<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
M/A/R/C Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 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> 2
THE M/A/R/C GROUP
7850 NORTH BELT LINE ROAD
IRVING, TEXAS 75063
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1995
To the Shareholders of
The M/A/R/C Group:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Shareholders (the
"Annual Meeting") of The M/A/R/C Group, a Texas corporation ("M/A/R/C"), will be
held at M/A/R/C's principal offices, 7850 North Belt Line Road, Irving, Texas
75063, on Thursday, April 20, 1995, at 10 a.m., Dallas time, for the following
purposes:
1. To elect three directors to hold office until the Annual Meeting of
Shareholders to be held in 1998 or until their respective successors shall
be elected and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on March 10, 1995, are
entitled to notice of and to vote at the Annual Meeting or any adjournment(s)
thereof.
You are cordially invited and urged to attend the Annual Meeting. Whether
or not you expect to attend in person, you are urged to promptly mark, sign,
date, and mail the enclosed form of proxy so that your shares of stock may be
represented and voted in accordance with your wishes and in order that the
presence of a quorum may be assured at the Annual Meeting. Your proxy will be
returned to you if you should be present at the Annual Meeting and should
request such return in the manner provided for revocation of proxies as set
forth in the enclosed Proxy Statement.
By Order of the Board of Directors
/s/ HAROLD R. CURTIS
HAROLD R. CURTIS
Secretary
March 22, 1995
Irving, Texas
<PAGE> 3
THE M/A/R/C GROUP
7850 NORTH BELT LINE ROAD
IRVING, TEXAS 75063
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1995
SOLICITATION OF PROXIES
This Proxy Statement and the accompanying form of proxy are being mailed to
the shareholders of The M/A/R/C Group, a Texas corporation ("M/A/R/C"), on March
22, 1995, in connection with the solicitation of proxies by the Board of
Directors of the Corporation to be voted at M/A/R/C's 1995 Annual Meeting of
Shareholders to be held Thursday, April 20, 1995, at 10 a.m., Dallas time, at
M/A/R/C's principal offices, 7850 North Belt Line Road, Irving, Texas 75063, and
any adjournment(s) thereof (the "Annual Meeting"), for the purposes set forth
below. In addition to the solicitation of proxies by use of the mail, officers
and regular employees of M/A/R/C may solicit the return of proxies by personal
interview, mail, telephone, and telegraph. The officers and employees will not
be additionally compensated but will be reimbursed for out-of-pocket expenses.
Brokerage houses and other custodians, nominees, and fiduciaries will be
requested to forward solicitation materials to the beneficial owners of stock.
The cost of preparing, printing, assembling, and mailing the accompanying Notice
of Annual Meeting of Shareholders, this Proxy Statement, the accompanying proxy,
any additional material, the cost of forwarding solicitation material to the
beneficial owners of stock, and other costs of solicitation will be borne by
M/A/R/C. In addition, M/A/R/C expects to pay fees not to exceed $15,000, plus
reasonable out-of-pocket expenses, for assistance by D. F. King & Co., Inc., a
professional solicitation firm, in soliciting proxies.
ANNUAL REPORT
The Annual Report to Shareholders covering the Corporation's fiscal year
ended December 31, 1994 (the "Annual Report"), is included with this Proxy
Statement. The Annual Report does not form any part of the material for the
solicitation of proxies.
REVOCABILITY OF PROXIES
M/A/R/C encourages the personal attendance of the shareholders at its
Annual Meeting of Shareholders, and the giving of a proxy does not preclude the
right to vote in person should any shareholder giving a proxy so desire. Any
shareholder giving a proxy has the unconditional right to revoke his proxy at
any time prior to the voting thereof, either in person at the Annual Meeting or
by giving written notice to M/A/R/C addressed to Mr. Harold R. Curtis,
Secretary, The M/A/R/C Group, 7850 North Belt Line Road, Irving, Texas 75063.
But the notice of revocation must be received at or prior to the Annual Meeting.
<PAGE> 4
PURPOSES OF THE MEETING
The Annual Meeting is to be held for the following purposes:
(1) To elect three directors to hold office until the Annual Meeting
of Shareholders to be held in 1998 or until their respective successors
shall be elected and qualified; and
(2) To transact such other business as may properly come before the
Annual Meeting or any adjournment(s) thereof.
The Board of Directors knows of no matters, other than those stated above,
to be presented for consideration at the Annual Meeting.
VOTING SECURITIES
The record date for determining the shareholders entitled to notice of and
to vote at the Annual Meeting was the close of business on March 10, 1995 (the
"Record Date"). As of the Record Date, there were 2,793,442 shares of M/A/R/C's
common stock, $1.00 par value per share, issued and outstanding, all of which
are entitled to vote. M/A/R/C's Articles of Incorporation prohibit cumulative
voting. Holders of common stock of record as of the Record Date will be entitled
to one vote per share on all matters to be acted upon at the Annual Meeting, and
all shares of common stock will vote as a single class on each matter.
QUORUM
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum to transact business at the Annual Meeting. If
a quorum is not present or represented at the Annual Meeting, the shareholders
entitled to vote at the Annual Meeting, who are present in person or represented
by proxy, have the power to adjourn the Annual Meeting from time to time,
without notice other than by announcement at the Annual Meeting, until a quorum
is present or represented. At any such adjourned meeting at which a quorum is
present or represented, any business may be transacted that might have been
transacted at the original Annual Meeting.
ACTION TO BE TAKEN UNDER THE PROXY
Proxies in the accompanying form that are properly executed and returned
will be voted at the Annual Meeting in accordance with the instructions thereon.
Any proxy upon which no instructions have been indicated with respect to a
specified matter will be voted as follows with respect to the matter:
(1) FOR election of the nominees for director named in this Proxy
Statement; and
(2) At the discretion of the holders of such proxies, as to the
transaction of such other business as may properly come before the Annual
Meeting or any adjournment(s) thereof.
2
<PAGE> 5
ELECTION OF DIRECTORS
BOARD OF DIRECTORS
The Board of Directors consists of nine members divided into three classes.
As of the Record Date, there are six members serving, and there are three
vacancies on the Board. Directors elected at an Annual Meeting of Shareholders
serve until the third following Annual Meeting of Shareholders or until their
respective successors are elected and qualified.
