<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Brandon Systems Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Brandon Systems Corporation
- --------------------------------------------------------------------------------
(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), or 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 the date of its filing.
(1) Amount Previously Paid:
_____________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________________________________
(3) Filing Party:
_____________________________________________________________________
(4) Date Filed:
_____________________________________________________________________
<PAGE> 2
BRANDON SYSTEMS CORPORATION
COPPER RIDGE CENTER
NINE POLITO AVENUE
LYNDHURST, NEW JERSEY 07071
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 12, 1996
To the Stockholders of
BRANDON SYSTEMS CORPORATION
Notice is hereby given that the 1996 Annual Meeting of Stockholders (the
"Annual Meeting") of Brandon Systems Corporation (the "Company") will be held at
The American Stock Exchange, 86 Trinity Place, 13th Floor, Board of Governors'
Room, New York, New York 10006-1881, on Tuesday, March 12, 1996, at 11:00 a.m.,
for the following purposes:
1. To elect three Class of 1999 directors;
2. To ratify the appointment of Coopers & Lybrand L.L.P. as the independent
auditors of the Company for the fiscal year ending September 29, 1996;
and
3. To consider and take action upon such other matters as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on January 19, 1996
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting.
Whether or not you expect to attend, you are requested to complete, sign, date
and return the enclosed proxy promptly. A return envelope, which requires no
postage if mailed in the United States, is enclosed for your convenience.
By Order of the Board of Directors,
MYRA BROWN
Secretary
January 24, 1996
Lyndhurst, New Jersey
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING YOUR VOTE IS
IMPORTANT. ACCORDINGLY, YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE TO INSURE THAT YOUR
SHARES ARE REPRESENTED. YOU MAY, HOWEVER, VOTE IN PERSON IF YOU ATTEND THE
MEETING.
<PAGE> 3
BRANDON SYSTEMS CORPORATION
COPPER RIDGE CENTER
NINE POLITO AVENUE
LYNDHURST, NEW JERSEY 07071
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 12, 1996
------------------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This proxy statement and the accompanying Notice of Annual Meeting and form
of proxy are being furnished to the stockholders of Brandon Systems Corporation,
a Delaware corporation (the "Company") in connection with the solicitation by
the Board of Directors of the Company of proxies to be used at the Annual
Meeting of Stockholders of the Company to be held on Tuesday, March 12, 1996, at
11:00 a.m., at The American Stock Exchange, 86 Trinity Place, 13th Floor, Board
of Governors' Room, New York, New York 10006-1881, and at any adjournments or
postponements thereof (the "Annual Meeting"). These proxy materials are first
being mailed on or about January 29, 1996, to holders of record on January 19,
1996 (the "Record Date") of the Company's common stock, par value $.10 per share
(the "Common Stock").
A proxy may be revoked by a stockholder at any time before it is voted by
written notice received by the Secretary of the Company, by submission of
another proxy bearing a later date or by appearing and voting in person at the
Annual Meeting. The mere presence at the Annual Meeting of the stockholder
appointing the proxy will not revoke the appointment. If not revoked, the proxy
will be voted at the Annual Meeting in accordance with the instructions
indicated on the proxy by the stockholder, or, if no instructions are indicated,
all shares represented by valid proxies received pursuant to this solicitation
and not revoked before they are voted will be voted for the election of the
three (3) nominees for directors named below, for the ratification of the
appointment of Coopers & Lybrand L.L.P. as the Company's independent auditors
for the 1996 fiscal year and, as to any other matters of business properly
submitted to stockholders at the Annual Meeting, as recommended by the Board of
Directors or, if no such recommendation is made, then in accordance with the
judgment of the person or persons voting the proxy.
All expenses of the Company in connection with this solicitation on behalf
of the Board of Directors will be borne by the Company. Proxies may be solicited
by directors, officers, or regular employees of the Company in person or by
telephone, facsimile transmission, or telex, without additional compensation.
Arrangements have been made for the Company's transfer agent, nominees, and
other custodians to send proxy materials to the beneficial owners of shares of
Common Stock held of record by such persons on the Record Date, and the Company
will reimburse such persons and the Company's transfer agent for their
reasonable out-of-pocket expenses incurred in forwarding such materials.
Holders of record of Common Stock at the close of business on the Record
Date are entitled to receive notice of, and will be entitled to vote at, the
Annual Meeting. At the close of business on the Record Date, the Company had
outstanding 4,384,402 shares of Common Stock. No other class of voting security
of the Company is issued and outstanding. The presence in person or by proxy of
the holders of a majority of the Common Stock on the Record Date is necessary to
constitute a quorum for the transaction of business. Each share of Common Stock
entitles the holder thereof to one vote on all matters which may come before the
Annual Meeting. There is no cumulative voting of shares. All matters coming
before this Annual Meeting are to be decided by the vote of stockholders
entitled to cast a majority of the number of votes present and entitled to be
cast, provided a quorum is present, except that directors are elected by the
affirmative vote of a plurality of the votes cast at the Annual Meeting.
1
<PAGE> 4
Abstentions and broker non-votes will be included in determining the number
of shares present or represented at the Annual Meeting for purposes of
determining whether a quorum exists. In determining whether a proposal submitted
to stockholders has received the requisite votes for approval, abstentions will
be counted and will have the effect as a vote against the proposal and broker
non-votes will not be counted and will have no effect on the outcome of that
vote. However, neither abstentions nor broker non-votes will be counted as votes
cast in connection with determining the plurality required to elect directors
and will have no effect on the outcome of that vote.
