<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
INFORMATION RESOURCES, INC.
- --------------------------------------------------------------------------------
(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] $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:
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(4) Date Filed:
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<PAGE>
INFORMATION RESOURCES, INC.
150 NORTH CLINTON STREET
CHICAGO, ILLINOIS 60661
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 1996
To the Stockholders of
Information Resources, Inc.
Notice Is Hereby Given that the Annual Meeting of the Stockholders of
INFORMATION RESOURCES, INC. (the "Company"), will be held at the offices of
the Company, 150 North Clinton Street, Chicago, Illinois 60661, on Thursday,
May 23, 1996, at 10:00 am Central Daylight Time, for the purpose of
considering and acting upon the following matters:
1. To elect four directors to the Board of Directors of the Company, each
to serve for a term of three years;
2. To consider and act upon a proposal to adopt the 1996 Stock Plan for
Non-Employee Directors in Lieu of Cash Retainer; and
3. To consider and act upon such other business as may properly come
before the Meeting.
Stockholders of record as of the close of business on April 12, 1996, will
be entitled to notice of and to vote at the Meeting. The transfer books will
not be closed. For ten days prior to the Meeting, a list of stockholders
entitled to vote at the Meeting with the address of and number of shares held
by each will be kept on file at the offices of the Company at 150 North
Clinton Street, Chicago, Illinois 60661 and will be subject to inspection by
any stockholder at any time during the Company's usual business hours. The
list will also be available for inspection by any stockholder during the
Meeting. Stockholders who do not expect to attend in person are urged to
execute and return the accompanying proxy in the envelope enclosed.
The annual report of the Company for the year 1995 is being mailed to all
stockholders of record and accompanies this Proxy Statement.
By order of the Board of Directors,
Information Resources, Inc.
Edward S. Berger
Secretary
Chicago, Illinois
April 23, 1996
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
----------------
<PAGE>
PROXY STATEMENT
INFORMATION RESOURCES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 23, 1996
GENERAL INFORMATION
This Proxy Statement is being furnished to the stockholders of Information
Resources, Inc., a Delaware corporation (the "Company"), 150 North Clinton
Street, Chicago, Illinois 60661, in connection with the solicitation of
proxies by its Board of Directors for use at the Annual Meeting of
Stockholders to be held on May 23, 1996, and any adjournments thereof ("the
Meeting"). Stockholders of record as of the close of business on April 12,
1996 are entitled to notice of and to vote at the Meeting. The approximate
date on which this Proxy Statement and the accompanying proxy are first being
sent to stockholders is April 23, 1996.
Stockholders are urged to sign the accompanying form of proxy and return it
as soon as possible in the envelope provided for that purpose. Returning a
proxy card will not prevent a stockholder from attending the Meeting. If the
enclosed proxy is properly executed and returned in time for voting with a
choice specified thereon, the shares represented thereby will be voted as
indicated on such proxy. If no specification is made, the proxy will be voted
by the proxy committee (i) for the election as directors of the nominees named
below (or substitutes therefor if any nominees are unable or unwilling to
serve), (ii) for the proposal to adopt the 1996 Stock Plan for Non-Employee
Directors in Lieu of Cash Retainer and (iii) in the discretion of such proxy
committee, upon such matters not presently known or determined which may
properly come before the Meeting. A stockholder who wishes to designate a
person or persons to act as his or her proxy at the Meeting, other than the
proxies designated by the Board of Directors, may strike out the names
appearing on the enclosed form of proxy, insert the name of any other such
person or persons, sign the form, and transmit it directly to such other
designated person or persons for use at the Meeting.
A stockholder who has given a proxy may revoke it at any time before it is
voted by (i) a subsequently dated proxy, (ii) written notification to the
persons named therein as proxies, which may be mailed or delivered to the
Company at the above address, or (iii) attendance at the Meeting and voting in
person. Attendance at the Meeting will not, in and of itself, constitute a
revocation of a proxy. All shares represented by effective proxies will be
voted at the Meeting and at any adjournments thereof.
The Company has one class of stock outstanding, common stock, $.01 par value
per share ("Common Stock"). On March 15, 1996, 27,723,652 shares of Common
Stock were outstanding and entitled to one vote each on all matters considered
at the Meeting. There are no cumulative voting rights with respect to the
election of directors.
<PAGE>
OWNERSHIP OF SECURITIES
The following table shows the total number of shares of Company Common Stock
beneficially owned as of the dates designated below, and the percentage of
Company Common Stock so owned as of that date, with respect to each person who
is known to be the beneficial owner of more than five percent of the Company's
Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------ ---------- --------
<S> <C> <C>
State of Wisconsin Investment Board................... 2,652,500(1) 9.57
P.O. Box 7842
Madison, WI 53707
Dewey Square Investors Corp........................... 2,597,400(2) 9.37
One Financial Center
Boston, MA 02111
FMR Corp.............................................. 1,758,100(3) 6.34
2 Devonshire Street
Boston, MA 02109
GeoCapital Corporation................................ 1,502,200(4) 5.42
767 Fifth Avenue
New York, NY 10153
</TABLE>
The following table shows the total number of shares of Company Common Stock
beneficially owned as of March 15, 1996, and the percentage of Company Common
Stock so owned as of that date, with respect to (i) each director of the
Company, (ii) each executive officer named in the Summary Compensation Table
below (the "Named Executive Officers"), and (iii) all directors and executive
officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP(5) OF CLASS
------------------------ ------------ --------
<S> <C> <C>
James G. Andress...................................... 433,607 1.54
Edwin E. Epstein...................................... 27,980 *
Gerald J. Eskin....................................... 419,402 1.51
Gian M. Fulgoni....................................... 653,578 2.33
George R. Garrick..................................... 1,000 *
John D. C. Little..................................... 208,392 *
Leonard M. Lodish..................................... 47,435 *
Edward E. Lucente..................................... 10,125 *
Edith W. Martin....................................... 8,515 *
George G. Montgomery, Jr.............................. 20,650 *
Randall S. Smith...................................... 226,874 *
Jeffrey P. Stamen..................................... 100,000 *
Glen L. Urban......................................... 53,390 *
Thomas W. Wilson, Jr.................................. 22,500 *
All directors and executive officers as a group (17
persons)............................................. 2,301,036 7.92
</TABLE>
- --------
*Less than 1%.
(1) Number of shares is based upon information set forth in Schedule 13G filed
with the Securities and Exchange Commission ("SEC") as of February 6,
1996, which indicates that this stockholder is a government agency which
manages public pension funds.
2
<PAGE>
(2) Number of shares is based upon information set forth in Schedule 13G filed
with the SEC as of February 12, 1996, which indicates that such shares are
held on behalf of numerous clients of this stockholder, a registered
investment adviser.
(3) Number of shares is based upon information set forth in Schedule 13G filed
with the SEC as of February 14, 1996, which indicates that such shares are
held on behalf of numerous clients of this stockholder, a registered
investment adviser.
(4) Number of shares is based upon information set forth in Schedule 13G filed
with the SEC as of February 15, 1996, which indicates that such shares are
held on behalf of numerous clients of this stockholder, a registered
investment adviser.