NOMINEES
The terms of two directors (Cecil B. Phillips and Rolan G. Tucker) expire
at the Annual Meeting. Three nominees are proposed to be elected as directors at
the Annual Meeting to serve until the Annual Meeting of Shareholders to be held
in 1998 or until their respective successors are elected and qualified. If any
nominee becomes unavailable to serve for any reason, the persons named in the
form of proxy are expected to vote for the election of another person as the
Board of Directors may recommend in the nominee's stead. The Board of Directors
has no reason to believe that any of the nominees will be unable or unwilling to
serve if elected. To the knowledge of M/A/R/C's management, the nominees intend
to serve the entire term for which election is sought. The nominees are:
<TABLE>
<CAPTION>
NAME POSITION HELD WITH M/A/R/C
--------------------------------- -------------------------------------------------
<S> <C>
Cecil B. Phillips Director and Chairman of the Board
Rolan G. Tucker Director
Jack D. Wolf Executive Vice President
</TABLE>
See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,"
"INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD,"
"EXECUTIVE COMPENSATION," and "CERTAIN TRANSACTIONS."
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of a majority of the shares of common stock
represented in person or by proxy and entitled to vote at the Annual Meeting is
required to elect each nominee for director.
The Board of Directors recommends that shareholders vote FOR the election
of the nominees.
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information concerning the number of shares of
common stock owned beneficially as of the Record Date by (i) each person known
to M/A/R/C to own more than 5% of the outstanding common stock, (ii) each
director and nominee for director of M/A/R/C, and (iii) all present directors
and corporate officers of M/A/R/C as a group.
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT OF
NAME AND ADDRESS BENEFICIALLY COMMON STOCK
OF BENEFICIAL OWNER OWNED(1) OUTSTANDING
----------------------------------------------- ------------ ------------
<S> <C> <C>
M/A/R/C Inc. Employee Stock Ownership Trust 305,518(2) 10.9%
Heartland Advisors, Inc. 330,300 11.8%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Investment Advisers, Inc. 204,841(3) 7.3%
3700 First Bank Place
Minneapolis, MN 55440
Brinson Partners, Inc. 159,876 5.7%
209 South LaSalle
Chicago, Illinois 60604-1295
Brinson Trust Company 211,584 7.6%
209 South LaSalle
Chicago, Illinois 60604-1295
Cecil B. Phillips 268,561(2)(4) 9.6%
7850 North Belt Line Road
Irving, Texas 75063
Elmer L. Taylor, Jr. 58,167(5) 2.1%
Route 1, Box 252
Jacksboro, Texas 76458
Sharon M. Munger 123,618(6) 4.4%
7850 North Belt Line Road
Irving, Texas 75063
Jack D. Wolf 86,370(7) 3.1%
7850 North Belt Line Road
Irving, Texas 75063
Thomas J. Tierney 32,691(2) 1.2%
2301 North Akard
Suite 300
Dallas, Texas 75201
Rolan G. Tucker 8,970 *
6934 Royal Lane
Dallas, Texas 75230
Alvin A. Achenbaum 1,200(2)(8) *
1325 Avenue of the Americas
New York, New York 10019
All directors and executive officers 690,085(9) 24.7%
as a group (12 persons)
</TABLE>
4
<PAGE> 7
- ---------------
(1) Unless otherwise indicated, each person or group has sole voting and
dispositive power with respect to all these shares.
(2) The Trustee of the Employee Stock Ownership Trust (the "ESOT") votes the
shares held by the ESOT as directed by the beneficiaries of the ESOT and,
except in certain limited circumstances, may acquire and dispose of the
assets of the ESOT only as the Administrative Committee of the ESOT
directs. The Administrative Committee presently consists of Cecil B.
Phillips, Thomas J. Tierney, Alvin A. Achenbaum, and Rolan G. Tucker. As
members of the Committee, these persons may be deemed to share investment
power with respect to the shares held by the ESOT. The total number of
shares held by the ESOT is not included in the number of shares reflected
in the table as being owned by these persons.
(3) 50,700 of these aggregate shares are held by First Interstate Bank of
Texas, N.A., as trustee for M/A/R/C's pension plan, but are managed by
Investment Advisers, Inc. Investment Advisers, Inc. both holds and manages
the remaining 154,141 shares as trustee of M/A/R/C's 401(k) plan.
(4) Includes 52,032 shares owned by Mr. Phillips' spouse and 38,981 shares held
in individual retirement accounts for the primary benefit of Mr. Phillips
and his spouse. Does not include 155,370 shares subject to being acquired
by Mr. Phillips under stock options exercisable within 60 days of the
Record Date.
(5) Does not include 21,752 shares subject to being acquired by Mr. Taylor
under stock options exercisable within 60 days of the Record Date.
(6) Does not include Ms. Munger's beneficial interest in 15,207 shares
allocated to her accounts with the ESOT or 174,404 shares subject to
being acquired by Ms. Munger under stock options and warrants exercisable
within 60 days of the Record Date.
(7) Does not include Mr. Wolf's beneficial interest in 12,302 shares allocated
to his accounts with the ESOT or 58,455 shares subject to being acquired by
Mr. Wolf under stock options and warrants exercisable within 60 days of the
Record Date.
(8) Does not include 6,000 shares subject to being acquired by Dr. Achenbaum
under a nonstatutory stock option exercisable within 60 days of the Record
Date.
(9) Does not include the beneficial interests of these persons in shares
allocated to their accounts with the ESOT or shares subject to stock
options or stock warrants exercisable within 60 days of the Record Date.
* Less than 1%.
5
<PAGE> 8
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
IDENTIFICATION OF DIRECTORS
The names, ages, and related information of the nominees and all directors
of the Corporation as of March 10, 1995, appear below.
NOMINEES
<TABLE>
<CAPTION>
PRESENT OFFICE(S) DIRECTOR
NAME AGE HELD IN THE CORPORATION SINCE
----------------------------------------- --- ---------------------------------- --------
<S> <C> <C> <C>
Cecil B. Phillips 70 Director and Chairman 1981
of the Board
Rolan G. Tucker 70 Director 1983
Jack D. Wolf 41 Executive Vice President --
</TABLE>
Mr. Cecil B. Phillips served as Director, Chairman of the Board, and Chief
Executive Officer of M/A/R/C from May 1983 to August 1993 when he relinquished
the title of Chief Executive Officer. As Chairman of the Board, he continues as
an active M/A/R/C employee. Mr. Phillips also served as Chairman of the Board of
Marketing And Research Counselors, Inc., M/A/R/C's former principal operating
subsidiary, from May 1983 until its merger into M/A/R/C in December 1984;
President and Chief Operating Officer of M/A/R/C from February 1982 to May 1983;
and as President and Chief Executive Officer of Marketing And Research
Counselors, Inc., from July 1965 to May 1983.
