<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
/X/ Filed by the Registrant
/ / 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 240.14a-11(c) or 240.14a-12
HA-LO INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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<PAGE>
HA-LO INDUSTRIES, INC.
5980 WEST TOUHY AVENUE
NILES, ILLINOIS 60714
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1999
Notice is hereby given that the Annual Meeting of Shareholders of HA-LO
Industries, Inc., an Illinois corporation (the "Company"), will be held at ROOM
20C, HARRIS BANK, CHICAGO, ILLINOIS on Tuesday, May 11, 1999 at 10:00 a.m.,
local time, for the following purposes:
(1) To elect ten directors to serve until the next Annual Meeting of
Shareholders or until their successors are duly elected and qualified;
(2) To ratify the reappointment of the firm of Arthur Andersen LLP as the
Company's independent auditors for 1999; and
(3) To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on March 16, 1999 are
entitled to notice of and to vote at the meeting and at any postponements or
adjournments thereof. A complete list of the shareholders entitled to vote at
the meeting will be subject to inspection by any shareholder at the Company's
principal executive office, 5980 West Touhy Avenue, Niles, Illinois 60714,
during usual business hours, for a period of ten days prior to the meeting.
By Order of the Board of Directors,
[SIGNATURE]
LOU WEISBACH
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Niles, Illinois
March 30, 1999
------------------------
THE BOARD OF DIRECTORS EXTENDS A CORDIAL INVITATION TO ALL SHAREHOLDERS TO
ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN AS PROMPTLY AS POSSIBLE THE ENCLOSED PROXY IN
THE ACCOMPANYING REPLY ENVELOPE. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE
THEIR PROXIES AND VOTE IN PERSON.
<PAGE>
HA-LO INDUSTRIES, INC.
5980 WEST TOUHY AVENUE
NILES, ILLINOIS 60714
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1999
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of HA-LO
Industries, Inc., an Illinois corporation ("HA-LO" or the "Company"), for use at
the Annual Meeting of Shareholders of the Company to be held on the date, at the
time and place and for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders and at any postponements or adjournments thereof.
The Company's principal executive office is located at 5980 West Touhy Avenue,
Niles, Illinois 60714 and its telephone number is (847) 647-2300. Shareholders
of record at the close of business on March 16, 1999 are entitled to notice of
and to vote at the meeting. This Proxy Statement and the accompanying proxy are
first being mailed to shareholders on or about March 30, 1999.
THE MEETING
VOTING AT THE MEETING
On March 16, 1999, there were issued and outstanding 48,477,748 shares of
common stock, no par value (the "Common Stock"). Each share of Common Stock
issued and outstanding on the record date entitles the holder thereof to one
vote on all matters submitted to a vote of shareholders at the meeting.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock will constitute a quorum. The affirmative
vote of the holders of a majority of the shares represented at the meeting,
whether present in person or represented by proxy, will be necessary for the
election of directors and for the ratification of the reappointment of the firm
of Arthur Andersen LLP as the Company's independent auditors for 1999.
Abstentions and broker non-votes will have the effect of a vote against a
nominee or a proposal.
PROXIES AND PROXY SOLICITATION
All shares of Common Stock represented by properly executed proxies will be
voted at the meeting in accordance with the directions marked on the proxies,
unless such proxies previously have been revoked. If no directions are indicated
on such proxies, they will be voted FOR the election of each nominee named below
under "Election of Directors" and FOR the ratification of the reappointment of
Arthur Andersen LLP as the Company's independent auditors for 1999. If any other
matters are properly presented at the meeting for action, which is not presently
anticipated, the named proxies will vote in accordance with their best judgment.
Each proxy executed and returned by a shareholder may be revoked at any time
before it is voted by timely submission of written notice of revocation or by
submission of a duly executed proxy bearing a later date (in either case
directed to the Secretary of the Company) or, if a shareholder is present at the
meeting, he or she may elect to revoke his or her proxy and vote his or her
shares in person.
In addition to solicitation by mail, certain directors, officers and other
employees of the Company, not specially employed for this purpose, may solicit
proxies, without additional remuneration therefor, by personal interview, mail,
telephone or telecopy. The Company will request brokers and other fiduciaries to
forward proxy soliciting material to the beneficial owners of shares of Common
Stock that are held of record by such brokers and fiduciaries and will reimburse
such persons for their reasonable out-of-pocket expenses.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 16, 1999, certain information
concerning the beneficial ownership of Common Stock by (i) all directors and
nominees, (ii) each of the executive officers named in the Summary Compensation
Table below and (iii) all directors and executive officers as a group. Unless
otherwise indicated, each person has sole investment and voting power (or shares
such powers with his or her spouse) with respect to the shares shown as
beneficially owned by that person.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
OWNED APPROXIMATE
NAME AND ADDRESS(1) ON MARCH 16, 1999 PERCENT OF CLASS
- ------------------------------------------------------------------------------ ----------------- -----------------
<S> <C> <C>
Lou Weisbach.................................................................. 3,075,783(2) 6.3%
Linden D. Nelson.............................................................. 2,900,931(3) 6.0%
Seymour N. Okner.............................................................. 661,953(4) 1.4%
Richard A. Magid.............................................................. 425,560(5) *
Marshall J. Katz.............................................................. 285,737(6) *
David C. Robbins.............................................................. 131,356(7) *
Neil A. Ramo.................................................................. 148,956(8) *
Thomas Herskovits............................................................. 111,346(9) *
Jordon R. Katz................................................................ 61,421(10) *
Robert Sosnick................................................................ 17,500(11) *
Jon Sloan..................................................................... 16,030(12) *
All Directors and Executive Officers, as a group (21 persons)................. 8,192,578 16.9%
</TABLE>
- ------------------------
* Less than one percent.
(1) The address of each executive officer and director of the Company is in care
of the Company, 5980 West Touhy Avenue, Niles, Illinois 60714.
(2) Includes 544,256 shares subject to options held by Mr. Weisbach that are
exercisable on March 16, 1999 or within 60 days thereafter (the "Measurement
Period"), and 2,286,527 shares owned by the Lou Weisbach Revocable Trust.
