SCHEDULE 14A
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 ss.240.14a-11(c) or ss.240.14a-12
UNITEL VIDEO, 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] 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):
------------------------------------------------------------------
<PAGE>
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.:
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3) Filing Party:
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4) Date Filed:
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2
<PAGE>
UNITEL VIDEO, INC.
555 WEST 57TH STREET
NEW YORK, NEW YORK 10019
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JULY 28, 1998
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Unitel
Video, Inc., a Delaware corporation (the "Company"), will be held at the offices
of Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, 18th Floor,
New York, New York 10036, on Tuesday, July 28, 1998, at 11:00 A.M., for the
purpose of considering and acting upon the following matters:
1. The election of two Class I directors to serve until the 2001 Annual
Meeting of Stockholders and until their respective successors are elected and
qualified.
2. The transaction of such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June 19, 1998 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting. Accordingly, only stockholders of record at the close of
business on that date will be entitled to vote at the meeting. A complete list
of the stockholders entitled to vote will be available for inspection by any
stockholder during the meeting. In addition, the list will be open for
examination by any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting
at the office of the Secretary of the Company, located at 555 West 57th Street,
New York, New York 10019.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the attached proxy statement for further information with
respect to the business to be transacted at the meeting. The Board of Directors
urges you to sign, date and return the enclosed proxy promptly. You are
cordially invited to attend the meeting in person. The return of the enclosed
proxy will not affect your right to vote in person if you do attend the meeting.
KAREN CEIL LAPIDUS,
Secretary
June 24, 1998
<PAGE>
UNITEL VIDEO, INC.
555 WEST 57TH STREET
NEW YORK, NEW YORK 10019
----------------
PROXY STATEMENT
----------------
GENERAL
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Unitel Video, Inc. (the "Company") for use
at the Company's 1998 Annual Meeting of Stockholders (the "Meeting"), which will
be held on the date, at the time and place and for the purposes set forth in the
foregoing notice, and at any adjournment or postponement thereof. This proxy
statement, the foregoing notice and the enclosed proxy are first being sent to
stockholders of the Company (the "Stockholders") on or about June 24, 1998.
The Board of Directors does not intend to bring any matter before the
Meeting except as specifically indicated in the notice and does not know of
anyone else who intends to do so. If any other matters properly come before the
Meeting, however, the persons named in the enclosed proxy, or their duly
constituted substitutes acting at the Meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment on such matters. If the
enclosed proxy is properly executed and returned prior to voting at the Meeting,
the shares represented thereby will be voted in accordance with the instructions
marked thereon. In the absence of instructions, the shares will be voted "FOR"
the election of the two nominees for director named herein.
Any proxy may be revoked at any time prior to its exercise by notifying the
Secretary in writing, by delivering a duly executed proxy bearing a later date,
or by attending the Meeting and voting in person.
VOTING SECURITIES AND SECURITY OWNERSHIP
VOTING SECURITIES
At the close of business on June 19, 1998, the record date fixed for the
determination of Stockholders entitled to notice of and to vote at the Meeting,
there were 2,710,216 outstanding shares of the Company's Common Stock, its only
class of voting securities. Each share of Common Stock entitles the record
holder thereof to one vote. The presence at the Meeting, in person or by proxy,
of a majority of such outstanding shares of Common Stock will constitute a
quorum.
