<PAGE> 1
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
Interactive Group, Inc.
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(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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<PAGE> 2
INTERACTIVE GROUP, INC.
5095 Murphy Canyon Road
San Diego, California 92123
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1997
TO THE STOCKHOLDERS OF INTERACTIVE GROUP, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
INTERACTIVE GROUP, INC., a Delaware corporation (the "Company"), will be held
on Tuesday, June 3, 1997 at 4:00 p.m. local time at the Company's offices
located at 5095 Murphy Canyon Road, San Diego, California, for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve the Company's Employee Stock Purchase Plan, as amended, to
increase the aggregate number of shares of Common Stock authorized for
issuance under such plan by 100,000 shares.
3. To ratify the selection of Ernst & Young LLP as independent auditors
of the Company for its fiscal year ending December 31, 1997.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 7, 1997 as
the record date for the determination of stockholders entitled to notice of and
to vote at this Annual Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ ROBERT C. VERNON
-------------------------
Robert C. Vernon
Acting Secretary
San Diego, California
April 30, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO
ENSURE YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF
YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
INTERACTIVE GROUP, INC.
5095 Murphy Canyon Road
San Diego, California 92123
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 3, 1997
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
INTERACTIVE GROUP, INC., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on Tuesday, June 3, 1997, at 4:00
p.m. local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at the Company's offices
located at 5095 Murphy Canyon Road, San Diego, California. The Company intends
to mail this proxy statement and accompanying proxy card on or about April 30,
1997 to all stockholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or
other regular employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
April 7, 1997 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business on April 7, 1997, the Company had outstanding and
entitled to vote 4,485,712 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 5095
Murphy Canyon Road, San Diego, California 92123, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
1.
<PAGE> 4
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received by the Company
not later than December 27, 1997 in order to be included in the proxy statement
and proxy relating to that Annual Meeting. Stockholders are also advised to
review the Company's Bylaws, which contain additional requirements with respect
to advance notice of shareholder proposals and director nominations.
PROPOSAL 1
ELECTION OF DIRECTORS
There are five nominees for the five Board positions presently
authorized in the Company's Bylaws. Each director to be elected will hold
office until the next annual meeting of stockholders and until his successor is
elected and has qualified, or until such director's earlier death, resignation
or removal. Each nominee listed below is currently a director of the Company,
having been elected by the stockholders.
Shares represented by executed proxies will be voted, if authority to
do so is not withheld, for the election of the five nominees named below. In
the event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected and management has no reason to believe
that any nominee will be unable to serve.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
NOMINEES
The names of the nominees and certain information about them are set
forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD WITH THE COMPANY
<S> <C> <C>
Robert C. Vernon 53 Chairman of the Board and Chief
Executive Officer
Mark Hellinger 37 President and Chief Operating Officer -
North American Operations and Director
Randolph S. Naylor 56 Director
Michael H. Gay 53 Director
Lyndol L. Cook 57 Director
</TABLE>
Robert C. Vernon joined the Company in 1975 and has served as Chief
Executive Officer and a director of the Company since 1978 and as Chairman of
the Board of Directors since 1979. From 1978 to 1996, Mr. Vernon also served
as President of the Company. From 1973 to 1975, Mr. Vernon served as
Director, Software Development for SDA Digital, a software developer for the
security industry, and from 1971 to 1973 as a Project Manager for Computer
Sciences Corporation, a software developer and integrator. Mr. Vernon received
a B.S. in Operations Research from the University of California, Berkeley.
2.
<PAGE> 5
Mark Hellinger joined the Company in 1985 and has served as President
and Chief Operating Officer - North American Operations since April 1996 and as
a director of the Company since October 1992. From 1994 to April 1996, he
served as Vice President and General Manager of the Company, and from 1990 to
1994, Mr. Hellinger served as Vice President, Operations of the Company. From
1985 to 1990, Mr. Hellinger served as branch manager of the Company's New York
office. Mr. Hellinger received a B.S. in Management Science from the
Massachusetts Institute of Technology.
Randolph S. Naylor has served as a director of the Company since March
1995. He was a founder of Intrepid Software, Inc. ("ISI") and served as
President of ISI from 1976 to March 1995, when ISI was acquired by the Company.
From April 1996 to April 1997, Mr. Naylor served as Senior Vice President of
the Company. From the merger of ISI with the Company in March 1995 until April
1996, Mr. Naylor served as Vice President, Marketing of the Company. Mr.
Naylor also serves as a director of VMARK Software, Inc., a software developer.
Mr. Naylor received a B.A. in Economics from Princeton University.
Michael H. Gay has served as a director of the Company since 1977.
