<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MARKET FACTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MARKET FACTS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which 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:
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Notes:
<PAGE>
MARKET FACTS, INC.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
-----------------------------------------------
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
-----------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 1995
<PAGE>
MARKET FACTS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 1995
To the Stockholders of Market Facts:
Notice is hereby given that the Annual Meeting of Stockholders of Market
Facts, Inc., a Delaware corporation, will be held at Harris Trust and Savings
Bank, 111 West Monroe Street in Chicago, Illinois on Thursday, April 27, 1995 at
10:30 A.M. for the following purposes:
(1) To elect four (4) directors to serve for a term of three (3) years each as
specified in the proxy statement or until their successors are elected and
qualify.
(2) To transact such other business as may properly come before the meeting.
The Annual Report of the Company for the fiscal year ended December 31, 1994
accompanies this Notice.
By Order of the Board of Directors,
WESLEY S. WALTON
Secretary
Chicago, Illinois
March 21, 1995
- --------------------------------------------------------------------------------
IMPORTANT
A proxy statement and proxy are submitted herewith. ALL STOCKHOLDERS ARE URGED
TO COMPLETE AND MAIL THE PROXY PROMPTLY. The enclosed envelope for return of
proxy requires no postage if mailed in the U.S.A. Stockholders attending the
meeting may personally vote on all matters which are considered, in which
event the signed proxy is revoked. It is important that your stock be voted.
- --------------------------------------------------------------------------------
<PAGE>
MARKET FACTS, INC.
PROXY STATEMENT
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
(708) 590-7000
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Market Facts, Inc. ("the Company") for use
at the Annual Meeting of Stockholders of the Company to be held on April 27,
1995. A stockholder may revoke a proxy at any time prior to the exercise of the
powers therein granted. This may be done prior to the meeting by written
revocation sent to the Secretary of the Company at the principal office of the
Company, 3040 West Salt Creek Lane, Arlington Heights, Illinois 60005; or it may
be done personally upon oral or written request at the Annual Meeting. All
expenses in connection with the solicitation of proxies will be borne by the
Company. In addition to the use of the mail, proxies may be solicited
personally, by telephone or by telegraph. This Proxy Statement and proxy are
being mailed on or about March 21, 1995 to all stockholders of record on March
1, 1995.
VOTING SECURITIES
The Board of Directors has fixed the close of business on March 1, 1995 as the
record date for the determination of the stockholders entitled to vote at the
meeting and any adjournment thereof, notwithstanding any subsequent transfers of
stock. The stock transfer books of the Company will not be closed.
On March 1, 1995, there were outstanding 1,812,339 shares of Common Stock of
the Company, each of which shares is entitled to one vote.
The following table sets forth all persons known by the Board of Directors to
be beneficial owners of more than five percent of the Company's Common Stock
outstanding as of March 1, 1995:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
NAME AND ADDRESS NUMBER OF SHARES AND PERCENT
OF BENEFICIAL OWNER NATURE OF BENEFICIAL OWNERSHIP(1) OF CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Bankmont Financial Corp.
111 West Monroe St. 240,252(2) 13.26%
P.O. Box 755
Chicago, Illinois 60690
- ----------------------------------------------------------------------------------------
Verne B. Churchill
Market Facts, Inc. 149,478(3) 8.20%
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
- ----------------------------------------------------------------------------------------
Gregory J. Spagna
Suite 1600 140,000(4) 7.72%
25 West 45th Street
New York, New York 10036
- ----------------------------------------------------------------------------------------
Sanford M. Schwartz
Market Facts--New York, Inc. 101,474(5) 5.60%
902 Broadway
New York, New York 10010
- ----------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
- ------------------
(1) The nature of beneficial ownership of securities is direct, and arises from
sole voting and investment power, unless otherwise indicated by footnote.
(2) As reported in Schedule 13G dated February 13, 1995, filed by Bankmont
Financial Corp., a wholly-owned subsidiary of Bank of Montreal. Bankmont
Financial Corp., its wholly-owned subsidiary Harris Bankcorp, Inc., and its
wholly-owned subsidiary Harris Trust and Savings Bank, expressly disclaim
beneficial ownership of the 238,892 shares of Company Common Stock held by
the Harris Trust and Savings Bank as Trustee of the Market Facts, Inc.
Profit Sharing and Retirement Plan ("Profit Sharing Plan") and the Market
Facts Employee Stock Ownership Plan ("ESOP").