(5) Unless otherwise indicated, each person has sole voting and investment
power with respect to all such shares. The number of shares disclosed for
the following individuals includes stock options which are exercisable
within 60 days in the following amounts: (i) James G. Andress--433,607
options; (ii) Edwin E. Epstein--11,250 options; (iii) Gerald J. Eskin--
72,635 options; (iv) Gian M. Fulgoni--340,018 options; (v) John D.C.
Little--30,258 options; (vi) Leonard M. Lodish--45,901 options; (vii)
Edward E. Lucente--8,125 options; (viii) Edith W. Martin--8,125 options;
(ix) George G. Montgomery, Jr.--11,250 options; (x) Randall S. Smith--
163,974 options; (xi) Jeffrey P. Stamen--100,000 options; (xii) Glen L.
Urban--15,322 options; (xiii) Thomas W. Wilson, Jr.--12,500 options; and
(xiv) all directors and officers as a group (17 persons)--1,319,327
options.
COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16") sets
forth certain filing requirements relating to securities ownership by
directors, executive officers and ten percent stockholders of a publicly-held
company. To the Company's knowledge, all filing requirements were satisfied by
the Company's directors and executive officers except that Edwin E. Epstein
and Edward E. Lucente, directors of the Company, inadvertently failed to file
one report each with respect to open-market purchases of Company Common Stock.
These transactions were subsequently disclosed on a Section 16 report after
the required filing deadline. In making the foregoing disclosure, the Company
has relied solely on written representations of its directors and executive
officers and copies of the Section 16 reports that they have filed with the
SEC.
ELECTION OF DIRECTORS
(PROPOSAL NUMBER 1 ON THE ENCLOSED PROXY CARD)
The By-laws of the Company provide that the number of directors of the
Company shall not be less than five nor more than fifteen and will be
determined from time to time by resolution of the Board of Directors. The
number of directors is currently set at twelve. The Certificate of
Incorporation of the Company provides for a classified Board of Directors
consisting of three classes (as nearly equal in number as possible) and that
the directors will be elected to hold office for terms of three years or until
their successors are elected and qualified. Those directors identified below
as nominees for election have been nominated for election to full three-year
terms ending in 1999. Also listed below are the remaining directors of the
Company whose terms expire as indicated below.
It is intended that, in the absence of contrary specifications, votes will
be cast pursuant to the enclosed proxies for the election of the listed
nominees. Proxies will not be voted for a greater number of nominees. Should
any of the nominees become unable or unwilling to accept nomination or
election, it is intended, in the absence of contrary specification, that the
proxies will be voted for the balance of those named and for a substitute
nominee or nominees. However, as of the date of this proxy statement,
officials of the Company know of no reason to anticipate such an occurrence.
All of the nominees have consented to be named as nominees and to serve as
directors if elected.
3
<PAGE>
A. NOMINEES FOR ELECTION:
<TABLE>
<CAPTION>
POSITIONS WITH COMPANY, BUSINESS
NAME AGE EXPERIENCE AND OTHER POSITIONS
- ---- --- --------------------------------
<S> <C> <C>
James G. Andress................. 57 Director of the Company since 1989; Current member
of the Executive Committee, the Compensation Com-
mittee and the Audit Committee; President and
Chief Operating Officer of the Company from March
1994 to September 1995; Chief Executive Officer
from May 1990 to September 1995; Acting Chief Fi-
nancial Officer from January 1995 to September
1995; Vice Chairman from July 1993 until March
1994; President from November 1989 until July
1993; Director of Liposome Co., Inc., NeoRx Corp.,
Sepracor, Inc., Genelabs Technologies, Inc., Ge-
netics Institute, Inc., Option Care, Inc., America
Online, Inc., Walsh International, Inc. and
Allstate Insurance Co., Inc.
Edwin E. Epstein............... 72 Director of the Company since 1987; Current member
of the Executive Committee and Chairman of the Au-
dit Committee; President of Retailing Insights,
Inc., food industry consultants, since 1971. Di-
rector of PIA Merchandising Services, Inc.
Edward E. Lucente.............. 55 Director of the Company since 1991; President and
CEO of Liant Software Corp., since 1995; Head of
worldwide sales and marketing of Digital Equipment
Corp. from March 1993 until April 1994; Executive
Vice-President of Northern Telecom Limited from
January 1992 until March 1993; Member of the Exec-
utive Office of Northern Telecom limited from Feb-
ruary 1991 until March 1993; Senior Vice-President
of Marketing for Northern Telecom Limited from
February 1991 until January 1992; Corporate Vice
President of International Business Machines Cor-
porations ("IBM") from 1981 until February 1991;
Director of Genicom Corporation.
Jeffrey P. Stamen.............. 50 Director of the Company since March 1994; Senior
Vice-President of the OLAP Division of Oracle Cor-
poration since July 1995; President--IRI Software
from February 1991 to July 1995; Vice President of
the Company from January 1986 to July 1995.
B. TERMS EXPIRING IN 1997:
Gerald J. Eskin, Ph. D......... 61 Co-founder of the Company; Director of the Company
since 1977; Vice Chairman since December 1981;
Professor of Marketing at the University of Iowa
since 1974 (currently adjunct status).
John D.C. Little, Ph.D......... 68 Director of the Company since 1985; Current member
of the Executive Committee; Professor of Manage-
ment Science at The Sloan School of Management,
Massachusetts Institute of Technology.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
POSITIONS WITH COMPANY, BUSINESS
NAME AGE EXPERIENCE AND OTHER POSITIONS
- ---- --- --------------------------------
<S> <C> <C>
George G. Montgomery, Jr....... 62 Director of the Company since 1982; Current Chair-
man of the Compensation Committee and Executive
Stock Option Committee; Advisory Director of
Hambrecht & Quist LLC, investment bankers.
Glen L. Urban, Ph.D............ 56 Director of the Company since 1986; Current member
of the Audit Committee; Professor of Management
Science at, and Dean of, The Sloan School of Man-
agement, Massachusetts Institute of Technology;
Director of The Dexter Corporation.
C. TERMS EXPIRING IN 1998:
Gian M. Fulgoni................ 48 Chief Executive Officer since 1986; Director since
1981; Current member of the Executive Committee;
Chairman of the Board of Directors from February
1991 until April 1995; Director of PLATINUM tech-
nology, inc.
Leonard M. Lodish, Ph.D........ 52 Director of the Company since 1986; Current member
of the Compensation Committee; Samuel R. Harrell
Professor of the Marketing Department at the Whar-
ton School of Business, University of Pennsylva-
nia; Director of Franklin Electronic Publishing
and J&J Snack Foods, Inc.
Edith W. Martin, Ph.D.......... 50 Director of the Company since 1991; Current member
of the Compensation Committee and Executive Stock
Option Committee; Vice President, Information Sys-
tems and Chief Information Officer for Eastman Ko-
dak, Co., since January 1996; Vice President and
Chief Technology Officer for the Student Loan Mar-
keting Association (Sallie Mae) since August 1994;
Vice President and Chief Information Officer for
INTELSAT from July 1992 until 1994; Vice President
of High Technology Center for the Boeing Company
from 1984 to 1992; Director of Medtronic, Inc. and
Immunex, Inc.
