account
pursuant to the provisions of the General Physics Corporation Profit
Investment Plan.
(13) Member of the Audit Committee.
(14) Member of the Compensation Committee.
(15)Includes (i) 888,209 shares of Common Stock issuable upon exercise of
currently exercisable stock options, (ii) 356,250 shares of Common Stock
issuable upon conversion of Class B Stock, and (iii) 593,750 shares of
Common Stock issuable upon conversion of Class B Stock issuable upon
exercise of currently exercisable stock options.
(16)Includes 593,750 shares of Class B Stock issuable upon exercise of
currently exercisable stock options.
As of March 15, 1999 the Company owned 2,842,300 shares of SGLG, Inc.
("SGLG") common stock, constituting approximately 92% of the outstanding shares.
As of such date, Mr. Pollak owned 1,000 shares of SGLG common stock.
On December 29, 1998, the Company and Messrs. Feldman and Pollak entered
into an agreement (the "Exchange Agreement"). Pursuant to the Exchange
Agreement, on January 4, 1999, Mr. Pollak transferred to Mr. Feldman options to
purchase 193,750 shares of Class B Stock in exchange for options to purchase
172,422 shares of Common Stock plus 26,495 shares of Common Stock (the
"Exchange"). In addition, Mr. Pollak granted certain rights of first refusal
with respect to his Class B Stock and options to purchase Class B Stock to Mr.
Feldman and his family, and Mr. Feldman granted certain tag-along rights with
respect to Class B Stock and options to purchase Class B Stock to Mr. Pollak and
his family. In addition, Mr. Pollak agreed that, until May 31, 2004, during any
period commencing on the date any person or group commences or enters into, or
publicly announces an intention to commence or enter into, and ending on the
date such person abandons, a tender offer, proxy fight, or other transaction
that may result in a change in control of the Company, he will vote his shares
of Common Stock and Class B Stock on any matter in accordance with the
recommendation of the Company's Board of Directors. The Exchange and the other
provisions of the Exchange Agreement may have resulted in, or may at a
subsequent date result in, a change of control of the Company from Messrs.
Feldman and Pollak jointly to Mr. Feldman.
ELECTION OF DIRECTORS
Nine directors will be elected at the Annual Meeting to hold office until the
next Annual Meeting of Stockholders and until their respective successors are
elected and qualify. The Proxies solicited by this proxy statement may not be
voted for a greater number of persons than the number of nominees named. It is
intended that these Proxies will be voted for the following nominees, but the
holders of these Proxies reserve discretion to cast votes for individuals other
than the nominees for director named below in the event of the unavailability of
any such nominee. The Company has no reason to believe that any of the nominees
will become unavailable for election. Set forth below are the names of the
nominees, the principal occupation of each, the year in which first elected a
director of the Company and certain other information concerning each of the
nominees.
Jerome I. Feldman is founder and since 1959 has been President and Chief
Executive Officer and a Director of the Company. He has been a Director of
American Drug Company ("ADC"), a wholesale distributor of home decorating,
hardware and finishing products, since 1994 and a Director of GSE Systems, Inc.
("GSE"), a company engaged in the business of real time simulation and process
automation in the power and process industries, since 1994 and Chairman of the
Board of GSE since 1997. Mr. Feldman is also Chairman of the New England
Colleges Fund and a Trustee of Northern Westchester Hospital.
Age 70
Scott N. Greenberg has been a Director of the Company since 1987 and Executive
Vice President and Chief Financial Officer since June 1998. He was Vice
President and Chief Financial Officer from 1989 to June 1998 and Vice President,
Finance from 1985 to 1989. He has been a Director of ADC since 1998 and is a
nominee for Director of GSE. Age 42
John C. McAuliffe has been a Director of the Company since 1997, Senior Vice
President of the Company since June 1998 and President of General Physics
Corporation ("GPC"), a wholly-owned subsidiary of the Company, since 1997. He
was Executive Vice President and Chief Operating Officer of GPC from 1994 to
1997; Senior Vice President from 1993 to 1994; Chief Financial Officer and
Treasurer from 1992 to 1993; and Vice President, Finance from 1991 to 1992. Age
40
Sheldon L. Glashow, Ph.D. has been a Director of the Company since 1997.
Dr. Glashow is the Higgins Professor of Physics and the Mellon Professor of
the Sciences at Harvard University. He was the recipient of the Nobel Prize
in Physics in 1971. He has been a director of Interferon Sciences, Inc.
