SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ACCLAIM ENTERTAINMENT, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ACCLAIM ENTERTAINMENT, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of ACCLAIM ENTERTAINMENT, INC. (the
"Company"), a Delaware corporation, will be held at The Metropolitan Club, 3
Glen Cove Road, Glen Cove, New York, on Tuesday, February 2, 1999, at
10:00 A.M., for the following purposes:
1. To elect seven directors to serve for a term of one year and until
their respective successors shall be elected and shall qualify;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company for the year ending August 31, 1999; and
3. To transact such other business as may properly be brought before
the meeting.
Only stockholders of record at the close of business on December 18, 1998
are entitled to notice of and to vote at the meeting.
By order of the Board of Directors,
JAMES SCOROPOSKI
Secretary
Glen Cove, New York
December 29, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL ENSURE THAT YOUR SHARES WILL BE
VOTED. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
ACCLAIM ENTERTAINMENT, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 2, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ACCLAIM ENTERTAINMENT, INC. (the
"Company"), a Delaware corporation, for use at the Annual Meeting of
Stockholders of the Company (the "Meeting") to be held at The Metropolitan Club,
3 Glen Cove Road, Glen Cove, New York, on Tuesday, February 2, 1999, at
10:00 A.M., and at any adjournments thereof.
Stockholders who execute proxies retain the right to revoke them at any
time, by notice in writing to the Secretary of the Company, by revocation in
person at the Meeting or by presenting a later-dated proxy. Unless so revoked,
the shares represented by proxies will be voted at the Meeting. The shares
represented by proxies solicited by the Board of Directors of the Company will
be voted in accordance with the directions given therein. Stockholders vote at
the Meeting by casting ballots (in person or by proxy) which are tabulated by a
person who is appointed by the Board of Directors before the Meeting to serve as
inspector of election at the Meeting and who has executed and verified an oath
of office. Abstentions and broker "non-votes" are included in the determination
of the number of shares present at the Meeting for quorum purposes but broker
"non-votes" are not counted in the tabulations of the votes cast on proposals
presented to stockholders. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
The principal executive offices of the Company are located at One Acclaim
Plaza, Glen Cove, New York 11542. The approximate date on which this Proxy
Statement and the enclosed form of proxy will be first sent to stockholders is
December 29, 1998.
Stockholders of record of the common stock, par value $0.02 per share (the
"Common Stock"), of the Company at the close of business on December 18, 1998
shall be entitled to one vote for each share then held. There were issued and
outstanding on said date 53,416,009 shares of Common Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of December 18, 1998
(except as otherwise indicated) with respect to the number of shares of Common
Stock beneficially owned by each person who is known to the Company to be the
beneficial owner of more than 5% of the Common Stock, the number of shares of
Common Stock beneficially owned by each director and nominee for director of the
Company, each Named Executive Officer (as hereinafter defined) of the Company,
and all executive officers and directors of the Company as a group. Except as
otherwise indicated, each such stockholder has sole voting and investment power
with respect to the shares beneficially owned by such stockholder.
AMOUNT AND NATURE OF PERCENT OF COMMON
NAME AND ADDRESS BENEFICIAL OWNERSHIP(1) STOCK OUTSTANDING
- ---------------- ----------------------- -----------------
Gregory E. Fischbach(2) .............................................. 7,581,484 13.5%
One Acclaim Plaza
Glen Cove, NY 11542
James R. Scoroposki(3) ............................................... 7,035,784 12.5
One Acclaim Plaza
Glen Cove, NY 11542
Capital Guardian Trust Company(4) .................................... 4,039,100 8.0
333 South Hope Street
Los Angeles, CA 90071
Bernard J. Fischbach(5) .............................................. 517,942 *
1925 Century Park East, Suite 1260
Los Angeles, CA 90067
Robert H. Groman(6) .................................................. 152,916 *
196 Peachtree Lane
Roslyn Heights, NY 11577
Michael Tannen(7) .................................................... 149,291 *
90 Riverside Drive, Apt. 5B
New York, NY 10024
James Scibelli(8) .................................................... 73,250 *
One Hollow Lane, Suite 208
Lake Success, NY 11042
Kenneth L. Coleman(9) ................................................ 16,250 *
2011 North Shoreline Blvd.
Mountain View, CA 94043
Rodney Cousens(10) ................................................... 522,333 *
112-120 Brompton Road
London, England SW3 1JJ
Paul Eibeler(11) ..................................................... 91,666 *
One Acclaim Plaza
Glen Cove, NY 11542
All executive officers and directors as a group (9 persons)(12)....... 15,792,088 26.4%
- ------------------
* Less than 1% of class.
(1) Includes shares issuable upon the exercise of warrants and options which
are exercisable within the next 60 days.
(Footnotes continued on next page)
2
(Footnotes continued from previous page)
(2) Includes 2,660,833 shares issuable upon the exercise of warrants and
options, 36,276 shares held as co-trustee of trusts for the benefit of
Mr. Scoroposki's children and 156,276 shares settled by Mr. G. Fischbach in
trust for the benefit of his children.
(3) Includes 2,660,833 shares issuable upon the exercise of warrants and
options, 156,276 shares held as co-trustee of trusts for the benefit of
Mr. G. Fischbach's children and 36,276 shares settled by Mr. Scoroposki in
trust for the benefit of his children.
(4) Information in respect of the beneficial ownership of Capital Guardian
Trust Company ("CGTC") has been derived from its Schedule 13G, dated
July 9, 1998, filed on its behalf with the Securities and Exchange
Commission (the "Commission"). The Company has been advised that (a) CGTC
is a bank as defined in Section 3(a) of the Securities Act of 1933 (the
"Securities Act"), (b) CGTC exercised investment discretion with respect to
4,039,100 shares of Common Stock as a result of its serving as the
investment manager of various institutional accounts, and (c) CGTC has the
power to direct the vote of 3,608,100 shares of Common Stock.
