SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
AlphaNet Solutions, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
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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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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ALPHANET SOLUTIONS, INC.
7 RIDGEDALE AVENUE
CEDAR KNOLLS, NEW JERSEY 07927
April 14, 1997
To Our Shareholders:
You are most cordially invited to attend the 1997 Annual Meeting of
Shareholders of AlphaNet Solutions, Inc. at 9:00 A.M., local time, on
Thursday, May 15, 1997 at the offices of the Company, 7 Ridgedale Avenue,
Cedar Knolls, New Jersey.
The Notice of Meeting and Proxy Statement on the following pages describe
the matters to be presented to the meeting.
It is important that your shares be represented at this meeting to ensure
the presence of a quorum. Whether or not you plan to attend the meeting, we
hope that you will have your shares represented by signing, dating and
returning your proxy in the enclosed envelope, which requires no postage if
mailed in the United States, as soon as possible. Your shares will be voted in
accordance with the instructions you have given in your proxy.
Thank you for your continued support.
Sincerely,
/s/ Stan Gang
Stan Gang
Chairman of the Board, President
and Chief Executive Officer
ALPHANET SOLUTIONS, INC.
7 RIDGEDALE AVENUE
CEDAR KNOLLS, NEW JERSEY 07927
---------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1997
---------------------------------------------
The Annual Meeting of Shareholders (the "Meeting") of AlphaNet Solutions,
Inc., a New Jersey corporation (the "Company"), will be held at the offices of
the Company, 7 Ridgedale Avenue, Cedar Knolls, New Jersey, on Thursday, May
15, 1997, at 9:00 A.M., local time, for the following purposes:
(1) To elect five directors to serve until the next Annual Meeting of
Shareholders and until their respective successors shall have been duly
elected and qualified;
(2) To ratify the appointment of Price Waterhouse LLP as independent
accountants for the year ending December 31, 1997; and
(3) To transact such other business as may properly come before the Meeting
or any adjournment or adjournments thereof.
Holders of Common Stock of record at the close of business on April 4, 1997
are entitled to notice of and to vote at the Meeting, or any adjournment or
adjournments thereof. A complete list of such shareholders will be open to the
examination of any shareholder at the Meeting. The Meeting may be adjourned
from time to time without notice other than by announcement at the Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF
SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED RETURN ENVELOPE. THE PROMPT RETURN OF PROXIES WILL ENSURE A
QUORUM AND SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION. EACH PROXY
GRANTED MAY BE REVOKED BY THE SHAREHOLDER APPOINTING SUCH PROXY AT ANY TIME
BEFORE IT IS VOTED. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR
SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH SUCH PROXY CARD
SHOULD BE SIGNED AND RETURNED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.
By Order of the Board of Directors
/s/ Michael Gang
Michael Gang
Secretary
Cedar Knolls, New Jersey
April 14, 1997
THE COMPANY'S 1996 ANNUAL REPORT ACCOMPANIES THE PROXY STATEMENT.
ALPHANET SOLUTIONS, INC.
7 RIDGEDALE AVENUE
CEDAR KNOLLS, NEW JERSEY 07927
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P R O X Y S T A T E M E N T
-----------------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of AlphaNet Solutions, Inc. (the "Company") of proxies to
be voted at the Annual Meeting of Shareholders of the Company to be held on
Thursday, May 15, 1997 (the "Meeting"), at the offices of the Company, 7
Ridgedale Avenue, Cedar Knolls, New Jersey at 9:00 A.M., local time, and at
any adjournment or adjournments thereof. Holders of record of shares of Common
Stock, $.01 par value ("Common Stock"), as of the close of business on April
4, 1997, will be entitled to notice of and to vote at the Meeting and any
adjournment or adjournments thereof. As of that date, there were 5,102,900
shares of Common Stock issued and outstanding and entitled to vote. Each share
of Common Stock is entitled to one vote on any matter presented at the
Meeting.
If proxies in the accompanying form are properly executed and returned, the
shares of Common Stock represented thereby will be voted in the manner
specified therein. If not otherwise specified, the shares of Common Stock
represented by the proxies will be voted (i) FOR the election of the five
nominees named below as Directors, (ii) FOR the ratification of the
appointment of Price Waterhouse LLP as independent accountants for the year
ending December 31, 1997, and (iii) in the discretion of the persons named in
the enclosed form of proxy, on any other proposals which may properly come
before the Meeting or any adjournment or adjournments thereof. Any shareholder
who has submitted a proxy may revoke it at any time before it is voted, by
written notice addressed to and received by the Secretary of the Company, by
submitting a duly executed proxy bearing a later date or by electing to vote
in person at the Meeting. The mere presence at the Meeting of the person
appointing a proxy does not, however, revoke the appointment.
The presence, in person or by proxy, of holders of the shares of Common
Stock having a majority of the votes entitled to be cast at the Meeting shall
constitute a quorum. The affirmative vote by the holders of a plurality of the
shares of Common Stock represented at the Meeting is required for the election
of Directors, provided a quorum is present in person or by proxy. All actions
proposed herein other than the election of Directors may be taken upon the
affirmative vote of shareholders possessing a majority of the shares of Common
Stock represented at the Meeting, provided a quorum is present in person or by
proxy.
Abstentions are included in the shares present at the Meeting for purposes
of determining whether a quorum is present, and are counted as a vote against
for purposes of determining whether a proposal is approved. Broker non-votes
(when shares are represented at the Meeting by a proxy specifically conferring
only limited authority to vote on certain matters and no authority to vote on
other matters) are included in the determination of the number of shares
represented at the Meeting for purposes of determining whether a quorum is
present but are not counted for purposes of determining whether a proposal has
been approved and thus have no effect on the outcome.
