SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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 toss.240.14a-11(c) orss.240.14a-12
Volt Information Sciences, Inc.
-------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 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:
VOLT VOLT INFORMATION SCIENCES, INC.
- --------------------------------------------------------------------------------
560 Lexington Avenue
New York, New York 10022-2928
(212) 704-2400
February 28,2006
TO OUR SHAREHOLDERS
We are pleased to invite you to attend the annual meeting of stockholders of
Volt Information Sciences, Inc. to be held on Thursday, April 6, 2006 at 10:OO
a.m., local time, at the First Floor Atrium, Volt Corporate Park, 2401 N.
Glassell Street, Orange, CA 92865. Details regarding the meeting and the
business to be conducted are more fully described in the accompanying Notice of
Annual Meeting and Proxy Statement.
Your vote is important. Whether or not you plan to attend the annual meeting, we
hope you will vote as soon as possible. You may vote by mailing a proxy card.
Voting by written proxy will ensure your representation at the annual meeting
regardless of whether you attend in person. Please review the instructions on
the proxy card regarding each of these voting options. Pursuant to Section
303A.l2(a) of the Rules of the NYSE, a company's annual report to its
shareholders must disclose that the previous year's ss.12(a) CEO Certification
was submitted to the NYSE. As required, the Company's ss.12(a) CEO Certification
for the previous year was submitted to the NYSE on May 3, 2005, and certifies
that the CEO was not aware of any violation by the Company of NYSE's Corporate
Governance listing standards.
Thank you for your ongoing support of and
continued interest in Volt Information Sciences, Inc.
Sincerely,
William Shaw
President and Chairman of the Board
VOLT INFORMATION SCIENCES, INC.
560 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022-2928
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 6, 2006
TO THE SHAREHOLDERS OF
VOLT INFORMATION SCIENCES, INC.
The Annual Meeting of Shareholders of Volt Information Sciences, Inc. (the
"Company") will be held at the First Floor Atrium, Volt Corporate Park, 2401 N.
Glassell Street, Orange, CA 92865, on Thursday, April 6, 2006, at 10:00 a.m.,
Pacific time, to consider the following:
1. The election of four Class I directors to serve until the 2008
Annual Meeting of Shareholders and until their respective
successors are elected and qualified;
2. A proposal to ratify the action of the Audit Committee of the
Board of Directors in appointing Ernst & Young LLP as the
Company's independent registered public accounting firm for
the fiscal year ending October 29, 2006; and
3. Such other business as may properly come before the meeting or
any adjournments or postponements thereof.
Only shareholders of record at the close of business on February 22, 2006 will
be entitled to notice of, and to vote at, the meeting and any adjournments or
postponements thereof.
You are cordially invited to attend the meeting. Whether or not you plan to be
present, kindly fill out and sign the enclosed Proxy exactly as your name
appears on the Proxy, and mail it promptly in order that your vote can be
recorded. A return envelope is enclosed for your convenience and requires no
postage if mailed within the United States. The giving of this Proxy will not
affect your right to vote in person in the event that you find it convenient to
attend the meeting.
By Order of the Board of Directors
Jerome Shaw, Secretary
New York, New York
February 28, 2006
VOLT INFORMATION SCIENCES, INC.
560 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022-2928
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement, to be mailed on or about February 28, 2006, is furnished
in connection with the solicitation by the Board of Directors of Volt
Information Sciences, Inc., a New York corporation (the "Company" or "Volt"), of
Proxies in the accompanying form ("Proxy" or "Proxies") for use at the Annual
Meeting of Shareholders of the Company to be held on April 6, 2006 and at any
adjournments or postponements thereof (the "Annual Meeting").
Only holders of record of the Company's Common Stock (the "Common Stock") as of
the close of business on February 22, 2006 are entitled to notice of, and to
vote at, the Annual Meeting. As of the close of business on that date, there
were issued and outstanding 15,380,345 shares of Common Stock of the Company.
Each issued and outstanding share of Common Stock on that date is entitled to
one vote upon each matter to be acted upon at the Annual Meeting. The presence,
in person or by proxy, of at least 35% of the total issued and outstanding
shares of Common Stock entitled to vote at the Annual Meeting will constitute a
quorum for the transaction of business at the Annual Meeting.
All Proxies received will be voted in accordance with the specifications made
thereon. Proxies received without specification on a matter will be voted as
follows on that matter: (a) for the election of all nominees named herein to
serve as directors, and (b) in favor of the proposal to ratify the appointment
of Ernst & Young LLP ("Ernst & Young") as the Company's independent registered
public accounting firm for the Company's fiscal year ending October 29, 2006
("fiscal 2006"). Management does not intend to bring before the Annual Meeting
any matters other than those specifically described above and knows of no other
matters to come before the Annual Meeting. If any other matters or motions come
before the Annual Meeting, it is the intention of the persons named in the
accompanying form of Proxy to vote Proxies in accordance with their judgment on
those matters or motions, including any matter dealing with the conduct of the
Annual Meeting. Proxies may be revoked at any time prior to their exercise by
written notification to the Secretary of the Company at the Company's principal
executive offices located at 560 Lexington Avenue, New York, New York
10022-2928, by voting at the Annual Meeting or by submitting a later dated
proxy.
The Company maintains a Savings Plan (the "Savings Plan") in which separate
accounts are maintained for Common Stock held under the Employee Stock Ownership
Plan (the "ESOP Account") and 401(k) Plan (the "401(k) Account") features of the
Savings Plan. Subaccounts are maintained for each participant under the ESOP
Account and 401(k) Account. Separate Proxies are being transmitted to each
employee of the Company who is a participant in the Savings Plan. Shares held in
a participant's subaccounts will be voted by the trustee of the Savings Plan as
directed by the participant in a signed Proxy for Savings Plan participants
which is timely returned to the Savings Plan's trustee or its designee. Shares
as to which the Savings Plan trustee does not receive a timely direction will be
voted by the trustee as directed by the administrator of the Savings Plan in
such manner as the Savings Plan administrator deems proper in its fiduciary
capacity for the benefit of the Savings Plan and its participants.
A plurality of votes cast at the Annual Meeting in person or by proxy is
required for the election of each nominee to serve as a director. The
affirmative vote of a majority of votes cast at the Annual Meeting in person or
by proxy is required to ratify the selection of Ernst & Young as the Company's
independent registered public accounting firm for fiscal 2006. Votes withheld,
in the case of the election of directors, and abstentions and any broker
non-votes with respect to the ratification of independent registered public
accounting firm, are not considered votes cast with respect to that matter and,
consequently, will have no effect on the vote on that matter, but are counted in
determining a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, MANAGEMENT AND NOMINEES
The following table sets forth information, as of February 15, 2006 (except as
described in the footnotes to the following table), with respect to the
beneficial ownership of Common Stock, the Company's only class of voting or
equity securities, by (a) each person who is known to the Company to own
beneficially more than five percent of the outstanding shares of Common Stock,
(b) each of the executive officers named in the Summary Compensation Table
contained under "Executive Compensation", (c) each of the directors of the
Company, including nominees to serve as directors, and (d) executive officers
and directors as a group:
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
- ------------------- ------------------------ --------------------
William Shaw 2,876,044 (3)(4) 18.6%
c/o Volt Information Sciences, Inc.
