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.
560 Lexington Avenue
New York, New York 10022-2928
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 18, 2000
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 Tuesday, April 18, 2000, at 2:00 P.M.,
Pacific time, to consider the following:
1. The election of four Class I directors to serve until the 2002
Annual Meeting of Shareholders and 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 November 3, 2000; 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 March 10, 2000 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 24, 2000
<PAGE>
VOLT INFORMATION SCIENCES, INC.
560 Lexington Avenue
New York, New York 10022-2928
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement, to be mailed on or about March 24, 2000, is
furnished in connection with the solicitation by the Board of Directors of Volt
Information Sciences, Inc., a New York corporation (the "Company" or "Volt"), 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 18, 2000 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 March 10, 2000 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 15,077,685 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 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 560 Lexington Avenue, New York, New York
10022-2928, 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 required to
ratify the selection of Ernst & Young as the Company's independent auditors for
fiscal 2000. Votes withheld in the case of the election of directors and
abstentions and broker non-votes
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<PAGE>
with respect to any other 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 February 29, 2000
(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>
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership (1) Percent of Class (2)
- ------------------- ------------------------ --------------------
<S> <C> <C>
William Shaw 3,659,080 (3) (4) 24.1%
560 Lexington Avenue
New York, NY 10022-2928
Jerome Shaw 3,198,127 (3) (5) 21.2%
2401 N. Glassell Street
Orange, CA 92665
Westport Asset Management, Inc. 1,074,087 6.9%
253 Riverside Avenue
Westport, CT 06880
Dimensional Fund Advisors, Inc. 981,600 6.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
James J. Groberg 10,099 *
Irwin B. Robins 23,282 *
Steven A. Shaw 219,023 1.5%
Lloyd Frank 8,000 *
Mark N. Kaplan 6,000 *
William H. Turner 1,000 *
All executive officers and 7,159,722 (3) (4) (5)(8) 46.1%
directors as a group
(12 persons including the foregoing)
</TABLE>
- ----------------
(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.
(Footnotes continued on next page)
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<PAGE>
(2) Asterisk indicates less than 1%. Shares reflected as owned by a person that
are not outstanding, but that are issuable upon exercise of the portion of
options held by such person that are exercisable on or within 60 days after
February 29, 2000, are considered outstanding for the purpose of computing
the percentage of outstanding Common Stock that would be owned by the
person 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. None of
the named persons are known to own shares of common stock of Autologic
Information International, Inc., a 59% publicly-held subsidiary of the
Company ("Autologic"). If the portion of the options granted by Autologic
held by William Shaw (11,000 shares), Jerome Shaw (11,000 shares), James J.
Groberg (6,000 shares), Irwin B. Robins (6,000 shares), Steven A. Shaw (400
shares), and all executive officers and directors of the Company as a group
(9 persons, 47,400 shares) that are exercisable within 60 days of February
29, 2000 were exercised, none of such person or group would own at least 1%
of the outstanding common stock of Autologic.
(3) Includes the following shares issuable upon the exercise of the portion of
options granted by the Company which are exercisable on or within 60 days
after February 29, 2000: William Shaw, 120,000 shares; Jerome Shaw, 45,000
shares; James J. Groberg, 6,834 shares; Irwin B. Robins, 13,534 shares;
Steven A. Shaw, 9,100 shares; Mark N. Kaplan, 3,000 shares; and all
executive officers and directors as group (10 persons), 218,868 shares.
(4) Includes 99,561 shares owned 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) 2,885,430 shares owned by Mr. Shaw and his wife as trustees of
a revocable trust for their benefit or as community property, as to which
shares they may be deemed to have shared voting and investment power
(pursuant to the terms of the trust, Mr. Shaw may demand that the shares in
trust be transferred to him at any time) and (ii) 236,250 shares owned by
Mr. Shaw and his wife as trustees of a trust for the benefit of one of
their children, as to which shares 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 by Mr. Shaw's wife, as to which Mr. Shaw
disclaims beneficial ownership.
(6) Based on information as of December 31, 1999 contained in a Schedule 13G
dated February 16, 2000.
(7) Based on information as of December 31, 1999 contained in a Schedule 13G
dated February 3, 2000.
