SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the registrant /X/
Filed by a party other than the registrant |_|
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
THE SOLOMON-PAGE GROUP, LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
- --------------------------------------------------------------------------------
(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 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
- --------------------------------------------------------------------------------
(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
<PAGE>
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:
-2-
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
1140 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 3, 1998
-------------
To the Stockholders of The Solomon-Page Group Ltd.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of THE SOLOMON-PAGE GROUP LTD., a Delaware corporation (the
"Company"), will be held at The Penn Club, 30 West 44th Street, New York, New
York 10036 on Friday, April 3, 1998 at 10:00 a.m., local time, for the following
purposes:
1. To elect two (2) Class II directors to the Board of
Directors to serve until the 2001 Annual Meeting of Stockholders;
2. To ratify the appointment of Moore Stephens, P.C. as
the Company's independent auditors for the fiscal year ending September
30, 1998; and
3. To transact such other business as may properly be
brought before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on Wednesday,
February 25, 1998 as the record date for the Meeting. Only stockholders of
record on the stock transfer books of the Company at the close of business on
that date are entitled to notice of, and to vote at, the Meeting.
By Order of the Board of Directors
ERIC M. DAVIS,
Secretary
New York, New York
March 9, 1998
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING,
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
THE SOLOMON-PAGE GROUP LTD.
1140 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
--------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
APRIL 3, 1998
--------------------------
INTRODUCTION
The Proxy accompanying this Proxy Statement is being solicited by the
Board of Directors of The Solomon- Page Group Ltd., a Delaware corporation (the
"Company"), for use at the 1998 Annual Meeting of Stockholders of the Company
(the "Meeting") to be held at The Penn Club, 30 West 44th Street, New York, New
York 10036 on Friday, April 3, 1998 at 10:00 a.m., local time, and at any
adjournments thereof.
The principal executive offices of the Company are located at 1140
Avenue of the Americas, New York, New York 10036. The approximate date on which
this Proxy Statement and the accompanying Proxy will first be sent or given to
stockholders is March 10, 1998.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on February 25,
1998 the record date (the "Record Date") for the Meeting, will be entitled to
notice of, and to vote at, the Meeting and any adjournment(s) thereof. As of the
close of business on the Record Date, there were outstanding 5,129,285 shares of
the Company's common stock, $.001 par value (the "Common Stock"). Each
outstanding share of Common Stock is entitled to one vote. A majority of the
outstanding shares of Common Stock present in person or by Proxy is required for
a quorum.
VOTING OF PROXIES
Shares of Common Stock represented by Proxies that are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no instructions are contained in a Proxy, the
shares of Common Stock represented thereby will be voted (i) for election as
directors of the persons who have been nominated by the Board of Directors, (ii)
for ratification of the appointment of Moore Stephens, P.C. as the Company's
independent auditors for the fiscal year ending September 30, 1998, and (iii)
upon any other matter that may properly be brought before the Meeting, in
accordance with the judgment of the person or persons voting the Proxy. The
execution of a Proxy will in no way affect a stockholder's right to attend the
Meeting and to vote in person. Any Proxy executed and returned by a stockholder
may be revoked at any time thereafter by written notice of revocation given to
the Secretary of the Company prior to the vote to be taken at the meeting, by
execution of a subsequent Proxy that is presented at the Meeting, or by voting
in person at the Meeting, in any such case, except as to any matter or matters
upon which a vote shall have been cast pursuant to the authority conferred by
such Proxy prior to such revocation. Broker "non-votes" and the shares as to
which a stockholder abstains are included for purposes of determining whether a
quorum of shares is present at a meeting. A broker "non-vote" occurs when a
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the beneficial
owner.