("ISI"), a biopharmaceutical company, since 1991 and a Director of GSE since
1995. Dr. Glashow is a foreign member of the Russian Academy of Sciences.
Age 66
Roald Hoffmann, Ph.D. has been a Director of the Company since 1988. He
has been the John Newman Professor of Physical Science at Cornell University
since 1974. Dr. Hoffmann is a member of the National Academy of Sciences and
the American Academy of Arts and Sciences. In 1981, he shared the Nobel
Prize in Chemistry with Dr. Kenichi Fukui. Age 61
Bernard M. Kauderer has been a Director of the Company since 1997. He
retired from the United States Navy in 1986 as Vice Admiral. He was Former
Commander, Submarine Force, United States Atlantic and Pacific Fleets. He has
been a consultant to industry and government since 1986. Age 67
Ogden R. Reid has been a Director of the Company since 1979. Mr. Reid had
been Editor and Publisher of the New York Herald Tribune and of its
International Edition; United States Ambassador to Israel; a six-term member
of the United States Congress and a New York State Environmental
Commissioner. Age 73
Herbert R. Silverman has been a Director of the Company since 1994. Since 1975
he has been a Senior Advisor to Bank Julius Baer (New York), Zurich,
Switzerland, and since 1976 he has been Chairman of the Executive Committee of
Baer American Banking Corporation. He was a Director of Partners Funds, Inc. and
Focus Fund, both of which are mutual stock funds managed by Neuberger & Berman,
from 1965 to April 1997. He is Honorary Vice Chairman of the New York University
Board of Trustees and a life trustee of New York University and New York
University Medical Center. Age 81
Gordon Smale has been a Director of the Company since 1997. He has been
President and a Director of Atlantic Oil Corporation, a producing oil and gas
company, since 1970; President of Atmic, Inc., an oil and gas management
company, since 1983; Chairman of the Board of CamWest Inc., an oil and gas
exploration and development company, since 1992; and Manager of Cedar Ridge LLC,
a methane coal gas exploration and development company, since 1994. Age 67
Board of Directors
The Board of Directors has the responsibility for establishing broad corporate
policies and for the overall performance of the Company, although it is not
involved in day-to-day operating details. Members of the Board are kept informed
of the Company's business by various reports and documents sent to them as well
as by operating and financial reports made at Board and Committee meetings. The
Board held six meetings in 1998. All of the directors attended at least 75% of
the aggregate number of meetings of the Board and of committees of the Board on
which they served, except for Roald Hoffmann and Herbert R. Silverman.
Directors Compensation
Directors who are not employees of the Company or its subsidiaries receive an
annual fee of $5,000, payable quarterly, and $1,000 for each meeting of the
Board of Directors attended, but do not receive any additional compensation for
service on committees of the Board of Directors. Officers of the Company or its
subsidiaries do not receive additional compensation for serving as directors.
Executive Committee
The Executive Committee, consisting of Jerome I. Feldman and Scott N.
Greenberg, meets on call and has authority to act on most matters during the
intervals between Board meetings. The committee formally acted eighteen times in
1998 through unanimous written consent.
Audit Committee
The Audit Committee reviews the internal controls of the Company and the
objectivity of its financial reporting. It meets with appropriate Company
financial personnel and the Company's independent certified public accountants
in connection with these reviews. This committee recommends to the Board the
appointment of the independent certified public accountants to serve as auditors
for the following year in examining the books and records of the Company. This
Committee met twice in 1998. The Audit Committee consists of Ogden R. Reid,
Roald Hoffmann, Sheldon L. Glashow and Bernard M.
Kauderer.
Compensation Committee
The Compensation Committee, consisting of Herbert R. Silverman and Gordon
Smale, meets on call and has the authority to act with respect to the
compensation of officers. In 1998, the Compensation Committee held one meeting .
EXECUTIVE COMPENSATION
The following table and notes present the compensation paid by the Company and
subsidiaries to its President and Chief Executive Officer and the Company's most
highly compensated executive officers.
