SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement Confidential, for
Use of the
Commission Only (as
permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
MAIL BOXES ETC.
________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
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 date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration State No.:
________________________________________________________________________
(3) Filing Party:
____________________________MAIL BOXES ETC._____________________________
(4) Date Filed:
________________________________________________________________________
July 14, 1995
DEAR SHAREHOLDER:
You are cordially invited to attend our 1995 Annual Meeting of Shareholders
which will be held this year on Friday, August 25, 1995, at 10:30 A.M. at the
Wyndham Garden Hotel, at 5975 Lusk Boulevard, San Diego, California 92121.
Directions to the meeting are given on page 2 of this proxy statement.
The Notice of Annual Meeting and Proxy Statement which follow describe the
business to be conducted at the Meeting. We will also give a presentation 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 following Notice of
Annual Meeting and Proxy Statement, please be sure to complete, sign, date
and return your proxy card in the enclosed envelope.
If the address on the accompanying material is incorrect, please advise our
Investor Relations Department in writing at 6060 Cornerstone Court West, San
Diego, California 92121-3795.
Your vote is important. We will appreciate a prompt return of your signed
proxy card and look forward to seeing you at the meeting.
For the Board of Directors,
Anthony W. DeSio
Vice Chairman of the Board
President and Chief Executive Officer
Remember, please complete, sign, date and promptly
mail the enclosed Proxy Card in the enclosed envelope,
whether or not you plan to attend.
DIRECTIONS TO WYNDHAM GARDEN HOTEL
for
1995 ANNUAL SHAREHOLDERS MEETING
OF MAIL BOXES ETC.
WYNDHAM GARDEN HOTEL
5975 Lusk Boulevard
San Diego, California 92121
(619) 558-1818
DIRECTIONS:
From San Diego International Airport:
Go north on Interstate 5 to Route 52. Go east on Route 52 and take 805
north. Exit east-bound at Mira Mesa Boulevard and go east to Lusk Boulevard.
Turn left, and hotel is on the right.
MAIL BOXES ETC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 25, 1995
The 1995 Annual Meeting of Shareholders of Mail Boxes Etc. (the "Company")
will be held at the Wyndham Garden Hotel located at 5975 Lusk Boulevard, San
Diego, California on Friday, August 25, 1995, at 10:30 a.m., California time.
At the Annual Meeting, shareholders will consider and act upon the following
proposals:
1. The election of seven directors to hold office until their
successors are elected. Company management intends to present
the following persons as nominees for election to the Board of
Directors by the holders of the Common Stock: Michael Dooling,
Anthony W. DeSio, Robert J. DeSio, James F. Kelly, Daniel L. La
Marche, Harry Casari, and Joel Rossman.
2. Approval of the Mail Boxes Etc. 1995 Employee Stock Option Plan.
3. Approval of the Mail Boxes Etc. 1995 Stock Option Plan for
Non-Employee ("Outside") Directors.
4. Ratification of the Board of Directors' selection of Ernst &
Young LLP as independent auditors for the Company for fiscal
year ending April 30, 1996; and
5. Such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only shareholders of record on the books of the Company at the close of
business on June 26, 1995, will be entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. All shareholders are cordially
invited to attend the Annual Meeting in person. In order to assure a quorum,
all holders of Common Stock are urged to complete, sign and date the
accompanying Proxy card and return it promptly in the enclosed envelope.
Even if you return your Proxy card, you may nevertheless attend the meeting
and vote your shares in person.
By Order of the Board of Directors,
Bruce M. Rosenberg
Vice President, General Counsel
and Secretary
San Diego, California
July 14, 1995
MAIL BOXES ETC.
6060 Cornerstone Court West
San Diego, California 92121-3795
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 25, 1995
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Mail Boxes Etc., 6060 Cornerstone Court West,
San Diego, California 92121-3795 (the "Company") of your Proxy for use at the
Annual Meeting of Shareholders to be held August 25, 1995, or at any
adjournment thereof (the "Meeting"). This Proxy Statement and the
accompanying Proxy card are being mailed to all shareholders on or about July
14, 1995.
Any shareholder may revoke a Proxy at any time prior to its exercise
by filing a later-dated Proxy or a written notice of revocation with the
Secretary of the Company, or by voting in person at the Meeting. If a
shareholder plans not to attend the Meeting but desires to revoke an earlier
Proxy, a later dated Proxy or notice should be returned in time for receipt
not later than the close of business on the day preceding the Meeting.
On June 26, 1995, the record date fixed by the Board of Directors (the
"Board"), the Company had outstanding 11,071,875 shares of Common Stock.
Common Stock shareholders have one vote for each share on all business of the
Meeting, except that those shareholders may have cumulative voting rights
with respect to the election of seven Directors. No shareholder may cumulate
votes unless a shareholder has announced at the Meeting his intention to do
so, but if any shareholder makes such an announcement, all shareholders may
cumulate votes. Cumulative voting rights entitle a shareholder to give one
nominee as many votes as are equal to the number (seven) of Directors to be
elected, multiplied by the number of shares owned by him, or to distribute
his votes as he sees fit among two or more nominees on the same principle,
up to the total number of nominees to be elected. The seven nominees for
Director receiving the highest number of votes at the Meeting from the
holders of Common Stock will be elected.
With respect to voting on all matters other than election of
Directors, an affirmative vote of a majority of the shares represented and
voting at the meeting is required for approval of the matter. Abstentions
and broker non-votes are not counted as votes cast on any matter to which
they relate.
Summary Of Items To Be Voted Upon:
1. Election of Directors
2. Approval of 1995 Employee Stock Option Plan
3. Approval of 1995 Non-Employee (Outside) Directors Stock Option Plan
4. Ratification of the Board of Directors' selection of Ernst & Young LLP
as independent auditors for the Company for the fiscal year ending
April 30, 1996; and
5. Other Business.
A Proxy, if properly executed, duly returned and not revoked, will be voted
in accordance with the instructions contained thereon. As to the proposals
for which no instructions are given, such proxy will be voted FOR the
proposals contained thereon. The Proxy also confers discretionary authority
on the persons designated therein to vote on other business, not currently
contemplated, which may come before the Meeting.
SHARE OWNERSHIP
In addition to the Shareholders shown under the Section entitled Security
Ownership by Directors and Management on Page 10, the following table also
sets forth certain information regarding the ownership of the Company's
common stock as of April 30, 1995 for each person known to the Company to be
the beneficial owner of more than five per cent of the Company's common
stock. The shareholder listed below has sole voting and investment power
with respect to the shares beneficially owned.
Number of
Shares
Name and Address Beneficially Percent
of Beneficial Owners Owned of Class
-------------------- ------------- --------
United Parcel Service of 1,810,967 16.4%
America, Inc. (UPS)
55 Glenlake Parkway, N.E.
Atlanta, GA 30328
UPS acquired the stock under a Purchase Agreement dated September 14, 1990
("UPS Stock Purchase Agreement"), under which UPS also purchased warrants
giving it the right to acquire additional shares of Common Stock over a three
year period. In October 1991, UPS exercised its first series of warrants to
purchase an additional 355,555 shares of stock at a price of $10.125 per
share and in October 1992, UPS exercised its second series of warrants to
purchase an additional 355,554 shares of stock at a price of $12.15 per
share. The third warrant to purchase 355,554 shares of stock at $14.58 per
share was not exercised by UPS and expired on October 3, 1993.
(The foregoing number of shares of stock and stock purchase prices under
warrants are all as adjusted for a 4 for 3 stock split that was payable on
April 12, 1991, and a 2 for 1 stock split that was payable on April 13,
1992.)
Under the Stock Purchase Agreement, UPS was also granted a "right of first
offer" to purchase in the future any shares of MBE Common Stock to be sold by
certain principal shareholders of MBE. Principal shareholders of MBE are
identified in the Agreement as Anthony W. DeSio, Delores J. DeSio, the
Anthony W. DeSio and Delores J. DeSio Trust, Norman C. Roberts, the Norman C.
Roberts Trust, Michael Dooling, the Dooling Family Trust, and Jacaranda
Partners, L.P. ("Principal Shareholders").
In accordance with the terms of the UPS Stock Purchase Agreement, before
engaging in certain sales of MBE stock in excess of 533,333 shares in any 12
month period to any single person, entity, or group, each of the Principal
Shareholders is obligated to first offer to UPS the right to purchase such
shares of stock (in excess of 533,333) on the same terms and conditions as
are offered to the other person, entity, or group.
This right of first offer remains in effect until October 3, 1995, but does
not apply to certain sales made under SEC Rule 144 and does not apply to any
Principal Shareholder whose ownership of MBE stock decreases to 400,000
shares or less.
The right of first offer is more fully described in Section 6.09 of the UPS
Stock Purchase Agreement and reference should be made to the Agreement for a
definitive statement of that right.
ITEM NO. 1 - ELECTION OF DIRECTORS
Seven Directors are to be elected. Five of the nominees for Director were
elected as Directors at the last Annual Meeting of Shareholders.
At the last Board of Directors Meeting on May 23, 1995, the Board amended the
Bylaws to increase the number of authorized directors from six to seven.
Accordingly, an additional nominee has been selected by the Nominating
Committee for election to the Board. In addition, Director Richard J.
Greene, who was originally appointed to the Board by UPS under a stock
purchase agreement, will not stand for reelection to the Board. Another
nominee, Joel Rossman, has been proposed by UPS and approved by the
Nominating Committee to stand for election to the Board. The Board will
continue to consider qualified candidates to fill the positions of Director
in the future.
Directors serve for a term of one year and until their successors are duly
elected and qualified. Officers serve at the pleasure of the Board. During
the fiscal year ended April 30, 1995, the Company's Board of Directors held
four meetings, and each of the Directors attended at least 75% of the
meetings of the Board and the Committees on which they serve.