Since May 1996, Mr. Gay has served as Assistant General Counsel of Sun
Microsystems, Inc. From October 1995 until May 1996, Mr. Gay served as Vice
President, General Counsel and Secretary of Simic Galleries, Inc., an art
gallery. From May 1993 to October 1994, he was corporate counsel to the De
Anza Group, Inc., an investment and management company, and from October 1992
to May 1993, Mr. Gay was special counsel at Adams, Duque & Hazeltine, a law
firm. From 1985 to June 1992, Mr. Gay was general counsel to Fujitsu Systems
of America, Inc. and Fujitsu Customer Service of America, Inc. Mr. Gay
received a B.S. in Business Administration from UCLA, a J.D. from the
University of California, Hastings College of Law and an L.L.M. from New York
University.
Lyndol L. Cook has served as a director of the Company since July
1995. From March 1989 until he retired in September 1994, Mr. Cook was the
President and Chief Executive Officer of Polaris Pool Systems, Inc., a
manufacturer of swimming pool equipment. Mr. Cook received a B.S. in Military
Engineering from the United States Military Academy at West Point and an M.B.A.
from United States International University in San Diego.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1996 the Board of Directors
held five meetings. The Board has an Audit Committee and a Compensation
Committee.
The Audit Committee meets with the Company's independent auditors at
least annually to review the results of the annual audit and discuss the
financial statements; recommends to the Board the independent auditors to be
retained; and receives and considers the accountants' comments as to controls,
adequacy of staff and management performance and procedures in connection with
audit and financial controls. The Audit Committee is composed of one employee
director and two non-employee directors: Mr. Vernon and Messrs. Cook and Gay,
respectively. It met three times during the fiscal year ended December 31,
1996.
The Compensation Committee makes recommendations concerning salaries
and incentive compensation, awards stock options to employees and consultants
under the Company's stock option plan and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board
may delegate. The Compensation Committee is composed of two non-employee
directors: Messrs. Cook and Gay. It met one time during the fiscal year ended
December 31, 1996.
During the fiscal year ended December 31, 1996, all directors except
Mr. Gay attended at least 75% of the aggregate of the meetings of the Board and
of the committees on which they served, held during the period for which they
were a director or committee member, respectively. Mr. Gay attended one
Special Board of Directors meeting, two Regular Board of Directors meetings,
and all Meetings of the Audit and Compensation Committees; however, he was
unable to attend two regular meetings of the Board.
3.
<PAGE> 6
PROPOSAL 2
APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
In December 1995, the Board of Directors adopted the Employee Stock
Purchase Plan (the "Purchase Plan") authorizing the issuance of 100,000 shares
of the Company's Common Stock. At April 7, 1997, an aggregate of 88,496 shares
had been issued under the Purchase Plan and only 11,504 shares remained for the
grant of future rights under the Purchase Plan. In March 1997, the Board of
Directors of the Company approved an amendment to the Purchase Plan, subject to
stockholder approval, to increase the number of shares authorized for issuance
under the Purchase Plan from 100,000 shares to 200,000 shares. This amendment
is intended to afford the Company greater flexibility in providing employees
with stock incentives and ensures that the Company can continue to provide such
incentives at levels determined appropriate by the Board.
Stockholders are requested in this Proposal 2 to approve the Purchase
Plan, as amended. The affirmative vote of the holders of a majority of the
shares present in person or represented by proxy and entitled to vote at the
meeting will be required to approve the Purchase Plan, as amended. Abstentions
will be counted toward the tabulation of votes cast on the proposals presented
to the stockholders and will have the same effect as negative votes. Broker
non-votes are counted towards a quorum, but are not counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
The essential features of the Purchase Plan are outlined below:
PURPOSE
The purpose of the Purchase Plan is to provide a means by which key
employees of the Company (and any parent or subsidiary of the Company
designated by the Board of Directors to participate in the Purchase Plan) may
be given an opportunity to purchase Common Stock of the Company through payroll
deductions, to assist the Company in retaining the services of its employees,
to secure and retain the services of new employees, and to provide incentives
for such persons to exert maximum efforts for the success of the Company. As
of December 31, 1996, all of the Company's approximately 364 employees were
eligible to participate in the Purchase Plan, provided that such number may be
reduced by the application of specific eligibility requirements. See
"Eligibility" below.
The rights to purchase Common Stock granted under the Purchase Plan
are intended to qualify as options issued under an "employee stock purchase
plan" as that term is defined in Section 423(b) of the Code.
ADMINISTRATION
The Purchase Plan is administered by the Board of Directors, which has
the final power to construe and interpret the Purchase Plan and the rights
granted under it. The Board has the power, subject to the provisions of the
Purchase Plan, to determine when and how rights to purchase Common Stock of the
Company will be granted, the provisions of each offering of such rights (which
need not be identical), and whether any parent or subsidiary of the Company
shall be eligible to participate in such plan. The Board has the power, which
it has not exercised, to delegate administration of such plan to a committee of
not less than two Board members. The Board may abolish any such committee at
any time and revest in the Board the administration of the Purchase Plan.
OFFERINGS
The Purchase Plan is implemented by offerings of rights to all
eligible employees from time to time by the Board. Generally, each such
offering is expected to be of six months duration.
4.
