<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
NEW ENGLAND BUSINESS SERVICE, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
Notice of Annual Meeting of Stockholders
To Be Held October 22, 1999
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of New
England Business Service, Inc., a Delaware corporation (the "Company"), will be
held at the principal executive offices of the Company, 500 Main Street,
Groton, Massachusetts, on Friday, October 22, 1999 at 10:00 a.m., local time,
for the purpose of considering and voting upon the following matters:
1. To fix the number of directors and elect a Board of Directors to serve
until the next annual meeting of stockholders and until their successors
are elected and qualified;
2. To ratify the selection of Deloitte & Touche LLP as independent auditors
of the Company for the fiscal year ending June 24, 2000; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on August 27, 1999 as
the record date for the determination of stockholders entitled to notice of and
to vote at this meeting. Accordingly, only stockholders of record at the close
of business on that date are entitled to vote at the meeting or at any
adjournment thereof.
A copy of the Company's annual report to stockholders for the fiscal year
ended June 26, 1999, which contains financial statements and other information
of interest to stockholders, accompanies this notice and the accompanying proxy
statement.
The business matters listed above are discussed more fully in the
accompanying proxy statement. Whether or not you plan to attend the meeting,
you are urged to study the proxy statement carefully and then to fill out, sign
and date the enclosed proxy card. To avoid unnecessary expense, please mail
your proxy card promptly in the enclosed return envelope, which requires no
postage if mailed in the United States.
By order of the Board of Directors
Craig Barrows
Secretary
September 17, 1999
Whether or not you plan to attend the meeting, you are requested to sign and
mail promptly the enclosed proxy which is being solicited on behalf of the
Board of Directors. A return envelope which requires no postage if mailed in
the United States is enclosed for that purpose.
<PAGE>
NEW ENGLAND BUSINESS SERVICE, INC.
500 Main Street
Groton, Massachusetts 01471
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 22, 1999
We are mailing this proxy statement, with the accompanying proxy card, to
you on September 17, 1999 in connection with the solicitation of proxies by the
Board of Directors of New England Business Service, Inc. for the 1999 annual
meeting of stockholders and any adjournment of that meeting. The meeting will
be held on Friday, October 22, 1999, beginning at 10:00 a.m., local time, at
the principal executive offices of the Company, 500 Main Street, Groton,
Massachusetts.
INFORMATION ABOUT VOTING
Who can attend and vote at the meeting?
Stockholders of record at the close of business on August 27, 1999 are
entitled to attend and vote at the meeting. Each share of the Company's common
stock is entitled to one vote on all matters to be voted on at the meeting, and
can be voted only if the record owner is present to vote or is represented by
proxy.
What constitutes a quorum at the meeting?
The presence at the meeting, in person or represented by proxy, of the
holders of a majority of the common stock outstanding on August 27, 1999, the
record date, will constitute a quorum for purposes of the meeting. On the
record date, 13,972,382 shares of common stock were outstanding. For purposes
of determining whether a quorum exists, proxies received but marked "withhold"
or "abstain" and so-called "broker non-votes" (described below) will be counted
as present.
How do I vote by proxy?
If you properly fill in your proxy card and our transfer agent receives it
in time to vote at the meeting, your "proxy" (one of the individuals named on
your proxy card) will vote your shares as you have directed. No postage is
required if your proxy card is mailed in the United States in the return
envelope that has been enclosed with this proxy statement.
If you sign, date and return the proxy card but do not specify how your
shares are to be voted, then your proxy will vote your shares as follows:
. To fix the number of directors at nine and to elect the persons named
below under "Election of Directors".
. To ratify the selection of Deloitte & Touche LLP as auditors for fiscal
year 2000.
. In their discretion as to any other business which may properly come
before the meeting.
How do I vote if my shares are held by my broker?
If your shares are held by your broker in "street name", you will need to
instruct your broker concerning how to vote your shares in the manner provided
by your broker.
<PAGE>
What discretion does my broker have to vote my shares held in "street name"?
A broker holding your shares in "street name" must vote those shares
according to any specific instructions it receives from you. If specific
instructions are not received, your broker generally may vote your shares in
its discretion, depending on the type of proposal involved. Under NYSE rules,
there are certain matters on which brokers may not vote without specific
instructions from you. If such a matter comes to a vote at the meeting, your
shares will not be voted on that matter, giving rise to what is called a
"broker non-vote". Shares represented by broker non-votes will be counted for
purposes of determining the existence of a quorum.
Can I change my vote after I return my proxy card?
Yes. You may change your vote at any time before your proxy is exercised. To
change your vote, you may:
. Deliver to our corporate secretary a written notice revoking your
earlier vote; or
. Deliver to our transfer agent a properly completed and signed proxy card
with a later date; or
. Vote in person at the meeting.
Your attendance at the meeting will not be deemed to revoke a previously-
delivered proxy unless you clearly indicate at the meeting that you intend to
revoke your proxy and vote in person.
How do I vote my 401(k) shares?
If you participate in the Company's 401(k) plan, you will receive a proxy
card that covers Company shares allocated to your account. Properly completed
and signed proxy cards will serve to instruct the plan trustee on how to vote
any shares allocated to your account. The plan trustee will vote all shares as
to which no instructions have been received from plan participants as directed
by the Company's retirement committee in their best judgment.
How are votes counted?
. Election of directors. Assuming that the number of directors is fixed at
nine, the nine nominees who receive the most votes of those shares
present in person or represented by proxy at the meeting will be
elected. If you do not vote for a particular nominee, or you withhold
authority for one or all nominees, your vote will have no effect on the
outcome of the election.
. Other business. The ratification of selection of auditors and approval
of all other business which may properly come before the meeting require
the favorable vote of a majority of the shares present in person or
represented by proxy at the meeting and actually voting on the matter.
Abstentions and broker non-votes, which are described above, will have
no effect on the outcome of voting on these matters.
How is the Company soliciting proxies?
We bear the cost of preparing, assembling and mailing the proxy material
relating to the solicitation of proxies by the Board of Directors for the
meeting. In addition to the use of the mails, certain of our officers and
regular employees may, without additional compensation, solicit proxies in
person, by telephone or other means of communication. We will also request
brokerage houses, custodians, nominees and fiduciaries to forward copies of the
proxy material to those persons for whom they hold shares, and will reimburse
those record holders for their reasonable expenses in transmitting this
material.
