TOTAL RESEARCH CORPORATION
5 INDEPENDENCE WAY
PRINCETON, NEW JERSEY 08543
November 7, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Total Research Corporation to be held on Thursday, December 7, 2000, at 11:00
a.m. at the Marriott Hotel, Forrestal Center, 201 Village Boulevard, Princeton,
New Jersey.
We hope that you will attend in person. If you plan to do so, please
indicate in the space provided on the enclosed proxy. Whether you plan to attend
the Annual Meeting or not, we urge you to sign, date, and return the enclosed
proxy as soon as possible in the postage-paid envelope provided. This will
ensure representation of your shares in the event that you are unable to attend
the Annual Meeting.
The matters expected to be acted upon at the Annual Meeting are
described in detail in the attached Notice of Annual Meeting and Proxy
Statement.
The directors and officers of Total Research Corporation look forward
to meeting with you.
Sincerely,
David Brodsky
Chairman of the Board
<PAGE>
TOTAL RESEARCH CORPORATION
5 INDEPENDENCE WAY
PRINCETON, NEW JERSEY 08543
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date and Time: December 7, 2000, 11:00 a.m., Eastern Standard Time
Place: Marriott Hotel
Forrestal Center
201 Village Boulevard
Princeton, New Jersey 08540
Purpose: 1. Elect directors.
2. Ratify appointment of independent accountants.
3. Conduct other business if properly raised.
Who may vote: Only stockholders of record on October 31, 2000.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.
JANE B. GILES
Secretary
November 7, 2000
<PAGE>
TOTAL RESEARCH CORPORATION
5 INDEPENDENCE WAY
PRINCETON, NEW JERSEY 08543
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
Page
General Information...................................................... 1
Board of Directors Proposal No. 1
Election of Class I Directors......................................... 2
Board Committees...................................................... 3
Director Compensation................................................. 4
Director and Executive Officer Stock Ownership........................ 4
Information Concerning Executive Officers............................. 6
Report of the Compensation Committee on Executive Compensation........ 7
Executive Compensation................................................ 8
Stock Performance Graph............................................... 9
Certain Relationships and Related Transactions........................ 10
Board of Directors Proposal No. 2
Ratification of Appointment of Independent Auditors ................... 10
Fiscal Year 2000 Annual Report and Form 10-K............................. 11
Additional Information................................................... 11
Other Business........................................................... 12
Appendix 1
Audit Committee Charter............................................... A-1
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IMPORTANT: Stockholders are requested to DATE, SIGN and MAIL the enclosed proxy.
A postage paid envelope is provided.
--------------------------------------------------------------------------------
<PAGE>
TOTAL RESEARCH CORPORATION
5 Independence Way
Princeton, New Jersey 08543
PROXY STATEMENT
GENERAL INFORMATION
Who may vote
Stockholders of Total Research Corporation ("Total Research" or the
"Company"), as recorded in our stock register on October 31, 2000, may vote at
the Annual Meeting.
How to vote
You may vote in person at the Annual Meeting or by proxy. We recommend
that you vote by proxy even if you plan to attend the Annual Meeting. You can
always change your vote at the Annual Meeting.
How proxies work
The Company's Board of Directors (the "Board") is asking for your
proxy. Giving us your proxy means you authorize us to vote your shares at the
Annual Meeting in the manner you direct. You may vote for all, some or none of
our director candidates. You may also vote for or against the other proposals or
abstain from voting.
If you sign and return the enclosed proxy card but do not specify how
to vote, we will vote your shares in favor of our director candidates and in
favor of the ratification of the appointment of Ernst & Young LLP as independent
auditors for 2001.
You may receive more than one proxy or voting card depending on how you
hold your shares. Shares registered in your name are covered by one card. The
Company's employees receive a separate card for any shares held in the Company's
Employee Stock Purchase Plan. If you hold shares through someone else, such as a
stockbroker, you may get material from them asking how you want to vote.
Revoking a proxy
You may revoke a proxy before it is voted by submitting a new proxy
with a later date; by voting in person at the Annual Meeting; or by notifying
the Company's Secretary in writing at the address listed under "Additional
Information - Questions" on page 12.
