SCHEDULE 14A INFORMATION
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:
VIDEO SERVICES CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person (s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee ( Check appropriate box ) :
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6 (i) (2) 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):
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(4) Proposed maximun 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:
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(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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<PAGE>
VIDEO SERVICES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Video Services Corporation (the
"Company"), a Delaware corporation, will be held on December 18, 1998 at 11 a.m.
at the American Stock Exchange, 86 Trinity Place, New York, New York 10006 for
the following purposes:
1. To elect six directors of the Company to serve until the next
Annual Meeting of Stockholders and until their respective
successors have been elected and qualified;
2. To consider and ratify the appointment of Ernst & Young LLP as
independent certified public accountants for the fiscal year
1999; and
3. 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 11, 1998 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,
Michael E. Fairbourne
Secretary
Northvale, New Jersey
November 18, 1998
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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.
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<PAGE>
VIDEO SERVICES CORPORATION
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
December 18, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Video Services Corporation (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 11 a.m., local time, on
December 18, 1998 at the American Stock Exchange, 86 Trinity Place, New York,
New York 10166 and at any adjournments or postponements thereof.
If proxy card in the accompanying form is 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", FOR the ratification of
appointment of independent accountants 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 11, 1998 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 13,286,307 shares of Common
Stock outstanding and entitled to vote, and a majority, or 6,643,154 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
nonvotes 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 240 Pegasus
Avenue, Northvale, New Jersey 07647. The approximate date on which this Proxy
Statement and the enclosed form of proxy were first sent or given to
stockholders was November 18, 1998.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock at October 23, 1998 by (a) all persons known by
the Company who own beneficially more than five percent (5%) of the outstanding
Common Stock, (b) each Director of the Company, (c) each of the Named Executive
Officers and (d) all Directors and Named Executive Officers 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>
Name Common Stock Percent of Class
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<S> <C> <C>
5% Beneficial Owners:
The Equitable Companies Incorporated, The Equitable Life
Assurance Society of the United States, Equitable Deal Flow Fund,
L.P. and Equitable Capital Management Corporation................ 2,562,105 (1) 19.28%
Sandler Capital Management, Sandler
Associates and J.K. Media L.P.................................... 2,272,000 (2) 17.10%
Arnold P. Ferolito............................................... 3,050,382 (3) (19) 22.96%
Directors:
Robert H. Alter.................................................. 13,000 *
Terrence A. Elkes................................................ 522,012 (4) (5) (6) (7) 3.93%
Martin Irwin..................................................... 268,417 (8) (9) 2.02%
Louis H. Siracusano.............................................. 3,152,982 (3) (18) (19) 23.73%
Raymond L. Steele................................................ 14,000 *
Frank Stillo..................................................... 19,000 (10) *
Named Executive Officers:
Donald H. Buck................................................... 523,681 (3) (19) 3.94%
Steven G. Crane.................................................. 100,000 (11) (12) *
Michael E. Fairbourne............................................ 70,000 (13) (14) *
Daniel Rosen..................................................... 101,250 (15) (16) (17) *
All Directors and Named Executive Officers as a group, 4,730,498(20) 35.60%
consisting of 10 persons.
* Less than 1%.
</TABLE>
(1) Based on Amendment No. 1 dated July 8, 1997 to Schedule 13D filed on
November 8, 1996. The business address of The Equitable Companies
Incorporated ("Equitable"), The Equitable Life Assurance Society of the
United States ("ELAS"), Equitable Deal Flow Fund, L.P. ("EDFF") and
Equitable Capital Management Corporation ("ECMC") is 787 Seventh Avenue,
New York, New York 10019. ELAS is a wholly owned subsidiary of Equitable
and is the general partner of the general partner of EDFF. ECMC is the
investment manager of EDFF. EDFF is the record holder of 1,633,758 shares
of Common Stock and ELAS is the record holder of 928,347 shares of Common
Stock. ELAS also beneficially owns indirectly the 1,633,758 shares held by
EDFF through its control of EDFF. Because of its ownership of ELAS,
Equitable may be deemed to beneficially own indirectly the 2,562,105 shares
of Common Stock held by ELAS and EDFF. Certain other persons and entities
(AXA Assurances I.A.R.D. Mutuelle; AXA Assurances Vie Mutuelle; Alpha
Assurances I.A.R.D. Mutuelle; Alpha Assurances Vie Mutuelle; AXA Courtage
Assurance Mutuelle; Finaxa; AXA; Claude Bebear, Patrice Gamier and Henri de
Clermont-Tonnerre) may also be deemed to beneficially own indirectly such
2,562,105 shares because of their relationships to Equitable; however, all
of these parties expressly disclaim any beneficial ownership of these
shares. Messrs. Terrence A. Elkes and Kenneth F. Gorman each has an option
to purchase 149,512 shares of such Common Stock. These non-transferable
options are exercisable at $2.06 per share and expire in February 2000.