Excludes 127,500 shares held in trust for the benefit of Mr. Weisbach's wife
and 76,780 shares held in trusts for the benefit of Mr. Weisbach's children,
over which Mr. Weisbach has no sole or shared powers to vote or dispose.
(3) Includes 43,372 shares owned by Maple Lane Acquisition Limited Liability
Company ("Maple Lane"), of which Mr. Nelson is the managing member; 131,250
shares owned by Mr Nelson's wife; 78,300 shares held by a charitable
foundation of which Mr. Nelson is President; and 439,744 shares subject to
options exercisable during the Measurement Period. Excludes 262,500 shares
held in trusts for the benefit of Mr. Nelson's children, over which Mr.
Nelson has no voting or dispositive powers.
(4) Includes 22,500 shares subject to options held by Mr. Okner that are
exercisable during the Measurement Period, 526,240 shares owned by the
Seymour N. Okner Revocable Trust, 99,667 shares held by a charitable
foundation of which Mr. Okner is the President, and 46 shares held by Mr.
Okner's spouse. Excludes 372,755 shares held in trusts for the benefit of
two of Mr. Okner's children, over which Mr. Okner has no sole or shared
powers to vote or dispose and in which Mr. Okner's spouse is a trustee.
2
<PAGE>
(5) Includes 393,812 shares subject to options held by Mr. Magid that are
exercisable during the Measurement Period.
(6) Includes 282,137 shares subject to options held by Mr. Katz that are
exercisable during the Measurement Period.
(7) Includes 83,316 shares subject to options held by Mr. Robbins that are
exercisable during the Measurement Period; and an aggregate of 1,405 shares
owned in trust for the benefit of Mr. Robbins' two minor children. Excludes
91,171 shares held in trust for the benefit of Mr. Robbins' wife, over which
Mr. Robbins has no voting or dispositive power.
(8) Includes 82,680 shares subject to options held by Mr. Ramo that are
exercisable during the Measurement Period and 562 shares subject to options
held by Mr. Ramo's wife that are exercisable during the Measurement Period.
(9) Includes 32,718 shares held jointly with Mr. Herskovits' wife; 11,250 shares
owned by Mr. Herskovits' minor son; and 58,753 shares subject to options
held by Mr. Herskovits that are exercisable during the Measurement Period.
(10) Includes 16,312 shares held by the JR Katz Profit Sharing Plan; 796 shares
owned by Mr. Katz's minor sons; 1,500 shares owned by Mr. Katz's spouse; and
42,813 shares subject to options held by Mr. Katz that are exercisable
during the Measurement Period.
(11) Consists of 17,500 shares subject to options held by Mr. Sosnick that are
exercisable during the Measurement Period.
(12) Includes 15,750 shares subject to options held by Mr. Sloan that are
exercisable during the Measurement Period.
3
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires each of the Company's executive officers and directors
and persons who beneficially own more than 10% of the Common Stock to file
initial reports of beneficial ownership and reports of changes in beneficial
ownership of the Company's equity securities. Based solely on a review of the
copies of such reports furnished to the Company, the Company believes that
during the fiscal year ended December 31, 1998, all of its officers, directors
and 10% beneficial owners timely filed all required reports, except for David
Blumenthal, Sabina D. Filipovic, Gregory J. Kilrea, Barry T. Margolin, Linden D.
Nelson, Michael P. Nemlich, Seymour N. Okner and Neal A. Ramo, each of whom
filed one late report required to be filed on Form 4, and Marshall J. Katz, who
filed four late reports required to be filed on Form 4.
ELECTION OF DIRECTORS
Ten directors are to be elected to the Board of Directors. Each director
elected at the meeting will hold office until the next Annual Meeting of
Shareholders of the Company or until his respective successor is duly elected
and qualified.
The Board of Directors has nominated, and it is the intention of the persons
named as proxies to vote for the election of, the nominees named below, each of
whom has consented to serve as a director if elected. In the event that any of
the nominees should be unable to serve as a director, it is intended that the
proxies will be voted for the election of such substitute nominees, if any, as
shall be designated by the Board of Directors. Management has no reason to
believe that any nominee will be unable to serve.
Mr. Robbins is the son-in-law of Mr. Okner; there are no other family
relationships between any directors and executive officers of the Company.
INFORMATION CONCERNING NOMINEES FOR ELECTION AS DIRECTORS(1)
The following table sets forth certain information as of March 30, 1999 with
respect to each nominee:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ------------------------------ --- ---------------------------------------------------------------------------
<S> <C> <C>
Lou Weisbach.................. 50 Chairman of the Board, President and Chief Executive Officer
Linden D. Nelson.............. 38 Director and Vice Chairman of the Board; Chief Executive Officer of
Creative Concepts in Advertising, Inc.
Seymour N. Okner.............. 72 Director; Chairman of the Board of Market USA, Inc. and Marusa Marketing,
Ltd.
Richard A. Magid.............. 40 Director, Chief Operating Officer, Treasurer and Assistant Secretary
David C. Robbins.............. 46 Director, Executive Vice President
Thomas Herskovits............. 52 Director
Jordon R. Katz................ 47 Director
Marshall J. Katz.............. 50 Director
Neil A. Ramo.................. 56 Director
Robert Sosnick................ 65 Director
</TABLE>
4
<PAGE>
LOU WEISBACH has been the Chairman of the Board, President and Chief
Executive Officer of the Company since January 1, 1988. From 1972 through 1987,
he operated the predecessor of the Company as a sole proprietorship.
LINDEN D. NELSON has served as the Vice Chairman of the Company and Chief
Executive Officer of Creative Concepts in Advertising, Inc., a wholly owned
advertising specialty subsidiary of the Company, since its acquisition by HA-LO
in January 1997. Mr. Nelson was the Chairman and Chief Executive Officer of
Creative Concepts in Advertising, Inc.'s predecessor since its inception in July
1979 through December 1996.
SEYMOUR N. OKNER has served as a director of the Company and as Chairman of
the Board of Market USA and Marusa Marketing, Ltd., a marketing company and an
affiliate of Market USA, since their acquisition by HA-LO in September 1996.
