<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [ ] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Fritz Companies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
FRITZ COMPANIES, INC.
706 MISSION STREET
SAN FRANCISCO, CALIFORNIA 94103
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, SEPTEMBER 29, 1998, 10:30 A.M.
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of Fritz
Companies, Inc. will be held at The ANA Hotel, 50 Third Street, San Francisco,
California, on Tuesday, September 29, 1998, at 10:30 A.M. for the following
purposes:
(1) To elect six directors.
(2) To amend the 1992 Omnibus Equity Incentive Plan to increase the
number of shares authorized for issuance thereunder by 1,500,000.
(3) To transact such other business as may properly come before the
meeting.
Only stockholders of record on the books of the Company as of 5:00 P.M.,
August 3, 1998, will be entitled to vote at the meeting and any adjournment
thereof.
By Order of the Board of Directors
Jan H. Raymond,
Secretary
Dated: August 21, 1998
STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE.
<PAGE> 3
FRITZ COMPANIES, INC.
706 MISSION STREET
SAN FRANCISCO, CALIFORNIA 94103
------------------------
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Fritz
Companies, Inc. (the "Company") to be used at the Annual Meeting of Stockholders
on September 29, 1998, for the purposes set forth in the foregoing notice. This
proxy statement and the enclosed form of proxy were first sent to stockholders
on or about August 24, 1998.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any stockholder signing a proxy in the form accompanying
this Proxy Statement has the power to revoke it prior to or at the Annual
Meeting. A proxy may be revoked by a writing delivered to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy signed by the
person who signed the earlier proxy, or by attendance at the Annual Meeting and
voting in person.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 P.M.,
August 3, 1998, will be entitled to vote at the Annual Meeting.
As of the close of business on August 3, 1998, there were outstanding
36,190,514 shares of Common Stock of the Company, entitled to one vote per
share. The holders of a majority of the outstanding shares of the Common Stock
of the Company, present in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting or any adjournment thereof.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the Meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions and
broker non-votes as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. With regard to the election of directors,
votes may be cast "For" or "Withhold Authority" for each nominee; votes that are
withheld will be excluded entirely from the vote and will have no effect. The
proposal to amend the 1992 Omnibus Equity Incentive Plan requires the
affirmative vote of a majority of shares present in person or by proxy and
entitled to vote. Accordingly, abstentions on this proposal will have the effect
of a negative vote on this item. If a broker indicates on the proxy that it does
not have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote with
respect to that matter. Therefore, a broker non-vote will have no effect on the
proposal, which requires the affirmative vote of a majority of the shares
represented at the Annual Meeting and entitled to vote thereon.
ELECTION OF DIRECTORS
The persons named below are nominees for director to serve until the next
Annual Meeting of Stockholders and until their successors shall have been
elected. The nominees constitute the present Board of Directors.
In the absence of instructions to the contrary, shares represented by the
proxy will be voted and the proxies will vote for the election of all such
nominees to the Board of Directors. If any of such persons is unable or
unwilling to be a candidate for the office of director at the date of the Annual
Meeting, or any adjournment thereof, the proxies will vote for such substitute
nominee as shall be designated by the proxies. The management has no reason to
believe that any of such nominees will be unable or unwilling to serve if
<PAGE> 4
elected a director. Set forth below is certain information concerning the
nominees which is based on data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST DIRECTOR
NOMINEES FOR DIRECTOR AGE FIVE YEARS AND OTHER INFORMATION SINCE
--------------------- --- ----------------------------------------------- ---------
<S> <C> <C> <C>
Lynn C. Fritz.......... 56 Chairman of the Board. Mr. Fritz has been the 1977
Company's Chief Executive Officer since 1986.
Mr. Fritz is a director of Manugistics
Corporation (developer of software for supply
chain management).
Dennis L. Pelino....... 50 Chief Operating Officer since January 1994 and 1991
President since August 1996. Mr. Pelino was
Executive Vice President from January 1994
until August 1996 and Senior Vice President
from August 1992 until January 1994.
James Gilleran......... 65 Chairman of the Board and Chief Executive 1992
Officer of The Bank of San Francisco and its
parent, The San Francisco Company since
November 1994. Mr. Gilleran was Superintendent
of the California State Banking Department from
1989 until November 1994. Mr. Gilleran is a
director of Zindart (Holdings) Ltd. (toys and
collectibles).
