<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 14a-11(c) or 14a-12
</TABLE>
WATERHOUSE INVESTOR SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
[WATERHOUSE SECURITIES, INC. LETTERHEAD]
December 28, 1995
To Our Stockholders:
I am pleased to invite you to our eighth Annual Meeting of Stockholders,
to be held on Tuesday, February 6, 1996 at 11:00 a.m., at the Marriott Financial
Center Hotel, 85 West Street, New York, New York 10006.
On the following pages you will find the formal notice of the Annual
Meeting and our proxy statement. When you have finished reading the proxy
statement, please promptly mark, sign, date and return to us the enclosed proxy
card to ensure that your shares will be represented.
We appreciate your interest in and support of Waterhouse Investor
Services, Inc., and I look forward to seeing many of you at the Annual Meeting.
Sincerely yours,
/s/ Lawrence M. Waterhouse Jr.
<PAGE> 3
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
[WATERHOUSE SECURITIES, INC. LETTERHEAD]
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD FEBRUARY 6, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
Waterhouse Investor Services, Inc., a Delaware corporation (the "Company"), will
be held at the Marriott Financial Center Hotel, 85 West Street, New York, New
York 10006, on February 6, 1996, at 11:00 a.m. local time for the following
purposes:
1. To elect five (5) directors to serve until the Annual Meeting of
Stockholders in 1999 and until their respective successors are
duly elected and qualified.
2. To approve the appointment of independent accountants for the
Company's fiscal year ending August 31, 1996.
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed December 21, 1995 as the record date for
the determination of stockholders entitled to notice of and to vote at this
meeting. A list of stockholders entitled to notice of and to vote at the meeting
will be available for inspection by any stockholder at the offices of the
Company, 100 Wall Street, New York, New York 10005 for the ten days prior to
February 6, 1996.
It is important that you sign the enclosed proxy card and return it
promptly so that your shares will be represented. Whether or not you plan to
attend the Annual Meeting, please complete, sign and date the enclosed proxy
card and return it in the enclosed postage paid envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard H. Neiman
RICHARD H. NEIMAN
Secretary
Date: December 28, 1995
<PAGE> 4
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
PROXY STATEMENT
GENERAL
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Waterhouse Investor Services, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on February
6, 1996, and at any adjournments thereof. You are cordially invited to attend
the meeting, but whether or not you expect to attend in person, you are urged to
sign and date the enclosed proxy card and return it in the enclosed postage paid
envelope. Stockholders have the right to revoke their proxies at any time prior
to their exercise by filing a written notice of revocation with the Secretary of
the Company prior to the meeting, by attending the meeting and voting by ballot,
or by duly executing a proxy bearing a later date.
The entire cost of this proxy solicitation will be borne by the Company.
Solicitation may be made by mail, telephone, telegram or in person. Management
may also request banks, brokerage houses, custodians, nominees and fiduciaries
to obtain authorization for the execution of proxies, and may reimburse them for
expenses incurred by them in connection therewith.
Unless contrary instructions are indicated on the proxy, all valid proxies
received pursuant to this solicitation (and not revoked before they are voted)
will be voted (i) FOR the election of the nominees for directors named below;
and (ii) FOR the ratification of the selection of Price Waterhouse LLP as
independent accountants for the Company for its fiscal year ending August 31,
1996. In the event a stockholder specifies a different choice on the proxy, his
or her shares will be voted in accordance with the specifications so made.
VOTING SECURITIES
The Notice of Meeting, Proxy Statement and accompanying proxy card are to
be sent or given to stockholders on or about December 28, 1995. Each stockholder
is entitled to one vote on each of the matters to be considered at the Annual
Meeting for each share held as of the record date, December 21, 1995. As of the
record date, the Company had 11,452,244 shares of Common Stock outstanding and
no preferred stock outstanding.
VOTE REQUIRED FOR APPROVAL
The five (5) director nominees for terms ending in 1999 receiving a
plurality of the votes cast by the holders of outstanding shares of the
Company's Common Stock represented at the meeting, in person or by proxy, will
be elected as directors of the Company for such term.
The affirmative vote of a majority of the votes cast by holders of
outstanding shares of the Company's Common Stock represented at the meeting, in
person or by proxy, is necessary for the ratification of the selection of
independent accountants. Abstentions and broker non-votes (matters of a
non-routine nature as to which brokers holding shares in street name have
received no instructions from their clients and, accordingly, do not vote) are
counted for the purpose of determining the presence or absence of a quorum for
the transaction for business. Abstentions are counted in tabulations of votes
cast on proposals presented to stockholders whereas broker non-votes are not
counted for purposes of determining whether proposal has been approved. The
Board of Directors hopes that Stockholders will exercise their right to vote
rather than abstaining from voting. It is necessary that proxies be completed,
signed, dated and returned for all such shares to be voted at the Annual
Meeting.
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<PAGE> 5
WATERHOUSE INVESTOR SERVICES, INC.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
So far as is known to the Company, the following table sets forth, as of
December 1, 1995, the number of shares beneficially owned by each person who may
be deemed to be the beneficial owner of more than 5% of the outstanding Common
Stock (the only class of capital stock outstanding), each director, each nominee
for election as a director, each executive officer and all directors and
officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1)
-----------------------------
NAME NUMBER OF SHARES PERCENTAGE
---- ---------------- ----------
<S> <C> <C>
Lawrence M. Waterhouse, Jr. (2)(3) 3,182,630 22.59%
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
Jerome Belson (4) 934,892 6.64%
Jerome Belson Associates, Inc.
495 Broadway
New York, New York 10012
FMR Corp. (5) 710,454 5.04%
82 Devonshire Street
Boston, Massachusetts 02109
Kenneth I. Coco (3)(6) 204,909 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
Peter A. Wigger (7) 100,771 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
Edward J. Nicoll (8) 86,484 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
John H. Chapel (9) 82,031 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
Frank E. Conti (10) 78,829 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
</TABLE>
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<PAGE> 6
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
<TABLE>
<S> <C> <C>
Arthur J. Radin (11)(12) 24,078 *
c/o Feldman Radin & Co., P.C.
