GREENSTONE ROBERTS ADVERTISING, INC.
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
GREENSTONE ROBERTS ADVERTISING, INC. (the "Company") will be held at One
Huntington Quadrangle, Melville, New York 11747, on April 8, 1998 at 10:00 a.m.,
New York time, for the following purposes:
1. To elect four members to the Board of Directors for a term of two
years and until their respective successors shall have been duly
elected and shall have qualified.
2. To amend the Company's stock option plan to provide for the issuance
of stock options to non-employee members of the Board of Directors.
3. To extend the Company's stock option plan for an additional ten years.
4. To approve the appointment of Ernst & Young LLP as auditors for the
Company's 1998 fiscal year.
5. To consider and act upon any other business as may properly be brought
before the meeting, and any adjournments or postponements thereof, in
connection with the foregoing or otherwise.
Shareholders of record at the close of business on February 23, 1998 will
be entitled to notice of and to vote at the meeting.
By order of the Board of Directors,
Anthony V. Curto
Secretary
Dated: Melville, New York
February 28, 1998
If you do not expect to be present at the meeting and wish your shares to
be voted, please date, sign and mail the accompanying form of proxy as promptly
as possible in the enclosed envelope addressed to the Company's Transfer Agent.
<PAGE>
GREENSTONE ROBERTS ADVERTISING, INC.
ONE HUNTINGTON QUADRANGLE
MELVILLE, NEW YORK 11747
----------------------------
PROXY STATEMENT
----------------------------
The accompanying proxy is solicited by the Board of Directors of Greenstone
Roberts Advertising, Inc., a New York corporation (the "Company"), on behalf of
the Company for use at the Annual Meeting of Shareholders to be held at One
Huntington Quadrangle, Melville, New York 11747, on April 8, 1998 at 10:00 a.m.,
New York time, and any adjournments or postponements thereof, at which
shareholders of record on February 23, 1998 will be entitled to vote. On
February 23, 1998, the Company had outstanding 743,277 shares of Common Stock,
par value $.01 per share (the "Common Stock"). The Common Stock is the only
outstanding class of voting securities of the Company. Each shareholder will be
entitled to one vote for each share of Common Stock held.
The costs of soliciting proxies will be borne by the Company. Such costs
will include charges by brokers and other custodians, nominees and fiduciaries
for forwarding proxies and proxy material to beneficial owners of shares.
Solicitation may be made by mail, personally, by telephone or telegraph, by
officers, directors and regular employees of the Company; such persons will not
be separately compensated for such solicitation.
The shares represented by an executed form of the accompanying proxy will
be voted as directed with respect to the election of Directors or, if no
direction is indicated, will be voted in favor of the election as Directors of
the nominees listed below. Each proxy executed and returned by a shareholder may
be revoked at any time thereafter except as to any matter or matters upon which,
prior to such revocation, a vote shall have been cast pursuant to the authority
conferred by such proxy. Subject to the foregoing, a shareholder may revoke his
proxy by executing another proxy at a later date, by notifying the Secretary of
the Company in writing of his revocation or by attending and voting at the
Annual Meeting.
If voting by proxy with respect to the election of Directors, shareholders
may vote in favor of all nominees, withhold their votes as to all nominees or
withhold their votes as to specific nominees. With respect to each other
proposal that comes before the shareholders at the Annual Meeting, shareholders
may vote For the proposal, vote Against the proposal or Abstain from voting with
respect to the proposal. Assuming a quorum is present, (i) the affirmative vote
of a plurality of the votes cast by the holders of the shares of Common Stock
entitled to vote will be required to act with respect to the election of
Directors and (ii) the affirmative vote of a majority of the votes cast by the
holders of the shares of Common Stock entitled to vote will be required to act
on all other proposals that come before the Annual Meeting. Abstentions and
broker non-votes (when a nominee holding shares for a beneficial owner has not
received voting instructions from the beneficial owner with respect to a
particular matter and such nominee does not possess or choose to exercise
discretionary authority with respect thereto) will be included in the
determination of the number of shares of Common Stock present at the meeting for
quorum purposes. However, abstentions and broker non-votes will not be included
in the tabulations of votes cast on proposals presented to shareholders.
There is being mailed herewith to each shareholder of record the Company's
Annual Report on Form 10-K without exhibits, for the fiscal year ended October
31, 1997. The date of this Proxy Statement is the approximate date on which the
Proxy Statement and the accompanying form of proxy were first sent or given to
shareholders.
<PAGE>
ITEM 1: ELECTION OF DIRECTORS
In accordance with Article II, Section 1 of the By-laws of the Company, at
their annual meeting, a majority of the Board of Directors voted to increase the
number of Directors of the Company from six to seven. In addition, the Board of
Directors appointed Monsignor Thomas J. Hartman to replace the resigning
Director for the balance of his term pursuant to Article II, Section 3 of the
By-laws of the Company. Accordingly, four Directors are to be elected at the
Annual Meeting, each Director to hold office until the 2000 Annual Meeting of
Shareholders and until his respective successor shall have been duly elected and
shall have qualified. The Board of Directors has nominated the persons whose
names appear below. It is the intention of the persons named in the accompanying
proxy to vote the proxies in favor of the election of the nominees named below
if no direction to the contrary is given. The Board of Directors has no reason
to believe that any of those named will be unavailable. If any of those named
should become unavailable, discretionary authority is reserved to vote for a
substitute.