Committees of the Board include an Executive Committee, Audit Committee,
Compensation Committee, and Nominating Committee, the functions and
membership of which are described below.
The Executive Committee is empowered to exercise all the authority of the
Board, subject to certain limitations as prescribed by California law, during
the interval between regular Board meetings.
The Audit Committee's functions include making recommendations to the Board
of Directors on the selection of the Company's auditors, reviewing the
arrangements for and scope of the independent auditors' examination, meeting
with the independent auditors, the Board of Directors and certain Officers of
the Company to review the adequacy of internal controls and reporting, and
performing any other duties or functions deemed appropriate by the Board.
The Compensation Committee is responsible for making recommendations to the
Board of Directors regarding salaries and bonuses to be paid to Officers of
the Company. The Compensation Committee also serves as the Stock Option
Committee, which is responsible for the administration of the Company's Stock
Option Plan and the grant of options under the Plan.
The Nominating Committee's function is to identify and propose to the full
Board nominees to fill vacancies on the Board as they occur. The Nominating
Committee will consider persons brought to its attention by Officers,
Directors and Shareholders. Proposals may be addressed to the Nominating
Committee and mailed to the attention of the Secretary of the Company.
The members of the Executive Committee and Nominating Committee are Directors
Michael Dooling, Anthony W. DeSio, and James F. Kelly, and the members of the
Audit Committee and Compensation Committee are Directors Michael
Dooling, James F. Kelly, and Richard Greene.
The Audit, Compensation, and Nominating Committees each met once during the
fiscal year ended April 30, 1995. The Executive Committee did not meet
during the fiscal year ended April 30, 1995.
SECURITY OWNERSHIP BY DIRECTORS AND MANAGEMENT
<TABLE>
Set forth below are the beneficial shareholdings, as of April 30, 1995, of
the common stock of the Company held by the Directors, nominees for Director,
and named executive officers and Directors and executive officers as a group.
<CAPTION>
Shares of Percentage
Common Stock of Common
Owned Stock
Name Beneficially Outstanding
<S> <C> <C>
Michael Dooling 683,674 <F1> 5.7%
6060 Cornerstone Court
San Diego, CA 92121
Anthony W. DeSio 1,570,166 <F2> 13.2%
6060 Cornerstone Court
San Diego, CA 92121
Robert J. DeSio 159,210 <F3> 1.3%
Joel Rossman 0 <F4> --
James F. Kelly 33,652 *
Daniel L. La Marche 79,566 <F5> *
Gary S. Grahn 87,000 <F6> *
Bruce M. Rosenberg 138,602 <F7> 1.2%
Kenneth C. Sully 49,000 <F8> *
Directors and Execu- 2,987,872 <F9> 25%
tive Officers as a
Group (11 persons)
Directors, Executive 4,798,839 <F10> 40.2%
Officers and 10%
Shareholders as a Group
* Represents less than one percent (1%) of the Common Stock Outstanding
<FN>
<F1>
1. Includes 221,498 shares held by Mr. Dooling as General Partner of
Jacaranda Partners, and 8,912 shares held by Mr. Dooling's children
over which Mr. Dooling's wife retains sole voting control. Mr.
Dooling disclaims beneficial ownership of the shares held by his
children. The remainder of the shares are held in the Dooling family
trust of which Mr. Dooling and his wife are trustees and have voting
investment control.
</FN>
<FN>
<F2>
2. Includes 494,071 shares held by Mr. A.W. DeSio's wife and 463,631
shares held by the A.W. and Delores DeSio Trust. Mr. DeSio disclaims
all beneficial interests in shares held by his wife and one-half of
all beneficial interests in shares held by the Trust. Also includes
stock options under which Mr. A.W. DeSio has a right to acquire
285,160 of such shares pursuant to incentive stock options which are
currently exercisable as to 130,233 of the shares covered thereby.
</FN>
<FN>
<F3>
3. Mr. R.J. DeSio has a right to acquire 140,170 of such shares pursuant
to incentive stock options which are currently exercisable as to
85,208 of the shares covered thereby.
</FN>
<FN>
<F4>
4. Mr. Rossman is Vice President of Business Development at United Parcel
Service of America, Inc. (UPS). UPS owns 1,810,967 shares of stock.
Mr. Rossman does not have or share the voting or investment power with
respect to any such shares and disclaims beneficial ownership of all
such shares.
</FN>
<FN>
<F5>
5. These shares are held in the La Marche Family Trust, of which Mr. La
Marche is co-trustee with his wife and over which Mr. La Marche and
his wife have voting and investment control.
</FN>
<FN>
<F6>
6. Gary S. Grahn has a right to acquire 85,000 of such shares pursuant to
incentive stock options which are currently exercisable as to 22,500
of the shares covered thereby.
</FN>
<FN>
<F7>
7. Bruce M. Rosenberg has a right to acquire 127,893 of such shares
pursuant to incentive stock options which are currently exercisable as
to 72,639 of the shares covered thereby.
</FN>
<FN>
<F8>
8. Kenneth C. Sully has a right to acquire 49,000 of such shares pursuant
to incentive stock options which are currently exercisable as to
44,000 of the shares covered thereby.
</FN>
<FN>
<F9>
9. Includes 874,225 shares which may be acquired by the Directors and
Officers as a group, under incentive stock options, of which options
for 443,012 shares are currently exercisable by all Directors and
Officers as a group.
</FN>
<FN>
<F10>
10. Includes options to acquire stock as described in footnote 9 above.
</FN>
</TABLE>
Unless otherwise instructed by the Proxy, the shares represented by Proxies
on the accompanying form will be voted "FOR" the seven nominees named herein
for election by holders of Common Stock. In the event additional persons are
nominated, the proxyholders may cumulate and cast their votes, in their
discretion, among all or less than all of the above nominees or substitute
nominees in such proportions as the proxyholders see fit. The proxies cannot
be voted for a greater number of persons than the number of nominees herein.
Should any nominee decline or become unable to accept nomination or election,
which is not anticipated, the proxies will be voted for such substitute
nominee as may be designated by a majority of the Board.
BIOGRAPHICAL INFORMATION: The following biographical information is
furnished with respect to nominees for election as Directors.
Michael Dooling, 50, was elected Chairman of the Board of Directors of Mail
Boxes Etc. in May 1990. He has been a director since August 1987 and was
elected Vice Chairman of the Board in August 1988. Mr. Dooling has been the
General Partner of Jacaranda Partners, an investment partnership, since
January 1987.
Anthony W. DeSio, 65, was elected Vice Chairman of the Board of Directors of
Mail Boxes Etc. in May 1990, and has been a director, President and Chief
Executive Officer of Mail Boxes Etc. since November 1983. He has also been
President, Chief Executive Officer, and a Director of Mail Boxes Etc. USA,
Inc., a wholly-owned subsidiary of the Company, since January 1981. Prior to
that time, he was employed at The Brokerage, a San Diego business brokerage
firm. Mr. DeSio has held various management positions with Linkabit
Corporation, Western Union, General Electric Company and Lockheed Aircraft
Corporation. He spent two years in Washington, D.C., as a Presidential
interchange executive assigned to the Executive Office of the President of
the United States. Mr. DeSio is currently on the Board of Directors of the
Dwyer Group, a publicly traded franchising enterprise, located in Texas.
Anthony DeSio is the brother of Robert DeSio.
Robert J. DeSio, 60, has been a Director of Mail Boxes Etc. since July 1985
and is also Vice President of Franchise Services for Mail Boxes Etc. USA,
Inc., the Company's wholly-owned franchising subsidiary. From 1980 until
joining the Company in January 1983, Mr. R.J. DeSio owned and operated two
MBE Service Center franchises in San Diego and Oceanside, California. Mr.
DeSio has been in management of retail stores for over 25 years. Robert
DeSio is the brother of Anthony DeSio.
Joel Rossman, 42, has been selected as a nominee for the Board of Directors
of Mail Boxes Etc. pursuant to the Stock Purchase Agreement with United
Parcel Service of America, Inc. ("UPS"). Mr. Rossman is Vice President of
Business Development at UPS, the world's largest package delivery company,
headquartered in Atlanta, Georgia. Mr. Rossman joined UPS in 1970 and
has held various operational assignments, including District Sales Manager
and Director of Business Development for UPS in the Company's Asia Pacific
Region.
James F. Kelly, 57, has been a Director of Mail Boxes Etc. since January
1986. Mr. Kelly is Chairman and Chief Executive Officer of Kelly, Anderson,
Pethick & Associates, Inc., a Washington, D.C. based management consulting
firm. Prior to founding his management consulting firm in July 1984, Mr.
Kelly served five years as Deputy Associate Director of the U.S. Office of
Management and Budget (OMB) and five years as Director of Administrative
Management Policy at the U.S. Department of Interior.
Daniel L. La Marche, 66, has been a director of Mail Boxes Etc. since August
1985. Prior to joining the Company, Mr. La Marche served 15 years as
President and Chief Executive Officer of American Malleable Castings of
Marion, Ohio ("AMC"), resigning from that Company in 1985. Mr. La Marche was
a Vice President and Secretary at Mail Boxes Etc. from 1985 to 1986. From
1986 through 1990, Mr. La Marche was president and chief executive officer of
Integrated Marketing and Insurance Services, located in San Diego,
California, and since January 1991, has been acting as a consultant to that
firm.
Harry Casari, 59, has been selected as a nominee for the Board of Directors
of Mail Boxes Etc. by the Company's Nominating Committee. Mr. Casari is a
CPA and private investor. He was a partner at Ernst & Young LLP until his
retirement in September 1994. Mr. Casari was associated with Ernst & Young
for over 25 years. Mr. Casari is currently on the board of directors of
Infrasonics, Inc., Cohu, Inc., and ReadiCare, Inc., all of which are publicly
traded companies located in San Diego, California.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the nominees listed
above.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the annual and long-term
compensation for the Company's Chief Executive Officer and the next four most
highly compensated executive officers ("Named Executives") of the Company,
for fiscal years ending April 30, 1995, 1994 and 1993.
