<PAGE>
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
LCS INDUSTRIES, INC.
______________________________________________________________________________
(Name of Registrant as Specified in Charter)
LCS INDUSTRIES, INC.
______________________________________________________________________________
Name of Person(s) Filing Proxy Statement, if Other than Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
2) Aggregate number of securities to which the transaction applies:
___________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
___________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
5) Total fee paid:
___________________________________________________________________________
/ / 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.: Schedule 14A
___________________________________________________________________________
3) Filing Party: LCS Industries, Inc.
___________________________________________________________________________
4) Date Filed:
December 17, 1996
___________________________________________________________________________
<PAGE>
LCS INDUSTRIES, INC.
120 BRIGHTON ROAD
CLIFTON, NEW JERSEY 07012-1694
December 30, 1996
Dear Stockholder:
You are invited to attend the 1997 Annual Meeting to be held on February
11, 1997 in Weehawken, New Jersey.
Information about the Annual Meeting, including a listing and discussion
of the matters on which the stockholders of the Company will act, is set
forth in the accompanying Notice of Annual Meeting and Proxy Statement.
Whether or not you plan to attend the Meeting, you can be assured your
shares are represented at the Meeting by promptly completing, signing, dating
and returning your proxy form in the enclosed envelope.
Cordially,
/s/ Arnold J. Scheine
Arnold J. Scheine,
President
<PAGE>
LCS INDUSTRIES, INC.
120 BRIGHTON ROAD
CLIFTON, NEW JERSEY 07012-1694
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of LCS Industries, Inc.:
The Annual Meeting of Stockholders of LCS Industries, Inc. (the "Company")
will be held at the offices of the Company's subsidiary, The SpeciaLISTS
Ltd., located at 1200 Harbor Boulevard, Weehawken, New Jersey, on Tuesday,
February 11, 1997 at 10:00 a.m., Eastern Standard Time, for the following
purposes:
1. To elect one Director to hold office until the Annual Meeting of
Stockholders in 2000 and until his successor shall be elected and shall
qualify;
2. To ratify the appointment of Deloitte & Touche LLP to serve as the
Company's independent auditors for the fiscal year ending September 30,
1997;
3. To ratify the granting of non-qualified stock options to Mr. Arnold J.
Scheine, President and Chief Executive Officer and Mr. Marvin Cohen,
Senior Vice President and Secretary, to purchase 23,600 and 11,800
shares, respectively, of the Company's Common Stock, par value $.01;
4. To approve the 1996 Non-Employee Directors Stock Option Plan;
5. To consider and act upon such other and further business as may
properly come before the Meeting or any adjournments thereof.
Only stockholders of record as of the close of business on December 16, 1996
holding certificates reflecting the two-for-one reclassification of the
Company's Common Stock effective June 1, 1983, are entitled to notice of, and
to vote at, the Meeting.
Marvin Cohen
Secretary
December 30, 1996
<PAGE>
LCS INDUSTRIES, INC.
120 BRIGHTON ROAD
CLIFTON, NEW JERSEY 07012-1694
DECEMBER 30, 1996
PROXY STATEMENT
FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
The Board of Directors (the "Board") of LCS Industries, Inc. (the
"Company") solicits your proxy for use at the 1997 Annual Meeting of
Stockholders (the "Meeting") and any adjournment or adjournments thereof. The
approximate date on which this Proxy Statement is first being sent to the
stockholders is December 30, 1996. If a stockholder specifies on the proxy
form a choice with respect to the proposals hereinafter set forth, the stock
will be voted accordingly. In the absence of specific instructions, proxies
will be voted (i) FOR the election of the one proposed Director recommended
by the Board (Proposal 1), (ii) FOR the proposal to ratify the selection of
Deloitte & Touche LLP by the Board as independent auditors of the Company for
the 1997 fiscal year (Proposal 2), (iii) FOR the proposal to ratify the
granting of non-qualified stock options to Messers. Scheine and Cohen to
purchase 23,600 and 11,800 shares, respectively, of the Company's Common Stock,
par value $.01 (Proposal 3) and (iv) FOR the approval of the 1996
Non-Employee Directors Stock Option Plan (Proposal 4).
Only stockholders of record at the close of business on December 16, 1996
(the "Record Date") are entitled to vote at the Meeting, provided, that in
connection with a two-for-one reclassification provided for in the Restated
Certificate of Incorporation adopted by the stockholders on May 24, 1983,
stockholders who had not exchanged their old certificates for certificates
representing reclassified shares as of the Record Date are not entitled to
vote their shares at the Meeting. A list of stockholders of the Company
entitled to vote at the Meeting may be examined by any stockholder for any
purpose germane to the Meeting during ordinary business hours on or after
December 23, 1996, at the offices of The SpeciaLISTS Ltd. located at 1200
Harbor Boulevard, Weehawken, New Jersey. Of the actions proposed to be taken
at the Meeting by a vote of the stockholders, the election of the Director
will require the approval of a plurality of the votes cast. All other
proposals will require the approval of a majority of shares present in person
or represented by proxy at the Meeting and entitled to vote. As of the Record
Date, there were outstanding 4,603,985 shares of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), of which the holders of
4,566,339 shares are entitled to vote at the Meeting. Each share of Common
Stock entitled to vote at the Meeting is entitled to one vote. The Common
Stock is the only issued and outstanding voting security of the Company.
In addition to the use of the mails, the solicitation of proxies may be
made in person or by telephone, telecopy or telegraph by officers or regular
employees of the Company or its subsidiaries, none of whom will receive any
additional remuneration
<PAGE>
therefor. The costs of solicitation will be borne by the Company, and the
Company will reimburse brokerage houses, banks, custodians, nominees and
fiduciaries for forwarding proxy material to beneficial owners of stock.
Proxies are revocable at any time prior to the voting at the Meeting. The
right to revoke a proxy prior to its use is not subject to any limitation or
condition.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, to the knowledge of the Company, certain
information regarding the beneficial ownership of the Company's Common Stock
as of November 29, 1996 (except as otherwise noted in footnote (5) to such
table): (i) by each person or group known by the Company to own beneficially
more than five percent of the Company's Common Stock; (ii) by each Director
of the Company; (iii) by each of the five most highly compensated executive
officers and other significant employees (the "named executive officers") of
the Company during the fiscal year ended September 30, 1996; and (iv) by all
officers, Directors and all other significant employees of the Company as a
group.
