SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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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 (S) 240.14a-11(c) or (S) 240.14a-12
KUPPER PARKER COMMUNICATIONS, INCORPORATED
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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KUPPER PARKER COMMUNICATIONS, INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 7, 2003
TIME:
9:00 a.m. central time on Tuesday, April 8, 2003.
PLACE:
Kupper Parker Communications, Incorporated
Main Conference Room
8301 Maryland Avenue
St. Louis, Missouri 63105
ITEMS OF BUSINESS:
1. To elect 2 directors.
2. To ratify the appointment of Rubin, Brown, Gornstein & Co. LLP as
KPCG's independent accountants.
3. To consider such other business as may properly come before the
meeting.
RECORD DATE:
You are entitled to vote if you were a stockholder at the close of business on
Monday, March 10, 2003.
VOTING BY PROXY:
Please submit a proxy as soon as possible so that your shares can be voted at
the meeting in accordance with your instructions. For specific instructions,
please refer to the Questions and Answers beginning on page 3 of this proxy
statement and the instructions on the proxy card.
By order of the Board of Directors,
John J. Rezich
Secretary
This proxy statement and accompanying proxy card are being distributed on or
about March 12, 2003.
2003 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
Questions and Answers About the Proxy Materials and the Annual Meeting
Why am I receiving these materials? 3
What is the purpose of the annual meeting? 3
Who is entitled to vote? 3
What constitutes a quorum? 3
How do I vote? 3
May I change my vote after I return my proxy card? 3
What are the Board's recommendations? 4
What vote is required to approve each item? 4
Proposals to be Voted Upon
Proposal 1--Election of directors 4
Proposal 2--Appointment of independent auditors 6
Other Business 6
Board Structure and Compensation
Board and Committee Information 6
Audit Committee Report 7
Compensation Committee Report 8
Board Compensation 8
Executive Compensation
Summary Compensation Table 9
Stock Options 9
Employment Agreements 10
Certain Relationships and Related Transactions 11
Stock Ownership 12
Additional Information
Submission of Stockholder Proposals 13
Proxy Solicitation Costs 13
Section 16(a) Beneficial Ownership Reporting Compliance 13
APPENDIX A - Audit Committee Charter 14
In this proxy statement, the terms "KPCG," "we," "us" and "our" refer to Kupper
Parker Communications, Incorporated.
A copy of KPCG's Annual Report on Form 10-K for fiscal 2002 as filed with the
Securities and Exchange Commission (without exhibits) will be furnished without
charge upon the written request of any stockholder entitled to vote at the
meeting directed to the attention of John J. Rezich, Secretary, at KPCG's
principal executive offices at 8301 Maryland Avenue, St. Louis, Missouri, 63105.
2
KUPPER PARKER COMMUNICATIONS, INCORPORATED
PROXY STATEMENT
MARCH 7, 2003
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 8, 2003
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
WHY AM I RECEIVING THESE MATERIALS?
The Board of Directors of Kupper Parker Communications Incorporated ("KPCG") is
providing these proxy materials to you and soliciting your proxy in connection
with KPCG's annual meeting of stockholders to be held on April 8, 2003,
beginning at 9:00 a.m. central time, in the Main Conference Room of Kupper
Parker Communications, Inc., 8301 Maryland Avenue, St. Louis, Missouri, 63105,
and at any postponements or adjournments thereof. You are invited to attend the
meeting and are requested to vote on the proposals described in this proxy
statement.
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At KPCG's annual meeting, stockholders will act upon the matters outlined in the
accompanying notice of meeting, namely the election of directors and
ratification of the appointment of KPCG's independent auditors. In addition,
KPCG's management will report on performance during fiscal 2002 and respond to
questions from stockholders.
WHO IS ENTITLED TO VOTE?
Only stockholders at the close of business on the record date, March 10, 2003,
are entitled to receive notice of the annual meeting and to vote the shares of
common stock that they held on that date at the meeting, or any postponement or
adjournment of the meeting. You are a "stockholder of record" if you hold your
stock directly in your own name. You are a "street-name" stockholder if you hold
your stock indirectly in the name of a bank, broker or other nominee and they
will send you voting instructions. Each outstanding share entitles its holder to
cast one vote on each matter to be voted upon. A list of stockholders of record
will be available for examination for any purpose relevant to the annual meeting
at Kupper Parker's headquarters at 8301 Maryland Avenue, St. Louis, Missouri,
during regular business hours for the ten days prior to the annual meeting and
at the annual meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a majority
of the shares of common stock outstanding and entitled to vote on the record
date will constitute a quorum, and will therefore permit the conduct of business
at the meeting. As of the record date 5,816,907 shares of KPCG common stock were
outstanding. Abstentions count toward the quorum.