(5) Includes 285,416 shares issuable upon the exercise of options and 156,276
shares held as co-trustee of trusts for the benefit of Mr. G. Fischbach's
children.
(6) Includes 150,416 shares issuable upon the exercise of options.
(7) Includes 145,291 shares issuable upon the exercise of options.
(8) Includes 56,250 shares issuable upon the exercise of options.
(9) Includes 6,250 shares issuable upon the exercise of options.
(10) Includes 472,333 shares issuable upon the exercise of options.
(11) Includes 66,666 shares issuable upon the exercise of options.
(12) Includes 6,504,288 shares issuable upon the exercise of warrants and
options.
3
ELECTION OF DIRECTORS
Seven directors will be elected at the Meeting to serve for a term of one
year and until their respective successors shall have been elected and shall
qualify. The election of directors requires the affirmative vote of a plurality
of the shares of Common Stock present in person or by proxy at the Meeting.
UNLESS OTHERWISE INDICATED, THE ACCOMPANYING FORM OF PROXY WILL BE VOTED FOR THE
PERSONS LISTED BELOW. At this time, the Board of Directors knows of no reason
why any nominee might be unable to serve. There is no arrangement or
understanding between any director and any other person pursuant to which such
person was or is to be selected as a director, except that, pursuant to the
employment agreements entered into with each of Messrs G. Fischbach and
Scoroposki, the Company is obligated to use its best efforts to ensure that each
of them continues to serve as a director of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THE
ELECTION OF THE SEVEN NOMINEES TO THE COMPANY'S BOARD OF DIRECTORS NAMED BELOW.
YEAR BECAME
NAME OF NOMINEE PRINCIPAL OCCUPATION AGE A DIRECTOR
- --------------- -------------------- --- -----------
Gregory E. Fischbach................................. Co-Chairman of the Board 56 1987
President and Chief Executive
Officer of the Company
James R. Scoroposki.................................. Co-Chairman of the Board, 50 1987
Senior Executive Vice
President, Secretary, Treasurer
and Acting Chief Financial and
Accounting Officer of the Company
Kenneth L. Coleman................................... Senior Vice President, 56 1997
Silicon Graphics, Inc.
Bernard J. Fischbach................................. Attorney 53 1987
Robert H. Groman..................................... Attorney 56 1989
James Scibelli....................................... President, Roberts & 48 1993
Green, Inc.
Michael Tannen....................................... Chief Executive Officer 58 1989
and President,
Tannen Media Ventures, Inc.
Gregory E. Fischbach, a founder of the Company, has been Chief Executive
Officer of the Company since its formation, a member of the Board of Directors
since 1987 and Co-Chairman of the Board since March 1989. Mr. Fischbach was also
President of the Company from its formation to January 1990 and has been
President of the Company since October 1996.
James R. Scoroposki, a founder of the Company, has been Senior Executive
Vice President of the Company since December 1993, a member of the Board of
Directors since 1987, Co-Chairman of the Board since March 1989 and acting Chief
Financial and Accounting Officer since November 1997. Mr. Scoroposki has been
Secretary and Treasurer of the Company since its formation. Mr. Scoroposki was
also Chief Financial Officer of the Company from April 1988 to May 1990 and
Executive Vice President of the Company from its formation to November 1993.
Since December 1979, he has also been the President and sole shareholder of
Jaymar Marketing Inc., a sales representative organization. See "Certain
Relationships and Related Transactions."
Kenneth L. Coleman has been a member of the Board of Directors since July
1997. Mr. Coleman is currently Senior Vice President, Customer and Professional
Services, for Silicon Graphics, Inc. in Mountain View, California. For more than
the past five years, Mr. Coleman has held several positions at Silicon Graphics,
Inc. Since January 1998, Mr. Coleman has been a director of MIPS Technologies,
Inc., a licensor of microprocessor architecture, in Mountain View, California.
4
Bernard J. Fischbach has been a member of the Board of Directors since 1987
and has been engaged in the private practice of law with Fischbach, Perlstein &
Lieberman LLP (and its predecessor firms) in Los Angeles, California since 1976.
See "Certain Relationships and Related Transactions."
Robert H. Groman has been a member of the Board of Directors since 1989 and
has, for more than the preceding five years, been a partner in the general
practice law firm of Groman, Ross & Tisman, P.C. (and its predecessor firms) in
Long Island, New York. See "Certain Relationships and Related Transactions."
James Scibelli has been a member of the Board of Directors since 1993 and
has, since March 1986, served as president of Roberts & Green, Inc., a New York
financial consulting firm offering a variety of financial and investment
consulting services.
Michael Tannen has been a member of the Board of Directors since 1989 and
is currently Chief Executive Officer of Tannen Media Ventures, Inc., a media
investment company. From June 1988 through October 1996, Mr. Tannen was the
President and Chief Executive Officer of InterVision, Inc., a subsidiary of
Millicom Incorporated, a company involved in publishing, television production
and home video distribution and sales. From June 1992 to October 1996,
Mr. Tannen also served as Chief Executive Officer of Kinnevik Media Ventures,
Ltd., a media service subsidiary of A.B. Kinnevik, a Swedish conglomerate
engaged, among other things, in international satellite television broadcasting,
cable television networks and cellular mobile telephone and paging operations.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee (the "Audit Committee"), the
members of which are Messrs. Coleman, Groman, Scibelli and Tannen. The Audit
Committee has such powers as may be assigned to it by the Board of Directors
from time to time. It is currently charged with, among other things,
recommending to the Board of Directors the engagement or discharge of
independent public accountants, reviewing the plan and results of the auditing
engagement with the independent auditors of the Company as well as with the
officers of the Company, reviewing with the officers of the Company the scope
and nature of the Company's internal accounting controls and preparing on an
annual basis a written report to the Board of Directors summarizing the Audit
Committee's activities, conclusions and recommendations for the past year and
agenda for the coming year. During the fiscal year ended August 31, 1998, the
Audit Committee met on five occasions.