Thomas W. Wilson, Jr........... 64 Director of the Company since 1991; Chairman of
the Board of Directors since April 1995; Current
Chairman of the Executive Committee; Senior Part-
ner of McKinsey & Company, management consultants,
from 1973 until 1990 (retired)
</TABLE>
MEETINGS OF THE BOARD OF DIRECTORS
During 1995, the Board of Directors met or took formal action by unanimous
written consent on nine occasions, and all members attended at least 75% of
the Board meetings and their respective Committee meetings.
The Board of Directors maintains an Executive Committee, Audit Committee,
Compensation Committee and Executive Stock Option Committee. The Company has
no nominating committee. The nominating function is performed by the Executive
Committee, which has not established any policy or procedure for considering
nominees recommended by stockholders.
5
<PAGE>
The Executive Committee is empowered to exercise the authority of the Board
of Directors in the management of the business and affairs of the Company
between the meetings of the Board, except as provided by the by-laws or
limited by the provisions of the Delaware General Corporation Law. During
1995, the Executive Committee met or took formal action by unanimous written
consent on four occasions.
The Audit Committee recommends to the Board of Directors the appointment of
the independent certified public accountants for the following year and
reviews the scope of the audit, the independent certified public accountants
report and the auditors' comments relative to the adequacy of the Company's
system of internal controls and accounting policies. The Audit Committee met
during 1995 on two occasions.
The Compensation Committee is responsible for making determinations
regarding salaries and other compensation for the Company's executive
officers. The Committee also makes recommendations to the Executive Stock
Option Committee with respect to stock option grants to the Company's
directors and executive officers pursuant to the Executive Stock Option Plan.
The Compensation Committee met on two occasions during 1995.
The Executive Stock Option Committee is responsible for making
determinations regarding the grant of stock options from time to time to the
Company's directors and executive officers pursuant to the Executive Stock
Option Plan. During 1995, the Executive Stock Option Committee met on two
occasions and approved all director and executive stock option grants
throughout the course of the year.
EXECUTIVE COMPENSATION
The following information regarding compensation is given with respect to
(i) Gian M. Fulgoni and James G. Andress, each who served in the capacity of
Chief Executive Officer during the last completed fiscal year, (ii) the three
other highest paid executive officers of the Company who were executive
officers of the Company at year end and (iii) Jeffrey P. Stamen, who would
have been included as one of the highest paid executive officers of the
Company but for the fact that he was not serving as an executive officer of
the Company at the end of 1995 (the "Named Executive Officers").
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for determining the annual salary, bonus, and other compensation
of the Company's executive officers. The Committee also makes recommendations
to the Executive Stock Option Committee with respect to stock option grants to
the Company's executive officers. The Committee is composed entirely of
outside, non-management directors.
The goals of the Company's compensation programs are to align executive
compensation with the Company's performance, and to attract, retain and reward
executive officers who contribute to the Company's success within a highly
competitive industry. The programs are intended to support the goal of
increasing stockholder value by achieving specific financial and strategic
objectives.
The Committee has considered the potential impact of Section 162(m) of the
Internal Revenue Code on executive compensation in future years. Section
162(m) disallows a tax deduction by any publicly-held corporation for
individual compensation exceeding $1 million in any taxable year for a Named
Executive Officer, unless compensation is performance based. The Committee has
determined that, while Section 162(m) should be given consideration in
compensating executive officers, the Committee's compensation philosophy
should not be arbitrarily altered in order to limit or maintain executive
compensation within the Section 162(m) deduction limit. The Committee has,
however, determined that it will make every reasonable effort, consistent with
sound executive compensation principles and the needs of the Company, to
permit all
6
<PAGE>
amounts paid to the Named Executive Officers to be deductible by the Company.
$1,115,360 of the total compensation received in 1995 by George R. Garrick, a
former executive officer of the Company may not qualify for deduction for
federal income tax purposes as a result of Section 162(m). Such amounts were
paid to Mr. Garrick as a result of contractual obligations established in Mr.
Garrick's employment agreement. See "--Employment Agreements."
Compensation of Executive Officers Generally
Historically, the Company's fundamental compensation philosophy has been to
relate the total compensation package for an executive officer directly to his
or her contribution to the Company's performance objectives. Each executive's
incentive, or "at risk," compensation was directly tied to the achievement of
both Company and individual objectives, including both quantitative and
qualitative objectives (though quantitative, strategic and tactical objectives
are emphasized). Although the performance objectives of each executive officer
could differ depending upon the role and responsibilities within the
management group, historically, the typical performance objectives for the
executive officers as a group generally included the following: (i) Company
revenues and earnings per share; (ii) business unit revenues and profitability
and (iii) qualitative objectives toward tactical and strategic goals. Also,
certain elements of compensation for individual executive officers were
dictated by employment contracts that were in place.
The 1995 calendar year was a year of transition for both the Company and its
senior management. During 1995, senior management focused on the Company's
search for a strategic equity investor, culminating in the sale by the Company
of a portion of its software division to Oracle Corporation for approximately
$100 million. In addition, during 1995 several members of the Company's senior
management changed including: Thomas W. Wilson Jr., a director of the Company
since 1991, was appointed Chairman of the Board; Gary M. Hill and John P.
McNicholas Jr. were hired by the Company as Chief Financial Officer and Chief
Accounting Officer, respectively; James G. Andress, one of the Company's Chief
Executive Officers since 1991, resigned as an executive officer; Thomas M.
Walker, Chief Financial Officer of the Company since 1990, resigned; and
Jeffrey P. Stamen, President of IRI software since 1991, was retained by
Oracle Corporation as part of the Oracle transaction. In addition, in the
first quarter of 1996 George R. Garrick resigned as Executive Vice President
of the Company. Given these changes, the Compensation Committee decided to
award salary increases, cash bonuses and/or stock options to the Company's
executive officers on a discretionary basis taking into consideration each
such officer's contribution to the Company.
The Company's executive compensation package consists of three principal
components: (i) base salary; (ii) potential for an annual cash bonus based
upon Company, business unit and individual performance; and (iii) the
opportunity to earn equity-based incentives (i.e. stock options) to reward
individual performance, which is intended to encourage continued superior
achievement and to further align management and stockholder interests. The
Company generally seeks to position its compensation package for each
executive position at a level which, for outstanding performance, is at or
somewhat above industry average.
Salary. The Committee reviews each executive officer's salary annually. In
determining appropriate salary levels, the Committee considers the level and
scope of responsibility, experience, Company and individual performance for
the previous year, contractual provisions in employment agreements, as well as
competitive market data on salary levels. Based upon the performance of the
Company during 1994, the Committee concluded not to award salary increases to
its current executive officers for 1995 except for one dictated by an
employment contract.
Cash Bonuses. Except as described below the Company's executive officers
were not paid a cash bonus for 1995 performance. Two executive officers (who
are not Named Executive Officers) were paid cash bonuses in 1996 pursuant to
contractual agreements reached with the Company upon accepting employment
offers in 1995. In reaching the decision not to award discretionary bonus,
although individual performance was considered, the Committee concluded that
the overall performance of the Company as measured by its revenues, earnings
and shareholder return, did not warrant the payment of performance bonuses
except for those dictated by contract.