HOW DO I VOTE?
If you hold your stock as a stockholder of record, you can vote in person at the
annual meeting or you can vote by mail. If you are a street-name stockholder,
you will receive instructions from your bank, broker or other nominee describing
how to vote your stock. The enclosed proxy card contains instructions for mail
voting. Whichever method you use, your stock will be voted as you direct.
MAY I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. You may change your proxy instructions at any time prior to the vote at the
annual meeting. If you are a stockholder of record you may accomplish this by
filing with the Secretary of KPCG either a notice of revocation or a duly
executed proxy bearing a later date. Attendance at the meeting will not cause
your previously granted proxy to be revoked unless you specifically so request
or vote in person at the meeting. For shares held in street-name you may change
or revise your proxy instructions by submitting new voting instructions to your
bank, broker or other nominee.
3
WHAT ARE THE BOARD'S RECOMMENDATIONS?
If you sign and return your proxy card but do not complete it by giving
instructions as to how to vote, proxy holders named on the proxy card will vote
your shares in accordance with the recommendations of the Board of Directors.
The Board's recommendations, along with a description of each item, are set
forth in this proxy statement. In summary, the Board recommends a vote:
FOR election of the nominated slate of directors (see page 5);
FOR ratification of the appointment of Rubin, Brown, Gornstein & Co. LLP as
KPCG's independent auditors (see page 7), and
With respect to any other matter that properly comes before the meeting, the
proxy holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
Election of Directors. The affirmative vote of a plurality of the votes cast at
the meeting is required for the election of directors. A properly executed proxy
marked to withhold authority with respect to any nominee will not affect the
vote on the election of that nominee, although it will be counted for purposes
of determining whether there is a quorum. There is no cumulative voting as to
any matter, including the election of directors.
Other Items. The ratification of the appointment of Rubin, Brown, Gornstein &
Co. LLP requires the affirmative vote of the holders of a majority of the shares
present either in person or by proxy and entitled to vote on that matter. A
properly executed proxy marked "Abstain" with respect to this matter will not be
voted, although it will be counted for purposes of determining whether there is
a quorum. Accordingly, an abstention will have the effect of a vote against the
proposal.
If you are a street-name stockholder, NASD rules permit your broker to exercise
voting discretion with respect to certain "routine" matters. Thus, if you do not
give your broker specific instructions, your shares may be voted on "routine"
matters but will not be voted on "non-routine" matters. Broker non-votes will
not be counted in determining the number of shares necessary for approval of any
proposal for this meeting. Shares represented by such "broker non-votes" will,
however, be counted in determining whether there is a quorum. The election of
directors and the appointment of independent auditors are considered "routine"
matters under the relevant NASD rules, so there will not be any broker non-votes
with respect to those matters.
PROPOSALS TO BE VOTED UPON
PROPOSAL 1--ELECTION OF DIRECTORS
The Directors of our company are divided into two classes and hold office until
the second succeeding Annual Meeting of Stockholders following the election of
their respective class and the qualification of their successors. Mr. Rezich,
Mr. Roberts and Mr. Saitz constitute the class of Directors whose terms expire
in 2003. Mr. Kupper, Ms. De Hahn, Mr. Kling and Mr. Santry constitute the class
of Directors whose terms expire in 2002. As a result of his retirement in
September 2002, Mr. Roberts has decided not to stand for election as a Director
of our company.
There are 2 nominees for election to the Board this year. Mr. Rezich and Mr.
Saitz have served as directors since the merger of Kupper Parker Communications,
Incorporated and Greenstone Roberts Advertising, Inc on September 29, 2000 (the
"Merger"). If any nominee is unable to accept nomination or election, which the
Board of Directors has no reason to anticipate will occur, shares represented by
proxies will be voted for the election of such other person as the Board of
Directors may recommend unless the Board of Directors chooses to reduce the
number of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF EACH
OF THE NOMINEES DESCRIBED BELOW.
The following tables sets forth certain information with respect to our
executive officers and directors as of January 23, 2003.
