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 12, 1996
DEAR SHAREHOLDER:
You are cordially invited to attend our 1996 Annual Meeting of Shareholders
which will be held this year on Friday, August 23, 1996, 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
1996 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 23, 1996
The 1996 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 23, 1996, 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 amendments to the Mail Boxes Etc. 1995 Stock
Option Plan for Non-Employee ("Outside") Directors;
3. A shareholder proposal; and
4. 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 24, 1996, 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 12, 1996
MAIL BOXES ETC.
6060 Cornerstone Court West
San Diego, California 92121-3795
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 23, 1996
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 23, 1996, 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 12, 1996.
Any shareholder may revoke a Proxy at any time prior to its exercise by filing
a later-dated Proxyor 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 24, 1996, the record date fixed by the Board of Directors (the
"Board"), the Company had outstanding 11,184,506 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 amendments to the 1995 Stock Option Plan for Non-Employee
(Outside) Directors;
3. A shareholder proposal; and
4. 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 proposals
1 and 2, and AGAINST the shareholder proposal. 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 9, the following table also
sets forth certain information regarding the ownership of the Company's
common stock as of April 30, 1996 for each person known to the Company to be
the beneficial owner of more than five percent of the Company's common stock.
The shareholders listed below have sole voting and investment power with
respect to the shares beneficially owned.
Number of
Name and Address Shares Percent
of Beneficial Owners Beneficially of Class
Owned
- ----------------------------------------------------------------------------
United Parcel Service of 1,810,967 16.3%
America, Inc. (UPS)
55 Glenlake Parkway, N.E.
Atlanta, GA 30328
- -----------------------------------------------------------------------------
Fenimore Asset Management, Inc. 807,350 7.2%
118 North Grand Street
P.O. Box 310
Cobleskill, NY 12043
- -----------------------------------------------------------------------------
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.)
ITEM NO. 1 - ELECTION OF DIRECTORS
Seven Directors are to be elected. Each of the nominees for Director were
elected as Directors at the last Annual Meeting of Shareholders.
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, 1996, 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 Plans and the grant of options under the Plans.
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, Harry Casari, and Joel Rossman.
During the fiscal year ended April 30, 1996, the Audit Committee met three
times, with all members attending; the Compensation Committee met two times,
with all members attending; and the Nominating Committee met once with all
members attending. The Executive Committee did not meet during the fiscal
year ended April 30, 1996.
SECURITY OWNERSHIP BY DIRECTORS AND MANAGEMENT
<TABLE>
Set forth below are the beneficial shareholdings, as of April 30, 1996, 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 788,674 <F1> 6.5%
6060 Cornerstone Court
San Diego, CA 92121
Anthony W. DeSio 1,811,816 <F2> 15%
6060 Cornerstone Court
San Diego, CA 92121
Robert J. DeSio 159,780 <F3> 1.3%
Joel Rossman 20,000 <F4> *
James F. Kelly 53,652 <F5> *
Daniel L. La Marche 99,216 <F6> *
Harry Casari 20,500 <F7> *
Gary S. Grahn 87,000 <F8> *
Bruce M. Rosenberg 133,599 <F9> 1.1%
Roger A. Peters 30,000 <F10> *
Directors and 3,385,807 <F11> 28%
Executive Officers
as a Group (13 persons)
Directors, Executive 5,196,774 <F12> 43%
Officers and 10%
Shareholders as a Group
* Represents less than one percent (1%) of the Common Stock Outstanding
<FN>
<F1>
1. Includes 306,498 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. Mr. Dooling has a right to
acquire 20,000 of such shares pursuant to stock options which are currently
exercisable as to 4,000 of the shares covered thereby. The remainder of the
shares are held in the Dooling family trust of which Mr. Dooling and his
wife are trustees and have voting and investment control.
</FN>
<FN>
<F2>
2. Includes 60,225 shares held by Mr. A.W. DeSio's wife and 1,485,570 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 265,098 of such shares pursuant to incentive stock
options which are currently exercisable as to 136,491 of the shares covered
thereby.
</FN>
<FN>
<F3>
3. Mr. R. J. DeSio has a right to acquire 133,472 of such shares pursuant to
incentive stock options which are currently exercisable as to 95,708 of the
shares covered thereby.