The Directors are divided into two classes and hold office until the second
succeeding Annual Meeting of Shareholders following the election of their
respective class and the qualification of their successors. None of the officers
or Directors are related to one another.
Information as to Nominees for Election as Directors at the 1998 Annual Meeting
FIRST
NAME AGE POSITION ELECTED
Ronald M. Greenstone ....... 57 Chairman of the Board, Chief 1972
Executive Officer and Director
Richard Projain ............ 62 Director 1988
Monsignor Thomas J. Hartman. 51 Director 1998
Victor F. Trizzino ......... 56 Nominee N/A
Ronald M. Greenstone founded the Company in 1972 and has been Chairman of
the Board of Directors, Chief Executive Officer and a Director for more than the
past five years. Mr. Greenstone served as President of the Company from December
1988 to December 1991. Prior to founding the Company, Mr. Greenstone served as
Vice President in charge of account services for the former SH Goldstein
Advertising (Great Neck, New York).
Richard Projain has been a Principal of Kimba Consulting, Inc., a
management consulting firm since January 1994. Mr. Projain served as a freelance
consultant between November 1991 and December 1993. For the more than five years
prior thereto, he was President, Chief Executive Officer and a Director of
Electrosound Group, Inc. Electrosound was engaged in the business of providing
services and products to the recorded music industry.
Monsignor Thomas Hartman has been a Catholic priest with the Diocese of
Rockville Center for more than the past five years. Monsignor Hartman has been
the Director of Radio and Television for the Diocese of Rockville Center serving
at Telicare, a cable television station, located in Uniondale, New York since
1979. He is a Director with Haven Bancorp Inc., a NASDAQ listed, bank holding
company.
Victor F. Trizzino has been an independent management consultant since July
1995. For more than five years prior thereto, he was President, Chief Executive
Officer and a Director of Standard Microsystems Corporation. Standard
Microsystems Corporation was engaged in the design, manufacture and marketing of
local area network products and of integrated circuits for the personal computer
market.
The Board of Directors recommends that the shareholders vote FOR the nominees
for election as Directors.
<PAGE>
Information as to Directors Whose Terms Expire at the 1999 Annual
Meeting
FIRST
NAME AGE POSITION ELECTED
Gary C. Roberts ....... 59 President and Director 1988
Anthony V. Curto ...... 61 Secretary and Director 1988
Martin S. Sussman ..... 60 Director 1991
Gary C. Roberts has been President and Director of the Company since
January 1992. Mr. Roberts served as Executive Vice President since joining the
Company in January 1988. From January 1983 until December 1987, Mr. Roberts
served as Executive Vice President, Chief Operating Officer and Partner at
Slater Hanft Martin (a New York, New York based advertising agency). From
January 1970 to December 1982, Mr. Roberts served as Executive Vice President
and group head at Wells Rich Greene (a New York, New York based advertising
agency). Mr. Roberts received his Bachelor of Science degree in Marketing from
New York University in 1960.
Anthony V. Curto has been Secretary of the Company since August 25, 1994.
Mr. Curto has been a partner with the law firm of Curto, Barton & Alesi, P.C.
which firm has been retained by the Company, since 1991. For more than 5 years
prior thereto, he was a partner with the law firm of Meyer, Suozzi, English &
Klein, P.C. Mr. Curto is admitted to practice law in the State of New York and
obtained his J.D. degree from New York Law School in 1960. He has been a
Director and Counsel to Yoo Hoo, Inc. and C&C Corp. Mr. Curto also has been an
adjunct professor at the business school of Hofstra University.
Martin S. Sussman has been a partner with the law firm of Seltzer, Sussman
& Habermann since forming the firm in 1974. Mr. Sussman specializes in corporate
and corporate tax issues. He is a Director of Griffon Corporation, a New York
Stock Exchange listed company. He is counsel to the law firm of Blau, Kramer,
Wactlar & Lieberman, P.C. He was admitted to the New York State Bar in June 1961
and obtained his LL.B. and LL.M. degrees from New York University in 1960 and
1961, respectively.
Compensation of Directors
Each Director who is not an executive officer of the Company is paid $1500
for each regular or special meeting of the Board of Directors attended.
Directors are not compensated for committee meetings attended.
Committees of the Board of Directors
The Board of Directors of the Company has established the following
committees:
(i) Executive Committee -- the duties of the Executive Committee
are to exercise all functions of the Board of Directors in the
intervals between meetings of the Board of Directors. The members of
the Executive Committee during the Company's recently completed fiscal
year were Messrs. Greenstone, Projain and Roberts.
(ii) Audit Committee -- the duties of the Audit Committee include
recommending the engagement of independent auditors, reviewing and
considering actions of management in matters relating to audit
functions, reviewing with independent auditors the scope and result of
their audit engagement, reviewing reports from various regulatory
authorities, reviewing the system of internal controls and procedures,
and reviewing the effectiveness of procedures intended to prevent
violations of law and regulation. The members of the Audit Committee
during the Company's recently completed fiscal year were Messrs.
Curto, Projain and Sussman.
(iii) Stock Option Plan Committee -- the duties of the Stock
Option Plan Committee are to administer the Company's Option Plan (as
defined herein), including determining which employees of the Company
and its subsidiary will be granted options to purchase shares of
Common Stock of the Company and the number of shares of Common Stock
subject to each option granted. The members of the Stock Option Plan
Committee during the Company's recently completed fiscal year were
Messrs. Curto, Projain and Sussman.