4
- ---------------------------- --------------- -------------------------------------------------------------------------
NAME AGE POSITION(s)
- ---------------------------- --------------- -------------------------------------------------------------------------
Bruce Kupper 50 Chief Executive Officer, President and Chairman of the Board
- ---------------------------- --------------- -------------------------------------------------------------------------
Mary De Hahn 53 Chief Operating Officer and Director
- ---------------------------- --------------- -------------------------------------------------------------------------
John Rezich 47 Chief Financial Officer, Treasurer, Secretary and Director
- ---------------------------- --------------- -------------------------------------------------------------------------
Gary Roberts 64 President of Long Island Operations and Director
- ---------------------------- --------------- -------------------------------------------------------------------------
S. Lee Kling 73 Director
- ---------------------------- --------------- -------------------------------------------------------------------------
James Saitz 53 Director
- ---------------------------- --------------- -------------------------------------------------------------------------
Chris Santry 54 President, KPC East
- ---------------------------- --------------- -------------------------------------------------------------------------
Bruce Kupper has served as our Chief Executive Officer, President and Chairman
of the Board since the Merger. Prior to that time he served in the same
capacities for Kupper Parker Communications, Incorporated (1993 -- 2000) and its
predecessor, Kupper Advertising, Inc. (1978 -- 1993). Prior to that time, Mr.
Kupper worked as an account executive for Young & Rubicam where he was named
Young & Rubicam's 1977 National Account Executive of the Year.
Mary De Hahn has served as Chief Operating Officer and as a Director of our
company since the Merger. Prior to that time she served in the similar executive
capacities for Kupper Parker Communications, Incorporated (1993 -- 2000) and its
predecessor, Kupper Advertising, Inc. (1988 -- 1993). Before joining Kupper
Advertising, Inc., Ms. De Hahn served as senior vice president of marketing for
Landmark Bancshares Corporation, a bank holding company in St. Louis, Missouri
and executive director of the Missouri Arts Council.
John Rezich has served as Chief Financial Officer and a Director of our company
since the Merger. Prior to that time he served in the same capacities for Kupper
Parker Communications, Incorporated from May 2000 to September 2000. Mr. Rezich
joined Kupper Parker Communications, Incorporated in October 1999 as Executive
Vice President, Mergers and Acquisitions. From 1985 to March 1999, Mr. Rezich
served in various executive financial positions for True North Communications,
Inc., a publicly held marketing communications company.
Gary Roberts has been a Director of our company since February 1989. Prior to
the Merger, Mr. Roberts had been President of our company for a period of more
than five years. Mr. Roberts joined Greenstone Roberts Advertising, Inc. in
1988. Prior to that time he served in various executive capacities for Slater
Hanft Martin (a New York, New York advertising agency) and Wells Rich Greene (a
New York, New York advertising agency).
S. Lee Kling has been a Director of our company since the Merger. Prior to that
time, Mr. Kling served as an advisory director to Kupper Parker Communications,
Incorporated for a period of more than five years. He has served since 1991 as
Chairman of the Board of Kling Rechter & Company, a merchant banking company
which works in partnership with First Chicago Equity Capital Corp., and served
as Vice Chairman of Willis Corroon Corp. of Missouri until July 2000. S. Lee
Kling has been a Director of our company since the Merger. Prior to that time,
Mr. Kling served as an advisory director to Kupper Parker Communications,
Incorporated for a period of more than five years. He has served since June 2002
as Chairman of the Board of The Kling Company. From 1991 to June 2002, Mr. Kling
served as Chairman of the Board of Kling Rechter & Company, a merchant banking
company. Mr. Kling served as Chairman of the Board of Landmark Bancshares
Corporation, a bank holding company in St. Louis, Missouri ("Landmark"), until
December 1991 when the company merged with Magna Group, Inc. He had served in
such capacity with Landmark since 1974 and had also served as Chief Executive
Officer of Landmark from 1974 through October 1990, except for the period from
May 1978 to January 1979 when he served as Assistant Special Counselor on
Inflation for the White House and Deputy for Ambassador Robert S. Strauss. Mr.
Kling serves on the Boards of Directors of Falcon Products, Co. (a furniture and
fixtures manufacturer), National Beverage Corp. (a beverage manufacturer),
Electro Rent Corporation (an electronic equipment rental company), Engineered
Support Systems, Inc. (a product manufacturer in the defense industry), and
Bernard Chaus, Inc. (a company that designs, arranges for the manufacture of,
and markets an extensive range of women's career and casual sportswear), all of
which are public companies.
James Saitz has been a Director of our company since the Merger. Prior to that
time, Mr. Saitz served as an advisory director to Kupper Parker Communications,
Incorporated for a period of more than five years. Mr. Saitz is the Chairman and
Chief Executive Officer of Trustcorp Financial, Inc. (1994 -- present), a
commercial bank holding company, and is the Chairman and Chief Executive Officer
of Missouri State Bank (1994 -- present), a commercial bank.
