20
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)
x Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GP STRATEGIES CORPORATION
(Name of Registrant as Specified In Its Charter)
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required
Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
<PAGE>
GP STRATEGIES CORPORATION
9 West 57th Street
Suite 4170
New York, New York 10019
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 10, 1998
To The Stockholders:
The Annual Meeting of Stockholders of GP Strategies Corporation (the
"Company") will be held in the Whitney Room of the Hotel Inter-Continental New
York, 111 East 48th Street, New York, New York on the 10th day of June 1998, at
2:45 p.m. local time, for the following purposes:
1. To elect ten Directors to serve until the next Annual Meeting and until
their respective successors are elected and qualify.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record as of the close of business on April 24, 1998
are entitled to receive notice of and to vote at the meeting. A list of such
stockholders shall be open to the examination of any stockholder during ordinary
business hours, for a period of ten days prior to the meeting, at the principal
executive offices of the Company, 9 West 57th Street, Suite 4170, New York, New
York.
By Order of the Board of Directors
Lydia M. DeSantis
Secretary
New York, New York
April 30, 1998
If you do not expect to be present at the meeting, please fill in, date and
sign the enclosed Proxy and return it promptly in the enclosed return envelope.
<PAGE>
GP STRATEGIES CORPORATION
9 West 57th Street
Suite 4170
New York, New York 10019
---------------
New York, New York
April 30, 1998
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of GP Strategies Corporation, a Delaware corporation the ("Company"),
for use only at the Annual Meeting of Stockholders to be held in the Whitney
Room of the Hotel Inter-Continental New York, 111 East 48th Street, New York,
New York on the 10th day of June, 1998 at 2:45 p.m., local time, and at any
adjournments thereof. The approximate date on which this Proxy Statement and the
accompanying Proxy were first given or sent to security holders was April 30,
1998.
Each Proxy executed and returned by a stockholder may be revoked at any time
thereafter, by written notice to that effect to the Company, attention of the
Secretary, prior to the Annual Meeting, or to the Chairman, or the Inspectors of
Election, at the Annual Meeting, or by the execution and return of a later-dated
Proxy, except as to any matter voted upon prior to such revocation.
The Proxies in the accompanying form will be voted in accordance with the
specifications made and where no specifications are given, such Proxies will be
voted FOR the ten nominees for election as directors named herein. In the
discretion of the proxy holders, the Proxies will also be voted FOR or AGAINST
such other matters as may properly come before the meeting. The management of
the Company is not aware that any other matters are to be presented for action
at the meeting. Although it is intended that the Proxies will be voted for the
nominees named herein, the holders of the Proxies reserve discretion to cast
votes for individuals other than such nominees in the event of the
unavailability of any such nominee. The Company has no reason to believe that
any of the nominees will become unavailable for election. The Proxies may not be
voted for a greater number of persons than the number of nominees named. The
election of directors will be determined by a plurality of the votes of the
shares of Common Stock and Class B Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote on the election of directors.
Accordingly, in the case of shares that are present or represented at the Annual
Meeting for quorum purposes, not voting such shares for a particular nominee for
director, including by withholding authority on the Proxy, will not operate to
prevent the election of such nominee if he or she otherwise receives a plurality
of the votes.
VOTING SECURITIES
The Board of Directors has fixed the close of business on April 24, 1998 as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the Annual Meeting. The issued and outstanding stock of the
Company on April 24, 1998 consisted of 10,770,762 shares of Common Stock, each
entitled to one vote, and 62,500 shares of Class B Stock, each entitled to ten
<PAGE>
votes. A quorum of the stockholders is constituted by the presence, in person or
by proxy, of holders of record of Common Stock and Class B Stock, representing a
majority of the number of votes entitled to be cast. The only difference in the
rights of the holders of Common Stock and the rights of holders of Class B Stock
is that the former class has one vote per share and the latter class has ten
votes per share. The Class B Stock is convertible at any time into shares of
Common Stock on a share for share basis at the option of the holders thereof.
PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of Common Stock and
Class B Stock beneficially owned as of March 31, 1998, by each person who is
known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock or Class B Stock.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of
Title of of Beneficial Beneficial Percent
Class Owners Ownership of Class (1)
- -------- ------------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Class B Stock Jerome I. Feldman 387,400 shares(2)(3)(4) 50.00%(5)(6)
c/o GP Strategies
Corporation
9 West 57th Street
Suite 4170
New York, NY 10019
Class B Stock Martin M. Pollak 387,400 shares(2)(3)(4) 50.00%(5)(6)
c/o GP Strategies
Corporation
9 West 57th Street
Suite 4170
New York, NY 10019
Common Stock Dimensional Fund Advisors 546,625 shares(7) 5.11%
1299 Ocean Avenue
Santa Monica, CA 90401
- ----------
</TABLE>
(1) The percentage of class calculation assumes for each beneficial owner that
all of the options are exercised in full only by the named beneficial owner
and that no other options are deemed to be exercised by any other
stockholder.
(2) Includes 356,150 shares each of Class B Stock issuable upon exercise of
currently exercisable stock options held by each of Messrs. Feldman and
Pollak.
(3) For information with respect to the shares of Common Stock beneficially
owned by Messrs. Feldman and Pollak, see "Security Ownership of Directors
and Named Executive Officers."
