SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
HA-LO INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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HA-LO INDUSTRIES, INC.
5980 WEST TOUHY AVENUE
NILES, ILLINOIS 60714
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 1998
Notice is hereby given that the Annual Meeting of Shareholders of HA-LO
Industries, Inc., an Illinois corporation (the "Company"), will be held in Room
20C of Harris Trust and Savings Bank-- 111 West Monroe Street, 20th Floor
Center, Chicago, Illinois 60606 on Tuesday, June 2, 1998 at 10:00 a.m., local
time, for the following purposes:
(1) To elect ten directors to serve until the next Annual Meeting of
Shareholders or until their successors are duly elected and qualified;
(2) To ratify the reappointment of the firm of Arthur Andersen LLP as the
Company's independent auditors for 1998; and
(3) To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on April 8, 1998 are
entitled to notice of and to vote at the meeting and at any postponements or
adjournments thereof. A complete list of the shareholders entitled to vote at
the meeting will be subject to inspection by any shareholder at the Company's
principal executive office, 5980 West Touhy Avenue, Niles, Illinois 60714,
during usual business hours, for a period of ten days prior to the meeting.
By Order of the Board of Directors,
/s/ Lou Weisbach
--------------------------------------
LOU WEISBACH
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Niles, Illinois
April 20, 1998
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THE BOARD OF DIRECTORS EXTENDS A CORDIAL INVITATION TO ALL SHAREHOLDERS TO
ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN AS PROMPTLY AS POSSIBLE THE ENCLOSED PROXY IN
THE ACCOMPANYING REPLY ENVELOPE. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE
THEIR PROXIES AND VOTE IN PERSON.
HA-LO INDUSTRIES, INC.
5980 WEST TOUHY AVENUE
NILES, ILLINOIS 60714
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 1998
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INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of HA-LO
Industries, Inc., an Illinois corporation (the "Company" or "HA-LO"), for use at
the Annual Meeting of Shareholders of the Company to be held on the date, at the
time and place and for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders and at any postponements or adjournments thereof.
The Company's principal executive office is located at 5980 West Touhy Avenue,
Niles, Illinois 60714 and its telephone number is (847) 647-2300. Shareholders
of record at the close of business on April 8, 1998 are entitled to notice of
and to vote at the meeting. This Proxy Statement and the accompanying proxy are
first being mailed to shareholders on or about April 20, 1998.
THE MEETING
VOTING AT THE MEETING
On April 8, 1998, there were issued and outstanding 21,395,372 shares of
common stock, no par value (the "Common Stock"). Each share of Common Stock
issued and outstanding on the record date entitles the holder thereof to one
vote on all matters submitted to a vote of shareholders at the meeting.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock will constitute a quorum. The affirmative
vote of the holders of a majority of the shares represented at the meeting,
whether present in person or represented by proxy, will be necessary for the
election of directors and for the ratification of the reappointment of the firm
of Arthur Andersen LLP as the Company's independent auditors for 1998.
Abstentions and broker non-votes will have the effect of a vote against a
nominee or a proposal.
PROXIES AND PROXY SOLICITATION
All shares of Common Stock represented by properly executed proxies will be
voted at the meeting in accordance with the directions marked on the proxies,
unless such proxies previously have been revoked. If no directions are indicated
on such proxies, they will be voted FOR the election of each nominee named below
under "Election of Directors" and FOR the ratification of the reappointment of
Arthur Andersen LLP as the Company's independent auditors for 1998. If any other
matters are properly presented at the meeting for action, which is not presently
anticipated, the named proxies will vote in accordance with their best judgment.
Each proxy executed and returned by a shareholder may be revoked at any time
before it is voted by timely submission of written notice of revocation or by
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submission of a duly executed proxy bearing a later date (in either case
directed to the Secretary of the Company) or, if a shareholder is present at the
meeting, he or she may elect to revoke his or her proxy and vote his or her
shares in person.
The cost of soliciting proxies will be paid by the Company. In addition to
solicitation by mail, certain directors, officers and other employees of the
Company, not specially employed for this purpose, may solicit proxies, without
additional remuneration therefor, by personal interview, mail, telephone or
telecopy. The Company will request brokers and other fiduciaries to forward
proxy soliciting material to the beneficial owners of shares of Common Stock
that are held of record by such brokers and fiduciaries and will reimburse such
persons for their reasonable out-of-pocket expenses.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information concerning each person,
other than members of management, who is known by the Company to beneficially
own more than 5% of the total number of outstanding shares of Common Stock. Such
information is based solely on Schedules 13G and 13D filed by each such person
with the Securities and Exchange Commission (the "Commission").
NUMBER OF SHARES APPROXIMATE
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OWNED CLASS
- -------------------------------------------------------------- ----------------- ---------------
AXA-UAP
The Equitable Companies Incorporated
c/o The Equitable Companies Incorporated
1290 Avenue of the Americas
New York, New York 10104.................................... 1,352,159(1) 6.5%
- ------------------------
(1) Information is as of December 31, 1997 and is derived from the Schedule 13G
filed with the Commission on February 17, 1998 jointly by Alpha Assurances
Vie Mutuelle, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle,
AXA Courtage Assurance Mutuelle (collectively, "Mutuelles AXA"), Alliance
Capital Management, L.P., Wood, Struthers & Winthrop Management Corp., The
Equitable Companies Incorporated ("Equitable") and AXA-UAP. AXA-UAP owns a
majority interest in Equitable, and Mutuelles AXA, as a group, owns a
majority interest in AXA-UAP. Equitable is the parent holding company of a
group of investment management companies that provide investment advisory
and management services for their clients, which include registered
investment companies and institutional accounts. The investment management
companies hold investment power and, in some cases, voting power over
securities within their portfolios. Equitable disclaims all investment and
voting power over the Common Stock listed on the Schedule 13G; however, it
may be deemed to "beneficially own" such shares pursuant to the rules
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Alliance Capital Management L.P., which is an investment
adviser and a wholly-owned subsidiary of Equitable, is the beneficial owner
of 1,312,659 shares of Common Stock as a result of acting as investment
adviser to various investment companies. Wood, Struthers & Winthrop
Management Corp., which is an investment adviser and a wholly-owned
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subsidiary of Equitable, is the beneficial owner of 39,500 shares of Common
Stock as a result of acting as investment adviser to various investment
companies.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 1, 1998, certain information
concerning the beneficial ownership of Common Stock by (i) all directors and
nominees, (ii) each of the executive officers named in the Summary Compensation
Table below and (iii) all directors and executive officers as a group. Unless
otherwise indicated, each person has sole investment and voting power (or shares
such powers with his or her spouse) with respect to the shares shown as
beneficially owned by that person.