Christopher Santry became an executive officer of our company on October 5,
2001, the day we purchased Christopher Thomas Associates, Inc. Prior to that
day, Mr. Santry had been an executive officer, director and shareholder of
Christopher Thomas Associates, Inc. for a period of more than five years.
5
There are no family relationships among any of our officers or directors.
PROPOSAL 2--APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Rubin, Brown, Gornstein & Co. LLP as
auditors of KPCG for fiscal 2003. This firm of independent public accountants
has served KPCG in this capacity for fiscal 2002. A representative of Rubin,
Brown, Gornstein & Co. LLP is expected to be present at the annual meeting and
will have the opportunity to make a statement and will also be available to
respond to appropriate questions.
During our two most recent fiscal years and subsequent interim periods, there
have occurred none of the "reportable events" listed in Item 304(a)(1)(iv)(A-D)
of Regulation S-B.
During fiscal 2003, we paid the following fees to Rubin, Brown, Gornstein & Co.
LLP:
- ---------------------------------------------------------- ---------------
Audit $67,000
- ---------------------------------------------------------- ---------------
Financial information systems design and development --
- ---------------------------------------------------------- ---------------
All other fees:
- ---------------------------------------------------------- ---------------
Audit-related fees (1) --
- ---------------------------------------------------------- ---------------
Other fees (2) 9,200
- ---------------------------------------------------------- ---------------
Total $76,200
- ---------------------------------------------------------- ---------------
1. Audit-related fees include accounting consultation, assistance with
registration statements and consents.
2. Other fees represent tax services.
KPCG's Audit Committee has received the written disclosure and the letter from
Rubin Brown, Gornstein & Co. LLP required by Independence Standards Board
Standard No. 1, as currently in effect, and has discussed with Rubin, Brown,
Gornstein & Co. LLP their independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF RUBIN, BROWN,
GORNSTEIN & CO. LLP AS AUDITORS FOR 2003.
OTHER BUSINESS
As of the date of this proxy statement, KPCG has no knowledge of any other
business that will be presented at the annual meeting. If any other business
should properly be brought before the annual meeting or any postponements or
adjournments thereof, the proxy holders will vote as recommended by the Board of
Directors, or, if no recommendation is given, at their own discretion.
BOARD STRUCTURE AND COMPENSATION
BOARD AND COMMITTEE INFORMATION
The Board of Directors met four times during fiscal 2002.
We have established an Audit Committee, a Compensation Committee, a Stock Option
Plan Committee, and an Executive Committee for our Board of Directors.
The Audit Committee is composed of two independent directors, currently Mr.
Saitz and Mr. Kling. The Audit Committee reports to our board of directors
regarding the appointment of our independent public accountants, the scope and
fees of prospective annual audits and the results thereof, compliance with our
accounting and financial policies and management's procedures and policies
relative to the adequacy of our internal accounting controls. The Audit
Committee has met one time during fiscal 2002. The members of the Audit
Committee meet the independence standards of Rule 4200 (a)(14) of the National
Association of Securities Dealers' listing standards.
The Compensation Committee is composed of two independent directors, currently
Mr. Saitz and Mr. Kling, who make determinations regarding the compensation of
our executive officers. No interlocking relationships exist between our
6
board of directors and the board of directors or Compensation Committee of any
other company, nor has any such interlocking relationship existed in the past.
The Compensation Committee has met one time during fiscal 2002.
The Stock Option Plan Committee is composed of two independent directors,
currently Mr. Saitz and Mr. Kling, who make determinations regarding the
administration of our Option Plan, including the determination of stock option
grants made under the plan. The Stock Option Committee has met in January 2002
to approve the issuance of 213,000 stock options to our employees and in January
2003 to approve the issuance of 5,000 stock options to our employees.
The Executive Committee is composed of Mr. Kupper, Ms. De Hahn and Mr. Kling.
The duties of the Executive Committee are to exercise all functions of our Board
of Directors in the intervals between regular meetings of the Board of
Directors. The Executive Committee has not met since the Merger.
AUDIT COMMITTEE REPORT
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act or the Exchange Act that
might incorporate this Proxy Statement or future filings with the SEC, in whole
or in part, the following report shall not be deemed to be incorporated by
reference into any such filing.
Membership and Role of the Audit Committee - The Audit Committee consists of the
following members of the Board of Directors: James Saitz and S. Lee Kling. Both
members of the Audit Committee are independent as defined under the National
Association of Securities Dealers' listing standards. The Audit Committee
operates under a written charter adopted by the Board of Directors which is
included in this proxy as Appendix A.