<PAGE>
(4) On March 26, 1986, Mr. Feldman and Mr. Pollak entered into an agreement (i)
granting each other the right of first refusal over the sale or
hypothecation of the Class B Stock and options to purchase Class B Stock
now owned or subsequently acquired by each of them and (ii) in the event of
the death of either of them granting the survivor a right of first refusal
over the sale or hypothecation of the Class B Stock or options to acquire
shares of Class B Stock held by the estate of the decedent. The aforesaid
right of first refusal is for the duration of the life of the survivor of
Mr. Feldman or Mr. Pollak.
(5) Percentage could increase up to approximately 92.5% if either individual
exercised all of his stock options and the other individual did not exercise
any.
(6) Based upon the Common Stock and Class B Stock of the Company outstanding at
March 31, 1998, Mr. Feldman and Mr. Pollak controlled in the aggregate
approximately 6.8% of the voting power of all voting securities of the
Company. This percentage for Mr. Feldman and Mr. Pollak would increase to
approximately 42.8% if they exercised all of the currently exercisable
stock options to purchase shares of the Common Stock and Class B Stock of
the Company held by them.
(7) Based on a Schedule 13G filed by Dimensional Fund Advisors Inc.
("Dimensional") with the Securities and Exchange Commission. Dimensional
has informed the Company that the shares reported on the 13G are owned by
advisory clients of Dimensional and that Dimensional disclaims beneficial
ownership of such shares.
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
<TABLE>
The following table sets forth, as of March 31, 1998, beneficial ownership of
shares of Common Stock and Class B Stock of the Company and its subsidiary by
each director, each of the named executive officers and all directors and
executive officers as a group.
<CAPTION>
TOTAL NUMBER OF TOTAL NUMBER OF
SHARES OF SHARES OF CLASS B
COMMON STOCK PERCENT OF STOCK BENEFICIALLY PERCENT OF
BENEFICIALLY COMMON STOCK(1) OWNED CLASS B
NAME OWNED STOCK(1)
<S> <C> <C> <C> <C> <C>
Jerome I. Feldman(2)(3) 402,567(4) 3.66(5) 387,400(5) 92.5(5)
Martin M. Pollak(2)(3) 405,005(6) 3.68(5) 387,400(5) 92.5(5)
Scott N. Greenberg(2) 66,907(7) * 49,950(7) 44.4
Sheldon L. Glashow(8) 4,095(9) * - -
Roald Hoffmann(8) 15,360(9) * - -
Bernard M. Kauderer 4,095(9) * - -
John C. McAuliffe 22,696(9)(10) * - -
Ogden R. Reid(8) 11,910(9) * - -
Herbert R. Silverman(3) 10,910(9) * - -
Gordon Smale(3) 4,000(9) * - -
Lawrence M. Gordon 48,032(9) * - -
Directors and Executive
Officers as a Group
(12 persons) 999,577(9) 8.68 824,750 100.00
</TABLE>
* The number of shares owned is less than one percent of the outstanding shares.
<PAGE>
(1) The percentage of class calculation assumes for each beneficial owner that
all of the options are exercised in full only by the named beneficial owner
and that no other options are deemed to be exercised by any other
stockholder.
(2) Member of the Executive Committee.
(3) Member of the Compensation Committee.
(4) Includes (i) 67,977 shares of Common Stock beneficially owned by Mr.
Feldman (ii) 333,417 shares of Common Stock issuable upon exercise of
currently exercisable stock options held by Mr. Feldman, and (iii) 1,173
shares of Common Stock held by members of his family. Mr. Feldman disclaims
beneficial ownership of the 1,173 shares of Common Stock held by members of
his family.
(5) For information with respect to the shares of Class B Stock beneficially
owned by Messrs. Feldman and Pollak, see footnotes 2, 5 and 6 to "Principal
Stockholders Table."
(6) Includes (i) 61,718 shares of Common Stock beneficially owned by Mr. Pollak
(ii) 335,917 shares of Common Stock issuable upon exercise of currently
exercisable stock options held by Mr. Pollak, (iii) 5,752 shares of Common
Stock held by his wife, and (iv) 1,618 shares of Common Stock for a
foundation of which Mr. Pollak is a trustee. Mr. Pollak disclaims
beneficial ownership of the 5,752 shares of Common Stock held by his wife
and the 1,618 shares held by the foundation.
(7) Includes (i) 6,032 shares of Common Stock beneficially owned by Mr.
Greenberg (ii) 60,875 shares of Common Stock issuable upon exercise of
currently exercisable stock options held by Mr. Greenberg, and (iii) 49,950
shares of Class B Stock issuable upon exercise of currently exercisable
stock options held by Mr. Greenberg.
(8) Member of the Audit Committee.
(9) Includes (i) 450 shares for Roald Hoffmann, 3,477 shares for John C.
McAuliffe, 250 shares for Ogden R. Reid, 1,250 shares for Herbert R.
Silverman, 95 shares for Bernard M. Kauderer, 95 shares for Sheldon L.
Glashow, 2,007 shares for Lawrence M. Gordon and 143,351 shares for all
directors and executive officers as a group, and (ii) 14,910 shares for
Roald Hoffmann, 16,000 shares for John C. McAuliffe, 11,660 shares for
Ogden R. Reid, 9,660 shares for Herbert A. Silverman, 4,000 shares for
Bernard M. Kauderer, 4,000 shares for Sheldon L. Glashow, 4,000 shares for
Gordon Smale, 46,025 shares for Lawrence M. Gordon and 844,464 shares for
all directors and executive officers, issuable upon exercise of currently
exercisable stock options.