The Board of Directors knows of no matters, other than those stated above,
to be presented for consideration at the Annual Meeting. If, however, any other
matters properly come before the Annual Meeting, it is the intention of the
persons named in the enclosed proxy to vote such proxy in accordance with the
recommendation of the Board of Directors, or, if no such recommendation is
given, in their judgment on any such matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 1, 1996, certain information
concerning the ownership of shares of Common Stock by (i) each person who is
known by the Company to own beneficially more than five percent (5%) of the
issued and outstanding Common Stock, (ii) each director and nominee for director
of the Company, (iii) each named executive officer described in the section of
this Proxy Statement captioned "Executive Compensation", and (iv) all directors
and executive officers as a group. Except as otherwise indicated, each
individual named has sole investment and voting power with respect to the
securities shown.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES(1) PERCENT
---------------------------------------------------------- ------------------- -------
<S> <C> <C>
Ira B. Brown.............................................. 1,156,871(2) 25.9%
Copper Ridge Center
Nine Polito Avenue
Lyndhurst, New Jersey 07071
Myra Brown................................................ 1,156,871(2) 25.9%
Copper Ridge Center
Nine Polito Avenue
Lyndhurst, New Jersey 07071
BEM Management, Inc. ..................................... 299,200(3) 6.7%
520 Madison Avenue
New York, New York 10022
Amerindo Investment Advisors Inc.......................... 237,500(4) 5.3%
One Embarcadero
San Francisco, California 94111-3162
Domenica Schulz-Scarpulla................................. 70,625 1.6%
Martin M. Pollak.......................................... 24,955 *
Patricia Kennedy.......................................... 22,188 *
Peter Lordi............................................... 22,093 *
Kenneth A. DeGhetto....................................... 8,844 *
Steven S. Elbaum.......................................... 8,563
Charles Y.C. Tse.......................................... 6,000 *
Robert J. Miano........................................... 3,923 *
William E. Hess........................................... 3,612 *
All directors and executive officers as a group (14
persons)................................................ 1,343,355(1) 30.1%
</TABLE>
- ---------------
* Less than 1%
(1) Includes shares issuable pursuant to options to purchase Common Stock
exercisable within 60 days of the date hereof as follows: Ms.
Schulz-Scarpulla 43,750 shares, Ms. Kennedy 22,188 shares, Mr. Tse
2
<PAGE> 5
6,000 shares, Mr. Elbaum 3,000 shares, Mr. Lordi 2,250 shares, and Mr. Hess
3,000 shares and, all executive officers and directors as a group, 82,688
shares.
(2) Includes 908,835 shares held by Mr. Brown, 190,925 shares held by Mrs.
Brown, and 57,111 shares held by Rene Brown, the daughter of Mr. Brown and
Mrs. Brown, as to which each of Mr. Brown and Mrs. Brown each share voting
and dispositive power with Ms. Brown pursuant to a power of attorney. Mr.
Brown and Mrs. Brown each disclaims beneficial ownership of the shares of
Common Stock owned by the other.
(3) Based upon the most recent information furnished to the Company by BEM
Management Inc., Messrs. Blau and Metzger each have beneficial ownership of
297,000 shares of the 299,200 shares by virtue of their respective positions
with BEM Management Inc. and/or its affiliates. Mr. Metzger has sole voting
and dispositive power of 2,200 shares, and Messrs. Blau and Metzger share
voting and dispositive power over the 297,000 shares.
(4) Based on the most recent information available to the Company.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The Board of Directors has nominated and recommends the election of each of
the three (3) nominees listed below to serve as Class of 1999 directors. A Class
of 1999 director will serve until the 1999 Annual Meeting of Stockholders and
until his or her successor is elected and has qualified. Should any nominee(s)
become unavailable for election, the shares represented by the enclosed form of
proxy will be voted in favor of the remaining nominees and may be voted for the
election of substitute candidate(s) nominated by the Board of Directors. At
present, it is not anticipated that any nominee will not be a candidate. The
number of directors to be elected at the Annual Meeting is limited to three.
<TABLE>
<CAPTION>
NOMINEES CLASS TERM
------------------------------------------ ----- --------------------------
<S> <C> <C>
Kenneth A. DeGhetto....................... 1999 Until 1999 Annual Meeting
Steven S. Elbaum.......................... 1999 Until 1999 Annual Meeting
Peter Lordi............................... 1999 Until 1999 Annual Meeting
</TABLE>
The Board of Directors recommends that you vote "FOR" the election of each
of the director nominees.
3
<PAGE> 6
INFORMATION CONCERNING CURRENT DIRECTORS,
NOMINEES AND OTHER EXECUTIVE OFFICERS
Set forth below is a brief description of each nominee and incumbent
director and each other executive officer of the Company.