(3) Includes 10,000 shares subject to immediately exercisable stock options,
2,749 shares allocated to Mr. Churchill under the ESOP and 43,032 shares
held for the benefit of Mr. Churchill in the Market Facts Stock Fund of the
Company's Profit Sharing Plan.
(4) As reported in Mr. Spagna's Schedule 13G dated January 31, 1995.
(5) Includes 100,000 shares which are subject to the terms of a Restricted Stock
Award and vest 10% each year commencing January 5, 1993. As of March 1,
1995, 30,000 of such shares had vested. Upon the termination of Dr.
Schwartz's employment with the Company, any unvested shares will be
forfeited and returned to the Company. A total of 442 shares are allocated
to Dr. Schwartz under the ESOP and 1,032 shares are held for the benefit of
Dr. Schwartz in the Market Facts Stock Fund of the Company's Profit Sharing
Plan.
Information regarding shares of Common Stock of the Company beneficially owned
by all directors and nominees, by all present directors and executive officers
as a group, and by each Named Executive is included under "Information
Respecting Nominees," "Continuing Directors" and "Security Ownership of Named
Executive" on pages 4, 5 and 6 of this Proxy Statement.
ELECTION OF DIRECTORS
At the Annual Meeting four (4) directors of the Company will be elected. The
Company's Restated Certificate of Incorporation divides the Board of Directors,
which presently consists of eleven directors, into three classes, each having a
term of three years. Four directors, Messrs. William W. Boyd, John C. Robertson,
Timothy Q. Rounds and Glenn W. Schmidt, have been nominated by the Board of
Directors to serve for a term of three years each. It is intended that the
enclosed proxy shall be voted for the election of these four (4) nominees unless
authority to do so is withheld. In the event any of said nominees shall cease to
be a candidate for election for any reason, the proxy will be voted for a
substitute nominee designated by the Board of Directors and for the remaining
nominees so listed. The Board of Directors currently has no reason to believe
that any nominee will be either unwilling or unable to serve as a director if
elected. Any proxies given by stockholders cannot be voted for a greater number
of persons than the number of nominees listed and identified.
3
<PAGE>
INFORMATION RESPECTING NOMINEES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
NAME AGE PRINCIPAL OCCUPATION DATE FIRST APPROXIMATE % OF
OR EMPLOYMENT FOR ELECTED DIRECTOR NUMBER OF CLASS
LAST FIVE YEARS COMMON SHARES OWNED
BENEFICIALLY
OWNED 3/1/95(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William W. Boyd 68 Chairman of the Board of January 24, 1994 None 0%
Sterling Plumbing Group,
Inc., Rolling Meadows,
Illinois since 1992;
prior thereto, Chairman,
President and Chief
Executive Officer.(2)
- --------------------------------------------------------------------------------------------------------------------
John C. Robertson 63 President, Market Facts March 26, 1964 20,616 1.14%
of Canada, Ltd.(3)
- --------------------------------------------------------------------------------------------------------------------
Timothy Q. Rounds 56 Senior Vice President of September 12, 1984 34,567(4) 1.90%
the Company.
- --------------------------------------------------------------------------------------------------------------------
Glenn W. Schmidt 52 Executive Vice President July 23, 1980 69,062(5) 3.79%
of the Company.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) The nature of beneficial ownership of securities is direct, and arises from
sole voting and investment power, unless otherwise indicated by footnote.
(2) Mr. Boyd is a trustee of the SteinRoe Income Trust, the SteinRoe Investment
Trust and the SteinRoe Municipal Trust. He also is Chairman of the Board of
Trustees of Elmhurst College, as well as a director of Cummins-Allison Corp.
and Kohler Company.
(3) Until April 30, 1994, Mr. Robertson and his wife jointly owned the Canadian
company which held 50% of the outstanding shares of Common Stock of Market
Facts of Canada, Ltd. The Company acquired their interest in the Canadian
company on April 30, 1994 and now has full ownership of Market Facts of
Canada, Ltd.
(4) Includes 8,500 shares subject to immediately exercisable stock options and
1,422 shares allocated to Mr. Rounds under the ESOP.
(5) Includes 10,000 shares subject to immediately exercisable stock options,
15,600 shares held by Mr. Schmidt as custodian for his children, 2,256
shares allocated to him under the ESOP and 11,815 shares held for his
benefit in the Market Facts Stock Fund of the Company's Profit Sharing
Plan.
