TODD AO CORP, PRE 14A, 1997-01-13

TODD AO CORP
PRE 14A, 1997-01-13
ALLIED TO MOTION PICTURE PRODUCTION

Previous: LAWTER INTERNATIONAL INC, SC 13D/A, 1997-01-13

Next: SUMMA INDUSTRIES, 10-Q, 1997-01-13

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:

[x] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by Rule

14a-6(e)(2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to @ 240.14a-11(c) or @ 240.14a-12

(Name of Registrant as Specified In Its Charter)

THE TODD-AO CORPORATION

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

PRELIMINARY COPY 01/13/97

THE TODD-AO CORPORATION
900 N. Seward Street
Los Angeles, California 90038

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

February 25, 1997

To the Stockholders:

The Annual Meeting of Stockholders of The Todd-AO Corporation, a
Delaware corporation, will be held at Todd-AO Studios, 900 N. Seward Street,
Los Angeles, CA 90038 on February 25, 1997, at 10:30 a.m. for the following
purposes:

1. To elect a Board of Directors.
2. To approve: (i) an increase in the number of shares reserved for
issuance under the 1994 Stock Option Plan from 330,000 to 630,000; and
(ii) the grant of new stock options under the 1994 Stock Option Plan to Salah
M. Hassanein, Marshall Naify and Robert A. Naify to purchase 100,000 Class A
Shares each at an exercise price of $10.50 per share.

3. To approve: (i) the award under the 1995 Stock Option Plan of stock
options to officers and directors to purchase an aggregate of 80,000 Class A
shares at an exercise price of $10.50 per share; and (ii) an increase in the
number of shares authorized under the 1995 Stock Option Plan from
770,000 to 900,000.

4. To approve amendments to the 1986, 1994 and 1995 Stock Option Plans
which: (i) modify the requirements for membership on the Committee which
administers the Plans, consistent with amendments to Securities Exchange
Act Rule 16b-3; and (ii) allow the Committee in its discretion to permit an
optionee to assign the vested portion of a nonqualified stock option.

5. To adopt the 1997 Stock Option Plan and approve the award of stock
options thereunder to purchase an aggregate of 140,000 Class A shares to
non-employee directors of the Company.

6. To ratify the appointment by the Board of Directors
of Deloitte & Touche LLP as the Company's independent auditors
for fiscal 1997.

7. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Only stockholders of record at the close of business on January 17, 1997
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.

STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.

DATED: January 20, 1997

/s/ Dan Malstrom
Dan Malstrom
Secretary

<PAGE>
Page (i)

THE TODD-AO CORPORATION
PROXY STATEMENT FOR 1997 ANNUAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS

Description Page

Information Concerning the Meeting 1
Record Date and Voting Rights 1
Voting of Proxies; Revocability 1
Ownership by Naify Interests 1
Solicitation of Proxies 1
Security Ownership of Certain
Beneficial Owners and Management 2
Election of Directors 3
Director Nominees 4
Meetings 5
Committees 6
Compensation Committee Interlocks
and Insider Participation 6
Other Officers 6
Executive Compensation 6
Summary Compensation Table 6
Option/SAR Exercises and Value Table 8
Employment Agreements 9
Report of the Compensation Committee 9
Report of the Stock Option Committee 10
Section 16(a) Reporting 10
Stock Performance Graph 10
Stock Options 11
1986 Stock Option Plan 11
1994 Stock Option Plan 11
1995 Stock Option Plan 12
Proposal to Amend the 1994 Stock Option
Plan and Approve Awards Thereunder 12
General 12
Required Vote 12
Description of Amendment 12
Proposal to Amend the 1995 Stock Option Plan
Plan and Approve Awards Thereunder 13
General 13
Required Vote 14
Proposal to Amend Administrative Provisions
of the 1986, 1994 and 1995 Stock Option Plans 14
Committee Membership 14
Background 15
Description of Amendment 15
Assignability of Non-Qualified Stock Options 15
Background 15
Description of Amendment 16
Required Vote 16

<PAGE>
Page (ii)

Description Page

Proposal to Approve the Adoption of
the 1997 Stock Option Plan
and Stock Option Awards Thereunder 16
General 16
Eligibility and Benefits 16
Administration 17
Terms of Options 17
Tax Treatment 17
Amendment 19
Awards 19
Required Vote 19
New Plan Benefit Table 19
Approval of Independent Auditors 20
Stockholder Proposals 21
Transaction of Other Business 21

Appendix A: 1997 Stock Option Plan

<PAGE>

PAGE 1

THE TODD-AO CORPORATION
900 N. Seward Street
Los Angeles, California 90038

The accompanying proxy is solicited by the Board of Directors of The
Todd-AO Corporation (the "Company") for use at the Annual Meeting of
Stockholders to be held on February 25, 1997 at 10:30 a.m., and at any
adjournment of the meeting, for the purposes set forth in the accompanying
notice.

INFORMATION CONCERNING THE MEETING

Record Date and Voting Rights

Only stockholders of record as of the close of business on January 17,
1997 are entitled to notice of and to vote at the meeting. On that date
there were outstanding 8,201,890 shares of Class A Stock and 1,747,178 shares
of Class B Stock. The holders of shares of Class A and Class B Stock are
entitled to, respectively, one vote and ten votes for each share held.
Stockholders are not entitled to cumulate their votes in connection with the
election of directors.

Voting of Proxies; Revocability

If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, they will be voted FOR the election of
management nominees for directors and FOR Proposals 2, 3, 4, 5 and 6. Any
stockholder may revoke his or her proxy at any time before it has been
exercised by written notice to the Company, by submission of a proxy bearing
a later date or by voting in person at the meeting.

Ownership by Naify Interests

On the record date for this meeting, the Naify Interests owned of
record and beneficially 3,154,072 shares of Class A Stock (38.46% of the
total outstanding Class A Stock) and 1,703,639 shares of Class B Stock
(97.51% of the total outstanding Class B Stock) and have over 75% of the
combined voting power of both classes of stock. As a result, stockholder
approval of the proposals is virtually assured, notwithstanding negative
votes by other stockholders.

Solicitation of Proxies

Solicitation of proxies in the accompanying form is made by the Board of
Directors and the cost thereof will be borne by the Company. In addition to

<PAGE>
PAGE 2

the use of the mails, management may solicit proxies by telephone, telegraph
and personal interview. Brokers, nominees and other similar record holders
will be requested to forward soliciting material to persons who have a
beneficial interest in the Class A Stock registered in the name of such
nominees and will be reimbursed for their reasonable out-of-pocket expenses
by the Company.

This Proxy Statement was first mailed to stockholders on or about
January 24, 1997.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the
beneficial ownership of the Company's outstanding Common Stock as of January
17, 1997 by (i) each person known by the Company to be the beneficial owner of
more than 5% of the outstanding shares of Common Stock, (ii) each director or
executive officer of the Company who beneficially owns any shares, and (iii)
all directors and executive officers of the Company as a group. Except as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of Common Stock owned by them, except to the
extent such power may be shared with a spouse.

<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED PERCENT (2)

NAME(1) CLASS A CLASS B CLASS A CLASS B
<S> <C> <C> <C> <C>
A.C. Childhouse 49,240 -- .60% --%
Clay M. Davis 25,100 (3) -- .31 --
J.R. DeLang 59,200 (3) -- .72 --
David Haas 5,000 (3) .06 --
Heine Securities
Corporation(4) 652,442 -- 7.95 --
Richard C. Hassanein 20,150 (3) -- .25 --
Salah M. Hassanein 559,043 (3) -- 6.69 --
Herbert L. Hutner 27,543 -- .34 --
Christopher D. Jenkins 61,600 (3) -- .75 --
Robert I. Knudson 73,889 (3) -- .90 --
Marshall Naify(7) 1,185,984 (3)(5) 678,839 14.29 38.85
Michael S. Naify(7) 77,834 -- .95 --
Robert A. Naify(7) 1,113,964 (3)(6) 906,290 13.42 51.87
Other Naify Interests(7) 775,855 118,510 9.46 6.78
A. Frank Pierce 5,000 .06 --
Zelbie Trogden 9,600 (3) -- .12 --
All directors and
current executive
officers as a group
(18 persons) 3,310,862 (3) 1,585,129 37.62 90.72
</TABLE>

<PAGE>
PAGE 3

Notes to Security Ownership Table:

(1) The address of each of the beneficial owners identified is 172
Golden Gate Avenue, San Francisco, California 94102, except for Heine
Securities Corporation whose address is 51 JFK Parkway, Short Hills, New
Jersey 07078.