<PAGE>
Broker "non-votes" are not included in the tabulation of the voting results on
the election of directors or issues requiring approval of a majority of the
votes cast and, therefore, do not have the effect of votes in opposition in such
tabulations. Proxies marked as abstaining with respect to the proposal to ratify
the appointment of independent auditors will have the effect of a vote against
such proposal.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by telephone, telegraph, overnight
courier and personal interview by officers, directors and employees of the
Company. The Company will, upon request, reimburse brokerage houses and persons
holding Common Stock in the names of their nominees for their reasonable
expenses in sending soliciting material to their principals.
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the
Company's Common Stock as of February 25, 1998 by each person known by the
Company to be the beneficial owner of more than five percent of the Common
Stock, each director, each executive officer named in the summary compensation
table and by all directors and executive officers of the Company as a group.
Unless otherwise indicated, the address of each person or entity listed below is
the Company's principal executive offices.
Name and Address Shares Percentage
of Beneficial Owner (1) Beneficially Owned(2) of Class
- ----------------------- ------------------ ---------
Herbert Solomon....................... 724,266(3) 13.5%
Lloyd Solomon......................... 1,016,666(3) 19.0%
Scott Page............................ 818,566(3) 15.3%
Eric M. Davis......................... 127,333(4) 2.5%
Edward Ehrenberg(5)................... 14,500(6) (7)
Joel A. Klarreich(8).................. 14,500(6) (7)
All Directors and Executive Officers
as a Group (6 persons)............... 2,715,831(9) 46.6%
- --------------------------
(1) All of such persons have sole investment and voting power over the shares
listed as being beneficially owned by them.
(2) All persons identified below as holding options are deemed to be
beneficial owners of shares of Common Stock subject to such options by
reason of their right to acquire such shares within 60 days after February
25, 1998.
(3) Includes 216,666 shares subject to options. (4) Includes 23,333 shares
subject to options.
(5) Mr. Ehrenberg's address is 76 Sayre Drive, Princeton, New Jersey 08540.
(6) Represents 14,500 shares subject to options.
(7) Less than 1%.
(8) Mr. Klarreich's address is c/o Newman Tannenbaum Halpern Syracuse &
Hirschtritt LLP, 900 Third Avenue, New York, New York 10022.
(9) Includes 702,331 shares subject to options.
-2-
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
Article Six of the Certificate of Incorporation of the Company provides
for the organization of the Board of Directors into three classes. All directors
are chosen for a full three-year term to succeed those whose terms expire. It is
proposed that two directors be elected as Class II Directors to serve until the
2001 Annual Meeting of Stockholders and until their respective successors are
elected and shall qualify.
Unless otherwise specified, all Proxies received will be voted in favor
of the election of Herbert Solomon and Eric M. Davis as Class II Directors to
serve until the 2001 Annual Meeting of Stockholders. Directors are to be elected
by a plurality of the votes cast, in person or by proxy, at the Meeting. All
nominees for director are currently directors of the Company. Management has no
reason to believe that any of the nominees will not remain a candidate for
election at the date of the Meeting. Should any of the nominees not then remain
a candidate, the Proxies will be voted in favor of those nominees who remain
candidates and may be voted for substitute nominees selected by the Board of
Directors. The following table and the paragraphs following the table set forth
information regarding the current ages, terms of office and business experience
of the current and proposed directors of the Company:
Expiration of
Current Term of
Name Age Office as Director
- ---- --- ------------------
NOMINEES FOR ELECTION AS DIRECTORS:
CLASS II DIRECTORS:
Herbert Solomon 67 1998
Eric M. Davis 36 1998
CONTINUING MEMBERS OF THE BOARD OF
DIRECTORS:
CLASS I DIRECTORS:
Lloyd Solomon 38 2000
Joel A. Klarreich 51 2000
CLASS III DIRECTORS:
Scott Page 32 1999
Edward Ehrenberg 67 1999
HERBERT SOLOMON (Class II) has been the Chairman of the Board of the
Company since August 1990, shortly after he retired from his previous executive
career in the apparel and retail industries. From 1981 to 1990, Mr. Solomon was
Executive Vice President -- Merchandising of Amcena Corporation, which owned
Ohrbach's, a leading apparel retailer. From 1976 to 1981, he served as Chairman
of the Board and Chief Executive Officer of Ohrbach's. Mr. Solomon received a
B.B.A. degree from Bernard Baruch College of the City of New York. Mr. Solomon
is the father of Lloyd Solomon and the father-in-law of Scott Page.