4
<PAGE>
CONTINUING DIRECTORS WHOSE TERMS OF OFFICE EXPIRE IN 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
NAME AGE PRINCIPAL OCCUPATION DATE FIRST APPROXIMATE % OF
OR EMPLOYMENT FOR ELECTED DIRECTOR NUMBER OF CLASS
LAST FIVE YEARS COMMON SHARES OWNED
BENEFICIALLY
OWNED 3/1/95(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lawrence W. Labash 47 Senior Vice President of January 24, 1994 23,511(2) 1.29%
the Company.
- --------------------------------------------------------------------------------------------------------------------
Thomas H. Payne 49 President and Chief December 7, 1982 49,570(3) 2.71%
Operating Officer of the
Company.
- --------------------------------------------------------------------------------------------------------------------
Sanford M. Schwartz 43 Executive Vice President of October 28, 1992 101,474(4) 5.60%
the Company and President
of Market Facts--New York,
Inc. since July, 1992;
prior thereto, President of
Elrick & Lavidge, a market
research firm in New York,
New York.
- --------------------------------------------------------------------------------------------------------------------
Wesley S. Walton 56 Secretary of the Company; April 27, 1988 20,000(6) 1.10%
and Chairman of the
Management Committee for
the law firm of Keck, Mahin
& Cate, Chicago,
Illinois.(5)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------
(1) The nature of beneficial ownership of securities is direct, and arises from
sole voting and investment power, unless otherwise indicated by footnote.
(2) Includes 8,500 shares subject to immediately exercisable stock options,
3,300 shares with respect to which voting and investment powers are shared,
1,323 shares allocated to Mr. Labash under the ESOP and 7,294 shares held
for his benefit in the Market Facts Stock Fund of the Company's Profit
Sharing Plan.
(3) Includes 19,000 shares subject to immediately exercisable stock options,
2,427 shares allocated to Mr. Payne under the ESOP and 5,486 shares held for
his benefit in the Market Facts Stock Fund of the Company's Profit Sharing
Plan.
(4) Includes 100,000 shares which are subject to the terms of a Restricted Stock
Award and vest 10% each year commencing January 5, 1993. As of March 1,
1995, 30,000 of such shares had vested. Upon the termination of Dr.
Schwartz's employment with the Company, any unvested shares will be
forfeited and returned to the Company. A total of 442 shares are allocated
to Dr. Schwartz under the ESOP and 1,032 shares are held for the benefit of
Dr. Schwartz in the Market Facts Stock Fund of the Company's Profit Sharing
Plan.
(5) Keck, Mahin & Cate serves as general counsel to the Company and is expected
to continue in that capacity for the current year.
(6) Includes 2,000 shares held by the Wesley S. and Jurdis Walton Charitable
Foundation, as to which voting and investment powers are shared.
5
<PAGE>
CONTINUING DIRECTORS WHOSE TERMS OF OFFICE EXPIRE IN 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
APPROXIMATE NUMBER OF
NAME AGE PRINCIPAL OCCUPATION DATE FIRST COMMON SHARES % OF CLASS OWNED
OR EMPLOYMENT FOR ELECTED DIRECTOR BENEFICIALLY OWNED
LAST FIVE YEARS 3/1/95(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Verne B. Churchill 62 Chairman and Chief Executive March 13, 1967 149,478(2) 8.20%
Officer of the Company.
- ----------------------------------------------------------------------------------------------------------------------------------
Karen E. Predow-James 46 Division Manager, Consumer February 3, 1993 None 0%
Communications Services for
AT&T, Basking Ridge, New
Jersey since October, 1994;
prior thereto, Vice
President of The Chase
Manhattan Bank, N.A., New
York, New York.
- ----------------------------------------------------------------------------------------------------------------------------------
Jack R. Wentworth 66 Professor and former Dean, April 27, 1988 200 0.01%
Graduate School of Business,
Indiana University,
Bloomington, Indiana.(3)
- ----------------------------------------------------------------------------------------------------------------------------------
ALL 20 PRESENT DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP 642,180(4) 33.27%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) The nature of beneficial ownership of securities is direct, and arises from
sole voting and investment power, unless otherwise indicated by footnote.
(2) Includes 10,000 shares subject to immediately exercisable stock options,
2,749 shares allocated to Mr. Churchill under the ESOP and 43,032 shares
held for the benefit of Mr. Churchill in the Market Facts Stock Fund of the
Company's Profit Sharing Plan.
(3) Dr. Wentworth is also a director of Kimball International, Inc. and Lone
Star Industries, Inc.
(4) Includes 26,400 shares with respect to which voting and investment powers
are shared, 118,000 shares subject to immediately exercisable stock options,
20,883 shares allocated to executive officers under the ESOP and 88,842
shares held for the benefit of executive officers of the Company in the
Market Facts Stock Fund of the Company's Profit Sharing Plan.