(8) Excludes 2,529 shares owned by Mr. Frank's wife as to which Mr. Frank
disclaims beneficial ownership.
-3-
<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors consists of eight directors, divided
into two classes. The terms of office of Class I and Class II directors expire
at the 2000 and 2001 Annual Meetings 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. Each of the present
directors of the Company was elected by the Company's shareholders except Lloyd
Frank, who was elected by the Board of Directors on March 6, 2000.
Unless otherwise directed, persons named in the enclosed Proxy intend
to cast all votes pursuant to Proxies received for the election of Irwin B.
Robins, Steven A. Shaw, Lloyd Frank and Mark N. Kaplan as Class I directors to
serve until the 2002 Annual Meeting of Shareholders 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)
IRWIN B. ROBINS, 65, has been a Senior Vice President of the Company
since September 1985 and has been employed in executive capacities by the
Company since 1980. Mr. Robins has served as a director of the Company since
1981. Mr. Robins has advised the Company that he intends to retire as an
employee of the Company at a mutually convenient time during fiscal 2000 but Mr.
Robins and the Company intend that Mr. Robins will remain a director of the
Company and that Mr. Robins will become a consultant to the Company handling
certain legal and transactional matters as may be mutually agreed upon (see
"Executive Remuneration - Employment Agreements and Termination of Employment").
STEVEN A. SHAW, 40, 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 still owns most
of the equity interest. He has served as a director of the Company since August
1998.
LLOYD FRANK, 74, has been a director of the Company since March 6,
2000. Mr. Frank has been a partner in the law firm of Parker Chapin LLP since
January 1977. Parker Chapin LLC provided legal services for the Company during
fiscal 1999 and has been retained to provide legal services to the Company
during fiscal 2000. Mr. Frank is also a director of Park Electrochemical Corp.
and Dryclean USA, Inc.
MARK N. KAPLAN, 70, has been a director of the Company since April
1991. Mr. Kaplan has been of counsel to the law firm of Skadden, Arps, Slate,
Meagher & Flom LLP since 1999 and, from October 1979 until that time, was a
partner in that firm. Skadden, Arps, Slate, Meagher & Flom LLP may be retained
to provide legal services to the Company during fiscal 2000. Mr. Kaplan is also
a director of Grey Advertising Inc., DRS Technologies, Inc., Refac Technology
Development Corporation, American Biltrite, Inc. and Congoleum Corporation
-4-
<PAGE>
DIRECTORS WHOSE TERM OF OFFICE CONTINUES AFTER THE ANNUAL MEETING
(CLASS II)
WILLIAM SHAW, 75, 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.
JEROME SHAW, 73, 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 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, 71, has been a Senior Vice President and the Chief
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, 60, has been a director of the Company since August
1998. He has been Chairman since September 1999 and, from August 1997 to August
1999, was President, of PNC Bank, New Jersey. From October 1996 to July 1997 he
was President and Chief Executive Officer of Franklin Electronic Publishers,
Inc. (a designer and developer of hand-held electronic information products)
and, 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., Franklin Electronic Publishers, Inc.
and New Jersey Resources Corp.
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, Compensation and Stock Option Committees, but
does not have a nominating committee.
The Audit Committee consists of Mark N. Kaplan, William H. Turner
(since March 2000 when he replaced John R. Torrell who resigned as a director)
and, since he joined the Board in March 2000, Lloyd Frank. This committee 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 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 their audit of the Company's financial statements, including the
result of the independent auditor's review of internal accounting controls and
suggestions for improvements. The Audit Committee met twice during the past
fiscal year.
The Compensation Committee, consisting of Messrs. Kaplan, Turner and,
since he joined the Board in March 2000, Frank, is authorized to make
recommendations to the Board concerning the
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<PAGE>
compensation of those officers who are also directors of the Company. The
Compensation Committee did not meet separately from the full Board during the
past fiscal year.
The Stock Option Committee consists of Messrs. William Shaw and Kaplan.
The Stock Option Committee is authorized to administer (including granting
options under) the Company's stock option plans. However, since August 1996,
when revised provisions of Rule 16b-3 promulgated under the Securities and
Exchange Act of 1934 became effective, all options have been granted by the full
Board of Directors.