-3-
<PAGE>
ERIC M. DAVIS (Class II) has been Vice President and Chief Financial
Officer of the Company since February 1994, and a director of the Company since
September 1994. From 1984 through February 1994, Mr. Davis was employed by
Mortensen and Associates, P.C., a predecessor of Moore Stephens, P.C., the
Company's auditors. Mr. Davis is a Certified Public Accountant and received a
B.S. degree from Davis & Elkins College, Elkins, West Virginia.
LLOYD SOLOMON (Class I) has been the Vice Chairman of the Board of
Directors and the Chief Executive Officer of the Company since June 1995. Prior
to his election to these positions, he had been the President or an Executive
Vice President and a director of the Company since the inception of its business
in 1990. From 1986 through 1990, Mr. Solomon served as an Executive Vice
President of Rand Thomson Consulting Group, a personnel services firm. Mr.
Solomon received an M.B.A. from New York University and a B.A. from Boston
University. He is the son of Herbert Solomon and the brother-in-law of Scott
Page.
JOEL A. KLARREICH (Class I) has been a director of the Company since
June 1995. Mr. Klarreich has been a practicing attorney since 1968 and member of
the law firm of Newman Tannenbaum Helpern Syracuse & Hirschtritt LLP since 1996.
He is general counsel to the Association of Personnel Consultants of New York
State, the sole statewide trade association of permanent placement firms in New
York. From 1988 to 1996, Mr. Klarreich was a member of the law firm of Klein,
Heisler & Klarreich, P.C. He has a B.B.A. from the City College of the City of
New York and J.D. from St. John's University School of Law.
SCOTT PAGE (Class III) has been the President of the Company since June
1995. Prior to becoming President, he had been an Executive Vice President of
the Company since August 1991, when he was also elected a director. From 1989 to
1991, Mr. Page served as a managing director of Rand Thomson Consulting Group.
Mr. Page is the son-in-law of Herbert Solomon and the brother-in-law of Lloyd
Solomon.
EDWARD EHRENBERG (Class III) has been a director of the Company since
June 1995. Mr. Ehrenberg has been the President of E.E. Enterprises, a
consulting firm, since 1988. Mr. Ehrenberg was Vice President and General
Manager of U.S. Operations of Electrocatalytic, Inc., a manufacturer and
marketer of cathodic protection and chlorine generating products, from March
1995 to June 1995. He was Executive Vice President of Enzon, Inc., a public
biotech company in Piscataway, New Jersey from August 1991 to August 1992. Mr.
Ehrenberg has held executive positions with the Ford Motor Company, Xerox,
International Harvester and was Chairman and Chief Executive Officer of CH
Holdings, Chicago, Illinois prior to moving to New Jersey. Mr. Ehrenberg has an
M.B.A. from the Wharton School of the University of Pennsylvania and a B.S. from
New York University.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
For the fiscal year ended September 30, 1997, there were four meetings
of the Board of Directors. In addition, members of the Board of Directors
consulted regularly with each other and from time to time acted by unanimous
written consent pursuant to the laws of the State of Delaware. The Board of
Directors established the three standing committees described below on June 8,
1995. One meeting of the Audit Committee was held during the fiscal year ended
September 30, 1997. One meeting of the Compensation Committee and the Stock
Option Committee was held during the fiscal year ended September 30, 1997. Prior
to establishing these committees, the customary functions of such committees had
been performed by the entire Board of Directors. The Board of Directors does not
presently have a standing nominating committee, the customary functions of such
committee being performed by the entire Board of Directors.