This Proxy Statement, together with the related proxy card, is being mailed
to the shareholders of the Company on or about April 14, 1997. The Annual
Report to Shareholders of the Company for the year ended December 31, 1996,
including financial statements (the "Annual Report"), is being mailed together
with this Proxy Statement to all shareholders of record as of April 4, 1997.
In addition, the Company has provided brokers, dealers, banks, voting trustees
and their nominees, at the Company's expense, with additional copies of the
Annual Report so that such record holders could supply such materials to
beneficial owners as of April 4, 1997.
ELECTION OF DIRECTORS
At the Meeting, five Directors are to be elected (which number shall
constitute the entire Board of Directors of the Company) to hold office until
the next Annual Meeting of Shareholders and until their successors are duly
elected and qualified.
It is the intention of the persons named in the enclosed forms of proxy to
vote the shares of Common Stock represented thereby, unless otherwise
specified in the proxy, for the election as Directors of the persons whose
names and biographies appear below. All of the persons whose names and
biographies appear below are at present Directors of the Company. In the event
any of the nominees should become unavailable or unable to serve as a
Director, it is intended that votes will be cast for a substitute nominee
designated by the Board of Directors. The Board of Directors has no reason to
believe that the nominees named will be unable to serve if elected. Each of
the nominees has consented to being named in this Proxy Statement and to serve
if elected.
The current members of the Board of Directors and nominees for election to
the Board are as follows:
SERVED AS A
NAME AGE DIRECTOR SINCE POSITIONS WITH THE COMPANY
---- --- -------------- --------------------------
Stan Gang............... 62 1984 Chairman of the Board, President and Chief
Executive Officer
Michael Gang............ 30 1995 Secretary and Director
Michael R. Bruce........ 58 1995 Director
David J. Sorin, Esq..... 39 1996 Director
Susan H. Wolford........ 41 1996 Director
The principal occupations and business experience, for at least the past
five years, of each nominee is as follows:
Stan Gang founded the Company and has served as Chairman of the Board,
President and Chief Executive Officer of the Company since 1984. Mr. Gang has
nearly 40 years of experience in the computer sales and services industry.
Prior to joining the Company, Mr. Gang was employed by IBM Corporation for 10
years in technical capacities and by MAI Equipment Corporation for five years
and Memorex Telex Corporation for 13 years in various management capacities.
Michael Gang joined the Company in April 1989 as Corporate Account Manager
and has been a Director and Secretary of the Company since September 1995.
Michael R. Bruce has been a Director of the Company since September 1995.
Since 1993, Mr. Bruce has been a business consultant to several information
technology companies. Until July 1993, Mr. Bruce was president and chief
executive officer of Systems Industries, a storage systems company
specializing in open systems and DEC attachments. Prior to that, Mr. Bruce was
chief operating officer of Sequoia Systems, Inc., a company specializing in
fault tolerant on-line transaction processing systems. Earlier in his career,
Mr. Bruce served IBM for 29 years in various executive and management
positions.
David J. Sorin, Esq. has been a Director of the Company since May 1996. Mr.
Sorin currently is, and since 1993 has been, the Managing Partner of the
Princeton, New Jersey office of the law firm Buchanan Ingersoll, counsel to
the Company. Prior to joining Buchanan Ingersoll, Mr. Sorin was a partner with
another law firm. Earlier in his career, he was an associate with Davis, Polk
& Wardwell, a New York City-based law firm. Mr. Sorin also serves as a member
of the Board of Directors of the New Jersey Technology Council, a not-for-
profit organization serving the high technology community.
2
Susan H. Wolford has been a Director of the Company since May 1996. Ms.
Wolford currently is Senior Vice President with Parker/Hunter Incorporated,
one of the representatives of the underwriters in the Company's initial public
offering consummated in March and April 1996, prior to Ms. Wolford's election
to the Board of Directors of the Company in May 1996. Prior to joining
Parker/Hunter Incorporated in 1995, Ms. Wolford was a Managing Director with
PNC Securities Corp. from 1992 to 1995. Prior to that, she was a Senior Vice
President of Kidder, Peabody & Co. Incorporated in New York from 1981 to 1991.
All Directors hold office until the next annual meeting of shareholders and
until their successors are duly elected and qualified. Other than Stan Gang
and Michael Gang, who are father and son, there are no family relationships
among any of the Directors, executive officers and key employees of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF THE
NOMINEES FOR THE BOARD OF DIRECTORS.
COMMITTEES AND MEETINGS OF THE BOARD
The Board of Directors has a Compensation Committee, which approves salaries
and certain incentive compensation for management and key employees of the
Company; an Audit Committee, which reviews the results and scope of the audit
and other services provided by the Company's independent accountants; and an
Option Committee, which administers the Company's 1995 Stock Plan. The
Compensation Committee currently consists of Stan Gang, Mr. Bruce and Ms.
Wolford. The Compensation Committee was established in May 1996 and held one
meeting during 1996. The Audit Committee currently consists of Stan Gang,
Messrs. Bruce and Sorin and Ms. Wolford. The Audit Committee was established
in May 1996 and held one meeting during 1996. The Option Committee currently
consists of Messrs. Bruce and Sorin and Ms. Wolford. The Option Committee was
established in May 1996 and held two meetings during 1996. There were six
meetings of the Board of Directors during 1996. Each incumbent Director
attended at least 75% of the aggregate of all meetings of the Board of
Directors held during the period in which he or she served as a Director and
the total number of meetings held by all committees on which he or she served
during the period, if applicable.