(iv) Compensation Committee -- the duties of the Compensation
Committee are to recommend to the Board remuneration for officers of
the Company, and to recommend the establishment of and monitor a
compensation and incentive program for all salaried personnel of the
Company. In addition, the Compensation Committee will review
compensation paid to non-employee shareholders of the Company owning
at least 1% of the outstanding Common Stock. The members of the
Compensation Committee during the Company's recently completed fiscal
year were Messrs. Curto, Projain and a former Director, Leonard
Schrift.
Meetings of Directors
During the fiscal year ended October 31, 1997, four meetings of the Board
of Directors, one meeting of the Audit Committee, one meeting of the
Compensation Committee and one informal meeting of the Stock Option Plan
Committee were held. No Director attended less than 75% of the meetings of the
Board held while he was a member, and no Director attended less than 75% of the
meetings held by all committees on which he served.
Executive Officers Who Are Not Directors
Each of the Executive Officers of the Company is a Director of the Company.
Stock Ownership by Directors, Nominees and Officers
The following table sets forth the number of shares of Common Stock of the
Company beneficially owned as of January 23, 1998, and the percentage of the
outstanding shares of Common Stock so held, by (i) each beneficial owner of more
than five percent of Common Stock, (ii) each person who is a Director or nominee
of the Company, (iii) each executive officer of the Company named in the Summary
Compensation Table set forth herein; and (iv) all Directors and executive
officers as a group.
Number of
Shares
Name of Beneficially Percentage
Beneficial Owner Owned of Class
-------------------- ----------- ----------
Ronald M. Greenstone......... 305,000 (1) 39%
Gary C. Roberts.............. 105,000 (2) 13%
Martin S. Sussman............ 3,000 (3) *%
Anthony V. Curto............. 0 0%
Richard Projain.............. 3,000 *%
All Directors and executive
officers as a group (5 persons) 416,000 52%
* Less than 1%
(1) Includes 25,000 shares of Common Stock which the holder has the right to
acquire within 60 days upon the exercise of options granted by the Company.
(2) Includes 15,000 shares of Common Stock which the holder has the right to
acquire within 60 days upon the exercise of options granted by the Company.
(3) Includes 1,000 shares of Common Stock over which the holder has sole voting
power and sole investment power.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
PHILOSOPHY
The fundamental philosophy of the Company's executive compensation program
is to offer competitive compensation opportunities which are based on each
individual executive officer's contribution and personal performance. The
compensation of the Company's executive officers is reviewed and approved by the
Compensation Committee which utilizes compensation analyzes for similar type and
size agencies provided by the industry trade associations to ensure that the
compensation is both reasonable and competitive, and also is directly linked to
the Company's financial performance and shareholder interest.
There are three elements in the Company's executive compensation program,
as determined by individual and corporate performance.
- Base salary compensation is determined by the potential impact of the
individual on the Company's performance, the skill and experience
required by the job, and the performance and potential of the incumbent
in the job.
- Annual incentive compensation is based on corporate operating earnings.
Mr. Greenstone and Mr. Roberts each are eligible to earn a bonus based
on a percentage of the Company's profits before provision for income
tax.
- Long term incentive compensation consists of eligibility under the
Option Plan. Stock option grants are awarded based on individual and
Company performance.
Mr. Greenstone and Mr. Roberts also maintain a significant long-term stock
ownership position in the Company's Common Stock. This ownership position
creates a strong linkage between the Company's management and its shareholders'
interests.
THE COMPENSATION COMMITTEE
Anthony V. Curto
Richard Projain
Former Director Leonard Schrift
Summary Compensation Table
The following table sets forth for the Company's last three fiscal years
the compensation paid by the Company to its Chief Executive Officer and
President whose cash compensation exceeded $100,000 (the "Named Executive
Officers").
<TABLE>
<CAPTION>
GREENSTONE ROBERTS ADVERTISING, INC.
EXECUTIVE COMPENSATION
ANNUAL COMPENSATION LONG-TERM COMPENSATION
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Year Base Other Restricted All Other
Name and ended Salary(2) Bonus Annual Stock LTIP Compensation(3)
Principal Position October 31, ($) ($) Compensation Awards Options Payouts ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald Greenstone 1995 365,000 -- -- -- -- -- 1,386
Chairman and CEO 1996 365,000 -- -- -- -- -- 1,425
1997 296,563 -- -- -- -- -- 1,425
Gary Roberts 1995 300,000 -- -- -- -- -- 1,386
President 1996 300,000 -- -- -- -- -- 1,425
1997 243,750 -- -- -- -- -- 1,425
Leonard Schrift(1) 1995 -- -- -- -- -- -- --
Sr. V.P., CFO 1996 84,000 -- -- -- -- -- --
Treasurer 1997 123,194 -- -- -- -- -- --
1 As Mr. Schrift joined the Company in March 1996, amounts for Mr. Schrift in
1996 reflect less than a full year of compensation.
2 The Named Executive Officers receive indirect compensation in the form of
automobile allowances, the use of automobiles and insurance payments on the
automobiles. The amount of such indirect compensation paid or distributed in
fiscal 1997 did not exceed, with respect to any named individual, the lesser
of $50,000 or 10% of the total annual compensation reported for such person.
3 Amounts represent contributions by the Company under the 401(k)
savings plan.