Previously, Mr. Okner was the President, Treasurer, Secretary and a director of
Market USA's predecessor since its inception in November 1988. He was also the
President and Secretary of Marusa Marketing, Ltd. from April 1992 through
September 1996. Prior to 1988, Mr. Okner served in various executive capacities,
primarily in the insurance industry, including President of Montgomery Ward Life
Insurance Company and Signature Life Insurance Company of America.
RICHARD A. MAGID has served as a director of the Company since 1992, was
appointed Chief Operating Officer in July 1996 and has been the Treasurer since
August 1992 and the Assistant Secretary since March 1996. He previously served
as the Chief Financial Officer from August 1992 until July 1996 and Vice
President-Finance from August 1992 through March 1996. From 1981 until joining
HA-LO in 1992, he was employed by the accounting firm of Arthur Andersen LLP,
most recently as an audit and financial consulting manager.
DAVID C. ROBBINS has been Executive Vice President since November 1992 and a
director of the Company since 1995. From 1978 to November 1992, he was an
independent sales representative of marketing specialty and premium advertising
products.
THOMAS HERSKOVITS has served as a director of the Company since 1992. Mr.
Herskovits has been the managing partner of Herskovits Enterprises, a venture
capital company, since 1996 and was the President and Chief Executive Officer of
Specialty Foods Corp. from 1993 to 1996. From 1989 through 1993, he was
President of the KGF Frozen Products Group, an operating unit of Kraft General
Foods. From 1984 to 1989, he was President of the Kraft Dairy Group of Kraft
General Foods.
JORDON R. KATZ has served as a director of the Company since 1992. Mr. Katz
has been the president of JR Katz Assoc., Inc., an insurance and employee
benefits planning company, since 1976.
MARSHALL J. KATZ has been a director and an independent financial consultant
to the Company and other parties since 1992. From 1988 through 1991, Mr. Katz
was the owner and president of Northbrook Management Co., a money management
firm trading in futures and options.
NEIL A. RAMO has served as a director of the Company since 1992 and has been
the president of NEMAR, Inc., an independent marketing company, since July 1993.
Since May 1996, Mr. Ramo has also been a realtor of the Prudential Florida
Realty Company. From August 1991 through June 1993, Mr. Ramo was the president
of RMI, Inc., d/b/a Creative Promotions International, a predecessor marketing
company to NEMAR, Inc. From 1984 to 1989, he was the president of Carson Pirie
Scott
5
<PAGE>
Department Stores. After retiring from Carson Pirie Scott Department Stores, he
pursued personal interests until he founded RMI, Inc.
ROBERT SOSNICK has served as a director of the Company since November 1997.
Mr. Sosnick has been the president of Real Estate Development & Investment
Company, a developer of high rise office buildings, industrial parks, shopping
centers and other developments since 1980. Since 1986, he has been a director of
Palace Sports & Entertainment, an owner and developer of entertainment and
sports arenas.
- ------------------------
(1) Only directorships of issuers with a class of securities registered pursuant
to Section 12 of the Exchange Act, or subject to the requirements of Section
15(d) of the Exchange Act, and directorships of issuers registered as
investment companies under the Investment Company Act of 1940, as amended,
are required to be listed in the above table.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has designated an Audit Committee and a Compensation
Committee. The Board of Directors has not designated a Nominating Committee;
rather, the Board of Directors as a whole performs the functions that would
otherwise be delegated to such committee.
Current members of the Audit Committee are Thomas Herskovits and Jordon R.
Katz. The functions of the Audit Committee include assessing the scope of the
Company's engagement of its independent public accountants, reviewing their
reports and recommending to the Board of Directors the engagement and discharge
of independent auditors. The Audit Committee recommended the engagement of
Arthur Andersen LLP as the Company's auditors for 1999. The Audit Committee also
meets with the financial staff of the Company to review accounting procedures
and internal audit controls.
Current members of the Compensation Committee are Thomas Herskovits and
Jordon R. Katz. The functions of the Compensation Committee include setting
executive officer salaries, determining annual bonuses and, together with the
Board of Directors acting as a whole, administering the Company's incentive
compensation plans, including the HA-LO Industries, Inc. Stock Plan (the "Stock
Plan"), the HA-LO Industries, Inc. 1997 Stock Plan (Amended and Restated) (the
"Restated Plan") and the Executive Incentive Compensation Plan (the "Executive
Incentive Compensation Plan"). See "Report of the Compensation Committee on
Executive Compensation," below.
During 1998, the Board of Directors held five meetings and took action by
written consent fourteen times, the Audit Committee held three meetings and the
Compensation Committee took action by meeting or written consent two times. Each
director attended at least 75% of the aggregate number of meetings held by the
Board of Directors and the committees, if any, on which he served during 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Thomas Herskovits and
Jordon R. Katz. None of the members of the Compensation Committee is either a
current or former officer or employee of the Company.
6
<PAGE>
COMPENSATION OF DIRECTORS
Pursuant to the Restated Plan, in 1998 each non-employee director of the
Company was entitled to receive compensation in the form of a non-qualified
stock option ("NSO") to purchase 15,000 shares of Common Stock (as adjusted to
reflect a 3-for-2 stock split in the form of a 50% stock dividend by the Company
on February 19, 1999) at an exercise price per share equal to the Fair Market
Value (as defined in the Restated Plan) of the Common Stock on the date of the
first regularly scheduled Board of Directors meeting during such calendar year.
During fiscal 1998, each non-employee director received under the Restated Plan
an NSO to purchase 15,000 shares of Common Stock at an exercise price per share
of $17.83.
On March 2, 1999, the date of the first regularly scheduled Board of
Directors meeting during 1999, each non-employee director received under the
Restated Plan an NSO to purchase 15,000 shares of Common Stock at an exercise
price of $10.00.