805 Third Avenue
New York, New York 10022
George F. Staudter (11)(13) 16,884 *
9637 Preston Trail West
Ponte Vedra Beach, Florida 32082
Frank J. Petrilli (14) 16,672 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
Richard H. Neiman (15) 13,875 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, New York 10005
William J. Cardew (11)(16) 9,486 *
205 East 95th Street
New York, New York 10128
James F. Rittinger (11)(17) 8,763 *
c/o Satterlee Stephens Burke & Burke LLP
230 Park Avenue
New York, New York 10169
M. Bernard Siegel (18) 5,050 *
c/o Waterhouse Investor Services, Inc.
100 Wall Street
New York, NY 10005
Msgr. Thomas J. Hartman 0 0
98 Cherry Lane
Hicksville, NY 11801
All officers and directors as a group (15 persons) (19) 4,647,460 33.0%
</TABLE>
- --------------------
*Less than 1% of the outstanding shares of Common Stock
(1) Beneficial ownership of directors and officers and 5% stockholders includes
both outstanding Common Stock as well as shares issuable upon conversion of
the Company's 6% Convertible Subordinated Notes and shares issuable upon
exercise of options currently exercisable or which will become exercisable
within sixty (60) days of the date of this table.
(2) Includes 1,646,104 shares held by Marjorie J. McGahran and Mr. Waterhouse's
children, all of which Mr. Waterhouse has the power to vote as
attorney-in-fact. Also includes 85,133 shares allocated to Mr. Waterhouse's
account in the Waterhouse Investor Services, Inc. Employee Stock Ownership
Plan (the "ESOP"), and 175,000 shares issuable upon the exercise of stock
options under the Company's Stock Option Plan.
(3) Includes 25,800 unallocated shares and approximately 92,094 shares which
can be acquired through conversion of the Company's 6% Convertible
Subordinated Notes held in the ESOP of which Messrs.
- 3 -
<PAGE> 7
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
Waterhouse and Coco are Trustees.
(4) Includes 177,000 shares owned by Mr. Belson's spouse, as to which Mr.
Belson disclaims beneficial ownership and 8,125 shares owned by the Joseph
Belsky Foundation. Also includes 7,032 shares issuable under the exercise
of stock options under the Company's Stock Option Plan and approximately
42,735 shares which can be acquired through conversion of the Company's 6%
Convertible Subordinated Notes.
(5) Includes 573,229 shares beneficially owned by Fidelity Management &
Research Company, as a result of its serving as investment adviser to
various registered investment companies. Also includes 137,225 shares
beneficially owned by Fidelity Management Trust Company, as a result of its
serving as trustee or managing agent for various private investment
accounts, primarily employee benefit plans. FMR Corp. has sole voting power
with respect to 83,975 shares and sole dispositive power with respect to
710,454 shares.
(6) Includes approximately 43,890 shares allocated to Mr. Coco's account in the
ESOP. Also includes shares owned by Mr. Coco's spouse, as to which Mr. Coco
disclaims beneficial ownership. Also includes 14,375 shares issuable upon
exercise of stock options under the Company's Stock Option Plan.
(7) Includes approximately 61,009 shares allocated to Mr. Wigger's account in
the ESOP. Also includes 2,026 shares held by immediate family members who
reside with Mr. Wigger, as to which Mr. Wigger disclaims beneficial
ownership. Also includes 14,375 shares issuable upon the exercise of stock
options under the Company's Stock Option Plan and approximately 4,273
shares which can be acquired through conversion of the Company's 6%
Convertible Subordinated Notes.
(8) Includes 2,344 shares issuable upon the exercise of stock options under the
Company's Stock Option Plan.
(9) Includes approximately 48,906 shares allocated to Mr. Chapel's account in
the ESOP and 14,375 shares issuable upon the exercise of stock options
under the Company's Stock Option Plan.
(10) Includes 29,755 shares issuable upon the exercise of stock options under
the Company's Stock Option Plan and approximately 45,912 shares allocated
to Mr. Conti's account in the ESOP.
(11) Includes 7,032 shares issuable upon the exercise of stock options under the
Company's Stock Option Plan.
(12) Includes approximately 3,419 shares which can be acquired through
conversion of the Company's 6% Convertible Subordinated Notes.
(13) Includes approximately 1,068 shares which can be acquired through
conversion of the Company's 6% Convertible Subordinated Notes.
(14) Includes 5,000 shares issuable upon the exercise of stock options under the
Company's Stock Option Plan and approximately 8,547 shares which can be
acquired through conversion of the Company's 6% Convertible Subordinated
Notes.
(15) Includes 13,750 shares issuable upon the exercise of stock options under
the Company's Stock
- 4 -
<PAGE> 8
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
Option Plan.
(16) Includes approximately 214 shares which can be acquired through conversion
of the Company's 6% Convertible Subordinated Notes. Also includes 1,250
shares and approximately 641 shares which can be acquired through
conversion of the Company's 6% Convertible Subordinated Notes held by Mr.
Cardew's spouse as to which Mr. Cardew disclaims beneficial interest.
(17) Includes approximately 855 shares which can be acquired through conversion
of the Company's 6% Convertible Subordinated Notes.
(18) Includes approximately 3,750 shares issuable upon the exercise of stock
options under the Company's Stock Option Plan and approximately 675 shares
allocated to Mr. Siegel's account in the ESOP. Mr. Siegel has served as
Senior Vice President and Chief Financial Officer of the Company since
November 1994. He also serves as Executive Vice President for Finance for
Waterhouse Securities, Inc. Prior to joining the Company in November 1993,
Mr. Siegel spent six years with Fleet Brokerage Services, Inc. in a number
of executive capacities, most recently as Executive Vice President, Chief
Operating Officer and Chief Financial Officer.