560 Lexington Avenue
New York, NY 10022-2928
Jerome Shaw
c/o Volt Information Sciences, Inc. 3,633,908 (3)(5) 23.6%
2401 N. Glassell Street
Orange, CA 92665
Dimensional Fund Advisors Inc. 1,325,086 (6) 8.6%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Barclays Global Investors, NA 912,454 (7) 5.9%
45 Fremont Street
San Francisco, CA 94105
Lloyd Frank 962,362 (8) 6.3%
c/o Troutman Sanders LLP
405 Lexington Avenue
New York, NY 10174
Steven A. Shaw 867,944 (3) (9) 5.6%
c/o Volt Information Sciences, Inc.
560 Lexington Avenue
New York, NY 10022-2928
Bruce G. Goodman 817,450 (10) 5.3%
c/o Hinckley, Allen & Snyder LLP
28 State Street
Boston, MA 02109-1775
2
Linda Shaw 817,450 (11) 5.3%
c/o Bruce G. Goodman
Hinckley, Allen & Snyder LLP
28 State Street
Boston, MA 02109-1775
Howard B. Weinreich 43,581 (3) *
James J. Groberg 30,884 (3) *
Thomas Daley 19,512 (3) *
Mark N. Kaplan 10,500 (3) *
Theresa A. Havell 4,000 *
William H. Turner 1,000 *
All executive officers and directors as a 7,385,244 (12) 47.4%
group (15 persons, including the foregoing)
- ----------------------------------------
(1) Except as noted, the named beneficial owners have sole voting and
dispositive power with respect to their beneficially owned shares.
Shares beneficially owned include shares held in the executive
officer's ESOP Account and 401(k) Account.
(2) Asterisk indicates less than 1%. Shares reflected as owned by a person
that are not outstanding but that are issuable upon exercise of the
portion of options held by such person that are exercisable on or
within 60 days after February 15, 2006 are considered outstanding for
the purpose of computing the percentage of outstanding Common Stock
that would be owned by that person if the options were exercised, but
(except for the calculation of the beneficial ownership by all
executive officers and directors as a group) are not considered
outstanding for the purpose of computing the percentage of outstanding
Common Stock owned by any other person.
(3) Includes the following shares issuable upon the exercise of the portion
of options granted by the Company that are exercisable on or within 60
days after February 15, 2006: William Shaw, 45,000 shares; Jerome Shaw,
45,000 shares; Steven A. Shaw, 40,000 shares; Howard B. Weinreich,
20,000 shares; James J. Groberg, 29,300 shares; Thomas Daley, 7,100
shares; and Mark N. Kaplan, 7,500 shares.
(4) Includes (i) 2,103,457 shares owned by William Shaw as trustee under
two trusts for his benefit and (ii) 3,833 shares held by a family
foundation of which Mr. Shaw and two other members of his family are
trustees, as to which shares Mr. Shaw disclaims beneficial ownership.
(5) Includes (i) 1,282,901 shares owned by Jerome Shaw and his wife as
trustees of a revocable trust for their benefit or as community
property, as to which shares they may be deemed to have shared voting
and investment power (pursuant to the terms of the trust, Mr. Shaw may
demand that the shares in trust be transferred to him at any time),
(ii) 1,114,048 shares owned by Mr. Shaw as trustee under two trusts for
his benefit, (iii) 201,250 shares owned by Mr. Shaw and his wife as
trustees of a trust for the benefit of one of their children, as to
which shares Mr. and Mrs. Shaw may be deemed to have shared voting and
investment power; (iv) 6,750 shares owned by Mr. Shaw's wife, as to
which shares Mr. Shaw disclaims beneficial ownership; (v) an aggregate
of 294,502 shares owned by Mr. Shaw, Michael Shaw, Steven A. Shaw and
Lloyd Frank as co-trustees of a trust for the benefit of three of
Jerome Shaw's children; (vi) 9,500 shares held by a family foundation
of which Mr. Shaw is a director as to which shares Mr. Shaw disclaims
beneficial ownership and (vii) an aggregate of 657,331 shares owned by
Jerome Shaw, Linda Shaw, Deborah Shaw Sevy and Lloyd Frank as
co-trustees of a trust for the benefit of the children
3
of William Shaw. The inclusion of the shares in clauses (iii), (v) and
(vii) is not an admission of beneficial ownership of those shares by
Mr. Shaw.
(6) Based on information as of December 31, 2005 contained in a Schedule
13G amendment dated February 1, 2006 which indicates that Dimensional
Fund Advisors Inc., an investment advisor, has sole voting and/or
investment power as to these shares which are owned by investment funds
as to which it furnishes investment advice or serves as investment
manager, but as to which it disclaims beneficial ownership.
(7) Based on information as of December 31, 2005 contained in a Schedule
13G dated January 31, 2006 which indicates that Barclays Global
Investors, NA, a bank, has sole voting power over 660,459 shares and
has sole dispositive power over 713,148 shares and Barclays Global Fund
Advisors, an investment advisor, has sole voting and dispositive power
over an additional 199,306 shares.
(8) Includes (i) 2,529 shares owned by Mr. Frank's wife, as to which shares
Mr. Frank disclaims beneficial ownership, (ii) 294,502 shares owned by
Mr. Frank, Jerome Shaw, Michael Shaw and Steven A. Shaw as co-trustees
of a trust for the benefit of three children of Jerome Shaw and (iii)
an aggregate of 657,331 shares owned by Mr. Frank, Jerome Shaw, Linda
Shaw and Deborah Shaw Sevy as co-trustees of a trust for the benefit of
the children of William Shaw. The inclusion of the shares in clauses
(ii) and (iii) is not an admission of beneficial ownership of those
shares by Mr. Frank.
(9) Includes (i) 9,298 shares held by Steven A. Shaw as trustee of trusts
for the benefit of two of his nephews, as to which Mr. Shaw disclaims
beneficial ownership, and (ii) an aggregate of 294,502 shares owned by
Steven A. Shaw, Jerome Shaw, Michael Shaw and Lloyd Frank as
co-trustees of a trust for the benefit of the children of Jerome Shaw,
of whom Steven A. Shaw is one.
(10) Includes (i) 400 shares owned by Mr. Goodman as custodian for his
children, (ii) 1,000 shares owned by Mr. Goodman as trustee of an
irrevocable trust for the benefit of his children, (iii) 124,798 and
9,496 shares owned by Mr. Goodman's wife, Linda Shaw, individually, and
as custodian for one of her children, respectively, (iv) 9,096 shares
owned by Mr. Goodman's wife, as custodian for their child, (v) 3,833
shares held by a family foundation of which Mr. Goodman's wife and two
other members of her family are trustees, as to all of which shares Mr.
Goodman disclaims beneficial ownership and (vi) an aggregate of 657,331
shares owned by Mr. Goodman's wife, Jerome Shaw, Deborah Shaw Sevy and
Lloyd Frank as co-trustees of a trust for the benefit of the children
of William Shaw, one of whom is Mr. Goodman's wife. The inclusion of
the shares in clauses (ii), (iii), (iv) and (vi) is not an admission of
beneficial ownership of those shares by Mr. Goodman.
(11) Includes (i) 9,496 and 9,096 shares owned by Ms. Shaw as custodian for
two of her children, respectively, (ii) an aggregate of 657,331 shares
owned by Ms. Shaw, Jerome Shaw, Deborah Shaw Sevy and Lloyd Frank as
co-trustees of a trust for the benefit of the children of William Shaw,
of whom Linda Shaw is one, (iii) 3,833 shares held by a family
foundation of which Ms. Shaw and two other members of her family are
trustees as to which shares Ms. Shaw disclaims beneficial ownership,
(iv) 11,496 and 400 shares owned by Ms. Shaw's husband, individually,
and as custodian for his children and (v) 1,000 shares owned by Ms.