-4-
<PAGE>
The members of the Audit Committee are Lloyd Solomon, Edward Ehrenberg
and Joel A. Klarreich. The Audit Committee reviews, analyzes and makes
recommendations to the Board of Directors with respect to the Company's
accounting policies, controls and statements, consults with the Company's
independent public accountants, reviews filings containing financial information
of the Company to be made with the Securities and Exchange Commission and
reviews for approval proposed transactions in the Company's securities by
officers, directors and employees of the Company in light of applicable
statutes, rules and regulations.
The members of the Compensation Committee are Herbert Solomon, Edward
Ehrenberg and Joel A. Klarreich. The Compensation Committee reviews and approves
the salary and other compensation of officers and employees of the Company,
including non-cash benefits, and designates the employees entitled to
participate in the Company's benefit plans and other arrangements, as from time
to time constituted, exclusive of stock option plans, agreements and
arrangements.
The members of the Stock Option Committee are Edward Ehrenberg and Joel
A. Klarreich. The Stock Option Committee determines the terms of grants of stock
options and the persons to whom such options shall be granted in accordance with
the Company's stock option plans and administers such plans.
EXECUTIVE COMPENSATION
The following table provides summary information concerning cash and
certain other compensation paid or accrued by the Company to or on behalf of the
Company's Chief Executive Officer and each of the other most highly compensated
executive officers of the Company whose compensation exceeded $100,000 for the
three years ended September 30, 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------ ----------------------------
OTHER ANNUAL RESTRICTED
NAME AND COMPENSATION STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS ($) OPTIONS(#)(2) COMPENSATION(3)
------------------ ---- --------- -------- ------ ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herbert Solomon 1997 $225,000 -- -- -- -- $17,136
Chairman of the Board........ 1996 225,000 -- -- -- 200,000(4) 17,136
1995 200,000 -- -- -- 150,000 13,941
Lloyd Solomon 1997 $350,000 $200,000(5) -- -- -- $18,238
Chief Executive Officer...... 1996 350,000 32,110 -- -- 200,000(4) 18,238
1995 350,000 -- -- -- 150,000 1,520
Scott Page 1997 $200,000 $731,505(6) -- -- -- $13,457
President.................... 1996 200,000 615,988(6) -- -- 200,000(4) 13,457
1995 200,000 350,818(6) -- -- 150,000 4,486
Eric M. Davis
Vice President - Finance 1997 $150,000 $ 25,000 -- -- 10,000 --
Chief Financial Officer...... 1996 $130,000 25,000 -- -- -- --
1995 109,655 15,000 -- -- 40,000 --
</TABLE>
- ---------------------
(1) Although the officers receive certain perquisites such as auto allowances
and company credit cards, the value of such perquisites did not exceed for
any officer the lesser of $50,000 or 10% of the officer's salary and
bonus.
(2) No stock appreciation rights have been awarded.
(3) Represents premiums paid by the company with respect to split-dollar life
insurance obtained for the benefit of the named executive officers.
(footnotes continued on following page)
-5-
<PAGE>
(4) Represents options issued in consideration for terminating the escrow
share agreement. See "Escrow Shares" below.
(5) Includes a special bonus of $100,000 granted by the compensation committee
of the board of directors.
(6) Represents commissions payable under Mr. Page's employment agreement equal
to 30% of the revenues generated by his recruitment and placement
activities as a recruitment and placement counselor.
The following table sets forth certain information regarding stock
option grants made to officers of the company during the fiscal year ended
September 30, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE
---- ------------- ------------ -------- ----
<S> <C> <C> <C> <C>
Eric M. Davis.............. 10,000 4.1 2.375 4/14/07
</TABLE>
- --------------------
(1) Such options become exercisable (i) as to one-third of the shares covered
thereby commencing on April 14, 2000, (ii) as to an additional one-third
of the shares covered thereby commencing on April 14, 2001 and (iii) as to
the remaining one-third of such shares commencing on April 14, 2002.
The following table sets forth certain information regarding
unexercised stock options held by officers of the Company as of September 30,
1997. No stock options were exercised by such officers during the fiscal year
ended September 30, 1997.
