0000912057-95-007955.txt : 19950925
0000912057-95-007955.hdr.sgml : 19950925
ACCESSION NUMBER: 0000912057-95-007955
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 19951114
FILED AS OF DATE: 19950921
SROS: NONE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AUTOMATIC DATA PROCESSING INC
CENTRAL INDEX KEY: 0000008670
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
IRS NUMBER: 221467904
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0630
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-05397
FILM NUMBER: 95575162
BUSINESS ADDRESS:
STREET 1: ONE ADP BOULVARD
CITY: ROSELAND
STATE: NJ
ZIP: 07068
BUSINESS PHONE: 2019945000
MAIL ADDRESS:
STREET 1: ONE ADP BOULEVARD
CITY: ROSELAND
STATE: NJ
ZIP: 07068
DEF 14A
1
DEF 14A
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
ADP-REGISTERED TRADEMARK- AUTOMATIC DATA PROCESSING, 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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
------------------------------------------------------------------------
/X/ 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:
------------------------------------------------------------------------
[LOGO]
AUTOMATIC DATA PROCESSING, INC.
ONE ADP BOULEVARD - ROSELAND, NEW JERSEY 07068
---------------------
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
------------------------
To the Stockholders:
PLEASE TAKE NOTICE that the 1995 Annual Meeting of Stockholders of AUTOMATIC
DATA PROCESSING, INC. (the "Company") will be held at 10:00 a.m., Tuesday,
November 14, 1995 at the Company's corporate headquarters, ONE ADP BOULEVARD,
ROSELAND, NEW JERSEY 07068, for the following purposes:
1. To elect a Board of Directors (Proposal 1);
2. To approve an amendment to the Company's 1990 Key Employees' Stock
Option Plan approved by the Board of Directors increasing by 5,000,000
shares the number of shares of Common Stock of the Company that may be
acquired upon the exercise of options that may be granted to employees
under such plan (Proposal 2);
3. To ratify the appointment of Deloitte & Touche LLP to serve as the
Company's independent certified public accountants for the fiscal year
which began on July 1, 1995 (Proposal 3); and
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Only the holders of Common Stock of record at the close of business on
September 15, 1995 are entitled to vote at the meeting. Each stockholder is
entitled to one vote for each share of Common Stock held on the record date.
By order of the Board of Directors
FRED S. LAFER
SECRETARY
September 25, 1995
Roseland, New Jersey
THE PRESENCE IN PERSON AND/OR THE REPRESENTATION BY PROXY OF THE HOLDERS OF
A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OF STOCK ENTITLED TO VOTE IS
NECESSARY AND SUFFICIENT TO CONSTITUTE A QUORUM. ACCORDINGLY, IF YOU DO NOT
EXPECT TO BE PRESENT AT THE MEETING, PLEASE EXECUTE THE ACCOMPANYING PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES, SO THAT YOUR SHARES OF STOCK MAY BE REPRESENTED AT THE
MEETING.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS OF
[LOGO]
AUTOMATIC DATA PROCESSING, INC.
ONE ADP BOULEVARD - ROSELAND, NEW JERSEY 07068
TO BE HELD ON NOVEMBER 14, 1995
SOLICITATION AND REVOCATION OF PROXY
The accompanying proxy is being solicited by the Board of Directors of the
Company for use at the forthcoming Annual Meeting of Stockholders. Each
stockholder giving such a proxy has the power to revoke the same at any time
before it is voted by so notifying the Secretary of the Company in writing. All
expenses in connection with the solicitation will be borne by the Company. This
proxy statement and the accompanying proxy are being mailed to the stockholders
on or about September 25, 1995.
The Company has one class of securities outstanding and entitled to vote at
the Annual Meeting of Stockholders, its Common Stock, par value $.10 per share.
At the close of business on September 15, 1995, the record date for
determination of stockholders entitled to notice of and to vote at the meeting,
the Company had issued and outstanding 143,867,876 shares of Common Stock
(excluding 13,249,570 treasury shares not entitled to vote). Each outstanding
share of Common Stock is entitled to one vote with respect to each matter to be
voted on at the meeting.
The representation in person or by proxy of a majority of the shares
entitled to vote shall constitute a quorum at the Annual Meeting of
Stockholders. Directors are elected by a plurality of the affirmative votes
cast. The affirmative vote of the holders of a majority of the shares cast is
required: (i) to approve the proposed amendment to the Company's 1990 Key
Employees' Stock Option Plan; and (ii) to ratify the appointment of Deloitte &
Touche LLP as the Company's independent certified public accountants. Under the
Company's Restated Certificate of Incorporation and By-laws and under Delaware
law, abstentions and "non-votes" are counted as present in determining whether
the quorum requirement is satisfied. With regard to the election of Directors,
votes may be cast in favor or withheld. Votes that are withheld will be excluded
entirely from the vote and will have no effect. Abstentions may be specified on
all proposals (other than the election of Directors) and will have the effect of
a negative vote because all of the proposals (other than the election of
Directors) require the affirmative vote of a majority of the shares present in
person or by proxy and entitled to vote. Under applicable Delaware law, a
non-vote will have no effect on the outcome of the election of Directors or the
other two proposals. A non-vote occurs when a nominee holding shares for a
beneficial owner votes on one proposal, but does not vote on another proposal
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner.
The Company's Board of Directors has adopted a policy whereby stockholders'
proxies are received by the Company's independent tabulators and the vote is
certified by independent inspectors of election. Proxies and ballots that
identify the vote of individual stockholders will be kept confidential from the
Company's management and directors, except as necessary to meet legal
requirements, in cases where stockholders request disclosure, or in a contested
election.