</FN>
<FN>
<F4>
4. Mr. Rossman, who is Vice President of Business Development at United Parcel
Service of America, Inc. (UPS), has a right to acquire these shares pursuant
to stock options which are currently exercisable as to 4,000 of the shares
covered thereby. 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. Mr. Kelly has a right to acquire 20,000 of such shares pursuant to stock
options which are currently exercisable as to 4,000 of the shares covered
thereby.
</FN>
<FN>
<F6>
6. Includes 79,216 shares 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. Mr.La Marche has a right to
acquire 20,000 of such shares pursuant to stock options which are currently
exercisable as to 4,000 of the shares covered thereby.
</FN>
<FN>
<F7>
7. Mr. Casari has a right to acquire 20,000 of such shares pursuant to stock
options which are currently exercisable as to 4,000 of the shares covered
thereby.
</FN>
<FN>
<F8>
8. Gary S. Grahn has a right to acquire 81,950 of such shares pursuant to
incentive stock options which are currently exercisable as to 35,900 of the
shares covered thereby.
</FN>
<FN>
<F9>
9. Bruce M. Rosenberg has a right to acquire 122,952 of such shares pursuant
to incentive stock options which are currently exercisable as to 86,080 of the
shares covered thereby.
</FN>
<FN>
<F10>
10. Roger A. Peters has the right to acquire 30,000 of such shares pursuant to
incentive stock options which are currently exercisable as to 7,500 of the
shares covered thereby.
</FN>
<FN>
<F11>
11. Includes 952,472 shares which may be acquired by the Directors and Officers
as a group, under incentive and non-qualified stock options, of which options
for 507,679 shares are currently exercisable by all Directors and Officers as
a group.
</FN>
<FN>
<F12>
12. Includes options to acquire stock as described in footnote 11 above.
</FN>
</TABLE>
BIOGRAPHICAL INFORMATION: The following biographical information is furnished
with respect to nominees for election as Directors.
Michael Dooling, 51, 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, 66, 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. 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. Anthony DeSio
is the brother of Robert DeSio.
Robert J. DeSio, 61, has been a Director of Mail Boxes Etc. since July 1985
and is also Vice President - Training and Communications for the Company.
Mr. DeSio joined the Company in January 1983 and owned and/or operated three
MBE Service Center franchises in San Diego County. Mr. DeSio has been in
management of retail stores for over 30 years. Robert DeSio is the brother of
Anthony DeSio.
Joel Rossman, 43, was elected to the Board of Directors in August 1995. He is
Vice President of Business Development at United Parcel Service of America
(UPS) which he joined in 1970. Mr. Rossman has held various operational
assignments at UPS, including District Sales Manager and Director of Business
Development in the Company's Asia Pacific Region.
James F. Kelly, 58, 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, 67, 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, 60, was elected to the Board in August 1995. Mr. Casari is a CPA
and private investor and he was a partner at Ernst & Young LLP until his
retirement in September 1994. Mr. Casari was associatedwith 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.
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.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the annual and long-term
compensation of each of the Chief Executive Officer and the next four most
highly compensated executive officers ("Named Executives") of the Company, for
fiscal years ending April 30, 1996, 1995 and 1994.
<TABLE>
Summary Compensation Table:
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Fiscal ---------------------------------- ------------
Name and Year Other Stock All Other
Principal Ended Salary Bonus Annual Options Compensation
Position April 30 ($) ($) Compensation <F13> (#) ($)
<S> <C> <C> <C> <C> <C> <C>
A. W. DeSio 1996 $273,310 $113,800 $20,745 35,000 $3,969 <F14>
President, CEO
and Vice Chairman 1995 248,458 66,000 20,444 10,000 3,485
of the Board
1994 226,633 25,000 46,320 30,000 3,036
Robert J. DeSio 1996 89,867 38,000 12,174 20,000 ---
Vice President -
Training and 1995 86,238 22,500 7,794 15,000 ---
Communications,
Director of Board 1994 79,366 10,500 7,911 17,000 ---
Gary S. Grahn 1996 100,582 43,000 13,824 25,000 ---
Vice President and
Chief Financial 1995 89,655 26,000 10,109 15,000 ---
Officer
1994 80,765 14,000 5,311 25,000 ---
Bruce M. Rosenberg 1996 94,687 40,000 12,401 25,000 ---
Vice President,
General Counsel and 1995 86,218 24,000 14,483 15,000 ---
Secretary
1994 78,851 11,000 8,766 17,000 ---
Roger A. Peters 1996 125,008 46,000 2,330 30,000 ---
Vice President -
Network Operations 1995 33,656 11,000 -- -- ---
<FN>
<F13>
This amount includes employer matching contributions and profit sharing
under the Company's 401(K) Plan and payments for unused vacation and/or sick
leave.
