SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
INTERNATIONAL POST LIMITED
--------------------------
(Name of Registrant as Specified In Its Charter)
INTERNATIONAL POST LIMITED
--------------------------
(Name of Person(s) Filing Proxy Statement)
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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No:
3) Filing Party:
4) Date Filed:
<PAGE>
INTERNATIONAL POST LIMITED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of International Post Limited (the
"Company"), a Delaware corporation, will be held on January 8, 1997 at 10 a.m.
at The Sky Club, 200 Park Avenue, 56th Floor, New York, New York 10166 for the
following purposes:
1. To elect seven directors of the Company to serve until the next
Annual Meeting of Stockholders and until their respective successors have been
elected and qualified; and
2. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Stockholders of record at the close of business on November 15, 1996
are entitled to notice of and to vote at the meeting.
YOU ARE REQUESTED TO FILL IN, DATE AND SIGN THE ENCLOSED PROXY, WHICH
IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND TO MAIL IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
/s/ GARY R. STRACK
------------------
Gary R. Strack
Secretary
New York, New York
November 26, 1996
IMPORTANT: Please sign, date and return your proxy card in the self-addressed,
stamped envelope enclosed for your convenience. No postage is required if mailed
within the United States.
<PAGE>
INTERNATIONAL POST LIMITED
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
January 8, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of International Post Limited (the
"Company"), a Delaware corporation, to be used at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") which will be held at 10
a.m., local time, on January 8, 1997 at The Sky Club, 200 Park Avenue, 56th
Floor, New York, New York 10166 and at any adjournments or postponements
thereof.
If proxy cards in the accompanying form are properly executed and
returned, the shares of common stock of the Company (the "Common Stock")
represented thereby will be voted as instructed on the proxy. Stockholders who
execute proxies retain the right to revoke them at any time by notice in writing
to the Secretary of the Company or by revocation in person at the meeting;
unless so revoked, the shares represented by proxies will be voted at the
meeting in accordance with the directions given therein. If no directions are
given, proxies will be voted FOR the election of the nominees named below under
the caption "Election of Directors-Nominees for Election" and in the discretion
of the proxies named on the proxy card with respect to such other business as
may properly come before the meeting and any adjournments or postponements
thereof.
Holders of record of the Common Stock on November 15, 1996 will be
entitled to notice of and vote at the Annual Meeting or at any adjournment or
postponement thereof. As of that date, there were 6,226,958 shares of Common
Stock outstanding and entitled to vote, and a majority, or 3,113,480 of these
shares, will constitute a quorum for the transaction of business. Abstentions
and broker non-votes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions and broker
non-votes are not considered votes cast and will have no effect on the outcome
of the votes for the proposal set forth above. Each share of Common Stock
entitles the holder thereof to one vote on all matters to come before the
meeting, including the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES NAMED HEREIN.
The principal executive offices of the Company are located at 545 Fifth
Avenue, New York, New York 10017. The approximate date on which this Proxy
Statement and the enclosed form of proxy were first sent or given to
stockholders was November 26, 1996.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of September 30, 1996
(unless otherwise indicated), by (a) the persons who are known to the Company to
be the beneficial owners of more than five percent of the Common Stock, (b) each
director and Named Executive Officer (as hereinafter defined) of the Company,
and (c) all officers and directors of the Company as a group. Unless otherwise
indicated, each of the persons or entities listed below exercises sole voting
and investment power over the shares that each of them beneficially owns.
<TABLE>
<CAPTION>
Amount
Beneficially Percent
NAME Owned of Class
- - - - - - - ---- ------------ ---------
Beneficial Owners:
<S> <C> <C>
MTE Holdings, Inc. (1)................................ 2,562,105 41.15%
Goldman, Sachs & Co. (2).............................. 507,800(3) 8.15%
Sandler Capital Management,
Sandler Associates and J.K. Media (4)................. 1,096,000 17.60%
Directors and Named Executive Officers:
Robert H. Alter....................................... 2,000 *
Julius Barnathan...................................... 7,000 *
Terrence A. Elkes (5)(6)(7)........................... 516,012(8) 8.25%
Kenneth F. Gorman (5)(6)(7)........................... 291,012(9) 4.65%
Martin Irwin (10)..................................... 69,417 1.11%
Jeffrey J. Kaplan (11)................................ 181,818 2.84%
Kenneth D. Lorber (12)................................ 0 *
Adrien Macaluso (13).................................. 0 *
Dominic Pandolfino.................................... 0 *
Daniel Rosen (14)..................................... 11,250 *
Louis H. Siracusano (15).............................. 3,500 *
Sylvester Timpanaro .................................. 0 *
All Directors and Executive Officers as a group,
consisting of 12 persons (16)......................... 1,082,009 16.73%
- - - - - - - -----------------------
* Less than 1%.
</TABLE>
- 3 -
<PAGE>
(1) The business address of MTE Holdings, Inc. ("Holdings") is c/o Goldstein
Golub Kessler & Co. PC, 1185 Avenue of the Americas, New York, New York
10036-2602, Attention: Jeffrey Grossman. Holdings' share ownership includes
an aggregate of 299,024 shares with respect to which Terrence A. Elkes and
Kenneth F. Gorman have options to purchase from Holdings. Apollo Partners,
Ltd. ("Apollo"), a private investment firm in which Terrence A. Elkes and
Kenneth F. Gorman are Managing Directors and co-owners, is the record owner
and has voting control over 100% of the voting stock of Holdings pursuant
to a voting trust agreement under which it serves as trustee for the
beneficiaries, The Equitable Life Assurance Society of the United States
and the Equitable Deal Flow Fund, L.P. (collectively, the "Equitable
Entities"). Shares owned by Holdings are pledged to the Equitable Entities
by Holdings as collateral security for certain loans to Holdings. Such
loans are in default, and the Equitable Entities are in the process of
foreclosing on such shares.
(2) The shares are held by Goldman, Sachs & Co. in its capacity as the
investment adviser to numerous entities. Goldman, Sachs & Co. and its
affiliates disclaim beneficial ownership of these shares. The address of
Goldman, Sachs & Co. is 85 Broad Street, New York, NY 10004.
(3) Includes 477,100 shares beneficially owned by Goldman Sachs Small Cap
Equity Fund (the "Fund") for which Goldman, Sachs & Co. acts as investment
adviser. The Fund is a separate portfolio of Goldman Sachs Equity
Portfolios, Inc., an open-end management investment company. The address of
the Fund is One New York Plaza, New York, NY 10004.
(4) Based on Amendment No. 3 dated February 1, 1996 to a Schedule 13D by
Sandler Capital Management, Sandler Associates and J.K. Media. Of such
shares, 921,000 are held by Sandler Capital Management, 155,000 are held by
Sandler Associates and 20,000 are held by J.K. Media.