<TABLE>
Summary Compensation Table: Long-Term
<CAPTION> Compensation
Annual Compensation Awards
Fiscal -------------------------------------- ------------
Name and Year Other Stock All Other
Principal Ended Salary Bonus Annual Options Compensation
Position April 30 ($) ($) Compensation <F11> (#) ($)
<S> <C> <C> <C> <C> <C> <C>
A.W. DeSio 1995 248,458 66,000 20,444 10,000 3,485 <F12>
President, CEO
and Vice Chairman 1994 226,633 25,000 46,320 30,000 3,036
of the Board
1993 211,484 48,491 18,199 45,000 2,712
Robert J. DeSio 1995 86,238 22,500 7,794 15,000 ---
Vice President -
Franchise Services 1994 79,366 10,500 7,911 17,000 ---
Director of Board
1993 75,941 16,000 10,152 20,000 ---
Gary S. Grahn 1995 89,655 26,000 10,109 15,000 ---
Vice President and
Chief Financial 1994 80,765 14,000 5,311 25,000 ---
Officer
1993 60,004 20,000 1,010 20,000 ---
Bruce M. Rosenberg 1995 86,218 24,000 14,483 15,000 ---
Vice President,
General Counsel and 1994 78,851 11,000 8,766 17,000 ---
Secretary
1993 75,028 18,000 12,262 20,000 ---
Kenneth C. Sully * 1995 89,507 21,000 14,215 20,000 ---
Vice President -
Franchise Development 1994 77,751 11,000 8,601 20,000 ---
1993 71,273 21,000 9,997 20,000 ---
* Mr. Sully resigned from his position with the Company effective April 30,
1995.
<FN>
<F11>
This amount includes employer matchin contributions and profit sharing
under the Company's 401(k) Plan and payments for unused vacation and/or
sick leave.
</FN>
<FN>
<F12>
These amounts are the value of the Company's contributions for the purchase
of a split dollar life insurance policy.
</FN>
</TABLE>
Option Grants in FY1995
Information concerning FY1995 grants to and exercises by the Chief Executive
Officer and the other Named Executives is provided below.
<TABLE>
Individual Grants:
<CAPTION>
Potential
Realizable Value
% of Total at Assumed
Options Annual Rates of
Options Granted Exercise Stock Price
Granted to Price Expriation Appreciation for
Name (#) <F13> Employees ($/Sh) Date Option Term <F14>
5% 10%
<S> <C> <C> <C> <C> <C> <C>
A.W. DeSio 10,000 6% 6.81 8/1/04 42,800 108,500
Robert J. DeSio 15,000 9% 6.81 8/1/04 64,200 162,750
Gary S. Grahn 15,000 9% 6.81 8/1/04 64,200 162,750
Bruce M. Rosenberg 15,000 9% 6.81 8/1/04 64,200 162,750
Kenneth C. Sully 20,000 12% 6.81 8/1/04 85,600 217,000
<FN>
<F13>
Under the terms of the 1985 Stock Option Plan, the per share option price is
the fair market value of MBE stock on the date of grant, and the term of an
option is ten years. The options vest at a rate of 25% per year and expire
ten years after the date of grant. The exercise price may be paid by cash
or delivery of already owned shares. All grants of options include a
"reload" feature which permits the optionee to pay the exercise price by
tendering MBE common stock to the Company, which in turn gives the optionee
the right to purchase the same number of shares tendered, at a price equal
to the fair market value on the exercise date. Under the Plan, all options
will also vest immediately in the event of the optionee's disability or
death and in the event that the Company enters into an agreement to dispose
of all or substantially all of the assets of the corporation or if there is
a change in control of the stock of the corporation.
</FN>
<FN>
<F14>
As required by the Securities and Exchange Commission, the dollar amounts in
the last two columns represent the hypothetical gain or "option spread" that
would exist for the options based on assumed 5% and 10% annual compounded
rates of stock price appreciation over the full option term. These assumed
rates of appreciation applied to the price on the date of the award of these
options would result in a Common Stock price on August 1, 2004, of $11.09
an $17.66, respectively. If these price appreciation assumptions are applied
to all of the Company's outstanding Common Stock on the date of such award,
such as Common Stock would appreciate in the aggregate by approximately
$47,350,000 and $120,000,000, respectively, over the ten-year period ending
on August 1, 2004. These prescribed rates are not intended to forecast
possible future appreciation, if any, of the Common Stock.
</FN>
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES FY1995
AND FISCAL YEAR END OPTION/SAR VALUES
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money
Shares Options/SARs Options/SARS
Acquired Value at FY End (#) at FY End ($) *
on Exercise Realized
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
A.W. DeSio 140,000 438,800 90,114 195,016 30,396 157,000
Robert J. DeSio -0- -0- 70,958 69,212 176,386 91,328
Gary S. Grahn -0- -0- 43,750 41,250 -0- 96,800
Bruce M. Rosenberg -0- -0- 72,639 55,254 99,341 96,800
Kenneth C. Sully -0- -0- 59,000 30,000 19,350 69,875
</TABLE>
* Values were calculated based on a closing market price of $10.13 for
MBE common stock on April 28, 1995.
PERFORMANCE GRAPH
The following table and graph shows a comparison of five year cumulative
total return to shareholders for the Company, Standard & Poor's (S&P") 500
Stock Index, S&P Small Cap 600 Stock Index, and the Nasdaq Retail index,
which is a composite index selected by the Company for the period of five
fiscal years commencing May 1, 1990 and ended April 30, 1995. The S&P Small
Cap 600 Stock Index has only recently become available and is included for
the first time as another comparative index. The Company intends in future
years to show comparisons with only the S&P 500 index and the S&P Small Cap
600 index, and to omit the Nasdaq retail index. Accordingly, all three
indexes are shown for the current year, but the Company intends to show only
two comparative indexes in the future.
<TABLE>
<CAPTION>
5/1/90 4/30/91 4/30/92 4/30/93 4/30/94 4/30/95
<S> <C> <C> <C> <C> <C> <C>
MBE $100 $154 $249 $197 $114 $140
S&P 500 100 118 134 147 154 181
S&P SMALLCAP 600 100 106 126 149 170 181
NASDAQ 100 138 167 156 171 166
Retail Index
</TABLE>
Notes: (1) Assumes $100 invested on May 1, 1990 in MBE Common Stock
and each of the indexes and that all dividends were
reinvested.
EMPLOYMENT CONTRACTS
On April 29, 1992, the Company and Anthony W. DeSio agreed to extend the term
of the written employment agreement under which Mr. A. W. DeSio is employed
as the Company's President and Chief Executive Officer. The renewed
agreement extended from May 1, 1991 and provides that Mr. DeSio would be
employed as the Company's CEO, until April 30, 1996.
Under the agreement, Mr. DeSio received a base salary of $248,458 in fiscal
year 1995. In addition, the agreement provides for an annual bonus payment
based on the percentage increase in earnings per share (EPS) of the Company's
common stock. As additional long term compensation, Mr. DeSio is entitled to
receive incentive stock options under the Company's stock option plan, in an
amount to be determined by the Board of Directors, at a price equal to
the fair market value of the stock on the date of grant.
Under the employment agreement, the Company also agreed to obtain a split
dollar life insurance policy for the benefit of Mr. A. W. DeSio in an amount
which is to be determined and reviewed on an annual basis by the Compensation
Committee and the Board. The Company will retain an equity interest in the
policy to the extent of its contributions. The intended face value of the
policy is approximately $5 million. In FY1993 and FY1994, the Company
contributed an aggregate of $200,000 towards the funding of the policy, and
in FY1995, the Company contributed $100,000 towards funding the policy. For
the subsequent five years, through FY2000, the Company intends to contribute
amounts of approximately $100,000 per year to fund the policy provided that
the cash value of the Company's interest in the policy is equal to its
contributions and none of such contributions will have any negative impact on
the Company's earnings. At the end of FY2000, the policy is expected to be
fully funded, and no further contributions are contemplated.
Following his employment as CEO, or his election to take earlier retirement,
the agreement provides that Mr. DeSio is to be retained as a consultant to
the Company for a period of 5 years. Under the consulting provisions of the
agreement, Mr. DeSio would be available to provide consulting services as
specified by the Board of not more than 20 hours per week. Mr. DeSio's
compensation under the consulting agreement would be one half of the base pay
that was in effect on the date of termination of his full-time employment.
During the consulting phase, a bonus payment would be established by the
Board of Directors, instead of the formula for bonuses based on increases in
EPS as described above.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") of the Company's Board of Directors
is comprised of 3 directors who are not employees of the Company. The
Committee determines the CEO's compensation and, upon recommendation of the
CEO, reviews and approves all executive officers' compensation, including
salary, bonus payments, and awards under the Company's stock option plan.
The Committee has provided the following report on the CEO's compensation,
the compensation policies of the Company as they apply to its executive
officers and the relationship of Company performance to executive
compensation.
Overall Philosophy
The Company's overall executive compensation philosophy is based on the
premise that compensation should be aligned with and should support the
Company's business strategy and long-term goals and should enhance
shareholder value. Under the guidance of the Committee, compensation
policies have been designed that the Committee believes link executive
compensation to the attainment of the Company's specific goals, and which
will allow the Company to attract and retain those executives critical to the
long-term success of the Company by recognizing and rewarding their
contributions. The key elements of executive compensation are base salary,
annual incentive awards, and stock options.