CERTAIN TRANSACTIONS
Concurrent with the acquisition by the Company of Creative Concepts in
Advertising, Inc. and related entities ("CCA") in January 1997, Linden D. Nelson
purchased certain nonoperating assets from CCA for consideration consisting of
(i) a $1,530,159 promissory note of Mr. Nelson and (ii) Mr. Nelson's guarantee
of the Company's collection of certain other nonoperating assets of CCA and of
certain receivables owed by entities controlled by Mr. Nelson, which totalled
approximately $2,650,000 (the "Nelson Receivables"). Mr. Nelson is a director
and executive officer of the Company. The note bore interest at 7.0% per annum.
The largest amount of such indebtedness outstanding at any time in 1998 was
$663,000. As of April 8, 1998, all amounts owing under these obligations had
been satisfied by Mr. Nelson.
During 1998, CCA leased its former corporate headquarters located in Beverly
Hills, Michigan from Mr. Nelson. Rental payments under this lease were $25,000
per month. As of January 1999, the term of this lease was no longer in effect.
In addition, during 1998, pursuant to two lease arrangements, CCA leased office
space near Detroit, Michigan from 2100 E. Maple LLC ("E. Maple LLC"), a company
controlled by Mr. Nelson and his spouse. Under these two leases with E. Maple
LLC, CCA paid approximately $327,630 for rent and related expenses. The Company
believes that the lease terms of the leases with Mr. Nelson and his affiliates,
including the rental payments, were no less favorable to the Company than the
terms the Company otherwise could obtain from unaffiliated third parties.
During fiscal 1998, the Company paid approximately $1,067,000 to Motor City
Creative LLC ("Motor City") for embroidery and other services rendered to the
Company. Mr. Nelson indirectly owns a 49% interest in Motor City. The Company
expects to pay at least such amount to Motor City for embroidery and other
services to be rendered to the Company during fiscal 1999.
During 1997, CCA advanced approximately $272,000 to Motor City to fund
certain operating expenses. All amounts advanced to Motor City were reimbursed
by Mr. Nelson in April 1998. Such advances to Motor City will not recur. The
largest amount of such indebtedness outstanding at any time in 1998 was
$272,000.
In connection with the Company's acquisition of CCA, the Company issued
4,262,122 shares of Common Stock (the "CCA Shares") to the former shareholders
of CCA, including Mr. Nelson (the "CCA Shareholders"). The Company also (i)
obligated itself to file registration statements with the Commission
7
<PAGE>
with respect to the resale of CCA Shares by the CCA Shareholders, in specified
increments, over the two to three years following the acquisition and (ii)
granted to the CCA Shareholders certain rights (the "Demand Rights"),
exercisable on or before June 30, 1998, to require the Company, at its expense,
to register under the Securities Act all or part of the CCA Shares if, by
December 31, 1997, sales of CCA Shares by the CCA Shareholders have not
generated aggregate gross proceeds to the CCA Shareholders of at least $18.0
million. As of December 31, 1997, sales of CCA Shares had generated aggregate
gross sales proceeds of approximately $14.0 million. In addition, if the Company
proposes to register under the Securities Act any shares of Common Stock for its
own account, the CCA Shareholders may require the Company, at its expense but
subject to certain restrictions, to include in such registration all or a
portion of the CCA Shares. The Demand Rights were not exercised by Mr. Nelson in
1998.
As part of the CCA transaction, in January 1997, CCA, Mr. Nelson and Maple
Lane (an entity affiliated with Mr. Nelson) entered into (i) a real estate
purchase agreement whereby CCA purchased
from Maple Lane a parcel of undeveloped real property in Troy, Michigan (the
"Troy Real Estate") and (ii) a Real Property Put and Option Agreement whereby
CCA would have the right to require Maple Lane to (1) repurchase the Troy Real
Estate and (2) lease back the Troy Real Estate on agreed terms (the "Lease").
Mr. Nelson has guaranteed Maple Lane's obligation under these agreements. On
January 5, 1999, CCA delivered a put notice to Maple Lane, thereby requiring
Maple Lane to purchase the Troy Real Estate for an amount equal to approximately
$9,500,000; the closing of the transaction is required on or before April 5,
1999. As of the date hereof, the closing has not yet occurred. The terms of the
Lease provide for a triple net, five year term with two five year extensions at
CCA's option, with lease payments to be either agreed to by the parties prior to
the commencement of the term or, if no agreement can be met, a rental amount
deemed to be fair market value rental as determined by independently selected
appraisers. As of the date hereof, no agreement has been reached on the initial
rental amount of the Troy Real Estate.
During 1998, CCA made sales to the Linden D. Nelson Foundation, a charitable
foundation of which Mr. Nelson is President, in the amount of $199,000.
In February 1995, the Company entered into a Bonus Shares Agreement (as
amended in October 1996, the "Bonus Shares Agreement"), with David C. Robbins, a
director and executive officer of the Company. The Bonus Shares Agreement was in
recognition of Mr. Robbins' efforts in fostering a particular customer
relationship and in consideration of his assistance to the Company in
maintaining a continued positive customer relationship with that customer and
maximizing its sales and profits under a five-year Exclusive Premium Purchasing
Agreement executed by the Company and the customer in January 1995 (the
"Purchasing Agreement"). In connection therewith, Mr. Robbins covenanted not to
compete with the Company during the term of the Purchasing Agreement. Pursuant
to the Bonus Shares Agreement, Mr. Robbins received 450,000 shares of Common
Stock (the "Bonus Shares") as restricted stock, which Bonus Shares are in lieu
of commissions to which he would otherwise be entitled for sales of Company
products under the Purchasing Agreement. Commencing in 1995, these Bonus Shares
became eligible to vest (I.E., cease to be subject to transfer restrictions) in
accordance with a formula based, in part, upon the gross profit earned by the
Company on sales of its products under the Purchasing Agreement. As of January
27, 1998, Mr. Robbins was fully vested in all Bonus Shares.