The Board of Directors met four times during the past fiscal year. Each
incumbent 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 29, 1999, October 30, 1998 and October 31,
1997 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 29, 1999 for services rendered in all
capacities to the Company and its subsidiaries:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Securities
Underlying
Annual Compensation Options
------------------- ------- All Other
Principal Position Year Salary (1) Bonus Volt Autologic Compensation (2)
- ------------------ ---- ---------- ----- ---- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
William Shaw 1999 $368,462 $ -- -- 10,000 $1,344
President and 1998 355,000 30,000 -- -- 1,981
Chief Executive Officer 1997 355,000 30,000 -- -- 1,697
Jerome Shaw, 1999 368,462 -- -- 10,000 1,344
Executive Vice President 1998 355,000 30,000 -- -- 1,981
1997 355,000 30,000 -- -- 1,697
James J. Groberg, 1999 297,461 20,000 15,000 5,000 1,091
Senior Vice President and 1998 284,769 25,000 5,000 -- 1,683
Chief Financial Officer 1997 263,889 15,000 -- -- 1,339
Irwin B. Robins, 1999 262,500 10,000 20,000 5,000 1,091
Senior Vice President 1998 247,558 15,000 -- -- 1,685
1997 232,615 15,000 -- -- 1,457
Steven A. Shaw 1999 200,000 40,000 -- 2,000 993
Vice President 1998 141,278 -- -- -- 665
1997 90,346(3) -- -- -- 355
</TABLE>
- ----------------
(1) Includes compensation deferred under the Company's deferred compensation
plan and under Section 401(k) of the Internal Revenue Code of 1986, as
amended.
(Footnotes continued on next page)
-6-
<PAGE>
(2) Amounts in fiscal 1999 include premiums under the Company's group life
insurance policy ($447 for each of William Shaw and Jerome Shaw; $194 for
each of James J. Groberg and Irwin B. Robins; and $224 for Steven A. Shaw);
the market value at the date of contribution of the portion of the shares
of Common Stock contributed by the Company under the ESOP ($863 for each of
the named executives officers, except that for Steven A. Shaw the amount
was $740); and 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 1999 with respect to fiscal 1998 to the named
officers in accordance with such plan ($34 for each of the named officers,
except that for Steven A. Shaw the amount was $29).
(3) Mr. Shaw was elected Vice President of the Company in April 1997. Includes
compensation paid to Mr. Shaw for services rendered in all capacities for
the full fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning options granted
during the Company's 1999 fiscal year to the executive officers named in the
Summary Compensation Table by the Company and by Autologic, its 59% - owned
subsidiary:
<TABLE>
<CAPTION>
Individual Options
Number of Percent of (1)
Shares Total Options Potential
Underlying Granted to Exercise Realizable Value At Assumed
Options Employees in Price Expiration Annual Rates of Stock Price
Granted Fiscal Year (3) Per Share Date Appreciation for Option Term (4)
------- --------------- --------- ---- --------------------------------
5% 10%
-- ----
<S> <C> <C> <C> <C> <C> <C>
William Shaw 10,000 (1) 7.0% $ 4.25 11/4/08 $26,728 $67,734
Jerome Shaw 10,000 (1) 7.0% 4.25 11/4/08 26,728 67,734
James J. Groberg 15,000 (2) 12.5% 16.63 3/10/09 156,830 397,439
5,000 (1) 3.5% 4.25 11/4/08 13,364 33,867
Irwin B. Robins 20,000 (2) 16.7% 18.56 3/25/09 233,477 591,677
5,000 (1) 3.5% 4.25 11/4/08 13,364 33,867
Steven A. Shaw 2,000 (1) 1.4% 4.25 11/4/08 5,346 13,917
</TABLE>
- ----------------
(1) Options granted under Autologic Employees' Incentive Stock Option Plan (the
"Autologic Plan"). Each option was granted at an exercise price equal to
100% of the market value of Autologic's common stock on the date of grant,
have a ten year term and vest in five equal annual installments, commencing
one year following the date of grant, subject to possible earlier
termination at specified times following termination of employment with
Volt, death or disability.