(10) Includes 3,219 shares of Common Stock allocated to Mr. McAuliffe's account
pursuant to the provisions of the General Physics Corporation Profit
Investment Plan.
As of March 31, 1998 the Company owned 2,842,300 shares of SGLG, Inc.
("SGLG") common stock, constituting approximately 92% of the outstanding shares.
In addition, Mr. Pollak owns 1,000 shares of SGLG common stock.
ELECTION OF DIRECTORS
Ten directors will be elected at the meeting to hold office until the next
Annual Meeting of Stockholders and until their respective successors are elected
and qualify. The Proxies solicited by this proxy statement may not be voted for
a greater number of persons than the number of nominees named. It is intended
<PAGE>
that these Proxies will be voted for the following nominees, but the holders of
these Proxies reserve discretion to cast votes for individuals other than the
nominees for director named below in the event of the unavailability of any such
nominee. The Company has no reason to believe that any of the nominees will
become unavailable for election. Set forth below are the names of the nominees,
the principal occupation of each, the year in which first elected a director of
the Company and certain other information concerning each of the nominees.
Jerome I. Feldman is founder of, and since 1959, has been President and
Chief Executive Officer and a Director of the Company. He has been a Director of
Interferon Sciences, Inc. ("Interferon") since 1981 and was Chairman of the
Executive Committee from 1981 to 1996; a Director from 1981 to 1996 and Chairman
of the Board from 1985 to 1995 of GTS Duratek Inc., ("Duratek"); a Director
since 1987, Chairman of the Executive Committee since 1988 and Chief Executive
Officer since 1994 of General Physics Corporation ("GPC"), a training company
which provides performance improvement services to Fortune 500 companies and
commercial and governmental clients, and a Director of GSE Systems, Inc.,
("GSE") since 1994 and Chairman of the Board of GSE since April 1997. Mr.
Feldman is also a Trustee of the New England Colleges Fund. Age 69
Martin M. Pollak is founder of, and since 1959, has been Executive Vice
President, Treasurer and a Director of the Company. He has been a Director of
Interferon since 1981 and was Chairman of the Board from 1981 to 1996; a
Director of Duratek from 1983 to 1996 and Chairman of the Executive Committee
from 1985 to 1995; a Director of GPC since 1987 and Chairman of the Board since
1988; President, Chief Executive Officer and a director of American Drug Company
("ADC"), which provides consulting services to Western companies doing business
in Russia and Eastern Europe, since 1994; and a director of GSE since 1994. Mr.
Pollak is the former Chairman of the Czech and Slovak United States Economic
Council and a trustee of the Board of Trustees of the Worcester Foundation for
Experimental Biology, and was a Director of Brandon Systems Corporation from
1986 to 1996. Age 70
Scott N. Greenberg has been a Director of the Company since 1987, Vice
President and Chief Financial Officer since 1989 and Vice President, Finance
from 1985. He has been a Director of GPC since 1987; Chief Financial Officer of
ADC since 1994, a Director of Interferon since 1996, and from 1991 to 1995, was
a Director of Duratek. Age 41
Sheldon L. Glashow, Ph.D. has been a Director of the Company since June
1997. Dr. Glashow is the Higgins Professor of Physics and the Mellon Professor
of the Sciences at Harvard University. He was the recipient of the Nobel Prize
in Physics in 1971. He has been a director of Interferon since 1991; a director
of GSE since 1995. He had been a director of GPC from 1986 to 1997; a director
of CalCol, Inc. from 1994 to 1996 and a director of Duratek from 1985 to 1995.
Dr. Glashow is a foreign member of the Russian Academy of Sciences. Age 65
Roald Hoffmann, Ph.D. has been a Director of the Company since 1988 and a
Director of Interferon since 1991. He has been a John Newman Professor of
Physical Science at Cornell University since 1974. Dr. Hoffmann is a member of
the National Academy of Sciences and the American Academy of Arts and Sciences.
In 1981, he shared the Nobel Prize in Chemistry with Dr. Kenichi Fukui. Age 60
Bernard M. Kauderer has been a Director of the Company since June 1997. He
retired from the United States Navy in 1986 as Vice Admiral. He was Former
<PAGE>
Commander, Submarine Force, United States Atlantic and Pacific Fleets and a
consultant to industry and government since 1986. He had been a director of GPC
from 1988 to 1997. Age 66
John C. McAuliffe has been a Director of the Company since June 1997. He has
been a Director of GPC since 1994; President since February 1997, Executive Vice
President and Chief Operating Officer from 1994 to February 1997; Senior Vice
President from 1993 to 1994; Chief Financial Officer and Treasurer since 1992;
Vice President, Finance from 1991 to 1993. Age 39
Ogden R. Reid has been a Director of the Company since 1979. He had been a
Director of Interferon from 1982 to 1996; a Director of GPC from 1988 to 1997,
and Vice Chairman of the Board of Duratek from 1991 to 1995. Mr. Reid had been
Editor and Publisher of the New York Herald Tribune and of its International
Edition; United States Ambassador to Israel; a six-term member of the United
States Congress and a New York State Environmental Commissioner. Age 72
Gordon Smale has been a Director of the Company since June 1997. He has been
President and a director of Atlantic Oil Corporation since 1970; President of
Atmic, Inc. since 1983; Chairman of the Board of CamWest Inc. since 1992;
Chairman of the Board of Stephens Energy International since 1996. He had been a
director of GPC from 1995 to 1997 and President of Red Cedar Gathering Company
from 1995 to 1997. Age 66
Herbert R. Silverman has been a Director of the Company since 1994. Since
1975 he has been a Senior Advisor to Bank Julius Baer (New York), Zurich,
Switzerland, Chairman of the Executive Committee of Baer American Banking
Corporation since 1976 and was a member of the Board of Directors of Partners
Funds, Inc. and Focus Fund, both of which are mutual stock funds managed by
Neuberger & Berman from 1965 to April 1997. He is Honorary Vice Chairman of the
New York University Board of Trustees and a life trustee of New York University
and New York University Medical Center. Age 80
Board of Directors
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although it
is not involved in day-to-day operating details. Members of the Board are kept
informed of the Company's business by various reports and documents sent to them
as well as by operating and financial reports made at Board and Committee
meetings. The Board held four meetings in 1997. All of the directors attended at
least 75% of the meetings of the Board, except for Roald Hoffmann and Herbert R.