NUMBER OF SHARES
BENEFICIALLY OWNED APPROXIMATE
NAME(1) ON APRIL 1, 1998 PERCENT OF CLASS
- ------------------------------------------- ------------------ ----------------
Linden D. Nelson........................... 2,251,092(2) 10.5%
Lou Weisbach............................... 2,075,302(3) 9.8%
Seymour N. Okner........................... 945,297(4) 4.5%
Richard A. Magid........................... 276,083(5) 1.3%
Marshall J. Katz........................... 241,295(6) 1.1%
David C. Robbins........................... 127,646(7) *
Neil A. Ramo............................... 113,470(8) *
Thomas Herskovits.......................... 85,063(9) *
Jordon R. Katz............................. 39,531(10) *
Robert Sosnick............................. 22,500(11) *
Gregory J. Kilrea.......................... 30,384(12) *
All Directors and Executive Officers,
as a group (17 persons).................. 6,321,068 28.3%
- ------------------------
* Less than one percent.
(1) The address of each executive officer and director of the Company is in
care of the Company, 5980 West Touhy Avenue, Niles, Illinois 60714.
(2) Includes 28,915 shares owned by Maple Lane Acquisition Limited Liability
Company, of which Mr. Nelson is the managing member; 137,500 shares owned
by Mr. Nelson's wife; 100,000 shares held by a charitable foundation of
which Mr. Nelson is President; and 262,500 shares subject to options
exercisable on April 1, 1998 or within 60 days thereafter (the "Measurement
Period"). Excludes 275,000 shares held in trusts for the benefit of Mr.
Nelson's children, over which Mr. Nelson has no voting or dispositive
powers.
(3) Includes 188,174 shares subject to options held by Mr. Weisbach that are
exercisable during the Measurement Period, 500 shares held by Mr.
Weisbach's minor child and 1,836,628 shares owned by the Lou Weisbach
Revocable Trust. Excludes 85,000 shares held in trust for the benefit of
Mr. Weisbach's wife and 51,187 shares held in trusts for the benefit of Mr.
Weisbach's children, over which Mr. Weisbach has no sole or shared powers
to vote or dispose.
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(4) Includes 2,500 shares subject to options held by Mr. Okner that are
exercisable during the Measurement Period and 933,797 shares owned by the
Seymour N. Okner Revocable Trust. Excludes 310,781 shares held in trusts
for the benefit of one of Mr. Okner's children.
(5) Includes 261,584 shares subject to options held by Mr. Magid that are
exercisable during the Measurement Period.
(6) Consists of shares subject to options held by Mr. Katz that are exercisable
during the Measurement Period.
(7) Includes 45,619 shares subject to options held by Mr. Robbins that are
exercisable during the Measurement Period and an aggregate of 937 shares
owned in trust for the benefit of Mr. Robbins' two minor children. Excludes
310,781 shares held in trust for the benefit of Mr. Robbins' wife, over
which Mr. Robbins has no voting or dispositive power.
(8) Includes 45,952 shares subject to options held by Mr. Ramo that are
exercisable during the Measurement Period and 375 shares subject to options
held by Mr. Ramo's wife that are exercisable during the Measurement Period.
(9) Includes 41,812 shares held jointly with Mr. Herskovits' wife; 7,500 shares
owned by Mr. Herskovits' minor son; and 30,001 shares subject to options
held by Mr. Herskovits that are exercisable during the Measurement Period.
(10) Includes 19,875 shares held by the JR Katz Profit Sharing Plan; 1,225
shares owned by Mr. Katz's minor sons; and 18,125 shares subject to
options held by Mr. Katz that are exercisable during the Measurement
Period.
(11) Includes 2,500 shares subject to options held by Mr. Sosnick that are
exercisable during the Measurement Period.
(12) Consists of shares subject to options held by Mr. Kilrea that are
exercisable during the Measurement Period.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires each of the Company's executive
officers and directors and persons who beneficially own more than 10% of the
Common Stock to file initial reports of beneficial ownership and reports of
changes in beneficial ownership of the Company's equity securities. Based solely
on a review of the copies of such reports furnished to the Company, the Company
believes that during the fiscal year ended December 31, 1997, all of its
officers, directors and 10% beneficial owners timely filed all required reports,
except for Mr. Herskovits, Ms. Berman, Mr. Kilrea, Mr. Ramo, Mr. Weisbach and
Mr. Jordan Katz, each of whom filed one untimely report on Form 4, Mr. Nelson,
who filed two untimely reports on Form 4, Mr. Marshall Katz, who filed three
untimely reports on Form 4 and Mr. Sosnick, who filed one untimely report on
Form 3.
ELECTION OF DIRECTORS
Ten directors are to be elected to the Board of Directors. Each director
elected at the meeting will hold office until the next Annual Meeting of
Shareholders of the Company or until his respective successor is duly elected
and qualified.
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The Board of Directors has nominated, and it is the intention of the persons
named as proxies to vote for the election of, the nominees named below, each of
whom has consented to serve as a director if elected. In the event that any of
the nominees should be unable to serve as a director, it is intended that the
proxies will be voted for the election of such substitute nominees, if any, as
shall be designated by the Board of Directors. Management has no reason to
believe that any nominee will be unable to serve.
