<PAGE>
<PAGE>
Section 240.14a-101 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 Section 240.14a-11(c) or Section
240.14a-12
HMG WORLDWIDE CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
<PAGE>
HMG WORLDWIDE CORPORATION
475 Tenth Avenue
New York, New York 10018
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 12, 1997
-----------
To the Stockholders of
HMG WORLDWIDE CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of HMG WORLDWIDE CORPORATION, a Delaware corporation (the "Company"),
will be held at the offices of the Company, 234 South Eight Street, Reading,
Pennsylvania 19603 on Tuesday, August 12, 1997 at the hour of 2:00 p.m., for the
following purposes:
(1) To elect six Directors of the Company for the ensuing year.
(2) To ratify the selection of Friedman Alpren & Green as the Company's
independent auditors for the fiscal year ending December 31, 1997.
(3) To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on July 7, 1997 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
HERBERT F. KOZLOV
Secretary
New York, New York
July 8, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND PROMPTLY
RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. ANY
STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING BY GIVING
WRITTEN NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY
ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE>
<PAGE>
HMG WORLDWIDE CORPORATION
475 Tenth Avenue
New York, New York 10018
-----------
PROXY STATEMENT
-----------
This Proxy Statement is being mailed on or about July 8, 1997 to all
stockholders of record at the close of business on July 7, 1997 in connection
with the solicitation by the Board of Directors of Proxies for the Annual
Meeting of Stockholders (the "Meeting") to be held on August 12, 1997. Proxies
will be solicited by mail, and all expenses of preparing and soliciting such
proxies will be paid by the Company. All Proxies duly executed and received by
the persons designated as proxy therein will be voted on all matters presented
at the Meeting in accordance with the specifications given therein by the person
executing such Proxy or, in the absence of specified instructions, will be voted
for the named nominees to the Company's Board of Directors and in favor of each
of the proposals indicated on such Proxy. The Board does not know of any other
matter that may be brought before the Meeting but, in the event that any other
matter should come before the Meeting, or any nominee should not be available
for election, the persons named as proxy will have authority to vote all Proxies
not marked to the contrary in their discretion as they deem advisable.
Any stockholder may revoke his or her Proxy at any time before the Meeting
by written notice to such effect received by the Company at the address set
forth above, Attn: Corporate Secretary, by delivery of a subsequently dated
Proxy or by attending the Meeting and voting in person.
Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business
at the Meeting. Abstentions will be counted in tabulations of the votes cast on
each of the proposals presented at the Meeting, whereas broker non-votes will
not be counted for purposes of determining whether a proposal has been approved.
The total number of shares of the Company's Common Stock outstanding as of
July 7, 1997 was 8,664,150. The Common Stock is the only class of securities of
the Company entitled to vote, each share being entitled to one non-cumulative
vote. Only stockholders of record as of the close of business on July 7, 1997
will be entitled to vote. A majority of the shares of Common Stock outstanding
and entitled to vote, or 4,332,075 shares, must be present at the Meeting in
person or by proxy in order to constitute a quorum for the transaction of
business. Assuming the presence of a quorum, a vote of a majority of the shares
of Common Stock present and voting in person or by proxy at the Meeting is
required to pass upon each of the matters presented.
A list of stockholders entitled to vote at the Meeting will be available at
the Company's offices, 475 Tenth Avenue, New York, New York 10018 for a period
of ten days prior to the Meeting and at the Meeting itself for examination by
any stockholder.
<PAGE>
<PAGE>
ELECTION OF DIRECTORS
Seven directors are to be elected at the Meeting to serve for a term of one
year or until their respective successors are elected and qualified.