<TABLE>
<CAPTION>
AGGREGATED FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS
SEPTEMBER 30, 1997(#) AT SEPTEMBER 30, 1997($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
---- ------------------------- -----------------------------
<S> <C> <C>
Herbert Solomon............... 216,666/133,334 303,665/110,832
Lloyd Solomon................. 216,666/133,334 303,665/110,832
Scott Page.................... 216,666/133,334 303,665/110,832
Eric M. Davis................. 23,333/56,667 29,032/64,617
</TABLE>
- --------------------
(1) Based on the market value, as reported on the Nasdaq Small Cap Market,
of $3.03 per share of Common Stock at September 30, 1997 and exercise
prices ranging from $1.25 to $2.50 per share.
-6-
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Herbert
Solomon, Lloyd Solomon and Scott Page, dated June 14, 1993 and amended June 8,
1995 in the case of Lloyd Solomon and Scott Page, pursuant to which Herbert
Solomon agreed to serve as Chairman of the Board of the Company, Lloyd Solomon
agreed to serve as Vice Chairman of the Board and Chief Executive Officer of the
Company and Scott Page agreed to serve as President of the Company. Pursuant to
his employment agreement, Herbert Solomon receives a base salary of $225,000
(increased from $200,000 effective October 1, 1995), which amount is to be
annually reviewed and may be increased by the Board of Directors and, in
addition, payments equal to 20% of the revenues generated by his recruitment and
placement activities as a recruitment and placement counselor. Pursuant to his
employment agreement, Lloyd Solomon receives a base salary of $350,000, which
amount is to be annually reviewed and may be increased by the Board of
Directors, and, in addition, incentive compensation for each fiscal year during
the term of his employment equal to that percentage of the Company's pre-tax
operating income as equals the percentage of the Company's revenue represented
by the Company's pre-tax operating income. By way of example, in a particular
year, should the Company's pre-tax operating income equal 5% of the Company's
revenue, Lloyd Solomon would be entitled to receive as incentive compensation an
amount equal to 5% of the Company's pre-tax operating income. Additionally, in
fiscal 1997, the Compensation Committee of the Board of Directors of the Company
awarded Lloyd Solomon a special bonus of $100,000, for his efforts in increasing
the Company's revenues and profitability. Pursuant to his employment agreement,
Scott Page receives a base salary of $200,000, which amount is to be annually
reviewed and may be increased by the Board of Directors and, in addition,
payments equal to 30% of the revenues generated by his recruitment and placement
activities as a recruitment and placement counselor.
Each employment agreement provides for an initial term of five years
ending June 13, 1998, which is to be extended automatically from year-to-year
unless terminated by either party. Each employment agreement provides that if
the employee is terminated other than for "cause" (as defined therein), he is to
continue to receive the compensation provided for under his employment
agreement, and that if he becomes disabled (as defined therein), the Company may
elect to place him on disability status, in which event he would be paid
one-half of the compensation provided for under his employment agreement. Each
of these employment agreements provides for liquidated damages equal to 2.99
times the "base amount" (as such term is defined in Section 280G(b)(2)(A) of the
Internal Revenue Code of 1986, as amended, (the "Code")) of the employee's
compensation during the most recent fiscal year in the event of a change in
control of the Company, which is defined therein to mean (a) a change in control
as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (b) a person (as such term is defined in Sections 13(d)
and 14(d) of the Exchange Act) other than a current director or officer of the
Company becoming the beneficial owner, directly or indirectly, of 20% of the
voting power of the Company's outstanding securities or (c) the members of the
Board of Directors at the beginning of any two-year period ceasing to constitute
at least a majority of the Board of Directors at any time during such two-year
period unless the election of any new director during such period has been
approved in advance by two-thirds of the directors in office at the beginning of
such two-year period. Each employment agreement prohibits the employee from
competing with the Company's business during the term thereof and for a period
of one year thereafter.