(5) Includes five-year, non-qualified options to purchase 30,000 shares of
Common Stock at an exercise price equal to the initial public offering
price of $11.00 per share granted as of February 15, 1994 to each of Mr.
Elkes and Mr. Gorman in connection with the Company's initial public
offering in February 1994 (the "Offering") and the Company's purchase from
Video Services Corporation ("VSC") of all of the outstanding capital stock
of Audio plus Video International, Inc. ("Audio Plus Video") simultaneously
with the closing of the Offering (the "Acquisition"). Such options vested
three months after the consummation of the Offering and are
non-transferable.
(6) Includes five-year options to purchase 30,000 shares of Common Stock at an
exercise price equal to the initial public offering price of $11.00 per
share granted by VSC, as of the date of the consummation of the Offering,
to each of Mr. Elkes and Mr. Gorman in connection with the Offering and the
Acquisition. Such options vested three months after the consummation of the
Offering and are non-transferable.
(7) Includes six-year, non-qualified options to purchase 149,512 shares of
Common Stock at an exercise price of 18.75% of the initial public offering
price ($2.06 per share) granted by Holdings, as of the date of the
consummation of the Offering, to each of Mr. Elkes and Mr. Gorman in
connection with the Offering and the Acquisition, and in settlement of
Apollo's rights under a certain contract with Holdings. Such options are
non-transferable and vested after January 1, 1995.
(8) Includes 10,000 shares owned by Mr. Elkes' children. Mr. Elkes disclaims
beneficial ownership of all such shares.
(9) Includes 2,000 shares owned by Mr. Gorman's children and 3,000 shares owned
by Mr. Gorman's grandchildren. Mr. Gorman disclaims beneficial ownership of
all such shares.
(10) Mr. Irwin's share ownership excludes options to purchase 120,000 shares of
Common Stock under the Company's long-term incentive plan, exercisable at
prices ranging from $4.00 to $6.00 per share, which become exercisable more
than 60 days after the date of this Proxy Statement.
(11) Mr. Kaplan's share ownership represents options to purchase 181,818 shares
of Common Stock granted to Mr. Kaplan by the Company, which are immediately
exercisable at $9.35 per share. Mr. Kaplan's share ownership
- 4 -
<PAGE>
excludes options to purchase 90,000 shares of Common Stock under the
Company's long-term incentive plan, exercisable at prices ranging from
$4.00 to $6.00 per share, which become exercisable or vest more than
60 days after the date of this Proxy Statement.
(12) Mr. Lorber's share ownership excludes options to purchase 25,000 shares of
Common Stock under the Company's long-term incentive plan, exercisable at
prices ranging from $4.00 to $6.00 per share, which become exercisable or
vest more than 60 days after the date of this Proxy Statement.
(13) Mr. Macaluso's share ownership excludes options to purchase 60,000 shares
of Common Stock under the Company's long-term incentive plan, exercisable
at prices ranging from $4.00 to $6.00 per share, which become exercisable
or vest more than 60 days after the date of this Proxy Statement.
(14) Mr. Rosen's share ownership (i) excludes options to purchase 75,000 shares
of Common Stock under the Company's long-term incentive plan, exercisable
at prices ranging from $4.00 to $6.00 per share, which become exercisable
or vest more than 60 days after the date of this Proxy Statement, and (ii)
includes shares of Common Stock owned by Mr. Rosen's son and the Ned Rosen
Trust, of which Mr. Rosen is the trustee, in the amounts of 1,250 and
5,000, respectively. Mr. Rosen disclaims beneficial ownership of all shares
of Common Stock owned by his son and the Ned Rosen Trust.
(15) Mr. Siracusano is a director and the chief executive officer of VSC. VSC
currently owns 212,094 shares of Common Stock. VSC has granted options to
Messrs. Elkes and Gorman, each to purchase 30,000 of such shares.
(16) Share ownership for all officers and directors as a group does not include
options to purchase an aggregate of 382,500 shares of Common Stock granted
to all officers and directors as a group under the Company's long-term
incentive plan, which become exercisable or vest more than 60 days after
the date of this Proxy Statement.
- 5 -
<PAGE>
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
Seven directors will be elected at the Annual Meeting to serve until
the next Annual Meeting of Stockholders and until their respective successors
have been elected and qualified. Directors are elected by an affirmative vote of
a majority of the votes cast.
EACH PROXY RECEIVED WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
NAMED BELOW UNLESS OTHERWISE SPECIFIED IN THE PROXY. At this time, the Board of
Directors of the Company knows of no reason why any nominee might be unable to
serve. Except as indicated below, there are no arrangements or understandings
between any director and any other person pursuant to which such person was
selected as a director or nominee.
DIRECTOR
SINCE
--------
Robert H. Alter, 67................................................... 1993
Robert H. Alter was elected a director of the Company in October
1993. Mr. Alter is the Vice Chairman and a director of the
Cabletelevision Advertising Bureau ("CAB"), the national trade
association of the cable television industry devoted to marketing
and advertising, a position he has held since October 1991. Prior
to October 1991, Mr. Alter, who founded the CAB, also served as its
President and Chief Executive Officer for ten years. In November
1992, Mr. Alter was elected President of Alter Associates, Inc.
From October 1991 to November 1992, Mr. Alter served as the senior
advisor to the Board of Directors of Star TV/Hong Kong.
Julius Barnathan, 69.................................................. 1993
Julius Barnathan was elected a director of the Company in October
1993 and during fiscal 1994, 1995 and 1996 served as a director of
VSC. Mr. Barnathan is currently a consultant and has been employed
as such by Quantel Ltd. since February 1992, by Faroudja
Laboratories Inc. since July 1994, by Statistical Research Inc.
since March 1995 and by Warner Bros. since March 1996. Mr.
Barnathan was employed by Capital Cities/ABC, Inc. for 39 years. He
served as Senior Vice President of Capital Cities/ABC, Inc. in
charge of Technology and Strategic Planning and President of ABC
Broadcast Operations and Engineering. Mr. Barnathan is Chairman of
the National Captioning Institute.
Terrence A. Elkes, 62................................................. 1993
Terrence A. Elkes was elected Chairman of the Board of Directors of
the Company in October 1993 and had served on the partnership
committee of Manhattan Transfer/Edit Company ("MTE Co."), from July
1992 to February 1994, when it dissolved upon consummation of the
Offering. Mr. Elkes is a Managing Director of Apollo, a private
investment firm involved in the acquisition of companies in the
media, communications, entertainment and broadcasting fields, which
he co-founded in 1987. Prior to forming Apollo, Mr. Elkes was
employed by Viacom International, Inc. where he served as President
and Chief Executive Officer.
