<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
HOOPER HOLMES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
HOOPER HOLMES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF HOOPER HOLMES, INC.]
HOOPER HOLMES, INC.
170 Mt. Airy Road
Basking Ridge, New Jersey 07920
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Hooper Holmes, Inc., to be held on Wednesday, May 22, 1996 at 11:00 a.m. local
time, at the American Stock Exchange, 86 Trinity Place, New York, New York.
The Notice of Annual Meeting and Proxy Statement which follow describe the
business to be conducted at the meeting. There will also be a brief report on
the current status of our business.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. After reading the Notice of Annual
Meeting and Proxy Statement, please complete, sign, date and return your proxy
in the envelope provided.
On behalf of the Officers and Directors of Hooper Holmes, Inc., I wish to
thank you for your interest in the Company and I hope that you will be able to
attend our Meeting.
For the Board of Directors,
/s/ James M. McNamee
James M. McNamee
President and Chief Executive Officer
April 17, 1996
<PAGE>
HOOPER HOLMES, INC.
170 Mt. Airy Road
Basking Ridge, New Jersey 07920
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 22, 1996
-----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Annual Meeting") of
Shareholders of Hooper Holmes, Inc., a New York corporation (the "Company"),
will be held on Wednesday, May 22, 1996 at 11:00 a.m. local time, at the
American Stock Exchange, 86 Trinity Place, New York, New York, for the following
purposes:
1. To elect directors.
2. To ratify the selection of the firm of KPMG Peat Marwick LLP as
auditors for the 1996 fiscal year.
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment thereof.
Holders of record of the Company's common stock, par value $.04 per share
(the "Common Stock"), as of the close of business on April 4, 1996, the record
date fixed by the Board of Directors for such purpose (the "Record Date"), are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Robert William Jewett
Robert William Jewett
Secretary
April 17, 1996
Please sign the enclosed proxy and return it promptly in the envelope
enclosed which requires no postage if mailed in the United States.
<PAGE>
[LOGO OF HOOPER HOLMES, INC.]
HOOPER HOLMES, INC.
170 Mt. Airy Road
Basking Ridge, New Jersey 07920
-----------------
PROXY STATEMENT
-----------------
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of Hooper Holmes,
Inc., (the "Company") for use at the Annual Meeting of Shareholders to be held
on May 22, 1996.
An Annual Report to Shareholders containing the financial statements for the
fiscal year ended December 31, 1995 is enclosed herewith. This proxy statement
and form of proxy were first sent to shareholders on or about the date stated in
the accompanying Notice of Annual Meeting of Shareholders.
Only shareholders of record as of the Record Date are entitled to vote at the
meeting and any adjournments thereof. As of that date, 6,712,114 shares of
Common Stock of the Company were issued and outstanding. Each share outstanding
as of the record date will be entitled to one vote, and shareholders may vote in
person or by proxy. Execution of a proxy will not in any way affect a
shareholder's right to attend the meeting and vote in person. Any shareholder
giving a proxy has the right to revoke it at any time before it is voted by
providing written notice to the Secretary of the Company or by submitting
another proxy bearing a later date. In addition, shareholders attending the
meeting may revoke their proxies at any time prior to the time such proxies are
exercised.
The presence in person or by proxy of the holders of a majority of the votes
entitled to be cast at the meeting will constitute a quorum. Broker non-votes,
abstentions and withhold-authority votes all count for the purpose of
determining a quorum. Directors who receive a plurality of the votes cast at the
meeting will be elected. Each other item on the agenda will be approved if a
majority of the votes cast at the meeting are in favor of the item. Votes cast
includes votes for or against an item, but do not include broker non-votes,
abstentions or withheld-authority votes. All properly executed proxies returned
in time to be cast at the meeting, if no contrary instruction is indicated, will
be voted FOR the election of all directors nominated herein and FOR the
ratification of the auditors.
The solicitation of proxies will be made primarily by mail. Proxies may also
be solicited personally and by telephone or telegraph by regular employees of
the Company, without any additional remuneration and at minimal cost. The cost
of soliciting the proxies will be borne by the Company.
1
<PAGE>
ITEM 1 -- ELECTION OF DIRECTORS
The Board of Directors consists of nine members divided into three classes
of three members each. At each Annual Meeting of Shareholders, one class of
directors is elected to serve for a three-year term or until their successors
are elected and have qualified. The class of directors to be elected at this
Annual Meeting will serve until the 1999 Annual Meeting.
Any shareholder submitting a proxy has the right to withhold authority to
vote for any individual nominee to the Board of Directors by writing that
nominee's name in the space provided on the proxy. Shares represented by all
proxies received by the Company and not so marked as to withhold authority to
vote for any individual director or for all directors nominated will be voted
FOR the election of the nominees named below. The Company knows of no reason why
any such nominee should be unable to serve, but in the event that any nominees
shall be unavailable or unable to serve as directors, the proxy holders will
vote for substitute nominees in the exercise of their best judgment, but may not
vote for more than three persons.