</TABLE>
<PAGE>
Employment Agreements
Ronald Greenstone currently serves as Chairman and Chief Executive Officer
of the Company pursuant to the terms of an employment agreement which expires on
January 1, 2001. This agreement was entered into on January 1, 1998. This
agreement currently provides for an annual salary of no less than $275,000 and a
cash bonus equivalent to 10% of the profit of the Company before provision for
income taxes.
Gary Roberts currently serves as President of the Company pursuant to the
terms of an employment agreement which expires on January 1, 2000. This
agreement was entered into on January 1, 1998. This agreement currently provides
for an annual salary of no less than $225,000 and a cash bonus equivalent to 2%
of the profits of the Company before provision for income taxes.
Each of the foregoing employment agreements restricts the respective
officer's ability to use or disclose confidential information related to the
business of the Company and to compete with the Company upon termination of his
employment by the Company.
In addition, each of the employment agreements provides that the respective
officer, upon termination of employment otherwise than for cause, will receive a
lump sum payment equal to such officer's annual salary, will continue to receive
such officer's annual salary for the remainder of the employment period and will
continue to be eligible for the Company's employee benefits.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers to file with the Securities and Exchange
Commission (the "Commission") initial reports of ownership and reports of
changes in ownership of the Company's Common Stock. Copies of all such Section
16(a) reports are required to be furnished to the Company. These filing
requirements also apply to holders of more than ten percent of the Company's
Common Stock.
To the Company's knowledge, based solely on review of the copies of Section
16(a) reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended October 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
beneficial owners of ten percent or more of Common Stock were complied with.
COMPARATIVE PERFORMANCE OF THE COMPANY
The commission requires the Company to present a chart comparing the
cumulative total shareholder return on its Common stock with the cumulative
total shareholder return of (i) a broad equity market index and (ii) a published
industry index or peer group for a five-year period. The following chart
compares the performance of the Common Stock with (i) the stocks comprising the
NASDAQ National Market (the "NASDAQ Index") and (ii) the stocks comprising the
Dow Jones Advertising Industry Group (the "Dow Jones Advertising Index"), and
assumes an investment of $100 on October 31, 1992 in each of the Common stock,
the NASDAQ Index and the Dow Jones Advertising Index:
<TABLE>
<CAPTION>
In lieu of the graph, the data is presented in chart form
Oct. 31, 1992 Oct. 31, 1993 Oct. 31, 1994 Oct. 31, 1995 Oct. 31, 1996 Oct. 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Company 100 77 68 64 68 35
NASDAQ Index 100 129 128 172 183 227
Dow Jones 100 103 114 131 180 250
Advertising
Index
</TABLE>
<PAGE>
1998 Stock Option Plan, As Amended
The Company is presently operating under the 1988 Stock Option Plan, as
amended ("Plan"). A Committee appointed by the Board of Directors administers
the Plan. Under the Plan, the Committee was authorized to grant stock options to
purchase an aggregate of up to 900,000 shares of the Company to employees of the
Company or its subsidiaries, including directors who are employees, but not
directors who are not employees. Presently there are 36 employees of the Company
eligible under the Plan. Options granted under the Plan may be either "incentive
stock options" within the meaning of Section 422A of the Internal Revenue Code
or non-qualified stock options. The duration of any option granted under the
Plan shall be for a period fixed by the Committee, but not more than ten years
from the date upon which the option is granted. Any amendment to the Plan by the
Board of Directors that would increase the number of shares issuable under the
Plan or change the class of employees to whom options may be granted is subject
to approval of the Company's shareholders.
ITEM 2: AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN
At a meeting on January 26, 1998, the Board of Directors elected to amend
the Plan to permit the granting of stock options to non-employee directors as
provided in the amendment attached as Exhibit A. In addition, subject to
shareholder approval of the Plan amendment, the Board of Directors voted to
issue to Messrs. Projain, Sussman and Curto options to purchase four thousand
(4,000) shares of common stock of the Company. The Board of Directors, subject
to shareholder approval of the Plan Amendment, also voted to grant to all
members of the Board of Directors who are not employees of the Company options
to purchase an additional two thousand (2,000) shares of stock of the Company on
each anniversary thereof that such individual is a member of the Board of
Directors. Accordingly, the Company has reserved one hundred and twelve thousand
(112,000) of the options available under the Plan for this purpose, subject to
ratification by the shareholders.
The Board of Directors believes that the adoption of this amendment would
promote the interests of the Company and its stockholders by enabling the
Company to attract and retain outside directors, to provide them an incentive to
continue service with the Company and provide them additional incentive to
promote the success of the Company's business.
<PAGE>
The issuance of these options is subject to shareholder approval. If these
options had been issued as of the last completed fiscal year, they would have
been issued as follows:
AMENDED AND EXTENDED PLAN BENEFITS
Name and Position Dollar Value($) Number of Units
- ------------------ ----------------- ----------------
Ronald M. Greenstone
Chairman and CEO............... $3,125(1) 25,000(1)
Gary C. Roberts
President...................... $1,875(1) 15,000(1)
Richard Projain
Director....................... $0(2) 4,000(3)
Anthony V. Curto
Director....................... $0(2) 4,000(3)
Martin S. Sussman
Director....................... $0(2) 4,000(3)
1 These options were granted prior to the proposed amended and extended Plan
and have been valued as of the last completed fiscal year.
2 If these options had been issued as of the last completed fiscal year, they
would have been granted as their fair market value and, would have had no
additional value as of that date.
3 If these options had been issued as of the last completed fiscal year, these
would have been the numbers of units issued.