PROPOSAL 1
ELECTION OF DIRECTORS
Properly executed proxies will be voted as marked, and if not marked, will
be voted in favor of the election of the persons named below (each of whom is
now a director) as directors to serve until the
next Annual Meeting of Stockholders and until their successors are duly elected
and qualified. If any nominee does not remain a candidate at the time of the
meeting (a situation which management does not anticipate), proxies solicited
hereunder will be voted in favor of those nominees who do remain as candidates
and may be voted for substitute nominees designated by the Board of Directors.
SERVED AS A
DIRECTOR
CONTINUOUSLY
NAME AGE SINCE PRINCIPAL OCCUPATION
-------------------- ----- ------------ -------------------------------------------------------
Joseph A. Califano, 64 1982 Chairman of the Board and President, Center on
Jr. Addiction and Substance Abuse at Columbia University
(1)
Leon G. Cooperman 52 1991 Chairman and Chief Executive Officer, Omega Advisors,
Inc., an investment partnership (2)
George H. Heilmeier 59 1994 President and Chief Executive Officer of Bellcore (Bell
Communication Research), a research and engineering
consortium (3)
Ann Dibble Jordan 60 1993 Consultant (4)
Harvey M. Krueger 66 1967 Senior Managing Director of Lehman Brothers, investment
bankers (5)
Charles P. Lazarus 71 1987 Chairman of the Board of Toys "R" Us, Inc., a toy
specialty retail chain (6)
Frederic V. Malek 58 1978 Chairman, Thayer Capital Partners, a merchant banking
firm; and Co-Chairman, CB Commercial Real Estate Group
(7)
Henry Taub 68 1961 Chairman of the Executive Committee of the Board (8)
Laurence A. Tisch 72 1972 Chairman, President and Chief Executive Officer of CBS,
Inc., which is engaged in the broadcasting business
(9)
Arthur F. Weinbach 52 1989 President and Chief Operating Officer of the Company
(10)
Josh S. Weston 66 1977 Chairman of the Board and Chief Executive Officer of
the Company (11)
------------------------
(1) Mr. Califano was a senior partner in the Washington, D.C. office of Dewey
Ballantine from 1983 through 1992. He is also a director of Authentic
Fitness Corporation, Chrysler Corporation, K Mart Corporation, New York and
New England Telephone Companies, Travelers Group and Warnaco.
(2) Mr. Cooperman was Chairman and Chief Executive Officer of Goldman Sachs
Asset Management from 1989 until July 1991, and is a limited partner of
Goldman, Sachs & Co. Prior to that time,
2
Mr. Cooperman spent 22 years in Goldman Sachs' Investment Research
Department, in which he served as partner-in-charge, co-chairman of the
Investment Policy Committee and chairman of the Stock Selection Committee.
(3) Dr. Heilmeier has been President and Chief Executive Officer of Bellcore
(Bell Communication Research) since March 1991. Prior to that time, he had
served as Senior Vice President and Chief Technical Officer of Texas
Instruments, Inc. for more than the past five years. Mr. Heilmeier is also
a director of Compaq Computer Corporation, The MITRE Corporation and TRW,
Inc.
(4) Mrs. Jordan is the former Director, Social Services Department, Chicago
Lying-In Hospital, University of Chicago Medical Center, a position she
assumed in 1970. She is also a director of Capital Cities/ABC, Inc.,
Hechinger Company, Johnson & Johnson Corporation, Salant Corporation and
The Travelers, Inc.
(5) Mr. Krueger has been a Senior Managing Director of Lehman Brothers and its
predecessor companies for more than the past five years. He is also a
director of Chaus, Inc., Club Med Inc., IVAX Corporation and R.G. Barry
Corporation.
(6) Mr. Lazarus has been Chairman of the Board of Toys "R" Us, Inc. for more
than the past five years. He is also a director of Loral Corporation.
(7) Mr. Malek has been Chairman of Thayer Capital Partners since 1992. During
1992 he was Campaign Manager, Bush-Quayle '92. Prior to that time, he was
Vice-Chairman of Northwest Airlines, Inc. from 1990 until December 1991,
and was President of Northwest Airlines from 1989 to 1990. Mr. Malek is
also a director of FPL Group Incorporated, National Education Corporation,
American Management Systems Corp., ICF, Inc., Manor Care Corp. and various
Paine Webber mutual funds.
(8) Mr. Taub became Honorary Chairman of the Company's Board of Directors in
1986 and has been Chairman of the Executive Committee since 1983. He is
also a director of Bank Leumi Trust Company of New York, Hasbro, Inc. and
Rite Aid Corp.
(9) Mr. Tisch has been Chairman, President and Chief Executive Officer of CBS,
Inc. since December 1990, after having served as President and Chief
Executive Officer of CBS, Inc. since January 1987. He is also a director of
Bulova Corporation, Petrie Stores Corp., Federated Department Stores, Inc.
CNA Financial Corporation, and Loews Corporation.
(10) Mr. Weinbach became President and Chief Operating Officer of the Company in
January 1994 after having served as Executive Vice President since August
1992. Prior to that time, he had been Senior Vice President, Administration
and Finance, for more than the past five years.
(11) Mr. Weston has been Chairman of the Board and Chief Executive Officer of
the Company for more than the past five years. He is also a director of
Public Service Enterprise Group and Shared Medical Systems Corporation.