The affirmative vote of a plurality of votes cast at the Meeting is
required to elect directors. Proxies submitted which contain abstentions or
broker non-votes will be deemed present at the Meeting in determining the
presence of a quorum. Shares of Common Stock that are voted to abstain with
respect to any matter are considered shares entitled to vote, and cast, with
respect to that matter. Shares of Common Stock subject to broker non-votes with
respect to any matter will not be considered as shares entitled to vote with
respect to that matter.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information at June 19, 1998 (except as
indicated below) with respect to each person (including any "group" as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), who is known by the Company to be the beneficial owner of
more than 5% of the
<PAGE>
Company's Common Stock. Unless otherwise indicated, each beneficial owner
named below has sole voting and dispositive power with respect to the shares of
Common Stock indicated as beneficially owned by such owner.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------- -------------------- ----------
<S> <C> <C>
Herbert Bass.................................. 184,379(1) 6.8%
146 Waters Edge
Admiral's Cove
Jupiter, Florida 33477
Alex Geisler.................................. 214,353(2) 7.9%
131 Regatta Drive
Admiral's Cove
Jupiter, Florida 33477
Dimensional Fund Advisors Inc........... 176,500(3) 6.5%
1299 Ocean Avenue
Santa Monica, California 90401
Investment Counselors of Maryland...... 175,000(4) 6.5%
803 Cathedral Street
Baltimore, Maryland 21201
Metro Networks, Inc........................ 165,360(5) 6.1%
2800 Post Oak Boulevard
Suite 4000
Houston, Texas 77056
</TABLE>
- ---------------
(1) Includes 11,000 shares subject to presently exercisable stock options.
(2) Includes 11,000 shares subject to presently exercisable stock options,
57,193 shares held by Jean Z. Geisler (Mr. Geisler's wife) as trustee for
the benefit of the Geislers' children and 67,234 shares held by Mrs.
Geisler, with respect to all of which shares Mr. Geisler has sole voting
and dispositive power. Mr. and Mrs. Geisler disclaim beneficial ownership
as to the 57,193 shares held by Mrs. Geisler as trustee.
(3) Pursuant to a Schedule 13G, dated February 9, 1998, filed by Dimensional
Fund Advisors Inc. ("DFA") with the Securities and Exchange Commission (the
"SEC"), DFA has indicated that all shares listed in the table above
opposite its name are owned by advisory clients of DFA, no one of which, to
DFA's knowledge, owns more than 5% of the Company's Common Stock. DFA has
indicated that it has sole dispositive power with respect to all such
shares of Common Stock, that it has sole voting power with respect to
123,100 of such shares and that certain of its officers, who also serve as
officers of DFA Investment Dimensions Group Inc. (the "Fund") and The DFA
Investment Trust Company (the "Trust"), each an open-end management
investment company registered under the Investment Company Act of 1940,
vote 23,200 additional shares of Common Stock which are owned by the Fund
and 30,200 shares of Common Stock which are owned by the Trust.
(4) Pursuant to a Schedule 13G, dated March 19, 1998, filed by Investment
Counselors of Maryland, Inc. ("ICM") with the SEC, ICM has indicated that
all of the shares listed in the table above opposite its name are owned by
advisory clients of ICM, no one of which, to ICM's knowledge, owns more
than 5% of the
2
<PAGE>
Company's Common Stock. ICM has indicated that it has sole dispositive
power with respect to all of such shares of Common Stock and sole voting
power as to 130,000 of such shares of Common Stock.
(5) Pursuant to a Schedule 13D, dated January 29, 1998, filed by Metro
Networks, Inc. ("Metro Networks") with the SEC, Metro Networks indicated
that it has sole dispositive power and sole voting power with respect to
all of the shares listed in the table above opposite its name.
The following table sets forth information at June 19, 1998 with respect to
the beneficial ownership of the Company's Common Stock by (a) each director and
each nominee for election as a director of the Company, (b) each executive
officer named in the Summary Compensation Table under the caption "EXECUTIVE
COMPENSATION" and (c) all directors and executive officers of the Company as a
group (12 persons). Unless otherwise indicated, each person named below and each
person in the group named below has sole voting and dispositive power with
respect to the shares of Common Stock indicated as beneficially owned by such
person or group.
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------------ -------------------- ----------
Herbert Bass............................... 184,379(1) 6.8%
Alex Geisler............................... 214,353(2) 7.9%
Walter G. Arader........................... 31,000(3) *
Philip S. Birsh............................ 20,400(4) *
Barry Knepper.............................. 64,768(5) 2.4%
Richard Clouser............................ 61,172(6) 2.2%
Mark Miller................................ 975(7) *
Thomas Eyring.............................. 7,694(8) *
Albert Walton.............................. 8,081(9) *
All Directors and executive officers
as a group (12 persons)........... 614,399(10) 21.2%
- ------------
* Less than one percent.