Nominees for Directors (Term expires 1999)
The nominees for directors and further information with respect to each
nominee are set forth below.
Frederick D. King
Mr. King, age 72, has served as Chairman of the Board of Directors of the
Company since 1973. He was President of the Company from 1967 to 1973 and has
been a director since 1961. Mr. King is a member of the Executive Committee.
Anne King Sullivan
Mrs. Sullivan, age 62, has been a director of the Company since 1981. Before
retirement, she was employed in Providence by Rhode Island School of Design and
Textron, Inc., and in Boston by Shepley Bulfinch Richardson Abbott, Architects.
She later was self-employed as a consultant in public relations and advertising.
Mrs. Sullivan's volunteer activities include community government, teaching,
work with the elderly, the brain-damaged, and through Hospice with the
terminally ill and bereaved. She is a member of the Nominating Committee and the
Executive Compensation Committee.
Benjamin A. Currier
Mr. Currier, age 61, is Senior Vice President of Operations for Security Life
of Denver Insurance Company in Denver, Colorado. Prior to joining Security Life
in 1995, Mr. Currier was Vice President, Allstate Life Insurance Company since
1978. He has been a director of the Company since April 1996.
Directors Continuing in Office
The directors whose terms expire at the Annual Meetings in 1997 and 1998 and
further information with respect to each continuing director are set forth
below.
John E. Nolan, Jr.
Mr. Nolan, age 68, is a partner in the law firm of Steptoe & Johnson LLP,
Washington, D.C. and has been engaged in the practice of law since 1956. He has
been a director of the Company since 1971, and is a member of the Audit
Committee and the Executive Compensation Committee. Mr. Nolan also serves on
the Board of Directors of Iomega Corporation. (Term expires at the Annual
Meeting in 1997).
2
<PAGE>
Elaine L. La Monica
Dr. La Monica, Ed.D, J.D., age 51, is Professor and Acting Chair, Department
of Nursing Education at Teachers College, Columbia University. She has been
associated with Columbia University since 1981, and has maintained a private
consulting practice in management for health care organizations since 1974. Dr.
La Monica has been a director of the Company since 1989, and is a member of the
Audit Committee. (Term expires at the Annual Meeting in 1997).
Quentin J. Kennedy
Mr. Kennedy, age 62, was Executive Vice President, Secretary, Treasurer and
Director of Federal Paper Board Company in Montvale, New Jersey until his
retirement on April 1, 1996. He had served in various executive positions with
Federal Paper Board since 1960. Mr. Kennedy has been a director of the Company
since 1991. He is a member of the Audit Committee, the Executive Committee and
the Executive Compensation Committee. (Term expires at the Annual Meeting in
1997).
James M. McNamee
Mr. McNamee, age 51, has served as President and Chief Executive Officer of
the Company since 1984. He was Chief Operating Officer from 1983 to 1984, and
Executive Vice President and General Manager, Western Division from 1982 to
1983. Mr. McNamee has been an employee of the Company since 1968, an officer
since 1979 and a director since 1984. He is a member of the Executive
Committee. (Term expires at the Annual Meeting in 1998).
Kenneth R. Rossano
Mr. Rossano, age 61, is Senior Vice President, Cassidy & Associates in
Boston, Massachusetts. From 1991 to 1992, he was Vice President, Development,
Massachusetts Higher Education Assistance Corporation in Boston, Massachusetts.
From 1989 to 1991 he was Senior Associate, The Education Resources Institute in
Boston, Massachusetts. From 1961 to 1989 he was employed by the Bank of Boston.
He has been a director of the Company since 1967, and is a member of the
Executive Committee. (Term expires at the Annual Meeting in 1998).
G. Earle Wight
Mr. Wight, age 62, has served as Senior Vice President of the Company since
1985 and has been a director of the Company since 1966. He served as Vice
President of the Company from 1980 to 1985 and as Vice President and Secretary
of Hooper Holmes Canada, Ltd. from 1977 to 1980. Mr. Wight is a member of the
Nominating Committee. (Term expires at the Annual Meeting in 1998).
3
<PAGE>
Certain Relationships and Related Transactions
Messrs. F.D. King, G.E. Wight and Mrs. A.K. Sullivan are first cousins.
Messrs. Wight and Rossano are brothers-in-law.
On July 7, 1992 and September 23, 1993 the Company made loans to Mr. James
M. McNamee, President, CEO and a director, in the amount of $49,341 and $45,023
respectively, which were due and payable in 36 months from the date of the loan
and subsequently extended 24 and 12 months, respective]y, for the purpose of
paying taxes due on stock compensation. The maximum amount outstanding in 1995
was $61,374. Interest is accrued at the rates of 4.8 % and 3.6% respectively and
interest and principal is being repaid through payroll deductions. As of March
31, 1996, $37,319 was outstanding.