</FN>
<FN>
<F14>
These amounts are the value of the Company's contributions for the
purchase of a split dollar life insurance policy.
</FN>
</TABLE>
Option Grants in FY1996
Information concerning FY1996 grants to and exercises by the Chief Executive
Officer and the other Named Executives is provided below.
<TABLE>
Individual Grants:
<CAPTION>
Potential
Realizable Value
at Assumed
Annual Rates of
% of Total Stock Price
Options Options Exercise Appreciation for
Granted Granted to Price Expiration Option Term<F16>
Name (#)<F15> Employees ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
A. W. DeSio 35,000 13% 8.25 5/23/05 $181,650 $460,250
Robert J. DeSio 20,000 7% 8.25 5/23/05 103,800 263,000
Gary S. Grahn 25,000 9% 8.25 5/23/05 129,750 328,750
Bruce M. Rosenberg 25,000 9% 8.25 5/23/05 129,750 328,750
Roger A. Peters 30,000 11% 8.25 5/23/05 155,700 394,500
<FN>
<F15>
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 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>
<F16>
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 tern. 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 May 23, 2005, of $13.44 and
$21.40, respectively. If these price appreciation assumptions are applied to
all of the Company's outstanding Common Stock on the date of such award, such
Common Stock would appreciate in the aggregate by approximately $5,709,000
and $14,465,000, respectively, over the ten-year period ending on May 23, 2005.
These prescribed rates are not intended to forecast possible future
appreciation, if any, of the Common Stock.
</FN>
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES FY96
AND FISCAL YEAR END OPTION/SAR VALUES
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money
Shares Options/SARs Options/SARs
Acquired Value at FY End (#) at FY End ($)*
Name on Exercise Realized -------------------------- --------------------------
(#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
A.W. DeSio 45,000 $360,225 136,491 128,598 $954,661 $943,910
Robert J. DeSio 18,667 142,302 95,708 37,764 824,285 357,159
Gary S. Grahn 7,850 53,519 35,900 46,050 254,542 379,760
Bruce M. Rosenberg 7,000 69,125 86,080 36,872 676,474 366,054
Roger A. Peters -0- -0- 7,500 22,500 75,975 227,925
</TABLE>
* Values were calculated based on a closing market price of $18.38 for
MBE common stock on April 30, 1996.
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, and S&P Small Cap 600 Stock Index for the period of five fiscal years
commencing May 1, 1991 and ended April 30, 1996.
Comparison of Five Year Cumulative Total Return*
Among Mail Boxes Etc., the S & P 500 Index and the S & P Smallcap 600
*$100 invested on 04/30/91 in stock or index - including reinvestment of
dividends.
Fiscal Year ending April 30.
<TABLE>
<CAPTION>
5/1/91 4/30/92 4/30/93 4/30/94 4/30/95 4/30/96
<S> <C> <C> <C> <C> <C> <C>
MBE $100 $162 $128 $74 $91 $165
S&P 500 100 114 125 131 154 201
S&P SMALLCAP 600 100 120 141 162 171 232
</TABLE>
Notes:(1) Assumes $100 invested on May 1, 1991 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 at which time Mr. DeSio would be retained
as a consultant to the Company for a period of five years.
By action of the Board of Directors, Mr. DeSio's Employment Agreement was
amended to provide that his service as the Company's President and Chief
Executive Officer would be extended for another year, until April 30, 1997.
