<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ASI SOLUTIONS 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
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
ASI SOLUTIONS INCORPORATED
780 THIRD AVENUE
NEW YORK, NEW YORK 10017
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 5, 1998
----------------
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of ASI Solutions Incorporated (the "Company") will be held
on Wednesday, August 5, 1998 at 11:00 a.m. New York time at the offices of the
Company at 780 Third Avenue, New York, New York 10017 for the following
purposes:
1. To elect eight directors of the Company to serve until the 1999 Annual
Meeting of Stockholders and until their respective successors are duly
elected and qualified.
2. To consider and act upon a proposal to approve an amendment to the
Company's 1996 Stock Option and Grant Plan (the "Option Plan") to increase
the total number of shares of common stock, par value $.01 per share, of
the Company that may be issued under the Option Plan from 800,000 to
1,200,000.
3. To consider and act upon any other matters that may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
The Board of Directors has fixed the close of business on June 22, 1998 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's common stock, par value $.01 per
share, at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting and at any adjournments or postponements
thereof.
You are requested to fill in and sign the enclosed form of proxy, which is
being solicited by the Board of Directors of the Company, and to mail it
promptly in the enclosed postage-prepaid envelope. Any proxy may be revoked by
delivery of a later dated proxy. Stockholders of record who attend the Annual
Meeting may vote in person, even if they have previously delivered a signed
proxy.
By Order of the Board of Directors
Carl S. Koerner
Secretary
New York, New York
July 10, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID
ENVELOPE PROVIDED. IF YOU ARE A STOCKHOLDER OF RECORD AND YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE
PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
ASI SOLUTIONS INCORPORATED
780 THIRD AVENUE
NEW YORK, NEW YORK 10017
----------------
PROXY STATEMENT
----------------
FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 5, 1998
July 10, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ASI Solutions Incorporated (the
"Company") for use at the 1998 Annual Meeting of Stockholders of the Company
to be held on Wednesday, August 5, 1998, and at any adjournments or
postponements thereof (the "Annual Meeting"). At the Annual Meeting,
stockholders will be asked to vote upon the election of eight directors of the
Company, to consider and act upon a proposal to approve an amendment to the
Company's 1996 Stock Option and Grant Plan (the "Option Plan"), and to act
upon any other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about July 10, 1998. The Board
of Directors has fixed the close of business on June 22, 1998 as the record
date for the determination of stockholders entitled to notice of and to vote
at the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's common stock, par value $.01 per share (the "Common Stock"), at the
close of business on the Record Date will be entitled to notice of and to vote
at the Annual Meeting. Holders of Common Stock outstanding as of the close of
business on the Record Date will be entitled to one vote for each share held
by them. As of the close of business on the Record Date, there were 6,522,408
shares of Common Stock outstanding and entitled to vote at the Annual Meeting.
The presence, in person or by proxy, of holders of at least a majority of
the total number of shares of Common Stock outstanding and entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. Both abstentions and broker non-votes (as defined below) will be
counted as present in determining the presence of a quorum. A plurality of
votes cast shall be sufficient for the election of directors. Abstentions and
broker non-votes will be disregarded in determining the "votes cast" for
purposes of electing directors and will not affect the election of the
candidates receiving a plurality of votes. The affirmative vote of the holders
of a majority of the shares of Common Stock present or represented and
entitled to vote is required to approve the amendment to the Option Plan.
Abstentions will be included in determining the number of shares of Common
Stock present or represented and entitled to vote for purposes of approval of
the proposal to amend the Option Plan, and will therefore have the effect of
votes "against" the proposal. Broker non-votes will not be counted in
determining the number of shares of Common Stock present or represented and
entitled to vote to approve the amendment to the Option Plan, and will
therefore not have the effect of votes either "for" or "against" the proposal.
A "broker non-vote" is a proxy from a broker or other nominee indicating that
such person has not received instructions from the beneficial owner or other
person entitled to vote the shares which are the subject of the proxy on a
particular matter with respect to which the broker or other nominee does not
have discretionary voting power.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED, POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO
THE VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL
MEETING AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED
AND NO INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR OF THE COMPANY NAMED IN THIS PROXY STATEMENT AND FOR THE
PROPOSAL TO APPROVE THE AMENDMENT TO THE OPTION PLAN. IT IS NOT
<PAGE>
ANTICIPATED THAT ANY MATTERS OTHER THAN THE ELECTION OF DIRECTORS AND THE
AMENDMENT TO THE OPTION PLAN WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER
MATTERS ARE PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION
OF THE PROXY HOLDERS.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above; by filing a duly executed proxy
bearing a later date; or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not such stockholder has
previously given a proxy, but the presence (without further action) of a
stockholder at the Annual Meeting will not constitute revocation of a
previously given proxy.
The Company's 1998 Annual Report, including audited financial statements for
the fiscal year ended March 31, 1998 ("Fiscal 1998"), is being mailed to
stockholders concurrently with this Proxy Statement. The Annual Report,
however, is not part of the proxy solicitation materials.
PROPOSAL 1: ELECTION OF DIRECTORS
INTRODUCTION
The Board of Directors of the Company currently consists of eight members.
At the Annual Meeting, eight directors will be elected to serve until the 1999
Annual Meeting of Stockholders and until their respective successors are duly
elected and qualified. The Board of Directors has nominated Bernard F.