Confidential voting
Independent inspectors count the votes. Your individual vote is kept
confidential from us unless special circumstances exist. For example, a copy of
your proxy will be sent to us if you write comments on the card.
Quorum
In order to carry on the business of the Annual Meeting, we must have a
quorum. This means at least a majority of the outstanding shares eligible to
vote must be represented at the Annual Meeting, either by proxy or in person.
Shares owned by Total Research are not voted and do not count for this purpose.
Votes needed
Election as a director requires a plurality of the votes eligible to be
cast by the Common Stock present in person or represented by proxy at the Annual
Meeting and entitled to vote on the subject matter.
<PAGE>
For the other proposal to be voted upon at the Annual Meeting, the affirmative
vote of a majority of the votes eligible to be cast by the Common Stock present
in person or represented by proxy at the Annual Meeting and entitled to vote on
the matter is required.
The inspectors of election will treat abstentions and broker non-votes
(i.e., shares held by brokers or nominees that the broker or nominee does not
have discretionary power to vote on a particular matter and as to which
instructions have not been received from the beneficial owners or persons
entitled to vote) as shares that are present and entitled to vote for purposes
of determining a quorum. With regard to the election of directors, votes may be
cast in favor of or withheld; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on proposals
other than the election of directors and will be counted as present for purposes
of the item on which the abstention is noted. Therefore, such abstentions will
have the effect of a negative vote. The inspectors of election will treat broker
non-votes as shares that are unvoted and not present on such proposals. With
regard to proposals other than the election of directors such broker non-votes
will have no effect on the outcome.
Attending in person
Only stockholders, their proxy holders and the Company's guests may
attend the Annual Meeting.
If you hold your shares through someone else, such as a stockbroker,
bring proof of your ownership to the Annual Meeting. Acceptable proof could
include an account statement showing that you owned Total Research shares on
October 31, 2000.
Cost of proxy
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others who forward
solicitation material to beneficial owners of common stock.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
---------------------
(Item 1 on the proxy card)
Under the Company's Certificate of Incorporation, as amended, the Board
of Directors is classified into three classes. The two directors serving in
Class I have terms expiring at the 2000 Annual Meeting. The Board of Directors
has nominated the Class I directors currently serving on the Board of Directors,
Albert Angrisani and J. Edward Shrawder, for election to serve as directors of
the Company for a three-year term until the 2003 Annual Meeting of Stockholders
of the Company and until their successors are elected and qualified or until
their earlier resignation or removal. Although management has no reason to
believe that the nominees will not be available as candidates, should such a
situation arise, proxies may be voted for the election of such other persons as
the holders of the proxies may, in their discretion, determine.
Directors are elected by a plurality of the votes cast at the Annual
Meeting, either in person or by proxy. Votes that are withheld will be excluded
entirely from the vote and will have no effect.
The Board of Directors oversees the management of the Company on your
behalf. The Board reviews the Company's long-term strategic plans and exercises
direct decision-making authority in essential areas. The Board chooses the Chief
Executive Officer, sets the scope of his authority to manage the Company's
day-to-day business and evaluates his performance.
Of the slate of directors proposed by Total Research, one of the two
nominees is not an employee of the Company. The table below sets forth the
names, ages, current positions with the Company and personal information of each
of the nominees for director.
The Board recommends that you vote FOR each of the nominees:
-2-
<PAGE>
Albert Angrisani................. Mr. Angrisani has been the Company's
Age 51 President and Chief Executive Officer
Director since 1994 since July 1998. Prior to July 1998, Mr.
Class I Angrisani was aconsultant to the Company.
From January 1993 to April 1998, Mr.
Angrisani was the President of the
Princeton-Potomac Management Company, a
consulting and financial services firm.
J. Edward Shrawder............... Mr. Shrawder has been the Chief Financial
Age 59 Officer of Kent Research, a marketing
Director since 1993 research firm located in Illinois, since
Class I 1990. From 1987 to 1990, he was President
of Elrick & Lavidge, a major marketing
research firm.
BOARD COMMITTEES
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board appoints committees to help carry out its duties. In
particular, committees work on key issues in greater detail than would be
possible at Board meetings. Each committee reviews the results of its meetings
with the full Board.