COMPENSATION OF DIRECTORS
Each of the Company's non-employee Directors receives compensation of $1,000
per meeting for each regularly-scheduled meeting in which he or she
participates. In addition, each of the non-employee members of the Board who
serve on the Audit, Option and/or Compensation Committee of the Board receives
a $500 fee per meeting for each regularly-scheduled Committee meeting in which
such Committee member participates, as long as such Committee meeting or
meetings is or are held on a day or days other than the day of a regularly-
scheduled Board meeting. The Company also provides reimbursement to Directors
for reasonable and necessary expenses incurred in connection with attendance
at meetings of the Board of Directors or its Committees. Non-Employee
Directors also receive stock options pursuant to the Company's 1995 Non-
Employee Director Stock Option Plan (the "Non-Employee Director Plan") and
Directors who are also employees are eligible to participate in the Company's
1995 Stock Plan. See "1995 Stock Plan."
On August 25, 1995, the Board of Directors and shareholders adopted the
Company's Non-Employee Director Plan, effective September 1, 1995. The Non-
Employee Director Plan provides for the grant of options to purchase a maximum
of 100,000 shares of Common Stock of the Company to non-employee Directors of
the Company. The Non-Employee Director Plan is administered by the Board of
Directors. As of February 28, 1997, options to purchase an aggregate of 60,000
shares of Common Stock had been granted in accordance with the terms of such
plan.
Each person who was a Director of the Company on the effective date of the
Company's initial public offering or became or becomes a Director of the
Company thereafter, and who is not also an employee or officer of the Company
was or shall be granted, on the effective date of such offering or the date on
which he or she became or becomes a Director, whichever is later, an option to
purchase 20,000 shares of Common Stock, at an
3
exercise price per share equal to the then fair market value of the shares.
All options become exercisable in five equal annual installments commencing
one year after the date of grant provided that the optionee then remains a
Director at the time of vesting of the installments. Each annual vesting
installment of options will be reduced proportionately based on the optionee's
actual attendance at Board of Directors' meetings if the optionee fails to
attend at least 80% of such meetings held in any calendar year. The term of
each option will be for a period of ten years from the date of grant, unless
sooner terminated in accordance with the Non-Employee Director Plan. Options
may not be assigned or transferred except by will or by the laws of descent
and distribution, or pursuant to domestic relations order, and are exercisable
to the extent vested at any time prior to the scheduled expiration date of the
option. The Non-Employee Director Plan terminates on the earlier of August 31,
2005 or at such time as all shares of Common Stock currently or hereafter
reserved for issuance shall have been issued. On March 20, 1996, the Company
granted to Michael R. Bruce options to purchase 20,000 shares of Common Stock
under the Non-Employee Director Plan at an exercise price of $10.50 per share.
In addition, on May 3, 1996, the Company granted to each of David J. Sorin and
Susan H. Wolford options to purchase 20,000 shares of Common Stock under the
Non-Employee Director Plan at an exercise price of $11.375 per share.
EXECUTIVE OFFICERS
The following table identifies the current executive officers of the
Company:
IN CURRENT
NAME AGE CAPACITIES IN WHICH SERVED POSITION SINCE
---- --- -------------------------- --------------
Stan Gang............... 62 Chairman of the Board, President and Chief June 1984
Executive Officer
Sophien Bennaceur....... 35 Executive Vice President and Chief October 1996
Operating Officer
Gary S. Finkel.......... 39 Vice President, Chief Financial Officer and November 1995
Treasurer
John Centinaro.......... 41 Vice President--Sales February 1997
John Crescenzo.......... 48 Vice President--Customer Technology February 1997
Services
Bruce Flitcroft......... 31 Vice President--Network Consulting Services February 1997
Lawrence Mahon.......... 33 Vice President--National Accounts May 1996
Philip M. Pfau.......... 42 Vice President--Operations and May 1996
Administration
Dennis Samuelson........ 40 Vice President--Education Services May 1996
Sophien Bennaceur joined the Company in October 1996 and currently serves as
Executive Vice President and Chief Operating Officer. Prior to joining the
Company, Mr. Bennaceur served as Chief Information Officer of SAP America,
Inc., a major international business applications software company, from April
1996 until September 1996. Prior to that, Mr. Bennaceur was Director of MIS
and Director of Product Development of Ceridian Corporation, an information
services company, from September 1992 to March 1996.
Gary S. Finkel joined the Company in October 1995 and currently serves as
Vice President, Chief Financial Officer and Treasurer. Prior to joining the
Company, Mr. Finkel served as Vice President and Chief Financial Officer of
Continental Health Affiliates, Inc. ("CHA"), a diversified publicly-held
health care provider, from 1989 through October 1995 in various financial
management positions. He also was Vice President, Chief Financial Officer and
Treasurer of Infu-Tech, Inc., a publicly-held 59% owned subsidiary of CHA from
1992 through October 1995. Prior to that, from 1982 to 1989, he held various
financial management positions at Sony Corporation of America. Mr. Finkel is a
Certified Public Accountant.
4
John Centinaro joined the Company in February 1992 and currently serves as
Vice President--Sales. Prior to joining the Company, from 1978 to 1992, Mr.
Centinaro served as Regional Business Operations Manager and National Account
Service Manager with Memorex Telex Corporation. Mr. Centinaro is a member of
the Association for Field Service Management.
John Crescenzo joined the Company in September 1991 and currently serves as
Vice President--Customer Technology Services. Prior to joining the Company,
Mr. Crescenzo served in various executive management capacities with Memorex
Telex Corporation for nearly twenty years working in mainframe, communication
and microcomputer services.
Bruce Flitcroft joined the Company in August 1990 and currently serves as
Vice President--Network Consulting Services. Prior to joining the Company, Mr.
