SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT X
FILED BY A PARTY OTHER THAN THE REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/ / PRELIMINARY PROXY STATEMENT
X DEFINITIVE PROXY STATEMENT
/ / DEFINITIVE ADDITIONAL MATERIALS
/ / SOLICITING MATERIAL PURSUANT TO SEC.240.14A-11(C) OR SEC.240.14A-12
BERLITZ INTERNATIONAL, INC.
________________________________________________________________________________
(Name of Registrant as Specified in its Charter)
BERLITZ INTERNATIONAL, INC.
________________________________________________________________________________
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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 computed1
pursuant to Exchange Act Rule 0-111:
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4) Proposed maximum aggregate value of transaction:
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1Set forth the amount on which the filing fee is calculated and state how it was
determined.
/ / 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 No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[BERLITZ LOGO]
April 19, 1996
Dear Shareholder:
You are cordially invited to attend the 1996 annual meeting of shareholders
that will be held on Wednesday, May 15, 1996 at 10:00 a.m. in Princeton, New
Jersey.
The Notice and Proxy Statement on the following pages contains details
concerning the business to come before the meeting. Management will report on
current operations and there will be an opportunity for discussion concerning
Berlitz International, Inc. and its activities. Please sign and return your
proxy card in the enclosed envelope to ensure that your shares will be
represented and voted at the meeting even if you cannot attend. You are urged to
sign and return the enclosed proxy card even if you plan to attend the meeting.
I look forward to personally greeting all shareholders who are able to
attend.
/s/ Soichiro Fukutake
Soichiro Fukutake
Chairman
<PAGE>
[BERLITZ LOGO]
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1996
Notice is hereby given that the 1996 annual meeting of shareholders (the
"Meeting") of Berlitz International, Inc. (the "Company") will be held at the
Berlitz International, Inc. corporate headquarters, 400 Alexander Park,
Princeton, New Jersey 08540 on Wednesday, May 15, 1996 at 10:00 a.m. local time
for the following purposes:
1. To elect five directors to serve for two-year terms until the 1998
annual meeting of shareholders;
2. To ratify the selection by the Board of Directors of the Company of
Deloitte & Touche LLP, independent accountants, to audit the Company's
consolidated financial statements for 1996; and
3. To transact such other business as may properly come before the
Meeting in connection with the foregoing or otherwise.
The Board of Directors has fixed the close of business on April 12, 1996 as
the record date for the purpose of determining shareholders entitled to notice
of and to vote at the Meeting or any postponement or adjournment thereof. A list
of such shareholders will be open to the examination of any shareholder during
regular business hours for a period of ten days prior to the meeting at the
offices of the Company at 400 Alexander Park, Princeton, New Jersey, 08540.
In order to assure a quorum, it is important that the shareholders who do
not expect to attend the Meeting in person fill in, sign, date and return the
enclosed proxy in the accompanying envelope.
By order of the Board of Directors
/s/ Robert C. Hendon, Jr.
Robert C. Hendon, Jr.
Secretary
Princeton, New Jersey
April 19, 1996
<PAGE>
BERLITZ INTERNATIONAL, INC.
400 ALEXANDER PARK
PRINCETON, NEW JERSEY 08540
PROXY STATEMENT
1996 ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996
The enclosed proxy is solicited by the Board of Directors of Berlitz
International, Inc. (the "Company") for use at the 1996 annual meeting of
shareholders (the "Meeting") to be held at the Company's corporate headquarters
at 400 Alexander Park, Princeton, New Jersey 08540 on Wednesday, May 15, 1996,
at 10:00 a.m. local time, and at any postponement or adjournment thereof. The
enclosed proxy, properly executed and received by the Company prior to the
Meeting, and not revoked, will be voted in accordance with the directions
thereon; and if no directions are indicated, the proxy will be voted for each
nominee for election as a director and for approval of the selection of Deloitte
& Touche LLP as independent accountants for the Company for 1996. If any other
matter should be presented at the Meeting upon which a vote may properly be
taken, the shares represented by the proxy will be voted with respect thereto at
the discretion of the person or persons holding such proxy. Proxies may be
revoked by shareholders at any time prior to the voting of the proxy by written
notice to the Company, by submitting a new proxy or by personal ballot at the
Meeting.
As of the close of business on April 12, 1996, the record date for
determining shareholders entitled to vote at the Meeting, the Company had
outstanding 9,406,013 shares of its $.10 par value common stock (the "Common").
Each share of Common outstanding is entitled to one vote at the Meeting. The
first date on which this Proxy Statement and the enclosed form of proxy are
being sent to the Company's shareholders is on or about April 19, 1996.
ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of ten members
divided into two classes. At the Meeting, five directors will be elected to hold
office for two-year terms until the 1998 annual meeting of shareholders, and
until their successors have been elected and qualified or until their earlier
death, resignation or removal. The proxy will be voted in accordance with the
directions thereon or, if no directions are indicated, for election of the five
directors named below whose election has been proposed and recommended by the
Board of Directors. If any nominee shall, prior to the Meeting, become
unavailable for election as a director, the persons named in the accompanying
form of proxy will vote, in their discretion, for a nominee, if any, as may be
recommended by the Board of Directors, or the Board of Directors may, in their
discretion, reduce the number of directors to eliminate the vacancy.
INFORMATION AS TO OFFICERS AND NOMINEES FOR ELECTION AS DIRECTORS
The respective ages, positions with the Company, business experience,
directorships in other companies and Board committee memberships of the nominees
for election and the continuing incumbent directors are set forth below, as of
March 1, 1996. All nominees, except for Mr. Kazuo Yamakawa, are currently
directors of the Company. There is no family relationship between any of the
directors of the Company.
<PAGE>
NOMINEES FOR DIRECTOR TO BE ELECTED FOR TERMS TO EXPIRE IN 1998
Hiromasa Yokoi, 56
Mr. Yokoi was elected Vice Chairman of the Board and Chief Executive Officer
of the Company in February 1993 and additionally was elected President effective
on August 31, 1993. Mr. Yokoi has served as a Director of Benesse Corporation
("Benesse") (formerly Fukutake Publishing Co., Ltd., and currently a
publicly-held company since October 1995 and the beneficial owner of 6,735,338
shares of Common) since June 1992 and as Benesse's Director for Berlitz and
North American Sector since April 1994. Prior to that, he served as General
Manager of the Overseas Operations Division (formerly the International
Division) of Benesse from October 1990 to March 1994 and as General Manager of
the President's Office of Benesse from July 1990 to September 1990. Mr. Yokoi
has served as a Director of the Company since January 1991. He is currently a
member of the Executive Committee.