Mr. Rolan G. Tucker, a certified public accountant, is active in numerous
business and civic affairs. Until 1989, he served as Chairman of the Board of
Metropolitan Savings and Loan Association, Dallas, Texas, for a period in excess
of five years. From 1976 until 1986, he also was President and Chief Executive
Officer of Metropolitan Savings. Mr. Tucker's affiliation with Metropolitan
Savings ended in August of 1989 after Metropolitan was placed into receivership
by the Office of Thrift Supervision. At the request of federal regulators, Mr.
Tucker also served as Chairman of the Board of Horizon Federal Savings and Loan,
New Orleans, Louisiana, from May 1987 until February 1989. Mr. Tucker was a
member of the Dallas City Council from 1980 to 1983, and he served several terms
as a member of the Board of Directors of the Federal Home Loan Bank of Dallas.
Mr. Tucker's civic activities include service on the Advisory Board of the
Salvation Army, as well as service on the Boards of Directors for the Dallas
Rotary Foundation, and his church.
Mr. Jack D. Wolf is President of M/A/R/C's Targetbase Marketing operating
company, a position he assumed in 1990. Prior to that, Mr. Wolf had advanced
through the ranks of M/A/R/C into progressively responsible positions. Starting
as a data processing manager in 1976, Mr. Wolf was named manager of M/A/R/C's
Greensboro, North Carolina office in 1978. He was elected Vice President of
M/A/R/C in 1981; Senior Vice President in 1984; and Executive Vice President in
1986. Mr. Wolf is active in several marketing organizations, including service
on the Advisory Council for the National Center for Database Marketing.
6
<PAGE> 9
DIRECTORS WHOSE TERMS EXPIRE AT THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD IN 1997
<TABLE>
<CAPTION>
PRESENT OFFICE(S) DIRECTOR
NAME AGE HELD IN THE CORPORATION SINCE
----------------------------------------- --- ---------------------------------- --------
<S> <C> <C> <C>
Thomas J. Tierney 63 Director 1982
Sharon M. Munger 48 Director, Chief Executive Officer, 1983
and President
</TABLE>
Mr. Thomas J. Tierney has been Chairman of the Board of Corporate
Communications Center, Inc. for more than the past five years. Mr. Tierney was
Chairman of the Board of Southwest Newswire, Inc., a company engaged in news
distribution, for more than five years prior to January 1988. For more than five
years prior to December 1986, when he resigned these positions, Mr. Tierney was
Vice President of Criterion Capital, a venture capital company, and
Browning-Ferris Industries. Mr. Tierney has served as a member of the Board of
Directors of Allwaste, Inc. (NASDAQ -- "ALWS"), Houston, Texas, since 1989, and
of Comerica Texas since April 1991. Comerica Texas is a subsidiary of Comerica
Corporation (NYSE -- "CMA").
Ms. Sharon Munger assumed the duties of Chief Executive Officer of M/A/R/C
in August 1993, in addition to her responsibilities as President. She had served
as President and Chief Operating Officer since November 1986. From December 1984
through November 1986, Ms. Munger served as Executive Vice President of M/A/R/C
and President and Chief Operating Officer of M/A/R/C's Marketing Services Group.
Ms. Munger has served in various executive positions with M/A/R/C and its
subsidiaries since January 1978.
DIRECTORS WHOSE TERMS EXPIRE AT THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD IN 1996
<TABLE>
<CAPTION>
PRESENT OFFICE(S) DIRECTOR
NAME AGE HELD IN THE CORPORATION SINCE
----------------------------------------- --- ---------------------------------- --------
<S> <C> <C> <C>
Elmer L. Taylor, Jr. 68 Director, Vice Chairman of the 1981
Board
Alvin A. Achenbaum 69 Director 1987
</TABLE>
Mr. Elmer L. Taylor, Jr., has been a consultant to M/A/R/C since his
retirement from active employment with M/A/R/C in March 1988. He continues to
serve as M/A/R/C's Vice Chairman of the Board, a position he has held since his
election in December 1984. Mr. Taylor also served as Chairman of the Board of
First National Bank at Kennedale, Kennedale, Texas, until it was placed into
receivership in 1990. Mr. Taylor served as President of Marketing And Research
Counselors, Inc., from May 1983 until its merger into M/A/R/C in December 1984
and as its Executive Vice President from 1968 to May 1983. Mr. Taylor was Chief
Operating Officer of Marketing And Research Counselors, Inc., from January 1982
until the merger of Marketing And Research Counselors, Inc. into M/A/R/C in
1984.
Dr. Alvin A. Achenbaum is President of Achenbaum Associates Incorporated.
Prior to that, Dr. Achenbaum was Vice Chairman, Professional Services, of Backer
Speilvogel Bates Worldwide from the Fall of 1989 until the end of 1992. Before
joining Backer Speilvogel Bates Worldwide, Dr. Achenbaum was a founding
principal of Canter, Achenbaum, Associates Inc., New York, New York, a marketing
and management counseling firm established in 1974. Dr. Achenbaum has served in
various executive capacities in the marketing, advertising, and marketing
research industries since 1951.
7
<PAGE> 10
FAMILY RELATIONSHIPS
Ms. Corinne F. Maginnis serves as an Executive Vice President of M/A/R/C at
an annual salary of $168,000. Ms. Maginnis is the sister of Director, President,
and Chief Executive Officer, Sharon M. Munger.
Ms. Cathy C. Phillips serves as M/A/R/C's Vice President of Corporate
Services at an annual salary of $85,000. Ms. Phillips is the wife of Director
and Chairman of the Board, Cecil B. Phillips.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The M/A/R/C Board of Directors held four (4) meetings during the fiscal
year ended December 31, 1994, and took certain other action by unanimous
consent. Every director attended all of the meetings of the Board of Directors
and committees of the Board on which the director served that were held during
the period the person was a director.
The Board of Directors has established three standing committees: an
Executive Committee, an Audit Committee, and a Compensation Committee.
The Executive Committee consists of Cecil B. Phillips, Chairman, and Sharon
M. Munger. The Executive Committee may exercise all the authority of the Board
of Directors in the management of M/A/R/C's business and affairs except as
prohibited by law. The Executive Committee held no formal meetings during the
fiscal year ended December 31, 1994.
The members of the Audit Committee are Rolan G. Tucker, Chairman, Thomas J.