7
<PAGE>
Option Grants. During 1995, the Company awarded stock options to five of its
executive officers. With respect to one individual, such options were granted
as compensation for services rendered during 1993. Insufficient options were
available for such option grants in 1994. Two additional executive officers
received option grants in recognition of substantial increases in
responsibilities within the Company's executive management team. Options were
also granted as an inducement to two key individuals to join the Company's
executive management team. See table entitled "Stock Option Grants in Last
Fiscal Year" below. Except for these option grants and based upon the
Company's performance in 1994, the Company's executive officers were not
awarded stock option grants in 1995. In reaching this decision, although
individual performance was considered, the Committee concluded that the
overall performance of the Company as measured by its revenues, earnings and
shareholder return, did not warrant the payment of performance option grants.
The Committee believes that stock based incentives for executive officers
are an important feature of the Company's executive compensation package.
Stock options granted to executive officers generally vest over a four-year
period and are typically granted with an exercise price equal to the fair
market value of the Company's Common Stock as of the date of grant. The
ultimate value of stock options is directly tied to the value of a share of
Common Stock. The Committee also considers the amount and terms of options
already held by a particular officer, the amount and terms of options granted
to that officer's peers, the role of each executive in accomplishing the
Company's performance objectives and the highly competitive nature of the
Company's industry.
Compensation of the Chief Executive Officers. The position of the Chief
Executive is currently filled by Mr. Gian M. Fulgoni. Mr. James G. Andress
served as Co-Chief Executive Officer of the Company until his resignation on
September 5, 1995. Historically the Company has compensated its Chief
Executive Officer utilizing the same philosophy and general criteria used for
other executive officers. As described above, specific performance objectives
were not set for the Company's Executive Officers in 1995, including its Chief
Executive Officers.
During 1995, Mr. Fulgoni received a $330,750 salary, the same amount paid in
1994. Mr. Andress was paid $225,163 in 1995 (the same annual salary rate paid
in 1994) through his date of resignation. As part of his severance arrangement
stipulated in his employment contract, Mr. Andress received an additional
$105,586 through the end of 1995. Based upon the results of the Company's
performance in 1994, Mr. Fulgoni and Mr. Andress were not awarded a cash bonus
or stock options in 1995. In reaching this decision, although individual
performance was considered, the Committee concluded that the overall
performance of the Company as measured by its revenues, earnings and
shareholder return, did not warrant the payment of a cash bonus or an award of
stock options.
It is the Committee's view that each of Mr. Fulgoni's and Mr. Andress' total
compensation package was based on an appropriate balance of (i) the Company's
performance (ii) individual performance levels and (iii) competitive
standards.
The foregoing report has been approved by current and former members of the
Committee.
The Compensation Committee
George G. Montgomery, Jr., Chairman*
James G. Andress**
Leonard M. Lodish
Edith W. Martin*
- --------
*Also a member of the Executive Stock Option Committee.
**Became a member of the Compensation Committee in September 1995, after his
resignation as Chief Executive Officer.
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation to the Named Executive
Officers for services rendered to the Company for the Company's last three
fiscal years:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------- ------------
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- --------------------------- ---- -------- ----- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Gian M. Fulgoni..................... 1995 $330,750 0 0 $ 2,772
Chief Executive Officer 1994 330,750 0 161,465(2) 2,772
1993 330,750 0 120,374(3) 1,826
James G. Andress(4)................. 1995 225,163 0 0 108,358(5)
President, Chief Executive 1994 330,750 0 161,465(2) 2,772
Officer and Chief Operating Officer 1993 330,750 0 120,374(3) 2,698
George R. Garrick(6)................ 1995 295,224 0 0 1,029,611(9)
President--IRI North America 1994 275,000 0 0 1,286,661(10)
1993 443,013(7) 0 255,000(8) 8,958
Randall S. Smith.................... 1995 272,692 0 80,000(11) 2,772
President--International 1994 275,465 0 7,764(12) 2,772
Information Services Group 1993 202,000 0 21,466(13) 2,698
Thomas W. Wilson, Jr................ 1995 174,519(14) 0 80,000(15) --
Chairman of the Board 1994 -- 0 20,000(16) 115,000(17)
1993 -- 0 -- 52,500(17)
Jeffrey P. Stamen(18)............... 1995 176,025 0 0 1,525,184(21)
President of IRI Software 1994 280,000 0 211,453(19) 2,772
1993 239,398 0 155,735(20) 2,698
</TABLE>
- --------
(1) Except as otherwise noted, represents contributions made by the Company
to the Information Resources, Inc. 401K Retirement Savings Plan.
(2) Includes 11,465 options granted in lieu of the cash bonus for services
rendered in 1993 and 150,000 performance options granted for services
rendered in 1993.
(3) Includes 13,696 options granted in lieu of the cash bonus for services
rendered in 1992, 100,000 performance options granted for services
rendered in 1992 and 6,678 options granted in lieu of a portion of the
cash bonus for services rendered in 1993.
(4) Resigned as an executive officer of the Company effective September 1995.
(5) Includes $105,586 of severance payments.
(6) Resigned from Company effective March 1996.
(7) Includes $411,282 related to an overseas assignment.
(8) Options granted pursuant to an employment contract effective November 4,
1993.
(9) Includes (i) $51,931 of imputed interest on a interest free loan of
$1,200,000 of which $800,000 was outstanding during 1995 and (ii)
$975,000 paid to Mr. Garrick pursuant to his employment agreement upon
the exercise of certain stock options. Mr. Garrick's employment agreement
provided that the Company pay him the difference between $34.00 and the
fair market value of the stock ($14.50) on the exercise date of the
option. The interest free loan to Mr. Garrick was repaid in full on March
13, 1996.
(10) Includes (i) $63,889 of imputed interest on a interest free loan
described in footnote (9) of which $1,200,000 was outstanding during 1994
and (ii) $1,220,000 paid to Mr. Garrick pursuant to his
9
<PAGE>
employment agreement upon the exercise of certain stock options. As
described in footnote (9) Mr. Garrick's employment agreement provided that
the Company pay him the difference between $34.00 and the fair market
value of the stock ($12.17) on the exercise date of the option.
(11) Options granted May 24, 1995 in recognition of significantly increased
responsibilities undertaken within the Company's international business
operations.
(12) Options granted in lieu of the cash bonus for 1993.
(13) Includes 17,000 performance options granted for services rendered in
1992, 707 options granted in lieu of the cash bonus for services rendered
in 1992, and 3,759 options granted in lieu of a portion of the cash bonus
for services rendered in 1993.
(14) Represents salary from May 12, 1995. Mr. Wilson's annual salary rate is
$275,000.
(15) Options granted November 27, 1995, in recognition of significantly
increased responsibilities with the Company's executive management team.
(16) Options granted for directorship services rendered in 1994.
(17) Payments for consulting services.
(18) Resigned from Company effective July 1995 in connection with the sale to
Oracle Corporation of a portion of the Company's software business.