Base Salary
In April 1992, the Board of Directors agreed to extend the written employment
agreement for the Company's CEO, A. W. DeSio. At that time, the Committee
reviewed and established the base salary of the CEO based on a combination of
factors, including revenue growth, asset growth, earnings per share growth,
return on equity, and comparison to executive compensation in other
comparable growth companies. In accordance with the Agreement, Mr. A. W.
DeSio's base compensation was $248,458 for FY1995.
The Committee also reviews and approves the salary levels and annual
adjustments for the other executive officers of the Company. The salary
levels for the other officers are based on the performance of each Officer,
while taking into consideration the performance of the Company as measured by
a combination of factors specified above.
Annual Bonus Plan
The annual bonus plan for the officers of the Company is designed to closely
align the interests of the officers with the interests of the shareholders of
the Company. As set forth in Mr. A. W. DeSio's employment agreement, an
annual bonus is paid to the CEO in accordance with the growth in earnings per
share (EPS) of the Company's common stock. In addition, in the event that
there is no growth in earnings per share over the prior year, but there is
still substantial net income, the Committee has decided to pay a
discretionary bonus to the CEO and other officers, which is less than the
bonus otherwise received. So that the interests of the other officers are
similarly aligned, the officers are also eligible to receive annual bonuses
in accordance with the increase in earnings per share, with adjustments made
by the CEO to each individual officer's bonus, as well as discretionary
bonuses based on net income.
Based on the previously described bonus arrangements, the CEO's bonus for
FY1995 was $66,000.
Stock Options
The Committee believes that there is a strong correlation between stock
ownership and management performance. Accordingly, one of the major
components of the officers' compensation is from the grant of stock options
which helps to align their interests with those of the shareholders. In
addition, the grant of stock options may sometimes be used as an additional
incentive to encourage extraordinary efforts by management or individual
officers.
Stock options are classified as long-term incentives and are intended to link
the long-term interests of the executive with those of the Company's
shareholders. Stock options will provide value to the optionee only when the
price of MBE stock increases above the option price. All options are granted
at fair market value, vest at the rate of 25% per year, and expire either
five years after vesting or ten years after grant. The number of options
granted is within the discretion of the Compensation Committee, which does
consider the number of options granted in previous years.
Based on the guidelines described above, Mr. A. W. DeSio was granted options
to buy 10,000 shares in August 1994.
Compensation Committee
James F. Kelly, Chairman
Michael Dooling
Richard J. Greene
REIMBURSEMENT OF DIRECTORS
Directors receive fees of $1,750 plus expenses for each meeting attended. In
addition, members of the Executive Committee, Audit Committee, and
Compensation Committee receive $1,500 per year (and the Compensation
Committee Chairman receives $2,750 per year). No fees are paid to members of
the Nominating Committee. Directors who are also employees receive no
compensation for performing their duties as Directors.
Under the Stock Option Plan for Non-Employee ("Outside") Directors which was
approved by the Board on May 23, 1995 and is being presented to the
shareholders for approval, the outside directors will forego all future
compensation in connection with attendance at Board meetings and will only
receive a one-time grant of stock options, which will vest over a five year
period. The term of the Plan is five years, and any new director who is
appointed or elected to the Board in the future, but prior to December 31,
2000, will also receive a one-time grant of stock options at the then current
market price.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of the Company's
equity securities to file reports of ownership and changes in ownership of
such equity securities with the Securities and Exchange Commission ("SEC").
Directors, officers and greater than 10% Shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on a review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the
Company believes that during fiscal year 1995 its directors, officers and
greater than 10% beneficial owners complied with all Section 16(a) filing
requirements, except that Mr. Anthony W. DeSio, acquired 64,233 shares
through the exercise of stock options on May 2, 1994, but did not file a Form
4 until July 8, 1994.
TRANSACTIONS WITH MANAGEMENT
The Company is currently involved in two transactions with Ralph Askar, who
assumed the position of Vice President - Franchise Development in June 1995.
Before assuming that position, Mr. Askar had owned the MBE Area Franchise for
the state of Colorado for over seven years. In January 1995, the Company
repurchased the Colorado Area Franchise from Mr. Askar for the sum of $1.7
million. Mr. Askar received an $800,000 initial payment, with the balance of
$900,000 to be paid over ten years at an interest rate of 8%.
In May 1995, in connection with Mr. Askar's acceptance of his position as
Vice President of Franchise Development, the Company loaned Mr. Askar
$200,000 to assist him in the purchase of his primary residence in San Diego.
That loan, made under a note which bears interest at 9%, is due and payable
in six months.
ITEM NO. 2 - APPROVAL OF THE MAIL BOXES ETC. 1995
EMPLOYEE STOCK OPTION PLAN
There will be presented to the meeting a proposal to adopt the 1995 Employee
Stock Option Plan (the "Plan"). The Plan will replace the 1985 Employee
Stock Option Plan which, by its terms, expires on March 12, 1996. The
Company's experience with stock options has convinced the Board of Directors
of the important role of stock options in attracting and retaining the
services of experienced and qualified employees and in encouraging such
employees to have a greater financial investment in the Company.
Summary of the Stock Option Plan
The following is a summary description of the Stock Option Plan and is
qualified in its entirety by reference to the text of the Stock Option Plan
which is set forth as Appendix A to this Proxy Statement.
Purpose. The purpose of the Stock Option Plan is to provide increased
incentives to employees, to encourage new employees to become affiliated with
the Company and to associate more closely the interests of such persons with
those of the Company.
Administration. The Stock Option Plan is administered by the
Compensation Committee, ("Committee") which consists of at least two members
appointed by the Board of Directors. No member of the Committee is eligible
to participate in the Stock Option Plan, nor may any person be appointed to
the Committee unless he or she was not eligible to participate in the Stock
Option Plan or any other plan of the Company at any time within the one-year
period immediately prior to such appointment as provided in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended.
Subject to the express provisions of the Stock Option Plan, the Committee has
the authority and sole discretion to determine those employees of the Company
to whom options are granted under the Stock Option Plan, the number of shares
covered by and the terms and conditions of the options to be granted, and the
time or times when options are granted. The Committee also has authority to
alter any restrictions or conditions upon options, adopt rules and
regulations, and make all other determinations deemed necessary or desirable
for the administration of the Stock Option Plan.
Eligible Participants. Options under the Stock Option Plan may only
be granted to those employees of the Company and its subsidiaries who are
compensated through the payment of an annual salary.
Shares Subject to the Stock Option Plan. If the proposed Plan is
approved by the stockholders at the Meeting, a total of 3,000,000 shares of
Common Stock will be issuable upon exercise of options granted or which may
be granted under the Stock Option Plan. The shares of Common Stock to be
issued upon exercise of options granted under the Stock Option Plan will
be authorized and unissued shares. If any option granted under the Stock
Option Plan expires or terminates for any reason without having been
exercised in full, the remaining shares covered thereby will be available for
grant under additional options under the Stock Option Plan.
Stock Options. The Committee may grant either Incentive Stock Options
which meet the requirements of Section 422 of the Internal Revenue Code of
1986, as amended, or stock options which are not qualified as Incentive Stock
Options.
Limitation on Grant of Options. The aggregate fair market value of
the Common Stock (determined as of the time of the grant of any option
designated as an Incentive Stock Option) with respect to which options
designated as Incentive Stock Options are exercisable for the first time by
an employee during any calendar year, may not exceed $100,000.
Option Price. The price at which any shares of Common Stock may be
purchased pursuant to the exercise of an option granted under the Stock
Option Plan is fixed by the Committee. In the case of an Incentive Stock
Option, the purchase price may not be less than the fair market value of the
Common Stock on the date of grant of the option (or, in the case of holders
of at least 10% of the Company's outstanding Common Stock, 110% of the fair
market value on such date), without regard to any restrictions other than
those restrictions which by their terms will never lapse.
Exercise of Options. Each option granted under the Stock Option Plan
shall continue in effect for such period as the Committee shall determine,
provided that no option, or installment thereof, may be exercisable
subsequent to ten years from the date of grant (five years from the date of
grant in the case of options issued to 10% stockholders). No option may be
exercisable beyond three months after the date upon which the option holder
ceases to be an employee of the Company, except that in the event of
termination of employment by reason of death or disability, the option may be
exercised by the holder or his legal representative for a period of up to
three years after termination of employment. If an option holder ceases to
be an employee of the Company for any reason other than retirement or death,
such option will terminate as of the date of cessation of employment.
The purchase price for the shares of Common Stock may be paid in cash, by
deferred payment approved by the Committee, by delivery of shares of Common
Stock, or any combination of cash and Common Stock as the Committee may
permit. The Company may require as a condition to the exercise of an option,
that the option holder pay the amount of any tax which the Committee
determines is required to be withheld.
Transfer Restrictions. An option is exercisable only by the holder
during his or her lifetime, and no option is assignable or transferable by
the holder except by will or the laws of descent and distribution.
Changes in Common Stock. If the Company is a party to any merger,
consolidation, purchase of property or stock, separation or reorganization or
liquidation, the Board of Directors (or if the Company is not the surviving
corporation, the board of directors of the surviving corporation) has the
authority to make arrangements, which will be binding on option holders,
for the substitution of new options for, or the arrangements, which will be
binding on option holders, for the substitution of new options for, or the
assumption by another corporation of, any options then outstanding under the
Stock Option Plan.
In the event of a merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, or other change in Corporate structure affecting
the Common Stock, the Committee will conclusively determine the appropriate
adjustment to be made in the exercise prices of outstanding options and in
the number and kind of shares as to which outstanding options will be
exercisable.
In the event of any of the foregoing transactions, the total number of shares
of Common Stock on which options may be granted under the Stock Option Plan
will be appropriately adjusted by the Committee.