3
DIRECTORS' MEETINGS, COMMITTEES AND FEES
During the last fiscal year six meetings of the Board of Directors were
held. All directors (except for Edwin D. Etherington who has decided not to
stand for reelection as a director of the Company) attended at least 75%, in the
aggregate, of the meetings of the Board of Directors and the committees of which
they were members.
The Company has a standing Audit Committee composed of Messrs. Califano,
Cooperman, Etherington and Krueger, and Mrs. Jordan. Mr. Krueger is the
Chairman. The principal functions of the Audit Committee are to (i) make
recommendations to the full Board of Directors concerning the appointment of
independent auditors, (ii) review the scope of the audit and related fees, (iii)
review the Company's accounting principles, policies and reporting practices
with the independent and internal auditors and management, (iv) discuss with the
independent auditors the results of their audit and determine what action, if
any, is required with respect to the Company's internal controls and (v)
consider other audit and non-audit matters from time to time as requested by the
full Board of Directors. The Audit Committee met four times during fiscal 1995.
The Company has a Compensation Committee composed of Messrs. Lazarus, Malek
and Tisch. Mr. Malek is the Chairman. The purpose of the Compensation Committee
is to develop guidelines and review the compensation and performance of officers
of the Company and other Company associates, to review and approve criteria for
granting bonuses and options to officers of the Company, and to develop plans
for managerial succession. The Compensation Committee met four times in fiscal
1995.
The Company has an Executive Committee composed of Messrs. Krueger, Malek,
Taub and Weston. Mr. Taub is the Chairman. The purpose of the Executive
Committee is to act in the absence of the Board of Directors. The Executive
Committee did not meet during fiscal 1995.
The Company does not have a Nominating Committee or any committee performing
nominating or similar functions.
Non-employee directors are paid an annual retainer of $25,000, plus $1,000
for each Board of Directors meeting attended. In addition, non-employee
directors are paid $750 for each committee meeting attended, except for the
chairman of such committee, who is paid $1,000 for each meeting he attends, and
except that each non-employee member of the Executive Committee is paid $1,000
for each meeting he attends. Non-employee directors may elect to defer payment
of the above amounts. In addition, Mr. Etherington, a director, received $10,000
during the fiscal year for various consultive type services to the Company.
There are no fees paid to employee directors or other fee arrangements provided
by the Company.
The non-employee directors of the Company are entitled to participate in the
1989 Non-Employee Director Stock Option Plan (the "Directors' Plan") pursuant to
which options for 10,000 shares of Common Stock have been granted to each of the
Company's non-employee directors at an exercise price of $22.91 per share (other
than Mr. Cooperman who has been granted an option for 10,000 shares of Common
Stock at an exercise price of $38.68 per share, Mrs. Jordan who has been granted
an option for 5,000 shares of Common Stock at an exercise price of $52.29 per
share, and Mr. Heilmeier who has been granted an option for 5,000 shares of
Common Stock at an exercise price of $58.75 per share). Options for 5,000 shares
of Common Stock will automatically be granted to persons who become non-employee
directors at any time after the adoption of the Directors' Plan; the foregoing
option grants for 10,000 shares reflect the adjustments caused by the Company's
2 for 1 stock split in May 1991. In
4
addition, each non-employee director will be granted an additional 5,000 options
for shares of Common Stock on the first business day after each fifth
anniversary of the date of the initial grant to each such non-employee director,
provided that he or she is then still serving in such capacity. On November 2,
1994, the fifth anniversary of their initial option grants, Messrs. Califano,
Etherington, Krueger, Lazarus, Malek, and Tisch each received a grant of an
additional option for 5,000 shares of Common Stock at an exercise price of
$57.44 per share. All options have been and will be granted at the fair market
value of the Common Stock, determined on the basis of the closing price of the
Common Stock in consolidated trading on the date of grant, as reported in The
Wall Street Journal. The Directors' Plan was adopted on November 2, 1989 and
will remain in effect until terminated by action of the Board of Directors.
Twenty percent of the options granted under the Directors' Plan become
exercisable on the first anniversary of the date such options were granted, and
twenty percent become exercisable on each successive anniversary date until all
such options are exercisable; provided, that options become exercisable only if
the director is then still serving in such capacity, unless certain specified
events occur such as the death, disability or retirement of a director, in which
case the options shall immediately vest and become fully exercisable. All
options granted under the Directors' Plan shall have a term of ten years.