INFORMATION CONCERNING NOMINEES
The following table sets forth the positions and offices presently held
with the Company by each nominee, his age, his tenure as a director and the
number of shares of the Company's Common Stock beneficially owned as of July 7,
1997:
<TABLE>
<CAPTION>
Positions Number of
Presently Held Shares Approximate
with the Director Beneficially Percentage
Name Age Company Since Owned(1) of Class (1)
- ---- --- -------------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Michael Wahl 59 Chairman of the Board and 1984 1,269,625(2) 13.7%
Chief Executive Officer
Andrew Wahl 36 President and Director 1984 722,703(3) 7.9%
Robert V. Cuddihy, Jr. 37 Chief Operating Officer, 1987 356,308(4) 4.0%
Chief Financial Officer
and Director
L. Randy Riley 45 Executive Vice President 1993 340,083(5) 3.8%
and Director
Herbert F. Kozlov 44 Secretary and Director 1988 202,976(6) 2.3%
Lawrence J. Twill, Sr. 59 Director 1987 91,150(7) 1.0%
</TABLE>
- ---------
(1) Includes shares issuable pursuant to currently exercisable options and
options which will be exercisable within 60 days of July 7, 1997. Except as
otherwise indicated, the persons named herein have sole voting and
dispositive power with respect to the shares beneficially owned.
(2) Includes 599,828 shares issuable upon exercise of options.
(3) Includes 516,750 shares issuable upon exercise of options.
(4) Includes 223,850 shares issuable upon exercise of options.
(5) Includes 223,850 shares issuable upon exercise of options.
(6) Includes 185,100 shares issuable upon exercise of options.
(7) Includes 80,400 shares issuable upon exercise of options.
MICHAEL WAHL has been a director of the Company since its inception in May
1984 and the Company's Chairman and Chief Executive Officer, since October 1,
1993. Since 1984, Mr. Wahl has served as the Chairman of the Board of HMG
Worldwide In-Store Marketing, Inc. ("HMG"). Since May 1986, Mr. Wahl has also
served as the chief executive officer of HMG. Mr. Wahl served as HMG's President
from 1975 to April 1986.
ANDREW WAHL has been a director of the Company since its inception in May
1984 and the Company's President since October 1, 1993. From May 1984 to October
1993, Mr. Wahl served as the Company's chief executive officer. In December
1990, Mr. Wahl became the Secretary of the Company. From July 1987 to October
1993, Mr. Wahl also served as the Company's Chairman of the Board. Additionally,
Mr. Wahl served as the Company's President from
2
<PAGE>
<PAGE>
May 1984 until December 1990. From September 1980 until May 1984, Mr. Wahl
served as Vice President for HMG, where his primary responsibilities were in the
areas of new business development and pension and profit-sharing management.
ROBERT V. CUDDIHY, JR. has been the Company's chief financial officer and
Secretary since July 1987 and a director since February 1988. In March 1989, Mr.
Cuddihy also assumed the responsibilities of chief operating officer of the
Company. In December 1990, Mr. Cuddihy became the Company's President and
discontinued his function as its Secretary. On October 1, 1993, he relinquished
his role as President. From July 1981 until July 1987, Mr. Cuddihy was with KPMG
Peat Marwick, Certified Public Accountants, where he last served as a senior
audit manager.
L. RANDY RILEY has been a director of the Company since March 1994. Mr.
Riley is, and for at least the past five years has been, employed by HMG in an
executive capacity, most recently as President of HMG. He was previously
employed by Ernest & Julio Gallo and by Colgate-Palmolive Company in senior
marketing positions.
HERBERT F. KOZLOV has been a director of the Company since February 1988.
Since August 1989, Mr. Kozlov has also served as the chief executive officer of
EVS. Mr. Kozlov is a member of Parker Duryee Rosoff & Haft, counsel to the
Company. Mr. Kozlov has been a practicing attorney for more than the past ten
years.
LAWRENCE J. TWILL, SR. has been a director of the Company since July 1987.
Since March 1991, Mr. Twill has been President of Ashwood Capital, a private
merchant banking firm. From February 1990 to February 1991, he was a Managing
Director of Peers & Co., which at the time was a subsidiary of Kemper
Securities, Inc. From June 1988 to February 1990, Mr. Twill served as Executive
Vice President, Investment Banking and a member of the Executive Committee of
Bateman Eichler, Hill Richards, a subsidiary of Kemper Securities, Inc. From
February 1986 to November 1988, Mr. Twill was Chairman of Woolcott & Co., Inc.,
an investment banking firm which served as the managing underwriter of the
Company's 1987 secondary public offering. From February 1985 to January 1986,
Mr. Twill was the Chairman and Chief Executive Officer of Lawrence Twill
Associates, a financial consulting firm. From April 1984 to March 1985, Mr.