- 6 -
<PAGE>
DIRECTOR
SINCE
--------
Kenneth F. Gorman, 57................................................. 1993
Kenneth F. Gorman was elected a director of the Company in October
1993 and had served on the partnership committee of MTE Co. from
July 1992 to February 1994, when it dissolved upon consummation of
the Offering. Mr. Gorman is currently a Managing Director of
Apollo, which he co-founded in 1987. Prior to forming Apollo, Mr.
Gorman served as the Executive Vice President and a director of
Viacom International, Inc. and Chairman of the Viacom Networks
Group. Mr. Gorman has served since 1990 as a member of, and
chairman of the audit committee of, the board of directors of The
Musicland Group, Inc.
Martin Irwin, 60...................................................... 1993
Martin Irwin was elected President, Chief Executive Officer and a
director of the Company in October 1993 and had served as
President, Chief Executive Officer and a member of the partnership
committee of MTE Co. from July 1992 to February 1994, when it
dissolved upon consummation of the Offering. From September 1991
through June 1992, Mr. Irwin ran the post-production operations of
VSC, which he co-founded in 1979. Mr. Irwin served as President,
Chief Operating Officer and a director of VSC from 1979 to 1989 and
then served as a director of and Senior Consultant to VSC from July
1989 until July 1992. Prior to co-founding VSC, Mr. Irwin was
employed by EUE/Screen Gems, a division of Columbia Pictures
Industries, Inc., where he last served as Senior Vice President and
General Manager.
Jeffrey J. Kaplan, 48................................................. 1993
Jeffrey J. Kaplan was elected Executive Vice President, Chief
Financial Officer and a director of the Company in October 1993 and
had been a member of the partnership committee of MTE Co. from July
1992 to February 1994, when it dissolved upon consummation of the
Offering. Mr. Kaplan has been Senior Vice President and Chief
Financial Officer of both VSC and Audio Plus Video, a subsidiary of
the Company, since September 1987 and a director since March 1992.
Mr. Kaplan was a financial advisor to various public and private
companies from September 1985 to September 1987. From November 1978
until August 1985, Mr. Kaplan was employed by Clabir Corporation, a
New York Stock Exchange listed company, where he last served as
Executive Vice President and Chief Financial Officer.
Louis H. Siracusano, 54............................................... 1993
Louis H. Siracusano was elected a director of the Company in
October 1993 and had been a member of the partnership committee of
MTE Co. from July 1992 to February 1994, when it dissolved upon
consummation of the Offering. He has served as Chairman, Chief
Executive Officer and a director of VSC since 1986 and President
since 1989. Mr. Siracusano also served as President of Audio Plus
Video from July 1989 to February 1994. Mr. Siracusano was a founder
of VSC and has served in various capacities with VSC since its
formation. Mr. Siracusano was with Ampex Corporation and the
American Broadcasting Company in various sales and engineering
management positions prior to VSC's formation in 1979.
- 7 -
<PAGE>
The Board of Directors of the Company has standing Compensation and
Audit Committees. Messrs. Gorman (Chairman), Alter and Barnathan are members of
the Audit Committee. Messrs. Siracusano (Chairman), Alter and Barnathan are
members of the Compensation Committee. None of Messrs. Alter, Barnathan, Gorman
or Siracusano is an employee of the Company. The Company does not have a
standing Nominating Committee.
The Compensation Committee is charged by the Board of Directors with
administering, reviewing and recommending changes in the Company's long-term
incentive plan. The Compensation Committee may determine the employees entitled
to grants, the option prices, which may not be less than fair market value on
the date of grant, and the other terms of options or grants. The Compensation
Committee met or acted by written consent on three occasions during the 1996
fiscal year.
The Audit Committee has such powers as may be assigned to it by the
Board of Directors from time to time and is charged with selecting the
independent accountants to be retained by the Company, reviewing the scope and
nature of the Company's internal auditing system and the objectivity of the
Company's financial reporting. In addition, the Audit Committee reviews material
transactions with related parties. The Audit Committee met or acted by written
consent on two occasions during the 1996 fiscal year.
During the 1996 fiscal year, the Board of Directors of the Company met,
or acted by unanimous written consent, on eight occasions. Each of the directors
attended at least 75% of the meetings of the Board of Directors and of the
meetings held by committees of the Board of Directors on which he served during
the 1996 fiscal year.
- 8 -
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
Name Age Position
- - - - - - - ---- --- --------
Martin Irwin ........ 60 Chief Executive Officer, President and Director
Jeffrey J. Kaplan.... 48 Executive Vice President, Chief Financial
Officer and Director
Kenneth D. Lorber.... 49 Vice President; President of The Post Edge,
Inc. ("Post Edge")
Adrien Macaluso...... 51 Vice President; President of Audio Plus Video
Daniel Rosen......... 58 Vice President; President of Manhattan Transfer
Gary R. Strack....... 44 Vice President, Treasurer and Secretary
Jane Stuart.......... 48 Vice President; President of Big Picture/Even
Time Limited ("BPET")
For information on the business background of Messrs. Irwin and Kaplan,
see "Nominees for Election" above.
Kenneth D. Lorber was elected Vice President of the Company in October
1995 and was elected President and a director of Post Edge, a wholly-owned
subsidiary of the Company, in May 1995. Mr. Lorber had served as Vice President
of Post Edge since 1992. From 1987 to 1992, Mr. Lorber was a principal of
Kaplan/Lorber Public Relations, Inc., a public relations consulting firm. In
1977, Mr. Lorber and a partner founded Video Works, Inc. Mr. Lorber was Chairman
and Chief Operating Officer of Video Works, Inc. until 1987 when he sold his
equity interest in the company.
Adrien Macaluso was elected Vice President of the Company in February
1994 and was elected President and a director of Audio Plus Video prior to the
consummation of the Offering in February 1994. Mr. Macaluso had served as Vice
President and General Manager of Audio Plus Video since 1985 and Group Vice
President of VSC since 1991.
Daniel Rosen was elected Vice President of the Company and President of
Manhattan Transfer in April 1994. Prior to that time, Mr. Rosen was President of
Editel NY for twelve years. During 1991-1992, Mr. Rosen also served as President
of Editel LA and was named President of the New York divisions of Unitel Video,
namely Unitel NY, Editel NY and Windsor Digital, which were acquired by Unitel
Video in May 1992.
Gary R. Strack was elected Vice President and Secretary of the Company
in October 1993 and Treasurer in January 1995. Mr. Strack was Controller of the
Company from October 1993 until January 1995. He had served as Treasurer of VSC
and Audio Plus Video from May 1989 until October 1993. Prior to that time, he
was Assistant Controller of VSC for four years. Mr. Strack, a certified public
accountant, was the Assistant Controller of Damon Creations, Inc., an apparel
company, from 1981 to 1984.