<PAGE> 7
ELIGIBILITY
Any person who is customarily employed at least twenty hours per week
and five months per calendar year by the Company (or by any parent or
subsidiary of the Company designated from time to time by the Board) on the
first day of an offering period is eligible to participate in that offering
under the Purchase Plan, provided such employee has been in the continuous
employ of the Company for such continuous period preceding the first day of the
offering period as the Board may require, but in no event shall the required
period of continuous employment be greater than two years. The Board may
provide that officers of the Company who are "highly compensated" as defined in
the Code are not eligible to be granted rights under the Purchase Plan.
Non-employee directors are not eligible to purchase shares under the Purchase
Plan.
Notwithstanding the foregoing, no employee is eligible for the grant
of any rights under the Purchase Plan if, immediately after such grant, the
employee would own, directly or indirectly, stock possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company or
of any parent or subsidiary of the Company (including any stock which such
employee may purchase under all outstanding rights and options), nor will any
employee be granted rights that would permit him to buy more than $25,000 worth
of stock (determined at the fair market value of the shares at the time such
rights are granted) under all employee stock purchase plans of the Company in
any calendar year.
PARTICIPATION IN THE PLAN
Eligible employees become participants in the Purchase Plan by
delivering to the Company, prior to the date selected by the Board as the
offering date for the offering, an agreement authorizing payroll deductions of
up to 15% of such employees' earnings during the purchase period for such
offering.
PURCHASE PRICE
The purchase price per share at which shares are sold in an offering
under the Purchase Plan shall equal the lower of (a) 85% of the fair market
value of a share of Common Stock on the date of commencement of the offering,
or (b) 85% of the fair market value of a share of Common Stock on the date on
which the shares under the Plan are purchased.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions
over the offering period. At any time during the purchase period, a
participant may reduce or terminate his or her payroll deductions. A
participant may not increase or begin such payroll deductions during the course
of an offering period. All payroll deductions made for a participant are
credited to his or her account under the Purchase Plan and deposited with the
general funds of the Company. A participant may make additional payments into
such account only if specifically provided for in the offering and only if the
participant has not had the maximum amount withheld during the offering.
PURCHASE OF STOCK
By executing an agreement to participate in the Purchase Plan, the
employee is entitled to purchase shares under such plan. In connection with
offerings made under the Purchase Plan, the Board may specify a maximum number
of shares any employee may be granted the right to purchase and the maximum
aggregate number of shares which may be purchased pursuant to such offering by
all participants. If the aggregate number of shares to be purchased upon
exercise of rights granted in the offering would exceed the maximum aggregate
number, the Board would make a pro rata allocation of shares available in a
uniform and equitable manner. Unless the employee's participation is
discontinued, his right to purchase shares is exercised automatically on each
purchase date established by the Board for the offering. See "Withdrawal"
below.
5.
<PAGE> 8
WITHDRAWAL
While each participant in the Purchase Plan is required to sign an
agreement authorizing payroll deductions, the participant may withdraw from a
given offering by terminating his or her payroll deductions and by delivering
to the Company a notice of withdrawal from the Purchase Plan. Such withdrawal
may be elected at any time prior to the end of the applicable offering period.
Upon any withdrawal from an offering by the employee, the Company will
distribute to the employee his or her accumulated payroll deductions, without
interest, less any accumulated deductions previously applied to the purchase of
stock on the employee's behalf during such offering, and such employee's
interest in the offering will be automatically terminated. The employee is not
entitled to again participate in such offering. An employee's withdrawal from
an offering will not have any effect upon such employee's eligibility to
participate in subsequent offerings under the Purchase Plan.
TERMINATION OF EMPLOYMENT
Rights granted pursuant to any offering under the Purchase Plan
terminate immediately upon cessation of an employee's employment for any
reason, and the Company will distribute to such employee all of his or her
accumulated payroll deductions, without interest.
RESTRICTIONS ON TRANSFER
Rights granted under the Purchase Plan are not transferable and may be
exercised only by the person to whom such rights are granted.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Purchase Plan at any time.
The Board may amend the Purchase Plan at any time. Any amendment of
the Purchase Plan must be approved by the stockholders within twelve months of
its adoption by the Board if the amendment would (a) increase the number of
shares of Common Stock reserved for issuance under the Purchase Plan, (b)
modify the requirements relating to eligibility for participation in the
Purchase Plan, or (c) modify any other provision of the Purchase Plan in a
manner that would materially increase the benefits accruing to participants
under the Purchase Plan, if such approval is required in order to comply with
the requirements of Rule 16b-3 under the Exchange Act.
Rights granted before amendment or termination of the Purchase Plan
will not be altered or impaired by any amendment or termination of such plan
without consent of the person to whom such rights were granted.
EFFECT OF CERTAIN CORPORATE EVENTS
In the event of a dissolution, liquidation or specified type of merger
of the Company, the surviving corporation either will assume the rights under
the Purchase Plan or substitute similar rights, or the exercise date of any
ongoing offering will be accelerated such that the outstanding rights may be
exercised immediately prior to, or concurrent with, any such event.