The Board of Directors recommends that the shareholders vote FOR the approval of
the amendment of the Plan.
ITEM 3: EXTENSION OF THE COMPANY'S STOCK OPTION PLAN
The Board of Directors believes that the Plan has been valuable to
furthering the interests of the Company and that the Company's continued ability
to grant stock options to executive officers and key employees substantially
enhances its ability to attract and retain the high caliber personnel upon whose
judgment, skill and initiative the success of the Company depends. Therefore,
the Company believes that it is in the best interest of the Company and its
shareholders to extend the Plan as provided in the attached Exhibit B for an
additional ten (10) years. The Board of Directors believes that the adoption of
this extension would promote the interests of the Company and its stockholders
by enabling the Company to attract and retain high caliber personnel to promote
the success of the Company's business.
The Board of Directors recommends that the shareholders vote FOR the
approval of the extension of the Plan.
<PAGE>
ITEM 4: APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Ernst & Young LLP as
auditors of the Company and its subsidiary for the 1998 fiscal year. This firm
of independent public accounts has served the Company in this capacity since
1997. One or more representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting of Shareholders and will have the opportunity to
make a statement if they desire to do so, and will also be available to respond
to appropriate questions.
The Board of Directors recommends that the shareholders vote FOR the
approval of the appointment of Ernst & Young LLP as auditors of the Company for
the 1998 fiscal year.
<PAGE>
ITEM 5: OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the Board
of Directors intends to present, and knows that others will present, at the
Annual Meeting of Shareholders is set forth herein. If any other matter or
matters are properly brought before the Annual Meeting of Shareholders or any
adjournment or postponement thereof, it is the intention of the persons named in
the accompanying form of proxy to vote the proxy on such matters in accordance
with his judgment.
Shareholders' Proposals
Any proposal which a shareholder expects to present at the next Annual
Meeting of Shareholders must be received at the Company's principal executive
office shown on the first page of this Proxy Statement, Attention: Secretary,
not later than October 31, 1998 to be considered for inclusion in the proxy
material for the 1999 Annual Meeting of Shareholders.
<PAGE>
* * *
THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997 IS
ENCLOSED HEREWITH TO SHAREHOLDERS AS AT FEBRUARY 23, 1998. A SHAREHOLDER OWNING
SHARES BENEFICIALLY BUT NOT OF RECORD AS AT FEBRUARY 23, 1998, SHOULD REQUEST A
REPRESENTATION THAT SUCH SHAREHOLDER WAS A BENEFICIAL OWNER OF THE COMPANY'S
COMMON STOCK ON THAT DATE. SUCH REQUESTS SHOULD BE DIRECTED TO RONALD M.
GREENSTONE, CHAIRMAN, GREENSTONE ROBERTS ADVERTISING, INC., ONE HUNTINGTON
QUADRANGLE, MELVILLE, NEW YORK 11747.
<PAGE>
EXHIBIT A
AMENDMENT NO. 2 TO 1988 STOCK OPTION PLAN
THIS INSTRUMENT, dated as of January 1, 1998, is an amendment to that
certain 1988 Stock Option Plan of Greenstone Rabasca Roberts, Inc., now known as
Greenstone Roberts Advertising, Inc.
WHEREAS, Section 17 of the 1988 Stock Option Plan of Greenstone Rabasca
Roberts, Inc., as amended ("Plan") permits the amendment of the Plan;
NOW, THEREFORE, in consideration of the above premises, the Plan is hereby
amended as follows effective as of January 1, 1998:
1. Section 2(e) of the Plan is amended by the deletion thereof in its
entirely and the insertion in lieu thereof the following:
"Eligible Recipients" shall mean employees of the Corporation or its
Subsidiaries, including directors who are also employees and directors
who are not employees.
2. Except as specifically amended hereby, the Plan shall remain in full
force and effect.
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the
day and year first above written.
GREENSTONE ROBERTS ADVERTISING, INC.
By:
<PAGE>
EXHIBIT B
1998 STOCK OPTION PLAN
OF
GREENSTONE ROBERTS ADVERTISING, INC.
WHEREAS, the Corporation has extended the 1988 Stock Option Plan, as
amended;
NOW, THEREFORE, in consideration of the covenants and promises herein
contained,
it is agreed as follows:
1. Purpose. The purpose of this Stock Option Plan is to advance the
interests of Greenstone Roberts Advertising, Inc. (the "Corporation") by
encouraging and enabling the acquisition of a larger personal proprietary
interest in the Corporation by Eligible Recipients upon whose judgment and keen
interest the Corporation and its Subsidiaries are largely dependent for the
successful conduct of their operations. It is anticipated that the acquisition
of such proprietary interest in the Corporation will stimulate the efforts of
such Eligible recipients on behalf of the Corporation and its Subsidiaries and
strengthen their desire to remain with the Corporation and its Subsidiaries. It
is also expected that the opportunity to acquire such a proprietary interest
will enable the Corporation and its Subsidiaries to attract desirable personnel.
2. Definitions. When used in this Plan, unless the context otherwise
requires:
(a) "Board of Directors" or "Board" shall mean the Board of Directors of
Greenstone Roberts Advertising, Inc. as constituted at any time.
(b) "Chairman of the Board" shall mean the person who at the time shall
be Chairman of the Board of Directors.
(c) "Committee" shall mean the stock option Committee of the board of
Directors, as described in Section 3.
(d) "Corporation" shall mean Greenstone Roberts Advertising, Inc.