Shaw's husband as trustee of an irrevocable trust for the benefit of
his children. The inclusion of the shares in clauses (iv) and (v) is
not an admission of beneficial ownership of those shares by Ms. Shaw
(12) Includes (i) 205,500 shares issuable upon the exercise of the portion
of options granted by the Company that are exercisable on or within 60
days after February 15, 2006 and (ii) the shares described in footnotes
(4), (5), (8), (9) and (10).
4
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of seven directors, divided
into two classes. The terms of office of Class I and Class II directors expire
at the 2006 and 2007 Annual Meetings of Shareholders, respectively. At each
annual meeting, directors are chosen to succeed those in the class whose term
expires at that annual meeting to serve for a term of two years each and until
their respective successors are elected and qualified. Each of the present
directors of the Company was elected by the Company's shareholders.
Unless otherwise directed, persons named in the enclosed Proxy intend to cast
all votes pursuant to Proxies received for the election of Lloyd Frank, Bruce G.
Goodman, Mark N. Kaplan and Steven A. Shaw as Class I directors to serve until
the 2008 Annual Meeting of Shareholders and, in each case, until his respective
successor is elected and qualified (those persons are referred to in this Proxy
Statement as the "nominees"). Each nominee has indicated his availability to
serve as a director. In the event that any of the nominees should become
unavailable or unable to serve for any reason, the holders of the Proxies have
discretionary authority to vote for one or more alternate nominees who will be
designated by the Board of Directors.
A plurality of the votes cast at the Annual Meeting in person or by proxy is
required for the election of each nominee. Votes withheld will have no effect on
the outcome of the election of directors.
BACKGROUND OF NOMINEES AND CONTINUING DIRECTORS
NOMINEES
(CLASS I)
LLOYD FRANK, 80, has been a director of the Company since March 2000. He has
been Counsel to the law firm of Troutman Sanders LLP since April 2005 and was
counsel to the law firm of Jenkens & Gilchrist Parker Chapin LLP from January
2005 to April 2005 and, from January 1977 until that time, was a partner in that
firm (and its predecessor, Parker Chapin LLP). Mr. Frank is also a director of
Dryclean USA, Inc. and Park Electrochemical Corp.
BRUCE G. GOODMAN, 57, has been a director of the Company since May 2000. He has
been a partner of the law firm of Hinckley, Allen & Snyder LLP since April 1995.
MARK N. KAPLAN, 75, has been a director of the Company since April 1991. He has
been Of Counsel to the law firm of Skadden, Arps, Slate, Meagher & Flom LLP
since 1999 and, from October 1979 until that time, was a partner in that firm.
Mr. Kaplan is also a director of American Biltrite, Inc., Autobytel Inc.,
Congoleum Corporation, DRS Technologies, Inc. and Refac.
STEVEN A. SHAW, 46, has been Executive Vice President, co-Chief Executive
Officer and Chief Operating Officer of the Company since September 2005 and
prior thereto served as Executive Vice President and Chief Operating Officer of
the Company since March 2005, Senior Vice President of the Company from November
2000 until March 2005 and a Vice President of the Company from April 1997 to
November 2000. He has been employed by the Company in executive capacities since
November 1995. He has served as a director of the Company since August 1998.
DIRECTORS WHOSE TERM OF OFFICE CONTINUES AFTER THE ANNUAL MEETING (CLASS II)
WILLIAM SHAW, 81, a founder of the Company, has been President, co-Chief
Executive Officer and Chairman of the Board of the Company since September 2005
and prior thereto served as President, Chief Executive Officer and Chairman of
the Board since its inception in 1957. He has been employed in
5
executive capacities by the Company and its predecessors since 1950. He has
served as a director of the Company since its formation in 1957.
WILLIAM H. TURNER, 66, has been a director of the Company since August 1998. He
has been Dean at Stony Brook University School of Business since February 2004.
He has also been the Senior Partner of Summus Ltd., a consulting firm, since
October 2002. From September 1999 until his retirement in September 2002, and,
from August 1997 to August 1999, he was President of PNC Bank, New Jersey. From
October 1996 to July 1997, he was President and Chief Executive Officer of
Franklin Electronic Publishers, Inc. (a designer and developer of hand-held
electronic information products) and, from February 1991 to September 1996, he
was Vice Chairman of The Chase Manhattan Bank and its predecessor, Chemical
Banking Corporation. He is also a director of Ameriprise Financial, Inc.,
Franklin Electronic Publishers, Inc., New Jersey Resources Corp. and Standard
Motor Products, Inc.
THERESA A. HAVELL, 59, has been a director of the Company since April 2004. She
has been President and Chief Executive Officer of Havell Capital Management LLC
(a money management company) since 1996. Prior to 1996 Ms. Havell was a Partner,
Member of Executive Committee, Director and Chief Investment Officer of the
Fixed Income Group of NeubergerBerman.
William Shaw and Jerome Shaw are brothers. Steven A. Shaw is the son of Jerome
Shaw. Bruce G. Goodman is the son-in-law of William Shaw. There are no other
family relationships among the directors or executive officers of the Company.
Messrs. William Shaw and Jerome Shaw are parties to employment agreements with
the Company. See "Executive Remuneration - Employment and Termination
Agreements."
CORPORATE GOVERNANCE
The Company's business and affairs are managed and under the direction of the
Board of Directors. Members of the Board of Directors are kept informed of the
Company's business through discussions with the Company's Chief Executive
Officers and other officers, by reviewing materials provided to them and by
participating in meetings of the Board of Directors and its committees. The
Company has an Audit Committee, Compensation Committee and Nominating/Corporate
Governance Committee.
The Board of Directors met seven times during the past fiscal year. Each
incumbent director attended at least 75% of the meetings of the Board of
Directors and Committees on which he served which were held during the fiscal
year.
INDEPENDENT DIRECTORS; EXECUTIVE SESSIONS OF THE BOARD
The Board of Directors has determined that Theresa A. Havell, Mark N. Kaplan and
William H. Turner meet the current independence requirements under the listing
standards of the New York Stock Exchange. The Board of Directors made these
determinations based primarily upon a review of the written responses of
directors to questions regarding employment and compensation history,
affiliations and family and other relationships and on discussions with them.
The Board of Directors determined that there were no material relationships
between any of such persons and the Company that could interfere with their
exercise of independent judgment and that each meets the current independence
requirements applicable to independent directors under the listing standards of
the New York Stock Exchange to serve on the Board of Directors.
The Board of Directors has also determined that Lloyd Frank meets the current
independence requirements under the listing standards of the New York Stock
Exchange. Troutman Sanders LLP and Jenkens & Gilchrist Parker Chapin LLP and its
predecessor law firms, to which Mr. Frank is now Counsel, and was formerly a
partner, have been retained by the Company annually since 1962 to review and
advise the Company with respect to its legal position on numerous matters. These
firms have also rendered professional services to William Shaw and to Jerome
Shaw, for which, the Company has been
6
advised, William and Jerome Shaw were billed directly. The fees paid by the
Company to Troutman Sanders LLP and to Jenkens & Gilchrist Parker Chapin LLP
with respect to services rendered by them to the Company while Mr. Frank was
Counsel to such firms during the Company's 2005 fiscal year, exclusive of
disbursement reimbursement, represented less than 1% of each firm's consolidated
gross revenues during its 2005 fiscal year and were not material to either firm.
Mr. Frank owns 8,000 shares of the Company's Common Stock and his spouse owns
2,529 shares. Mr. Frank is also one of the trustees of various trusts for the
benefit of the children of William Shaw and Jerome Shaw as described above. Mr.