In September 1996, the Company acquired Market USA, Inc. ("Market USA") and
Marusa Marketing, Ltd. ("Marusa"). Seymour N. Okner, a director of the Company,
was the President and a principal shareholder of each of Market USA and Marusa
at the time the acquisitions were consummated. Pursuant
8
<PAGE>
to the Agreement and Plan of Merger and Amalgamation effecting such acquisitions
(the "Merger Agreement"), certain shareholders of Market USA and Marusa,
including Mr. Okner (the "Selling Shareholders"), agreed to indemnify the
Company for certain liabilities. During 1997-1998, Revenue Canada and the
Minister of Revenue of Quebec asserted claims with respect to Marusa's
compliance with certain Canadian and Quebec tax regulations for periods prior to
the consummation of the merger. Marusa has entered into accords with Canadian
and Quebec taxing authority with respect to such assessment and the Selling
Shareholders have made payments to the Company of sums required under the
Purchase Agreement.
Pursuant to a Consulting Agreement dated March 17, 1997, Marshall J. Katz, a
director of the Company, provides advisory and consulting services to the
Company, on a non-exclusive basis, with respect to acquisitions and business
combinations. Mr. Katz's compensation for such services is contingent upon the
successful completion of acquisitions for which he has rendered advice to the
Company. During 1998, Mr. Katz received approximately $770,000 and was granted
options to acquire 264,400 shares of Common Stock at the fair market value on
date of grant in consideration for consulting services he rendered.
In January, 1998, with the prior notice and approval of the Company, Mr.
Katz entered into an agreement to provide advisory and consulting services to
Promotional Marketing, LLC (d/b/a UPSHOT) ("Upshot") and its members with
respect to a possible sale of Upshot. In the course of his engagement, Mr. Katz
advised Upshot with respect to numerous potential acquisitions by entities
unrelated to the Company. In June of 1998, the Company acquired Upshot. Mr. Katz
rendered no services to the Company or Upshot in the course of the negotiations
and abstained from any discussions of the transaction held by the Company's
Board of Directors. Pursuant to Mr. Katz's agreement with Upshot, he was paid an
amount equal to $1,381,000 in the transaction.
Duncan & Hill, a division of the Company, was retained to develop
advertising for certain products sold by Natural Golf. Thomas Herskovits, a
director of the Company, serves as the Chairman of the Board of and owns a 26%
equity interest in Natural Golf. During fiscal 1998, Duncan & Hill billed
Natural Golf an aggregate of approximately $133,000 for services rendered.
JR Katz Assoc., Inc., was retained by the Company as a broker representative
for group insurance and as an advisor for retirement plans. Jordon R. Katz, a
director of the Company, serves as the President of JR Katz Assoc., Inc. During
fiscal 1998, JR Katz Assoc., Inc. earned insurance commissions of $113,920 with
respect to its work for the Company.
9
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information with respect to
all compensation earned by or paid to each of the Company's Chief Executive
Officer and its four other most highly compensated executive officers who were
serving as executive officers on December 31, 1998, and whose total salary plus
bonus for 1998 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
-------------------
ANNUAL COMPENSATION SECURITIES
----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#)(2)
- ----------------------------------------------------------- --------- ---------- ----------- -------------------
<S> <C> <C> <C> <C>
Lou Weisbach............................................... 1998 $ 500,000 -- --
Chairman of the Board, President and Chief Executive 1997 $ 500,000 -- 35,984
Officer 1996 $ 500,000 -- 755,907
Linden D. Nelson........................................... 1998 $ 500,000 -- 102,000
Vice Chairman of the Board and Chief Executive Officer of 1997 $ 500,000 -- 429,734
CCA 1996 -- -- --
Richard A. Magid........................................... 1998 290,577 -- 6,300
Chief Operating Officer, Treasurer and Assistant 1997 207,804 38,438 105,563
Secretary 1996 169,255 -- 121,875
David C Robbins............................................ 1998 135,000 650,000 8,850
Executive Vice President(3) 1997 130,577 423,617 32,063
1996 175,000 594,998 23,345
Jon Sloan.................................................. 1998 75,000 164,920 11,100
Vice President--National Accounts 1997 75,000 126,087 12,450
1996 -- -- --
</TABLE>
- ------------------------
(1) Amount for Mr. Magid was earned under the Executive Incentive Compensation
Plan. Amounts shown for Messrs. Robbins and Sloan consist of commissions
earned for sales of Company products.
(2) Mr. Weisbach and Mr. Nelson each earned 35,984 options in 1997 under the
Executive Incentive Compensation Plan, which options were granted in 1998.
Mr. Magid and Mr. Robbins earned 14,063 options in 1997 under the Executive
Incentive Compensation Plan, which options were granted in 1998.
(3) Salary paid to Mr. Robbins was in lieu of an equal dollar amount of
commissions earned by him for sales of Company products.
10
<PAGE>
The following table sets forth information with respect to options to
purchase shares of the Company's Common Stock that were granted in 1998 to each
of the executive officers named in the Summary Compensation Table above. No
stock appreciation rights ("SARs") were granted to any of the persons listed on
the table below during 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL VALUE AT ASSUMED
----------------- ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL GRANTS PRICE APPRECIATION
SECURITIES OPTIONS/SARS ------------- FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM (1)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED(#)(2) FISCAL YEAR (3) ($/SH) DATE 5%($) 10%($)
- ---------------------------------- ------------- ----------------- ------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lou Weisbach...................... 35,984 1.4% 17.25 02/12/08 368,097 953,808
Linden Nelson..................... 35,984 1.4 17.25 02/12/08 368,097 953,808
75,000 3.0 17.83 02/23/08 840,989 2,131,232
27,000 1.1 16.46 01/05/08 279,493 708,291
Richard A. Magid.................. 14,063 * 17.25 02/12/08 143,857 372,760
6,300 * 18.00 11/12/08 71,317 180,730
David C. Robbins.................. 8,850 * 16.46 01/05/08 91,612 232,162
14,063 * 17.25 02/12/08 143,857 372,760
Jon Sloan......................... 2,100 * 16.46 01/05/08 21,738 55,089
9,000 * 16.46 01/05/08 93,164 236,097
</TABLE>
- ------------------------
* Less than 1%
(1) The amounts shown in these columns are the result of calculations at assumed
annual rates required by the Commission and are not intended to forecast
possible future appreciation, if any, of the price of the Company's Common
Stock. The Company did not use an alternative formula for a grant date
valuation, as the Company is not aware of any formula that will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.