ESCROW SHARES
On September 18, 1996, the Company terminated the agreement relating to
the Escrow Shares described below and an aggregate of 794,136 shares of Common
Stock held in escrow (the "Escrow Shares") was cancelled. In consideration for
terminating the escrow share agreement, the Company granted stock options to
purchase 200,000 shares of common stock at $2.27 per share as to options for
132,156 shares and at $2.06 per share as to options for 67,844 shares
(respectively, 110% and 100% of then current fair market value) to each of
Herbert Solomon, Lloyd Solomon and Scott Page.
In connection with the employment agreements entered into in June 1993
between the Company and each of Herbert Solomon, Lloyd Solomon and Scott Page,
these persons placed in escrow the Escrow Shares. In the event the Company's
earnings before income tax as reported in the Company's audited financial
statements, subject to adjustment (the "Minimum Pre-Tax Earnings"), were to
equal or exceed the amounts listed below for any fiscal year
-7-
<PAGE>
ending on or prior to September 30, 1999, the Escrow Shares were to be released
from escrow and delivered to such stockholders in the amounts set forth opposite
the Minimum Pre-Tax Earnings listed below:
Minimum Pre-Tax Earnings Escrow Shares to be Released
- ----------------------------- --------------------------------
$1,000,000 264,712
$2,000,000 264,712
$3,000,000 264,712
In the event that any of the Escrow Shares had been released, the
aggregate fair market value thereof on the date of release would have been
treated for financial reporting purposes as compensation expense to the Company.
1993 LONG-TERM INCENTIVE PLAN
On August 6, 1993, the Company adopted the 1993 Incentive Plan in order
to motivate qualified employees of the Company, to assist the Company in
attracting employees and to align the interests of such persons with those of
the Company's stockholders. The 1993 Incentive Plan provides for the grant of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), "non-qualified stock options,"
restricted stock, performance grants and other types of awards to officers, key
employees, consultants and independent contractors of the Company and its
affiliates.
The 1993 Incentive Plan, which is administered by the Stock Option
Committee of the Board of Directors, currently authorizes the issuance of a
maximum of 1,500,000 shares of Common Stock, which may be either newly issued
shares, treasury shares, reacquired shares, shares purchased in the open market
or any combination thereof. If any award under the 1993 Incentive Plan
terminates, expires unexercised, or is cancelled, the shares of Common Stock
that would otherwise have been issuable pursuant thereto will be available for
issuance pursuant to the grant of new awards. The number of shares of Common
Stock available under the 1993 Incentive Plan and the terms of any option or
other award granted thereunder are subject to adjustment in the event of a stock
split, combination of shares, stock dividend or certain other events if the
Stock Option Committee determines that such event equitably requires such an
adjustment. In the event of a change in control of the Company (as defined in
the 1993 Incentive Plan), the 1993 Incentive Plan provides among other things
that all stock options outstanding on the date of such change in control shall
become immediately exercisable in full.
As of December 31, 1997, there were options outstanding under the 1993
Incentive Plan with respect to an aggregate of 1,343,250 shares of Common Stock.
Of these, Herbert Solomon, Lloyd Solomon and Scott Page held five-year options
with respect to 150,000 shares of Common Stock each, at an exercise price of
$1.375 per share, all of which were then exercisable. Other employees held
options for periods of 10 years with respect to an aggregate of 893,250 shares,
at exercise prices ranging from $.625 to $2.50 per share. Of such options, Eric
M. Davis held options to purchase 30,000 shares exercisable at $2.50 per share
and options to purchase 40,000 shares exercisable at $1.25 per share. Each of
these options may be exercised as to one-third of the shares covered thereby
commencing on the third anniversary of the date of the grant, as to a further
one-third of such shares commencing on the fourth anniversary thereof, and as to
the remaining shares covered thereby commencing on the fifth anniversary
thereof.