Preston Martin......... 74 Chairman, President and Chief Executive Officer 1992
of Martin Holdings, Inc. (bank asset holding
company), Chairman of Martin Associates
(consulting firm) and Chairman of LINC Group,
Inc. (insurance agency). Mr. Martin is a
director of SoCal Savings (financial
institution holding company) and INCO Homes
(home builder). Mr. Martin was previously Vice
Chairman of the Board of Governors of the
Federal Reserve Board.
Paul S. Otellini....... 47 Executive Vice President of Intel Corporation 1998
(semiconductor manufacturer). Mr. Otellini is a
director of Autodesk Corp. (software provider).
William J. Razzouk..... 50 Consultant. From September 1997 until May 1998, 1998
Mr. Razzouk was President and Chief Operating
Officer of Storage USA (real estate investment
trust). From February 1996 until June 1996, Mr.
Razzouk was President of America Online
(internet services). Prior to February 1996,
Mr. Razzouk was Executive Vice President of
Federal Express Corporation (provider of global
transportation logistics). Mr. Razzouk is a
director of La Quinta Inns, Inc. (hotel chain)
and Waste Connections, Inc. (waste management).
</TABLE>
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During the fiscal year ended May 31, 1998 ("fiscal 1998"), the Board of
Directors held five meetings and acted by unanimous written consent on a number
of occasions. Prior to February 10, 1998, the Company had only an Audit and
Compensation Committee, the members of which were James Gilleran and Preston
Martin. At its meeting on February 10, 1998, the Board of Directors elected to
split the Audit and Compensation Committee into two separate committees -- the
Audit Committee and the Compensation Committee. The Company does not have a
Nominating Committee.
2
<PAGE> 5
The members of the Audit Committee are James Gilleran and Paul S. Otellini.
Among the functions performed by this committee are to make recommendations to
the Board of Directors with respect to the engagement or discharge of
independent auditors, to review with the independent auditors the plan and
results of the auditing engagement, to review the Company's internal auditing
procedures and system of internal accounting controls and to make inquiries into
matters within the scope of its functions.
The members of the Compensation Committee are Preston Martin and William
Razzouk. Among the functions performed by this committee are to review and make
recommendations to the Board of Directors concerning the compensation of the key
management employees of the Company and to administer the Company's equity
incentive and 401(k) plans.
During fiscal 1998, the Audit Committee held one meeting, the Compensation
Committee held no meetings and the Audit and Compensation Committee held two
meetings.
ATTENDANCE AT MEETINGS
During fiscal 1998, there were no members of the Board of Directors who
attended fewer than seventy-five percent of the meetings of the Board of
Directors and all committees of the Board on which they served.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid directors fees
consisting of $24,000 per year and $1,000 for each Board meeting attended.
Directors who attend committee meetings receive an additional $1,000 for each
meeting not held on the same day as a Board meeting. Of the $24,000 annual
retainer paid to nonemployee directors, 60% is paid in Common Stock pursuant to
the Nonemployee Director Restricted Stock Plan.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and four
other most highly compensated executive officers for services in all capacities
to the Company and its subsidiaries during the fiscal years indicated is set
forth below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- -------------------------
OTHER ANNUAL SECURITIES ALL OTHER
COMPENSATION RESTRICTED UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) STOCK($)(2) OPTIONS(#) TION($)
--------------------------- ---- --------- -------- ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Lynn C. Fritz 1998 $500,000 -- $ 8,000 -- 50,000
Chairman of the Board and 1997 $500,000 -- $15,000 -- -- --
Chief Executive Officer 1996 $500,000 -- $18,000 $328,125 30,000 --
Dennis L. Pelino 1998 $375,000 -- -- -- -- --
President and Chief 1997 $358,300 -- $ 5,000 $690,000 -- --
Operating Officer 1996 $275,000 -- $ 6,000 $574,375 -- --
Robert Arovas 1998 $230,000 -- -- $ 60,000(3) 25,000 --
Executive Vice President and 1997(4) $ 82,400 -- -- -- 10,000 --
Chief Financial Officer 1996 -- -- -- -- -- --
Eugene E. Wojciechowski 1998 $182,000 -- -- $ 60,000(3) 15,000
Senior Vice President 1997(5) $ 60,667 -- -- -- -- --
1996 60,667 -- -- -- -- --
Jan H. Raymond 1998 $200,000 -- -- $110,000(3) 15,000
Senior Vice President, 1997 $189,700 -- $15,500 -- 6,000 --
Secretary and General Counsel 1996 $193,750 -- $ 6,000 $406,875 -- --
</TABLE>
- ---------------
(1) While the named executive officers enjoy certain perquisites, for fiscal
years 1996, 1997 and 1998 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus.