(2) Based on 8,201,890 shares of Class A Common Stock and 1,747,178
shares of Class B Common Stock outstanding at January 17, 1997. Pursuant to
the rules of the Commission, certain shares of Common Stock which a person
has the right to acquire within 60 days of the date hereof pursuant to the
exercise of stock options are deemed to be outstanding for the purpose of
computing the percentage ownership of such person but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person.

(3) Includes options exercisable within 60 days by Messrs Childhouse
(8,333); Davis (25,100), DeLang (59,200); Haas (5,000); R. Hassanein (19,050);
S. M. Hassanein (152,000); Hutner (8,333); Jenkins (61,600); Knudson (41,800)
Marshall Naify (98,100); Michael Naify (5,000); R. A. Naify (98,100); Pierce
(5,000); Trogden (9,600); All directors and current executive officers as a
group (600,466).

(4) Schedule 13G filed on February 10, 1996 by Heine Securities
Corporation and Michael F. Price indicates that Heine Securities Corporation
has sole investment discretion and voting authority with respect to the
shares of Class A Common Stock, which are legally owned by one or more of its
investment advisory clients.

(5) Includes 98,067 Class A shares held in the name of Marshall Naify
as trustee for one of his children and 30,166 shares of Class A Common Stock
held by a trust for which Mr. Naify is both trustee and beneficiary. Excludes
106,092 shares of Class A Common Stock held by an independent trustee for the
benefit of three of Mr. Naify's children. Mr. Naify disclaims beneficial
ownership of the shares held by the independent trustee.

(6) Excludes 461,473 shares of Class A Common Stock held of record or
beneficially by Mr. Naify's adult children and grandchildren as to which he
disclaims beneficial ownership.

(7) The Naify Interests (consisting of Marshall Naify, Robert A. Naify,
various members of their families and trusts for the benefit of such members)
may be deemed to constitute a "group" for purposes of Sections 13(d) and
13(g) of the Securities Exchange Act of 1934. The total Class A and B Stock
beneficially owned by The Naify Interests as of January 17, 1997 is 3,154,072
(38.46%) and 1,703,639 (97.51%), respectively.

ELECTION OF DIRECTORS

At the meeting a Board of thirteen directors will be elected to hold
office until the next annual meeting of stockholders and until their

<PAGE>
PAGE 4

respective successors are duly elected and qualified. Each of the nominees
was elected at the Annual Meeting of Stockholders on March 27, 1996, except
for Messrs. Haas and Pierce who were elected at a special board of Directors
meeting held on October 4, 1996. Certain officers and directors of the
Company were formerly associated in various capacities with United Artists
Communications, Inc. ("UACI"), now known as United Artists Theatre Circuit,
Inc., a motion picture theater company. UACI owned approximately 85% of the
Company's common stock until 1986. Election of each nominee requires the
affirmative votes of a majority of the total combined votes of the Class A
and Class B shares.

EACH PROXY RECEIVED WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES NAMED BELOW UNLESS OTHERWISE SPECIFIED IN THE PROXY.

Director Nominees

Salah M. Hassanein was elected as a Director in 1962. In July 1996,
Mr. Hassanein was appointed the President and Chief Executive Officer of the
Company. From 1994 to 1996, he served as President and Chief Operating
Officer. Prior to 1994, Mr. Hassanein was the Company's Senior Executive Vice
President. Mr. Hassanein also served as President of Warner Bros.
International Theatres Co. from 1988 to June 30, 1994, and is presently a
consultant to Warner Bros. Mr. Hassanein previously served as Executive Vice
President of UACI and President and director of United Artists Eastern
Theatres, Inc. Mr. Hassanein is a principal of SMH Entertainment, Inc. and a
director of Software Technologies Corporation.

J.R. DeLang was elected a Director in 1993. He has been the Senior
Vice President of the Company and the Executive Vice President of the
Company's Todd-AO Studios division since 1993. Mr. DeLang previously served
as Vice President of Sales and Marketing of Todd-AO Studios from 1988 to 1993
and Director of Sales and Marketing from 1987 to 1988.

Richard C. Hassanein has served as Vice President of the Company
and Director since 1993 and served as Executive Vice President of the
Company's subsidiary, Todd-AO Studios West, since 1995. Previously, he served
as Executive Vice President of the Company's subsidiary, Todd-AO Studios
East, from 1991 to 1995. Prior to 1991, Mr. Hassanein was an independent
representative for film and television producers. Previously, he was
President of United Film Distribution Co., Inc. Mr. Hassanein is the son of
Salah M. Hassanein.

Christopher D. Jenkins has been a Senior Vice President and
Director of the Company since 1987. He was appointed President of Todd-AO
Studios in 1990 and served as Vice President from 1987 to 1990. Mr. Jenkins
is currently a lead sound mixer for the Company.

Marshall Naify was elected a Director in 1964, and currently serves
as Co-Chairman of the Board. He served as Chairman of the Board during the

<PAGE>
PAGE 5

period of 1990 until July 1996. From 1995 until July 1996, he also served as
Co-Chief Executive Officer. Mr. Naify previously served as Chairman of the
Board and Co-Chief Executive Officer of UACI. Mr. Naify is an investor. He is
the brother of Robert A. Naify.

Robert A. Naify was elected a Director in 1959 and currently serves
as Co-Chairman of the Board. Mr. Naify served as Co-Chairman and Co-Chief
Executive Officer from 1995 until July 1996. He previously served as
President and Chief Executive Officer during the period of 1990 until 1994.
Mr. Naify also served as President and Co-Chief Executive Officer of UACI.
Mr. Naify is an investor and is a director of Tele-Communications, Inc. He is
the brother of Marshall Naify.

A.C. Childhouse was elected a Director in 1964. He previously
served as a Senior Vice President and Director of UACI. Mr. Childhouse is an
investor.

David Haas was elected a Director in October 1996. Mr. Haas has
been a financial consultant since 1995, and has assisted clients in the
negotiation and structuring of acquisitions. From 1990 to 1994, Mr. Haas
served as Senior Vice President and Controller of Time Warner Inc.

Herbert L. Hutner was elected as a Director in 1987. He is an
investor and a financial consultant.

Robert I. Knudson was elected as a Director in 1983, and currently
serves as a consultant to the Company. He was previously an Executive Vice
President of the Company and served as President of Todd-AO Studios from 198
until 1990.

Michael S. Naify was elected a Director in 1993. He was previously
Vice President of the Company, serving in that capacity from 1993 to 1994. He
is the son of Marshall Naify.

A. Frank Pierce was elected as a Director in October 1996. Mr.
Pierce currently acts as an international consultant providing services
related to motion picture distribution. From January 1993 to June 1996, Mr.
Pierce served as Senior Vice President of Europe Theatrical Distribution for
Time Warner Entertainment. From 1972 to 1993, he served as Vice President of
Europe Theatrical Distribution for Time Warner Entertainment. From 1955 to
1972, Mr. Pierce served in numerous international positions within the motion
picture industry including Managing Director of Italy for Paramount Pictures
International and management positions in four Latin American countries for
Columbia Pictures International.

Zelbie Trogden was elected a Director in 1994. He has been a
financial consultant and a director of Citadel Holding Corporation and
Fidelity Federal Bank since 1993. Prior thereto, he held various executive
positions with Bank of America and Security Pacific National Bank from 1960
to 1993.

<PAGE>
PAGE 6

Meetings

During the fiscal year ended August 31, 1996, the Board of Directors
held two meetings. The only directors who failed to attend at least 75% of
the meetings of the Board of Directors were Herbert Hutner and Marshall
Naify.

Committees

The Company has an Executive Committee composed of Messrs. Salah
Hassanein, Marshall Naify and Robert A. Naify. The functions of the
Executive Committee include acting on matters which by reason of time
limitations cannot be acted upon by the Board of Directors and studying
matters which are anticipated to be considered by the Board in the future.
During the fiscal year ended August 31, 1996, the Executive Committee held
no formal meetings, but met informally on a number of occasions.