Mr. John E. Nolan, Jr., a director of the Company, is a partner in the law
firm of Steptoe & Johnson LLP, which performs legal services for the Company.
Compensation of Directors
Each director of the Company will receive an annual fee of $12,000 in 1995
plus a $500 fee for each committee meeting attended. Directors are also
reimbursed for out-of-pocket expenses incurred in attending Board and committee
meetings.
In June, 1990, the Company entered into supplemental indemnity agreements
with its executive officers and directors. The indemnity agreements require the
Company to indemnify such person for all expenses actually and reasonably
incurred in defending or settling an action to which such person is a party or
threatened to be made a party or is otherwise involved because of their status
as an officer or director of the Company. If the action is brought by or in
the right of the Company, the indemnification must be made only if such person
acted in good faith, for a purpose reasonably believed to be in the best
interest of the Company (or, in the case of service to another entity, not
opposed to the interest of the Company).
Committees of the Board
The Board of Directors has an Audit Committee, an Executive Committee, a
Nominating Committee and an Executive Compensation Committee.
The Audit Committee acts as principal liaison between the Board of Directors
and the independent auditors employed by the Company and reviews the annual
financial statements and the Company's internal accounting systems and controls.
The Committee also recommends to the Board of Directors the selection of
independent auditors to be employed by the Company.
The Executive Committee exercises the authority of the Board of Directors
in certain corporate matters between meetings and exercises specific powers and
authority as may from time to time be lawfullv delegated to it by the Board of
Directors.
The Nominating Committee nominates individuals for election or reelection to
the Board of Directors. It will consider nominations recommended by shareholders
who submit written recommendations to the Nominating Committee in care of the
Secretary of the Company.
4
<PAGE>
The Executive Compensation Committee, among other matters, annually reviews
and determines the compensation of the Chief Executive Officer of the Company
and, upon his recommendation, the compensation of the other elected officers
and senior management of the Company and annually reviews and recommends to the
Board of Directors the compensation and allowances for the Company's outside
directors. The Committee also prepares a report to shareholders (enclosed in
this Proxy Statement) which discusses the Company's compensation policies for
the executive officers, the Committee's bases for determining the compensation
of the Chief Executive Officer for the past fiscal year, and the relationship
between compensation and the Company's performance for the past fiscal year.
The Executive Compensation Committee also administers the 1987 Nonqualified
Stock Option Plan, the 1992 Stock Option Plan and the 1994 Stock Option Plan,
and determines the amount and terms of the options granted under the plans. The
Committee also administers the 1993 Employee Stock Purchase Plan.
The Board of Directors held four regular meetings and four special meetings
during the fiscal year ended December 31, 1995. The Audit Committee met once,
the Executive Committee met three times, the Executive Compensation Committee
met six times, and the Nominating Committee met twice in 1995. A11 directors
attended at least 75% of the total number of meetings of the Board of Directors
and the committees to which they belong.
Compensation Committee Interlocks and Insider Participation
For 1995, Mrs. Anne King Sullivan and Messrs. Quentin J. Kennedy and John E.
Nolan, Jr. served on the Executive Compensation Committee. Mr. Nolan is a
partner in the law firm of Steptoe & Johnson, LLP, which performs legal services
for the Company.
5
<PAGE>
Executive Officers
Set forth below are the executive officers of the Company who are not
Directors. Executive officers serve at the pleasure of the Board of Directors.
Information is not included in this Proxy Statement for that portion of any
period for which information is required during which any executive officer did
not hold such position.
Robert William Jewett
Mr. Jewett, age 43, has served as Senior Vice President and General Counsel
of the Company since 1991 and as Secretary since 1983. He served as Vice
President and General Counsel from 1988 to 1991 and as Corporate Counsel from
1981 to 1988.
Paul W. Kolacki
Mr. Kolacki, age 53, has served as Executive Vice President and Chief
Operating Officer of the Company's Portamedic Health Information Services
Division since 1991. He was Senior Vice President and General Manager of the
Company's Health Information Services Eastern Division from 1990 to 1991,
Senior Vice President and General Manager, Eastern Division of the Company from
1988 to 1990 and Vice President and General Manager, Eastern Division, from
1986 to 1988. He was Division Vice President and Great Lakes Zone Manager from
1983 to 1986. Mr. Kolacki has been an employee of the Company since 1964.
Fred Lash
Mr. Lash, age 50, has served as Senior Vice President of the Company since
1993, as Chief Financial Officer since 1989 and as Treasurer since 1987. He was
Chief Accounting Officer from 1988 to 1989, and Controller from 1987 to 1988.