Reynolds, Eli Salig, Seymour Adler, Ph.D., David Tory, Michael J. Boylan, Ilan
Kaufthal, Carl S. Koerner and F. Samuel Smith (the "Nominees") to serve as
directors. Each of the Nominees is currently serving as a director of the
Company. The Board of Directors anticipates that each of the Nominees will
serve, if elected, as a director. However, if any person nominated by the
Board of Directors is unable to accept election, the proxies will be voted for
the election of such other person or persons as the Board of Directors may
recommend. The Board of Directors will consider a nominee for election to the
Board of Directors recommended by a stockholder of record if the stockholder
submits the nomination in compliance with the requirements of the Company's
Amended and Restated By-laws (the "By-laws"). See "Other Matters--Stockholder
Proposals" for a summary of these requirements.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES.
INFORMATION REGARDING THE DIRECTORS/NOMINEES
The names, ages and a description of the business experience, principal
occupation and past employment during at least the last five years of each of
the Nominees are set forth below.
<TABLE>
<CAPTION>
NAME AGE
---- ---
<S> <C>
Bernard F. Reynolds.................................................. 56
Eli Salig............................................................ 49
Seymour Adler, Ph.D. ................................................ 50
David Tory(1)........................................................ 55
Michael J. Boylan(1)(2).............................................. 51
Ilan Kaufthal(1)(2).................................................. 50
Carl S. Koerner (2).................................................. 48
F. Samuel Smith...................................................... 58
</TABLE>
- --------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
2
<PAGE>
BERNARD F. REYNOLDS co-founded the Company in 1978. Prior to that time, Mr.
Reynolds held positions as a Senior Officer and Director--Human Resources and
Training at Dean Witter Reynolds, Inc. and Bache and Company Incorporated. Mr.
Reynolds is a former Chairman of the Wall Street Human Resource Directors
Association, and has served on the Human Resources Management Committee of the
Securities Industry Association.
ELI SALIG co-founded the Company in 1978. Previously, Mr. Salig worked in
Human Resources and Training at Dean Witter Reynolds, Inc. and immediately
prior to founding the Company, Mr. Salig was a Vice President and a Director
of Corporate Personnel at Dean Witter Reynolds, Inc.
SEYMOUR ADLER, PH.D. co-founded the Company in 1978. Prior to Dr. Adler's
present assignments, he served as Vice President, Research and Development for
the Company. In addition to having served as a consultant to industry
throughout his professional career, Dr. Adler has been on the faculties of the
City University of New York, Purdue University and Stevens Institute of
Technology. He is currently an adjunct Professor at New York University.
DAVID TORY joined the Company in 1996 as a director. Currently, Mr. Tory
acts as an independent consultant to industry. From 1988 through 1995, Mr.
Tory was employed as President and Chief Executive Officer of The Open
Software Foundation, a non-profit consortium comprised of major computer
hardware and software companies and user organizations. From 1978 to 1988, Mr.
Tory was employed by Computer Associates, Inc. in Europe and the United
States. Mr. Tory is also a member of the Board of Directors of Flexi
International.
MICHAEL J. BOYLAN joined the Company in 1996 as a director. He is the Vice
Chairman--Publishing Operations and a member of the Board of Directors of
American Media, Inc., a leading publisher in the field of personality
journalism. Mr. Boylan is also currently employed as President of MacFadden
Publishing, Inc., a privately held New York based firm which publishes a
variety of trade and consumer titles.
ILAN KAUFTHAL joined the Company in 1996 as a director. Mr. Kaufthal is Vice
Chairman and head of Mergers and Acquisitions for the Investment Banking
Department of Schroder & Co., Inc. Mr. Kaufthal joined Schroder & Co., Inc. in
February 1987 and is a member of its Executive Committee. Prior to joining
Schroder & Co., Inc., Mr. Kaufthal was employed by NL Industries Inc., where
he served as its Senior Vice President and Chief Financial Officer. Mr.
Kaufthal is also a member of the Boards of Directors of Cambrex Corporation,
United Retail Group, Inc. and Russ Berrie and Company, Inc.
CARL SELDIN KOERNER, ESQ. joined the Company in 1996 as a director and
Secretary. Mr. Koerner is a partner in the law firm of Koerner Silberberg &
Weiner, LLP, counsel to the Company. Mr. Koerner is also a director of
International Plastic Technologies, Inc.
F. SAMUEL SMITH joined the Company in February 1998 as a director. Mr. Smith
serves as a Managing Director of McLagan Partners, Inc. ("New McLagan"), a
wholly-owned subsidiary of the Company which provides comprehensive
compensation research and consulting services to companies primarily in the
financial services and securities industries. Mr. Smith founded McLagan
Partners Incorporated ("Old McLagan"), the predecessor to New McLagan, in 1966
and served as a Managing Director until Old McLagan was acquired by the
Company in November 1997. Mr. Smith is also a director of Chase Franklin
Corporation.
During Fiscal 1998, the Board of Directors met five times. During Fiscal
1998, each director attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors (held during the period for which
such director served on the Board of Directors) and (ii) the total number of
meetings of all committees of the Board of Directors on which such director
served (during the periods for which such director served on such committee or
committees).