2
<PAGE>
VOTING SECURITIES
Who owns more than 5% of the Company's stock?
On August 27, 1999, there were 13,972,382 shares of common stock
outstanding. On that date, to our knowledge there were five stockholders who
own beneficially more than 5% of the common stock. The table below contains
information, as of that date (except as noted below), regarding the beneficial
ownership of these persons or entities. Unless otherwise indicated, we believe
that each of the persons or entities listed below has sole voting and investing
power with respect to all the shares of common stock indicated.
<TABLE>
<CAPTION>
Name and Address Number of Shares
of Beneficial Owner Beneficially Owned Percent
------------------- ------------------ -------
<S> <C> <C>
Palisade Capital Management, L.L.C.............. 1,559,250(1) 11.16
One Bridge Plaza
Fort Lee, NJ 07024
Jay R. Rhoads, Jr............................... 1,189,200(2) 8.51
c/o New England Business Service, Inc.
500 Main Street
Groton, MA 01471
David L. Babson & Company Inc................... 1,164,300(3) 8.33
1 Memorial Drive
Cambridge, MA 02142
T. Rowe Price Associates, Inc................... 1,032,200(4) 7.39
100 E. Pratt Street
Baltimore, MD 21202
Fenimore Asset Management, Inc.................. 859,225(5) 6.15
118 North Grand Street
Cobleskill, NY 12043
</TABLE>
- --------
(1) Information is based on a Form 13F dated August 4, 1999, filed with the SEC
by Palisade Capital Management, L.L.C.
(2) Includes 6,000 shares which may be acquired within 60 days of August 27,
1999 through the exercise of stock options. Also includes 85,768 shares
owned by Mr. Rhoads's wife, as to all of which shares Mr. Rhoads disclaims
beneficial ownership.
(3) Information is based on a Form 13F dated August 10, 1999, filed with the
SEC by David L. Babson & Company Inc.
(4) Information is based on a Form 13F dated June 30, 1999, filed with the SEC
by T. Rowe Price Associates, Inc. ("Price Associates"). These shares are
owned by various individual and institutional investors which Price
Associates serves as investment adviser with power to direct investments
and/or sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates is
deemed to be the beneficial owner of these shares; however, Price
Associates expressly disclaims that it is, in fact, the beneficial owner of
these shares.
(5) Information is based on a Form 13F dated August 11, 1999, filed with the
SEC by Fenimore Asset Management, Inc.
3
<PAGE>
How much stock do the Company's directors and executive officers own?
On August 27, 1999, the director nominees, the executive officers of the
Company named in the summary compensation table below, and all of the director
nominees and executive officers of the Company as a group beneficially owned
the number of shares of common stock shown below:
<TABLE>
<CAPTION>
Name of Number of Shares
Beneficial Owner Beneficially Owned(1) Percent(1)
- ---------------- --------------------- ----------
<S> <C> <C>
Neil S. Fox(2)............................... 164 *
Robert L. Gable(3)........................... 9,290 *
Benjamin H. Lacy(4).......................... 18,225 *
Thomas J. May................................ 0
Herbert W. Moller(5)......................... 8,390 *
Robert J. Murray(6).......................... 404,315 2.83
Richard H. Rhoads(7)......................... 54,537 *
Brian E. Stern(8)............................ 5,290 *
M. Anne Szostak(9)........................... 2,000 *
George P. Allman(10)......................... 51,491 *
Edward M. Bolesky(11)........................ 87,553 *
Richard T. Riley(12)......................... 9,039 *
Robert D. Warren(13)......................... 47,533 *
All directors and executive officers as a
group (17 persons)(14)...................... 798,294 5.46
</TABLE>
- --------
* Less than one percent
(1) The number and percent of the shares of common stock with respect to each
named beneficial owner are calculated by assuming that all shares which
may be acquired by such person within 60 days of August 27, 1999 are
outstanding.
(2) Shares owned jointly by Mr. Fox and his wife.
(3) Includes 4,000 shares which may be acquired within 60 days of August 27,
1999 through the exercise of stock options.
(4) Includes 3,225 shares which may be acquired within 60 days of August 27,
1999 through the exercise of stock options.
(5) Includes (a) 3,390 shares owned jointly by Mr. Moller and his wife; and
(b) 4,000 shares which may be acquired within 60 days of August 27, 1999
through the exercise of stock options.
(6) Includes (a) 63,433 shares owned jointly by Mr. Murray and his wife; (b)
337,278 shares which may be acquired within 60 days of August 27, 1999
through the exercise of stock options; (c) 1,544 restricted shares awarded
under the Company's stock compensation plan (as to which he has sole
voting power, but no investment power); and (d) 2,058 shares allocated to
his account in the Company's 401(k) plan.
(7) Includes (a) 25,000 shares which may be exercised within 60 days of August
27, 1999 through the exercise of stock options; and (b) 1,000 shares owned
by Mr. Rhoads's wife individually and 841 shares owned by his wife and a
co-trustee of a trust for the benefit of Mr. Rhoads's children, as to all
of which shares Mr. Rhoads disclaims beneficial ownership.
(8) Includes (a) 2,000 shares which may be exercised within 60 days of August
27, 1999 through the exercise of stock options; and (b) 3,000 shares owned
by Mr. Stern's wife, as to all of which shares Mr. Stern disclaims
beneficial ownership.
(9) Includes 1,510 shares owned jointly by Ms. Szostak and her husband.
(10) Includes (a) 6,554 shares owned jointly by Mr. Allman and his wife; (b)
42,903 shares which may be acquired within 60 days of August 27, 1999
through the exercise of stock options; (c) 1,005 restricted shares awarded
under the Company's stock compensation plan (as to which he has sole
voting power, but no investment power); and (d) 949 shares allocated to
his account in the Company's 401(k) plan.