Flitcroft was President of a computer network services company, DATAR IDS
Corp., which he founded in 1986. The Company acquired DATAR IDS Corp. in 1990.
Lawrence Mahon joined the Company in July 1985 and currently serves as Vice
President--National Accounts. Prior to joining the Company, he held various
positions with a Computerland franchisee.
Philip M. Pfau joined the Company in February 1994 and currently serves as
Vice President--Operations and Administration. Prior to that, he acted as an
independent consultant for the Company from September 1993 to February 1994.
Prior to joining the Company, Mr. Pfau held various financial positions with
the Customer Service Division of TRW, Inc., including Controller from January
1988 to August 1993 and Financial Planning Manager from January 1986 until
December 1987. Mr. Pfau is a Certified Public Accountant.
Dennis Samuelson joined the Company in October 1989 and currently serves as
Vice President--Education Services. Prior to joining the Company, Mr.
Samuelson held various staff management positions with AT&T and was Manager of
the AT&T Information Center which provided programming and support to AT&T's
General Business Systems division. Mr. Samuelson is a former member of the
Novell Advisory Board and a current member of the Certification Advisory Board
of Sylvan Prometric. In addition, he is a former President and currently is a
member of the Board of Directors of the Information Technology Training
Association.
Executive officers of the Company are elected annually by the Board of
Directors and serve until their successors are duly elected and qualified.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Directors, officers and shareholders
who beneficially own more than 10% of any class of equity securities of the
Company registered pursuant to Section 12 of the Exchange Act (the "Reporting
Persons") to file initial reports of ownership and reports of changes in
ownership with respect to the Company's equity securities with the Securities
and Exchange Commission (the "SEC"). All Reporting Persons are required by SEC
regulation to furnish the Company with copies of all reports that such
Reporting Persons file with the SEC pursuant to Section 16(a).
Based solely on the Company's review of the copies of such forms received by
the Company and upon written representations of the Company's Reporting
Persons received by the Company, Dennis Samuelson, Vice President--Education
Services of the Company, did not report on a timely basis one 1996
transaction. In particular, Mr. Samuelson failed to report on a timely basis
the grant to his spouse, an employee of the Company, on September 16, 1996 of
options to purchase 800 shares of Common Stock at an exercise price of $9.00
per share. Such transaction was reported late on a Form 5 which was filed with
the SEC on March 6, 1997.
5
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION IN 1996 AND 1995
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by or paid to the Company's
Chief Executive Officer and the four most highly compensated executive
officers of the Company whose aggregate cash compensation exceeded $100,000
(collectively, the "Named Executives") during the years ended December 31,
1995 and 1996.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ------------
AWARDS
------------
SECURITIES ALL
OTHER ANNUAL UNDERLYING OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION(2) OPTIONS COMPENSATION(3)
POSITION(1) YEAR ($) ($) ($) (#) ($)
(a) (b) (c) (d) (e) (g) (i)
------------------ ---- ------- ------ --------------- ------------ ---------------
Stan Gang............... 1996 250,000 -- -- -- 3,000
President and Chief 1995 212,512 -- -- -- 1,870
Executive Officer
Gary S. Finkel.......... 1996 125,000 15,000 -- 3,500 1,677
Vice President, Chief 1995 21,795(4) -- -- 10,000 --
Financial Officer and
Treasurer
Bruce Flitcroft......... 1996 162,000 85,000 -- 10,000 3,000
Vice President--Network 1995 162,375 35,000 -- 20,000 3,000
Consulting Services
Lawrence Mahon.......... 1996 155,000 -- -- 2,500 --
Vice President-- 1995 155,000 -- -- 12,500 --
National Accounts
Dennis Samuelson........ 1996 150,000 -- -- 2,500(5) 3,000
Vice President-- 1995 86,250 88,750 -- 20,000 3,000
Education Services
- --------
(1) Sophien Bennaceur became Executive Vice President and Chief Operating
Officer of the Company effective October 14, 1996. His current annual base
salary is $225,000.
(2) The costs of certain benefits are not included because they did not
exceed, in the case of each Named Executive, the lesser of $50,000 or 10%
of the total annual salary and bonus as reported above.
(3) Represents 401(k) contributions made by the Company on behalf of the Named
Executive.
(4) Mr. Finkel joined the Company in October 1995.
(5) Excludes 800 shares subject to options granted in September 1996 to
Virginia R. Samuelson, an employee of the Company and the wife of Dennis
Samuelson.
6
STOCK OPTION GRANTS IN 1996
The following table sets forth information concerning individual grants of
stock options made pursuant to the Company's 1995 Stock Plan (the "Plan")
during 1996 to each of the Named Executives. The Company has never granted any
stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVDUAL GRANTS
------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES
NUMBER OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION
OPTIONS EMPLOYEES OR BASE TERM (3)
GRANTED(2) IN FISCAL PRICE EXPIRATION --------------------
NAME(1) (#) YEAR ($/SH) DATE 5% ($) 10% ($)
(a) (b) (c) (d) (e) (f) (g)
------- ---------- ---------- -------- ---------- --------- ----------
Stan Gang................. -- -- -- -- -- --
Gary S. Finkel............ 3,500 1.5% 9.00 9/15/06 19,810 50,203
Bruce Flitcroft........... 10,000 4.3% 9.00 9/15/06 56,600 143,437
Lawrence Mahon............ 2,500 1.1% 9.00 9/15/06 14,150 35,859
Dennis Samuelson.......... 2,500(4) 1.1% 9.00 9/15/06 14,150 35,859
- --------
(1) Mr. Bennaceur was granted options to purchase 30,000 shares of Common
Stock effective October 14, 1996 at an exercise price of $11.375 per
share.