Number of Percent
Name and Address(1) Shares(2) of Class
------------------------------- ------------ ----------
Arnold J. Scheine
120 Brighton Road
Clifton, New Jersey 07012 663,380(3) 13.4%
Marvin Cohen
120 Brighton Road
Clifton, New Jersey 07012 421,936(4) 9.0%
Heartland Advisors, Inc.
William J. Nasgovitz,
President
790 North Milwaukee Street
Milwaukee, Wisconsin 53202 557,360(5) 12.1%
Bernard Ouziel
120 Brighton Road
Clifton, New Jersey 07012 86,800 1.9%
Joseph R. Barbaro
1140 Avenue of the Americas
New York, NY 10036 4,000 0.1%
Gerald A. King
97 Commerce Way
Dover, Delaware 19904 237,298 5.2%
Lon Mandel
1200 Harbor Boulevard
Weehawken, New Jersey 07087 24,254 0.5%
2
<PAGE>
Number of Percent
Name and Address((1)) Shares((2)) of Class
------------------------------- ------------ ----------
Phyllis Stein
1200 Harbor Boulevard
Weehawken, New Jersey 07087 17,051 0.4%
William Rella
120 Brighton Road
Clifton, New Jersey 07012 150,629 3.2%
All officers, Directors and
other significant employees
as a group (11 persons) 1,663,402 32.3%
- ------
(1) Unless otherwise indicated, the named beneficial owner possesses sole
voting and dispositive power with respect to the shares.
(2) Assumes exercise of incentive stock options presently outstanding and
exercisable within 60 days as follows: Mr. Scheine - 330,000; Mr. Cohen -
83,000; Mr. Ouziel - 47,200; Mr. Rella - 64,000; all officers, Directors
and other significant employees, as a group 554,350.
(3) Includes 7,330 shares of Common Stock owned of record and beneficially by
Mr. Scheine's wife as to which shares he disclaims beneficial ownership
and 175,000 shares of Common Stock registered in the name of HAS
Investments, L.P., a limited partnership created for estate planning
purposes.
(4) Includes 2,200 shares of Common Stock owned of record and beneficially by
Mr. Cohen's wife as to which shares he disclaims beneficial ownership.
(5) Based on information obtained directly from Heartland Advisors, Inc. as
of November 25, 1996.
PROPOSAL 1
ELECTION OF DIRECTOR
The Board of Directors is composed of four members. The Restated
Certificate of Incorporation and By-laws of the Company divide the Board into
three classes, as nearly equal in size as possible, with one class of
Directors elected each year for a three-year term. It is intended that the
shares of stock represented by the proxies will, unless such authority is
withheld, be voted in favor of the following person as a Class II Director of
the Company, to hold office until the Annual Meeting of Stockholders in 2000
and until his successor shall be elected and shall qualify:
Bernard Ouziel - age 58. A Director since 1983; Mr. Ouziel has been a
practicing attorney in private practice for more than the last five years.
THE BOARD RECOMMENDS A
VOTE FOR THE NOMINEE NAMED ABOVE
The terms of office of the following Directors will continue beyond the
Meeting:
Arnold J. Scheine - age 59 - President and a Director since 1969. Mr.
Scheine's term will expire in 1998.
3
<PAGE>
Marvin Cohen - age 62 - Senior Vice President and Secretary since 1981 and
a Director since 1969. Mr. Cohen's term will expire in 1998.
Joseph R. Barbaro - age 51 - a Director since 1996; Mr. Barbaro has been a
partner in the accounting firm of Phillips Gold and Company, LLP for more
than the last five years. Mr. Barbaro's term will expire in 1999.
Mr. Ouziel performed legal services for the Company during the fiscal year
ended September 30, 1996 and was paid therefor the aggregate sum of $58,144.
The firm of Phillips Gold and Company, LLP, of which Mr. Barbaro is a
partner, performed accounting, tax and other consulting services during the
fiscal year ended September 30, 1996 and was paid therefor the aggregate sum
of $143,467.
There are no family relationships between or among any Directors,
executive officers or other significant employees of the Company.
COMMITTEES AND MEETINGS OF THE BOARD
The business and affairs of the Company are managed under the direction of
the Board of Directors. The Board has responsibility for establishing broad
corporate policies and for the overall performance of the Company rather than
day-to-day operating details. Members of the Board are kept informed of the
Company's business by various reports and documents sent to them each month,
as well as by reports presented at meetings of the Board and its committees
by officers and employees of the Company and its subsidiaries. During fiscal
1996, the Board met nine times (including actions by unanimous written
consent). All the Directors attended all of the meetings of the Board and
each committee on which he sat during such year. During Fiscal 1996, the
Board had five committees: the Audit Committee, the Compensation Committee,
the Stock Option Committee, which administers the 1983 and 1993 Incentive
Stock Option Plans (the "ISO Plans"), the 1994 Employee Stock Purchase Plan
Committee and the 1993 Non-Employee Directors Stock Option Committee.
Messers. Barbaro, as chairman, and Ouziel were members of the Audit
Committee, Messers. Ouziel, as chairman, and Barbaro were members of the
Compensation and Stock Option Committees, Messrs. Scheine, as chairman, and
Ouziel were members of the 1994 Employee Stock Purchase Plan Committee and
Messrs. Scheine, as chairman, and Cohen were members of the 1993 Non-Employee
Directors Stock Option Committee. The Audit Committee, which met once during
fiscal 1996, generally reviews the scope and procedures of the audit
activities of the auditors and reports on their examinations. It also reviews
reports, if any, from the Company's financial management and independent
auditors on compliance with corporate policies and the adequacy of the
Company's internal accounting controls. The Compensation Committee, which
administers and reviews the compensation of senior management and the
Company's benefits plans, met one time. During Fiscal 1996, the 1994 Employee
Stock Purchase Plan Committee, the Stock Option Committee and the 1993
Non-Employee Directors Stock Option Plan Committee each met one time.
COMPENSATION OF DIRECTORS
Each director who is not an officer of the Company receives a $5,000
annual director's fee and a $500 fee for each meeting he attends. Directors
who are officers of the Company
4
<PAGE>
do not receive additional compensation for service as directors. In addition,
pursuant to the terms of the Company's 1993 Non-Employee Directors Stock
Option Plan, on the fifth business day following the public release of the
Company's annual earnings for any fiscal year in which the sales and net
income per share of Common Stock increases by more than 5% over the prior
fiscal year, each non-employee director, who has been a non-employee director
at all times during the fiscal year, shall be granted a non-qualified option
to purchase 5,000 shares of the Company's Common Stock. Each such option
shall be exercisable pro rata over the five year period following, and shall
have an exercise price per share equal to the fair market value of the Common
Stock on, the date of grant. Based on 1996's results, options covering 5,000
shares are issuable under the 1993 Plan, as presently in effect. If Proposal
4 is approved by the stockholders at the annual meeting, 22,000 shares will
be issuable.