DIRECTORS AND NOMINEES
<TABLE>
<CAPTION>
TERM
NAME PRESENT POSITION AGE EXPIRES
-------------------------------------------- --------------------------- ---- -------
<S> <C> <C> <C>
Ira B. Brown................................ Chairman of the Board, 68 1998
Chief Executive Officer and
Director
Myra Brown.................................. Secretary and Director 62 1997
Domenica Schulz-Scarpulla................... President, Chief Operating 38 1998
Officer and Director
Peter Lordi................................. Senior Vice President, 52 1996*
Chief Financial Officer,
Treasurer and Director
Kenneth A. DeGhetto......................... Director 71 1996*
Steven S. Elbaum............................ Director 47 1996*
William E. Hess............................. Director 75 1998
Martin M. Pollak............................ Director 68 1997
Charles Y.C. Tse............................ Director 69 1997
</TABLE>
- ---------------
* Nominee for election as Class of 1999 director.
MR. BROWN has served as Chairman of the Board and Chief Executive Officer
of the Company since its founding in 1968. In addition, he served as the
Company's President until May, 1993 and was the Company's Treasurer until April,
1987. Mr. Brown is the husband of Myra Brown.
MRS. BROWN has been Secretary and a director of the Company since its
founding in 1968. She is a private investor. Mrs. Brown is the wife of Ira B.
Brown.
MS. SCHULZ-SCARPULLA has been President and Chief Operating Officer of the
Company since May, 1993 and served as Executive Vice President and Chief
Operating Officer from February, 1992 to that time. She served as Senior Vice
President of the Company from February, 1989 to February, 1992, and as Vice
President of the Company from April, 1987 until February, 1989. From March, 1986
to April, 1987, Ms. Schulz-Scarpulla was regional director of the Company. She
was Branch Manager of the Company's Edison, New Jersey office from April, 1984
to March, 1986. Ms. Schulz-Scarpulla has been a director of the Company since
May, 1989. She joined the Company as an Account Executive in January, 1981.
MR. LORDI, a certified public accountant, has served as Senior Vice
President of the Company since December, 1993, became Treasurer of the Company
in April, 1987 and has served as Chief Financial Officer since June, 1986. He
has been a director of the Company since September, 1986 and served as Vice
President of the Company from June, 1986 to December, 1993.
MR. DEGHETTO became a director of the Company in August, 1989. He has been
a member of the Board of Directors of Foster Wheeler Corporation, a major
international engineering, design and manufacturing company, since 1972, and
served as Chairman of the Board of Foster Wheeler Corporation from 1982 to 1987.
Mr. DeGhetto has been a member of the Board of Directors of Foster Wheeler
Limited since 1967 and a member of the Board of Directors of Cali Realty Corp.
since August, 1994.
MR. ELBAUM became a director of the Company in January, 1987. He has been
the Chairman of the Board and Chief Executive Officer of The Alpine Group, Inc.,
a diversified public holding company, since June, 1984.
4
<PAGE> 7
MR. HESS became a director of the Company in November, 1986. He has served
as an independent business consultant since 1977 and served as President of H&B
Hess Co., a textbook publisher, from 1984 to 1993. Prior to that, Mr. Hess
served as an Executive Vice President of National Distillers Product Company.
MR. POLLAK became a director of the Company in December, 1986, and also
served as a director of the Company from 1968 to 1973. He has served as
Executive Vice President, Treasurer and director of National Patent Development
Corporation, a diversified holding company, since August, 1959. He has been the
Chairman of the Board of General Physics Corporation, a high-tech engineering
and consulting firm, since January, 1986. Mr. Pollak has served as Chairman of
the Board of Interferon Sciences, Inc., a biotechnology company, since 1981 and
as a director of Duratek Corporation, a nuclear waste vitrification company,
since 1983. Mr. Pollak has served as Chief Executive Officer, President and a
member of the Board of Directors of American Drug Company, which sells
over-the-counter drugs and medical equipment in Russia and Eastern Europe, since
July, 1993.
MR. TSE became a director of the Company in August, 1992. He is the former
Vice-Chairman and President of International Operations of the Warner Lambert
Company, a major pharmaceutical and consumer products company. Mr. Tse has been
a director of Foster Wheeler Corporation since 1982, and a director of Transcell
Technologies, Inc. since December, 1993. Mr. Tse served as President of The
Cancer Research Institute, Inc. from 1991 to 1992.
OTHER EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME PRESENT POSITION AGE
------------------------------------------- -------------------------- ---
<S> <C> <C>
Patricia Kennedy........................... Senior Vice President 40
Robert J. Hanas............................ Vice President 50
Robert J. Miano............................ Vice President 46
Raymond J. Bolan........................... Controller and 52
Assistant Treasurer
Patricia G. Byrnes......................... General Counsel and 34
Assistant Secretary
</TABLE>
MS. KENNEDY has served as Senior Vice President of the Company since
December, 1993. Ms. Kennedy served as Vice President of the Company from
December, 1991 to December, 1993 and was a divisional Vice President of the
Company from May, 1990 to December, 1991. She was National Manager of the
Company from April, 1989 to May, 1990, and served as Branch Manager of the
Company's Chicago, Illinois office from September, 1987 to April, 1989.
MR. HANAS has served as Vice President-Human Resources of the Company since
January, 1989. Mr. Hanas was the Corporate Manager of Personnel from January,
1985 until December, 1988 of Ebasco Services, Inc., formerly an international
engineering and construction services concern.