Frank has no other interests which precluded him from being independent under
the criteria for service on the Board of Directors. After considering all of the
above facts and the advice of counsel, the Board of Directors has determined
that, in the Board's business judgment, the relationship of Mr. Frank with the
Company and with the Shaw families and the aforesaid ownership of Common Stock
was not material to the Company, to Mr. Frank's law firm, or to Mr. Frank, and
that such relationships did not interfere with Mr. Frank's exercise of his
independent judgment and that he meets the current independence requirements
applicable to independent directors under the listing standards of the New York
Stock Exchange to serve on the Board of Directors.
The Company has held executive sessions of the non-management directors. In
accordance with the listing standards of the New York Stock Exchange, these
sessions are intended to promote open discussion among non-management directors.
Mark N. Kaplan has been chosen to preside at these sessions.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Shareholders may communicate directly with the Board of Directors by sending
communications to the Board of Directors, c/o Howard B. Weinreich, General
Counsel and Senior Vice President, Volt Information Sciences, Inc., 560
Lexington Avenue, New York, NY 10022-2928. Mr. Weinreich will forward all such
communications directly to the Board of Directors.
CODE OF BUSINESS CONDUCT AND CORPORATE GOVERNANCE GUIDELINES
The Company has a Code of Business Conduct and Ethics and corporate governance
guidelines. Copies of the Company's Code of Business Conduct and Ethics and
other significant corporate policies are available at the Company's website:
www.volt.com, in the Investor Relations/Corporate Governance section.
COMPLIANCE WITH NEW YORK STOCK EXCHANGE CORPORATE GOVERNANCE GUIDELINES
On May 3, 2005, William Shaw, as the Chief Executive Officer of the Company,
certified to the New York Stock Exchange, on which the Company's Common Stock is
listed, that, as of the date of his certification, he was unaware of any
violation by the Company of the New York Stock Exchange's corporate governance
listing standards.
AUDIT COMMITTEE
The Audit Committee presently consists of Theresa A. Havell, Mark N. Kaplan and
William H. Turner, each of whom is financially literate and meets the current
independence requirements for audit committee membership under the rules of the
Securities and Exchange Commission (the "SEC") and the listing standards of the
New York Stock Exchange. The Board of Directors has determined that Mark N.
Kaplan is an "audit committee financial expert". This determination is based on
Mr. Kaplan's relevant experience as Chief Executive Officer of an investment
banking firm, Chief Operating Officer of a public company, former Chairman and
current member of the Audit Committee of The City of New York and as Co-Chair of
the Audit Advisory Committee of the Board of Education of The City of New York.
The Audit Committee provides assistance to the Company's directors in fulfilling
the Board's oversight responsibility as to the Company's accounting, auditing
and financial reporting practices and as to the
7
quality and integrity of the publicly distributed financial reports of the
Company. The specific functions and responsibilities of the Audit Committee are
set forth in a written charter of the Audit Committee adopted by the Board of
Directors, which gives the Audit Committee sole authority to select the
independent registered public accounting firm, to pre-approve all audit
services, and to perform periodic reviews of the performance and independence
from management of the independent registered public accounting firm, and grants
the Audit Committee the authority to fulfill its obligations under SEC and New
York Stock Exchange requirements. Mark N. Kaplan, Chairman of the Audit
Committee, has been designated by the Audit Committee to approve non-audit
services to be performed by the independent registered public accounting firm.
The Audit Committee reviews and reassesses its charter annually and recommends
any changes to the Board of Directors for approval. A copy of the Audit
Committee charter, as amended through February 22, 2006, is attached as Exhibit
A to this Proxy Statement. A report of the Audit Committee appears under the
caption "Audit Committee Report," below.
The Audit Committee met fifteen times during the past fiscal year.
COMPENSATION COMMITTEE
The Company's Compensation Committee consists of Lloyd Frank, Theresa A. Havell,
Mark N. Kaplan and William H. Turner, each of whom meets the current
independence requirements for compensation committee membership under the
listing standards of the New York Stock Exchange. Mr. Turner serves as chair of
the Compensation Committee. The Compensation Committee met twice during the past
fiscal year.
The responsibilities of the Compensation Committee are set forth in a written
charter adopted by the Board of Directors which gives the Compensation Committee
authority to approve and evaluate the director and officer compensation plans,
policies and programs of the Company; and prepare an annual report on executive
compensation for inclusion in the Company's proxy statement for its annual
meeting of shareholders. A copy of the Compensation Committee's charter is
available at the Company's website: www.volt.com, in the Investor
Relations/Corporate Governance section.
NOMINATING/CORPORATE GOVERNANCE COMMITTEE
The Company's Nominating/Corporate Governance Committee consists of Lloyd Frank,
Theresa A. Havell, Mark N. Kaplan and William H. Turner, each of whom meets the
current independence requirements for Nominating/Corporate Governance Committee
membership under the listing standards of the New York Stock Exchange. Ms.
Havell serves as chair of the Nominating/Corporate Governance Committee. The
Nominating/Corporate Governance Committee did not formally meet during the past
fiscal year separate from the full Board of Directors.
The responsibilities of the Nominating/Corporate Governance Committee include:
identifying, evaluating and recommending to the Board prospective nominees for
Director; reviewing the Company's corporate governance policies and making
recommendations to the Board from time to time regarding matters of corporate
governance; and reviewing the performance of the Board and its members. The
Nominating/Corporate Governance Committee has not established a formal process
to identify and evaluate prospective nominees for Director. Copies of the
Company's Nominating/Corporate Governance Committee Charter and Corporate
Governance Guidelines are available at the Company's website: www.volt.com, in
the Investor Relations/Corporate Governance section.
Stockholders may submit names of qualified candidates for director, along with
detailed information on their backgrounds, to the Company's Secretary for
referral to the Nominating/Corporate Governance Committee for consideration.
8
AUDIT COMMITTEE REPORT
Management has the primary responsibility for the Company's financial reporting
process, including its financial statements, while the Board is responsible for
overseeing the Company's accounting, auditing and financial reporting practices
and the Company's independent registered public accounting firm has the
responsibility for the examination of the Company's annual financial statements
and expressing an opinion on the conformity of those financial statements with
accounting principles generally accepted in the United States. In assisting the
Board in fulfilling its oversight responsibility with respect to the Company's
year ended October 30, 2005, the Audit Committee:
o Reviewed and discussed the proposed audited financial statements for
the fiscal year ended October 30, 2005 with management and Ernst &
Young, the Company's independent registered public accounting firm;
o Discussed with Ernst & Young the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended, relating to the
conduct of the audit; and
o Received the written disclosures and a letter from Ernst & Young
stating that Ernst & Young was an independent registered public
accounting firm with respect to the Company within the meaning of the
Federal Securities Laws and the Rules and Regulations thereunder,
including the independence rules adopted by the SEC pursuant to the
Sarbanes-Oxley Act of 2002; and Rule 3600T of the Public Company
Accounting Oversight Board, which designates as interim independence
standards Rule 101 of the American Institute of Certified Public
Accountants Code of Professional Conduct and Standards Nos. 1, 2 and 3
of the Independence Standards Board. The Audit Committee also discussed
Ernst & Young's independence with Ernst & Young and considered whether
the provision of non-audit services rendered by Ernst & Young was
compatible with maintaining its independence under SEC rules governing
the independence of a company's outside auditors (see "Ratification of
Selection of Independent Registered Public Accounting Firm").