Tierney, and Elmer L. Taylor, Jr. The Audit Committee is responsible for
recommending to the Board an independent accounting firm and, on behalf of the
Board of Directors, reviewing the audit performed by the firm's Board of
Directors and the auditor's annual report to management. Additionally, the Audit
Committee establishes M/A/R/C's investment policies and oversees its investment
portfolio. The Audit Committee held two (2) meetings during the fiscal year
ended December 31, 1994.
The Compensation Committee consists of Cecil B. Phillips, Chairman, Thomas
J. Tierney, Alvin A. Achenbaum, and Rolan G. Tucker. The Compensation Committee
is responsible for reviewing and recommending the various compensation packages
offered to M/A/R/C's key executives and administering M/A/R/C's employee benefit
plans. The Compensation Committee also administers M/A/R/C's 1983 and 1991 stock
option plans and the Key Executive Stock Plan. The Compensation Committee held
three (3) meetings during the fiscal year ended December 31, 1994.
COMPENSATION OF DIRECTORS
Each director who is not a M/A/R/C officer or employee is paid a director's
fee of $12,000 per annum. In addition, each outside director receives $6,000 per
year for each committee of the Board on which the director serves. Officers and
employees of M/A/R/C who serve as directors serve without pay beyond their
regular compensation. M/A/R/C reimburses all directors and officers for their
travel and other necessary business expenses incurred in the performance of
their services. Each director who is not an officer or an employee of M/A/R/C is
entitled to certain benefits on retirement from M/A/R/C's Board of Directors. To
be eligible for these benefits, an outside director must have completed five
years of service on M/A/R/C's Board of Directors. Upon the director's retirement
from the Board and for a period equal to the total number of years of the
director's service on the Board, M/A/R/C will pay the director annual
compensation equal to the average of the annual compensation paid to the
director in the three (3) highest years of service prior to the director's
retirement. These benefits are unfunded general obligations. M/A/R/C accrues a
portion of the cost of these benefits annually. The aggregate amount expensed in
1994 was $155,000.
8
<PAGE> 11
M/A/R/C has a noncompetition agreement with Elmer L. Taylor, Jr., Vice
Chairman of the Board of Directors, under which Mr. Taylor is obligated not to
compete with M/A/R/C through December 31, 1997. Mr. Taylor is compensated at the
rate of $60,000 per year, and M/A/R/C also provides other benefits including an
automobile, health insurance coverage, life insurance coverage, and
reimbursement of expenses incurred on M/A/R/C's behalf.
M/A/R/C has an agreement with Achenbaum Associates Incorporated, a company
wholly owned by Director Alvin A. Achenbaum, for consulting services. The
agreement was amended in 1994 to provide that Dr. Achenbaum's company will be
compensated on an hourly basis rather than on an annual fee basis. In addition,
the agreement provides that M/A/R/C will reimburse expenses and will pay the
furniture and equipment costs for Dr. Achenbaum's office. M/A/R/C paid Dr.
Achenbaum's company $100,029 and incurred depreciation expenses of $19,555 under
the agreement in 1994.
See "EXECUTIVE COMPENSATION" and "CERTAIN TRANSACTIONS."
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
reviewing and recommending the various compensation packages offered to
M/A/R/C's key executives. The following report sets out the elements and
describes the basis on which 1994 compensation determinations were made by the
Committee with respect to M/A/R/C's executive officers.
COMPENSATION COMMITTEE REPORT
COMPENSATION PHILOSOPHY
The Committee follows a series of guidelines when making compensation
decisions. The Committee believes that executive compensation programs for
M/A/R/C should accomplish the following:
- Attract, retain, and motivate highly talented individuals and offer
competitive levels of annual compensation for their expertise,
creativity, and leadership.
- Provide annual incentive opportunities which focus the executive's
efforts and attention on M/A/R/C's annual and long-term business
objectives and strategies, and offer awards for meeting M/A/R/C's
business goals.
- Align the executive's long-term vision and thinking with that of
M/A/R/C's owners by offering stock-based incentives which link the
executive's remuneration to returns experienced by shareholders.
In general, the Committee believes that it should set executive
compensation levels in the 75th percentile or higher of M/A/R/C's peer group in
order to attract and retain competent management. The Committee considers
information gleaned from public filings by other reporting companies engaged in
the marketing research industry, the compensation survey published each year by
the Council of American Survey Research Organizations (the primary trade
organization for the marketing research industry), and other available industry
information. The Committee believes that none of the companies it considered are
the companies that form either the S & P 500 composite or the DJ Other
Industrial Services composite as shown in the Comparison of Cumulative
Shareholder Return Chart at page 15.
9
<PAGE> 12
COMPENSATION PROGRAMS AND POLICIES
To meet M/A/R/C's objectives, the Committee administers three components of
the executive compensation program:
- Base Salary
- Annual Incentive Awards
- Stock Ownership Programs
The Committee reviews these programs annually to ensure that they meet
M/A/R/C's compensation goals and specifications. The various elements of the
compensation program for executive officers are further discussed below:
BASE SALARY
The Committee believes that in order to retain top talent, it is crucial
that M/A/R/C offer competitive levels of base salary to its executives. The
Committee sets salary levels by evaluating the performance of the executive and
by referencing M/A/R/C's competitive labor market. For the most part, the
Committee considers the competitive labor market to be other firms in the
marketing research industry and certain business services companies. The
Committee reviews base salaries annually for competitiveness and makes
adjustments as it feels necessary.
In addition to using market data to set executive salaries, the Committee
also takes into consideration each executive's overall experience, expertise,
tenure with M/A/R/C, and length of service in the executive's current position
when setting appropriate salary levels. The Committee feels that this policy
provides stability and offers compensation that is commensurate with each
executive's relative position and contribution to M/A/R/C.
ANNUAL INCENTIVE COMPENSATION
A professional services business is uniquely dependent upon the expertise
and motivation of its employees for success. The Committee strongly believes in
providing performance incentives that promote the achievement of shared and
individual performance goals. Such incentives allow employees to share in the
rewards of their collective and individual performance for the Company. The
Committee generally relies on the Chief Executive Officer's recommendations when
making awards to those who report to the Chief Executive Officer. Awards will
vary depending upon individual performance and M/A/R/C's overall performance.