MR. MIANO has served as Vice President of the Company since December, 1994
and was Director of Technical Operations of the Company from October, 1993 to
December, 1994. He was President and Chief Executive Officer of Comdisco
Computing Services, a computing services subsidiary of Comdisco, from July, 1988
to October, 1993.
MR. BOLAN has served as Controller of the Company since February, 1985 and
Assistant Treasurer of the Company since March, 1995.
MS. BYRNES has served as General Counsel of the Company since December,
1993 and Assistant Secretary of the Company since May, 1993. Ms. Byrnes served
as Counsel of the Company from May, 1993 to December, 1993. She was Associate
Counsel from January, 1991 to May, 1993 and from January, 1989 to January, 1991
was Staff Attorney for the Suburban Propane Division of Quantum Chemical
Corporation, a national supplier of propane and propane-related equipment.
5
<PAGE> 8
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During the fiscal year ended October 1, 1995, the Board of Directors held
five (5) meetings. During that fiscal year, each director attended 75% or more
of the aggregate of (i) the meetings of the Board of Directors and (ii) the
meetings of the committees on which such director served.
COMMITTEES OF THE BOARD
The current membership and responsibilities of the standing committees of
the Company's Board of Directors are as follows:
EXECUTIVE COMMITTEE. The Executive Committee consists of Messrs. Brown and
Lordi and Mmes. Brown and Schulz-Scarpulla. Between meetings of the Board of
Directors, the Executive Committee has all powers which may be lawfully
delegated to it. In general, the Executive Committee may supervise the
management of all business of the Company except matters which by law
specifically require the action of the Board of Directors or of the
stockholders. During fiscal year 1995, the Executive Committee met on four (4)
occasions. Actions taken by the Executive Committee are subsequently presented
for ratification at the next regular meeting of the Board of Directors.
AUDIT COMMITTEE. The Audit Committee consists of Messrs. Elbaum and Tse.
The Audit Committee held two (2) meetings during fiscal year 1995. This
Committee reviews and makes inquiries, as it deems appropriate, with respect to
the scope and results of the audit by the Company's independent auditors and the
adequacy of the Company's system of internal accounting controls and procedures,
proposes the appointment of the Company's independent auditors, subject to
approval by the Board of Directors and, approves the fees paid for services
rendered by such independent auditors.
COMPENSATION COMMITTEE. The Compensation Committee consists of Messrs.
DeGhetto, Hess and Pollak. The Compensation Committee held one (1) formal
meeting and had a number of informal meetings and discussions during fiscal year
1995. The Compensation Committee reviews and makes recommendations with respect
to the Company's Savings Investment Plan, and administers the Company's 1993
Incentive Stock Option Plan, 1993 Employee Stock Purchase Plan, and the 1987
Long-Term Equity Incentive Plan. This Committee also reviews and approves the
remuneration of executive officers of the Company.
CORPORATE PLANNING COMMITTEE. The Corporate Planning Committee assists the
Company's executive officers in evaluating potential business opportunities and
in corporate planning matters. The Corporate Planning Committee consists of
Messrs. Brown, DeGhetto, Elbaum and Pollak. The Corporate Planning Committee
held one (1) meeting during fiscal year 1995.
The Board of Directors does not have a nominating committee.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth a summary for the last three (3) fiscal
years of the cash and non-cash compensation awarded to, earned by, or paid to
the Chief Executive Officer of the Company and each of the four (4) other most
highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------
- --------------------------------------------------------------------------------------------------
AWARDS
--------------
NAME AND ANNUAL COMPENSATION OPTIONS/
PRINCIPAL ----------------------------- SARS
POSITION YEAR SALARY($) BONUS($) (#)
- ------------------------------------- ----- -------- -------- --------------
<S> <C> <C> <C> <C> <C>
Ira B. Brown......................... 1995 $387,429 $103,998 --
Chief Executive Officer 1994 $339,066 $103,998 --
1993 $300,000 (1) --
Domenica Schulz-Scarpulla............ 1995 $202,889 $92,110 --
President and 1994 $192,422 $132,686 --
Chief Operating Officer 1993 $157,799 $80,156 (2) 50,000
Patricia Kennedy..................... 1995 $162,164 $56,341 --
Senior Vice President 1994 $144,556 $51,999 --
1993 $122,920 $37,072 20,000
Peter Lordi.......................... 1995 $149,572 $57,569 --
Senior Vice President, 1994 $138,302 $51,999 --
Chief Financial Officer 1993 $126,538 $27,000 25,000
and Treasurer
Robert J. Miano...................... 1995 $148,346 $35,001 --
Vice President -- 1994 (3) (3) (3)
Technical Operations 1993 (3) (3) (3)
</TABLE>
- ---------------
(1) For fiscal year 1993, the Compensation Committee acceded to Mr. Brown's
request that he not be awarded a bonus.
(2) Ms. Schulz-Scarpulla earned shares of Common Stock as an incentive bonus
upon the realization of certain corporate earnings goals in 1993. The shares
awarded Ms. Schulz-Scarpulla for fiscal 1993 were 3,125 shares, at a fair
market value of $11.25 per share, which is included in the $80,156.
(3) Mr. Miano became an executive officer on December 15, 1994.