Continues as member of the Company's Board of Directors.
(19) Includes 11,453 options granted in lieu of the cash bonus for services
rendered in 1993 and 200,000 performance options granted for services
rendered in 1993 and in connection with the execution by Mr. Stamen of a
noncompetition agreement with the Company.
(20) Includes 1,252 options granted in lieu of a portion of the cash bonus for
services rendered in 1992, 150,000 performance options granted for
services rendered in 1992 and 4,483 options granted in lieu of a portion
of the cash bonus for services rendered in 1993.
(21) Includes $1,522,788 paid to Mr. Stamen for certain vested stock options
held by him on the closing date of the Oracle transaction (see footnote
18). Pursuant to a severance arrangement made available to employees
severed by the Company in connection with the Oracle transaction, the
Company paid Mr. Stamen an amount necessary to achieve a $5.00 pretax
gain for such options as determined on the closing date of the
transaction.
STOCK OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR
INDIVIDUAL GRANTS OPTION TERM(4)
------------------------ -------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE(3) DATE 5% 10%
- ---- ---------- ------------ -------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gian M. Fulgoni......... 0 -- -- -- -- --
James G. Andress........ 0 -- -- -- -- --
George R. Garrick....... 0 -- -- -- -- --
Randall S. Smith........ 80,000(1) 4.2% $13.25 05/24/05 $666,628 $1,689,367
Thomas W. Wilson, Jr.... 80,000(2) 4.2% 11.00 11/27/05 553,427 1,402,493
Jeffrey P. Stamen....... 0 -- -- -- -- --
</TABLE>
The following table sets forth information concerning individual grants of
stock options made during the Company's last fiscal year to each of the Named
Executive Officers:
- -------
(1) Represents options granted on May 24, 1995 in recognition of significantly
increased responsibilities undertaken within the Company's international
business operations. Such options are exercisable in quarterly
installments beginning on the first anniversary of the grant date and on
the next three anniversaries thereafter.
10
<PAGE>
(2) Represents options granted on November 27, 1995 in recognition of
significantly increased responsibilities with the Company's executive
management team. Such options are exercisable in quarterly installments
beginning on the first anniversary of the grant date and on the next three
anniversaries thereafter.
(3) Represents the fair market value of the Company's Common Stock on the date
of grant.
(4) The amounts shown under these columns are the result of calculations at
the 5% and 10% rates required by the Securities and Exchange Commission
and are not intended to forecast future appreciation of the price of the
Company's Common Stock.
AGGREGATE STOCK OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END STOCK OPTION VALUES
The following table sets forth information concerning each exercise of stock
options during the Company's last fiscal year by each of the Named Executive
Officers and the fiscal year-end value of unexercised stock options:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT 12/31/95 OPTIONS AT 12/31/95(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gian M. Fulgoni......... 0 $ 0 261,288 203,231 $383,382 0
James G. Andress(2)..... 0 0 354,779 202,341 496,378 0
George R. Garrick(3).... 50,000 724,500 33,333 116,667 0 $618,250
Randall S. Smith........ 0 0 154,724 93,500 435,778 0
Thomas W. Wilson, Jr.... 0 0 11,250 98,750 0 110,000
Jeffrey P. Stamen(4).... 107,360 480,227 100,000 0 0 0
</TABLE>
- --------
(1) Based on closing price of $12.375 on the last trading day of 1995.
(2) Resigned as an executive officer effective September 1995.
(3) Resigned from the Company effective March 1996.
(4) Resigned from the Company effective July 1995 in connection with the sale
to Oracle Corporation of a portion of the Company's software business.
11
<PAGE>
PERFORMANCE GRAPH
The following line graph compares cumulative total stockholder return on the
Company's Common Stock over the past five fiscal years with the cumulative
total return of (i) the Standard & Poors 500 Composite Index, (ii) the
Hambrecht & Quist LLC Technology Index and (iii) The Furman Selz LLC Marketing
Services and Technology Index. Historically the Company has utilized the H&Q
Technology Index as an industry comparison though it has elected to change
such comparison to the Furman Selz LLC Marketing Services and Technology
Index. The Company recently sold a portion of its software business to Oracle
Corporation. As a result of that transaction, the Company believes that the
Furman Selz LLC Marketing Services and Technology Index includes companies
that are more comparable both in terms of the type of business conducted and
market capitalization.
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
Measurement Period
(Fiscal Year Covered) IRI H&Q TECH FURMAN SELZ S&P 500
- ------------------- ------- -------- ----------- -------
<S> <C> <C> <C> <C>
Measurement Pt-
1990 $100.00 $100.00 $100.00 $100.00
1991 $275.00 $147.83 $180.19 $130.47
1992 $315.00 $170.04 $233.59 $140.41
1993 $385.00 $185.56 $253.70 $154.56
1994 $137.50 $215.39 $250.15 $156.60
1995 $123.75 $323.40 $340.52 $215.45
</TABLE>
EMPLOYMENT AGREEMENTS
During 1995, the Company had employment agreements with three of its Named
Executive Officers who have since resigned from the Company in such capacity.
These include James G. Andress, former President, Chief Executive Officer and
Chief Operating Officer; George R. Garrick, former President--IRI North
America and Jeffrey P Stamen, former President--IRI Software. Mr. Andress
resigned his position as an executive officer of the Company on September 5,
1995. Mr. Garrick resigned from his position as an executive officer of the
Company on March 13, 1996. Mr. Stamen resigned from the Company on July 27,
1995 in connection with the sale of a portion of the Company's software
business to Oracle Corporation.
Mr. Andress' agreement dated November 6, 1989 provided for a minimum base
salary of $300,000 per year plus a bonus or other incentive compensation as
the Board of Directors or the Executive Committee deemed appropriate. On
September 5, 1995, Mr. Andress gave notice of his election to terminate the
agreement. In connection with such notice, Mr. Andress resigned from all
executive offices held with the Company. Mr. Andress was entitled to receive
his base salary for the unexpired term of the agreement (six months), and he,
or his estate, as the case may be, may exercise in full any vested stock
options held by him for a period of one year and one month after the
termination date.
12
<PAGE>
Mr. Garrick's agreement, dated November 4, 1993, provided for a minimum base
salary of $275,000 per year, with an annual increase of not less than 6%, plus
a bonus or other appropriate incentive compensation as the Board of Directors
or the Executive Committee deemed appropriate. Pursuant to his employment
contract Mr. Garrick was granted 255,000 stock options and the Company made a
personal, unsecured, non-interest bearing loan in the amount of $1,200,000 to
Mr. Garrick. On March 13, 1996 the Company and Mr. Garrick mutually agreed to
terminate the employment relationship. Pursuant to the termination of the
employment relationship: (i) Mr. Garrick exercised 50,000 stock options
(exercise price $0.01) and the Company paid Mr. Garrick the difference between
the pretax proceeds of the exercise and $34.00 per share; (ii) 100,000 options
held by Mr. Garrick were canceled by the Company; and (iii) Mr. Garrick paid
to the Company the sum of $800,000 which represented the outstanding balance
of a loan made to Mr. Garrick pursuant to his employment agreement. See
"Management Relationships and Related Transactions."
