SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
Volt Information Sciences, Inc.
(Name of Registrant as Specified in Its Charter)
----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
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[ ] 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.:
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4) Date Filed:
VOLT INFORMATION SCIENCES, INC.
560 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022-2928
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 11, 2003
TO THE SHAREHOLDERS OF
VOLT INFORMATION SCIENCES, INC.
The Annual Meeting of Shareholders of Volt Information Sciences, Inc. (the
"Company") will be held at the 1st floor Atrium, Volt Corporate Park, 2401 N.
Glassell Street, Orange, California, on Friday, April 11, 2003, at 10:00 A.M.,
Pacific time, to consider the following:
1. The election of four Class II directors to serve until the 2005 Annual
Meeting of Shareholders and until their respective successors are elected
and qualified;
2. A proposal to ratify the action of the Board of Directors in appointing
Ernst & Young LLP as the Company's independent auditors for the fiscal year
ending November 2, 2003; and
3. Such other business as may properly come before the meeting or any
adjournments or postponements thereof.
Only shareholders of record at the close of business on February 21, 2003
will be entitled to notice of, and to vote at, the meeting and any adjournments
or postponements thereof.
You are cordially invited to attend the meeting. Whether or not you plan to
be present, kindly fill out and sign the enclosed Proxy exactly as your name
appears on the Proxy, and mail it promptly in order that your vote can be
recorded. A return envelope is enclosed for your convenience and requires no
postage if mailed within the United States. The giving of this Proxy will not
affect your right to vote in person in the event that you find it convenient to
attend the meeting.
By Order of the Board of Directors
Jerome Shaw, Secretary
New York, New York
March 3, 2003
VOLT INFORMATION SCIENCES, INC.
560 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022-2928
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement, to be mailed on or about March 3, 2003, is furnished
in connection with the solicitation by the Board of Directors of Volt
Information Sciences, Inc., a New York corporation (the "Company" or "Volt"), of
Proxies in the accompanying form ("Proxy" or "Proxies") for use at the Annual
Meeting of Shareholders of the Company to be held on April 11, 2003 and at any
adjournments or postponements thereof (the "Annual Meeting").
Only holders of record of the Company's Common Stock (the "Common Stock")
as of the close of business on February 21, 2003 are entitled to notice of, and
to vote at, the Annual Meeting. As of the close of business on that date, there
were issued and outstanding 15,217,415 shares of Common Stock of the Company.
Each issued and outstanding share of Common Stock on that date is entitled to
one vote upon each matter to be acted upon at the Annual Meeting. The presence,
in person or by proxy, of at least 35% of the total issued and outstanding
shares of Common Stock entitled to vote at the Annual Meeting will constitute a
quorum for the transaction of business at the Annual Meeting.
All Proxies received will be voted in accordance with the specifications
made thereon. Proxies received without specification on a matter will be voted
as follows on that matter: (a) for the election of all nominees named herein to
serve as directors, and (b) in favor of the proposal to ratify the appointment
of Ernst & Young LLP ("Ernst & Young") as the Company's independent auditors for
the Company's fiscal year ending November 2, 2003 ("fiscal 2003"). Management
does not intend to bring before the Annual Meeting any matters other than those
specifically described above and knows of no other matters to come before the
Annual Meeting. If any other matters or motions come before the Annual Meeting,
it is the intention of the persons named in the accompanying form of Proxy to
vote Proxies in accordance with their judgment on those matters or motions,
including any matter dealing with the conduct of the Annual Meeting. Proxies may
be revoked at any time prior to their exercise by written notification to the
Secretary of the Company at the Company's principal executive offices located at
560 Lexington Avenue, New York, New York 10022-2928, by voting at the Annual
Meeting or by submitting a later dated proxy.
The Company maintains a Savings Plan (the "Savings Plan") in which separate
accounts are maintained for Common Stock held under the Employee Stock Ownership
Plan (the "ESOP Account") and 401(k) Plan (the "401(k) Account") features of the
Savings Plan. Subaccounts are maintained for each participant under the ESOP
Account and 401(k) Account. Separate Proxies are being transmitted to each
employee of the Company who is a participant in the Savings Plan. Shares held in
a participant's subaccounts will be voted by the trustee of the Savings Plan as
directed by the participant in a signed Proxy for Savings Plan participants
which is timely returned to the Savings Plan's trustee or its designee. Shares
as to which the Savings Plan trustee does not receive a timely direction will be
voted by the trustee as directed by the administrator of the Savings Plan in
such manner as the Savings Plan administrator deems proper in its fiduciary
capacity for the benefit of the Savings Plan and its participants.