Frank A. Stiner
Mr. Stiner, age 62, has served as Vice President, Administrative Group of
the Company since 1990 and as Assistant Vice President, Administrative Group
from 1988 to 1990. He was Assistant Vice President, Administrative Services
from 1982 to 1988. Mr. Stiner has been an employee of the Company since 1959.
6
<PAGE>
Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of December 31, 1995, the beneficial
ownership of the Company's issued and outstanding Common Stock (on the basis of
6,712,114 shares outstanding), including the stock ownership of each person
who, to the Company's knowledge, owns over 5 % of the Company's outstanding
Common Stock, each of the directors of the Company, each executive officer
named in the Summary Compensation Table which follows, and the directors and
officers of the Company as a group, and the percentage which the shares owned
constitute of the total shares outstanding.
<TABLE>
<CAPTION>
<S> <C> <C>
Amount & Nature Percent of Class
of Beneficial (based on # of
Name, Position & Address Ownership of shares outstanding
of Beneficial Owners Common Stock (1) 12/31/95)
----------------------------- ---------------------- --------------------
Frederick D. King and Kenneth R. Rossano, Trustees 647,550 9.65%
Under the Will of John J. King
c/o Fiduciary Trust Co.
P.O. Box 1647
Boston, MA 02105-1647
The TCW Group, Inc. 482,000 (2) 7.18%
865 South Figueroa Street
Los Angeles, CA 90017
Robert Day
200 Park Avenue, Suite 2200
New York, NY 10166
Heartland Advisors 424,900 (3) 6.33%
790 North Milwaukee Street
Milwaukee, WI 53202
Dimensional Fund Advisors, Inc. 398,850 (4) 5.94%
1299 Ocean Avenue
Santa Monica, CA 90401
Kopp Investment Advisors, Inc. 339,900 (5) 5.06%
6600 France Ave., South, Suite 672
Edina, MN 55435
Directors
- ---------
Frederick D. King 798,358 (6) 11.89%
G. Earle Wight 244,138 (7) 3.64%
John E. Nolan, Jr. 5,000 07%
Kenneth R. Rossano 790,701 (8) 11.78%
Anne King Sullivan 71,555 (9) 1.07%
James M. McNamee 164,117 (10) 2.45%
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Amount & Nature Percent of Class
of Beneficial (based on # of
Name, Position & Address Ownership of shares outstanding
of Beneficial Owners Common Stock (1) 12/31/95)
----------------------------- ---------------------- --------------------
Directors (Continued)
- ---------
Quentin J. Kennedy 1,500 .02%
Elaine L. La Monica 600 .01%
Benjamin A. Currier 0 0%
Other Most Highly Paid Executive Officers
- -----------------------------------------
Paul W. Kolacki 19,587 (11) .29%
Fred Lash 22,392 (12) .33%
Robert William Jewett 15,802 (13) .24%
All officers and directors as a group (13 total) 1,496,582 (14) 22.30%
- ----------------
</TABLE>
(1) Includes shares, if any, held by or for a spouse or minor children or as a
trustee. Unless otherwise indicated, the director or 5% stockholder
possesses sole investment and voting power in respect of these shares.
(2) The TWC Group, Inc. ("TWC"), a parent holding company, and Robert Day, an
individual who may be deemed to control TWC, filed a joint statement on
Schedule 13G dated February 12, 1996, disclosing that on December 31, 1995
they beneficially owned 482,000 shares of Common Stock of the Company,
representing approximately 7.2 % of the Common Stock. On the Schedule 13G,
TWC and Robert Day certify that the shares of Common Stock were not acquired
for the purpose of, and do not have the effect of changing or influencing
the control of the Company and were not acquired in connection with, or as a
participant in, any transaction having such purpose or effect.
(3) Heartland Advisors, Inc. ("Heartland"), a registered investment advisor,
filed a statement on Schedule 13G dated February 9, 1996, disclosing that on
December 31, 1995 it beneficially owned 424,900 shares of Common Stock of
the Company, representing approximately 6.3% of the Common Stock. Such
shares are in investment advisory accounts of Heartland and Heartland has
sole voting and dispositive power. In the Schedule 13G, Heartland certifies
that the shares of Common Stock were not acquired for the purpose of, and do
not have the effect of changing or influencing the control of the Company
and were not acquired in connection with, or as a participant in, any
transaction having such purpose or effect.
(4) Dimensional Fund Advisors, Inc., ("Dimensional"), a registered investment
advisor, filed a statement on Schedule 13G dated February 7, 1996,
disclosing that on December 31, 1995, it beneficially owned 398,850 shares
of Common Stock; of the Company, representing approximately 5.9% of the
Common Stock. Such shares are held in portfolios of DFA Investment
Dimensions Group, Inc., a registered open-end investment company, or in a
series of the DFA Investment Trust Company, a Delaware Business Trust, or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, all of which Dimensional serves as
investment manager. In the Schedule 13G, Dimensional certifies that the
shares of Common Stock were not acquired for the purpose of, and do not have
the effect of changing or influencing the control of the Company and were
not acquired in connection with, or as a participant in, any transaction
having such a purpose or effect.