3
<PAGE> 6
(2) As of the end of fiscal year 1998, the aggregate restricted stock holdings
for the named executives consisted of 42,901 shares worth $557,713 at the
then current fair market value (as represented by the closing price of the
Company's Common Stock on May 31, 1998), without giving effect to the
diminution of value attributable to the restrictions on such stock. Such
amount includes $187,200 for Mr. Fritz (14,000 shares), $53,924 for Mr.
Arovas (4,148 shares), $53,924 for Mr. Wojciechowski (4,148 shares) and
$267,865 for Mr. Raymond (20,605 shares). Mr. Pelino did not hold any
restricted stock at such date. Dividends are paid on the restricted shares
to the extent payable on the Company's Common Stock generally. Except as set
forth in footnote 3 below, no shares granted to the named executives vest in
less than three years from the date of grant.
(3) The restricted stock awarded during 1997 to Messrs. Arovas, Raymond and
Wojciechowski was 30% vested at the date of grant, and the remaining 70%
vests five years from the date of grant.
(4) Mr. Arovas joined the Company during fiscal 1997.
(5) Mr. Wojciechowski joined the Company during fiscal 1997.
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following table sets forth certain information regarding stock options
granted during fiscal 1998 to the executive officers named in the foregoing
Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES PERCENT OF AT ASSUMED ANNUAL RATES OF
UNDERLYING TOTAL OPTIONS MARKET STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR PRICE ON OPTION TERM(4)
GRANTED EMPLOYEES IN BASE PRICE DATE OF EXPIRATION ------------------------------
NAME (#) (1) FISCAL YEAR ($/SH)(2) GRANT(2) DATE(3) 0%($) 5%($) 10%($)
---- ---------- ------------- ----------- -------- ---------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lynn C. Fritz.............. 50,000 7.67% $10.125 $10.125 7/23/07 0 $25,315 $50,625
Dennis L. Pelino........... -- -- -- -- -- -- -- --
Robert Arovas.............. 25,000 3.83% $10.125 $10.125 7/23/07 0 $12,658 $25,313
Eugene E. Wojciechowski.... 15,000 2.30% $10.125 $10.125 7/23/07 0 $ 7,595 $15,188
Jan H. Raymond............. 15,000 2.30% $10.125 $10.125 7/23/07 0 $ 7,595 $15,188
</TABLE>
- ---------------
(1) All such options were granted in fiscal 1998 and become exercisable (a) as
to 1/3 (33.3%) of the shares on the day after the first anniversary of the
grant, (b) as to an additional 1/3 (33.3%) of the shares on the day after
the second anniversary of the grant, and (c) as to the remaining 1/3 (33.3%)
of the shares on the day after the third anniversary of the grant. Under the
terms of the Company's stock option plan, the Compensation Committee retains
discretion, subject to plan limits, to modify the terms of outstanding
options.
(2) All options were granted at fair market value.
(3) All options granted in fiscal 1998 were granted for a term of 10 years.
(4) Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% and 10%
rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if any,
of the Company's stock price. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock as
well as the optionholder's continued employment through the vesting period.
The potential realizable value calculation assumes that the optionholder
waits until the end of the option term to exercise the option.
4
<PAGE> 7
The following table sets forth certain information with respect to
exercises of stock options during fiscal 1998 by the listed executive officers
and with respect to stock options held by each of the Company's executive
officers as of May 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lynn C. Fritz............ -- -- 160,000 60,000 -- 143,750
Dennis L. Pelino......... -- -- 435,800 -- 416,900 --
Robert Arovas............ -- -- -- 35,000 -- 83,125
Eugene E.
