SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ x ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Volt Information Sciences, Inc.
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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:
<PAGE>
VOLT INFORMATION SCIENCES, INC.
1221 Avenue of the Americas
New York, New York 10020-1579
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 15, 1999
TO THE SHAREHOLDERS OF
VOLT INFORMATION SCIENCES, INC.
The Annual Meeting of Shareholders of Volt Information Sciences, Inc. (the
"Company") will be held at the 1st floor Atrium, Volt Corporate Park, 2401 N.
Glassell Street, Orange, California, on Thursday, April 15, 1999, at 2:30 P.M.,
Pacific time, to consider the following:
1. The election of one Class I director to serve until the Annual
Meeting of Shareholders to be held in the year 2000 and four Class II
directors to serve until the Annual Meeting of Shareholders to be held
in the year 2001 and, in each case, until their respective successors
are elected and qualified;
2. A proposal to ratify the action of the Board of Directors in
appointing Ernst & Young LLP as the Company's independent auditors for
the fiscal year ending October 29, 1999; and
3. Such other business as may properly come before the meeting or any
adjournments or postponements thereof.
Only shareholders of record at the close of business on February 23, 1999 will
be entitled to notice of, and to vote at, the meeting and any adjournments or
postponements thereof.
You are cordially invited to attend the meeting. Whether or not you plan to be
present, kindly fill out and sign the enclosed Proxy exactly as your name
appears on the Proxy, and mail it promptly in order that your vote can be
recorded. A return envelope is enclosed for your convenience and requires no
postage if mailed within the United States. The giving of this Proxy will not
affect your right to vote in person in the event that you find it convenient to
attend the meeting.
By Order of the Board of Directors
Jerome Shaw, Secretary
New York, New York
March 1, 1999
<PAGE>
VOLT INFORMATION SCIENCES, INC.
1221 Avenue of the Americas
New York, New York 10020-1579
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement, to be mailed on or about March 1, 1999, is
furnished in connection with the solicitation by the Board of Directors of Volt
Information Sciences, Inc., a New York corporation (the "Company"), of Proxies
in the accompanying form ("Proxy" or "Proxies") for use at the Annual Meeting of
Shareholders of the Company to be held on April 15, 1999 and at any adjournments
or postponements thereof (the "Annual Meeting").
Only holders of record of the Company's Common Stock (the "Common
Stock") as of the close of business on February 23, 1999 are entitled to notice
of, and to vote at, the Annual Meeting. As of the close of business on that
date, there were issued and outstanding 15,025,356 shares of Common Stock of the
Company. Each issued and outstanding share of Common Stock on that date is
entitled to one vote upon each matter to be acted upon at the Annual Meeting.
The presence, in person or by proxy, of at least 35% of the total issued and
outstanding shares of Common Stock entitled to vote at the Annual Meeting will
constitute a quorum for the transaction of business thereat.
All Proxies received will be voted in accordance with the
specifications made thereon or, in the absence of specification: (a) for the
election of all nominees named herein to serve as directors and (b) in favor of
the proposal to ratify the appointment of independent auditors. Management does
not intend to bring before the Annual Meeting any matters other than those
specifically described above and knows of no matters other than the foregoing to
come before the Annual Meeting. If any other matters or motions properly come
before the Annual Meeting, it is the intention of the persons named in the
accompanying form of Proxy to vote that Proxy in accordance with their judgment
on those matters or motions, including any matter dealing with the conduct of
the Annual Meeting. Proxies may be revoked at any time prior to their exercise
by written notification to the Secretary of the Company at the Company's
principal executive offices located at 1221 Avenue of the Americas, New York,
New York 10020-1579, by voting at the Annual Meeting or by submitting a later
dated proxy.
Separate Proxies are being transmitted to each employee of the Company
who is a participant in the Company's Employee Stock Ownership Plan (the "ESOP")
or has shares of the Company's Common Stock allocated to his or her account as a
participant in the Company's 401(k) Savings Plan (the "Savings Plan"). Shares in
the ESOP allocated to a participant's ESOP account will be voted as directed by
the participant in a signed Proxy which is timely returned to the ESOP Trustee.
Unallocated shares and shares in the ESOP as to which the ESOP Trustee does not
receive a direction will be voted by the ESOP Trustee on the foregoing matters
in the same proportion as shares are voted by participants who direct the
Trustee as to how to vote. Shares of Common Stock held in a Savings Plan
participant's account will be voted as directed by the participant in a signed
Proxy which is timely returned to the Savings Plan Trustee. Shares in the
Savings Plan as to which the Savings Plan Trustee does not receive a direction
will be voted by the Savings Plan Trustee in such manner as the Plan
Administrator deems proper in the Plan Administrator's best judgment.