Henry D. James, 58
Mr. James has served as Executive Vice President and Chief Financial Officer
of the Company since November 21, 1995, and as Vice President and Chief
Financial Officer of the Company from January 1995 to November 1995. He
previously served as Vice President and Controller of the Company and its
predecessor, Berlitz Languages, Inc. ("Berlitz Languages"), since 1981. Mr.
James joined Berlitz Languages in 1977 and served as Controller with that
company prior to 1981. Mr. James has served as a Director of the Company since
November 21, 1995.
Edward G. Nelson, 64
Since January 1985, Mr. Nelson has served as Chairman and President of
Nelson Capital Corporation. From 1983 to 1985, he was Chairman and Chief
Executive Officer of Commerce Union Corporation. He also serves on the Board of
Directors of ClinTrials, Inc., Osborn Communications Corporation, Central
Parking System, and Advocat, Inc. He is a trustee of Vanderbilt University. Mr.
Nelson became a Director of the Company in February 1993. He is currently a
member of the Audit Committee, the Compensation Committee and the Disinterested
Directors Committee.
Robert L. Purdum, 60
Mr. Purdum served as Chairman of the Board of Armco, Inc. from December 1993
until his retirement in April 1994 and currently is an independent consultant
and a partner with American Industrial Partners, a private investment company
composed of former chairmen and chief executives. He served in various positions
since first joining Armco in 1962, including Chairman and Chief Executive
Officer (November 1990 to December 1993), President and Chief Executive Officer
(April 1990 to November 1990), President (October 1986 to April 1990), Chief
Operating Officer (February 1985 to October 1986) and Chief Executive
Officer-Steel Group (November 1982 to February 1985). Mr. Purdum also has served
on the Board of Directors of Holophane Corporation since 1994. In addition, he
has been a member of the Board of Trustees of GMI Engineering and Management
Institute since 1991 and serves on their International Committee and Capital
Campaign Committee. Mr. Purdum has served as a Director of the Company since
August 1994. He is currently a member of the Audit Committee and the
Disinterested Directors Committee.
2
<PAGE>
Kazuo Yamakawa, 56
Mr. Yamakawa has served as a Director of Benesse and has supervised its
General Administration and Accounting Departments since June 1995. He also has
served as General Manager of Benesse's Accounting Department since January 1996.
Since joining Benesse in April 1995, he served as Counselor until June 1995.
Prior to that, Mr. Yamakawa served in various positions with The Shokochukin
Bank, including Director (April 1993 to March 1995), General Manager of its
Tokyo branch (April 1993 to March 1995), General Manager of its International
Department (October 1991 to March 1993) and General Manager of its New York
Branch (April 1988 to September 1991). Mr. Yamakawa would assume the position of
Director of the Company presently held by Mr. Saburo Nagai, who is retiring.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE FIVE
DIRECTORS NAMED ABOVE.
INCUMBENT DIRECTORS--TERMS EXPIRE IN 1997
Soichiro Fukutake, 50
Mr. Fukutake has served as Chairman of the Board of the Company since
February 1993. Mr. Fukutake joined Benesse in 1973, and since May 1986 has
served as its President and Representative Director. He also serves on the Board
of Directors of a number of companies, private foundations and associations in
Japan. Mr. Fukutake became a Director of the Company in February 1993. He is
currently a member of the Executive Committee and the Compensation Committee.
Manuel Fernandez, 59
Mr. Fernandez has served as Executive Vice President and Chief Operating
Officer, Worldwide Language Instruction of the Company since January 1, 1995.
Prior thereto, he was Executive Vice President, Language Services of the Company
from September 1993 to January 1995 and Vice President, European Operations of
the Company from October 1989 to September 1993. He previously served as Vice
President, European Operations for Berlitz Languages from January 1983 to
October 1989. Mr. Fernandez was first employed by Berlitz Languages in 1963. Mr.
Fernandez has served as a Director of the Company since July 1993. He is
currently a member of the Executive Committee.
Robert Minsky, 51
Mr. Minsky has served as Executive Vice President and Chief Operating
Officer, Translations and Publishing of the Company since January 1, 1995. Prior
thereto, he served as Executive Vice President, Translations of the Company from
October 1, 1993 to January 1995, and as Chief Financial Officer of the Company
from November 1990 to January 1995. From November 1990 to October 1993, he also
served as a Vice President of the Company. Mr. Minsky has served as a Director
of the Company since April 1991. He is currently a member of the Executive
Committee.
3
<PAGE>
Susumu Kojima, 53
Mr. Kojima has served as Executive Vice President, Asia Division of the
Company since January 1, 1996. Prior thereto, he served as Executive Vice
President, Corporate Planning of the Company from September 1993 to December
1995, and as Senior Vice President, Corporate Planning of the Company from
February 1993 to September 1993. Mr. Kojima has served as Director of Benesse
since March 1993. Prior to that, he was Joint General Manager of the Business
Development Department of The Industrial Bank of Japan, Limited ("I.B.J.") from
June 1991 to February 1993. Between November 1987 and June 1991, he served as
Senior Deputy General Manager, Industrial Research Department of I.B.J. after
having served as Chief Representative of I.B.J.'s Washington Representative
Office from September 1983. Mr. Kojima was elected as a Director of the Company
in February 1993. He is currently a member of the Executive Committee.
Aritoshi Soejima, 69
Mr. Soejima served as Senior Counselor of Benesse from December 1980 until
his appointment as a member of the Disinterested Directors and Compensation
Committees of the Company. From 1950 to 1981, Mr. Soejima served in various
positions with the Japanese government (including the Ministry of Finance) and
multilateral financial institutions (including the World Bank and International
Monetary Fund). Mr. Soejima also currently serves as Chairman of Osaka, Tokyo
Bay, Nagoya Hilton Company, Ltd., Counselor of Nippon Hilton Company, Ltd. and
Director and Counselor of Capital International Company, Ltd. and as special
advisor to the Board of Directors of the Nippon Fire & Marine Insurance Company,
Ltd. In addition, he serves on the Board of Directors of a number of companies,
private foundations and associations in Japan. Mr. Soejima became a Director of
the Company in February 1993. He is currently a member of the Audit Committee,
the Compensation Committee and the Disinterested Directors Committee.
1995 BOARD OF DIRECTORS MEETINGS, COMMITTEES AND FEES
During 1995, the Board of Directors of the Company met in person four times
and took no actions by unanimous written consent.
In 1995, the Board of Directors had standing Executive, Audit, Disinterested
Directors, and Compensation Committees. The Company does not have a standing
Nominating Committee.
The Executive Committee, during the intervals between meetings of the Board
of Directors, may, with certain exceptions, exercise the powers of the Board of
Directors. The Executive Committee did not meet during 1995.