(2) Based on Amendment No. 6 dated June 11, 1998 to Schedule 13D dated December
21, 1994. The Reporting Persons are Sandler Capital Management, a
registered investment adviser and a New York general partnership ("SCM"),
and Harvey Sandler, John Kornreich, Michael Marocco and Andrew Sandler
(each, a "Individual", and collectively, the "Individuals"). SCM shares are
held through 21st Century Communications Partners, L.P., 21st Century
Communications T.E. Partners, L.P. and 21st Century Communications Foreign
Partners, L.P., each of which is a Delaware limited partnership
(collectively, the "Partnerships"). SCM also hold shares on behalf of
certain managed accounts with respect to which SCM exercises investment
discretion. Each Individual, through a Delaware corporation that is
controlled by such Individual and that serves as a general partner of SCM,
may be deemed to be a beneficial owner of the shares of Common Stock held
by the Partnerships and such managed accounts. Of the 2,272,000 shares of
Common Stock, 1,752,000 of such shares are held by Sandler Capital
Management. Sandler Associates, a New York limited partnership, owns
400,000 shares of Common Stock (each Individual is a general partner of
Sandler Associates) and J.K. Media L.P., a New York limited partnership
controlled by John Kornreich, owns 120,000 shares of Common Stock. The
business address of these entities is 767 Fifth Avenue, New York, New York
10153.
(3) Messrs. Elkes and Gorman each has an option to purchase 14,616, 14,616 and
768 of Messrs. Siracusano's, Ferolito's and Buck's shares, respectively.
See footnote (5). Mr. Irwin received, upon the consummation of the Merger,
an option to purchase 36,540, 36,540 and 1,920 of Messrs. Siracusano's,
Ferolito's and Buck's shares, respectively. See footnote (9). Mr.
Fairbourne has an option to purchase 29,232, 29,232 and 1,536 of Messrs.
Siracusano's, Ferolito's and Buck's shares, respectively. See footnote
(13).
(4) Includes non-qualified, non-transferable options to purchase 30,000 shares
of Common Stock at an exercise price of $11.00 per share. These options
expire in February 1999.
(5) Includes non-transferable options to purchase 30,000 shares of Common Stock
at an exercise price of $11.00 per share. These options expire in February
1999.
(6) Includes non-qualified, non-transferable options to purchase from Equitable
149,512 shares of Common Stock at an exercise price of $2.06 per share. See
footnote (1).
(7) Includes 10,000 shares owned by Mr. Elkes' children. Mr. Elkes disclaims
beneficial ownership of all such shares.
(8) Includes options to purchase 40,000 shares of Common Stock granted to Mr.
Irwin under the 1993 Long-Term Incentive Plan (the "1993 Plan"),
exercisable at prices ranging from $4.00 to $6.00 per share.
(9) Includes options to purchase an additional 80,000 shares of Common Stock
granted to Mr. Irwin under the 1993 Plan, exercisable at prices ranging
from $4.00 to $6.00 per share. Also includes options to purchase an
aggregate of 75,000 shares of Common Stock at an exercise price of $0.75
per share granted by Messrs. Siracusano, Ferolito and Buck.
(10) Includes 14,000 shares of Common Stock owned by the Frank Stillo Children's
Trust, of which Mr. Stillo's wife is the trustee. Mr. Stillo disclaims
beneficial ownership of such shares.
<PAGE>
(11) Includes options to purchase 75,000 shares of Common Stock under the 1997
Long-Term Incentive Plan (the "1997 Plan"), granted to Mr. Crane under his
letter agreement with the Company, exercisable at $3.375 per share.
(12) Includes options dated September 14, 1998 to purchase 25,000 shares of
Common Stock, granted to Mr. Crane under the 1997 Plan, exercisable at
$3.0625 per share.
(13) Includes options granted in June 1997 to purchase 60,000 shares of Common
Stock from Messrs. Siracusano, Ferolito and Buck at an exercise price of
$2.00 per share.
(14) Includes options to purchase 10,000 shares of Common Stock granted to Mr.
Fairbourne under the 1997 Plan, exercisable at $2.94 per share.
(15) Includes (i) options to purchase 25,000 shares of Common Stock granted to
Mr. Rosen under the 1993 Plan, exercisable at prices ranging from $4.00 to
$6.00 per share, and (ii) 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.
(16) Includes options to purchase 25,000 shares of Common Stock granted to Mr.
Rosen under the 1997 Plan, exercisable at $3.0625 per share.
(17) Includes options to purchase an additional 50,000 shares of Common Stock
granted to Mr. Rosen under the 1993 Plan, exercisable at prices ranging
from $4.00 to $6.00 per share.
(18) Includes 39,900 shares of Common Stock transferred by Mr. Siracusano to
seven trusts for the benefit of his family members on September 25, 1998.
Mr. Siracusano did not retain voting power, investment power or other
control of or interest in the 39,900 shares of Common Stock.
(19) Includes options to various employees, consultants and independent
contractors to purchase 182,700, 182,700 and 9,600 of Messrs. Siracusano's,
Ferolito's and Buck's shares, respectively, exercisable at prices ranging
from $0.25 to $6.00 per share.
(20) Does not include options to purchase stock from Messrs. Siracusano and Buck
granted to Messrs. Elkes and Irwin. See footnotes above.