STOCK SUBJECT TO PURCHASE PLAN
If rights granted under the Purchase Plan expire, lapse or otherwise
terminate without being exercised, the Common Stock not purchased under such
rights again becomes available for issuance under such plan.
6.
<PAGE> 9
FEDERAL INCOME TAX INFORMATION
Rights granted under the Purchase Plan are intended to qualify for the
favorable federal income tax treatment accorded rights granted under an
employee stock purchase plan which qualifies for such treatment under
provisions of Section 423 of the Code.
A participant will be taxed on amounts withheld for the purchase of
shares as if such amounts were actually received. Other than this, no income
will be taxable to a participant until disposition of the shares acquired, and
the method of taxation will depend upon the holding period of the purchased
shares.
If the stock is disposed of at least two years after the beginning of
the offering period and at least one year after the stock is transferred to the
participant, then the lesser of (a) the excess of the fair market value of the
stock at the time of such disposition over the exercise price or (b) the excess
of the fair market value of the stock as of the beginning of the offering
period over the exercise price (determined as of the beginning of the offering
period) will be treated as ordinary income. Any further gain or any loss will
be taxed as a long-term capital gain or loss. Capital gains currently are
generally subject to lower tax rates than ordinary income. The maximum capital
gains rate for federal income tax purposes is 28% while the maximum ordinary
rate is effectively 39.6% at the present time.
If the stock is sold or disposed of before the expiration of either of
the holding periods described above, then the excess of the fair market value
of the stock on the exercise date over the exercise price will be treated as
ordinary income at the time of such disposition, and the Company may, in the
future, be required to withhold income taxes relating to such ordinary income
from other payments made to the participant. The balance of any gain will be
treated as capital gain. Even if the stock is later disposed of for less than
its fair market value on the exercise date, the same amount of ordinary income
is attributed to the participant, and a capital loss is recognized equal to the
difference between the sales price and the fair market value of the stock on
such exercise date. Any capital gain or loss will be long- or short-term
depending on whether the stock has been held for more than one year.
There are no federal income tax consequences to the Company by reason
of the grant or exercise of rights under the Purchase Plan. The Company is
entitled to a deduction to the extent amounts are taxed as ordinary income to a
participant (subject to the requirement of reasonableness, the provisions of
Section 162(m) of the Code and the satisfaction of a tax reporting obligation).
7.
<PAGE> 10
The following table presents certain information with respect to
shares purchased under the Purchase Plan during the fiscal year ended December
31, 1996 by (i) each of the executive officers named in the Summary
Compensation Table, (ii) all executive officers as a group, and (iii) all
non-executive officer employees as a group. Non-employee directors are not
eligible to purchase shares under the Purchase Plan.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Employee Stock Purchase Plan
---------------------------------------
Number of Shares
Name and Position Dollar Value(1) Purchased
- ----------------- --------------- ----------------
<S> <C> <C>
Robert C. Vernon . . . . . . . . . . . . . . . . . . . . . . -- --
Chief Executive Officer
Mark Hellinger . . . . . . . . . . . . . . . . . . . . . . . -- --
President and Chief Operating Officer - North American
Operations
Randolph S. Naylor . . . . . . . . . . . . . . . . . . . . . -- --
Senior Vice President
Michael D. Reynolds . . . . . . . . . . . . . . . . . . . . -- --
Vice President, Finance and Administration,
Chief Financial Officer and Secretary
Michael K. Grad . . . . . . . . . . . . . . . . . . . . . . $18,301 3,571
Vice President, Sales - North American Operations
All Executive Officers as a Group . . . . . . . . . . . . . . $18,301 3,571
All Non-Executive Officer Employees as a Group . . . . . . . $448,990 84,925
- -----------------------------------
</TABLE>
(1) Fair market value on the date of grant multiplied by the number of shares
purchased.
8.
<PAGE> 11
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997 and has
further directed that management submit the selection of independent auditors
for ratification by the stockholders at the Annual Meeting. Representatives of
Ernst & Young LLP are expected to be present at the Annual Meeting, will have
an opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Audit Committee and the
Board will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board in their discretion
may direct the appointment of different independent auditors at any time during
the year if they determine that such a change would be in the best interests of
the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at the Annual
Meeting will be required to ratify the selection of Ernst & Young LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 3.
9.
<PAGE> 12
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of February 1, 1997 by: (i) each
director and nominee for director; (ii) each of the executive officers named in
the Summary Compensation Table employed by the Company in that capacity on
February 1, 1997; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of
more than five percent of its Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership (1)
--------------------------------
Number of Percent of
Beneficial Owner Shares Total
- ----------------------------------------------------------- --------- ----------
<S> <C> <C>
Robert C. Vernon . . . . . . . . . . . . . . . . . . . . . 1,053,422 23.5%
Interactive Group, Inc.
5095 Murphy Canyon Road
San Diego, CA 92123
Randolph S. Naylor . . . . . . . . . . . . . . . . . . . . . . 386,725 8.6%
Interactive Group, Inc.