Mr. Robbins is the son-in-law of Mr. Okner; there are no other family
relationships between any directors and executive officers of the Company.
INFORMATION CONCERNING NOMINEES FOR ELECTION AS DIRECTORS(1)
The following table sets forth certain information as of April 1, 1998 with
respect to each nominee:
NAME AGE POSITION WITH THE COMPANY
- -------------------------------- --- --------------------------------------------------------------------------
Lou Weisbach.................... 49 Chairman of the Board, President and Chief Executive Officer
Linden D. Nelson................ 37 Director, Vice Chairman of the Board and Chief Executive Officer of
Creative Concepts in Advertising, Inc., a wholly owned subsidiary of the
Company
Seymour N. Okner................ 71 Director, Chief Executive Officer, Chairman and President of Market USA,
Inc. and Marusa Marketing, Ltd.
Richard A. Magid................ 39 Director, Chief Operating Officer, Treasurer and Assistant Secretary
David C. Robbins................ 45 Director, Executive Vice President
Thomas Herskovits............... 51 Director
Jordon R. Katz.................. 46 Director
Marshall J. Katz................ 49 Director
Neil A. Ramo.................... 55 Director
Robert Sosnick.................. 64 Director
- ------------------------
(1) Only directorships of issuers with a class of securities registered pursuant
to Section 12 of the Exchange Act, or subject to the requirements of Section
15(d) of the Exchange Act, and directorships of issuers registered as
investment companies under the Investment Company Act of 1940, as amended,
are required to be listed below.
LOU WEISBACH has been the Chairman of the Board, President and Chief
Executive Officer of the Company since January 1, 1988. From 1972 through 1987,
he operated the predecessor of the Company as a sole proprietorship.
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LINDEN D. NELSON has served as the Vice Chairman of HA-LO and Chief
Executive Officer of Creative Concepts in Advertising, Inc., a wholly owned
advertising specialty subsidiary of the Company, since its acquisition by HA-LO
in January 1997. Mr. Nelson was the Chairman and Chief Executive Officer of
Creative Concepts in Advertising, Inc.'s predecessor since its inception in July
1979 through December 1996.
SEYMOUR N. OKNER has served as a director of HA-LO and as Chairman,
President and Chief Executive Officer of Market USA, Inc., a wholly-owned
telephone-based marketing services subsidiary of the Company, since its
acquisition by HA-LO in September 1996. Previously, Mr. Okner was the President,
Treasurer, Secretary and a director of Market USA's predecessor since its
inception in November 1988. He was also the President and Secretary of Marusa
Marketing, Ltd., a marketing company and an affiliate of Market USA, from April
1992 through September 1996. Prior to 1988, Mr. Okner served in various
executive capacities, primarily in the insurance industry, including President
of Montgomery Ward Life Insurance Company and Signature Life Insurance Company
of America.
RICHARD A. MAGID has served as a director since 1992, was appointed Chief
Operating Officer in July 1996 and has been the Treasurer since August 1992 and
the Assistant Secretary since March 1996. He previously served as the Chief
Financial Officer from August 1992 until July 1996 and Vice President-Finance
from August 1992 through March 1996. From 1981 until joining HA-LO in 1992, he
was employed by the accounting firm of Arthur Andersen LLP, most recently as an
audit and financial consulting manager.
DAVID C. ROBBINS has been Executive Vice President since November 1992 and a
director since 1995. From 1978 to November 1992, he was an independent sales
representative of marketing specialty and premium advertising products.
THOMAS HERSKOVITS has served as a director since 1992. Mr. Herskovits has
been the managing partner of Herskovits Enterprises, a venture capital company,
since 1996 and was the President and Chief Executive Officer of Specialty Foods
Corp. from 1993 to 1996. From 1989 through 1993, he was President of the KGF
Frozen Products Group, an operating unit of Kraft General Foods. From 1984 to
1989, he was President of the Kraft Dairy Group of Kraft General Foods.
JORDON R. KATZ has served as a director since 1992. Mr. Katz has been the
president of JR Katz Assoc., Inc., an insurance and employee benefits planning
company, since 1976.
MARSHALL J. KATZ has been a director and an independent financial consultant
to the Company since 1992. From 1988 through 1991, Mr. Katz was the owner and
president of Northbrook Management Co., a money management firm trading in
futures and options.
NEIL A. RAMO has served as a director since 1992 and has been the president
of NEMAR, Inc., an independent marketing company, since July 1993. Since May
1996, Mr. Ramo has also been a realtor of the Prudential Florida Realty Company.
From August 1991 through June 1993, Mr. Ramo was the president of RMI, Inc.,
d/b/a Creative Promotions International, a predecessor marketing company to
NEMAR, Inc. From 1984 to 1989, he was the president of Carson Pirie Scott
Department Stores. After retiring from Carson Pirie Scott Department Stores, he
pursued personal interests until he founded RMI, Inc.
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ROBERT SOSNICK has served as a director since November 1997. Mr. Sosnick has
been the president of Real Estate Development & Investment Company, a developer
of high rise office buildings, industrial parks, shopping centers and other
developments since 1980. Since 1986, he has been a director of Palace Sports &
Entertainment, an owner and developer of entertainment and sports arenas.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has designated an Audit Committee and a Compensation
Committee. The Board of Directors has not designated a Nominating Committee;
rather, the Board of Directors as a whole performs the functions that would
otherwise be delegated to such committee.
Current members of the Audit Committee are Thomas Herskovits and Jordon R.
Katz. The functions of the Audit Committee include assessing the scope of the
Company's engagement of its independent public accountants, reviewing their
reports and recommending to the Board of Directors the engagement and discharge
of independent auditors. The Audit Committee recommended the engagement of
Arthur Andersen LLP as the Company's auditors for 1998. The Audit Committee also
meets with the financial staff of the Company to review accounting procedures
and internal audit controls.