4
<PAGE>
(11) Includes (a) 79,768 shares which may be acquired within 60 days of August
27, 1999 through the exercise of stock options; (b) 609 restricted shares
awarded under the Company's stock compensation plan (as to which he has
sole voting power, but no investment power); and (c) 5,642 shares
allocated to his account in the Company's 401(k) plan.
(12) Includes (a) 8,750 shares which may be acquired within 60 days of August
27, 1999 through the exercise of stock options; and (b) 289 restricted
shares awarded under the Company's stock compensation plan (as to which he
has sole voting power, but no investment power).
(13) Includes (a) 3,000 shares owned jointly by Mr. Warren and his wife; (b)
42,678 shares which may be acquired within 60 days of August 27, 1999
through the exercise of stock options; (c) 450 restricted shares awarded
under the Company's stock compensation plan (as to which he has sole
voting power, but no investment power); and (d) 885 shares allocated to
his account in the Company's 401(k) plan.
(14) Includes (a) 78,051 shares owned jointly by directors and executive
officers and their respective spouses; (b) 638,005 shares which may be
acquired within 60 days of August 27, 1999 through the exercise of stock
options; (c) 5,035 restricted shares awarded to the executive officers
under the Company's stock compensation plan (as to which each has sole
voting power, but no investment power); (d) 13,022 shares allocated to the
accounts of the executive officers under the Company's 401(k) plan; and
(e) 4,841 shares owned by spouses of directors and executive officers, as
to all of which shares the directors and executive officers disclaim
beneficial ownership.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the directors and executive officers of
the Company, and certain persons who own more than 10% of the common stock are
required to report their ownership of the common stock and changes in that
ownership to the SEC and the NYSE. Specific due dates for these reports have
been established, and we are required to report in this proxy statement any
failure to file by these dates during the Company's fiscal year 1999.
Based solely on our review of copies of the reports we have received, or
written representations from certain reporting persons, we believe that, during
the Company's fiscal year 1999, all of these reporting requirements were timely
satisfied by our directors, executive officers and 10% holders.
5
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Who sits on the Company's Board of Directors?
The Company's by-laws provide for a Board of Directors of not fewer than
three nor more than nine directors. The Board of Directors currently consists
of eight members.
You are being asked to fix the number of directors for the next year at nine
and to vote for all nine directors at the meeting. The Board is nominating all
eight current directors for re-election, and is nominating Mr. May, who is not
currently a director, for election at the meeting. Persons elected as directors
at the meeting will hold office until the next annual meeting of stockholders
and until their respective successors are elected and qualified, subject to
their prior death, resignation or removal.
All of the nominees other than Messrs. Fox and May were elected as directors
at the 1998 annual meeting of stockholders. Mr. Fox was elected as a director
by the Board on April 23, 1999. We have no reason to believe that any of the
nominees will be unavailable to serve if elected. However, if any one of them
becomes unavailable, the persons named as proxies in the accompanying proxy
card have discretionary authority to vote for a substitute chosen by the Board.
Any vacancies not filled at the meeting may be filled by the Board.
INFORMATION ABOUT THE NOMINEES
Neil S. Fox, age 58, has been a director of the Company since April 1999.
Mr. Fox has been chairman and chief executive officer of Lowe Fox Pavlika, a
marketing consulting firm affiliated with the Interpublic Group of Companies,
since 1998. Prior to that, he was chairman of Fox Pavlika & Partners for more
than five years.
Robert L. Gable, age 68, has been a director of the Company since 1996. Mr.
Gable was chairman of Unitrode Corporation, a supplier of electronic components
and sub-systems, from 1990 until his retirement in 1998, and was chief
executive officer of Unitrode from 1990 to 1997. Mr. Gable is a director of
Unitrode Corporation and Ibis Technology Corporation.
Benjamin H. Lacy, age 73, has been a director of the Company since 1970. Mr.
Lacy has been president of the Clipper Ship Foundation, Inc., a grant-making
charitable foundation, since May 1995. Prior to that he was of counsel to the
law firm of Hill & Barlow, a professional corporation, which served as general
counsel to the Company from 1973 to 1998.
Thomas J. May, age 51, has been chairman and chief executive officer of
NSTAR since August 1999. NSTAR is a holding company formed in connection with
the combination of BEC Energy and Commonwealth Energy System, which was
completed in August 1999. From May 1998 to August 1999, Mr. May was chairman,
president and chief executive officer of BEC Energy, a holding company formed
in May 1998 for Boston Edison Company, a regulated public utility, and other
non-utility businesses. He has been chairman and chief executive officer of
Boston Edison since 1994, and was president of Boston Edison from 1994 to
August 1999. Mr. May is a trustee of NSTAR and a director of Boston Edison
Company, BankBoston Corporation, Liberty Mutual Insurance Company, Liberty
Mutual Fire Insurance Company, Liberty Financial Companies, Inc. and RCN
Corporation.
Herbert W. Moller, age 58, has been a director of the Company since 1996.
Mr. Moller retired from The Gillette Company, a diversified consumer products
company, in 1998, having been with Gillette for 32 years. From 1992 until his
retirement in 1998, Mr. Moller was vice president, finance and strategic
planning, Gillette North Atlantic Group.
Robert J. Murray, age 58, has been a director since 1991. Mr. Murray has
been chairman, president and chief executive officer of the Company since 1995.
Mr. Murray retired from The Gillette Company in 1995,
6
<PAGE>
having been with Gillette for more than 34 years. From 1991 until his
retirement in 1995, Mr. Murray was executive vice president, North Atlantic
Group of Gillette. Mr. Murray is a director of Fleet National Bank, LoJack
Corporation, Hannaford Bros. Co. and Allmerica Financial Corporation.
Richard H. Rhoads, age 69, joined the Company in 1965 and has been a
director since 1970. From 1975 to 1991, he was chief executive officer of the
Company, and from 1988 to his retirement in 1995, he was chairman of the board
of the Company.
Brian E. Stern, age 51, has been a director of the Company since 1995. Mr.
Stern has been senior vice president of Xerox Corporation, a provider of
document processing products and services, and president of Xerox Technology
Enterprises since January 1999. From 1994 to January 1999, he was senior vice
president and president of the Office Document Products Group of Xerox. Mr.
Stern is a director of HON Industries, Inc. and Esselte AB.