7
<PAGE> 10
The following table sets forth information concerning each exercise of
stock options during fiscal 1995 by each of the named executive officers and the
fiscal year-end value of unexercised options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(E)
(D) VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
(B) FY-END(#) AT FY-END($)
(A) SHARES ACQUIRED (C) EXERCISABLE(1)/ EXERCISABLE(1)/
NAME ON EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE(2)* UNEXERCISABLE(2)*
- ----------------------------- --------------- ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Ira B. Brown................. -- -- -- --
Domenica Schulz-Scarpulla.... -- -- 43,750(1) $ 468,063(1)
31,250(2) $ 322,688(2)
Peter Lordi.................. 6,250 $ 51,875 6,250(1) $ 62,500(1)
12,500(2) $ 125,000(2)
Patricia Kennedy............. -- -- 22,188(1) $ 247,372(1)
13,125(2) $ 136,344(2)
Robert J. Miano.............. 2,000 $ 32,500 1,250(1) $ 10,625(1)
3,750(2) $ 31,875(2)
</TABLE>
- ---------------
* Unexercisable options become immediately exercisable upon any
"change-in-control" of the Company as such term is defined in the Company's
1993 Incentive Stock Option Plan.
COMPENSATION OF DIRECTORS
Members of the Board of Directors of the Company who are not also officers
receive a fee of $1,500 for each Board meeting attended, and an additional fee
of $1,000 for each Committee meeting attended, plus reimbursement for travel
expenses where applicable. Also, pursuant to the Company's 1993 Incentive Stock
Option Plan, members of the Board of Directors of the Company who are not also
officers receive a Non-Qualified Stock Option to purchase 3,000 shares of the
Company's Common Stock, having an exercise price equal to the fair market value
on the date of such grant, upon their first election and subsequent re-election
as a member of the Company's Board of Directors. Effective January, 1995,
members of the Board of Directors who are not also officers additionally each
receive an annual retainer of $7,500, payable on a quarterly basis.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
In July, 1994, the Company entered into an Employment Agreement (the
"Agreement") with Mr. Brown, its Chairman of the Board, Chief Executive Officer
and founder ("CEO"), which provides that he will continue as the Chief Executive
Officer of the Company through December 31, 1996 unless extended by mutual
agreement of the parties or terminated for good cause (as defined therein). He
will then provide consulting services to the Company as its Chairman of the
Board and/or consultant for a period of ten (10) years. The Agreement contains a
noncompete provision which extends for two (2) years beyond the term of the
Agreement. Under the Agreement, the CEO's annual base salary for calendar year
1994 was $350,000 and for calendar years 1995 and 1996 is $400,000,
respectively. An annual bonus may be paid to the CEO at the discretion of the
Compensation Committee of the Board of Directors. During the consulting term of
the Agreement, the CEO will be paid $200,000 annually for rendering various
consulting and advisory services to the Company. In the event of Mr. Brown's
disability during the term of the Agreement, he will continue to receive his
Chief Executive Officer compensation and thereafter his consultant compensation
for up to ten (10) years from the date of disability. In the event of his death
during the CEO term, compensation at the above consultant rate will be paid to
Mrs. Brown, while she is living, for ten (10) years, and in the event of his
8
<PAGE> 11
death during the Chairman/consultant term, compensation at the above consultant
rate will be paid to Mrs. Brown, while she is living, for the balance of the
Chairman/consultant term. Under the Agreement, the CEO and his spouse will be
entitled to continuing medical benefits for their respective lives. The
Agreement provides that in the event of a change-in-control of the Company, as
defined therein, during Mr. Brown's service as Chief Executive Officer, Chairman
or a consultant, under certain conditions Mr. Brown may elect to resign and he
(or his spouse) will receive all compensation otherwise due him for the
remainder of the term of the Agreement. The Agreement also provides for share
registration rights exercisable through July 7, 2004. Among other things, the
Company may be obligated to file up to three (3) registration statements at a
cost not to exceed $100,000 each with respect to shares which would be
registered on behalf of the CEO. The Company is obligated to indemnify the CEO
and his spouse in their capacity as officers and/or directors of the Company in
accordance with the Company's by-laws and to afford such individuals the benefit
of any director and officer liability insurance maintained by the Company.
In January, 1996, the Company presented an Employment Agreement (the
"Agreement") to Ms. Schulz-Scarpulla, its President and Chief Operating Officer
("COO"), which provides that she will continue as President and COO of the
Company through December 31, 1998, unless extended by mutual agreement of the
parties or terminated for good cause (as defined therein). The Company
anticipates that the Agreement will be executed. The Agreement contains a
noncompete provision which extends for three (3) years beyond the term of the
Agreement. Under the Agreement, the COO's initial annual base salary is $200,000
and is subject to increase in the discretion of the Compensation Committee of
the Board of Directors. The COO's base salary was increased by the Compensation
Committee of the Board of Directors to $210,000 effective January, 1996. An
annual bonus may be paid to the COO at the discretion of the Compensation
Committee of the Board of Directors. In the event of Ms. Schulz-Scarpulla's
disability during the term of the Agreement, she will continue to receive annual
compensation in the amount of $100,000 for up to two (2) years from the date of
disability for rendering various advisory services to the Company. The Agreement
provides that in the event of a change-in-control of the Company, as defined
therein, during Ms. Schulz-Scarpulla's service as COO, under certain conditions
Ms. Schulz-Scarpulla may elect to resign and receive compensation equal to:
three (3) times her most recent annual base salary; and, bonus monies equal to
the average of the annual cash bonuses the COO actually received for the two (2)
calendar years immediately prior to her separation of employment. If such a
change-in-control were to occur during a period of disability, she would under
certain circumstances receive the balance of the disability compensation payable
to her under the Agreement. The Agreement also provides that in the event the
COO's employment is not continued following the expiration of the term of the
Agreement, the Company will pay, in quarterly installments over three (3) years
a severance amount equal to: two (2) times her most recent annual base salary;
and, the average annual cash bonus received over the two (2) preceding years.