8
<PAGE>
(5) Kopp Investment Advisors, Inc. ("Kopp"), a registered investment
advisor, filed a statement on Schedule 13G dated February 5, 1996,
disclosing that on December 31, 1995, it beneficially owned 339,900 shares
of Common Stock of the Company, representing approximately 5.1% of the
Common Stock. Such shares are owned by various individual and institutional
investors for which Kopp serves as investment advisor with power to direct
investments and/or sole power to vote the Common Stock. In the Schedule 13G,
Kopp certifies that the shares of Common Stock were not acquired for the
purpose of, and do not have the effect of, changing or influencing the
control of the Company and were not acquired in connection with, or as a
participant in, any transaction having such purpose or effect.
(6) Includes 647,550 shares held by the John J. King Trust of which Mr. King is
co-trustee with shared voting and dispositive power, and 280 shares held by
Mr. King's spouse, Natalie.
(7) Includes 189,843 shares held by the Lucille K. Wight Trust, of which Mr.
Wight is trustee with sole voting and dispositive power, and 44,295 shares
held by 874367 Ontario, Inc., a corporation of which Mr. Wight and his
spouse Sonia are sole shareholders.
(8) Includes 132,889 shares held by Mr. Rossano's spouse, Cynthia, and 647,550
shares held by the John J. King Trust, of which Mr. Rossano is co-trustee
with shared voting and dispositive power.
(9) Includes 71,405 shares held by the Anne K. Sullivan Receivable Trust, of
which Mrs. Sullivan is co-trustee but has sole voting and dispositive power,
and 150 shares held by Mrs. Sullivan's spouse, Donald.
(10) Includes 27,387 shares held by Mr. McNamee and his spouse Patricia as joint
tenants, 1,866 shares held by Mr. McNamee's spouse, Patricia, 1,516 shares
held by Mr. McNamee's son, Sean, and 350 shares held by Mr. McNamee's
spouse Patricia as custodian for Sean McNamee, their minor child. Also
includes 95,500 shares currently issuable upon the exercise of options.
(11) Includes 400 shares held by Mr. Kolacki and his spouse, Sandra, as
joint tenants. Also includes 18,250 shares currently issuable upon the
exercise of options.
(12) Includes 300 shares held by Mr. Lash and his spouse, Suzanne, as joint
tenants. Also includes 21,875 shares currently issuable upon the exercise
of options.
(13) Includes 14,750 shares currently issuable upon the exercise of options.
(14) Includes shares owned individually by each officer and director in the
group as well as shares indirectly owned by such persons as trustees of
various trusts; however, where more than one officer or director is a
trustee of the same trust, the total number of shares owned by such trust
is counted only once in determining the amount owned by all officers and
directors as a group. Also includes 160,675 shares currently issuable upon
the exercise of options.
Compliance with Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors of the Company and persons who beneficially own more than
ten percent of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
American Stock Exchange. Based solely on a review of reports and written
representations furnished to the Company, the Company believes that all Section
16(a) filing requirements applicable to its executive officers, directors and
shareholders were complied with, except for two Form 4s reporting stock
acquisitions, which were filed late by Mr. James M. McNamee.
9
<PAGE>
Compensation of Executive Officers
The following table provides certain summary information concerning
compensation paid or accrued for the last three complete fiscal years to or on
behalf of the Company's Chief Executive Officer and the three other most highly
paid executive officers of the Company whose total annual salary and bonus
exceeded $100,000 in 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards Payouts
- ----------------------------------------------------------------------------------------
Name and LTIP All Other
Principal Salary Bonus Options Payouts Compensation
Position Year ($)(1) ($)(2) # ($)(3) $ (4)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James M. McNamee 1995 265,000 83,000 50,000 - 62,806
President and Chief 1994 227,625 76,344 20,000 - 40,088
Executive Officer 1993 219,000 92,375 25,000 82,875 36,453
Paul W. Kolacki 1995 159,500 42,500 33,000 - 43,419
Executive Vice President 1994 141,979 40,000 18,000 - 17,287
and Chief Operating Officer 1993 118,300 30,000 15,000 - 26,257
Fred Lash 1995 142,800 40,000 26,300 - 23,580
Senior Vice President 1994 133,167 22,500 11,300 - 11,678
Chief Financial Officer 1993 108,333 25,000 18,000 - 11,460
and Treasurer
Robert William Jewett 1995 120,800 15,000 15,200 - 12,673
Senior Vice President 1994 110,854 9,500 7,700 - 6,816
General Counsel and Secretary 1993 90,000 6,500 6,000 - 6,426
- ----------------------
</TABLE>
(1) Includes directors fees paid to Mr. McNamee.