The Board of Directors has an Audit Committee, a Compensation Committee
and an Executive Committee. In fiscal 2000, the Board of Directors met three
times and acted by unanimous written consent on two occasions, the Compensation
Committee met once, the Audit Committee met once and the Executive Committee met
six times.
The Audit Committee reviews the adequacy of internal controls, the
results and scope of annual audits and other services provided by the Company's
independent auditors. In fiscal 2000, the Audit Committee was composed of
Messrs. John P. Freeman, George Lindemann and J. Edward Shrawder (Chair).
The Compensation Committee establishes salaries, bonuses, and other
forms of compensation for executives of the Company and such other employees of
the Company as assigned thereto by the Board. In fiscal 2000, the Compensation
Committee was composed of Messrs. Albert Angrisani, David Brodsky, John P.
Freeman, George Lindemann and Howard Shecter (Chair).
The Executive Committee has broad power to act on behalf of the Board.
This committee was established in July 1998. In fiscal 2000, the Executive
Committee was composed of Messrs. Albert Angrisani, David Brodsky (Chair),
Howard Shecter and Lorin Zissman.
The Company does not have a nominating committee. The functions
customarily performed by a nominating committee are performed by the Board of
Directors as a whole. Any stockholder who wishes to make a nomination at an
annual or special meeting for the election of directors must do so in compliance
with the applicable procedures set forth in the Company's By-laws. The Company
will furnish copies of such By-law provisions upon written request to the
Corporate Secretary at the Company's principal executive offices, 5 Independence
Way, Princeton, NJ 08543.
During the period in which each person served as a director, each
director attended at least 75% of the aggregate number of meetings of the Board
of Directors and the committees of the Board on which such person served.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee, which consists solely of independent members
of the Company's Board of Directors, has reviewed and discussed with management
the audited financial statements included in the Company's 2000 Annual Report of
Form 10-K. Additionally, the Audit Committee has discussed with the independent
auditors the matters required to be discussed by SAS 61. The Audit Committee has
received the written disclosures and the letter from Ernst & Young, LLP, the
independent accountants, required by Independence Standards Board Standard No. 1
and has discussed with the independent accountant the independent accountant's
independence. Based on this discussion, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Company's Annual Report
-3-
<PAGE>
on Form 10-K. A written Audit Committee Charter, attached as Appendix 1 to this
Proxy Statement, was adopted by the Board of Directors on June 1, 2000.
John P. Freeman, George Lindemann and J. Edward Shrawder
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation
for serving on the Board of Directors. Non-employeedirectors are reimbursed for
their out-of-pocket expenses in attending Board meetings. Each non-employee
director receives 50,000 stock options upon joining the Board of Directors and
10,000 stock options at the end of each year of service on the Board of
Directors. See also "Certain Relationships and Related Transactions - Agreements
with Other Employee Directors."
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP
The following table sets forth information, as of October 1, 2000,
concerning the Common Stock of the Company beneficially owned by (i) each
director and nominee of the Company, (ii) the Company's Chief Executive Officer
and its other four most highly compensated Executive Officers during the fiscal
year ended June 30, 2000 (collectively, the "Named Executive Officers") and all
executive officers and directors as a group, and (iii) each stockholder known by
the Company to be the beneficial owner of more than 5% of the outstanding Common
Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED PERCENT OF
OUTSTANDING SHARES
<S> <C> <C>
Albert Angrisani(1) 588,225 *
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
Doug Berdie(2) 45,400 *
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
David Brodsky (3) 725,693 5.4%
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
Theresa Flanagan (4) 215,428 *
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
John P. Freeman 200,000 1.6%
c/o Covenant Partners
500 N. Gulph Road, Suite
King of Prussia, PA 19406
Patti Hoffman(5) 193,651 1.0%
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
George L. Lindemann(6) 243,048 1.5%
c/o Southern Union Company
767 Fifth Avenue, 50th Floor
New York, New York 10153
-4-
<PAGE>
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED PERCENT OF
OUTSTANDING SHARES
Mark Nissenfeld(7) 186,540 1.0%
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
Howard Shecter(8) 296,380 1.7%
c/o Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
J. Edward Shrawder(9) 188,777 1.1%
c/o Kent Research
1716 Livingston Street
Evanston, Illinois 60201
Lorin Zissman 1,254,874 9.8%
c/o Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
All directors and executive officers as a group (18 4,267,958 25.1%
persons) (10)
--------------------
</TABLE>
* Less than 1%
(1) Includes 40,000 shares subject to options exercisable within 60 days,
an additional 500,000 options exercisable within 60 days subject
to certain forfeiture and performance contingencies and 28,225
performance bonus shares.