The Company also has a Compensation Committee consisting of Messrs.
Childhouse, Hutner and Pierce and an Audit Committee consisting
of Messrs. Haas, Hutner and Trogden. The principal functions of the
Compensation Committee are to review and make recommendations to the
Board of Directors concerning executive compensation. The Compensation
Committee acted once during the fiscal year ended August 31, 1996. The
Audit Committee makes recommendations to the Board concerning the
engagement of independent auditors, reviews the auditing engagement, its
results and the Company's internal accounting controls, and directs
investigations into matters within the scope of its functions. The Audit
Committee met once during the fiscal year ended August 31, 1996.

A Committee consisting of Messrs. Childhouse and Hutner administered
the Company's Stock Option Plans during fiscal 1996 and acted once
during that year.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee is an employee of
the Company.

Other Officers

Information concerning the officers of the Company who are not also
directors is incorporated by reference from pp. 13-15 of the Annual Report on
Form 10-K which was mailed concurrently with this Proxy Statement.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. Commencing September 1, 1996, Directors
who are not employees of the Company will receive $10,000 cash compensation
annually for their services as directors. The following table shows, for the
years ended August 31, 1996, 1995 and 1994 all forms of compensation for the
Chief Executive Officer and each of the most highly compensated executive
officers of the Company whose total annual salary and bonus exceeded
$100,000 for the year ended August 31, 1996.

<PAGE>
PAGE 7

Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
No. of Securities
Fiscal Underlying All Other
Name and Principal Position Year Salary Options Compensation
<S> <C> <C> <C> <C>
Salah M. Hassanein 1996 100,000 (2) -- --
President and 1995 100,001 (2) 66,000 --
Chief Executive Officer 1994 100,000 (2) 110,000 --
The Todd-AO Corporation

J.R. DeLang 1996 335,442 -- 15,000 (3)
Executive Vice-President 1995 293,942 -- 19,168 (3)
Todd-AO Studios 1994 203,876 -- 3,073 (3)

Christopher D. Jenkins 1996 575,631 (4) -- 3,460 (4)
President 1995 465,981 (4) -- 3,385 (4)
Todd-AO Studios 1994 471,920 (4) -- 4,146 (4)

Clay M. Davis 1996 176,546 -- 3,460 (5)
Vice President 1995 151,575 16,500 3,385 (5)
Todd-AO Studios 1994 151,231 -- 3,385 (5)

Richard O'Hare 1996 173,695 -- 17,228 (6)
President 1995 176,491 11,000 --
Todd-AO Video Services 1994 -- -- --

</TABLE>

Notes to Summary Compensation Table

(1) The columns for "Bonus" and "Other Annual Compensation" have been
omitted because there is no compensation required to be reported in such
columns. The aggregate amount of perquisites and other personal benefits
provided to each officer listed above is less than 10% of the total annual
salary of such officer.

(2) Amounts shown as salary include professional fees of $80,000 for
1996, 1995 and 1994.

(3) Amounts shown as "All Other Compensation" represent contributions
made by the Company to its 401(k) Plan for 1996 and 1995 and under a
collective bargaining agreement to the Motion Picture Industry Pension Plan
for 1994 on Mr. DeLang's behalf.

<PAGE>
PAGE 8

(4) Amounts shown as salary include compensation of $475,631, $365,981
and $388,586 for 1996, 1995 and 1994, respectively, attributable to services
as a sound mixer. Amounts shown as "All Other Compensation" represent
contributions made by the Company under a collective bargaining agreement to
the Motion Picture Industry Pension Plan on Mr. Jenkins' behalf.

(5) Amounts shown as "All Other Compensation" represent contributions
made by the Company under a collective bargaining agreement to the Motion
Picture Industry Pension Plan on Mr. Davis' behalf.

(6) Amounts shown as "All Other Compensation" represent contributions
made by the Company to its 401(k) Plan on Mr. O'Hare's behalf.

Option/SAR Exercises and Value Table

No stock options were granted by the Company during the fiscal year ended
August 31, 1996 to the executive officers named in the Summary Compensation
Table. The following table shows each exercise of stock options during the
fiscal year ended August 31, 1996 by each of the executive officers named
in the Summary Compensation Table, together with respective aggregate
values of unexercised options as at August 31, 1996.

Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values

Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Salah M. Hassanein -- -- 110,000/66,000 $924,880/$626,208

J. R. DeLang -- -- 52,800/13,200 $463,331/$105,930

Christopher D. Jenkins -- -- 59,400/6,000 $524,964/$52,965

Clay M. Davis -- -- 20,900/6,600 $195,569/$52,965

Rick O'Hare -- -- 6,600/4,400 $50,741/$33,827

</TABLE>

<PAGE>
PAGE 9

Employment Agreements

The Company has employment agreements with Messrs. Jenkins, DeLang,
Davis and O'Hare. Under Mr. Jenkins' agreement (which expired on 12/31/96
but is expected to be renewed for a term expiring December 31, 2000),
compensation for sound mixing services is paid on an hourly basis at four
times the minimum supervisor union rate. Mr. Jenkins receives an additional
$100,000 per year for management and administrative services. The agreement
with Mr. DeLang (expiring September 30, 1997) provides for a salary of
$285,000 for the twelve months ending September 30, 1995, $300,000 for the
twelve months ending September 30, 1996 and $320,000 for the twelve months
ending September 30, 1997. Mr. Davis' agreement (expiring February 28, 1999)
provides for compensation of $200,000 per annum, consisting of $150,000 for
engineering and technical services and $50,000 per annum for management and
administrative services. Mr. O'Hare's agreement (expiring August 31, 1997)
provides for a salary of $153,016, $168,000 and $203,000 for the twelve
months ending August 31, 1995, 1996, and 1997, respectively.

None of the foregoing agreements include any termination or
change-in-control payments. The Company's stock option plans provide that
the unvested portion of the awards will become vested and exercisable in
connection with a change-in-control.

REPORT OF THE COMPENSATION COMMITTEE

Securities and Exchange Commission rules require a disclosure of the
Compensation Committee's policies applicable to the Company's executive
officers with respect to compensation reported for the fiscal year ending
August 31, 1995. During the fiscal year, the Compensation Committee
approved a new employment agreement with Clay M. Davis. Mr. Davis'
compensation is commensurate with his responsibilities and consistent with
that earned by other executives of comparable experience. Compensation
levels for the Company's full time executives are generally determined
primarily by reference to competitive levels for individuals of like
experience in similar positions and by prior performance with the
Company rather than by relationship to corporate performance.

The Company's compensation policy is to provide a reasonably
competitive level of current compensation to its executives together with
long term equity incentives, the value of which depends upon performance that
increases value to the stockholders. The Company does not presently pay cash
bonuses to its executives and the equity incentives consist solely of stock
options with vesting restrictions, which the Committee believes
encourages commitment and provides benefits directly related to corporate
performance.

COMPENSATION COMMITTEE

A. C. Childhouse
Herbert L. Hutner
A. Frank Pierce

<PAGE>
PAGE 10

REPORT OF THE STOCK OPTION COMMITTEE

During fiscal 1996 there were no stock options granted to officers
or directors.

STOCK OPTION COMMITTEE

A. C. Childhouse
Herbert L. Hutner

SECTION 16(a) REPORTING

Section 16(a) of the Exchange Act requires the Company's officers,
directors and 10% shareholders to file reports of ownership with the SEC and
to provide the Company with copies of such filings. Based solely upon
a review of the copies received, the Company believes that its
executive officers, directors and 10% shareholders were in compliance with
Section 16(a) for the fiscal year ended August 31, 1996.

STOCK PERFORMANCE GRAPH

The graph on the following page compares the yearly percentage change in
the cumulative total shareholder return on the Company's Class A Common
Stock during the five years ended August 31, 1996 with the cumulative total
return on the NASDAQ Stock Market Index (U. S. Companies) and a selected
peer group index consisting of NASDAQ stocks with a Standard Industrial
Classification similar to the Company's.