Jane Stuart was elected Vice President of the Company in May 1995. Ms.
Stuart has been the President of BPIX, Inc. and Highway Interactive, Inc. since
1994 and Big Picture Communications, Inc. since 1993. Ms. Stuart began working
at Big Picture Editorial, Inc. ("BP") as Business Manager in 1988 and became
General Manager in 1990 until 1995. Between 1980 and 1988, Ms. Stuart worked at
Even Time Ltd. ("ET"), worked in the film stock-footage business and began a
talent management business. Prior to 1981, Ms. Stuart worked as a reporter for
the Middletown Times Herald Record and The Record of Bergen County.
There is no family relationship between any officer or director of the
Company.
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<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons who
beneficially own more than ten percent of the Common Stock to file with the
Securities and Exchange Commission initial reports of beneficial ownership and
reports of changes in beneficial ownership of the Common Stock. Officers,
directors and persons owning more than ten percent of the Common Stock are
required to furnish the Company with copies of all such reports. To the
Company's knowledge, based solely on a review of copies of such reports
furnished to the Company, the Company believes that during the fiscal year ended
July 31, 1996, its executive officers, directors and persons beneficially owning
more than ten percent of the Common Stock complied with all applicable Section
16(a) filing requirements.
- 10 -
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation paid or accrued by the
Company for the 1996 fiscal year with respect to (a) the Company's Chief
Executive Officer and (b) each of the four most highly compensated executive
officers, other than the Chief Executive Officer, of the Company at July 31,
1996, whose salary and bonus from the Company in fiscal 1996 exceeded $100,000,
and an additional two officers who would have been amongst the most highly
compensated executive officers of the Company had they not resigned as executive
officers of the Company during fiscal 1996 (collectively, the "Named Executive
Officers").
<TABLE>
<CAPTION>
Annual Compensation
---------------------------------------------------
NUMBER OF
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION(2) OPTIONS (3) COMPENSATION
- - - - - - - --------------------------- ---- ------ --------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Martin Irwin
Chief Executive Officer, 1996 $233,500 1,967 --- 120,000(4) ---
President and Director 1995 220,000 1,868 --- 120,000(4) ---
1994 209,231 707 --- 120,000(4) ---
Jeffrey J. Kaplan
Executive Vice President, 1996 $190,000 31,864 --- 271,818 ---
Chief Financial Officer and 1995 190,000 31,866 --- 271,818 ---
Director 1994 --- --- --- 271,818 ---
Kenneth D. Lorber
Vice President; President 1996 $115,000 797 --- 25,000 ---
of Post Edge 1995 --- --- --- --- ---
1994 --- --- --- --- ---
Adrien Macaluso
Vice President; President of 1996 $178,000 65,296 --- 60,000 ---
Audio Plus Video 1995 160,000 66,505 --- 60,000 ---
1994 --- --- --- --- ---
Dominic Pandolfino(5)
Vice President; Vice 1996 $ 86,729 951 --- 15,000 ---
President and General 1995 150,000 1,769 --- 15,000 ---
Manager of Manhattan 1994 139,904 620 --- 15,000 ---
Transfer
Daniel Rosen
Vice President; President of 1996 $229,808(6) 26,874 --- 75,000 ---
Manhattan Transfer 1995 200,000 51,066(7) --- 75,000 ---
1994 --- --- --- 75,000 ---
Sylvester Timpanaro(5)
Vice President; Executive 1996 $ 81,154 924 --- 15,000 37,500(8)
Vice President Sales of 1995 150,000 1,804 --- 15,000 ---
Manhattan Transfer 1994 139,904 620 --- 15,000 ---
</TABLE>
(1) Fiscal 1995 and 1996 include amounts representing matching
contributions by the Company under the Company's 401(K) plan. All
amounts in fiscal 1994 represent matching contributions by the Company
under the Company's 401(K) plan.
(2) Excludes items which are, in the aggregate, less than $50,000 or 10% of
the total annual salary and bonus.
(3) Fiscal 1996 includes the replacement of options which had been
previously granted under the Company's long-term incentive plan. Such
replacement options were granted upon revised terms, including without
limitation, a three year vesting period commencing in fiscal 1996 and a
range in price from $4.00 to $6.00 per share.
- 11 -
<PAGE>
(4) Does not include options to acquire an aggregate of 208,250 shares of
Common Stock granted by the stockholders of the Company's predecessor
to Mr. Irwin in consideration for his interest in the predecessor at
prices which ranged from $1.80 to $7.78 per share. Mr. Irwin exercised
a portion of such options on January 5, 1996, pursuant to which he
acquired 69,417 shares of Common Stock at $1.80 per share. The
remainder of such options expired in December 1995.
(5) Messrs. Pandolfino and Timpanaro's compensation only includes salary
and matching contributions by the Company under the Company's 401(K)
plan through March 1, 1996 and January 1, 1996, respectively, the
effective dates of resignation of such officers in fiscal 1996.
(6) Includes $4,808 of retroactive compensation attributable from May 1,
1995 to July 31, 1995 in connection with the approval by the
Compensation Committee of the Board of Directors of an increase of Mr.
Rosen's base compensation, effective as of May 1, 1995, to $225,000 per
annum.
(7) Includes a $25,000 signing bonus paid on August 1, 1994 and a minimum
guarantee bonus of $25,000 for fiscal 1995. See "Employment
Arrangements."
(8) In connection with his resignation, effective as of February 1, 1996,
Mr. Timpanaro agreed not to compete with the Company, or be employed by
a competitor thereof, for a period of one year in consideration of
$75,000, payable in monthly installments.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to the grant of
stock options during the last fiscal year to the Named Executive Officers. Only
information concerning those Named Executive Officers who received option grants
in fiscal 1996 is provided.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS GRANTED EXERCISE STOCK PRICE
UNDERLYING OPTIONS TO EMPLOYEES IN PRICE PER EXPIRATION APPRECIATION FOR
NAME GRANTED (1) FISCAL YEAR 1996 SHARE DATE OPTION TERM (5)
- - - - - - - ---- ------------------ ----------------- ---------- ---------- --------------------
5% 10%
------- --------
<S> <C> <C> <C> <C> <C> <C>
Martin Irwin 40,000(2) 9.37 $4.00 4/10/06 $59,901 $190,155
40,000(3) 9.37 5.00 4/10/06 19,901 150,155
40,000(4) 9.37 6.00 4/10/06 0 110,155
Jeffrey J. Kaplan 30,000(2) 7.03 4.00 4/10/06 44,926 142,616
30,000(3) 7.03 5.00 4/10/06 14,926 112,616
30,000(4) 7.03 6.00 4/10/06 0 82,616
Kenneth D. Lorber 8,333(2) 1.95 4.00 4/10/06 12,479 39,614
8,334(3) 1.95 5.00 4/10/06 4,146 31,285
8,333(4) 1.95 6.00 4/10/06 0 22,948
Adrien Macaluso 20,000(2) 4.68 4.00 4/10/06 29,950 95,078
20,000(3) 4.68 5.00 4/10/06 9,950 75,078
20,000(4) 4.68 6.00 4/10/06 0 55,078
Daniel Rosen 25,000(2) 5.86 4.00 4/10/06 37,438 118,847
25,000(3) 5.86 5.00 4/10/06 12,438 93,847
25,000(4) 5.86 6.00 4/10/06 0 68,847
</TABLE>
- 12 -
<PAGE>
(1) All option grants represent the replacement of options which had been
previously granted under the Company's long-term incentive plan. For
purposes of this table, such grants have been broken down according to
the exercise price thereof.