Based on the foregoing review and discussions, the Audit Committee recommended
to the Board of Directors that the Company's audited financial statements for
the fiscal year ended October 30, 2005 be included in the Company's Annual
Report on Form 10-K filed with the SEC for that year.
Respectfully,
Mark N. Kaplan, Chair
Theresa A. Havell
William H. Turner
9
EXECUTIVE REMUNERATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation during
the fiscal years ended October 30, 2005 ("fiscal 2005"), October 31, 2004
("fiscal 2004") and November 2, 2003 ("fiscal 2003") of the Company's co-Chief
Executive Officers and each of the four other executive officers of the Company
serving as executive officers of the Company at the end of fiscal 2005 who
received the highest regular cash compensation during fiscal 2005 for services
rendered in all capacities to the Company and its subsidiaries (the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES
------------------------ UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) BONUS OPTIONS COMPENSATION (2)
- ------------------ ---- ---------- ----- ------- ----------------
William Shaw, 2005 $455,250 -- -- $3,038
President, Chairman and 2004 432,231 -- -- 2,911
Co-Chief Executive 2003 413,462 -- -- 2,906
Officer
Steven A. Shaw 2005 262,500 $10,000 -- 3,302
Executive Vice President, 2004 240,192 7,500 -- 2,848
Co-Chief Executive Officer and 2003 225,096 -- 10,000 2,644
and Chief Operating Officer
Jerome Shaw, 2005 455,250 -- -- 3,375
Executive Vice President 2004 432,231 -- -- 3,191
2003 413,462 -- -- 2,989
James J. Groberg, 2005 350,000 7,500 -- 337
Senior Vice President and 2004 345,202 -- -- 365
Chief Financial Officer 2003 338,385 -- -- 365
Thomas Daley, 2005 249,995 255,158(3)(4) -- 2,984
Senior Vice President 2004 249,995 81,585(3) -- 2,823
2003 249,995 33,327(3) 5,000 2,651
Howard B. Weinreich, 2005 290,360 18,000 -- 2,706
Senior Vice President and 2004 274,792 170,000(5) -- 3,440
General Counsel 2003 258,819 -- 5,000 2,583
- ----------------
(1) Includes compensation deferred under the Company's deferred
compensation plan and under Section 401(k) of the Internal Revenue Code
of 1986, as amended.
(2) Amounts in fiscal 2005 include (i) premiums under the Company's group
life insurance policy ($702 for each of William Shaw and Jerome Shaw,
$351 for each of Steven A. Shaw, Thomas Daley and Howard B. Weinreich
and $337 for James J. Groberg) and (ii) the Company's contribution
under the 401(k) Plan feature of the Savings Plan ($2,336 for William
Shaw, $2,673 for Jerome Shaw; $2,951 for Steven A. Shaw; $2,633 for
Thomas Daley and $2,355 for Howard B. Weinreich).
(3) Based on combined pre-tax income and improvement in performance of
divisions for which Mr. Daley has management responsibility.
(4) See also "Related Party Transactions".
(5) A substantial portion of this amount is related to services in
connection with the sale of the Company's real estate during fiscal
2004.
10
OPTION GRANTS IN LAST FISCAL YEAR
No options were granted by the Company during fiscal 2005 to the Named Executive
Officers.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information concerning shares of Common
Stock of the Company subject to unexercised options held at October 30, 2005 by
the Named Executive Officers:
SHARES NUMBER OF SHARES
DEEMED UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
NAME ON EXERCISE REALIZED (EXERCISABLE / UNEXERCISABLE) (EXERCISABLE / UNEXERCISABLE)
- ---- ----------- -------- ----------------------------- -----------------------------
William Shaw -- -- 45,000/- $ -/-
Steven A. Shaw -- -- 38,000/6,000 $ 37,870/47,880
Jerome Shaw -- -- 45,000/- $ 25,501/-
James J. Groberg 6,000 $80,157 29,300/- $ 18,103/-
Thomas Daley 11,150 78,175(1) 7,100/3,000 $ 297/360
Howard B. Weinreich -- -- 19,000/3,000 $ 28,635/23,940
(1) Includes $41,500 paid by Mr. Daley into the Company's General Counsel's
escrow account in accordance with the findings of the Company's Audit Committee.
See "Related Party Transactions".
COMPENSATION OF DIRECTORS
Each director of the Company who is not an officer or employee of the Company
receives a director's fee at the annual rate of $45,000 ($50,000 in the case of
Mark N. Kaplan in view of his additional responsibilities as Chair of the Audit
Committee) and is also reimbursed for out-of-pocket expenses related to his
services. The Board of Directors determined that Mr. Kaplan receive an
additional fee of $50,000 as Chair of the Audit Committee and Mr. Turner and Ms.
Havell each receive an additional fee of $30,000 for their services on the Audit
Committee during the 2005 fiscal year, which amounts were paid during the fiscal
year.
Mark N. Kaplan holds an option to purchase 7,500 shares of the Company's Common
Stock at an exercise price of $40.03 which expires on January 25, 2008.
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company is a party to employment agreements dated as of May 1, 1987 with
William Shaw and Jerome Shaw. These agreements, as amended, provide for the
employment of each in his present executive capacity at an annual base salary
which is presently $485,000 (subject to increases and additional compensation,
including bonuses, from time to time, at the discretion of the Board of
Directors). The employment term under each employment agreement continues until
the April 30 which is five years next following the giving by either the Company
or the executive of notice to terminate such employment. The agreements also
provide for service thereafter for the remainder of the executive's life as a
consultant to the Company for annual consulting fees equal to 75% for the first
ten years of the consulting period, and 50% for the remainder of the consulting
period, of his base salary as in effect immediately prior to the commencement of
the consulting period. Upon the death of the executive, the Company will pay to
his beneficiary a death benefit equal to three times his annual base salary at
the date of death if his death shall have occurred while employed as an
executive, 2.25 times his annual base salary at the end of his employment as an
executive if his death shall have occurred during the first ten years of the
consulting period or 1.5 times his annual base salary at the end of his
employment as an executive if his death shall have occurred during the remainder
of the consulting period. Each employment agreement permits the executive to
accelerate the commencement of the consulting period if a "change in control",
as defined in the agreements, of the Company shall occur or if the Company's
office where the executive presently performs his principal services shall be
relocated to a different geographical area.
11
Under their employment agreements, William Shaw and Jerome Shaw are prohibited
from engaging in any business competitive with the Company, competing with the
Company for its customers or encouraging employees of the Company to leave their
employment. These restrictions apply for the duration of the respective
agreements and for one year thereafter if the executive's employment shall have
been terminated by the Company "for cause," as defined in the agreement. William
Shaw and Jerome Shaw will not be bound by these restrictions after a "change in
control," as defined in the agreement, of the Company shall have occurred if,
during their respective consulting periods, they shall elect to terminate their
respective employment agreements and thereby relinquish any further payments or
other benefits thereunder.
The Company is a party to an employment agreement with Thomas Daley, effective
as of the beginning of the Company's 2004 fiscal year, which provides for his
continued employment as a Senior Vice President of the Company at an annual base
salary which is presently $249,995 (subject to increases from time to time, at
the discretion of the Company). In addition, the agreement provides for
quarterly incentives and a year end improvement bonus which are based upon the
profitability of certain business units. The employment term under the
employment agreement is "at will" and may be terminated by either the Company or
Mr. Daley by giving notice to terminate such employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Decisions regarding the cash compensation of the Company's co-chief executive
officers are made either by the Compensation Committee or the Board of
Directors, on recommendation of the Compensation Committee.