Silverman. All of the Directors attended the meetings of the Committees on which
they served.
Directors Compensation
Directors who are not employees of the Company or its subsidiaries receive
an annual fee of $5,000, payable quarterly, and $1,000 for each meeting of the
Board of Directors attended, but do not receive any additional compensation for
service on committees of the Board of Directors. Officers of the Company or its
subsidiaries do not receive additional compensation for serving as directors.
<PAGE>
Executive Committee
The Executive Committee, consisting of Jerome I. Feldman, Martin M. Pollak
and Scott N. Greenberg, meets on call and has authority to act on most matters
during the intervals between Board meetings. The committee formally acted
twenty-four times in 1997 through unanimous written consent.
Audit Committee
The Audit Committee reviews the internal controls of the Company and the
objectivity of its financial reporting. It meets with appropriate Company
financial personnel and the Company's independent certified public accountants
in connection with these reviews. This committee recommends to the Board the
appointment of the independent certified public accountants to serve as auditors
for the following year in examining the books and records of the Company. This
Committee met once in 1997. The Audit Committee currently consists of Ogden R.
Reid, Roald Hoffmann and Sheldon L. Glashow.
Compensation Committee
The Compensation Committee, currently consisting of Jerome I. Feldman,
Martin M. Pollak, Herbert R. Silverman and Gordon Smale, meets on call and has
the authority to act with respect to the compensation of officers and the grant
of options to officers and employees of the Company. In 1997, the Compensation
Committee held one meeting and formally acted once through unanimous written
consent.
<PAGE>
EXECUTIVE COMPENSATION
The following table and notes present the compensation paid by the Company
and subsidiaries to its President and Chief Executive Officer and the Company's
most highly compensated executive officers.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Long Term
Compensation Compensation All Other
Salary Bonus Stock/Options Compensation
Name and Principal Position Year ($) ($) (# Shares) ($)
- --------------------------- ---- --- --- ---------- ---
<S> <C> <C> <C> <C> <C>
Jerome I. Feldman 1997 336,008 135,950(1) 125,000(2) 181,379(3)
President and Chief 1996 321,805 - 244,667(4) 35,433(5)
Executive Officer 1995 334,376(6) 161,250(7) 231,250(8) 33,910(9)
Martin M. Pollak 1997 300,000(10) 135,950(1) 125,000(2) 193,717(3)
Executive Vice President 1996 287,510(10) 247,167(4) 38,061(5)
and Treasurer 1995 326,202(6)(10) 161,250(7) 231,250(8) 36,240(9)
Scott N. Greenberg 1997 218,112 51,570(11) 87,125(2) 78,116(12)
Vice President and 1996 209,315 114,375(7) 78,750(13) 4,316(14)
Chief Financial Officer 1995 260,791 77,500(7) 30,000 4,028(14)
Lawrence M. Gordon 1997 135,754(15) - 51,525(2) 74,418(12)
General Counsel 1996 99,457(15) 114,375(7) 4,500 4,418(14)
1995 233,205(15) 149,375(7) 25,000 4,418(14)
John C. McAuliffe 1997 200,979(16) 75,000(17) 60,000(2) 105,920(18)
President, General Physics 1996 172,750(16) - - 4,287(19)
Corporation 1995 148,756(16) - 10,000(2) 4,078(19)
</TABLE>
(1) Includes $50,000 as a bonus from GPC for services rendered to GPC and
$85,950 in shares of Interferon common stock, deferred at the election of
the Messrs. Feldman and Pollak from 1996 to 1997, for services rendered
to Interferon.
(2) Consists of options to purchase shares of Common Stock pursuant to the
Company's 1973 Non-Qualified Stock Option Plan, as amended (the "Plan").
(3) Includes for Messrs. Feldman and Pollak $147,000 in cash and Common Stock
in connection with the merger of the Company and GPC (the "Merger");
$11,340 from Group Term Life Insurance paid by the Company; $3,800 as a
matching contribution by the Company to the 401(k) Savings Plan, and
$19,239 for Mr. Feldman and $22,613 for Mr. Pollak for the split dollar
value of the insurance premium paid by the Company.