In addition, a non-employee director who chooses to retire after 20 years of
service in such capacity and having attained the age of 70 will receive a
pension of $25,000 per year for the remainder of his or her life. If a
non-employee director chooses to retire after having attained the age of 65 with
15 years of service, he or she will receive a pension of $12,500 per year.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
The following table contains information as of August 25, 1995 with respect
to the beneficial ownership of Common Stock of the Company by each director and
nominee for director of the Company, by each of the five most highly compensated
executive officers of the Company and by all directors and executive officers of
the Company as a group (including the named individuals). Unless otherwise noted
in the footnotes following the table, the persons as to whom the information is
given had sole voting and investment power over the shares of Common Stock shown
as beneficially owned. To the knowledge of the management of the Company, no
person beneficially owned as of August 25, 1995 more than 5% of the outstanding
shares of the Company's Common Stock.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1)
------------------------------------------------
RIGHT TO
ACQUIRE BEFORE
HELD AS OF OCTOBER 24,
AUGUST 25, 1995 PERCENT
NAME 1995 UNDER OPTIONS OF CLASS (2)
------------------------------------------------ -------------- --------------- ---------------
Fred D. Anderson, Jr. 18,072 13,000 0
Gary C. Butler 93,824 20,000 0
Joseph A. Califano, Jr. 400 10,000 0
Robert J. Casale 30,021 37,000 0
Leon G. Cooperman 1,000 5,500 0
Edwin D. Etherington 4,650 4,000 0
George H. Heilmeier 100 0 0
Ann Dibble Jordan 100 2,000 0
5
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1)
------------------------------------------------
RIGHT TO
ACQUIRE BEFORE
HELD AS OF OCTOBER 24,
AUGUST 25, 1995 PERCENT
NAME 1995 UNDER OPTIONS OF CLASS (2)
------------------------------------------------ -------------- --------------- ---------------
Harvey M. Krueger 8,000 10,000 0
Charles P. Lazarus 2,000 10,000 0
Frederic V. Malek 2,000 10,000 0
Henry Taub 2,293,259 0 1.6%
Laurence A. Tisch 1,600 10,000 0
Arthur F. Weinbach 81,522 148,000 0
Josh S. Weston 216,725 305,000 0
Directors and Officers as a group
(25 persons, including those named above) 2,919,072 712,150 2.0%
------------------------
(1) In addition, information is furnished below with respect to beneficial
ownership, as of August 25, 1995, by members of the immediate families of
certain of the directors and officers and by certain other persons, as to
which such directors and officers disclaim beneficial interest:
(a) Members of Mr. Taub's immediate family were potential beneficiaries of
charitable trusts or owned outright an aggregate of 80,358 shares of
Common Stock of the Company, and a charitable foundation of which Mr.
Taub is an officer owned an aggregate of 3,932 shares of Common Stock
of the Company.
(b) Members of Mr. Malek's immediate family were potential beneficiaries
of charitable trusts or owned outright an aggregate of 800 shares of
Common Stock of the Company.
(c) Mr. Weston's daughter owned 200 shares of Common Stock of the Company.
(d) Members of the immediate families of non-director officers of the
Company owned 41,955 shares of Common Stock of the Company.
(2) Ownership of less than 1% is reflected as "0" in the table.
STOCKHOLDER APPROVAL REQUIRED
Directors shall be elected by a plurality of the affirmative votes cast at
the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS.
6
COMPENSATION OF EXECUTIVE OFFICERS
The following sections of this proxy statement cover the components of the
total compensation of the five most highly compensated executive officers of the
Company. These sections include: (i) a series of tables covering annual and
long-term compensation; (ii) a pension plan table summarizing the annual
benefits payable under the Company's defined benefit retirement plans; (iii) a
report by the Compensation Committee of the Board of Directors describing the
Company's compensation policies for fiscal 1995 for its executive officers and
the rationale upon which its chief executive officer's compensation for fiscal
1995 was based; and (iv) a performance graph comparing the Company's total
stockholder return to the S&P 500 and the S&P Computer Software Services Indices
over a five year period.
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation of the Company's chief
executive officer and the four other most highly compensated executive officers
for services in all capacities to the Company for the three years ended June 30,
1995.
LONG-TERM COMPENSATION
----------------------
NUMBER OF
SECURITIES
RESTRICTED UNDERLYING
YEAR ANNUAL COMPENSATION(1) STOCK OPTIONS ALL OTHER
NAME AND ENDED ----------------------- AWARDS GRANTED COMPENSATION
PRINCIPAL POSITION JUNE 30, SALARY BONUS (3) (4) (5)
----------------------------------- -------- ---------- ----------- ---------- ---------- ------------
Josh S. Weston 1995 $1,000,000 $200,000 $ -- -- $ 7,684
Chairman and Chief Executive 1994 $1,068,750 $ -- $1,179,640 -- $ 6,521
Officer 1993 $1,005,000 $ -- $ -- 20,000 $ 6,021
Arthur F. Weinbach 1995 $ 455,000 $225,000 $ -- 40,000 $ 4,568
President and Chief Operating 1994 $ 405,833 $210,000 $ 447,844 40,000 $ 3,520
Officer 1993 $ 365,000 $175,000 $1,271,650 20,000 $ 3,020
Robert J. Casale 1995 $ 388,750 $160,000 $ -- 15,000 $ 4,599
Group President 1994 $ 366,923 $175,000 $ -- 15,000 $ 3,529
1993 $ 356,250 $175,000 $ 695,000 30,000 $ 3,029
Gary C. Butler 1995 $ 345,833 $220,000 $ -- 20,000 $63,961
Group President 1994 $ 286,250 $180,000 $ 341,656 10,000 $ 2,980
1993 $ 268,750 $172,000 $ 445,000 30,000 $ 2,480
Fred D. Anderson, Jr. 1995 $ 326,250 $140,000(2) $ -- 20,000 $ 3,750
Chief Financial Officer 1994 $ 311,250 $115,000 $ -- 10,000 $ 4,203
1993 $ 251,190 $105,000 $ 650,625 50,000 $55,344
------------------------
(1) None of the named executive officers received any perquisites or other
personal benefits of an amount, or any other annual compensation of a type,
required to be reported by the Securities and Exchange Commission pursuant
to applicable rules and regulations.
(2) Mr. Anderson's annual bonus is paid 50% in cash and 50% in the form of
restricted stock (see note 3 below).
(3) The dollar values shown in the Restricted Stock Awards column are based on
the closing market price of the Company's Common Stock on the date the
restricted shares were granted. Restricted shares may not be transferred or
pledged, but such Company-imposed restrictions lapse with the passage of
time (over periods of up to six years) and continued employment with the
Company.
7
As of June 30, 1995, the aggregate number of shares of restricted stock held
by a named executive officer and the aggregate fair market value of such
shares (calculated by multiplying the aggregate number of shares held by
such a named executive officer by $62 7/8, the closing price on the New York
Stock Exchange of the Company's Common Stock on June 30, 1995) was: Mr.