(2) For Mr. McNamee, includes stock awards with a fair market value of
$48,000, $41,344, and $52,875, respectively. Perquisites fall below the
thresholds required for disclosure and, accordingly, have been omitted.
(3) Represents fair market value of stock bonus awarded to Mr. McNamee under
the CEO Stock Award and Bonus Plan, which provides for annual stock from
1990 to 1994 based on sustained earnings growth since 1989.
(4) The amounts disclosed in this column include:
(a) Company contributions of the following amounts in 1995, 1994 and 1993
respectively, under the Company's Salary Reduction Plan, a defined
contribution plan, on behalf of Mr. McNamee ($2,354, $1,309, and
$2,249), Mr. Kolacki ($1,949, $1,309, and $1,112), Mr. Lash ($1,850,
$1,309, and $1,433) and Mr. Jewett ($930, $1,155, and $765).
(b) Payment by the Company in 1995 of premiums on whole-life insurance
policies for Mr. McNamee ($55,878), Mr. Kolacki ($41,470), Mr. Lash
($21,730), and Mr. Jewett ($10,917), and in 1994 and 1993 the following
amounts each year, Mr. McNamee ($34,204), Mr. Kolacki ($15,978), Mr.
Lash ($10,369), and Mr. Jewett ($5,661).
(c) Payment to Mr. Kolacki ($9,167 in 1993 representing approximate
incremental mortgage costs associated with his relocation to New
Jersey.
(d) Payment by the Company in 1995, 1994 and 1993 of premiums on a
disability insurance policy for Mr. McNamee of $4,575, $4,575 and
$3,050, respectively.
10
<PAGE>
Option Grants in Last Fiscal Year
The following table provides certain information on option grants in
1995 under the Company's 1994 Stock Option Plan.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------
GRANT DATE
INDIVIDUAL GRANTS VALUE
- -------------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS GRANTED GRANT DATE
OPTION TO EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANTED #(1) FISCAL YEAR PRICE ($/Sh) DATE VALUE $ (4)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James M. McNamee 20,000 (2) 11.0% 7.88 01/22/05 92,766
30,000 (3) 17.8% 8.00 11/19/05 141,360
Paul W. Kolacki 18,000 (2) 9.9% 7.88 01/22/05 83,489
15,000 (3) 8.9% 8.00 11/19/05 70,680
Fred Lash 11,300 (2) 6.2% 7.88 01/22/05 52,413
15,000 (3) 8.9% 8.00 11/19/05 70,680
Robert William Jewett 7,700 (2) 4.3% 7.88 01/22/05 35,715
7,500 (3) 4.4% 8.00 11/19/05 35,340
- ------------------------
</TABLE>
(1) The 1987 Nonqualified Stock Option Plan, and the 1992 and 1994 Stock Option
Plans provide grants that become 25% exercisable commencing 24 months after
grant date and 25% become exercisable on each successive anniversary of that
date, with full vesting occurring on the fourth anniversary date. The
options terminate upon termination of employment for any reason other than
death, disability or retirement. Further, to be eligible to exercise the
options, an optionee must remain in the employment of the Company for a
period of 24 months from the date of grant (or retirement, if earlier).
Options that are not fully vested and exercisable as of the date the
optionee terminates employment because of death, disability or retirement,
or as of the date of an actual or threatened change in control of the
Company, become vested and exercisable in full on such date. Similarly, the
vesting of options may be accelerated in connection with certain mergers,
consolidations, sales or transfers by the Company of substantially all of
its assets.
(2) These options were granted under the 1994 Stock Option Plan on January
23, 1995.
(3) These options were granted under the 1994 Stock Option Plan on November
20, 1995.
(4) The Company used the Black-Scholes option pricing model to determine
grant date persent value.
11
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides certain information on options exercised in
1995 and the value of certain unexercised options at December 31, 1995.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
- -------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#)(2) FY-END ($)(3)
SHARES
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James M. McNamee 0 0 95,500/145,000 46,125/8,750
Paul W. Kolacki 0 0 18,250/67,375 8,859/6,375
Fred Lash 0 0 21,875/60,925 17,719/4,700
Robert William Jewett 0 0 14,750/32,900 13,781/2,863
</TABLE>
(1) Amount represents the difference between the exercise price and the fair
market value on the date of exercise, multiplied by the number of options
exercised.
(2) Includes the effect of a three for two stock split of the Company's
Common Stock in 1992.
(3) Amount represents the difference between the exercise price and the fair
market value on December 31, 1993 ($11,875), multiplied by the number of
options unexercised.
12
<PAGE>
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The report of the Executive Compensation Committee below shall not be
deemed to be filed under, or incorporated by reference into any filing
under, the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates
this Report by reference.