(4) Includes options to purchase 150,000 shares of Class B Stock granted
pursuant to the Employment Agreements and options to purchase an
aggregate of 94,667 and 97,167 shares of Common Stock for Messrs. Feldman
and Pollak, respectively.
<PAGE>
(5) Includes for Messrs. Feldman and Pollak $3,500 as a matching contribution
by the Company to the 401(k) Savings Plan, $11,340 for Group Term Life
Insurance paid by the Company and $20,593 and $23,221 for the split
dollar value of the insurance premium paid by the Company for the benefit
of Messrs. Feldman and Pollak, respectively.
(6) Includes $20,000 received from GPC for services rendered to GPC.
(7) Bonus was received in shares of common stock of GTS Duratek, Inc.
("Duratek") from holdings of the Company's shares of Duratek common
stock.
(8) Includes options to purchase 62,500 shares of Common Stock and 62,500
shares of Class B Stock, granted pursuant to the terms of the Employment
Agreement dated as of May 19, 1995 and 106,250 pursuant to the Company's
Plan.
(9) Includes $3,500 as a matching contribution by the Company to the 401(k)
Savings Plan, $11,340 for Group Term Life Insurance paid by the Company,
and $19,070 and $21,400 for the split dollar value of the insurance
premium paid by the Company for the benefit of Messrs. Feldman and
Pollak, respectively.
(10) $150,000 of Mr. Pollak's compensation was paid by American Drug Company
("ADC") for his devoting a portion of his working hours to ADC.
(11) Bonus received from Interferon for services rendered to Interferon,
deferred at the election of Mr. Greenberg from 1996 to 1997.
(12) Includes for Messrs. Greenberg and Gordon $73,500 in cash and Common
Stock in connection with the Merger; $3,800 as a matching contribution
made by the Company to the 401(k) Savings Plan, and $816 and $918 for
Group Term Life Insurance paid by the Company for Messrs. Greenberg and
Gordon, respectively.
(13) Includes options to purchase 75,000 shares of Class B Stock and 3,750
shares of Common Stock.
(14) Includes for Messrs. Greenberg and Gordon $3,500 as a matching
contribution made by the Company to the 401(k) Savings Plan for 1996 and
1995, and $816 for 1996 and $528 for 1995 for Mr. Greenberg, and $919 for
1995 and 1996 for Mr. Gordon for Group Term Life Insurance paid by the
Company.
(15) Excludes $135,000 for 1997 and 1996 and $75,000 for 1995 paid to Mr.
Gordon for which the Company was reimbursed by Interferon in
consideration of the Company's permitting Mr. Gordon's to devote a
portion of his working hours to Interferon.
(16) Salary paid to Mr. McAuliffe for services rendered solely to GPC.
(17) Bonus paid to Mr. McAuliffe for services rendered solely to GPC.
(18) Consists of $100,650 in cash and Common Stock in connection with the
Merger; $4,940 which is the dollar value of GPC's contribution under
GPC's Profit Investment Plan, a defined contribution plan, and $330 for
Group Term Life Insurance paid by GPC.
(19) Includes $3,957, which is the dollar value of GPC's contribution under
the Company's Profit Investment Plan, and $330 for Group Term Life
Insurance paid by GPC.
<PAGE>
The following table and notes contain information concerning the grant of
non-qualified stock options in 1997 to the named executive officers.
<TABLE>
OPTION GRANTS AT DECEMBER 31, 1997
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
% of Total Stock Price
Options Options Granted Exercise or Appreciation for
Granted to Employees at Base Price Market Expiration Option Term(5)
Name (#) December 31, 1997 ($/Sh) Value($) Date 5%($) 10%($)
- ---- --- ----------------- ------ -------- ---- ----- ------
Jerome I. Feldman
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock 100,000(1) 6 7.75 7.75 07/01/02 214,118 473,145
Common Stock 25,000(2) 2 9.98 11.75 12/15/02 68,932 152,322
Martin M. Pollak
Common Stock 100,000(1) 6 7.75 7.75 07/01/02 214,118 473,145
Common Stock 25,000(2) 2 9.98 11.75 12/15/02 68,932 152,322
Scott N. Greenberg
Common Stock 75,000(1) 5 7.75 7.75 07/01/02 160,589 354,859
Common Stock 1,250(3) - 8.75 8.75 07/10/00 1,724 3,620
Common Stock 5,625(2) - 11.15 13.125 11/24/02 17,328 38,298
Common Stock 5,250(2) - 9.98 11.75 12/15/02 14,476 31,988
Lawrence M. Gordon
Common Stock 50,000(1) 3 7.75 7.75 07/01/02 107,059 236,573
Common Stock 1,525(2) - 9.98 11.75 12/15/02 4,205 9,293
John C. McAuliffe
Common Stock 10,000(1) 1 7.31 7.31 06/04/02 20,204 44,647
Common Stock 50,000(4) 3 7.75 7.75 07/01/07 243,697 617,575
</TABLE>
(1) The options were granted pursuant to the terms of the Company's 1973
Non-Qualified Stock Option Plan (the "Plan"). The options are exercisable
cumulatively at the rate of 20% per annum for a period of five years from
the date of grant.
(2) The options were granted pursuant to the terms of the Plan. The options are
exercisable immediately for a period of five years from the date of grant.
(3) The options were granted pursuant to the terms of the Plan. The options are
exercisable immediately for a period of three years from the date of grant.