Wojciechowski.......... -- -- -- 15,000 -- 43,125
Jan H. Raymond........... -- -- 18,000 19,000 97,750 62,625
</TABLE>
EMPLOYMENT AGREEMENTS
In October of 1996, the Company entered into a long term employment
agreement with Dennis Pelino. The Agreement was amended in July 1998. The
agreement as amended, which expires on October 31, 2002, is performance based
and provides compensation in stock in relationship to the performance goals and
objectives of Mr. Pelino. The terms of the agreement provide Mr. Pelino with a
base salary of $375,000 and a severance benefit of two years salary in the event
of involuntary termination.
TRANSACTIONS WITH THE COMPANY
In connection with the Company's U.S. customs brokerage operations, the
Company's customers are required to obtain surety bonds. The Company places such
customs bonds with Intercargo Corporation ("Intercargo") and other underwriters
of customs bonds. In addition, the Company carries various liability insurance
policies with Intercargo. Lynn Fritz owns approximately 3% of the outstanding
common stock of Intercargo. During fiscal 1998, the Company placed approximately
$4,343,000 of insurance business with Intercargo and received $589,000 in
insurance commissions and fees from Intercargo. The Company believes that the
amounts received are substantially the same as the Company would have received
from other third parties.
AUDIT AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To the Board of Directors:
As members of the Compensation Committee, it is our duty to evaluate and
determine the appropriate levels of compensation for officers and directors and
to administer the Company's 1992 Omnibus Equity Incentive Plan and 401(k) Plan.
Our general policy is to discharge these responsibilities in a manner which
links executive performance to long term shareholder value. Our specific
objectives are to enhance the long term performance of the Company, enable the
Company to attract and retain outstanding executives and employees and provide
meaningful incentives, without subjecting the Company to excessive cost.
BASE SALARY
Generally, base salary for senior officers, including the officers named in
the Summary Compensation Table, is set by reviewing the average salary for
positions of similar level of responsibility in the peer group. Our peer group,
for compensation purposes, is comprised of a group of companies whose growth and
financial profiles are similar to our own. Mr. Fritz' base salary is $500,000.
He has not had an increase to base since the Company went public in 1992. Mr.
Fritz requested of the Committee that given the current operating performance of
the Company, his salary and the salaries of the Company's other executive
officers not be
5
<PAGE> 8
increased at this time. The Committee agreed to Mr. Fritz' request and therefore
determined that no adjustment to base pay is in order for Mr. Fritz or any of
the named executives.
BONUS
The cash bonus provides an annual reward for exceptional performance which
exceeds expectation. Bonus awards are subject to significant variability
depending on the annual performance of the Company. The bonuses for the Chief
Executive Officer is based solely on the performance of the Company. In
recognition of the Company's fiscal year performance, no cash bonuses were paid
to any executive officers in respect of fiscal 1998.
STOCK BASED INCENTIVES
Stock based incentives are used as a means of rewarding executives for
making decisions which lead to substantial growth in stockholder value and for
the perceived long term value of the executive to the Company. No specific
minimum holdings of Fritz stock are required formally; however, executives are
encouraged to hold significant stock in the Company.
Stock options and restricted stock are the primary long term incentive
awards for executives. We believe that stock options focus attention on managing
the Company from the perspective of an owner with an equity stake in the
business. In this regard, the Company has approved and implemented a Performance
Based Retention Plan that utilizes restricted stock as a key element of
performance recognition and retention value. Mr. Fritz and Mr. Pelino do not
participate in the Performance Based Retention Plan, but the other named
executives do and received awards under the Plan in the fiscal year 1998.
The Committee continues to support the leadership that Mr. Fritz brings to
the organization and the importance of his long-term value. In that regard, in
July of 1997 the Committee awarded Mr. Fritz a grant of 50,000 market based
nonqualified stock options.
As a matter of policy, the Company believes it is important to retain the
flexibility to maximize the Company's tax deductions. Amendments to Section 162
(m) of the Internal Revenue Code have eliminated the deductibility of most
compensation over a million dollars in any given year unless the specifications
outlined in Section 162(m) are met. It will continue to be the policy of this
Committee to consider the impact, if any, of Section 162 (m) on the Company and
to document as necessary specific performance goals in order to seek to preserve
the Company's tax deduction.