Mr. Stamen's employment agreement provided for a minimum base salary and
participation in all Company benefit plans on the same basis as other
executive officers of the Company. On July 27, 1995, pursuant to the sale of a
portion of the Company's software business to Oracle Corporation, Mr. Stamen
resigned as an executive officer of the Company. See "Management Relationships
and Related Transactions."
DIRECTOR COMPENSATION
In 1995, directors who were not full-time employees of the Company each
received an annual fee of $15,000 plus $1,500 for each Board meeting attended.
Members of the Board who serve on a committee each receive an annual fee of
$2,500 per committee. Chairpersons of such committees receive an annual fee of
$5,000. Total fees paid during 1995 to non-employee directors were as follows:
Mr. Epstein, $29,750; Dr. Little, $23,500; Dr. Lodish, $23,500; Mr. Lucente,
$21,000; Dr. Martin, $24,750; Mr. Montgomery, $29,750; Mr. Stamen, $8,750 and
Dr. Urban, $23,500. All directors are reimbursed for travel expenses.
In addition to options disclosed elsewhere herein which were granted to
certain directors who are also Named Executive Officers of the Company, the
Company granted options to directors during 1995 to purchase the following
shares: (i) 2,500 shares to Mr. Epstein; Dr. Little; Mr. Lucente and Dr. Urban
at an exercise price of $13.25 and to Dr. Martin and Mr. Montgomery at an
exercise price of $13.00; (ii) 50,000 shares to Mr. Eskin at an exercise price
of $13.25; and (iii) 2,500 shares at an exercise price of $13.25 and 28,000
shares at an exercise price of $11.00 to Dr. Lodish. In all cases, the
exercise price of the options granted was equal to the fair market value per
share of the Company's Common Stock on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the Compensation Committee consisted of George G. Montgomery,
Jr., James G. Andress, Leonard M. Lodish and Edith W. Martin. Mr. Andress
became a member of the Compensation Committee in September 1995. Mr. Andress
served as an executive officer of the Company until he resigned on September
5, 1995. Pursuant to his employment contract, Mr. Andress is entitled to
receive his base salary for the unexpired term of the agreement. See "--
Employment Agreements." Mr. Montgomery is advisory director of Hambrecht &
Quist, LLC, an investment banking firm. Hambrecht & Quist LLC rendered certain
investment banking services to the Company, all in the regular course of
business. These services included acting as an underwriter of a public
offering of Common Stock in 1992 and acting as a special advisor to the
Company in connection with its consideration of certain financing alternatives
during 1994 and 1995. In 1995, Hambrecht & Quist LLC was paid a fee of
$617,079 for services rendered in connection with the sale of a portion of the
Company's software business to Oracle Corporation. The Company has also
entered into an employment/retainer agreement with Leonard M. Lodish. The
Company paid Dr. Lodish $153,846 in 1995 pursuant to this arrangement.
13
<PAGE>
PROPOSAL TO ADOPT THE 1996 STOCK PLAN FOR NON-EMPLOYEE
DIRECTORS IN LIEU OF CASH RETAINER
(Proposal Number 2 on the Enclosed Proxy Card)
The 1996 Stock Plan for Non-Employee Directors in Lieu of Cash Retainer (the
"Directors' Plan") was adopted by the Executive Committee of the Board of
Directors on April 19, 1996, subject to approval by the Company's
stockholders. If stockholder approval is obtained, the Directors' Plan will
become effective on the date of the 1996 Annual Meeting of Stockholders.
The principal features of the Directors' Plan are summarized below. The
summary is qualified in its entirety by the full text of the Directors' Plan
which is set forth as Exhibit A to this Proxy Statement.
GENERAL
The purposes of the Directors' Plan are to promote the long-term success of
the Company by more closely aligning the interests of the non-employee
directors and the stockholders of the Company, to provide an additional
inducement for the non-employee directors to remain as directors for the
Company and to provide a means by which the Company may attract qualified
persons to serve as directors of the Company.
The aggregate number of shares which may be issued pursuant to the
Directors' Plan is 100,000 shares of the Company Common Stock, subject to
proportionate adjustment in the event of stock splits and similar events. The
shares may be either authorized but unissued shares, treasury shares or a
combination of such shares.
STOCK IN LIEU OF CASH RETAINER
Under the Directors' Plan, each person who is a member of the Board of
Directors of the Company and who is not an employee or full-time consultant of
the Company or any of its subsidiaries (an "Eligible Director") will be paid
annually, in lieu of 75 percent of the cash retainer payable for his or her
services on the Board, in shares of Common Stock. The aggregate "retainer"
payable to an Eligible Director (currently $21,000) does not include meeting
fees, if any, payable for attendance at meetings of the Board or its
committees. The payment of Common Stock to Eligible Directors shall generally
be made on the date of the Annual Meeting of Stockholders at which directors
are elected (or, in the case of an Eligible Director elected as a director by
the Board, on the date of such election). Such stock grant will be made based
upon the fair market value of the Company Common Stock determined over the
five days preceding the grant date of the shares.
The table below shows the number of shares of Common Stock that will be
received by the following groups during calendar year 1996 assuming the
Directors' Plan is approved by stockholders (based upon a $14.25 share price,
the fair market value of the Company Common Stock on April 19, 1996.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
---------
<S> <C>
All current executive officers.................................. 0
All current non-employee directors.............................. 9,947
</TABLE>
ADMINISTRATION
The Directors' Plan will be administered by the Executive Committee of the
Board of Directors or by a different committee appointed by the Board of
Directors and consisting of members of the Board (the "Committee").
The Committee has the power to interpret the Directors' Plan and to
prescribe rules, regulations and procedures. All questions of interpretation
and application of the Directors' Plan are subject to the determination of the
Committee.
14
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
Under current tax law, a director will recognize taxable income for federal
income tax purposes upon receipt of shares of Common Stock in lieu of the
annual cash retainer equal to the fair market value of the shares. In each
instance that an amount is treated as compensation received, the Company is
entitled to a corresponding deduction in the same amount for compensation paid.
AMENDMENT AND TERMINATION
The Board of Directors may amend, alter, suspend, discontinue or terminate
the Directors' Plan or any issuance of shares of Common Stock thereunder,
except that no such action by the Board of Directors may impair the rights of a
participant in the Directors' Plan with respect to shares of Common Stock
issued to him or her under the Directors' Plan without such participant's
consent. Notwithstanding the foregoing, provisions in the Directors' Plan which
relate to the determination of the number of shares of Common Stock granted to
an Eligible Director may not be amended more often than once every six months,
other than to conform with changes in the Internal Revenue Code of 1986, as
amended, or the rules and regulations issued thereunder.
The Directors' Plan will remain in effect until it is terminated by the Board
of Directors or until no Common Stock remains available for issuance under the
Directors' Plan, and the Company has no further rights or obligations with
respect to Common Stock under the Directors' Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The proposed Directors' Plan must be approved by a majority of the votes cast
by stockholders present at the 1996 meeting of stockholders, in person or
represented by proxy, and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ADOPT THE 1996
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS.