(2) Includes 29,500 shares subject to options exercisable within 60 days.
(3) Includes 43,332 shares subject to options exercisable within 60 days.
(4) Includes 125,040 shares subject to options exercisable within 60 days
and 10,000 shares owned jointly with his spouse.
(5) Includes 63,465 shares subject to options exercisable within 60 days.
(6) Includes 49,998 shares subject to options exercisable within 60 days.
(7) Includes 63,465 shares subject to options exercisable within 60 days.
(8) Includes 83,330 shares subject to options exercisable within 60 days
and 20,000 shares owned jointly with his spouse.
(9) Includes 46,666 shares subject to options exercisable within 60 days.
(10) Includes an aggregate of 1,070,996 shares subject to options
exercisable within 60 days.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consisted of Albert Angrisani, David
Brodsky, John P. Freeman, George Lindemann and Howard Shecter. Mr. Angrisani, in
addition to being a director, is also President and Chief Executive Officer of
the Company. No executive officer of the Company served on the compensation
committee of another entity or on any other committee of the board of directors
of another entity performing similar functions during the last fiscal year.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons who
beneficially own more than ten percent of the Company's Common Stock to report
their ownership of and transactions in the Company's Common Stock to the
Securities and Exchange Commission and the Nasdaq National Market. Copies of
these reports are also required to be supplied to the Company. The Company
believes, based solely on a review of the copies of
-5-
<PAGE>
such reports received by the Company, that all applicable Section 16(a)
reporting requirements were complied with during 2000.
INFORMATION CONCERNING EXECUTIVE OFFICERS
The following table provides certain information as of October 1, 2000,
about each of the Company's executive officers.
NAME POSITION(S) WITH COMPANY
---- ------------------------
Albert Angrisani President, Chief Executive Officer and Director
Doug Berdie President, Strategic Brand Research
Matthew J. Campion Executive Vice President, Global Life Sciences
Gareth Davies Managing Director, Total Research Europe
Theresa Flanagan President, Customer Loyalty
Jane B. Giles Corporate Secretary
William Guerin Vice President, Business Development
Patti Hoffman Chief Administrative Officer
Matthew Kirby Acting Chief Financial Officer, Acting Chief
Accounting Officer, and Acting Treasurer
Chris Kuever Senior Vice President and Director
Global Operations
Russell V. Nathan Chairman, Total Research Europe
Mark Nissenfeld, Ph.D. Executive Vice President and Director of Pricing and
Project Management Financial Controls
The business experience, principal occupation, employment and certain
other information concerning each of the Company's executive officers is set
forth below. Information regarding the business experience of Mr. Angrisani is
set forth above under the caption "Election of Directors".
Doug Berdie has been President of Strategic Brand Research since
November 1998. He joined the Company in February 1989 and served as Director of
Research from 1989 to 1998.
Matthew J. Campion has been Executive Vice President, Global Life
Sciences since July 1999. He joined the Company in July 1986 and served as an
Account Executive from 1995 to 1999.
Gareth Davies assumed the position of Managing Director, Total Research
Europe in June 1998. In 1989 he joined Business Marketing Services as a
Financial Controller and had been their Financial Director prior to their
purchase by Total Research Corporation in 1994.
Theresa Flanagan became President of the Customer Loyalty division of
the Company in July 1996. Ms. Flanagan joined the Company in 1983 and served as
Senior Vice President from June 1993 to July 1996.
Jane B. Giles has been Corporate Secretary since July 1, 1999. She
joined the Company in April 1997 as Human Resources Manager. Prior to joining
the Company she had been with Mobil Oil Corporation for 20 years as a Human
Resources Specialist.
William Guerin joined the Company in July 1999 as Vice President of
Business Development. Prior to opening his own consulting firm in August 1998,
he served as Manager of Sales Performance for Pennsylvania Power and Light
Company, Inc. from 1996 to 1998.