The Company is committed to a goal oriented compensation system based on
how the Company performs. In years when the Company meets its aggressive
business plan, we intend to recognize this achievement with substantial bonus
awards.
Compensation Committee
PRESTON MARTIN
WILLIAM RAZZOUK
Audit and Compensation Committee
JAMES E. GILLERAN
PRESTON MARTIN
July 30, 1998
6
<PAGE> 9
PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total stockholder return on its Common Stock for the period from June
1, 1993 to May 31, 1998 with the cumulative total return of the NASDAQ Market
Index and a peer group index consisting of Air Express International
Corporation, Circle International Group, Inc. and Expeditors International of
Washington, Inc.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FRITZ COMPANIES, INC.
NASDAQ MARKET INDEX AND PEER GROUP INDEX
<TABLE>
<CAPTION>
FRITZ PEER GROUP NASDAQ
COMPANIES INDEX MARKET INDEX
<S> <C> <C> <C>
1993 100.00 100.00 100.00
1994 118.63 107.06 109.66
1995 208.63 146.44 120.03
1996 270.59 186.26 169.42
1997 85.29 276.45 190.08
1998 101.96 322.61 241.34
</TABLE>
ASSUMES $100 INVESTED ON JUNE 1, 1993
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING MAY 31, 1998
7
<PAGE> 10
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to each named director and each named
executive officer, and as to all directors and executive officers as a group,
the number of shares and percentage of the Company's Common Stock beneficially
owned as of July 15, 1998.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY
OWNED AS OF JULY 15, 1998
-------------------------
NUMBER
EXECUTIVE OFFICER OR DIRECTOR OF SHARES PERCENT
----------------------------- ---------- -------
<S> <C> <C>
Lynn C. Fritz(1)............................................ 13,143,466(2) 36.6%
Dennis L. Pelino............................................ 435,800(3) 1.2%
Robert Arovas............................................... 19,773(4) *
Eugene E. Wojciechowski..................................... 10,388(5) *
Jan H. Raymond.............................................. 42,221(6) .1%
James Gilleran.............................................. 8,733 *
Preston Martin.............................................. 10,293 *
Paul S. Otellini............................................ 894 *
William J. Razzouk.......................................... 2,294 *
All directors and executive officers as a group (12
persons).................................................. 13,687,820(7) 38.1%
</TABLE>
- ---------------
* Less than 1/10 of 1%.
(1) The address of Mr. Fritz is 706 Mission Street, San Francisco, California
94103. Mr. Fritz may be deemed to be a "control person" of the Company
within the meaning of the rules and regulations of the Securities and
Exchange Commission by reason of his stock ownership and positions with the
Company. Except for Mr. Fritz, the only stockholders who were known by the
Company to own beneficially more than 5% of the Company's Common Stock on
May 31, 1998 are Franklin Resources, Inc. which owned 3,558,867 shares
(9.9%) on such date; Trimark Financial Corporation which owned 3,109,110
shares (8.7%) on such date; State of Wisconsin Investment Board which owned
1,969,300 shares (5.5%) on such date; and Westport Asset Management which
owned 1,875,524 shares (5.2%) on such date. The address of Franklin
Resources, Inc. is 777 Mariners Island Boulevard, San Mateo, California
94404; the address of Trimark Financial Corporation is One First Canadian
Place, Toronto, Ontario M5X 1EF; the address of State of Wisconsin
Investment Board is 121 East Wilson Street, Madison, Wisconsin 53707; and
the address of Westport Asset Management is 253 Riverside Avenue, Westport,
CT 06880.
(2) Includes employee stock options exercisable within 60 days to purchase
186,666 shares.
(3) Includes employee stock options exercisable within 60 days to purchase
435,800 shares.
(4) Includes employee stock options exercisable within 60 days to purchase
11,666 shares.
(5) Includes employee stock options exercisable within 60 days to purchase 5,000
shares.
(6) Includes employee stock options exercisable within 60 days to purchase
23,000 shares.