The Company is obligated to indemnify the COO in her capacity as an officer
and/or a director of the Company in accordance with the Company's by-laws and to
afford such individual the benefit of any officer and director liability
insurance maintained by the Company.
In January, 1996, the Company also presented Employment Agreements
(collectively, the "Agreements") to Messrs. Lordi and Miano and Ms. Kennedy,
which provide that each individual will continue in his or her current position
with the Company through December 31, 1998, unless extended by mutual agreement
of the parties or terminated for good cause (as defined therein). The Company
anticipates that the Agreements will be executed. Each of the Agreements
contains a noncompete provision which extends for three (3) years beyond the
term of the Agreements. Under the Agreements, each individual's initial base
salary is $150,000, $150,000, and $160,000, respectively, and is subject to
increase at the discretion of the Compensation Committee of the Board of
Directors. Each individual's base salary was increased by the Compensation
Committee of the Board of Directors to $158,000, $158,000, and $168,000,
respectively, effective January, 1996. An annual bonus may be paid to each
individual at the discretion of the Compensation Committee of the Board of
Directors. The Agreements provide that in the event of a change-in-control of
the Company, as defined therein, during each individual's employment under the
Agreements, under certain conditions each of the individuals may elect to resign
and receive compensation equal to: three (3) times his or her most recent annual
base salary; and, bonus monies equal to the average of the annual cash bonuses
such individual actually received for the two (2) calendar years immediately
prior to his/her
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<PAGE> 12
separation of employment. The Agreements also provide that in the event Mr.
Lordi's or Ms. Kennedy's employment is not continued following the expiration of
the term of the Agreements, the Company will pay, in quarterly installments over
two (2) years a severance amount equal to: one and one-half times his or her
most recent annual base salary; and, the average annual cash bonus received over
the two (2) preceding years. If Mr. Miano's employment is not so continued, he
will receive a severance amount equal to: one times his most recent annual base
salary; and, the average annual cash bonus he received over the two (2)
preceding years. The Company is obligated to indemnify such individuals in his
or her capacity as an officer and/or a director of the Company in accordance
with the Company's by-laws and to afford such individuals the benefit of any
officer and director liability insurance maintained by the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee currently are Messrs. DeGhetto,
Hess and Pollak, none of whom is or has ever been an officer or employee of the
Company. During fiscal 1995, no executive officer of the Company served as a
director or as a member of the compensation committee of another entity, one of
whose executive officers served as a director of the Company or as a member of
the Company's Compensation Committee.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
developing and implementing the policies which determine executive compensation,
including incentive compensation, for the Company's executive officers. The
Committee is comprised entirely of outside directors.
The Company's philosophy in compensating its executive officers, including
its Chief Executive Officer, is to relate financial reward to corporate and
individual performance. The Company utilizes base salary and bonus as the
principal components of its executive compensation program.
Base Salary. Each year the Chief Executive Officer evaluates and reports
to the Compensation Committee on the performance and level of responsibility of
each of the Company's executive officers (other than himself) and makes specific
base salary recommendations for each of these executive officers. The
Compensation Committee reviews and discusses each individual's performance and
level of responsibility and subjectively determines base salary based upon these
recommendations.
In January, 1996, the Company presented an employment agreement to each of
the executive officers named in the Summary Compensation Table under which each
of the executive officers will continue in his/her current position with the
Company through December 31, 1998, unless extended by mutual agreement of the
parties or terminated for good cause (as defined therein), at a specified
initial base salary for 1996. Under his/her respective employment agreement,
base salaries for each of the executive officers named in the Summary
Compensation Table for 1997 and 1998 will be established at the discretion of
the Committee, in December of the preceding year, in an amount not less than the
initial base salary set forth in such agreement. The Company anticipates that
these employment agreements will be executed.
In order to evaluate the general competitiveness of the base pay of its
executive officers, the Company used the annual Information Technology
Association of America Survey conducted by William M. Mercer, Incorporated, a
nationally recognized compensation research and survey organization, and
compared base salaries with those of other computer and computer professional
services companies which the Company considers to be similar to it in terms of
annual revenues and types of services provided (the "computer survey group").
Base salaries for fiscal 1995 for the Company's executive officers excluding the
Chief Executive Officer were comparatively within the 50-75th percentile range
of base pay of the computer survey group for positions of similar
responsibility. These base salaries also serve as the initial base salaries
specified in the respective employment agreements with the named executive
officers. Although not identical to the group of companies comprising the Peer
Group index used in the Performance Graph contained in this Proxy Statement, the
computer survey group includes approximately 40% of the computer and computer
professional
10
<PAGE> 13
services companies included in the Peer Group index. The Company also utilizes
survey information from Wyatt Data Services to help calibrate the base pay of
the executive officers (other than the Chief Executive Officer) at appropriate
percentage differentials to the base pay of the Chief Executive Officer.