Patti Hoffman assumed the position of Chief Administrative Officer
effective July 1, 1999. From June 1996 to June 1999, she had been President of
the U .S. Regional Offices division of the Company.
-6-
<PAGE>
Ms. Hoffman joined the Company in February 1995 as Vice President-Human
Resources. Prior to that time, Ms. Hoffman was an independent human resources
consultant.
Matthew Kirby joined the Company in April 2000 as Acting Chief
Financial Officer, Acting Chief Accounting Officer and Acting Treasurer. Prior
to joining the Company he had been with United News and Media, plc as Executive
Vice President, Chief Financial Officer from 1989 to 2000. From 1984 to 1989 he
had been Director of Accounting with USA Network and from 1981 to 1984 he was
International Accountant for AFS International/Intercultural Programs, Inc.
Chris Kuever became Senior Vice President and Director of Global
Operations in January 1999. He joined the Company March 1989 and most recently
was Vice President and Director of Data Processing.
Russell V. Nathan was founder, chairman and managing director of
Romtec plc which went public on an IPO on the London Stock Exchange in April
1996. Since the acquisition of Romtec plc by Total Research Corporation on May
12, 2000, Mr. Nathan has served as Chairman of Total Research Europe. In 1997,
Mr. Nathan was awarded a Commander of the British Empire in Queen's Birthday
Honours. Mr. Nathan is past chairman of Thames Valley Enterprise, Thames Valley
Business Link and Thames Valley Economic Partnership. Currently he is a
Vice-President of the Marketing Council and a Director of the South East England
Development Agency.
Mark Nissenfeld, Ph.D., became Executive Vice President and Director of
Pricing and Project Management Financial Controls in July 2000. From July 1996
to July 2000, he was President of the Global Life Sciences division of the
Company. Dr. Nissenfeld joined the Company in June 1993 as Research Director of
the Company and Managing Director of the Life Sciences division.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and approves the compensation of
executives of the Company and such other employees of the Company as assigned
thereto by the Board and makes recommendations to the Board with respect to
standards for setting compensation levels and employee benefit programs. The
Compensation Committee adopted the Report on Executive Compensation set forth
below.
REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation for fiscal 2000 consisted of two
primary components: base salary and bonus. The base salary and bonus of the
Named Executive Officers is established in such officer's employment agreement.
See "Certain Relationships and Related Transactions - Employment Agreements".
The salary and bonus components of the Company's executive compensation
are together designed to facilitate fulfillment of the following compensation
objectives: (i) retaining competent management; (ii) rewarding management for
the attainment of short and long term accomplishments; (iii) aligning the
interests of management with those of the Company's stockholders; and (iv)
relating executive compensation to the achievement of the Company's goals and
financial performance.
Base Salary. The base salary of each of the Named Executive Officers
in fiscal 2000 was paid in accordance with the terms of their respective
employment agreements.
Bonuses. The Compensation Committee believes that awarding annual
bonuses provides an incentive and reward for short-term financial success and
long-term Company growth. The bonus component of the long-term employment
agreements of each of the executive officers is intended to link compensation in
significant part to the Company's financial performance and the attainment of
the Company's goals. The bonus earned by each of the executive officers was
calculated in accordance with a formula set forth in such officer's employment
agreement which entitles such officer to a bonus based on their business unit
and/or Company's financial performance for each fiscal year. See "Certain
Relationships and Related Transactions - Employment Agreements".
-7-
<PAGE>
Incentive Stock Options. The Company uses incentive stock options as a
long-term, non-cash incentive and to align the long-term interests of executive
officers and stockholders of the Company. Stock options are awarded based upon
the market price of the Common Stock on the date of grant and are linked to
future performance of the Company's stock because they do not become valuable to
the holder unless the price of the Company's stock increases above the price on
the date of grant. The number of options granted to an executive officer as a
form of non-cash compensation is determined by the following factors: (i) the
number of stock options previously granted to an Executive Officer; (ii) the
Executive Officer's remaining options exercisable; and (iii) the value of those
remaining stock options as compared to the anticipated value that an Executive
Officer will add to the Company in the future.