The Audit Committee recommends to the Board of Directors the engagement of
the independent auditors of the Company and reviews with the independent
auditors the scope and results of the Company's audits. The Audit Committee
reviews the terms of all agreements between the Company and its affiliates. The
Audit Committee meets with management and with the Company's internal auditors
and independent auditors to review matters relating to the quality of financial
reporting and internal accounting control, including the nature, extent and
results of their audits, and otherwise maintains communications between the
Company's independent auditors and the Board of Directors. The Audit Committee
met four times during 1995.
4
<PAGE>
Initially, the Disinterested Directors Committee was established for the
purpose of protecting the long-term interests of the Company and its minority
shareholders by independently reviewing and monitoring all matters affecting the
relationship between the Company and Maxwell Communication Corporation, plc and
its affiliates. Following the Merger (hereinafter defined), the Disinterested
Directors Committee's role was retained and reconstituted to review and monitor
all matters affecting the relationship between the Company and Benesse and its
affiliates. During 1995, the Disinterested Directors Committee met in person one
time and took action by unanimous consent one time.
The Compensation Committee reviews performance of corporate officers,
establishes overall employee compensation policies and recommends to the Board
of Directors major compensation programs. The Compensation Committee also
reviews and approves salary arrangements and other remuneration for executive
officers of the Company and is responsible for review of certain employee
benefit plans. The Compensation Committee oversees and approves grants of stock
options and other stock-based awards pursuant to the Stock Option Plan
(hereinafter defined) and the Company's Non-Employee Directors Stock Plan (the
"Directors' Stock Plan"). The Committee also administers the 1993 Short-Term
Executive Incentive Compensation Plan (the "Short-Term Incentive Plan") and the
1993 Long-Term Executive Incentive Compensation Plan (the "Long-Term Incentive
Plan") and approves awards and discretionary bonuses under these plans. No
member of the Compensation Committee is eligible to participate in the Stock
Option Plan or the Short-Term Incentive Plan. During 1995, the Compensation
Committee met two times.
The Company's standard retainer payable to each director who is not an
employee of the Company or any of its affiliates is $30,000 per annum plus
expenses, with an additional $2,000 for each Committee meeting attended in
person and $1,000 for each meeting participated in by telephone. No fees are
paid for actions taken by unanimous written consent. Only those directors who
are also full-time employees of the Company or any of its affiliates are
eligible to participate in the health benefit plan maintained by the Company.
Directors employed by the Company or any of its affiliates receive no
compensation in consideration of their duties as directors. The outside
directors earned an aggregate of approximately $126,000 as cash compensation for
their services during 1995.
The Company has entered into indemnification agreements with each director
pursuant to which the Company agreed to pay any amount such director becomes
obligated to pay as a result of any claims made against such director because of
any alleged act, omission, neglect or breach of duty which he commits while
acting in his capacity as a director and solely because of his being a director,
subject to limitations imposed by the New York Business Corporation Law
("NYBCL").
5
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number and percentage of outstanding
shares of Common beneficially owned as of April 5, 1996 by each director,
nominee, the Company's chief executive officer during the fiscal year ended
December 31, 1995, the four most highly compensated executive officers of the
Company at December 31, 1995 and all officers and directors as a group who
served at December 31, 1995. If not mentioned by name, no individual in the
categories described above beneficially owned any shares of Common as of April
5, 1996. No security set forth in the third column of the following table
reflects an amount as to which the beneficial owner has joint voting or
investment power.
<TABLE><CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- -------------------------------------- ---------- --------
<C> <S> <C> <C>
Common Soichiro Fukutake 6,735,338 (1) 71.61%
Common Manuel Fernandez 8,745 *
Common Robert Minsky 2,857 *
Common Edward G. Nelson 1,500 (2) *
Common Henry D. James 7,672 *
Common All Officers and Directors as a Group
(16 in number) 6,775,746 72.04%
</TABLE>
To the best of registrant's knowledge, there are no events of delinquent
filing requiring disclosure under Item 405 of Regulation S-K.
- ------------
(1) Soichiro Fukutake is the President, Representative Director and principal
shareholder of Benesse Corporation, which is the beneficial owner of
6,735,338 shares of Common. See "Security Ownership of Certain Beneficial
Owners."
(2) An additional 1,000 shares of Common, for which Mr. Nelson has disclaimed
ownership, are owned by Mr. Nelson's wife.
* Less than 1%
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the ownership by each person or group known
by the Company to own beneficially more than 5% of Common:
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ----------------------------------- --------- --------
Common Benesse Corporation (1) 6,735,338 71.61%
3-17-17 Minamigata
Okayama-shi 700, Japan
Common Dimensional Fund Advisors, Inc (2) 506,282 5.38%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
- ------------
(1) Fukutake Publishing Co., Ltd. changed its name to Benesse Corporation on
April 1, 1995. As of April 5, 1996, 6,722,138 shares of Common are held by a
wholly owned subsidiary of Benesse and 13,200 shares of Common are held
directly by Benesse. Soichiro Fukutake is the President, Representative
Director and principal shareholder of Benesse.
(2) This information is taken from the Schedule 13G, dated February 7, 1996,
filed by Dimensional Fund Advisors, Inc. ("Dimensional") with the Securities
and Exchange Commission. Dimensional, a registered investment advisor, is
deemed to have beneficial ownership of these 506,282 shares of Common at
December 31, 1995, all of which are held in portfolios of DFA Investment
Dimensions Group, Inc., a registered open-end investment company, or in
series of the DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, all of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
On April 4, 1996, the Company consummated the purchase of 627,000 shares of
Common from Maxwell Communication Corporation, plc (In Administration) ("Maxwell
Communication") at a price of $9 per share. These shares were previously held in
escrow pursuant to an Escrow Agreement among the Company, Maxwell Communication
and IBJ Schroder Bank & Trust Company, and subject to a Stock Purchase Agreement
between the Company and Maxwell Communication. See "Certain Relationships and
Related Transactions." These shares were placed into treasury by the Company and
reserved for future use.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Summary of Cash and Certain Other Compensation
The following Summary Compensation Table sets forth the compensation awarded
to, earned by or paid to the Chief Executive Officer ("CEO") and certain
executive officers (collectively, the "Named Executive Officers") during the
fiscal years ended December 31, 1995, 1994 and 1993 for services rendered in all
capacities to the Company and its subsidiaries.
On December 9, 1992, the Company and Benesse entered into an amended and
restated merger agreement (the "Merger Agreement") pursuant to which Benesse
agreed to acquire, through a merger of the Company with an indirect wholly-owned
U.S. subsidiary (the "Merger"), approximately 67% of the outstanding Common, par
value $.10 per share, of the Company. The compensation disclosed below under
"All Other Compensation" incorporates amounts received by the Named Executive
Officers in 1993 as a result of the Merger.