Indemnity. Neither the Board of Directors nor the Committee, nor any
employees of the Company shall be liable for any act, omission,
interpretation, construction or determination made in good faith in
connection with their responsibilities under the Stock Option Plan. The
Company has agreed to indemnify the members of the Board of Directors, the
members of the Committee, and the employees of the Company in respect of any
claim, loss, damage or expense (including counsel fees) arising from any such
act, omission, interpretation, construction or determination to the full
extent permitted by law.
Amendment, Termination and Duration of the Stock Option Plan. The
Board of Directors may amend, suspend or terminate the Stock Option Plan in
whole or in part. The Board may not, however, materially increase the
benefits accruing to option holders, increase the number of shares of Common
Stock reserved for issuance pursuant to the Stock Option Plan or materially
modify the requirements to be a participant in the Stock Option Plan without
stockholder approval. Except as otherwise provided in the Stock Option Plan,
no amendment, suspension or termination of the Stock Option Plan may affect
the rights of any option holder without such option holder's consent. The
Stock Option Plan will terminate on May 22, 2005. No option may be granted
under the Stock Option Plan thereafter, but such termination will not affect
the validity of options granted prior to the date of termination.
Federal Income Tax Consequences. The grant of an incentive stock
option or a nonqualified stock option would not result in income for the
option holder or in a deduction for the Company.
The exercise of a nonqualified stock option would result in ordinary income
for the option holder and a deduction for the Company measured by the
difference between the option price and the fair market value of the shares
received at the time of exercise. Income tax withholding would be required.
The exercise of an incentive stock option would not result in income for the
option holder if the holder (i) does not dispose of the shares within two
years after the date of grant or one year after the transfer of shares upon
exercise and (ii) is an employee of the Company or a subsidiary of the
Company from the date of grant until three months before the exercise date.
If these requirements are met, the basis of the shares upon later disposition
would be the option price. Any gain will be taxed to the employee as
long-term capital gain and the Company would not be entitled to a deduction.
The excess of the market value on the exercise date over the option price is
an item of tax preference, potentially subject to the alternative minimum
tax.
If the employee disposes of the shares prior to the expiration of either of
the holding periods, the employee would recognize ordinary income and the
Company would be entitled to a deduction equal to the lesser of the fair
market value of the shares on the exercise date minus the option price or the
amount realized on disposition minus the option price. Any gain in excess of
the ordinary income portion would be taxable as long-term or short-term
capital gain.
Shareholder Approval
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock represented and voted at the Meeting is required for
approval of the 1995 Employee Stock Option Plan.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR
approval of the Employee Stock Option Plan.
ITEM NO. 3 - APPROVAL OF MAIL BOXES ETC. 1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE ("OUTSIDE") DIRECTORS
On May 23, 1995, the Board of Directors adopted, subject to approval
by the Company's stockholders, the 1995 Stock Option Plan for Non-Employee
("Outside") Directors (the "Plan"). Outside Directors are directors who are
not employees of the Company, or any of its subsidiaries or affiliates.
Under the Plan, all Outside Directors will forego all of their ordinary cash
compensation which they receive for attendance at Board meetings, and,
instead receive only stock options. The Outside Directors serving on various
Committees would still receive cash compensation for Committee service.
Currently, that compensation ranges in amounts from $1,500 to $2,750 per
year. See page 21 of this proxy statement for a further explanation of the
compensation paid to Directors.
The Board believes that this Plan will also assist the Company in
attracting, retaining and compensating outside directors and provide them
with a personal financial stake in the Company. The Board also believes the
Plan will be beneficial to the Company and its stockholders by underscoring
the common interests of the Directors with stockholders in increasing the
value of the Company's stock over the long term.
If the Plan is approved by the shareholders, the Board intends to
eliminate all other cash compensation ordinarily payable to the Outside
Directors, except for out-of-pocket expenses and cash compensation paid to
those directors for service on the Board Committees, as described under
"Reimbursement of Directors, at page 21."
Description of the Plan
The following summary description of the Plan is qualified in its
entirety by reference to the full text of the Plan, which is attached to this
Proxy Statement as Appendix B.
If approved by the Company's stockholders, the Plan will provide for
a single one-time grant of options to purchase 20,000 shares of Common Stock
(subject to adjustment as provided in the Plan) to each current Outside
Director who has been nominated or renominated for election to the Board.
For Fiscal Year 1996, the Plan would provide a grant of options to Messrs.
Dooling, Kelly, La Marche, Casari, and Rossman. The grant to Mr. Rossman
would be beneficially assigned to United Parcel Service and all beneficial
interests in those options would accrue to UPS directly. Each option grant
will vest in equal installments over five years, have a ten-year term, and
will permit the holder to purchase shares at their fair market value on
the date the option was granted. Payment for shares to the Company may be in
cash, Common Stock, or a combination thereof. The Plan will expire, unless
earlier terminated, on December 31, 2000.
Option grants under the Plan have been made as of May 23, 1995, the
date of approval of the Plan by the Board, subject to final approval by the
Shareholders. If the Plan is not approved by the shareholders, all option
grants will be immediately rescinded.
The following table sets forth summary information concerning the
value of option grants to all eligible Outside Directors under the Plan,
based on the assumption that such grants have been made on May 23, 1995, at
the closing price of $8.25 per share.
<TABLE>
OUTSIDE DIRECTOR STOCK OPTION PLAN BENEFITS
<CAPTION>
Number of
Plan Participant Stock Options Dollar Value
---------------- ------------- ------------
<S> <C> <C>
Michael Dooling 20,000 $25,000
James F. Kelly 20,000 25,000
Daniel L. La Marche 20,000 25,000
Harry Casari 20,000 25,000
Joel Rossman 20,000 25,000
</TABLE>
The dollar value shown above reflects the increase of $1.25 in the
fair market value of the Common Stock between May 23, 1995, the date of
grant, and June 30, 1995, when the closing price of the stock was $9.50 per
share.
All options will expire ten years after the date of grant, subject to
Plan provisions relating to permanent disability or death. If a
participating director terminates service on the Board as the result of
permanent disability or death, all previously granted options will become
immediately exercisable, but must be exercised within three years of such
termination of service, and in any event within ten years of grant. If a
participating director terminates service on the Board for any reason other
than permanent disability or death, his or her outstanding options may be
exercised only to the extent that they were exercisable at the time of such
termination and expire three months after such termination. Each option will
be non-assignable and non-transferable other than by will or the laws of
descent and distribution.
An aggregate of 260,000 shares of common stock will be subject to the
Plan. Shares subject to options that terminate unexercised will be available
for future option grants. Adjustments will be made in the number and kind of
shares subject to the Plan and outstanding options, and in the purchase price
of outstanding options, in the event of any change in the Company's
outstanding shares by reason of any stock split or stock dividend,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change.
Administration
The Plan will be administered by the Board of Directors or a Committee
appointed by the Board. The Board or Committee will be authorized to
interpret the Plan, establish and amend rules relating to the Plan and make
other determinations necessary or advisable for the administration of the
Plan, but will have no discretion with respect to the selection of directors
to receive options, the number of shares subject to the Plan or to each grant
or the purchase price for shares subject to option. The Board or Committee
will also have no authority to increase Plan benefits materially.
The Board or Committee may terminate the Plan at any time or amend it
in whole or in part, except that the provisions specifying amounts, pricing
and timing of grants may not be amended other than to comport with specified
changes in applicable law. In addition, any amendment that increases the
number of shares subject to the Plan or to any option or extends the period
during which options may be granted will require approval by the Company's
stockholders.
Certain Federal Income Tax Considerations
The options granted under the Plan will be non-statutory
("non-qualified") options not intended to qualify under Section 422 of the
Internal Revenue Code. The grant of non-qualified options will not result in
taxable income to the director or a tax deduction for the Company. The
exercise of a non-qualified option will result in taxable ordinary income to
the director and a corresponding deduction for the Company, in each case
equal to the difference between the fair market value of the shares on the
date the option was granted (the option price) and their fair market value on
the date the option was exercised.
Shareholder Approval
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock represented and voted at the Meeting is required for
approval of the Stock Option Plan for Outside Directors.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR
approval of the Stock Option Plan for Outside Directors.
ITEM NO. 4 - RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS
The firm of Ernst & Young LLP was selected by the Audit Committee of the
Board of Directors to serve as independent auditors for the Company with
respect to the fiscal year ending April 30, 1996.
A resolution will be presented to the meeting for ratification by
shareholders of the Company of the appointment by the Board of Directors of
Ernst & Young LLP as independent auditors to audit the books and records of
the Company for fiscal year 1996 and to perform other appropriate services.
If the shareholders do not approve the proposal, the Board of Directors will
reconsider its actions with respect to the appointment of independent
auditors. Even if the selection is ratified, the Board of Directors, in its
discretion, may direct the appointment of a different independent auditing
firm at any time during the year if the Board of Directors feels that such a
change would be in the best interests of the Company and its shareholders.
It is expected that one or more representatives of Ernst & Young LLP will be
present at the meeting. The representative will have the opportunity to make
a statement and to respond to appropriate questions.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR ratification of the
selection of Ernst & Young LLP as independent auditors for the fiscal year
1996.
OTHER BUSINESS
The Company does not know of matters other than the foregoing that will be
presented for consideration at the meeting. However, if other matters
properly come before the meeting, it is the intention of the proxy holders to
vote the shares represented by the Proxies in accordance with their best
judgement.
The Company bears the cost of this solicitation. Proxies may be solicited by
mail, telephone, telegraph or personally by Directors, officers or regular
employees of the Company without remuneration other than normal employees'
salaries. The Company will reimburse persons holding shares in their names
or in the names of their nominees for expenses of forwarding proxy materials
to their principals. Brokerage houses, custodians, nominees and fiduciaries
will be reimbursed by the Company for their reasonable expenses incurred in
forwarding the Board's soliciting material to the Company's beneficial
shareholders.