Compensation of the Chief Executive Officer. The compensation package
of Mr. Angrisani, the Company's President and Chief Executive Officer, consists
primarily of base salary and bonus components. The levels of base salary and
bonus, as well as the factors considered in determining such levels, are
established by Mr. Angrisani's Employment Agreement and the Compensation
Committee.
In fiscal 2000, Mr. Angrisani earned a base salary of $200,000 and an
estimated bonus of $125,000. In addition, pursuant to his employment agreement,
Mr. Angrisani receives certain other customary perquisites and benefits. As of
October 1, 2000, Mr. Angrisani beneficially owned 500,000 options subject to
certain forfeiture and performance contingencies, and 430,000 incentive stock
options were granted to Mr. Angrisani on April 6, 1999. The vesting of the
additional 430,000 options is contingent upon meeting designated performance
goals.
Albert Angrisani, David Brodsky, John P. Freeman, George Lindemann,
Howard Shecter
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation earned, whether paid or
deferred, by each Named Executive Officer for services rendered in all
capacities to the Company during the fiscal years ended June 30, 1998, 1999 and
2000.
<TABLE>
<CAPTION>
Long-Term Compensation
Awards All Other
Annual Compensation Securities Underlying Compensation
Name and Principal Position Year Salary ($) Bonus ($) Options (#) ($)
<S> <C> <C> <C> <C> <C>
Albert Angrisani......... 2000 200,000 - - 18,000(4)
President and Chief 1999 175,000 125,000 430,000(3) 12,000(5)
Executive Officer (1) 1998 175,000(2) 43,900 - -
Doug Berdie.................. 2000 140,000 - - 10,200(4)
President - Strategic 1999 130,000 55,150 - 7,400(4)
Brand Research 1998 120,000 10,000 - -
Patti Hoffman............ 2000 150,000 - - 10,500(4)
Chief Administrative 1999 140,000 40,000 - 10,140(4)
Officer
Offices division 1998 120,000 32,800 - 4,140(6)
-8-
<PAGE>
Mark Nissenfeld......... 2000 170,000 - - 11,100(4)
Executive Vice President & 1999 155,847 - - 12,000(4)
Director of Pricing & 1998 120,000 32,000 - 4,140(6)
Project
Management Financial
Controls
Theresa Flanagan......... 2000 140,000 - 10,200(4)
President - Customer 1999 134,480 44,300 - 10,034(4)
Loyalty division 1998 120,000 6,000 - 3,695(6)
</TABLE>
--------------------------------------------------------------------------------
(1) Mr. Angrisani assumed the responsibilities of President and Chief
Executive Officer of the Company on July 1, 1998. Prior to July 1998,
Mr. Angrisani was a consultant to the Company.
(2) Represents fees paid to Mr. Angrisani in his capacity as a consultant
to the Company.
(3) Represents Incentive Stock Options granted to Mr. Angrisani. See
"Report on Executive Compensation - Compensation of the Chief Executive
Officer."
(4) Represents Company's match on employee 401(k) contributions and car
allowance.
(5) Represents Mr. Angrisani's car allowance.
(6) Represents Company's match on 401(k) plan contributions.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND VALUE OF OPTIONS AT FISCAL
YEAR END
<TABLE>
<CAPTION>
Number of Value of
--------- --------
Securities Unexercised
---------- -----------
Number of Underlying in-the-money
--------- ---------- ------------
Shares Unexercised Options at
------ ----------- ----------
Acquired on Value Options at Fiscal Year-End Fiscal Year-End (1)
----------- ----- -------------------------- -------------------
Name Exercise Realized (Exercisable/Unexercisable) (Exercisable/Unexercisable)
---- -------- -------- --------------------------- ---------------------------
($) (#) ($)
--- --- ---
<S> <C> <C> <C> <C>
Angrisani, Albert - - 540,000/430,000 994,240/174,580
Berdie, Doug 10,000 27,810 29,500/40,000 40,758/16,240
Flanagan, Theresa 61,500 171,032 125,040/63,460 246,141/124,921
Hoffman, Patti 123,075 342,272 63,465/63,460 124,931/124,921
Nissenfeld, Mark 123,075 342,272 63,465/63460 124,931/124/921
-----------------------
</TABLE>
(1) Market value of underlying shares of Common Stock, based on the average
of the high and low sales price ($2.781), on June 30, 2000, minus the
aggregate exercise price.
