<PAGE>
===============================================================================
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section 240.14a-12
OPINION RESEARCH CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
OPINION RESEARCH CORPORATION
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction 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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
OPINION RESEARCH CORPORATION
23 Orchard Road
Skillman, New Jersey 08558
______________________________
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
______________________________
Annual Meeting of Stockholders
June 13, 2000
<PAGE>
OPINION RESEARCH CORPORATION
23 Orchard Road
Skillman, New Jersey 08558
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 13, 2000
_______________
The Annual Meeting of Stockholders of Opinion Research Corporation (the
"Company") will be held on Tuesday, June 13, 2000 at 10:00 a.m., local time, at
the Company's headquarters, 23 Orchard Road, Skillman, New Jersey, for the
following purposes:
1. To elect one Director to serve until the 2003 Annual Meeting of
Stockholders of the Company and until his respective successor has been duly
elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the 2000 fiscal year.
3. To transact such other business as may properly come before the Meeting
or any adjournment or postponement thereof.
The close of business on April 21, 2000 was established as the record date
for the Meeting. All stockholders of record at that time are entitled to notice
of, and to vote at, the Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Meeting. The Board of
Directors urges you to date, sign and return promptly the enclosed proxy to give
voting instructions with respect to your shares of Common Stock. The proxies
are solicited by the Board of Directors. The return of the proxy will not
affect your right to vote in person if you do attend the Meeting. A copy of the
Company's Annual Report to Stockholders for the year ended December 31, 1999, is
also enclosed.
By order of the Board of Directors
DOUGLAS L. COX
Secretary
April 28, 2000
_______________________________________________________________________________
IMPORTANT
A Proxy Statement and proxy are submitted herewith. All stockholders
are urged to complete and mail the proxy promptly. The enclosed envelope for
return of proxy requires no postage if mailed in the U.S.A. Stockholders
attending the Meeting may personally vote on all matters which are considered,
in which event the signed proxy is revoked. It is important that your shares be
voted.
_______________________________________________________________________________
<PAGE>
OPINION RESEARCH CORPORATION
23 Orchard Road
Skillman, New Jersey 08558
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors (the "Board of
Directors") of Opinion Research Corporation (the "Company"), a Delaware
corporation, for use at the Annual Meeting of Stockholders (the "Meeting") to be
held on Tuesday, June 13, 2000, at 10:00 a.m., local time, at the Company's
headquarters, 23 Orchard Road, Skillman, New Jersey, and any adjournment or
postponement thereof. This Proxy Statement, the foregoing notice, and the
enclosed proxy are first being mailed to stockholders on or about April 28,
2000.
The Board of Directors does not intend to bring any matters before the
Meeting other than the matters specifically referred to in the foregoing notice,
nor does the Board of Directors know of any matter which anyone else proposes to
present for action at the Meeting. However, if any other matters properly come
before the Meeting, the persons named in the accompanying proxy or their duly
constituted substitutes acting at the Meeting will be deemed authorized to vote
or otherwise act thereon in accordance with their judgment on such matters.
When your proxy card is returned properly signed, the shares represented
will be voted in accordance with your directions. In the absence of
instructions, the shares represented at the Meeting by the enclosed proxy will
be voted "FOR" the nominee of the Board of Directors in the election of
directors and "FOR" the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000. Any proxy
may be revoked at any time prior to its exercise by notifying the Secretary of
the Company in writing, by delivering a duly executed proxy bearing a later date
or by attending the Meeting and voting in person.
-1-
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Outstanding Shares and Voting Rights
At the close of business on April 21, 2000, the record date, the Company
had outstanding 4,270,749 shares of its common stock, par value $.01 per share
(the "Common Stock"). On each matter voted upon at the Meeting and any
adjournment or postponement thereof, each record holder of Common Stock will be
entitled to one vote per share.
The presence, in person or by proxy, of stockholders entitled to cast a
majority of the votes which stockholders are entitled to cast in the election of
directors and on the selection of Ernst & Young LLP as the Company's independent
auditors will constitute a quorum as to each such matter. Assuming a quorum is
present at the Meeting, a plurality of all the votes cast at the Meeting shall
be sufficient to elect a director. The selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000
requires the affirmative vote of a majority of the votes cast at the Meeting.
For purposes of determining the number of votes cast with respect to any voting
matter, only those cast "for" or "against" are included. Abstentions and broker
non-votes are counted only for purposes of determining whether a quorum is
present at the Meeting.
Principal Stockholders
The following table sets forth certain information regarding the holdings
of each stockholder who was known to the Company to be the beneficial owner, as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), of more than 5% of any voting class of the Common Stock at the
close of business on March 20, 2000. Each of the persons named in the table
below as beneficially owning the shares set forth therein has sole voting power
and sole investment power with respect to such shares, unless otherwise
indicated.