5095 Murphy Canyon Road
San Diego, CA 92123
Ronald H. Jones . . . . . . . . . . . . . . . . . . . . . . . . 379,400 8.5%
2484 Pine Street
San Diego, CA 92103
Mark Hellinger . . . . . . . . . . . . . . . . . . . . . . 352,774 7.9%
Interactive Group, Inc.
5095 Murphy Canyon Road
San Diego, CA 92123
John W. Darracq . . . . . . . . . . . . . . . . . . . . . . . . 321,002 7.2%
Interactive Group, Inc.
5095 Murphy Canyon Road
San Diego, CA 92123
Craig P. Gallagher . . . . . . . . . . . . . . . . . . . . . . 301,502 6.7%
Interactive Group, Inc.
5095 Murphy Canyon Road
San Diego, CA 92123
Michael K. Grad (2) . . . . . . . . . . . . . . . . . . . . . . 8,837 *
Michael D. Reynolds (3) . . . . . . . . . . . . . . . . . . . 4,666 *
Lyndol L. Cook . . . . . . . . . . . . . . . . . . . . . . . . 2,000 *
Michael H. Gay . . . . . . . . . . . . . . . . . . . . . . . . -- --
All executive officers and directors
as a group (8 persons) (4) . . . . . . . . . . . . . . . . . 1,808,424 40.2%
</TABLE>
- -----------------------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors
and principal stockholders and Schedules 13G filed with the Securities
and Exchange Commission ("SEC"). Unless otherwise indicated in the
footnotes to this table and subject to community property laws where
applicable, the Company believes that each of the stockholders named
in this table has sole voting and investment power with respect to the
shares indicated as beneficially owned. Applicable percentages are
based on 4,485,712 shares outstanding on February 1, 1997, adjusted as
required by rules promulgated by the SEC.
(2) Includes 4,666 shares subject to options exercisable within 60 days of
February 1, 1997.
10.
<PAGE> 13
(3) Includes 4,666 shares subject to options exercisable within 60 days of
February 1, 1997.
(4) Includes 9,332 shares subject to options exercisable within 60 days of
February 1, 1997.
COMPLIANCE WITH THE REPORTING REQUIREMENTS OF SECTION 16(A)
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than ten
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations
that no other reports were required during the fiscal year ended December 31,
1996, all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with,
except the following: (i) Mr. Michael Grad filed a late Form 4 to report a
purchase of Common Stock under the Company's Employee Stock Purchase Plan, and
(ii) Mr. Jeffrey Scime filed a late initial report of ownership on Form 3.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
As consideration for service on the Company's Board of Directors, each
non-employee director of the Company receives $500 for each regular meeting of
the Board of Directors attended and for each committee meeting attended. In
the fiscal year ended December 31, 1996, the total compensation paid to
non-employee directors was $6,500. As consideration for service on the Board
of Directors, each employee director receives $250 for each regular meeting of
the Board of Directors attended. In the fiscal year ended December 31, 1996,
the total compensation paid to employee directors for attendance at the
Company's Board of Directors meetings was $3,000. The members of the Board of
Directors are also eligible for reimbursement for their expenses incurred in
connection with attendance at Board and committee meetings in accordance with
Company policy.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ended December 31,
1994, 1995 and 1996, certain compensation awarded or paid to, or earned by, the
Company's current Chief Executive Officer and its four most highly paid
executive officers of the Company who earned more than $100,000 in the fiscal
year ended December 31, 1996 (collectively, the "Named Executive Officers").
11.
<PAGE> 14
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
---------------------------- ------------
OTHER SECURITIES ALL OTHER
ANNUAL RESTRICTED UNDERLYING COMPEN-
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPEN- STOCK OPTIONS/ SATION
POSITION YEAR ($)(1) ($)(2) SATION($) AWARD(S)($) SARS (#) ($)(3)
------------------ ------ ------ ------ --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert C. Vernon 1996 $257,369 $36,425 -- -- -- $2,778
Chief Executive 1995 $204,998 $27,169 -- -- -- $1,500
Officer 1994 $169,006 $27,865 -- -- -- $1,500
Mark Hellinger 1996 $200,425 $31,903 -- -- -- $1,500
President and 1995 $175,764 $27,350 $411,416(4) $451,200(5) -- $1,500
Chief Operating 1994 $136,822 -- $13,592(4) $ 19,200(5) -- $1,408
Officer - North
American Operations
Randolph S. Naylor(6) 1996 $186,878 $26,620 -- -- -- $ 4,500
Senior Vice 1995 $191,104 -- -- -- -- $14,691
President 1994 $247,736 -- -- -- -- $ 5,107
Michael D. Reynolds(7) 1996 $129,301 $11,876 -- -- -- $2,805
Vice President, 1995 $94,071 $5,000 -- -- 14,000 $ 986
Finance and 1994 $78,731 $13,734 -- -- -- $ 925
Administration,
Chief Financial
Officer and
Secretary
Michael K. Grad 1996 $117,992 $118,438 -- -- -- $4,500
Vice President, 1995 $ 96,379 $100,759 -- -- 14,000 $1,500
Sales - North 1994 $ 94,223 $123,486 -- -- -- $1,500
American
Operations
</TABLE>
(1) Includes an automobile allowance on behalf of Messrs. Vernon, Naylor,
Hellinger and Grad in the amounts of $12,090, $7,070, $7,488 and
$7,800, respectively, for each of 1996, 1995 and 1994. Also includes
accrued vacation elected to be paid in cash in the amounts of $6,339
and $5,776 for Messrs. Vernon and Hellinger, respectively, in 1995 and
$6,916 and $4,334 for Messrs. Vernon and Hellinger, respectively, in
1994.