MERGER
On August 27, 1997, IPL's stockholders voted to approve the Agreement and
Plan of Merger among Video Services Corporation, a New Jersey corporation ("Old
Video"), International Post Limited ("IPL") and Messrs. Louis Siracusano, Arnold
Ferolito and Donald Buck (the "Merger Agreement") pursuant to which Old Video
merged with and into IPL, with IPL being the surviving corporation (the
"Merger"). As a result of the Merger, the separate corporate existence of Old
Video ceased. At the effective time of the Merger, IPL's name was changed to
Video Services Corporation and the Nasdaq National Market symbol was changed to
"VSCX". On February 12, 1998, the Company's shares of Common Stock began trading
on the American Stock Exchange ("AMEX") under the symbol "VS". Messrs. Louis
Siracusano, Arnold Ferolito and Donald Buck collectively owned all of the stock
of Old Video. As a result of the Merger, they received in the aggregate
7,011,349 shares of Common Stock (plus an additional 212,096 shares of Common
Stock which replaced an equal number of shares of IPL's common stock then owned
by Old Video which were canceled upon the Merger). Individually, each of Messrs.
Siracusano, Ferolito and Buck received 3,349,382, 3,349,382 and 524,681 shares
of Common Stock, respectively, which accounted for approximately 25.33%, 25.33%
and 3.97%, respectively, of the total number of shares of Common Stock
outstanding. Approval of the Merger was sought by solicitation of the IPL
stockholders through a proxy statement dated July 25, 1997.
<PAGE>
ELECTION OF DIRECTORS
Six persons have been nominated for election as directors 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. The nominees for election
are: Robert H. Alter, Terrence A. Elkes, Martin Irwin, Louis H. Siracusano,
Raymond L. Steele and Frank Stillo.
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.
Nominees for Election
Robert H. Alter, age 69, became a director of the Company upon consummation
of the Merger and had been a director of IPL since October 1993. Mr. Alter is a
director of Source Media, Inc. and 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. From October 1991 to October 1992, Mr. Alter
served as the senior advisor to the Board of Directors of Star TV/Hong Kong.
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.
Terrence A. Elkes, age 64, became a director and the Chairman of the Board
of the Company upon consummation of the Merger and had been a director and the
Chairman of the Board of IPL since October 1993. Mr. Elkes served on the
partnership committee of MTE Co. from July 1992 to February 1994, when it
dissolved upon consummation of IPL's initial public offering. Mr. Elkes is a
Managing Director of Apollo Partners, Ltd. ("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 with Mr.
Gorman, a former director of IPL. Prior to forming Apollo, Mr. Elkes was
employed by Viacom International, Inc. where he served as President from
1978-1982 and Chief Executive Officer from 1983-1987. Mr. Elkes serves as
director of IDC Services, Inc., a private company based in Illinois ("IDC") and
is an indirect owner of IDC through his interest in Apollo. On December 29,
1993, IDC filed for relief under Chapter 11 of the Bankruptcy Code. Its
prepetition debts and liabilities were discharged in January 1996.
Martin Irwin, age 62, became a director and the Vice-Chairman of the Board
of the Company upon consummation of the Merger and had been a director,
President and Chief Executive Officer of IPL since October 1993. Prior thereto,
Mr. Irwin served as President, Chief Executive Officer and was a member of the
partnership committee of MTE Co. from August 1992 to February 1994, when it
dissolved upon consummation of IPL's initial public offering. From September
1991 through June 1992, Mr. Irwin ran the post-production operations of Old
Video, which he co-founded in 1979. Mr. Irwin served as President, Chief
Operating Officer and a director of Old Video from 1979 to 1989 and then served
as a director of and Senior Consultant to Old Video from July 1989 until July
1992. Prior to co-founding Old Video, 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.
Louis H. Siracusano, age 56, became a director, President and Chief
Executive Officer of the Company upon consummation of the Merger and had been a
director of IPL since October 1993. Prior thereto, Mr. Siracusano had been a
member of the partnership committee of MTE Co. from July 1992 to February 1994,
when it dissolved upon consummation of IPL's initial public offering. He served
as the Chairman, Chief Executive Officer and a director of Old Video 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 Old Video
and served in various capacities with Old Video since its formation. Mr.
Siracusano was with Ampex Corporation and the American Broadcasting Company in
various sales and engineering management positions prior to Old Video's
formation in 1979.
<PAGE>
Raymond L. Steele, age 63, became a director of the Company upon
consummation of the Merger and currently serves as Chairman of the Compensation
Committee. Prior thereto, Mr. Steele had been a Principal of Pacholder
Associates, Inc., an institutional money manager and workout specialist, until
his retirement in 1991. Since November 1993, he has been retained as a
consultant for Emerson Radio Corp., NUWAVE Technologies Inc., a distributor of
video enhancement chips, Home Holdings, Inc., an insurance holding company, and
GFTA, a German software developer. He served as a director of numerous
companies, including Orion Pictures Corporation and Webcraft Technologies, Inc.,
and currently serves as a director of Emerson Radio Corp., ICH Corp.,
Pharmhouse, Inc., Modernfold, Inc., a manufacturer of movable walls, and GFTA.