(GRAPH)

<TABLE>

The Todd-AO Corporation
Five Year Performance Comparison

Year End Data

08/31/91 08/31/92 08/31/93 08/31/94 08/31/95 08/31/96
<S> <C> <C> <C> <C> <C> <C>
The Todd-AO Corporation 100.0 96.90 87.80 153.50 248.10 332.70
NASDAQ Stock Market 100.0 108.50 143.10 148.90 200.50 226.10
NASDAQ Peer Group 100.0 114.10 250.00 181.30 201.00 93.00
(SIC 7810-7819 US + Foreign)
Motion Picture Production
and Allied Services

</TABLE>

<PAGE>
PAGE 11

STOCK OPTIONS

The Company presently has three stock option plans: the 1986 Stock
Option Plan, the 1994 Stock Option Plan and the 1995 Stock Option Plan.
All plans relate solely to Class A shares.

1986 Stock Option Plan

The Company's 1986 Stock Option Plan (the "1986 Plan") was approved by
the shareholders in July 1987. The 1986 Plan provides for the grant of
incentive stock options (at not less than 100% of fair market value on the date
of the grant), non-qualified stock options (at not less than 85% of fair
market value on the date of the grant) or a combination thereof. An
aggregate of 660,000 Class A Shares was originally reserved for issuance
under the 1986 Plan, which is administered by the Stock Option Committee.
Options to purchase an aggregate of 290,735 shares were outstanding under the
1986 Plan at January 17, 1996 as incentive and non-qualified options at
exercise prices ranging from $2.03 to $5.06 per share. On February 7, 1995,
the shareholders approved an extension of the termination date of the 1986
Plan until August 31, 2004 with respect to options for an aggregate of
213,675 shares granted on September 26, 1994. On March 27, 1996, the
shareholders approved an extension of the termination date of the 1986 Plan
with respect to nonqualified options to purchase an aggregate of 163,560
shares originally expiring on August 31, 1996. The termination date was
extended to August 31, 1997 with respect to 50% of such shares and until
August 31, 1998 as to the remaining 50%.

If adopted, Proposal 4 will (i) modify the requirements
for membership on the Committee which administers the 1986 Plan,
consistent with amendments to SEC Rule 16b-3; and (ii) allow the Committee
in its discretion to permit an optionee to assign the vested portion of
a nonqualified stock option.

1994 Stock Option Plan

The Company's 1994 Stock Option Plan (the "1994 Plan") was approved by the
shareholders in August 1994. The 1994 Plan provides for the grant of
incentive stock options (at not less than 100% of fair market value on the
date of the grant), non-qualified stock options (at not less than 85% of fair
market value on the date of the grant) or a combination thereof. An
aggregate of 330,000 shares has been reserved for issuance under the 1994
Plan. All of those shares have been awarded to Salah Hassanein (at an
exercise price of $3.26 per share) and Marshall Naify and Robert A. Naify
(at an exercise price of $3.59 per share) as incentive options to purchase
110,000 Class A Shares each. The options vest over a five year period
commencing on September 1, 1994 and once vested terminate on August 31,
2003 (in the case of Mr. Hassanein) and 06/23/99 (in the case of Messrs.
Naify and Naify). There are presently no options available for grant. The
1994 Plan is administered by the Stock Option Committee.

<PAGE>
PAGE 12

If adopted, Proposals 2 and 4 will: (i) increase the number of
shares reserved for issuance under the 1994 Plan by 300,000; (ii) approve
the award to Salah M. Hassanein, Marshall Naify and Robert A. Naify
of options to purchase 100,000 shares each; and (iii) modify the requirements
for membership on the Committee consistent with amendments to SEC Rule 16b-3;
and (iv) allow the Committee in its discretion to permit an optionee
to assign the vested portion of a nonqualified stock options.

1995 Stock Option Plan

The Company's 1995 Stock Option Plan (the "1995 Plan") was
approved by the shareholders in February 1995. The 1995 Plan provides for
the grant of incentive stock options (at not less than 100% of fair market
value on the date of the grant), non-qualified stock options (at not less
than 85% of fair market value on the date of the grant) or a combination
thereof. An aggregate of 440,000 shares was originally reserved for
issuance under the 1995 Plan. Options to purchase an aggregate of 650,910
shares were outstanding under the 1995 Plan at January 17, 1996 as incentive
and non-qualified options at exercise prices ranging from $4.50 to $5.29 per
share. The options vest over a five year period commencing on or near the
date of grant and once vested terminate on August 31, 2004. As of January
17, 1997, there were 74,390 options available for grant under the 1995 Plan.
The 1995 Plan is administered by the Stock Option Committee.

If adopted, Proposals 3 and 4 will :(i) increase the number of shares
reserved for issuance under the 1995 Plan by 130,000; (ii) approve the
award to officers and directors of options to purchase 80,000 shares at
$10.50 per share; and (iii) modify the requirements for membership on
the Committee consistent with amendments to SEC Rule 16b-3;
and (iv) allow the Committee in its discretion to permit an optionee
to assign the vested portion of a nonqualified stock options.

PROPOSAL TO AMEND
THE 1994 STOCK OPTION PLAN
AND APPROVE AWARDS THEREUNDER

General

On January 8, 1997, the Board of Directors, subject to shareholder
approval, increased the number of shares reserved for issuance under the
1994 Plan by 300,000 and granted options to purchase 100,000 shares each to
Messrs. Salah M. Hassanein, Marshall Naify and Robert A. Naify. The exercise
price of the options is $10.50 per share. The respective vesting dates for
each optionee are as follows:

Number of Shares Vesting On:

01/08/97 09/01/97 09/01/98 09/01/99 09/01/00 09/01/01 Total
<S> <C> <C> <C> <C> <C> <C> <C>
Salah M. Hassanein 20,000 20,000 20,000 20,000 20,000 -- 100,000
Marshall Naify 20,000 20,000 20,000 20,000 9,474 10,526 100,000
Robert A Naify 20,000 20,000 20,000 20,000 9,474 10,526 100,000

</TABLE>

<PAGE>
PAGE 13

It is anticipated that all such options will be nonqualified stock options
except for incentive options of 26,994 shares to Mr. Hassanein and 11,673
shares each to Marshall Naify and Robert A. Naify.

Messrs. Hassanein, Naify and Naify presently each have options for 110,000
shares under the 1994 Plan and 66,000 shares under the 1995 Plan. The effect
of the proposal would be to increase each individual's options to 266,000
shares, subject to vesting restrictions. As shown in the Summary
Compensation Table, Mr. Hassanein receives cash compensation of $100,000
per year. Messrs. Marshall Naify and Robert A. Naify receive employee
compensation of $5,000 per year. Given these levels of cash compensation
and the absence of other incentive compensation or bonus plans, the Board of
Directors believes that the additional options are appropriate.

Required Vote

Approval of the amendment of the 1994 Plan and awards thereunder requires
the affirmative votes of a majority of the total combined votes of the Class A
and Class B shares. The Board of Directors recommends a vote FOR this
proposal.

PROPOSAL TO AMEND
THE 1995 STOCK OPTION PLAN
AND APPROVE AWARDS THEREUNDER

General

The Board of Directors proposes to increase the number of shares
reserved for issuance under the 1995 Plan by 130,000. As of January
17, 1997 there were only 74,390 options available for grant under the
1995 Plan. The Board of Directors believes that it is in the Company's
best interests to have additional shares available for potential issuance
to key personnel.

The shareholders are also requested to approve the award on December
17, 1996 of new incentive stock options to purchase an aggregate of 80,000
shares to officers and directors, all at an exercise price of $10.50 per
share. The names of the recipients, the respective option amounts and
the vesting dates are as follows:

Number of Shares Vesting On:
01/08/97 09/01/97 09/01/98 09/01/99 09/01/00 Total
<S> <C> <C> <C> <C> <C> <C>
Silas R. Cross 2,000 2,000 2,000 2,000 2,000 10,000
Clay M. Davis 2,000 2,000 2,000 2,000 2,000 10,000
J. R. DeLang 2,000 2,000 2,000 2,000 2,000 10,000
Coburn Haskell 2,000 2,000 2,000 2,000 2,000 10,000
Richard Hassanein 2,000 2,000 2,000 2,000 2,000 10,000
Chris Jenkins 2,000 2,000 2,000 2,000 2,000 10,000
Robert Knudson 2,000 2,000 2,000 2,000 2,000 10,000
Rick O'Hare 2,000 2,000 2,000 2,000 2,000 10,000

Total 80,000
</TABLE>

<PAGE>
PAGE 14

All of these individuals are active in the Company's management and do
not participate in any other bonus or incentive plans. The award of
additional options is consistent with the Company's policy of providing
long term equity incentives the value of which depends upon performance
that increases value to the stockholders.