SECURITY OWNERSHIP OF NAMED EXECUTIVE (1)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
APPROXIMATE NUMBER OF COMMON SHARES
NAME BENEFICIALLY OWNED 3/1/95 % OF CLASS OWNED
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stephen J. Weber 23,274(1) 1.28%
- ------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) This table describes the beneficial ownership of shares held by the sole
non-director Named Executive. Such shares include 10,130 shares held
directly, 3,000 shares with respect to which voting and investment powers
are shared, 8,500 shares subject to immediately exercisable options, and
1,644 shares allocated to the Named Executive under the ESOP.
6
<PAGE>
REMUNERATION OF EXECUTIVE OFFICERS
The Summary Compensation Table which follows includes, for each of the fiscal
years ended December 31, 1994, 1993, 1992, 1991 and 1990, individual
compensation for services to the Company and its subsidiaries paid to: (i) the
Chief Executive Officer and (ii) the four other most highly paid executive
officers of the Company for 1994 (together the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM ALL OTHER
COMPENSATION COMPENSATION(2)
AWARDS
- --------------------------------------------------------------------------------------------------------------------------
NAME AND YEAR SALARY BONUS OTHER ANNUAL RESTRICTED SECURITIES
PRINCIPAL POSITION COMPENSATION(1) STOCK UNDERLYING
AWARD OPTIONS
(SHARES)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Verne B. Churchill 1994 $196,300 $ 87,000 $ 6,085 0 0 $ 3,380
1993 $188,656 $ 80,000 $ 4,557 0 0 $ 6,399
Chairman and 1992 $188,656 $ 34,000 $ 4,897 0 6,000 $ 0
Chief Executive Officer 1991 $188,656 $ 42,782 $ 5,977 0 4,000 $ 7,021
1990 $188,656 $ 41,500 $ 11,203 0 0 $ 7,238
- --------------------------------------------------------------------------------------------------------------------------
Thomas H. Payne 1994 $172,964 $ 87,000 $ 11,863 0 0 $ 3,380
1993 $166,244 $ 80,000 $ 6,825 0 0 $ 5,859
President and 1992 $166,244 $ 34,000 $ 4,617 0 15,000 $ 0
Chief Operating Officer 1991 $166,244 $ 35,084 $ 4,849 0 4,000 $ 6,757
1990 $166,244 $ 39,500 $ 8,167 0 0 $ 7,238
- --------------------------------------------------------------------------------------------------------------------------
Glenn W. Schmidt 1994 $163,684 $ 62,000 $ 12,594 0 0 $ 3,380
1993 $157,300 $ 56,000 $ 5,576 0 0 $ 5,478
Executive Vice President 1992 $157,300 $ 30,000 $ 5,257 0 6,000 $ 0
1991 $156,680 $ 31,000 $ 6,668 0 4,000 $ 6,345
1990 $143,833 $ 41,300 $ 8,595 0 0 $ 6,534
- --------------------------------------------------------------------------------------------------------------------------
Sanford M. Schwartz 1994 $182,130 $ 15,000 $ 10,831 0 0 $ 3,380
1993 $175,032 $ 10,000 $ 1,227 0 0 $ 5,031
Executive Vice President 1992 $ 84,150 $ 0 $ 0 $475,000(3) 0 $ 0
and President of
Market Facts--New York, Inc.
- --------------------------------------------------------------------------------------------------------------------------
Stephen J. Weber 1994 $135,968 $ 40,000 $ 9,944 0 0 $ 3,380
1993 $129,602 $ 35,000 $ 4,735 0 0 $ 4,604
Senior Vice President 1992 $123,412 $ 26,000 $ 5,296 0 5,000 $ 0
1991 $117,535 $ 25,500 $ 4,856 0 3,500 $ 4,543
1990 $112,858 $ 27,000 $ 5,945 0 0 $ 4,888
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
- ----------------
(1) These amounts represent, for each of the Named Executives, transportation
allowance payments or the value of his personal use of a Company car which
is reported to the Internal Revenue Service as income, and quarterly
reimbursements of interest paid on demand notes given to purchase Company
stock. The amount of such reimbursements has the effect of reducing the
interest rate on the demand notes to 4%. The total amount of perquisites
and other personal benefits did not exceed the lesser of $50,000 or 10% of
total annual salary and bonus for any of the Named Executives for any year
shown.