(1) See footnote (1) above to the first table under the caption "Share
Ownership of Certain Beneficial Owners and Management" for information as
to the beneficial ownership by Mr. Bass of the Company's Common Stock.
(2) See footnote (2) above to the first table under the caption "Share
Ownership of Certain Beneficial Owners and Management" for information as
to the beneficial ownership by Mr. Geisler of the Company's Common Stock.
(3) Includes 23,000 shares issuable to Mr. Arader pursuant to presently
exercisable stock options.
(4) Includes 13,000 shares issuable to Mr. Birsh pursuant to presently
exercisable stock options.
(5) Includes 40,000 shares issuable to Mr. Knepper pursuant to presently
exercisable stock options, 4,868 shares allocated to Mr. Knepper and held
in his account under the Company's 401(k) Employee Savings and Stock
Ownership Plan (the "Savings Plan"), 2,100 shares held by Mr. Knepper in an
Individual Retirement Account and 3,600 shares purchasable by Mr. Knepper
under the Company's Employee Stock Purchase Plan (the "Purchase Plan").
(6) Includes 35,000 shares issuable to Mr. Clouser pursuant to presently
exercisable stock options, 2,146 shares allocated to Mr. Clouser and held
in his account under the Savings Plan and 3,600 shares purchasable by Mr.
Clouser under the Purchase Plan. Also includes 15,000 shares issuable to
Mr. Clouser's wife pursuant to presently exercisable stock options, 1,826
shares allocated to his wife and held in her account under the
3
<PAGE>
Savings Plan and 3,600 shares purchasable by her under the Purchase Plan,
with respect to all of which shares Mr. Clouser disclaims beneficial
ownership.
(7) Includes 975 shares allocated to Mr. Miller and held in his account under
the Savings Plan.
(8) Includes 3,500 shares issuable to Mr. Eyring pursuant to presently
exercisable stock options, 594 shares allocated to Mr. Eyring and held in
his account under the Savings Plan and 3,600 shares purchasable by Mr.
Eyring under the Purchase Plan.
(9) Includes 4,000 shares issuable to Mr. Walton pursuant to presently
exercisable stock options, 481 shares allocated to Mr. Walton and held in
his account under the Savings Plan and 3,600 shares purchasable by Mr.
Walton under the Purchase Plan.
(10) Includes 163,500 shares issuable to executive officers and directors of the
Company pursuant to presently exercisable stock options and 28,800 shares
purchasable by executive officers of the Company under the Purchase Plan.
ELECTION OF DIRECTORS
The Company's By-Laws fix the number of directors of the Company at six and
provide that the Board of Directors shall be divided into three classes,
designated as Class I, Class II and Class III, each class to be as equal in
number as possible. There are presently two directors in each. At each annual
meeting of stockholders, directors are chosen to succeed those in the class
whose term expires at such annual meeting.
At the Meeting, Stockholders will elect two Class I directors to serve for
a term of three years, until the 2001 Annual Meeting of Stockholders and the
election and qualification of their respective successors. Unless otherwise
directed, proxies will be voted for the election of Walter G. Arader and Philip
S. Birsh as Class I directors.
Each of the nominees has indicated a willingness to serve as a director of
the Company. In the event that any of the nominees should become unavailable or
unable to serve for any reason, the persons named in the enclosed proxy will
vote for one or more alternate nominees as the Board of Directors may recommend.