Under the agreement, Mr. DeSio received a base salary of $273,310 in fiscal
year 1996. In addition, Mr. DeSio receives an annual bonus payment which may
be based on the percentage increase in earnings per share (EPS) of the
Company's common stock. In addition, if the EPS has not increased year over
year, but earnings are still substantial, then a bonus may be paid in an
amount deemed appropriate by the Compensation Committee. As additional long
term compensation, Mr. DeSio is also 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 FY93, FY94, and FY95 the Company
contributed an aggregate of $300,000 toward the funding of the policy, and in
FY96, the Company contributed $100,000 toward funding the policy. For the
subsequent four 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 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.
As noted above, Mr. DeSio's Employment Agreement was amended to extend his
full time service as President and CEO for an additional year, until April 30,
1997. Following his retirement from full-time employment as CEO, the
agreement provides that Mr. DeSio is to be retained as a consultant to the
Company for a period of five years. Under the consulting provisions of the
agreement, Mr. DeSio would then 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 or
as otherwise described above.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") of the Company's Board of Directors
is comprised of four 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 $273,310 for FY96.
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 may pay a discretionary bonus to the CEO
and other officers. 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
FY96 was $113,800.
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 35,000 shares in May 1995.
Compensation Committee
James F. Kelly, Chairman
Michael Dooling
Joel Rossman
Harry Casari
REIMBURSEMENT OF DIRECTORS
Under the Stock Option Plan for Non-Employee ("Outside") Directors, which was
approved by the shareholders on August 25, 1995, the outside directors received
no compensation (other than expenses) in connection with attendance at Board
meetings and received only a one-time grant of stock options, which will vest
over a five year period. In addition, members of the Executive Committee,
Audit Committee, and Compensation Committee receive $1,750 per year (and the
Compensation Committee Chairman receives $3,000 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.
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 1996 its directors, officers and greater than 10%
beneficial owners complied with all Section 16(a) filing requirements, except
for the following: in June 1988, a 20% stock split in the form of a dividend
was paid to all shareholders but was inadvertently not disclosed on the
subsequent Form 4 filings of Mr. Anthony W. DeSio. This was corrected in the
Form 4 filing made on May 10, 1996, which also noted the inadvertent failure
to report previously made gifts of 2,660 shares of stock to family and charity
and the transfer of stock by Mr. DeSio and by Mr. DeSio's wife from their
direct holdings into the DeSio Trust.
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,
which bears interest at 9%, has a current principal balance of $101,878, which
is all due and payable September 1, 1996. Mr. Askar's repayment obligations
to the Company are secured by a right of offset retained by the Company in
connection with the Company's obligation to pay a total of $900,000 to Mr.
Askar for the repurchase of the Area Franchise as described above.
ITEM NO. 2 - APPROVAL OF AMENDMENT TO MAIL BOXES ETC. 1995
STOCK OPTION PLAN FOR NON-EMPLOYEE ("OUTSIDE") DIRECTORS
On August 25, 1996, the shareholders approved the adoption of the 1995 Stock
Option Plan for Outside Directors. In order to make the Plan consistent in
certain respects with the 1995 Stock Option Plan for Employees, and to further
align the interests of the Directors with those of the shareholders, the Board
of Directors has approved, subject to shareholder approval, the following
amendments to the Plan:
1. amendment of Section 8 of the Plan, "Recapitalization" to eliminate any
discretion on the part of the Board or Compensation Committee in the event of
a recapitalization of the Company, involving a stock split, stock dividend or
other similar event. The purpose of this amendment is to maintain, to the
maximum extent possible, the ability of the Company, in the event of a merger
or acquisition, to use the pooling of interests method of accounting;
2. addition of a provision mandating forfeiture of any outstanding stock
options or proceeds of stock options of any outside director who acts in
competition with the Company or contrary to the best interests of the Company
after termination of service on the Board; and
3. addition of a provision providing immediate and accelerated vesting of
options in the event of a merger, takeover, or other type of change in control
of the stock of the Company.
While the Company currently has no plans regarding, and does not know of any
plans or proposals regarding, any merger, takeover or other type of event
involving a change in control of Company stock, the Board of Directors
believes that the amendments proposed above are appropriate and are in
the best interests of the shareholders.