The Board of Directors has established an Audit Committee and a Compensation
Committee. The Audit Committee recommends the appointment of auditors and
oversees the accounting and audit functions of the
3
<PAGE>
Company. The Audit Committee currently consists of Messrs. Boylan, Kaufthal
and Tory. The Audit Committee met three times during Fiscal 1998. The
Compensation Committee, which currently consists of Messrs. Boylan, Kaufthal
and Koerner, determines the salaries and bonuses of the Company's executive
officers. The Compensation Committee also administers the Option Plan, the
Company's 1996 Directors' Stock Option Plan (the "Directors' Plan") and the
Company's 1996 Employee Stock Purchase Plan (the "Stock Purchase Plan"). The
Compensation Committee met once during Fiscal 1998. The Board of Directors
does not have a standing nominating committee. The full Board of Directors
performs the function of such a committee.
COMPENSATION OF DIRECTORS
Directors of the Company who are also employees receive no additional
compensation for their service as directors. Non-employee directors are
eligible to receive options to purchase shares of Common Stock under the
Directors' Plan. Under the Directors' Plan, options to purchase up to an
aggregate of 50,000 shares of Common Stock may be granted. Pursuant to the
Directors' Plan, each non-employee director is automatically granted an option
to purchase 5,000 shares of Common Stock on the first day such individual
serves as a director. In addition, each non-employee director who is appointed
chairperson of a committee of the Board of Directors receives an option to
purchase 2,500 shares of Common Stock upon such appointment. Options issued
under the Directors' Plan are granted with exercise prices equal to the fair
market value of the underlying Common Stock on the date of grant, vest ratably
over three-year terms, and expire ten years after the date of grant. There
were no options granted during Fiscal 1998 under the Directors' Plan.
All directors of the Company are reimbursed for travel expenses incurred in
attending meetings of the Board of Directors and its committees.
INFORMATION REGARDING EXECUTIVE OFFICERS
The names, ages and positions of each of the executive officers of the
Company, as well as a description of their business experience and past
employment, are as set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Bernard F. Reynolds... 56 Chairman of the Board and Chief Executive Officer
Eli Salig............. 49 President and Chief Operating Officer, Director
Seymour Adler, Ph.D. . 50 Executive Vice President, Director
Michael J. Mele....... 44 Senior Vice President and Chief Financial Officer
Dennis L. Stevens..... 46 Vice President, Marketing
</TABLE>
For biographical information regarding Messrs. Reynolds and Salig and Dr.
Adler, see "--Information Regarding the Directors/Nominees."
MICHAEL J. MELE joined the Company in 1997 and currently serves as Senior
Vice President and Chief Financial Officer. Prior to joining the Company, Mr.
Mele served for four years as Vice President and Chief Financial Officer of
Linotype-Hell Company. From 1991 to 1993, Mr. Mele was Vice President of
Finance and Administration for the North American operations of Daimler-Benz's
AEG Electronics subsidiary. He was previously employed by Mars, Inc., Thomas &
Betts Corporation and KPMG Peat Marwick.
DENNIS L. STEVENS joined the Company in 1995 and currently serves as Vice
President, Marketing. Prior to joining the Company, Mr. Stevens served for two
years as Managing Director, Marketing and Communications in the Consulting
Services division at Price Waterhouse L.L.P. From 1980 to 1993, Mr. Stevens
was a Vice President of Marketing at American Express Travel Related Services
Inc., with overall management responsibility for product management, new
product development, advertising and research.
4
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth information
concerning the compensation earned during the indicated periods by the
Company's Chief Executive Officer and the Company's four (4) other most highly
compensated executive officers whose total salary and bonus exceeded $100,000
during Fiscal 1998 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------- ------------
ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
YEAR $ $ # $
------ ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Bernard F. Reynolds........ 1998 244,292 -- -- 57,404(1)
Chairman of the Board and 1997 237,169 135,000 -- 57,404(1)
Chief Executive Officer 1996 237,169 30,000 -- 57,404(1)
Eli Salig.................. 1998 239,888 -- -- 35,400(1)
President and Chief 1997 237,169 -- -- 35,400(1)
Operating Officer 1996 237,169 20,000 -- 35,400(1)
Seymour Adler, Ph.D. ...... 1998 225,500 -- -- 15,712(1)
Executive Vice President 1997 240,000 -- 124,841 15,712(1)
1996 233,332 25,000 -- 15,712(1)
Michael J. Mele............ 1998 146,250 -- 25,000 3,826(2)
Senior Vice President and 1997(3) -- -- -- --
Chief Financial Officer
Dennis L. Stevens.......... 1998 171,625 15,000 5,000 4,800(2)
Vice President, Marketing 1997 171,879 45,830 10,000 --
1996 106,250 -- -- --
</TABLE>
- --------
(1) Represents the dollar value of premiums paid by the Company with respect
to life insurance policies in the names of Messrs. Reynolds and Salig and
Dr. Adler. The face amounts of the policies are $2.3 million, $1.3 million
and $800,000 for Messrs. Reynolds and Salig and Dr. Adler, respectively.
In the event of the death of any of these executives, the Company would be
entitled to receive 50% of the applicable death benefit.
(2) Represents contributions by the Company under its 401(k) plan on behalf of
Messrs. Mele and Stevens.
(3) Mr. Mele's employment with the Company commenced in March 1997.