Name and Address Amount Percent
of Beneficial Owner Beneficially Owned of Class
- -------------------------- ------------------ --------
Gruber & McBaine (1) 691,400 16.19
Capital Management
50 Osgood Place
San Francisco, CA 94133
John F. Short (2)(3)(4) 582,846 13.09
23 Orchard Road
Skillman, NJ 08558
Michael R. Cooper (1)(2) 576,003 13.12
44 CopperVail Court
Princeton, NJ 08540
-2-
<PAGE>
Name and Address Amount Percent
of Beneficial Owner Beneficially Owned of Class
- -------------------------- ------------------ --------
Cumberland Associates (1) 490,000 11.47
1114 Avenue of the Americas
New York, New York 10036
Cannell Capital Management (1) 306,900 7.19
600 California Street
San Francisco, CA 94108
______________________________
(1) Based solely on information provided to the Company by the beneficial
owners.
(2) Includes 181,375 and 119,167 shares subject to exercisable options
beneficially owned by Mr. Short and Dr. Cooper, respectively.
(3) Does not include 25,530 shares held in trusts for the benefit of the
children of Mr. Short.
(4) Includes 206,625 shares held by Mr. Short as co-trustee of the Company's
Retirement Plan, over which Mr. Short has sole voting power.
Security Ownership of Management
The following table sets forth certain information regarding the Common Stock
beneficially owned by each director of the Company, by the Company's Chief
Executive Officer, and each of the Company's four other most highly compensated
executive officers in 1999 (the "Named Executive Officers"), and by all
directors and executive officers of the Company as a group, at the close of
business on March 20, 2000. Each of the persons named in the table below as
beneficially owning the shares set forth therein has sole voting power and sole
investment power with respect to such shares, unless otherwise indicated.
Name of Amount Percent
Beneficial Owner Beneficially Owned of Class
- ---------------------- ------------------ --------
John F. Short (1)(2)(3) 582,846 13.09
Michael R. Cooper # (1) 576,003 13.12
Gregory C. Ellis (1) 140,000 3.23
James T. Heisler (1) 108,024 2.52
Stephen A. Greyser (1) 96,250 2.21
Douglas L. Cox (1) 70,000 1.63
Jeffrey T. Resnick (1) 64,422 1.50
-3-
<PAGE>
Name of Amount Percent
Beneficial Owner Beneficially Owned of Class
- ---------------------- ------------------ --------
Lenard B. Tessler (1) 39,600 *
Derek B. Smith (1) 22,000 *
Dale J. Florio 0 0
All Directors and executive
officers as a group (13 persons) (4)(5) 1,706,645 35.29
- -------------------
* Denotes less than one percent of applicable class.
# Dr. Cooper resigned as Director, Chairman and Chief Executive Officer of the
Company effective February 12, 1999. See "Transaction with Management."
(1) Includes options exercisable as of March 20, 2000 for each of the named
executives and directors: Mr. Short - 181,375; Dr. Cooper - 119,167; Mr.
Ellis - 60,000; Dr. Heisler - 14,667; Professor Greyser - 83,750; Mr. Cox -
20,000; Mr. Resnick - 22,500; Mr. Tessler - 20,000; Dr. Smith - 15,000.
(2) Does not include 25,530 shares held in trust for the benefit of the children
of Mr. Short.
(3) Includes 206,625 shares held by Mr. Short as co-trustee of the Company's
Retirement Plan, over which Mr. Short has sole voting power.
(4) The 71,500 shares beneficially owned by the executive officers of the
Company and held pursuant to the Company's Retirement Plan are included only
once in the total.
(5) Includes three executive officers who are not among the Named Executive
Officers.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than ten percent of a registered class of
the Company's equity securities (collectively, the "reporting persons") to file
reports of ownership and changes in ownership with the SEC and to furnish the
Company with copies of these reports. Based on the Company's review of the SEC
copies of these reports received by it, the Company believes that all filings
required to be made by the reporting persons for 1999 were made on a timely
basis, with the exception of three Form 4's required to be filed by Michael T.
Errecart, which were filed approximately 50 days late and one Form 4 required to
be filed by Frank J. Quirk, which was filed approximately eight days late.
-4-
<PAGE>
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table sets forth, for the Company's last three fiscal years, the
cash compensation paid by the Company, as well as certain other compensation
paid or accrued for those years, to the Company's Named Executive Officers.