(2) Options are granted pursuant to and in accordance with the Plan. See "--
1995 Stock Plan."
(3) Represents the difference between (i) the market value of the Common Stock
for which the option may be exercised, assuming that the market value of
the Common Stock on the date of grant appreciates in value to the end of
the ten-year option term at rates of 5% and 10% per annum, respectively,
and (ii) the exercise price of the option. On the grant date of the
options, the fair market value of the Company's underlying Common Stock
was $9.00 per share.
(4) Excludes 800 shares subject to options granted in September 1996 to
Virginia R. Samuelson, an employee of the Company and the wife of Dennis
Samuelson.
1995 STOCK PLAN
The Plan was adopted by the Board of Directors and approved by the
shareholders of the Company on August 25, 1995. A total of 747,100 shares of
Common Stock currently are reserved for issuance upon exercise of options
granted or to be granted under the Plan. The Plan is administered by the
Option Committee of the Board of Directors of the Company. Subject to the
provisions of the Plan, the administrator of the Plan has the discretion to
determine the optionees, the type of options to be granted (incentive stock
options ("ISOs") or non-qualified stock options ("NQSOs")), the vesting
provisions and the terms of the option grants. The exercise price of an ISO
may not be less than the fair market value per share of the Common Stock on
the date of grant. The exercise price of a NQSO may not be less than 85% of
the fair market value per share of the Common Stock on the date of grant. In
the case of an optionee who beneficially owns 10% or more of the outstanding
capital stock of the Company, the exercise price of an option may not be less
than 110% of the fair market value per share on the date of grant. The options
terminate not more than ten years from the date of grant, subject to earlier
termination on the optionee's death, disability or termination of employment
with the Company. Options are not assignable or otherwise transferable except
by will or the laws of descent and distribution. The options become
exercisable in five equal annual installments commencing one year after the
date of grant provided that the optionee then remains an employee at the time
of vesting of the installments.
7
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES
The following table sets forth information concerning each exercise of
options during 1996 by each of the Named Executives and the year-end number and
value of unexercised options held by each of the Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL FISCAL
SHARES YEAR-END YEAR-END
ACQUIRED ON VALUE (#) ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
(a) (b) (c) (d) (e) (1)
---- ----------- -------- ------------- --------------
Stan Gang.......................... -- -- --/-- --/--
Gary S. Finkel..................... -- -- 2,000/11,500 14,000/80,500
Bruce Flitcroft.................... -- -- 4,000/26,000 28,000/182,000
Lawrence Mahon..................... 2,500 10,625 --/12,500 --/87,500
Dennis Samuelson................... -- -- 4,000/18,500(2) 28,000/129,500
- --------
(1) Based on a year-end fair market value of the underlying securities equal to
$16.00 per share.
(2) Excludes 800 shares subject to options granted in September 1996 to
Virginia R. Samuelson, an employee of the Company and the wife of Dennis
Samuelson.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The following executive officers of the Company entered into three-year
employment agreements with the Company, each commencing October 1, 1995. Under
the terms of their respective agreements, Messrs. Gang, Centinaro, Crescenzo,
Flitcroft, Mahon, Pfau and Samuelson currently are entitled to an annual base
salary of $250,000, $100,000, $125,000, $200,000, $155,000, $90,000 and
$150,000, respectively, and bonuses, the amounts and payment of which are
within the discretion of the Board of Directors or the Compensation Committee
thereof.
Effective November 1, 1995, the Company and Mr. Finkel executed a three-year
employment agreement pursuant to which Mr. Finkel currently is entitled to an
annual base salary of $130,000 and a bonus, the amount and payment of which is
within the discretion of the Board of Directors or the Compensation Committee
thereof. Effective October 14, 1996, the Company and Mr. Bennaceur executed a
one-year employment agreement, terminable at will by either party, pursuant to
which Mr. Bennaceur currently is entitled to an annual base salary of $225,000
and a bonus, the amount and payment of which is within the discretion of the
Board of Directors or the Compensation Committee thereof.
The above-described agreements require each executive to maintain the
confidentiality of Company information and assign inventions to the Company. In
addition, each of such executive officers has agreed that during the term of
his respective agreement and thereafter for a period of up to 18 months,
provided that such executive officer is being compensated at one-half of his
annual base salary under such agreement, such person will not compete with the
Company by engaging in any capacity in any business which is competitive with
the business of the Company.
In addition to the foregoing employment contracts, the Company has executed
indemnification agreements with each of its executive officers and Directors
pursuant to which the Company has agreed to indemnify such
8
parties to the full extent permitted by law, subject to certain exceptions, if
such party becomes subject to an action because such party is a Director,
officer, employee, agent or fiduciary of the Company. The Company has not
entered into any change-in-control arrangements.
Substantially all of the Company's employees have executed an invention
assignment and confidentiality agreement pursuant to which the employee agrees
to keep confidential all proprietary information of the Company and to assign
to the Company all rights in any proprietary information or inventions made or
contributed by the employee during his or her employment. In addition, the
Company requires that all new employees execute such agreement as a condition
of employment by the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Stan Gang, Michael Bruce and Susan
Wolford. The Option Committee is comprised of Messrs. Bruce and Sorin and Ms.
Wolford. There are no Compensation Committee or Option Committee interlocks
between the Company and any other entities involving the Company's executive
officers and Board of Directors who serve as executive officers of such
entities.
From time to time until consummation of the Company's initial public offering
in March 1996, the Company made loans to and received loans from Stan Gang. All
outstanding loans made by the Company to Stan Gang, totaling $413,000 at
December 31, 1995, were repaid by Mr. Gang in 1996.