Required Vote

Approval of the increase in reserved shares under the 1995 Plan requires
the affirmative votes of a majority of the total combined votes of the Class
A and Class B shares. Approval of the awards under the 1995 plan does not
require a shareholder vote but is nonetheless requested and will be
deemed obtained by the affirmative votes of a majority of the total
combined votes of the Class A and Class B shares. The Board of Directors
recommends a vote FOR this proposal.

PROPOSAL TO AMEND ADMINISTRATIVE
PROVISIONS OF THE 1986, 1994 and 1995
STOCK OPTION PLANS

The Board of Directors proposes to amend the provisions of the 1986,
1994 and 1995 Stock Option Plans in order to: (i) change the eligibility for
membership on the Committee which administers the Plans; and (ii) allow
the Committee in its discretion to permit the assignment of the vested
portion of nonqualified stock options.

Committee Membership

Section 2 of the 1986 Stock Option Plan provides in part as follows:

2. Administration. The Plan shall be administered by a committee of
not less than two persons to be appointed by the Board of Directors of the
Company. (the "Committee.)" The Committee shall from time to time at its
discretion make determinations with respect to the officers and key employees
of the Company to whom options shall be granted and the amount of such
options. No member of the Committee shall be eligible to receive options or
stock under the Plan or options, stock or stock appreciation rights under any
other stock option or stock bonus plan of the Company while serving on
the Committee or for a period of one year prior to serving on the Committee.

Section 6.1 of the 1994 Plan and the 1995 Plan each provide as follows:

6.1. Composition of Committee. The Plan shall be administered
by a Committee to be appointed by the Board of Directors of the Company.
The Committee shall consist of at least two directors who are
"disinterested persons" within the meaning of Exchange Act Rule 16b-3,
which presently requires (with certain exceptions) that such directors
have not been granted or awarded equity securities pursuant to the Plan
or any other Company plan during the one year period prior to
service on the Committee.

<PAGE>
PAGE 15

Background

During 1996, Securities Exchange Act Rule 16b-3 was amended to
eliminate the "disinterested person" requirement and presently provides that
awards of stock options will be exempt transactions for purposes of the
"short swing" profit recovery provisions of Section 16(b) of the Exchange Act
if approved by a committee of two or more Non-Employee Directors (as
defined), by the entire Board of Directors or by the shareholders. The
proposed amendments will bring the administration of the 1986, 1994
and 1995 Plans into conformity with Rule 16b-3 as amended.

Description of Amendment

As amended, the first paragraph of Section 2 of the 1986 Plan and
Section 6.1 of the 1994 Plan and 1995 Plan will each provide as follows:

Composition of Committee. The Plan shall be administered
by a Committee to be appointed by the Board of Directors of the Company.
The Committee shall consist of at least two directors who are
"Non-Employee Directors" within the meaning of Exchange Act Rule 16b-3.
The Committee shall be entitled to take any action which it deems appropriate
to comply with Exchange Act Rule 16b-3 and related provisions (as presently
existing or hereafter amended), including without limitation submission of
any transaction to the entire Board of Directors or the shareholders
for approval.

Assignability of Non-Qualified Stock Options

Section 9 of the 1986 Plan provides as follows:

9. NONASSIGNABILITY. No stock option shall be assignable or
transferable by the grantee except by will or by the laws of descent
and distribution. During the life of the grantee, any stock options
which have been granted to him shall be exercisable only by him.

Section 8 of the 1994 Plan and the 1995 Plan each provide as follows:

8. NONASSIGNABILITY. No option shall be assignable or
transferable by the optionee except by will, by the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code. During the lifetime
of the optionee, the option shall be exercisable only by the
optionee, and no other person shall acquire any rights therein.

Background

Options under the 1986, 1994 and 1995 Plans can be granted as either
incentive options or non-qualified options. Incentive options provide
certain potential income tax advantages to the optionee. However,
the Internal Revenue Code imposes certain limitations on incentive
options, including a requirement that such options be non-assignable

<PAGE>
PAGE 16

and a limitation on the dollar amount of becoming exercisable during
any calendar year. The Company understands that there are
certain estate planning implications associated with the ability to
assign the vested portion of an employee stock option and believes
that it is appropriate to permit such assignability with respect to
non-qualified options.

Description of Amendment

As amended, Section 9 of the 1986 Plan and Section 8 of the 1994 Plan
and 1995 Plan will each provide as follows:

ASSIGNABILITY. No Incentive Option shall be assignable or
transferable by the optionee except by will, by the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code. During the lifetime
of the optionee, the Incentive Option shall be exercisable only by the
optionee, and no other person shall acquire any rights therein. The
Committee in its absolute discretion may permit assignment of the
vested portion of any Non-Qualified Stock Option outstanding under
the Plan.

Required Vote

Approval of the amendments to the 1986, 1995 and 1995 Stock Option Plans
requires the affirmative votes of a majority of the total combined votes of
the Class A and Class B shares. The Board of Directors recommends a vote
FOR this proposal.

PROPOSAL TO APPROVE THE ADOPTION OF
THE 1997 STOCK OPTION PLAN
AND STOCK OPTION AWARDS

General

The 1997 Stock Option Plan (the "1997 Plan") was adopted by the Board of
Directors on January 8, 1997 subject to approval by the stockholders. The
1997 Plan is intended to provide long-term incentives to selected individuals
in the form of options to purchase the Company's Class A Common Stock.
The initial group of optionees consists of the Company's non-employee
directors. The following discussion constitutes a brief description of the
material features of the 1997 Plan and is qualified in its entirety by
reference to the 1997 Plan which is attached as Appendix A.

Eligibility and Benefits

The 1997 Plan provides for the grant to Company employees, directors
and consultants of stock options which entitle the optionee to purchase
shares from the Company at a fixed price over the term of the option.

<PAGE>
PAGE 17

Options may be granted either as incentive stock options as defined by
the Internal Revenue Code, non-qualified stock options or a combination
thereof. All 140,000 shares covered by the 1997 Plan have been allocated
to the five Company directors who are not employees. Absent forfeitures
or further shareholder action it is not anticipated that other individuals
will receive options.

Administration

The 1997 Plan is administered by a Committee (the "Committee") appointed
by the Board of Directors. The Committee consists of at least two directors
who are "Non-Employee Directors" within the meaning of Exchange Act
Rule 16b-3. Initially the Plan will be administered by the Company's
Compensation Committee (presently consisting of Messrs. Childhouse,
Hutner and Pierce). The Committee shall be entitled to take any action
which it deems appropriate to comply with Exchange Act Rule 16b-3 and
related provisions (as presently existing or hereafter amended), including
without limitation submission of any transaction to the entire Board of
Directors or the shareholders

Terms of Options

The terms and conditions of each option will be specified in written
agreements in a form to be determined by the Committee. The Plan contains
the following limitations on awards:

Exercise Price. The exercise price for non-qualified options must
be at least 85% of the fair market value of the Class A shares on the date
of the grant. For incentive options the exercise price must generally be
at least 100% of fair market value and, for those individuals owning more
than 10% of the combined voting power of the Company's Common Stock
("10% shareholders"), at least 110% of fair market value.

Vesting. Options in installments over a period determined by the
Committee. Shares covered by incentive options must be held at least
one year after exercise and cannot be resold within two years from the
date of the grant. In addition, the aggregate fair market value of the
stock (determined as of the date of the grant) with respect
to which an incentive option becomes exercisable for the first time
during any calendar year cannot exceed $100,000.

Term. Once vested, an installment generally remains exercisable
until August 31, 2006, the termination date of the 1997 Plan. Incentive
options must be exercised within 10 years of the grant date (5 years for
10% shareholders). Upon termination of services, vested installments
are exercisable within 3 months after the date of termination (one year
if termination is due to death or disability). Unvested installments are
forfeited and returned to the pool of shares which are subject to potential
awards of options.