A plurality of votes cast at the Annual Meeting in person or by proxy is
required for the election of each nominee to serve as a director. The
affirmative vote of a majority of votes cast at the Annual Meeting in person or
by proxy is required to ratify the selection of Ernst & Young as the Company's
independent auditors for fiscal 2003. Votes withheld, in the case of the
election of directors, and abstentions and any broker non-votes with respect to
the ratification of independent auditors, are not considered votes cast with
respect to that matter and, consequently, will have no effect on the vote on
that matter, but are counted in determining a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, MANAGEMENT AND NOMINEES
The following table sets forth information, as of February 15, 2003 (except
as described in the footnotes to the following table), with respect to the
beneficial ownership of Common Stock, the Company's only class of voting or
equity securities, by (a) each person who is known to the Company to own
beneficially more than five percent of the outstanding shares of Common Stock,
(b) each of the executive officers named in the Summary Compensation Table
contained under "Executive Compensation", (c) each of the directors of the
Company, including nominees to serve as directors, and (d) executive officers
and directors as a group:
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
- ------------------- ------------------------ --------------------
William Shaw 3,612,243 (3) (4) 23.7%
560 Lexington Avenue
New York, NY 10022-2928
Jerome Shaw 3,201,645 (3) (5) 21.0%
2401 N. Glassell Street
Orange, CA 92665
Dimensional Fund Advisors Inc. 1,007,500 (6) 6.6%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Barclays Global Investors, NA. 815,725 (7) 5.4%
and
Barclays Global Fund Advisors
45 Fremont Street
San Francisco, CA 94105
Thomas Daley 15,457 (3) *
James J. Groberg 28,087 (3) *
Steven A. Shaw 301,732 (3) 2.0%
Howard B. Weinreich 29,097 (3) *
Lloyd Frank 10,529 (8) *
Bruce G. Goodman 119,980 (9) *
Mark N. Kaplan 10,500 (3) *
Irwin B. Robins 29,344 (3) *
William H. Turner 1,000 *
All executive officers and directors as a 7,387,185 (10) 47.9%
group (15 persons, including the foregoing)
- -------------------------
(1) Except as noted, the named beneficial owners have sole voting and
dispositive power with respect to their beneficially owned shares. Shares
beneficially owned include shares held in the executive officer's ESOP
Account and 401(k) Account.
-2-
(2) Asterisk indicates less than 1%. Shares reflected as owned by a person
that are not outstanding but that are issuable upon exercise of the
portion of options held by such person that are exercisable on or within
60 days after February 15, 2003 are considered outstanding for the
purpose of computing the percentage of outstanding Common Stock that
would be owned by that person if the options were exercised, but (except
for the calculation of the beneficial ownership by all executive officers
and directors as a group) are not considered outstanding for the purpose
of computing the percentage of outstanding Common Stock owned by any
other person.
(3) Includes the following shares issuable upon the exercise of the portion
of options granted by the Company that are exercisable on or within 60
days after February 15, 2003: William Shaw, 45,000 shares; Jerome Shaw,
45,000 shares; Thomas Daley, 14,250 shares; James J. Groberg, 26,500
shares; Steven A. Shaw, 23,300 shares; Howard B. Weinreich, 14,500
shares; Irwin B. Robins, 21,000 shares; and Mark N. Kaplan, 7,500 shares.
(4) Includes 99,561 shares owned by Mr. Shaw as sole trustee of a trust for
the benefit of his wife, as to which shares Mr. Shaw disclaims beneficial
ownership.
(5) Includes (i) 2,886,230 shares owned by Mr. Shaw and his wife as trustees
of a revocable trust for their benefit or as community property, as to
which shares they may be deemed to have shared voting and investment
power (pursuant to the terms of the trust, Mr. Shaw may demand that the
shares in trust be transferred to him at any time), (ii) 236,250 shares
owned by Mr. Shaw and his wife as trustees of a trust for the benefit of
one of their children, as to which shares Mr. and Mrs. Shaw may be deemed
to have shared voting and investment power (the inclusion of which
236,250 shares is not an admission of beneficial ownership of those
shares by Mr. Shaw) and (iii) 6,750 shares owned by Mr. Shaw's wife, as
to which shares Mr. Shaw disclaims beneficial ownership.
(6) Based on information as of December 31, 2002 contained in a Schedule 13G
amendment dated February 3, 2003 which indicates that Dimensional Fund
Advisors Inc. has sole voting and investment power as to these shares
which are owned by investment funds as to which it furnishes investment
advice and serves as investment manager, but as to which it disclaims
beneficial ownership.
(7) Based on information as of December 31, 2002 contained in a Schedule 13G
dated February 10, 2003 which indicates that Barclay Global Investors,
NA. has sole voting and investment power as to 625,117 of these shares
and Barclays Global Fund Advisors has sole voting and investment power as
to 190,608 of these shares.
(8) Includes 2,529 shares owned by Mr. Frank's wife, as to which Mr. Frank
disclaims beneficial ownership.
(9) Includes (i) 1,400 shares owned by Mr. Goodman as custodian for his
children, (ii) 97,447 and 6,511 shares owned by Mr. Goodman's wife,
individually, and as custodian for one of her children, respectively, and
(iii) 6,111 shares owned by Mr. Goodman's wife as custodian for their
child, as to all of which shares Mr. Goodman disclaims beneficial
ownership.
(10) Includes (i) 217,750 shares issuable upon the exercise of the portion of
options granted by the Company that are exercisable on or within 60 days
after February 15, 2003 and (ii) the shares described in footnotes 4, 5,
8 and 9.
-3-
ELECTION OF DIRECTORS
The Company's Board of Directors consists of nine directors, divided into
two classes. The terms of office of Class I and Class II directors expire at the
2004 and 2003 Annual Meetings of Shareholders, respectively. At each annual
meeting, directors are chosen to succeed those in the class whose term expires
at that annual meeting to serve for a term of two years each and until their
respective successors are elected and qualified. Each of the present directors
of the Company was elected by the Company's shareholders.