The following table sets forth certain information about each nominee and
each director whose term of office will continue after the Meeting:
CLASS OF DIRECTOR TERM
NAME DIRECTOR AGE SINCE EXPIRES
- ---- -------- --- -------- -------
Nominees:
- ---------
Walter G. Arader.................... I 78 1981 2001
Philip S. Birsh..................... I 40 1992 2001
Directors whose term of office
will continue after the Meeting:
- --------------------------------
Barry Knepper....................... II 48 1995 1999
Richard Clouser..................... II 57 1996 1999
Herbert Bass........................ III 68 1969 2000
Alex Geisler........................ III 74 1969 2000
4
<PAGE>
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Name Title
- ---- -----
Barry Knepper President, Chief Executive
Officer and Director
Richard L. Clouser Senior Vice President - Corporate,
President of the Mobile Division and
Director
Karen Ceil Lapidus Vice President, General Counsel
and Secretary
Albert Walton President of the Editel Los Angeles
Division
Tom Eyring Chief Technology Officer
Edwin Levine President of the Unitel New York
Studios Division
Neil Marcus Chief Financial Officer
Herbert Bass Director
Alex Geisler Director
Philip S. Birsh Director
Walter G. Arader Director
Mr. Knepper has been Chief Executive Officer of the Company since April 1996, a
Director of the Company since May 1995 and its Treasurer since 1983. Mr. Knepper
served as Senior Vice President-Finance and Administration from May 1995 to
April 1996 and was the Company's Chief Financial Officer from 1982 to April
1996.
Mr. Clouser has been President of the Company's Mobile division since 1982,
Senior Vice President-Corporate since April 1996 and a Director since October
1996.
Ms. Lapidus has been General Counsel and Secretary of the Company since January
1994 and a Vice President since April 1996. From 1984 until joining the Company,
Ms. Lapidus was an associate attorney at Mudge Rose Guthrie Alexander & Ferdon,
a New York law firm.
Mr. Walton has been President of the Editel Los Angeles division since July
1995. From May 1994 through July 1995 he was the Director of New Business
Development for the Editel Los Angeles division. He served as Vice President of
CIS from 1988 through 1994, a Hollywood based specialized visual effects
company.
5
<PAGE>
Mr. Eyring has been Chief Technology Officer since June 1995. From 1991 to June
1995 he was Vice President of Engineering of the Editel New York division and
from 1982 through 1991 he was Director of Engineering Services for the Editel
New York division.
Mr. Levine has been President of the Unitel New York Studios division since
August 1996. From June 1975 to August 1996 he was Vice President of Technical
Operations for the Unitel New York division of the Company.
Mr. Marcus has been Chief Financial Officer of the Company since May 1998 and a
financial consultant to the Company from August 1997. From 1993 until joining
the Company, Mr. Marcus served as Chief Financial Officer of Kavanau Real Estate
Trust, a publicly traded company, and Sanford Nalitt and Associated Companies, a
Staten Island Real Estate developer.
Messrs. Bass and Geisler have served as directors of the Company since its
founding in 1969. Mr. Bass served as President of the Company and Mr. Geisler as
Executive Vice President of the Company from 1969 until 1989, when they became
Co-Chairmen and Co-Chief Executive Officers. On August 11, 1993, they
relinquished their duties as Co-Chief Executive Officers and, from that date
through August 31, 1996, they each served as consultants to the Company.
Mr. Arader has been a director of the Company since March 1981 and has been
Chairman and Chief Executive Officer of Walter G. Arader & Associates, a
financial and management consulting firm, since January 1, 1993. For more than
five years prior thereto, Mr. Arader was Chairman and Chief Executive Officer of
the financial and management consulting firm of Arader, Herzig & Associates,
Inc. Mr. Arader is a former Commissioner of the Pennsylvania Securities
Commission and a former Secretary of Commerce of the Commonwealth of
Pennsylvania. Mr. Arader is a director of HMG/Courtland, Inc.
Mr. Birsh has been a director of the Company since April 1992 and Publisher of
Playbill Incorporated, which publishes "Playbill" Magazine, and President and
Publisher of Racing Today Publishing Inc., which publishes a variety of racing
magazines, since March 1992. In January 1992, Mr. Birsh became President of AJP
Realty Corp., a real estate investment company. From May 1989 to February 1992,
Mr. Birsh was Senior Vice President and director of the private business group
of Kidder Peabody & Co. Incorporated, and for the nine years prior to May 1989,
Mr. Birsh was with Drexel Burnham Lambert Incorporated. At his departure in
1989, Mr. Birsh was a vice president in the mergers and acquisitions department.
Each officer of the Company serves, at the pleasure of the Board of Directors,
for a term of one year and until his or her successor is elected and qualified.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held eight meetings during the fiscal year ended
August 31, 1997. Each of the directors attended at least 75% of the aggregate
number of meetings of the Board of Directors and of the committees on which he
served which were held during the Company's last fiscal year.