The Board believes that these amendments to the Plan will be beneficial to
the Company and its stockholders by further underscoring the common interests
of the Directors and the stockholders in increasing the value of the Company's
stock over the long term.
The foregoing summary description of the amendments to the Plan is qualified
in its entirety by reference to the full text of the amendments to the Plan,
which is attached to this Proxy Statement as Appendix A.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR approval of
the amendments to the 1995 Stock Option Plan for Non-Employee Directors.
ITEM 3 SHAREHOLDER PROPOSAL
The following proposal was submitted by a shareholder of the Company.
The shareholder's name, address, and information regarding the number of shares
owned by the shareholder will be provided by the Company upon written or oral
request to the Office of the Secretary of the Company.
Amendment of 1995 Employee Stock Option Plan
Reasons for Proposed Amendments
"Currently, under the 1995 Employee Stock Option Plan, the Committee
administering the Plan has broad, liberal and sole discretion in:
a. selecting a date to grant an employee a stock option;
b. establishing the stock-option price per share; and
c. determining the method for paying for shares.
"These decisions can directly affect share value and are too important to the
Company's shareholders to be left to a small committee. Accordingly, to
prevent any abuse of discretion, such as selecting grant dates at the lowest
annual share price, the Plan should be amended to provide that:
a. the date for granting options will be one of two fixed annual dates,
six months apart;
b. the option price will be an average price per share for 40 trading days
following the option grant date; and
c. payments for shares will be in cash.
Proposed Amendments to the Plan
"The following definitions shall be inserted into Section 2, Definitions:
(f) The words "Stock-Option Grant Date" refer to either May 15 or November
15 of a year.
(g) The words "Stock-Option Price" refer to a 40-day average of the closing
price of a share of the Company's stock as quoted on National Association
of Securities Dealers Automated Quotation System (NASDAQ) or any other
stock exchange on the succeeding 40 trading days after the Stock-Option
Grant Date on which the Committee has granted a stock option.
The first two sentences of Section 5, Administration of Plan, shall be deleted
and two new sentences inserted:
"Within the limitations described in the Plan, 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, and interpret, construe and implement
the provisions of the Plan. If the Committee grants any stock options under
the Plan, it shall grant those stock options only on a Stock-Option Grant
Date."
Subsection 8(b) shall be deleted in its entirety and a new Subsection 8(b)
inserted:
"(b) Price. The purchase price per share of stock deliverable on the exercise
of an option shall be the Stock-Option Price as determined under the
Plan."
The first three sentences of Subsection 8(e) shall be deleted and the following
new sentences inserted:
"(e) Exercise of Option and Time and Method of Payment. Each Employee
exercising an option under a Stock Option Agreement shall notify the
Company's Secretary, in writing, and, concurrently, pay the Secretary,
in cash or by check, the total of the Stock-Option Price times the
number of shares being purchased. As soon as practicable afterwards,
the Secretary shall cause a stock certificate to be issued and
delivered in such Employee's name representing the shares purchased."
A new Subsection 8(g), Grant Date, shall be inserted:
"(g) Grant date. The date of grant of any stock options granted under the Plan
shall be a Stock-Option Grant Date."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
FOREGOING PROPOSAL FOR THE REASONS DISCUSSED BELOW.
The proponent requests amendment of the Employee Stock Option Plan to require
(a) options be granted only on May 15 or November 15 of each year;
(b) the Stock Option exercise price be set, not on the grant date, but as
determined by a 40-day average price following the grant date; and
(c) that payment for all stock option exercises be only in cash.
The proposed amendments to the Employee Stock Option Plan requested by the
proponent would not be in the best interests of the Corporation or its
shareholders and would result in the following adverse consequences to the
Company, its employees, and its shareholders.
Adverse Effect on Executive Compensation Practices
Executive compensation is generally comprised of at least three basic elements:
current salary, short-term bonus, and long-term incentives, such as stock
options.
The Compensation Committee, composed exclusively of outside (non-employee)
Directors, periodically reviews executive compensation studies conducted by
independent organizations to ensure that the Company's total management
compensation policies are consistent with those of other public companies of
similar size.