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE><CAPTION>
LONG-TERM
COMPENSATION (8)
ANNUAL COMPENSATION ----------------
-------------------------------- LONG-TERM
OTHER AWARDS OF
ANNUAL OPTIONS/ ALL OTHER
NAME AND SALARY BONUS COMPENSATION SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) (6) ($) ($) (7) (#) (9) ($) (10)
- ------------------------------------ ---- ------- ------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Hiromasa Yokoi (1).................. 1995 444,800 180,000 55,200 None 9,750
Vice Chairman of the Board, 1994 404,320 161,700 39,000 None 9,750
CEO and President 1993 271,058 None 10,000 None None
Manuel Fernandez (2)................ 1995 224,800 51,000 1,312 None 9,750
Executive Vice President and 1994 207,200 72,500 20,978 None 9,750
Chief Operating Officer, 1993 157,400 30,000 10,494 None 404,681
Worldwide Language Instruction
Robert Minsky (3)................... 1995 227,900 80,000 None None 9,750
Executive Vice President and 1994 207,200 46,600 None None 9,750
Chief Operating Officer, 1993 177,723 30,000 None None 287,902
Translations and Publishing
Susumu Kojima (4)................... 1995 210,000 25,200 42,000 None 9,750
Executive Vice President, 1994 200,000 45,000 42,000 None 9,500
Corporate Planning 1993 143,962 None 14,000 None None
Henry D. James (5).................. 1995 182,300 51,000 None None 9,750
Executive Vice President and 1994 168,000 78,800 None None 9,750
Chief Financial Officer 1993 157,755 25,000 None None 373,292
</TABLE>
- ------------
(1) Mr. Yokoi joined the Company as an officer in 1993 and his base salary of
$355,000 became effective April 1, 1993. Therefore, amounts shown for him
for 1993 reflect less than a full year of compensation. Mr. Yokoi's salary
increased to $361,000 effective August 30, 1993, to $404,320 effective
January 1, 1994, to $444,800 effective January 1, 1995, and to $480,000
effective January 1, 1996.
(2) Mr. Fernandez's base salary increased from a base salary of $143,418
effective April 1, 1992, to $185,000 effective August 30, 1993, to $207,200
effective January 1, 1994, to $224,800 effective January 1, 1995, and to
$240,000 effective January 1, 1996. Mr. Fernandez's 1993 percentage
increase in base salary was due to the additional responsibilities he
assumed as a result of his promotion to Executive Vice President, Language
Services from Vice President, European Operations.
(3) Mr. Minsky's salary increased from a base salary of $174,900 effective
April 1, 1992, to $178,000 effective August 30, 1993, to $185,000 effective
October 4, 1993, to $207,200 effective January 1, 1994, to $227,900
effective January 1, 1995, and to $240,000 effective January 1, 1996.
(4) Mr. Kojima joined the Company as an officer in 1993 and his base salary of
$190,000 became effective on April 1, 1993. Therefore, amounts shown for
him for 1993 reflect less than a full year of compensation. Mr. Kojima's
salary increased to $200,000 effective January 1, 1994, to $210,000
effective January 1, 1995, and to $225,000 effective January 1, 1996. Mr.
Kojima became Executive Vice President, Asia Division effective January 1,
1996.
(5) Mr. James' salary increased from a base salary of $157,755 effective April
1, 1992, to $168,000 effective January 1, 1994, to $182,300 effective
January 1, 1995, and to $210,000 effective January 1, 1996. Mr. James' 1996
percentage increase in base salary was due to the additional
responsibilities he assumed as a result of his promotion to Executive Vice
President.
(6) Amounts shown represent base salary earned in the respective years.
(7) Other Annual Compensation for Mr. Yokoi and Mr. Kojima represents monthly
housing allowances commencing September 1, 1993. For Mr. Fernandez, this
column includes relocation expense reimbursements of $19,795 and $10,494 in
1994 and 1993, respectively.
(Footnotes continued on following page)
8
<PAGE>
(Footnotes continued from preceding page)
(8) The column designated by the SEC to report Long-Term Incentive Plan Payouts
has been excluded because (i) the Company had no performance-based
long-term compensation plans for employees effective during any portion of
fiscal year 1993, and (ii) no payouts have been made in 1994 or 1995 under
the Company's long-term incentive plan, effective January 1, 1994, as
discussed in the Compensation Committee report under "Long-Term Executive
Incentive Compensation Plan".
The column designated by the SEC to report Restricted Stock Awards has been
excluded because the Company made no awards of restricted stock to the Named
Executive Officers during any portion of fiscal years 1995, 1994 or 1993.
Prior to the Merger, all restricted stock awards had vested in twenty
percent increments over a five year period commencing on the first
anniversary of the date of grant. Shareholders of restricted stock received
dividends at the same rate and at the same time as shareholders of common
stock of the Company.
Pursuant to the terms of the Merger Agreement and the 1989 Stock Option and
Incentive Plan (the "Stock Option Plan"), on February 8, 1993 all
restrictions on restricted stock lapsed and the holders of such shares
received, for each share held, (i) $19.50, (ii) 0.165 share of Common and
(iii) $1.48, representing the net proceeds from the disposition of the
Company's claims arising from three promissory notes issued by Maxwell
Communication and an affiliate in favor of the Company or a subsidiary of
the Company (the "Maxwell Notes"). In addition, holders of restricted stock
received $.01 per share at such time as consideration for the redemption of
the Common Share Purchase Rights (each, a "Right") granted pursuant to the
terms of the Amended and Restated Safeguard Rights Agreement, dated as of
February 5, 1992, between the Company and United States Trust Company of New
York (the "Rights Agreement"). Consequently, there were no Common restricted
shares outstanding at December 31, 1995.
(9) The Company has not granted stock options or SARs to any of the Named
Executive Officers during fiscal years 1995, 1994 or 1993. There have been
no exercises of options or SARs for the fiscal year 1995.
Pursuant to the Merger Agreement and the Stock Option Plan, on February 8,
1993, each outstanding option became fully vested and was converted into
the right to receive (i) 0.165 share of Common, (ii) $19.50 minus the
exercise price of such option and (iii) $1.48, representing the net
proceeds from the disposition of the Company's claims arising from the
Maxwell Notes.
At December 31, 1995, there were no options or SARs outstanding.