The Board of Directors also has a Compensation Committee (the "Compensation
Committee"), the members of which are Messrs. Coleman and Scibelli. The
Compensation Committee has such powers as may be assigned to it by the Board of
Directors from time to time. It is currently charged with, among other things,
determining compensation packages for the Chief Executive Officer and the Senior
Executive Vice President of the Company, establishing salaries, bonuses and
other compensation for the Company's executive officers and with administering
the Company's 1998 Stock Incentive Plan (the "1998 Plan"), the Company's 1998
Employee Stock Purchase Plan (the "1998 Purchase Plan"), the Company's 1988
Stock Option Plan (the "1988 Plan") and the Company's 1995 Restricted Stock
Plan, and recommending to the Board of Directors changes to such plans. During
the fiscal year ended August 31, 1998, the Compensation Committee met on five
occasions.
The Board of Directors also has an Executive Committee (the "Executive
Committee"), the members of which are Messrs. Coleman, Scibelli and Scoroposki.
The Executive Committee has such powers as may be assigned to it by the Board of
Directors from time to time. It is currently charged with, among other things,
recommending to the Board of Directors the criteria for candidates to the Board
of Directors, the size of the Board of Directors, the number of committees of
the Board of Directors and their sizes and functions, and the nomination and
selection of Board of Directors' candidates and committee members and rotation
of committee members. In addition, the Executive Committee is responsible for
establishing and implementing an annual evaluation process for the chief
executive officer and the Board of Directors and periodically assessing the
overall composition of the Board of Directors to ensure an effective membership
mix and, when appropriate, recommending to the Board of Directors a chief
executive officer succession plan and succession process. The Executive
Committee did not meet during the fiscal year ended August 31, 1998.
The Company will consider for election to the Board of Directors a nominee
recommended by a stockholder if the recommendation is made in writing and
includes (i) the qualifications of the proposed nominee to serve on
5
the Board of Directors, (ii) the principal occupations and employment of the
proposed nominee during the past five years, (iii) each directorship currently
held by the proposed nominee and (iv) a statement that the proposed nominee has
consented to the nomination. The recommendation should be addressed to the
Secretary of the Company.
During the fiscal year ended August 31, 1998, the Board of Directors met on
four occasions. All of the directors attended at least 75% of the aggregate
number of meetings of the Board of Directors and meetings of the Committees of
the Board of Directors of which such director is a member.
Messrs. Gregory E. and Bernard J. Fischbach are brothers. There is no
family relationship among any other directors or executive officers of the
Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of filings in respect of fiscal 1998 furnished
to the Company pursuant to Rule 16a-3(e) promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") and written representations from its
directors and executive officers, the Company believes that, during and with
respect to the fiscal year ended August 31, 1998, all filing requirements under
Section 16(a) of the Exchange Act applicable to its officers, directors and
greater than ten percent beneficial owners were complied with on a timely basis,
except that Mr. Bernard Fischbach filed late one Form 4 covering the exercise of
certain stock options.
6
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes all plan and non-plan compensation awarded
to, earned by or paid to the Company's Chief Executive Officer and its three
executive officers, other than the Chief Executive Officer (together, the "Named
Executive Officers"), who were serving as executive officers during and at the
end of the last completed fiscal year ended August 31, 1998 for services
rendered in all capacities to the Company and its subsidiaries for each of the
Company's last three fiscal years:
LONG-TERM
COMPENSATION
AWARDS
------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
---------------------------- STOCK UNDERLYING ALL OTHER
SALARY BONUS AWARD(S) OPTIONS COMPENSATION*
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- --------------------------- ---- -------- -------- ---------- ---------- -------------
Gregory E. Fischbach 1998 $775,000 $747,500 $ 0 550,000(1) $24,150
Co-Chairman, Chief Executive 1997 775,000 0 0 0 21,600
Officer and President................. 1996 775,000 0 0 150,000 19,200
James R. Scoroposki
Co-Chairman, Senior Executive
Vice President, Acting Chief 1998 $500,000 $632,500 $ 0 550,000(1) $ 6,000
Financial and Accounting Officer, 1997 500,000 0 0 0 5,500
Secretary and Treasurer............... 1996 500,000 0 0 150,000 5,100
Rodney Cousens (2) (3)
President and Chief Operating
Officer--International of
Acclaim Europe........................ 1998 $532,785 $532,785 $ 0 42,500(4) $ 1,955
Paul Eibeler(2)
Vice President and General
Manager............................... 1998 $263,465 $147,500 $114,375(5) 50,000 $ 8,600(6)
- ------------------
* Except as otherwise indicated, represents dollar value of insurance premiums
paid by the Company during the fiscal year with respect to term life
insurance for the benefit of the Named Executive Officers.
(1) Of the options to purchase 550,000 shares of Common Stock granted in fiscal
1998, options to purchase (a) 150,000 shares at an exercise price of $4.0625
per share were granted in lieu of options granted in fiscal 1994 (which were
cancelled in fiscal 1998) to purchase an equal number of shares at an
exercise price of $17.00 per share; (b) 150,000 shares at an exercise price
of $4.125 per share were granted in lieu of options granted in fiscal 1994
(which were cancelled in fiscal 1998) to purchase an equal number of shares
at an exercise price of $13.25 per share; and (c) 150,000 shares at an
exercise price of $4.0625 per share were granted in lieu of options granted
in fiscal 1996 (which were cancelled in fiscal 1998) to purchase an equal
number of shares at an exercise price of $13.75 per share.
(2) The Named Executive Officer was appointed an executive officer of the
Company on August 21, 1998.