(2) Vests on April 10, 1997.
(3) Vests on April 10, 1998.
(4) Vests on April 10, 1999.
(5) Valuation is based upon the potential realizable dollar value of the
replacement option grants with assumed rates of appreciation of 5% and
10% per annum from the date of grant to the end of the option term.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table provides information with respect to the exercise
of stock options during the fiscal year by the Named Executive Officers and the
value of unexercised options owned by the Named Executive Officers at fiscal
year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SECURITIES SECURITIES VALUE OF VALUE OF
UNDERLYING UNDERLYING UNEXERCISED UNEXERCISED
NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE JULY 31, 1996 JULY 31, 1996 JULY 31, 1996(1) JULY 31, 1996(1)(2)
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - - - - - ---- ----------- -------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Martin Irwin 49,617 115,360(3) 0 120,000 --- 0
Jeffrey J. Kaplan --- --- 181,818 90,000 --- 0
Kenneth D. Lorber --- --- 0 25,000 --- 0
Adrien Macaluso --- --- 0 60,000 --- 0
Dominic Pandolfino --- --- 0 0 --- 0
Daniel Rosen --- --- 0 75,000 --- 0
Sylvester Timpanaro --- --- 0 0 --- 0
</TABLE>
(1) The value is based on the excess of the market price of the Company's
Common Stock at the end of the Company's 1996 fiscal year over the
option price of the unexercised options.
(2) At July 31, 1996, the closing bid price of the Common Stock on
NASDAQ/NMS was $4 per share.
(3) On January 5, 1996, Mr. Irwin exercised options to purchase 69,417
shares of Common Stock at $1.80 per share in connection with options to
purchase an aggregate of 208,250 shares of Common Stock granted by the
stockholders of the Company's predecessor to Mr. Irwin in consideration
for his interest in the predecessor at prices which ranged from $1.80
to $7.78 per share. The remainder of such options expired in December
1995. The value realized is calculated by determining the difference
between the fair market value of the Common Stock underlying the
options exercised and the exercise price of such options. At January 5,
1996, the closing bid price of the Common Stock on NASDAQ/NMS was
$4 1/8 per share.
- 13 -
<PAGE>
LONG-TERM INCENTIVE PLANS - AWARDS IN THE LAST FISCAL YEAR
The following table provides information with respect to each award
made to the Named Executive Officers under the Company's long-term incentive
plan in the last fiscal year. Only information concerning those Named Executive
Officers who received such awards in fiscal 1996 is provided.
NUMBER OF SHARES UNDERLYING
NAME OPTIONS GRANTED (1) VESTING PERIOD(2)
- - - - - - - ---- --------------------------- --------------
Martin Irwin 120,000 4/10/96 - 4/10/99
Jeffrey J. Kaplan 90,000 4/10/96 - 4/10/99
Kenneth D. Lorber 25,000 4/10/96 - 4/10/99
Adrien Macaluso 60,000 4/10/96 - 4/10/99
Daniel Rosen 75,000 4/10/96 - 4/10/99
(1) All options granted to the Named Executive Officers in fiscal 1996
represent the replacement of options which had been previously granted
under the Company's long-term incentive plan. Such replacement options
were granted under revised terms, including without limitation, a range
in price from $4.00 to $6.00 per share.
(2) All replacement options vest in equal installments on each of April 10,
1997, 1998 and 1999.
EMPLOYMENT ARRANGEMENTS
Prior to the consummation of the Offering, the Company entered into
employment contracts with Messrs. Irwin, Kaplan and Macaluso, each having a term
commencing on February 8, 1994 and ending three years thereafter, or twelve
months following notice of termination by either party, whichever is later.
Mr. Irwin's contract provides for base compensation of $220,000 per
annum and a bonus equal to two percent of the base salary for each one percent
increase over certain earnings per share target levels ($0.70 per share for
fiscal year 1996) to be established annually by the Compensation Committee of
the Board of Directors. Effective as of February 15, 1996, Mr. Irwin's base
compensation was increased to $250,000 per annum.
Mr. Kaplan's contract provides for base compensation of $190,000 per
annum and a bonus calculated in the same fashion as Mr. Irwin's.
Mr. Macaluso's contract provides for base compensation of $160,000 per
annum and a bonus equal to two percent of the base salary for each one percent
increase in profitability of Audio Plus Video and its subsidiaries. Effective as
of February 15, 1996, Mr. Macaluso's base compensation was increased to $200,000
per annum.
The Company entered into an employment contract with Mr. Rosen, with a
term commencing on May 23, 1994 and ending on May 22, 1997 or twelve months
following a notice of termination by either party, whichever is later. Mr.
Rosen's contract provides for base compensation of $200,000 per annum and a
bonus calculated in the same fashion as Mr. Macaluso's, except that
profitability relates to Manhattan Transfer and its subsidiaries. Effective as
of May 1, 1995, Mr. Rosen's base compensation was increased to $225,000 per
annum.
- 14 -
<PAGE>
Each of the above-referenced employment agreements provide that (i) the
Compensation Committee of the Board of Directors may award a discretionary bonus
to the executive in connection with services performed relating to, in the case
of certain executive officers, the execution of certain extraordinary corporate
events, (ii) the employee will be entitled to participate in such compensation
plans, incentive plans, group life, health, accident, disability and
hospitalization insurance plans, pension plans and retirement plans as the
Company may make available to its other executive employees, and (iii) upon
termination without cause, the employee is entitled to receive his annual base
compensation and any incentive compensation for the remainder of the originally
scheduled term of the agreement. Termination for cause includes termination for
breach, nonperformance, fraud or conviction of a felony. Additionally, each such
employment agreement provides that the employee is entitled to terminate his
employment at any time during the six-month period following any "change in
control" (as defined in the Company's long-term incentive plan) that results in
a material diminution in the capacity and terms of his employment. Any such
termination shall be treated as a termination without cause.