(19) Includes 302,884 shares issuable upon the exercise of stock options under
the Company's Stock Option Plan and 148,932 shares which can be acquired
through conversion of the Company's 6% Convertible Subordinated Notes.
ELECTION OF FOUR DIRECTORS
(ITEM 1 ON THE PROXY CARD)
The Board of Directors of the Company is divided into three staggered
classes providing for a class of directors to be elected each year. Members of
each class are elected for three year terms and until their successors are
elected and qualified. Messrs. Coco, Neiman, Petrilli, Radin and Rittinger,
whose terms expire at the 1996 Annual Meeting, have been nominated for
re-election to serve for a term of three years and until their respective
successors are duly elected and qualified.
It is intended that shares represented by proxies solicited by the Board
of Directors will, unless authority to vote for some or all of the nominees is
withheld, be voted in favor of electing these nominees as directors. The Company
has no reason to believe any of the nominees will be unable or unwilling to
serve if elected. However, if any nominee becomes unavailable for any reason,
the shares may be voted for another person nominated by the present Board.
All of the nominees for election as directors are currently directors of
the Company. The Board of Directors unanimously recommends that stockholders
vote for each of the nominees.
The names, terms of offices and certain other information with respect to
the persons nominated for election as directors and other persons serving as
directors are as follows:
NOMINEES FOR ELECTION AS DIRECTORS
KENNETH I. COCO, age 47, Senior Vice President, Treasurer, Assistant Secretary
and Director. Mr. Coco has served as Treasurer and a Director of the Company
since its inception. Mr. Coco has served as Secretary of the Company from
October 1992 to July 1994. Since 1979, Mr. Coco has served as an officer of
Waterhouse Securities in various capacities. From February 1986 until March 1989
Mr. Coco was
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<PAGE> 9
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
Senior Vice President and an Assistant Treasurer of Waterhouse Securities
responsible for financial reporting. From March 1989 to August 1992, Mr. Coco
was the Chief Financial Officer of Waterhouse Securities. Since August 1992, Mr.
Coco has been Executive Vice President-Administration with Waterhouse
Securities.
RICHARD H. NEIMAN, age 45, Executive Vice President, General Counsel, Secretary
and Director. Mr. Neiman joined the Company in July, 1994. Mr. Neiman also
serves in similar capacities for Waterhouse Securities, Waterhouse National
Bank, Waterhouse Asset Management, Inc. and National Investor Services Corp. Mr.
Neiman joined the Company after four years as a Director of Price Waterhouse's
Regulatory Advisory Practice in Washington, D.C. From 1979 to 1990, Mr. Neiman
served in various legal positions at Citicorp in New York, including General
Counsel of its Global Equities Group. From 1975 to 1979 Mr. Neiman was a senior
attorney with the Office of the Comptroller of the Currency in Washington, D.C.
FRANK J. PETRILLI, age 45, President, Chief Operating Officer and Director. Mr.
Petrilli joined the Company in January 1995. Mr. Petrilli also serves as a
Director of Waterhouse Securities, Waterhouse National Bank, Waterhouse Asset
Management, Inc. and National Investor Services Corp. Mr. Petrilli joined the
Company from American Express where he served since 1988 in various capacities,
most recently as President and Chief Operating Officer of American Express
Centurion Bank. Prior to joining American Express, Mr. Petrilli spent 13 years
with Colt Industries, Inc. in various investment, treasury and accounting
positions.
ARTHUR J. RADIN, age 58, Director. Mr. Radin has served as President of Feldman
Radin & Co., P.C., Certified Public Accountants, and in a similar position with
its predecessor, since 1983. Mr. Radin has served as a Director of the Company
since November 1987.
JAMES F. RITTINGER, age 49, Director. Mr. Rittinger has been a partner and,
prior thereto, an associate of the law firm of Satterlee Stephens Burke & Burke
LLP since 1971. Mr. Rittinger has served as a Director of the Company since its
inception.
INFORMATION CONCERNING OTHER DIRECTORS
LAWRENCE M. WATERHOUSE, JR., age 58, Chairman of the Board of Directors and
Chief Executive Officer. Mr. Waterhouse has served as the Chairman of the Board
of Directors, President until January 1995, and Chief Executive Officer of the
Company since its inception. Mr. Waterhouse is the founder of Waterhouse
Securities Inc. ("Waterhouse Securities") and has served as Chief Executive
Officer since its inception. Mr. Waterhouse also serves as Chairman of
Waterhouse National Bank, and as a Director of National Investor Services Corp.,
both wholly-owned subsidiaries, as well as a Director of Waterhouse Asset
Management, Inc., a subsidiary of Waterhouse National Bank. Mr. Waterhouse's
term expires in 1998.
JEROME BELSON, age 70, Chairman Emeritus of the Board and Director. Mr. Belson
has served as Chairman Emeritus of the Board of the Company since its inception.
Mr. Belson has served as Chairman Emeritus of the Board of Directors of
Waterhouse Securities since February 1986 and as an officer of Waterhouse
Securities in various capacities from October 1980 to February 1986. Mr. Belson
also serves as a Director of Waterhouse National Bank. From January 1974 to
February 1984, Mr. Belson was a senior partner at the law firm of Belson,
Connolly & Belson. Mr. Belson is an owner, in whole or in part, and the
President and Chairman of the Board of ten private real estate management
corporations. Mr. Belson is a director of AMREP Corporation. Mr. Belson's term
expires in 1998.
WILLIAM J. CARDEW, age 69, Director. Mr. Cardew has served as a Director of the
Company since 1992
- 6 -
<PAGE> 10
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
and has been Executive Vice President, Chief Operating Officer and a Director of
The Merchants Bank of New York since February 1985. Mr. Cardew's term expires in
1997.
JOHN H. CHAPEL, age 43, Senior Vice President and Director. Mr. Chapel has
served as an executive officer and a Director of the Company since its
inception. He has also served as an officer of Waterhouse Securities in various
other capacities since July 1981 and currently serves as President of Waterhouse
Securities. Mr. Chapel's term expires in 1997.