(2) Options granted under the Company's 1995 Non-Qualified Stock Option Plan
(the "Company Plan"). Each option was granted at an exercise price equal to
100% of the market value of the Company's Common Stock on the date of
grant, have a ten year term and vest in five equal annual installments,
commencing one year following the date of grant, subject to possible
earlier termination at specified times following termination of employment,
death or disability.
(3) The percentages reflect, in the case of options granted under the Company
Plan, the percent of total options granted to all employees of the Company
during fiscal 1999 and, in the case of the Autologic Plan, the percent of
total options granted to all employees of Autologic during fiscal 1999.
(Footnotes continued on next page)
-7-
<PAGE>
(4) These values 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 or Autologic's common stock.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
There were no options to purchase Common Stock of the Company or
Autologic exercised during fiscal year ended October 29, 1999 by any of the
executive officers named in the Summary Compensation Table. The following table
sets forth certain information concerning Common Stock of the Company and
Autologic subject to unexercised options held at October 29, 1999 by the
executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Number of Shares
----------------
Underlying Unexercised Value of In-the-Money
---------------------- ---------------------
Options at Fiscal Year-End Options at Fiscal Year-End
-------------------------- --------------------------
(Exercisable / Unexercisable) (Exercisable / Unexercisable) (1)
----------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
William Shaw 120,000/ - (2) $1,181,250/ - (2)
11,000/8,000 (3) - / - (3)
Jerome Shaw 45,000/ - (2) 75,001/ - (2)
11,000/8,000 (3) - / - (3)
James J. Groberg 6,834/13,666 (2) 10,208/37,500 (2)
6,000/4,000 (3) - / - (3)
Irwin B. Robins 13,534/17,666 (2) 15,084/19,000 (2)
6,000/4,000 (3) - / - (3)
Steven A. Shaw 7,000/7,000 (2) 10,500/7,000 (2)
400/1,600 (3) - / - (3)
</TABLE>
----------------
(1) Represents the closing sale price of the Company's Common Stock as reported
by NYSE on October 29, 1999, minus the option exercise price. None of the
options to purchase common stock of Autologic (which is traded on the
Nasdaq National Market) were in-the-money.
(2) Shares subject to options under the Company Plan.
(3) Shares subject to options under the Autologic Plan.
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.
-8-
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT
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 $375,000 (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 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 $270,000 (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.
Mr. Robins has advised the Company that he intends to retire as an
employee of the Company at a mutually convenient time during fiscal 2000. It is
expected that, until his retirement, Mr. Robins will continue to receive
compensation in accordance with the terms of his Employment Agreement. Mr.
Robins and the Company intend that Mr. Robins will remain a director of the
Company and, following his retirement, will continue to serve as a consultant to
the Company handling certain legal and transactional matters as may be mutually
agreed upon. The Company and Mr. Robins are in the process of negotiating a
severance and consulting arrangement which is expected to provide for payments
to Mr. Robins of $100,000 upon Mr. Robin's retirement and $100,000 on January 2,
2001. In addition, it is expected that Mr. Robins will receive compensation at
an hourly rate to be agreed upon from time to time as services are provided to
the Company following his retirement and that the stock options presently held
by Mr. Robins to purchase shares of the Company's Common Stock will remain
exercisable in accordance with their terms for the remainder of each option's
ten-year term in the same manner as if Mr. Robins remained an employee provided
Mr. Robins complies with the non-competition covenant contained in his stock
option agreement. In consideration for the foregoing, Mr. Robins would extend
the term of the non-
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<PAGE>
competition provision described below for a period of five years following the
later of his cessation of service as a consultant or director, regardless of the
reason for such cessation.
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 the 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, James J. Groberg and
Steven A. Shaw, executive officers and directors of the Company, participated in
deliberations of the Company's Board of Directors concerning executive officer
compensation during the year ended October 29, 1999. Each executive officer who
is also a director does not participate in deliberations as to his own
compensation. Mark N. Kaplan and, since March, 2000, Lloyd Frank, serve on the
Board. During fiscal 1999, Skadden, Arps, Slate, Meagher & Flom LLP, to which
Mr. Kaplan serves as counsel, received $286,690 for services rendered to the
Company in fiscal 1998 and Parker Chapin LLP, of which firm Lloyd Frank is a
partner, received legal fees of $111,290 for services provided to the Company
and its subsidiaries during fiscal 1999.