SUMMARY COMPENSATION TABLE
Annual Long Term
Compensation Compensation All Other
Salary Bonus Stock/Options Compensation
Name and Principal Position Year ($) ($) (# Shares) ($)
Jerome I. Feldman 1998 320,780 - - 87,867(1)
President and Chief 1997 336,008 135,950(2) 125,000(3) 181,379(4)
Executive Officer 1996 321,805 - 244,667(5) 35,433(6)
Martin M. Pollak 1998 288,125(7) 25,000(8) - 89,191(1)
Executive Vice President 1997 300,000(9) 135,950(2) 125,000(3) 193,717(4)
and Treasurer 1996 287,510(9) - 247,167(5) 38,061(6)
Scott N. Greenberg 1998 227,000 - - 29,316(10)
Executive Vice President 1997 218,112 51,570(11) 87,125(3) 78,116(12)
and Chief Financial Officer 1996 209,315 114,375(13) 78,750(14) 4,316(15)
John C. McAuliffe 1998 211,585(16) 90,000(16) 10,000(3) 30,588(17)
Senior Vice President 1997 200,979(16) 75,000(16) 60,000(3) 105,920(18)
President, General Physics 1996 172,750(16) - - 4,287(19)
Corporation
(1) Includes for each of Messrs. Feldman and Pollak $49,000 in cash and Common
Stock received in connection with the merger of the Company and GPC (the
"Merger); $20,304 for group term life insurance premiums; and a $4,000
matching contribution to the Company's 401(k) Savings Plan (the "401(k)
Savings Plan"). Also includes $14,563 for Mr. Feldman and $15,887 for Mr.
Pollak for the split dollar value of insurance premiums.
(2) Includes $50,000 as a bonus from GPC for services rendered to GPC and
$85,950 in shares of ISI common stock, deferred at the election of the
Messrs. Feldman and Pollak from 1996 to 1997, for services rendered to
ISI.
(3) Consists of options to purchase shares of Common Stock granted pursuant to
the Company's 1973 Non-Qualified Stock Option Plan, as amended (the
"Plan").
(4) Includes for each of Messrs. Feldman and Pollak $147,000 in cash and
Common Stock received in connection with the Merger; $11,340 for group
term life insurance premiums; and a $3,800 matching contribution to the
401(k) Savings Plan. Also includes $19,239 for Mr. Feldman and $22,613 for
Mr. Pollak for the split dollar value of insurance premiums.
(5) Includes for each of Messrs. Feldman and Pollak options to purchase
150,000 shares of Class B Stock granted pursuant to an employment
agreement. Also includes options to purchase 94,667 shares of Common Stock
for Mr. Feldman and 97,167 shares of Common Stock for Mr. Pollak granted
pursuant to the Plan.
(6) Includes for each of Messrs. Feldman and Pollak $11,340 for group term
life insurance premiums and a $3,500 matching contribution to the 401(k)
Savings Plan. Also includes $20,593 for Mr. Feldman and $23,221 for Mr.
Pollak for the split dollar value of insurance premiums.
(7) $141,000 of Mr. Pollak's compensation was paid by ADC for his devoting a
portion of his working hours to ADC.
(8) Includes $25,000 as a bonus from GPC for services rendered to GPC.
(9) $150,000 of Mr. Pollak's compensation was paid by ADC for his devoting a
portion of his working hours to ADC.
(10) Includes $24,500 in cash and Common Stock received in connection with the
Merger; a $4,000 matching contribution to the 401(k) Savings Plan; and
$816 for group term life insurance premiums.
(11) Bonus received from ISI in shares of ISI common stock deferred at the
election of Mr. Greenberg from 1996 to 1997, for services rendered to ISI.
(12) Includes $73,500 in cash and Common Stock received in connection with the
Merger; a $3,800 matching contribution to the 401(k) Savings Plan; and
$816 for group term life insurance premiums.
(13) Bonus received from the Company in shares of common stock of GTS Duratek,
Inc. ("Duratek").
(14) Includes options to purchase 75,000 shares of Class B Stock not granted
pursuant to the Plan and options to purchase 3,750 shares of Common Stock
granted pursuant to the Plan.
(15) Includes a $3,500 matching contribution to the 401(k) Savings Plan and
$816 for group term life insurance premiums.
(16) Paid by GPC for services rendered solely to GPC.
(17) Includes $20,153 in cash and Common Stock received in connection with the
Merger; $10,000 contributed by GPC under GPC's Profit Investment Plan, a
defined contribution plan (the "GPC Plan"); and $435 for group term life
insurance premiums paid by GPC.
(18) Consists of $100,650 in cash and Common Stock received in connection with
the Merger; $4,940 contributed by GPC under the GPC Plan; and $330 for
group term life insurance premiums paid by GPC.