REPORT OF THE COMPENSATION COMMITTEE
In order to attract, retain and motivate executives who will contribute to
the Company's success, the Company's executive compensation philosophy is to
provide competitive pay for competitive performance and superior pay for
superior performance.
To create a structure of compensation that achieves these critical goals,
the Compensation Committee relies on:
-- A performance review system that provides a forum for dialogue and
relates salary increases to competitive conditions and bonuses to
performance.
-- A program for providing long-term incentive opportunities in the form
of stock options that relate executive awards directly and solely to
stockholder gains.
THE COMPENSATION PROGRAM IN GENERAL
The Company's executive pay program is made up of the following elements:
Base Salary. Salaries of the named executive officers are listed in the
Summary Compensation Table. The following considerations are used in
determining the appropriate salary level: (a) their experience; (b) their
level of responsibility for corporate results and functions; and (c) external
pay practices.
Bonuses. Bonuses paid to the named executive officers are also listed in
the Summary Compensation Table. The following considerations are used in
determining the appropriate bonuses: (a) employment agreements in effect; (b)
the individual's performance and contribution to the Company's goals; and (c)
the overall profitability of the Company.
Stock Options. Stock options encourage and reward effective management and
employee performance resulting in long-term corporate financial success, as
measured by stock price appreciation. Stock options only have value to the
recipient if the price of the Company's stock appreciates in value from the
date the stock options are granted, a benefit in which the Company's
stockholders participate as well.
Sincerely,
Bernard Ouziel, Chairman
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the fiscal years indicated, the cash
and other compensation provided by the Company and its subsidiaries to each
of the named executive officers of the Company in all capacities in which
they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term All Other
Annual Compensation Compensation Compensation
--------------------------------------- -------------- --------------
Other Annual Awards
Name and Fiscal Salary Bonus Compensation Options
Principal Position Year ($) ($) ($) (#)(1,2) ($)(3)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ARNOLD J. SCHEINE 1996 550,299(4) 369,871(4) 0 0 16,218
President & Chief 1995 356,776 330,500 0 226,000 15,352
Executive Officer 1994 309,518 0 0 44,000 15,332
MARVIN COHEN 1996 274,143 125,457 0 0 16,965
Senior Vice President & 1995 242,464 124,650 0 22,000 15,950
Secretary 1994 217,509 0 0 11,000 16,003
WILLIAM RELLA 1996 360,000 412,576 0 0 14,679
President-Fulfillment 1995 240,000 437,500 0 80,000 14,679
Services 1994 240,000 34,485 0 0 14,679
LON MANDEL 1996 180,000 506,609 0 0 2,876
President and CEO, 1995 180,000 503,251 0 0 2,310
The SpeciaLISTS Ltd. 1994 190,000 420,292 0 11,000 2,790
PHYLLIS STEIN 1996 96,803 207,191 0 0 2,916
President-List Brokerage 1995 157,850 227,940 0 0 1,985
The SpeciaLISTS Ltd. 1994 146,534 172,493 0 5,500 2,662
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- ------
(1) The Company does not grant SARs. All options granted were incentive or
non-qualified stock options.
(2) Stock options for the 1995 and 1994 fiscal years have been adjusted,
where appropriate, to give effect to the 10% stock dividend paid in
January, 1995 and the 2 for 1 stock split paid as a 100% stock dividend
on October 24, 1995.
(3) Consists of (i) with the exception of Mr. Rella, the Company's matching
contribution to the Company's 401(k) Plan and (ii) as to Messrs.
Scheine, Cohen and Rella, the total premiums on split-dollar insurance
policies during such fiscal year.
(4) Effective October 1, 1995, the Company and a wholly owned group company
entered into three year employment agreements with Mr. Scheine. The
annual base salaries under the agreements aggregate $545,000, along with
other benefits as are customarily given to executives of the Company.
Mr. Scheine will receive an annual bonus equal to two percent of the
first five million dollars of pre-tax income and three percent of
pre-tax income in excess of five million dollars. If the bonus reaches
$500,000, a new formula will be negotiated for any excess amount. In
addition, a $6,000 loan previously made to Mr. Scheine was forgiven.
6
<PAGE>
STOCK OPTION GRANTS
No options were granted during the company's last fiscal year to the named
executive officers.
STOCK OPTIONS EXERCISES AND HOLDINGS
The following table sets forth information concerning stock options
exercised during the last fiscal and stock options held as of the end of the
last fiscal year by the named executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTIONS VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at at
FY-End (#) FY-End ($)
Shares Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
----------------- ------------------ ---------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Arnold J. Scheine 0 0 440,000/ 50,000 3,009,600/412,500
Marvin Cohen 0 0 149,000/ 25,000 1,142,570/206,250
William Rella 132,000 2,438,702 64,000/104,000 505,984/515,984
Lon Mandel 11,000 251,625 0 0/0
Phyllis Stein 5,500 125,813 0 0/0
----------------- ------------------ ---------------- --------------------- --------------------
</TABLE>
THE 1983 AND 1993 INCENTIVE STOCK OPTION PLANS
The Company's 1983 ISO Plan expired on May 24, 1993, and the Company's
1993 ISO Plan was adopted by the stockholders of the Company in March 1993 to
replace it. Both ISO Plans are qualified plans under section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Under the 1983 ISO
options for 341,200 shares were exercised during the period ended November
29, 1996 and 224,700 were outstanding as of November 29, 1996. The 1993 ISO
Plan authorizes the granting of options to purchase up to 2,200,000 shares of
Common Stock until November 3, 2002. As of November 29, 1996, options to
purchase an aggregate of 690,087 shares of Common Stock had been granted
under the 1993 ISO Plan and 606,373 options were outstanding. During the
period ended November 29, 1996, 40,463 options had been exercised.
401 (K) RETIREMENT SAVINGS PLAN
During fiscal 1991, the Company established the LCS Industries Inc.,
Employee Retirement Savings Plan (the "401(k) Plan"). The 401(k) Plan allows
employees of the
7
<PAGE>
Company to defer a portion of their compensation on a pre-tax basis through
contributions to the 401(k) Plan. For the period January 1, 1996 to June 30,
1996, the Company provided a matching contribution to a maximum of 35% of the
employee's first 6% contributed. For the remainder of fiscal year 1996, the
matching contribution was to a maximum of 25% of the employee's first 6%
contributed. The Company's matching contribution to the 401(k) Plan amounted
to $196,000 during the 1996 fiscal year. The Company may also make a
discretionary contribution to the 401(k) Plan. In the fiscal year ended
September 30, 1996, no discretionary contributions were made to the 401(k)
Plan.