(2) Includes non-cash bonuses paid to Mr. Vernon valued at $1,425, $2,169
and $2,865 in 1996, 1995 and 1994, respectively. Includes non-cash
bonuses paid to Mr. Hellinger valued at $1,903 in 1996 and $2,350 in
1995. Includes non-cash bonus paid to Mr. Naylor valued at $1,620 in
1996. Includes non-cash bonuses paid to Mr. Reynolds valued at $1,876
in 1996. Includes non-cash bonuses paid to Mr. Grad valued at $1,381,
$995 and $2,865 in 1996, 1995 and 1994, respectively, and commissions
paid to Mr. Grad of $87,057, $99,764 and $120,621 in 1996, 1995 and
1994, respectively.
(3) Represents the Company's contributions under a qualified profit
sharing plan for Messrs. Vernon, Naylor, Hellinger, Reynolds and Grad
in 1996, 1995 and 1994. The amount for Mr. Vernon includes the
Company's 401(k) matching contribution of $1,278 in 1996. The amount
for Mr. Naylor also includes $3,545 and $3,607 paid by the Company in
1995 and 1994, respectively, under a split-dollar life insurance
agreement, the Company's 401(k) matching contributions for Mr. Naylor
of $3,000, $1,847 and $1,500 in 1996, 1995 and 1994, respectively, and
$7,799 in interest income paid by the Company to Mr. Naylor on a
debenture in 1995. The amount for Mr. Reynolds includes $1,393 paid
by the Company in 1996 as 401(k) matching contributions. The amount
for Mr. Grad includes $3,000 paid by the Company in 1996 as 401(k)
matching contributions.
(4) Represents cash amounts granted for the payment of taxes resulting
from Mr. Hellinger's stock bonuses in 1995 and 1994, respectively.
(5) Includes 28,200 shares of Common Stock granted to Mr. Hellinger as a
stock bonus in 1994 and 112,800 shares of Common Stock granted to Mr.
Hellinger as a stock bonus in 1995. Such shares were issued on
January 1, 1994 and January 1, 1995, respectively, and vested over a
one year period from the date of issuance. As of December 31, 1996,
Mr. Hellinger held beneficially 352,774 shares of Common Stock valued
at $1,940,257. The Company does not anticipate paying dividends on
its Common Stock in the foreseeable future.
12.
<PAGE> 15
(6) Mr. Naylor retired from the Company in April 1997.
(7) Mr. Reynolds resigned from the Company in April 1997.
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under the
Company's 1995 Stock Option Plan, as amended (the "1995 Plan"). As of February
28, 1997, options to purchase a total of 302,500 shares were outstanding under
the 1995 Plan and 197,500 options to purchase shares remained available for
grant thereunder.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company did not grant stock options or stock appreciation rights
to the Named Executive Officers during the year ended December 31, 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION/SAR VALUES
There were no option exercises by the Named Executive Officers during
the year ended December 31, 1996. The following table sets forth information
with respect to the number and value of securities underlying unexercised
options held by the Named Executive Officers as of December 31, 1996:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1996(1) DECEMBER 31, 1996(2)
------------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Michael D. Reynolds . . . . . . . . . . 4,667 9,333 $25,669 $51,332
Michael K. Grad . . . . . . . . . . . . 4,667 9,333 $25,669 $51,332
</TABLE>
- ----------------------
(1) Includes both "in-the-money" and "out-of-the-money" options.
"In-the-money" options are options with exercise prices below the market
price of the Company's Common Stock.
(2) Based on the fair market value of the Common Stock as of December 31, 1996.
Amounts reflected are based on the fair market value minus the exercise
price and do not indicate that the optionee sold such stock.
EMPLOYMENT AGREEMENTS
The Company and Mr. Naylor entered into a two-year employment
agreement in March 1995 which provided that Mr. Naylor would receive an annual
base salary of $175,000 and be eligible to receive an annual bonus of $25,000
if certain revenue and profit levels were achieved. Pursuant to the terms of
the employment agreement, the Company notified Mr. Naylor that the agreement
would expire as of April 4, 1997.
13.
<PAGE> 16
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(1)
The Company's executive compensation program is administered by the
Compensation Committee (the "Committee") of the Board of Directors. The
Committee is appointed by the Board and is comprised of two non-employee
Directors. The Committee has responsibility for all compensation matters
concerning the Company's executive officers.