Option Grants. The following table sets forth the option grants made during
Fiscal 1998 to the Named Executive Officers.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF RATES OF STOCK
SECURITIES PERCENT OF PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM(1)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -----------------
# FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---------- ------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Bernard F. Reynolds..... -- -- -- -- -- --
Eli Salig............... -- -- -- -- -- --
Seymour Adler, Ph.D. ... -- -- -- -- -- --
Michael J. Mele......... 25,000(2) 6.2% $7.75 8/28/07 $121,848 $308,788
Dennis L. Stevens....... 5,000(2) 1.2% $7.75 8/28/07 $ 24,370 $ 61,758
</TABLE>
- --------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based upon assumed rates of stock appreciation set by the Securities
and Exchange Commission (the "SEC") of five percent and ten percent
compounded annually from the date the respective options were granted.
Actual gains, if any, are dependent on the performance of the Common
Stock. There can be no assurance that the amounts reflected will be
achieved.
(2) These options vest ratably over a three-year term.
5
<PAGE>
Year-End Option Holdings. The following table sets forth the value of
options held at the end of Fiscal 1998 by the Named Executive Officers. None
of the Named Executive Officers exercised any options during Fiscal 1998.
FISCAL 1998 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT FISCAL MONEY OPTIONS AT FISCAL
YEAR-END (#) YEAR-END ($)
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
------------------------- ----------------------------
<S> <C> <C>
Bernard F. Reynolds...... -- / -- -- / --
Eli Salig................ -- / -- -- / --
Seymour Adler, Ph.D...... 124,841/ -- $499,364/ --
Michael J. Mele.......... -- /25,000 -- /$68,750
Dennis L. Stevens........ 3,333/11,667 $ 13,332/$40,418
</TABLE>
- --------
(1) Based on $10.50 per share, the price of the last reported trade of the
Common Stock on the Nasdaq National Market on March 31, 1998.
EMPLOYMENT AGREEMENTS
The Company has executive employment agreements with Bernard F. Reynolds,
Eli Salig and Seymour Adler, Ph. D. (each an "Executive"). The current annual
base salaries of Messrs. Reynolds and Salig and Dr. Adler under their
employment agreements are $267,540, $257,250 and $249,960, respectively. Each
Executive is entitled to fringe benefits and an annual bonus to be determined
by the Board of Directors. Each Executive can be terminated for cause (as
defined in the employment agreements) with all future compensation ceasing. If
the Executive is terminated without cause, dies during the term, or is unable
to competently and continuously perform the duties assigned to him because of
ill health or other disability (as defined in the employment agreements), the
Executive or the Executive's estate or beneficiaries shall be entitled to full
compensation for three years following the date thereof. If the Executive
resigns, his compensation ceases as of the date of his resignation. During the
period of employment and for a period of three years thereafter, the
Executives are prohibited from competing with the Company. In order for a non-
competition clause to be enforceable under applicable state law, the clause
must be limited in terms of scope and duration. While the Company believes
that the non-competition clauses in the employment contracts are enforceable,
there can be no assurance that a court will declare them to be enforceable in
all circumstances.
6
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph provides a comparison of cumulative total stockholder
return for the period from April 15, 1997 (the date on which the Common Stock
was first registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and publicly traded) through March 31, 1998,
among the Company, the Standard & Poor's Smallcap 600 Index and a peer group
composite index (the "Peer Group Index"). The Peer Group Index includes Barrett
Business Services, Inc., Fiserv, Inc., Kelly Services, Inc., Manpower Inc. and
Norrell Corporation. The Stock Performance Graph assumes an investment of $100
in each of the Company and the two indices, and the reinvestment of any
dividends. The historical information set forth below is not necessarily
indicative of future performance. Data for the Standard & Poor's Smallcap 600
Index and the Peer Group Index was provided to the Company by Zacks Investment
Research, Inc.
[STOCK PERFORMANCE GRAPH APPEARS]
<TABLE>
<CAPTION>
4/15/97 3/31/98
------- -------
<S> <C> <C>
The Company..................................................... $100.00 $175.00
Standard & Poor's Smallcap 600 Index............................ $100.00 $147.68
Peer Group Index................................................ $100.00 $129.54
</TABLE>
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee of the Board of Directors consists of Michael J.
Boylan, Ilan Kaufthal and Carl Seldin Koerner. Mr. Koerner is the Secretary of
the Company and is also the managing partner of the law firm of Koerner
Silberberg & Weiner, LLP, counsel to the Company. See "Certain Transactions."
The Compensation Committee is responsible for (i) reviewing the performance
and approving the compensation, including bonuses, of the Company's Chief
Executive Officer and the executive officers and key managers reporting
directly to the Chief Executive Officer, and (ii) administering, reviewing and
approving stock option grants and authorizing the number of shares of common
stock issuable under the Company's 1996 Stock Option and Grant Plan and the
Company's 1996 Directors' Stock Option Plan.
COMPENSATION PHILOSOPHY AND PRACTICE
The Compensation Committee's philosophy is based upon the belief that
executive compensation should be closely aligned with the annual and long-term
financial performance of the Company and increases in stockholder value. The
Compensation Committee believes that leadership and motivation of the
Company's employees is critical to the continued success of the Company and
that appropriate compensation for performance is the foundation of any
successful enterprise. As such, the Compensation Committee closely monitors
the allocation of the Company's executives' compensation among salary, bonus
and stock option grants in order to create the optimum level of incentives for
such executives to manage the Company's affairs with the goal of improving the
Company's financial performance and increasing value to stockholders.