1994 EMPLOYEE STOCK PURCHASE PLAN
At the annual meeting of stockholders in March 1994, the 1994 Employee
Stock Purchase Plan was adopted. The Plan provides eligible employees of the
Company and its subsidiaries the opportunity to acquire up to 300,000 shares
of Common Stock. Purchases are made on a monthly basis through payroll
deductions of from 1% to 10% of eligible compensation. Shares are offered at
a 15% discount from the closing price on the last trading date of each month
with no brokerage commissions. A total of 9,968 shares were purchased during
the fiscal year ended September 30, 1996.
8
<PAGE>
COMPANY PERFORMANCE
The graph and table below compares for each of the last five fiscal years
the cumulative total return of the Company, The Nasdaq Stock Market(SM) and a
peer group (19 companies) comprising companies within SIC code 7374. The
cumulative total returns of Company Common Stock and the two comparative
indices assume $100 invested in each on September 30, 1991 and also assume
reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG LCS INDUSTRIES, INC., THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
900|------------------------------------------------------------------|
| |
| * |
800|------------------------------------------------------------------|
| |
| * |
700|------------------------------------------------------------------|
| |
| |
D 600|------------------------------------------------------------------|
O | |
L | |
L 500|------------------------------------------------------------------|
A | |
R | |
S 400|------------------------------------------------------------------|
| |
| & |
300|------------------------------------------------------------------|
| & # |
| # |
200|------------------------------------------------------------------|
| *&# *&# |
| *&# |
100|---*&#------------------------------------------------------------|
| |
| |
0|----|----------|---------|-----------|-----------|---------|------|
9/91 9/92 9/93 9/94 9/95 9/96
* = LCS INDUSTRIES, INC. & = PEER GROUP
# = NASDAQ STOCK MRKT - US
Year Ended September 30,
---------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
LCS Industries* 100 122 143 162 806 727
Peer Group& 100 124 162 192 244 340
The Nasdaq Stock Market(SM)# 100 112 147 148 204 243
9
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS
The Board recommends that the stockholders ratify its selection of
Deloitte & Touche LLP, independent auditors, to audit the accounts of the
Company for fiscal year 1997. Deloitte & Touche LLP has audited the accounts
of the Company beginning with the fiscal year ended September 30, 1986. A
representative of Deloitte & Touche LLP will be present at the Meeting, will
have the opportunity to make a statement if he desires to do so and will be
available to respond to appropriate questions raised at the Meeting. In the
event that the stockholders do not ratify the selection of Deloitte & Touche
LLP, the Board will reconsider the appointment.
THE BOARD RECOMMENDS A
VOTE FOR THE APPOINTMENT OF INDEPENDENT AUDITORS
PROPOSAL 3
RATIFICATION OF GRANTING NON-QUALIFIED
STOCK OPTIONS
The Board recommends that the stockholders ratify the granting of
non-qualified options (the "Excess Options") to Mr. Arnold J. Scheine,
President and Chief Executive Officer, and Mr. Marvin Cohen, Senior Vice
President and Secretary, to purchase 23,600 and 11,800 shares, respectively,
of the Company's Common Stock. The Excess Options consist of that portion of
the non-qualified 10-year options granted to Mr. Scheine and Mr. Cohen on
February 6, 1995 to purchase 50,000 and 25,000 shares, respectively, (the
"1995 Options") which in the aggregate exceeded one percent of the Company's
voting outstanding shares of Common Stock as of that date. The Excess Options
are exercisable at $5.75 per share (the fair market value on the date of
grant) with 25% of each Excess Option vesting on the date of stockholder
approval, and an additional 25% of each Excess Option vesting on April 1,
July 1 and October 1, 1997. In March, 1996, the Company was advised that, in
accordance with Schedule D of The Nasdaq Stock Market(SM) By-laws, the granting
of options in excess of one percent of the Company's voting outstanding
shares of Common Stock requires stockholder approval. Stockholders are not
being asked to ratify or approve the grant of any portion of the 1995 Options
except the Excess Options to purchase an aggregate of 35,400 shares of the
Company's Common Stock. In the event stockholders fail to ratify the grant of
the Excess Options, the Excess Options will be cancelled and the remaining
1995 Options granted to Messrs. Scheine and Cohen to purchase 26,400 and
13,200 shares, respectively, which are fully vested, will remain in full
force and effect. All information in the foregoing paragraph has been
adjusted to reflect the 2 for 1 stock split paid as a 100% stock dividend on
October 24, 1995. The 1995 Options were granted in recognition of their
continued contributions to the Company's growth and success and, therefore,
your ratification of the granting of the Excess Options is requested.
THE BOARD RECOMMENDS A
VOTE FOR THE GRANTING OF NON-QUALIFIED STOCK OPTIONS
10
<PAGE>
PROPOSAL 4
APPROVAL OF THE 1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Board recommends that the stockholders approve the Company's 1996
Non-Employee Directors Stock Option Plan (the "1996 Directors Plan") to
replace the 1993 Non-Employee Directors Stock Option Plan (the "1993
Directors Plan"). The 1996 Plan will permit the grant of options for an
aggregate of 250,000 shares of the Company's Common Stock to Directors who
are not employees of the Company. If the stockholders approve the 1996
Directors Plan, the 1993 Directors Plan will be terminated retroactive to
September 30, 1996.
The Board believes that the adoption of the 1996 Directors Plan to replace
the 1993 Directors Plan will permit the Company to more effectively compete
with other organizations offering similar plans in attracting and retaining
directors of exceptional talent who are able to make important contributions
to the Company by giving them a direct and long-term interest in the
Company's future success. The Board of Directors believes that approval of
the 1996 Directors Plan is in the best interests of the Company and its
stockholders and is necessary to redress the unintended unfairness to
eligible Directors under the 1993 Directors Plan in that the 5,000 shares of
Common Stock to be covered by each grant would become less valuable as the
Company declared stock dividends and stock splits. The 1996 Directors Plan
would eliminate this unfairness by adjusting the awards with respect to each
of the Company's fiscal years commencing after September 30, 1995 to reflect
the 10% stock dividend paid on January 30, 1995 and the 2 for 1 stock split
in the form of a 100% stock dividend paid on October 24, 1995. The full text
of the 1996 Directors Plan is attached as Annex A, and reference is made
thereto for a complete statement of its terms. Below is a brief description
of the principal features of the 1996 Directors Plan.