Weston, 22,000 shares ($1,383,250); Mr. Weinbach, 24,800 shares
($1,559,300); Mr. Casale, 13,000 shares ($817,375); Mr. Butler, 18,000
shares ($1,131,750); and Mr. Anderson, 10,000 shares ($628,750).
The restricted stock awards to the named executive officers reported in the
table that vest, in whole or in part, in under three years from the date of
grant are as follows:
(i) Mr. Weston received a grant of 22,000 restricted shares in fiscal 1994,
of which 11,000 vested in fiscal 1995, and 11,000 shares may
subsequently vest, pursuant to the terms of the 1994 Executive Incentive
Compensation Plan depending upon the achievement by the Company of
certain earnings per share objectives;
(ii) Mr. Weinbach received a grant of 23,200 restricted shares in fiscal
1993, of which 800 shares vested in fiscal 1994, 5,600 shares vested in
fiscal 1995, and 5,600 shares will vest in each of the next three
fiscal years; and a grant of 8,500 shares in fiscal 1994, of which 500
shares vested in fiscal 1995, and 500 shares will vest in each of
fiscal 1996 through 1998 and 6,500 shares will vest in fiscal 1999;
(iii) Mr. Casale received a grant of 13,000 restricted shares in fiscal 1993,
of which 4,200 shares vest in each of fiscal 1996 and 1997, and 4,600
vest in fiscal 1998;
(iv) Mr. Butler received a grant of 8,800 restricted shares in fiscal 1993,
of which 800 shares vest in fiscal 1996 and 4,000 shares vest in each of
the next two fiscal years; and a grant of 6,500 shares in fiscal 1994,
of which 500 shares vested in fiscal 1995, 500 shares will vest in each
of fiscal 1996 through 1998 and 4,500 shares vest in fiscal 1999.
(v) Mr. Anderson received a grant of 22,500 restricted shares in fiscal
1993, of which 2,500 shares vested in each of fiscal 1994 and 1995 and
2,500 shares will vest in each of fiscal years 1996 through 1999. The
remaining 7,500 shares of this grant vest as earned as part of Mr.
Anderson's annual bonus and, accordingly, are not reflected in the
Restricted Stock Awards column of the table above. 1,053, 1,086 and
1,000 shares vested as part of Mr. Anderson's 1993, 1994 and 1995
bonuses, respectively.
Dividends are paid on restricted stock at the same rate as other outstanding
shares of the Company's Common Stock. In the event of a change of control of
the Company, the unvested portion of the restricted stock of Messrs.
Weinbach, Casale, Butler, and Anderson will be subject to limited
accelerated vesting.
(4) The Company does not award Stock Appreciation Rights (SARS).
(5) For the year ended June 30, 1995, consists of the sum of (i) contributions
to the Company's Retirement and Savings Plan (401(k)) in the following
amounts: Mr. Weston, $3,000; Mr. Weinbach, $3,345; Mr. Casale, $3,402; Mr.
Butler, $3,227; and Mr. Anderson, $3,392, and (ii) compensatory split-dollar
insurance premiums (with a statistically calculated economic benefit to the
executive determined by Phoenix Home Life Insurance Company for W-2 income
purposes) in the following amounts: Mr. Weston, $4,684; Mr. Weinbach,
$1,223; Mr. Casale, $1,197; Mr. Butler, $559; and Mr. Anderson, $358. In
fiscal 1995, $60,175 of relocation benefits were included for Mr. Butler. In
fiscal 1993 and 1994, $55,344 and $3,895, respectively, of relocation
benefits were included for Mr. Anderson.
8
STOCK OPTION PLANS
The Company has in effect a 1981 Key Employees' Stock Option Plan (the "1981
Plan") and a 1990 Key Employees' Stock Option Plan (the "1990 Plan"). The 1981
Plan and the 1990 Plan collectively are referred to as the "Option Plans".
Officers and key employees are eligible to participate in the Option Plans,
which permit the issuance, in addition to non-qualified options, of "incentive
stock options" ("ISOs") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Company has ceased granting
options under the 1981 Plan, but outstanding options under the 1981 Plan will
remain valid. In the event of a change in control of the Company, the unvested
portion of the stock options of Messrs. Weinbach, Casale, Butler and Anderson
will be subject to limited accelerated vesting.
The Option Plans are administered by the Compensation Committee of the Board
of Directors. The Committee has the authority to determine the employees to whom
options will be granted and, subject to the Option Plans, the terms and amount
of options granted.
ISOs expire no more than ten years from their date of grant, with an
exercise price equal to 100% of the fair market value on the date of grant.
Non-qualified options may expire as much as twelve years after the date of
grant, but the exercise price need not be equal to 100% of the fair market value
on the grant date.
An optionee has no rights as a stockholder with respect to any shares
covered by his options until the date of issuance of a stock certificate to him
for such shares. During the life of the optionee, the option is exercisable only
by him. No option is exercisable more than 15 days after termination of
employment, or (if termination is due to the death of an optionee) more than six
months after the appointment and qualification of an executor or administrator
of the deceased optionee's estate or twelve (12) months after the death of the
optionee, whichever occurs earlier.
The following table sets forth certain information concerning stock option
grants to the named executive officers during the fiscal year ended June 30,
1995.