M. Anne Szostak, age 49, has been a director of the Company since 1998. Ms.
Szostak has been executive vice president and corporate director of human
resources of Fleet Financial Group, Inc., a diversified financial services
company, since 1998. From 1994 to 1998, Ms. Szostak was senior vice president
and corporate director of human resources of Fleet. Ms. Szostak is a director
of Providence Energy Corporation.
What committees has the Board established?
The Board of Directors has standing audit, organization and compensation,
stock option, nominating, and executive committees.
The audit committee recommends the selection of the Company's independent
auditors, and acts as a direct channel between the independent auditors and the
Board. In addition, the committee reviews and reports to the Board its
assessment of the quality and performance of the Company's internal auditors
and independent accountants, and the adequacy of the Company's financial
controls. During fiscal year 1999, members of the committee were Messrs. Lacy
and Moller (chairman) and, prior to October 23, 1998, Mr. Stern. At the annual
meeting of the Board on that date, Ms. Szostak was appointed to the committee
in place of Mr. Stern. The committee met two times during the last fiscal year.
The organization and compensation committee reviews and makes
recommendations to the Board of Directors concerning the election of officers
and the compensation of the officers and directors. In addition, the committee
administers and grants awards under the Company's stock compensation plan.
During fiscal year 1999, members of the committee were Messrs. Gable and Lacy
(chairman) and, prior to October 23, 1998, former director Peter A. Brooke, who
retired from the Board at the 1998 annual meeting of stockholders. At the
annual meeting of the Board on that date, Ms. Szostak was appointed to the
committee in place of Mr. Brooke. The committee met three times during the last
fiscal year.
The stock option committee administers and grants awards under the Company's
stock option plans. During fiscal year 1999, members of the committee were
Messrs. Gable and Lacy (chairman) and, prior to October 23, 1998, Mr. Brooke.
At the annual meeting of the Board on that date, the size of the committee was
reduced to two. The committee met four times during the last fiscal year.
The nominating committee recommends to the Board of Directors persons to be
nominated for election as directors by the stockholders at the annual meeting
of stockholders or by the Board of Directors to fill vacancies. During fiscal
year 1999, members of the committee were Messrs. Gable and Stern and, prior to
October 23, 1998, former director Jay R. Rhoads, Jr., who retired from the
Board at the 1998 annual meeting of stockholders. At the annual meeting of the
Board on that date, Richard H. Rhoads was appointed to the committee and as its
chairman in place of Jay R. Rhoads, Jr. The committee recommended Mr. Fox for
election as a director by the Board in April 1999 and the persons nominated for
election as directors by the stockholders at the 1999 annual meeting of
stockholders.
7
<PAGE>
The executive committee may exercise all of the authority of the Board,
except those powers that are expressly reserved to the Board by law, the
Company's charter or by-laws or resolution of the Board. During fiscal year
1999, members of the committee were Messrs. Lacy, Moller, Murray (chairman) and
R.H. Rhoads. The committee met or acted by unanimous written consent nine times
during the last fiscal year.
How often did the Board meet in fiscal year 1999?
The Board of Directors met five times during the last fiscal year. All of
the directors attended at least 75% of the meetings of the Board of Directors
and committees of the Board on which they served.
How are the directors compensated?
Directors who are also employees of the Company receive no additional
compensation for serving on the Board or its committees.
Non-employee directors receive as compensation for all services as directors
an annual retainer of $18,000, plus $1,000 for each Board meeting and each
committee meeting (not held on the same day as a Board meeting) which they
attend. The annual retainer is paid 50% in cash and 50% in shares of common
stock in accordance with the Company's stock compensation plan. Each chairman
of a committee (other than Mr. Murray) receives an additional annual fee of
$2,000.
Under the terms of the Company's 1997 key employee and eligible director
stock option and stock appreciation rights plan, each non-employee director is
annually granted on the tenth day following his or her election at the annual
meeting of stockholders an option to purchase 1,000 shares of common stock. In
the case of the first annual meeting of stockholders at which a director is
elected, the option grant to that director is for 3,000 shares. Each of these
option grants becomes exercisable one year after the date of grant, and expires
ten years after the date of grant.
Non-employee directors may defer receipt of their cash fees and retainers
pursuant to a deferral plan. Deferred amounts are generally paid to the
director beginning on the first day of the first fiscal year beginning after
the director's 70th birthday, and may be paid in a lump sum at that time or in
quarterly installments over a period not to exceed ten years. Interest is
credited to each participating director's account quarterly at the so-called
"base rate" of interest of BankBoston, N.A. on the last preceding June 30th and
December 31st. None of the current directors has elected to defer payments as
described above.
8
<PAGE>
EXECUTIVE COMPENSATION
How were the executive officers compensated for fiscal year 1999?
The following table sets forth all compensation paid by the Company to the
chief executive officer and each of the other four most highly compensated
executive officers of the Company, who are collectively referred to as the
"named executive officers", in all capacities for the last three fiscal years.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
---------------------
Annual Compensation Awards(1)
-------------------------------------- ---------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Bonus(2) Compensation(3) Awards(4) Options (#) Compensation(5)
------------------ ---- -------- -------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Murray........ 1999 $500,000 $129,151 $37,871 $43,048 50,000 $10,590
Chairman, President and 1998 393,800 161,079 37,492 0 35,000 10,590
CEO
1997 393,800 263,988 44,499 0 88,165 5,490
George P. Allman........ 1999 175,000 84,060 -- 28,006 15,000 10,293
Senior Vice President, 1998 165,000 65,010 -- 0 11,000 10,089
President, Diversified 1997 153,750 71,113 -- 0 33,778 2,972
Operations
Edward M. Bolesky....... 1999 180,000 51,009 -- 16,978 15,000 15,113
Senior Vice President, 1998 180,000 81,538 -- 0 13,100 15,013
President, NEBS Direct 1997 173,800 80,185 -- 0 40,124 8,480
Marketing
Richard T. Riley(6)..... 1999 200,000 24,249 -- 8,054 15,000 42,581
Senior Vice President, 1998 105,115 42,500 -- 0 20,000 6,879
President, Rapidforms 1997 -- -- -- -- -- --
Robert D. Warren........ 1999 170,000 37,640 -- 12,544 14,000 10,273
Senior Vice President, 1998 162,500 60,268 -- 0 11,600 8,369
Business
Management and 1997 152,500 79,200 -- 0 33,778 1,804
Development
</TABLE>
- --------
(1) The Company has not issued stock appreciation rights. In addition, the
Company does not maintain a "long-term incentive plan," as that term is
defined by applicable rules. Securities underlying options are shares of
common stock.