The Executive Compensation Committee of the Board is comprised of three
directors who are not present or former employees of the Company. The Committee
establishes compensation policies for the CEO and other executive officers and
administers the Company's programs for cash compensation and stock awards,
bonuses and options, including options under the 1994 Stock Option Plan.
Essentially, the Committee believes that executive compensation should
be largely determined by management's performance in the shareholders'
interests. This usually means earnings. Sustained growth in earnings will
ultimately be reflected in increased shareholder value and positioning the
Company for future growth in revenues and earnings is an important management
function.
The Committee believes that employee stock ownership effectively aligns
employees with the interests of stockholders and looks to stock options to
provide an opportunity for employee stock ownership. The Committee further
believes that compensation is important to attract talented individuals to the
Company, to retain them and to provide incentive.
Compensation for all executive officers include salary, cash bonuses and
stock options. In addition, the CEO is entitled to stock awards and stock
bonuses (or cash payments in lieu of stock awards or stock bonuses) under the
CEO Plan that has been in effect. Each year the Committee reviews and
determines the compensation of the CEO and, with the advice and recommendations
of the CEO, the compensation of other executive officers. In furtherance of the
Company's policy to provide incentives and to reward performance, compensation
is based on specific criteria developed through the company's experience,
including attainment of revenue and expense objectives, planning and
organizational development and personal leadership. The weight accorded each of
these factors is within the Committee's discretion and may depend on the
Company's performance during the year.
From 1990 through 1994. the CEO's compensation was determined under a
Plan that provided for relatively modest salary increases plus stock awards and
bonuses or cash in lieu of such stock awards and bonuses. For 1995, an
exceptional year because management's efforts were concentrated on sale of the
Nurse's House Call Division and acquisition of ASB Meditest, the CEO's
compensation was determined under principles developed in the 1990-94 Plan.
Thus, although it was difficult to relate 1995 earnings to earlier years because
of the realignment of the Company's business, the Commitee recognized the CEO's
success in completing the sale and acquisition in the face of adverse
circumstances.
For 1995, Mr. McNamee was awarded a cash bonus of $35,000, the same
bonus he received for 1994 and 1993.
Stock awards for the CEO have been based on continuing satisfactory
performance measured against management objectives established by the Board.
These objectives include corporate growth and development, profitability, total
return to shareholders and management team development. For 1995, the CEO
received a stock award of 6,000 shares, as compared with 5,250 shares awarded
for 1994. Stock bonuses for the CEO have been based on sustained increases in
earnings per share and for 1995, as for 1994, no stock bonus was awarded to the
CEO.
The Committee continues to regard stock options as an important feature
of incentive compensation. For 1995, it awarded the CEO options on 50,000
shares: he had received options on 20,000 shares for 1994.
13
<PAGE>
The Committee is currently developing a CEO Compensation Plan for the
years 1996-98. It is expected that this will follow the outline of the 1990-94
Plan with the additional feature of a very substantial option award if earnings
per share and stock price reach target levels after 1998. Such a provision would
be subject to stockholder approval at the 1997 annual meeting.
Section 162(m) of the Internal Revenue Code, enacted in 1993 and
effective for taxable years beginning after January 1, 1994, generally limits
to $1 million per individual per year the federal income tax deduction for
compensation paid by a publicly-held company to certain executive officers.
Compensation that qualifies as performance-based compensation for purposes of
this section is not subject to the $1 million deduction limitation. The
Executive Compensation Committee will continue to evaluate this provision but
presently intends to qualify compensation as performance-based to the extent
feasible and in the best interest of the Company.
EXECUTIVE COMPENSATION COMMITTEE
Quentin J. Kennedy
Anne King Sullivan
John E. Nolan, Jr., Chairman
14
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph below shall not be deemed to be filed
under, or incorporated by reference into any filing under, the Securities Act
of 1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this Graph by reference.
The following graph compares the cumulative total shareholder return
(assuming dividends are reinvested) on the Company's Common Stock for the last
five years with the cumulative total return (assuming dividends are reinvested)
of the Standard & Poor's 500 Stock Index and a peer group index consisting of
the Mediq Inc. and Policy Management Systems Inc. The peer group was changed in
1995 due to the sale of the Company's health care business and due to the fact
that Olsten no longer has its health information component. In preparing the
peer group index, the returns of each component issurer in the group were
weighted according to its stock market capitalization. The shareholder return
shown on this graph is not necessarily indicative of future performance.