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
-------------------------------------- -------------------------------------
Other Annual Restricted Shares Subject All Other
Name and Principal Salary Bonus Compensation Stock to Options Compensation
Position Year ($) ($) ($) Award(s) ($) (#) ($) (3)
- ---------------------- -------- -------- -------- ---------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael R. Cooper* 1999 34,615 0 98,958 (1) 0 0 11,561 (4)
Chairman and CEO 1998 410,000 250,000 0 0 0 85,594
1997 390,000 162,500 0 0 235,417 (2) 91,000
John F. Short 1999 347,692 140,000 0 0 0 53,283 (5)
Chairman, CEO, 1998 290,000 0 0 0 0 54,817
and President 1997 260,000 116,000 0 0 138,542 (2) 42,939
Gregory C. Ellis 1999 240,638 75,000 0 0 0 4,800 (4)
COO - Market 1998 216,600 0 0 0 0 2,400
Research 1997 190,962 100,000 0 0 60,000 2,250
Douglas L. Cox** 1999 200,000 0 0 0 0 2,656 (4)
Chief Financial 1998 31,397 0 0 0 60,000 2,400
Officer 1997 0 0 0 0 0 0
James T. Heisler 1999 179,500 12,000 0 0 0 4,800 (4)
Exec. Vice President 1998 167,000 20,000 0 0 5,000 1,257
1997 155,577 15,000 0 0 11,667 (2) 1,279
Jeffrey T. Resnick 1999 179,500 20,000 0 0 0 4,800 (4)
Exec. Vice President 1998 166,538 23,250 0 0 0 1,257
1997 155,000 10,000 0 0 10,000 (2) 2,296
</TABLE>
* Dr. Cooper resigned as Director, Chairman, and Chief Executive Officer of
the Company effective February 12, 1999. See "Transaction with
Management."
** Mr. Cox joined the Company as Chief Financial Officer in October 1998.
-5-
<PAGE>
(1) Consists of the difference between the prices paid by Dr. Cooper for the
exercise of his vested stock options to purchase 145,416 shares of the
Company's common stock and the fair market values at the dates of the
exercise.
(2) Includes options issued in 1993 and 1994 that were canceled and reissued in
December 1997. The reissued options retained all the original attributes
except for expiration dates which are six years from the date of grant for
options initially granted in 1993 and seven years for those options
originally granted in 1994. All reissued options have an exercise price
equal to or greater than the market value of the stock on the date of
grant. The number of reissued options for each named executive were: Dr.
Cooper - 145,416; Mr. Short - 78,542; Dr. Heisler - 8,167 and Mr. Resnick -
7,500.
(3) During 1995, the Company entered into certain agreements with trusts
established for the benefit of the children of Dr. Cooper and Mr. Short.
Under these agreements, the Company pays certain premiums on life insurance
policies on the officers, to which the trusts are the beneficiaries. The
Company is entitled to the repayment of the premiums paid on these
insurance policies upon maturity. The premiums paid on behalf of Dr.
Cooper and Mr. Short by the Company were $11,157 and $44,170 in 1999,
$74,940 and $48,104 in 1998, $77,202 and $37,143 in 1997, respectively.
(4) Consists of a Company match under the Company's Defined Contribution Plan
for each named executive.
(5) Consist of Company payments on behalf of the named executive of $4,313 to
cover the premiums payable on supplemental disability and life insurance
policies and a $4,800 Company match under the Company's Defined
Contribution Plan.
-6-
<PAGE>
Stock Option Grants During 1999
The following table contains information concerning the grant of stock
options to the Named Executive Officers. The Company does not have any plans
pursuant to which stock appreciation rights ("SARs") may be granted.
<TABLE>
<CAPTION>
Option Grants in 1999
---------------------
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Terms (1)
--------------------------------------- -----------------------------
% of
Total
Options
Granted
To Exercise or
Options Employees Base Price Expiration
Name Granted (#) 1999 ($/Sh)* Date 5% 10%
- ----------------------- ------------ ------------ ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Cooper** 0 0% 0 0 0 0
John F. Short 0 0% 0 0 0 0
Gregory C. Ellis 0 0% 0 0 0 0
Douglas L. Cox 0 0% 0 0 0 0
James T. Heisler 0 0% 0 0 0 0
Jeffrey T. Resnick 0 0% 0 0 0 0
</TABLE>
* All options have an exercise price equal to or greater than the market
price of the Common Stock on the date of grant.
** Dr. Cooper resigned as Director, Chairman and Chief Executive Officer of
the Company effective February 12, 1999. See "Transaction with Management".
(1) Illustrates value that might be realized upon exercise of options
immediately prior to the expiration of their term, assuming specified
compounded rates of appreciation on the Common Stock over the term of the
options. Assumed rates of appreciation are not necessarily indicative of
future stock performance.
Stock Option Exercises and Holdings During 1999
The following table sets forth information related to options exercised
during 1999 by the Named Executive Officers and the number and value of options
held at December 31, 1999, by such individuals. The Company does not have any
plan pursuant to which SARs may be granted.
-7-
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1999
and Option Values at December 31, 1999
--------------------------------------
Number of Value of
Shares Value Unexercised Options at Unexercised Options at
Acquired On Realized December 31, 1999 (#) December 31, 1999 ($)
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------- --------------- ----------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Cooper* 145,416 98,958 119,167 0 436,771 0
John F. Short 0 0 181,375 20,000 592,339 82,500
Gregory C. Ellis 0 0 60,000 20,000 226,667 82,083
Douglas L. Cox 0 0 20,000 40,000 88,750 177,500
Jeffrey J. Resnick 0 0 20,833 4,167 66,563 13,750
James T. Heisler 0 0 13,000 4,500 27,396 15,083
</TABLE>
* Dr. Cooper resigned as Director, Chairman, and Chief Executive Officer of
the Company effective February 12, 1999. See "Transaction with
Management."