GENERAL INFORMATION ABOUT THE 1996 DIRECTORS PLAN
The purpose of the 1996 Directors Plan is to encourage the long-term
growth of stockholder value by offering incentives to non-employee directors
in addition to their cash fees. In addition, the 1996 Directors Plan is
intended to permit the Company to compete with other organizations offering
similar plans in attracting and retaining directors of exceptional talent who
are able to make important contributions to the Company by giving them a
direct and long-term interest in the Company's future success.
ADMINISTRATION
The 1996 Directors Plan will be administered by the Directors Plan
Compensation Committee of the Board of Directors (the "Directors Plan
Committee"). Members of the Directors Plan Committee are not eligible to
participate in the 1996 Directors Plan and must number not less than two
directors.
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The Directors Plan Committee has broad authority to construe and interpret
the 1996 Directors Plan, to define the terms used in it, to prescribe, amend
and rescind rules and regulations relating to the administration of the 1996
Directors Plan, and to make all other determinations necessary or advisable
for the administration of the 1996 Directors Plan.
ELIGIBILITY
Persons eligible to receive awards under the 1996 Directors Plan must be
non-employee directors on the date of grant of an award but cannot have been
employees of the Company or any of its subsidiaries at any time during the
fiscal year of the Company immediately preceding the date of grant.
TIMING AND AMOUNT OF AWARDS
Each eligible director shall be granted (with respect to the Company's
fiscal year ended September 30, 1996) an award of and option to purchase
11,000 shares of the Company's Common Stock on the date of stockholder
approval of the 1996 Directors Plan. Each eligible director shall also be
granted an award of and option to purchase 11,000 shares (subject to
antidilution adjustments) of the Company's Common Stock on the fifth business
day following the public release of the Company's annual earnings for any
fiscal year commencing after September 30, 1996 in which the sales and net
income per share of Common Stock increases by more than 5% over the prior
fiscal year subject to antidilution adjustments.
STOCK SUBJECT TO THE 1996 DIRECTORS PLAN
Shares of the Company's authorized but unissued Common Stock or shares of
Common Stock reacquired by the Company may be issued upon exercise of options
under the 1996 Directors Plan. The aggregate number of shares of stock to be
issued upon exercise of options granted under the 1996 Directors Plan may not
exceed 250,000 shares subject to antidilution adjustments. If any option
lapses or terminates for any reason without having been fully exercised, the
shares subject to the option again become available for future awards.
TERMS OF OPTIONS
Options granted under the 1996 Directors Plan shall be non-qualified stock
options. The exercise price of all options will be equal to 100% of the fair
market value of the Common Stock on the date of grant.
Stock options shall be exercisable pro rata annually over the five year
period following the date of grant. The purchase price of the stock purchased
upon exercise of any option must be paid in full in cash or by check at the
time of each exercise of the option or by certificates for Common Stock or a
combination of each. Option holders are protected by antidilution adjustments
in the event of a stock dividend, recapitalization, merger, consolidation,
split-up, combination or exchange of shares or the like.
TERMINATION OF RELATIONSHIP
An option granted under the 1996 Directors Plan shall not be transferable
by the optionee other than by will or by the laws of descent and
distribution. During his lifetime, each such option shall be exercisable only
by the optionee to whom granted.
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If any optionee ceases to be a director of the Company by reason of his
death or disability, his options may thereafter be exercised only to the
extent to which each was exercisable at the time of his death or disability
or for two years thereafter whichever period is shorter. If an optionee
ceases to be a director of the Company for any reason other than death or
disability, his options may thereafter be exercised to the extent it was
exercisable at the time he ceased to be a director but no longer than three
months after he ceased to be a director.
AMENDMENT AND TERMINATION
Awards may be granted under the 1996 Directors Plan any time within the
ten year period following the effective date of the plan. The Directors Plan
Committee may at any time suspend, amend or terminate the 1996 Directors
Plan. However, except for certain adjustments made in the event of a change
in the outstanding shares of the Company's Common Stock, no amendments may be
adopted that would cancel or impair any previously granted option, or that
would materially increase the total number of shares which may be issued
under the 1996 Directors Plan, change those eligible to receive Awards, or
materially increase the benefits accruing to holders of options under the
1996 Directors Plan without the consent of the Company's Stockholders.
FEDERAL INCOME TAX CONSEQUENCES
Under current law, there will be no federal income tax consequences to
either the optionee or the Company upon the grant of a non-qualified stock
option. On the exercise of a non-qualified stock option, the optionee has
taxable income equal to the excess of the fair market value of the shares on
the exercise date over the exercise price of the option. The Company will be
entitled to a tax deduction in an amount equal to the optionee's taxable
income.
THE BOARD RECOMMENDS A
VOTE FOR APPROVAL OF THE 1996 DIRECTORS PLAN
ANNUAL REPORT TO STOCKHOLDERS
The annual report to stockholders concerning the operations of the Company
for the fiscal year ended September 30, 1996, including financial statements
for that year, accompanies this proxy statement. Such report is not to be
treated as part of these proxy soliciting materials. The Company will provide
to each stockholder, on written request addressed to the Director of Investor
Relations, a copy of the Company's most recent Annual Report on Form 10-K as
filed with the Securities and Exchange Commission including the financial
statements and schedules thereto.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the
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Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. Executive officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company and any written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that during
fiscal 1996 all filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners were complied with, except
for one officer. Such person was Kathryn Barber, former President of the
Outbound Telemarketing Services Division, who filed, however, not on a timely
basis, three Form 4's relating to her beneficial sale of 13,200 shares of
Common Stock.
OTHER MATTERS
The Board does not intend to bring any other matters before the Meeting
and, at the time of filing this Proxy Statement with the Securities and
Exchange Commission, is not aware that any other matters are to be presented
for action at the Meeting by others. If Mr. Ouziel is unavailable for
election as Director, or if any other matters properly come before the
Meeting, it is intended that the shares represented by proxies will be voted
with respect thereto in accordance with the judgment of the person or persons
voting the proxies.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the Company's proxy material
relating to its 1998 Annual Meeting of Stockholders must be received by the
Company no later than August 31, 1997. Any such proposal must comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934.
Proposals should be addressed to: Secretary of the Company, 120 Brighton
Road, Clifton, New Jersey 07012-1694.