REPORT WITH RESPECT TO EXECUTIVE COMPENSATION COMMITTEE
The following report with respect to the Company's compensation
policies applicable to the Company's executive officers in fiscal 1999 is
presented by the Board of Directors other than Lloyd Frank, who did not serve on
the Board during fiscal 1999.
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.
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
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<PAGE>
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 Board, in determining the
fiscal 1999 annual compensation of William Shaw, the Company's Chief Executive
Officer, determined to increase Mr. Shaw's annual salary by $20,000 to $375,000
based upon Mr. Shaw's leadership, experience and knowledge, and in light of the
fact that Mr. Shaw's annual salary had not been increased since fiscal 1996. The
increase was in lieu of a bonus which Mr. Shaw had received in each of fiscal
1998 and 1997 ($30,000 for each year).
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 1999
compensation of its executive officers, including compensation resulting from
the exercise of stock options, is deductible. The options granted by the Board
in fiscal 1999 and 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.
Respectfully,
William Shaw Jerome Shaw
James J. Groberg Irwin B. Robins
Mark N. Kaplan Steven A. Shaw
William H. Turner
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<PAGE>
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 (this peer group was selected by the Company because the
Company operates in five diverse business segments). The comparison assumes $100
was invested on November 1, 1994 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):
[ PERFORMANCE GRAPH APPEARS HERE ]
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
- --------------------------------------------------------------------------------
VOLT INFORMATION SCIENCES, INC. $100 $179 $299 $773 $268 $221
NEW YORK STOCK EXCHANGE INDEX 100 117 143 187 215 250
PEER GROUP INDEX 100 109 132 143 122 108
- --------------------------------------------------------------------------------
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<PAGE>
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 received approximately $1,000 in excess of
its direct costs in fiscal 1999. 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 29, 1999 were timely filed, except that Mr.
Robins was late in reporting a gift he made of 50 shares.
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 November 3,
2000. 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.
-13-
<PAGE>
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
March 2000, the Company extended 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. The policies expire in March 2002.
The premium cost for two years of the policies is $541,788.
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 included in the
Company's proxy statement and form of proxy to be used in connection with the
Company's 2001 Annual Meeting of Shareholders must be received by the Company by
November 25, 2000. Any such proposals, as well as any questions relating
thereto, should be directed to the Secretary of the Company, 560 Lexington
Avenue, New York, New York 10022-2928.
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 must be timely received by the
Secretary of the Company at 560 Lexington Avenue, New York, New York 10022-2928
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 24, 2000
-14-
<PAGE>
[ ]PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VOLT INFORMATION SCIENCES, INC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Solicited On Behalf Of The Board C 1. Election of Directors: With- For All
Of Directors For Annual Meeting For hold Except
Of Shareholders Of Volt O [ ] [ ] [ ]
Information Sciences, Inc. The election of the following to serve as
M Class I directors:
The undersigned hereby appoints Irwin B. Robins
WILLIAM SHAW and JEROME SHAW, M Steven A. Shaw
jointly and severally, Proxies Lloyd Frank
with full power of substitution, O Mark N. Kaplan
to vote on behalf of the
undersigned at the Annual N INSTRUCTION: To withhold authority to vote
Meeting of Shareholders of VOLT for any individual nominee, mark "For All
INFORMATION SCIENCES, INC. to be Except" and write that nominee's name in the
held on April 18, 2000, and at space provided below.
any adjournments or
postponements thereof, as --------------------------------------------
indicated upon the following For Against Abstain
matters as described in the 2. The proposal to ratify the action of the [ ] [ ] [ ]
Notice of Meeting and Board of Directors in appointing Ernst &
accompanying Proxy Statement Young LLP as the Company's independent
related to such meeting, receipt auditors for the fiscal year ending November
of which is acknowledged, and 3, 2000.
with discretionary power upon
such other business as may come The Board of Directors recommends a vote for
before the meeting, according to the election of each nominee to serve as a
the number of votes and as fully director and for Proposal 2 set forth in
as the undersigned would be this Proxy.
entitled to vote if personally
present, hereby revoking any Each properly executed Proxy will be voted
prior Proxy or Proxies. in accordance with the specifications made
above. If no specification is made, the
-------------- shares represented by this Proxy will be
Please be sure to sign Date voted FOR the election of all listed
and date this Proxy. nominees and FOR Proposal 2.