Frank Stillo, age 64, became a director of the Company upon consummation of
the Merger and currently serves as Chairman of the Audit Committee. He has been
active in the printing industry since 1950 and co-founded his own printing
company in 1968. Since 1989, Mr. Stillo has been the Chairman and Chief
Executive Officer of Sandy Alexander, Inc., a printing company and Chief
Executive Officer of MGA Printing Co., a subsidiary of Sandy Alexander, Inc. and
has served as its President since 1981. Mr. Stillo also currently serves as the
President of The Metropolitan Lithographers Association, director of Web Offset
ASS-PIA and trustee of ALA -S&A Fund and Pension Fund.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Position
Louis H. Siracusano........................ 56 Chief Executive Officer, President and Director
Steven G. Crane............................ 42 Vice President and Chief Financial Officer
Donald H. Buck............................. 59 Vice President
Michael E. Fairbourne...................... 45 Vice President-Administration, Chief Accounting Officer and Secretary
Daniel Rosen............................... 60 Vice President-Post Production; President of Manhattan Transfer
Gary R. Strack............................. 46 Vice President-Planning
</TABLE>
For information on the business background of Mr. Siracusano see "'Nominees
for Election above.
Donald Buck became the Company's Vice President and President of Audio Plus
Video International, Inc. upon consummation of the Merger. Prior thereto, Mr.
Buck served as a Senior Vice President of Old Video since August 1987, the
President of Atlantic Satellite Communications, Inc. since August 1992 and the
President of Waterfront Communications Corporation since April 1993. Mr. Buck
served as President of Video Dub, Inc. (formerly, a subsidiary of Old Video)
from 1980. During 1975-1980, he was an Executive Vice President of Sales for
E.U.E. Screen Gems Video Division of Columbia Pictures Industries.
Steven G. Crane has been the Company's Vice President and the Chief
Financial Officer since October 27, 1997. Prior thereto, Mr. Crane started and
owned his own company, ATE, Inc., which supplies used, rebuilt and new packaging
relating equipment to the beverage industry worldwide, since February 1995. Mr.
Crane also currently serves as a director of ATE, Inc. From August 1990 to
February 1995, Mr. Crane served as a Division Chief Financial Officer of
Pepsi-Cola International, a subsidiary of PepsiCo, Inc.
Michael E. Fairbourne became the Company's Vice President-Administration,
Chief Accounting Officer and Secretary upon consummation of the Merger. Prior
thereto, Mr. Fairbourne served as the Senior Vice President-Administration of
Old Video since March 1994. Previously, Mr. Fairbourne was the Vice
President-Controller of Old Video from July 1987 to March 1994 and the
Controller of Old Video from September 1983 to July 1987. Prior to joining Old
Video, from 1976 to 1983, Mr. Fairbourne, a certified public accountant, was in
private practice.
Daniel Rosen was elected the Company's Vice President-Post Production in
May 1998 and was elected President of Manhattan Transfer in May 1994. Prior
thereto, Mr. Rosen served as the Vice President of IPL from May 1994 until
August 1997. 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.
<PAGE>
Gary R. Strack was elected the Company's Vice President-Planning in
February 1998. Prior thereto, Mr. Strack served as the Vice President, Treasurer
and Secretary of IPL from January 1995 until August 1997. Mr. Strack was the
Vice President, Controller and Secretary of IPL from October 1993 until January
1995. He had served as Treasurer of Old Video from May 1989 until October 1993.
Prior to that time, he was Assistant Controller of Old Video for four years. Mr.
Strack, a certified public accountant, was the Assistant Controller of Damon
Creations, Inc., an apparel company, from 1981 to 1984.
There are no family relationships among the above directors and executive
officers.
CERTAIN TRANSACTIONS
Business Relationships
The representations, warranties and agreements of the parties contained in
the Merger Agreement survive for a period of fifteen (15) months following the
closing of the Merger; provided, however, that the representations and
warranties relating to environmental, employee benefits and tax matters and
title to Video common stock survive the closing for a period of three (3) years,
plus any extension of time with respect to employee benefits and/or tax matters
agreed to with the applicable governmental authorities. The indemnification
obligations of each of IPL on the one hand and Old Video and its stockholders on
the other hand as a result of a breach of their respective representations,
warranties or agreements generally will not exceed $5,000,000. No
indemnification claim may be made against any party unless and until the
aggregate claims against such party equals $350,000 and then only for claims in
excess of such amount. The Merger Agreement also provides for certain rights of
set-off with respect to indemnification claims. Old Video's stockholders have
deposited in escrow $6,250,000 in Common Stock (valued as of the closing of the
Merger) under the terms of the Losses Escrow Agreement in connection with their
indemnification obligations to the Company under, the Merger Agreement and their
indemnification obligations to the Company are limited to the rights the Company
has under this escrow. Each stockholder of Old Video has the right to substitute
cash for any shares of Common Stock such stockholder so deposited in escrow
based upon the value of such deposited shares as of the closing of the Merger.