A plurality of votes cast at the Annual Meeting in person or by proxy
is required for the election of each nominee. The affirmative vote of a majority
of the votes cast at the Annual Meeting in person or by proxy is
<PAGE>
required to ratify the selection of Ernst & Young as the Company's independent
auditors for fiscal 1999. Abstentions and broker non-votes with respect to
either matter are not considered votes cast with respect to that matter (and,
consequently, will have no effect on the vote on the foregoing matters), but are
counted in determining a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, MANAGEMENT AND NOMINEES
The following table sets forth information, as of January 31, 1999
(except as described in the footnotes to the following table), with respect to
the beneficial ownership of Common Stock, the Company's only class of voting or
equity securities, by (a) each person who is known to the Company to own
beneficially more than five percent of the outstanding shares of Common Stock,
(b) each of the directors of the Company, including nominees to serve as
directors, (c) each of the executive officers named in the Summary Compensation
Table contained under "Executive Compensation" and (d) executive officers and
directors as a group:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Class (2)
---------------- ------------------------ ---------
<S> <C> <C>
William Shaw
1221 Avenue of the Americas
New York, NY 10020-1579 3,674,227 (3)(4) 24.3%
Jerome Shaw
2401 N. Glassell Street
Orange, CA 92665 3,192,992 (3)(5) 21.2%
Westport Asset Management
253 Riverside Avenue
Westport, CT 06880 864,287(6) 5.6%
Palisade Capital Management LLC
One Bridge Plaza, Suite 695
Fort Lee, NJ 07024 810,700 (7) 5.3%
James J. Groberg 5,395 (3) *
Mark N. Kaplan 3,000 *
Irwin B. Robins 17,829 (3) *
Steven A. Shaw 207,853 (3) 1.4%
John R. Torell III 3,000 *
William H. Turner 1,000 *
Howard B. Weinreich 12,551 (3) *
All Executive Officers and
Directors as a Group
(12 persons including the foregoing) 7,128,291 (3)(8) 46.3%
</TABLE>
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(Footnotes on next page)
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<PAGE>
(1) Except as noted, the named beneficial owners have sole voting and
dispositive power with respect to their beneficially owned shares.
Includes shares held for the account of executive officers under the ESOP
and the Savings Plan.
(2) Asterisk indicates less than 1%. Shares reflected as owned by a person
that are not outstanding, but that are issuable upon exercise of options
held by such person that were exercisable on or within 60 days after
January 31, 1999, are considered outstanding for the purpose of computing
the percentage of outstanding Common Stock that would be owned by the
optionee if the options were exercised, but (except for the calculation
of the beneficial ownership by all executive officers and directors as a
group) are not considered outstanding for the purpose of computing the
percentage of outstanding Common Stock owned by any other person.
(3) Includes the following shares issuable upon the exercise of the portion
of options granted by the Company which were exercisable on or within 60
days after January 31, 1999: William Shaw, 120,000 shares; Jerome Shaw,
45,000 shares; James J. Groberg, 2,167 shares; Irwin B. Robins, 7,867
shares; Steven A. Shaw, 4,200 shares; Howard B. Weinreich, 5,500 shares;
and all executive officers and directors as group, 189,234 shares.
(4) Includes 99,561 shares owned of record by Mr. Shaw as sole trustee of a
trust for the benefit of his wife, as to which shares Mr. Shaw disclaims
beneficial ownership.
(5) Includes (i) 2,879,430 shares owned of record by Mr. Shaw and his wife as
trustees of a revocable trust for their benefit or as community property,
as to which they have shared voting and investment power (pursuant to the
terms of the trust, Mr. Shaw may demand that these shares be transferred
to him at any time) and (ii) 236,250 shares owned of record by Mr. Shaw
and his wife as trustees of a trust for the benefit of one of their
children, as to which Mr. and Mrs. Shaw may be deemed to have shared
voting and investment power (the inclusion of which 236,250 shares is not
an admission of beneficial ownership of those shares by Mr. Shaw).
Excludes 6,750 shares owned of record by Mr. Shaw's wife, as to which Mr.
Shaw disclaims beneficial ownership.
(6) Based on information as of December 31, 1998 contained in a Schedule 13G
dated January 22, 1999.
(7) Based on information as of December 31, 1998 contained in a Schedule 13G
dated February 16, 1999.
(8) Excludes 6,750 shares owned beneficially by the spouse of an executive
officer and director, as to which shares that executive officer and
director disclaims beneficial ownership.
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<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors consists of eight directors, divided
into two classes, having been increased from six by the Board of Directors on
August 17, 1998. The terms of office of Class I and Class II directors expire at
the 2000 (except that the term of Steven A. Shaw expires at the Annual Meeting)
and 1999 Annual Meeting of Shareholders, respectively. At each annual meeting,
directors are chosen to succeed those in the class whose term expires at that
annual meeting to serve for a term of two years each and until their respective
successors are elected and qualified, except that, if elected, Steven A. Shaw's
term will expire at the Annual Meeting of Shareholders to be held in the year
2000. Each of the present directors of the Company was elected by the Company's
shareholders except Steven A. Shaw and William H. Turner, who were elected by
the Board of Directors on August 17, 1998.
Unless otherwise directed, persons named in the enclosed Proxy intend
to cast all votes pursuant to Proxies received for the election of Steven A.
Shaw as a Class I director to serve until the Annual Meeting of Shareholders to
be held in the year 2000 and for the election of William Shaw, Jerome Shaw,
James J. Groberg and William H. Turner as Class II directors to serve until the
Annual Meeting of Shareholders to be held in the year 2001 and, in each case,
until his successor is elected and qualified (those persons are referred to in
this Proxy Statement as the "nominees"). Each nominee has indicated his
availability to serve as a director. In the event that any of the nominees
should become unavailable or unable to serve for any reason, the holders of the
Proxies have discretionary authority to vote for one or more alternate nominees
who will be designated by the Board of Directors.