(2) For fiscal year 1999, 25% of each named executive officer's annual bonus
was paid in the form of restricted shares in lieu of cash. The dollar value
of these restricted shares is excluded from the amounts reported in this
column, and is set forth under the column heading "Restricted Stock
Awards".
(3) The amounts reported are the value of the Company's reimbursement to Mr.
Murray for his tax liability arising from the Company's payment of certain
occupancy expenses associated with his residence in Boston, Massachusetts.
(4) The amounts reported are the value of restricted shares that were awarded
to each named executive officer under the Company's stock compensation
plan in lieu of cash as part of his annual bonus for fiscal year 1999. The
awards vest on the third anniversary of the date of grant, except that
such awards will vest immediately in case of the holder's death,
disability or retirement, or a change in control of the Company. Dividends
are payable on unvested awards to the same extent as they are paid on the
common stock generally, except that such dividend payments are
automatically reinvested in shares of common stock, and the additional
shares are subject to the same restrictions that are applicable to the
underlying restricted shares.
9
<PAGE>
(5) The table below presents the components of this column for fiscal year
1999, which represent (a) the value of Company contributions to the account
of each named executive officer pursuant to the terms of the Company's
401(k) plan (in the case of Mr. Riley, the Rapidforms 401(k) plan), (b) the
value of premiums paid by the Company on group term life insurance for the
benefit of the named executive officers, and (c) in the case of Mr. Riley,
the value of the payment made to him in connection with the termination of
a supplemental executive retirement plan maintained by the Company's
Rapidforms subsidiary.
<TABLE>
<CAPTION>
401(k) Plan Group Term Life Rapidforms SERP
Contribution Insurance Premium Termination Payment
------------ ----------------- -------------------
<S> <C> <C> <C>
Robert J. Murray.......... $ 9,600 $ 990 $ 0
George P. Allman.......... 9,600 693 0
Edward M. Bolesky......... 14,400 713 0
Richard T. Riley.......... 11,000 60 31,521
Robert D. Warren.......... 9,600 673 0
</TABLE>
(6) Mr. Riley was elected an executive officer of the Company effective January
23, 1998.
Stock Option Plan
The following table provides details regarding stock options granted to the
named executive officers during the last fiscal year under the Company's 1997
key employee and eligible director stock option and stock appreciation rights
plan. The table also shows hypothetical values of the common stock obtainable
upon exercise of each option grant, net of the option's exercise price,
assuming that the market price of the common stock appreciates at compound
annual rates of 5% and 10% over the ten-year term of the option. The assumed
rates of appreciation are presented as examples pursuant to the SEC's rules on
disclosure of executive compensation. We do not advocate or necessarily agree
that these rates are indicative of future growth in the market price of the
common stock.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Appreciation For Option Term
-----------------------------
Number % of Total
of Shares Options Exercise
Underlying Granted Price
Options To Employees Per Expiration
Name Granted(1) In Fiscal Year Share Date 5% 10%
---- ---------- -------------- -------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Murray........ 50,000 8.81% $27.5625 9/8/2008 $ 866,695 $ 2,196,376
George P. Allman........ 15,000 2.64% 27.5625 9/8/2008 260,009 658,913
Edward M. Bolesky....... 15,000 2.64% 27.5625 9/8/2008 260,009 658,913
Richard T. Riley........ 15,000 2.64% 27.5625 9/8/2008 260,009 658,913
Robert D. Warren........ 14,000 2.47% 27.5625 9/8/2008 242,675 614,985
</TABLE>
- --------
(1) The stock options awarded vest annually in four equal installments
beginning on September 8, 1999 and ending on September 8, 2002, except that
all of such options will vest immediately in case of a change in control of
the Company.
The following table shows stock option exercises by the named executive
officers during the last fiscal year, including the aggregate value realized
upon exercise. This represents the excess of the fair market value, at the time
of exercise, of the common stock acquired at exercise over the exercise price
of the option. In addition, the table includes the number of shares underlying
both exercisable and unexercisable stock options at the end of the last fiscal
year. The table also shows the value of "in-the-money" options, which
represents the positive spread, if any, between the exercise prices of stock
options held by each named executive officer and the closing price ($27.0625)
of the common stock on June 25, 1999, the last trading day of fiscal year 1999.
10
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at Fiscal Year End at Fiscal Year End
------------------------------ -------------------------
Number of
Shares
Acquired Value
Name At Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Murray........ 5,569 $52,105 315,389 145,639 $2,505,843 $394,734
George P. Allman........ 0 0 36,226 39,052 207,290 42,803
Edward M. Bolesky....... 3,772 40,549 72,642 43,202 562,514 49,770
Richard T. Riley........ 0 0 5,000 30,000 0 0
Robert D. Warren........ 0 0 36,251 38,127 203,540 42,803
</TABLE>
Stock Compensation Plan
Under the Company's stock compensation plan, the organization and
compensation committee may grant awards of common stock to officers and other
key employees in lieu of cash in payment of all or part of their regular,
bonus, or other special compensation. For fiscal year 1999, 25% of each named
executive officer's annual bonus was paid in common stock. The number of shares
awarded to each named executive officer was determined by the $28.0625 closing
price of the common stock on the NYSE on July 29, 1999, which was the third
business day following the public release of the Company's financial results
for the fourth quarter of fiscal year 1999. The shares awarded as described
above were issued in the form of restricted stock. The material terms of the
awards are described in footnote 4 to the summary compensation table.