(4) The options were granted pursuant to the terms of the Plan. The options are
exercisable cumulatively at the rate of 10% per annum for a period of ten
years from the date of grant.
<PAGE>
(5) Represents gain that would be realized assuming the options were held for
the entire three, five and ten year terms, and the stock price increased at
compounded rates of 5% and 10% from a base price of $8.75 (three years),
$7.75, $9.98, and $7.31 (five years) and $7.75 (ten years) per share. The
potential realizable values per option or per share under such 5% and 10%
rates of stock appreciation would be: for the three year option, $1.38 and
$2.90 from a base price of $8.75; for the five year options, $2.14, $4.73,
$2.76, $6.09, $2.02 and $4.46, from a base price of $7.75, $9.98 and $7.31,
respectively; and for the ten year option, $4.87 and $12.35 from a base
price of $7.75. These amounts represent assumed rates of appreciation only.
Actual gain, if any, on stock exercise and Common Stock holdings will be
dependent on overall market conditions and on the future performance of the
Company and its Common Stock. There can be no assurance that the amounts
reflected in this table will be achieved.
The following table and notes set forth information for the named executive
officers regarding unexercised options held at the end of 1997. No options were
exercised by the named executive officers in 1997.
<TABLE>
AGGREGATED DECEMBER 31, 1997 OPTION VALUES
<CAPTION>
Exercisable/Unexercisable Value of Unexercised
Options In-the-Money Options at
at December 31, 1997(#) December 31, 1997($)
Name Exercisable/Unexercisable Exercisable/Unexercisable(2)
- ---- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Jerome I. Feldman 689,567(1) 130,100(1) 3,646,028 749,769
Martin M. Pollak 692,067(1) 130,100(1) 3,685,991 749,769
Scott N. Greenberg 110,825(1) 85,050(1) 578,118 497,384
Lawrence M. Gordon 46,025 40,000 256,897 245,000
John C McAuliffe 13,000 57,000 76,750 350,125
</TABLE>
- ----------
(1) Includes 356,150 exercisable and 50,100 unexercisable Class B Options for
each of Messrs. Feldman and Pollak and 49,950 exercisable and 25,050
unexercisable Class B Options for Mr. Greenberg, which options are
convertible into shares of Common Stock on a share for share basis.
(2) Calculated based on $13.875, which was the closing price of the Common Stock
as reported by the American Stock Exchange on December 31, 1997.
<PAGE>
The following table and notes set forth information for the named executive
officers regarding the exercise of stock options pursuant to the GTS Duratek,
Inc. Stock Option Plan of the Company during 1997 and unexercised options held
at the end of 1997.
<TABLE>
AGGREGATED OPTION EXERCISES AT DECEMBER 31, 1997
AND YEAR-END OPTION VALUES
<CAPTION>
Shares Exercisable/Unexercisable Value of Unexercised
Acquired Value Options at In-the-Money Options at
on Exercise Realized December 31, 1997(#) December 31, 1997 ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- --- --- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Jerome I. Feldman 10,000 111,000 115,000 - 1,341,500 -
Martin M. Pollak 25,000 247,500 100,000 - 1,167,500 -
Scott N. Greenberg 22,000 275,454 3,000 - 34,800 -
Lawrence M. Gordon 18,200 204,295 6,800 - 78,880 -
John C McAuliffe - - - - - -
</TABLE>
(1) Calculated based on the closing price of the Common Stock , as reported by
Nasdaq National Market on December 31, 1997, which was $13.50.
Compensation Committee Report on Executive Compensation
The Compensation Committee is responsible for administering the compensation
program for the executive officers of the Company. The Compensation Committee is
currently comprised of Jerome I. Feldman, Martin M. Pollak, Herbert R. Silverman
and Gordon Smale.
The Compensation Committee's executive compensation policies are designed to
offer competitive compensation opportunities for all executives which are based
on personal performance, individual initiative and achievement, as well as
assisting the Company in attracting and retaining qualified executives.
The Compensation Committee also endorses the position that stock ownership
by management and stock-based compensation arrangements are beneficial in
aligning management's and shareholders' interests in the enhancement of
shareholder value and recommends the grant of stock options to executive
officers whose performance has a significant effect on the success of the
Company.
Compensation paid to the Company's executive officers generally consists of
the following elements: base salary, annual bonus and long-term compensation in
the form of stock options and the 401(k) Savings Plan. The compensation for Mr.
Pollak is determined on the same basis as that of Mr. Feldman, the President and
Chief Executive Officer. The compensation for the other executive officers of
the Company is determined by a consideration of each officer's initiative and
contribution to overall corporate performance and the officer's managerial
abilities and performance in any special projects that the officer may have
undertaken. Competitive base salaries that reflect the individual's level of
responsibility are important elements of the Company's executive compensation
philosophy. Subjective considerations of individual performance are considered
by the Board in establishing annual bonuses and other incentive compensation.
<PAGE>
The Company has certain broad-based employee benefit plans in which all
employees, including the named executives are permitted to participate on the
same terms and conditions relating to eligibility and subject to the same
limitations on amounts that may be contributed. In 1997, the Company also made
matching contributions to the 401(k) Savings Plan for those participants.