RELATED PARTY TRANSACTIONS
During the Company's fiscal year ended October 30, 2005, Troutman Sanders LLP,
of which firm Lloyd Frank has been Counsel since April 1, 2005, provided legal
services to the Company. The Company paid or accrued $313,000 to that firm for
such services. Prior thereto, the Company paid an additional $573,000 to Jenkens
& Gilchrist Parker Chapin LLP, the law firm of which Mr. Frank was Counsel from
November 1, 2004 through March 31, 2005, for services rendered by that firm
while Mr. Frank was Counsel to it. Troutman Sanders LLP has been retained to
provide legal services to the Company during fiscal 2006.
During the Company's fiscal year ended October 30, 2005, Hinckley, Allen &
Snyder LLP, of which firm Bruce G. Goodman is a partner, provided legal services
to the Company for which it was paid $5,000, and that firm has been retained to
provide legal services to the Company during fiscal 2006.
The Company renders various payroll and related services to a corporation
primarily owned by Steven A. Shaw, an officer and director, for which the
Company received approximately $5,000 in excess of its direct costs in fiscal
2005. Such services are performed on a basis substantially similar to those
performed by the Company for and at substantially similar rates as charged by
the Company to unaffiliated third parties. In addition, the Company rents
approximately 2,600 square feet of office space to that corporation in the
Company's El Segundo, California facility (which space is located within the
Company's facility and shares common areas), which the Company does not require
for its own use, on a month-to-month basis at a rental of $1,750 per month.
Based on the nature of the premises and a report from a real estate broker, the
Company believes the rent is a fair and reasonable rate for the space.
In 2005, after an investigation conducted by independent counsel appointed by
the Audit Committee of the Board of Directors, the Audit Committee concluded
that Mr. Thomas Daley, an executive officer of the Company, had, in July, 2005,
exercised options and sold the underlying shares of stock of the Company in
violation of the Company's Insider Trading Policy. The Audit Committee required
Mr. Daley to pay $31,500, representing the difference between the price at which
Mr. Daley sold the stock and the average market price of the Company's stock
over the three days following the Company's
12
release of its 3rd quarter results, and pay a further penalty of $10,000. These
moneys have been paid by Mr. Daley to the Company's General Counsel's attorney
escrow account. The matter was self-reported on behalf of the Company to the
SEC, which has advised independent counsel to the Audit Committee that no
enforcement action has been recommended at this time. In connection with this
matter, the Audit Committee recommended that the Company advance Mr. Daley's
legal fees upon his entering into a written agreement to repay such fees if it
were ultimately determined that he was not entitled to be indemnified for legal
expenses under applicable law. The Company has advanced to date $95,800 directly
to Mr. Daley's attorneys in connection with such matter. The Company has also
paid to date legal fees of the independent counsel to the Audit Committee of
approximately $260,000 associated with this matter.
The brother of Daniel Hallihan, an executive officer of the Company, was
employed during fiscal 2005 in the Company's Computer Systems segment in an
inventory control position for a compensation that is less than that specified
in Item 404 of Regulation S-K. The Company believes that he has been employed on
the same terms that the Company would employ a similarly situated unrelated
individual.
From time to time the Company has employed, and will continue to employ,
relatives of executive officers, as well as relatives of other full time
employees, during the summer months and in its Staffing Solutions Group. The
Company believes that it has always employed, and will continue to employ, those
individuals on substantially the same terms that it employs unrelated
individuals.
REPORT WITH RESPECT TO EXECUTIVE COMPENSATION DETERMINATIONS
The following report with respect to the Company's compensation policies
applicable to the determination of the compensation of the Company's executive
officers for fiscal 2005 is presented by the Compensation Committee.
EXECUTIVE COMPENSATION. Compensation of executive officers is comprised of
salary as a base compensation and bonuses.
All determinations as to the compensation of an executive officer who is also a
member of the Board of Directors are made on an individual basis by the
Compensation Committee after consultation with senior management or by the Board
of Directors on the recommendation of the Compensation Committee. In making its
decisions as to base salary, the Compensation Committee gives effect to the
executive's performance and responsibilities, inflationary trends, competitive
market conditions and other subjective factors, without ascribing specific
weights to these factors. Bonuses are based upon the Company's, a segment's or a
division's performance, as well as the executive's overall performance,
contribution toward the Company's profitability, meeting corporate objectives
and, in certain instances, meeting specific corporate goals or completing
specific programs or projects. The compensation (salary and bonuses) of
executive officers who are not members of the Board of Directors is determined
by senior management utilizing similar subjective criteria.
The Company has utilized stock options to provide long-term incentive
compensation to key employees, including executive officers, of the Company and
its subsidiaries.
CO-CHIEF EXECUTIVE OFFICER COMPENSATION. The annual compensation of William
Shaw, the Company's Chief Executive Officer, is fixed under the terms of his
Employment Agreement with the Company (discussed under "Executive Remuneration
- -- Employment and Termination Agreements," above), subject to increases and
additional compensation, including bonus, from time to time, at the discretion
of the Board of Directors. In determining whether to increase Mr. Shaw's base
salary or award bonuses or other additional compensation, the Board of Directors
uses similar criteria as it does for other executive officers who are directors.
The annual compensation of Mr. Shaw was increased by $35,000 during fiscal 2005.
13
The annual compensation of Steven A. Shaw, the Company's Co-Chief Executive
Officer, was increased by $50,000 to $305,000 when he was appointed to that
position, and is subject to increases and additional compensation, including
bonus, from time to time, at the discretion of the Board of Directors.
CERTAIN TAX LEGISLATION. Section 162(m) of the Internal Revenue Code of 1986
("Section 162(m)") precludes a public company from taking a federal income tax
deduction for annual compensation in excess of $1,000,000 paid to either of the
Company's co-chief executive officers or any of the Company's four other most
highly compensated executive officers. Certain "performance based compensation"
is excluded from the deduction limitation. All of the fiscal 2005 compensation
of its executive officers is tax deductible. Options previously granted by the
Board are not deemed "performance based compensation" under Section 162(m).
Therefore, the difference between the market value of the Company's Common Stock
underlying those stock options at the date of their exercise and the exercise
price of the options will be taken into account in determining whether the
$1,000,000 Section 162(m) limitation is exceeded.
Respectfully,
William H. Turner, Chair
Lloyd Frank
Theresa A. Havell,
Mark N. Kaplan
14
SHAREHOLDER RETURN PERFORMANCE GRAPH
The Company's Common Stock has been listed on the New York Stock Exchange since
May 7, 1997. The following graph compares the cumulative total shareholder
return to holders of the Company's Common Stock with (a) the New York Stock
Exchange Stock Market Index and (b) securities of companies traded on the New
York Stock Exchange having market capitalizations that are within 5% of the
market capitalization of the Company's Common Stock as at the end of the
Company's latest fiscal year-end (this peer group has been historically selected
by the Company because the Company has operated in four diverse business
segments). The comparison assumes $100 was invested on November 3, 2000 in the
Company's Common Stock and in each of the comparison groups, and assumes
reinvestment of dividends (the Company paid no dividends during the periods):
COMPARE 5-YEAR CUMULATIVE TOTAL REURN
AMONG VOLT INFORMATION SCIENCES, INC.