<PAGE>
PAGE 18

Acceleration. Options accelerate and become fully exercisable without
regard to vesting restrictions in the event of certain changes in control as
defined in the Plan.

Transferability. Awards of incentive options are not transferable
by the grantee except by will, intestate succession or pursuant to certain
qualified domestic relations orders. Consistent with the amendments
to the 1986, 1994 and 1995 Plans, the Committee in its discretion may
permit the assignment of the vested portion of non-qualified stock options.

Tax Treatment

Based on management's understanding of existing federal income tax
laws, the principal consequences of the grant and exercise of incentive
stock options and non-qualified stock options are summarized below.

Incentive Options. The grant of an incentive stock option does not
ordinarily have any income tax consequences to the optionee. If the shares
are held at least one year after exercise and are not disposed of within two
years from the date of grant, the optionee does not recognize taxable income
upon exercise, but the amount by which the fair market value of the stock at
the time of exercise exceeds the exercise price will be an item of tax
preference which may be subject to the alternative minimum tax. Any gain or
loss recognized upon the disposition of such shares by the optionee after
the two-year and one-year periods described above will be treated as
long-term capital gain or loss. If the option is treated as an incentive
option, the Company does not receive a tax deduction.

Non-Qualified Options. The grant of a non-qualified stock option also
does not ordinarily have any income tax consequences to the optionee. Upon
exercise, the optionee will recognize ordinary income equal to the difference
between the fair market value of the shares on the date of exercise and the
exercise price. The Company is entitled to a tax deduction in the same
amount as the income recognized by the optionee and at the same time that
the optionee recognizes such income.

When an optionee disposes of shares acquired upon exercise of a non-
qualified stock option, any amount realized in excess of the fair market
value of the shares on the date of exercise will be treated as capital gain
if the shares are a capital asset and will be long-term or short-term,
depending on the holding period for the shares. The holding period commences
upon exercise of the option. If the amount realized is less than such fair
market value, the loss will be treated as long-term or short-term capital
loss, depending upon the holding period for the shares.

<PAGE>
PAGE 19

Amendment

The Board of Directors has broad authority to amend the 1997 Plan
provided that participants consent to any amendments which diminish their
rights. Shareholder approval or ratification is required for amendments
which: (i) increase the number of shares subject to the 1997 Plan;
(ii) materially modify the requirements as to eligibility for participation
in the 1997 Plan; (iii) extend the term during which options may be
exercised; or (iv) extend the final date upon which options may be granted.
Notwithstanding the foregoing, the Board of Directors may adopt such
amendments as the Board shall in good faith deem necessary in order to
conform the 1997 Plan to the requirements of Securities Exchange Act Rule
16b-3.

Awards

On January 8, 1997 the Board of Directors, subject to approval of the
shareholders awarded non-qualified stock options to the Company's
non-employee directors as follows:

Number of Shares Vesting On:
01/08/97 09/01/97 09/01/98 09/01/99 09/01/00 Total
<S> <C> <C> <C> <C> <C> <C>
A. C. Childhouse 8,333 8,333 8,334 -- -- 25,000
David Haas 5,000 5,000 5,000 5,000 5,000 25,000
Herbert Hutner 8,333 8,333 8,334 -- 25,000
Michael S. Naify 5,000 5,000 5,000 5,000 5,000 25,000
A. Frank Pierce 5,000 5,000 5,000 5,000 5,000 25,000
Zelbie Trogden 3,000 3,000 3,000 3,000 3,000 15,000

Total 140,000

</TABLE>

Mr. Trogden was previously awarded an option for 10,000 shares. None of
other non-employee directors presently have other Company stock options,
and the Board of Directors believes that the award of stock options
is necessary to encourage and retain the services of qualified
individuals as Board Members.

Required Vote

Adoption of the 1997 Plan and awards thereunder requires the affirmative
votes of a majority of the total combined votes of the Class A and Class B
shares. The Board of Directors recommends a vote FOR this proposal.

NEW PLAN BENEFIT TABLE

The foregoing amendments may be deemed equivalent to the creation of a
new stock option plan for those individuals whose options are being approved.
The following table sets forth information regarding the expected benefits
arising from Proposals 2, 3 and 5 for each person named in the
Summary Compensation Table and for the indicated groups:

<PAGE>
PAGE 20

NEW PLAN BENEFITS
AMENDMENT OF 1994 STOCK OPTION PLAN
APPROVAL OF AWARDS UNDER 1995 STOCK OPTION PLAN
ADOPTION OF 1997 STOCK OPTION PLAN

Name and Principal Position Dollar Value ($)(1) Number of Units
<S> <C> <C>
Salah M. Hassanein -- 100,000
J.R. DeLang -- 10,000
Christopher D. Jenkins -- 10,000
Rick O'Hare -- 10,000
Clay Davis -- 10,000

Executive Group (2) -- 380,000

Non-Executive (3) -- 140,000(3)
Director Group

Non-Executive Officer (4) -- 158,500(4)
Employee Group

</TABLE>

Notes to New Plan Benefit Table:

(1) Options were granted on January 8, 1997 at $10.50 per share.
On January , 1997, the closing price of the Company's Class A Stock
as reported by NASDAQ was $ .

(2) This group consists of all executive officers.

(3) This group consists of Messrs. Childhouse, Haas, Hutner, Knudson,
Michael S. Naify and Pierce.

(4) These options were awarded by the Stock Option Committee on
December 17, 1996.

APPROVAL OF INDEPENDENT AUDITORS

Deloitte & Touche LLP has served as the Company's independent auditors
for many years. The Board of Directors has approved their engagement for
1997 and requests ratification from the stockholders. A representative
of Deloitte & Touche LLP will be present at the meeting with the opportunity
to make a statement and/or respond to appropriate stockholder questions.

<PAGE>
PAGE 21

Required Vote

Shareholder approval is not required for the appointment of Deloitte &
Touche LLP since the Board of Directors has the responsibility for
selecting auditors. Ratification is nonetheless requested, and will be
deemed obtained by the affirmative votes of a majority of the total
combined votes of the Class A and Class B shares. The Board of Directors
recommends a vote FOR this proposal.

STOCKHOLDER PROPOSALS

If any stockholder intends to present a proposal for action at the
Company's Annual Meeting to be held in 1998 and wishes to have such
proposal set forth in management's proxy statement, such stockholder must
forward the proposal to the Company so that it is received on or before the
later of (i) August 31, 1997, or (ii) a reasonable time before the proxy
materials for the annual meeting are mailed to stockholders. Proposals
should be addressed to the Company at 900 N. Seward Street, Los Angeles,
CA 90038 (Attention: Corporate Secretary).

TRANSACTION OF OTHER BUSINESS

As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present
to the meeting. If other matters are presented, proxies will be voted in
accordance with management's judgment unless instructions to the contrary
are given.

Dated: January 20, 1997

By Order of the
Board of Directors
/s/ Dan Malstrom
Dan Malstrom, Secretary

<PAGE>
PAGE 21
APPENDIX A

THE TODD-AO CORPORATION
1997 STOCK OPTION PLAN
(Effective January 8, 1997)

1. PURPOSE. This 1997 Stock Option Plan is intended to provide long
term incentives to key Company personnel in the form of options to
purchase shares of the Company's Class A Common Stock.

2. DEFINITIONS. The following terms shall have the indicated meanings:
2.1. Act. "Act" shall mean the Securities Act of 1933, as amended.

2.2. Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.3. Company. "Company" shall include The Todd-AO Corporation
and any of its subsidiary corporations which meet the definition set forth in
Section 425 (f) of the Code.

2.4. Committee. "Committee" shall mean the Committee appointed by
the Board of Directors to administer the Plan.

2.5. Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.

2.6. Fair Market Value. "Fair market value" shall be the last sale price
in the NASDAQ National Market System on a given date as published in
the Wall Street Journal or if no report is available for such date, the next
preceding date for which a report is available. If the shares are hereafter
listed on one or more securities exchanges, "fair market value" thereafter
shall be the highest closing price on any exchange for the date in question,
or if such date is not a trading date, the next preceding trading date.