If the proposed amendment were adopted and reduced the potential benefits
available under the Stock Option Plan, the Compensation Committee, in order
to retain qualified management personnel, would then have to adjust other
elements of management's compensation policies (i.e., current salary and/or
short-term bonuses) to maintain the competitiveness of its compensation package
or risk the loss of some of its key executives to other companies. Therefore,
shareholders would gain nothing by adopting the proposed amendments, and the
Compensation Committee would be deprived of the flexibility necessary to
establish a proper balance to the compensation package offered to its key
executives.
Adverse Tax Consequences
The Employee Stock Option Plan is set up as a "qualified" plan under the
Internal Revenue Code 422. This is a very common type of plan adopted by
many public companies and results in substantial tax benefits to the
individual employee and to the Corporation. Accordingly, adoption of such
a plan is in the best interests of the Company's Shareholders. In order
to remain in compliance with 422 of the Internal Revenue Code, the
exercise price of a stock option cannot be lower than the fair market value
(or market price) of the stock on the date of grant. Under the proponent's
suggestion, the exercise price would be a "40-day average price" and could
be lower than the fair market price on the date of grant. Accordingly,
under the proponent's amendment, the Plan would not remain qualified under
the Internal Revenue Code, which would be a significant disadvantage to the
Company's employees. Since it is the goal of the Board of Directors to
motivate the Company's employees to achieve the best results for the
Corporation, the Board does not believe that this proposal
is beneficial to the Corporation or its shareholders.
Adverse Accounting Treatment
Under the proponent's suggestion to set the option price at the "40-day average
price" following the date of grant, the Company and its shareholders could
suffer an adverse accounting impact. This would occur if the 40-day average
price were less than the market price on the date of grant. Generally accepted
accounting principles (GAAP) would then require that any difference in price
be charged to the Company's earnings whether or not the options were ever
exercised. This is required because the Company would essentially be granting
a "below market price" option, which necessitates an immediate charge to
current earnings. Obviously, any reduction in quarterly earnings would not be
in the shareholders' best interests. In short, the Company would be
unnecessarily penalizing itself by setting up a procedure which could require
a charge to earnings and put the company at a competitive disadvantage.
Undue Restrictions On Ability Of Board To Operate
One of the obligations of the Company's Board of Directors and its Compensation
Committee is to set compensation levels for the management of the Company and
to administer the Company's Stock Option Plan, as well as other employee benefit
plans. Although the Company's Stock Option Plan, like most other stock option
plans, grants a significant amount of discretion to the Committee regarding
operation of the Plan, the Directors on the Compensation Committee and the
Board have clear legal obligations to carry out their duties in good faith and
in the best interests of the Corporation. The Board of Directors believe that
the suggestions made by the proponent would unnecessarily restrict the
Compensation Committee and make it more difficult for them to carry out their
responsibilities. If the Plan were amended to allow stock options to be
granted on only two specific days each year, the Company would be at a
significant competitive disadvantage in hiring top management officers since
the Board would not be able to make timely grants of stock options if needed
as an inducement to recruit such officers.
The proponent also proposes that all payments for the exercise of stock options
be made only in cash. While it has been the longstanding practice of the
Company to require cash payments in lieu of notes, there is no reason why such
a requirement should be made mandatory nor any reason why payment in Company
stock should not be acceptable. Payment in Company stock is expressly
authorized under Internal Revenue Code 422, and most stock option plans do
allow such payments. Whether payments are made in cash, or currently-owned
Company stock, or otherwise, has no financial or accounting impact on the
Company. In short, amending the Plan as proposed would unnecessarily restrict
the Board in granting options to most effectively motivate officers and
employees and would cause the Plan to become "nonqualified" under the federal
tax laws, and thus reduce employee incentives. For these reasons, the Board
believes that the proposal would not be in the best interests of the Company's
shareholders.
ACCORDINGLY, THE BOARD OF DIRECTORS STRONGLY RECOMMENDS A
VOTE AGAINST THIS PROPOSAL.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Ernst & Young LLP has been regularly employed by the Company for
a number of years to serve as independent auditors and has been selected to
serve as independent auditors for the Company for the fiscal year ending April
30, 1997. However, the Board of Directors, in its discretion, may at any time
appoint other independent accountants to serve as auditors for the Company if
the Board determines that such action is 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 Annual Meeting. The representative will have the opportunity
to make a statement and to respond to appropriate questions.