(2) These amounts represent, for each of the Named Executives, amounts
contributed for their accounts pursuant to the Market Facts Profit Sharing
Plan and the ESOP. Pursuant to the Profit Sharing Plan, the amounts
credited to the Named Executives in 1994, 1993, 1992, 1991 and 1990,
respectively, were as follows: Mr. Churchill, $3,380, $3,049, $0, $3,464
and $5,467; Mr. Payne, $3,380, $2,779, $0, $3,365 and $5,467; Mr. Schmidt,
$3,380, $2,589, $0, $3,162 and $4,935; and Mr. Weber, $3,380, $2,152, $0,
$2,269 and $3,692. Dr. Schwartz was credited with $3,380 in 1994 and
$2,365 in 1993.
Shares of the Company's Common Stock were contributed to the ESOP for the
Named Executives in 1994, 1993, 1992, 1991 and 1990, respectively, as
follows: Mr. Churchill, 0 shares, 508 shares, 0 shares, 837 shares and 308
shares; Mr. Payne, 0 shares, 463 shares, 0 shares, 798 shares and 308
shares; Mr. Schmidt, 0 shares, 431 shares, 0 shares, 749 shares and 278
shares; and Mr. Weber, 0 shares, 358 shares, 0 shares, 535 shares and 208
shares. Dr. Schwartz received no contribution in 1994 and 394 shares in
1993. Based on the closing price per share as of December 31 of each such
year ($8.00, $6.25, $3.75, $4.25 and $5.75, respectively), the value of
the contributions to each Named Executive was as follows: Mr. Churchill,
$0, $3,175, $0, $3,557 and $1,771; Mr. Payne, $0, $2,894, $0, $3,392 and
$1,771; Mr. Schmidt, $0, $2,694, $0, $3,183 and $1,599; and Mr. Weber, $0,
$2,238, $0, $2,274 and $1,196. No contribution was made to Dr. Schwartz in
1994 and the value of the 1993 contribution was $2,463 on December 31,
1993.
(3) On July 6, 1992, in connection with the commencement of his employment
with the Company, Dr. Schwartz was awarded 100,000 shares of Common Stock,
subject to a ten-year vesting schedule. The amount shown is the value of
such shares based on the closing price at the time of the award. The
shares vest at the rate of 10,000 shares per year, commencing January 5,
1993 and ending January 5, 2002. Prior to vesting, the shares are subject
to restrictions on transfer and forfeiture, if Dr. Schwartz's employment
with the Company should terminate. As of December 31, 1994, Dr. Schwartz
held 80,000 restricted shares with an aggregate value of $640,000, based
on the closing price of the shares on December 31, 1994. Dr. Schwartz is
entitled to receive dividends on the shares, whether or not they have
vested. As of December 31, 1994, no shares of restricted stock were held
by any of the other Named Executives.
STOCK OPTIONS
Shown below is information with respect to the unexercised options to purchase
the Company's common stock at year-end 1994 granted under the 1982 Incentive
Stock Option Plan (the "1982 Plan") to the Named Executives. There were no
options granted to the Named Executives during 1994 since the 1982 Plan expired
as of May 1, 1992.
Options granted pursuant to the 1982 Plan are not transferable except by will
or under the laws of descent and distribution, and stock acquired through the
exercise of an option may not be sold or otherwise transferred, except by will
or pursuant to the laws of descent and distribution, for two years from the
exercise date. All shares received upon the exercise of an option granted
pursuant to the 1982 Plan bear an appropriate restrictive legend.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
NAME SHARES VALUE NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON REALIZED ($) UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
EXERCISE OPTIONS AS OF 12/31/94 ON 12/31/94
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Churchill 0 0 10,000/0 $ 80,000/$0
- -----------------------------------------------------------------------------------------------------------
Payne 0 0 19,000/0 $152,000/$0
- -----------------------------------------------------------------------------------------------------------
Schmidt 0 0 10,000/0 $ 80,000/$0
- -----------------------------------------------------------------------------------------------------------
Schwartz 0 0 0/0 $ 0/$0
- -----------------------------------------------------------------------------------------------------------
Weber 0 0 8,500/0 $ 68,000/$0
- -----------------------------------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT AGREEMENTS
In October 1994, Messrs. Churchill, Schmidt and Schwartz entered into
Employment Agreements (collectively the "Agreements") with the Company. Each
Agreement has a three-year term of employment which commenced on October 25,
1994, the date the Board of Directors ratified and approved the Agreements. The
Agreements provide for a base annual salary for Messrs. Churchill, Schmidt and
Schwartz of $198,120, $165,204 and $183,820, respectively. These salaries may be
adjusted to conform to alterations in the Company's compensation policy for
officers. The Agreements also provide for reimbursement of expenses, the right
to participate in the Company's benefit programs and eligibility for an annual
bonus consistent with the provisions and goals set by the Board of Directors for
each bonus year.