The Board of Directors has a Compensation Committee, a Stock Option
Committee and an Audit Committee, the members of which, in each case, are
Messrs. Arader and Birsh. The Board of Directors does not have a Nominating
Committee. The entire Board of Directors considers questions relating to
nominations for directors. The Compensation Committee and the Stock Option
Committee, the functions of which are described below under the caption
"Compensation Committee and Stock Option Committee Report on Executive
Compensation," met informally throughout the fiscal year ended August 31, 1997.
The principal functions of the Audit Committee are to recommend to the Board of
Directors the appointment of independent auditors, to review the performance and
scope of audit and non-audit services to be performed by the independent
auditors, to review the adequacy of internal auditing and accounting procedures
and to supervise investigation of matters relating to
6
<PAGE>
corporate procedures and controls. The Audit Committee met informally throughout
the fiscal year ended August 31, 1997.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive $2,500 each fiscal
quarter and $1,000 for each Board of Directors' meeting and each committee
meeting attended. Pursuant to the terms of the Company's 1992 Stock Option Plan
(the "1992 Plan"), each director of the Company who is not an employee of the
Company or any subsidiary of the Company is automatically granted an option to
purchase 3,000 shares of Common Stock on May 1 of each year during the term of
the 1992 Plan. During fiscal 1997, Messrs. Arader, Birsh, Bass and Geisler were
granted an option under the 1992 Plan to purchase 3,000 shares of Common Stock
at an exercise price of $6.00, the fair market value per share of Common Stock
of the Company on the date of grant.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning
compensation with respect to each person who served as the Company's chief
executive officer during the fiscal year ended August 31, 1997 and each of the
Company's four other most highly compensated executive officers:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
------------------------- SECURITIES ALL OTHER
NAME AND BONUS UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY $ (1)$ OPTIONS(#) SATION $
------------------ ---- -------- --------- ------------ --------
<S> <C> <C> <C> <C> <C>
Barry Knepper..................... 1997 $183,365 $1,568(2)
President and 1996 $159,413 25,000 1,389
Chief Executive Officer 1995 $138,972 10,000 1,600
Richard Clouser................... 1997 $206,654 $1,568(2)
Senior Vice President 1996 $191,083 $73,405 12,500 1,389
Corporate and 1995 $173,916 $69,300 1,600
President, Mobile Division
Mark Miller.......................... 1997 $177,934
Former President, Unitel- 1996 $172,517
Hollywood Division (3) 1995 $166,009
Albert Walton...................... 1997 $207,231(4) $40,000 $1,568(2)
President, Editel- 1996 $152,454 10,000 141
Los Angeles Division 1995 $ 99,597
Thomas Eyring.................... 1997 $162,254 $1,568(2)
Chief Technology Officer 1996 $157,587 $ 8,100 7,500 776
1995 $151,805
</TABLE>
- ---------------
(1) Bonus compensation is shown for the fiscal year in which earned.
7
<PAGE>
(2) Includes the value, as at August 31, 1997, of shares of Common Stock
allocated to such executive officer under the Company's Savings Plan during
the fiscal year ended August 31, 1997.
(3) Mr. Miller's employment with the Company terminated in October 1997.
(4) Includes $24,957 in respect of salary earned in fiscal 1996 and paid in
fiscal 1997.
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
During fiscal 1997, Mr. Albert Walton was a party to an employment
agreement with the Company pursuant to which he served as President of the
Editel Los Angeles division of the Company. Under the agreement, the term of
which ends on August 31, 1998, Mr. Walton receives a base salary at the rate of
$190,000 per annum. In addition, Mr. Walton receives bonus compensation during
the term of the agreement equal to 5% of the pre-tax net income of the Editel
Los Angeles division for the Company's 1997 and 1998 fiscal years and a one time
$40,000 bonus payment. Under the agreement, Mr. Walton is provided with an
automobile and related expense allowance.