(e) "Eligible Recipients" shall mean employees of the Corporation or its
Subsidiaries, including directors who are also employees and
directors who are not employees.
(f) "Fair Market Value" on a specified date shall mean the average of
the bid and asked closing prices at which one Share is traded on
the over-the-counter market, as reported on the National Association
of Securities Dealers Automated Quotation system, or the closing
price for a Share on the stock exchange if any, on which Shares are
primarily traded, but if no shares were traded on such date, then
on the last previous date on which a share was so traded, or, if
none of the above is applicable, the value of a Shares established
by the board of Directors for such date using any reasonable method
of valuation.
(g) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended.
(h) "Options" shall mean the stock options issued pursuant to this Plan.
(i) "Plan" shall mean this 1998 Stock Option Plan of Greenstone Roberts
Advertising, Inc. as adopted by the board of Directors as of
January 1, 1998, as such Plan may be amended from time to time.
(j) "Share" shall mean a share of common stock of the corporation, par
value $.01.
(k) "Subsidiary" shall mean any "subsidiary corporation", as such term
is defined in Section 425(f) of the Internal Revenue Code.
3. Administration of the Plan. The Board of Directors shall appoint a
Committee of at least three (3) members of the board of directors, each of whom
shall be a "disinterested person" within the meaning of Rule 16 under the
Securities Exchange Act of 1934, as amended, which shall have the authority to
administer the Plan as provided herein. Each member of the committee shall hold
office until the next regular annual meeting of the Board of directors following
his designation and until his successor is designated as a member of the
committee. Any vacancy in the Committee may be filled by a resolution adopted by
a majority of the full Board of Directors. Any member of the committee may be
removed at any time, with or without cause, by resolution adopted by a majority
of the full Board of Directors. A member of the Committee may resign from the
committee at any time by giving written notice to the President or Secretary of
the Corporation, and unless otherwise specified therein, such resignation shall
take effect upon receipt thereof. The acceptance of such resignation shall not
be necessary to make it effective. The Committee shall establish such rules and
procedures as are necessary or advisable to administer the Plan.
4. Participants. Except as hereinafter provided, the class of individuals
who are potential recipients of Options to be granted under this Plan consists
of those individuals who are Eligible Recipients, as determined by the
Committee. The Eligible Recipients to whom Options are granted under this Plan
and the number of shares subject to each such Option shall be determined by the
Committee, in its sole discretion, in accordance with the terms and conditions
of this Plan.
5. Shares; Grant of Options. The Committee may, but shall not be required
to, grant, in accordance with this Plan, Options to purchase an aggregate of up
to 900,000 shares, which may be either Treasury Shares or authorized but
unissued Shares.
Options granted under this Plan may be either "incentive stock options"
(within the meaning of section 422A of the Internal Revenue Code), unless the
Committee, in its sole discretion, designates otherwise. Options which are
designated not to be incentive stock options shall not be treated as such for
purposes of this Plan and the Internal Revenue Code.
If any Option shall expire, be cancelled or terminate for any reason
without having been exercised in full, the unpurchased shares subject thereto
may again be made subject to Options under the Plan.
Nothing herein contained shall be construed to prohibit the grant of
Options at different times to the same Eligible Recipient.
The form of Option shall be determined from time to time by the Committee.
The terms and provisions of the Option shall be set forth in writing in a
certificate of agreement (the "Option Certificate") signed by the Option holder
and on behalf of the Corporation by the Chairman of the Board of Directors or
the President or a Vice President of the Corporation. The Option Certificate
shall state whether or not the Option is an incentive stock option. The
Committee may, in its sole discretion, at the time an Option is granted,
establish one or more conditions to the exercise of an Option, provided that, if
such Option is designated as an incentive stock option, then such condition or
conditions shall not be inconsistent with Section 422A of the Internal Revenue
Code.
6. Price. The exercise price per Share of the Shares to be purchased
pursuant to any Option shall be fixed by the Committee at the time an Option is
granted, but in no event shall it be less than the Fair Market Value of a Share
on the day on which the Option is granted.
7. Duration of Options. The duration of any Option granted under this Plan
should be for a period fixed by the Committee but not more than ten (10) years
from the date upon which the Option is granted.
8. Limitations Regarding Ten Percent Stockholders. No Option which is
intended to qualify as an incentive stock option may be granted under this Plan
to any eligible Recipient who, at the time the Option is granted, owns, or is
considered as owning, within the meaning of Section 422A of the Internal Revenue
Code, shares possessing more than ten percent (10%) of the total combined voting
power or value of all classes of stock of the Corporation or a Subsidiary,
unless the exercise price under such option is at least 110 percent (110%) of
the Fair Market Value of a Share on the date such Option is granted and the
duration of such Option is not more than five (5) years.
9. Option Holder Not a Stockholder. An Option holder shall not be deemed to
be the holder of, or to have any of the rights of a stockholder with respect to,
any Shares subject to such Option unless and until the Option shall have been
exercised pursuant to the terms thereof, the Corporation shall have issued and
delivered Shares to the Option holder, and said holder's name shall have been
entered as a stockholder of record on the books of the Corporation. Thereupon,
said holder shall have full voting, dividend and other ownership rights with
respect to such Shares.