Unless otherwise directed, persons named in the enclosed Proxy intend to
cast all votes pursuant to Proxies received for the election of William Shaw,
Jerome Shaw, James J. Groberg and William H. Turner as Class II directors to
serve until the 2005 Annual Meeting of Shareholders and until his successor is
elected and qualified (those persons are referred to in this Proxy Statement as
the "nominees"). Each nominee has indicated his availability to serve as a
director. In the event that any of the nominees should become unavailable or
unable to serve for any reason, the holders of the Proxies have discretionary
authority to vote for one or more alternate nominees who will be designated by
the Board of Directors.
A plurality of the votes cast at the Annual Meeting in person or by proxy
is required for the election of each nominee. Votes withheld will have no effect
on the outcome of the election of directors.
BACKGROUND OF NOMINEES AND CONTINUING DIRECTORS
NOMINEES (CLASS II)
WILLIAM SHAW, 78, a founder of the Company, has been President, Chairman of
the Board and Chief Executive Officer of the Company since its formation and has
been employed in executive capacities by the Company and its predecessors since
1950. He has served as a director of the Company since its formation in 1957.
JEROME SHAW, 76, also a founder of the Company, has been Executive Vice
President and Secretary of the Company since its formation and has been employed
in executive capacities by the Company and its predecessors since 1950. He has
served as a director of the Company since its formation in 1957.
JAMES J. GROBERG, 74, has been a Senior Vice President and the Chief
Financial Officer of the Company since September 1985 and was also employed in
executive capacities by the Company from 1973 to 1981. He has served as a
director of the Company since 1987.
WILLIAM H. TURNER, 63, has been a director of the Company since August
1998. He has been a Senior Partner of Summus Ltd., a consulting firm, since
October 2002. Mr. Turner was Chairman from September 1999 until his retirement
in September 2002 and, from August 1997 to August 1999, was President, of PNC
Bank, New Jersey. From October 1996 to July 1997, he was President and Chief
Executive Officer of Franklin Electronic Publishers, Inc. (a designer and
developer of hand-held electronic information products) and, from February 1991
to September 1996, he was Vice Chairman of The Chase Manhattan Bank and its
predecessor, Chemical Banking Corporation. He is also a director of Standard
Motor Products, Inc., Franklin Electronic Publishers, Inc. and New Jersey
Resources Corp.
DIRECTORS WHOSE TERM OF OFFICE CONTINUES AFTER THE ANNUAL MEETING (CLASS I)
LLOYD FRANK, 77, has been a director of the Company since March 2000. Mr.
Frank has been a partner in the law firm of Jenkens & Gilchrist Parker Chapin
LLP (and its predecessor, Parker Chapin LLP) since January 1977. Mr. Frank is
also a director of Park Electrochemical Corp. and DRYCLEAN USA, Inc.
BRUCE G. GOODMAN, 54, has been a director of the Company since May 2000. He
has been a partner of the law firm of Hinckley, Allen & Snyder LLP since April
1995.
-4-
MARK N. KAPLAN, 73, has been a director of the Company since April 1991.
Mr. Kaplan has been of counsel to the law firm of Skadden, Arps, Slate, Meagher
& Flom LLP since 1999 and, from October 1979 until that time, was a partner in
that firm. Mr. Kaplan is also a director of Grey Advertising Inc., DRS
Technologies, Inc., Refac Technology Development Corporation, Autobytel Inc.,
American Biltrite, Inc. and Congoleum Corporation.
IRWIN B. ROBINS, 68, retired as Senior Vice President of the Company in
June 2000, a position he had held since September 1985. He had been employed in
executive capacities by the Company since 1980. Since his retirement, Mr. Robins
has served as a consultant to the Company handling certain legal and
transactional matters as are mutually agreed upon. Mr. Robins has served as a
director of the Company since 1981.
STEVEN A. SHAW, 43, has been a Senior Vice President of the Company since
November 2000 and a Vice President of the Company since April 1997. He has been
employed by the Company in various capacities since November 1995. He has served
as a director of the Company since August 1998.
William Shaw and Jerome Shaw are brothers. Steven A. Shaw is the son of
Jerome Shaw. Bruce G. Goodman is the son-in-law of William Shaw. There are no
other family relationships among the directors or executive officers of the
Company. Messrs. William Shaw and Jerome Shaw are parties to employment
agreements with the Company. See "Executive Remuneration - Employment and
Termination Agreements."
COMMITTEES OF THE BOARD
The Company has an Audit Committee, but does not have compensation or
nominating committees.
The Audit Committee consists of Lloyd Frank, Mark N. Kaplan and William H.
Turner, each of whom the Company believes meets the current independence
requirements for audit committee members under the listing standards of the New
York Stock Exchange, on which the Company's Common Stock is listed. The
Committee provides assistance to the Company's directors in fulfilling the
Board's oversight responsibility as to the Company's accounting, auditing and
financial reporting practices and as to the quality and integrity of the
publicly distributed financial reports of the Company. The specific functions
and responsibilities of the Audit Committee are set forth in a written charter
of the Audit Committee adopted by the Board of Directors. A copy of the Audit
Committee's charter was most recently published in the Company's proxy statement
for its 2002 Annual Meeting of Shareholders. The Audit Committee reviews and
reassesses its charter annually and recommends any changes to the Board for
approval. Under its charter, the Audit Committee, among other things, reviews
and discusses with the Company's independent auditors the scope of the proposed,
and results of the completed, audit of the annual financial statements of the
Company. The Committee also reviews, with management and the Company's
independent auditors, the annual audited financial statements and the interim
unaudited financial statements for the first three fiscal quarters of the
Company's fiscal year, and discusses any significant changes to the Company's
accounting principles and any items required to be communicated by the
independent auditors in accordance with Statement of Auditing Standards 61
relating to the independent auditors' review of those financial statements. In
connection therewith, the Committee reviews with management and the independent
auditors their judgments about the accounting principles employed by the
Company. The Committee also reviews with the independent auditors, the Company's
internal auditor and financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the Company, and
discusses with the independent auditors significant financial risk exposures and
the steps management has taken to monitor, control and report such exposures. In
addition, the Committee reviews the independence and performance of the
independent auditors and recommends to the full Board the independent auditors
to be selected to audit the financial statements of the Company. The Committee
is authorized to investigate any matter brought to its attention within the
scope of its duties, with the power to retain outside advisors for this purpose
if, in its judgment, that is appropriate. A report of the Audit Committee
appears under the caption "Audit Committee Report," below. The Audit Committee
met ten times during the past fiscal year.