During fiscal 1997, Mr. Mark Miller was a party to an employment agreement
with the Company pursuant to which he served as President of the Company's
Unitel-Hollywood division. Under the agreement, in fiscal 1997 Mr. Miller was
entitled to receive a base salary at the rate of $178,500 per annum and bonus
compensation in an amount equal to 5% of the pre-tax net income of the
Unitel-Hollywood division. In addition, Mr. Miller was provided with an
automobile and related expense allowance. Mr. Miller and the Company terminated
the agreement in October 1997 at which time the Company agreed to pay to Mr.
Miller severance and Mr. Miller left the employ of the Company.
Commencing September 1, 1997, Mr. Barry Knepper has an employment agreement
with the Company pursuant to which he serves as President and Chief Executive
Officer of the Company. Under the agreement, the term of which is one year with
automatic one-year renewals unless either party gives 90 days notice of
termination, Mr. Knepper receives a base salary at the rate of $200,000 per
annum with a consumer price index increase each May 1st (a minimum of 5%) during
the term. In addition, Mr. Knepper is entitled to receive bonus compensation for
all fiscal years of the Company during the term of the agreement equal to 2 1/2%
of consolidated pretax profits of the Company. Under the Agreement Mr. Knepper
is also provided with an automobile and related expense allowance. In the event
of a change in control (as defined in the agreement) of the Company and the
termination of Mr. Knepper's employment in certain circumstances, under the
agreement the Company will pay to Mr. Knepper severance in an amount equal to
the greater of one year's base salary and the remaining base salary for the
employment term plus a pro-rata portion of the current year's bonus amount.
The Company has entered into severance agreements with Messrs. Clouser and
Eyring, through December 31, 1998, which automatically renew on such date and on
every one-year anniversary thereafter unless terminated by the Company. In the
event of a change of control (as defined in such agreements) of the Company and
the termination of the officer's employment in certain circumstances, the
Company will pay to such officer severance in an amount equal to one-half of his
annual base salary.
STOCK OPTIONS
The Company currently grants stock options to employees and directors under
the 1992 Plan. During the fiscal year ended August 31, 1997, no stock options
were granted to or exercised by any of the executive officers named in the
Summary Compensation Table. The following table sets forth certain information
with respect to the number and value of unexercised options held by such
officers as of August 31, 1997.
8
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND
FISCAL 1997 YEAR-END OPTION VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES ACQUIRED AT FY-END(#) AT FY-END($)
ON EXERCISE VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Barry Knepper........................ -- -- 38,000/19,000 $23,125/$26,250
Richard Clouser...................... -- -- 35,000/ 7,500 $14,370/$13,125
Mark Miller.......................... -- -- 0/0 0/0
Albert Walton........................ -- -- 4,000/ 6,000 $ 7,000/$10,500
Thomas Eyring........................ -- -- 3,000/ 4,500 $ 5,370/$ 8,055
</TABLE>
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board if Directors, which consists of
Walter G. Arader and Philip S. Birsh, determines the salaries, bonuses and other
compensation (other than stock options), of the Company's executive officers.
The Stock Option Committee of the Board of Directors, which also consists of
Messrs. Arader and Birsh, is authorized to grant incentive and non-qualified
stock options to key employees of the Company, including executive officers,
under the 1992 Plan, and to administer all of the Company's stock option plans.
The primary objectives of the Company's executive compensation structure
are to maintain executive compensation at competitive levels to retain qualified
personnel and to reward individuals for their respective contributions to the
Company's success. Bonuses are granted in order to reward and acknowledge
employees for, among other things, individual initiative and achievement. The
grant of stock options is intended to provide executives with a stake in the
long-term success of the Company and to coordinate executives' and stockholders'
long-term interests by creating a direct link between a portion of executive
compensation and increases in the market price of the Company's Common Stock.