Employment Agreements
Mr. Short has an employment agreement with the Company providing for an annual
salary of $350,000 subject to increase with respect to each fiscal year during
the term of the agreement, to be determined by the Compensation Committee of the
Board of Directors. In addition, Mr. Short is eligible to receive additional
incentive compensation as determined by the Compensation Committee of the Board
of Directors. The agreement provides that in the event Mr. Short's employment
is terminated by the Company without cause or Mr. Short terminates the
employment for cause (as defined therein), in addition to his compensation
through the date of such termination, he is to receive an immediate cash payment
equal to two times his annual base compensation, unless such termination occurs
within 24 months after a change in control (as defined therein), in which case
Mr. Short shall receive an immediate cash payment equal to two and one-half
times his annual base compensation.
Mr. Cox has an employment agreement with the Company providing for an annual
salary of $200,000 subject to increase with respect to each fiscal year during
the term of the agreement to be determined by the Compensation Committee of the
Board of the Directors. In addition, Mr. Cox is eligible to receive an
additional incentive compensation in accordance with short-term and/or long-term
incentive compensation programs established by the Company from time to time.
The agreement provides that in the event Mr. Cox's employment is terminated by
the Company without cause or Mr. Cox terminates his employment for cause (as
defined therein), he is to receive his current annual salary and, if permissible
under the terms of the applicable Company plans, medical and life insurance
benefits, until 11 months after the effective date of such termination.
-8-
<PAGE>
Effective February 12, 1999, Dr. Cooper resigned from his positions as
Director, Chairman, and Chief Executive Officer of the Company. See
"Transaction with Management." Prior to such time, Dr. Cooper had an employment
agreement with the Company providing for an annual salary of $390,000, subject
to increase with respect to each fiscal year during the term of the agreement,
to be determined by the Compensation Committee of the Board of Directors. Dr.
Cooper's annual salary at the time of his resignation was $410,000. In
addition, Dr. Cooper was eligible to receive additional incentive compensation
as determined by the Compensation Committee of the Board of Directors. The
agreement provides that in the event Dr. Cooper's employment was terminated by
the Company without cause or that Dr. Cooper terminated his employment for cause
(as defined therein), in addition to his compensation through the date of such
termination, Dr. Cooper would receive an immediate cash payment equal to five
times his annual base compensation.
Transaction with Management
On February 12, 1999, the Company reached an Agreement and General Release
(the "Agreement") with Dr. Cooper, pursuant to which Dr. Cooper resigned as
Director, Chairman, and Chief Executive Officer of the Company and agreed to a
buy-out by the Company of his employment contract. The Agreement provided,
among other things, that the Company make a lump sum cash payment of $1,800,000
to Dr. Cooper, and reimburse him, up to a maximum of $50,000, for his reasonable
costs and legal fees incurred in connection with negotiating and executing this
Agreement. In addition, certain exercisable stock options of Dr. Cooper,
allowing him to purchase a total of 145,416 shares of the Common Stock, were
amended to eliminate a 90-day post-termination provision and to provide for an
expiration date of December 31, 1999. These options were exercised prior to
their expiration. Dr. Cooper's remaining options to purchase 119,183 shares of
the Common Stock were also amended to provide for an expiration date of December
31, 2000. The original expiration dates of Dr. Cooper's stock options ranged
from January 3, 2002 to December 1, 2004.
-9-
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
Compensation Philosophy and Components
The Company's compensation philosophy is established by the Committee,
which consists of two independent directors.
The Committee believes that leadership and motivation of the Company's
executives are critical to establishing the Company's success both in the
marketplace and as an investment for our shareholders. The Committee will
ensure that the Company's executives are compensated in a manner that furthers
the Company's business strategies and aligns their interests with those of the
shareholders. To support this philosophy, the following principles provide a
framework for the compensation program:
o The Company will offer competitive total compensation that will attract
the best talent, motivate individuals to perform at their highest
levels, reward outstanding achievement, and retain those individuals
with the leadership abilities and skills necessary for building long-
term shareholder value.
o The Company will maintain a significant portion of executive total
compensation at risk, tied both to annual and long-term financial
performance and the creation of shareholder value.
o The Company will encourage executives to manage from the perspective of
owners with equity stakes in the Company.
The components of the Company's executive compensation program include a
balanced mix of the following:
Base compensation: this is established for each executive position based on
job responsibilities, level of experience, individual contribution to the
business, as well as analyses of competitive industry practice.
Incentive compensation: this is established based on the factors listed
above under base compensation, the completion of specific objectives, plus
specific quantitative performance factors including, revenues and earnings
growth, operating income as a percentage of revenues, and revenues and earnings
relative to budgeted levels.
Stock options: the Company uses stock options as a long-term, non-cash
incentive to align the long-term interests of executive officers and
shareholders of the Company. Stock options are awarded at the current market
price of the Common Stock on the date of grant and currently, grants would vest
over three years and have a life of seven years. Award sizes are based both
upon individual performance, level of responsibility and potential to make
significant contributions to the Company. Recent grants to executive officers
have been conditioned in part on personal purchases of stock by the executives,
thus further aligning their interests with those of our shareholders. No
-10-
<PAGE>
options were granted to executive officers in 1999.