A plurality of the votes cast at the Annual Meeting in person or by
proxy is required for the election of each nominee. Votes withheld will have no
effect on the outcome of the election of directors.
Background of Nominees and Continuing Directors
Nominees
(Class I)
STEVEN A. SHAW, 39, has been a Vice President of the Company since
April 1997 and has been employed by the Company in various capacities since
November 1995. For more than five years prior thereto, he operated a number of
privately-held telecommunication services companies, of which he owns most of
the equity interest. He has served as a director of the Company since August
1998.
(Class II)
WILLIAM SHAW, 74, a founder of the Company, has been President,
Chairman of the Board and Chief Executive Officer of the Company since its
formation and has been employed in executive capacities by the Company and its
predecessors since 1950. He has served as a director of the Company since its
formation in 1957. He is also a director of Autologic Information International,
Inc., a 59% publicly-held subsidiary of the Company ("Autologic").
JEROME SHAW, 72, also a founder of the Company, has been Executive Vice
President and Secretary of the Company since its formation and has been employed
in executive capacities by the Company and its
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<PAGE>
predecessors since 1950. He has served as a director of the Company since its
formation in 1957. He is also a director of Autologic.
JAMES J. GROBERG, 70, has been a Senior Vice President and Principal
Financial Officer of the Company since September 1985 and was also employed in
executive capacities by the Company from 1973 to 1981. He has served as a
director of the Company since 1987. He is also a director of Autologic.
WILLIAM H. TURNER, 59, has been a director of the Company since August
1998. He has been President of PNC Bank, New Jersey since August 1997. From
October 1996 to July 1997 he was President and Chief Executive Officer of
Franklin Electronic Publishers, Inc. From February 1991 to September 1996 he was
Vice Chairman of The Chase Manhattan Bank and its predecessor, Chemical Banking
Corporation. He is also a director of Standard Motor Products, Inc. and Franklin
Electronic Publishers., Inc.
Directors Whose Term of Office Continues After the Annual Meeting
(Class I)
IRWIN B. ROBINS, 64, has been a Senior Vice President of the Company
since September 1985 and has been employed in executive capacities by the
Company since 1980. He has served as a director of the Company since 1981.
JOHN R. TORELL III, 59, has been a director of the Company since
October 1989. Mr. Torell has been Chairman of Torell Management Inc. (an
investment company) for more than the past five years. He is past President of
Manufacturers Hanover Corporation (a bank holding company) and Manufacturers
Hanover Trust Company (a bank); past Chairman, President and Chief Executive
Officer of CalFed, Inc. (a savings and loan holding company); and past Chairman
and Chief Executive Officer of Fortune Bancorp (a savings and loan holding
company). He is also a director of American Home Products Corporation, Paine
Webber Group, Inc., and Heartland Technologies, Inc.
MARK N. KAPLAN, 69, has been a director of the Company since April
1991. Mr. Kaplan has been a partner in the law firm of Skadden, Arps, Slate,
Meagher & Flom LLP since October 1979. He is also a director of Grey Advertising
Inc., DRS Technologies, Inc., Refac Technology Development Corporation, American
Biltrite, Inc., Congoleum Corporation and MovieFone, Inc.
William Shaw and Jerome Shaw are brothers. Steven A. Shaw is the son of
Jerome Shaw. There are no other family relationships among the directors or
executive officers of the Company. Messrs. William Shaw, Jerome Shaw and Irwin
B. Robins are parties to employment agreements with the Company. See "Employment
Agreements" under "Executive Remuneration".
Committees of the Board
The Company has Audit and Compensation Committees, but does not have a
nominating committee.
The Audit Committee, consisting of Messrs. Kaplan and Torell, is
authorized to examine and consider matters related to internal and external
audits of the Company's accounts, the financial affairs and accounts of the
Company, the scope of the independent auditor's engagement, the effect on the
Company's financial statements of any proposed changes in generally accepted
accounting principles, disagreements, if any, between
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<PAGE>
the Company's independent auditors and management, the quality of the Company's
system of internal accounting controls, and matters of concern to the
independent auditors resulting from the audit, including the result of the
independent auditor's review of internal accounting controls and suggestions for
improvements. The Audit Committee met once during the past fiscal year.
The Compensation Committee, consisting of Messrs. Kaplan and Torell, is
authorized to make recommendations to the Board concerning compensation for
those officers who are also directors of the Company. The Compensation Committee
did not meet separately from the entire Board during the past fiscal year.
The Stock Option Committee consists of Messrs. William Shaw, Kaplan and
Torell. However, since August 1996, when the Company adopted revised provisions
of Rule 16b-3 promulgated under the Securities and Exchange Act of 1934, all
options have been granted by the full Board of Directors.
The Board of Directors met five times during the past fiscal year. Each
director attended at least 75% of the meetings of the Board of Directors and
Committees on which he served which were held during the fiscal year.