By Order of the Board of Directors
Marvin Cohen
Secretary
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ANNEX A
LCS INDUSTRIES, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. Purposes. The purposes of the 1996 Non-Employee Directors Stock Option
Plan (the "Plan") of LCS Industries, Inc., a Delaware corporation (the
"Company"), are to enable the Company to attract and retain
independent directors and to provide such directors with additional
incentives to promote the interests of the Company and its
stockholders.
2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
a. "Award" means Stock Options granted to eligible Non-Employee
Directors of the Company.
b. "Board" means the Board of Directors of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Committee" means the Committee referred to in Section 3 of the
Plan. If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be exercised
by those members of the Board who ANNEX A are not eligible to
participate in the Plan.
e. "Company" means LCS Industries, Inc., a corporation organized under
the laws of the State of Delaware (or any successor corporation).
f. "Disability" means a permanent and total disability as determined
under the Company's long-term disability program or if no such
program has been adopted, for purposes of the Plan, "Disability"
shall mean the continuous absence of a director for 187 consecutive
days or more due to physical or mental illness or incapacity.
g. "Fair Market Value" means the value of a share of Common Stock on a
particular date, determined as follows: (i) if the Common Stock is
listed on such a date on one or more national securities exchanges
or is quoted on NASDAQ, the last reported sales price of a share of
Common Stock on such date as recorded on the composite tape system,
or, if such system does not cover the Common Stock, the last
reported sale price of a share of Common Stock on such date on the
principal national securities exchange on which the Common Stock is
listed, or if the Common Stock is not listed on any national
securities exchange on such date, the last reported sale price of a
share of Common Stock on such date as reported by NASDAQ, or, if no
sale of Common stock took place on such date, the last reported
sale price of a share of Common Stock on the most recent day on
which a sale of a share of Common Stock took place as recorded by
such system or on such exchange or as reported by NASDAQ, as the
case may be, or (ii) if the Common Stock is neither listed on such
date on a national securities exchange nor quoted on NASDAQ, as
determined by the Committee.
h. "NASDAQ" means the Automated Quotation System of the National
Association of Securities Dealers, Inc.
i. "Non-Employee Directors" means directors of the Company who are
neither officers nor full-time employees of the Company or any
direct or indirect subsidiary of the Company.
j. "Non-Qualified Stock Option" means any Stock Option that is not an
incentive stock option within the meaning of Section 422 of the
Code.
k. "Participant" means a Non-Employee Director to whom an Award has
been granted.
l. "Stock" or "Common Stock" means the Common Stock, $.01 par value,
of the Company.
m. "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 6 below.
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n. "Subsidiary" means any corporation of which more than 50% of the
outstanding stock having ordinary voting power to elect a majority
of the board of directors of such corporation is at the time
directly or indirectly owned by the Company or by one or more of
its subsidiaries.
3. Administration.
a. The Plan shall be administered by a committee (the "Committee") of
the Board consisting of not less than two directors who are not
eligible to participate in the Plan.
b. The interpretation and construction by the Committee of any
provisions of the Plan or any Award granted under it shall be final,
binding and conclusive on all parties in the absence of manifest
error. The Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing
the Plan as it shall, from time to time, deem advisable, to
interpret the terms and provisions of the Plan and any Award issued
under the Plan (and any agreements related thereto), and to
otherwise administer the Plan. No member of the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any Award granted under it.
c. All actions of the Committee with respect to the Plan shall require
the vote of a majority of its members or, if there are only two
members, by the vote of both.
4. Eligibility; Timing and Amount of Awards. The persons who shall be
eligible to receive Awards under the Plan shall be those directors of
the Company who are Non-Employee Directors at the date of grant of an
Award and who were non employees of the Company or any of its
Subsidiaries at any time during the fiscal year of the Company
immediately proceeding such date of grant. Subject to the provisions
of Section 5(d) hereof, each Non-Employee Director shall be granted an
Award covering 11,000 shares of Common Stock on the date the Plan is
approved by the stockholders of the Company and on the fifth business
day following the public release of the Company's annual earnings with
respect to any fiscal year of the Company commencing after September
30, 1996 in which the sales and net earnings per share of Common Stock
increased by more than 5% over the prior fiscal year.
5. Stock; Adjustment upon Certain Events.
a. The Stock subject to the Awards granted under the Plan shall be
shares of the Company's authorized but unissued Common Stock or
shares of Common Stock reacquired by the Company.
b. Subject to the provisions of Sections 5(d), 5(e) and 5(f) hereof,
the aggregate number of shares of Common Stock that may be issued
pursuant to Awards granted under the Plan shall not exceed 250,000
shares of Common Stock. In the event that any outstanding Award or
portion thereof is for any reason forfeited, cancelled or otherwise
terminated prior to its exercise, the shares of Common Stock covered
by such Award or portion thereof shall again be available for the
grant of Awards under the Plan.
c. No fractional shares of Common Stock shall be issued or transferred
in connection with the exercise of any Award. In lieu thereof, the
Company shall pay to the optionee a cash adjustment equal to the
portion of the Fair Market Value of one share of Common Stock on the
date of the Award represented by the fractional share of Common
Stock which would otherwise be issued.
d. In the event that, prior to the expiration of an Award theretofore
granted, the Company shall effect a subdivision, recapitalization or
consolidation of the shares of its Common Stock or the payment of a
stock dividend in Common Stock upon such shares without the receipt
of consideration, then (i) if such event shall result in an increase
in the number of issued shares of Common Stock, the number of shares
of Common stock covered by an Award shall be proportionately
increased, the exercise price per share of Common Stock covered by
the Award shall be proportionately reduced, and the number of shares
of Common Stock which may be Awarded under the Plan shall be
proportionately increased, and (ii) if such event shall result in a
decrease in the number of issued shares of Common Stock, the number
of shares of Common Stock covered by an Award shall be
proportionately decreased, the exercise price per share of Common
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Stock covered by an Award shall be proportionately increased and the
number of shares of Common Stock which may be awarded under the Plan
shall be proportionately decreased. In the event that, prior to the
granting, as specified in the Plan, of all possible Awards, the
Company shall effect a subdivision, recapitalization or
consolidation of the shares of its Common Stock or the payment of a
stock dividend in Common Stock upon such shares without the receipt
of consideration, then (iii) if such event shall result in an
increase in the number of issued shares of Common Stock, the number
of shares covered by each ungranted Award shall be proportionately
increased and (iv) if such event shall result in a decrease, the
number of shares covered by each ungranted Award shall be
proportionately decreased.