Benefits: It is the Company's intent to be competitive with, but not to
exceed, the practices of other professional service firms regarding health,
retirement and other benefit programs.
Compensation of the Chief Executive Officer in 1999
Mr. Short's employment agreement provides for a base compensation of
$350,000 in 1999 and an incentive compensation opportunity of $200,000, of which
$140,000, or 70%, was paid.
The Committee's criteria for determining Mr. Short's compensation are
driven by the competitive marketplace, the performance of Mr. Short and the
Company and a desire to increase the relative proportion of variable,
performance based, compensation to total compensation.
The Committee has reviewed the compensation of other chief executive
officers within the marketing services industry, and considered the
effectiveness of Mr. Short in shaping the strategy, culture, discipline, and
focus of the management team, his anticipation of market trends and adjustment
of the Company's plans and investments, consistent with the maximization of
long-term shareholder value.
Highlights of performance in 1999 include the successful acquisition of
Macro International Inc., the growth in Company revenues by 62% to $118.6
million, the growth of earnings measures by similar percentages to new records
and the increase in share price of 64%.
Qualifying Executive Compensation for Deductibility under the Internal Revenue
Code
Beginning in 1994, section 162(m) of the U.S. Internal Revenue Code of 1986
limits deductibility of compensation in excess of $1 million paid to the
Company's chief executive officer and to each of the other four highest-paid
executive officers unless this compensation qualifies as "performance-based."
The Committee intends to take such actions as are appropriate to qualify
compensation paid to executives for deductibility under the Code. Further, base
salary and bonus levels are expected to remain well below the limitation in the
foreseeable future.
Compensation Committee:
Stephen A. Greyser, D.B.A.
Derek B. Smith, Ph.D.
-11-
<PAGE>
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process on
behalf of the board of directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as to
the quality, not just the acceptability, of the Company's accounting principles
and such other matters as are required to be discussed with the Committee under
generally accepted auditing standards. In addition, the Committee has discussed
with the independent auditors the auditors' independence from management and the
Company, including the matters in the written disclosures required by the
Independence Standards Report.
The Committee discussed with the Company's independent auditors the overall
scope and plans for their audit. The Committee meets with the independent
auditors, with and without management present, to discuss the results of their
examinations, their evaluations of the Company's internal controls, and the
overall quality of the Company's financial reporting. The Committee held four
meetings during 1999.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 1999 for filing with the Securities and Exchange
Commission. The Committee and the Board have also recommended, subject to
shareholder approval, the selection of the Company's independent auditors.
Audit Committee:
Lenard B. Tessler
Stephen A Greyser, D.B.A.
-12-
<PAGE>
AUDIT COMMITTEE CHARTER
Organization
This charter governs the operations of the Audit Committee. The Committee
shall review and reassess the charter at least annually and obtain the approval
of the board of directors. The Committee shall be appointed by the board of
directors and shall, not later than June 2001, consist of three directors, each
of whom are independent of management and the Company. Members of the Committee
shall be considered independent if they have no relationship that may interfere
with the exercise of their independence from management and the Company. All
Committee members shall be financially literate and at least one member shall
have accounting or related financial management expertise.
Statement of Policy
The Audit Committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of the
Company's financial statements, and the legal compliance and ethics programs as
established by management and the board. In so doing, it is the responsibility
of the Committee to maintain free and open communication between the Committee,
independent auditors and management of the Company. In discharging its
oversight role, the Committee is empowered to investigate any matter brought to
its attention with full access to all books, records, facilities, and personnel
of the Company and the power to retain outside counsel, or other experts for
this purpose.
Responsibilities and Processes
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board and report the
results of their activities to the Board. Management is responsible for
preparing the Company's financial statements, and the independent auditors are
responsible for auditing those financial statements. The Committee in carrying
out its responsibilities believes its policies and procedures should remain
flexible, in order to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.
The following shall be the principal recurring processes of the Audit
Committee in carrying out its oversight responsibilities. The processes are set
forth as a guide with the understanding that the Committee may supplement them
as appropriate.
o The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Audit Committee, as representatives of
the Company's shareholders. The Committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The Committee shall discuss with the auditors
their independence from management and the Company and the
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<PAGE>
matters included in the written disclosures required by the Independence
Standards Board. Annually, the Committee shall review and recommend to
the Board the selection of the Company's independent auditors, subject
to shareholders' approval.
o The Committee shall discuss with the independent auditors the overall
scope and plans for their audit. Also, the Committee shall discuss with
management and the independent auditors the adequacy and effectiveness
of the accounting and financial controls, including the Company's system
to monitor and manage business risk, and legal and ethical compliance
programs. Further, the Committee shall meet separately with the
independent auditors, with and without management present, to discuss
the results of their examinations.
o The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent auditors
under generally accepted auditing standards. The chair of the Committee
may represent the entire Committee for the purposes of this review.