Deferred Compensation Plan
Officers of the Company, including the named executive officers, may defer,
until 60 days following the termination of employment with the Company, a
portion of all compensation payable by the Company for personal services
rendered to the Company. Each participating officer may request that the
deferred amounts be allocated among several available investment options
established and offered by the Company, subject to approval by the Company's
retirement committee. The benefit payable under the plan at any time to a
participant following termination of employment is equal to the applicable
deferred amounts, plus or minus any earnings or losses attributable to the
investment of such deferred amounts. The amount of compensation in any given
fiscal year that is deferred by a named executive officer is included in the
summary compensation table under the column headings "salary" or "bonus", as
appropriate.
The Company has established a trust for the benefit of participants in the
deferred compensation plan. Pursuant to the terms of the trust, as soon as
possible after any deferred amounts have been withheld from a plan participant,
the Company will contribute such deferred amounts to the trust to be held for
the benefit of the participant in accordance with the terms of the plan and the
trust. However, the assets in the trust will become available to the Company's
creditors if the Company becomes insolvent or bankrupt. If the funds in the
trust are insufficient to pay amounts due under the plan to a participant, the
Company remains obligated to pay any deficiency.
Supplemental Executive Retirement Plan
In connection with the termination of the Company's defined benefit pension,
the Company froze participation in, and the accrual of benefits under, a
related supplemental executive retirement plan as of the end of fiscal year
1997. Effective January 4, 1999, the Company implemented a new supplemental
executive retirement plan, or SERP, for key employees who are designated as
participants by the organization and compensation committee. Benefits under the
SERP are payable as a life annuity upon normal retirement at
11
<PAGE>
age 65, or in a reduced amount in the event of earlier retirement on or after
age 55, and are based on age, length of service (not less than 5 years), the
participant's annual base salary at the time of termination of employment, and
an average of the participant's three highest bonuses paid during the five
years immediately preceding the termination of the participant's employment.
Benefits payable under the SERP are not subject to any reduction for Social
Security or other offset amounts. The following table shows the annual benefit
payable under the SERP to participants who retire at or after the age 65.
Retirement Benefit Table
<TABLE>
<CAPTION>
Annual Retirement Benefit
Average Final Compensation ---------------------------------------
Used as Basis for 5 Years of 10 Years of 15 or More
Computing Retirement Benefit Service Service Years of Service
---------------------------- ---------- ----------- ----------------
<S> <C> <C> <C>
$200,000 $ 27,500 $ 55,000 $ 75,000
300,000 41,250 82,500 112,500
400,000 55,000 110,000 150,000
500,000 68,750 137,500 187,500
600,000 82,500 165,000 225,000
700,000 96,250 192,500 262,500
</TABLE>
As of June 26, 1999, Mr. Bolesky, who is the only named executive officer
who participates in the SERP, had 6 years of service for purposes of the SERP.
Change-in-Control Arrangements
The Company has entered into agreements with each named executive officer
providing for certain benefits in the event of a change in control of the
Company. A change in control includes, among other events and subject to
certain exceptions, the acquisition by any person of beneficial ownership of
35% or more of the outstanding common stock. If a tender offer or exchange
offer is made for more than 25% of the outstanding common stock, the named
executive officer has agreed not to leave the employ of the Company, except in
the case of disability or retirement, and to continue to render services to the
Company until such offer has been abandoned or terminated or a change in
control has occurred.
If, within 24 months after a change in control of the Company, the named
executive officer's employment is terminated (1) by the Company other than for
cause (as defined in the agreement), disability or retirement or (2) by the
named executive officer for good reason (as defined in the agreement), the
Company has agreed to pay the named executive officer, in addition to salary,
benefits and awards accrued through the date of termination, an amount equal to
1.5 times the sum of the named executive officer's then current annualized base
salary, plus the average of the actual bonuses earned during each of the three
most recent fiscal years ending on or before the date of the change in control.
The Company has also agreed to provide the named executive officer with
benefits under all employee welfare benefit plans, or equivalent benefits, for
up to 30 months following such termination. The Company must give 90 day
advance notice of termination to the named executive officer unless such
termination is for cause.
Each change in control agreement continues in effect until July 1, 2001;
provided, however, that the agreement continues in effect for 24 months
following a change in control that occurs during the term of the agreement.
Except as otherwise provided in the change in control agreement, the Company
and each named executive officer may terminate the named executive officer's
employment at any time. Each change in control agreement terminates if either
party terminates the named executive officer's employment before a change in
control.
12
<PAGE>
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Prior to October 23, 1999, the members of the organization and compensation
committee and the stock option committee were Messrs. Gable and Lacy and former
director Peter A. Brooke, who retired from the Board at the 1998 annual meeting
of stockholders. At the annual meeting of the Board on October 23, 1999, Ms.
Szostak was appointed to the organization and compensation committee in place
of Mr. Brooke. The size of the stock option committee was reduced to two, and
Messrs. Gable and Lacy continued as members of that committee.
At the end of fiscal year 1999, the Company had outstanding borrowings of
approximately $21,333,333 from Fleet National Bank, one of several banks party
to an unsecured, revolving line of credit with the Company. Fleet National Bank
is a wholly owned subsidiary of Fleet Financial Group, Inc., of which
Ms. Szostak is an executive officer.
REPORT OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
What is our executive compensation philosophy?
For fiscal year 1999 the organization and compensation committee adjusted
its plan to provide for increased pay-for-performance. In so doing the salary
ranges for executive officers were targeted to reflect a midpoint which in
general is about the 50th percentile of the base salaries of officers in
similar positions in a representative group of non-durable goods manufacturers
and direct marketing companies of comparable size, as determined by a
nationally recognized compensation and benefits consultant. The prior practice
targeted the range midpoint at about the 60th percentile. In addition, annual
bonuses are provided for, the payment and the amount of which depend upon the
degree of attainment of pre-established individual objectives. With total base
salary and annual bonus compensation continuing to be targeted at the 75th
percentile, the mix of dollars has been changed with a higher portion going
into incentive dollars as a result of lowering the base salary target to the
50th percentile. Long-term compensation is tied directly to the increase in
value of the common stock, and hence takes the form of stock options, with
option prices equal to 100% of current market value, in amounts reflecting the
level of responsibility of the grantees for the Company's long-range success.