Current members of the Compensation Committee are Thomas Herskovits and
Jordon R. Katz. The functions of the Compensation Committee include setting
executive officer salaries, determining annual bonuses and administering the
Company's incentive compensation plans, including the HA-LO Industries, Inc.
Stock Plan (the "Stock Plan") and the HA-LO Industries, Inc. 1997 Stock Plan
(Amended and Restated) (the "Restated Plan"). See "Report of the Compensation
Committee on Executive Compensation", below.
During 1997, the Board of Directors held four meetings and took action by
written consent sixteen times, the Audit Committee held two meetings and the
Compensation Committee took action by meeting or written consent four times.
Each director attended at least 75% of the aggregate number of meetings held by
the Board of Directors and the committees, if any, on which he served during
1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Thomas Herskovits and
Jordon R. Katz. None of the members of the Compensation Committee is either a
current or former officer or employee of the Company.
COMPENSATION OF DIRECTORS
Pursuant to the Restated Plan, in 1997 each non-employee director of the
Company was entitled to receive compensation in the form of a non-qualified
stock option ("NSO") to purchase 5,000 shares of Common Stock at an exercise
price per share equal to the Fair Market Value (as defined in the Restated Plan)
of the Common Stock on the date of the first regularly scheduled Board of
Directors meeting during such calendar year. During fiscal 1997, each
non-employee director received under the Restated Plan an NSO to purchase 5,000
shares of Common Stock at an exercise price per share of $14.13. The Restated
Plan was subsequently amended to permit an increase in such grants from 5,000
shares of Common Stock to 10,000 shares of Common Stock.
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Commencing in fiscal 1998, each non-employee director of the Company is
entitled to receive compensation under the Restated Plan (a plan substantially
similar to the Stock Plan) in the form of an NSO to purchase 10,000 shares of
Common Stock at an exercise price per share equal to the Fair Market Value (as
defined in the Restated Plan) of the Common Stock on the date of the first
regularly scheduled Board of Directors meeting during such calendar year. On
February 23, 1998, each non-employee director received under the Restated Plan
an NSO to purchase 10,000 shares of Common Stock at an exercise price of $26.75.
CERTAIN TRANSACTIONS
Concurrent with the acquisition by the Company of Creative Concepts in
Advertising, Inc. and related entities ("CCA") in January 1997, Linden D. Nelson
purchased certain nonoperating assets from CCA for consideration consisting of
(i) a $1,530,159 promissory note of Mr. Nelson and (ii) Mr. Nelson's guarantee
of the Company's collection of certain other nonoperating assets of CCA and of
certain receivables owed by entities controlled by Mr. Nelson, which totaled
approximately $2,650,000 (the "Nelson Receivables"). Mr. Nelson is a director
and executive officer of the Company. The note bears interest at 7.0% per annum.
As of April 8, 1998, all amounts owing under these obligations have been
satisfied by Mr. Nelson.
CCA leases its corporate headquarters located in Beverly Hills, Michigan
from Mr. Nelson. Rental payments under this lease are $25,000 per month. The
Company believes that the lease terms, including the rental payments, are no
less favorable to the Company than the terms the Company otherwise could obtain
from unaffiliated third parties.
During fiscal 1997, the Company paid approximately $545,000 to Motor City
Creative LLC ("Motor City") for embroidery and other services rendered to the
Company. Mr. Nelson indirectly owns a 49% interest in Motor City. The Company
expects to pay at least such amount to Motor City for embroidery and other
services to be rendered to the Company during fiscal 1998.
During 1997, CCA advanced approximately $272,000 to Motor City to fund
certain operating expenses. All amounts advanced to Motor City were reimbursed
by Mr. Nelson in April 1998. Such advances to Motor City will not recur.
In connection with the Company's acquisition of CCA, the Company issued
2,841,415 shares of Common Stock (the "CCA Shares") to the former shareholders
of CCA, including Mr. Nelson (the "CCA Shareholders"). The Company also (i)
obligated itself to file registration statements with the Commission with
respect to the resale of CCA Shares by the CCA Shareholders, in specified
increments, over the two to three years following the acquisition and (ii)
granted to the CCA Shareholders certain rights to require the Company, at its
expense, to register under the Securities Act all or part of the CCA Shares if,
by December 31, 1997, sales of CCA Shares by the CCA Shareholders have not
generated aggregate gross proceeds to the CCA Shareholders of at least $18.0
million. As of December 31, 1997, sales of CCA Shares had generated aggregate
gross sales proceeds of approximately $14.0 million. In addition, if the Company
proposes to register under the Securities Act any shares of Common Stock for its
own account, the CCA Shareholders may require the Company, at its expense but
subject to certain restrictions, to include in such registration all or a
portion of the CCA Shares.
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In February 1995, the Company entered into a Bonus Shares Agreement (as
amended in October 1996, the "Bonus Shares Agreement"), with David C. Robbins, a
director and executive officer of the Company. The Bonus Share Agreement was in
recognition of Mr. Robbins' efforts in fostering a particular customer
relationship and in consideration of his assistance to the Company in
maintaining a continued positive relationship with that customer and maximizing
its sales and profits under a five-year Exclusive Premium Purchasing Agreement
executed by the Company and the customer in January 1995 (the "Purchasing
Agreement"). In connection therewith, Mr. Robbins covenanted not to compete with
the Company during the term of the Purchasing Agreement. Pursuant to the Bonus
Shares Agreement, Mr. Robbins received 300,000 shares of Common Stock (the
"Bonus Shares") as restricted stock, which Bonus Shares are in lieu of
commissions to which he would otherwise be entitled for sales of Company
products under the Purchasing Agreement. Commencing in 1995, these Bonus Shares
became eligible to vest (i.e., ceased to be subject to transfer restrictions) in
accordance with a formula based, in part, upon the gross profit earned by the
Company on sales of its products under the Purchasing Agreement. As of April 1,
1998, Mr. Robbins was fully vested in all Bonus Shares.