Under his or her respective employment agreement, each of the executive
officers named in the Summary Compensation Table is also entitled to bonus
compensation determined by the Compensation Committee using the bonus
compensation guidelines described below.
The base salary of Mr. Brown, Chairman and Chief Executive Officer of the
Company, was separately considered by the Compensation Committee. In July, 1994,
the Company entered into an employment agreement with Mr. Brown under which Mr.
Brown will continue as Chairman and Chief Executive Officer of the Company
through December 31, 1996, unless extended by mutual agreement of the parties,
and will continue thereafter as Chairman and/or a consultant for a period not to
exceed ten years. Under the employment agreement, Mr. Brown's base pay was
established at $400,000 for calendar years 1995 and 1996. At the time the
Agreement was entered into, in determining Mr. Brown's base salary for calendar
years 1995 and 1996, the Compensation Committee considered his then-existing
base pay and also assessed his performance as Chief Executive Officer. This
assessment, which by its nature was subjective, took into account the Company's
then-current record 1993 revenues and net earnings, the Company's continuing
successful internal growth and geographical expansion, the continuing
development of improved and new business services, strategic planning, and the
selection and development of executive personnel, all of which factors received
approximately equal weight by the Compensation Committee. Under the employment
agreement, Mr. Brown is also entitled to bonus compensation for fiscal years
1995 and 1996 determined by the Compensation Committee using the bonus
compensation guidelines described below.
Incentive Compensation. The Company believes that a significant percentage
of each executive's compensation should be tied directly to the financial
performance of the Company as well as the executive's individual performance.
Annual bonus compensation for eligible executives is determined by the
Compensation Committee pursuant to Executive Bonus Guidelines as adopted by the
Compensation Committee in 1994 to serve as a guide in the determination of bonus
awards to the Chief Executive Officer and the other eligible executives of the
Company including all executive officers. Pursuant to the Executive Bonus
Guidelines, at the start of each fiscal year, an annual bonus fund is
established which is determined as a percentage of the Company's estimated
fiscal year net after tax earnings. Also established is the maximum number of
bonus points which may be received by the Chief Executive Officer and the other
executives eligible for the bonus pool. Corporate financial performance
objectives are also established at the beginning of each year, based on target
levels of revenues from operations, net earnings after taxes, and increases to
stockholder's equity. If some but fewer than all corporate financial performance
objectives are satisfied, bonus compensation will be based on the percentage of
goals satisfied.
Individual performance objectives are also established at the beginning of
the fiscal year for each eligible executive, the successful achievement of which
determines the percentage of the maximum allocated bonus points that the
executive will actually receive. The satisfaction of such individual objectives
is based on the subjective evaluation and assessment by the Chief Executive
Officer of the performance of each of the other eligible executives and by the
Compensation Committee for the Chief Executive Officer. If the executive attains
100% of the agreed individual performance objectives, he or she receives 100% of
his or her maximum allocated bonus points, and if fewer than all individual
performance objectives are satisfied, then between 0% and 100% of the available
allocated points are awarded based on the percentage of objectives satisfied. At
the end of the fiscal year, a dollar value is established for each bonus point
based on the bonus pool available, the maximum available points for all eligible
executives and actual fiscal year-end results. Undistributed funds made
available to the annual bonus fund for fiscal 1995 were returned to the Company.
For fiscal 1995, 66% of bonus compensation for eligible executive officers
who perform staff functions was based on satisfaction of the corporate financial
performance objectives and the balance of the bonus compensation was based on
satisfaction of the individual performance objectives. For eligible executives
with operating responsibilities, 34% of bonus compensation was based on
satisfaction of the corporate financial performance objectives and the balance
was based on satisfaction of the individual performance objectives.
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<PAGE> 14
For each of the Chief Executive Officer and the Chief Operating Officer, 100% of
bonus compensation was based on the satisfaction of the corporate financial
performance objectives.
For fiscal 1995, the Company exceeded each of the targeted corporate
financial performance objectives and each executive officer named in the Summary
Compensation Table also met all or substantially all of his or her individual
performance objectives. The bonuses awarded for fiscal 1995 were on average
approximately 34% of each named executive officer's base pay.
Stock Based Compensation. Stock options are from time to time granted by
the Compensation Committee to eligible executives at fair market value on the
date of the award and are intended to align executive compensation opportunities
with shareholder returns. While stock option grants are generally considered and
made annually, the Committee did not grant stock options to any executive
officer named in the Summary Compensation Table during fiscal 1995 as additional
long-term compensation based on the Compensation Committee's subjective
determination that the named executive officers' current level of compensation
was adequate at that time. During the current fiscal year, the Compensation
Committee has and will continue to review the grant of stock options to named
executive officers.