EXECUTIVE REMUNERATION
Summary Compensation Table
The following table sets forth information concerning the compensation
during the fiscal years ended October 30, 1998, October 31, 1997 and November 1,
1996 of the Company's Chief Executive Officer and each of the four other
executive officers of the Company who received the highest cash compensation
during the fiscal year ended October 30, 1998 for services rendered in all
capacities to the Company and its subsidiaries:
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Securities Underlying All Other
Principal Position Year Salary (1) Bonus Options Compensation (3)
------------------ ---- ---------- ----- --------- ----------------
<S> <C> <C> <C> <C> <C>
William Shaw, 1998 $355,000 $30,000 -- $1,981
President and 1997 355,000 30,000 -- 1,697
Chief Executive Officer 1996 355,000 -- 54,000(2) 1,707
Jerome Shaw, 1998 355,000 30,000 -- 1,981
Executive Vice President 1997 355,000 30,000 -- 1,697
1996 355,000 -- 54,000(2) 1,707
James J. Groberg, 1998 284,769 25,000 5,000 1,683
Senior Vice President and 1997 263,889 15,000 -- 1,339
Principal Financial Officer 1996 248,462 65,000 32,000(2) 1,340
Irwin B. Robins, 1998 247,558 15,000 5,000 1,685
Senior Vice President 1997 232,615 15,000 -- 1,457
1996 220,155 10,000 32,000(2) 1,468
Howard B. Weinreich, 1998 181,831 12,000 5,000 1,682
General Counsel 1997 171,600 12,000 -- 1,343
1996 161,589 7,500 12,000(2) 1,349
</TABLE>
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(Footnotes on next page)
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<PAGE>
(1) Includes compensation deferred under the Company's deferred compensation
plan and under the Savings Plan.
(2) In addition to options to purchase shares of the Company's Common Stock,
options granted in fiscal 1996 include options to purchase the following
number of shares of Common Stock of Autologic: William Shaw, 9,000
shares; Jerome Shaw, 9,000 shares; James J. Groberg, 5,000 shares; Irwin
B. Robins, 5,000 shares; and Howard B. Weinreich, 3,000 shares.
(3) Amounts in fiscal 1998 include premiums under the Company's group life
insurance policy ($598 for William Shaw; $598 for Jerome Shaw; $300 for
James J. Groberg; $302 for Irwin B. Robins; and $299 for Howard B.
Weinreich) and the market value at the date of contribution of the
portion of the shares of Common Stock contributed by the Company under
its ESOP ($1,344 for each of the named executive officers), together with
the market value at fiscal year-end of the portion of the shares
forfeited by terminated employees under such plan, which were allocated
during fiscal 1998 with respect to fiscal 1997 to the named officers in
accordance with such plan ($39 for each of the named executive officers).
Option Grants in Last Fiscal Year
The following table contains information concerning options granted
during the Company's fiscal year ended October 30, 1998 to the following
executive officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
Potential Realizable
Number of Percent of Value at Assumed
Securities Total Options Annual Rates of Stock
Underlying Granted to All Exercise Price Appreciation
Options Employees in Price Per Expiration For Option Term (2)
Name Granted Fiscal Year Share (1) Date (1) 5% 10%
- - ---- --------- ------------- --------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
James J. Groberg 5,000 9.6% $40.03 1/25/08 $125,873 $318,988
Irwin B. Robins 5,000 9.6% 40.03 1/25/08 125,873 318,988
Howard B. Weinreich 5,000 9.6% 40.03 1/25/08 125,873 318,988
</TABLE>
(1) Each option was granted at an exercise price equal to the market value of
the Company's Common Stock on the date of grant and is exercisable during
a ten-year term (subject to early termination in certain instances). The
options vest in three (as to Messrs. Groberg and Robins) to five (as to
Mr. Weinreich) equal annual installments commencing one year after the
date of grant.
(2) These are hypothetical values using assumed compound growth rates
prescribed by the Securities and Exchange Commission and are not intended
to forecast possible future appreciation, if any, in the market price of
the Company's Common Stock.
Stock Option Exercises and Fiscal Year-End Values
The following table sets forth certain information concerning Common
Stock of the Company acquired upon the exercise of stock options to purchase
shares of the Company's Common Stock during the Company's fiscal year ended
October 30, 1998 (no options to purchase Common Stock of Autologic were
exercised), and Common Stock of the Company and Autologic subject to unexercised
options held at October 30, 1998, in each case by the executive officers named
in the Summary Compensation table:
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<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value of
Underlying In-the-Money
Unexercised Options Options
at Fiscal at Fiscal
Shares Year-End Year-End
Acquired Value (Exercisable/ (Exercisable/
Name on Exercise Realized (1) Unexercisable) Unexercisable) (2)
- - ---- ----------- ------------ -------------- ------------------
<S> <C> <C> <C> <C>
William Shaw -- -- 129,000/0 $1,495,313/0
Jerome Shaw 75,000 $885,938 54,000/0 265,127/0
James J. Groberg -- -- 5,500/5000 2,946/0
Irwin B. Robins -- -- 11,200/5000 36,529/0
Howard B. Weinreich -- -- 7500/5000 26,513/0
</TABLE>
- - --------------------------
(1) Represents the closing sale price of the Common Stock underlying the
option, as reported by the New York Stock Exchange, Inc. on the date of
exercise of the options, minus the option exercise price. None of the
options to purchase Common Stock of Autologic were exercised.