The Committee sets aside a bonus pool each year equal to 18.5% of M/A/R/C's
income before taxes after giving effect to the bonus pool calculation. If the
income before taxes, adjusted for the bonus pool calculation, exceeds the
Committee's predetermined profit objective for the year by at least 17%, the
bonus pool expands to 23.125% of M/A/R/C's income before taxes as adjusted to
take the bonus pool calculation into account. The predetermined profit objective
for 1994 set by the Committee was $3.6 million. This incentive program delivers
annual cash awards from the bonus pool to participants based on their individual
contributions to M/A/R/C and their operating unit. In past years this bonus
generally ranged from 10% to 30% of base salary. Beginning with the 1993 bonus
pool, the Committee decided to contribute funds available from the bonus pool to
M/A/R/C's employee stock ownership plan (the "ESOP") sufficient to fund the
annual installment due to M/A/R/C to repay a $2.5 million borrowing by the ESOP
for the purpose of
10
<PAGE> 13
acquiring M/A/R/C's common stock. (See the discussion of the ESOP at page 15.)
Any balance in the bonus pool remaining after the ESOP contribution is available
for cash awards.
In 1994, the Committee decided to emphasize M/A/R/C's sales functions by
devoting the entire bonus pool available for cash incentives to reward those
persons who achieved predetermined sales objectives. Since M/A/R/C exceeded its
overall performance goal in 1994, the bonus pool expanded from 18.5% of income
before taxes to 23.125%, making $752,200 available for cash awards after the
ESOP contribution. This money was divided 60% to the sales group and 40% to the
group known as "senior partners" -- those having major sales and marketing
responsibilities. The 31 persons qualifying for the sales group portion of the
bonus pool were awarded bonuses proportionate to their adjusted sales. Eleven
"senior partners" received the balance of the bonus pool based upon their
respective impact on M/A/R/C's core accounts, leadership in acquiring new
accounts, and contribution to the definition and implementation of M/A/R/C's
sales strategies.
STOCK OWNERSHIP PROGRAMS
The Committee believes that if key executives are given opportunities to
own significant levels of M/A/R/C's stock, they will have strong incentives to
enhance the value of M/A/R/C. The Committee feels that the best interests of the
shareholders are served when there is a link between the executives'
compensation and the returns the shareholders receive from ownership. Thus,
M/A/R/C administers several stock-based programs which deliver stock incentives
to executives and allow the executives the opportunity to increase their
personal holdings in M/A/R/C. Each stock-based incentive plan is discussed in
greater detail below:
- The 1991 Nonstatutory Executive Stock Plan allows for the issuance of
stock options. Under this plan, the stock-based instrument will
appreciate in value if and only if M/A/R/C's stock appreciates in value
from the time of grant. In this manner, shareholders are assured that
participants will be motivated to act in a manner that benefits
shareholders.
- The Key Executive Stock Plan gives key executives selected by the Board
of Directors the opportunity to purchase warrants to acquire M/A/R/C
common stock and to acquire restricted stock to be held in tandem with
the warrants. The warrants are sold to the executive at fair market
value. M/A/R/C may guarantee a loan to the executive to purchase these
warrants which the executive is primarily liable to repay. The restricted
stock issued to the executive in tandem with the warrants must be
forfeited upon any of several events, including the exercise of the
corresponding warrant. In conjunction with this plan, a bonus fund
consisting of 25% of each annual increase in M/A/R/C's income before
taxes achieved after the base year 1990 is set aside for these key
executives to assist in their purchase of warrants and options. No
allocations of earnings are made from this fund as a result of regaining
previous levels of profitability. The Committee feels that this plan
enables executives to increase their proprietary interest in M/A/R/C and
further serves the shareholders' interests.
DISCUSSION OF THE 1994 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
Sharon M. Munger was appointed Chief Executive Officer in August 1993, in
addition to her responsibilities as President, with no increase in salary. In
1994, the Committee continued Ms. Munger's salary at the previous year's level
of $275,000 at her request. Rather than accept an increase in salary, Ms. Munger
requested that the Committee tie part of her compensation to increases in the
value of the shareholders' equity. Ms. Munger disqualified herself from
eligibility for participation in the cash bonus pool and instead opted to accept
a warrant for the purchase of M/A/R/C stock. The Committee awarded a warrant
entitling Ms. Munger to purchase 50,000 shares of M/A/R/C common stock at $10.75
per share (the
11
<PAGE> 14
market price on the date of grant). In this way, a substantial portion of the
Chief Executive Officer's compensation was tied to increases in shareholder
values during her tenure.
CONCLUSION
The Committee believes that M/A/R/C's compensation programs are reasonable
and competitive and offer opportunities for executives to be rewarded for
enhancing results. The stock-based incentive programs continue to provide the
necessary link between executive performance and shareholder returns.
Cecil B. Phillips, Chair,
and Alvin A. Achenbaum,
Thomas J. Tierney, and
Rolan G. Tucker, members.
As of December 31, 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of nonemployee directors, except for
Cecil B. Phillips, the Chairman of the Committee. Mr. Phillips' base salary is
$200,000 per year. In addition, Mr. Phillips received the first annual
installment in 1994 under his supplemental executive retirement plan, as
discussed at page 19. In addition, an interest-bearing loan made to Mr. Phillips
in a prior year had a balance of $175,000 at December 31, 1994. M/A/R/C also
made advances to Mr. Phillips in 1994 aggregating $200,000. The highest
aggregate principal amount of Mr. Phillips' indebtedness in 1994 was $375,000.
Since December 31, 1994, M/A/R/C made further advances to Mr. Phillips totaling
$60,000. Subsequently, Mr. Phillips repaid the entire $260,000 in advances he
received in 1994 and 1995. The Corporation also guarantees up to $500,000 of a
bank loan to Mr. Phillips.
As discussed at page 8 under the caption "Compensation of Directors," Dr.
Alvin A. Achenbaum is the sole owner of Achenbaum Associates Incorporated, which
has a consulting agreement with M/A/R/C. M/A/R/C paid fees and expenses to or
for the benefit of Achenbaum Associates Incorporated in 1994 totaling $119,584.
The agreement is subject to M/A/R/C's review and cancellation at the end of any
quarter.
12
<PAGE> 15
SUMMARY TABLE OF EXECUTIVE COMPENSATION
The following table provides summary information concerning compensation of
M/A/R/C's Chief Executive Officer and each of the four other most highly
compensated executive officers for the periods indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------- RESTRICTED ---------- -----------
OTHER ANNUAL STOCK OPTIONS/ LONG-TERM ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS(S) SARS INCENTIVE COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#) PAYOUTS ($) ($)(2)
- ------------------ ----- ------- ------- ------------ ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cecil B. Phillips 1994 200,000 0 400,000 0 0 0 0
Director and 1993 400,000 0 0 0 0 0 0
Chairman of the 1992 400,000 0 0 0 120,000 0 0
Board
Sharon M. Munger 1994 275,000 0 0 0 50,000 0 1,507
Director, Chief 1993 275,000 0 0 0 0 0 2,152
Executive Officer, 1992 275,000 0 0 0 0 0 0
and President
Peter B. Bogda 1994 188,000 13,000 0 0 0 0 1,507
Executive Vice 1993 196,000 0 0 0 0 0 1,944
President 1992 196,000 17,000 0 0 0 0 0
Jack D. Wolf 1994 180,000 30,000 0 0 0 0 1,507
Executive Vice 1993 180,000 0 0 0 0 0 1,640
President 1992 180,000 0 0 0 0 0 0
Michael P.