NYSE MARKET INDEX AND PEER GROUP INDEX
[GRAPH OMITTED]
ASSUMES $100 INVESTED ON NOV. O3, 2000
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING OCT. 30, 2005
2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ----
VOLT INFORMATION SCIENCES, INC. $100.00 $52.18 $61.84 $80.46 $133.56 $85.75
PEER GROUP INDEX $100.00 $62.06 $54.45 $79.21 $78.38 $80.52
NYSE MARKET INDEX $100.00 $83.50 $73.56 $89.55 $99.88 $111.83
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of ownership, and reports
of changes of ownership, of the Company's equity securities with the SEC and
furnish copies of those reports to the Company. Based solely upon a review of
the copies of the reports furnished to the Company to date and representations
that no reports were required, the Company believes that all reports required to
be filed by such persons with respect to the Company's fiscal year ended October
30, 2005 were timely filed, except for one Form 4 filed late for each of Steven
A. Shaw, Jerome Shaw and Lloyd Frank.
15
RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors of the Company has, subject to
shareholder ratification, selected Ernst & Young as the independent registered
public accounting firm to audit the Company's financial statements for the
fiscal year ending October 29, 2006. Ernst & Young did not render consulting
services to the Company during the Company's 2005 fiscal year.
AUDIT FEES
Audit fees billed by Ernst & Young for its audits of the annual financial
statements of the Company and its subsidiaries for fiscal 2004 and for its
reviews of the financial statements included in Quarterly Reports on Form 10-Q
filed with the SEC for that year aggregated $1,128,110. For fiscal 2005 audit
fees also include the performance of the audit of the Company's internal
controls over financial reporting under Section 404 of the Sarbanes-Oxley Act
and related regulations and aggregate $2,708,000. The Company did not, prior to
filing this definitive proxy statement with the SEC, receive a final bill for
audit fees from Ernst & Young. In accordance with the FAQ issued by the Office
of the Chief Accountant of the SEC dated January 16, 2001 (superseded on other
issues by the Application of the SEC's Rules on Auditor Independence (December
13, 2004)), the Company has asked Ernst & Young for the amount that is expected
to be billed for such services, and Ernst & Young has replied that it expects to
bill the Company approximately an additional $1.9 million. The Company has not
yet received nor reviewed any supporting documentation for these charges.
AUDIT-RELATED FEES
Audit-related fees for services rendered in connection with employee benefit
plans and other accounting consultations for fiscal 2004 were $407,300 and for
fiscal 2005 were $319,200.
TAX FEES
The aggregate fees billed by Ernst & Young for tax compliance, tax advice and
tax planning for fiscal 2004 were $184,200 and for fiscal 2005 were $152,200.
ANTICIPATED ATTENDANCE BY ERNST & YOUNG AT THE ANNUAL MEETING
Ernst & Young has indicated to the Company that it intends to have a
representative present at the Annual Meeting who will have the opportunity to
make a statement if he or she so desires and will be available to respond to
appropriate questions.
REQUIRED VOTE
A resolution will be submitted to shareholders at the Annual Meeting for the
ratification of the selection by the Audit Committee of the Board of Directors
of Ernst & Young as the independent registered public accounting firm to audit
the Company's financial statements for the fiscal year ending October 29, 2006.
The affirmative vote of a majority of the votes cast at the Annual Meeting in
person or by proxy will be required to adopt this resolution. The Board of
Directors recommends a vote "FOR" this resolution. Abstentions and broker
non-votes will have no effect on the outcome of the vote on this proposal.
If the resolution selecting Ernst & Young LLP as the Company's independent
registered public accounting firm is adopted by shareholders, the Audit
Committee of the Board of Directors nevertheless retains the discretion to
select different auditors should it then deem it in the Company's best
interests. Any such future selection need not be submitted to a vote of
shareholders.
16
MISCELLANEOUS
COST OF SOLICITING PROXIES
The cost of solicitation of Proxies, including the cost of reimbursing banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding Proxy soliciting material to beneficial owners
of Common Stock, will be borne by the Company. Proxies may be solicited without
extra compensation by certain officers and regular employees of the Company by
mail and, if determined to be necessary, by telephone, telegraph or personal
interviews.
INDEMNIFICATION INSURANCE
New York law permits a corporation to purchase insurance covering a
corporation's obligation to indemnify directors and officers and also covering
directors and officers individually, subject to certain limitations, in
instances in which they may not otherwise be indemnified by the corporation. The
Company maintains insurance policies from National Union Fire Insurance Company
of Pittsburgh, PA, Federal Insurance Company and American Casualty Company of
Reading PA covering reimbursement to the Company for any obligation it incurs as
a result of indemnification of officers and directors and also covering
indemnification for officers and directors individually in certain cases where
additional exposure might exist. The policies expire May 1, 2006. The annual
premium cost of the policies was $692,195.
SHAREHOLDER PROPOSALS
From time to time shareholders may present for consideration at meetings of
shareholders proposals which may be proper subjects for inclusion in the proxy
statement and form of proxy distributed in connection with such meetings. In
order to be so included, such proposals must be submitted in writing on a timely
basis. Shareholder proposals intended to be included in the Company's proxy
statement and form of proxy to be used in connection with the Company's 2007
Annual Meeting of Shareholders must be received by the Company by October 31,
2006. Any such proposals, as well as any questions relating thereto, should be
directed to the Secretary of the Company, 560 Lexington Avenue, New York, New
York 10022-2928.
The Company's by-laws, as amended, require shareholders who intend to nominate
directors or propose business at any annual meeting to provide advance notice of
such intended action, as well as certain additional information, to the Company.
Such notice and information must be timely received by the Secretary of the
Company at 560 Lexington Avenue, New York, New York 10022-2928 not less than 120
nor more than 150 days prior to the anniversary date of the notice of the annual
meeting of shareholders held in the immediately preceding year. However, in the
event the date of the annual meeting is changed by more than 30 days from the
one year anniversary date of the date the annual meeting was held in such
immediately preceding year and less than 130 days informal notice to
shareholders or other public disclosure of the date of the annual meeting in the
current year is given or made, advance notice of nominations or business
proposed by a shareholder must be received by the Company not later than the
close of business on the tenth calendar day following the date on which formal
or informal notice or public disclosure of the date of the annual meeting is
mailed or otherwise first publicly announced, whichever first occurs. Copies of
the by-law provision are available upon request made to the Secretary of the
Company.
By Order of the Board of Directors
Jerome Shaw, Secretary
New York, New York
February 28, 2006
17
EXHIBIT A
VOLT INFORMATION SCIENCES, INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of the Board of Directors known as the Audit
Committee. The Audit Committee shall be composed of three or more directors,
appointed by the Board of Directors, who are independent of the management of
the Company and are free of any relationship that, in the opinion of the Board
of Directors, would interfere with their exercise of independent judgment as a
committee member. Members will be financially literate and at least one will
have accounting or related financial management expertise. Audit Committee
members shall meet the requirements of the listing standards of the New York
Stock Exchange. A majority shall constitute a quorum of the Audit Committee. A
majority of the members in attendance shall decide any questions brought before
any meeting of the Audit Committee.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Company's directors in
fulfilling the Board's oversight responsibility as to the Company's accounting,
auditing and financial reporting practices and as to the quality and integrity
of the publicly distributed financial reports of the Company.
RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to oversee the corporate accounting and reporting practices of
the Company, relative to internal controls and generally accepted accounting
principles. In so doing, the Audit Committee should maintain free and open means
of communication between the directors, the independent registered public
accounting firm, the internal auditors, and the financial management of the
Company.
In carrying out its responsibilities, the Audit
Committee will:
1. Appoint, compensate and oversee the work of any independent registered
public accounting firm engaged to perform any audit, review or attest
services for the Company and its divisions and subsidiaries.