FRANK E. CONTI, age 55, Senior Vice President and Director. Mr. Conti has served
as Senior Vice President and a Director of the Company since November 1987. He
currently serves as Executive Vice President for technology for Waterhouse
Securities. From November 1985 through October 1987, Mr. Conti served as Senior
Vice President of Chemical New Jersey Corporation. From February 1983 through
November 1985, Mr. Conti was the owner of Conti Consulting, a management
consulting organization. From January 1981 until December 1982, Mr. Conti served
as Vice President of A.L. Burbank & Co., Ltd., a ship broker. Mr. Conti's term
expires in 1997.
MSGR. THOMAS J. HARTMAN, age 49, Director. Msgr. Hartman has served as a
Director of the Company since July 1995. Msgr. Hartman is the Director of Radio
and Television for Telicare, the television station for the Diocese of Rockville
Centre, New York. Msgr. Hartman also serves on the board of numerous charitable
organizations and foundations. Msgr. Hartman is also the author of several books
and a frequent contributor and host on various television and radio programs.
Msgr. Hartman's term expires in 1998.
EDWARD J. NICOLL, age 42, President Emeritus and Director. Mr. Nicoll served as
Executive Vice President of the Company from its inception until August, 1994
and a Director of the Company since its inception. Mr. Nicoll served as an
officer of Waterhouse Securities in various capacities since its inception and
as President and Chief Operating Officer of Waterhouse Securities from February
1986 to August 1994. Mr. Nicoll resigned as Executive Vice President of the
Company and as President and Chief Operating Officer of Waterhouse Securities on
August 31, 1994. Mr. Nicoll continues as a consultant to the Company and as a
Director of the Company and of Waterhouse National Bank. Mr. Nicoll was elected
President Emeritus of the Company effective September 1, 1994. Mr. Nicoll's term
expires in 1997.
GEORGE F. STAUDTER, age 64, Director. Mr. Staudter has been a managerial and
financial consultant from 1990 to date, and has been a financial and investment
advisor since 1986. From 1986 to 1989, Mr. Staudter served as the Executive Vice
President and as a director of Douglas Capital Management, Inc., an investment
manager. From December 1981 through May 1986, Mr. Staudter was the owner and
manager of Hartness House Inn, a country inn located in Springfield, Vermont.
From August 1977 to December 1981, Mr. Staudter served as Vice President and
Treasurer of Revlon, Inc. Mr. Staudter is a director of Koger Equity, Inc., a
real estate investment trust and the Chairman of the Waterhouse Investors Cash
Management Fund, Inc. Mr. Staudter has served as a Director of the Company since
its inception. Mr. Staudter's term expires in 1998.
PETER A. WIGGER, age 48, Senior Vice President and Director. Mr. Wigger has
served as Senior Vice President and a Director of the Company and Executive Vice
President of Waterhouse Securities in charge of clearing operations since
November 1987. From July 1986 through November 1987, Mr. Wigger was Senior Vice
President and Director of Operations for the investment banking firm McLeod
Young Weir, Inc. From December 1970 through June 1986, Mr. Wigger was Vice
President and Director of Operations for the investment banking and brokerage
firm Richardson Greenshields Securities, Inc. Mr. Wigger's term expires in 1998.
- 7 -
<PAGE> 11
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
COMMITTEES OF THE BOARD
The Board of Directors has established an Audit Committee which recommends
to the Board a firm of independent public accountants which audits the accounts
of the Company and its subsidiaries for the ensuing year, reviews the year-end
audit plan and the scope thereof with the independent public accountants with
regard to the completed audit, and reviews the audit with the independent public
accountants. Messrs. Radin and Cardew are members of the Audit Committee. The
Audit Committee met four times in the fiscal year ended August 31, 1995.
The Board of Directors has established a Compensation Committee which is
comprised of three members who are non-employee directors of the Company. The
Compensation Committee determines the Chief Executive Officer's compensation and
reviews and approves compensation of other senior executive officers and
administers the Company's Stock Option Plan. The Compensation Committee met
three times in the fiscal year ended August 31, 1995. (See Report of
Compensation Committee.)
The Board of Directors does not have a standing Nominating Committee or
other committee performing similar functions.
The Board of Directors met four times during the fiscal year ended August
31, 1995. Each member of the Board of Directors of the Company attended all of
the meetings of the Board and the committees of which they were members.
EXECUTIVE COMPENSATION
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") of the Waterhouse Investor
Services, Inc. Board of Directors is responsible for the Company's executive
compensation program. The Committee is comprised of Messrs. Jerome Belson, James
F. Rittinger and George F. Staudter, non-employee directors of the Company. The
Committee determines the Chief Executive Officer's compensation and reviews and
approves the compensation of other senior executive officers based on the
recommendations of the Chief Executive Officer. The Committee is also
responsible for overseeing the administration of certain compensation and
benefit plans, including the Company's Stock Option Plan.
The Committee and Board of Directors believe the executive compensation
program should attract and retain executives of superior talent and promote the
interests of the Company and its stockholders. As such, a portion of executives'
total compensation is in the form of stock based compensation as well as annual
incentive awards that reflect Company and individual performance. Base salary
levels are set at competitive levels. The Committee annually reviews
compensation practices and financial performance of a selected group of
competitor companies.
The Committee has reviewed the Company's compensation plans in light of
recent changes to the Internal Revenue Code which became effective with respect
to fiscal years beginning on or after January 1, 1994 relating to the
disallowance of deductions for remuneration in excess of $1,000,000 paid to
certain executive officers. The Company's philosophy is to pay its officers
fairly for their efforts, rather than be guided by whether all amounts paid are
tax deductible. The Committee currently believes that in order to properly
evaluate performance it is necessary to utilize qualitative as well as
quantitative criteria and in April 1995 adopted a Performance Management Plan
for key executive officers of the Company. The Committee believes that the
benefits to the Company by the use of qualitative criteria to evaluate
perfor-
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<PAGE> 12
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
mances outweigh the non-material loss of a portion of the deduction
attributable to compensation. The Committee will continue to monitor this
situation and take appropriate action if it is warranted in the future.