In September 1996, the Company acquired Market USA, Inc. ("Market USA") and
Marusa Marketing, Ltd. ("Marusa"). Seymour N. Okner, a director of the Company,
was the President and a principal shareholder of each of Market USA and Marusa
at the time the acquisitions were consummated. Pursuant to the Agreement and
Plan of Merger and Amalgamation effecting such acquisitions (the "Merger
Agreement"), certain shareholders of Market USA and Marusa, including Mr. Okner
(the "Selling Shareholders"), agreed to indemnify the Company for certain
liabilities. Revenue Canada is currently reviewing Marusa's compliance with
certain Canadian tax regulations for periods prior to the consummation of the
merger. Although no assessment has been made to date, the Selling Shareholders
have made a good faith deposit of approximately $350,000 as a credit against
taxes which may be ultimately assessed. The Company believes that additional
Canadian tax liabilities relating to the operations of Marusa prior to the
Company's acquisition may be imposed and generally that the Selling Shareholders
are obligated under the Merger Agreement to indemnify the Company for such
liabilities. It is uncertain if and when any such liabilities will be imposed or
what the aggregate amount of such additional liabilities will be.
Pursuant to a Consulting Agreement dated March 17, 1997, Marshall J. Katz, a
director of the Company, provides advisory and consulting services to the
Company with respect to acquisitions and business combinations. Mr. Katz's
compensation for such services is contingent upon the successful completion of
acquisitions for which he has rendered advice to the Company. During 1997, Mr.
Katz received approximately $1,600,000 and was granted options to acquire
102,225 shares of Common Stock at the fair market value on date of grant in
consideration for consulting services he rendered.
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EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information with respect to
all compensation earned by or paid to each of the Company's Chief Executive
Officer and its four other most highly compensated executive officers who were
serving as executive officers on December 31, 1997, and whose total salary plus
bonus for 1997 exceeded $100,000.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
AWARDS
--------------------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
------------------------ RESTRICTED UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) STOCK($)(2) OPTIONS(#) SATION(3)
- -------------------------------------------------- --------- ----------- ----------- ------------- ----------- -----------
Lou Weisbach ..................................... 1997 $ 500,000 $ -- $ -- -- $ 250
Chairman of the Board, 1996 500,000 -- -- 503,938 250
President and Chief 1995 250,000 160,493 -- 1,500 100
Executive Officer
Linden D. Nelson ................................. 1997 500,000 -- -- -- --
Vice Chairman of the Board and 1996 -- -- -- -- --
Chief Executive Officer of CCA 1995 -- -- -- -- --
Richard A. Magid ................................. 1997 207,804 38,438 -- 61,000 2,899
Chief Operating Officer, 1996 169,255 -- -- 81,250 2,899
Treasurer and Assistant Secretary 1995 144,233 -- -- 87,500 2,749
David C. Robbins ................................. 1997 130,577 423,617 -- 12,000 --
Executive Vice President(4) 1996 175,000 594,998 -- 15,563 --
1995 170,000 607,500 1,200,000 5,500 --
Gregory J. Kilrea ................................ 1997 137,692 29,063 -- 26,100 2,000
Chief Financial Officer 1996 116,231 -- -- 31,250 --
1995 -- -- -- -- --
- ------------------------
(1) Amounts for Messrs. Magid and Kilrea were earned under the Company's
Executive Incentive Compensation Plan. See "Incentive Compensation Plan."
Amounts shown for Messrs. Weisbach and Robbins consist of commissions earned
for sales of Company products.
(2) Amount relates to shares issued to Mr. Robbins pursuant a Bonus Shares
Agreement between Mr. Robbins and the Company. See "Certain Transactions."
(3) Amounts shown for 1997 consist of: $250 contributed by the Company on behalf
of each of Messrs. Weisbach and Magid to a 401(k) plan it maintains; $2,000
of matching contributions made by the Company under one of its non-qualified
benefit plans on behalf of Messrs. Magid and Kilrea; and $649 of term life
insurance policy premiums paid by the Company for Mr. Magid.
(4) Salary paid to Mr. Robbins was in lieu of an equal dollar amount of
commissions earned by him for sales of Company products.
11
The following table sets forth information with respect to options to
purchase shares of the Company's Common Stock that were granted during 1997 to
each of the executive officers named in the Summary Compensation Table above. No
stock appreciation rights ("SARs") were granted to any of the persons listed on
the table below during 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
------------------------------------ STOCK PRICE
NUMBER OF % OF TOTAL APPRECIATION FOR
SECURITIES OPTIONS/SARS EXERCISE OR OPTION TERM(1)
UNDERLYING OPTIONS/ GRANTED TO EMPLOYEES BASE PRICE EXPIRATION --------------------------
NAME SARS GRANTED(#)(2) IN FISCAL YEAR(3) ($/SH) DATE 5%($) 10%($)
- --------------------------- ------------------- ----------------------- ----------- ---------- ----------- -------------
Lou Weisbach............... -- * -- -- --
Linden Nelson.............. 262,500 16.2% 25.13 01/02/07 4,146,444 10,509,917
Richard A. Magid........... 60,000 3.7 25.13 01/02/07 947,758 2,402,267
1,000 * 13.38 03/14/07 8,406 21,311
David C. Robbins........... 12,000 * 25.13 01/02/07 189,552 480,453
Gregory J. Kilrea.......... 10,100 * 25.13 01/02/07 159,540 404,383
1,000 * 13.38 03/14/07 8,406 21,311
15,000 * 24.00 12/19/07 226,402 573,747
- ------------------------
* Less than 1%
(1) The amounts shown in these columns are the result of calculations at assumed
annual rates required by the Commission and are not intended to forecast
possible future appreciation, if any, of the price of the Company's Common
Stock. The Company did not use an alternative formula for a grant date
valuation, as the Company is not aware of any formula that will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.
(2) All options were granted at an exercise price equal to the Fair Market Value
of the Company's Common Stock on the date of grant and vest over a
three-year period in increments of one-third each on the first, second and
third anniversaries of the date of grant, except for 262,500 options granted
to Mr. Nelson in connection with the Company's acquisition of CCA, which
vested immediately.