(10) The amounts reported in this column for the fiscal year 1995 include a
contribution of $4,500 made by the Company for the account of each Named
Executive Officer pursuant to the thrift portion (the "401(k) Plan") of the
Berlitz Retirement Savings Plan (the "Retirement Savings Plan"). The
amounts reported also include a contribution of $5,250 made by the Company
for the account of each Named Executive Officer pursuant to the retirement
portion (the "Pension Plan") of the Retirement Savings Plan.
PENSION PLAN TABLE
The Company's Supplemental Executive Retirement Plan ("SERP"), effective
January 1, 1996, is a defined benefit plan which provides retirement
income/disability retirement benefits, retiree medical benefits and death
benefits to the Chairman of the Board, certain designated executives and their
designated beneficiaries. The following table shows the estimated annual
retirement income/disability retirement benefits (assuming payments made on the
normal life annuity) payable upon retirement at age 60 to a participant in
specified compensation and years of service classifications.
9
<PAGE>
<TABLE><CAPTION>
YEARS OF SERVICE
------------------------------------------------------
INITIAL
PARTICIPANT
(HEREINAFTER
DEFINED) ALL OTHER PARTICIPANTS
------------ ------------------------------------
COMPENSATION 5 OR MORE 5 10 15 OR MORE
- ---------------------------- ------------ ------- ------- ----------
<S> <C> <C> <C> <C>
$100,000.................... $ 30,000 $10,000 $20,000 $ 30,000
150,000..................... 45,000 15,000 30,000 45,000
200,000..................... 60,000 20,000 40,000 60,000
250,000..................... 75,000 25,000 50,000 75,000
300,000..................... 90,000 30,000 60,000 90,000
400,000..................... 120,000 40,000 80,000 120,000
550,000..................... 165,000 55,000 110,000 165,000
750,000..................... 225,000 75,000 150,000 225,000
</TABLE>
Under the SERP, monthly benefits are available to any participant who
retires at age 60 or above, with at least 5 years of service with the Company.
The retirement income/disability retirement benefits are based on a percentage
of an average monthly salary (calculated on the base salary and short-term
bonuses paid over the last 36 months of employment1) and will be paid to the
retired participant for life, with 50% of such benefit paid to the participant's
surviving spouse for life upon the retired participant's death. Such percentage
for participants designated as of January 1, 1996 ("Initial Participants") is
30%. For future participants, such percentage will be 2% (or such other
percentage as the Board of Directors may determine) multiplied by years of
service, not to exceed 30%. The Company will also provide each retired
participant and their surviving spouse with medical coverage for both of their
lives. If a participant with at least 5 years of service dies before retirement,
the participant's designated beneficiary will receive, in lieu of the
above-mentioned benefits, a one-time payment equal to the participant's base
salary projected to age 65 at a 4% annual increase. Awards under the SERP are
not subject to deduction for Social Security or other offset amounts, except to
the extent of any disability benefits payable under the Company's long-term
disability insurance policy. The Company intends to fund the SERP through a
combination of funds generated from operations and life insurance policies on
the participants.
The Named Executive Officers, all of whom are Initial Participants, will
each have at least 5 years of service at age 60. The 1995 compensation covered
under the SERP for each of the Named Executive Officers is shown under the
"Salary" and "Bonus" columns of the Summary Compensation Table.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company has a severance agreement with Robert Minsky which provides that
if Mr. Minsky is terminated other than for cause, he is to be paid one year's
severance at his then current annual base salary plus a prorated amount of the
award under the Company's Short-Term Incentive Plan to which he would have been
entitled for such year and the continuation of certain other benefits.
The Company is a party to indemnification agreements with each director and
executive officer pursuant to which the Company agrees to pay, subject to
limitations imposed by the NYBCL, any amount such director or executive officer
becomes obligated to pay as a result of any claims made against such director or
executive officer because of any alleged act or omission or neglect or breach of
duty which he commits while acting in his capacity as a director or executive
officer, as the case may be.
- ------------
(1) In the case of the Chairman of the Board, who does not receive a salary from
the Company, the SERP benefits are based on an imputed salary determined by
the Company's Board of Directors.
10
<PAGE>
COMPENSATION COMMITTEE REPORT FOR FISCAL YEAR 1995
The Compensation Committee of the Board of Directors reviews and determines
the compensation of the Company's executive officers. It also reviews and
approves any employment, severance or similar agreements for executive officers.
The Committee determines the amount, if any, of the Company's contributions
pursuant to the Retirement Savings Plan, and oversees and approves grants of
stock options and other stock-based awards pursuant to the Stock Option Plan and
the Directors' Stock Plan. The Committee also administers the Short-Term
Incentive Plan and the Long-Term Incentive Plan and approves awards and
discretionary bonuses under each of such plans.
The Company seeks to compensate executive officers at levels competitive
with other companies with similar annual revenues and to provide incentives for
superior individual and corporate performance. Salaries are set to correspond to
the mid-range of salaries paid by competitive companies. In setting
compensation, the Company compares itself with companies with similar annual
revenues rather than with industry peers because the Company is the only
publicly-held language instruction company.
The key components of executive officer compensation are base salary, cash
bonuses, and awards pursuant to incentive-based plans. The Committee attempts to
combine these components in such a way to attract, motivate and retain key
executives critical to the long-term success of the Company. A discussion of the
various components of executive compensation for the fiscal year 1995 follows.
BASE SALARY
Each executive officer receives a base salary, with the potential for annual
salary increases based largely on merit from prior annual performance.
The proposed annual compensation of Company employees was discussed at the
two Compensation Committee meetings held in 1995. Base salary recommendations
were made by management of the Company for the Committee to approve. After
review and consideration by the Committee of management's recommendations, the
Committee approved base salary adjustments for executive officers considering
individual and Company performance. Such adjustments averaged 7.5% and 8.9% for
1995 and 1996, respectively. The criteria used to evaluate Company performance
were sales and earnings figures, and return on equity. The Committee believes
that all such criteria were accorded equal weight.
BONUSES
In 1993, the Committee approved the Short-Term Incentive Plan, commencing
with the 1993 calendar year, pursuant to which each executive officer is
eligible for an annual bonus based upon the officer's present employment
position, individual performance, and, through 1994, the total Company's
performance compared to earnings goals. In 1995, the Committee amended the
Short-Term Incentive Plan so that Division Vice Presidents would receive 1995
and subsequent years' awards based on 60% of divisional performance and 40% of
total Company performance. The Committee believes that individual performance
and Company performance are given approximately equal weight. The Short-Term
Incentive Plan also permits the Committee to award discretionary cash awards to
employees, who may or may not be participants under the Short-Term Incentive
Plan, subject to those terms and conditions as the Committee shall determine in
its sole discretion.