In determining its executive compensation policies from year to year, the
Company expects to take appropriate measures to prevent the employee
remuneration paid by it from being rendered non-deductible by operation of the
terms of Section 162(m) of the Internal Revenue Code. Such measures may include
(1) limiting the amount of non-performance-based compensation paid to any
employee, and (2) complying with the statutory requirements for exempting
performance-based compensation from non-deductibility by obtaining stockholder
approval of qualified performance-based plans. In October 1997, such approval
was obtained for the Company's 1997 key employee and eligible director stock
option and stock appreciation rights plan.
How were executive base salaries determined for fiscal year 1999?
The individual salaries of the executive officers for fiscal year 1999 were
recommended by the organization and compensation committee and approved by the
Board of Directors at the beginning of that year in accordance with the above-
stated policy. These salary recommendations were made by the committee after
review of individual performance appraisals by the chief executive officer and
discussion with him of the performance of the Company during fiscal year 1998
and of the individual performances of the executive officers (other than
himself) during that year. Accordingly, the chief executive officer recommended
to the committee that annual salary adjustments for executive officers would
range from 0% (for those currently at or above the 50th percentile) to 6.1% for
those either below the 50th percentile or having been assigned increased
responsibilities.
13
<PAGE>
How were annual executive bonuses determined for fiscal year 1999?
At the beginning of fiscal year 1999, all of the executive officers were
designated as participants in the Company's annual executive bonus plan and
target bonuses of 70% of base salary for the chief executive officer and 60% of
base salary for the other executive officers were established. For the second
consecutive year financial performance targets for the executive officers
(other than the chief executive officer) were increased. For fiscal year 1999
the use of financial performance targets was increased from 70% to 80% of the
target bonus, placing increased emphasis on the achievement of pre-established
Company and business segment financial objectives.
For executive officers having revenue responsibility for particular business
segments of the Company, a combination of financial performance targets equal
to the Company's budgeted net income and business segment net sales and profit
from operations for fiscal year 1999 were established as the goals for the
achievement of 80% of the target bonuses. Executive officers without business
segment revenue responsibility had performance targets equal to the Company's
consolidated, budgeted net sales and net income for fiscal year 1999
established as the goals for the achievement of 80% of their target bonuses.
Personal objectives were established for each of the executive officers, the
attainment of which, in whole or in part, would determine the extent of such
officer's right to receive the other 20% of the target bonus.
Based on these criteria, the chief executive officer received a bonus of
34.4% of his base salary and the other executive officers received bonuses
ranging from 13.9% to 64% of their respective base salaries.
Were stock options granted to executives in fiscal year 1999?
In September 1998, the stock option committee, employing the Black-Scholes
methodology first employed in fiscal year 1997, authorized the granting of a
stock option to the chief executive officer to purchase shares with a market
value on the date of grant equal to 110% of his fiscal year 1999 base salary.
At the same meeting, options were granted to the other executive officers for
shares with a market value of 90% of their respective fiscal year 1999 base
salaries. In all cases, the per share option exercise price for options granted
by the committee in fiscal year 1999 was set at 100% of the then current market
value of a share of the common stock.
How was the chief executive officer's compensation determined for fiscal year
1999?
Robert J. Murray's base salary and bonus target were fixed at the time of
his employment as chairman, president and chief executive officer on December
13, 1995 and remained unchanged through June 30, 1998. To properly recognize
the contribution by Mr. Murray in successfully restoring the growth and
profitability of the Company, in identifying and effectively acquiring and
integrating four acquisitions in an eighteen-month period and his overall
leadership and management strength, the organization and compensation committee
recommended and the Board authorized an increase in annual base salary from
$393,800 to $500,000, effective as of July 1, 1998. This base annual salary is
within the range for the position as prescribed by the committee's independent
compensation consultant and is properly positioned to recognize Mr. Murray's
depth of management experience.
The committee initially recommended to the Board that 100% of Mr. Murray's
target bonus for fiscal year 1999 be related to the Company's consolidated,
budgeted net sales and net income for fiscal year 1999, which was consistent
with prior years. The full Board determined that 20% of his target bonus should
relate to the attainment of qualitative objectives, as was the case with the
other executive officers. On this basis, the full Board determined that 80% of
Mr. Murray's target bonus should relate to the consolidated financial
performance targets, and established qualitative objectives related to the
integration of acquired companies and management succession as the goals for
the achievement of the remaining 20% of his target bonus.
14
<PAGE>
Because Mr. Murray's principal residence is located more than 75 miles from
the Company's headquarters, the Company pays certain occupancy expenses
associated with a second residence within a shorter commuting distance and
reimburses Mr. Murray for his tax liability arising from this arrangement.
Otherwise, Mr. Murray was not provided any fringe benefits other than those
available to all officers of the Company.
Board of Directors
Robert L. Gable
Herbert W. Moller
Richard H. Rhoads M. Anne Szostak
Benjamin H. Lacy
Robert J. Murray
Brian E. Stern
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 19, 1999, pursuant to its publicly-announced stock buyback program,
the Company purchased 240,000 shares of common stock in privately-negotiated
transactions from two trusts created by Jay R. Rhoads, Jr. The Company
purchased the shares at a price equal to $27 per share. Mr. Rhoads is the
beneficial owner of more than 5% of the common stock, and is also the brother
of Richard H. Rhoads, who is a director of the Company.
Certain other relationships involving the Company's directors and executive
officers are disclosed under the heading "Compensation Committee Interlocks and
Insider Participation in Compensation Decisions".
15
<PAGE>
PERFORMANCE GRAPH
The following chart compares the value of $100 invested in the Company's
common stock from June 24, 1994 through June 26, 1999 with a similar investment
in the S&P 600 small cap stock index, and in a peer group consisting of nine
publicly held companies selected on the basis of similarity to the Company in
the nature of products offered, marketing and distribution channels utilized
and customer markets served. The comparison assumes that all dividends are
reinvested. This fiscal year the index of peer group companies was expanded to
reflect the expansion of the Company's selling methods to include direct mail,
telesales and the use of a field sales force. In accordance with SEC rules, the
return data for the former peer group companies is provided below for
comparative purposes, but will not be provided in future years. Viking Office
Products, Inc., which was included in the former peer group, was acquired by
Office Depot, Inc. in August 1998. As a result, Viking has been omitted from
both the peer group companies and the former peer group companies in the
presentation below.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NEBS S&P 600 Peer Group Former Peer Group
<S> <C> <C> <C> <C>
FYE 1994............................ 100.00 100.00 100.00 100.00
FYE 1995............................ 109.83 119.39 126.53 131.77
FYE 1996............................ 113.06 150.68 169.82 165.62
FYE 1997............................ 155.79 179.46 155.14 142.35
FYE 1998............................ 190.46 211.89 141.07 132.36
FYE 1999............................ 172.19 201.42 154.35 140.22
</TABLE>
Peer Group Companies:
<TABLE>
<S> <C>
American Business John H. Harland Co. The Standard Register
Products, Inc. Moore Corporation, Ltd. Co.