2. Have a clear understanding with the independent registered public
accounting firm that it is ultimately accountable to the Audit
Committee.
3. Review the independence and performance of the independent registered
public accounting firm.
4. Meet with the independent registered public accounting firm and
financial management of the Company to review the scope of the proposed
audit for the current year and the audit procedures to be utilized, and
at the conclusion of the audit, review such audit, including comments
or recommendations of the independent registered public accounting
firm.
5. Review with the independent registered public accounting firm, the
Company's internal auditor, and financial and accounting personnel, the
adequacy and effectiveness of the accounting and financial controls of
the Company, and elicit any recommendations for the improvement of such
controls or particular areas where new or more detailed controls or
procedures are desirable. Discuss with the independent registered
public accounting firm significant financial risk exposures
and the steps management has taken to monitor, control and report such
exposures.
6. Review the internal audit function of the Company, including its
independence, authority, reporting obligations, organizational
structure, staff qualifications and the proposed internal audit plans
for the current year.
7. Review the Company's annual audited financial statements prior to
filing or distribution with management and the independent registered
public accounting firm to determine that the independent registered
public accounting firm is satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. Any
changes in accounting principles should be reviewed.
8. Review with financial management and the independent registered public
accounting firm the Company's quarterly financial results, and discuss
any significant changes to the Company's accounting principles and any
items required to be communicated by the independent registered public
accounting firm in accordance with Statement of Auditing Standards 61.
9. Review with financial management and the independent registered public
accounting firm their judgments about the accounting principles
employed by the Company.
10. Provide sufficient opportunity for the internal auditors and the
independent registered public accounting firm to meet with the members
of the Audit Committee without members of management present. Among the
items to be discussed in these meetings are the independent registered
public accounting firm's evaluation of the Company's financial,
accounting and auditing personnel and the cooperation that the
independent registered public accounting firm received during the
course of the audit.
11. Submit the minutes of all meetings of the Audit Committee to, or
discuss the matters discussed at each Audit Committee meeting with, the
Board of Directors.
12. Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if,
in its judgment, that is appropriate.
13. Review and reassess the adequacy of this charter at least annually.
Submit this charter to the Board of Directors for approval and have
this charter published at least every three years in accordance with
Securities and Exchange Commission regulations.
14. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
annual proxy statement.
Nothing contained in this charter is intended to, or should be construed as,
creating any responsibility or liability of the members of the Audit Committee
except to the extent otherwise provided under the New York law which shall
continue to set the legal standard for the conduct of the members of the
Committee.
A-2
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VOLT INFORMATION SCIENCES, INC.
Solicited On Behalf Of The Board Of Directors For Annual
Meeting Of Shareholders Of Volt Information Sciences, Inc
WITH- FOR ALL
FOR HOLD EXCEPT
The undersigned hereby appoints C [_] [_] [_]
WILLIAM SHAW, JEROME SHAW and O 1. Election of Directors: The
HOWARD B. WEINREICH, jointly and M election of the following to serve
severally, Proxies with full power M as Class I directors:
of substitution, to vote on behalf O
of the undersigned at the Annual N Lloyd Frank Bruce G. Goodman
Meeting of Shareholders of VOLT Mark N. Kaplan Steven A. Shaw
INFORMATION SCIENCES, INC. to be
held on April 6, 2006, and at any INSTRUCTION: To withhold authority
adjournments or postponements to vote for any individual nominee,
thereof, as indicated upon the mark "For All Except" and write
following matters as described in that nominee's name in the space
the Notice of Meeting and provided below.
accompanying Proxy Statement ___________________________________
related to such meeting, receipt of FOR AGAINST ABSTAIN
which is acknowledged, and with [_] [_] [_]
discretionary power upon such other
business as may come before the 2. The proposal to ratify the
meeting, according to the number of action of the Audit Committee of
votes and as fully as the the Board of Directors in
undersigned would be entitled to appointing Ernst & Young LLP as the
vote if personally present, hereby Company's independent registered
revoking any prior Proxy or public accounting firm for the
Proxies. fiscal year ending October 29, 2006.
The Board of Directors recommends a
Date vote for the election of
Please be sure to sign ------------------ each nominee to serve as a director
and date this Proxy and for Proposal 2 set forth in
- ----------------------------------------- this Proxy.
Each properly executed Proxy will
be voted in accordance with
- ----------------------------------------- the specifications made above. If no
Shareholder sign above--Co-holder (if any) specification is made, the
sign above shares represented by this Proxy
will be voted FOR the election of
all listed nominees and FOR
Proposal 2.
The Submission Of This Proxy, If
Executed Properly,
Revokes All Prior Proxies.
+ +
- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
VOLT INFORMATION SCIENCES, INC.
- --------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly
owned shares, each owner should sign. If signing as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Proxies executed by corporations should be signed by a duly
authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED?
- ------------------------------------
- ------------------------------------
- ------------------------------------
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VOLT INFORMATION SCIENCES, INC.
Solicited On Behalf Of The Board Of Directors For Annual
Meeting Of Shareholders Of Volt Information Sciences, Inc
WITH- FOR ALL
FOR HOLD EXCEPT
The undersigned hereby appoints S [_] [_] [_]
WILLIAM SHAW, JEROME SHAW and A 1. Election of Directors: The
HOWARD B. WEINREICH, jointly and V election of the following to serve
severally, Proxies with full power I as Class I directors:
of substitution, to vote on behalf N
of the undersigned at the Annual G Lloyd Frank Bruce G. Goodman
Meeting of Shareholders of VOLT S Mark N. Kaplan Steven A. Shaw
INFORMATION SCIENCES, INC. to be
held on April 6, 2006, and at any P INSTRUCTION: To withhold authority
adjournments or postponements L to vote for any individual nominee,
thereof, as indicated upon the A mark "For All Except" and write
following matters as described in N that nominee's name in the space
the Notice of Meeting and provided below.
accompanying Proxy Statement ___________________________________
related to such meeting, receipt of FOR AGAINST ABSTAIN
which is acknowledged, and with [_] [_] [_]
discretionary power upon such other
business as may come before the 2. The proposal to ratify the
meeting, according to the number of action of the Audit Committee of
votes and as fully as the the Board of Directors in
undersigned would be entitled to appointing Ernst & Young LLP as the
vote if personally present, hereby Company's independent registered
revoking any prior Proxy or public accounting firm for the
Proxies. fiscal year ending October 29, 2006.
This Proxy also provides voting
Date instructions to the trustee of Volt
Please be sure to sign ------------------ Information Sciences, Inc. Savings
and date this Proxy Plan.
- -----------------------------------------
The Board of Directors recommends a
vote for the election of
each nominee to serve as a director
- ----------------------------------------- and for Proposal 2 set forth in
Shareholder sign above--Co-holder (if any) this Proxy.
sign above
Each properly executed Proxy will
be voted in accordance with
the specifications made above. If no
specification is made, the
shares represented by this Proxy
will be voted FOR the election of
all listed nominees and FOR
Proposal 2.
The Submission Of This Proxy, If
Executed Properly,
Revokes All Prior Proxies.
+ +
- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
VOLT INFORMATION SCIENCES, INC.
- --------------------------------------------------------------------------------
NOTE: Please sign your name or names exactly as set forth hereon. For jointly
owned shares, each owner should sign. If signing as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which you
are acting. Proxies executed by corporations should be signed by a duly
authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED?
- ------------------------------------
- ------------------------------------
- ------------------------------------