(7) Includes shares which the directors and executive officers have the option
to purchase within 60 days.
PROPOSAL TO AMEND THE 1992 OMNIBUS EQUITY INCENTIVE PLAN
In October 1992, the Company adopted the 1992 Omnibus Equity Incentive Plan
(the "Plan") pursuant to which an aggregate of 1,520,000 shares of Common Stock
were originally reserved for issuance to key employees of the Company and its
subsidiaries. The principal features of the Plan are summarized below.
GENERAL
The Plan provides for awards of both nonqualified stock options and
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code, stock appreciation rights, restricted stock and performance awards
entitling the recipient to receive cash or Common Stock in the future following
the attainment of performance goals determined by the committee administering
the Plan.
8
<PAGE> 11
At the Annual Meeting held in May 1994, the stockholders of the Company
approved an amendment to the Plan to increase the number of shares authorized
for issuance under the Plan to 3,040,000 shares. At the Annual Meeting held in
October 1996, the stockholders approved an amendment to the Plan to increase the
number of shares authorized for issuance to 4,540,000 shares. In May 1998, the
Board of Directors of the Company conditionally amended the Plan, subject to
stockholder approval at the 1998 Annual Meeting, to increase the number of
shares authorized for issuance under the Plan by an additional 1,500,000 shares.
The reason for this increase is to ensure that a sufficient number of
shares of the Company's Common Stock is available under the Plan for awards to
attract, retain and motivate selected employees with outstanding experience and
ability. As of June 30, 1998, the number of shares remaining available for
future awards was 1,130,704, which would increase to 2,630,704 if the proposal
is approved. Set forth below is a summary of the principal features of the Plan.
PURPOSE
The purpose of the Plan is to promote the success and enhance the value of
the Company by linking the personal interests of participating employees and
consultants to those of the Company's stockholders and by providing such
employees and consultants with an incentive for outstanding performance. The
Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of participating employees and
consultants upon whose judgment, interest and special efforts the Company is
largely dependent for the successful conduct of its operations.
ELIGIBILITY TO RECEIVE AWARDS
Key employees of the Company and its subsidiaries, and persons who provide
significant services to the Company or its subsidiaries, but who are neither
employees of the Company or its subsidiaries nor directors of the Company
("consultants") are eligible to be granted awards under the Plan. However,
incentive stock options (see below) may be granted only to employees. In 1994,
the Plan was amended to restrict eligibility for awards under the Plan to a
maximum of 400,000 shares per recipient in any twelve month period.
ADMINISTRATION
The plan is administered by the Compensation Committee of the Board of
Directors of the Company (the "Committee").
OPTIONS
The price of shares of the Company's Common Stock subject to each option
(the "option price") is set by the Committee but may not be less than 50% of the
fair market value on the date of grant in the case of an option that is not an
incentive stock option (a nonqualified stock option"), and not less than 100% of
the fair market value in the case of an incentive stock option.
Options granted under the Plan are exercisable at the times and on the
terms established by the Committee, provided that options granted to officers
who are subject to section 16(b) of the Securities and Exchange Act of 1934
("Section 16(b)") may not be exercised until six months following the date of
grant. Subject to the foregoing limitations, the Committee may accelerate the
exercisability of any option.
The option price must be paid in full in cash or its equivalent at the time
of exercise. The Committee also may permit payment of the option price by the
tender of previously acquired shares of the Company's stock or such other legal
consideration which the Committee determines to be consistent with the Plan's
purpose and applicable law.
STOCK APPRECIATION RIGHTS
The Plan permits the grant of three types of SARs: Affiliated SARs,
Freestanding SARs and Tandem SARs, or any combination thereof. An Affiliated SAR
is an SAR that is granted in connection with a related option and which will be
deemed to automatically be exercised simultaneously with the exercise of the
related
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<PAGE> 12
option. A Freestanding SAR is an SAR that is granted independently of any
option. A Tandem SAR is an SAR that is granted in connection with a related
option, the exercise of which requires a forfeiture of the right to purchase a
share under the related option (and when a share is purchased under the option,
the SAR is similarly cancelled).