-5-
The Board of Directors met six times during the past fiscal year. Each
incumbent director attended at least 75% of the meetings of the Board of
Directors and Committees on which he served which were held during the fiscal
year.
AUDIT COMMITTEE REPORT
Management has the primary responsibility for the Company's financial
reporting process, including its financial statements, while the Board is
responsible for overseeing the Company's accounting, auditing and financial
reporting practices and the Company's independent public auditors have the
responsibility for the examination of the Company's annual financial statements
and expressing an opinion on the conformity of those financial statements with
accounting principles generally accepted in the United States. In assisting the
Board in fulfilling its oversight responsibility with respect to the Company's
year ended November 3, 2002, the Audit Committee:
o Reviewed and discussed the audited financial statements for the
fiscal year ended November 3, 2002 with management and Ernst &
Young, the Company's independent auditors;
o Discussed with Ernst & Young the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct
of the audit; and
o Received the written disclosures and the letter from Ernst & Young
regarding its independence as required by Independence Standards
Board Standard No. 1. The Audit Committee also discussed Ernst &
Young's independence with Ernst & Young and considered whether the
provision of non-audit services rendered by Ernst & Young was
compatible with maintaining its independence under Securities and
Exchange Commission rules governing the independence of a
company's outside auditors (see "Ratification of the Selection of
Auditors").
Based on the foregoing review and discussions, the Audit Committee
recommended to the Board that the Company's audited financial statements for the
fiscal year ended November 3, 2002 be included in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission for that year.
Respectfully,
Lloyd Frank
Mark N. Kaplan
William H. Turner
-6-
EXECUTIVE REMUNERATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
during the fiscal years ended November 3, 2002 ("fiscal 2002"), November 4, 2001
("fiscal 2001") and November 3, 2000 ("fiscal 2000") of the Company's Chief
Executive Officer and each of the four other executive officers of the Company
serving as executive officers of the Company at the end of fiscal 2002 who
received the highest regular cash compensation during fiscal 2002 for services
rendered in all capacities to the Company and its subsidiaries (the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
------------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) BONUS OPTIONS COMPENSATION (2)
- ------------------ ---- ---------- --------- ---------------------- ----------------
William Shaw, 2002 $400,000 -- -- -- $2,605
President and 2001 396,154 -- -- -- 2,497
Chief Executive Officer 2000 382,212 -- -- -- 4,111
Jerome Shaw, 2002 400,000 -- -- -- 2,605
Executive Vice President 2001 396,154 -- -- -- 2,497
2000 382,212 -- -- -- 4,111
James J. Groberg, 2002 330,000 -- -- -- 203
Senior Vice President and 2001 330,000 $20,000 -- -- 1,851
Chief Financial Officer 2000 325,378 20,000 15,000 -- 4,400
Thomas Daley, 2002 249,995 22,586 (3) -- -- 2,355
Senior Vice President 2001 249,995 28,203 (3) -- -- 2,269
2000 239,134 22,473 (3) -- -- 3,781
Howard B. Weinreich, 2002 252,600 -- -- -- 2,655
Senior Vice President and 2001 250,869 4,000 2,500 -- 2,527
General Counsel 2000 243,034 2,000 -- -- 4,062
- ----------------
(1) Includes compensation deferred under the Company's deferred compensation
plan and under Section 401(k) of the Internal Revenue Code of 1986, as
amended.
(2) Amounts in fiscal 2002 include (i) premiums under the Company's group
life insurance policy ($528 for each of William Shaw and Jerome Shaw;
$203 for James J. Groberg; and $264 for each of Thomas Daley and Howard
B. Weinreich) and (ii) the Company's contribution under the 401(k) Plan
feature of the Savings Plan ($2,077 for each of William Shaw and Jerome
Shaw; $2,072 for Steven Shaw; $2,091 for Thomas Daley; and $2,391 for
Howard B. Weinreich).
(3) Based on combined pre-tax income of divisions for which Mr. Daley has
management responsibility.