Redington 1994 160,000 30,000 0 0 0 0 1,507
Executive Vice 1993 143,750 0 0 0 17,000 0 2,135
President 1992 125,000 6,100 0 0 0 0 0
</TABLE>
- ---------------
(1) Payments under M/A/R/C's supplemental executive retirement plan.
(2) All amounts in this column represent allocations made under M/A/R/C's
employee stock ownership plan.
13
<PAGE> 16
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets out information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options and SARs held as of the end of the fiscal year:
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUE
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END FY-END
--------------- ---------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---------------------- --------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
C. Phillips 0 0 155,368 $ 424,477
0 0
S. Munger 0 0 37,524 $ 212,383
8,880 51,593
P. Bogda 0 0 15,821 $ 104,758
3,000 17,430
J. Wolf 0 0 11,688 $ 67,907
2,922 16,977
M. Redington 0 0 17,632 $ 96,288
6,958 34,272
</TABLE>
COMPARISON OF CUMULATIVE SHAREHOLDER RETURN
The following graph provides a comparison with the stated indices of the
yearly percentage change in M/A/R/C's cumulative total shareholder return on its
common stock for a five-year period, as required by the Rules of the U.S.
Securities and Exchange Commission:
14
<PAGE> 17
COMPARISON OF CUMULATIVE SHAREHOLDER RETURN 1989 - 1994
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500
(FISCAL YEAR COVERED) M/A/R/C INC INDEX PEER GROUP
--------------------- ----------- -------- ----------
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 75.51 96.89 93.38
1991 98.98 126.42 118.54
1992 75.92 136.05 134.94
1993 78.37 149.76 146.09
1994 124.90 151.74 143.52
</TABLE>
Data Source: S&P Compustat Services
COMPENSATION PURSUANT TO PLANS
ESOP AND 401(K) PLAN
Substantially all salaried employees, including officers, are eligible to
participate in M/A/R/C's Employee Stock Ownership Plan and its related Section
401(k) Plan (the "ESOP and 401(k) Plan"). There were 543 employees participating
in the ESOP and 401(k) Plan at December 31, 1994. The ESOP and 401(k) Plan may
purchase shares of common stock for the benefit of participating employees. The
ESOP and 401(k) Plan may be amended by the Board of Directors at any time. Any
amendment could have the effect of increasing the cost of the ESOP and 401(k)
Plan to M/A/R/C. No amendment, however, may divert any part of the trust fund
for the ESOP and 401(k) Plan to purposes other than the exclusive benefit of
participants in the ESOP and 401(k) Plan and their beneficiaries.
Participating employees may contribute up to the lesser of 10% of their
salary or $8,475 (or, if greater, the maximum amount permitted under the
applicable Internal Revenue Service regulations) to the ESOP and 401(k) Plan
through payroll deductions. M/A/R/C's matching contributions, if any, are
determined by the Compensation Committee of the Board of Directors based on
M/A/R/C's performance at the close of the fiscal year.
The ESOP and 401(k) Plan also affords additional investment options,
including an equity fund, a fixed income fund, and a bond fund in addition to a
M/A/R/C stock fund.
15
<PAGE> 18
When a participant in the ESOP and 401(k) Plan terminates employment, he
may have a vested benefit in the amounts allocated to his account. Vesting
occurs at the rate of 20% per year of employment after an initial vesting of 20%
at the end of the second year.
On January 18, 1993, the Board of Directors authorized the Corporation to
loan $2.5 million to the Employee Stock Ownership Plan for the purpose of
acquiring M/A/R/C common stock in the open market or in negotiated transactions.
The loan is repayable over a 15-year period with interest at 7.04% per annum. As
of the Record Date, 305,518 shares of M/A/R/C common stock had been acquired in
open market transactions at an aggregate cost of $2,446,000, or an average of
$8.01 per share. M/A/R/C made a contribution of $259,000 to the ESOP for the
fiscal year ended December 31, 1994. This contribution provided the funds the
ESOP needed to pay the 1994 installment due to M/A/R/C on the loan.
PENSION PLAN
Substantially all M/A/R/C employees, including officers, are also eligible
for participation in M/A/R/C's pension plan (the "Pension Plan"). There were 822
persons participating in the Pension Plan as of January 1, 1994. The Pension
Plan provides that it may be amended by the Board of Directors at any time. Any
amendment could have the effect of increasing the cost of the Pension Plan to
M/A/R/C. No amendment, however, may divert any part of the trust fund for the
Pension Plan to purposes other than the exclusive benefit of participants in the
Pension Plan and their beneficiaries.
The cash compensation table does not include the accrual of contributions
to the Pension Plan for the account of specified persons, since the Pension Plan
is a defined benefit plan, and the accrual in respect of a specified person is
not separately or individually calculated by the actuaries for the Pension Plan.
The Pension Plan provides, in general, for monthly payments to, or on
behalf of, each covered employee upon the employee's retirement at his or her
social security retirement age, disability, or death, based upon years of
service, and the highest average monthly rate of compensation for the five
highest consecutive years preceding retirement. The compensation covered by the
Pension Plan includes all amounts paid to participants for performance of
personal services that are required to be reported as wages for federal income
tax purposes.
Average monthly rate of compensation ("Average Monthly Compensation") is
determined by averaging pay in the five consecutive years of employment that
produce the highest average.
The Pension Plan provides a lifetime monthly pension commencing at the
participant's social security retirement age which is equal to:
(a) 1.5% of Average Monthly Compensation, multiplied by the number of
years of benefit service, less
(b) 1.25% of the primary social security benefit payable to the
participant upon retirement, multiplied by the number of years of
benefit service (limited to a maximum of 35 years).
No participant receives a benefit less than $12.00 per month per year of
benefit service.
The amount of pension actually accrued under the pension formula is payable
as a life annuity. If the participant is married, the benefit is payable in the
form of an actuarially reduced benefit with 50% of the benefit then payable to
the surviving spouse upon the death of the retired participant.