(2) All options were granted at an exercise price equal to the Fair Market Value
of the Company's Common Stock on the date of grant and vest over a
three-year period in increments of one-third each on the first, second and
third anniversaries of the date of grant.
(3) Percentage calculations in this column include the number of options granted
to employees of the Company and non-employee independent sales
representatives for sales of Company products, which sales representatives
have subsequently become employees of the Company.
11
<PAGE>
The following table sets forth information with respect to the options
exercised by and the unexercised options held by each of the executive officers
named in the Summary Compensation Table above, as of December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
FY-END (#) AT FY-END ($)(1)
SHARES VALUE --------------------- ---------------------
ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE ($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- ----------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Lou Weisbach............................ 0 0 532,262/285,984 2,042,869/951,755
Linden Nelson........................... 0 0 393,750/137,984 3,279,938/1,058,245
Richard A. Magid........................ 67,501 1,141,877 343,625/66,363 5,635,761/545,727
David C. Robbins........................ 0 0 68,429/33,663 1,300,870/275,948
Jon Sloan............................... 0 0 6,025/17,525 50,188/149,202
</TABLE>
- ------------------------
(1) On December 31, 1998, the closing price per share of the Company's Common
Stock was $25.08 (as adjusted to reflect a 3-for-2 stock split in the form
of a 50% stock dividend by the Company on February 19, 1999).
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Mr. Weisbach serves as the President and Chief Executive Officer of the
Company pursuant to a five year employment agreement which commenced on January
1, 1997. Mr. Weisbach's base salary is $500,000, which amount may be increased
from time to time by the Board of Directors; he is eligible to receive bonus
payments and additional compensation based upon achievement of profit objectives
to be established from time to time solely by the Board of Directors. Mr.
Weisbach is also eligible to receive additional compensation pursuant to the
Executive Incentive Compensation Plan. The employment agreement provides that on
each anniversary of its effective date, the term of Mr. Weisbach's employment
automatically shall be extended for an additional one year period, such that the
term of the agreement is restored to five years on December 31 of each year;
however, either party may elect not to so extend the agreement by giving notice
of such election at least 60 days prior to December 31 of each year. In the
event Mr. Weisbach's employment is terminated following a "Change of Control,"
he shall receive, for twenty-four (24) months, benefits no less favorable than
those he received under the employment agreement prior to such termination. A
"Change of Control" is defined as, among other things, (i) any consolidation or
merger wherein the Company is not the continuing or surviving company or which
contemplates that all or substantially all of the assets and/or business is
controlled by another, (ii) any sale, lease, exchange or transfer of all or
substantially all of the assets of the Company, (iii) approval by the
shareholders of liquidation or dissolution, (iv) any "person" becoming the
beneficial owner of more than 50% of the combined voting power of the Company,
(v) any sale, exchange or transfer of 50% of the securities of the Company
representing the total fair market value of the Company or the combined voting
power of the Company or (vi) if during a period of two consecutive years from
the effective date, individuals who at the beginning of such period constituted
the directors of the Company cease for any reason to constitute a majority
thereof.
12
<PAGE>
Mr. Nelson serves as the Vice Chairman of the Company and Chief Executive
Officer of CCA pursuant to a five year employment agreement which commenced on
January 3, 1997. Mr. Nelson's base salary is $500,000; he is eligible to receive
bonus payments and additional compensation in such amounts as shall be
determined by the Board of Directors in its sole discretion. Mr. Nelson is also
eligible to receive additional compensation pursuant to the Executive Incentive
Compensation Plan. The agreement also provides that during the employment of Mr.
Nelson and for a period of two (2) years thereafter, he would not disclose
proprietary information of the Company or compete with the Company.
Mr. Magid serves as the Chief Operating Officer, Vice President and
Treasurer of the Company pursuant to an employment agreement extending through
December 31, 2000. Mr. Magid's initial base salary was $275,000, which was
increased as of April 1, 1998 to $300,000, he is eligible to receive bonus
payments and additional compensation based upon achievement of profitability and
other financial targets to be established from time to time solely by the Board
of Directors. Mr. Magid is also eligible to receive additional compensation
pursuant to the Executive Incentive Compensation Plan. The employment agreement
prohibits Mr. Magid from disclosing any confidential and proprietary information
of the Company and from directly or indirectly disclosing such information,
except in connection with conducting the business and affairs of the Company.
The agreement also provides that, during his employment and for one year
thereafter, Mr. Magid shall not, directly or indirectly, compete with the
Company.
The Company has executed materially similar agreements with Linden D.
Nelson, Richard A. Magid, Gregory J. Kilrea, David A. Robbins, Gene Eherenfeldt,
Sabina D. Filipovic, Michael P. Nemlich, Barry T. Margolin, Barbara G. Berman,
David J. Blumenthal, Michael J. Linderman, Jon Sloan, Bradford S. Kerr and Peter
A. Blythe (each, an "Executive") to ensure the continued dedication of such
Executives notwithstanding the possibility, threat or occurrence of a "Change of
Control." The agreements become effective upon a Change of Control.
"Change of Control" is defined in these agreements, generally, as (1) the
acquisition by an individual, group or entity (each, a "Person") of 30% of the
outstanding stock of the Company or the combined voting power of the then
outstanding voting power of the Company (but expressly excluding (i)
acquisitions directly from the Company by a Person whose holdings do not exceed
40% of the outstanding stock or voting securities prior to or after such
acquisition, (ii) any acquisition by the Company, (iii) any acquisition by an
Employee Benefit Plan maintained and controlled by the Company, or (iv) certain
acquisitions by a corporation pursuant to a merger, consolidation or
reorganization); (2) members of the current Board of Directors cease to
constitute a majority of the Board of Directors unless such new Directors were
approved by a vote of at least a majority of the current Board of Directors; and
(3) certain reorganizations, mergers and consolidations of the Company or sales
of the assets of the Company unless, generally, 60% of the outstanding shares of
the surviving entity are held by Persons who were holders of the Company prior
to such transaction, or at least a majority of the members of the Board of
Directors of such surviving company were members of the Company's Board of
Directors prior to such transaction.