COMPENSATION PHILOSOPHY
The Board's executive compensation program strongly links management
pay with (1) the duties assigned to and performed by each executive officer and
(2) the Company's annual and long-term performance. The program is intended to
attract, motivate and retain senior management. The program provides for base
salaries which reflect such factors as level of responsibility, individual
performance, internal fairness and external competitiveness; the potential for
annual incentive cash bonus awards which are payable upon the Company's
achievement of annual financial objectives approved by the Board; and long-term
incentive opportunities in the form of stock options and other equity
incentives which strengthen the mutuality of interest between management and
the Company's stockholders. While the income tax implications of the
compensation program to the Company and its executive officers are continually
assessed, including the recently enacted $1 million per covered employee
limitation on the compensation expenses deductible by the Company, they are not
currently a significant factor in the administration of the program.
The Company strives to provide compensation opportunities which
emphasize effectively rewarding management for the achievement of critical
financial and operating performance objectives. The Committee supports a
pay-for-performance policy that determines compensation amounts based on
Company, business unit and individual performance. While the establishment of
base salaries turns principally on the factors noted above, annual incentive
bonuses for senior subsidiary executives are based on the financial and
operating performance of their respective business units, and annual incentive
bonuses for senior corporate executives are based on the financial and
operating performance of the Company as a whole. In addition, the program
provides stock incentive opportunities designed to align the interests of
executives and other key employees with other stockholders through the
ownership of Common Stock. The following is a discussion of each of the
elements of the Company's executive compensation program including a
description of the decisions and actions taken by the Committee with respect to
compensation in fiscal 1996 for the Chief Executive Officer (the "CEO") and all
executive officers as a group.
MANAGEMENT COMPENSATION PROGRAM
Compensation paid to the Company's executive officers for fiscal 1996
(as reflected in the foregoing tables with respect to the Named Executive
Officers) consisted of the following elements: base salary, cash bonuses and
stock options.
BASE SALARY
With respect to determining the base salary of executive officers, the
Committee takes into consideration a variety of factors including the
executive's levels of responsibility and individual performance, and the
salaries of similar positions in the Company and in comparable companies in the
Company's industry. The Committee believes that its process for determining
and adjusting the base salary of executive officers is fully consistent with
sound personnel practices. Annual adjustments in base salaries typically are
made effective at the beginning of the calendar year for which they are
intended to apply and therefore reflect in large part the Committee's
subjective assessment of prior year's business and individual performance
achievements.
__________________________________
(1) The material in this report is not soliciting material, is not deemed
filed with the SEC, and is not to be incorporated by reference into any
filing of the Company under the 1933 Act or 1934 Act whether made before or
after the date hereof and irrespective of any general incorporation
language contained in such filing.
14.
<PAGE> 17
BONUSES
In fiscal 1996, Mr. Randolph Naylor, the Company's Senior Vice
President, Mr. Michael Reynolds, the Company's Vice President, Finance and
Administration, Chief Financial Officer and Secretary, Mr. Mark Hellinger, the
Company's President and Chief Operating Officer - North American Operations,
and Mr. Michael Grad, the Company's Vice President, Sales, received cash
bonuses based on the Company's performance for fiscal 1995 and on the
Compensation Committee's subjective assessment of their respective performances
in 1995. The Company's Chief Executive Officer, Robert C. Vernon, received a
cash bonus in fiscal 1996 as described below in "Chief Executive Officer
Compensation."
1995 STOCK OPTION PLAN
The long term incentive element of the Company's management
compensation program provides for grants of stock awards, which include
Incentive Stock Options and Nonstatutory Stock Options. These discretionary
stock awards are granted and administered by the Committee under the 1995 Plan,
which is intended to create an opportunity for employees of the Company to
acquire an equity ownership interest in the Company and thereby enhance their
efforts in the service of the Company and its stockholders. The compensatory
and administrative features of the 1995 Plan conform in all material respects
to the design of standard comparable plans in the Company's industry and are,
in the Committee's estimation, fair and reasonable.
In August and September 1996, the Board of Directors approved grants
of incentive stock options to an executive officer and certain non-executive
officer employees of the Company at an exercise price equal to the then-current
fair market value of the Common Stock. The incentive stock options become
exercisable over a four year period with 25% vesting one year from the date of
grant and one-forty-eighth (1/48) of the total number of shares granted vesting
monthly thereafter.
CHIEF EXECUTIVE OFFICER COMPENSATION
During fiscal 1996, Mr. Robert C. Vernon, Chairman of the Board and
Chief Executive Officer of the Company, was eligible to participate in the same
executive compensation plans as were available to other executive officers of
the Company. Based on the performance of the Company in the prior fiscal year
and the Committee's assessment of Mr. Vernon's ongoing personal performance in
the position of Chief Executive Officer, Mr. Vernon received a salary increase
during fiscal 1996. Among the factors considered by the Committee in its
consideration of Mr. Vernon's performance were the acquisitions of Intrepid
Software, Inc. and Just-In-Time Enterprise Systems, Inc., the continued
expansion of the Company's core business into both domestic and international
markets and the continued success of the Company's new product development and
sales and marketing efforts. Finally, the Committee desired to commence
bringing Mr. Vernon's salary up to a level commensurate with other chief
executive officers of comparable public companies.