(2) Represents the closing sale price of the Common Stock underlying the
options, as reported by the New York Stock Exchange, Inc. on October 30,
1998, minus the option exercise prices. None of the options to purchase
Common Stock of Autologic were in-the-money.
Standard Compensation of Directors
Each director of the Company who is not an officer or employee of the
Company receives a director's fee at the annual rate of $25,000 and is also
reimbursed for out-of-pocket expenses related to his services. On January 26,
1998, Mark N. Kaplan and John R. Torell III, non-employee directors, were each
granted an option under the Company's 1995 Non-Qualified Stock Option Plan to
purchase 7,500 shares of Common Stock at an exercise price of $40.03 per share,
100% of the average of the high and low sales prices of the Common Stock on the
New York Stock Exchange, Inc. on that date. Each option has a ten year term and
is exercisable as to one-fifth of the number of shares subject to the option
annually, on a cumulative basis, commencing one year after the date of grant.
Employment Agreements
The Company is a party to employment agreements dated as of May 1, 1987
with William Shaw and Jerome Shaw. These agreements, as amended, provide for the
employment of each in his present executive capacity at an annual base salary
which is presently $355,000 (subject to increases and additional compensation,
including bonuses, from time to time, at the discretion of the Board of
Directors). The employment term under each employment agreement continues until
the April 30 which is five years next following the giving by either the Company
or the executive of notice to terminate such employment. The agreements also
provide for service thereafter for the remainder of the executive's life as a
consultant to the Company for annual consulting fees equal to 75% for the first
ten years of the consulting period, and 50% for the remainder of the consulting
period, of his base salary as in effect immediately prior to the commencement of
the consulting period. Upon the death of the executive, the Company will pay to
his beneficiary a death benefit equal to three times his annual base salary at
the date of death if his death shall have occurred while employed as an
executive, 2.25 times his annual base salary at the end of his employment as an
executive if his death shall have occurred during the first ten years of the
consulting period or 1.5 times his annual base salary at the end of his
employment as an executive if his death shall have occurred during the remainder
of the consulting period. Each employment agreement permits the executive to
accelerate the commencement of
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<PAGE>
the consulting period if a "change in control", as defined in the agreements of
the Company shall occur or if the Company's office where the executive presently
performs his principal services shall be relocated to a different geographical
area.
The Company is also a party to an employment agreement dated as of May
1, 1987, as amended, with Irwin B. Robins, providing for his continued
employment as Senior Vice President and head of the Company's Legal Department
until April 30, 2000. Pursuant to the agreement, Mr. Robins is entitled to
receive an annual base salary, which is presently $255,000 (subject to increases
and additional compensation, including bonuses, from time to time, at the
discretion of the Board of Directors). The agreement also provides that, if a
"change in control", as defined in the agreement of the Company shall occur and
thereafter either Mr. Robins shall elect to terminate his employment within two
years after the occurrence of certain events which, generally are adverse
changes in his compensation, position, function or location or his employment
shall be terminated by the Company for any reason other than death, incapacity
or "cause", as defined in the agreement, Mr. Robins will be entitled to receive
(a) his regular compensation, including benefits, through the date on which his
employment terminates and (b) a lump-sum payment in an amount equal to 2.99
times his "base amount", as defined in Section 280G (b) (3) of the Internal
Revenue Code of 1986, as amended. Mr. Robins will not be obligated to seek other
employment nor mitigate the payment of the lump sum with any compensation
received from other employment.
Under the three employment agreements described above, William Shaw,
Jerome Shaw and Irwin B. Robins are prohibited from engaging in any business
competitive with the Company, competing with the Company for its customers or
encouraging employees of the Company to leave their employment. These
restrictions apply for the duration of the respective agreements and for one
year thereafter if the executive's employment shall have been terminated by the
Company "for cause" as defined in his agreement. William Shaw and Jerome Shaw
will not be bound by these restrictions after a "change in control", as defined,
of the Company shall have occurred if, during their respective consulting
periods, they shall elect to terminate their respective employment agreements
and thereby relinquish any further payments or other benefits thereunder.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
To date, all decisions regarding the cash compensation of executive
officers who are directors and, since August 1996, all decisions regarding the
granting of stock options have been made by the entire Board of Directors.
Accordingly, William Shaw, Jerome Shaw, Irwin B. Robins and James J. Groberg,
executive officers of the Company, participated in deliberations of the
Company's Board of Directors concerning executive officer compensation during
the year ended October 30, 1998. Each executive officer who is also a director
does not participate in deliberations as to his own compensation. Skadden, Arps,
Slate, Meagher & Flom LLP, of which firm Mark Kaplan is a Partner, provided
legal services for the Company during fiscal 1998 for which it received legal
fees of $284,690 and it may provide legal services to the Company during fiscal
1999.