In addition, each Agreement terminates upon the officer's death and may be
terminated by the Company for cause, or upon the officer's disability, or by
mutual agreement. If the Agreement is terminated due to the officer's death or
if his death occurs prior to receipt of all payments under the Agreement, all
such payment(s) shall be made to the officer's designated beneficiary or estate.
The Agreements contain confidentiality and noncompete restrictions during the
term of employment and for a period of one year thereafter. The Agreements also
require the employee to reimburse the Company for any benefits provided under
the Agreement which are disallowed as deductible expenses by the Internal
Revenue Service on the grounds that they do not constitute a reasonable
allowance or are deemed to be a waste of corporate assets by a court of
competent jurisdiction.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
At the Compensation Committee's request, Mr. Payne conferred with the
Committee to make recommendations for 1994 bonuses for Messrs. Schmidt, Schwartz
and Weber.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee, throughout 1994 and subsequently, has been
composed of Jack R. Wentworth, Chairman, Karen Predow-James and Wesley S.
Walton.
In September 1994, the Committee reviewed the salaries of the Named Executives
and approved a five percent (5%) increase commencing March 1, 1994, for Messrs.
Verne B. Churchill, Thomas H. Payne, Glenn W. Schmidt, Sanford M. Schwartz and
Stephen J. Weber. These increases were in line with those made for unit managers
and were considered appropriate in light of the improved financial results of
the Company.
9
<PAGE>
At the Committee's request, Mr. Payne, President, conferred with the Committee
to make recommendations for 1994 bonuses for Messrs. Schmidt, Schwartz and
Weber. Thereafter, the Committee independently determined these 1994 bonuses as
set forth in the Summary Compensation Table. Mr. Weber's bonus was based in
large part on the Company's bonus policy established January 17, 1992, and
applicable to Client Service Unit Managers, such as Mr. Weber. Under this
policy, each Client Service Unit receives a bonus pool equal to a percentage of
gross revenue and an additional payment equal to a percentage of net margin (net
margin being defined as gross margin less unallocated overhead salaries plus
late job costs). The bonus paid from the pool for each unit manager, such as Mr.
Weber, under this policy, is based upon the discretion of upper management.
When Mr. Schwartz joined the Company in July 1992, the common stock incentive
award described in note (3) to the Summary Compensation Table above was
negotiated and a salary of $175,000 was agreed to. There was no agreed bonus or
formula for a bonus in light of the incentive nature of the common stock award.
Nonetheless, in the judgment of management and the Committee, a 1993 bonus of
$10,000 was deemed appropriate in light of the 1993 results achieved by Market
Facts--New York, Inc. under the direction of Mr. Schwartz. In 1994, the results
for Market Facts--New York, Inc. again improved, and in the judgment of
management and the Committee, a $15,000 bonus to Mr. Schwartz recognizing his
achievement was deemed appropriate.
The 1994 bonuses for Messrs. Churchill, Payne and Schmidt were in large part
based on the continued improved financial results of the Company in 1994. It was
the view of the Committee that each of these individuals made a material
contribution to the Company's continued and sustained recovery and financial
growth during 1994. Mr. Schmidt's 1994 bonus was also a reflection of his
continued success in containing expenses while revenues were increasing during
1994.
Finally, on recommendation of the Compensation Committee, the Board, with
interested members abstaining, offered in September 1994, employment contracts
to certain senior management, including the Named Executives. Three of the five
Named Executives accepted those agreements, which are described above under
"Remuneration of Executive Officers."
Effective January 1, 1994, the allowable deduction for federal income tax
purposes of compensation paid by the Company to the Named Executives is
$1,000,000 per executive per year. This limitation does not apply to
compensation that is based upon the attainment of performance goals or paid
pursuant to a written contract that was in effect on February 17, 1993. These
limitations have not affected the Company's ability to deduct all taxable
compensation paid to its Named Executives and is not expected to affect these
deductions in the foreseeable future.
Proposed regulations to implement the deductibility limitation have been
published but have not been adopted. Due to this uncertainty and the fact that
the compensation of the Named Executives is not expected to exceed the tax
deductible maximum in the foreseeable future, the Committee will continue to
monitor the effects of the limitation on the compensation of its Named
Executives.