Twill was the President and Chief Executive Officer of New York Airlines. Mr.
Twill is also a member of the Board of Directors of United Waste Systems, Inc.
Michael Wahl is the father of Andrew Wahl. There are no other family
relationships among the Company's officers and directors.
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Executive officers are
elected annually by the Board of Directors to hold office until the first
meeting of the Board following the next annual meeting of stockholders and until
their successors are chosen and qualified.
INFORMATION CONCERNING THE BOARD
The Board of Directors held four meetings during the year ended December
31, 1996. All then incumbent directors attended at least 75% of such meetings.
The Compensation and Stock Option Committee of the Board is responsible for
oversight and administration of executive compensation and also reviews and
implements appropriate action with respect to all matters pertaining to stock
options granted under the Company's 1986, 1991, 1993 and 1994 stock option
plans. The Committee is presently composed solely of Mr. Twill.
The Audit Committee of the Board is charged with the review of the
activities of the Company's independent auditors, including, but not limited to,
fees, services and scope of audit. The Audit Committee is presently composed of
Messrs. M. Wahl, Kozlov and Cuddihy. The Audit Committee did not hold formal
meetings during the year ended December 31, 1996.
3
<PAGE>
<PAGE>
The Retirement Committee of the Company Board administers the Company's
Capital Accumulation Plan. Mr. Twill is presently the sole member of the
Retirement Committee.
The Company does not have a nominating committee charged with the search
for, and recommendation to the Board of, potential nominees for Board positions.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of the Company's
Common Stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that through December 31, 1996,
its officers and directors and greater than 10% beneficial owners complied with
all filing requirements, except that the Forms 5 required to be filed by each of
the Company's directors with respect to the year ended December 31, 1996 were
filed five business days after the filing deadline.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1994, the Company advanced $250,000 to Robert V. Cuddihy, Jr., an
officer and Director. Such amount is due to be repaid in one installment due
January 31, 1998. Unpaid amounts bear interest at a fluctuating rate equal to
the six months U.S. Treasury bill rate. In 1995 and 1996, Mr. Cuddihy made
prepayments of $66,422 and $4,906, respectively, plus accrued interest. At
December 31, 1996, the unpaid balance of such advance was $178,072.
In 1995, the Company advanced $100,000 to Andrew Wahl, an officer and
Director. Such amount is due to be repaid in one installment due January 1,
1998. Unpaid amounts bear interest at a fluctuating rate equal to the six months
U.S. Treasury bill rate. In 1995, Mr. Wahl made a prepayment of $25,000. At
December 31, 1996, the unpaid balance of such advance was $75,000, and no
interest was paid during 1996.
4
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
Set forth below is the aggregate compensation for services rendered in all
capacities to the Company during its fiscal years ended December 31, 1996, 1995
and 1994 by its chief executive officer and each of its executive officers whose
compensation exceeded $100,000 during its fiscal year ended December 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- ------------------------- ------------------------
OTHER NUMBER OF ALL
NAME AND ANNUAL RESTRICTED SECURITIES LONG TERM OTHER
PRINCIPAL COMPEN- STOCK UNDERLYING INCENTIVE COMPEN-
POSITION YEAR SALARY BONUS SATION(1) AWARDS OPTIONS PAYOUTS SATION
- --------- ---- ------ ----- --------- ---------- ----------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael Wahl 1996 $250,000 $ - - - 140,000 - -
Chief Executive 1995 $250,000 $100,000 - - - - -
Officer 1994 $250,000 $100,000 - - - - -
Andrew Wahl 1996 $250,000 $ - - - 140,000 - -
President 1995 $190,000 $ 76,000 - - - - -
1994 $190,000 $125,000 - - - - -
Robert V. Cuddihy, Jr. 1996 $200,000 $ - - - 70,000 - -
Chief Operating and 1995 $150,000 $100,000 - - - - -
Financial Officer 1994 $150,000 $125,000 - - - - -
L. Randy Riley 1996 $250,000 $ 70,000 - - 129,450 - -
Executive Vice President 1995 $210,000 $ - - - - - -
1964 $210,000 $ 70,000 - - - - -
</TABLE>
- -------
(1) Personal benefits provided to Messrs. Michael Wahl, Andrew Wahl, Cuddihy and
Riley did not exceed the disclosure thresholds established under SEC rules
and therefore are not included in this table.