(3) The Company also made aggregate contributions of $86,740 in fiscal 1998 for
Mr. Cousens under a United Kingdom statutory pension plan.
(4) Such options to purchase 42,500 shares at an exercise price of $4.125 per
share were granted in fiscal 1998 in lieu of options granted in fiscal 1995
(which were cancelled in fiscal 1998) to purchase an equal number of shares
at an exercise price of $9.24 per share.
(Footnotes continued on next page)
7
(Footnotes continued from previous page)
(5) On May 8, 1998, the Company issued to Mr. Eibeler 15,000 shares of
restricted stock. The value reflected is calculated based on the closing
sale price of a share of Common Stock on the date of grant. The shares will
vest in full in January 1999 provided that Mr. Eibeler is in the Company's
employ at that time. As of August 31, 1998 such shares had an aggregate
value of $86,250 (based on the closing sale price of a share of Common Stock
on August 31, 1998).
(6) Of such amount, approximately $8,000 relates to reimbursement of moving
expenses incurred by Mr. Eibeler in fiscal 1997.
No stock appreciation rights or long-term incentive plan awards (all as
defined in the proxy regulations promulgated by the Commission) were awarded to,
earned by, or paid to the Named Executive Officers during any of the Company's
last three fiscal years.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to grants of
options to purchase shares of Common Stock pursuant to the 1988 Plan and/or the
1998 Plan to the Named Executive Officers during the fiscal year ended
August 31, 1998:
INDIVIDUAL GRANTS
------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK
SECURITIES TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ---------- --------------- -------- ---------- ------------ ------------
Gregory E. Fischbach...... 300,000(1) 6.5% $ 4.0625 9/18/07 $ 1,591,093 $ 3,255,456
100,000 2.2 4.0625 9/18/07 530,364 1,085,152
150,000(1) 3.2 4.1250 1/8/08 786,172 1,618,353
James R. Scoroposki ...... 300,000(1) 6.5 $ 4.0625 9/18/07 $ 1,591,093 $ 3,255,456
100,000 2.2 4.0625 9/18/07 530,364 1,085,152
150,000(1) 3.2 4.1250 1/8/08 786,172 1,618,353
Rodney Cousens............ 42,500(2) 1.0 $ 4.1250 1/8/08 $ 222,749 $ 458,533
Paul Eibeler.............. 50,000 1.1 $ 7.6250 5/8/08 $ 87,057 $ 364,451
All Stockholders(3)....... $187,015,579 $473,934,194
- ------------------
(1) Such options were granted in lieu of, and subject to cancellation by the
Named Executive Officer of, previously granted options. See note (1) to the
Summary Compensation Table above.
(2) Such options were granted in lieu of, and subject to cancellation by the
Named Executive Officer of, previously granted options. See note (4) to the
Summary Compensation Table above.
(3) These figures were calculated assuming that the price of the 51,716,849
shares of Common Stock issued and outstanding on August 31, 1998 increased
from $5.75 per share (the closing sale price of a share of Common Stock on
August 31, 1998) at compound rates of 5% and 10% per year for ten years. The
purpose of including this information is to indicate the potential
realizable value at the assumed annual rates of stock price appreciation for
the ten-year option term for all of the Company's stockholders.
8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information with respect to each exercise of
stock options during the fiscal year ended August 31, 1998 by the Named
Executive Officers and the value at August 31, 1998 of unexercised stock options
held by the Named Executive Officers.
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY OPTIONS
SHARES UNDERLYING UNEXERCISED AT FISCAL
ACQUIRED VALUE OPTIONS YEAR-END($)
ON EXERCISE REALIZED AT FISCAL YEAR-END(#) EXERCISABLE/
NAME (#) ($) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE*
- ---- ----------- -------- ------------------------- --------------------
Gregory E. Fischbach..................... 0 $ 0 1,165,000/600,000 $ 3,278,439/$918,750
James R. Scoroposki...................... 0 $ 0 1,165,000/600,000 $ 3,278,439/$918,750
Rodney Cousens........................... 0 $ 0 336,834/621,167 $ 761,815/$1,286,646
Paul Eibeler............................. 0 $ 0 66,666/183,334 $ 141,665/$283,335
- ------------------
* Fair market value of securities underlying the options at fiscal year end
minus the exercise price of the options.