The Committee has complete discretion to determine the number of SARs
granted to any optionee or recipient and the terms and conditions pertaining to
such SARs. However, the grant price must be at least equal to the fair market
value of a share of the Company's Common Stock on the date of grant in the case
of a Freestanding SAR and equal to the option price of the related option in the
case of an Affiliated SAR or Tandem SAR. An SAR that is granted to an officer
who is subject to Section 16(b) may not be exercised until at least six months
following the date of grant.
RESTRICTED STOCK AWARDS
The Plan permits the grant of restricted stock awards which are restricted
Common Stock bonuses that vest in accordance with terms established by the
Committee. Restricted Stock granted to an officer subject to Section 16(b) may
not vest prior to six months following the date of its grant. The Committee may
impose restrictions and conditions on the shares, including, without limitation,
restrictions based upon the achievement of specific performance goals
(Company-wide divisional and/or individual), and/or restrictions under
applicable federal or state securities law. The Committee may accelerate the
time at which any restrictions lapse, and/or remove any restrictions. During the
lifetime of the recipient, all rights with respect to the restricted stock
granted to the recipient under the Plan will be available only to such
recipient.
PERFORMANCE UNIT/SHARE AWARDS
The Plan permits the grant of performance unit and performance share awards
which are bonuses credited to an account established for the recipient and
payable in cash, Common Stock or a combination thereof. Each performance unit
has an initial value that is established by the Committee at the time of its
grant. Each performance share has an initial value equal to the fair market
value of a share of the Company's Common Stock on the date of its grant. The
number and/or value of performance units/shares that will be paid out to
recipients will depend upon the extent to which performance goals established by
the Committee are satisfied. The payment date for performance unit/share awards
granted to officers and directors subject to Section 16(b) may not be less than
six months from the date of grant.
After a performance unit/share award has vested, the recipient will be
entitled to receive a payout of the number of performance units/shares earned by
the recipient, to be determined as a function of the extent to which the
corresponding performance goals have been achieved. The Committee also may waive
the achievement of any performance goals for such performance unit/share.
Subject to the applicable award agreement, performance units/shares awarded
to recipients will be forfeited to the Company upon the earlier of the
recipient's termination of employment or the date set forth in the award
agreement.
NONTRANSFERABILITY OF AWARDS
Awards granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
applicable laws of descent and distribution. However, an optionee or recipient
may designate one or more beneficiaries to receive any exercisable or vested
Awards following his or her death.
STOCK OPTIONS AND RESTRICTED STOCK
As of June 30, 1998, no Awards had been made under the Plan in the form of
stock appreciation rights or performance units; restricted stock grants of
498,457 shares of Common Stock were outstanding under the Plan, options to
purchase 1,891,885 shares of Common Stock were outstanding under the Plan, and
1,130,704 shares remained available for future Awards under the Plan.
10
<PAGE> 13
NEW PLAN BENEFITS
Regulations recently adopted by the Securities and Exchange Commission
require disclosure of benefits to the executive officers of the Company named in
the summary compensation table and to certain other categories of award
recipient, if such benefits are determinable. In addition to the grants of stock
options set forth below, it is likely that substantial additional grants will be
made to all of such persons and others during the life of the Plan, and it is
impossible to determine the amount of terms of such future grants.
The following table sets forth as of May 31, 1998 (a) the aggregate number
of shares of the Company's Common Stock subject to awards granted under the Plan
since June 1, 1997 (all of which were in the form of stock options or restricted
stock), and (b) the fair market value of options based on the difference between
the exercise price and $13.00 per share, the closing price of the shares of
Common Stock on May 31, 1998 and the fair market value of restricted stock based
on $13.00 per share.
<TABLE>
<CAPTION>
NUMBER OF DOLLAR VALUE OF
OPTIONS AND OPTIONS AND
NAME OF INDIVIDUAL OF GROUP SHARES GRANTED SHARES GRANTED
--------------------------- -------------- ---------------
<S> <C> <C>
Lynn C. Fritz............................................... 50,000 $ 143,750
Dennis L. Pelino............................................ -- --
Robert Arovas............................................... 30,926 $ 145,788
Eugene E. Wojciechowski..................................... 20,926 $ 120,163
Jan H. Raymond.............................................. 26,656 $ 194,653
All executive officers, as a group.......................... 153,962 $ 734,256
All employees who are not executive officers, as a group.... 644,594 $2,782,424
All directors who are not executive officers, as a group.... 4,468 $ 58,084
</TABLE>
REQUIRED VOTE
The affirmative vote of a majority of shares present in person or by proxy
at the Annual Meeting and entitled to vote is required to approve the proposed
amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE 1992 OMNIBUS EQUITY INCENTIVE PLAN.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
June 1, 1997 to May 31, 1998 all filing requirements applicable to its officers,
directors, and greater than ten-percent beneficial owners were complied with.