Each year the Compensation Committee conducts a full review of the
compensation level of each of the Company's executive officers. In determining
annual compensation, the Compensation Committee considers the Company's
performance based on rate of growth and ability to meet and surpass financial
projections. Additionally, in determining compensation for executive officers
individually, the Compensation Committee considers the performance of the
specific executive, the role and level of responsibility such executive has
assumed in the Company's performance as a whole, the particular executive's
importance to the future growth of the Company and the success of the
executive individually and collectively with the other members of the
management team in achieving short-term and long-term goals.
Based upon the complexity, revenues and growth potential of the Company and
in consideration of the caliber, level of experience and performance of the
Company's management, the Compensation Committee believes that the Company's
executive compensation practices maintain an overall level of compensation
that is competitive and beneficial to the Company.
As set forth above under "Executive Compensation--Option Grants in Fiscal
1998," stock options were granted to two of the executive officers of the
Company in Fiscal 1998. Stock options were also granted to various employees
of the Company in Fiscal 1998. The Compensation Committee recommended and the
Board of Directors approved the option grants based upon the same factors
considered in making the compensation decisions described above.
CARL SELDIN KOERNER
ILAN KAUFTHAL
MICHAEL J. BOYLAN
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Company's executive compensation is determined by the Compensation
Committee of the Board of Directors, which currently consists of Messrs.
Boylan, Kaufthal and Koerner. Mr. Koerner is the managing partner of the law
firm of Koerner Silberberg & Weiner, LLP, which has served as counsel to the
Company. See "Certain Transactions."
CERTAIN TRANSACTIONS
OFFICER LOANS
During the fiscal year ended March 31, 1996, the Company loaned $233,519,
$112,617 and $17,597 to Messrs. Reynolds and Salig and Dr. Adler,
respectively. The loans were evidenced by 5-year notes bearing interest at the
rate of 7% per annum and requiring equal annual principal payments over the
term of the notes. On May 21, 1997, Messrs. Reynolds and Salig and Dr. Adler
transferred an aggregate of 45,534 shares of the Company's Common Stock owned
by them to the Company in full satisfaction of these notes. The fair market
value of the Common Stock transferred was equal to the principal plus accrued
interest outstanding, based upon a closing price for the Company's Common
Stock of $8.625 per share as reported on the Nasdaq National Market at the end
of trading on May 21, 1997.
RELEASE OF GUARANTEES
Messrs. Reynolds and Salig had previously personally guaranteed the
Company's indebtedness under its old bank credit facility which matured in
September 1997. The Company repaid all indebtedness outstanding under the old
credit facility in April 1997 with the proceeds of the Company's initial
public offering and in connection therewith, Messrs. Reynolds and Salig were
released from their personal guarantees.
MCLAGAN ACQUISITION
On November 13, 1997, the Company, through certain of its wholly owned
direct and indirect subsidiaries, acquired substantially all of the assets and
businesses of Old McLagan and its related entities McLagan Partners
International Incorporated and McLagan Partners Asia Incorporated (the
"McLagan Acquisition"). The consideration paid by the Company in the McLagan
Acquisition included (i) $15.5 million in cash; (ii) $5 million in
subordinated notes bearing interest at 8% per annum and payable in three equal
principal installments on each of April 30, 1998, April 30, 1999 and April 30,
2000; and (iii) 50,000 shares of Common Stock. The Company also discharged
approximately $1 million of Old McLagan's outstanding liabilities and agreed
to make deferred payments in an aggregate amount of $1 million, on April 30,
2000, to certain employees of Old McLagan; provided that such employees
continue to be employed by New McLagan (or a related entity) as of such date.
F. Samuel Smith, a director of the Company, was a principal shareholder and an
executive officer of Old McLagan.
In connection with the McLagan Acquisition, New McLagan entered into
employment and non-competition agreements with Old McLagan's four primary
executive officers, C. Bruce McLagan, F. Samuel Smith (a director of the
Company), Albertus W. van den Broek and Michael P. Curran (collectively, the
"McLagan Executives"), pursuant to which the McLagan Executives agreed to
serve as Managing Directors of New McLagan for initial terms ending on March
31, 2000 (with non-competition periods running for varying terms thereafter).
New McLagan also adopted an Incentive Compensation Plan (the "Plan"), under
which the McLagan Executives will be entitled to receive from New McLagan, in
the form of cash bonuses, specified percentages of the Consolidated Operating
Income (as defined in the Plan) of New McLagan (and its related entities)
attributable to the assets purchased by the Company in the McLagan Acquisition
for specified periods.
9
<PAGE>
INTEREST OF COUNSEL
Carl Seldin Koerner, a director and the Secretary of the Company, is the
managing partner of the law firm of Koerner Silberberg & Weiner, LLP. Such
firm has been general counsel to the Company since 1989. During Fiscal 1998,
the Company paid legal fees of $691,000 to Koerner Silberberg & Weiner, LLP.
The Company believes that the fees paid to Koerner Silberberg & Weiner, LLP
are comparable to those fees that would have been paid to an unrelated third
party law firm.