Mr. Gang agreed to indemnify the Company for any and all losses which the
Company may sustain, up to $1.0 million arising from or relating to the alleged
wrongful conduct of two of its former employees and the current employer of
such former employees (the "Defendants") and to date has paid $675,000 of his
personal funds to the Company in connection with an indemnification arrangement
with the Company. Pursuant to the terms of the agreement between the Company
and Mr. Gang, the Company shall reimburse Mr. Gang in the event and to the
extent that the Company is awarded and collects damages from the Defendants,
receives sums as a result of a settlement between the Company and the
Defendants, or receives proceeds under an insurance policy.
On March 19, 1996, in connection with the Company's initial public offering
of its Common Stock, the Company terminated its status as an S Corporation. In
connection therewith, the Company declared a distribution, made in March 1996,
of substantially all of the Company's previously taxed but undistributed
earnings of $6.2 million. The recipients of such distribution were the then
current shareholders of the Company, consisting solely of Stan Gang and The
Gang Annuity Trust, a trust created by Stan Gang for the benefit of certain
members of Mr. Gang's family. See "Security Ownership of Certain Beneficial
Owners and Management."
On July 24, 1996, the Company consummated the acquisition of certain assets
and the business of Lior, Inc. ("Lior"). The Company purchased such assets and
business for an aggregate purchase price of $1.0 million, of which $900,000 was
paid at closing and $100,000 was paid in January 1997. The Company funded the
purchase price from proceeds raised in its initial public offering. The Company
did not assume any liabilities of Lior, other than the obligations to perform
under certain purchase orders and service contracts. The Company acquired such
assets and business from Stan Gang, who had purchased such assets for the same
consideration directly from Lior on July 18, 1996 pending approval of the
transaction by the Company's Board of Directors.
Susan H. Wolford has been a Senior Vice President of Parker/Hunter
Incorporated since 1995. Parker/Hunter Incorporated acted as one of the
representatives of the underwriters in the Company's initial public offering
consummated in March and April 1996, prior to Ms. Wolford's election to the
Board of Directors of the Company in May 1996. As compensation for services of
the underwriters in the initial public offering, the underwriters received a 7%
underwriting discount.
David J. Sorin has been the Managing Partner of the Princeton, New Jersey
office of the law firm Buchanan Ingersoll since 1993. Buchanan Ingersoll has
been counsel to the Company since 1995.
9
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total return on the Nasdaq Composite
Index and a Peer Group Index (capitalization weighted) for the period beginning
on the date on which the SEC declared effective the Company's Form 8-A
Registration Statement pursuant to Section 12 of the Exchange Act and ending on
the last day of the Company's last completed fiscal year. The stock performance
shown on the graph below is not indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN(1)(2)
AMONG THE COMPANY, THE NASDAQ COMPOSITE INDEX
AND A PEER GROUP INDEX(3)
(CAPITALIZATION WEIGHTED)
LOGO
3/21/96 3/31/96 6/30/96 9/30/96 12/31/96
------- ------- ------- ------- --------
AlphaNet Solutions, Inc.............. 100.0 92.5 82.1 87.9 148.0
Nasdaq Composite Index............... 100.0 100.2 108.4 112.3 117.8
Peer Group Index (Capitalization
Weighted)........................... 100.0 100.1 142.6 189.4 216.0
- --------
(1) Graph assumes $100 invested on March 21, 1996 in the Company's Common
Stock, the Nasdaq Composite Index and the Peer Group Index (capitalization
weighted).
(2) Cumulative total return assumes reinvestment of dividends.
(3) The Company has constructed a Peer Group Index consisting of other computer
equipment resellers that also provide information technology consulting
services to their clients, including Compucom Systems, Inc., Dataflex
Corporation, Glasgal Communications, Inc., Government Technology Services,
Inc., Micros-to-Mainframes, Inc., Pomeroy Computer Resources, Inc.,
Transnet Corporation and Vanstar Corporation. The Company believes that
these companies most closely resemble the Company's business mix and that
their performance is representative of the industry.
10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report:
The Company's executive compensation policy is designed to attract and
retain highly qualified individuals for its executive positions and to provide
incentives for such executives to achieve maximum Company performance by
aligning the executives' interest with that of shareholders by basing a
portion of compensation on corporate performance.
Each of the Named Executives have executed employment agreements which
establishes salaries and other terms of employment. The Compensation and
Option Committee, however, generally review and determine base salary levels
for executive officers of the Company at or about the start of the fiscal year
and determine actual bonuses after the end of the fiscal year based upon
Company and individual performance.
The Company's executive officer compensation program is comprised of base
salary, discretionary annual cash bonuses, stock options and various other
benefits, including medical insurance and a 401(k) Plan, which are generally
available to all employees of the Company.
Salaries, whether established pursuant to contract or otherwise, are
established in accordance with industry standards through review of publicly
available information concerning the compensation of officers of comparable
companies. Consideration is also given to relative responsibility, seniority,
individual experience and performance. Salary increases are generally made
based on increases in the industry for similar companies with similar
performance profiles and/or attainment of certain division or Company goals.
Bonuses are paid on an annual basis and are discretionary. The amount of
bonus is based on criteria which are designed to effectively measure a
particular executive's attainment of goals which relate to his or her duties
and responsibilities as well as overall Company performance. In general, the
annual incentive bonus is based on operational and financial results of the
Company and focuses on the contribution to these results of a business unit or
division, and the executive's individual performance in achieving the results.
