GREENSTONE ROBERTS ADVERTISING, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
GREENSTONE ROBERTS ADVERTISING, INC. (the "Company") will be held at 401
Broadhollow Road, Melville, New York 11747, on April 13, 1999 at 10:00 a.m., New
York time, for the following purposes:
1. To elect three 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 approve the appointment of BDO Seidman LLP as auditors for the
Company's 1999 fiscal year.
3. 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, 1999 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 26, 1999
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
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PROXY STATEMENT
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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 401
Broadhollow Road, Melville, New York 11747, on April 13, 1999 at 10:00 a.m., New
York time, and any adjournments or postponements thereof, at which shareholders
of record on February 23, 1999 will be entitled to vote. On February 23, 1999,
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, 1998. 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
Three Directors are to be elected at the Annual Meeting, each Director to
hold office until the 2001 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 1999 Annual Meeting
FIRST
NAME AGE POSITION ELECTED
Gary C. Roberts ......... 60 President and Director 1988
Anthony V. Curto ........ 62 Secretary and Director 1988
Martin S. Sussman ....... 61 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.
The Board of Directors recommends that the shareholders vote FOR the nominees
for election as Directors.
Information as to Directors Whose Terms Expire at the 2000 Annual Meeting
FIRST
NAME AGE POSITION ELECTED
Ronald M. Greenstone ........ 58 Chairman of the Board, Chief 1972
Executive Officer and Director
Richard Projain ............. 63 Director 1988
Monsignor Thomas J. Hartman.. 52 Director 1998
Victor F. Trizzino ......... 57 Director 1998
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. Mr. Projain was President,
Chief Executive Officer and Director of Electrosound Group, Inc. until October,
1991. In May, 1993 Electrosound Group, Inc. filed a petition for an order for
relief under Chapter 11 of the Bankruptcy Code. 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 President and Chief Executive Officer 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.
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.
At a meeting on January 26, 1998, the Board of Directors elected to amend
the Stock Option Plan to permit the granting of stock options to non-employee
directors. In addition, the Board of Directors voted to issue 4,000 shares of
common stock to each of the non-employee directors. The fair value of the
options granted was not material. The Board also voted to grant to all members
of the Board of Directors who are not employees of the Company an additional
2,000 options to purchase shares of stock of the Company on each anniversary
that such individual is a member of the Board of Directors.
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 Trizzino.
(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 Trizzino.
Meetings of Directors
During the fiscal year ended October 31, 1998, five meetings of the Board
of Directors, one meeting of the Audit Committee, one meeting of the
Compensation Committee, one meeting of the Stock Option Plan Committee and three
Executive Committee meetings were held. No Director attended less than 80% 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 22, 1999, 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.
<PAGE>
Number of
Shares
Name of Beneficially Percentage
Beneficial Owner Owned of Class
-------------------- ------------ ----------
Ronald M. Greenstone................. 305,000 (1) 38%
Gary C. Roberts...................... 105,000 (2) 13%
Martin S. Sussman.................... 9,000(3)(4) 1%
Anthony V. Curto..................... 6,000 (4) 1%
Richard Projain...................... 9,000 (4) 1%
Thomas Hartman....................... 2,300 (5) *
All Directors and executive officers
as a group (6 persons).............. 436,000 54%
(1) Includes 25,000 shares of Common Stock which the holder has the right to
acquire within one year 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 one year 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.
(4) Includes 6,000 shares of Common Stock which the holder has the right to
acquire within one year upon the exercise of options granted by the
Company.
(5) Includes 2,000 shares of Common Stock which the holder has the right to
acquire within one year upon the exercise of options granted by the
Company.
* Less than 1%
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
Victor Trizzino
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 $100,000 (the "Named Executive
Officers"). <TABLE> <CAPTION>
GREENSTONE ROBERTS ADVERTISING, INC.