The Committee shall review with management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form 10-K
including their judgment about the quality, not just acceptability, of
accounting principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements. Also, the Committee
shall discuss the results of the annual audit and any other matters required to
be communicated to the Committee by the independent auditors under generally
accepted auditing standards.
-14-
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative total
stockholder return on the Common Stock during the period commencing December 31,
1994 and ending December 31, 1999, with (a) the cumulative total return of the
Nasdaq Stock Market, (b) Total Return Index Values for American Stock Exchange
U.S. only stocks, (c) a Peer Group of companies engaged in the market research
industry consisting of: Gartner Group, Inc., Information Resources, Inc.,
M/A/R/C, Inc., Market Facts, Inc., NFO Worldwide, Inc., and Opinion Research
Corporation, and (d) S&P SmallCap 600 Index. In 1999, the Company's Common
Stock began trading on the American Stock Exchange as opposed to the Nasdaq
Stock Market. Therefore, the Company is now tracking the performance of the
Common Stock against the Total Return Index Values for American Stock Exchange
U.S. only stocks as opposed to the total return of the Nasdaq stock market. The
comparison assumes $100 was invested on December 31, 1994, in the Company's
Common Stock and in each of the foregoing indices and assumes the reinvestment
of dividends. The returns of each company in the Peer Group have been weighted
according to their market capitalization at the beginning of the period
indicated.
The Peer Group was developed by the Company's management based on its
knowledge of the market and competing companies and an analysis of the
relatively small group of market research companies whose stock is publicly
traded. As the majority of the Peer Group is no longer publicly traded, the
Company has begun tracking its performance against the S&P SmallCap 600 Index
and will continue to do so in future years.
[LINE GRAPH]
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Opinion Research Corporation 100.0 124.2 67.1 114.3 109.3 178.9
- --------------------------------------------------------------------------------------------------------------
Nasdaq Stock Market Total
Return Index 100.0 141.3 173.9 213.1 300.2 542.4
- --------------------------------------------------------------------------------------------------------------
Amex Stock Market Total
Return Index - U.S. stocks 100.0 128.7 130.1 163.5 175.5 224.2
- --------------------------------------------------------------------------------------------------------------
Peer Group 100.0 216.9 359.9 363.5 214.3 348.5
- --------------------------------------------------------------------------------------------------------------
S&P SmallCap 600 Index 100.0 130.0 157.7 198.0 195.4 219.7
- --------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
BOARD OF DIRECTORS
Compensation of Directors
For 1999, each director who was not an employee of the Company (an "outside
director"), was entitled to receive $15,000 per annum. In addition, each
outside director was paid $5,000 for chairing a Committee, $1,500 for each Board
meeting attended, and $1,250 for each Committee meeting attended. All directors
were also entitled to be reimbursed for incidental travel expenses incurred in
attending Board and Committee meetings.
Pursuant to the 1997 Stock Incentive Plan, each outside director is
automatically granted options to acquire the "formula number" of shares of
Common Stock. The exercise price for these options is equal to the fair market
value of the underlying shares on the date of grant. The options are non-
qualified stock options. The outside directors' options become exercisable on
the first anniversary of the date of grant provided the outside director is a
member of the Board of Directors on that date. The "formula number" of the stock
option grants for 1999 was 5,000 for each director. In addition, each director
will be granted options to purchase an additional 5,000 shares of Common Stock
for chairing a Committee.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee or the Stock Option
Committee (Principal Officers) are executive officers of the Company.
None of the executive officers of the Company serve on the Board of
Directors of another entity.
Over several years, the Company made loans to each of the named executives
bearing an interest rate of 9.5%. Including accrued interest, the aggregate
amount of indebtedness outstanding for each of the named executives at December
31, 1999 was: Mr. Short - $149,918; and Dr. Heisler - $80,806.
The Faculty Group, Inc., of which Professor Greyser is a principal,
received $50,000 in consulting fees and $1,649 in expense reimbursements during
1999.
Committees and Meetings of the Board of Directors
The business of the Company is managed under the direction of its Board of
Directors. The Board of Directors met twelve times during the fiscal year ended
December 31, 1999 and took certain other actions by unanimous consent. The
Board meets regularly during the fiscal year to review significant developments
affecting the Company and act on matters requiring Board approval. Every
director attended all of the meetings of the Board of Directors and Committees
of the Board on which the director served that were held during the period the
person was a director.
The Board of Directors has established six standing committees: an
Executive Committee, an Audit Committee, a Compensation Committee, a Stock
Option Committee (Executive Officers), a Stock Option Committee (Non-Executive
Officers), and a Nominations Committee.
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<PAGE>
The Executive Committee
The Executive Committee was established to perform such duties as the Board
of Directors from time to time may direct and, with certain limitations, will
exercise the authority of the full Board between meetings of the full Board. In
1999, Mr. Short (Chairman) and Professor Greyser served as members of the
Executive Committee. The Executive Committee met twice during 1999.