AUDITORS
KPMG Peat Marwick LLP serves as the Company's principal independent
accountants. Representatives of KPMG Peat Marwick LLP will be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
11
<PAGE> 14
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present to
the meeting. If other matters properly come before the meeting, those who act as
proxies will vote in accordance with their judgment.
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal for action at the
Company's 1999 Annual Meeting and wishes to have such proposal set forth in
management's proxy statement, such stockholder must forward the proposal to the
Company so that it is received on or before April 23, 1999. Proposals should be
addressed to the Company at 706 Mission Street, San Francisco, California 94103,
Attention: Corporate Secretary.
In accordance with Rule 14a-4(c)(1) promulgated by the Securities and
Exchange Commission, management proxies intend to use their discretionary voting
authority with respect to any shareholder proposal raised at the Company's 1999
Annual Meeting as to which the proponent fails to notify the Company on or
before July 10, 1999.
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including
the charges of brokerage houses and other custodians, nominees or fiduciaries
for forwarding documents to stockholders, will be paid by the Company.
By Order of the Board of Directors
Jan H. Raymond
Secretary
Dated: August 21, 1998.
12
<PAGE> 15
FRITZ COMPANIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 29, 1998
The undersigned stockholder of Fritz Companies, Inc., a Delaware
corporation ("Fritz"), hereby constitutes and appoints Lynn C. Fritz and Dennis
L. Pelino, and each of them, the attorneys and proxies of the undersigned, each
with the power of substitution, to attend and act for the undersigned at the
Annual Meeting of Stockholders of Fritz to be held at Ana Hotel, 50 Third
Street, San Francisco, California, on September 29, 1998, at 10:30 a.m. local
time, and at any adjournments or postponements thereof, and in connection
therewith to vote and represent all of the shares of Common Stock of Fritz
held of record by the undersigned on August 3, 1998, as follows on the reverse
side of this proxy.
Said attorneys and proxies, and each of them, shall have all the powers
which the undersigned would have if acting in person. The undersigned hereby
revokes any other proxy to vote at such meeting and hereby ratifies and
confirms all that said attorneys and proxies, and each of them, may lawfully do
by virtue hereof. Said proxies, without hereby limiting their general
authority, are specifically authorized to vote in accordance with their best
judgment with respect to all matters incident to the conduct of the meeting and
all matters presented at the meeting but which are not known to the Board of
Directors at the time of the solicitation of this proxy.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- FOLD AND DETACH HERE -
<PAGE> 16
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF FRITZ COMPANIES, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS NO. 1 AND NO. 2
Please mark
your votes as [X]
indicated in
this example
Item 1 -- Election of Directors
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to the to vote for all
contrary) nominees listed
[ ] [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:
Lynn C. Fritz; Dennis L. Pelino; James Gilleran; Preston Martin; Paul S.
Otellini; William J. Razzouk
Item 2 -- Amendment of the 1992 Omnibus Equity Incentive Plan to increase the
number of shares authorized for issuance thereunder by 1,500,000
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Item 3 -- In their discretion, upon any and all such other matters as may
properly come before the meeting or any adjournment thereof
The undersigned acknowledges receipt of a copy of the Notice of Annual Meeting
of Stockholders and Proxy Statement relating to the meeting.
IMPORTANT: In signing this proxy please sign exactly as your name(s) is (are)
shown on the share certificate to which the proxy applies. When signing as an
attorney, executor, administrator, trustee or guardian, please give your full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person. EACH JOINT TENANT MUST SIGN.
______________________________________
Signature
______________________________________
(Additional signature if held jointly)
Dated: ________________________, 1998
PLEASE SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- FOLD AND DETACH HERE -