PROPOSAL 2: APPROVAL OF AN AMENDMENT
TO THE COMPANY'S 1996 STOCK OPTION AND GRANT PLAN
INTRODUCTION
On May 20, 1998, the Board of Directors adopted, subject to stockholder
approval at the Annual Meeting, an amendment to the Option Plan (the "Plan
Amendment") pursuant to which the number of shares of Common Stock reserved
for issuance under the Option Plan will be increased from 800,000 to
1,200,000.
The Board of Directors believes that the Company's growth and long-term
success depend in large part upon retaining and motivating key personnel and
that such retention and motivation can be achieved in part through the grant
of stock options. The Board of Directors also believes that stock options can
play an important role in the success of the Company by encouraging and
enabling the officers and other employees of the Company, upon whose judgment,
initiative and efforts the Company depends for sustained growth and
profitability, to acquire a proprietary interest in the long-term performance
of the Company. The Board of Directors anticipates that providing such persons
with a direct stake in the Company will ensure a closer identification of the
interests of the participants in the Option Plan with those of the Company,
thereby stimulating the efforts of such participants to promote the Company's
future success and strengthen their desire to remain with the Company. The
Board of Directors believes that the proposed increase in the number of shares
issuable under the Option Plan will help the Company accomplish these goals
and will keep the Company's equity incentive compensation competitive with
that of its competitors.
As of the date of this Proxy Statement, options to purchase all 800,000
shares of Common Stock currently reserved for issuance under the Option Plan
have been granted. In addition, options to purchase an additional 133,533
shares of Common Stock have been granted under the Option Plan, subject to
stockholder approval of the Plan Amendment at the Annual Meeting. If the Plan
Amendment is approved by the stockholders, these 133,533 shares will come out
of the additional 400,000 shares of Common Stock reserved for issuance, and
266,467 shares of Common Stock will remain available for issuance under the
Option Plan. If the Plan Amendment is not approved by the stockholders, the
133,533 additional options will automatically be cancelled.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO THE OPTION PLAN.
SUMMARY OF THE OPTION PLAN
The following description of certain features of the Option Plan is intended
to be a summary only and does not describe every provision of the Option Plan.
Number of Shares Issuable. Subject to adjustment for stock splits, stock
dividends and similar events, 800,000 shares of Common Stock are currently
authorized and reserved for issuance under the Option Plan. If adopted, the
Plan Amendment would increase the number of shares of Common Stock authorized
and reserved for issuance to 1,200,000. Shares of Common Stock underlying any
grants of options under the Option Plan which expire or are cancelled or
terminated (other than by exercise) shall be added back to the shares of
Common Stock available for issuance under the Option Plan.
10
<PAGE>
Plan Administration; Eligibility. The Option Plan provides that it shall be
administered by the full Board of Directors or a committee of not less than
three non-employee directors as appointed by the Board of Directors from time
to time. The Option Plan is currently administered by the Compensation
Committee, which consists of Messrs. Boylan, Kaufthal and Koerner. The Board
of Directors may discontinue or amend the Option Plan at any time provided
that the rights and obligations under any option issued prior to an amendment
to the Option Plan can not be adversely affected by such amendment without the
consent of the optionee and provided that certain amendments, if required by
regulatory requirements or in certain other circumstances, require the
approval of the Company's stockholders. The Compensation Committee has full
power to select, from among the persons eligible for awards under the Option
Plan, the individuals to whom awards will be granted, to make any combination
of awards to participants, and to determine the specific terms of each award,
subject to the provisions of the Option Plan. Incentive Options (as defined
below) may be granted only to officers or other employees of the Company or
its subsidiaries, including members of the Board of Directors who are also
employees of the Company or its subsidiaries. Non-Qualified Options (as
defined below) may be granted or issued to officers or other employees of the
Company, directors and to consultants and other key persons who provide
services to the Company (regardless of whether they are also employees).
Material Terms of Options. The Option Plan permits the grant of (i) options
to purchase shares of Common Stock intended to qualify as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") ("Incentive Options"), and (ii) options that do not so qualify
("Non-Qualified Options"). The exercise price of each option granted under the
Option Plan is determined by the Compensation Committee but, in the case of
Incentive Options, may not be less than 100% of the fair market value of the
underlying shares on the date of grant. No Incentive Option may be granted
under the Option Plan to any employee of the Company or any subsidiary who
owns at the date of grant shares of stock representing in excess of 10% of the
voting power of all classes of stock of the Company or a parent or a
subsidiary unless the exercise price for the stock subject to such option is
at least 110% of the fair market value of such stock at the time of grant and
the option term does not exceed five years. Each option may be exercised only
by the optionee during his or her lifetime. As of the close of business on
June 30, 1998, the fair market value of a share of Common Stock was $8.00, as
determined by the price of a share of Common Stock on the Nasdaq National
Market ("Nasdaq").
The term of each option is fixed by the Compensation Committee and, in the
case of an Incentive Option, may not exceed ten years from the date of grant.
The Compensation Committee determines at what time or times each option may be
exercised and, subject to the provisions of the Option Plan, the period of
time during which options may be exercised, if any, after termination of
employment for any reason. Options may be made exercisable in installments,
and the exercisability of options may be accelerated by the Compensation
Committee. Upon the exercise of options, the option exercise price must be
paid in full (i) in cash or by certified or bank check or other instrument
acceptable to the Compensation Committee, (ii) if the applicable option
agreement permits, by delivery of shares of Common Stock already owned by the
optionee, or (iii) through a "cashless" exercise procedure, subject to certain
limitations.