Except as otherwise described above, the Committee's determinations regarding
1994 compensation were not subject to specific criteria but were based upon more
general criteria as the Committee in its discretion considered to be relevant,
including the Committee's perception of the individual's performance and the
overall financial and earnings performance of the Company.
Karen Predow-James
Wesley S. Walton
Jack R. Wentworth, Chairman
10
<PAGE>
TOTAL RETURN COMPARISON
The following graph sets forth a five-year comparison of cumulative total
returns for: (i) the Company (which is traded on the NASDAQ/NMS); (ii) the
Center for Research in Securities Prices ("CRSP") Index for NASDAQ Stock Market
(U.S. Companies); and (iii) a Peer Group of companies listed on NASDAQ in 1994
that performs market research services (the "Peer Group"). In identifying the
Peer Group, the Company reviewed a list of NASDAQ companies designated under the
Standard Industrial Classification Code ("SIC Code") for "Business Consulting
Service Companies" as well as companies listed under the SIC Codes for the
subcategory "Commercial, Economic, Sociological, and Educational Research"
included under the category entitled "Research, Development, and Testing
Services" and the subcategory "Information Retrieval Services" included under
the category "Computer Programming, Data Processing, and Other Computer Related
Services." From the companies listed within one of these three SIC Codes, the
Company selected those with business descriptions similar to that of the
Company's for inclusion in the Peer Group. The Peer Group includes the following
companies: American Business Information, Inc.; Find SVP, Inc.; M/A/R/C Group,
Inc.; Market Facts, Inc.; NFO Research, Inc.; Opinion Research Corp.; and Total
Research Corporation. All returns were calculated assuming dividend reinvestment
and the returns of each company have been weighted according to market
capitalization at the beginning of each period indicated.
COMPARISON OF FIVE YEAR--CUMULATIVE TOTAL RETURNS
Performance Graph for Market Facts, Inc.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG MARKET FACTS, INC., NASDAQ STOCK MARKET (U.S. COMPANIES) AND PEER GROUP
<CAPTION>
NASDAQ
STOCK MARKET
Measurement Period MARKET (U.S. SELF DETERMINED
(Fiscal Year Covered) FACTS, INC. COMPANIES) PEER GROUP
- ------------------- ---------- ------------ ---------------
<S> <C> <C> <C>
Measurement Pt-
12/29/89 $100.0 $100.0 $100.0
FYE 12/31/90 $ 81.4 $ 84.9 $ 64.9
FYE 12/31/91 $ 58.0 $136.3 $ 90.4
FYE 12/31/92 $ 58.4 $158.6 $130.3
FYE 12/31/93 $109.7 $180.9 $112.7
FYE 12/30/94 $134.6 $176.9 $135.4
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
SYMBOL CRSP TOTAL RETURNS INDEX: 12/29/89 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
____ MARKET FACTS, INC. 100.0 81.4 58.0 58.4 109.7 134.6
- -- - -- NASDAQ STOCK MARKET 100.0 84.9 136.3 158.6 180.9 176.9
(U.S. Companies)
- - - Peer Group 100.0 64.9 90.4 130.3 112.7 135.4
- -----------------------------------------------------------------------------------------------
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that
include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading
day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the
preceding trading day is used.
D. The index level for all series was set to 100.0 on 12/29/89.
- -----------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
VOTE REQUIRED
Presence in person or by proxy of holders of a majority of the outstanding
shares of Common Stock will constitute a quorum at the Annual Meeting. Assuming
a quorum is present, the affirmative vote by the holders of a plurality of the
shares represented and entitled to vote will be required to act on the election
of directors, and the affirmative vote by the holders of a majority of the
shares represented and entitled to vote will be required on all other matters to
come before the Annual Meeting. A broker non-vote is not counted in determining
voting results. If a shareholder, present in person or by proxy, abstains on any
matter, the shareholder's shares will not be voted on such matter. Thus, an
abstention from voting on a matter has the same legal effect as a vote "AGAINST"
the matter.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Since December of 1990, the Company has engaged the firm of KPMG Peat Marwick
LLP as its independent public accountants. A representative from this firm will
be present at the Annual Meeting of Stockholders, and will be available to
respond to appropriate questions from the stockholders if the need arises, or
make a statement if the representative desires to do so. It is anticipated that
this firm will be engaged as the Company's independent public accountants in
1995.
BOARD OF DIRECTORS AND COMMITTEE DATA
During 1994, four Board meetings were held. Each incumbent director of the
Company attended all of the meetings held during the period he was a director.