Compliance with IRC Code Section 162(m). Section 162(m) of the Internal
Revenue Code generally disallows a deduction to publicly traded companies to the
extent of excess compensation over $1 million paid to a chief executive officer
or to any of the four other most highly compensated executive officers. The
Company has not adopted a policy under Section 162(m) as it has determined that
compensation paid to its executives will not exceed the $1 million threshold in
the foreseeable future.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Kenneth A. DeGhetto, Chairman
William E. Hess
Martin M. Pollak
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<PAGE> 15
BRANDON SYSTEMS CORPORATION
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
BRANDON SYSTEMS CORPORATION, S&P 500 INDEX AND PEER GROUP INDEX
<TABLE>
<CAPTION>
BRANDON SYS-
MEASUREMENT PERIOD TEMS CORPO- S&P 500 IN- PEER GROUP
(FISCAL YEAR COVERED) RATION DEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 140.4 126.1 145.9
1992 161.6 135.4 186.8
1993 210.0 150.7 188.9
1994 365.2 151.2 279.5
1995 437.1 191.0 334.9
</TABLE>
- - Assumes $100 invested on September 30, 1990 in Brandon Systems Corporation,
S&P 500 Index and Peer Group Index.
- - Total return assumes reinvestment of dividends.
The above performance graph compares the performance of Brandon Systems
Corporation with that of the S&P 500 Index and a Peer Group of technical
computer and office clerical companies with the investment weighted based on
market capitalization. This weighting occurred at the beginning of the period
covered by the above graph. The technical computer companies in the peer group
are: CDI Corp., Computer Task Group, Electronic Data Systems Corporation, and
Keane, Inc.; the office clerical companies in the peer group are: Kelly
Services, Inc., Olsten Corporation, and Uniforce Temp Personnel. Adia Services,
Inc., which had previously been included in the Peer Group Index, has been
eliminated from the Peer Group in the above performance graph in light of the
fact that, due to a strategic alliance with a foreign corporation, financial
data is no longer available.
PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon the recommendation of its Audit Committee, has
selected the accounting firm of Coopers & Lybrand L.L.P. to serve as the
independent auditors of the Company for its current fiscal year ending September
29, 1996. Coopers & Lybrand L.L.P. has served as the Company's independent
auditors since 1985.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting. They will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
The Board of Directors recommends that you vote "FOR" ratification of the
selection of Coopers & Lybrand L.L.P. as the Company's independent auditors.
13
<PAGE> 16
OTHER MATTERS
At the date of this Proxy Statement, the Company knows of no business other
than that described above that will be presented at the Annual Meeting. If any
other business should properly come before the Annual Meeting, it is intended
that the persons named in the enclosed proxy will have discretionary authority
to vote the shares represented by such proxies.
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 officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten percent stockholders are required by
regulations of the Securities and Exchange Commission to furnish the Company
with copies of all Section 16(a) forms which they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the fiscal year
ended October 1, 1995, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
satisfied.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1997 ANNUAL MEETING
In accordance with rules promulgated by the Securities and Exchange
Commission, any proposal of a stockholder intended for inclusion in the proxy
material to be distributed by the Company in connection with its 1997 Annual
Meeting must be received by the Secretary of the Company no later than October
1, 1996. Any such proposal should be submitted in writing to: Secretary, Brandon
Systems Corporation, Copper Ridge Center, 9 Polito Avenue, Lyndhurst, New Jersey
07071.
By Order of the Board of Directors,
BRANDON SYSTEMS CORPORATION
MYRA BROWN
Secretary
January 24, 1996
Lyndhurst, New Jersey
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<PAGE> 17
PROXY BRANDON SYSTEMS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
March 12, 1996
The undersigned stockholder of Brandon Systems Corporation (the "Company")
hereby appoints Raymond Bolan and Carolyn Cox and each of them, the agent and
proxy of the undersigned, each with full power of substitution, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the annual meeting of stockholders of the Company to be held at The American
Stock Exchange, 86 Trinity Place, 13th Floor, Board of Governors' Room, New
York, New York, on March 12, 1996 at 11:00 a.m., and at any and all
adjournments or postponements thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO CONTRARY DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. PLEASE VOTE PROMPTLY.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
(CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
<PAGE> 18
<TABLE>
<CAPTION>
Please mark
your votes /X/
as this
WITHHOLD
FOR AUTHORITY FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. THE ELECTION OF DIRECTORS. Electing Kenneth / / / / 2. RATIFICATION OF SELECTION OF INDEPENDENT / / / / / /
A. DeGhetto, Steven S. Elbaum, and Peter AUDITORS. Ratifying the selection of
Lordi to the Board of Directors of the Coopers & Lybrand L.L.P. to serve as
Company as Class of 1999 directors until independent auditors of the Company
the 1999 annual meeting of stockholders for the fiscal year ending September 29,
and until their successors are elected and 1996.
have qualified.
</TABLE>
<TABLE>
<CAPTION> WITHOLD
FOR AUTHORITY
<S> <C> <C> <C>
(INSTRUCTION: To grant authority to vote for all of the 3. IN THEIR DISCRETION, THE PROXIES are / / / /
nominees named above check the "FOR" box; to withhold authorized to vote upon such other
authority for any individual nominee check the "FOR" box matters as may properly come before
and cross out the name of the individual above; to withhold the meeting or any adjournment or
authority for all nominees check the "Withhold Authority" postponement thereof.
box.)
I PLAN TO ATTEND THE MEETING / /
</TABLE>
Signature(s) Date
---------------------------------------------- --------
(Please date this proxy and sign your name as it appears on the stock
certificate. Executors, administrators, trustees, etc. should give their
full titles. If a corporation or partnership, please sign in corporate or
partnership name by authorized officer or partner respectively. All joint
owners should sign.)
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