BASE SALARY. The Chief Executive Officer and the Committee review
executive salaries annually and consider competitive salary levels, along with
individual contributions and responsibility level. Base salary levels of senior
executives are generally established after a review of competitive median levels
of comparison companies. The market comparison for determining median
compensation levels includes a self selected group of competitor companies in
the full service retail or discount brokerage business, with comparable size and
financial returns.
The Chief Executive Officer, Lawrence M. Waterhouse, Jr., did not receive
an increase in base salary for the fiscal year ended August 31, 1995. The base
salary of the Chief Executive Officer was set under the terms of his Employment
Agreement entered into with the Company on September 1, 1991. Other executives,
not covered by employment agreements, received base salary increases ranging
from 6% to 10% of their fiscal year 1994 salaries.
ANNUAL INCENTIVES. The Annual Incentive Plan awards bonus payments to
executive officers and all employees of the Company. Awards are based on the
Company's performance and individual contributions to the business during the
fiscal year. The Plan provides for a bonus pool to be reserved in the amount of
approximately 20% of the Company's pre-tax income for all incentive awards. The
Committee believes that pre-tax income is a key measure of the Company's
performance. The Plan is effectively used to motivate all employees to perform
at high levels, consistent with Company objectives.
The total amount of all annual incentives is determined based on Company
pre-tax income, as described above. Individual executive awards are determined
based on the Committee's discretionary evaluation. Factors such as the size of
the bonus pool, business area performance including growth and profitability,
competitive market compensation and individual performance are considered in
determining award amounts. While there is no formal weighting of factors, the
executive's individual performance, as it relates to the Company's financial,
operating and strategic objectives, is the most important consideration.
The Committee determined the annual incentive award of the Chief Executive
Officer for fiscal year 1995, based on its evaluation of Mr. Waterhouse's
overall contribution as Chief Executive Officer to the Company's performance
levels, as reflected by, but not limited to, measures such as return on equity
and net income growth. Mr. Waterhouse's 1995 award under the 1995 Annual
Incentive Plan was $650,000. The Committee also reviews, modifies where it deems
necessary, and approves annual incentive awards for other senior executives
based on the recommendations of the Chief Executive Officer.
STOCK BASED COMPENSATION. The Board of Directors and the Committee believe
that significant equity participation by executives and employees is fundamental
in promoting the success of the Company and the long term interests of its
shareholders. Through the Company's Employee Stock Ownership Plan (ESOP) and
Stock Option Plan, the benefits of equity ownership are extended to executives
and all employees of the Company.
Through the ESOP, the Company purchases the Company's common stock (the
"Common Stock") from annual Company contributions that are allocated to all
eligible employees. For the fiscal year ending August 31, 1995, ESOP allocations
for the Chief Executive Officer and four most highly compensated executives
totaled 4,412 shares as a group (0.04% of the outstanding Common Stock of the
Company).
- 9 -
<PAGE> 13
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
The Committee administers the 1992 Stock Option Plan and determines the
amount of options granted to the Chief Executive Officer. In considering awards
of options the Committee considers (i) the executive's contributions to Company
performance, (ii) the executive's contribution to long-term performance and
obtaining strategic goals, and (iii) practice in the industry. With the Chief
Executive Officer's recommendations, the Committee determines the grants for
executive officers.
To assess the competitive position of the Company's long term incentive
and total compensation levels, the Committee works with independent consultants
and reviews competitive data of selected competitor companies of comparable size
and financial returns. These efforts assist the Committee in awarding
appropriate amounts of future stock option grants and integrating the level of
long term compensation with an overall compensation strategy.
CHIEF EXECUTIVE OFFICER'S COMPENSATION. As previously discussed, the Chief
Executive Officer, Mr. Lawrence M. Waterhouse, Jr., has a base salary set by the
terms of an Employment Agreement entered into with the Company on September 1,
1991. Mr. Waterhouse has not received an increase in base salary since 1991. The
Committee awarded Mr. Waterhouse an annual incentive bonus based on its
evaluation of the Company's financial performance and his contribution in
achieving the Company's long term objectives. Performance factors used in
determining his incentive are discussed in the Report of Compensation Committee.
In fiscal year 1995, the Chief Executive Officer was awarded stock options
covering 31,250 shares of Common Stock (adjusted to reflect 25% stock dividend
paid September 14, 1995) as set forth in the table under Summary Compensation.
Under the terms of his Employee Agreement, the Company maintains, at its
expense, life insurance on the life of Mr. Waterhouse, with premiums not to
exceed $100,000 per year. The premiums were $84,264 in fiscal year 1995. Company
allocations to Mr. Waterhouse's ESOP account in fiscal year 1995 amounted to 794
shares.
Under Mr. Waterhouse's leadership, the Company has achieved strong growth
and financial performance. Over the last five fiscal year periods ending August
31, 1995, the cumulative total return of the Company's stock has grown 2,139%
(assuming reinvestment of dividends), outperforming the S&P 500 Index and NASDAQ
Financial Index. These indices grew 102% and 127%, respectively.
COMPENSATION COMMITTEE
Jerome Belson James F. Rittinger George F. Staudter
- 10 -
<PAGE> 14
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
PERFORMANCE GRAPH.
The following graph compares the performance of the Common Stock of the
Company with the S&P 500 Composite Index, the NASDAQ Financial Index and a
selected peer group for the past five year period. The comparison of total
return (change in fiscal year end-stock price, plus reinvested dividends) for
each year in the graph assumes that $100 was invested at the beginning of the
period in the stock of the Company, a composite of the peer group, the S&P 500
Index and the NASDAQ Financial Index.