11
<PAGE>
At its February 1996 meeting, the Committee approved, after discussion, 1995
bonuses for executive officers under the Short-Term Incentive Plan. Such bonuses
that accrued for 1995 ranged from 11.5% to 40% of each executive officer's base
salary. The Committee also approved a discretionary special bonus proposal for
certain executive officers, recommended by management based upon exceptional
individual performance. Such special bonuses that accrued for 1995 for such
executive officers ranged from 3.8% to 8.2% of their total salary.
STOCK OPTIONS AND RESTRICTED STOCK
The Stock Option Plan provides for the award of stock options, restricted
stock and other stock-based awards to senior management of the Company. Grants
under this plan are intended to provide executives with the promise of
longer-term rewards which appreciate in value with favorable future performance
of the Company. In determining grants of stock options and restricted stock, the
Compensation Committee reviews individual performance and Company performance.
The criteria used to evaluate Company performance include sales and earnings
figures, and return on equity. The Committee believes that all such criteria are
accorded equal weight. The Committee did not approve, and the Company did not
make, any grants of stock options, restricted stock, or any other stock-based
award under the Stock Option Plan in 1995.
LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
In 1993, the Committee approved the Long-Term Incentive Plan, effective
January 1, 1994, pursuant to which the Chairman of the Board, officers and
certain key employees are eligible to receive, for each performance unit granted
to the individual by the Committee, cash awards based on Company performance and
common stock price results over a five year period ending on December 31, 1998.
The plan was instituted to, among other things, provide executives with a direct
economic interest in meeting long-term business objectives. Performance units
are granted by the Committee to each participant in its discretion. Criteria
used to evaluate Company performance are earnings and sales figures. The weight
assigned to the earnings component of Company performance is 60% and the weight
assigned to the sales component of Company performance is 40%. For each
performance unit granted by the Committee, each participant will receive a cash
award based on Company performance and the Company's common stock price results
from January 1, 1994 through December 31, 1998. The Long-Term Incentive Plan
also contains provisions governing such awards in the event of a change of
control of the Company or a "going private" transaction with Benesse or its
affiliates.
OTHER COMPENSATION
The executive officers also are eligible to participate in the Pension Plan.
The Pension Plan provides for the Company to make regular contributions based on
salaries of eligible employees. During 1995, the Compensation Committee
determined that the Company would contribute 3.5% of eligible employees'
respective base salary to the Pension Plan. During 1995, the Compensation
Committee also determined that matching contributions by the Company would be
provided under the 401(k) Plan to all domestic employees up to a maximum of 3%
of the employee's salary.
12
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Hiromasa Yokoi's salary increased to $480,000 effective January 1, 1996
from $444,800 effective January 1, 1995. Mr. Yokoi also earned a bonus of
$180,000 for 1995 under the Short-Term Incentive Plan.
The Compensation Committee approved and ratified the compensation paid to
Mr. Yokoi for fiscal year 1995 based on Mr. Yokoi's business experience and
familiarity with the Company, and his responsibilities to guide, among other
things, the Company's daily affairs and the Company's long-term strategic plan
in a global marketplace. The Company's 1995 performance was taken into
consideration in determining Mr. Yokoi's 1995 compensation package. The
Committee believes that Mr. Yokoi's 1995 compensation package was in line with
compensation packages of chief executive officers of other companies with
similar annual revenues.
TAX LEGISLATION
The U.S. Internal Revenue Service recently issued final regulations to limit
deductions for certain compensation in excess of $1 million annually paid to
executive officers of public companies. The Committee has reviewed such
regulations and, based on present levels of compensation, does not anticipate
the loss of deductibility for any compensation paid over the next year.
COMPENSATION COMMITTEE MEMBERSHIP
During 1995, the Compensation Committee consisted of Soichiro Fukutake,
Edward G. Nelson, and Aritoshi Soejima. All of the views expressed by the
Compensation Committee in 1995 may not have been the views of each member of the
Compensation Committee individually. However, all decisions affecting
compensation were approved by all of the members of the Compensation Committee.
Compensation Committee for Fiscal Year 1995
Soichiro Fukutake
Edward G. Nelson
Aritoshi Soejima
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As discussed above, during 1995 and at March 1, 1996, the Compensation
Committee consisted of Soichiro Fukutake, Edward G. Nelson, and Aritoshi
Soejima. None of these committee members were officers of the Company or any of
its subsidiaries during 1995 or any previous year.
Mr. Fukutake serves as the Chairman of the Board of the Company. In addition
to his role in presiding over board meetings, Mr. Fukutake is actively involved
in creating and monitoring strategies for the Company's global growth. As a
result, upon recommendation of management and after discussion, the Compensation
Committee in 1993, with Mr. Fukutake absent, approved the inclusion of Mr.
Fukutake as a participant in the Long-Term Incentive Plan, based upon the
considerable time and effort spent by Mr. Fukutake in monitoring long-term
strategies for the Company, apart from his duties as Chairman of the Board.
Similarly, upon recommendation of management and after discussion, the
Compensation Committee in 1995, with Mr. Fukutake absent, approved the inclusion
of Mr. Fukutake as a participant in the SERP and approved the granting of
additional performance units to Mr. Fukutake under the Long-Term Incentive Plan.
(See "Certain Relationships and Related Transactions.")
Aritoshi Soejima previously served as an advisor to Benesse. He resigned
such position prior to his appointment as a Disinterested Director and a member
of the Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Saburo Nagai currently serves as the Benesse nominee on the Board of
Directors of the Company pursuant to the acquisition by Benesse in January 1991
of a 20% interest in The Berlitz Schools of Languages (Japan), Inc.
("Berlitz-Japan"), a subsidiary of the Company. Mr. Nagai will retire effective
May 15, 1996, and Mr. Kazuo Yamakawa has been nominated to be his successor.
On December 9, 1992, the Company and Benesse entered into the Merger
Agreement pursuant to which Benesse agreed to acquire, through the Merger of the
Company with an indirect wholly owned U.S. subsidiary of Benesse, approximately
67% of the then outstanding Common. Immediately following the Merger, public
shareholders of the Company held the remaining approximately 33% of Common then
outstanding. Mr. Soichiro Fukutake is the President, Representative Director and
principal shareholder of Benesse.
The Company was formerly included in the consolidated tax returns of the
affiliated group of which Macmillan Inc. ("Macmillan") was the parent (the
"Macmillan Group") and consequently is severally liable for any Federal income
tax liabilities for the Macmillan Group arising prior to December 1989. Pursuant
to certain agreements, Macmillan agreed to pay all such Federal tax liabilities
and Maxwell Communication placed and agreed to maintain cash and other assets
valued at $39.5 million in escrow to secure Macmillan's obligation, including
any such tax liability assessed against the Company. Management believes that
such liability, if any, will not result in a material effect on the financial
condition of the Company.