Report With Respect to Executive Compensation Committee
Executive Compensation. Compensation of executive officers is comprised
of salary as a base compensation, bonuses as a means of short-term compensation
and stock options to foster long-term incentive. All determinations as to the
compensation of each executive officer who is a member of the Company's Board of
Directors is made on an individual basis by the Board, after consultation with
senior management, although an executive officer who is also a member of the
Board does not participate in the Board's determination of his own compensation.
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<PAGE>
In making its decisions as to base salary, the Board gives effect to
the executive's performance and responsibilities, inflationary trends,
competitive market conditions and other subjective factors, without ascribing
specific weights to these factors. Bonuses are based upon the Company's
performance, as well as the executive's overall performance, contribution toward
the Company's profitability, meeting corporate objectives and, in certain
instances, meeting specific corporate goals or completing specific programs or
projects. The compensation (salary and bonuses) of the four executive officers
who are not members of the Board is determined by senior management on the same
subjective basis.
The Company has utilized stock options as the primary method of
providing long-term incentive compensation to key employees, including executive
officers, of the Company and its subsidiaries. The Company believes that stock
options foster the interest of key employees in seeking long-term growth for the
Company, as well as linking their interests with the overall interest of
shareholders. In determining when to grant options and the size of the award to
any particular executive, the Board of Directors takes into consideration
factors such as the executive's position, level of responsibility, value to the
Company, objectives, accomplishments and performance, the incentive and
objectives intended to be provided, when the last prior option was granted to
the individual, the individual's other compensation and the recommendation of
senior management. No one factor is given special weight, but decisions are made
based on an overall assessment of each individual.
Chief Executive Officer Compensation. The fiscal 1998 annual base
salary and bonus of William Shaw, the Company's Chief Executive Officer,
remained at $355,000 and $30,000 respectively.
Certain Tax Legislation. Section 162(m) of the Internal Revenue Code of
1986 ("Section 162(m)") precludes a public company from taking a federal income
tax deduction for annual compensation in excess of $1,000,000 paid to its chief
executive officer or any of its four other most highly compensated executive
officers. Certain "performance based compensation" is excluded from the
deduction limitation. The Company believes that all of the fiscal 1998
compensation of its executive officers, including compensation resulting from
the exercise of stock options, is deductible. The options granted by the Board
in fiscal 1998 are not deemed "performance based compensation" under Section
162(m). Therefore, the difference between the market value of the Company's
Common Stock underlying a stock option at the date of its exercise and the
exercise price of the option will be taken into account in determining whether
the $1,000,000 Section 162(m) limitation is exceeded.
Board of Directors: William Shaw Jerome Shaw James J. Groberg
Mark N. Kaplan Irwin B. Robins John R. Torell III
William H. Turner Steven A. Shaw
Shareholder Return Performance Graph
The Company's Common Stock has been listed on the New York Stock
Exchange (the "NYSE") since May 7, 1997, prior to which it was quoted on The
Nasdaq Stock Market's National Market System. The following graph compares the
cumulative total shareholder return to holders of the Company's Common Stock
with (a) the NYSE Stock Market Index and (b) securities of companies traded on
the NYSE having market capitalizations that are within 5% of the market
capitalization of the Company's Common Stock as at the end of the Company's
latest fiscal year-end (these peer groups were selected by the Company because
the Company operates in five diverse industries). The comparison assumes $100
was invested on November 1, 1993 in the Company's Common Stock and in each of
the comparison groups, and assumes reinvestment of dividends (the Company paid
no dividends during the periods):
-10-
<PAGE>
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
VOLT INFORMATION SCIENCES, INC. $100 $141 $253 $421 $1,089 $378
NEW YORK STOCK EXCHANGE INDEX 100 104 122 149 193 223
PEER GROUP INDEX 100 90 101 107 131 99
- - --------------------------------- ------ ---- ----- ----- ------ ------
</TABLE>
Certain Transactions
The Company renders various payroll and related services to a
corporation primarily owned by Steven A. Shaw, a Vice President and director of
the Company, for which the Company receives an amount (approximately $5,000 in
fiscal 1998) in excess of its direct costs. Such services are performed on a
basis substantially similar to those performed by the Company for, and at
substantially similar rates as is charged by the Company to, unaffiliated third
parties. In addition, the Company rents to that corporation approximately 2,500
square feet of space in its El Segundo, California facility on a month-to-month
basis at a rental of $1,500 per month, which the Company believes is the fair
market rental for such space.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of ownership, and reports
of changes of ownership, of the Company's equity securities with the Securities
and Exchange Commission and furnish copies of those reports to the Company.
Based solely on a review of the copies of the reports furnished to the Company
to date and representations that no reports were required, the Company believes
that all reports required to be filed by such persons with respect to the
Company's fiscal year ended October 30, 1998 were timely filed.
-11-
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has, subject to shareholder
ratification, selected Ernst & Young LLP, independent public accountants, to
audit the Company's financial statements for the fiscal year ending October 29,
1999. A resolution will be submitted to shareholders at the Annual Meeting for
such ratification. The affirmative vote of a majority of the votes cast at the
Annual Meeting in person or by proxy will be required to adopt this resolution.
The Board of Directors recommends a vote "FOR" this resolution. Abstentions and
broker non-votes will have no effect on the outcome of the vote on this
proposal.