MANAGEMENT RELATIONSHIPS AND RELATED TRANSACTIONS
George G. Montgomery, Jr., a director of the Company, is advisory director of
Hambrecht & Quist LLC, an investment banking firm. Hambrecht & Quist LLC
rendered certain investment banking services to the Company, all in the regular
course of business. These services included acting as an underwriter of a
public offering of Common Stock in 1992 and acting as a special advisor to the
Company in connection with its consideration of certain financing alternatives
in 1995. In 1995, Hambrecht & Quist LLC was paid a fee of $617,079 for services
rendered in connection with the sale of a portion of the Company's software
business to Oracle Corporation.
The Company has also entered into an employment/retainer agreement with
Leonard M. Lodish. The Company paid Dr. Lodish $153,846 in 1995 pursuant to
this arrangement.
In connection with an employment termination agreement between the Company
and George R. Garrick, the Company acquired a nine percent equity interest in
Digital Marketing LLC., an Illinois limited liability company formed by Mr.
Garrick. See "Executive Compensation--Employment Agreements". In consideration
for the equity interest, the Company paid $600,000.
15
<PAGE>
On July 27, 1995, pursuant to the sale of a portion of the Company's
software business to Oracle Corporation, Jeffrey P. Stamen resigned as an
executive officer of the Company. See "Executive Compensation--Employment
Agreements". Pursuant to the termination of the employment agreement (i) all
outstanding options held by Mr. Stamen became immediately exercisable, (ii)
the Company paid Mr. Stamen $1,522,788 to provide a $5.00 pretax gain on
certain vested options held by Mr. Stamen, (iii) Mr. Stamen retained 100,000
options, and (iv) the Company granted Mr. Stamen a put option ($6.00 put
price) on such retained options. The put option is exercisable at any time
following the second anniversary of the closing of the Oracle transaction and
ending on the date of expiration of the options. In addition, Mr. Stamen's put
option can be exercised within the first two years following the closing of
the Oracle transaction if any of the following occur: (i) Mr. Stamen is not
nominated by Company management and/or is not elected to the Company's Board
of Directors at any meeting of stockholders at which his election to the Board
is to be voted upon; (ii) Mr. Stamen is incapacitated and thereby prevented
from continued service on the Company's Board of Directors or (iii) in the
event of a Change of Control of the Company. A change of control generally
includes merger, consolidation or reorganization of the Company pursuant to
which the Company or any entity controlled by it is not the surviving entity
or as the acquisition of the beneficial ownership of, or power to vote, 40% or
more of the outstanding voting securities of the Company.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Grant Thornton LLP, independent certified public accountants, audited the
financial statements of the Company for the year ended December 31, 1995. The
Company, in conjunction with its Audit Committee, is in the process of
evaluating its worldwide needs and thus has not made a determination or
selection as to its independent certified public accountants for calendar year
1996. Representatives of Grant Thornton LLP will be present at the 1996 Annual
Meeting of Stockholders and will be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order for a proposal by a stockholder of the Company to be included in
the Company's proxy statement and form of proxy for the 1997 Annual Meeting of
stockholders, the proposal must be received by the Company at its executive
offices located at 150 North Clinton, Chicago, Illinois 60661 no later than
December 25, 1996.
QUORUM AND VOTING PROCEDURES
The presence in person or by proxy of holders of record of a majority of the
outstanding shares of Common Stock is required for a quorum to transact
business at the Meeting, but if a quorum should not be present, the Meeting
may be adjourned from time to time until a quorum is obtained. Under
applicable Delaware law, abstentions and "broker non-votes" (i.e., proxies
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote
shares as to a matter with respect to which the brokers or nominees do not
have discretionary power to vote) will be treated as present for purposes of
determining the presence of a quorum at the Meeting.
Directors will be elected by the plurality vote of the holders of Common
Stock entitled to vote at the Meeting and present in person or by proxy. The
remaining proposals described herein require the vote of holders of a majority
of the shares of Common Stock entitled to vote at the Meeting and present in
person or by proxy. Under applicable Delaware law, abstentions will be deemed
present and entitled to vote and will, therefor, have the effect of a negative
vote on the proposals other than the election of directors, but will have no
effect on the outcome of the election of directors. A broker non-vote will
have no effect on any proposal described in the proxy statement, including the
election of directors.
16
<PAGE>
OTHER MATTERS
Together with this proxy statement, the Company has provided each
stockholder entitled to vote, a copy of its Annual Report for the year ended
December 31, 1995. The Company will provide, without charge, a copy of its
1995 Form 10-K, upon the written request of any such stockholder. Requests
should be directed to Edward S. Berger, Secretary, Information Resources,
Inc., 150 N. Clinton St., Chicago, Illinois 60661.
The Company knows of no matters, other than those referred to herein, which
will be presented at the Meeting. If, however, any other appropriate business
should properly be presented at the Meeting, the proxies named in the enclosed
form of proxy will vote the proxies in accordance with their best judgment.
EXPENSES OF SOLICITATION
All expenses incident to the solicitation of proxies by the Company will be
paid by the Company. Solicitation may be made personally, or by telephone,
telegraph or mail, by one or more employees of the Company, without additional
compensation. The Company has engaged Georgeson & Company, Inc. to assist in
the solicitation of proxies from brokers, bank nominees, institutional holders
and certain individual holders of record. Georgeson & Company, Inc. will
receive a fee from the Company of approximately $6,500, plus reimbursement of
its out-of-pocket expenses. The Company will reimburse brokerage houses and
other custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred in forwarding copies of solicitation material to beneficial
owners of Common Stock held of record by such persons.
By order of the Board of Directors,
Information Resources, Inc.
Edward S. Berger
Secretary
Chicago, Illinois
April 23, 1996
17
<PAGE>
EXHIBIT A
INFORMATION RESOURCES, INC.
1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
IN LIEU OF CASH RETAINER
1. Purpose. The purpose of the Plan is to (a) encourage ownership of Company
Stock by non-employee directors and thereby align such directors' interests
more closely with the interests of stockholders of the Company, and (b) assist
the Company in securing and retaining highly qualified persons to serve as
non-employee directors, in which position they may contribute to the long-term
growth and profitability of the Company, by affording such persons an
opportunity to acquire Stock.
2. Definitions. Whenever used in this Plan, the following terms will have
the respective meanings set forth below:
(a) "Board" means the Company's Board of Directors as constituted from
time to time.
(b) "Committee" means the committee described in Section 4.
(c) "Company" means Information Resources, Inc., a Delaware corporation.
(d) "Distribution Date" means (i) with respect to a director elected by
the stockholders of the Company, the date of such election, and (ii) with
respect to a director appointed by the remaining members of the Board, the
effective date of such appointment.
(e) "Fair Market Value" of Stock means the average of the official
closing prices of the Stock on the NASDAQ National Market or such other
securities exchange or automated quotation system on which the Stock shall
be primarily traded at the time of such determination on the five trading
days preceding the Distribution Date.
(f) "Participant" means a non-employee, and non-full-time consultant,
director who is eligible to receive, and receives Stock under the Plan.
(g) "Plan" means the 1996 Stock Plan for Non-Employee Directors in Lieu
of Cash Retainer.