(19) Includes $3,957 contributed by GPC under the GPC Plan and $330 for group
term life insurance premiums paid by GPC.
The following table and notes contain information concerning the grant of
stock options in 1998 to the named executive officers.
OPTION GRANTS IN 1998
Potential Realizable
Percent Value at Assumed
of Total Annual Rates of
Options Exercise Stock Price
Options Granted to or Base Appreciation for
Granted Employees Price Market Expiration Option Term(1)
Name (#) in 1998 ($/Sh) Value($) Date 5%($) 10%($)
- ----- ------
John C. McAuliffe 10,000(2) 3% 10.41 12.25 01/12/08 65,468 165,009
- -------------
(1) Represents gain that would be realized assuming the options were held for
the entire ten year term and the stock price increased at compounded rates
of 5% and 10% from a base price of $10.41 per share. The potential
realizable values per option or per share under such 5% and 10% rates of
stock appreciation would be $6.55 and $16.59 from a base price of $10.41.
These amounts represent assumed rates of appreciation only. Actual gain, if
any, on option exercise and Common Stock holdings will be dependent on
overall market conditions and on the future performance of the Company and
its Common Stock. There can be no assurance that the amounts reflected in
this table will be achieved.
(2) Options to purchase Common Stock granted pursuant to the terms of the Plan
. The options are exercisable cumulatively at the rate of 20% per annum for
a period of five years from the date of grant.
The following table and notes contain information concerning the exercise of
stock options during 1998 and unexercised options held at the end of 1998 by the
named executive officers. Unless otherwise indicated, options are to purchase
Common Stock.
AGGREGATED OPTION EXERCISES IN 1998
AND YEAR-END OPTION VALUES
Exercisable/Unexercisable Value of Unexercised
Shares Options In-the-Money Options at
Acquired Value at December 31, 1998(#) December 31, 1998($)
Name on Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable(1)
Jerome I. Feldman1 93,750(2) 121,094 565,917(3) 60,000 3,720,422 43,500
Martin M. Pollak -0- -0- 762,169(3) 60,000 4,925,697 43,500
Scott N. Greenberg 5,000 31,875 145,875(3) 45,000 939,611 326,250
John C McAuliffe -0- -0- 21,000 59,000 147,590 403,935
- ----------
(1) Calculated based on $15.00, which was the closing price of the Common Stock
as reported by the New York Stock Exchange on December 31, 1998.
(2) Shares of Class B Stock
(3) Includes options to purchase 212,500, 406,250, and 75,000 shares of Class B
Stock held by Messrs. Feldman, Pollak, and Greenberg, respectively.
The following table and notes contain information concerning the exercise of
stock options pursuant to the GTS Duratek, Inc. Stock Option Plan of the Company
during 1998 and unexercised options held at the end of 1998 by the named
executive officers.
AGGREGATED OPTION EXERCISES IN 1998
AND YEAR-END OPTION VALUES
Shares Exercisable/Unexercisable Value of Unexercised
Acquired Value Options at In-the-Money Options at
on Exercise(#) Realized($) December 31, 1998(#) December 31, 1998 ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable(1)
Jerome I. Feldman 15,000 165,500 100,000 - 309,800 -
- -
Martin M. Pollak 50,000 430,630 50,000 - 159,400 -
- -
Scott N. Greenberg 2,000 22,450 1,000 - 3,038 -
- ------------
(1) Calculated based on the closing price of the Duratek common stock , as
reported by Nasdaq National Market on December 31, 1998, which was $4.938.
Compensation Committee Report on Executive Compensation
The Compensation Committee is responsible for administering the
compensation program for the executive officers of the Company. The
Compensation Committee consists of Herbert R. Silverman and Gordon Smale.
The Compensation Committee's executive compensation policies are designed
to offer competitive compensation opportunities for all executives which are
based on personal performance, individual initiative and achievement, as well as
assisting the Company in attracting and retaining qualified executives. The
Compensation Committee also endorses the position that stock ownership by
management and stock-based compensation arrangements are beneficial in aligning
management's and shareholders' interests in the enhancement of shareholder
value.