No additional deposit is required by Old Video's stockholders in the event of
any decrease in the value of the Common Stock so deposited in escrow. IBJ
Schroder Bank & Trust Company acts as the escrow agent in connection with this
escrow. In addition, the Company has agreed to indemnify Old Video's
stockholders in connection with the lease between the Company and a partnership
owned by the Old Video stockholders, which indemnification obligations are not
subject to any of the foregoing limitations.
The Merger Agreement also provides that, from time to time after the
consummation of the Merger, and in any event at least semi-annually, the Audit
Committee of the Board will review the compliance of the Company and Old Video
with their respective representations and warranties contained in the Merger
Agreement and will report the results of such review to the Board, and, in
connection therewith, will seek such advice and retain such advisors (including,
without limitation, legal counsel and accountants) as it will determine to be
appropriate. Moreover, the Audit Committee of the Board will be responsible for
authorizing any action to be taken by the Company in respect of indemnification
claims by and against the Company.
Transactions with Management and Others
Old Video leased a facility from a partnership, whose partners, one of whom
was Mr. Siracusano, then owned a majority interest in Old Video, under a lease
accounted for as an operating lease. In August 1997, immediately prior the
Merger, the principal stockholders of Old Video contributed the stock of two S
Corporations holding all of the general and limited partnership interest in the
partnership. The rental expense under the lease for the fiscal year 1998
amounted to $130,000.
The Company leases a building from an entity owned by certain principal
stockholders of the Company, one of whom is Mr. Siracusano, under a lease
accounted for as an operating lease. The rental expense under the lease for the
fiscal year 1998 amounted to $270,000.
Mr. Fairbourne was granted options in June 1997 to purchase 60,000 shares
of Common Stock from Messrs. Siracusano, Ferolito and Buck at an exercise price
of $2.00 per share in replacement of options to purchase approximately 22,245
shares of Old Video common stock at an exercise price of $5.39 per share which
were cancelled upon consummation of the Merger.
Video Dub, Inc., a former subsidiary of Old Video which is owned by the
Messrs. Siracusano, Ferolito and Buck, leased space at 240 Pegasus Avenue,
Northvale, New Jersey, in accordance with past practice, on a month-to-month
basis at a rate of approximately $11,000 per month. This lease was terminated on
September 30, 1997. Further, the Company agreed to provide office services to
certain former subsidiaries of Old Video which are owned by Messrs. Siracusano,
Ferolito and Buck following the Merger for a monthly fee of $1,000, provided
such services are reasonably proportionate to such fee.
<PAGE>
BOARD OF DIRECTORS
Meetings and Committees
During the 1998 fiscal year, the Board of Directors of the Company met, or
acted by unanimous written consent, on four 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 1998 fiscal year.
The Board of Directors of the Company has standing Compensation and Audit
Committees. Messrs. Stillo (Chairman), Alter and Steele are members of the Audit
Committee. Messrs. Steele (Chairman), Stillo and Alter are members of the
Compensation Committee. None of Messrs. Alter, Steele or Stillo 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
reviewing and approving the compensation and benefits for the Company's
executive officers and 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 on one occasion during the 1998 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 did not meet during the
1998 fiscal year.
Directors' Compensation
Each member of the Board who is not an officer of the Company receives
4,000 shares of the Company's Common Stock (6,000 shares in the case of the
Chairman of the Board) for serving on the Board plus $750 ($1,500 in the case of
the Chairman of the Board) and reimbursement of expenses for each Board or
committee meeting attended. Directors who chair committees receive $1,000 plus
reimbursement of expenses for each committee meeting attended.
The stockholders and directors of the Company adopted a restricted share
plan for directors who are not employees of the Company (the "Director Plan"). A
total of 50,000 shares of Common Stock is available for issuance under such
plan. During fiscal year 1998, 6,000 shares of common stock were awarded to Mr.
Stillo and Mr. Steele.
A special committee consisting of Messrs. Alter, Elkes and Gorman (a
director prior to the Merger) were appointed by the Board of Directors of IPL to
evaluate and negotiate the Merger Agreement on behalf of IPL. In connection with
this service, each of Messrs. Alter, Elkes and Gorman received $15,000.
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 (10%) of the Company's common stock (the "Common Stock")
(collectively, the "Reporting Persons") to file with the Securities and Exchange
Commission initial reports of beneficial ownership and reports of changes in
beneficial ownership of the Common Stock. Reporting Persons 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 and
certain representations of the Reporting Persons, the Company believes that
during the 1998 fiscal year all of the Reporting Persons complied with all
applicable Section 16(a) reporting requirements.
<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 Messrs.
Fairbourne and Strack, are entitled to receive an incentive bonus based on the
achievement of objective criteria, such as cash flow and net income targets. The
specific objective criteria applicable to an executive depends upon the
executive's position and responsibilities with the Company.
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. Siracusano's compensation for the fiscal year ended June 30, 1998 was
determined pursuant to his employment agreement, which expires on August 27,
2001. Mr. Siracusano's employment agreement was negotiated with the special
committee of IPL prior to the consummation of the Merger in August 1997. Mr.