- -------------------------------------
The Submission Of This Proxy, If Executed
Shareholder sign above---Co-holder Properly, Revokes All Prior Proxies.
- --------(if any) sign above----------
</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> <C> <C> <C>
With- For All
Solicited On Behalf Of The Board Of For hold Except
Directors For Annual Meeting Of Shareholders 1. Election of Directors: [ ] [ ] [ ]
Of Volt Information Sciences, Inc. The election of the following to serve
as Class I directors:
The undersigned hereby appoints WILLIAM SHAW Irwin B. Robins
and JEROME SHAW, jointly and severally, Steven A. Shaw
Proxies with full power of substitution, to Lloyd Frank
vote on behalf of the undersigned at the Mark N. Kaplan
Annual Meeting of Shareholders of VOLT
INFORMATION SCIENCES, INC. to be held on INSTRUCTION: To withhold authority to vote
April 18, 2000, and at any adjournments or for any individual nominee, mark "For All
postponements thereof, as indicated upon the Except" and write that nominee's name in the
following matters as described in the Notice 4 space provided below.
of Meeting and accompanying Proxy Statement
related to such meeting, receipt of which is For Against Abstain
acknowledged, and with discretionary power 0 2. The proposal to ratify the action of the [ ] [ ] [ ]
upon such other business as may come before Board of Directors in appointing Ernst &
the meeting, according to the number of Young LLP as the Company's independent
votes and as fully as the undersigned would 1 auditors for the fiscal year ending November
be entitled to vote if personally present, 3, 2000.
hereby revoking any prior Proxy or Proxies.
Please be sure to sign and date this Proxy K This Proxy also provides voting instructions
to the trustee of the Company's Savings
-------------- Plan.
Please be sure to sign Date
and date this Proxy. The Board of Directors recommends a vote for
- ------------------------------------- the election of each nominee to serve as a
director and for Proposal 2 set forth in
Shareholder sign above---Co-holder this Proxy.
- --------(if any) sign above----------
Each properly executed Proxy will be voted
in accordance with the 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> <C> <C> <C>
With- For All
Solicited On Behalf Of The Board Of For hold Except
Directors For Annual Meeting Of Shareholders 1. Election of Directors: [ ] [ ] [ ]
Of Volt Information Sciences, Inc. The election of the following to serve
as Class I directors:
The undersigned hereby appoints WILLIAM SHAW Irwin B. Robins
and JEROME SHAW, jointly and severally, Steven A. Shaw
Proxies with full power of substitution, to Lloyd Frank
vote on behalf of the undersigned at the E Mark N. Kaplan
Annual Meeting of Shareholders of VOLT
INFORMATION SCIENCES, INC. to be held on INSTRUCTION: To withhold authority to vote
April 18, 2000, and at any adjournments or S for any individual nominee, mark "For All
postponements thereof, as indicated upon the Except" and write that nominee's name in the
following matters as described in the Notice space provided below.
of Meeting and accompanying Proxy Statement O For Against Abstain
related to such meeting, receipt of which is 2. The proposal to ratify the action of the [ ] [ ] [ ]
acknowledged, and with discretionary power Board of Directors in appointing Ernst &
upon such other business as may come before P Young LLP as the Company's independent
the meeting, according to the number of auditors for the fiscal year ending November
votes and as fully as the undersigned would 3, 2000.
be entitled to vote if personally present,
hereby revoking any prior Proxy or Proxies. This Proxy also provides voting instructions
to the trustee of the Company's Employee
-------------- Stock Option Plan.
Please be sure to sign Date
and date this Proxy. The Board of Directors recommends a vote for
- ------------------------------------- the election of each nominee to serve as a
director and for Proposal 2 set forth in
Shareholder sign above---Co-holder this Proxy.
- --------(if any) sign above----------
Each properly executed Proxy will be voted
in accordance with the 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
- --------------------------------------------------------------------------------