The stock option program is designed to relate executives' and certain
middle managers' long-term interests to shareholders' long-term interests. In
general, stock option awards are granted on an annual basis if warranted by
the Company's growth and profitability. Stock options are awarded on the basis
of individual performance and/or the achievement of internal strategic
objectives. Certain stock options are subject to forfeiture in the event
certain performance goals are not met.
Based on review of available information, the Committee believes that the
current Chief Executive Officer's total annual compensation is reasonable and
appropriate given the size, complexity and historical performance of the
Company's business, the Company's position as compared to its peers in the
industry, and the specific challenges faced by the Company during the year,
such as the completion of the Company's initial public offering, the
acquisition of certain of the assets and business of Lior, changes in the
market for computer products and services and other industry factors. No
specific weight was assigned to any of the criteria relative to the Chief
Executive Officer's compensation.
Compensation Committee Members
Stan Gang
Michael R. Bruce
Susan H. Wolford
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are, as of February 28, 1997, approximately 113 holders of record and
2,300 beneficial owners of the Company's Common Stock. The following table
sets forth certain information, as of February 28, 1997, with respect to
holdings of the Company's Common Stock by (i) each person known by the Company
to beneficially own more than 5% of the total number of shares of Common Stock
outstanding as of such date, (ii) each of the Company's Directors (which
includes all nominees) and Named Executives, and (iii) all Directors and
executive officers as a group.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(1) OF CLASS(2)
---------------------- ----------------------- -----------
(i) Certain Beneficial Owners:
Stan Gang(3)
7 Ridgedale Avenue
Cedar Knolls, NJ 07927...................................... 2,550,000 50.0
The Gang Annuity Trust(4)
c/o Andrew Kimmel, Esq.
185 Ridgedale Avenue
Cedar Knolls, NJ 07927...................................... 350,000 6.9
(ii) Directors (which includes all nominees) and Named Execu-
tives who are not set forth above:
Gary S. Finkel(5)............................................ 2,000 *
Lawrence Mahon(6)............................................ -- --
Bruce Flitcroft(7)........................................... 7,075 *
Dennis Samuelson(8).......................................... 4,200 *
Michael Gang(4)(9)........................................... 3,000 *
Michael R. Bruce(10)......................................... 5,000 *
David J. Sorin, Esq.(11)..................................... -- --
Susan H. Wolford(12)......................................... 200 *
(iii) All Directors and executive officers as a group (13
persons)(3)(13)........................................ 2,577,975 50.3
- --------
* Less than one percent.
(1) Except as set forth in the footnotes to this table and subject to
applicable community property law, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by such shareholder.
(2) Applicable ownership percentage is based on 5,102,900 shares of Common
Stock outstanding on February 28, 1997 plus presently exercisable stock
options held by each such holder which will become exercisable within 60
days after February 28, 1997.
(3) Does not include the shares of Common Stock owned by The Gang Annuity
Trust dated January 3, 1994. Mr. Gang expressly disclaims beneficial
ownership of such shares.
(4) The trustee of such trust is Andrew Kimmel, Esq., the settlor and income
beneficiary is Stan Gang and the beneficiaries of the trust are Stan
Gang's two adult children, including Michael Gang. Such trust is an
irrevocable five-year annuity trust which terminates automatically on
January 3, 1999 pursuant to which, until termination, the trust will pay
an annuity amount from the net income of the trust to Mr. Gang or his
estate, if applicable, no less than quarter annually, in an amount equal
to the greater of $60,000 or the entire net income of the trust estate
for such period. In the event net income is insufficient to pay such
12
annuity amount, the principal of the trust will be used for the payment of
such annuity amount. Upon termination of the annuity term, any remaining
principal not required to be paid to Mr. Gang in satisfaction of the final
annuity amount shall be divided equally and put into two separate trusts to
be established for the benefit of Mr. Gang's two adult children, each of
whom will be an income beneficiary of such respective trust until
termination pursuant to the terms thereof, at which time all remaining
principal shall be distributed to such children, respectively. Mr. Kimmel,
as trustee, has full voting and dispositive power with respect to the
shares of the Company held by the trust.
(5) Represents 2,000 shares of Common Stock underlying options which are
exercisable as of February 28, 1997 or within 60 days after such date.
Excludes 11,500 shares underlying options which become exercisable over
time after such period.
(6) Does not include options to purchase 12,500 shares of Common Stock not
currently vested.
(7) Includes 4,000 shares of Common Stock underlying options which are
exercisable as of February 28, 1997 or within 60 days after such date,
1,230 shares owned by Mr. Flitcroft and 1,845 shares held by his wife as
a custodian for minor children. Excludes 46,000 shares underlying options
which become exercisable over time after such period.
(8) Represents 4,000 shares of Common Stock underlying options which are
exercisable as of February 28, 1997 or within 60 days after such date and
200 shares held as a custodian for minor children. Excludes 18,500 shares
underlying options which become exercisable over time after such period
and 800 shares subject to options not currently vested and owned by his
wife, an employee of the Company.
(9) Represents 3,000 shares of Common Stock underlying options which are
exercisable as of February 28, 1997 or within 60 days after such date.
Excludes 12,000 shares underlying options which become exercisable over
time after such period. In addition, excludes the shares owned by The
Gang Annuity Trust. Mr. Gang expressly disclaims beneficial ownership of
such shares.
(10) Includes 4,000 shares of Common Stock underlying options which are
exercisable as of February 28, 1997 or within 60 days after such date.
Excludes 16,000 shares underlying options which become exercisable over
time after such period.
(11) Does not include options to purchase 20,000 shares of Common Stock
granted to Mr. Sorin on May 3, 1996 pursuant to the Non- Employee
Director Plan which are not currently vested.