The primary function of the Audit Committee is to provide advice with respect to
the Company's financial matters and to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing (i) the financial reports
and other financial information which will be provided by the Company to any
governmental body or the public, (ii) the Company's systems of internal controls
that management and the Board of Directors have established and (iii) the
Company's auditing, accounting and financial reporting processes generally.
The Audit Committee's primary duties and responsibilities are to: i) serve as an
independent and objective party to monitor the Company's financial reporting
process and internal control system, ii) review and appraise the audit efforts
of the Company's independent accountants and iii) provide an open avenue of
communication among the independent accountants, financial and senior
management, and the Board of Directors.
Review of the Company's Audited Financial Statements for the Fiscal Year ended
October 31, 2002 - The Audit Committee has reviewed and discussed the audited
financial statements of the Company for the fiscal year ended October 31, 2002
with the Company's management. The Audit Committee has discussed with Rubin
Brown, Gornstein & Co. LLP, the Company's independent public accountants, the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committee). The Audit Committee has also received the
written disclosures and the letter from Rubin, Brown, Gornstein & Co. LLP
required by Independence Standards Board No. 1 (Independent Discussion with
Audit Committees) and the Audit Committee has discussed with Rubin, Brown,
Gornstein & Co. LLP the latter's independence. Based on the Audit Committee's
review and discussions noted above, the Audit Committee recommended to the Board
of Directors that the Company's audited financial statements be included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended October 31,
2002 for filing with the SEC.
James Saitz
S. Lee Kling
7
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has furnished the following
report on executive compensation:
The fundamental philosophy of the Company's executive compensation program is to
offer competitive compensation opportunities that are based on each individual
executive officer's contribution and personal performance. The compensation of
the Company's executive officers is reviewed and approved by the Compensation
Committee which utilizes compensation analyses for similar type and size
agencies provided by the industry trade associations to ensure that the
compensation is both reasonable and competitive, and also is directly linked to
the Company's financial performance and shareholder interest.
There are three elements in the Company's executive compensation program, as
determined by individual and corporate performance.
Base salary compensation is determined by the potential impact of the individual
on the Company's performance, the skill and experience required by the job, and
the performance and potential of the incumbent in the job. Annual incentive
compensation is based on corporate operating earnings. Long-term incentive
compensation consists of eligibility under the Option Plan. Stock option grants
are awarded based on individual and Company performance.
KPCG's Executive Officers also maintain a significant long-term stock ownership
position in the Company's Common Stock. This ownership position creates a strong
linkage between the Company's management and its shareholders' interests.
During fiscal 2002, we have met one time to review the annual compensation of
KPCG's Executive Officers.
S. Lee Kling
James Saitz
BOARD COMPENSATION
Employee directors receive no compensation for their service on the Board of
Directors or committees thereof. Non-employee directors are paid an annual
retainer of $10,000 for their services. Both employee and non-employee directors
are also eligible for stock option grants under our Stock Option Plan.
8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation received,
for each of the last three fiscal years, for services rendered to us by our
Chief Executive Officer and each of our other most highly compensated executive
officers during the fiscal year ended October 31, 2002 whose total compensation
equaled or exceeded $100,000.
Annual Compensation Long-term Compensation
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Other Restricted Securities
Name and Principal Annual Stock Underlying LTIP All Other
Position Year Salary Bonus Comp. (1) Awards Options/SAR's Payouts Comp. (1)
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Bruce Kupper (2) 2002 210,000 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
CEO 2001 298,062 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
2000 288,000 317,750 -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Mary De Hahn (2) 2002 126,000 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
COO 2001 155,030 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
2000 170,000 90,000 -- -- -- -- 9,323
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
John Rezich (2) 2002 126,000 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
CFO 2001 145,030 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
2000 120,000 20,000 -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Gary Roberts 2002 210,000 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Director 2001 238,154 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
2000 226,250 -- -- -- -- -- 1,575
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Chris Santry (3) 2002 183,333 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
Director 2001 16,667 -- -- -- -- -- --
- ------------------------- ------- ----------- ----------- ----------- ----------- --------------- ----------- ------------
1. Amounts shown in this column are for company contributions to
KPCG's ESOP and 401K plans on behalf of the named Executive.
2. Includes compensation received from Kupper Parker Communications,
Incorporated prior to the Merger.
3. Mr. Santry commenced employment in October 2001.
YEAR 2002 STOCK OPTION GRANTS TO EXECUTIVE OFFICERS
On January 9, 2002, we granted stock options of 50,000, 25,000, 25,000, 10,000
and 10,000 to Mr. Kupper, Ms. De Hahn, Mr. Rezich, Mr. Kling and Mr. Saitz,
respectively, at a price of $0.71 per share. These stock options fully vest on
January 9, 2003 and have an expiration date of January 9, 2008.