A number of factors are considered in determining compensation of
executives, such as historical financial results, anticipated revenues and
earnings for the next fiscal year, individual contributions to, and length of
service with, the Company, compensation levels at other companies (both within
and outside the Company's industry), and equity and fairness within the top
levels of management. Decisions on executive officer compensation are, however,
primarily subjective. No pre-determined weight is generally assigned to any of
the factors mentioned above. A guideline in determining bonus compensation for
division presidents and other designated executive officers has historically
been the achievement of budgeted sales and earnings levels, but no other
specific corporate performance related targets are otherwise used and the
achievement of such goals is not, in all cases, determinative of whether an
executive officer will receive bonus compensation or the amount of such
compensation.
The salary of Barry Knepper, President and Chief Executive Officer of the
Company, for the fiscal year ended August 31, 1997, was $183,365 compared with a
salary of $159,413 for the fiscal year ended August 31, 1996. Mr. Knepper's
salary for the last fiscal year increased in April 1996 when the Board of
Directors elected Mr. Knepper to serve as the Company's Chief Executive Officer
after consideration of a number of factors, including historical levels of base
salary compensation for the Chief Executive Officer of the Company and Mr.
Knepper's
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length of service with the Company. The Compensation Committee did not grant Mr
Knepper a bonus for fiscal 1997, primarily due to the Company's continuing
unfavorable operating results.
The Stock Option Committee did not award any stock options to the executive
officers named in the Summary Compensation Table during the fiscal year ended
August 31, 1997.
The Compensation Committee
The Stock Option Committee
Walter G. Arader
Philip S. Birsh
PERFORMANCE GRAPH
The following graph compares the yearly change in the cumulative total
return on the Company's Common Stock for the five fiscal years ended August 31,
1997 with (i) Media General Financial Services' American Stock Exchange Index
and (ii) a peer group of three companies, consisting of The Todd - AO
Corporation, Laser-Pacific Media Corporation and Carlton Communications PLC,
which either compete with the Company in one of its service areas or are engaged
in related fields. The comparison assumes an investment of $100 on September 1,
1992 in the Company and in each of the comparison groups and that all dividends
were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
--GRAPHICAL REPRESENTAION OF DATA TABLE BELOW--
FISCAL YEAR ENDING
-----------------------------------------------
COMPANY 1992 1993 1994 1995 1996 1997
- ------- ---- ---- ---- ---- ---- ----
UNITEL VIDEO INC ......... 100 72.53 54.95 56.04 49.45 61.54
PEER GROUP ............... 100 111.13 126.62 158.60 197.35 206.24
BROAD MARKET ............. 100 116.82 117.94 141.21 146.94 169.04
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Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act, that might incorporate future filings, including this Proxy Statement, in
whole or in part, the information set forth above under the captions
"Compensation Committee and Stock Option Committee Report on Executive
Compensation" and "Performance Graph" shall not be incorporated by reference
into any such filings.
CERTAIN TRANSACTIONS
The Company is a party to an agreement (each, an "Agreement") with each of
Messrs. Herbert Bass and Alex Geisler, directors and former Co-Chairmen and
Co-Chief Executive Officers of the Company. Under the Agreements, Messrs. Bass
and Geisler served as consultants to the Company through August 31, 1996.
Beginning September 1, 1996, Mr. Bass and Mr. Geisler are each entitled to
receive retirement benefits for the rest of his life at an annual rate of
$92,061 per annum. These retirement benefits are payable for a minimum of 10
years and will be paid to the consultant's estate in the event of his death
prior to August 31, 2006. Each consultant also is entitled to receive
non-competition payments of $50,000 per annum for the 10 years following the
terms of the Agreements.
Susan Devlin, wife of Richard Clouser, President of the Company's Mobile
division, was employed by the Company during the fiscal year ended August 31,
1997 as a Vice President of its Mobile division and, during fiscal 1997, was
paid a salary of $165,323 and earned bonus compensation of $73,405. Commencing
September 1, 1997, Ms. Devlin has an employment contract with the Company
pursuant to which she serves as Vice President - General Manager of the
Company's Mobile division. Under the agreement, the term of which is two years
with automatic one-year renewals unless either party gives 90 days notice of
termination, Ms. Clouser receives a base salary at the rate of $168,000 through
December 31, 1997 and $210,000 thereafter through August 31, 1998 with a
consumer price index increase each September 1st during the balance of the term.