OPTION GRANTS IN LAST FISCAL YEAR
During fiscal 2002, no options to purchase Company securities were granted
to any of the Named Executive Officers.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information concerning (a) options
to purchase shares of Common Stock of the Company's former 59% owned subsidiary,
Autologic Information International, Inc. ("Autologic"), which were exchanged on
November 30, 2001 by the Named Executive Officers for a
-7-
cash payment by Autologic upon the sale of Autologic discussed in footnote 1 to
the following table (none of the Named Executive Officers exercised options to
purchase shares of the Company's Common Stock during the year ended November 3,
2002) and (b) shares of Common Stock of the Company subject to unexercised
options held at November 3, 2002 by the Named Executive Officers:
SHARES NUMBER OF SHARES
DEEMED UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
NAME ON EXERCISE REALIZED (EXERCISABLE / UNEXERCISABLE) (EXERCISABLE / UNEXERCISABLE)
- ---- ----------- -------- ----------------------------- -----------------------------
William Shaw 10,000 (1) $28,770 45,000 / -- (2) -- / --
Jerome Shaw 10,000 (1) $28,770 45,000 / -- (2) -- / --
James J. Groberg 10,000 (1) $14,385 20,500 / 15,000 (2) -- / --
Thomas Daley -- -- 14,250 / 2,000 (2) -- / --
Howard B. Weinreich 8,000 (1) $14,385 14,500 / 2,500 (2) -- / --
- ---------------------
(1) Shares subject to options granted by Autologic which were surrendered
to Autologic in exchange for a cash payment (value realized) equal to
the number of shares subject to the option, multiplied by the
difference between the tender and merger price per share ($7.127) and
the option exercise price per share in accordance with an Agreement and
Plan of Merger dated September 25, 2001 among the purchaser, its parent
and Autologic (the "Merger Agreement") pursuant to which Autologic was
acquired by an unaffiliated third party on November 30, 2001 pursuant
to a tender offer and merger.
(2) Shares subject to options granted by the Company.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an officer or employee of the
Company receives a director's fee at the annual rate of $40,000 (increased from
$30,000 effective June 1, 2002) and is also reimbursed for out-of-pocket
expenses related to his services.
Mark N. Kaplan holds an option to purchase 7,500 shares of the Company's
Common Stock at an exercise price of $40.03 until January 25, 2008.
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company is a party to employment agreements dated as of May 1, 1987
with William Shaw and Jerome Shaw. These agreements, as amended, provide for the
employment of each in his present executive capacity at an annual base salary
which is presently $400,000 (subject to increases and additional compensation,
including bonuses, from time to time, at the discretion of the Board of
Directors). The employment term under each employment agreement continues until
the April 30 which is five years next following the giving by either the Company
or the executive of notice to terminate such employment. The agreements also
provide for service thereafter for the remainder of the executive's life as a
consultant to the Company for annual consulting fees equal to 75% for the first
ten years of the consulting period, and 50% for the remainder of the consulting
period, of his base salary as in effect immediately prior to the commencement of
the consulting period. Upon the death of the executive, the Company will pay to
his beneficiary a death benefit equal to three times his annual base salary at
the date of death if his death shall have occurred while employed as an
executive, 2.25 times his annual base salary at the end of his employment as an
executive if his death shall have occurred during the first ten years of the
consulting period or 1.5 times his annual base salary at the end of his
employment as an executive if his death shall have occurred during the remainder
of the consulting period. Each employment agreement permits the executive to
accelerate the commencement of the consulting period if a "change in control",
as defined in the agreements, of the Company shall occur or if the Company's
office where the executive presently performs his principal services shall be
relocated to a different geographical area.
-8-
Under their employment agreements, William Shaw and Jerome Shaw are
prohibited from engaging in any business competitive with the Company, competing
with the Company for its customers or encouraging employees of the Company to
leave their employment. These restrictions apply for the duration of the
respective agreements and for one year thereafter if the executive's employment
shall have been terminated by the Company "for cause," as defined in the
agreement. William Shaw and Jerome Shaw will not be bound by these restrictions
after a "change in control," as defined in the agreement, of the Company shall
have occurred if, during their respective consulting periods, they shall elect
to terminate their respective employment agreements and thereby relinquish any
further payments or other benefits thereunder.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
To date, all decisions regarding the cash compensation of executive
officers who are directors and, since August 1996, all decisions regarding the
granting of stock options have been made by the entire Board of Directors.
Accordingly, William Shaw, Jerome Shaw, James J. Groberg and Steven A. Shaw,
executive officers and directors of the Company, as well as Irwin B. Robins (who
ceased being an executive officer upon his retirement in June 2000, but who has
remained a director of, and consultant to, the Company), participated in
deliberations of the Company's Board of Directors concerning executive officer
compensation during the year ended November 3, 2002, as did Mark N. Kaplan,
Lloyd Frank, Bruce G. Goodman and William H. Turner, the remaining directors of
the Company. Each executive officer who is also a director does not participate
in deliberations as to his own compensation.
During the Company's fiscal year ended November 3, 2002, Jenkens &
Gilchrist Parker Chapin LLP, of which firm Lloyd Frank is a partner, provided
legal services to the Company and to the Company's 59% owned subsidiary,
Autologic Information International, Inc. ("Autologic") until the Company's sale
of its interest in Autologic on November 30, 2001. Jenkens & Gilchrist Parker
Chapin LLP has been retained to provide legal services to the Company during
fiscal 2003.
Hinckley, Allen & Snyder LLP, of which firm Bruce G. Goodman is a partner,
provided legal services to the Company during fiscal 2002 and has been retained
to provide legal services to the Company during fiscal 2003.