During 2002, our executive officers did not exercise any of their various stock
option grants.
9
The following table sets forth unexercised stock options held by each of our
Executive Officers as of October 31, 2002:
- ----------------------------------------- -------------------------------------- -------------------------------------
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options/SAR's as of Options/SAR's as
October 31, 2002 of October 31, 2002 (1)
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
Bruce Kupper 141,700 50,000 $46,735 --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
Mary De Hahn -- 25,000 -- --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
John Rezich -- 25,000 -- --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
Gary Roberts 15,000 -- -- --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
S. Lee Kling -- 10,000 -- --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
James Saitz -- 10,000 -- --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
Christopher Santry 50,000 -- -- --
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------
1. Calculated by determining the difference between the exercise
price and the deemed fair value of the securities underlying the
options at October 31, 2002.
EMPLOYMENT AGREEMENTS
Effective January 1, 2002 we entered into a two-year employment agreement with
Mr. Kupper. Mr. Kupper's Employment Agreement provides for an initial base
salary of $360,000 per year, annual raises of 4%, and incentive compensation in
accordance with KPCG's Executive Compensation Program. Mr. Kupper is also
eligible to receive stock options and to participate in certain fringe benefits
and in KPCG's employee benefit plans generally available to senior executives.
The terms of this agreement provide that Mr. Kupper will become a consultant to
KPCG for the two-year period immediately following the expiration of the term of
his employment, as extended, if applicable. During this consulting period, Mr.
Kupper will receive annual compensation equal to 75% of the average of his
annual base salary over the last three full calendar years of his employment.
This consulting arrangement will also apply if Mr. Kupper resigns prior to the
scheduled expiration of the term of his employment, subject to a reduction in
the annual compensation based on vesting over a five-year period commencing
January 1, 2002.
Mr. Kupper's Employment Agreement provides that, in the event of termination of
employment by KPCG or by Mr. Kupper after the occurrence of one or more
specified events (none of which have occurred to date) (a "Qualifying
Termination"), Mr. Kupper would be entitled to receive his base salary,
incentive compensation and certain continuing benefits for two years and the
annual consulting compensation described above for the following two years. This
employment agreement provides that, upon a Qualifying Termination, each stock
option granted after January 1, 2002 and then held by Mr. Kupper shall be fully
vested and exercisable in full for up to three years (but not beyond ten years
after the date of grant of such option). Mr. Kupper's Employment Agreement also
contains a provision prohibiting him from engaging in certain competitive
activities with KPCG during his employment and during any severance and/or
consulting period.
Effective June 1, 2001, we amended Mr. Kupper's employment agreement to reduce
his base pay from $360,000 to $252,000. At the same time Ms. De Hahn and Mr.
Rezich accepted voluntary annual base pay reductions from $180,000 to $126,000.
Mr. Kupper again accepted a voluntary annual base pay reduction in 2002 from
$252,000 to $180,000.
In September 2000, in connection with the Merger, we entered into a two-year
employment agreement with Mr. Roberts providing for an annual base salary of
$240,000. Pursuant to this employment agreement, if we terminate Mr. Roberts'
employment without cause, or if we are unable to enter into a mutually agreeable
written renewal employment agreement for a term of not less than one year prior
to the expiration of the initial employment agreement, we are obligated to pay
Mr. Roberts all amounts owed under the initial employment agreement and
termination payments of $225,000.
In October 2001, in connection with the acquisition of Christopher Thomas
Associates, Inc., we entered into a two-year employment agreement with Mr.
Santry providing for an annual base salary of $200,000, an annual stock option
grant of at least 50,000 shares, and an annual cash bonus equal to three percent
of the revenues of Christopher Thomas Associates, Inc. in excess of $4,500,000.
During 2002, we amended this employment agreement so that Mr. Santry could work
on a part-time basis at an annual salary of $100,000.
10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Saitz, a member of our Board of Directors, is the Chairman and Chief
Executive Officer of Missouri State Bank, a commercial bank. This firm provided
us with commercial banking services during 2002 and is expected to provide us
with similar services during 2003. In addition, we provided certain advertising
and other communications services to Missouri State Bank. We believe that all of
the transactions between our company and Missouri State Bank were made on terms
no less favorable than those that either party could have obtained from
unaffiliated third parties.