In September 1994, the Company borrowed $20.0 million from a U.S. subsidiary
of Benesse, as evidenced by a subordinated promissory note (the "U.S. Note")
bearing interest at a rate of 6.93% per annum. Berlitz-Japan also borrowed Y1.0
billion (approximately $10.1 million) from Benesse as
14
<PAGE>
evidenced by an interest-free subordinated promissory note (the "Japan Note").
Such notes, (collectively, the "Benesse Notes") mature on the earlier of June
30, 2003 or twelve months from the date that all payment obligations under a
bank term loan and senior notes established in connection with the Merger (the
"Acquisition Debt Facilities") have been satisfied. To the extent that interest
payments on the U.S. Note are not permitted while any amounts remain outstanding
under the Acquisition Debt Facilities, such accrued interest will roll over
semiannually into the note principal. The Company recorded $1.4 million in
interest expense on the Benesse Notes in 1995.
The Benesse Notes are subordinate in rights of payment to debt under the
Acquisition Debt Facilities, including the financial hedging instruments.
Payment obligations under the U.S. Note are guaranteed by the Company and its
significant U.S. subsidiaries, subject to senior guarantees of the Acquisition
Debt Facilities. The Company and its significant U.S. subsidiaries have also
executed a guarantee of payment obligations under the Japan Note, effective as
of the day following the date upon which all payment obligations under the
Acquisition Debt Facilities are satisfied.
In March 1996, the Company received the proceeds of a $6.0 million
subordinated promissory note payable to a U.S. subsidiary of Benesse (the "FHAI
Note"). The FHAI note bears interest at a rate of the six month LIBOR plus 1%
per annum, reset semi-annually, and matures on the earlier of June 30, 2003 or
twelve months from the date that all payment obligations under the Acquisition
Debt Facilities have been satisfied. To the extent that interest payments on the
FHAI Note are not permitted while any amounts remain outstanding under the
Acquisition Debt Facilities, such accrued interest will roll over semiannually
into the note principal. The FHAI Note is subordinate in rights of payment to
debt under the Acquisition Debt Facilities, including the financial hedging
instruments, and it ranks pari passu with the Benesse Notes.
The Company and Benesse maintain a joint Directors and Officers ("D&O")
insurance policy covering acts by directors and officers of both Benesse and the
Company. The premium on the D&O policy is allocated 60% to Benesse and 40% to
the Company. Commencing in May 1995, the Company obtained a stand-alone
Employment Practices Liability ("EPL") insurance policy covering the Company,
its officers and directors (including the Benesse directors who are also
directors of the Company). The premium on the EPL policy is allocated 30% to
Benesse and 70% to the Company.
The Company and Benesse participated in certain other joint business
arrangements during 1995, in the ordinary course of business, including the
following: i) pursuant to an extended industrial block contract renewed in 1995
for a prepayment of Y10.0 million (approximatedly $100,000), Berlitz-Japan
provided lessons to Benesse at an industrial lesson rate which was approximately
20% below the rate charged for individual instruction; ii) pursuant to a
services agreement, Benesse periodically offered its customers language and
homestay programs arranged and operated by the Company's specialty instruction
program, Berlitz Study AbroadTM, and iii) Benesse also periodically offered its
customers language study and homestay programs arranged and operated by
L.I.F.E.(R), another of the Company's specialty instruction programs.
As of May 31, 1995, the Company entered into a Stock Purchase Agreement to
buy 627,000 shares of the Company's Common (the "Berlitz Shares") from Maxwell
Communication, not later than September 16, 1996, at a price of $9 per share.
The Company's obligation to buy these shares was subject to the satisfaction of
certain conditions. On April 4, 1996, the Company consummated the
15
<PAGE>
purchase of the Berlitz Shares. Such shares were placed into treasury by the
Company and reserved for future use.
Management believes that the Company has entered into all such agreements on
terms no less favorable than it would have received in an arms-length
transaction with independent third parties. Each of the transactions with
Benesse entered into after the Merger was approved by the Disinterested
Directors Committee.
PERFORMANCE GRAPHS
The following graphs set forth the Company's total shareholder return as
compared to the S&P 400 Industrial Index and two peer groups (described below)
over a five-year period, beginning December 31, 1990, and ending December 31,
1995. The total shareholder return assumes $100 invested at the beginning of the
period in the Company's common stock, the S&P 400 Industrial Index and the peer
group indices. It also assumes reinvestment of all dividends.
As the Company is the only publicly-held language instruction company, there
are no directly comparable companies. The two closest industry groups to the
Company are education companies and educational publishers. Therefore, the
Company has created an index of selected publicly-held companies in each of
these two industries. These indices have been plotted against the Company's
total shareholder return and the S&P 400 Industrial Index. The companies
included in the education companies index are Flightsafety International, which
sells primarily flight training materials, and National Education Corporation,
which sells primarily technical and vocational training materials. The companies
included in the educational publishing index are Houghton Mifflin, John Wiley &
Sons and McGraw-Hill, Inc. While none of these companies are directly comparable
to the Company, the Company believes they come under either the same broad
rubric of education-related activities as the Company, in the case of the
education companies index, or educational publishers, in the case of the
educational publishing index.
16
<PAGE>
COMPARISON OF STOCK PRICES
BERLITZ INTERNATIONAL, INC., THE S&P 400 INDUSTRIAL INDEX
AND SELECTED EDUCATION COMPANIES
[ GRAPH ]
<TABLE><CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Berlitz........................................... $100 $147 $163 $102(1) $ 96 $122
S&P 400 Index..................................... $100 $127 $131 $140 $141 $186
Education Companies............................... $100 $110 $ 98 $ 80 $ 88 $115
</TABLE>
- ------------
(1) As a result of the Merger, each share of the Company's common stock
outstanding prior to the Merger ("Old Common") was converted into the right
to receive i) $19.50, ii) 0.165 share of Common, iii) $1.48, representing
the net proceeds from the disposition of the Company's claims on the Maxwell
Notes, and iv) $.01, representing consideration paid for the redemption of
each Right under the Rights Agreement. Immediately following the Merger,
10,033,013 shares of Common were outstanding. Prior to the Merger,
19,075,584 shares of Old Common were outstanding.