PERFORMANCE GRAPH
The following graph depicts the cumulative total return on the
Company's Common Stock compared to the cumulative total return for the Nasdaq
Composite Index and the Nasdaq Industrial Index. The graph assumes an investment
of $100 on June 30, 1995. Reinvestment of dividends is assumed in all cases.
[Performance Graph]
<PAGE>
The comparisons on the graph above are required by the Securities and
Exchange Commission and are not intended to forecast or be indicative of
possible future performance of the Company's Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Albert Angrisani, pursuant
to which he serves as President and Chief Executive Officer of the Company for a
three year term ending June 30, 2001, at an annual salary of $200,000, subject
to adjustment by the Executive Committee of the Board of Directors in fiscal
years 2000 and 2001, based on changes in corporate goals and objectives. Mr.
Angrisani is also entitled to receive a bonus of up to $125,000 per annum based
upon the Company's financial performance. If Mr. Angrisani's employment is
terminated by the Company for any reason other than Cause (as defined therein)
or disability or following a Change in Control (as defined therein), or Mr.
Angrisani terminates his employment for Good Reason (as defined therein), then
the Company is obligated to pay him a lump sum cash severance payment of
$1,000,000, in addition to continuing to provide all employee benefits to Mr.
Angrisani and his family for the remainder of the Term (as defined therein) and
all options held by Mr. Angrisani would vest immediately. Mr. Angrisani has
agreed not to engage in a Competing Business (as defined therein) during the
Term and for a period of one year thereafter, subject to certain exceptions. Mr.
Angrisani's employment agreement provides for three non-collateralized annual
loans of $100,000 each from the Company. The entire principal and interest on
such loans is due on June 30, 2001; provided, that the entire amount may
forgiven under certain circumstances described in Mr. Angrisani's employment
agreement.
The Company has entered into an employment agreement with each of Doug
Berdie, Theresa Flanagan, Patti Hoffman and Mark Nissenfeld, pursuant to which
each serves as an executive officer of the Company for the following periods:
Patti Hoffman and Mark Nissenfeld for the term ending December 31, 2000; Doug
Berdie and Theresa Flanagan for the term ending June 30, 2001. Each of such
executive officers is entitled to participate in all benefit plans and
performance bonuses offered by the Company. Each such executive officer has
agreed not to solicit any of the Company's clients or employees for a period of
one year following the termination of his or her respective employment
agreement.
AGREEMENTS WITH OTHER EMPLOYEE DIRECTORS
The Company has employment agreements with certain of its executive
officers. See "Report on Executive Compensation". In addition, Messrs. Brodsky
and Shecter have employment agreements for the period of April 1, 1999 through
June 30, 2000, for $125,000 and $75,000, respectively, to compensate them for
their active participation in specific aspects of the Company's business.
Messrs. Brodsky and Shecter's employment agreements are subject to adjustment by
the Compensation Committee of the Board of Directors in fiscal years 2000 and
2001, based on changes in corporate goals and objectives.
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Item 2 on the proxy card)
The Board of Directors has appointed Ernst & Young LLP ("Ernst &
Young") as independent auditors to audit the financial statements of the Company
for the fiscal year ending June 30, 2001, subject to ratification by the
Company's stockholders at the Annual Meeting. Ernst & Young began to serve as
independent auditors for Total Research following the Company's dismissal of
Amper, Politzimer & Mattia ("APM"), effective on October 22, 1998. If the
stockholders reject the appointment, the Board will reconsider its selection. If
the stockholders ratify the appointment, the Board, in its sole discretion, may
still direct the appointment of new independent auditors at any time during the
year if the Board believes that such a change would be in the best interests of
the Company. The Company has been advised that a representative of Ernst & Young
will be present at the Annual Meeting, will have the opportunity to make a
statement if he or she wishes and is expected to be available to respond to
appropriate questions.
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DISMISSAL OF FORMER ACCOUNTANT
Effective on October 22, 1998, the Company dismissed APM as the
Company's principal independent accountants. The decision to change independent
accountants was recommended by the Audit Committee of the Company's Board of
Directors.