The Option Plan provides that in the case of certain transactions
constituting a change in control of the Company, all outstanding options shall
become fully exercisable whether or not such options were exercisable
immediately prior thereto. In addition, the Option Plan and the options issued
thereunder shall terminate upon the effectiveness of any such transaction or
event, unless provision is made in connection with such transaction for the
assumption of options theretofore granted, or the substitution for such
options of new options of the successor entity or parent thereof, with
appropriate adjustment as to the number and kind of shares and the per share
exercise prices. In the event of such termination, each holder of outstanding
options shall be permitted to exercise all options for a period of at least 15
days prior to the date of such termination.
Tax Aspects Under the U.S. Internal Revenue Code. Under current federal tax
law, an employee who receives a Non-Qualified Option does not generally
realize any taxable income at the time the option is granted. However, upon
the exercise of such an option, the employee will recognize ordinary income
measured by the excess of the then fair market value of the Common Stock over
the exercise price, and the Company generally
11
<PAGE>
will be entitled to a tax deduction for a corresponding amount. On the other
hand, an employee who receives an Incentive Option does not generally realize
any taxable income at the time the option is granted or at the time it is
exercised. The excess of the fair market value of the Common Stock on the date
of exercise over the exercise price is a "tax preference item," however, that
may cause the employee to be subject to the alternative minimum tax. Upon the
sale of stock received upon exercise of any Incentive Option, the optionee
will recognize a capital gain or loss or, depending on the holding period of
the shares of Common Stock, ordinary income, equal to the difference between
the sale price and the exercise price. The Company is not entitled to a tax
deduction with respect to the grant or exercise of an Incentive Option.
Option Plan Benefits. The following table sets forth the option grants to
the individuals and groups identified below that were made on May 20, 1998
under the Option Plan subject to stockholder approval of the Plan Amendment at
the Annual Meeting. These grants were made from the 400,000 additional shares
of Common Stock reserved under the Option Plan that stockholders are being
asked to approve. If the Plan Amendment is not approved by the stockholders,
the option grants set forth below will be cancelled.
OPTIONS GRANTED UNDER THE OPTION PLAN
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME AND POSITION VALUE ($) OF OPTIONS
----------------- --------- ----------
<S> <C> <C>
Bernard F. Reynolds.................................. -- --
Chairman of the Board and Chief Executive Officer
Eli Salig............................................ -- --
President and Chief Operating Officer
Seymour Adler, Ph.D. ................................ -- --
Executive Vice President
Michael J. Mele. .................................... -- 15,000
Senior Vice President and Chief Financial Officer
Dennis L. Stevens.................................... -- 5,000
Vice President, Marketing and Sales
Executive Officers as a Group........................ -- 20,000
Non-Executive Director Group......................... -- --
Non-Executive Officer Employee Group................. -- 113,533
</TABLE>
12
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth as of June 15, 1998 certain information
regarding the beneficial ownership of Common Stock by (i) each person or
"group" (as that term is defined in Section 13(d)(3) of the Exchange Act)
known by the Company to be the beneficial owner of more than 5% of the Common
Stock, (ii) each executive officer of the Company, (iii) each director and
Nominee and (iv) all directors and executive officers as a group (10 persons).
Except as otherwise indicated, the Company believes, based on information
furnished by such persons, that each person listed below has sole voting and
investment power over the shares of Common Stock shown as beneficially owned,
subject to community property laws, where applicable.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER(1) OWNED(2) COMMON STOCK(2)
--------------------------- ---------------- ---------------
<S> <C> <C>
Bernard F. Reynolds........................ 2,575,872(3) 39.5%
Eli Salig.................................. 1,176,824 18.0%
Seymour Adler, Ph.D........................ 340,319(4) 5.1%
Michael J. Mele............................ 3,428(5) *
Dennis L. Stevens.......................... 5,765(6) *
David Tory................................. 11,667(7) *
Michael J. Boylan.......................... 13,333(8) *
Ilan Kaufthal.............................. 1,667(9) *
Carl S. Koerner............................ 2,167(10) *
F. Samuel Smith............................ 74,905 1.1%
All directors and executive officers as a
group (10 persons)........................ 4,205,947 63.2%
</TABLE>
- --------
* Less than 1%
(1) The address of each of Messrs. Reynolds and Salig and Dr. Adler is c/o
ASI Solutions Incorporated, 780 Third Avenue, New York, New York 10017.
(2) In computing the number of shares of Common Stock beneficially owned by a
person, shares of Common Stock subject to options and warrants held by
that person that are currently exercisable or that become exercisable
within 60 days of June 15, 1998 are deemed outstanding. For purposes of
computing the percentage of outstanding shares of Common Stock
beneficially owned by such person, such shares of stock subject to
options or warrants that are currently exercisable or that become
exercisable within 60 days of June 15, 1998 are deemed to be outstanding
for such person but are not deemed to be outstanding for purposes of
computing the ownership percentage of any other person.
(3) Includes (i) 100,000 shares owned by Mr. Reynolds' wife, and (ii) 4,270
shares owned by Mr. Reynolds' son, of which shares Mr. Reynolds disclaims
beneficial ownership.
(4) Includes 124,841 shares subject to currently exercisable stock options.
(5) Includes 2,500 shares owned by Mr. Mele's wife, of which shares Mr. Mele
disclaims beneficial ownership.