The Audit Committee
The Audit Committee is charged with reviewing the audited financial
statements of the Company and making recommendations to the full Board on
matters concerning the Company's audits and the selection of independent
auditors. Mr. Tessler (Chairman) and Professor Greyser serve as members of the
Audit Committee. The Audit Committee met four times during 1999.
The Compensation Committee
The Compensation Committee is responsible for establishing salaries,
bonuses and other compensation for the Company's executive officers. Professor
Greyser (Chairman) and Dr. Smith serve as members of the Compensation Committee.
The Compensation Committee met four times during 1999.
The Stock Option Committees
The Stock Option Committee (Executive Officers) and the Stock Option
Committee (Non-Executive Officers) together serve as the Committee described in
the 1997 Stock Incentive Plan (the "Plan"). The Stock Option Committee
(Executive Officers) administers the Plan solely with respect to persons who are
directors or principal officers as defined in the Plan, and the Stock Option
Committee (Non-Executive Officers) administers the Plan solely with respect to
other persons. Professor Greyser (Chairman) and Dr. Smith serve as members of
the Stock Option Committee (Executive Officers). Mr. Short served as the Stock
Option Committee (Non-Executive Officers) in 1999. Neither Stock Option
Committee met during 1999.
The Nominations Committee
The Nominations Committee was established to consider and make
recommendations to the Board regarding Board qualifications, structure and
membership. Professor Greyser (Chairman) and Mr. Short serve as members of the
Nominations Committee. The Nominations Committee met once during 1999.
-17-
<PAGE>
ELECTION OF DIRECTORS
At the Meeting, the stockholders will elect one director to hold office
until the Annual Meeting of Stockholders to be held in 2003 and until his
respective successor has been duly elected and qualified. Proxies executed on
the enclosed form will be voted, in the absence of other instructions, "FOR" the
election of the person named below. Should the nominee become unavailable to
accept nomination or election as a director, the persons named in the enclosed
proxy will vote the shares which they represent for the election of such other
person as the Board of Directors may recommend, unless the Board of Directors
reduces the number of directors. The nominee is not currently serving as a
director of the Company.
The following sets forth certain information about the nominee:
Mr. Frank J. Quirk, 59, joined the company in 1999 with the acquisition of
Macro International ("Macro"), where he served, and continues to serve, as the
Chief Executive Officer since 1980. Under his direction Macro has grown from $3
million in annual revenues to over $65 million today. Mr. Quirk received his
A.B. and M.B.A. from Cornell University.
Directors whose present terms continue until 2001:
Mr. Tessler, 47, joined the Board of Directors in July 1997. Mr. Tessler
is a founding partner of TGV Partners, a private investment partnership which
was formed in April 1990. Mr. Tessler served as Chairman of the Board of Empire
Kosher Poultry from 1994 to 1997, after serving as its President and Chief
Executive Officer from 1992 to 1994. Before founding TGV Partners, Mr. Tessler
was a founding partner of Levine, Tessler, Leichtman & Co., a leveraged buyout
firm formed in 1987. From 1982 to 1987, Mr. Tessler was a founder, director and
executive vice president of Walker Energy Partners, a publicly traded master
limited partnership in the oil and gas industry, and subsequently he served as
an independent financial consultant to financially troubled companies in that
industry. Prior thereto, Mr. Tessler practiced accounting in New York
specializing in tax. Mr. Tessler received a M.B.A. from Fairleigh Dickinson
University. Mr. Tessler currently serves as a member of the board of directors
of G&G Retail holdings, Inc., Primary Network Holdings, Inc., and Garfield &
Marks Designs, Ltd., Inc.
Dr. Heisler, 54, joined the Company in 1982 and was appointed to the Board
in 1991. Since joining the Company, Dr. Heisler has held various managerial
positions. After managing the Company's Washington D.C. based government
practice, he developed the Company's Telecommunications and Market Assessment
practices. He is currently involved in corporate-wide business development and
key client relationships. Dr. Heisler received a Ph.D. in Social Psychology
from the Illinois Institute of Technology.
Mr. Dale J. Florio, 45, was appointed to the Board in July 1999 to complete
the term of Dr. James C. Fink, who resigned effective June 30, 1999. Mr. Florio
is an attorney and co-founder of the Princeton Public Affairs Group, a firm
specialized in public relations, public affairs, and government relations.
Immediately prior to co-founding the Princeton Public Affairs Group in 1987, Mr.
Florio was responsible for managing Philip Morris' state and local government
affairs program throughout all 50 states. Before joining Philip Morris, Mr.
Florio served as federal public affairs representative with the National
Association of Manufacturers and as an administrative
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<PAGE>
assistant to a member of the New Jersey General Assembly. Mr. Florio received a
law degree from Seton Hall Law School.
Directors whose present terms continue until 2002:
Mr. Short, 55, was appointed Chief Executive Officer and Chairman of the
Board of Directors in 1999. Mr. Short joined the Company and was appointed as
its Chief Financial Officer in 1989. He joined the Board of Directors in 1991.
Mr. Short was later appointed Vice Chairman in 1992 and President in 1998.