e. In the event the Company shall be the surviving corporation in any
merger, consolidation, combination or reorganization, each
outstanding Award shall be deemed to pertain to and apply to the
securities to which the recipient of the Award would have been
entitled if the Award had been exercised in full immediately prior
to such merger, consolidation, combination or reorganization of the
Company, and shall otherwise be deemed to be fully effective without
change.
f. In the event the Company shall not be the surviving corporation in
any merger, consolidation, combination or reorganization, or in the
event the Company is to be dissolved or liquidated, then, unless the
surviving corporation assumes the outstanding Awards or substitutes
for the outstanding Awards new awards which are determined by the
Board, in its sole discretion, to be substantially similar in nature
and equivalent in terms and value, to the Awards then outstanding,
(i) all restrictions and conditions (other than those required by
applicable Federal or state securities laws or by the rules,
regulations or other requirement of the Securities and Exchange
Commission, NASDAQ or any stock exchange upon which the Common Stock
is then listed) imposed on the transfer of any shares of Common
Stock issued upon the previous exercise of Stock Options under the
Plan shall lapse on a date fixed by the Board prior to the effective
date of such transaction, dissolution or liquidation, (ii) the time
at which all Awards under the Plan then outstanding may be exercised
shall be accelerated and they shall become exercisable in full on or
before the earlier of (A) a date fixed by the Board prior to the
effective date of such transaction, dissolution or liquidation or
(B) two business days prior to the effective date of such
transaction, dissolution or liquidation, and (iii) upon the
effective date of such transaction, dissolution or liquidation, any
unexercised Awards under the Plan shall expire without additional
compensation to the holder thereof.
g. In the event of a change in the Common Stock as presently
constituted, whereby all the authorized shares of Common Stock with
par value are converted into the same number of shares with a
different par value or without par value, the shares resulting from
any such change shall be deemed to be the Stock for the purposes of
the Plan.
h. To the extent that the foregoing adjustments relate to Common Stock
or other securities of the Company, such adjustments shall be made
by the Committee, whose determination in this respect shall be
final, binding and conclusive on all parties in the absence of
manifest error.
i. Except as expressly provided in this Section 5, the issuance by the
Company of shares of Common Stock or of securities convertible into
shares of Common Stock of any class for cash, property, labor or
services upon direct sale, upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or other
securities, and in any case whether or not for Fair Market Value,
shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Common Stock subject to
Awards theretofore granted, the exercise prices per share of Common
Stock covered by Awards theretofore granted or the number of shares
of Common Stock which may be awarded under the Plan.
j. Except as expressly provided in this Section 5, no adjustment shall
be made in the number of shares of Common Stock to which a
Participant is entitled or in the number of shares of Common Stock
subject to Stock Options which may be awarded under the Plan by
reason of any dissolution, liquidation, merger or spinoff of assets
or stock of another corporation, or by reason of any issue by the
Company of shares of stock of any class, or securities convertible
into shares of stock of any class.
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k. The grant of an Award pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or
assets.
6. Stock Options. All Stock Options granted under the Plan shall be
Non-Qualified Stock Options and shall have the following terms and
conditions.
a. Option Price. The option price per share of Stock purchasable under
a Stock Option shall be equal to 100% of the Fair Market Value of
the Stock on the date of the grant of the option.
b. Option Term. Subject to the provisions of paragraphs (f), (g) and
(h) of this Section 6, each Stock Option shall be exercisable for a
period of five years from the date the option is granted.
c. Exercisability. Stock Options shall be exercisable in five equal
installments as follows: as to one-fifth of the shares of Stock
covered thereby upon grant and as to an additional one-fifth after
each of the first, second, third and fourth anniversaries of the
date of grant.
d. Method of Exercise. Subject to Section 6(c) above, Stock Options may
be exercised in whole or in part at any time during the option term
by giving written notice of exercise to the Company specifying the
number of shares of Common Stock to be purchased. Such notice shall
be accompanied by payment in full of the purchase price, either by
certified or bank check. As determined by the Committee at or after
grant, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the Participant (based, in each
case, on the Fair Market Value of the Stock on the date the Stock
Option is exercised). No shares of Stock shall be issued upon the
exercise of a Stock Option until full payment therefor has been
made.
e. Non-transferability of Options. No Stock Option shall be
transferable by a Participant otherwise than by will or by the laws
of descent and distribution, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the
Participant.
f. Termination by Death. If a Participant dies, the Stock Option may
thereafter be exercised, to the extent it was exercisable at the
date of the Participant's death, by the legal representative of the
estate of by the legatee of the Participant under the will of the
Participant, for a period of two years from the date of such death
or until the expiration of the stated term of the Stock Option,
whichever period is the shorter.
g. Termination by Reason of Disability. If a Participant ceases to be a
director by reason of Disability, any Stock Option held by such
Participant may thereafter be exercised, to the extent it was
exercisable at the time the Participant ceased to be a director due
to Disability, but may not be exercised after two years from the
date the Participant ceased to be a director or the expiration of
the stated term of the Stock Option, whichever period is the
shorter; provided, however, that, if the Participant dies more than
twelve months after the beginning of such two-year period, any
unexercised Stock Option held by such Participant shall thereafter
be exercisable to the extent it was exercisable at the time the
Participant ceased to be a director due to Disability for a period
of twelve months from the date of such death or for the stated term
of the Stock Option, whichever period is the shorter.
h. Termination for Other Reasons. If a Participant ceases to be a
director of the Company for reasons other than as set forth in
paragraphs (f) or (g) of this Section 6, any Stock Option held by
such Participant may thereafter be exercised to the extent it was
exercisable at the time the Participant ceased to be a director but
may not be exercised after three months from the date the
Participant ceased to be a director or the expiration of the stated
term of the Stock Option, whichever period is the shorter; provided,
however, that, if the Participant dies within such three-month
period, any unexercised Stock Option held by such Participant shall
thereafter be exercisable, to the extent it was exercisable at the
time the Participant ceased to be a director, for a period of twelve
months from the date of such death or for the stated term of the
Stock Option, whichever period is the shorter.
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7. Rights as a Stockholder. A Participant or a permitted transferee of an
Award shall have no rights as a stockholder with respect to any shares
of Common Stock covered by a Stock Option until he becomes the holder
of record of such shares of Common Stock. Except as provided in
Section 5 hereof, no adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to
the date the Participant becomes the holder of record of such shares
of Common Stock.