SHAREHOLDER PROPOSALS FOR 1996 PROXY STATEMENT
Shareholders may submit proposals to be considered for inclusion in
the Company's proxy statement for next year's annual meeting of shareholders,
consistent with the regulations of the Securities and Exchange Commission.
Such proposals must be received by the Secretary of the Company not earlier
than February 15, 1996 and not later than March 15, 1996.
By Order of the Board of Directors
Bruce M. Rosenberg
Vice President, General Counsel
and Secretary
July 14, 1995
APPENDIX A
MAIL BOXES ETC.
1995 EMPLOYEE STOCK OPTION PLAN
A Stock Option Plan is hereby adopted for the benefit of officers and
key employees of Mail Boxes Etc. and its subsidiaries, hereinafter sometimes
referred to, collectively, as the "Company".
1. Purpose. The purpose of the Plan is to advance the growth and
prosperity of the Company and its shareholders by providing for
officers and key management employees an incentive to serve and to
continue service with the Company. By encouraging such officers and
key management employees to become owners of the stock of Mail Boxes
Etc., the Company seeks to attract and retain in its employ people
with training, experience and ability, and to furnish additional
incentive to employees upon whose judgment, initiative and efforts the
successful conduct of its business depends. It is the intention of
the Company that this objective will be accomplished through the
granting of incentive stock options and non-qualified stock options to
officers and key employees. Nothing contained in this Plan or the
related Stock Option Agreements shall be deemed to confer any rights
upon the holder of the option to be employed by the Company for any
period of specific duration.
The Compensation Committee, appointed by the Board of Directors shall
have full discretion to grant stock options within the limits herein
prescribed.
2. Definitions. As used herein:
(a) The word "Committee" refers to the Compensation Committee of the
Board of Directors of Mail Boxes Etc.
(b) The word "Plan" refers to the Mail Boxes Etc. 1995 Stock Option
Plan.
(c) The word "Company" refers to Mail Boxes Etc. and its
subsidiaries. The term "subsidiary" shall mean any present or
future corporation which would be a "subsidiary corporation" of
the Company as the term is defined in Section 424 of the
Internal Revenue Code of 1986, as amended.
(d) The words "option" or "options" or "stock option" or "stock
options" refer generally to a stock option or options giving the
optionee the right to purchase shares in Mail Boxes Etc. An
"incentive stock option" is an option granted hereunder, and
intended to be qualified for favorable tax treatment as an
Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended. A "non-qualified stock option" is an
option granted hereunder and intended not to qualify for
favorable tax treatment as an Incentive Stock Option under
Section 422 of the Internal Revenue Code of 1986, as amended.
(e) The words "Eligible Employee" or "Employee" refer to officers
and key employees of the Company, including newly employed
executives, who may be so designated from time to time by the
Committee, in its discretion, and who are compensated through
the payment of an annual salary.
3. Term and Effective Date of Plan. The term of the Plan shall be for
ten (10) years from its effective date, designated by the Board of
Directors of Mail Boxes Etc. as May 23, 1995, if ratified and approved
by a majority vote of the shares represented and voting at
shareholders meeting to be held on or before May 22, 1996. Options
may be granted under this Plan from and after the effective date.
However, no options granted under this Plan may be exercised, and no
shares shall be issued under this Plan, until the Plan is approved by
the Company's shareholders. If such shareholder approval is not
obtained prior to May 22, 1996, then all options previously granted
under this Plan shall terminate and cease to be outstanding, and no
further options shall be granted and no shares shall be issued under
this Plan.
4. Shares of Stock Subject to the Plan. The shares of stock which may be
issued under the Plan, on exercise of a stock option shall not exceed
in the aggregate 3,000,000 shares of the Company's Common Stock, no
par value. Such shares will be authorized and unissued shares. Any
shares subject to an option granted under this Plan, which for any
reason expires or is terminated unexercised, shall again be subject to
and be available under this Plan.
5. Administration of the Plan. Within the limitations described herein,
the Committee shall administer the Plan, select the Employees to whom
incentive stock options, nonqualified stock options, or both, will be
granted, determine the number of shares to be optioned and awarded to
each Employee, determine the method of payment of option shares
exercised, including deferred payment not to exceed five (5) years
from the date of exercise, together with interest at times and rates
determined reasonable by the Committee during the existence of the
Plan, and interpret, construe and implement the provisions of the
Plan. In the event the optionee tenders shares of Common Stock to the
Company in payment for the exercise price of an option previously
granted under the Plan, the optionee shall receive in return an
incentive stock option which shall fully vest over three years from
the date of grant for the number of shares of Common Stock tendered to
the Company at an exercise price equal to the fair market value at
which the tendered shares of Common Stock were valued when delivered
to the Company. By the adoption of this Plan, the Board of Directors
is delegating to the Committee (if appointed by resolution) plenary
authority to administer the Plan. The Committee shall consist of
not less than two members of the Board of Directors. No member of the
Committee shall be eligible to receive any options under this Plan,
nor may any person be appointed to the Committee unless he or she was
not eligible to participate in the Plan at any time within the
one-year period immediately prior to his or her appointment as
provided in Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended. The Committee shall have authority to adopt
rules and regulations for carrying out the Plan, and to interpret,
construe and implement the provisions of the Plan. Decisions of the
Committee shall be binding on the Company and on all Employees
eligible to participate in the Plan. The selection of any Employee to
be a recipient of any options and the number and type of such options
to be granted are subject to approval by the Committee.
6. Indemnification. In addition to such other rights of indemnification
as they may have as Directors or as members of the Committee, members
of the Board of Directors and of the Committee shall be indemnified by
the Company against the reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan,
or any option granted thereunder, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company), or paid by them in
satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such persons were liable for
negligence or misconduct in their duties; provided that within sixty
(60) days after the institution of such action, suit or proceeding,
such person shall offer the Company, in writing, the opportunity, at
its own expense, to handle and defend the same.
7. Number of Options Granted to an Eligible Employee. In addition to an
initial grant to an Employee, such Employee may be granted, during the
term of the Plan, additional options if in the opinion of the
Committee the circumstances so warrant. The aggregate fair market
value (determined at the time the option is granted) of the
stock with respect to which incentive stock options are exercisable
for the first time by an individual during any calendar year shall not
exceed $100,000.
8. Stock Option Agreement.
(a) Form. Options shall be evidenced by Stock Option Agreements in
such form and not inconsistent with this Plan as the Committee shall
approve from time to time. The Committee, however, in its discretion
may set forth in the agreements, terms and conditions more restrictive
than the terms and conditions set forth in this Plan. Such
agreements shall contain in substance the following terms and
conditions.
(b) Price. The purchase price per share of stock deliverable upon
the exercise of an option shall be fixed by the Committee. In the
case of an incentive stock option, the purchase price shall be the
fair market value of the stock on the date of grant, determined
without regard to any restriction other than a restriction which, by
its terms, will never lapse. In the case of a grant of an incentive
stock option to an individual, who, at the time the option is granted,
owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any parent or subsidiary
corporation, such price shall not be less than 110% of the fair market
value of such stock on the date of the granting of the option. The
date of grant is the "Date of Grant" specified in the Stock Option
Agreement. In the event of a grant conditioned, among other things,
on shareholder ratification of this Plan, the date of such conditional
grant shall be the date of grant for the purpose of this Paragraph 8.
As used in this Plan, the term "fair market value" means the closing
price of a share of the Common Stock as quoted on the National
Association of Securities Dealers Automated Quotation System
("Nasdaq") on the date as of which fair market value is to be
determined or, if unavailable, then the price as reported by a
recognized market reporting system on such date.
(c) Number of Shares. The Stock Option Agreement shall specify the
number of shares subject to the option. However, the aggregate fair
market value (determined as of the time the option is granted) of the
stock for which any Employee may be granted incentive stock options in
any calendar year (under all stock option plans of the Company and any
parent or subsidiary corporations) shall not exceed $100,000.
(d) Exercise Dates. An option may be exercisable, in part or in
full, at any time and from time to time, as determined by the
Committee and set forth in the Stock Option Agreement, during a ten
(10) year period following any grant; provided, however, that every
option granted hereunder shall become exercisable in installments
of not less than 25% of the shares subject to option in each of the
first, second, third, and fourth years following the date of grant.
In the case of a grant of an incentive stock option to an individual,
who, at the time the option is granted, owns stock possessing more
than 10% of the total combined voting stock of the Company or of
any parent or subsidiary corporation, such option shall not be
exercisable after the expiration of five (5) years from the date such
option is granted. The maturity of any option may be accelerated at
the discretion of the Committee.
(e) Exercise of Option and Time and Method of Payment. Each
Employee exercising an option pursuant to a Stock Option Agreement
shall notify the Secretary of the Company of the exercise thereof, in
writing, and shall pay to the Secretary, in cash or by check, at the
time of delivery of such notice, or, in the discretion of the
Committee, on a deferred basis evidenced by a promissory note,
containing such terms and subject to such security as the Committee
shall determine fair and reasonable from time to time, for the total
option price for the number of shares so elected, whereupon the
Secretary shall cause to be issued and delivered to such Employee, as
soon as practicable thereafter, a certificate of stock in the name of
the Employee for the shares so purchased. The Committee, in its sole
discretion, may accept payment in previously acquired Mail Boxes Etc.
common stock (valued at fair market value), subject to compliance with
applicable laws and regulations and such conditions as the Committee
may impose. Payment may also be made, in the discretion of the
Committee, by delivery (including by Fax) to the Company or its
designated agent of an executed irrevocable option exercise form
together with irrevocable instructions to a broker-dealer to sell or
margin a sufficient portion of the shares and deliver the sale or
margin loan proceeds directly to the Company to pay for the exercise
price.