10-YEAR OPTION REPRICINGS
During the fiscal year ended August 31, 1998, the Compensation Committee
granted stock options in lieu of, and subject to the cancellation of, options
previously granted to certain of the Named Executive Officers as set forth
below:
LENGTH OF
NUMBER OF ORIGINAL OPTION
SECURITIES MARKET PRICE OF EXERCISE TERM
UNDERLYING STOCK AT TIME PRICE NEW REMAINING AT
OPTIONS OF AT TIME OF EXERCISE DATE OF
REPRICED OR REPRICING OR REPRICING OR PRICE REPRICING OR
NAME AND POSITION DATE AMENDED(#) AMENDMENT($) AMENDMENT($) ($) AMENDMENT
- ----------------- -------- ------------- --------------- ------------ -------- ----------------
Gregory E. Fischbach
Co-Chairman, Chief 9/19/97 150,000 $ 4.0625 $ 17.00 $ 4.0625 8/14/04
Executive Officer and 9/19/97 150,000 4.0625 13.75 4.0625 2/28/05
President.............. 1/9/98 150,000 4.1250 13.25 4.1250 4/13/04
James R. Scoroposki
Co-Chairman, Senior
Executive Vice
President, Acting Chief
Financial and
Accounting Officer, 9/19/97 150,000 $ 4.0625 $ 17.00 $ 4.0625 8/14/04
Secretary and 9/19/97 150,000 4.0625 13.75 4.0625 2/28/05
Treasurer.............. 1/9/98 150,000 4.1250 13.25 4.1250 4/13/04
Rodney Cousens
President and Chief
Operating Officer--
International of
Acclaim Europe......... 1/9/98 42,500 $ 4.1250 $ 9.24 $ 4.1250 12/7/05
Paul Eibeler
Vice President and
General Manager........ N/A N/A N/A N/A N/A N/A
9
COMPENSATION COMMITTEE REPORT ON REPRICING OF STOCK OPTIONS
The Compensation Committee believes that stock options are the most
effective way of aligning the long-term interests of the executives of the
Company with those of stockholders. In fiscal 1997, the Compensation Committee
granted options to purchase stock to substantially all of the Company's
employees, other than Messrs. G. Fischbach and Scoroposki, in lieu of options
previously granted to them whose exercise price was higher than the then-current
market price. In fiscal 1998, the Compensation Committee considered the broad
decline in the price of the Common Stock, which had resulted in a disparity
between the original exercise prices of certain outstanding options under the
1988 Plan held by some of the Company's executive officers as compared to the
then-current (and comparably lower) market price. In the Compensation
Committee's view, such options did not provide a meaningful incentive or
retention device to such executive officers. Accordingly, the Compensation
Committee (i) on September 19, 1997 and January 9, 1998, determined to grant
options to purchase stock to Messrs. Fischbach and Scoroposki in lieu of options
previously granted to them whose exercise price was higher than the then-current
market price and (ii) on January 9, 1998, determined to grant to Mr. Cousens
options to purchase 42,500 shares (which had not been included in the fiscal
1997 option grants to substantially all employees) in lieu of options previously
granted to him whose exercise price was higher than the then-current market
price.
Compensation Committee
Kenneth L. Coleman James Scibelli
DIRECTORS' COMPENSATION
Directors who are not also employees of the Company receive a $10,000
annual fee, reimbursement of expenses for attending meetings of the Board of
Directors and are generally entitled to receive an annual grant of options to
purchase 18,750 shares of Common Stock under the 1998 Plan. In addition, options
may be granted under the 1998 Plan to non-employee directors who render services
to the Company and who are not also members of the Compensation Committee. In
fiscal 1998, in consideration of services rendered to the Company, Mr. Bernard
Fischbach received options under the 1988 Plan to purchase 93,750 shares of
Common Stock at an exercise price of $3.656 per share, and each of Messrs.
Groman and Tannen received options under the 1988 Plan to purchase 95,000 shares
of Common Stock at an exercise price of $3.656 per share. See "Certain
Relationships and Related Transactions."
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has employment agreements with each of Gregory E. Fischbach and
James R. Scoroposki, providing for Mr. G. Fischbach's employment as President
and Chief Executive Officer and for Mr. Scoroposki's employment as Senior
Executive Vice President, Secretary and Treasurer, for terms expiring in August
2000.
The agreements with Messrs. G. Fischbach and Scoroposki provide for annual
base salaries of $775,000 and $500,000, respectively, for the term of the
agreements. In addition, each of the agreements provides for annual bonus
payments to Mr. G. Fischbach in an amount equal to 3.25%, and to Mr. Scoroposki
in an amount equal to 2.75%, of the Company's net pre-tax profits for each
fiscal year. The agreement with Mr. Scoroposki specifically allows him to devote
that amount of his business time to the business of a sales representative
organization controlled by him as does not interfere with the services to be
rendered by him to the Company. The sales representative organization under his
control has officers and employees who oversee its operations. Mr. Scoroposki
attends board meetings of such organization but has no active involvement in its
day-to-day operations. See "Certain Relationships and Related Transactions."
Under the agreements, the Company provides each of Messrs. Fischbach and
Scoroposki with $2 million term life insurance and disability insurance.
If the employment agreement of either of Messrs. G. Fischbach or Scoroposki
is terminated within one year after occurrence of a change in control of the
Company (other than a termination for cause) or if either of Messrs. G.
Fischbach or Scoroposki terminates his employment agreement upon the occurrence
of both a change in control of the Company and a change in the circumstances of
his employment, he would be entitled to receive
10
severance benefits in an amount equal to the total of (i) three years' base
salary and (ii) three times the largest bonus paid to him for the three fiscal
years immediately preceding any such termination of his employment.
Each of the agreements with Messrs. G. Fischbach and Scoroposki provides
that, in the event of a change in control of the Company and a change in the
circumstances of his employment, all options theretofore granted to each of them
shall vest and become immediately exercisable and the Company has agreed to
indemnify each of them against any excise taxes imposed on such executive by
section 4999(a) of the Internal Revenue Code of 1986, as amended (the "Code")
(including all applicable taxes on such indemnification payment).
In addition, at the end of their respective terms, if the agreements with
each of Messrs. G. Fischbach and Scoroposki are not renewed on substantially
similar terms, the employee would be entitled to receive severance benefits in
an amount equal to the total cash compensation paid to him during the 12-month
period immediately preceding such termination of his employment.
Each of the agreements with Messrs. G. Fischbach and Scoroposki prohibits
disclosure of proprietary and confidential information regarding the Company and
its business to anyone outside the Company both during and subsequent to
employment. In addition, the employees agree, for the duration of their
employment with the Company and for one year thereafter, not to engage in any
competitive business activity, nor to persuade or attempt to persuade any
customer, software developer, licensor, employee or other party with whom the
Company has a business relationship to sever its ties with the Company or reduce
the extent of its relationship with the Company.
BENEFIT PLANS
The Company does not have a pension plan. For information with respect to
options granted to Named Executive Officers of the Company under the 1988 Plan
and the 1998 Plan, see page 8.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee for the fiscal year ended
August 31, 1998 were Messrs. Coleman and Scibelli, who are intended to be
"non-employee directors" within the meaning of Rule 16b-3(b)(3)(i) promulgated
under the Exchange Act and "outside directors" within the contemplation of
section 162(m)(4)(C)(i) of the Code. There were no interlocks or insider
participation (as defined in the proxy regulations promulgated by the
Commission) between the Board of Directors or the Compensation Committee thereof
and the board of directors or compensation committees of any other company.