Mr. Kling, a member of our Board of Directors, is a Managing Consultant of
Lockton Companies, an insurance brokerage and advisor. This firm provided us
with insurance brokerage services during 2002 and is expected to provide us with
similar services during 2003. We believe that all of the transactions between
our company and Lockton Companies were made on terms no less favorable than
those that either party could have obtained from unaffiliated third parties.
In connection with our new bank loan agreement, Mr. Kupper, our Chairman and
Chief Executive Officer, has personally guaranteed $500,000 of the bank loan.
During the third quarter of fiscal 2002, the Company financed its purchase of
the clients of RGSD by borrowing $125,000 from Mr. Kupper. This loan calls for
sixty monthly payments of $2,416.65 consisting of principal and interest at a
rate of 6%. The clients purchased from RGSD secure the loan.
11
STOCK OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of January 23, 2003 for:
1. Each person or entity who is known by us to beneficially own five percent
or more of the outstanding shares of our common stock;
2. Each director;
3. Each executive officer; and
4. All directors and executive officers of KPCG as a group.
- ---------------------------------------- ------------------------------ ------- --------------------------------------
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
- ---------------------------------------- ------------------------------ ------- --------------------------------------
Bruce Kupper 1,783,100 (1) 27.92
- ---------------------------------------- ------------------------------ ------- --------------------------------------
Mary De Hahn 326,020 (2) 5.11
- ---------------------------------------- ------------------------------ ------- --------------------------------------
John Rezich 188,500 (3) 2.95
- ---------------------------------------- ------------------------------ ------- --------------------------------------
Gary Roberts 72,708 (4) 1.14
- ---------------------------------------- ------------------------------ ------- --------------------------------------
S. Lee Kling 35,000 (5) 0.55
- ---------------------------------------- ------------------------------ ------- --------------------------------------
James Saitz 10,000 (6) 0.16
- ---------------------------------------- ------------------------------ ------- --------------------------------------
Chris Santry 68,500 (7) 1.07
- ---------------------------------------- ------------------------------ ------- --------------------------------------
All Directors and Executive Officers
as a Group 2,483,828 38.89
- ---------------------------------------- ------------------------------ ------- --------------------------------------
1. Includes 191,700 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
2. Includes 25,000 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
3. Includes 25,000 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
4. Includes 15,000 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
5. Includes 10,000 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
6. Includes 10,000 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
7. Includes 50,000 shares of Common Stock that the holder has the
right to acquire within one year upon exercise of the related
options granted by our company.
Following is certain information as of October 31, 2002 for our equity
compensation plans:
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE EXERCISE NUMBER OF SECURITIES
ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING REMAINING AVAILABLE FOR
OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND FUTURE ISSUANCES UNDER
WARRANTS AND RIGHTS RIGHTS EQUITY COMPENSATION PLANS
PLAN CATEGORY
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by shareholders 569,150 $0.68 80,850
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by shareholders -- -- --
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 569,150 $0.68 80,850
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
12
ADDITIONAL INFORMATION
SUBMISSION OF STOCKHOLDER PROPOSALS
KPCG's bylaws provide, in general, that to be considered for presentation at the
2004 annual meeting of stockholders, although not included in the proxy
statement, proposals of stockholders must be received in writing by KPCG at
least 60 days but no more than 90 days before the date of the annual meeting;
provided that, in the event that less than 70 days' notice or prior public
disclosure of the date of the meeting is given or made to the stockholders,
notice by the stockholder to be timely must be received no later than the close
of business on the tenth day following the day on which notice of the date of
the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever is earlier. Notice of stockholder proposals
should be sent to the Secretary, Kupper Parker Communications Incorporated, 8301
Maryland Avenue, St. Louis, Missouri 63105. Proposals of stockholders intended
for presentation and for inclusion in the proxy statement for the 2004 annual
meeting must be received by KPCG at the address listed above not later than
October 15, 2003.
PROXY SOLICITATION COSTS
This solicitation of proxies is being made on behalf of the Board of Directors.
Such solicitation of proxies normally will be made by mail. Employees of KPCG
may also solicit proxies by telephone or personal contact, but at no additional
compensation. Bankers, brokers and others holding common stock in their names or
in the names of nominees will be reimbursed for reasonable expenses incurred in
sending proxies and proxy material to the beneficial owners of such shares. KPCG
has retained American Stock Transfer & Trust Company to aid in the solicitation
of proxies from its stockholders. The fees of such firm are estimated to be
$5,000, plus reimbursement of out-of-pocket expenses. The total cost of
solicitation of proxies will be borne by KPCG.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder require that directors, officers and
beneficial owners of more than 10% of the common stock file certain reports
regarding their beneficial ownership of common stock with the Securities and
Exchange Commission. All such required reports were timely filed during and for
2002.