OPTION GRANTS IN LAST FISCAL YEAR
--------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS TO EMPLOYEES EXERCISE GRANT DATE
GRANTED IN FISCAL YEAR PRICE EXPIRATION VALUE
NAME (#) (1) (%) ($/SHARE) DATE ($) (2)
------------------------------ ---------- --------------- ----------- ---------- ----------
Josh S. Weston -- -- -- -- --
Arthur F. Weinbach 40,000 1.5 61.90 5/19/05 715,000
Robert J. Casale 15,000 .6 61.90 5/19/05 268,000
Gary C. Butler 20,000 .7 58.75 1/23/05 382,000
Fred D. Anderson, Jr. 20,000 .7 61.90 5/19/05 358,000
------------------------
(1) All options were granted pursuant to the 1990 Plan. The options were granted
at an exercise price equal to the fair market value of the Company's Common
Stock on the date of grant. The options were granted for terms of ten years,
and vest during periods from four to six years subsequent to the date of
grant.
(2) The grant date values were calculated on the basis of the Black-Scholes
option pricing model. Options were assumed to be exercised seven years after
the date of grant, based on historical experience. A risk-free interest rate
of 7.9%, stock price volatility of 17% and the dividend yield of 1% were
used in the calculation for the option grant to Mr. Butler. For the other
grants shown
9
above the risk-free interest rate was 6.6%, the stock price volatility was
16% and the dividend yield was 1%. A discount of 14% was applied to the
calculated value to reflect the risk of forfeiture during the option term.
The actual value of the options will depend on the market value of the
Company's Common Stock on the dates the options are exercised. No
realization of value from the options is possible without an increase in the
price of the Company's Common Stock, which would benefit all stockholders
commensurately.
AGGREGATED OPTION EXERCISES
FOR FISCAL YEAR ENDED JUNE 30, 1995
AND OPTION VALUES AS OF JUNE 30, 1995
The following table sets forth certain information concerning option
exercises during the last fiscal year by the named executive officers and
unexercised options held by such officers at the end of the last fiscal year.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT 6/30/95 6/30/95
SHARES ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED -------------------------- -----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------------- --------------- ------------- ----------- ------------- -------------- -------------
Josh S. Weston 156,895 $ 6,991,633 305,000 85,000 $ 12,747,000 $ 2,665,000
Arthur F. Weinbach 26,000 $ 1,205,250 132,000 144,000 $ 5,617,000 $ 2,526,000
Robert J. Casale 54,000 $ 2,178,165 11,000 114,000 $ 471,000 $ 2,782,000
Gary C. Butler 26,000 $ 843,565 6,000 121,000 $ 241,000 $ 2,904,000
Fred D. Anderson, Jr. -- $ -- 13,000 67,000 $ 206,000 $ 723,000
DEFINED BENEFIT PLANS
The following table shows the estimated annual retirement benefits payable
under the Company's retirement program, consisting of the Retirement Capital
Accumulation Plan (the "Pension Plan") and the Supplemental Officers' Retirement
Plan (the "Supplemental Retirement Plan"), to persons in specified average
compensation and credited service classifications, assuming retirement at age
65.
FINAL
5-YEAR YEARS OF CREDITED SERVICE AT RETIREMENT
AVERAGE ---------------------------------------------------------------
COMPENSATION 10 15 20 25 30
------------- ----------- ----------- ----------- ----------- -----------
$ 400,000 $ 65,000 $ 100,000 $ 118,000 $ 129,000 $ 145,000
500,000 80,000 123,000 143,000 154,000 170,000
600,000 95,000 145,000 168,000 179,000 195,000
700,000 110,000 168,000 193,000 204,000 220,000
800,000 125,000 190,000 218,000 229,000 245,000
900,000 140,000 213,000 243,000 254,000 270,000
1,000,000 155,000 235,000 268,000 279,000 295,000
Compensation covered by the Pension Plan is limited to January 1 base salary
up to the current compensation limit in effect for the plan year. Compensation
covered under the Supplemental Retirement Plan includes cash compensation and
compensation from restricted stock vesting during the year. Benefits under the
Supplemental Retirement Plan are subject to reduction for social security,
Pension Plan and 401(k) benefits.
10
Messrs. Weinbach, Casale, Butler and Anderson have, in the aggregate, 14, 6,
19 and 1 years of credited service respectively under the Pension Plan and 6, 5,
6 and 2 years under the Supplemental Retirement Plan.
Mr. Weston is not a participant in the Supplemental Retirement Plan and,
accordingly, the table above does not reflect his retirement benefit. In fiscal
1995, the Company agreed to pay a portion of the annual premium of two life
insurance policies insuring the lives of Mr. Weston and his wife. In return for
the Company's agreement, Mr. Weston agreed to reduce the annual retirement
benefit for a period of 15 years under his employment contract from $550,000 per
year to $382,000 per year, an amount calculated to reimburse the Company in full
for all costs (including costs for the use of money) of the life insurance
premiums paid by the Company. If the Company does not receive full reimbursement
for such costs, Mr. Weston's retirement benefit will be further reduced or the
trust which owns the life insurance policies will make the Company whole.
EMPLOYMENT AGREEMENTS
Josh S. Weston, the Chairman of the Board and Chief Executive Officer, as
well as a director, of the Company, entered into an employment agreement with
the Company as of June 1, 1983, whose term, subject to early termination under
certain circumstances, runs until July 31, 1996. Mr. Weston's annual salary
during the term of the agreement, as amended, will be $1,000,000. The agreement,
as amended, provides that Mr. Weston is eligible to receive an annual bonus of
up to $200,000 and a restricted stock grant of up to 11,000 shares per year
based upon the Company's earnings per share performance during the year. The
agreement also provides for certain retirement benefits as described in the
"Defined Benefit Plans" section of this proxy statement.