Set forth below is information with respect to options to purchase the
Company's Common Stock granted in the year ended December 31, 1996 and prior
years under the Company's 1986, 1991 1993 and 1994 Stock Option Plans.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED EXERCISE
OPTIONS TO EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) IN FISCAL YEAR ($/Sh) DATE PRESENT VALUE $
- ---- ----------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael Wahl 140,000 23.3% $1.25 12/12/06 $43,050
Andrew Wahl 140,000 23.3% $1.25 12/12/06 $43,050
Robert V. Cuddihy, Jr. 70,000 11.7% $1.25 12/12/06 $21,525
L. Randy Riley 129,450 21.6% $1.25 12/12/06 $39,805
</TABLE>
5
<PAGE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF OPTIONS AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1996 AT DECEMBER 31, 1996
ACQUIRED ---------------------- -----------------------
ON VALUE UNEXER- UNEXER-
NAME EXERCISE REALIZED EXERCISABLE CISABLE EXERCISABLE CISABLE
- ---- -------- -------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Michael Wahl 184,572 $272,430 599,828 $ -
Andrew Wahl 516,750 $21,199
Robert V.
Cuddihy, Jr. 223,850 $14,981
L. Randy Riley 223,850 $ -
</TABLE>
EMPLOYMENT AGREEMENTS
Effective October 1, 1993, Michael Wahl became the Company's Chairman of
the Board and chief executive officer pursuant to a five year employment
contract ("Wahl Employment Agreement") at a base salary of no less than $250,000
per year. He is also entitled to receive such bonuses as may be awarded to him
from time to time by the Board in its sole discretion.
Upon termination of the Wahl Employment Agreement by the Company for any
reason other than for cause, the Company will be obligated to continue to make
salary payments to Mr. Wahl, or to his estate in the event of his death, for a
period of up to two years after such termination. The Wahl Employment Agreement
also precludes Mr. Wahl from competing with the Company for a period of two
years following termination of employment.
With the exception of Michael Wahl, none of the executive officers of the
Company is employed by the Company pursuant to an employment agreement.
COMPENSATION OF DIRECTORS
The Company's policy is to reimburse directors for travel and out-of-pocket
expenses incurred, if any, to attend its directors' meetings. See "Compensation
Committee Interlocks and Insider Participation".
DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
Although the Company has a Compensation Committee, the Board as a whole
rather than the Compensation Committee has set compensation for its executive
officers for each of the past three years. Four of such directors received cash
compensation as executive officers of the Company.
Effective October 1, 1993, Michael Wahl, who had previously been the chief
executive officer of HMG, became Chairman of the Board and Chief Executive
Officer of the Company pursuant to an employment agreement (the "Wahl
6
<PAGE>
<PAGE>
Employment Agreement"). In negotiating the Wahl Employment Agreement, the Board
of Directors determined that Mr. Wahl should receive a base salary equal to that
which he received under a five year employment agreement entered into in 1990
with HMG under the former owners. In order to induce Mr. Wahl to enter into such
prior employment agreement, HMG had agreed to pay Mr. Wahl the additional sum of
$1.0 million, of which $750,000 had been paid, with the balance payable to Mr.
Wahl in two installments of $125,000 each due in 1994 and 1995, respectively.