The Company and its BPET subsidiary entered into an employment contract
with Jane Stuart, with a term commencing on May 4, 1995 and ending on May 4,
2000. Ms. Stuart's contract provides for base compensation of $100,000 per
annum. Under her employment contract, Ms. Stuart is entitled to participate in
all stock option and other equity related incentive programs, group life,
health, accident, disability and hospitalization insurance plans, pension plans
and retirement plans as the Company may make available to its other executive
employees. Upon termination without cause, Ms. Stuart is entitled to receive her
annual base compensation for the remainder of the originally scheduled term of
the agreement. Termination for cause includes termination for breach,
nonperformance, fraud or conviction of a felony. Ms. Stuart is a partner of BPET
Partnership, a New York general partnership, which pursuant to a purchase
agreement (the "BP/ET Purchase Agreement"), dated as of April 25, 1995, by and
among the Company, BPET and certain shareholders of BP and ET, is entitled to
certain contingent purchase price payments based on (i) increases in
profitability of BPET and (ii) increases in the amount of post-production work
performed for BPET or directed by BPET to the Company, over a certain base
number, for the twelve month period ending April 30, 1996, up to a maximum
amount of $1,920,000 in additional purchase price payments.
Post Edge entered into an employment contract with Kenneth D. Lorber
with a term commencing on June 1, 1995 and ending on May 31, 1998, or twelve
months following notice of termination by either party, whichever is later. Mr.
Lorber's contract provides for base compensation of $115,000 per annum and a
bonus equal to 30% of the base salary for any fiscal year within the term that
the business plan of Post Edge is achieved. Under his employment contract, Mr.
Lorber is entitled to participate in such compensation plans, incentive plans,
group life, health, accident, disability and hospitalization insurance plans,
pension plans and retirement plans as Post Edge may make available to its other
executive employees. Upon termination without cause, Mr. Lorber is entitled to
receive his annual base compensation and any incentive compensation for the
remainder of the originally scheduled term of the agreement. Termination for
cause includes termination for breach, nonperformance, fraud or conviction of a
felony. Mr. Lorber is entitled to terminate his employment at any time during
the six-month period following any "change in control" (as defined in the
Company's long-term incentive plan) that results in a material diminution in the
capacity and terms of his employment. Any such termination shall be treated as a
termination without cause.
DIRECTORS' COMPENSATION
Each member of the Board of Directors who is not an officer received an
annual fee of $15,000 ($18,000 in the case of the Chairman of the Board of
Directors) for serving on the Board of Directors plus $750 ($1,500 in the case
of the Chairman of the Board of Directors) and reimbursement of expenses for
each Board of Directors or committee meeting attended. Directors who chair
committees received $1,000 plus reimbursement of expenses for each committee
meeting attended.
The stockholders and directors of the Company have approved a
restricted share plan for directors who are not employees of the Company. A
total of 50,000 shares of Common Stock is available for issuance under such plan
and each non-employee director received an award of 2,000 shares (5,000 shares
in the case of the Chairman of the Board of Directors) in fiscal 1994 which
vested in February 1996.
- 15 -
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee"),
which is composed entirely of directors who are neither officers nor employees
of the Company, establishes and reviews the Company's arrangements and programs
for compensating executive officers, including the Named Executive Officers.
PHILOSOPHY AND POLICY
The Committee's policy is to design executive compensation packages
that reward the achievement of both short-term and long-term objectives of the
Company. Consistent with this approach, the compensation of the Company's
executive officers generally consists of base salary, incentive bonuses and a
long-term equity based component. The base salary and incentive bonuses are
designed to compensate executives for the attainment of short-term objectives
while the long-term performance of the executive is rewarded through the
periodic grants of stock options, stock appreciation rights and restricted stock
under the Company's long-term incentive plan.
BASE SALARY. The Company believes that the base salaries paid to its
executive officers are competitive with the salaries of executives in comparable
positions with companies which compete with the Company. Although the Committee
believes that the base salaries paid by certain of the Company's competitors are
higher than the salaries paid by the Company, the Company has been successful in
attracting and retaining high-quality executives as a result of the incentive
and long-term components of its executive compensation policies.
INCENTIVE BONUSES. All of the executive officers, other than Jane
Stuart, are entitled to receive an incentive bonus based on the achievement of
objective criteria, such as earnings per share targets. The specific objective
criteria applicable to an executive depends upon the executive's position and
responsibilities with the Company. In addition, certain executives are entitled
to earn a discretionary bonus in connection with services performed relating to
the execution of certain extraordinary corporate events. For a description of
certain purchase price payments applicable to Ms. Stuart, see "Employment
Arrangements" and "Certain Transactions."
LONG-TERM COMPENSATION. The Committee believes that, in addition to
compensating executives for long-term performance of the Company, the granting
of stock options and other equity based compensation aligns the interest of
executives with those of the Company's stockholders. The size of the grants are
consistent with these principles and also are based on the executive's
performance and position with the Company.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Irwin's compensation for the fiscal year ended July 31, 1996 was
determined pursuant to his employment agreement which expires on February 15,
1997. Mr. Irwin's base salary was increased to $250,000 per annum, effective as
of February 15, 1996. This increase was effected to maintain Mr. Irwin's salary
at a level comparable to those of chief executive officers of certain of the
Company's competitors. Mr. Irwin's employment agreement was negotiated with the
principal stockholders of the Company prior to the consummation of the Company's
initial public offering in February 1994. In consideration of Mr. Irwin's
interest in the Company's predecessor, such stockholders granted Mr. Irwin stock
options to purchase from them an aggregate of 208,250 shares of Common Stock at
prices ranging from $1.80 to $7.78 per share. Certain of those options became
exercisable only if certain performance targets were met. In addition, in fiscal
1994 the Company granted Mr. Irwin stock options to purchase 120,000 shares of
Common Stock under the Company's long-term incentive plan at an exercise price
of $11.00 per share, the initial public offering price. In fiscal 1996, the
Company replaced all options previously granted under the Company's long-term
incentive plan upon revised terms, including without limitation, a reduction in
the exercise price ranging from $4.00 to $6.00 per share and a three year
vesting period commencing in fiscal 1996. See "Report on Repricing of Options."
For fiscal 1996, Mr. Irwin did not earn a cash bonus. The Committee believes
that Mr. Irwin's compensation package is consistent with its philosophy and
policies on executive compensation.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction for compensation over $1,000,000 paid to the Company's Chief Executive
Officer and certain other highly compensated executive officers. Incentive
plans, such as the Company's long-term incentive plan, subject to certain
transition rules are not subject to these
- 16 -
<PAGE>
deduction limits. The Committee does not believe that the cash compensation to
be paid to the Chief Executive Officer or such other highly compensated
executives will exceed the deduction limit set by Section 162(m).