2.7. Incentive Options. "Incentive options" shall be those options
described in Section 422(a) of the Code.

2.8. Non-Qualified Options. "Non-qualified options" shall mean
options which are not incentive options.

2.9. Shares. Unless the context otherwise requires, "shares" shall
mean the shares of the Company's Class A Stock.

3. SHARES OF STOCK SUBJECT TO THE PLAN. The shares that may
be issued under the Plan shall be authorized and unissued or reacquired
shares of the Company's Class A Stock. The aggregate number of shares
which may be issued under the Plan shall not exceed 140,000 shares of
Class A Stock, unless an adjustment is required by Section 12. To the
extent that options granted under the Plan terminate, expire or are canceled
prior to exercise, new options may be granted with respect to such shares.

<PAGE>
PAGE 22

4. ELIGIBILITY. Options may be granted under the Plan to any director,
employee, prospective employee or consultant to the Company. The
Committee shall determine, within the limitations of the Plan, the persons
to whom options are to be granted and the exercise price, vesting schedule
and other terms of the option. Each option shall be evidenced by a written
agreement between the Company and the optionee.

5. APPROVAL OF SHAREHOLDERS. The Plan shall be subject to the
approval of a majority of the total combined votes of all outstanding shares
of stock entitled to vote. Options granted prior to such approval shall not
become exercisable unless and until such approval is obtained.

6. ADMINISTRATION.

6.1. Composition of Committee. The Plan shall be administered by a
Committee to be appointed by the Board of Directors of the Company.
The Committee shall consist of at least two directors who are "Non-
Employee Directors" within the meaning of Exchange Act Rule 16b-3.
The Committee shall be entitled to take any action which it deems
appropriate to comply with Exchange Act Rule 16b-3 and related
provisions (as presently existing or hereafter amended), including without
limitation submission of any transaction to the entire Board of Directors or
the shareholders for approval.

6.2. Non-Uniform Determinations. The Committee's determinations
under the Plan need not be uniform and may be made by it selectively
among persons who participate (or who are eligible to participate) in the
Plan, whether or not such persons are similarly situated. Without limiting
the generality of the foregoing, the Committee shall be entitled to make
non-uniform and selective determinations as to the amount and terms of
options and leaves of absence.

6.3. Interpretation of Plan. The Committee shall have the power to
interpret and construe the Plan, and its interpretation and construction of
any provisions of the Plan within its authority shall be final. No member
of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted under it.

7. TERM OF OPTIONS AND EFFECT OF TERMINATION.

7.1. Date of Grant. The date on which any option is granted shall be
the date of the Committee's approval of such grant.

7.2. Termination Date. Options may be granted under the Plan until
August 31, 2006, the date of termination of the Plan. Notwithstanding any
other provision of the Plan, no option granted under the Plan shall be
exercisable after August 31, 2006.

<PAGE>
PAGE 23

7.3. Effect of Termination. In the event that any outstanding option
under the Plan expires by reason of lapse of time or otherwise is
terminated for any reason, then the unissued shares shall again become
available in the pool of shares of Common Stock for which options may be
granted under the Plan.

8. ASSIGNABILITY. No Incentive option shall be assignable or
transferable by the optionee except by will, by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
in the Code. During the lifetime of the optionee, the Incentive option shall
be exercisable only by the optionee, and no other person shall acquire any
rights therein. The Committee in its absolute discretion may permit
assignment of the vested portion of any Non-Qualified stock option
outstanding under the Plan.

9. TERMS AND CONDITIONS OF OPTIONS. Options granted pursuant
to the Plan shall be evidenced by agreements in such form as the
Committee shall from time to time determine, which agreements shall
comply with the terms and conditions of the Plan and shall state the
following, subject to the limitations imposed by Section 10 with respect to
incentive options:

9.1. Number of Shares. Each option agreement shall state the number
of shares to which the option pertains.

9.2. Option Price. Each option agreement shall state the option price
per share. The option price per share for non-qualified options shall be not
less than 85% of the fair market value of the Common Stock on the date
that the option is granted.

9.3. Vesting. An option shall be exercisable in annual installments
over a period specified by the Committee. Except as specifically otherwise
provided herein, if the optionee ceases to serve as a director, employee or
consultant prior to the eligibility date of an installment, the option shall
terminate with respect to that installment (without pro ration for fractional
years of service) and all subsequent installments. After the optionee has
become eligible to exercise an installment, the right to exercise with
respect to that installment shall remain in effect until the expiration or
sooner termination of the option.

9.4. Medium and Time of Payment. The option price shall be payable
upon the exercise of an option in cash or, at the discretion of the
Committee, in shares of the Common Stock or in a combination of cash
and such shares. The Company shall have the right to require the optionee
to remit to the Company an amount sufficient to satisfy federal, state and
local withholding tax requirements. Upon receipt of payment and
applicable tax remittance, the Company shall, subject to Section 9.6,
deliver to the optionee (or person entitled to exercise the option) a
certificate or certificates for the shares of Common Stock to which the
option pertains.

<PAGE>
PAGE 24

9.5. Partial Exercise. To the extent that an option has become
exercisable, it may, subject to the restrictions and limitations set forth in
this Plan and the option agreement, be exercised in whole or in part,
provided, however, that no option shall be exercised for less than ten
shares. If exercised in part, the unexercised portion of an option shall
continue to be held by the option holder and may thereafter be exercised as
herein provided within the term of the option.

9.6. Securities Law Restrictions. No option may be exercised until the
applicable listing requirements of any securities exchange, or the
registration or qualification requirements of any governmental authority
have been complied with. Unless the shares issuable upon exercise of an
option have been registered under the Act, the option holder shall, as a
condition of issuance, provide written representations satisfactory to the
Company's counsel to the effect that the shares are being acquired for the
optionee's own account as an investment and not with a view to, or for sale
in connection with, the distribution of any such shares and that no transfers
of the shares shall be made except in compliance with the Act and any
rules and regulations promulgated thereunder. A legend to this effect may
be endorsed upon unregistered shares so issued.

9.7. Other Provisions. The option agreements authorized under the
Plan shall contain such other provisions as the Committee shall deem
advisable.

10. RESTRICTIONS ON INCENTIVE OPTIONS. Incentive options
under the Plan, if any, may be granted only to directors who are also
officers or key employees of the Company. The aggregate fair market
value (determined as of the date of grant) with respect to which incentive
options are exercisable for the first time by any individual during any
calendar year (under all incentive stock option plans of the employer
corporation and its parents and subsidiaries) shall not exceed $100,000.
The option price for incentive options shall be not less than 100% of fair
market value on the date of the grant. No incentive option shall be
exercisable for more than ten years after the date of its grant. In addition,
if the recipient of an incentive option owns stock possessing more than
10% of the total combined voting power of all classes of stock of the
Company, the option price shall be not less than 110% of fair market value
on the date of the grant and the option shall not be exercisable for more
than 5 years from the date of its grant.

11. TERMINATION OF SERVICES.

11.1. Termination of Services-Generally. In the event that an optionee
shall cease to be an employee, consultant or director of the Company for
any reason other than death or disability, the option shall be exercisable, to
the extent it was exercisable at the date the optionee ceased to be an
employee, consultant or director, for a period of three months after such
date and prior to the date on which the option expires by its terms. If not
so exercised, the option shall terminate.

<PAGE>
PAGE 25

11.2. Death or Disability. If an optionee dies or becomes permanently
disabled within the meaning of Section 22(e)(3) of the Code while serving
as an employee, consultant or director of the Company, or within the three-
month period after termination of such status during which exercise of an
option is permitted in accordance with Section 11.1, such option may, to
the extent it was exercisable at the time of death or disability, be exercised
for a period not to exceed the lesser of: (i) one year after the optionee's
death or disability; or (ii) the period prior to the date on which the option
expires by its terms. In the event of death, the option may be exercised by
any person or persons designated by the optionee on a Beneficiary
Designation Form adopted by the Committee for such purpose, or, if there
is no effective Beneficiary Designation Form on file with the Committee,
by the executors or administrators of the optionee's estate or by any person
or persons who shall have acquired the option directly from the optionee
by his will or the applicable law of descent and distribution.