(3) Percentage calculations in this column are based solely on the number of
options granted to employees of the Company and do not take into account
options granted to non-employee independent sales representatives for sales
of Company products.
12
The following table sets forth information with respect to the unexercised
options held by each of the executive officers named in the Summary Compensation
Table above, as of December 31, 1997. None of such persons exercised any options
during 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
VALUE OF
NUMBER OF SECURITIES UNEXERCISED IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FY-END(#) FY-END($)(1)
------------------------- ---------------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- -------------------------------------- ------------------------- ---------------------------
Lou Weisbach.......................... 186,205/335,302 $ 428,672/24,278
Linden Nelson......................... 262,500/0 228,375/0
Richard A. Magid...................... 179,688/125,062 3,000,431/951,700
David C. Robbins...................... 33,033/19,782 670,479/106,392
Gregory J. Kilrea..................... 25,000/32,350 212,437/58,907
- ------------------------
(1) On December 31, 1997, the closing price per share of the Company's Common
Stock was $26.00.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Mr. Weisbach serves as the President and Chief Executive Officer of the
Company pursuant to a five year employment agreement which commenced on January
1, 1997. Mr. Weisbach's base salary is $500,000, which amount may be increased
from time to time by the Board of Directors; he is eligible to receive bonus
payments and additional compensation based upon achievement of profit objectives
to be established from time to time solely by the Board of Directors. Mr.
Weisbach is also eligible to receive additional compensation pursuant to the
Company's Executive Incentive Compensation Plan as described below. The
employment agreement provides that on each anniversary of its effective date,
the term of Mr. Weisbach's employment automatically shall be extended for an
additional one year period, such that the term of the agreement is restored to
five years on December 31 of each year; however, either party may elect not to
so extend the agreement by giving notice of such election at least 60 days prior
to December 31 of each year. In the event Mr. Weisbach's employment is
terminated following a "Change of Control," he shall receive, for twenty-four
(24) months, benefits no less favorable then those he received under the
employment agreement prior to such termination. A "Change of Control" is defined
as, among other things, (i) any consolidation or merger wherein the Company is
not the continuing or surviving company or which contemplates that all or
substantially all of the assets and/or business is controlled by another, (ii)
any sale, lease, exchange or transfer of all or substantially all of the assets
of the Company, (iii) approval by the shareholders of liquidation or
dissolution, (iv) any "person" becoming the beneficial owner of more than 50% of
the combined voting power of the Company, (v) any sale, exchange or transfer of
50% of the securities of the Company representing the total fair market value of
the Company or the combined voting power of the Company or (vi) if during a
period of two consecutive years from the effective date, individuals who at the
beginning of such period constituted the directors of the Company cease for any
reason to constitute a majority thereof.
Mr. Magid serves as the Chief Operating Officer, Vice President and
Treasurer of the Company pursuant to an employment agreement extending through
December 31, 2000. Mr. Magid's initial
13
base salary was $275,000, which was increased as of April 1, 1998 to $300,000;
he is eligible to receive bonus payments and additional compensation based upon
achievement of profitability and other financial targets to be established from
time to time solely by the Board of Directors. Mr. Magid is also eligible to
receive additional compensation pursuant to the Company's Executive Incentive
Compensation Plan. The employment agreement prohibits Mr. Magid from disclosing
any confidential and proprietary information of the Company and from directly or
indirectly disclosing such information, except in connection with conducting the
business and affairs of the Company. The agreement also provides that, during
his employment and for one year thereafter, Mr. Magid shall not, directly or
indirectly, compete with the Company.
The Company has executed materially similar agreements with Linden D.
Nelson, Richard A. Magid, Gregory J. Kilrea, David A. Robbins, Gene Eherenfeldt,
Sabina D. Filipovic, Michael P. Nemlich, Barry T. Margolin and Barbara G. Berman
(each, an "Executive") to ensure the continued dedication of such Executives
notwithstanding the possibility, threat or occurrence of a "Change of Control."
The agreements become effective upon a Change of Control.
"Change of Control" is defined in these agreements, generally, as (1) the
acquisition by an individual, group or entity (each, a "Person") of 30% of the
outstanding stock of the Company or the combined voting power of the then
outstanding voting power of the Company (but expressly excluding (i)
acquisitions directly from the Company by a person whose holdings do not exceed
40% of the outstanding stock or voting securities prior to or after such
acquisition, (ii) any acquisition by the Company, (iii) any acquisition by an
employee benefit plan maintained and controlled by the Company, or (iv) certain
acquisitions by a corporation pursuant to a merger, consolidation or
reorganization); (2) members of the current Board of Directors cease to
constitute a majority of the Board of Directors unless such new Directors were
approved by a vote of least a majority of the current Board of Directors; and
(3) certain reorganizations, mergers and consolidations of the Company or sales
of the assets of the Company unless, generally, 60% of the outstanding shares of
the surviving entity are held by holders other than holders of the Company prior
to such transaction, or at least a majority of the members of the Board of
Directors of such surviving company were members of the Company's Board of
Directors prior to such transaction.
Each agreement provides that, in the event an Executive's employment is
terminated following a Change of Control, as a result of the death or disability
of the Executive, by the Company other than for cause (as defined in the
agreement), or by the Executive for good reason (as defined in the agreement),
the Company will be obligated to pay the Executive a lump sum payment equal to
the Executive's accrued but unpaid base and bonus compensation.