The amount of Mr. Vernon's cash bonus for fiscal 1996 was based on the
Company's financial and operating performance for fiscal year 1995.
SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Code limits the Company to a deduction for
federal income tax purposes of no more than $1 million of compensation paid to
certain Named Executive Officers in a taxable year. Compensation above $1
million may be deducted if it is "performance-based compensation" within the
meaning of the Code.
The Compensation Committee has determined that stock options granted
under the Company's 1995 Stock Option Plan with an exercise price at least
equal to the fair market value of the Company's Common Stock on the date of
grant shall be treated as "performance-based compensation."
15.
<PAGE> 18
Submitted by the Compensation Committee of the Board of Directors:
Michael H. Gay, Chairman
Lyndol L. Cook
With Respect to the Discussion of Option Grants, Submitted by the Board of
Directors:
Robert C. Vernon, Chairman of the Board
Mark Hellinger
Randolph S. Naylor
Michael H. Gay
Lyndol L. Cook
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows a comparison of cumulative total returns for
the Company, the SIC Code Index for companies listed with SIC Code 7373
"Computer Integrated Systems Design" and the Nasdaq Market Index for the period
that commenced on May 23, 1995 (the date on which the Company's Common Stock
was first traded on the Nasdaq National Market System) and ended on December
31, 1996. The graph assumes that all dividends have been reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT
(INTERACTIVE GROUP, SIC CODE INDEX, NASDAQ MARKET INDEX)
FISCAL YEAR ENDING
<TABLE>
<CAPTION>
COMPANY BASE 6/30/1995 9/29/1995 12/29/1995 3/29/1996 6/28/1996 9/30/1996 12/31/1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTERACTIVE GROUP I 100.00 88.89 98.15 103.70 62.96 75.93 98.15 81.48
SIC CODE INDEX 100.00 107.90 124.92 138.10 139.64 152.18 148.04 137.22
NASDAQ MARKET 100.00 105.68 117.75 116.80 122.20 131.26 134.87 141.22
</TABLE>
__________________________________
(1) This Section is not "soliciting material," is not deemed "filed" with
the SEC and is not to be incorporated by reference in any filing of the Company
under the 1933 Act or the 1934 Act whether made before or after the date hereof
and irrespective of any general incorporation language in any such filing.
16.
<PAGE> 19
CERTAIN TRANSACTIONS
The Company has entered into indemnity agreements with certain
officers and directors which provide, among other things, that the Company will
indemnify such officer or director, under the circumstances and to the extent
provided for therein, for expenses, damages, judgments, fines and settlements
he may be required to pay in actions or proceedings which he is or may be made
a party by reason of his position as a director, officer or other agent of the
Company, and otherwise to the full extent permitted under Delaware law and the
Company's Bylaws.
OTHER MATTERS
The Board of Directors knows of no other matters that will be
presented for consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, it is the intention of the persons named
in the accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ ROBERT C. VERNON
-------------------------
Robert C. Vernon
Acting Secretary
April 30, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO: CORPORATE SECRETARY, INTERACTIVE GROUP, INC.,
5095 MURPHY CANYON ROAD, SAN DIEGO, CA 92123.
17.
<PAGE> 20
INTERACTIVE GROUP, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
P FOR THE ANNUAL MEETING OF STOCKHOLDERS
R TO BE HELD ON JUNE 3, 1997
O
The undersigned hereby appoints Robert C. Vernon and Mark Hellinger, and
X each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Interactive Group, Inc.
Y which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of Interactive Group, Inc. to be held at the Company's offices
located at 5095 Murphy Canyon Road, San Diego, California on Tuesday, June 3,
1997 at 4:00 p.m. local time, and at any and all postponements, continuations
and adjournments thereof, with all powers that the undersigned would possess
if personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as
to any and all other matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE
INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
-----------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-----------
<PAGE> 21
[ X ] Please mark
votes as in
this example.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW
AND FOR PROPOSALS 2 AND 3.
1. To elect directors to serve for the ensuing year and until their successors
are elected.
NOMINEES: Robert C. Vernon, Mark Hollinger, Randolph S. Naylor, Michael H. Gay,
Lyndol L. Cook
FOR WITHHELD
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
MARK HERE
[ ] ______________________________________ FOR ADDRESS [ ]
For all nominees except as noted above CHANGE AND
NOTE BELOW
2. To approve the Company's Employee Stock Purchase Plan, as amended to increase
the aggregate number of shares of Common Stock authorized for issuance under
such plan by 100,000 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To ratify the selection of Ernst & Young LLP as independent auditors of the
Company for its fiscal year ending December 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
Please sign exactly as your name appears hereon. If the stock is registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If signer is
a corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership name by authorized person.
Signature: ______________ Date: ______ Signature: ______________ Date: ______