Compensation paid to the Company's executive officers generally consists
of the following elements: base salary, annual bonus and long-term compensation
in the form of stock options and the 401(k) Savings Plan. The compensation for
Mr. Pollak in 1998 was determined on the same basis as that of Mr. Feldman, the
President and Chief Executive Officer. The compensation for the other executive
officers of the Company is determined by a consideration of each officer's
initiative and contribution to overall corporate performance and the officer's
managerial abilities and performance in any special projects that the officer
may have undertaken. Competitive base salaries that reflect the individual's
level of responsibility are important elements of the Company's executive
compensation philosophy. Subjective considerations of individual performance are
considered by the Compensation Committee in establishing annual bonuses and
other incentive compensation.
The Company has certain broad-based employee benefit plans in which all
employees, including the named executives are permitted to participate on the
same terms and conditions relating to eligibility and subject to the same
limitations on amounts that may be contributed. In 1998, the Company also made
matching contributions to the 401(k) Savings Plan for those participants.
Mr. Feldman's 1998 Compensation
Mr. Feldman's compensation in 1998 was determined principally by the terms
of his employment agreement with the Company, described below, which was
negotiated with an independent committee of the Board of Directors of the
Company.
In reviewing Mr. Feldman's performance in 1998 and determining appropriate
compensation, the Committee took the following major accomplishments into
consideration:
oThe transformation of the Company into a performance improvement and
training company
oThe sale of all of the operating assets of Five Star Group, Inc. to
American Drug Company
oThe acquisition of the Learning Technologies business of SHL
Systemhouse Co.
oThe increase in analyst coverage of the Company
Mr. Feldman was the driving force behind the Company's transformation into
a global performance improvement organization that helps customers achieve
superior business results by maximizing the effectiveness of people, processes
and technology. Mr. Feldman together with his senior management team focused
their efforts on designing and implementing the Company's strategy of increasing
sales and profitability within the commercial training and performance group
through acquisitions and internal growth, while monetizing other investments.
Mr. Feldman spearheaded the acquisition in June 1998 of the Learning
Technologies business of SHL Systemhouse Co., an MCI company, which enhanced the
scope of the information technology-related services and products of the
Company, provided the Company with an established network of offices and
training facilities in Canada and the United Kingdom, and further established
the Company as a global company. In addition, as a result of the sale on
September 30, 1998 of substantially all of the operating assets of Five Star
Group, over 95% of the Company's revenue is now derived from performance
improvement and training.
The Compensation Committee considered Mr. Feldman's integral role in the
above-described transactions as well as his significant contribution to the
Company's financial progress.
Herbert R. Silverman Gordon Smale
Employment Contracts and Termination of Employment and Change in Control
Arrangements
As of May 19, 1995, the Company entered into three-year employment
agreements (the "Employment Agreements") with each of Jerome I. Feldman, the
Company's President and Chief Executive Officer, and Martin M. Pollak, the
Company's Executive Vice President and Treasurer (each, an "Employee"). As of
November 19, 1996, the Company amended the Employment Agreements (the
"Employment Agreement Amendments"), which amendments extended the term of the
Employment Agreements from May 18, 1998 to May 31, 1999.
Each Employment Agreement provides for each Employee to receive a minimum
base salary of $325,000 for the first year of the Employment Agreement, $350,000
for the second year of the Employment Agreement and $375,000 for the third year
of the Employment Agreement (subject to increase by the Board of Directors).
Under the terms of each of the Employment Agreements, each of the Employees
received options to purchase 62,500 shares of Common Stock and 62,500 shares of
Class B Stock. Under the terms of each of the Employment Agreement Amendments,
each of the Employees received options to purchase 150,000 shares of Class B
Stock. The Employment Agreements each provide for the termination of employment
upon the Employee's death, physical or mental disability or retirement. In
addition, the Company may terminate the Employee's employment "for cause"
(including failing to perform required duties or engaging in gross negligence or
willful misconduct with respect to the Company), and each Employee may
voluntarily terminate his employment for "Good Reason," which occurs if the
Employee in good faith determines that due to a change in control of the Company
he is not able to effectively discharge his duties as a result of certain
specified acts by the Company. "Change in control" is defined to include (1) any
"person" (other than the Employees or certain persons who may acquire securities
of the Company from an Employee) acquiring the beneficial ownership of more than
30% of the combined voting power of the Company's then outstanding securities or
(2) any individual being nominated for election to the Board of Directors of the
Company without the approval of the Board.