In addition, if an Executive is terminated by the Company without cause
after a Change of Control, the Company will pay such Executive an amount equal
to the product of a multiple, specified in the agreement, times the sum of the
Executive's base salary plus a formula based upon the bonus or commission paid
to the Executive during the previous three years. The specified multiples, which
range from 2.0 to 2.99, differ for each Executive. In addition, the Company is
obligated to continue to provide to the Executive and/or the Executive's family,
for 90 days following termination, benefits that are comparable to the benefits
received by the Executive immediately prior to termination. In the event the
Executive's employment is terminated due to death, disability or for cause, the
agreement shall terminate without further obligation to the Executive and all
accrued obligations shall be paid to the Executive within 30 days of
termination. The agreements prohibit the Executive from
14
(i) disclosing confidential information regarding the Company, (ii) during the
period of Executive's employment with the Company and for one year thereafter,
engaging, directly or indirectly, in any business in the United States or Canada
that directly competes with the business of the Company; (iii) soliciting or
engaging in business conducted by the Company with a customer or prospective
costumer; or (iv) soliciting any employee or independent contractor of the
Company that results in the termination of the employment or agency relationship
of such individual.
INCENTIVE COMPENSATION PLAN
The Company has established an Executive Incentive Compensation Plans for
each of Mr. Weisbach, Mr. Nelson, Mr. Magid, Mr. Kilrea, Mr. Margolin, Ms.
Filipovic, Mr. Eherenfeldt, Mr. Blumenthal, Mr. Nemlich, Ms. Berman, Mr. Robbins
and Bradford S. Kerr. Each Plan became effective commencing with fiscal year
1997. Under the Plan each Executive except Mr. Robbins and Ms. Berman is
eligible to receive a cash bonus, expressed as a percent, of his/her base
salary, and options to purchase Common Stock, which options have an exercise
price equal to the then fair market value of the Common Stock, vest over three
years and are exercisable for ten years after grant. Mr. Robbins and Ms. Berman
are eligible to receive only options to purchase Common Stock, which options
have the same characteristics, as those earned by the other executives. The
awards are granted based upon the Company's achievement of certain earnings per
Share ("EPS") targets set by the Compensation Committee and approved by the
Board of Directors of the Company, which targets may be adjusted for capital
changes (e.g., stock splits, stock dividends, etc.) or due to circumstances
materially affecting the EPS, (e.g., acquisitions). Awards of cash and options
are based upon the Company's actual EPS as a percentage of the target EPS, which
percentage will determine the percent of the Executive's base salary that will
be awarded as a cash award and the number of options that will be awarded;
provided, that (i) no awards will be made unless actual EPS equals at least 90%
of the target EPS, and (ii) no additional awards will be granted for the amount
by which actual EPS exceeds 115% of the target EPS.
15
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE
ACT, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN
WHOLE OR IN PART, THE REPORT PRESENTED BELOW AND THE PERFORMANCE GRAPH FOLLOWING
SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
REPORT OF THE COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is currently comprised of Thomas Herskovits and
Jordon R. Katz, neither of whom currently is or has been in the past an officer
or employee of the Company. The Compensation Committee is responsible for
setting executive officer salaries, determining annual bonuses and administering
the Company's incentive compensation plans, including the Stock Plan and the
Restated Plan.
POLICY AND OBJECTIVES
The Compensation Committee believes that executive compensation should
attract, retain and motivate the highly qualified individuals required for the
success of the Company and should also be commensurate with performance. The
Compensation Committee also strives to ensure that the compensation of each
executive officer of the Company is fair in relation to his or her experience
and overall responsibility at the Company. In general, the Compensation
Committee considers both corporate and individual performance in determining
executive compensation. Corporate performance is evaluated by reviewing the
extent to which strategic and business plan goals are met. Individual
performance is evaluated by reviewing organization and management development
against set objectives. In making these evaluations, the Compensation Committee
relies upon input from the Chief Executive Officer and/or the Chief Operating
Officer regarding the financial performance of the Company and the performance
of specific employees.
Compensation for executive officers of the Company is divided into cash and
stock-based components as follows:
CASH-BASED COMPENSATION
The Company's cash-based compensation consists of salary, bonus and payments
pursuant to a non-qualified benefit plan maintained by the Company (the
"Non-Qualified Plan"). Annual base salary for each of the Company's executive
officers is paid either pursuant to an employment agreement between the officer
and the Company (see "Executive Compensation--Employment Agreements", above), or
upon the approval of the Compensation Committee, which annually reviews the base
salary payable to each executive officer. The Compensation Committee's
determination of annual salary is based upon its review of the officer's past
performance, the responsibilities associated with the officer's position and any
changes with respect thereto, and the recommendation of the Chief Executive
Officer and/or the Chief Operating Officer. While the Compensation Committee
acknowledges the subjective nature of these determinations, it believes that the
base salary paid to each of the Company's executive officers fairly reflects
that officer's prior performance, position and overall contribution to the
Company's success.
16
Under the Non-Qualified Plan, which was established by the Company in 1990,
eligible employees may elect to defer a certain amount of compensation for
payment at a later date. Currently, the Non-Qualified Plan allows a
participating employee to defer up to 25% of his or her annual compensation (but
not less than $1,350) for a minimum of at least five years. Compensation that is
deferred under the Non-Qualified Plan is eligible for an "Employer Match" equal
to 50% of the deferred amount (up to a maximum of $2,000 per year), which vests
on an installment basis according to a formula set forth in the Non-Qualified
Plan. The Non-Qualified Plan provides for the payment of the deferred benefit,
which includes the deferred compensation, the matched amounts and interest, to
the employee on an installment basis after the employee attains at least 60
years of age. Under certain circumstances, including the death, disability or
financial hardship of the participating employee, the Non-Qualified Plan
provides for the payment of deferred benefits prior to the employee attaining 60
years of age.
In addition to an annual base salary, executive officers are eligible to
receive bonuses payable in cash, options to purchase Common Stock, or both
pursuant to the Company's Incentive Compensation Plan (See "Executive
Compensation--Incentive Compensation Plan", above).
STOCK-BASED COMPENSATION
The Compensation Committee is also responsible for administering the Stock
Plan and the Restated Plan. Option grants pursuant to such plans are intended to
encourage performance that will result in appreciation of the market value of
the Company's Common Stock. Stock options are generally awarded from time to
time by the Compensation Committee based upon recommendations from the Chief
Executive Officer. In making its determinations of option awards, the
Compensation Committee considers the performance of the proposed optionee, the
Company's financial performance during the relevant period and the number of
options previously granted to the optionee.