WATERHOUSE INVESTOR SERVICES
CUMULATIVE TOTAL SHAREHOLDER RETURN
WATERHOUSE FISCAL
YEAR ENDING 8-31-
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Waterhouse $100 $287 $559 $2,178 $1,318 $2,239
Peer Group $100 $200 $240 $494 $459 $898
NASDAQ Financial $100 $139 $179 $246 $272 $327
S&P 500 $100 $127 $137 $158 $166 $202
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Peer Group: First Albany, Charles Schwab, Inter Regional Financial
Group, Legg Mason, Piper Jaffray Cos., Quick and Reilly, Raymond
James Financial
- 11 -
<PAGE> 15
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
SUMMARY COMPENSATION TABLE
The following table shows compensation information for the Company's Chief
Executive Officer and the next four most highly compensated executive officers
of the Company for the fiscal years ended August 31, 1995, 1994, and 1993.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------
ALL OTHER
OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) (#)(1) ($)(2)(3)
- --------------------------- ---- ---------- --------- ------ ---------
<S> <C> <C> <C> <C> <C>
LAWRENCE M. WATERHOUSE, JR. 1995 $504,000 $650,000 31,250 $100,647
Chairman and Chief 1994 $504,000 $450,000 168,750 $119,217
Executive Officer of the 1993 $504,000 $500,000 - $ 95,273
Company and Chief Executive
Officer of Waterhouse Securities
FRANK J. PETRILLI 1995 $253,077 $150,000 25,000 -
President and Chief Operating 1994 - - - -
Officer of the Company 1993 - - - -
PETER A. WIGGER 1995 $220,000 $110,000 6,250 $ 20,913
Senior Vice President of the 1994 $206,000 $ 74,000 13,125 $ 30,464
Company and Executive Vice 1993 $196,000 $100,000 - $ 18,630
President of Waterhouse Securities
JOHN H. CHAPEL 1995 $180,000 $150,000 6,250 $ 16,383
Senior Vice President of the 1994 $165,000 $115,000 13,125 $ 25,934
Company and President of 1993 $140,000 $120,000 - $ 14,101
Waterhouse Securities
RICHARD H. NEIMAN 1995 $215,000 $ 95,000 6,250 -
Executive Vice President, General 1994 $200,000 $ 50,000 12,500 -
Counsel and Secretary of the 1993 - - - -
Company and Waterhouse Securities
</TABLE>
- ----------
(1) Adjusted to reflect the 50% stock dividend paid November 8, 1993, and
the 25% stock dividend paid September 14, 1995.
(2) Includes employer contributions to the Employee Stock Ownership Plan
for fiscal year 1995.
(3) Includes amounts paid by the Company for life insurance premiums for
fiscal year 1995, as follows: Mr. Waterhouse - $84,264 and Mr. Wigger
- $4,530.
The Company has a policy of paying directors who are not employees of the
Company an annual retainer and a reimbursement for all reasonable expenses
incurred in connection with traveling to and from meetings. For fiscal year 1995
the annual retainer for such directors was $10,000 and $1,500 for each committee
meeting attended. The policy has been revised as of September 1, 1995 to provide
an annual retainer of $15,000 and $1,000 for each committee meeting attended. In
addition, non-employee directors of the Company are annually granted an option
to purchase 2,344 shares (adjusted to reflect stock dividends) pursuant to the
Waterhouse Investor Services, Inc. 1992 Stock Option Plan. Directors who are
employees of the Company are not entitled to any additional compensation for
acting as such. The Board meets at least quarterly.
- 12 -
<PAGE> 16
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
OPTIONS GRANTED DURING FISCAL YEAR 1995
The following table sets forth information concerning individual grants of
stock options the Company's Chief Executive Officer and the next four most
highly compensated executive officers during fiscal year 1995.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM (2)
PERCENT OF TOTAL -------------------
OPTIONS OPTIONS GRANTED EXERCISE
GRANTED TO EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME (#)(1) FISCAL YEAR (%) ($/SH)(1) DATE ($) ($)
---- ------ --------------- --------- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Lawrence M. Waterhouse, Jr. 31,250 8.3% 11.90 10/26/04 233,750 592,813
Frank J. Petrilli 25,000 6.7% 11.80 1/23/05 185,500 470,250
Peter A. Wigger 6,250 1.7% 11.90 10/26/04 46,750 118,563
John H. Chapel 6,250 1.7% 11.90 10/26/04 46,750 118,563
Richard H. Neiman 6,250 1.7% 11.90 10/26/04 46,750 118,563
</TABLE>
- ----------
(1) Adjusted to reflect 25% stock dividend paid September 14, 1995.
(2) Amounts for the executive officers shown in these columns have been
derived by multiplying the exercise price by the annual appreciation rate
shown (compounded for the term of the options), multiplying the result by
the number of shares covered by the options, and subtracting the aggregate
exercise price of the options. The dollar amounts set forth under the
heading are the result of calculations at the 5% and 10% rates set by the
Securities and Exchange Commission and therefore are not intended to
forecast possible future appreciation, if any, of the stock price of the
Company.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISE IN FISCAL YEAR 1995
UNEXERCISED OPTIONS AT AUGUST 31, 1995
OPTION VALUES (ADJUSTED TO REFLECT
25% STOCK DIVIDEND PAID SEPTEMBER 14,1995)
------------------------------------------
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
SHARES ACQUIRED OPTIONS AT IN-THE-MONEY
NAME ON EXERCISE (#) VALUE REALIZED ($)(1) 8/31/95 (#) 8/31/95 ($)
- ---- --------------- --------------------- ----------- -----------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
------------- -------------
<S> <C> <C> <C> <C>
Lawrence M. Waterhouse, Jr. None Exercised - 175,000/25,000 68,750/275,000
Frank J. Petrilli None Exercised - 0/25,000 0/277,500
Peter A. Wigger None Exercised - 14,375/5,000 13,750/55,000
John H. Chapel None Exercised - 14,375/5,000 13,750/55,000
Richard H. Neiman None Exercised - 13,750/5,000 181,250/55,000
</TABLE>
- ----------
(1) Values realized are calculated by subtracting the exercise price from the
closing market price of the Common Stock as of the exercise date(s).