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 1997 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 14, 1997 and not later than March 14, 1997.
By Order of the Board of Directors
Bruce M. Rosenberg
Vice President, General Counsel
and Secretary
San Diego, California
July 12, 1996
APPENDIX A
First Amendment to the
Mail Boxes Etc.
1995 Stock Option Plan for
Non-Employee ("Outside") Directors
Pursuant to Section 10(a) of the Mail Boxes Etc. 1995 Stock Option Plan for
Non-Employee (Outside) Directors (the "Plan"), the Plan is hereby amended
as follows:
1. Paragraph 8, Recapitalization, shall be deleted and replaced in its
entirety by the following Paragraph 8:
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 adjustments shall be
made in the Plan and the grants thereunder, including the exercise
price of outstanding options, as are necessary, including 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.
2. The following paragraph (g) Forfeiture, is inserted into Section 6 of the
Plan:
6. Terms, Conditions and Form of Options
* * *
(g) Forfeiture. In the event of termination of service on the Board as
set forth under Paragraph (d) above, the exercise of any options already
vested as of the date of termination of service shall be further subject
to satisfaction of the conditions precedent that the option holder (a)
has not taken other employment or agreed to provide services to others in
competition with the Company, unless the written consent of the Company
has been obtained, and (b) has not taken any action which is contrary to
the best interests of the Company as determined by the Board of Directors
in its sole discretion. If at any time within one year after termination
of service the option holder engages in any activity described above,
including, but not limited to, violation of Company policies (including
insider trading policies), disclosing or misusing confidential information
of the Company, or participating in a hostile takeover attempt of the
Company, then (i) any outstanding options shall be immediately terminated,
and (ii) any financial gain resulting from exercising any options during
that time shall be paid by the option holder to the Company.
Notwithstanding the foregoing provisions, the option holder may be released
from the foregoing obligations if the Board of Directors (without the
participation of any "interested" Director) determines in its sole
discretion that such action is in the best interests of the Company.
3. The following new Section 9 is inserted into the Plan and existing Sections
9 through 12 are renumbered as Sections 10 through 13:
9. 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 out-
standing shall become immediately exercisable with respect to the full
number of shares subject to all such options during the period begin-
ning 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. Notwith-
standing 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.
4. The remaining terms and conditions of the Plan shall remain in full force
and effect.
PROXY
THIS PROXY IS SOLICITED ON BAHALF OF TH EBOARD OF DIRECTORS OF
MAIL BOXES ETC.
The undersigned hereby (i) acknowledges receipt of the Notice and Proxy
Statement dated July 12, 1996 relating to the Annual Meeting of Shareholders
of Mail Boxes Etc. (the "Company") to be held August 23, 1996 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 Commoon 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.
The Board of Directors recommends a vote FOR Items 1 and 2.
The Board of Directors recommends a vote AGAINST Item 3.
Item 1 - ELECTION OF DIRECTORS
Nominees: Michael Dooling Robert J. DeSio
A. W. DeSio Joel Rossman
James F. Kelly Harry Casari
Daniel L. La Marche
____ FOR ____ WITHHELD FOR ALL
____________________________________ WITHHELD FOR (Write that nominees'
name in the space provided)
Item 2 - APPROVAL OF AN AMENDMENT TO STOCK OPTION PLAN FOR NON-EMPLOYEE
("OUTSIDE") DIRECTORS
____ FOR ____ AGAINST ____ ABSTAIN
Item 3 - SHAREHOLDER PROPOSAL-AMENDMENT TO EMPLOYEE STOCK OPTION PLAN
____ FOR ____ AGAINST ____ ABSTAIN
Unless otherwise specified by the undersigned shareholder, this proxy will
be voted FOR proposals 1 and 2 and AGAINST proposal 3 and will be voted
by the proxyholders at their discretion as to any other matters properly
transacted at the Meeting or any adjournments thereof. To vote in accordance
with the Board of Directors' recommendations, just sign below and date.
No boxes need to be checked.
Signature(s) ___________________________ Date_________________
Note: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, adminstrator, trustee, or gaurdian,
please give full title as such.