The Board of Directors does not have a standing nominating committee. Its
Audit Committee, which held two meetings during 1994, consisted of Mr. Boyd as
Chairman, Dr. Wentworth and Mr. Schmidt. All three members of this committee
attended both meetings. The duties of the Audit Committee are to advise the
Company on its engagement of independent public accountants, and to review all
reports of the Company's audit performed by its independent public accountants.
In 1994 its Compensation Committee consisted of Dr. Wentworth as Chairman, Mr.
Walton and Dr. Predow-James. The functions performed by the Compensation
Committee are to establish the compensation and benefits for each of the Named
Executives. The Compensation Committee held two meetings in 1994, and all three
members of this committee attended both meetings.
Prior to January 1994, the Company had an arrangement whereby directors who
are not officers and employees of the Company each received an attendance fee of
$2,000 for each meeting at which they were present. Such directors who are
members of the Audit or Compensation Committee received an additional $1,000 for
each meeting of the Audit and/or Compensation Committees at which they were
present. Effective January 1994, the attendance fee for non-employee directors
was increased to $3,000 per meeting and the attendance fee for committee
meetings was increased to $1,500 per committee meeting. Directors who are also
officers and employees of the Company are not paid for their services as
directors as such, nor for the attendance at board or committee meetings. No
director received more than the standard arrangement for services as a director
during the last fiscal year.
12
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be included in the Company's proxy statement
and form of proxy relating to, and to be presented at, the Annual Meeting of
Stockholders of the Company to be held in 1996, must be received by the Company
on or before December 1, 1995.
OTHER MATTERS
The Board of Directors is not aware of any matters that will come before the
meeting other than the matters described herein. However, if other matters do
properly come before the meeting, it is the intention of the persons named in
the proxy to vote the proxy in accordance with their best judgment.
Stockholders who do not expect to attend the meeting in person are urged to
indicate their choices and sign, date and return the enclosed proxy as soon as
possible.
By Order of the Board of Directors,
Verne B. Churchill Thomas H. Payne
Chairman, Board of Directors President and
and Chief Executive Officer Chief Operating Officer
Chicago, Illinois
March 21, 1995
- -------------------------------------------------------------------------------
MARKET FACTS WILL BE PLEASED TO MAKE ITS ANNUAL REPORT ON FORM 10-K TO THE
SECURITIES AND EXCHANGE COMMISSION AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE,
UPON REQUEST IN WRITING TO THE CORPORATE ASSISTANT SECRETARY.
- -------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
MARKET FACTS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 27, 1995
The undersigned hereby constitutes and appoints VERNE B. CHURCHILL, THOMAS H.
PAYNE, and WESLEY S. WALTON, or any one or more of them, Proxies, will full
power of substitution, to vote for the undersigned the shares of Common Stock of
MARKET FACTS, INC., registered in the name of the undersigned at the Annual
Meeting of Stockholders of said corporation to be held on April 27, 1995, and at
any and all adjournments thereof, upon the following matters more fully
described in the Proxy Statement:
(1) FOR ( ) VOTE WITHHELD FROM ( ) the election as Directors of WILLIAM W.
BOYD, JOHN C. ROBERTSON, TIMOTHY Q. ROUNDS and GLEN W. SCHMIDT.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE
THROUGH THE NOMINEE'S NAME ABOVE.
(2) In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED, OR THE VOTE WILL BE
WITHHELD, IN ACCORDANCE WITH ANY SPECIFICATION MADE HEREIN. IF NOT OTHERWISE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE ABOVE DIRECTORS.
PLEASE SIGN ON OTHER SIDE
- --------------------------------------------------------------------------------
(CONTINUED FROM OTHER SIDE)
Receipt of the Annual Report of the Company and of the Notice of Annual Meeting
of Stockholders and the Proxy Statement dated March 21, 1995 is hereby
acknowledged.
The powers hereby granted may be exercised by a majority of said attorneys or
proxies or their substitute or substitutes present and acting at said Annual
Meeting or any adjournment thereof or, if only one be present and acting, then
by that one. The undersigned hereby revokes any and all proxies heretofore given
by the undersigned to vote at said meeting.
PROXY SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
PLEASE SIGN HERE:
______________________________________(SEAL)
______________________________________(SEAL)
Date and Signed _______________________, 1995
The signature to this proxy should conform to
the name as shown. Stock registered jointly
must be signed by all parties in whose name
such stock is registered. When signing as
attorney, executor, administrator, trustee or
guardian, give your title as such. If signer
is a corporation, please sign full corporate
name by authorized officer and affix corporate
seal.