(6) Includes 3,333 shares subject to currently exercisable stock options.
(7) Includes 1,667 shares subject to currently exercisable stock options.
(8) Includes 3,333 shares subject to currently exercisable stock options.
(9) Represents shares subject to currently exercisable stock options.
(10) Includes 1,667 shares subject to currently exercisable stock options.
13
<PAGE>
OTHER MATTERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC and Nasdaq. Officers, directors and greater than 10%
stockholders are required by SEC regulations to furnish the Company copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on
a review of the copies of such reports provided to the Company and written
representations that no other reports were required during, or with respect
to, Fiscal 1998, all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial owners have been
satisfied, except that Mr. Smith inadvertently failed to file a timely report
relating to becoming a director of the Company in February 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Coopers & Lybrand L.L.P. served as the Company's
independent public accountants during Fiscal 1998 and is expected to continue
to do so for fiscal year 1999. A representative of Coopers & Lybrand L.L.P. is
expected to be present at the Annual Meeting, will be given an opportunity to
make a statement if he so desires and will be available to respond to
appropriate questions.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. In an
effort to have as large a representation at the Annual Meeting as possible,
special solicitation of proxies may, in certain instances, be made personally
or by telephone, telegraph or mail by one or more employees of the Company.
The Company also may reimburse brokers, banks, nominees and other fiduciaries
for postage and reasonable clerical expenses of forwarding the proxy materials
to their principals who are beneficial owners of Common Stock.
STOCKHOLDER PROPOSALS
Any stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 and
intended to be presented at the Company's 1999 Annual Meeting of Stockholders
must be received by the Company at its principal executive office on or before
March 12, 1999 to be eligible for inclusion in the proxy statement and form of
proxy to be distributed by the Board of Directors in connection with such
meeting.
Any stockholder proposals (including recommendations of nominees for
election to the Board of Directors) intended to be presented at the Company's
1999 Annual Meeting of Stockholders, other than a stockholder proposal
submitted pursuant to Exchange Act Rule 14a-8, must be received in writing at
the principal executive office of the Company no later than sixty (60) days
prior to the date of such meeting, nor prior to ninety (90) days prior to the
date of such meeting, together with all supporting documentation required by
the By-laws; provided, however, that in the event less than seventy (70) days'
notice or prior public disclosure of the date of such meeting is given or made
to stockholders, stockholder proposals must be received, together with all
required supporting documentation, not later than the close of business on the
tenth day following the date on which such notice or public disclosure of the
date of the annual meeting is first made.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
14
<PAGE>
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL 1998
(INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO), WHICH WAS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1998, WILL BE PROVIDED
WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT IS MAILED UPON THE
WRITTEN REQUEST OF ANY SUCH PERSON TO MICHAEL J. MELE, SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER, ASI SOLUTIONS INCORPORATED, 780 THIRD AVENUE, NEW
YORK, NEW YORK 10017.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD TODAY.
15
<PAGE>
ASI SOLUTIONS INCORPORATED
780 THIRD AVENUE, NEW YORK, NEW YORK 10017
PROXY FOR COMMON STOCK
P
R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
O
X
Y The undersigned hereby appoints Bernard F. Reynolds and Michael J. Mele,
and each of them, proxies with full power of substitution to vote for and on
behalf of the undersigned at the Annual Meeting of Stockholders of ASI Solutions
Incorporated (the "Company"), to be held at the offices of the Company at 780
Third Avenue, New York, New York 10017 on Wednesday, August 5, 1998 at 11:00
a.m., New York time, and at any adjournments or postponements thereof, hereby
granting full power and authority to act on behalf of the undersigned at said
meeting and any adjournments or postponements thereof. The undersigned hereby
revokes any proxy previously given in connection with such meeting and
acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement and the 1998 Annual Report to Stockholders.
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE
<PAGE>
[X] Please mark votes as in this example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTION IS INDICATED WITH
RESPECT TO PROPOSAL 1 OR 2 BELOW, THE UNDERSIGNED'S VOTES WILL BE CAST "FOR"
EACH OF SUCH MATTERS. The undersigned's votes will be cast in accordance with
the proxies' discretion on such other business as may properly come before the
meeting or any adjournments or postponements thereof. PLEASE SIGN AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.
1. Proposal to elect Bernard F. Reynolds, Eli Salig, Seymour Adler, Ph.D.,
David Tory, Michael J. Boylan, Ilan Kaufthal, Carl S. Koerner and F. Samuel
Smith as Directors of the Company, each for a one-year term to continue
until the 1999 Annual Meeting of Stockholders and until the successor of
each is duly elected and qualified.
<TABLE>
<CAPTION>
<S> <C> <C>
[_] FOR ALL [_] WITHHELD [_]
FROM ALL ________________________________________________________
Withheld as to the nominee noted above
</TABLE>
2. Proposal to approve the amendment to the Company's 1996 Stock Option and
Grant Plan to increase the number of shares of Common Stock of the Company
that may be issued thereunder from 800,000 to 1,200,000.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To consider and act upon such other business as may properly come before
the meeting or any adjournments or postponements thereof.
<TABLE>
<CAPTION>
<S> <C>
For joint accounts, each owner should sign. Executors, Signature:___________________Date _______
administrators, trustees, corporate officers and others
acting in a representative capacity should give full title Signature:___________________Date _______
or authority.
</TABLE>