Upon the exercise of an option at a time when there is not in effect
under the Securities Act of 1933 a registration statement relating to
the stock issuable upon exercise thereof and available for delivery to
the Employee a prospectus meeting the requirements of Section 10(a)(3)
of said Act, the option holder shall represent and warrant in writing
to the Company that the shares are being purchased or acquired for
investment and not with a view to the distribution thereof. In the
event such a representation is required and made, the Committee may
cause each certificate for the purchased shares to be endorsed with a
legend evidencing the investment representation and restricting the
transfer of the shares except under circumstances deemed by the
Committee to be consistent with such representation.
(f) Termination of Employment. Any Stock option which has not been
exercised within ten (10) years (five (5) years in the case of an
incentive stock option granted to an individual, who, at the time the
option is granted, owns stock possessing more than 10% of the total
combined voting stock of the Company or of any parent or
subsidiary Company) from the date of the grant shall terminate and be
canceled. If the employment of an Employee terminates within the ten
(10) year period (or five (5) year period, whichever is applicable),
except as otherwise provided herein, such Employee shall have ninety
(90) days after such termination within which to exercise the vested
portion of his stock option; if termination is due to disability or
death of an Employee, such Employee or his legal representative shall
have three (3) years from the date of termination of employment to
exercise his stock option, and, in such case, all of the Employee's
stock options shall be deemed to have immediately vested upon
termination of employment and may be thereafter exercised without
regard to any previously specified vesting schedule. In addition, the
Committee, in its discretion, may provide for shorter or longer
periods not to exceed the stated option period if termination of
employment is due to disability or death. In no event, however, shall
the exercise occur after ten (10) years (or five (5) year period,
whichever is applicable) from the date of the grant. If an Employee's
employment terminates due to dishonesty or willful neglect of his
duties, all of the stock options shall forthwith terminate. For
purposes of this Plan, an optionee is disabled if he or she is unable
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to
last, for a continuous period of not less than twelve (12)
months.
9. Recapitalization. In the event of any change in the outstanding
shares of Company stock by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange of
shares or other similar corporate change, such equitable adjustments
shall be made in the Plan and the grants thereunder, including the
exercise price of outstanding options, as the Committee
determines are necessary or appropriate, including, if necessary, any
adjustments in the maximum number of shares referred to in Section 4
of the Plan. Such adjustment shall be conclusive and binding for all
purposes of the Plan.
10. Reorganization; Change in Control. In the event that the Company or
the shareholders of the Company enter into an agreement to dispose of
all or substantially all of the assets of the Company or to change
control of the stock of the Company ("Reorganization Agreement") by
means of a sale, merger, consolidation, reorganization, liquidation,
or an issuance, sale, exchange, disposition or other transfer of the
voting shares of stock of the Company resulting in a person (or group
of affiliated persons) becoming the beneficial owner, directly or
indirectly, of 50% or more of the combined voting power of the
Company's voting stock, or otherwise (other than any reorganization,
merger, or consolidation affected solely to change the
Company's state of incorporation) (each a "Reorganization"), all
options then outstanding shall become immediately exercisable with
respect to the full number of shares subject to all such options
during the period beginning on the date of the Reorganization
Agreement and ending on the second day prior to the Reorganization.
Upon the consummation of the Reorganization, this Plan and any
unexercised options issued hereunder (or any unexercised portion
thereof) shall terminate and cease to be effective unless assumed
pursuant to a written agreement by the successor corporation
or parent or subsidiary thereof. Notwithstanding the foregoing, in
the event that any Reorganization Agreement shall be terminated
without consummating the Reorganization, any unexercised options that
had become exercisable solely by reason of the provisions of this
Section shall again become unaccrued and unexercisable as of
said termination of the Reorganization Agreement. Any exercise of an
option prior to said termination of the Reorganization Agreement shall
remain effective notwithstanding that such option became exercisable
solely by reason of the Company entering into such Agreement.
11. General Restriction. Each option shall be subject to the requirement
that if at any time the Board of Directors or the Committee, in its
discretion, shall determine that the listing, registration, or
qualification of the shares subject to such option upon any
securities exchange or under any state or federal law, or the consent
or approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting
of such option, or the issue or purchase of shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Board of Directors. If required at any time by the Board or the
Committee, an option may not be exercised until the optionee has
delivered an investment letter to the Company.
12. Rights as a Shareholder. The holder of an option shall have no rights
as a shareholder with respect to any shares covered by the option
until the issuance of a stock certificate to him or her for such
shares, except that the Company shall provide option holders an annual
report in the form provided by the Company to its shareholders.
Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued. The Committee
and the Board of Directors agree to use their best efforts to secure
prompt issuance of stock certificates following full performance of
exercise duties by any optionee.
13. Non-Assignability of Options. No option shall be assignable or
transferable by the recipient except by will or by the laws of descent
and distribution, or pursuant to a qualified domestic relations order,
as defined in the Code. During the life of the recipient, the option
shall be exercisable only by him or her, or the duly appointed
legal representative of an incompetent option holder.
14. No Employment Rights. Nothing in the Plan shall confer upon the
Option holder any right to continue employment with the Company for
any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company (or any Subsidiary
employing such person) or of the Option holder, which rights are
hereby expressly reserved by each, to terminate such person's
employment at any time for any reason, with or without cause.
15. Withholding Taxes. Whenever under the Plan shares are to be issued or
cash is to be paid in satisfaction of options granted thereunder, the
Company shall have the right to require the recipient to remit to the
Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any
certificate or certificates for such shares or payment of such cash.
16. Amendment of the Plan. The Plan may, at any time or from time to
time, be terminated, modified or amended by a majority vote of the
shareholders of the Company. The Board of Directors may, at any time
and from time to time, modify or amend the Plan in any respect, except
that without shareholder approval, the Board of Directors may not
materially increase the benefits accruing to participants under
the Plan, materially increase the number of shares which may be issued
under the Plan (other than increases due to changes in capitalization)
or materially modify the requirements as to eligibility for
participation in the Plan. The termination, modification, or
amendment of the Plan shall not, without the consent of an
employee, affect his or her rights under an option previously granted
to him or her. With the consent of each employee affected, the Board
of Directors may amend outstanding option agreements in a manner not
inconsistent with the Plan.
17. Governing Law. The validity and construction of the Plan and any
agreements entered into thereunder shall be governed by the laws of
the State of California.
18. Termination. Unless previously terminated by the Board of Directors,
this Plan shall terminate at the close of business on May 22, 2005
(ten (10) years after the effective date), and no options shall be
granted under it thereafter, but such termination shall not affect any
option theretofore granted.
APPENDIX B
MAIL BOXES ETC.
1995 STOCK OPTION PLAN FOR
NON-EMPLOYEE ("OUTSIDE") DIRECTORS
1. Purpose. The 1995 Stock Option Plan for Non-Employee ("Outside")
Directors (the "Plan") is established to attract, retain and
compensate highly qualified individuals who are not employees of Mail
Boxes Etc. (the "Company") for service as members of the Board of
Directors ("Outside Directors") and to provide them with an ownership
interest in the Company's common stock. Under the Plan, the Outside
Directors will receive no other cash compensation (other than
reimbursement of expenses) for attendance at Board meetings.
Directors who serve on Committees of the Board will still be entitled
to receive compensation for that service as authorized by the Board.
The Plan will furthermore be beneficial to the Company and its
stockholders by providing the Outside Directors with greater personal
financial stake in the Company, in addition to underscoring their
common interest with stockholders in increasing the value of the
Company's stock over the long term.
2. Effective Date. The Plan shall become effective only if it is
approved by the affirmative vote of the holders of a majority of the
Shares present or represented and voted at a meeting of the Company's
shareholders to be held on or before May 22, 1996, and, if
so approved, shall be effective as of May 23, 1995, the date of
approval by the Board.
Options may be granted under the Plan from and after the effective
date. However, no options granted under the Plan may be exercised,
and no shares shall be issued under the Plan, until the Plan is
approved by the Company's shareholders. If such shareholder
approval is not obtained, then all options previously granted under
this Plan shall terminate and cease to be outstanding, no further
options shall be granted, and no shares shall be issued under the
Plan.
3. Administration of the Plan. The Plan shall be administered by the
Board of Directors of the Company (the "Board") or a Committee
appointed by the Board. The Board, or Committee, shall, subject to
the provisions of the Plan, grant options under the Plan and
shall have the power to construe the Plan, to determine all questions
as to eligibility, and to adopt and amend such rules and
regulations for the administration of the Plan as it may deem
desirable.
The Plan is intended to allow Outside Directors to receive Stock
Options without such Stock Options causing them to cease to be
"disinterested persons" (within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934) with respect to other stock
plans of the Company. To the extent that any provision of the Plan or
action by the Board (or such Committee) with respect thereto would be
inconsistent with such intent, such provision or action shall be null
and void.
4. Participation in the Plan. All Outside Directors of the Company's
Board of Directors shall be eligible to participate in the Plan.
"Outside Directors" shall mean any member of the Board of Directors of
the Company who is not at that time an employee of the Company, or any
of its subsidiaries or affiliates, and including all new Outside
Directors at the time they are appointed or nominated to be a
Director.
5. Non-Qualified Stock Options. Only non-qualified stock options
("options") may be granted under this Plan.
6. Terms, Conditions and Form of Options.
(a) Single Option Grant. A single, one-time grant of options to
purchase 20,000 shares of Stock (as adjusted pursuant to Section 8)
shall be automatically granted to each Outside Director as of May 23,
1995, the date of approval of this Plan by the Board of Directors. In
accordance with Section 2, this grant of options shall be rescinded
and of no effect if this Plan is not approved by the Company's
shareholders.
All Outside Directors appointed or nominated to the Board after
May 23, 1995 shall automatically receive a single, one-time grant of
options to purchase 20,000 shares of Stock (as adjusted pursuant to
Section 8) upon their date of appointment or nomination, whichever
occurs first. No grant of options shall vest, however, unless the
Outside Director who is appointed or nominated, is elected by the
Shareholders at the next annual Shareholders Meeting.