In June 2000, Irwin B. Robins retired as Senior Vice President and head of
the Company's legal department. Mr. Robins continues to serve as a consultant to
the Company handling certain legal and transactional matters as are mutually
agreed upon. Mr. Robins receives compensation at an hourly rate agreed upon from
time to time as services are provided to the Company. Stock options to purchase
25,000 shares of the Company's Common Stock held by Mr. Robins at the time of
his retirement to purchase shares of the Company's Common Stock remain
exercisable in accordance with their terms for the remainder of each option's
ten-year term in the same manner as if Mr. Robins remained an employee provided
Mr. Robins complies with the non-competition covenant contained in his stock
option agreements. In consideration of the foregoing, Mr. Robins extended the
term of the non-competition provision for a period of five years following the
later of his cessation of service as a consultant or as a director, regardless
of the reason for such cessation. During fiscal 2002, Mr. Robins was paid
$10,194 for services rendered as a consultant to the Company and $33,333 for
services rendered as a director.
The Company renders various payroll and related services to a corporation
primarily owned by Steven A. Shaw, a Senior Vice President and director of the
Company, for which the Company received approximately $1,000 in excess of its
direct costs in fiscal 2002. Such services are performed on a basis
substantially similar to those performed by the Company for, and at
substantially similar rates as is charged by the Company to, unaffiliated third
parties. In addition, the Company rents to that corporation approximately 2,500
square feet of space in the Company's El Segundo, California facility, which the
Company does not require for its own use, on a month-to-month basis at a rental
of $1,500 per month. Based on the nature of the premises and a recent market
survey conducted by the Company, the Company believes the rent is the fair
market rental for such space.
-9-
REPORT WITH RESPECT TO EXECUTIVE COMPENSATION DETERMINATIONS
The following report with respect to the Company's compensation policies
applicable to the determination of the compensation of the Company's executive
officers for fiscal 2002 is presented by the Board of Directors.
Executive Compensation. Compensation of executive officers is comprised of
salary as a base compensation, bonuses as a means of short-term compensation and
stock options to foster long-term incentive.
All determinations as to the compensation of an executive officer who is
also a member of the Board is made on an individual basis by the Board after
consultation with senior management, although an executive officer who is also a
member of the Board does not participate in the Board's determination of his own
compensation. In making its decisions as to base salary, the Board gives effect
to the executive's performance and responsibilities, inflationary trends,
competitive market conditions and other subjective factors, without ascribing
specific weights to these factors. Bonuses are based upon the Company's, a
segment's or a division's performance, as well as the executive's overall
performance, contribution toward the Company's profitability, meeting corporate
objectives and, in certain instances, meeting specific corporate goals or
completing specific programs or projects. The compensation (salary and bonuses)
of executive officers who are not members of the Board is determined by senior
management utilizing similar subjective criteria.
The Company has utilized stock options as the primary method of providing
long-term incentive compensation to key employees, including executive officers,
of the Company and its subsidiaries. The Board believes that stock options
foster the interest of key employees in seeking long-term growth for the
Company, as well as linking their interests with the overall interest of
shareholders. In determining when to grant options and the size of the award to
any particular executive, the Board takes into consideration factors such as the
executive's position, level of responsibility, value to the Company, objectives,
accomplishments and performance, the incentive and objectives intended to be
provided, when the last prior option was granted to the individual, the
individual's other compensation and the recommendation of senior management. No
one factor is given special weight, but decisions are made based on an overall
assessment of each individual.
Chief Executive Officer Compensation. The annual compensation of William
Shaw, the Company's Chief Executive Officer, is fixed under the terms of his
Employment Agreement with the Company (discussed under "Executive Remuneration
- -- Employment and Termination Agreements," above), subject to increases and
additional compensation, including bonus, from time to time, at the discretion
of the Board of Directors. In determining whether to increase Mr. Shaw's base
salary or award bonuses or other additional compensation, the Board uses similar
criteria as it does for other executive officers who are directors. The
compensation of Mr. Shaw remained unchanged in fiscal 2002 from his fiscal 2001
compensation.
Certain Tax Legislation. Section 162(m) of the Internal Revenue Code of
1986 ("Section 162(m)") precludes a public company from taking a federal income
tax deduction for annual compensation in excess of $1,000,000 paid to its chief
executive officer or any of its four other most highly compensated executive
officers. Certain "performance based compensation" is excluded from the
deduction limitation. All of the fiscal 2002 compensation of its executive
officers, including compensation resulting from the surrender of stock options
to purchase Common Stock of Autologic, is tax deductible. Options previously
granted by the Board are not deemed "performance based compensation" under
Section 162(m). Therefore, the difference between the market value of the
Company's Common Stock underlying those stock options at the date of their
exercise and the exercise price of the options will be taken into account in
determining whether the $1,000,000 Section 162(m) limitation is exceeded.
Respectfully,
William Shaw Jerome Shaw Irwin B. Robins
James J. Groberg William H. Turner Steven A. Shaw
Mark N. Kaplan Bruce G. Goodman Lloyd Frank
-10-
SHAREHOLDER RETURN PERFORMANCE GRAPH
The Company's Common Stock has been listed on the NYSE since May 7, 1997. The
following graph compares the cumulative total shareholder return to holders of
the Company's Common Stock with (a) the NYSE Stock Market Index and (b)
securities of companies traded on the NYSE having market capitalizations that
are within 5% of the market capitalization of the Company's Common Stock as at
the end of the Company's latest fiscal year-end (this peer group has been
historically selected by the Company because the Company has operated in five,
four since the sale of Autologic, diverse business segments). The comparison
assumes $100 was invested on November 1, 1997 in the Company's Common Stock and
in each of the comparison groups, and assumes reinvestment of dividends (the
Company paid no dividends during the periods):
GRAPH OMITTED
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
NEW YORK STOCK EXCHANGE INDEX $100 $115 $134 $145 $121 $106
PEER GROUP INDEX $100 $ 78 $ 86 $ 97 $ 67 $ 55
VOLT INFORMATION SCIENCES, INC. $100 $ 35 $ 29 $ 32 $ 16 $ 19
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of ownership, and reports
of changes of ownership, of the Company's equity securities with the Securities
and Exchange Commission and furnish copies of those reports to the Company.