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG HOOPER HOLMES INC., S&P 500 INDEX AND PEER GROUP INDEX
<CAPTION>
Measurement period HOOPER HOLMES S&P 500 PEER GROUP
(Fiscal year Covered) INC. Index Index
- --------------------- ------------- --------- ----------
<S> <C> <C> <C>
BASE $ 100.00 $ 100.00 $ 100.00
FYE 1991 $ 168.50 $ 130.48 $ 162.11
FYE 1992 $ 182.05 $ 140.46 $ 208.67
FYE 1993 $ 140.39 $ 154.62 $ 81.03
FYE 1994 $ 79.22 $ 156.66 $ 106.41
FYE 1995 $ 99.78 $ 215.54 $ 120.49
</TABLE>
ASSUMES $100 INVESTED ON JAN. 1, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 29, 1995
15
<PAGE>
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
In 1990, the Company entered into an employee retention agreement, as
amended (the "Agreement") with Mr. McNamee entitling him to certain benefits if
his employment is terminated within two years of a "change of control", as
defined in the Agreement. Following a change of control, Mr. McNamee is
entitled to retain the same position, duties and compensation as he had prior
to the change of control for a period of two years after the date of the change
of control. After a change in control has occurred, if Mr. McNamee's employment
is terminated by the Company or by Mr. McNamee within two years of the date of
the change of control (other than as a result of his death, disability or for
cause, as defined in the Agreement), Mr. McNamee is entitled to receive a lump
sum payment in cash equal to the aggregate of (a) to the extent unpaid, his
highest base salary through the date of termination (as defined in the
Agreement), (b) a pro rata portion of his recent bonus (as defined in the
Agreement, generally to be the highest annual guaranteed bonus to which he was
entitled during the last two full fiscal years prior to the date of the change
of control), (c) twice the sum of his highest base salary and recent bonus, and
(d) all amounts of compensation previously deferred (with accrued interest
thereon) and unpaid and any accrued vacation pay not yet paid by the Company.
In addition, he will be entitled to receive during the two year period after
the change of control, all benefits payable to him (or his family) under
welfare benefit programs (such as medical, dental, disability and life
insurance programs) equivalent to those most favorable immediately preceding
the date of the change of control. In the event that Mr. McNamee would be
subject to an excise tax, then he should be entitled to receive an additional
payment such that after Mr. McNamee pays such excise taxes, including any
excise tax imposed on any portion of such additional payment, Mr. McNamee will
retain additional payments equal to the excise taxes imposed.
16
<PAGE>
ITEM 2 -- RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of KPMG Peat Marwick LLP,
independent public accountants, to serve as auditors for the fiscal year ending
December 31, 1996, subject to ratification by the shareholders. This firm (and
its predecessor, KMG Main Hurdman) has served as the Company's auditors since
1980.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS SELECTION.
If the appointment is not approved, the Board will select other independent
accountants. It is expected that a member of the firm of KPMG Peat Marwick LLP
will be present at the Annual Meeting, will have an opportunity to make a
statement if so desired, and will be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Proposals of shareholder intended for inclusion in the Proxy Statement for the
Annual Meeting of Shareholders to be held in 1997, must be received at the
Company's executive offices not later than December 23, 1996. Proponents should
submit their proposals by Certified Mail -- Return Receipt Requested.
SOLICITATION OF PROXIES
The solicitation of proxies will be made primarily by mail. Proxies may also
be solicited personally and by telephone or telegraph by regular employees of
the Company, without any additional remuneration and at minimal cost. The cost
of soliciting the proxies will be borne by the Company.
BY ORDER OF THE BOARD OF DIRECTORS
HOOPER HOLMES, INC.
/s/ Robert William Jewitt
Robert William Jewitt
Secretary
April 17, 1996
17
<PAGE>
[ X ] Please mark your
votes as in this
example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of directors,
and FOR proposal 2.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Election of Directors and FOR
proposal 2.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors [ ] [ ]
Nominees:
- --------
Frederick D. King
Anne King Sullivan
Benjamin A. Cutter
For, except vote withheld from the following nominee(s):
- -------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of independent Auditors. [ ] [ ] [ ]
3. In their discretion, upon other
matters as may properly come
before the meeting or any
adjournment(s) thereof.
- --------------------------------------------------------------------------------
SIGNATURE(S)_______________________________________ DATE _________________
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator, trustee
or guardian, please give full title as such.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
P R O X Y
HOOPER HOLMES, INC.
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting, May 22, 1996
The undersigned hereby constitutes and appoints James M. McNamee and Robert
William Jewett and each of them, the true and lawful attorneys, agents and
proxies of the undersigned, with full power of substitution, to vote with
respect to all the shares of Common Stock of Hooper Holmes, Inc., standing in
the name of the undersigned at the close of business on April 4, 1996, at the
Annual Meeting of Shareholders and all adjournments thereof, with all powers
that the undersigned would possess if personally present.
(Change of address)
------------------------------------
------------------------------------
------------------------------------
------------------------------------
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Director's recommendations. The Proxy Committee cannot vote
your shares unless you sign and return this card.
SEE REVERSE SIDE