16
<PAGE> 19
The following table shows the estimated annual benefits payable at age 65
to persons in specified compensation and benefit service categories (assuming
the participant reaches normal retirement during 1994):
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS UPON
HIGHEST RETIREMENT WITH INDICATED YEARS OF CREDITED
CONSECUTIVE SERVICE
FIVE-YEAR AVERAGE --------------------------------------------------
SALARY 15 20 25 30 35
-------------------------------------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 40,000........................... $ 6,536 $ 8,715 $ 10,894 $ 13,073 $ 15,251
90,000........................... 17,636 23,514 29,393 35,271 41,150
120,000........................... 24,386 32,514 40,643 48,771 56,900
160,000........................... 33,386 44,514 55,643 66,771 77,900
200,000........................... 42,386 56,514 70,643 84,771 98,900
240,000........................... 51,386 68,514 85,643 102,771 119,900
280,000........................... 60,386 80,514 100,643 120,771 140,900
320,000........................... 69,386 92,514 115,643 138,771 161,900
</TABLE>
In no event may the estimated benefit exceed the maximum benefit limitation
under Section 415 of the Internal Revenue Code. The maximum benefit allowable
under Section 415 during 1994 amounts to $118,800 unless, prior to January 1,
1983, a higher benefit had been accrued under prior law. In that case, the
maximum benefit limitation will be the actual benefit accrued subject to a
maximum of $136,425. For 1994, earnings in excess of $150,000 were not
considered in determining plan benefits. Benefits accrued to December 31, 1988,
are protected.
The credited years of service under the Pension Plan and the current yearly
compensation covered by the Pension Plan for M/A/R/C's five most highly
compensated executive officers whose compensation during the fiscal year ended
December 31, 1994, exceeded $66,000, and who are eligible to participate in the
Pension Plan, are as follows:
<TABLE>
<CAPTION>
CURRENT
COMPENSATION
CREDITED YEARS COVERED BY
NAME OF INDIVIDUAL OF SERVICE PLAN
- --------------------------------------------------------------------- -------------- ------------
<S> <C> <C>
Sharon M. Munger..................................................... 22 $150,000
Peter B. Bogda....................................................... 22 $150,000
Jack D. Wolf......................................................... 19 $150,000
Corinne F. Maginnis.................................................. 17 $150,000
Michael P. Redington................................................. 10 $150,000
</TABLE>
1983 STOCK OPTION PLAN
M/A/R/C's 1983 Stock Option Plan (the "1983 Plan") was adopted by the Board
of Directors on March 10, 1983, approved by M/A/R/C's shareholders on July 28,
1983, and amended by the shareholders on July 17, 1986. The 1983 Plan expired by
its terms on March 10, 1993, so no longer can options on shares of common stock
be granted under this plan. As of December 31, 1994, options to acquire 382,526
shares were outstanding, and 282,032 of these were exercisable. No options have
been issued in tandem with SARs as permitted by the 1983 Plan. The 1983 Plan was
designed to serve as an incentive for attracting and retaining qualified and
competent employees.
The Compensation Committee of the Board of Directors administers and
interprets the 1983 Plan.
17
<PAGE> 20
Each option is exercisable after the period or periods specified in the
option agreement, but no option is exercisable after the expiration of ten years
from the date of grant.
None of M/A/R/C's five most highly compensated executive officers were
granted, or exercised, any stock options under the 1983 Plan during the fiscal
year ended December 31, 1994.
KEY EXECUTIVE STOCK PLAN
M/A/R/C implemented a Key Executive Stock Plan (the "KESP") in the latter
part of 1990. Under the KESP, key executives are given the opportunity to
purchase warrants to acquire M/A/R/C common shares. The price of the warrants is
determined as the fair market value of the warrants as of the date that the
warrants are issued, using the Black-Scholes Options Pricing Model. These
warrants are not exercisable within the first two years following the purchase,
but may be exercised at any time during the following five years. The exercise
price is determined as the average daily price of M/A/R/C stock as quoted by
NASDAQ in the month preceding the issuance of the warrant. The warrants are
restricted securities. The total number of warrants outstanding at December 31,
1994 under the KESP was 180,045.
The Board of Directors amended the KESP in January 1993 to authorize the
issuance of one share of common stock to be held in tandem with each warrant.
The shares are nontransferable and must be forfeited if the executive leaves
M/A/R/C's employment or if the corresponding warrant is exercised or sold. At
March 10, 1995, a total of 180,045 shares of restricted stock had been issued
and were outstanding under the KESP.
Two key executives sold an aggregate of 85,152 warrants issued under the
KESP during the year ended December 31, 1994. These executives returned to
M/A/R/C the restricted shares issued in tandem with the warrants.
In conjunction with the adoption of the KESP, M/A/R/C also adopted a bonus
plan for key executives that provides for the establishment of a bonus fund
consisting of 25% of each annual increase in income before taxes achieved after
the base year of the plan, calendar year 1990. Currently, M/A/R/C's income
before taxes must exceed $5,174,500 in order for funds to accrue to the fund in
any year. This fund is to be allocated by the Compensation Committee, and
bonuses are to be used by the participants to assist them in exercising their
warrants under the KESP and their options under the 1983 Stock Option Plan. No
allocations of earnings are to be made to the fund as a result of regaining
previous levels of profitability. The bonus program is to continue until the
participants exercise or surrender their warrants and options, or the warrants
and options expire. No bonuses were awarded under this plan in 1994.
NONSTATUTORY EXECUTIVE STOCK PLAN
In 1991 the Board of Directors adopted a Nonstatutory Executive Stock Plan
(the "NESP"), reserving 240,000 shares of M/A/R/C's common stock for issuance
upon the exercise of options granted under the NESP. In September 1994, the NESP
was amended to reserve an additional 300,000 shares for issuance. During 1994,
options to purchase an aggregate of 249,550 shares of common stock were granted
at an average exercise price of $9.39 per share. No options were cancelled or
exercised. At December 31, 1994: options on 369,550 shares of common stock were
outstanding under the NESP at an average price of $9.52 per share; there were
170,450 shares still available for grant; and options on 123,000 shares were
exercisable. The NESP is designed to attract, motivate, and retain highly
competent management level employees.