Mr. Feldman's 1997 Compensation
Mr. Feldman's compensation is determined principally by the terms of his
employment agreement, as defined below. As of May 19, 1995, the Company entered
into an employment agreement (the "Agreement") with Mr. Feldman which provided
that Mr. Feldman serve as President and Chief Executive Officer of the Company
for the period through May 18, 1998 (the "Employment Period"). On November 19,
1996, the Compensation Committee of the Board of Directors approved an amendment
to the Agreement which extended the Employment Period from May 18, 1998 to May
31, 1999. The Agreement provides Mr. Feldman with an annual base salary of
$325,000 for the first twelve months of the Employment Period, subject to such
increases as may be deemed appropriate by the Board of Directors. The employment
agreement was negotiated with an independent committee of the Board of Directors
of the Company.
In reviewing Mr. Feldman's performance in 1997 and determining
appropriate compensation, the Committee took the following major accomplishments
into consideration:
oThe successful completion of the merger of the Company with General
Physics Corporation pursuant to which General Physics Corporation
became a wholly-owned subsidiary of the Company (the "Merger").
oThe strengthening of the Company's financial position.
Mr. Feldman led the Company's efforts with respect to the successful
completion of the Merger which represented a significant step in the Company's
transformation into an operating Company focusing on providing training,
technical and educational services through its core operating subsidiary,
General Physics Corporation. In addition, Mr. Feldman and management have
focused their efforts on attempting to increase sales and profitability within
the commercial training group of General Physics Corporation through internal
growth and acquisitions, both domestically and internationally. Revenues within
the higher margin commercial client group increased over 30%. Mr. Feldman is
working with management of the Company and General Physics to strengthen this
business through acquisitions, specifically in the areas of information
technology, in additional market sectors and in the international arena.
Mr. Feldman is also leading the Company's efforts in monetizing
non-strategic assets and investments and improving shareholder value. In 1997,
he completed the sale for the Company of over 225,000 shares of GTS Duratek's
common stock in the open market.
The Compensation Committee considered Mr. Feldman's integral role in
the Merger, as well as his contribution to the Company's significant financial
<PAGE>
progress in recent years. The Company's transformation from a holding company to
an operating company contributed to the Company's acceptance for listing on the
New York Stock Exchange in March 1998.
Jerome I. Feldman Martin M. Pollak Herbert R. Silverman Gordon Smale
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Agreements with Messrs. Feldman and Pollak. As of May 19, 1995, the Company
entered into a three year agreement (the "Agreement") with its President and
Chief Executive Officer, Jerome I. Feldman, and with its Executive Vice
President and Treasurer, Martin M. Pollak (the "Employees"). On November 19,
1996, the Company amended the Agreement with the Employees, which amendment
extended the term of the Employment Period from May 18, 1998 to May 31, 1999
(the "Amendment").
Pursuant to the Agreement, Mr. Feldman serves as President and Chief
Executive Officer of the Company and Mr. Pollak serves as Executive Vice
President and Treasurer of the Company for the period through May 31, 1999. The
Agreement provides for each Employee to receive annual compensation (a minimum
base salary) of $325,000 for the first year of the Agreement, $350,000 for the
second year of the Agreement and $375,000 for the third year of the Agreement
(subject to increase by the Board of Directors). Under the terms of the
Agreement, each of the Employees received options to purchase 62,500 shares of
Common Stock and 62,500 shares of Class B Stock. Under the terms of the
Amendment, each of the Employees received options to purchase 150,000 shares of
Class B Stock. The Agreement provides for the termination of employment upon the
Employee's death, physical or mental disability or retirement. In addition, the
Company may terminate the Employee's employment "for cause" (including a failure
to perform required duties or the engaging in gross misconduct) and each
Employee may voluntarily terminate his employment for "Good Reason", which
occurs if the Employee determines in good faith that due to a change in control
of the Company he is not able to effectively discharge his duties. "Change in
control" is defined to include (1) any "person" (other than the Employees or
certain persons who may acquire securities of the Company from an Employee)
acquiring the beneficial ownership of more than 30% of the Company's outstanding
securities or (2) certain changes in the composition of the Board of Directors
of the Company.
Upon termination by the Company "for cause", all obligations of the Company
under the Agreement terminate. Upon termination by the Company other than "for
cause", disability, or retirement, or by the Employee for "Good Reason", such
Employee is entitled to receive as severance pay an amount equal to his full
base salary at the rate then in effect, multiplied by the greater of (1) the
number of years (including fractions thereof) remaining in the term of the
employment, or (2) the number three. In addition, the Employee would receive an
amount in cash equal to the aggregate spread between the exercise prices of all
options held by the Employee under the Company's 1973 Non-Qualified Stock Option
Plan and the higher of (x) the market value of the Common Stock, and (y) the
highest price paid in connection with any change in control of the Company.
Subject to certain conditions, the Company would also maintain for two years (or
until the Employee's commencement of full-time employment with a new employer)
certain insurance, health and disability plans in effect, or arrange for
substantially similar benefits. The Agreements also contain non-competition and
confidentiality provisions.
<PAGE>
Certain Transactions
For the year ended December 31, l997, Michael Feldman received salary
and bonus from GPC of approximately $121,000 as Director of International
Business Development. Michael Feldman devotes a substantial portion of his
working hours to GPC and is the son of Jerome I. Feldman.