-8-
<PAGE>
1996 STOCK OPTION PLAN
On September 17, 1996, the Company adopted the 1996 Stock Option Plan
(the "1996 Plan") in order to provide additional incentive to the officers,
directors and employees of the Company who are primarily responsible for the
management and growth of the Company, and to consultants and advisors to the
Company who otherwise materially contribute to the conduct and direction of its
business, and to retain and attract to the Company's employ persons of
competence. The 1996 Plan provides for grants of both "incentive stock options"
and "nonqualified stock options," and is meant to meet the requirements of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, and Section 162(m)
of the Code.
The 1996 Plan, which is administered by the Stock Option Committee of
the Board of Directors, currently authorizes the issuance of a maximum of
1,000,000 shares of Common Stock, no more than 200,000 of which may be granted
to any individual in any given year. In the event of a change in control of the
Company (as defined in the 1996 Plan), all stock options outstanding under the
1996 Plan shall become fully exercisable. In addition, if any option under the
1996 Plan shall expire or terminate for any reason without having been
exercised, the unpurchased shares shall again be available for the purposes of
the 1996 Plan.
As of the date hereof, pursuant to the 1996 Plan, options to purchase
132,156 shares of Common Stock at an exercise price of $2.27 per share and
options to purchase 67,844 shares of Common Stock at an exercise price of $2.06
per share have been granted to each of Herbert Solomon, Lloyd Solomon and Scott
Page, and options to purchase 10,000 shares of Common Stock at an exercise price
of $2.375 have been granted to Eric Davis.
DIRECTOR COMPENSATION
Directors who are not officers or employees of the Company receive such
compensation for their services as the Board of Directors may from time to time
determine. Currently, directors who are not employees of the Company receive a
fee of $1,000 for each Board of Directors meeting attended, and $1,000 per year
for each committee upon which such director serves, plus reasonable
out-of-pocket expenses. Directors who are officers or employees of the Company
are not entitled to any compensation for their service as a director.
1995 DIRECTORS' STOCK OPTION PLAN
On August 17, 1995 the Company adopted the 1995 Directors' Stock Option
Plan (the "Directors' Plan"), in which each director who is not an officer or
employee of the Company (each an "Eligible Director") is eligible to
participate. The purpose of the Directors' Plan is to secure for the Company and
its stockholders the benefits arising from stock ownership by its Eligible
Directors by providing a means whereby such Directors may purchase shares of
Common Stock pursuant to options granted in accordance with the Directors' Plan.
The Directors' Plan provides that each Eligible Director is to receive the grant
of an option to purchase 10,000 shares of Common Stock on the date such Eligible
Director is first elected as a member of the Board of Directors. To the extent
that shares of Common Stock remain available for the grant of options under the
Directors' Plan, on January 1st of each year commencing January 1, 1996, each
Eligible Director is to be granted an option to purchase 3,000 shares of Common
Stock. Unless terminated earlier by the Board of Directors, the Directors' Plan
will terminate on June 7, 2005.
The Directors' Plan, which is administered by the Board of Directors,
currently authorizes the issuance of a maximum of 100,000 shares of Common
Stock, subject to adjustment, pursuant to the exercise of options granted
thereunder. Such shares may be authorized but unissued shares or reacquired
shares. The number of shares of Common Stock available under the Directors' Plan
is subject to adjustment to prevent dilution in the event of a stock split,
combination of shares, stock dividend or certain other events. If an option
granted under the Directors' Plan, or any portion thereof, expires or terminates
for any reason without having been exercised in full, the unpurchased shares of
Common Stock covered by such option shall be available for future grants of
options.
-9-
<PAGE>
As of the date hereof, options to purchase 20,000, 6,000, 6,000 and
6,000 shares of Common Stock at exercise prices of $2.00, $0.5625, $1.875 and
$3.688 per share, respectively, have been granted pursuant to the Director's
Plan, and are held in equal proportions by the Eligible Directors, Edward
Ehrenberg and Joel A. Klarreich.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has appointed Moore Stephens, P.C. as the
Company's independent auditors for the fiscal year ending September 30, 1998.