Based solely upon a review of the copies of the reports furnished to the Company
to date and representations that no reports were required, the Company believes
that all reports required to be filed by such persons with respect to the
Company's fiscal year ended November 3, 2002 were timely filed.
-11-
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has, subject to shareholder
ratification, selected Ernst & Young as the independent auditors to audit the
Company's financial statements for the fiscal year ending November 2, 2003.
AUDIT FEES
Audit fees billed and expected to be billed by Ernst & Young for its audits
of the annual financial statements of the Company and its subsidiaries for the
year ended November 3, 2002 and for its reviews of the financial statements
included in Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission for that year are $441,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company and its subsidiaries did not engage Ernst & Young to provide
advice regarding financial information systems design or implementation during
the fiscal year ended November 3, 2002.
ALL OTHER FEES
Fees billed and expected to be billed by Ernst & Young for all other
services rendered to the Company and its subsidiaries during the Company's 2002
fiscal year are $845,600, including audit related services of $263,600 and
non-audit related services of $582,000. Audit related services principally
include fees for audits of employee benefit plans and statutory audits.
Non-audit related fees consist primarily of tax related services. Ernst & Young
did not render consulting services to the Company during the Company's 2002
fiscal year.
In connection with the standards for independence of the Company's
independent public accountants promulgated by the Securities and Exchange
Commission, the Audit Committee has considered whether the provision of such
services is compatible with maintaining the independence of Ernst & Young.
ANTICIPATED ATTENDANCE BY ERNST & YOUNG AT THE ANNUAL MEETING
Ernst & Young has indicated to the Company that it intends to have a
representative present at the Annual Meeting who will have the opportunity to
make a statement if he or she so desires and will be available to respond to
appropriate questions.
REQUIRED VOTE
A resolution will be submitted to shareholders at the Annual Meeting for
the ratification of the Board of Director's selection of Ernst & Young as the
independent auditors to audit the Company's financial statements for the fiscal
year ending November 2, 2003. The affirmative vote of a majority of the votes
cast at the Annual Meeting in person or by proxy will be required to adopt this
resolution. The Board of Directors recommends a vote "FOR" this resolution.
Abstentions and broker non-votes will have no effect on the outcome of the vote
on this proposal.
If the resolution selecting Ernst & Young LLP as independent public
accountants is adopted by shareholders, the Board of Directors nevertheless
retains the discretion to select different auditors should it then deem it in
the Company's best interests. Any such future selection need not be submitted to
a vote of shareholders.
-12-
MISCELLANEOUS
COST OF SOLICITING PROXIES
The cost of solicitation of Proxies, including the cost of reimbursing
banks, brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding Proxy soliciting material to beneficial owners
of Common Stock, will be borne by the Company. Proxies may be solicited without
extra compensation by certain officers and regular employees of the Company by
mail and, if determined to be necessary, by telephone, telegraph or personal
interviews.
INDEMNIFICATION INSURANCE
New York law permits a corporation to purchase insurance covering a
corporation's obligation to indemnify directors and officers and also covering
directors and officers individually, subject to certain limitations, in
instances in which they may not otherwise be indemnified by the corporation. In
March 2002, the Company extended insurance policies from National Union Fire
Insurance Company of Pittsburgh, PA, Federal Insurance Company and Continental
Casualty Company covering reimbursement to the Company for any obligation it
incurs as a result of indemnification of officers and directors and also
covering indemnification for officers and directors individually in certain
cases where additional exposure might exist. The policies expire March 8, 2003.
The annual premium cost of the policy was $469,040. The Company is in the
process of negotiating a renewal of these insurance policies.
SHAREHOLDER PROPOSALS
From time to time shareholders may present for consideration at meetings of
shareholders proposals which may be proper subjects for inclusion in the proxy
statement and form of proxy distributed in connection with such meetings. In
order to be so included, such proposals must be submitted in writing on a timely
basis. Shareholder proposals intended to be included in the Company's proxy
statement and form of proxy to be used in connection with the Company's 2004
Annual Meeting of Shareholders must be received by the Company by November 4,
2003. Any such proposals, as well as any questions relating thereto, should be
directed to the Secretary of the Company, 560 Lexington Avenue, New York, New
York 10022-2928.
The Company's by-laws, as amended, require shareholders who intend to
nominate directors or propose business at any annual meeting to provide advance
notice of such intended action, as well as certain additional information, to
the Company. Such notice and information must be timely received by the
Secretary of the Company at 560 Lexington Avenue, New York, New York 10022-2928
not less than 120 nor more than 150 days prior to the anniversary date of the
notice of the annual meeting of shareholders held in the immediately preceding
year. However, in the event the date of the annual meeting is changed by more
than 30 days from the one year anniversary date of the date the annual meeting
was held in such immediately preceding year and less than 130 days informal
notice to shareholders or other public disclosure of the date of the annual
meeting in the current year is given or made, advance notice of nominations or
business proposed by a shareholder must be received by the Company not later
than the close of business on the tenth calendar day following the date on which
formal or informal notice or public disclosure of the date of the annual meeting
is mailed or otherwise first publicly announced, whichever first occurs. Copies
of the by-law provision is available upon request made to the Secretary of the
Company.