Jerome I. Feldman, the President and Chief Executive Officer and a
director of the Company, had loans outstanding to the Company aggregating
approximately $376,000 (including accrued interest thereon) for the period
January 1, 1997 through April 30, 1998. Approximately $43,000 in principal
amount of such loan accrues interest at the rate of 6% per annum and the balance
of such loan does not accrue interest. As of April 30, 1998, approximately
$326,000 of such loan was outstanding.
PERFORMANCE GRAPH
For 1997, the Company selected the New York Stock Exchange Computer and
Data Processing Index as the appropriate line of business index instead of the
Dow Jones Biotech Index. This change is reflective of the Company's strategy of
focusing on training services through its core operating subsidiary, General
Physics Corporation , which provides performance improvement services to Fortune
500 companies, manufacturing and process industries, electric power utilities,
and other commercial and governmental clients. On March 27, 1998, the Company's
Common Stock commenced trading on the New York Stock Exchange.
The following table compares the performance of the Company for the
periods indicated with the performance of the AMEX Market Value Index, the New
York Stock Exchange Computer and Data Processing Index and the Dow Jones
Industry Group BTC -Biotechnology. Total Return Indices reflect reinvested
dividends and are weighted on a market capitalization basis at the time of each
reported data point. Assumes $100 invested on December 31, 1992 in the Company's
Common Stock, AMEX Market Value Index, New York Stock Exchange Computer and Data
Processing Index and the Dow Jones Industry Group BTC - Biotechnology. Values
are as of December 31 of specified year assuming that dividends are reinvested.
Comparison of 5-Year Cumulative Total Return
NYSE
COMPUTER
MEASUREMENT PERIOD & DATA DOW JONES
(FISCAL YEAR COVERED) GP STRATEGIES AMEX MARKET PROCESSING BIOTECH
1992 100.00 100.00 100.0 100.00
1993 153.49 119.52 114.9 93.78
1994 67.44 108.69 139.0 83.29
1995 79.65 137.33 182.9 143.87
1996 71.51 146.11 225.6 148.59
1997 129.07 171.49 332.3 160.08
Compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange. Officers, directors and greater than 10% shareholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based sole on its review of copies of such forms received by it and
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the period January
1, 1997 to March 31, 1998, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with, except that
Bernard M. Kauderer, Sheldon L. Glashow, John C. McAuliffe and Gordon Smale
filed untimely reports on Form 3.
STOCKHOLDER PROPOSALS
Stockholders may present proposals for inclusion in the Company's 1999
proxy statement provided they are received by the Company no later than January
13, 1999, and are otherwise in compliance with applicable Securities and
Exchange Commission regulations.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee has recommended, and the Board of Directors has
selected, the firm of KPMG Peat Marwick LLP to serve as independent auditors for
the Company for the year ending December 31, 1998. KPMG Peat Marwick LLP has
audited the Company's books since 1970. The Board considers KPMG Peat Marwick
LLP to be well qualified for the function of serving as the Company's auditors.
A representative of KPMG Peat Marwick LLP is expected to be present at
the Annual Meeting, will have the opportunity to make a statement if so desires
and is expected to be available to respond to appropriate questions from
stockholders.
GENERAL
So far as is now known, there is no business other than that described
above to be presented for action by the stockholders at the meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the meeting and any adjournments thereof in
accordance with the discretion of the persons named therein.
<PAGE>
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. It is
expected that the solicitations will be made primarily by mail, but employees or
representatives of the Company may also solicit proxies by telephone or
telegraph and in person, and arrange for brokerage houses and other custodians,
nominees and fiduciaries to send proxy material to their principals at the
expense of the Company.
Lydia M. DeSantis
Secretary
<PAGE>
GP STRATEGIES CORPORATION
COMMON STOCK Annual Meeting of Stockholders PROXY
To Be Held June 10, 1998
This proxy is solicited on behalf of the Board of Directors
Revoking any such prior appointment, the undersigned, a stockholder of GP
Strategies Corporation hereby appoints Jerome I. Feldman and Martin M. Pollak,
and each of them, attorneys and agents of the undersigned, with full power of
substitution, to vote all shares of the Common Stock of the undersigned in said
Company at the Annual Meeting of Stockholders of said Company to be held in the
Whitney Room of the Hotel Inter-Continental New York, 111 East 48th Street, New
York, New York on June 10, 1998, at 2:45 p.m. Local Time and at any adjournments
thereof, as fully and effectually as the undersigned could do if personally
present and voting, hereby approving, ratifying and confirming all that said
attorneys and agents or their substitutes may lawfully do in place of the
undersigned as indicated below.
This proxy when properly executed will be voted as directed. If no direction is
indicated, this proxy will be voted for proposal (1).
1. Election of Directors: Jerome I. Feldman, Martin M. Pollak, Scott N.
Greenberg, Sheldon L, Glashow, Roald Hoffmann, Bernard M. Kauderer, John C.
McAuliffe, Ogden R. Reid, Gordon Smale and Herbert R. Silverman. For Withhold
For All Except
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below)
-------------------------------------
2. Upon any other matters which may properly come before the meeting or any
adjournments thereof.
<PAGE>
Please sign exactly as name appears below.
Dated , 1998
Signature
Signature if held jointly
Please mark,sign, date and return the proxy card promptly using the enclosed
envelope. When shares are held by joint tenants both should sign. When signing
as attorney, as executor, administrator, trustee or guardian, please give full
title as such. If signer is a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership please sign in
partnership name by authorized person.
<PAGE>