11
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is charged with determining compensation
packages for the Chief Executive Officer and the Senior Executive Vice President
and administering the 1998 Purchase Plan, the 1998 Plan, the 1988 Plan and the
Company's 1995 Restricted Stock Plan. The Compensation Committee is also
responsible for determining, based on recommendations made by the Chief
Executive Officer and Senior Executive Vice President, compensation packages for
other executive officers of the Company.
The Compensation Committee recognizes the critical role that the current
executive officers have played in the significant growth and success of the
Company. Further, the Compensation Committee recognizes that the services of
these same executive officers are crucial to the Company's continued success.
Therefore, the primary objective of each executive's compensation package is to
provide a remuneration opportunity that will motivate and retain the key
executives of the Company in order to further ensure the Company's future.
Based on this belief, the Compensation Committee adopted the following
basic principles for compensating the executive, management and employee group:
o the current key executive team must be kept intact;
o compensation plans should reward individual and corporate achievement;
o shift a portion of fixed compensation expenses to variable compensation
expenses; and
o short- and long-term incentives must be effectively balanced to satisfy
both the short- and long-term needs of the Company.
Periodically, the Compensation Committee reviews the financial performance
and related executive pay levels of a select group of companies in the media and
entertainment industries. It is the goal of the Compensation Committee that
salaries for its top executives be in the 50th to 75th percentile range. If
warranted by the profitability of the Company, the Compensation Committee
believes that executives should have an opportunity to exceed the 75th
percentile. To date, the effective mixing of annual bonuses based on pre-tax
profits and stock options has contributed significantly to the retention,
motivation and success of the Company's executive team.
The Compensation Committee is also aware that, with the convergence of
various segments of the telecommunications, consumer electronics/computer, media
and entertainment industries and the growth of interactive technologies, a
number of large telecommunications, consumer electronics/computer, media and
entertainment companies have entered or are actively considering entering the
Company's market. Based on the potential opportunities in the growing
multi-media market, these organizations have the incentives and ability to make
a substantial investment in the Company's line of business. To penetrate this
market quickly, it would be necessary for them to recruit experienced key
executives. Considering the limited pool of executives with the necessary
experience, the Compensation Committee is concerned that the Company's current
executives would be sought after by such competitors.
In order to assess the risk of potential competing pay packages that may be
offered to the Company's executives by large telecommunications, consumer
electronics/computer, media and entertainment companies, the Compensation
Committee used the results of previously conducted research regarding
compensation practices at a select group of these companies.
Based on the results of such research and the Compensation Committee's own
knowledge of compensation packages for comparable positions at other companies,
both public and private, the Compensation Committee devised pay packages that
consist of three components, each designed to achieve a distinctive objective:
Base Salary provides regular compensation for services rendered at a
sufficient level to retain and motivate its executive officers.
Annual Bonus provides an incentive and reward for short-term
financial success. For the top two executives, annual bonuses are based
solely on the Company's net pre-tax profits. This eliminates Compensation
Committee discretion in determining annual bonuses. For all other
employees, annual bonuses are determined based on the recommendation of the
Co-Chairmen of the Company and are based
12
primarily on the Company's performance, individual performance, the
performance of the Company group or division in which the individual works
and other relevant factors.
Stock Options have and continue to be an integral part of the pay
package of executives as well as all employees. Options have kept the
Company's key management team in place since the Company's inception and
have provided a unique compensation opportunity. The Compensation Committee
believes that stock options, which are designed to focus attention on stock
values, are the most effective way of aligning the long-term interests of
executives, managers and employees with those of the Company's
stockholders. Options are customarily granted at prices equal to the fair
market value at the date of grant, are not exercisable until the first
anniversary of the date of grant and do not become fully exercisable until
the third anniversary of the date of grant. Options generally remain
exercisable during employment until the tenth anniversary of the date of
grant, which provides executives an incentive to increase stockholder value
over the long term since the full benefit of the options cannot be realized
unless stock price appreciation occurs over a number of years. Options are
generally granted to the Co-Chairmen of the Company by the Compensation
Committee and to the Company's other executive officers and its other
employees by the Compensation Committee based on the recommendation of the
Co-Chairmen of the Company.
The Company is subject to section 162(m) of the Code, which limits the
deductibility of certain compensation payments to its executive officers. The
Company does not have a policy requiring the Compensation Committee to qualify
all compensation for deductibility under this provision. The Compensation
Committee's current view is that any non-deductible amounts will be immaterial
to the Company's financial or tax position, and that the Company derives
substantial benefits from the flexibility provided by the current system, in
which the selection and quantification of performance targets are modified from
year to year to reflect changing conditions. However, the Compensation Committee
considers the net cost to the Company in making all compensation decisions and
will continue to evaluate the impact of this provision on its compensation
programs. The Company believes that any compensation expense incurred in
connection with the exercise of stock options under the 1988 Plan and the 1998
Plan will continue to be deductible as performance-based compensation.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Compensation Committee and the Board of Directors recognize the unique
skills and experience of the Chief Executive Officer. The goal of the
Compensation Committee in developing a pay package for the Chief Executive
Officer was to provide a significant incentive to motivate and retain his
services for a significant term. The current agreement with the Chief Executive
Officer, which expires in August 2000, provides:
SALARY
A base salary of $775,000 per year with no increase in base salary provided
during the term of the agreement. Increases in compensation will come solely as
a result of increases in the Company's pre-tax profits and increases in stock
market prices as described below.