10. Consideration for Options. As consideration for the grant of an Option,
the Corporation may, in its discretion, obtain in each case: (a) from any
Eligible Recipient who is an employee of the Corporation or a Subsidiary and
who, at the time the Option is granted, shall not have been under a contract of
employment, an option to have the services of such Eligible Recipient for such
period, up to one (1) year, as the Corporation shall determine; or (b) from any
Eligible Recipient who is under an employment contract at the time the Option is
granted, an option to extend the term of his contract for a period of up to one
(1) year upon such terms and conditions as the corporation and the Eligible
Recipient may agree, but if they are unable to agree, then upon the same terms
and conditions of such contract; or (c) from either an Eligible Recipient who is
or is not under an employment contract at the time the Option is granted, such
other consideration as the Committee, in its discretion, shall request.
11. Non-transferability of Options. Options and all rights thereunder shall
be non-transferable and non- assignable by the holder thereof, except to the
extent that the representative of the estate or the heirs of a deceased option
holder may be permitted to exercise them, and during the holderis lifetime shall
be exercisable only by the holder.
12. Exercise of Options. Except as otherwise provided herein, an Option,
after the grant thereof, shall be exercisable by the holder at such rate and
times as may be fixed by the Committee at the time the Option is granted;
provided, however, that no Option shall be exercisable within one (1) year of
the date such Option is granted.
Notwithstanding any other provision of this Plan to the contrary, any
Option granted under the Plan which is an incentive stock option shall not be
exercisable to the extent that the Fair Market Value of the shares (determined
as of the date of grant) with respect to which such option (and any other
incentive stock option granted to the holder under this Plan or any other stock
option plan maintained by the Corporation or any Subsidiary) first becomes
exercisable in any calendar year exceeds $100,000.
All or any part of any remaining unexercised Options granted to any person
may be exercised in full, whether or not then exercisable, upon the occurrence
of such special circumstance or event as in the sole discretion of the committee
merits special consideration.
An Option shall be exercised by the delivery of a written notice duly
signed by the Option holder thereof (or the representatives of the estate or the
heirs of a deceased Option holder) to such effect, together with the Option
Certificate and either cash, a certified check payment to the order of the
Corporation or shares duly endorsed over to the Corporation (which shares shall
be valued at their Fair Market Value as of the date preceding the day of such
exercise) or any combination of such methods of payment, which together amount
to the full exercise price of the shares purchased pursuant to the exercise of
the Option, to the Chairman of the Board, the President or an officer of the
Corporation who has been designated for the purpose of receiving the same;
provided, however, that a holder may not use any Shares acquired pursuant to the
exercise of an Option granted under this Plan or any other stock option plan
maintained by the Corporation or any Subsidiary unless the holder has
beneficially owned such Shares for at least six (6) months. No Option may be
granted pursuant to the Plan or exercised at any time when such Option, or the
granting or exercise thereof may result in the violation of any law or
governmental order or regulation.
Within a reasonable time after exercise of an Option, the Corporation shall
cause to be delivered to the person entitled thereto a certificate for the
shares purchased pursuant to the exercise of the Option. If the Option shall
have been exercised with respect to less than all of the shares subject to the
Option, the Corporation shall also cause to be delivered to the Person entitled
thereto a new Option Certificate in replacement of the Option Certificate
surrendered at the time of the exercise of the Option, indicating the number of
shares with respect to which the Option remains available for exercise, or the
original Option Certificate shall be endorsed to give effect to the Partial
exercise thereof.
13. Termination of Services. All or any part of any Option granted to an
employee of the Corporation of a Subsidiary to the extent unexercised, shall
terminate immediately if the Option holder ceases to be an employee of the
corporation or a Subsidiary, except that the Option holder shall have until the
end of the tenth (10th) business day following the date he ceases to be an
employee of the Corporation, or a Subsidiary, and no longer, to exercise any
unexercised Option that he could have exercised on the day on which such
employment or position terminated; provided that such exercise must be
accomplished prior to the expiration of the term of such Option. Notwithstanding
the foregoing, if an individual ceases to be an employee of the Corporation or a
Subsidiary due to retirement on or after attaining the age of sixty-five (65)
years (or such earlier date as such person shall be permitted to retire under
the Corporation's retirement plan), or to disability (as such term is defined in
Section 422A(c)(7) of the Internal Revenue Code, the existence of which
disability shall be determined by the Committee, in its sole discretion, which
determination shall be conclusive) or to death, the Option holder, or the
representative of the estate or the heirs of a deceased Option holder, shall
have the privilege of exercising the Options which are unexercised at the time
of such retirement, disability or death, but only to the extent that such
Options are then exercisable: (a) within three (3) months of the Option holder's
retirement; (b) within one(1) year of the Option Holder's disability, or (c)
within one (1) year of the Option Holder's death, as the case may be; provided,
however, that such exercise must be accomplished prior to the expiration of the
term of such Option. If an Option holder ceases to be an employee of such
corporation or a Subsidiary because of the Option holder's violation of his
duties to the Corporation and its Subsidiaries as he may from time to time have,
the existence of which violations shall be determined by the Committee, in its
sole discretion (which determination by the Committee shall be conclusive), all
unexercised Options of such Option holder shall terminate immediately upon such
termination and such Option holder shall have no right after such termination to
exercise any unexercised Option he might have exercised prior to the date he
ceased to be an employee of the Corporation or a Subsidiary.
Nothing contained herein or in the Option Certificate shall be construed to
confer on any Eligible Recipient any right to continue in the employ of the
Corporation or its Subsidiaries or as a director of the Corporation or its
Subsidiaries or derogate from any right of the Corporation or its Subsidiaries
to retire, request the resignation of or discharge such Eligible Recipient, at
any time, with or without cause.