REPORT ON REPRICING OF OPTIONS
In fiscal 1996, the Committee approved the replacement of all options
previously granted under the Company's long-term incentive plan, all of which
were exercisable at prices significantly in excess of the fair market value of
the Common Stock, as quoted on NASDAQ/NMS, at the time of such replacement. Such
replacement options were granted upon revised terms, including without
limitation, a three year vesting period commencing in fiscal 1996 and a reduced
exercise price ranging from $4.00 to $6.00 per share. The Committee believes
that the prior option price, which was at a significant premium to the fair
market value of the Common Stock, did not appropriately align interests of
management with that of the Company's stockholders. The Committee believes that
such replacement options are consistent with its philosophy and policies on
executive compensation.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF PER SHARE LENGTH OF
SECURITIES MARKET PRICE EXERCISE ORIGINAL OPTION
UNDERLYING OF STOCK AT PRICE AT TERM REMAINING
OPTIONS TIME OF TIME OF NEW EXERCISE AT DATE OF
NAME DATE REPRICED REPRICING REPRICING PRICE (1) REPRICING(2)
- - - - - - - ---- ---- ---------- ------------ --------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Martin Irwin 4/10/96 120,000 3 3/8 $11.00 $4-6 7 yrs. 3 mos.
Chief Executive Officer,
President and Director
Jeffrey J. Kaplan 4/10/96 90,000 3 3/8 11.00 4-6 7 yrs. 3 mos.
Executive Vice President,
Chief Financial Officer and
Director
Kenneth D. Lorber 4/10/96 25,000 3 3/8 5.75 4-6 8 yrs. 7 mos.
Vice President; President of
Post Edge
Adrien Macaluso 4/10/96 60,000 3 3/8 11.00 4-6 7 yrs. 3 mos.
Vice President;
President of Audio Plus Video
Daniel Rosen 4/10/96 75,000 3 3/8 11.00 4-6 7 yrs. 6 mos.
Vice President;
President of Manhattan
Transfer
</TABLE>
(1) All replacement options are exercisable at prices which range from
$4.00 to $6.00 per share. The first one-third of such options are
exercisable at $4.00 per share, an additional one-third of such options
are exercisable at $5.00 per share and the remainder of such options
are exercisable at $6.00 per share.
(2) The length of time remaining before the replaced options would have
expired is calculated as of November 15, 1996, except with respect to
options owned by Daniel Rosen and Kenneth D. Lorber, which are
calculated as of November 23, 1996 and November 1, 1996, respectively.
COMPENSATION COMMITTEE
Louis H. Siracusano, Chairman
Robert H. Alter
Julius Barnathan
The foregoing report of the Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
- 17 -
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return of
the Company's Common Stock with the cumulative total return of the NASDAQ
Composite Index and a selected peer group index for the period from February 8,
1994 (the date the Common Stock commenced trading on NASDAQ/NMS) until July 31,
1996, the end of the Company's fiscal year. The selected peer group, which
includes companies that are engaged in providing services related to those
provided by the Company and have similar market capitalizations, consists of
Laser-Pacific Media Corp., Northwest Teleproductions, Inc., Todd AO Corp. and
Unitel Video Inc. The graph assumes that the value of the investment in the
Common Stock was $100 on February 8, 1994 and that all dividends were
reinvested.
<TABLE>
<CAPTION>
February 8, 1994 July 29, 1994 July 31, 1995 July 31, 1996
---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
International Post Limited $100.00 $75.00 $43.75 $35.23
Peer Group $100.00 $81.32 $134.94 $121.42
NASDAQ Composite $100.00 $92.68 $128.49 $138.68
</TABLE>
- 18 -
<PAGE>
CERTAIN TRANSACTIONS
The Company was formed in October 1993 to own and operate the combined
businesses of MTE Co. and Audio Plus Video. The Company acquired the business of
MTE Co. immediately prior to, and in connection with, the consummation of the
Offering pursuant to a transaction in which (i) VSC and Holdings, the general
partners of MTE Co., received additional shares of Common Stock of the Company
in exchange for contributing their partnership interests in MTE Co. to the
Company and (ii) the assets and liabilities of MTE Co. were contributed to
Manhattan Transfer. MTE Co. terminated as a result of such transfers.
In December 1993, the Company entered into an acquisition agreement
with VSC pursuant to which, simultaneously with the closing of the Offering in
February 1994, it purchased from VSC all of the outstanding capital stock of
Audio Plus Video and IPL Express Courier, Inc. ("Courier"), a sister subsidiary,
that is managed by common personnel and serves as Audio Plus Video's in-house
delivery service. VSC previously owned 22% of the Company and now owns less than
5%.
Under the BP/ET Purchase Agreement, BPET Partnership is entitled to
certain contingent purchase price payments based on (i) increases in
profitability of BPET and (ii) increases in the amount of post-production work
performed for BPET or directed by BPET to the Company, over a certain base
number, for the twelve month period ending April 30, 1996, up to a maximum of
$1,920,000 in additional purchase price payments. Ms. Stuart is also a partner
of BPET Partnership. The Company believes that the amount of consideration paid
under the BP/ET Stock Purchase Agreement was determined pursuant to arm's-length
negotiations. In addition, in connection with such acquisition, BPET and the
Company entered into a five-year employment agreement with Jane Stuart. See
"Employment Arrangements."
In order to secure the prompt payment and performance of all of their
respective obligations under the BP/ET Purchase Agreement and Section 8 of Ms.
Stuart's employment agreement, Ms. Stuart pledged to the Company her partnership
interest in BP Partnership and each of Ms. Stuart and BP Partnership pledged to
the Company all of the notes (the "Notes") such parties received in
consideration for the stock of BP purchased by the Company under the BP/ET
Purchase Agreement and any Notes such parties may subsequently acquire, other
than any Notes which such parties may receive as contingent consideration under
the BP/ET Purchase Agreement. Such pledged securities were deposited into
escrow.
The Company has from time to time entered into transactions with VSC
for the purchase or sale of various services and materials. Services provided
for the Company by VSC include duplication services, satellite services,
maintenance and repair of post-production computer systems, and equipment
rentals and repairs. The Company paid approximately $241,000 for such services
during its 1996 fiscal year. In addition, the Company has provided services for
VSC, for which it received approximately $184,000 in the aggregate during the
1996 fiscal year. The Company believes that these transactions were at such
rates as could have been obtained in arm's-length transactions.
Audio Plus Video leases a facility in Northvale, New Jersey, which was
consolidated into a 38,000 square foot facility, including 4,000 square feet for
expansion, for its principal production and office facilities from L.I.M.A.