Siracusano's base salary is $200,000 per annum. For fiscal 1998, Mr. Siracusano
earned a cash bonus of $60,000. The Committee believes that Mr. Siracusano'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 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).
Compensation Committee Report
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.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all compensation paid or accrued by the
Company for the 1998 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 June 30,
1998, whose salary and bonus from the Company in the 1998 fiscal year exceeded
$100,000 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation
--------------------------------------------------------- -------------------
Number of
Other Annual Securities
Name and Principal Compensation Underlying All Other
Position Year Salary Bonus (1)(2) Options (3) Compensation
- - --------------------------- ------- ---------- ---------- --------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Louis H. Siracusano
Chief Executive Officer 1998 $191,775 $ 60,000 $ 3,095 --- $ 26,261 (7)
President and Director 1997 144,000 20,000 2,160 --- 24,569 (7)
1996 144,000 75,000 2,310 --- 23,001 (7)
Steven G. Crane (4)
Vice President and Chief 1998 $107,692 $ 38,500 --- 75,000
Financial Officer 1997 --- --- --- --- ---
1996 --- --- --- --- ---
Donald H. Buck
Vice President 1998 $173,394 $ 40,000 $ 2,190 --- ---
1997 144,000 20,000 2,292 --- ---
1996 144,000 100,000 2,310 --- ---
Michael E. Fairbourne
Vice President - 1998 $110,000 $ 27,500 $ 1,913 10,000 (6) ---
Administration, Chief 1997 90,000 17,500 1,650 --- ---
Accounting Officer 1996 86,000 20,000 1,440 --- ---
and Secretary
Daniel Rosen (5)
Vice President - 1998 $190,385 $ 25,000 $ 1,606 --- ---
Post Production, 1997 --- --- --- --- ---
President of Manhattan 1996 --- --- --- --- ---
Transfer/Edit, Inc.
</TABLE>
(1) The amounts set forth in this column represent matching contributions by
the Company on behalf of the Named Executive Officers under the Company's
401(k) plan.
(2) Excludes items, which are, in the aggregate, the lesser of either $50,000
or 10% of the executive's total annual salary and bonus.
(3) All options granted to the Named Executive Officers in the 1998 fiscal year
represent options granted under the 1997 Plan.
(4) Represents compensation from October 27, 1997 to June 30, 1998.
(5) Represents compensation from August 27, 1997 to June 30, 1998.
(6) Does not include options to acquire 60,000 shares of Common Stock from
Messrs. Siracusano, Ferolito and Buck at an exercise price of $2.00 per
share.
(7) Includes life and disability insurance paid by the Company.
<PAGE>
Option Grants in Last Fiscal Year
The following table provides information with respect to the grant of stock
options during the 1998 fiscal year to the Named Executive Officer. Only
information concerning those Named Executive Officers who received option grants
in fiscal 1998 is provided:
<TABLE>
<CAPTION>
Potential
Realizable
Value at Assumed
Number of Annual Rates of
Securities % of Total Stock Price
Underlying Options Granted Exercise Appreciation for
Options to Employees in Price Per Expiration Option Term (4)
Name Granted (1) Fiscal Year 1998 Share ($) Date 5% ($) 10%
($)
- - ---------------------- ------------- ------------------ ------------ ------------ --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Steven G. Crane 75,000 (2) 20.38 3.375 10/27/07 $143,925 $379,125
Michael E. Fairbourne 10,000 (3) 2.72 2.94 8/27/07 23,540 54,900
</TABLE>
(1) All options granted to the named Executive Officers in the 1998 fiscal year
represents options granted under the 1997 plan.
(2) Vests on October 27, 2000.
(3) Vests on August 27, 2000.
(4) Valuation is based upon the potential realizable dollar value of the 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. These rates are set by the
Securities and Exchange Commission and are not intended to forecast
possible future appreciation of this Company's stock price.
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 1998 fiscal year by the Named Executive Officers and
the value of unexercised options owned by the Named Executive Officers at June
30, 1998:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Number of Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired on Value June 30, 1998 June 30, 1998 (1) (2)
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- - ----------------------- -------------- ---------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
Louis H. Siracusano --- --- 0/0 $ 0/0
Steven G. Crane --- --- 0/75,000 0/0
Donald H. Buck --- --- 0/0 0/0
Michael E. Fairbourne --- --- 0/10,000 (3) 0/600
Daniel Rosen --- --- 75,000/0 0/0
</TABLE>
(1) The value is based on the excess of the market price of the Common Stock at
June 30, 1998 over the exercise price of the unexercised options.
(2) At June 30, 1998, the closing bid price of the Common Stock on the American
Stock Exchange was $3.00 per share.
(3) Does not include options to acquire 60,000 shares of Common Stock from
Messrs. Siracusano, Ferolito and Buck at an exercise price of $2,00 per
share.
<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 1997 Plan during the last
fiscal year. Only information concerning those Named Executive Officers who
received such awards in fiscal 1998 is provided.