ANNUAL BONUS
An annual bonus of 3.25% of net pre-tax profits, if any, will be paid to
the Chief Executive Officer. The Compensation Committee believes that the bonus
structure provides the Chief Executive Officer with sufficient incentive.
STOCK OPTIONS
Stock option grants are determined annually and options will generally vest
equally over a three-year period. In the fiscal year ended August 31, 1998, the
Chief Executive Officer received options to purchase 550,000 shares of Common
Stock. Of the options to purchase 550,000 shares of Common Stock, options to
purchase 450,000 were granted in lieu of previously granted options. See
"Executive Compensation." Under the 1998 Plan, in no event will the Chief
Executive Officer receive options to purchase more than 400,000 shares in any
single calendar year.
13
Unlike most large media and entertainment companies, no pension plan is
provided for the Company's executives. The Compensation Committee believes that
these programs at other companies are substantial. It believes, however, that
compensation is more effectively used by the application of the components
described above.
In setting the above compensation package a number of factors were
considered, including:
o the total return to stockholders of the Company as compared to competitor
companies during the five years prior to the execution of the employment
agreement;
o the unique skills and experience of the Chief Executive Officer;
o total compensation of key executives at a select group of entertainment
and media companies; and
o the importance of the Chief Executive Officer to the continued growth and
success of the Company and the need to provide him with a significant
incentive to motivate and retain his services for a five-year period.
COMPENSATION COMMITTEE
Kenneth L. Coleman James Scibelli
14
PERFORMANCE GRAPH
The following performance graph is a line graph comparing the yearly change
in the cumulative total stockholder return on the Common Stock against the
cumulative return of The Nasdaq Stock Market (U.S. Companies) Index and the Dow
Jones Entertainment and Leisure-Recreational Products and Services Index for the
five fiscal years ended August 31, 1998.
[CHART]
98 Nasdaq 98 AKLM 98 DJREC
Aug-93 100.00 100.00 100.00
Sep-93 102.68 111.90 101.83
Oct-93 104.90 109.52 109.53
Nov-93 101.55 93.33 106.93
Dec-93 104.57 80.95 105.53
Jan-94 107.76 84.29 107.34
Feb-94 106.69 97.62 106.92
Mar-94 100.08 52.38 97.18
Apr-94 98.79 53.81 93.91
May-94 98.97 66.67 98.97
Jun-94 95.04 61.79 94.30
Jul-94 97.22 57.86 97.26
Aug-94 103.07 64.76 99.07
Sep-94 102.89 64.76 95.26
Oct-94 104.66 66.19 94.81
Nov-94 101.01 59.52 93.81
Dec-94 101.23 54.76 96.97
Jan-95 101.66 53.57 101.41
Feb-95 106.85 54.29 106.93
Mar-95 110.01 66.19 109.18
Apr-95 113.62 57.14 111.67
May-95 116.39 65.00 116.64
Jun-95 125.66 70.24 117.50
Jul-95 134.78 90.48 121.33
Aug-95 137.33 96.19 119.82
Sep-95 140.48 98.10 119.72
Oct-95 139.47 90.00 119.08
Nov-95 142.59 80.24 125.95
Dec-95 141.64 47.14 123.47
Jan-96 142.67 40.95 133.96
Feb-96 148.09 47.86 135.69
Mar-96 148.27 40.24 133.43
Apr-96 160.27 39.29 134.22
May-96 167.39 45.71 133.21
Jun-96 159.53 36.67 135.40
Jul-96 145.47 29.05 124.11
Aug-96 153.67 30.95 123.54
Sep-96 165.17 29.52 135.42
Oct-96 164.44 18.81 135.86
Nov-96 174.01 19.76 146.78
Dec-96 173.80 12.38 139.03
Jan-97 185.75 19.11 144.62
Feb-97 176.22 20.24 147.57
Mar-97 164.46 18.10 141.28
Apr-97 169.72 12.86 150.79
May-97 188.51 15.71 155.44
Jun-97 194.13 15.71 154.99
Jul-97 214.56 15.71 157.61
Aug-97 213.68 15.24 151.99
Sep-97 226.93 19.29 158.96
Oct-97 214.53 13.93 161.96
Nov-97 215.46 15.48 174.73
Dec-97 211.40 13.81 182.31
Jan-98 217.95 15.71 190.89
Feb-98 238.41 19.76 201.65
Mar-98 247.16 25.24 206.05
Apr-98 251.47 29.05 225.53
May-98 239.49 24.53 215.29
Jun-98 255.10 22.62 220.86
Jul-98 252.01 21.67 225.83
Aug-98 201.79 21.90 186.77
Value of $100 invested over five years:
Acclaim Entertainment, Inc. Common Stock............................................................... $ 21.90
The Nasdaq Stock Market (U.S. Companies) Index......................................................... $201.79
Dow Jones Entertainment and Leisure-Recreational Products and Services Index........................... $186.77
15
SELECTION OF AUDITORS
At the recommendation of the Audit Committee, the Board of Directors has
selected KPMG Peat Marwick LLP to serve as auditors of the Company for the
fiscal year ending August 31, 1999. Although stockholder ratification of the
Board of Directors' action in this respect is not required, the Board of
Directors considers it desirable for stockholders to pass upon the selection of
auditors and, if the stockholders disapprove of the selection, intends to
consider the selection of other auditors for the current fiscal year.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF THE AUDITORS. UNLESS OTHERWISE INDICATED, THE ACCOMPANYING
FORM OF PROXY WILL BE VOTED FOR THE RATIFICATION OF THE APPOINTMENT OF THE
AUDITORS.