The Wahl Employment Agreement superseded Mr. Wahl's prior employment agreement
with HMG and released HMG from its obligation to pay Mr. Wahl these two
remaining $125,000 installments and provided for no new inducement payments. The
Board of Directors granted Mr. Wahl options to acquire the Company's Common
Stock in lieu of any such payments (the "Wahl Options").
Compensation levels afforded to Andrew Wahl, Robert V. Cuddihy, Jr., L.
Randy Riley and to the Company's other executive officers are based in
substantial part upon a comparative evaluation by the Company's Board of
Directors of each such person's functional responsibility and performance in
that particular segment of the Company's operations for which each is
responsible and, where discernable, the profitability of that segment.
During 1996, the Board approved the payment of bonuses and the grant of
stock options, to a number of employees, including executive officers. These
bonuses and grant of options were approved after considering the significant
transactions initiated and consummated by the executive officers on behalf of
the Company during the past year. The Board noted that the Company's executive
officers accomplishments included (i) renovated and expanded the Company's
140,000 square foot manufacturing facility in Reading, (ii) closed the first of
two New Jersey manufacturing facilities in May 1996 and moved its operations to
Reading, (iii) restructured the Company's New York and Chicago offices and
closed the Company's satellite sales office in Detroit Michigan, (iv) entered
into a one year lease agreement in September 1996 for a second facility in
Reading, with an option to extend the lease for an additional 5 years or to
exercise an option to purchase such facility for $1.2 million which is comprised
of 72,500 square feet of manufacturing and warehousing space on approximately 5
acres of property, (v) renovated and upgraded the Company's plastic injection
molding division in Reading, including the purchase of additional injection
molding equipment, in October and November 1996, (vi) consummated the Credit
Agreement in November 1996 with a financial institution whereby the Company
obtained a secured $11 million line revolving line of credit and term loan
facility, (vii) extended the Company's $32.2 million supply contract with Foster
Grant from seven to ten years expiring December 2005, continued the requirement
of Foster Grant to purchase a minimum of 70% of its annual in-store
merchandising display purchases from the Company and modified the minimum annual
dollar purchases required in any one given year to be no less than $2.5 million
per year, (viii) centralized a portion of the Company's purchasing operations in
New York, New Jersey, Pennsylvania and Illinois to better utilize and leverage
the Company's new consolidated plant operating capacity in Reading, (ix) closed
the second New Jersey manufacturing facility in December 1996 and moved its
operations to Reading, (x) closed, as of December 31, 1996, its European
operations, HMGBV, and (xi) expanded its client base during 1996 to include new
clients.
March 1, 1997
Michael Wahl, Chairman Herbert F. Kozlov
Andrew Wahl Robert V. Cuddihy, Jr.
L. Randy Riley Lawrence J. Twill, Sr.
7
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<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock (based on the market
price of the Company's Common Stock) with the cumulative total return of U.S.
companies on The Nasdaq Stock Market and non-financial companies on The Nasdaq
Stock Market.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1/1/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HMG Worldwide $100 $ 31 $346 $120 $106 $ 40
Nasdaq US $100 $116 $134 $131 $185 $227
Nasdaq Non-Financial $100 $109 $126 $121 $169 $206
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each member of the Board of Directors participated in the determination of
the level of compensation of the Company's executive officers. Five of such
directors are officers of the Company, i.e., Michael Wahl - Chief Executive
Officer, Andrew Wahl - President, Robert V. Cuddihy, Jr. - Chief Operating
Officer and Chief Financial Officer, L. Randy Riley - Executive Vice President,
and Herbert F. Kozlov - Secretary.
Herbert F. Kozlov, a director of the Company, is a member of Parker Duryee
Rosoff & Haft, counsel to HMG. Fees paid to such firm by the Company for the
year ended December 31, 1996 were approximately $200,000.
Lawrence J. Twill, Sr., a director of the Company, is President of Ashwood
Capital. Such firm, from time to time, also serves as an investment banking
advisor to the Company.