Each agreement provides that, in the event an Executive's employment is
terminated following a Change of Control, as a result of the death or disability
of the Executive, by the Company other than for cause (as defined in the
agreement), or by the Executive for good reason (as defined in the agreement),
the Company will be obligated to pay the Executive a lump sum payment equal to
the Executive's accrued but unpaid base and bonus compensation.
13
<PAGE>
In addition, if an Executive is terminated by the Company without cause
after a Change of Control, the Company will pay such Executive an amount equal
to the product of a multiple, specified in the agreement, times the sum of the
Executive's base salary plus a formula based upon the bonus or commission paid
to the Executive during the previous three years. The specified multiples, which
range from 2.0 to 2.99, differ for each Executive. In addition, the Company is
obligated to continue to provide to the Executive and/or the Executive's family,
for 90 days following termination, benefits that are comparable to the benefits
received by the Executive immediately prior to termination. In the event of the
Executive's employment is terminated due to death, disability or for cause, the
agreement shall terminate without further obligation to the Executive and all
accrued obligations shall be paid to the Executive within 30 days of
termination. The agreements prohibit the Executive from (i) disclosing
confidential information regarding the Company, (ii) during the period of
Executive's employment with the Company and for one year thereafter, engaging,
directly or indirectly, in any business in the United States or Canada that
directly competes with the business of the Company; (iii) soliciting or engaging
in business conducted by the Company with a customer or prospective customer; or
(iv) soliciting any employee or independent contractor of the Company that
results in the termination of the employment or agency relationship of such
individual.
14
<PAGE>
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE
ACT, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN
WHOLE OR IN PART, THE REPORT PRESENTED BELOW AND THE PERFORMANCE GRAPH FOLLOWING
SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
REPORT OF THE COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is currently comprised of Thomas Herskovits and
Jordon R. Katz, neither of whom currently is or has been in the past an officer
or employee of the Company. The Compensation Committee is responsible for
setting executive officer salaries, determining annual bonuses and administering
the Company's incentive compensation plans, including the Stock Plan, the
Restated Plan and the Executive Incentive Compensation Plan.
POLICY AND OBJECTIVES
The Compensation Committee believes that executive compensation should
attract, retain and motivate the highly qualified individuals required for the
success of the Company and should also be commensurate with performance. The
Compensation Committee also strives to ensure that the compensation of each
executive officer of the Company is fair in relation to his or her experience
and overall responsibility at the Company. In general, the Compensation
Committee considers both corporate and individual performance in determining
executive compensation. Corporate performance is evaluated by reviewing the
extent to which strategic and business plan goals are met. Individual
performance is evaluated by reviewing organization and management development
against set objectives. In making these evaluations, the Compensation Committee
relies upon input from the Chief Executive Officer and/or the Chief Operating
Officer regarding the financial performance of the Company and the performance
of specific employees.
Compensation for executive officers of the Company is divided into cash and
stock-based components as follows:
CASH-BASED COMPENSATION
The Company's cash-based compensation consists of salary, bonus and payments
pursuant to a non-qualified benefit plan maintained by the Company (the
"Non-Qualified Plan"). Annual base salary for each of the Company's executive
officers is paid either pursuant to an employment agreement between the officer
and the Company (see "Executive Compensation--Employment Agreements", above), or
upon the approval of the Compensation Committee, which annually reviews the base
salary payable to each executive officer. The Compensation Committee's
determination of annual salary is based upon its review of the officer's past
performance, the responsibilities associated with the officer's position and any
changes with respect thereto, and the recommendation of the Chief Executive
Officer and/or the Chief Operating Officer. While the Compensation Committee
acknowledges the subjective nature of these determinations, it believes that the
base salary paid to each of the Company's executive officers fairly reflects
that officer's prior performance, position and overall contribution to the
Company's success.
Under the Non-Qualified Plan, which was established by the Company in 1990,
eligible employees may elect to defer a certain amount of compensation for
payment at a later date. Currently, the
15
<PAGE>
Non-Qualified Plan allows a participating employee to defer up to 25% of his or
her annual compensation (but not less than $1,350) for a minimum of at least
five years. Compensation that is deferred under the Non-Qualified Plan is
eligible for an "Employer Match" equal to 50% of the deferred amount (up to a
maximum of $2,000 per year), which vests on an installment basis according to a
formula set forth in the Non-Qualified Plan. The Non-Qualified Plan provides for
the payment of the deferred benefit, which includes the deferred compensation,
the matched amounts and interest, to the employee on an installment basis after
the employee attains at least 60 years of age. Under certain circumstances,
including the death, disability or financial hardship of the participating
employee, the Non-Qualified Plan provides for the payment of deferred benefits
prior to the employee attaining 60 years of age.
In addition to an annual base salary, certain executive officers, including
the Executive Officers named in the Summary Compensation Table, are eligible to
receive bonuses payable in cash, options to purchase Common Stock, or both,
pursuant to the Executive Incentive Compensation Plan. The Executive Incentive
Compensation Plan became effective commencing with fiscal year 1997. Under the
Executive Incentive Compensation Plan, each Executive except Mr. Robbins and Ms.
Berman is eligible to receive a cash bonus, expressed as a percent of his/her
base salary, and options to purchase Common Stock. Mr. Robbins and Ms. Berman
are eligible to receive only options to purchase Common Stock. The awards are
granted based upon the Company's achievement of certain earnings per share
("EPS") targets set by the Compensation Committee and approved by the Board of
Directors of the Company, which targets may be adjusted for capital changes
(E.G., stock splits, stock dividends, etc.) or due to circumstances materially
affecting the EPS (E.G., acquisitions). Awards of cash and options are made
based upon the Company's actual EPS as a percentage of the target EPS, which
percentage will determine the percent of the Executive's base salary that will
be awarded as a cash award and the number of options that will be awarded;
provided, however, that (i) no awards will be made unless actual EPS is greater
than at least 90% of the target EPS, and (ii) no additional awards will be
granted for the amount by which actual EPS exceeds 115% of the target EPS.