EXECUTIVE COMPENSATION
Annual Compensation Long-Term Compensation
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
Year Base Other Restricted All Other
Name and ended Salary1 Bonus Annual Stock LTIP Compensation2
Principal Position October 31, ($) ($) Compensation Awards Options Payouts ($)
<S> <C> <C> <C>
Ronald Greenstone 1996 365,000 -- -- -- -- -- 1,425
Chairman and CEO 1997 296,563 -- -- -- -- -- 1,425
1998 277,375 -- -- -- -- -- 1,500
Gary Roberts 1996 300,000 -- -- -- -- -- 1,425
President 1997 243,750 -- -- -- -- -- 1,425
1998 227,519 -- -- -- -- -- 1,500
1 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 1998 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.
2 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.
CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS.
At a meeting held on November 2, 1998, the Board of Directors of the
Company approved the engagement of BDO Seidman LLP as its independent auditors
for the fiscal year ending October 31, 1998 to replace the firm of Ernst & Young
LLP, who were dismissed as auditors of the Company effective November 2, 1998.
At a meeting held on February 19, 1997, the Board of Directors of the Company
approved the engagement of Ernst & Young LLP as its independent auditors for the
fiscal year ending October 31, 1997 to replace the firm of Arthur Andersen LLP,
who were dismissed as auditors of the Company effective February 19, 1997.
The reports of Ernst & Young LLP and Arthur Andersen LLP on the Company's
financial statements for the fiscal years ended October 31, 1997 and 1996,
respectively, did not contain an adverse opinion or a disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope, or accounting
principles.
In connection with (i) the audit of the Company's financial statements for
the fiscal year ended October 31, 1997 and in the interim period from October
31, 1997 through November 2, 1998 by Ernst & Young LLP and (ii) the audit of the
Company's financial statements for the fiscal year ended October 31, 1996 and in
the interim period from October 31, 1996 through February 19, 1997 by Arthur
Andersen LLP, there were no disagreements with Ernst & Young LLP or Arthur
Andersen LLP on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope and procedures which, if not resolved to
the satisfaction of Ernst & Young LLP or Arthur Andersen LLP would have caused
Ernst & Young LLP or Arthur Andersen LLP to make reference to the matter in
their report. The Company has requested Ernst & Young LLP and Arthur Andersen
LLP to furnish it a letter addressed to the Commission stating whether it agrees
with the above statements. A copy of such letters, dated November 9, 1998 and
February 25, 1997 are filed as Exhibits 1 and 2, respectively, to Form 8-K filed
on November 9, 1998.
As of November 5, 1998, BDO Seidman LLP has been engaged as the Company's
new independent auditor. During its two most recent fiscal years and the
subsequent interim period ended November 5, 1998, the Company has not consulted
BDO Seidman LLP with regard to either; (i) application of accounting principles
to a specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements, or (ii)
any matter that was either the subject of a disagreement or a reportable event.
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, 1998, 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.
<PAGE>
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, 1993 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, 1993 Oct. 31, 1994 Oct. 31, 1995 Oct. 31, 1996 Oct. 31, 1997 Oct. 31, 1998
<S> <C> <C> <C> <C> <C> <C>
Company 100 88 82 88 45 25
NASDAQ Index 100 100 134 142 176 143
Dow Jones
Advertising Index 100 111 127 175 243 313
</TABLE>
<PAGE>
ITEM 2: APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected BDO Seidman LLP as
auditors of the Company and its subsidiary for the 1999 fiscal year. This firm
of independent public accounts has served the Company in this capacity since
1998. One or more representatives of BDO Seidman 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 BDO Seidman LLP as auditors of the Company for
the 1999 fiscal year.
<PAGE>
ITEM 3: 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, 1999 to be considered for inclusion in the proxy
material for the 2000 Annual Meeting of Shareholders.
* * *
THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998 IS
ENCLOSED HEREWITH TO SHAREHOLDERS AS AT FEBRUARY 23, 1999. A SHAREHOLDER OWNING
SHARES BENEFICIALLY BUT NOT OF RECORD AS AT FEBRUARY 23, 1999, 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., 401 BROADHOLLOW
ROAD, MELVILLE, NEW YORK 11747.