(12) Represents 200 shares owned as custodian for a minor child. Does not
include options to purchase 20,000 shares of Common Stock granted to Ms.
Wolford on May 3, 1996 pursuant to the Non-Employee Director Plan which
are not currently vested.
(13) Includes 6,500 shares of Common Stock underlying options granted to
executive officers of the Company not individually listed on the table
which are exercisable as of February 28, 1997 or within 60 days after
such date and includes an aggregate of 17,000 shares of Common Stock
underlying options granted to individuals listed above which are
exercisable as of February 28, 1997 or within 60 days after such date.
Excludes 242,500 shares underlying options granted to executive officers
and Directors which become exercisable over time after such period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1996, the Company paid, as compensation for services rendered to the
Company and for sales generated, an aggregate of $520,240 to Michael Gang, the
son of Stan Gang, the Company's Chairman of the Board, President, and Chief
Executive Officer. Michael Gang serves as Secretary and as a salesperson for
the Company and has served as a Director of the Company since September 1995.
For transactions involving Stan Gang, David J. Sorin and Susan H. Wolford,
each a Director of the Company, see "Executive Compensation--Compensation
Committee Interlocks and Insider Participation."
In 1995, the Board of Directors of the Company adopted a policy requiring
that any future transactions between the Company and its officers, Directors,
principal shareholders and their affiliates be on terms no less favorable to
the Company than could be obtained from unrelated third parties and that any
such transactions be approved by a majority of the disinterested members of
the Company's Board of Directors.
13
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has, subject to shareholder approval,
retained Price Waterhouse LLP as independent accountants of the Company for
the year ending December 31, 1997. Price Waterhouse LLP also served as
independent accountants of the Company for 1996. Neither the accounting firm
nor any of its members has any direct or indirect financial interest in or any
connection with the Company in any capacity other than as independent
accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 1997.
One or more representatives of Price Waterhouse LLP is expected to attend
the Meeting and to have an opportunity to make a statement and/or respond to
appropriate questions from shareholders.
SHAREHOLDERS' PROPOSALS
Shareholders who wish to submit proposals for inclusion in the Company's
proxy statement and form of proxy relating to the 1998 Annual Meeting of
Shareholders must advise the Secretary of the Company of such proposals in
writing by December 15, 1997.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for action
at the Meeting other than the matters referred to above and does not intend to
bring any other matters before the Meeting. However, if other matters should
come before the Meeting, it is intended that holders of the proxies will vote
thereon in their discretion.
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company, whose notice of meeting is attached to this Proxy
Statement, and the entire cost of such solicitation will be borne directly by
the Company.
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by Directors, officers and other employees
of the Company who will not be specially compensated for these services. The
Company will also request that brokers, nominees, custodians and other
fiduciaries forward soliciting materials to the beneficial owners of shares
held of record by such brokers, nominees, custodians and other fiduciaries.
The Company will reimburse such persons for their reasonable expenses in
connection therewith.
Certain information contained in this Proxy Statement relating to the
occupations and security holdings of Directors and officers of the Company is
based upon information received from the individual Directors and officers.
14
ALPHANET SOLUTIONS, INC. WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO BUT NOT INCLUDING EXHIBITS, TO EACH OF ITS
SHAREHOLDERS OF RECORD ON APRIL 4, 1997, AND TO EACH BENEFICIAL SHAREHOLDER ON
THAT DATE UPON WRITTEN REQUEST MADE TO THE SECRETARY OF THE COMPANY. A
REASONABLE FEE WILL BE CHARGED FOR COPIES OF REQUESTED EXHIBITS.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN
THE ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE
APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
By Order of the Board of Directors
/s/ Michael Gang
Michael Gang
Secretary
Cedar Knolls, New Jersey
April 14, 1997
15
ALPHANET SOLUTIONS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints Stan Gang and Sophien
Bennaceur, and each of them, his or her true and lawful agent and proxy with
full power of substitution in each, to represent and to vote on behalf of the
undersigned all of the shares of Common Stock of AlphaNet Solutions, Inc. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at the Company's offices, 7 Ridgedale
Avenue, Cedar Knolls, New Jersey at 9:00 A.M., local time, on Thursday, May 15,
1997 and at any adjournment or adjournments thereof, upon the following
proposals more fully described in the Notice of Annual Meeting of Shareholders
and Proxy Statement for the Meeting (receipt of which is hereby acknowledged).
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR proposals 1 and 2.
-------------
SEE REVERSE
(continued and to be signed on reverse side) SIDE
-------------
. Please Detach and Mail in the Envelope Provided .
- --------------------------------------------------------------------------------
++++ +
A [X] Please mark your + +
votes as in the +
example. +++++
VOTE FOR all nominees Nominees: Stan Gang
listed at right; except vote VOTE Michael Gang
withheld from the follow- WITHHELD Michael R. Bruce
ing nominees (if any) from all nominees David J. Sorin, Esq.
Susan H. Wolford
1. ELECTION [_] [_]
OF
DIRECTORS,
To withhold authority for any individual nominee, write that
nominee's name in the space provided below.
- -------------------------------
2. APPROVAL OF PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE
INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1997.
[_] FOR [_] AGAINST [_] ABSTAIN
3. In his discretion, the proxy is authorized to vote upon other matters as may
properly come before the Meeting.
[_] I Will [_] Will Not
attend the Meeting
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Signature of Shareholder
----------------------------------------
Signature of Shareholder
----------------------------------------
IF HELD JOINTLY
Dated:
---------------------------
Note: This proxy must be signed exactly as the name appears hereon. When shares
are held by joint tenants, both should sign. If the signer is a
corporation, please sign full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.