Upon termination of an Employment Agreement by the Company "for cause,"
all obligations of the Company under such Employment Agreement terminate. Upon
termination by the Company other than "for cause," disability, or retirement, or
by the Employee for "Good Reason," the Employee is entitled to receive as
severance pay an amount equal to his full base salary at the rate then in
effect, multiplied by the greater of (1) the number of years (including
fractions thereof) remaining in the term of the employment or (2) the number
three. Subject to certain conditions, the Company would also maintain for two
years (or until the Employee's commencement of full-time employment with a new
employer) certain insurance, health and disability plans in effect, or arrange
for substantially similar benefits. The Employment Agreements also contain
non-competition and confidentiality provisions.
Pursuant to the Exchange Agreement, Mr. Pollak agreed that the sole
obligation of the Company under his Employment Agreement, during the period from
the date of the Exchange Agreement to the earlier of May 31, 1999 and the date
of Mr. Pollak's death, would be to pay his salary and continue his employee
benefits, which obligation is unconditional irrespective of any action or
inaction of Mr. Pollak or the Company, except that the Company (by not less than
10 days notice to Mr. Pollak) may terminate such obligation if Mr. Pollak is
convicted of a crime involving moral turpitude, commits any act involving
dishonesty, disloyalty, or fraud with respect to the Company, or is grossly
negligent or engages in willful misconduct with respect to the Company.
Certain Transactions
Martin M. Pollak, Executive Vice President and Treasurer of the Company,
has determined to retire from the Company. His current employment agreement with
the Company will remain in effect until its scheduled termination date, May 31,
1999, at which time he will become a consultant to the Company under a
Consulting and Severance Agreement, dated December 29, 1998 (the "Consulting
Agreement"). Pursuant to the Consulting Agreement, Mr. Pollak will act as a
consultant to the Company for a five-year period ending May 31, 2004 (the
"Consulting Period"), for a consulting fee of $200,000 per year. During the
Consulting Period, Mr. Pollak will receive certain benefits, including life
insurance, medical benefits, use of an automobile, use of an office and
secretarial support. Pursuant to the Consulting Agreement, Mr. Pollak received
47,863 shares of Common Stock as severance and in consideration for his
consulting services to the Company.
Pursuant to the Exchange Agreement, Mr. Pollak was given the right to make
a "cashless exercise" (by using shares of Common Stock held by Mr. Pollak for at
least six months) of options to purchase 172,422 shares of Common Stock received
by him in the Exchange, as well as of options he already held to purchase
122,167 shares of Common Stock, and was granted certain registration rights with
respect to his shares of Common Stock, including on exercise of various options.
Also, as described above, Mr. Pollak agreed in the Exchange Agreement that,
until May 31, 2004, during any period commencing on the date any person or group
commences or enters into, or publicly announces an intention to commence or
enter into, and ending on the date such person abandons, a tender offer, proxy
fight, or other transaction that may result in a change in control of the
Company, he will vote his shares of Common Stock and Class B Stock on any matter
in accordance with the recommendation of the Company's Board of Directors. In
addition, in the Exchange Agreement, the Company consented to the Exchange and
the Company and Mr. Pollak exchanged general releases.
The Company has made loans to Jerome I. Feldman, the President and Chief
Executive Officer and a director of the Company. Mr. Feldman primarily utilized
the proceeds of such loans to exercise options to purchase Class B Stock. Such
loans bear interest at the prime rate of Fleet Bank and are secured by the
purchased Class B Stock. The largest aggregate amount of indebtedness
outstanding since January 1, 1998 was approximately $2,900,000. As of March 31,
1999, the aggregate amount of indebtedness outstanding was approximately
$2,100,000.
For the year ended December 31, l998, Michael Feldman received salary and
bonus from GPC of approximately $119,000 as Director of International Business
Development. Michael Feldman devotes a substantial portion of his working hours
to GPC and is the son of Jerome I. Feldman.
PERFORMANCE GRAPH
On March 27, 1998, the Common Stock commenced trading on the New York Stock
Exchange. Therefore, the Company has selected the NYSE Market Index U.S.
Companies as the appropriate broad equity market index for 1998, instead of the
AMEX Market Value Index. In addition, the Company has selected the MG Group
Index/Education and Training Services as the appropriate line of business index
for 1998 instead of the NYSE Computer and Data Processing Index. This change
reflects the Company's belief that the lines of business of the companies
included on the MG Group Index/Education and Training Services are more similar
to the principal line of business of the Company (performance improvement and
training) than the lines of business of the companies included on the NYSE
Computer and Data Processing Index. In addition, to the best of the Company's
knowledge, the NYSE Computer and Data Processing Index is no longer published.