8. Termination, Amendment and Modification. Awards may be granted
pursuant to the Plan from time to time within a period of ten years
from the date on which the Plan becomes effective. The Committee may,
at any time prior to that date, suspend or terminate the Plan and, at
any time or from time to time, may amend or alter the Plan (including,
without limitation, amendments deemed necessary or desirable by the
Committee in order that the Awards shall conform to any change in
applicable law or regulations or in any other respects; provided,
however, that, (a) no such action shall cancel or impair any Award
theretofore granted under the Plan; (b) except as provided in Section
5 hereof, without approval of the stockholders of the Company, no such
action may materially increase the total number of shares of Common
Stock which may be issued under the Plan, change the class of
individuals eligible to receive Awards under the Plan, or materially
increase the benefits accruing to the Participants hereunder, and (c)
the provisions of the Plan fixing the selection of Participants, the
granting and timing of Stock Options and the terms and conditions of
such Stock Options shall not be amended (other than to comport with
changes in the Code or the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder) more than once every six
months.
9. Investment Purposes. Each Award under the Plan shall be granted on the
condition that the purchase of shares of Common Stock upon exercise of
any Stock Option shall be for investment purposes only, and not with a
view to resale or distribution, and each Participant shall execute a
certificate, or such other documents as may be requested by the
Company to such effect. Certificates for shares of Common Stock
pursuant to the Plan shall bear such legend as the Board of the
Committee, in its sole discretion, determines to be necessary or
appropriate under Federal or state securities laws or to implement the
provisions of any agreement between the Participant and the Company
with respect to such shares of Common Stock. All certificates for
shares of Common Stock delivered under the Plan pursuant to the
exercise of a Stock Option shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities
and Exchange Commission, NASDAQ, any stock exchange upon which the
Common Stock is then listed and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be
placed on the certificates to the foregoing effect.
10. Other Provisions. The agreements with respect to Awards authorized
under the Plan shall contain such other provisions as the Committee
shall deem advisable.
11. Non-Exclusivity. The adoption of the Plan by the Board and the
stockholders of the Company shall not create any limitations on the
power of the Committee or the Board to adopt such other incentive
arrangements as it may deem desirable including, without limitation,
the granting or issuance of stock options, shares of Common Stock or
other incentives otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific
cases.
12. General Provisions.
a. The Company shall have the right to deduct withholding taxes, or to
make such other provisions as it deems necessary or appropriate to
satisfy its obligations to withhold Federal, state or local income
or other taxes incurred by reason of payments or the issuance of
shares of Common Stock in connection with Awards, including
withholding the amount of such taxes from any other sums due or to
become due from the Company or any of the Company's Subsidiaries to
the Participant upon such terms and conditions as the Committee may
prescribe.
b. Each Participant shall furnish to the Committee his current address
for the mailing of notices and delivery of Award agreements and
shares of Common Stock. Any notice under the Plan shall be deemed to
have been duly given if delivered, or deposited in the United States
mails, first-class postage prepaid and addressed, to the person for
whom intended at such address.
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c. If any provision of the Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other
provision hereof, and the Plan shall be construed and enforced as if
such provision had not been included.
d. Any benefit payable to or for the benefit of a minor, an incompetent
person or other person incapable of receipting therefor shall be
deemed paid when paid to such person's guardian or to the party
providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Committee, the
Board, the Company and other parties with respect thereto.
e. The headings and captions herein are provided for convenience only
and shall not be employed in the construction of the Plan. As used
in the Plan, the singular includes the plural and the masculine,
feminine and neuter genders each includes the others.
f. The Plan and all of the Awards granted hereunder shall be construed
and enforced in accordance with the laws of the State of Delaware.
13. Indemnification of the Committee and the Board. The members of the
Committee and the Board shall be indemnified, to the full extent
permitted by the Certificate of Incorporation and By-laws of the
Company, in connection with any action, suit or proceeding or in
connection with any appeal therein or settlement thereof, to which
they or any of them may be a party by reason of any action taken or
suffered or failure to act under or in connection with the Plan or any
Award granted thereunder.
14. Approval of Stockholders and Effective Date. The Plan shall not take
effect until approved by the holders of the requisite majority of the
outstanding shares of Common Stock.
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LCS INDUSTRIES, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS -- FEBRUARY 11, 1997
The undersigned, having received the Notice of Annual Meeting of
Stockholders and Proxy Statement, hereby constitutes and appoints Arnold J.
Scheine, Marvin Cohen and Pat R. Frustaci, and each of them, attorneys and
proxies with full power of substitution to represent the undersigned at the
Annual Meeting of Stockholders of LCS Industries, Inc. to be held at the
offices of the SpeciaLISTS Ltd., 1200 Harbor Boulevard, Weehawken, New
Jersey, on Tuesday, February 11, 1997 at 10:00 a.m., and any adjournment or
adjournments thereof, with all the powers the undersigned would possess if
personally present, upon the proposals set forth below and in their
discretion upon any other business or matters incident to the conduct of the
Meeting that may properly come before the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.
1. The election of one Director to serve a three-year term: Bernard Ouziel
|_| VOTE FOR |_| WITHHOLD AUTHORITY TO VOTE FOR
2. The ratification of the selection of Deloitte & Touche LLP as independent
auditors for the 1997 fiscal year.
|_| FOR |_| AGAINST |_| ABSTAIN
3. The ratification of the granting of non-qualified stock options to Mr.
Arnold J. Scheine, President and Chief Executive Officer, and Mr. Marvin
Cohen, Senior Vice President and Secretary, to purchase 23,600 and 11,800
shares, respectively, of the Company's Common Stock, par value $.01.
|_| FOR |_| AGAINST |_| ABSTAIN
4. The approval for the 1996 Non-Employee Directors Stock Option Plan.
|_| FOR |_| AGAINST |_| ABSTAIN
This Proxy is solicited on behalf of the Board of Directors. If not otherwise
specified above, this Proxy will be voted FOR the election of one Director,
FOR the ratification of the selection of Deloitte & Touche LLP as independent
auditors for the 1997 fiscal year, FOR the ratification of the granting of
non-qualified options to Messers. Scheine and Cohen and FOR the approval of
the 1996 Non- Employee Directors Stock Option Plan. The Board of Directors is
not aware of any other matters to be presented to the Meeting.
Dated:
-------------------- ----------------------------------------------
(Signature)
----------------------------------------------
(Signature if held jointly)
Please sign exactly as name appears above. If
a corporation, please sign in full corporate
name by a duly authorized officer. If a
partnership, please sign in partnership name
by a duly authorized partner. Executors,
administrators and trustees should so indicate
when signing. If shares are held jointly EACH
holder should sign. To assist our planning,
please check here if you plan personally to
attend the Meeting. |_|