Deluxe Corporation The Reynolds & Reynolds Systemax Inc.
Ennis Business Forms, Co. Wallace Computer
Inc. Services, Inc.
Former Peer Group Companies:
Deluxe Corporation Moore Corporation, Ltd. Systemax Inc. (formerly
Ennis Business Forms, Inc. Global
The Reynolds & Reynolds
</TABLE> Co. DirectMail Corp.)
16
<PAGE>
PROPOSAL TWO
RATIFICATION OF SELECTION OF AUDITORS
Upon the recommendation of its audit committee, the Board of Directors
selected the firm of Deloitte & Touche LLP as auditors of the Company for the
fiscal year ending June 24, 2000, subject to ratification by the stockholders
at the 1999 annual meeting of stockholders. A representative of Deloitte &
Touche LLP, which served as auditors for fiscal year 1999, is expected to be
present at the meeting, with the opportunity to make a statement if he or she
desires to do so, and to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2000 annual
meeting of stockholders must be received by the Company, at its offices at 500
Main Street, Groton, Massachusetts 01471, no later than May 13, 2000, in order
to be considered for inclusion in the Company's proxy statement and proxy card
relating to that meeting in accordance with Rule 14a-8 under the Securities
Exchange Act of 1934.
Additionally, under the advance notice provisions in our by-laws, director
nominations or any other proposals to be presented outside of the processes of
Rule 14a-8 by a stockholder from the floor of the 2000 annual meeting of
stockholders must be submitted by the stockholder to our corporate secretary at
the above address no later than July 24, 2000 and no earlier than June 24,
2000. The notice must contain the information required by the by-laws. These
advance notice provisions are separate from the requirements which a
stockholder must meet in order to have a proposal included in the Company's
proxy statement under Rule 14a-8.
AMENDMENTS TO THE COMPANY'S BY-LAWS
At the annual meeting of the directors held on October 23, 1998, the Board
amended the by-laws to clarify the circumstances under which the Company will
indemnify its directors and officers and advance expenses incurred by these
persons in defending or otherwise appearing in judicial proceedings in which
they may be involved as a result of their being directors or officers of the
Company.
At a regular meeting held on July 23, 1999, the Board amended the by-laws
(1) to empower the Board to advance the date of the annual meeting of
stockholders, (2) to clarify the plurality vote required for the election of
directors by the stockholders, and (3) to adopt advance notice provisions with
respect to director nominations and other proposals for business made by
stockholders at annual and special meetings of stockholders. The advance notice
provisions apply to the 2000 annual meeting of stockholders and are reflected
in the information set forth above under the heading "Stockholder Proposals".
You may obtain a copy of our by-laws without charge by writing to our
corporate secretary, New England Business Service, Inc., 500 Main Street,
Groton, MA 01471.
DIRECTOR NOMINATIONS
The nominating committee will consider your suggestions regarding potential
candidates for Board membership as part of the committee's review of the
composition of the Board. Your recommendations may be sent to the nominating
committee through our corporate secretary at the above address.
ANNUAL REPORT ON FORM 10-K
You may obtain a copy of our annual report on Form 10-K for the fiscal year
ended June 26, 1999 (without exhibits) without charge by writing to: Investor
Relations, New England Business Service, Inc., 500 Main Street, Groton, MA
01471.
17
<PAGE>
PROXY
NEW ENGLAND BUSINESS SERVICE, INC.
Meeting of Stockholders - October 22, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF NEW ENGLAND BUSINESS SERVICE, INC.
The undersigned stockholder in New England Business Service, Inc. (the
"Company") hereby appoints Robert J. Murray and Daniel M. Junius and each of
them, attorneys, agents and proxies, with power of substitution to each, to vote
all shares of Common Stock that the undersigned is entitled to vote, and, if
applicable, hereby directs the trustee of the 401(k) Plan for Employees of New
England Business Service, Inc. (the "Plan") to vote all shares of Common Stock
of the Company allocated to the account of the undersigned or otherwise which
the undersigned is entitled to vote pursuant to the Plan, at the Annual Meeting
of Stockholders of the Company to be held at the offices of the Company, 500
Main Street, Groton, Massachusetts on October 22, 1999 at 10:00 a.m., local
time, and any adjournments thereof.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
DETACH ITEMS
- --------------------------------------------------------------------------------
[X] Please mark votes as in this example.
The shares represented by this proxy will be voted as directed by the
undersigned. IF NO CONTRARY INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED
IN FAVOR OF ALL PROPOSALS AS DESCRIBED IN DETAIL IN THE PROXY STATEMENT.
1. To fix the number of persons constituting the full Board of Directors at nine
and to elect the following nominees as directors:
Neil S. Fox, Robert L. Gable, Benjamin H. Lacy, Thomas J. May,
Herbert W. Moller, Robert J. Murray, Richard H. Rhoads, Brian E. Stern
and M. Anne Szostak
FOR ALL NOMINEES [_] WITHHELD FROM ALL NOMINEES [_]
[_]______________________________________
For all nominees except as noted above
2. To ratify the selection of Deloitte & Touche LLP as independent auditors of
the Company for the current fiscal year ending June 24, 2000.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. And to vote and act upon any other business which may properly come before
the meeting or any adjournment thereof.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Please sign exactly as your name is printed opposite. When signing as
attorney-in-fact, executor, administrator, trustee or guardian, please give
title. If stock is held in joint names, all named stockholders should sign.