Throughout 1997, the Compensation Committee also awarded stock options under
the Stock Plan to qualifying employees and independent sales representatives of
the Company based on commissions earned on sales of the Company products during
1997. In doing so, the Compensation Committee rewarded these individuals for
their efforts on behalf of the Company and offered them the opportunity to
acquire an initial, or augment their existing, proprietary interest in the
Company.
COMPENSATION OF THE COMPANY'S CHIEF EXECUTIVE OFFICER
Lou Weisbach serves as the Chief Executive Officer of the Company pursuant
to an employment agreement with the Company. See "Executive
Compensation--Employment Agreements", above. During fiscal 1997, Mr. Weisbach's
total annual compensation was $500,000. The compensation paid to Mr. Weisbach
during 1997 was not based upon, and had no specific relation to, the performance
of the Company's Common Stock during 1997.
THE COMPENSATION COMMITTEE
Thomas Herskovits
Jordon R. Katz
17
PERFORMANCE GRAPH
NOTE: THE STOCK PRICE PERFORMANCE SHOWN ON THE GRAPH BELOW IS NOT
NECESSARILY INDICATIVE OF FUTURE PRICE PERFORMANCE.
COMPARISON OF $100 INVESTED IN THE COMPANY'S COMMON STOCK,
COMPOSITE EQUITY INDICES(1) AND THE COMPANY'S
PUBLISHED LINE OF BUSINESS GROUP(2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
HA-LO Industries, Inc. $100.0 $83.0 $98.1 $464.2 $778.3 $735.8
NASDAQ Stock Market (US Companies) $100.0 $114.8 $112.2 $158.7 $195.2 $239.6
NASDAQ Stocks - Miscellaneous Non-durable Goods $100.0 $87.9 $74.5 $117.2 $104.3 $122.8
NYSE Stock Market (US Companies) $100.0 $110.5 $110.4 $149.7 $181.5 $241.1
NYSE Stocks - Miscellaneous Non-durable Goods $100.0 $97.2 $118.0 $128.2 $150.4 $217.1
- ------------------------
(1) The Company's Common Stock was traded on the NASDAQ National Market until
October 27, 1997. Since then, it has been listed on the New York Stock
Exchange (NYSE). Therefore, the above graph compares the Company's Common
Stock performance with both a NASDAQ Stock Market Index, which was also used
in the Company's 1997 Proxy Statement, and a NYSE Market Index.
18
(2) The above graph includes two published line of business indices: NASDAQ and
NYSE stocks with SIC code 519 (miscellaneous nondurable goods). The
Company's line of business is within this SIC code. NASDAQ stocks within
this SIC code were used in the Company's 1997 Proxy Statement. NYSE stocks
within this SIC code are included as the Company's Common Stock is now
listed on the NYSE.
AUDITORS
It is proposed that the shareholders approve the reappointment of the firm
of Arthur Andersen LLP as the Company's independent auditors for 1998. The
decision to retain Arthur Andersen LLP as the Company's independent auditors for
1998 was approved by the Audit Committee of the Board of Directors and the Board
of Directors of the Company. A representative of Arthur Andersen LLP is expected
to attend the meeting where he or she will have the opportunity to make a
statement if he or she so desires and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
REAPPOINTMENT OF SUCH FIRM.
1999 ANNUAL MEETING OF SHAREHOLDERS
The 1999 Annual Meeting of Shareholders is presently scheduled to be held on
Tuesday, May 11, 1999. Any proposals of shareholders intended to be personally
presented at such meeting must be received by the Secretary of the Company for
inclusion in the Company's Proxy Statement and form of proxy no later than
December 21, 1998.
19
HA-LO INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Lou Weisbach, Richard A. Magid and Gregory J. Kilrea, and each of them, are
hereby constituted and appointed the lawful attorneys and proxies of the
undersigned, with full power of substitution, to vote and act as proxy with
respect to all shares of common stock, no par value, of HA-LO INDUSTRIES,
INC. standing in the name of the undersigned on the Company's books at the
close of business on April 8, 1998 at the Annual Meeting of Shareholders to
be held in Room 20C of Harris Trust and Savings Bank, 111 West Monroe Street,
8th Floor East, Chicago, Illinois 60606, at 10:00 a.m., local time, on
Tuesday, June 2, 1998, or at any postponement(s) or adjournment(s) thereof,
as follows:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE
NOMINEES LISTED IN ITEM 1 AND FOR THE PROPOSAL IN ITEM 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. ELECTION OF DIRECTORS / / / / / /
Nominees: Lou Weisbach, Linden D. Nelson,
Seymour N. Okner, Richard A. Magid, David C. Robbins,
Thomas Herskovits, Jordon R. Katz, Marshall J. Katz,
Neil A. Ramo and Robert Sosnick
- -------------------------------------------------------
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED ABOVE
The powers hereby granted may be exercised by any of said attorneys or
proxies or their substitutes present and acting at the above-described Annual
Meeting of Shareholders or any postponement(s) or adjournment(s) thereof, or,
if only one be present and acting, then by that one. The undersigned hereby
revokes any and all proxies heretofore given by the undersigned to vote at
said meeting.
FOR AGAINST ABSTAIN
2. RATIFICATION OF THE REAPPOINTMENT OF / / / / / /
ARTHUR ANDERSEN LLP AS THE COMPANY'S
AUDITORS FOR 1998.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or at any postponement(s)
or adjournment(s) thereof.
MARK HERE FOR ADDRESS
CHANGE AND NOTE BELOW / /
MARK HERE IF YOU
PLAN TO ATTEND
THE MEETING / /
Dated________________________, 1998
___________________________________
Signature
___________________________________
Signature
(Please sign proxy as name appears on corporate records. Joint owners should
each sign personally. Trustees and others signing in a representative
capacity should indicate the capacity in which they sign.)