The Compensation Committee of the Board of Directors administers and
interprets the NESP. The NESP provides for the granting of nonstatutory stock
options on terms and at prices determined by the
18
<PAGE> 21
Committee; but the exercise price of incentive stock options must not be less
than the greater of (i) the book value or (ii) the par value of the common stock
on the date of grant. Each option is exercisable after the period or periods
specified in the option agreement, but no option may be exercised after the
expiration of ten years from the date of grant. The options and the shares
issued under the NESP are restricted securities.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS
M/A/R/C maintains supplemental executive retirement plans ("SERPs") for
four key employees. Two of these employees are vested in their benefits. One of
the beneficiaries is Cecil B. Phillips, one of M/A/R/C's five most highly
compensated executive officers. Mr. Phillips received $400,000 in 1994 and will
receive $200,000 in 1995 and in each of the nine years following. The SERPs are
unfunded general obligations for which M/A/R/C reserves each year. Subject to
certain conditions, each of the SERPs vests after the covered employee reaches
his or her retirement age under the Pension Plan. M/A/R/C has reserved an
aggregate of $1,631,000 to cover these SERPs.
If any key employee covered by a SERP dies or becomes disabled prior to the
expiration of benefits, the benefits will be paid to the disabled employee or to
a beneficiary named by the employee.
CERTAIN TRANSACTIONS
M/A/R/C made advances to Cecil B. Phillips and guaranteed a loan as
discussed at page 12 under the caption "Compensation Committee Interlocks and
Insider Participation."
M/A/R/C has an agreement with Elmer L. Taylor, Jr., Director and Vice
Chairman of M/A/R/C's Board of Directors, under which Mr. Taylor is obligated
not to compete with M/A/R/C, as discussed at page 9 under the caption
"Compensation of Directors." The balance of Mr. Taylor's interest-bearing loans
from M/A/R/C in prior years was $57,500 in principal at December 31, 1994. The
highest aggregate principal amount of Mr. Taylor's indebtedness to M/A/R/C
during the fiscal year ended December 31, 1994, was $57,500. Mr. Taylor's
indebtedness bears interest at a floating rate equal to the prime rate.
In January 1993, M/A/R/C entered into a consulting agreement with Achenbaum
Associates Incorporated, a company wholly owned by Director Alvin A. Achenbaum,
as discussed at page 9 under the caption "Compensation of Directors" and at page
12 under the caption "Compensation Interlocks and Insider Participation."
SEE "INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES OF THE
BOARD" and "EXECUTIVE COMPENSATION."
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Coopers & Lybrand, L.L.P. served as the Corporation's independent auditors
during fiscal 1994 and will continue as the Corporation's independent auditors
during fiscal 1995. Representatives of Coopers & Lybrand, L.L.P. are expected to
be present at the Annual Meeting with the opportunity to make a statement if
they desire to do so and are expected to be available to respond to appropriate
questions.
19
<PAGE> 22
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, shareholders may present proper proposals for inclusion in M/A/R/C's
proxy statement and for consideration at its Annual Meeting of Shareholders by
submitting their proposals in a timely manner. In order to be included for the
Annual Meeting of Shareholders to be held in 1996, shareholder proposals must be
received by M/A/R/C no later than December 29, 1995, and must otherwise comply
with the requirements of Rule 14a-8.
By Order of the Board of Directors
/s/ HAROLD R. CURTIS
Harold R. Curtis
Secretary
March 20, 1995
Irving, Texas
20
<PAGE> 23
THE M/A/R/C GROUP
7850 NORTH BELT LINE ROAD
IRVING, TEXAS 75063
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned (1) acknowledges receipt of the Notice, dated
March 20, 1995, of the Annual Meeting of Shareholders of The M/A/R/C
Group (the "Company") to be held at the principal offices of the
Company, 7850 North Belt Line Road, Irving, Texas 75063, April 20,
1995, at 10:00 a.m., Dallas Time, and the Proxy Statement attached to
the Notice; and (2) appoints Cecil B. Phillips and Harold R. Curtis,
and each of them, as Proxies, each with power to appoint his
substitute, to represent and vote, as designated below, all the
shares of Common Stock, par value $1.00 per share, of the Company
held of record by the undersigned on March 10, 1995 (the "Record
Date"), or with respect to which the undersigned is entitled to vote
and act, at the meeting and any adjournment(s) thereof.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: / / FOR all nominees listed below / / WITHHOLD AUTHORITY
to vote for all nominees listed below
</TABLE>
NOMINEES
Cecil B. Phillips, Rolan G. Tucker and Jack D. Wolf
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
---------------------------------------------------------------------
The undersigned hereby revokes any proxy or proxies heretofore given
to vote upon or act with respect to such stock and hereby ratifies
and confirms all that the Proxies, their substitutes, or any of them,
may lawfully do by virtue hereof.
(Continued, and to be signed, on the reverse side)
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF THE
PERSONS LISTED ABOVE AND IN THE PROXY STATEMENT.
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment(s) thereof.
Dated: , 1995
-------------------------
SIGNATURE(S)
Dated: , 1995
-------------------------
SIGNATURE(S)
Please execute this Proxy
as your name appears
herein. When shares are
held by joint tenants,
both should sign. When
signing as attorney,
executor, administrator,
trustee, or guardian,
please give full title as
such. If a corporation,
please sign in full
corporate name by the
president or other
authorized officer. If a
partnership, please sign
in partnership name by
authorized person. If
shares are held jointly,
each shareholder named
should sign.
<PAGE> 24
ESOP BALLOT
CONFIDENTIAL VOTING INSTRUCTIONS FOR ANNUAL MEETING
OF SHAREHOLDERS OF THE M/A/R/C GROUP TO BE HELD APRIL 20, 1995
The undersigned participant in the M/A/R/C Inc. Employee Stock
Ownership Plan (the "Plan") acknowledges receipt of (1) the Notice of
Annual Meeting of Shareholders of The M/A/R/C Group (the "Company")
to be held at the principal offices of the Company, 7850 North Belt
Line Road, Irving, Texas, April 20, 1995, at 10:00 a.m., Dallas time,
and (2) the accompanying Proxy Statement. The undersigned directs
Investment Advisers, Inc., Trustee, to vote (or cause to be voted)
all shares of the Company's Common Stock allocated to the
undersigned's account under the Plan and standing in the Trustee's
name on March 10, 1995, as follows:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: / / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed below
below)
</TABLE>
NOMINEES
Cecil B. Phillips, Rolan G. Tucker and Jack D. Wolf
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
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2.IN THE DISCRETION OF THE TRUSTEE OR ITS PROXIES ON ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE MEETING. / / FOR / / AGAINST
(Continued, and to be signed, on the reverse side)
THESE CONFIDENTIAL VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY.
Dated: , 1995
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Name (Please Print)
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Signature of Participant
Please sign your name as
your account is
maintained under the Plan
and return promptly in
the envelope provided.