14. Adjustment of Shares. If prior to the complete exercise of any Option
there shall be declared and paid a stock dividend upon the common stock of the
Corporation or if the common stock of the Corporation shall be split-up,
converted, exchanged, reclassified, or in any way substituted for, the Option,
to the extent that it has not been exercised, shall entitle the holder thereof
upon the future exercise of the Option to such number and kind of securities or
cash or other property, subject to the terms of the Option, to which he would
have been entitled had he actually owned the shares subject to the unexercised
portion of the Option at the time of the occurrence of such stock dividend,
split-up, conversion, exchange, reclassification or substitution; and the
aggregate exercise price upon the future exercise of the Option shall be the
same as if the originally optioned shares were being purchased thereunder. If
prior to the complete exercise of any Option there shall be a spin-off
transaction pursuant to the reorganization of the Corporation, the Option to the
extent that it has not been exercised, shall be adjusted by adjusting the
exercise price of the Option and adjusting the number of shares subject thereto,
in order to reflect the decrease, if any, in the fair market value of the
shares, resulting from the spin-off transaction; in any such case, the Option as
adjusted, shall entitle the holder thereof, upon the future exercise of the
Option to number of shares which have a fair market value immediately after the
occurrence of the spin-off transaction equal to the fair market of the Shares
subject to the Option on the day before the occurrence of such spin-off
transaction, and the aggregate exercise price upon the future exercise of the
Option shall be the same as the aggregate exercise price of the shares subject
to the Option on the day before the occurrence of such spin-off transaction. Any
fractional shares or other securities payable upon the exercise of the Option as
a result of such adjustment due to the occurrence of such stock dividend,
split-up, conversion, exchange, reclassification, substitution or spin-off shall
be payable in cash based upon the Fair Market Value of such shares or securities
at the time of such exercise. If any such event should occur, the number of
shares with respect to which Options remain to be issued, or with respect to
which Options may be reissued, shall be adjusted in a similar manner.
Upon the dissolution or liquidation of the Corporation, or upon a
reorganization, merger or consolidation in which the Corporation is not the
surviving corporation, or in which the Corporation becomes a subsidiary of
another corporation, or upon the sale of substantially all of the property of
the Corporation to another corporation, the Plan and the Options issues
thereunder shall terminate, unless provision is made in connection with such
transaction for the assumption of Options theretofore granted, or the
substitution for such options of new options of the successor employer
corporation or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kinds of shares and the per share exercise prices.
15. Issuance of Shares and Compliance with Securities Laws. Before issuing
and delivering any shares to an Option holder, the Corporation may: (i) require
the holder to give satisfactory assurance that the Shares are being purchased
for investment and not with a view to resale or distribution, and will not be
transferred in violation of applicable securities laws; (ii) restrict the
transferability of such shares and require a legend to be endorsed on the
certificates representing the shares; and (iii) condition the exercise of an
Option or the issuance and delivery of Shares upon the listing, registration or
qualification of the shares covered by such Option upon a securities exchange or
under applicable securities laws.
The Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended. Any provision inconsistent with such Rule
shall be inoperative and shall not affect the validity of the Plan.
16. Income Tax Withholding. If the Corporation or a Subsidiary shall be
required to withhold any amounts by reason of any federal, state or local tax
rules or regulations in respect of the issuance of Shares pursuant to the
exercise of an Option, the Corporation or such Subsidiary shall be entitled to
deduct and withhold such amounts from any cash payments to be made to the Option
holder. In any event, the holder shall make available to the Corporation or such
Subsidiary, promptly when requested by the Corporation or such Subsidiary,
sufficient funds to meet the requirements of such withholding, and the
Corporation or such Subsidiary shall be entitled to take and authorize such
steps as it may deem advisable in order to have such funds made available to the
Corporation or such subsidiary out of any funds or property due or to become due
to the holder.
17. Administration and Amendment of the Plan. Except as hereinafter
provided, the Board of Directors and the Committee, if any, may at any time
withdraw or from time to time amend the Plan as it relates to, and the terms and
conditions of, any Options not heretofore granted, and the Board of Directors
and the Committee, if any, with the consent of each adversely affected Option
holder, may at any time cancel any outstanding Option or withdraw or from time
to time amend the Plan as it relates to, and the terms and conditions of, any
outstanding Option. Notwithstanding the foregoing, any amendment which would
increase the number of Shares issuable under Options or change the class of
employees to whom Options may be granted must be adopted by the Board of
Directors and shall be subject to the approval of the stockholders of the
Corporation within one (1) year of such amendment.
Determinations of the Committee as to any question, which may arise with
respect to the interpretation of the provisions of the Plan and Options, shall
be final. The Committee may authorize and establish such rules, regulations and
revisions thereof, not inconsistent with the provisions of the Plan, as it may
deem advisable to make the Plan and Options effective or provide for their
administration, and may take such other action with regard to the Plan and
Options as it shall deem desirable to effectuate their purpose.
18. Effective Date of the Plan. This Plan was approved by the stockholders
of the corporation on April 8,1998 by the vote of the holder of a majority of
the outstanding Shares of the Corporation at a duly held stockholders' meeting;
this Plan was adopted and approved by the Board of Directors on January 26,
1998. This Plan is effective as of January 1, 1998.
19. Final Issuance Date. No Option shall be granted under the Plan after
December 31, 2007.