Messrs. Anderson, Weinbach, Casale and Butler have entered into agreements
with the Company which provide for a defined severance period, not to exceed
nine months, in the event of a termination of their employment resulting from a
change in control of the Company.
CERTAIN TRANSACTIONS
Harvey M. Krueger, a director of the Company, is a Senior Managing Director
of Lehman Brothers, which provided various investment banking and brokerage
services to the Company in the past fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation Committee of the Board of Directors is composed of three
outside directors: Messrs. Lazarus, Malek and Tisch.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for setting on behalf of the Board of Directors the base salaries
and the total compensation levels of the Chairman and Chief Executive Officer,
the President and Chief Operating Officer and the presidents of the Employer
Services, Brokerage Services and Dealer Services businesses, as well as a
structure for other key executives of the Company. The Committee grants all
stock options and reviews all recommendations for grants of all restricted stock
to these and other key executives.
COMPENSATION POLICIES
The Company's executive compensation policies for fiscal 1995, which were
reviewed by the Committee, were designed to emphasize both competitive and
variable compensation, with direct linkages to business objectives and
exceptional performance.
11
The primary components of the compensation package for key executives for
fiscal 1995 were base salary, bonus, restricted stock and stock options. The
Company and the Committee have always believed that stock ownership in the form
of restricted stock and longer-term stock option vesting is vital in linking
management to stockholder interests. The Company sets its salary and bonus
targets BELOW the median of market range levels of comparable companies included
in the S&P 500 Index. Therefore, executives derive more from stock price
appreciation as a percent of total compensation than in a company whose base
salary levels are set at market levels or higher.
ANNUAL COMPENSATION
Annual compensation consists of a base salary and a cash bonus. The base
salaries for executives for fiscal 1995 were determined based upon the job grade
of the position, the salary range of the job grade and the performance of the
executive.
Key executives earned cash bonuses in fiscal 1995 based upon individual
annual accomplishments versus individual pre-established goals that included
business growth and increased profitability. Performance goals also included
quality/service, product development, organizational development and leadership.
LONG-TERM COMPENSATION
Long-term compensation is comprised of restricted stock and stock options.
The Company has from time to time sold shares of restricted stock to executive
officers and other key employees, at par value, in recognition of their
individual levels of relative responsibility and prospective contributions to
the business. Company imposed restrictions on transfer or pledge of the
restricted stock generally lapse over the ensuing five years, and are subject to
continued employment. The restricted stock plan is designed to encourage stock
ownership, longevity, and long-term performance. The Committee also considers
the dollar value of annually vested restricted stock in setting annual cash
compensation.
Stock options are granted, usually every two years, to executive officers
and other key employees in amounts based upon their job grade and individual
performance. Stock options are granted at fair market value as of the date of
grant, and have a term of up to ten years. Stock options provide incentive for
the creation of stockholder value over the long-term, and also significantly aid
in executive recruiting and retention.
Restricted stock and stock option grants were made to individual key
executives during fiscal 1995 on a basis consistent with the above guidelines.
BENEFITS
The Company provided certain supplemental benefits to key executives during
fiscal 1995 to ensure that it could compete effectively for executive talent.
These supplemental benefits included additional company paid life insurance and
certain additional retirement benefits described in the "Defined Benefit Plans"
section of this proxy statement.
CEO COMPENSATION
The Committee meets annually without the Chief Executive Officer present to
evaluate his performance and to determine his compensation.
The base salary for fiscal 1995 for Mr. Weston, the Chief Executive Officer,
was determined by the terms of his employment agreement with the Company as
described in the "Employment Agreements" section of this proxy statement. In
fiscal 1995, Mr. Weston's base salary was $1,000,000. His
12
cash compensation has always been below the median of the base compensation of
chief executive officers at companies included in the S&P 500 Index with annual
revenues between $1 and $5 billion, as surveyed by the Company.
The incentives of the Chief Executive Officer were provided in the form of
restricted stock and stock options. This ensured that the Chief Executive
Officer and the Company's stockholders would have a commonality of purpose in
enhancing stockholder value. As set forth in the 1994 Executive Incentive
Compensation Plan, the Chief Executive Officer will be eligible to receive a
cash bonus, as well as restricted stock, based upon the Company's earnings per
share performance during the year.
In recognition of the Company's financial results and stock performance
relative to the S&P 500 and Computer Software Services Indices over the last
five years, the Committee has granted Mr. Weston, during that period, stock
options totaling 205,000 shares and the opportunity to purchase 22,000 shares of
restricted stock. In fiscal 1995, the Company achieved a 17% earnings per share
growth, its 34th consecutive year of double digit earnings per share growth.
Based on those results and pursuant to the terms of the 1994 Executive Incentive
Compensation Plan, Mr. Weston received a bonus of $200,000, and 11,000 of the
22,000 shares of restricted stock previously purchased by him vested. The
Committee believes that Mr. Weston's leadership has been instrumental in
achieving the Company's unparalleled record of 136 consecutive quarters of
double-digit growth in earnings per share.