12. ADJUSTMENTS. Adjustments to the options and the shares covered
by the Plan shall be made as follows:

12.1. Recapitalizations. The number of shares of Common Stock
covered by the Plan, the number of shares and price per share of each
outstanding option, and the number of shares subject to each outstanding
option shall be proportionately adjusted for any increase or decrease in the
number of issued and outstanding shares of Common Stock resulting from:
(i) a subdivision or consolidation of shares; (ii) the payment of a stock
dividend of more than 2%; or (iii) any other increase or decrease of more
than 2% in the number of issued and outstanding shares of Common Stock
effected without receipt of consideration by the Company.

12.2. Rights Offerings. In the event the Company shall issue rights,
warrants or options to its shareholders on a pro rata basis entitling them to
purchase shares of Class A or Class B Stock at a price less than fair market
value of such Stock, the option price for outstanding options shall be
proportionately reduced (and/or the number of shares subject to the option
proportionately increased) to reflect as nearly as practicable the benefit
that the option holder would have received had the option been exercised
immediately prior to the record date for such rights, warrants or options.

12.3. Reorganizations. If any merger, consolidation or similar
transaction in which the Company is the surviving corporation (and which
is not a Change in Control as hereinafter defined) shall affect any
outstanding option under the Plan, the Committee shall take such action as
is equitable or appropriate to substitute a new option for such affected
option and to make the new option equivalent to the affected option as
nearly as practicable.

12.4. Changes in Control-Definition. A "Change in Control" shall be
deemed to have occurred if:

(a) there shall be consummated (i) any reorganization,
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation, or (ii) any sale or other transfer of all
or substantially all of the Company's assets (in one transaction or a series
of related transactions); or

<PAGE>
PAGE 26

(b) the stockholders of the Company shall have approved a
plan or proposal for the liquidation or dissolution of the Company; or

(c) there shall be consummated a sale to any person or group
(as defined in the Securities Exchange Act of 1934) of Class A and/or
Class B shares entitled to cast more than 50% of the total combined votes
of all outstanding Class A and Class B Shares; or

(d) the Board of Directors of the Company shall otherwise
have determined that a Change in Control has otherwise occurred.

12.5. Changes in Control--Effect. A Change in Control shall cause
each outstanding option to terminate effective one hundred eighty days
after the consummation thereof, unless any agreement relating to a Change
in Control shall otherwise provide. Notwithstanding the foregoing,
agreements relating solely to a transaction described in paragraph (c) of
Section 12.4 may not terminate an outstanding option earlier than one
hundred eighty days after the consummation thereof unless the optionee
consents to an earlier termination. Effective concurrently with the Change
in Control (whether or not the option is terminated or affected by the
Change in Control) each optionee shall be entitled to exercise his option in
full without regard to any limitations on exercisability and such option
shall be considered fully vested.

12.6. Committee's Authority. The Committee, in its discretion, shall
make such other and further adjustments are equitable and appropriate
with respect to any transaction affecting the capitalization of the Company.

12.7. Company's Rights Unimpaired. The grant of an option 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.

13. AMENDMENT OF THE PLAN.

13.1. Generally. The Board of Directors may, insofar as permitted by
law, from time to time, suspend or discontinue the Plan or revise or amend
it in any respect whatsoever, except that no such amendment shall alter or
impair or diminish any rights or obligations under any option theretofore
granted under the Plan without the consent of the person to whom such
option was granted. In addition, without further shareholder approval or
ratification, no such amendment shall: (i) materially increase the benefits
accruing to participants in the Plan; (ii) materially increase the number of
shares subject to the Plan (except as authorized by Section 12); (iii)
materially modify the requirements as to eligibility for participation in the
Plan; (iv) extend the term during which options may be exercised; or (v) or
extend the final date upon which options under the Plan may be granted.
Notwithstanding the foregoing, the Board of Directors may adopt such
amendments as the Board shall in good faith deem necessary in order to
conform the Plan to the requirements of Exchange Act Rule 16b-3.

<PAGE>
PAGE 27

13.2. Modifications to Options. Subject to the terms of the Plan and
with the consent of the optionee where appropriate, the Committee may
amend outstanding option agreements, including without limitation
amendments which accelerate exercisability of any option; or cancel an
option and issue a new option in substitution therefor.

14. MISCELLANEOUS.

14.1. No Rights as Shareholder. An optionee or a transferee of an
option shall have no rights as a shareholder with respect to any shares
covered by an option until the date of the receipt of payment (including
any amounts required by the Company to satisfy withholding tax
requirements) by the Company. No adjustment shall be made as to any
option 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 such date, except as provided in Section 12.3.

14.2. Application of Funds. The proceeds received by the Company
from the sale of shares pursuant to the exercise of options will be used for
general corporate purposes.

14.3. No Obligation to Exercise Option. The granting of an option
shall impose no obligation upon the optionee to exercise such option.

14.4. Agreement to Govern. In the event of any inconsistency
between the terms of the option agreement and the description thereof
contained herein, the terms of the agreement shall prevail.

Form of Proxy Card:

THE TODD-AO CORPORATION
ANNUAL MEETING OF STOCKHOLDERS FEBRUARY 25, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS

The undersigned hereby appoints Robert A. Naify, Silas R. Cross and Dan
Malstrom, and each of them, with power of substitution, as proxies of the
undersigned, to attend the Annual Meeting of Stockholders of The
Todd-AO Corporation to be held at Todd-AO Studios, 900 N. Seward
Street, Los Angeles, CA 90038, on February 25, 1996, at 10:30 A.M., and any
adjournment(s) thereof, and to vote all shares of Class A or Class B Stock
of The Todd-AO Corporation which the undersigned would be entitled to
vote if personally present on the following:

(1) To elect a board of thirteen directors for the ensuing year.

FOR all nominees listed WITHOUT AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed
below

(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below)

A. C. Childhouse, J. R. DeLang, David Haas, Richard C. Hassanein, Salah M.
Hassanein, Herbert L. Hutner, Christopher D. Jenkins, Robert I. Knudson,
Marshall Naify, Michael S. Naify, Robert A. Naify, A. Frank Pierce and
Zelbie Trogden.

(2) To approve: (i) an increase in the number of shares reserved for
issuance under the 1994 Stock Option Plan from 330,000 to 630,000; and
(ii) the grant of new stock options under the 1994 Stock Option Plan to Salah
M. Hassanein, Marshall Naify and Robert A. Naify to purchase 100,000 Class A
Shares each at an exercise price of $10.50 per share.

FOR AGAINST ABSTAIN

(3) To approve: (i) the award under the 1995 Stock Option Plan of stock
options to officers and directors to purchase an aggregate of 80,000 Class A
shares at an exercise price of $10.50 per share; and (ii) an increase in the
number of shares authorized under the 1995 Stock Option Plan from
770,000 to 900,000.

FOR AGAINST ABSTAIN

(4) To approve amendments to the 1986, 1994 and 1995 Stock Option Plans
which: (i) modify the requirements for membership on the Committee which
administers the Plans, consistent with amendments to Securities Exchange
Act Rule 16b-3; and (ii) allow the Committee in its discretion to permit an
optionee to assign the vested portion of a nonqualified stock option.

FOR AGAINST ABSTAIN

(5) To adopt the 1997 Stock Option Plan and approve the award of stock
options thereunder to purchase an aggregate of 140,000 Class A shares to
non-employee directors of the Company.

FOR AGAINST ABSTAIN

(6) To ratify the appointment by the Board of Directors
of Deloitte & Touche LLP as the Company's independent auditors
for fiscal 1997.

(7) In their discretion, upon any and all such other matters as may
properly come before the meeting or any adjournment thereof.

FOR AGAINST ABSTAIN

THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE
OF DIRECTIONS, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF DIRECTORS NOMINATED BY MANAGEMENT AND
FOR PROPOSALS 2, 3, 4 5 and 6.

Dated: , 1997

(Signature)

Please sign exactly as
name appears at left.
Joint owners should each
sign. Attorneys,
administrators, trustees,
etc. should so indicate
when signing.

STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND
RETURN THIS PROXY PROMPTLY IN THE ENVELOPE
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.