<TABLE>
<CAPTION>
Number of Shares
Underlying
Name Options Granted Vesting Period
- - ------------------------------------------------------------------- ----------------------- --------------------
<S> <C> <C>
Steven G. Crane.................................................. 75,000 10/27/97-10/27/00
Michael E. Fairbourne............................................ 10,000 8/27/97-8/27/00
</TABLE>
Employment Agreements
At the time of the Merger, the Company entered into employment agreements
with Messrs. Louis H. Siracusano and Donald H. Buck. Under Mr. Siracusano's
employment agreement with the Company, he serves as the President and Chief
Executive Officer of the Company for a four (4) year period or twenty four (24)
months following notice of termination by the Company or by Mr. Siracusano,
whichever is later. Under Mr. Buck's employment agreement with the Company, he
serves as the Vice President of the Company for a three (3) year period or
twelve (12) months following notice of termination by either party, whichever is
later.
Mr. Siracusano's employment agreement provides for base compensation of
$200,000 per annum, and annual bonuses and a long-term bonus based on the
Company's achievement of certain cash flow and net income targets to be
determined by Mr. Siracusano and the Compensation Committee of the Board. Under
the terms of the employment agreement, Mr. Siracusano is entitled to receive an
annual bonus of between 5% and 40% of his base salary for the relevant year upon
the Company's achievement of a percentage (ranging from 90% to 109.9% or
greater) of the agreed upon cash flow and net income targets for such year,
which bonus is payable within thirty (30) days of delivery to the Board of the
Company's audited financial statements. In addition, the employment agreement
provides that Mr. Siracusano is entitled to receive a long-term bonus of between
12.5% and 100% of his cumulative base salary for the entire contract period if
the Company achieves a percentage (ranging from 90% to 109.9% or greater) of the
agreed upon cash flow and net income targets for such period. The long-term
bonus is payable in a single installment within thirty (30) days following the
delivery of the Company's audited financial statements for the period ended June
30, 2001 and is to be reduced by amounts previously paid to Mr. Siracusano as
annual bonuses. The employment agreement further provides that the Compensation
Committee of the Board may award Mr. Siracusano other bonus payments in its
discretion.
Mr. Buck's employment agreement provides for base compensation of $175,000
per annum and a bonus to be negotiated and
agreed upon by the parties.
Each of Messrs. Siracusano's and Buck's employment agreements provides that
(i) the Compensation Committee may award a discretionary bonus to him on an
annual basis, (ii) each 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 the Company may make
available to its other executive employees, and (iii) upon termination without
cause, he is entitled to receive his annual base compensation and any incentive
compensation for the remainder of the originally scheduled term of the
employment 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 1997 Plan) that results in a material diminution in
the capacity and terms of his employment. Any such termination is to be treated
as a termination without cause.
Mr. Steven Crane's agreement with the Company provides for (i) base
compensation of $160,000 per annum, (ii) a bonus of 75% of the Chief Executive
Officer's bonus, (iii) stock options pursuant to the 1997 Plan of 75,000 shares,
(iv) a car allowance of $600 per month, (v) $25,000 for moving expenses and (vi)
a loan of $25,000 for use in facilitating his move.
IPL entered into an employment agreement with Daniel 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 provided for base compensation of $200,000 per annum and a bonus equal
to two percent (2%) of his base salary for each one percent (1%) increase in the
profitability of MTE and its subsidiaries compared to the prior year or base
year, whichever is higher. Effective as of May 1, 1995, Mr. Rosen's base
compensation was increased to $225,000 per annum. The agreement further provides
that (i) the Compensation Committee may award a discretionary bonus to Mr. Rosen
under certain circumstances, (ii) he 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 the
Company may make available to its other executive employees, and (iii) upon
termination without cause, Mr. Rosen 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, the
agreement provides that Mr. Rosen is entitled to terminate his employment at any
time during the six-month period following any "change in control" (as defined
in the 1993 Long-Term Incentive Plan) that results in a material diminution in
the capacity and terms of his employment. Any such termination will be treated
as a termination without cause.
The Company and Martin Irwin entered into a severance agreement dated as of
August 26, 1997. The agreement provides for Mr. Irwin to be paid severance of
(i) $150,000 per year for one year, (ii) $100,000 per year for the one year
period thereafter and (iii) $75,000 per year for the one year period thereafter.
Mr. Irwin is also entitled, for a period of three years from the date of the
agreement, to participate in and receive such benefits, services, equipment,
compensation and incentive plans and group life, health, accident, disability
and hospitalization insurance plans, pension plans and retirement plans as the
Company may make available to employees of the Company at the expense of the
Company. In addition, as part of such severance package, Old Video's
stockholders agreed to grant to Mr. Irwin, on a pro rata basis, options to
purchase an aggregate of 75,000 shares of the Common Stock they received in the
Merger at an exercise price of $0.75 per share. Such options are fully vested.