STOCK-BASED COMPENSATION
The Compensation Committee, together with the Board of Directors acting as a
whole, is also responsible for administering the Stock Plan and the Restated
Plan. Option grants pursuant to such plans are intended to encourage performance
that will result in appreciation of the market value of the Company's Common
Stock. Stock options are generally awarded from time to time by the Compensation
Committee based upon recommendations from the Chief Executive Officer. In making
its determinations of option awards, the Compensation Committee or the Board
considers the performance of the proposed optionee, the Company's financial
performance during the relevant period and the number of options previously
granted to the optionee.
Throughout 1998, the Compensation Committee or the Board also awarded stock
options under the Stock Plan to qualifying employees and independent sales
representatives of the Company based on commissions earned on sales of the
Company products during 1998. In doing so, the Compensation Committee or the
Board rewarded these individuals for their efforts on behalf of the Company and
offered them the opportunity to acquire an initial, or augment their existing,
proprietary interest in the Company.
16
<PAGE>
COMPENSATION OF THE COMPANY'S CHIEF EXECUTIVE OFFICER
Lou Weisbach serves as the Chief Executive Officer of the Company pursuant
to an employment agreement with the Company. See "Executive
Compensation--Employment Agreements", above. During fiscal 1998, Mr. Weisbach's
total annual compensation was $500,000. The compensation paid to Mr. Weisbach
during 1998 was not based upon, and had no specific relation to, the performance
of the Company's Common Stock during 1998.
THE COMPENSATION COMMITTEE
Thomas Herskovits
Jordon R. Katz
17
<PAGE>
PERFORMANCE GRAPH
NOTE: THE STOCK PRICE PERFORMANCE SHOWN ON THE GRAPH BELOW IS NOT NECESSARILY
INDICATIVE OF FUTURE PRICE PERFORMANCE.
COMPARISON OF $100 INVESTED IN THE COMPANY'S COMMON STOCK, NYSE
COMPOSITE INDEX AND THE COMPANY'S PUBLISHED LINE OF BUSINESS GROUP (1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NYSE STOCKS
<S> <C> <C> <C>
NYSE Stock Market (SIC 5190-5199 US + Foreign)
HA-LO Industries, Inc. (US Companies) Miscellaneous Nondurable Goods
12/31/93 100.0 100.0 100.0
12/30/94 118.2 100.0 121.5
12/29/95 559.1 135.5 131.9
12/31/96 937.5 164.3 154.7
12/31/97 886.4 218.3 223.5
12/31/98 1282.7 262.0 188.7
LEGEND
SYMBOL
</TABLE>
- ------------------------
(1) The above graph compares the performance of the Company's Common Stock with
that of a broad equity market index, the New York Stock Exchange (NYSE)
Market Index, and a published line-of-business index, NYSE stocks with SIC
code 519 (miscellaneous nondurable goods). The Company's line of business is
within this SIC code.
18
<PAGE>
AUDITORS
It is proposed that the shareholders approve the reappointment of the firm
of Arthur Andersen LLP as the Company's independent auditors for 1999. The
decision to retain Arthur Andersen LLP as the Company's independent auditors for
1999 was approved by the Audit Committee of the Board of Directors and the Board
of Directors of the Company. A representative of Arthur Andersen LLP is expected
to attend the meeting where he or she will have the opportunity to make a
statement if he or she so desires and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
REAPPOINTMENT OF SUCH FIRM.
2000 ANNUAL MEETING OF SHAREHOLDERS
The 2000 Annual Meeting of Shareholders is presently scheduled to be held on
Tuesday, May 9, 2000. Any proposals of shareholders intended to be personally
presented at such meeting must be received by the Secretary of the Company for
inclusion in the Company's Proxy Statement and form of proxy no later than
November 30, 1999. In addition, any proposals of shareholders intended to be
personally presented at such meeting (but not to be included in the Company's
Proxy Statement or form of proxy) must be received by the Secretary of the
Company no later than February 13, 2000.
19
<PAGE>
HA-LO INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Lou Weisbach, Richard A. Magid and Gregory J. Kilrea, and each of them, are
hereby constituted and appointed the lawful attorneys and proxies of the
undersigned, with full power of substitution, to vote and act as proxy with
respect to all shares of common stock, no par value, of HA-LO INDUSTRIES,
INC. standing in the name of the undersigned on the Company's books at the
close of business on March 16, 1999 at the Annual Meeting of Shareholders to
be held in Room 20C of Harris Trust and at any postponement(s) or
adjournment(s) thereof, as follows:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE
NOMINEES LISTED IN ITEM 1 AND FOR THE PROPOSAL IN ITEM 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
FOR WITHHOLD FOR ALL
1. ELECTION OF DIRECTORS ALL ALL EXCEPT
Nominees: Lou Weisbach, Linden D. Nelson, / / / / / /
Seymour N. Okner, Richard A. Magid,
David C. Robbins, Thomas Herskovits,
Jordon R. Katz, Marshall J. Katz,
Neil A. Ramo and Robert Sosnick
- ----------------------------------------
INSTRUCTION: To withhold authority
to vote for any individual nominee
write that nominee's name on the
space provided above
The powers hereby granted may be exercised by any
of said attorneys or proxies or their substitutes
present and acting at the above-described Annual
Meeting of Shareholders or any postponement(s)
or adjournment(s) thereof, or, if only one be
present and acting, then by that one. The
undersigned hereby revokes any and all proxies
heretofore given by the undersigned to vote at
said meeting.
2. RATIFICATION OF THE REAPPOINTMENT OF FOR AGAINST ABSTAIN
ARTHUR ANDERSEN LLP AS THE COMPANY'S / / / / / /
AUDITORS FOR 1999
3. MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
4. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before
the meeting or at any postponement(s)
or adjournment(s) thereof.
MARK HERE FOR
ADDRESS CHANGE
AND NOTE BELOW / /
Dated__________________, 1999
_____________________________
Signature
_____________________________
Signature
(Please sign as name appears on corporate records.
Joint owners should each sign personally. Trustees
and other signing in a representative capacity should
indicate the capacity in which they sign).