(h) "Retainer" means the annual amount of cash retainer payable to a non-
employee director of the Company for a full year's service on the Board, or
such lesser amount as may be payable to any non-employee director in
respect of service on the Board of less than a full year, and excluding
meeting fees payable for attendance at meetings of the Board or committees.
(i) "Stock" means the Common Stock, par value $.01 per share, of the
Company.
3. Number and Source of Shares Available under the Plan. The total number of
shares of Stock reserved and available for issuance under the Plan is 100,000
subject to adjustment as provided in Section 7 below. Such shares may be
previously issued and outstanding shares of Stock reacquired by the Company
and held in its treasury, or may be authorized but unissued shares of Stock,
or may consist partly of each.
4. Administration of the Plan. The Plan shall be administered by the
Executive Committee (the "Committee") of the Board or such other committee of
the Board designated by it for such purpose. The Committee shall have
authority, not inconsistent with the express provisions of the Plan: (a) to
issue Stock granted in accordance with this Plan to such directors as are
eligible to receive Stock; (b) to prescribe the form of forms of instruments
required under the Plan and to change such forms from time to time; (c) to
adopt, amend and rescind rules and regulations for the administration of the
Plan; and (d) to interpret the Plan and to decide any questions and settle all
controversies and disputes that may arise in connection with the Plan. Such
determination of the Committee shall be conclusive and shall bind all parties.
A-1
<PAGE>
5. Eligibility. Each director of the Company who, on any date on which Stock
is to be delivered (as specified in Section 6), is not an employee or a full-
time consultant of the Company or any parent or subsidiary of the Company and
is entitled to receive the Retainer will be eligible to receive Stock under
the Plan.
6. Stock in Lieu of Cash Retainer. In lieu of 75 percent of the annual cash
Retainer payable to each eligible Participant, Stock will be paid in such
amount each year for so long as this Plan is in effect, to the extent and
subject to the terms and conditions set forth below:
(a) Annual Stock Payment. The number of shares of Stock to be paid under
this Section 6 will be equal to (i) 75 percent of the amount of the
Retainer payable to each eligible Participant at the rate then in effect
divided by (ii) the Fair Market Value of Stock as determined on the
Distribution Date. No fractional shares of Stock will be granted; instead,
the cash remainder will be paid to the Participant. On the Distribution
Date or as promptly as practicable thereafter, the Company will deliver to
each Participant one or more certificates representing the Stock,
registered in the name of the Participant (or, if directed by the
Participant, in joint names of the Participant and his or her spouse). This
Section 6(a) as it relates to the determination of the number of shares of
Stock which a Participant is entitled to receive shall not be amended more
often than once every six months, other than to conform with changes in the
Internal Revenue Code of 1986, as amended, or the rules and regulations
issued thereunder.
(b) Rights of the Participant. Except for the terms and conditions set
forth in this Plan, a Participant paid Stock in lieu of the annual Retainer
will have all of the rights of a holder of the Stock, including the right
to receive dividends paid on such Stock and the right to vote the Stock at
meetings of stockholders of the Company. Upon delivery, such Stock will be
nonforfeitable.
7. Adjustment Provisions. In the event any recapitalization, reorganization,
merger, consolidation, spin-off, combination, repurchase, exchange of shares
or other securities of the Company, stock split or reverse split,
extraordinary dividend, liquidation, dissolution, or other similar corporate
transaction or event affects Stock such that an adjustment is determined by
the Board to be appropriate in order to prevent dilution or enlargement of
Participants' rights under the Plan, then the Board shall, in a manner that is
proportionate to the change to the Stock and is otherwise equitable, adjust
any or all of the number or kind of shares of Stock reserved for issuance
under the Plan.
8. Changes to the Plan. The Board may amend, alter, suspend, discontinue, or
terminate the Plan or authority to deliver Stock under the Plan; provided,
however, that, without the consent of an affected Participant, no such
amendment, alteration, suspension, discontinuation, or termination may impair
the rights of such Participant under any Stock theretofore paid to him or her
hereunder.
9. General Provisions.
(a) Consideration for Stock Issued. Stock will be paid under the Plan in
consideration of the services of Participants as directors of the Company.
(b) Compliance with Securities Laws, Listing Requirements, and Other Laws
and Obligations. The Company shall not be obligated to deliver any shares
of Stock under this Plan, (i) until, in the opinion of the Company's
counsel, all applicable federal and state laws and regulations have been
complied with, (ii) if the outstanding Stock is at the time listed on any
stock exchange, or quoted on any automated quotation system, until the
shares to be delivered have been listed or authorized to be listed or
quoted on such exchange or system upon official notice of issuance, and
(iii) until all other legal matters in connection with the issuance and
delivery of such shares have been approved by the Company's counsel. If the
sale of Stock has not been registered under the Securities Act of 1933, as
amended, the Company may require, as a condition to the payment of Stock,
such representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.
A-2
<PAGE>
(c) No Right to Continue as a Director. Nothing contained in the Plan or
any agreement hereunder will confer upon any Participant any right to
continue to serve as a director of the Company.
(d) No Shareholder Rights Conferred. Nothing contained in the Plan or any
agreement hereunder will confer upon any director any rights of a
shareholder of the Company unless and until shares of Stock are issued to
such Participant upon the payment of Stock.
(e) Governing Law. The validity, construction, and effect of the Plan and
any agreement hereunder will be determined in accordance with the laws of
the State of Delaware and applicable federal law.
10. Effective Date and Duration of Plan. The Plan will become effective at
the time that it is approved by the stockholders of the Company. The Plan will
remain in effect until such time as the Board may act to terminate the Plan, or
until such time as no Stock remains available for issuance under the Plan and
the Company has no further rights or obligations under the Plan with respect to
Stock granted issued hereunder.
A-3
<PAGE>
PROXY PROXY
INFORMATION RESOURCES, INC.
150 NORTH CLINTON STREET
CHICAGO, ILLINOIS 60661
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders -- May 23, 1996
The undersigned hereby appoints Gian M. Fulgoni, James G. Andress and
Edward S. Berger as Proxies, each with power to appoint his substitute, and
hereby authorizes them, together or separately, to represent and to vote,
as designated below, all shares of Common Stock of Information Resources, Inc.
(the "Company") held of record by the undersigned on April 12, 1996, at the
Annual Meeting of Stockholders to be held on May 23, 1996, or any adjournment
thereof.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE,
AND RETURN IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
INFORMATION RESOURCES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.[X]
1. Election of Directors -
Nominees: James G. Andress, Edwin E. Epstein, Edward E. Lucente
and Jeffrey P. Stamen
FOR WITHHOLD FOR ALL (Except Nominee(s) written below)
[_] [_] [_]
----------------------------------------------------
2. Proposal to Adopt the 1996 Stock Plan for Non-Employee Directors.
FOR WITHHOLD ABSTAIN
[_] [_] [_]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy when properly executed, will be voted in the manner directed herein
by the undersigned stockholder(s). IF NO DIRECTION IS MADE, THE PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Dated: ______________________, 1996
Signature(s)
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Please sign exactly as your name appears herein. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