8
<PAGE>
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of July 7, 1997, the number and
percentage of shares of Common Stock held by all persons who, to the knowledge
of the Company, are the beneficial owners of, or who otherwise exercise voting
or dispositive control over, more than five (5%) percent of the Company's
outstanding Common Stock within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the holdings of all
officers and Directors of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF APPROXIMATE
BENEFICIAL HOLDER SHARES(1) PERCENTAGE OF CLASS
- ------------------- --------- --------------------
<S> <C> <C>
Michael Wahl 1,269,625(2) 13.7%
475 Tenth Avenue
New York, New York 10018
Andrew Wahl 722,703(3) 7.9%
475 Tenth Avenue
New York, New York 10018
Gilmour 1994 Jersey Trust 972,222(4)(5) 11.3%
7 Bond Street
St. Helier
Jersey, Channel Island
State of Wisconsin Investment Board 740,000 8.6%
P. O. Box 7842
Madison, Wisconsin 53707
Great Court Analysis LLC 640,000 7.4%
5150 Overland Avenue
Culver City, CA 90230
All executive officers 2,982,845(6) 28.5%
and directors as a group
(7 persons)
</TABLE>
- ---------
(1) Includes shares issuable pursuant to currently exercisable options and
options which will be exercisable within 60 days of July 7, 1997. Except as
otherwise indicated, the persons named herein have sole voting and
dispositive power with respect to the shares beneficially owned.
(2) Includes 599,828 shares issuable upon exercise of options.
(3) Includes 516,750 shares issuable upon exercise of options.
(4) The trustee of the Gilmour 1994 Jersey Trust (the "Trust") is Hill Samuel
(Channel Islands) Trust Company Limited. The directors of the trustee have
indirect shared voting and dispositive powers with respect to such shares.
(5) Does not include 35,000 shares beneficially owned by David Harrison Gilmour,
a primary beneficiary of the Trust, and 100,002 shares beneficially owned by
Mr. Gilmour's spouse.
(6) Includes 1,829,778 shares issuable upon exercise of options owned by such
executive officers and directors.
9
<PAGE>
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Friedman Alpren & Green to audit the
accounts of the Company for the fiscal year ending December 31, 1997. Such firm,
which has served as the Company's independent auditor since 1989 has reported to
the Company that none of its members has any direct financial interest or
material indirect financial interest in the Company.
Unless instructed to the contrary, the persons named in the enclosed proxy
intend to vote the same in favor of the ratification of Friedman Alpren & Green
as the Company's independent auditors.
A representative of Friedman Alpren & Green is expected to attend the
meeting and will be afforded the opportunity to make a statement and/or respond
to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1997 Annual
Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Exchange Act, must be
received by the Company's offices in New York, New York by April 7, 1998 for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.
10
<PAGE>
<PAGE>
APPENDIX 1
HMG WORLDWIDE CORPORATION
475 TENTH AVENUE
NEW YORK, NEW YORK 10018
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT V. CUDDIHY, JR. and HERBERT F. KOZLOV
as Proxies, each with the power to appoint his substitute, and hereby authorizes
them, and each of them, to represent and vote, as designated below, all the
shares of Common Stock of HMG Worldwide Corporation ('HMG') held of record by
the undersigned on July 7, 1997 at the Annual Meeting of Stockholders to be held
on Tuesday, August 12, 1997, or any adjournment thereof.
<TABLE>
<S> <C>
1. Election of Directors:
[ ] FOR all nominees listed below (except as marked to the [ ] WITHHOLD AUTHORITY to vote for all nominees listed
contrary below) below
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(Instruction: To withhold authority to vote for any individual nominee,
strike such nominee's name from the list below.)
Robert V. Cuddihy, Jr. Herbert F. Kozlov L. Randy Riley Lawrence J. Twill, Sr.
Andrew Wahl Michael Wahl
2. To ratify the selection of Friedman Alpren & Green as HMG's independent
auditors for the fiscal year ending December 31, 1997:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any
adjournment or postponement thereof.
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This proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
Dated ________________________, 1997
____________________________________
Signature
____________________________________
Signature if held jointly
Please sign exactly as name appears
below. 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 the President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