Ernst & Young LLP has indicated to the Company that it intends to have
a representative present at the Annual Meeting who will be available to respond
to appropriate questions. This representative will have the opportunity to make
a statement if he or she so desires. If the resolution selecting Ernst & Young
LLP as independent public accountants is adopted by shareholders, the Board of
Directors nevertheless retains the discretion to select different auditors
should it then deem it in the Company's best interests. Any such future
selection need not be submitted to a vote of shareholders.
MISCELLANEOUS
Cost of Soliciting Proxies
The cost of solicitation of Proxies, including the cost of reimbursing
banks, brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding Proxy soliciting material to beneficial owners
of Common Stock, will be borne by the Company. Proxies may be solicited without
extra compensation by certain officers and regular employees of the Company by
mail and, if determined to be necessary, by telephone, telegraph or personal
interviews.
Indemnification Insurance
New York law permits a corporation to purchase insurance covering a
corporation's obligation to indemnify directors and officers and also covering
directors and officers individually, subject to certain limitations, in
instances in which they may not otherwise be indemnified by the corporation. In
December 1998, the Company renewed insurance policies from National Union Fire
Insurance Company of Pittsburgh, PA, Federal Insurance Company and Columbia
Casualty Company covering reimbursement to the Company for any obligation it
incurs as a result of indemnification of officers and directors and also
covering indemnification for officers and directors individually in certain
cases where additional exposure might exist, which expire in March 2001. The
annual premium cost of such policies to the Company is $216,182.
Shareholder Proposals
From time to time shareholders may present for consideration at
meetings of shareholders proposals which may be proper subjects for inclusion in
the proxy statement and form of proxy distributed in connection with such
meetings. In order to be so included, such proposals must be submitted in
writing on a timely basis. Shareholder proposals intended to be presented at the
Annual Meeting of Shareholders to be held in the year 2000 must be received by
the Company by November 4, 1999. Any such proposals, as well as any questions
relating thereto, should be directed to the Secretary of the Company, 1221
Avenue of the Americas, New York, New York 10020-1579.
-12-
<PAGE>
The Company's By-Laws, as amended, require shareholders who intend to
nominate directors or propose business at any annual meeting to provide advance
notice of such intended action, as well as certain additional information, to
the Company. Such notice and information should be provided to the Secretary of
the Company at 1221 Avenue of the Americas, New York, New York 10020-1579. Such
notice and information must be received by the Company not less than 120 nor
more than 150 days prior to the anniversary date of the notice of the annual
meeting of shareholders held in the immediately preceding year. However, in the
event the date of the annual meeting is changed by more than 30 days from the
one year anniversary date of the date the annual meeting was held in such
immediately preceding year and less than 130 days informal notice to
shareholders or other public disclosure of the date of the annual meeting in the
current year is given or made, advance notice of nominations or business
proposed by a shareholder must be received by the Company not later than the
close of business on the tenth calendar day following the date on which formal
or informal notice or public disclosure of the date of the annual meeting is
mailed or otherwise first publicly announced, whichever first occurs. Copies of
the By-Law provision is available upon request made to the Secretary of the
Company.
By Order of the Board of Directors
Jerome Shaw, Secretary
New York, New York
March 1, 1999
-13-
<PAGE>
PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VOLT INFORMATION SCIENCES, INC.
<TABLE>
<CAPTION>
<S> <C>
Solicited On Behalf Of The Board 1. Election of Directors: For With-
Of Directors For Annual Meeting Of (a) The election of the hold
Shareholders Of Volt Information C following to serve
Sciences, Inc. as a Class I director: [ ] [ ]
O Steven A. Shaw
The undersigned hereby appoints WILLIAM
SHAW and JEROME SHAW, jointly and M With- For All
severally, Proxies with full power of (b) The election of the For hold Except
substitution, to vote on behalf of the M following to serve [ ] [ ] [ ]
undersigned at the Annual Meeting of as Class II directors:
Shareholders of VOLT INFORMATION O William Shaw
SCIENCES, INC. to be held on April 15, Jerome Shaw
1999, and at adjournments or N James J. Groberg
postponements thereof, as indicated upon William H. Turner
the following matters as described in
the Notice of Meeting and accompanying INSTRUCTION: To withhold authority to
Proxy Statement related to such meeting, vote for any individual nominee, mark
receipt of which is acknowledged, and "For All Except" and write that nominee's
with discretionary power upon such other name in the space provided below.
business as may come before the meeting, -----------------------------------------
according to the number of votes and as For Against Abstain
fully as the undersigned would be 2. The proposal to ratify the [ ] [ ] [ ]
entitled to vote if personally present, action of the Board of
hereby revoking any prior Proxy or Directors in appointing
Proxies. Ernst & Young LLP as the
Company's Independent
auditors for the fiscal year
ending October 29, 1999.
The Board of Directors recommends a vote
Please be sure to sign and date for the election of each nominee to serve
this Proxy. as a director and for Proposal 2 set
- - ---------------------------------------- forth in this Proxy.
Each properly executed Proxy will be
- - ---- Shareholder sign above------------- voted in accordance with the
- - -----------Co-holder (if any) sign above specifications made above. If no
specification is made, the shares
represented by this Proxy will be voted
FOR the election of all listed nominees
and FOR Proposal 2.