16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. James R. Scoroposki, an officer, director and principal stockholder of
the Company, is the sole stockholder, a director and president of a sales
representative organization selling interactive entertainment software. Such
sales representative organization acts as a sales representative for the
Company, receives commissions from the Company with respect to interactive
entertainment software sold by it and will continue to do so during the fiscal
year ending August 31, 1999. For the fiscal year ended August 31, 1998, the
commissions paid by the Company to such sales representative organization
amounted to approximately $599,000. The agreements between the Company and such
sales representative organization are on terms that are at least as favorable to
the Company as could have been obtained from unaffiliated third parties. In
addition to representing the Company's products, such organization also
represents competitors of the Company who distribute interactive entertainment
software, and derives most of its revenue from representing companies other than
the Company.
Mr. Scoroposki is also the sole shareholder of The Crescent Club, which
provides restaurant services and related entertainment and meeting facilities to
the Company and will continue to do so for the fiscal year ending August 31,
1999. For the fiscal year ended August 31, 1998, payments made by the Company to
The Crescent Club amounted to approximately $50,300.
The firm of Fischbach, Perlstein & Lieberman LLP, of which Bernard J.
Fischbach, a director of the Company, is a partner, performs legal services for
the Company and will continue to do so for the fiscal year ending August 31,
1999. Payments made by the Company for said services amounted to approximately
$971,500 for the fiscal year ended August 31, 1998. In addition, in fiscal 1998,
Mr. B. Fischbach received options under the 1988 Plan to purchase 93,750 shares
of Common Stock at an exercise price of $3.656 per share in consideration of
services rendered to the Company.
The firm of Groman, Ross & Tisman, P.C., of which Robert H. Groman, a
director of the Company, is a partner, also performs legal services for the
Company and will continue to do so for the fiscal year ending August 31, 1999.
Payments made by the Company for said services amounted to approximately $58,100
for the fiscal year ended August 31, 1998. In addition, in fiscal 1998,
Mr. Groman received options under the 1988 Plan to purchase 95,000 shares of
Common Stock at an exercise price of $3.656 per share in consideration of
services rendered to the Company.
In fiscal 1998, the Company made a personal loan of $550,000 to Paul
Eibeler, an executive officer of the Company, in connection with his relocation.
The loan, which was made before Mr. Eibeler became an executive officer of the
Company, is outstanding in full, bears no interest and is to be repaid in full
over a five-year period.
In fiscal 1998, the Company made a personal loan of $200,000 to Rodney
Cousens, an executive officer of the Company. The loan, which was made before
Mr. Cousens became an executive officer of the Company, is outstanding in full,
bears interest at the applicable federal rate and is payable on demand.
STOCKHOLDER PROPOSALS
Any eligible stockholder of the Company who wishes to submit a proposal for
action at the next annual meeting of stockholders of the Company and desires
that such proposal be considered for inclusion in the Company's proxy statement
and form of proxy relating to such meeting must provide a written copy of the
proposal to the Company at its principal executive offices not later than
August 31, 1999, and must otherwise comply with the rules of the Commission
relating to stockholder proposals.
The proxy or proxies designated by the Company will have discretionary
authority to vote on any matter properly presented by an eligible stockholder of
the Company for action at the next annual meeting of stockholders of the Company
but not submitted for inclusion in the proxy materials for such meeting unless
notice of the matter is received by the Company at its principal executive
office not later than November 13, 1999, and certain other conditions of the
applicable rules of the Commission are satisfied.
17
MISCELLANEOUS
The Board of Directors does not intend to present and knows of no others
who intend, nor has it received timely notice of any stockholder's intention, to
present at the Meeting any matter or business other than that set forth in the
accompanying Notice of Annual Meeting of Stockholders. If other matters are
properly brought before the Meeting, it is the intention of the persons named in
the accompanying form of proxy to vote any proxies on such matters in accordance
with their judgment.
The Company will bear the cost of preparing, assembling and mailing the
enclosed form of proxy, this Proxy Statement and other material which may be
sent to stockholders in connection with this solicitation. Officers and regular
employees may solicit proxies by mail, telephone, telegraph and personal
interview, for which no additional compensation will be paid. The Company may
reimburse persons holding shares in their names or in the names of nominees for
their reasonable expenses in sending proxies and proxy material to their
principals.
Copies of the Annual Report to Stockholders for the fiscal year ended
August 31, 1998 are being mailed to stockholders simultaneously with this Proxy
Statement.
By order of the Board of Directors,
JAMES SCOROPOSKI
Secretary
Glen Cove, New York
December 29, 1998
18
ACCLAIM ENTERTAINMENT, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 2, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints GREGORY E. FISCHBACH and JAMES R. SCOROPOSKI,
or either of them, attorneys and proxies, with power of substitution and
revocation, to vote, as designated below, all shares of stock which the
undersigned is entitled to vote, with all powers which the undersigned would
possess if personally present, at the Annual Meeting of Stockholders (including
all adjournments thereof) of ACCLAIM ENTERTAINMENT, INC. to be held on Tuesday,
February 2, 1999, at 10:00 A.M., at The Metropolitan Club, 3 Glen Cove Road,
Glen Cove, New York.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS
/ / FOR all nominees / / WITHHOLD AUTHORITY* to vote for all nominees
NOMINEES: Gregory E. Fischbach, James R. Scoroposki, Kenneth L. Coleman,
Bernard J. Fischbach, Robert H. Groman, James Scibelli and Michael Tannen.
*INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
THROUGH INDIVIDUAL'S NAME.
2. RATIFICATION of the appointment of KPMG Peat Marwick LLP as independent auditors for the year ending August 31, 1999.
/ / FOR / / AGAINST / / ABSTAIN
(See reverse side)
3. The proxy is authorized to transact such other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR ITEMS 1 AND 2 AND IN THE DISCRETION OF SAID PROXY ON ANY OTHER
MATTER WHICH MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
Dated: _____________________ , ___
__________________________________
Print Name
__________________________________
Signature
NOTE: When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, custodian, guardian or corporate
officer, please give your full title as such. If a corporation, please sign full
corporate name by authorized officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.