Partners, a New Jersey general partnership. L.I.M.A. Partners is comprised of
two general partners who collectively own a substantial majority of the
outstanding capital stock of VSC. Louis H. Siracusano, a director of the
Company, is one of the general partners of L.I.M.A. Partners and holds a 50%
interest in the partnership. The existing lease has a 17 year term and provides
for an aggregate annual rent of approximately $388,000 (plus additional amounts
for utilities, real estate taxes and maintenance costs). During fiscal 1996,
Audio Plus Video paid an aggregate amount of $444,000 under such lease. The
Company believes that the terms of such lease are comparable to terms Audio Plus
Video could have obtained in an arm's-length transaction.
During fiscal 1996, the Company purchased certain machinery and
equipment from A.F. Associates, Inc., a subsidiary of VSC, of which Mr.
Siracusano is the Executive Vice President, for $103,000. The Company believes
that the terms of this transaction were comparable to terms it could have
obtained in an arm's-length transaction.
- 19 -
<PAGE>
MTE Co. subleased one of its two New York facilities from VSC. In
connection with the formation of MTE Co. and its acquisition of the business of
VSC Post Production, Inc. ("VSC Post") from VSC in July 1992, VSC agreed to
permit MTE Co. to continue to operate the business of VSC Post in the facility
covered by a lease agreement between VSC and an unaffiliated third party, in
return for which MTE Co. agreed to reimburse VSC for all payments due under the
lease. The annual rent under the lease is approximately $400,000 per year (plus
additional amounts for real estate taxes and operating expenses). Manhattan
Transfer, a wholly-owned subsidiary of the Company which operates the business
of MTE Co., completed consolidation with this facility and MTE Co.'s former
principal executive offices in March 1994. Such lease expired in June 1996.
The Company sublet its New York City corporate office from a VSC
affiliate, under a lease accounted for as an operating lease. Such rental
expense of the Company amounted to $24,500 for the year ended July 31, 1996. The
Company believes that the terms of this agreement were comparable to terms it
could have obtained in an arm's-length transaction.
In connection with the acquisition of the business of VSC Post in July
1992, MTE Co. assumed a VSC obligation to pay to Martin Irwin, the Chief
Executive Officer and President of the Company, the amount of $1,208,000. The
obligation arose in 1989 when Mr. Irwin (who co-founded VSC in 1979) sold his
equity interest in VSC back to VSC for cash and notes and entered into a
five-year consulting agreement with VSC. The debt to Mr. Irwin is evidenced by
two promissory notes which bear interest at rates ranging from 8% to 9.2% and
are payable through 1996. As of July 31, 1996, the outstanding balance of this
obligation was approximately $408,000. Such balance was subsequently paid by the
Company in August 1996.
PROPOSALS FOR NEXT YEAR'S MEETING
Any proposal by a stockholder who intends to be present at the next
Annual Meeting of Stockholders must be received by the Company for inclusion in
its proxy statement and form of proxy relating to the Annual Meeting no later
than July 26, 1997.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's financial statements for the fiscal year ended July 31,
1996 have been audited by Arthur Andersen LLP, independent auditors.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting of Stockholders to make a statement if they so desire and are expected
to be available to respond to appropriate questions.
MISCELLANEOUS
The Board of Directors of the Company does not intend to present, and
does not have any reason to believe that others intend to present, any matter of
business at the meeting other than as set forth in the accompanying Notice of
Annual Meeting of Stockholders. However, if other matters properly come before
the meeting, it is the intention of the persons named in the enclosed form of
proxy to vote any proxies in accordance with their judgment.
The Company will bear the cost of preparing, assembling and mailing the
enclosed form of proxy, this Proxy Statement and other material which may be
sent to stockholders in connection with this solicitation. The Board of
Directors may use the services of the Company's directors, officers and other
regular employees to solicit proxies. The Company may reimburse persons holding
shares in their names or in the names of nominees for their expenses in sending
proxies and proxy material to their principals.
Copies of the 1996 Annual Report to Stockholders, including financial
statements for the fiscal year ended July 31, 1996, are being mailed to the
stockholders prior to or simultaneously with this Proxy Statement. Such Annual
Report is not to be considered a part of this Proxy Statement.
- 20 -
<PAGE>
THE COMPANY WILL PROVIDE A COPY OF ITS ANNUAL REPORT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (FORM 10-K) FOR THE FISCAL YEAR ENDED JULY
31, 1996 TO EACH STOCKHOLDER WITHOUT CHARGE (OTHER THAN A REASONABLE CHARGE FOR
ANY EXHIBIT REQUESTED) UPON WRITTEN REQUEST TO:
International Post Limited
545 Fifth Avenue
New York, New York 10017
Attention: Jeffrey J. Kaplan
Executive Vice President and
Chief Financial Officer
- 21 -
<PAGE>
PROXY COMMON STOCK
INTERNATIONAL POST LIMITED
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
JANUARY 8, 1997
The undersigned hereby constitutes and appoints Jeffrey J. Kaplan and
Gary R. Strack, and each of them, with full power of substitution, attorneys and
proxies to represent and to vote all of the shares of Common Stock which the
undersigned would be entitled to vote, with all powers the undersigned would
possess if personally present, at the Annual Meeting of Stockholders of
INTERNATIONAL POST LIMITED, to be held at The Sky Club, 200 Park Avenue, 56th
Floor, New York, New York 10166, on January 8, 1997 at 10 a.m. local time, and
at any adjournments or postponements thereof, on all matters coming before said
meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES OF THE BOARD OF
DIRECTORS.
The undersigned acknowledges receipt of the accompanying Proxy
Statement dated November 26, 1996.
1. TO ELECT DIRECTORS:
FOR all nominees listed below [ ]
WITHHOLD AUTHORITY to vote for
all nominees listed below [ ]
*EXCEPTIONS [ ]
Nominees: Robert H. Alter, Julius Barnathan, Terrence A. Elkes, Kenneth F.
Gorman, Martin Irwin, Jeffrey J. Kaplan and Louis H. Siracusano. (INSTRUCTIONS:
To withhold authority to vote for any individual nominee, mark the "Exceptions"
box and write that nominee's name in the space provided below.)
*Exceptions
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2. At their discretion, upon any other business which may properly come before
the meeting or any adjournments or postponements thereof.
I plan [ ] I do not plan [ ] to attend the Annual Meeting.
Change of Address and or Comments Mark Here [ ]
(Please date and sign exactly as name
appears hereon. When signing as
attorney, trustee, executor,
administrator, guardian, corporate
officer, etc., please give full title.
If more than one trustee, all should
sign. Joint owners must each sign.)
Date: , 199
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Signature
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Signature
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
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