Ms. Clouser is entitled to receive bonus compensation for all fiscal years of
the Company during the term equal to 2% of the earnings of the Company's Mobile
division before interest and taxes. Under the agreement Ms. Devlin is also
provided with an automobile. In the event of the termination of Ms. Devlin's
employment in certain circumstances, under the agreement the Company will pay to
Ms. Devlin severance in an amount equal to one year's base salary and continue
her medical benefits for such period. The Company has also entered into a
severance agreement with Ms. Devlin through December 31, 1998 which
automatically renews on such date and on every one-year anniversary thereafter
unless terminated by the Company. In the event of a change of control (as
defined in the severance agreement) of the Company and the termination of Ms.
Devlin's employment in certain circumstances, under the agreement the Company
will pay to Ms. Devlin severance in an amount equal to one-half of her annual
base salary.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Grant Thornton as the
Company's principal certified public accountants for the fiscal year ending
August 31, 1998. A representative of Grant Thornton is expected to be present at
the Meeting with the opportunity to make a statement if he or she desires to do
so. The representative is also expected to be available to respond to
appropriate questions of stockholders.
STOCKHOLDER PROPOSALS
Since the Company expects that the Company's 1999 Annual Meeting of
Stockholders will be held in February 1999, which is the customary time for the
Company to hold its annual stockholders meeting, proposals of stockholders
intended to be presented at the 1999 Annual Meeting of Stockholders must be
received by the Company by October 31, 1998 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
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SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies for the
Meeting, including the cost of preparing, assembling and mailing proxy
materials, the handling and tabulation of proxies received and charges of
brokerage and other institutions, nominees and fiduciaries in forwarding such
materials to beneficial owners. The solicitation may be made in person or by
telephone or telegraph by directors, officers and regular employees of the
Company, or by a professional proxy solicitation organization engaged by the
Company.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K (INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR ITS
MOST RECENT FISCAL YEAR. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO KAREN CEIL
LAPIDUS, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY, AT THE ADDRESS OF THE
COMPANY APPEARING ON THE FIRST PAGE OF THIS PROXY STATEMENT.
Karen Ceil Lapidus,
Secretary
June 24, 1998
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UNITEL VIDEO, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS--JULY 28, 1998
The undersigned stockholder of UNITEL VIDEO, INC. (the "Company"), revoking
all previous proxies, hereby appoints HERBERT BASS and BARRY KNEPPER, and each
of them acting individually, as the attorney and proxy of the undersigned, with
full power of substitution and resubstitution, to vote all shares of Common
Stock of the Company which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of the Company, to be
held at 11:00 A.M. at the offices of Parker Chapin Flattau & Klimpl, LLP, 1211
Avenue of the Americas, 18th Floor, New York, New York 10036 on July 28, 1998,
and at any adjournment or postponement thereof; provided that said proxies are
authorized and directed to vote as indicated with respect to the following
matters:
1. [ ] FOR the two nominees for directors named below.
[ ] WITHHOLD AUTHORITY to vote for both of the nominees for directors named
below.
[ ] FOR both of the nominees for directors named below, except withhold
authority to vote for the nominee whose name is lined through.
Nominees: WALTER G. ARADER and PHILIP S. BIRSH
2. To vote on such other business as may properly come before the meeting.
This Proxy is solicited on behalf of the Board of Directors. Unless
otherwise specified, the shares will be voted "FOR" the election of the nominees
for director. This proxy also delegates discretionary authority to the proxies
to vote with respect to any other business which may properly come before the
meeting and at each adjournment or postponement thereof.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting, Proxy Statement and Annual Report of Unitel Video, Inc.
Dated:____________________________, 1998
________________________________________
Sigature of Stockholder
________________________________________
Signature of Stockholder
NOTE: Please sign this Proxy exactly as
the name(s) appear in the address. When
signing as attorney-in-fact, executor,
administrator, trustee or guardian,
please add your title as such. If the
stockholder is a corporation, please
sign with full corporate name by duly
authorized officer or officers. Where
stock is held in the name of two or more
persons, all such persons should sign.
PLEASE SIGN, DATE AND RETURN THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