Prior to joining the Company, Mr. Short served as the Chief Financial Officer of
Hay Systems, Inc., a wholly owned subsidiary of the Hay Group.
Professor Greyser, 65, has been a director of the Company since 1993.
Professor Greyser is Richard P. Chapman Professor (Marketing Communications) at
Harvard Business School, where he has been on the faculty for over 30 years.
Professor Greyser was associated with the Harvard Business Review for 35 years
as an editor, research director, and Editorial Board Secretary and Chairman.
Since 1972, Professor Greyser has been a Trustee of the Marketing Science
Institute, a non-profit business-supported research center in marketing, and
from 1972 through 1980 he served as its Executive Director. From 1985 through
1993, Professor Greyser served on the Board of Directors of the Public
Broadcasting Service, where he was Vice Chairman from 1991 through 1993.
Professor Greyser serves on the Board of Directors of the investment services
firm Gruntal & Co. Professor Greyser received an A.B., M.B.A., and D.B.A.
degrees from Harvard University.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" APPROVAL OF THE ABOVE PROPOSAL
-19-
<PAGE>
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval by the stockholders, the Board of Directors has
appointed the firm of Ernst & Young LLP, which served as the Company's
independent auditors for the last fiscal year, to serve as the Company'
independent auditors with respect to the consolidated financial statements of
the Company and its subsidiaries for the current fiscal year.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will have the opportunity to make a statement if he or she
desires to do so. The representative is also expected to be available to
respond to appropriate questions of stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS
-20-
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders in 2001 must be received by December 30, 2000 in order to be
considered for inclusion in the Company's Proxy Statement and form of proxy
relating to that Meeting. Stockholder proposals should be directed to Douglas
L. Cox, Secretary, at the address of the Company set forth on the first page of
this Proxy Statement.
A stockholder of the Company may wish to have a proposal presented at the
Annual Meeting of Stockholders in 2001, but not to have such proposal included
in the Company's Proxy Statement and Form of Proxy relating to that meeting. If
notice of any such proposal is not received by the Company at the address set
forth on the first page of this Proxy Statement by March 14, 2001 then such
proposal shall be deemed "untimely" for purposes of Rule 14a-4(c) promulgated
under the Exchange Act and, therefore, the Company will have the right to
exercise discretionary voting authority with respect to such proposal.
SOLICITATION OF PROXIES
The accompanying form of proxy is being solicited on behalf of the Board of
Directors of the Company. The expenses of solicitation of proxies for the
meeting will be paid by the Company. In addition to the mailing of the proxy
material, such solicitation may be made in person or by telephone or telegraph
by directors, officers or regular employees of the Company or its subsidiaries.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge to each person solicited by this
Proxy Statement, on the written request of such person, a copy of the Company's
Annual Report on Form 10-K, including the financial statements and schedules
thereto, as filed with the Securities and Exchange Commission for its most
recent fiscal year. Such written requests should be directed to Douglas L. Cox,
Secretary, at the address of the Company set forth on the first page of this
Proxy Statement.
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
OPINION RESEARCH CORPORATION
The undersigned, a holder of Common Stock of OPINION RESEARCH
CORPORATION (the "Company"), hereby constitutes and appoints JOHN F.
SHORT and DOUGLAS L. COX, and each of them acting individually, as the
attorney and proxy of the undersigned, with full power of substitution,
for and in the name and stead of the undersigned, to attend the Annual
Meeting of Stockholders of the Company to be held on Tuesday, June 13,
2000 at 10:00 a.m., at 23 Orchard Road, Skillman, New Jersey, and any
adjournment or postponement thereof, and thereat to vote all shares of
Common Stock which the undersigned would be entitled to vote if
personally present, as follows:
1. [_] FOR the nominee for director.
[_] WITHHOLD AUTHORITY.
Nominee: Frank J. Quirk
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 2000.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To vote on such other business as may properly come before the meeting.
[_] FOR [_] AGAINST [_] ABSTAIN
Unless otherwise specified, the shares will be voted "FOR" the
election of all nominees for director and "FOR" the other proposals as
previously set forth. This Proxy also delegates discretionary authority
to vote with respect to any other business which may properly come
before the meeting and any adjournment or postponement thereof.
------------------------------------------------------
(Please date and sign on reverse side)
<PAGE>
(Continued from other side)
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING, PROXY STATEMENT AND ANNUAL REPORT OF OPINION RESEARCH
CORPORATION.
[_] I plan to attend the Annual Meeting
Date: ________________, 2000
----------------------------
Signature of Stockholder
----------------------------
Signature of Stockholder
NOTE: Please sign this
proxy exactly as name(s)
appear(s) in address. When
signing as attorney-in-
fact, executor,
administrator, trustee or
guardian, please add your
title as such, and if
signer is a corporation,
please sign with full
corporate name by duly
authorized officer or
officers and affix the
corporate seal. When stock
is issued in the name of
two or more persons, all
such persons should sign.
Please sign, date and return in the enclosed postage-prepaid envelope.