- 13 -
<PAGE> 17
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
EMPLOYMENT AGREEMENTS
On September 1, 1991, the Company entered into an employment agreement
with Lawrence M. Waterhouse, Jr. with a three year term which was automatically
extended for an additional one year period on August 31, 1994 and on each August
31 thereafter unless either party gives notice not to renew.
The employment agreement provides that the Company employ Mr. Waterhouse
as senior executive officer of the Company. The compensation to be paid to Mr.
Waterhouse pursuant to the agreement consists of an annual base salary and such
other benefits (including bonuses) as the Company generally makes available to
its executive officers. The annual base salary for Mr. Waterhouse under the
agreement is $500,000. The agreement with Mr. Waterhouse provides that the
Company maintain, at its expense, life insurance on Mr. Waterhouse, the premiums
of which shall not exceed $100,000 per annum, payable to such beneficiaries as
Mr. Waterhouse shall designate, provided that an amount equal to the aggregate
premiums paid by the Company with respect to such policy shall be paid to the
Company from (i) the cash surrender value of such policy or (ii) the proceeds of
such policy in the event of Mr. Waterhouse's death.
The Company also entered into an employment agreement with Richard H.
Neiman on July 1, 1994 with a three year term which is automatically extended
for an additional one year period on June 30, 1997 and on each June 30
thereafter unless either party gives notice not to renew. The compensation to be
paid to Mr. Neiman consists of an annual base salary of $200,000 and such other
benefits (including bonuses) as the Company generally makes available to its
executive officers.
STOCK OPTION PLAN
In April 1987, the Company adopted a Stock Option Plan, which was
terminated in August 1993, except as to outstanding options under that plan. In
January 1993, stockholders of the Company approved the Waterhouse Investor
Services, Inc. 1992 Stock Option Plan covering 585,937 shares of the Company's
Common Stock (as adjusted to reflect the 25% stock dividend paid March 3, 1993,
the 50% stock dividend paid November 8, 1993 and the 25% stock dividend paid
September 14, 1995) (the "Plan") which was amended by stockholder approval to
cover an additional 937,500 shares of Common Stock (adjusted to reflect the 25%
stock dividend paid September 14, 1995). As of the date hereof, options covering
1,017,256 shares of Common Stock are outstanding under the above plans. The
purposes of the Plan is to enable the Company to provide additional incentives
to the Company's officers, directors and key employees to advance the interests
of the Company by giving them an opportunity to participate in an increase in
the market value of shares of Common Stock. The Plan provides for the grant of
stock options that are either "incentive" or "non-qualified" for federal income
tax purposes. "Incentive" stock options are intended to satisfy the requirements
of Section 422A of the Internal Revenue Code of 1986, as amended, and,
accordingly, no "incentive" stock options may be granted to directors of the
Company who are not also employees of the Company.
The Plan is administered by the Compensation Committee. The number of
shares of Common Stock as to which stock options will be granted to any officer,
director or key employee will be determined by the Compensation Committee based
upon such factors as it may deem to be relevant, such as previous and
anticipated contributions to and duration of employment with the Company. The
exercise price per share of a stock option is established by the Compensation
Committee in its discretion, but may not be less than the fair market value (or
not less than 110% of such value if the individual to whom an "incentive" stock
option is granted owns, as of the date of the grant, shares of the Company's
capital stock possessing 10% or more of the total voting power of all
outstanding shares of the Company's capital stock) of a share of Common Stock as
of the date of the grant. The aggregate fair market value (determined as of the
date of grant) of shares of Common Stock with respect to which "incentive" stock
options are exercisable for the first time by an individual to whom an
"incentive" stock option is granted during any calendar year (under
- 14 -
<PAGE> 18
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
all "incentive" stock option plans of the Company) may not exceed $100,000.
Payment for shares of Common Stock purchased upon the exercise of stock options
may be made in cash, shares of Common Stock (including shares acquired upon the
previous exercise of other stock options) or a combination thereof.
Stock options may be exercisable in whole at any time or in part from time
to time, subject to such restrictions as the Compensation Committee may
determine in its discretion on the date of grant, for a period not to exceed ten
years from the date of the grant and terminate thirty days after the date of
termination of employment or, in the case of a director who is not also an
employee, association with the Company for any reason other than death (in which
event such stock options terminate three months thereafter). Such period is
established by the Compensation Committee in its discretion on the date of
grant. Stock options are not transferable except upon death and may be exercised
during the life of an individual to whom they are granted only by such person.
The Plan (but not stock options then outstanding under the Plan) terminates on
October 15, 2002 or on such earlier date as the Board may determine in its
discretion.
EMPLOYEE STOCK OWNERSHIP PLAN
In October 1987, the Company established the Employee Stock Ownership Plan
and Trust (the "ESOP"). The purposes of the ESOP are to provide retirement and
related benefits to employees and their families and to provide employees with
an additional opportunity for stock ownership and capital accumulation.
Under the ESOP, the Company may make annual contributions to a trust, for
the benefit of eligible employees, of Common Stock or of cash to be used for the
purchase of Common Stock or other investments. Shares of Common Stock for the
ESOP may be either shares purchased in the open market or shares authorized and
unissued.
The amount of the Company's annual contribution is generally within the
discretion of the Board of Directors, except that the Company must contribute
sufficient cash to pay amounts currently due on any loans (the "Loans") the ESOP
may incur to purchase shares of Common Stock. Each Loan will be secured by the
shares of Common Stock purchased with the proceeds of the Loan, though the
Company may, in addition, guarantee any such Loans. At August 31, 1995, there
were no loans outstanding.
The Company's annual contribution is allocated to the accounts of eligible
employees in proportion to each eligible employee's compensation. In fiscal year
1995, officers participated in the ESOP on the same basis as other employees
except that any part of their earnings in excess of $150,000 was excluded for
purposes of allocating the Company's annual contribution.
Employees become 20% vested in the ESOP following the completion of two
years of service, increasing 20% per year until fully vested upon completion of
six years of service. Employees receive the shares of Common Stock and other
investments allocated to their account upon retirement, medical disability,
death or, with respect to the vested portion, other termination of employment.