The 1993 Plan provides that in the event of a "change in control" (as
defined in the 1993 Plan), (i) all stock appreciation rights outstanding for at
least six (6) months and all options awarded under the 1993 Plan not previously
vested and exercisable will immediately become fully vested and exercisable, and
(ii) the restrictions applicable to any restricted shares awarded under the 1993
Plan will lapse and such shares will be deemed fully vested. Consummation of the
Merger was deemed a change in control under the 1993 Plan, and, as a result of
the Merger, the 50,000 stock options held by Daniel Rosen, who was the only
Named Executive Officer under the 1993 Plan, immediately vested and became
exercisable. If an employee's employment is terminated due to a Change in
Control, his stock options under the 1993 Plan remain exercisable for the
shorter of five (5) years or the remainder of the original term and shall
thereafter terminate.
The 1997 Plan was adopted by the Board and approved by the stockholders in
connection with the consummation of the Merger to replace IPL's 1993 Plan which
would have expired in 2004. These plans are similar in their terms except that,
among other things, the aggregate number of shares of Common Stock issuable
under the 1997 Plan was increased to 735,000 from the 84,200 which remained
available for issuance under the 1993 Plan, stock options (other than incentive
stock options) may be issued under the 1997 Plan below the fair market value of
the underlying Common Stock on the date of grant, awards may be granted under
the 1997 Plan to consultants and independent contractors performing services for
the Company, and certain other revisions in respect of recent changes in federal
securities regulations affecting equity compensation plans, as well as revisions
in respect of Section 162(m) of the Internal Revenue Code of 1986, as amended,
were made to the 1997 Plan. The 1997 Plan shall continue in effect until July 9,
2007.
<PAGE>
The following table compares the cumulative total stockholder return of the
Company's Common Stock with the cumulative total return of the Russell 2000 and
a selected peer group index for the period from June 30, 1994 until June 30,
1998, 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., Four Media
Corporation, VDI Media, 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 (the date of IPL's initial public offering) and that all dividends were
reinvested.
Video Services Corporation
Performance Graph Appears Here
<TABLE>
<CAPTION>
February 8, June 30, June 30, June 30, June 30, June 30,
1994 1994 1995 1996 1997 1998
-------------- ------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Video Services Corporation $ 100.00 $ 76.67 $ 35.56 $ 34.44 $ 29.44 $ 26.67
Peer Group $ 100.00 $ 80.28 $110.55 $143.54 $ 99.55 $101.85
Russell 2000 $ 100.00 $ 91.06 $107.89 $131.85 $149.31 $171.28
</TABLE>
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company, in accordance with the
recommendation of its Audit Committee, none of whom is an officer of the
Company, has selected Ernst & Young, LLP as independent accountants of the
Company for the year ending June 30, 1999 and further directed that the
selection be submitted for ratification by shareholders at the Annual
Meeting. Ernst & Young, a nationally known firm of independent accountants,
has audited the Company's financial statements for the past two years.
Representatives of Ernst & Young, 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.
The Board of Directors recommends a vote FOR ratification of the
selection of Ernst & Young LLP as the Company's independent public
accountants for the fiscal year ending June 30, 1999. Proxies solicited by
the Company will be voted FOR ratification of the selection unless
otherwise indicated.
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 21, 1999. The Company's management proxies may
exercise their voting authority without any discussion of the proposal in
the Company's proxy material, for any proposal which is received by the
Company after October 4, 1999.
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 1998 Annual Report to Stockholders, including financial
statements for the fiscal year ended June 30, 1998, 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.
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
June 30, 1998 to each stockholder without charge (other than a reasonable
charge for any exhibit requested) upon written request to:
Video Services Corporation
240 Pegasus Avenue
Northvale, New Jersey 07647
Attn: Steven G. Crane
Vice President and Chief Financial Officer
<PAGE>
VIDEO SERVICES CORPORATION COMMON STOCK
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
December 18, 1998
The undersigned hereby constitutes and appoints Steven G. Crane and
Michael E. Fairbourne, 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 VIDEO SERVICES
CORPORATION, to be held at the American Stock Exchange, 86 Trinity Place, New
York, New York 10006, on December 18, 1998 at 11:00 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 stockholders. If no direction is made, this proxy will
be voted FOR the election as directors of the nominees of the Board of Directors
and FOR the ratification of the appointment of Ernst & Young, LLP.
The undersigned acknowledges receipt of the accompanying Proxy
Statement dated November 18, 1998.
Continued and to be signed and dated on the reverse side.
VIDEO SERVICES CORPORATION
P.O. BOX 11229
NEW YORK, NY 10203-0229
<PAGE>
1. TO ELECTION DIRECTORS:
FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below for all nominees listed below
Nominees: Robert H. Alter, Terrence A. Elkes, Martin Irwin, Louis H. Siracusano,
Raymond L. Steele and Frank Stillo. (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_____________________________________________________________________
2. Ratify the appointment of Ernst & Young, LLP as independent certified
public properly come accountants for the fiscal year 1999 or postponements
thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. At their discretion, upon any other business which may before the meeting
or any adjournments Change
I plan [ ] I do not plan [ ] to attend the annualMeeting.
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.)
Dated: ______________________________________________, 1998
------------------------------------------------------------
Signature
------------------------------------------------------------
Signature
Please sign and Return the Proxy Card Promptly Using the Enclosed Envelope. No
Postage is Required