17
<PAGE>
COMPARISON OF STOCK PRICES
BERLITZ INTERNATIONAL, INC., THE S&P 400 INDUSTRIAL INDEX,
AND SELECTED EDUCATIONAL PUBLISHING COMPANIES
[ GRAPH ]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Berlitz........................................... $100 $147 $163 $102(1) $ 96 $122
S&P 400 Index..................................... $100 $127 $131 $140 $141 $186
Educational Publishing Companies.................. $100 $110 $123 $140 $139 $175
</TABLE>
- ------------
(1) As a result of the Merger, each share of the Company's common stock
outstanding prior to the Merger ("Old Common") was converted into the right
to receive i) $19.50, ii) 0.165 share of Common, iii) $1.48, representing
the net proceeds from the disposition of the Company's claims on the Maxwell
Notes, and iv) $.01, representing consideration paid for the redemption of
each Right under the Rights Agreement. Immediately following the Merger,
10,033,013 shares of Common were outstanding. Prior to the Merger,
19,075,584 shares of Old Common were outstanding.
18
<PAGE>
RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
On February 27, 1996, upon recommendation of the Audit Committee, the Board
of Directors selected Deloitte & Touche LLP to serve as independent accountants
of the Company for 1996. The Board of Directors proposes and recommends that the
shareholders ratify the selection of the firm of Deloitte & Touche LLP to serve
as independent accountants of the Company for 1996. Deloitte & Touche LLP served
as the Company's independent accountants since 1993.
Unless otherwise directed by the shareholders, proxies will be voted for
approval of the selection of Deloitte & Touche LLP to audit the Company's
consolidated financial statements for the current year. A representative of
Deloitte & Touche LLP will attend the Meeting, and will have an opportunity to
make a statement if he or she so desires and to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR
1996.
VOTE REQUIRED
Under the NYBCL, approval of each nominee for director requires the
affirmative vote of a plurality of the shares of Common represented and entitled
to be voted at the Meeting.
The vote occurring at the Meeting will be overseen by an inspector. The
inspector's duties include determining the number of shares represented at the
Meeting, counting all votes and ballots and certifying the determination of the
number of shares represented and the outcome of the balloting. The aggregate
number of votes entitled to be cast by all shareholders present in person or
represented by proxy at the Meeting will be counted for purposes of determining
the minimum number of affirmative votes required for the election of directors
and for the ratification of appointment of auditors. Thus, an abstention from
voting will have the same effect as a vote against matters that are to be voted
on at the Meeting.
SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING OF SHAREHOLDERS
Appropriate proposals from shareholders intending to be present at the 1997
annual meeting of shareholders must be received by the Company for inclusion in
the Company's Proxy Statement and form of proxy relating to that meeting on or
before December 31, 1996.
MISCELLANEOUS
The Company will bear all of the costs of the solicitation of proxies for
use at the Meeting. In addition to the use of the mails, proxies may be
solicited by a personal interview, telephone and telegram by directors, officers
and employees of the Company, who will undertake such activities without
additional compensation. Banks, brokerage houses and other institutions,
nominees or fiduciaries will be requested to forward the proxy materials to the
beneficial owners of the shares of Common held of
19
<PAGE>
record by such persons and entities and will be reimbursed for their reasonable
expenses incurred in connection with forwarding such materials.
Shareholders who do not expect to attend in person are urged to sign, date
and return the enclosed proxy in the envelope provided. In order to avoid
unnecessary expense, we ask your cooperation in mailing your proxy promptly, no
matter how large or how small your holdings may be.
At the date of this Proxy Statement, management has no knowledge of any
business, other than that described herein, which will be presented for
consideration at the Meeting. In the event any other business is properly
presented at the Meeting, it is intended that the persons named in the enclosed
proxy will have authority to vote such proxy in accordance with their judgment
on such business.
The information required under Item 401 of Regulation S-K with respect to
executive officers of the Company is incorporated by reference herein to the
section entitled "Executive Officers and Directors of the Registrant" set forth
in part I of the Company's Form 10-K.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 1995, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENT AND SCHEDULES THERETO, WILL BE MAILED UPON ORAL OR WRITTEN
REQUEST, WITHOUT CHARGE, TO ANY SHAREHOLDER OF THE COMPANY. ALL SUCH REQUESTS
SHOULD BE DIRECTED TO ROBERT C. HENDON, JR., COMPANY SECRETARY, BERLITZ
INTERNATIONAL, INC., 400 ALEXANDER PARK, PRINCETON, NEW JERSEY, 08540, (609)
514-9650.
20
<PAGE>
BERLITZ INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF BERLITZ INTERNATIONAL, INC.
IN CONNECTION WITH ITS 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1996
The undersigned shareholder of Berlitz International, Inc. (the
"Company") hereby appoints Robert C. Hendon, Jr. and Robert Minsky or
either of them, the true and lawful attorneys, agents and proxies of the
undersigned, with full power of substitution, to vote all shares of Common
Stock of the Company which the undersigned may be entitled to vote at the
1996 annual meeting of shareholders of the Company to be held on May 15,
1996, and at any adjournment or postponement of such meeting with all powers
which the undersigned would possess if personally present, for the following
purposes:
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED
(Continued on the reverse side)
FOLD AND DETACH HERE
BERLITZ INTERNATIONAL, INC.
ANNUAL MEETING
OF
SHAREHOLDERS
WEDNESDAY-MAY 15, 1996
10:00 A.M.
BERLITZ INTERNATIONAL, INC.
CORPORATE HEADQUARTERS
400 ALEXANDER PARK
PRINCETON, NEW JERSEY
<PAGE>
BERLITZ INTERNATIONAL, INC. RECOMMENDS THAT SHAREHOLDERS VOTE Please mark
"FOR" THE NOMINEES AND PROPOSALS LISTED BELOW your votes as X
indicated on
this example.
1. ELECTION OF NOMINEES- To elect each of Hiromasa Yokoi, Henry D. James,
Edward G. Nelson, Robert L. Purdum and Kazuo Yamakawa as a director of the
Company to serve until the Company's 1998 annual meeting of shareholders
and until their successors are elected and qualified or their earlier
death, resignation or removal.
FOR all WITHHOLD (INSTRUCTION: To withhold authority to vote for any
nominees AUTHORITY individual nominee, write that nominee's name in the
space provided below.)
_________________________________________________
2. RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS-To ratify
the selection of the firm of Deloitte & Touche LLP to serve as independent
accountants of the Company for 1996.
FOR AGAINST ABSTAIN
3. OTHER-In their discretion upon such other matters, including withholding
a quorum if necessary, as may properly come before the Meeting.
This Proxy will be voted as directed or, if no direction is given, will be
voted FOR the election of the nominees and the approval of the proposal
described above.
Dated: ______________________, 1996
___________________________________
(Signature)
___________________________________
(Signature)
___________________________________
(Title or Capacity)
(Please sign your name or names exactly as it appears on your stock
certificate(s). When signing as attorney, executor, administrator,
trustee, guardian or corporate executor, please give your full title
as such. For joint accounts, all co-owners should sign.)
FOLD AND DETACH HERE