The following table compares the performance of the Common Stock for the
periods indicated with the performance of the NYSE Market Index - U.S.
Companies, the AMEX Market Value Index, the MG Group Index/Education and
Training Services and the NYSE Computer and Data Processing Index, assuming $100
were invested on December 31, 1993 in the Common Stock, the NYSE Market Index -
U.S. Companies, the AMEX Market Value Index, the MG Groupd Index/Education and
Training Services and the NYSE Computer and Data Processing Index. Values are as
of December 31 of the specified year assuming that all dividends were
reinvested.
Comparison of 5-Year Cumulative Total Return
MG NYSE
NYSE EDUCATION COMPUTER
MARKET INDEX AND AND DATA
MEASUREMENT PERIOD - U.S. AMEX MARKET TRAINING PROCESSING
(FISCAL YEAR COVERED) GP STRATEGIES OMPANIES VALUE INDEX SERVICES INDEX
1993 100.00 100.00 100.00 100.00 100.00
1994 43.94 101.00 90.94 89.68 120.97
1995 51.89 124.10 114.90 163.71 159.18
1996 46.59 156.30 122.25 298.77 196.34
1997 84.09 204.80 143.48 395.50 289.21
1998 90.91 262.40 144.40 444.74
Compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equities, to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based sole on its review of copies of such forms received by it and
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the period January
1, 1998 to March 15, 1999, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with, except for
Jerome I. Feldman who filed a late report.
STOCKHOLDER PROPOSALS
Stockholders may present proposals for inclusion in the Company's 2000
proxy statement provided they are received by the Company no later than January
13, 2000, and are otherwise in compliance with applicable SEC regulations.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee has recommended, and the Board of Directors has
selected, the firm of KPMG LLP to serve as independent auditors for the Company
for the year ending December 31, 1999. KPMG LLP has audited the Company's books
since 1970. The Board considers KPMG LLP to be well qualified for the function
of serving as the Company's auditors.
A representative of KPMG LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement if so desires and is
expected to be available to respond to appropriate questions from stockholders.
GENERAL
So far as is now known, there is no business other than that described
above to be presented for action by the stockholders at the meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the meeting and any adjournments thereof in
accordance with the discretion of the persons named therein.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. It is
expected that the solicitations will be made primarily by mail, but employees or
representatives of the Company may also solicit proxies by telephone or
telegraph and in person, and arrange for brokerage houses and other custodians,
nominees and fiduciaries to send proxy material to their principals at the
expense of the Company.
Lydia M. DeSantis
Secretary
GP STRATEGIES CORPORATION
COMMON STOCK Annual Meeting of Stockholders PROXY
To Be Held June 3, 1999
This proxy is solicited on behalf of the Board of Directors
Revoking any such prior appointment, the undersigned, a stockholder of GP
Strategies Corporation, hereby appoints Jerome I. Feldman and Scott N.
Greenberg, and each of them, attorneys and agents of the undersigned, with full
power of substitution, to vote all shares of the Common Stock of the undersigned
in said Company at the Annual Meeting of Stockholders of said Company to be held
in the Park Avenue Room of the Hotel Inter-Continental New York, 111 East 48th
Street, New York, New York on June 3, 1999, at 10:00 a.m., local time, and at
any adjournments thereof, as fully and effectually as the undersigned could do
if personally present and voting, hereby approving, ratifying and confirming all
that said attorneys and agents or their substitutes may lawfully do in place of
the undersigned as indicated below.
This proxy when properly executed will be voted as directed. If no direction is
indicated, this proxy will be voted for proposal (1).
1. Election of Directors: Jerome I. Feldman, Scott N. Greenberg, Sheldon
L, Glashow, Roald Hoffmann, Bernard M. Kauderer, John C. McAuliffe,
Ogden R. Reid, Herbert R. Silverman, and Gordon Smale.
For Withhold For
All Except
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the
space provided below)
- ------------------------------------------------------------------
2. Upon any other matters which may properly come before the meeting or any
adjournments thereof.
Please sign exactly as name appears below.
Dated , 1999 Signature Signature if held jointly
Please mark, sign, date and return the proxy card promptly
using the enclosed envelope. When shares are held by joint
tenants both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give
full title as such. If signer is 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.