By Order of the Board of Directors
Jerome Shaw, Secretary
New York, New York
March 3, 2003
-13-
REVOCABLE PROXY
[X]PLEASE MARK VOTES VOLT INFORMATION SCIENCES, INC.
AS IN THIS EXAMPLE
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL 1. The election of the following to With- For All
MEETING OF SHAREHOLDERS OF VOLT INFORMATION SCIENCES, INC. serve as Class II directors: For hold Except
[ ] [ ] [ ]
The undersigned hereby appoints WILLIAM SHAW, JEROME SHAW and S
HOWARD B. WEINREICH, jointly and severally, Proxies with full
power of substitution, to vote on behalf of the undersigned at A William Shaw Jerome Shaw
the Annual Meeting of Shareholders of VOLT INFORMATION
SCIENCES, INC. to be held on April 11, 2003, and at any V James J. Groberg William H. Turner
adjournments or postponements thereof, as indicated upon the
following matters as described in the Notice of Meeting and I INSTRUCTION: To withhold authority to vote for any individual
accompanying Proxy Statement related to such meeting, receipt nominee, mark "For All Except" and write that nominee's name
of which is acknowledged, and with discretionary power upon N in the space provided below
such other business as may come before the meeting, according
to the number of votes and as fully as the undersigned would G -----------------------------------------------------------------
be entitled to vote if personally present, hereby revoking any
prior Proxy or Proxies. S
2. The proposal to ratify the action of For Against Abstain
the Board of Directors in appointing [ ] [ ] [ ]
Ernst & Young LLP as the Company's
independent auditors for the fiscal
P year ending November 2, 2003.
L This Proxy also provides voting instructions to the trustee of
the Volt Information Sciences, Inc. Savings Plan.
------------------------- A
Please be sure to sign and date |Date | The Board of Directors recommends a vote for the election of each
this Proxy. | | N nominee to serve as a director and for Proposal 2 set forth in
---------------------------------------------------------- this Proxy.
| |
| | Each properly executed Proxy will be voted in accordance with the
| | specifications made above. If no specification is made, the
--Shareholder sign above-----Co-holder(if any) sign above- shares represented by this Proxy will be voted FOR the election
of all listed nominees and FOR Proposal 2.
The Submission Of This Proxy, If Executed Properly,
Revokes All Prior Proxies.
- ------------------------------------------------------------------------------------------------------------------------------------
DETACH ABOVE CARD, SIGN DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED
VOLT INFORMATION SCIENCES, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly owned shares, each owner should sign. If signing as
attorney, executor, administrator, trustee or guardian, please indicate the capacity in which you are acting. Proxies executed by
corporations should be signed by a duly authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
- -----------------------------------------
- -----------------------------------------
- -----------------------------------------
REVOCABLE PROXY
[X]PLEASE MARK VOTES VOLT INFORMATION SCIENCES, INC.
AS IN THIS EXAMPLE
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL With- For All
MEETING OF SHAREHOLDERS OF VOLT INFORMATION SCIENCES, INC. 1. The election of the following to For hold Except
serve as Class II directors: [ ] [ ] [ ]
The undersigned hereby appoints WILLIAM SHAW, JEROME SHAW and
HOWARD B. WEINREICH, jointly and severally, Proxies with full William Shaw Jerome Shaw
power of substitution, to vote on behalf of the undersigned at
the Annual Meeting of Shareholders of VOLT INFORMATION James J. Groberg William H. Turner
SCIENCES, INC. to be held on April 11, 2003, and at any C
adjournments or postponements thereof, as indicated upon the
following matters as described in the Notice of Meeting and O INSTRUCTION: To withhold authority to vote for any individual
accompanying Proxy Statement related to such meeting, receipt nominee, mark "For All Except" and write that nominee's name
of which is acknowledged, and with discretionary power upon M in the space provided below
such other business as may come before the meeting, according
to the number of votes and as fully as the undersigned would M -----------------------------------------------------------------
be entitled to vote if personally present, hereby revoking any
prior Proxy or Proxies. O
2. The proposal to ratify the action of For Against Abstain
N the Board of Directors in appointing [ ] [ ] [ ]
Ernst & Young LLP as the Company's
independent auditors for the fiscal
year ending November 2, 2003.
The Board of Directors recommends a vote for the election of each
nominee to serve as a director and for Proposal 2 set forth in
this Proxy.
Each properly executed Proxy will be voted in accordance with the
specifications made above. If no specification is made, the share
--------------------------- represented by this Proxy will be voted FOR the election of all
Please be sure to sign and date |Date | listed nominees and FOR Proposal 2.
this Proxy. | |
------------------------------------------------------------
| | The Submission Of This Proxy, If Executed Properly,
| | Revokes All Prior Proxies.
| |
--Shareholder sign above-----Co-holder(if any) sign above---
- ------------------------------------------------------------------------------------------------------------------------------------
DETACH ABOVE CARD, SIGN DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED
VOLT INFORMATION SCIENCES, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly owned shares, each owner should sign. If signing as
attorney, executor, administrator, trustee or guardian, please indicate the capacity in which you are acting. Proxies executed by
corporations should be signed by a duly authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
- -----------------------------------------
- -----------------------------------------
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