(b) Exercise Price. The exercise price per share of stock for which
each option is exercisable shall be 100% of the fair market value per
share of common stock on the date the option is granted, which shall
be the closing price of the stock as generally reported on the
National Association of Securities Dealers Automated Quotation System
("Nasdaq") on which the Shares may be traded on the date of the
granting of the Option.
(c) Vesting and Term of Options. Each option granted under the Plan
shall vest and become exercisable in five equal installments,
commencing on the first anniversary of the date of grant and annually
thereafter. Each option granted under the Plan shall expire ten years
from the date of grant, and shall be subject to earlier termination as
hereinafter provided.
(d) Termination of Service. In the event of the termination of
service on the Board by the holder of any option, other than by reason
of permanent disability or death as set forth in paragraph (e) hereof,
the then outstanding options of such holder shall be exercisable only
to the extent that they were exercisable on the date of such
termination and shall expire three months after such termination, or
on their stated expiration date, whichever occurs first.
(e) Permanent Disability or Death. In the event of termination of
service by reason of permanent disability or death of the holder of
any option, each of the then outstanding options of such holder shall
become immediately exercisable in full, and shall be exercisable by
the holder or the holder's legal representative at any time within a
period of three years after termination of service, but in no event
after the expiration date of the option.
(f) Payment. The option price shall be paid in full in cash or by
the surrender of shares of common stock of the Company, valued at
their fair market value on the date of exercise, or by any combination
of cash and stock.
7. Shares of Stock Subject to the Plan. The shares that may be purchased
pursuant to options under the Plan shall not exceed an aggregate of
260,000 shares of Company common stock (as adjusted pursuant to
Section 8). Any shares subject to an option grant which for any
reason expires or is terminated unexercised as to such shares shall
again be available for issuance under the Plan.
8. Recapitalization. In the event of any change in the outstanding
shares of Company stock by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange of
shares or other similar corporate change, such equitable
adjustments shall be made in the Plan and the grants thereunder,
including the exercise price of outstanding options, as the Committee
determines are necessary or appropriate, including, if necessary, any
adjustments in the maximum number of shares referred to in Section 7
of the Plan. Such adjustments shall be conclusive and binding for all
purposes of the Plan.
9. Miscellaneous Provisions.
(a) Rights as Stockholder. A participant under the Plan shall have
no rights as a holder of Company common stock with respect to option
grants hereunder, unless and until certificates for shares of such
stock are issued to the participant.
(b) Assignment or Transfer. No options granted under the Plan or
any rights or interests therein shall be assignable or transferable
by a participant except by will or the laws of decent and
distribution. During the lifetime of a participant, options granted
hereunder are exercisable only by, and payable only to, the
participant.
(c) Agreements. All options granted under the Plan shall be
evidenced by agreements in such form and containing such terms and
conditions (not inconsistent with the Plan) as the Board shall adopt
from time to time.
(d) No Right to Reelection. Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any of its
members for reelection by the Company's stockholders, nor confer upon
any Outside Director the right to remain a member of the Board for any
period of time, or at any particular rate of compensation.
(e) Compliance with Legal Regulations. During the term of the Plan
and the term of any options granted under the Plan, the Company shall
at all times reserve and keep available such number of shares as may
be issuable under the Plan, and shall seek to obtain from any
regulatory body having jurisdiction, including the Commissioner of
Corporations of the State of California, any requisite authority
required in the opinion of counsel for the Company in order to grant
options to purchase shares of Company common stock or to issue such
stock pursuant thereto. If in the opinion of counsel for the Company
the transfer, issue or sale of any share of its stock under the Plan
shall not be lawful for any reason, including the inability of the
Company to obtain from any regulatory body have jurisdiction authority
deemed by such counsel to be necessary to such transfer, issuance or
sale, the Company shall not be obligated to transfer, issue or
sell any such shares. In any event, the Company shall not be
obligated to transfer, issue or sell any shares to any participant
unless a registration statement which complies with the
provisions of the Securities Act of 1933, as amended (the "Securities
Act"), is in effect at the time with respect to such shares or other
appropriate action has been taken under and pursuant to the terms and
provisions of the Securities Act, or the Company receives
evidence satisfactory to the Board or Committee that the transfer,
issuance or sale of such shares, in the absence of an effective
registration statement or other appropriate action, would not
constitute a violation of the terms and provisions of the Securities
Act. The Company's obligation to issue shares upon the exercise of
any option granted under the Plan shall in any case be subject to the
Company being satisfied that the shares purchased are being purchased
for investment and not with a view to the distribution thereof, if at
the time of such exercise a resale of such shares would otherwise
violate the Securities Act in the absence of an effective registration
statement relating to such shares.
(f) Costs and Expenses. The costs and expenses of administering the
Plan shall be borne by the Company and not charged to any option or to
any Outside Director receiving an option.
(g) Withholding of Taxes. Pursuant to applicable federal, state,
local or foreign laws, the Company may be required to collect income
or other taxes upon the grant of an Option to, or exercise of an
Option by, a holder. The Company may require, as a condition to the
exercise of an Option, that the recipient pay the Company, at such
time as the Board or Committee determines, the amount of any taxes
which the Board or Committee may determine is required to be withheld.
(h) Indemnification. In addition to such other rights of
indemnification as they may have as Directors or as members of the
Committee, members of the Board of Directors and of the Committee
shall be indemnified by the Company against the reasonable
expenses, including attorneys' fees, actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them
may be a party by reason of any action taken or failure to
act under or in connection with the Plan, or any option granted
thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel
selected by the Company), or paid by them in satisfaction of
a judgment in any such action, suit or proceeding, except in relation
to matters as to which it shall be adjudged in such action, suit or
proceeding that such persons were liable for negligence or misconduct
in their duties; provided that within sixty (60) days after
the institution of such action, suit or proceeding, such person shall
offer the Company, in writing, the opportunity, at its own expense, to
handle and defend the same.
10. Amendment and Termination of the Plan.
(a) Amendments. The Board or Committee may from time to time amend
the Plan in whole or in part; provided, that no such action shall
adversely affect any rights or obligations with respect to any options
theretofore granted under the Plan, and provided further, that the
provisions of Sections 4 and 6 hereof may not be amended more than
once every six months, other than to comport with changes in the
Internal Revenue Code or regulations thereunder.
Unless the holders of at least a majority of the outstanding shares of
Company common stock present, or represented, and voted at a meeting
of stockholders shall have first approved thereof, no amendment of the
Plan shall be effective which would (i) increase the maximum number of
shares referred to in Section 7 of the Plan or the number of
shares subject to options that may be granted pursuant to section 6(a)
of the Plan to any one Outside Director or (ii) extend the maximum
period during which options may be granted under the Plan.
With the consent of the Outside Director affected, the Committee may
amend outstanding agreements evidencing options under the Plan in a
manner not inconsistent with the terms of the Plan.
(b) Termination. The Committee may terminate the Plan (but not any
options theretofore granted under the Plan) at any time. The Plan
(but not any options theretofore granted under the Plan) shall in any
event terminate on, and no options shall be granted after, December
31, 2000.
11. Compliance with SEC Regulations. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any related
regulations. If any provision of this Plan is later found
not to be in compliance with such Rule and regulations, the provision
shall be deemed null and void. All grants and exercises of options
under this Plan shall be executed in accordance with the requirements
of Section 16 of the Exchange Act and regulations promulgated
thereunder.
12. Governing Law. The validity and construction of the Plan and any
agreements entered into thereunder shall be governed by the laws of
the State of California.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MAIL BOXES ETC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 25, 1995.
The undersigned hereby (i) acknowledges receipt of the Notice and Proxy
Statement dated July 14, 1995 relating to the Annual Meeting of Shareholders
of MAIL BOXES ETC. (the "Company") to be held August 25, 1995 and (ii)
appoints Anthony W. DeSio, Michael Dooling, James F. Kelly and Bruce M.
Rosenberg as proxies, with full power of substitution and authorizes them, or
any of them, to vote all the shares of the no par value Common Stock of the
Company standing in the name of the undersigned at said meeting or any
adjournment thereof upon the matters specified below and upon such other
matters as may be properly brought before the meeting, conferring
discretionary authority upon such proxies as to such other matters. THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4.
1. ELECTION OF DIRECTORS
___ FOR all nominees listed below (except as marked to the contrary
below).
___ WITHHOLD AUTHORITY to vote for all nominees.
Michael Dooling, Anthony W. DeSio, Robert J. DeSio, James F. Kelly, Daniel L.
La Marche, Harry Casari, and Joel Rossman.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominees's name on the space provided below:
- ------------------------------------------------------------------------
2. Proposal to authorize adoption of the 1995 Mail Boxes Etc. Stock
Option Plan for Employees.
___ FOR ___ AGAINST ___ ABSTAIN
3. Proposal to authorize adoption of the 1995 Mail Boxes Etc. Stock
Option Plan for Non-Employee ("Outside") Directors
___ FOR ___ AGAINST ___ ABSTAIN
4. Proposal to ratify the Board of Directors' selection of Ernst & Young
LLP as the Company's independent auditors for the fiscal year ending
April 30, 1996.
___ FOR ___ AGAINST ___ ABSTAIN
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
************************************************************************
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as executor, administrator, trustee
or guardian, please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated:________________ , 1995 __________________________________________
(Signature)
__________________________________________
In order to assist us in obtaining seating
arrangements, please indicate below if you will
be attending the Shareholders' Meeting.
I will ___ will not ___ attend the
Annual Shareholders' Meeting on August 25,
1995.
(Please mark, date, sign and mail this proxy
card in the envelope provided. No postage is
required for domestic mailing.)