In addition, eligible employees who have reached the age of 55 and have
participated in the ESOP for ten years may elect to receive a partial
distribution of the value of the Common Stock held in their account.
The Company's contribution to the ESOP with respect to the year ended
August 31, 1995 was approximately $2,188,011 (approximately 62,700 shares).
Allocations for the five most highly compensated officers and for all executive
officers as a group (rounded to the nearest dollar) are as follows: Mr.
Waterhouse, $16,383; Mr. Wigger, $16,383; Mr. Chapel, $16,383; all eligible
executive officers (6 persons) as a group, $98,298 (approximately 4,412 shares).
Messrs. Petrilli and Neiman were not eligible for fiscal year 1995.
-15-
<PAGE> 19
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
CERTAIN TRANSACTIONS
Arthur J. Radin, a director of the Company, is President of Feldman Radin
& Co., P.C., an accounting firm that provides accounting services for the
Company.
James F. Rittinger, a director of the Company, is a partner in Satterlee
Stephens Burke & Burke LLP, a law firm that provides legal services to the
Company.
Future transactions between the Company and its executive officers and
directors will be on terms no less favorable to the Company than the terms which
could be obtained by the Company from unaffiliated parties in arms' length
transactions. If a proposed transaction would be material to the Company, it
must first be approved by the Board of Directors by a majority vote (with all
interested directors abstaining.)
PROPOSAL TO APPROVE AUDITORS
(ITEM 2 ON THE PROXY CARD)
The Board of Directors, on the recommendation of the Audit Committee, has
approved Price Waterhouse LLP as the Company's independent accountants for the
fiscal year ending August 31, 1996. Accordingly, the following resolution
concerning the ratification by the stockholders of the appointment of the
independent auditors will be offered at the meeting:
"RESOLVED, that the appointment by the Board of
Directors of the Company of Price Waterhouse LLP to
audit the accounts of the Company and its subsidiaries
for the fiscal year ending August 31, 1996 is hereby
ratified and approved".
It is expected that representatives of Price Waterhouse LLP will attend
the Annual Meeting to receive and respond to questions concerning the financial
statements contained in the Company's 1995 Annual Report to Stockholders.
Ratification of the selection of Price Waterhouse LLP as independent
accountants will require the affirmative vote of a majority of the shares of
Common Stock of the Company present in person or represented by proxy at the
meeting. The Board of Directors recommends a vote FOR ratification and, unless a
stockholder signifies otherwise, the persons named in the proxy will so vote.
- 16 -
<PAGE> 20
WATERHOUSE INVESTOR SERVICES, INC.
================================================================================
STOCKHOLDER PROPOSALS
All proposals of stockholders to be presented at the Company's next annual
meeting, tentatively scheduled for February 4, 1997, must be directed to the
Secretary of the Company at the Company's principal executive office and, if
they are to be considered for possible inclusion in the proxy statement and form
of proxy for such annual meeting in accordance with the rules and regulations of
the Securities and Exchange Commission, must be received on or before August 26,
1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT. Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), requires the
Company's executive officers and directors and persons who own more than 10% of
the Company's Common Stock ("Reporting Persons") to file reports of ownership
and changes in ownership of the Company's Common Stock with the Securities and
Exchange Commission and the New York Stock Exchange. Reporting Persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms that they file. Based solely on its review of the copies of such
forms received by the Company, the Company believes that during fiscal 1995, all
Reporting Persons complied with all applicable filing requirements, except that
Messrs. Belson, Cardew, Nicoll, Radin, Rittinger and Staudter each filed a late
report with respect to a single transaction, the grant to director's stock
options pursuant to the 1992 Stock Option Plan of the Company. In addition, Mr.
Cardew filed a late report with respect to one transaction and holdings of his
spouse.
OTHER BUSINESS
Neither the Company nor the Board of Directors knows of any other matters,
other than those indicated above, to be presented at the Annual Meeting of
Stockholders. If any additional matters are properly presented, the persons
named in the proxy will have discretion to vote the shares they represent in
accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard H. Neiman
RICHARD H. NEIMAN
Secretary
Dated: December 28, 1995
- 17 -
<PAGE> 21
WATERHOUSE INVESTOR SERVICES, INC. - PROXY
ANNUAL MEETING OF STOCKHOLDERS FEBRUARY 6, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Waterhouse Investor Services, Inc. hereby
appoints Lawrence M. Waterhouse, Jr. and Richard H. Neiman, or either of them,
with full power of substitution, proxies for the undersigned at the Annual
Meeting of Stockholders on February 6, 1996 or any adjournments thereof, to vote
as set forth below and on the reverse side hereof, the shares of Common Stock of
Waterhouse Investor Services, Inc. held of record by the undersigned on December
21, 1995.
Receipt of Notice of Annual Meeting of Stockholders and the Proxy
Statement attached thereto is acknowledged.
1. ELECTION OF FIVE DIRECTORS:
/ / FOR all nominees listed below
(except as marked to the contrary below.)
/ / WITHHOLD authority to vote for all nominees listed below.
INSTRUCTION: to withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.
Kenneth I. Coco, Richard H. Neiman,
Frank J. Petrilli, Arthur J. Radin, James F. Rittinger
2. PROPOSAL to approve the selection of Price Waterhouse LLP as independent
accountants for the fiscal year ending August 31, 1996.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 22
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted as directed herein by
the undersigned stockholder. If directions are not indicated, this proxy
will be voted FOR Items 1, 2 and 3.
______________________________________________________
Signature of Stockholder
______________________________________________________
Signature of Stockholder -- Joint Tenant
(Please sign exactly as your name(s) appear hereon.
When signing in a fiduciary capacity or as a corporate
officer, please give your full title as such. If more
than one name is shown, including the case of joint
tenants, each party should sign.)
Dated: ___________________________, 199______
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN ACCOMPANYING ENVELOPE.