Although the selection of auditors does not require ratification, the Board of
Directors has directed that the appointment of Moore Stephens, P.C. be submitted
to stockholders for ratification due to the significance of such firm's
appointment to the Company. Approval by holders of the majority of shares of
Common Stock represented in person or by proxy at the Meeting is necessary for
stockholder ratification of the appointment of Moore Stephens, P.C. If
stockholders do not ratify the appointment of Moore Stephens, P.C., the Board of
Directors will consider the appointment of other certified public accountants. A
representative of the auditors is expected to be present at the Meeting, and
will have the opportunity to make such statements as he may care to make and
will respond to appropriate questions from stockholders of the Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF MOORE STEPHENS, P.C. AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998.
________________________________
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1998, including financial statements, is enclosed herewith. If,
for any reason, you did not receive your copy of the Annual Report, please
advise the Company and another will be sent to you.
STOCKHOLDER PROPOSALS
Stockholder proposals in respect of matters to be acted upon at the
Company's 1999 Annual Meeting of Stockholders should be received by the Company
on or before October 25, 1998 in order that they may be considered for inclusion
in the Company's proxy materials.
By Order of the Board of Directors
Eric M. Davis, Secretary
New York, New York
March 9, 1998
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE SOLOMON-PAGE GROUP LTD.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
APRIL 3, 1998
The undersigned, a stockholder of The Solomon-Page Group Ltd.,
a Delaware corporation (the "Company"), does hereby constitute and appoint
Herbert Solomon, Lloyd Solomon and Scott Page and each of them, the true and
lawful attorneys and proxies with full power of substitution, for and in the
name, place and stead of the undersigned, to vote all of the shares of Common
Stock of the Company that the undersigned would be entitled to vote if
personally present at the 1998 Annual Meeting of Stockholders of the Company to
be held at The Penn Club, 30 West 44th Street, New York, New York 10036 on April
3, 1998 at 10:00 a.m., local time, or at any adjournment or adjournments
thereof.
The undersigned hereby instructs said proxies or their substitutes as
set forth below.
1. ELECTION OF DIRECTORS:
The election of Herbert Solomon and Eric M. Davis to Class II
of the Board of Directors, to serve until the 2001 Annual
Meeting of Stockholders and until their respective successors
are elected and shall qualify.
TO WITHHOLD
AUTHORITY TO WITHHOLD AUTHORITY
TO VOTE TO VOTE FOR ANY INDIVIDUAL
FOR ALL NOMINEE(S), PRINT NAME(S)
FOR ____ NOMINEES ____ BELOW
-------------------------
-------------------------
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS:
To ratify the appointment of Moore Stephens, P.C. as the
independent auditors of the Company for the fiscal year ending
September 30, 1998.
FOR _____ AGAINST _____ ABSTAIN _____
3. DISCRETIONARY AUTHORITY: To vote with discretionary authority
with respect to all other matters that may come before the
Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE
NOMINEES AS DIRECTORS, TO RATIFY THE APPOINTMENT OF MOORE STEPHENS, P.C. AS THE
COMPANY'S INDEPENDENT AUDITORS AND IN ACCORDANCE WITH THE DISCRETION OF THE
PROXIES OR PROXY WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE ANNUAL
MEETING.
<PAGE>
The undersigned hereby revokes any proxy or proxies heretofore given
and ratifies and confirms all that the proxies appointed hereby, or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof.
, 1998
_____________________ (L.S.)
_____________________ (L.S.)
Signature(s)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME
OR NAMES APPEAR HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE INDICATE THE
CAPACITY IN WHICH SIGNING. WHEN SIGNING
AS JOINT TENANTS, ALL PARTIES IN THE
JOINT TENANCY MUST SIGN. WHEN A PROXY IS
GIVEN BY A CORPORATION, IT SHOULD BE
SIGNED WITH FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER.
PLEASE MARK, DATE, SIGN AND MAIL
THIS PROXY IN THE ENVELOPE PROVIDED FOR
THIS PURPOSE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