By order of the Board of Directors,
John J. Rezich
Secretary
Dated: March 7, 2003
13
APPENDIX A
KUPPER PARKER COMMUNICATIONS INC.
AUDIT COMMITTEE CHARTER
COMMITTEE RESPONSIBILITIES
The Audit Committee of Kupper Parker Communications Inc.'s Board of Director's
is responsible for oversight of the company's financial reporting and internal
controls. Specific responsibilities include:
o Selecting, evaluating, and replacing the independent public auditors
that perform the audit of the annual financial statements included
within the Company's Annual Report to Shareholders.
o Ensuring receipt from the independent auditors of a written statement
regarding relationships and services, which may affect objectivity and
independence. Discuss any relevant matters with the independent
auditors and recommend that the full board take appropriate action to
address the auditor's independence issues, which may come to the
Committee's attention.
o Reviewing the audit plans and audit scopes of the internal audit staff
and the Company's independent auditors.
o Reviewing and advising management and the Board on the adequacy of the
Company's internal controls and financial reporting based upon the
reports of management, the Company's internal audit staff, and its
independent public accountants.
o The Committee or its Chairman will review interim results with a
company financial officer and the independent auditors prior to the
public announcement of financial results and the filing of SEC Form
10-QSB.
o Providing in the annual proxy statement a report of the Committee's
findings as a result of its oversight responsibilities.
COMMITTEE MEMBERSHIP
The membership of the Committee will be:
o appointed by the Board of Directors.
o comprised of independent directors as defined by the applicable
regulatory authorities.
o consist of at least two members; each of whom is financially literate
or becomes financially literate within a reasonable period of time
after appointment, and at least one of which has accounting or related
financial expertise. Financial literacy and financial expertise will be
as defined by the applicable regulatory authorities.
COMMITTEE MEETINGS
Meetings will be held as required, but no less than three times per year.
Minutes will be recorded and reports of committee meetings will be presented at
the next Board of Director's meeting.
COMMITTEE CHARTER REVIEW AND APPROVAL
This Audit Committee Charter will be reviewed and approved by the Board of
Directors annually and will be included in the proxy at least every three years.
14
PROXY
KUPPER PARKER COMMUNICATIONS INCORPORATED
ANNUAL MEETING OF SHAREHOLDERS, APRIL 8, 2003
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Bruce Kupper and John Rezich, or either
of them, proxy, with full power of substitution, to vote all shares of KUPPER
PARKER COMMUNICATIONS INCORPORATED which the undersigned is entitled to vote at
the Company's Annual Meeting to be held in the Company's main conference room,
Kupper Parker Communications, Incorporated, 8301 Maryland Avenue, St. Louis,
Missouri, 63105, on April 8, 2003 at 9:00 o'clock in the morning, St. Louis
time, and at any adjournment thereof, hereby ratifying all that said proxy or
his substitute may do so by virtue hereof, and the undersigned authorizes and
instructs said proxy to vote as follows:
1. ELECTION OF DIRECTORS: To elect the nominees below for a term of two years.
[ ] FOR ALL NOMINEES LISTED BELOW (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
(INSTRUCTION: to withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.)
John Rezich
James Saitz
2. APPOINTMENT OF INDEPENDENT AUDITORS: To approve the appointment of Rubin,
Brown, Gornstein & Co. LLP as auditors for 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon any other matters which may properly come before
the meeting or any adjournments thereof.
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 all nominees listed in proposal 1; and, for proposal 2 to ratify
the appointment of Rubin, Brown, Gornstein & Co. LLP as auditors for 2003. If
other business is presented at the annual meeting, this proxy will be voted on
those matters in accordance with the best judgment of the named proxies. The
Board of Directors recommends a vote FOR items 1 and 2.
Receipt of the Notice of Annual Meeting and Proxy Statement and of the
Annual Report on Form 10-KSB without exhibits of the Company preceding or
accompanying the same is hereby acknowledged.
Dated_____________________________, 2003
__________________________________ (L.S.)
(Signature of Shareholder)
__________________________________ (L.S.)
(Signature of Shareholder)
Your signature should appear the
same as your name appears hereon. If
signing as attorney, executor,
administrator, trustee or guardian,
please indicate the capacity in
which signing. When signing as joint
tenants, all parties to the joint
tenancy must sign. When proxy is
given by a corporation it should be
signed by an authorized officer.
PLEASE DATE, SIGN AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.