The Submission Of This Proxy, If Executed
Properly,Revokes All Prior Proxies.
</TABLE>
- - --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
VOLT INFORMATION SCIENCES, INC.
- - --------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly
owned shares, each owner should sign. If signing as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Proxies executed by corporations should be signed by a duly
authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- - --------------------------------------------------------------------------------
<PAGE>
PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VOLT INFORMATION SCIENCES, INC.
<TABLE>
<CAPTION>
<S> <C>
Solicited On Behalf Of The Board 1. Election of Directors: For With-
Of Directors For Annual Meeting Of (a) The election of the hold
Shareholders Of Volt Information E following to serve
Sciences, Inc. as a Class I director: [ ] [ ]
S Steven A. Shaw
The undersigned hereby appoints WILLIAM
SHAW and JEROME SHAW, jointly and O With- For All
severally, Proxies with full power of (b) The election of the For hold Except
substitution, to vote on behalf of the P following to serve [ ] [ ] [ ]
undersigned at the Annual Meeting of as Class II directors:
Shareholders of VOLT INFORMATION William Shaw
SCIENCES, INC. to be held on April 15, Jerome Shaw
1999, and at adjournments or James J. Groberg
postponements thereof, as indicated upon William H. Turner
the following matters as described in
the Notice of Meeting and accompanying INSTRUCTION: To withhold authority to
Proxy Statement related to such meeting, vote for any individual nominee, mark
receipt of which is acknowledged, and "For All Except" and write that nominee's
with discretionary power upon such other name in the space provided below.
business as may come before the meeting, -----------------------------------------
according to the number of votes and as For Against Abstain
fully as the undersigned would be 2. The proposal to ratify the [ ] [ ] [ ]
entitled to vote if personally present, action of the Board of
hereby revoking any prior Proxy or Directors in appointing
Proxies. Ernst & Young LLP as the
Company's Independent
auditors for the fiscal year
ending October 29, 1999.
The Board of Directors recommends a vote
Please be sure to sign and date for the election of each nominee to serve
this Proxy. as a director and for Proposal 2 set
- - ---------------------------------------- forth in this Proxy.
Each properly executed Proxy will be
- - ---- Shareholder sign above------------- voted in accordance with the
- - -----------Co-holder (if any) sign above specifications made above. If no
specification is made, the shares
represented by this Proxy will be voted
FOR the election of all listed nominees
and FOR Proposal 2.
The Submission Of This Proxy, If Executed
Properly,Revokes All Prior Proxies.
</TABLE>
- - --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
VOLT INFORMATION SCIENCES, INC.
- - --------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly
owned shares, each owner should sign. If signing as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Proxies executed by corporations should be signed by a duly
authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- - --------------------------------------------------------------------------------
<PAGE>
PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VOLT INFORMATION SCIENCES, INC.
<TABLE>
<CAPTION>
<S> <C>
Solicited On Behalf Of The Board 1. Election of Directors: For With-
Of Directors For Annual Meeting Of (a) The election of the hold
Shareholders Of Volt Information 4 following to serve
Sciences, Inc. as a Class I director: [ ] [ ]
0 Steven A. Shaw
The undersigned hereby appoints WILLIAM
SHAW and JEROME SHAW, jointly and 1 With- For All
severally, Proxies with full power of (b) The election of the For hold Except
substitution, to vote on behalf of the K following to serve [ ] [ ] [ ]
undersigned at the Annual Meeting of as Class II directors:
Shareholders of VOLT INFORMATION Wiliam Shaw
SCIENCES, INC. to be held on April 15, Jerome Shaw
1999, and at adjournments or James J. Groberg
postponements thereof, as indicated upon William H. Turner
the following matters as described in
the Notice of Meeting and accompanying INSTRUCTION: To withhold authority to
Proxy Statement related to such meeting, vote for any individual nominee, mark
receipt of which is acknowledged, and "For All Except" and write that nominee's
with discretionary power upon such other name in the space provided below.
business as may come before the meeting, -----------------------------------------
according to the number of votes and as For Against Abstain
fully as the undersigned would be 2. The proposal to ratify the [ ] [ ] [ ]
entitled to vote if personally present, action of the Board of
hereby revoking any prior Proxy or Directors in appointing
Proxies. Ernst & Young LLP as the
Company's Independent
auditors for the fiscal year
ending October 29, 1999.
The Board of Directors recommends a vote
Please be sure to sign and date for the election of each nominee to serve
this Proxy. as a director and for Proposal 2 set
- - ---------------------------------------- forth in this Proxy.
Each properly executed Proxy will be
- - ---- Shareholder sign above------------- voted in accordance with the
- - -----------Co-holder (if any) sign above specifications made above. If no
specification is made, the shares
represented by this Proxy will be voted
FOR the election of all listed nominees
and FOR Proposal 2.
The Submission Of This Proxy, If Executed
Properly,Revokes All Prior Proxies.
</TABLE>
- - --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
VOLT INFORMATION SCIENCES, INC.
- - --------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly
owned shares, each owner should sign. If signing as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Proxies executed by corporations should be signed by a duly
authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- - --------------------------------------------------------------------------------