The reports of APM on the Company's financial statements as of and for
each of the fiscal years ended June 30, 1997 and 1998 did not contain an adverse
opinion or disclaimer of opinion, nor were such reports qualified or modified as
to uncertainty, audit scope or accounting principles. In connection with audits
of the financial statements of the Company for the years ended June 30, 1997 and
1998 and during the interim period through the date of APM's dismissal, there
were no disagreements between the Company and APM on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures which, if not resolved to APM's satisfaction, would have caused APM
to make reference to such matter in its reports. Further, during such periods,
there were no events of the type required to be reported pursuant to Item
304(a)(1)(iv) of Regulation S-K.
ENGAGEMENT OF NEW ACCOUNTANT
On or about the date of the dismissal of APM, the Company appointed
Ernst & Young as the Company's new independent accountants.
During the Company's two most recent fiscal years or any subsequent
interim period prior to engaging Ernst & Young, neither the Company nor anyone
on its behalf consulted Ernst & Young regarding (i) the application of
accounting principles to any transaction; or the type of audit opinion that
might be rendered on the Company's financial statements, or (ii) any matter that
was either the subject of a disagreement or an event required to be reported
pursuant to Item 304(a)(1)(iv) of Regulation S-K.
The Board recommends that you vote FOR this proposal.
FISCAL YEAR 2000
ANNUAL REPORT AND FORM 10-K
A COPY OF THE FISCAL YEAR 2000 ANNUAL REPORT ACCOMPANIES THIS PROXY
STATEMENT. THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30,
2000, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, CONTAINS DETAILED
INFORMATION CONCERNING THE COMPANY AND ITS OPERATIONS. THE COMPANY WILL PROVIDE
TO ANY STOCKHOLDER A COPY OF THE FORM 10-K, WITHOUT CHARGE, UPON WRITTEN REQUEST
TO TOTAL RESEARCH CORPORATION, 5 INDEPENDENCE WAY, PRINCETON, NEW JERSEY, 08543,
ATTN: INVESTOR RELATIONS.
ADDITIONAL INFORMATION
Other business
The Board does not expect any business to come up for stockholder vote
at the Annual Meeting other than the items raised in this Proxy Statement. If
other business is properly raised, your proxy card authorizes the people named
as proxies to vote as they think best.
People with disabilities
We can provide reasonable assistance to help you participate in the
Annual Meeting if you tell us about your disability and your plan to attend the
Annual Meeting. Please call or write the Secretary at least two weeks before the
Annual Meeting at the number or address under the section titled "Questions?"
below.
Outstanding shares
On October 16, 2000, 12,747,753 shares of Common Stock were
outstanding. Each share has one vote.
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How we solicit proxies
In addition to mailing, Total Research employees may solicit proxies
personally, electronically or by telephone. Total Research pays the costs of
soliciting this proxy.
Stockholder proposals for next year
Any stockholder proposal which is intended to be presented at the
Company's 2001 Annual Meeting of Stockholders must be received at the Company's
principal executive offices, 5 Independence Way, Princeton, NY 08543, Attention:
Corporate Secretary, by no later than July 12, 2001, if such proposal is to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to such meeting, which meeting the Company expects will be held in
December 2001. Any such proposals must comply in all respects with the rules and
regulations of the Commission. Stockholders of the Company who intend to bring
business before the Annual Meeting must also comply with the applicable
procedures set froth in the Company's By-laws. The Company will furnish copies
of such By-law provisions upon written request to the Secretary's Office at the
aforementioned address.
Questions?
If you have questions or need more information about the Annual
Meeting, write to:
Corporate Secretary
Total Research Corporation
5 Independence Way
Princeton, New Jersey 08543
Attn: Corporate Secretary
or call us at (609) 520-9100.
OTHER BUSINESS
The Annual Meeting is being held for the purposes set forth in the
Notice which accompanies this Proxy Statement. The Board is not presently aware
of business to be transacted at the Annual Meeting other than as set forth in
the Notice.
By Order of the Board of Directors,
David Brodsky
Chairman of the Board
Princeton, New Jersey
November 7, 2000
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