Compensation Committee
of the Board of Directors
Frederic V. Malek, Chairman
Charles P. Lazarus
Laurence A. Tisch
13
PERFORMANCE GRAPH
The following graph compares the cumulative return on the Common Stock of
the Company for the most recent five years with the cumulative total return on
the S&P 500 Index and the S&P Computer Software Services Index ("CSSI") over the
same period, assuming an initial investment of $100 on June 30, 1990, with all
dividends reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AUTOMATIC DATA PROCESSING S&P 500 INDEX S&P COMPUTER SOFTWARE & SERVICES INDEX
Jun-90 100.00 100.00 100.00
Jun-91 119.40 107.40 86.72
Jun-92 158.29 121.86 97.86
Jun-93 179.42 138.40 144.54
Jun-94 200.63 140.35 163.74
Jun-95 239.93 176.94 254.89
PROPOSAL 2
APPROVAL OF AN AMENDMENT OF THE 1990 KEY EMPLOYEES' STOCK OPTION PLAN
On August 11, 1995, the Board of Directors approved an amendment to the 1990
Key Employees' Stock Option Plan (the "1990 Plan") which increased the number of
shares of the Company's Common Stock which can be issued pursuant to the 1990
Plan by 5,000,000 shares, so that after such amendment and adjustments for
cancelled stock options under the 1973 Key Employees' Stock Option Plan and the
1981 Key Employees' Stock Option Plan which were added to the amount of shares
available under the 1990 Plan, the total number of shares allocated to the 1990
Plan is 15,191,121.
DESCRIPTION
The 1990 Plan provides that options may be granted to any key employee of
the Company or any of its subsidiaries, permits the Company to grant incentive
stock options ("ISO") and non-qualified stock options, and contains specific
provisions applicable thereto. Employees who are also officers or directors of
the Company or its subsidiaries shall not, by reason of holding such offices, be
ineligible to receive options. However, no person who would own, directly or
indirectly, at the time the option is granted to him, more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
subsidiaries shall, except as otherwise provided by Section 422(c)(5) of the
Code, be eligible to receive an ISO under the 1990 Plan. An optionee will have
no rights as a stockholder with
14
respect to any shares covered by his options until the date of issuance of a
stock certificate to him for such shares. During the life of the optionee, the
option is exercisable only by him. No option will be exercisable more than 15
days after termination of employment, or (if termination is due to the death of
an optionee) more than six months after the appointment and qualification of an
executor or administrator of the deceased optionee's estate or twelve (12)
months after the death of the optionee, whichever occurs earlier.
The 1990 Plan shall be administered by a Stock Option Committee to be
appointed by the Board of Directors of the Company, which Stock Option Committee
consists of disinterested members of the Board of Directors. The Stock Option
Committee shall have the authority to determine the employees to whom options
will be granted, whether the options granted shall be ISOs or non-qualified
stock options, the number of shares that may be purchased under each option, the
period the options will remain outstanding, the dates options become exercisable
and the option price, except that the option price of each share of Common Stock
purchasable under any ISO shall not be less than 100% of the fair market value
thereof at the time the option is granted. The exercise price for all stock
options under the 1990 Plan can be paid for in cash or with shares of the
Company's Common Stock. ISOs may expire no later than ten years after their date
of grant and non-qualified options may expire no later than twelve years after
their date of grant. The Stock Option Committee shall interpret and generally
administer the 1990 Plan. Options may be granted under the 1990 Plan at any time
prior to August 15, 2001, on which date the 1990 Plan will expire, except as to
options then outstanding under the 1990 Plan. The 1990 Plan may be amended or
terminated at any time by the Board of Directors without stockholder action,
provided that any such amendment is in compliance with all applicable laws and
the rules of The New York Stock Exchange and other exchanges upon which the
shares of the Company are listed. Provisions are made in the 1990 Plan for
appropriate adjustments of shares subject to outstanding options in the event of
changes in the Company's outstanding Common Stock by reason of merger, stock
splits or similar events.
TAX CONSEQUENCES
Options granted under the 1990 Plan may be either non-qualified stock
options or ISOs, as determined from time to time by the Stock Option Committee.
As to non-qualified stock options, there will be no Federal income tax
consequences to either the optionee or the Company on the grant of the option.
Upon the exercise of a non-qualified stock option, the optionee has taxable
ordinary income equal to the difference between the option price paid and the
then fair market value of the shares received. The Company will generally be
entitled to a tax deduction in an amount equal to the optionee's taxable
ordinary income. In the case of an optionee subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended, the optionee will recognize
ordinary income after exercise only upon the expiration of six months following
the date of grant, unless the optionee elects pursuant to Section 83(b) of the
Code to use the exercise date for purposes of such calculation. Upon disposition
of the stock by the optionee, he will recognize capital gain or loss, as the
case may be, equal to the difference between the amount realized on such
disposition and his basis for the stock, which will include the amount
previously recognized by him as ordinary income.
If an option granted under the 1990 Plan is designated as an ISO and
thereafter continues to qualify as such, the optionee will generally recognize
no income upon grant or exercise of the ISO and the Company will not be allowed
a deduction for Federal income tax purposes (which it would
15
otherwise receive in the case of an exercise of a non-qualified stock option).
Upon a subsequent sale or other disposition of shares received upon exercise of
an ISO, if such sale or other disposition occurs at least two years after the
date of grant and one year after the transfer of shares pursuant to the exercise
of the option, any gain or loss will be taxed to the optionee as a capital gain.
If either of such requirements is not satisfied, gain realized upon such sale or
other disposition will be taxed as ordinary income. The Company, in turn, will
generally then be entitled to a deduction for Federal income tax purposes in the
amount of such ordinary income recognized by the optionee. Whenever ISOs are
exercised, the difference between the exercise price and the fair market value
of the shares constitutes a positive adjustment in determining alternative
minimum taxable income. As a result, Section 55 of the Code may impose an
"alternative minimum tax" upon the optionee exercising an ISO.
STOCKHOLDER APPROVAL REQUIRED
Approval of the proposed amendment to the 1990 Plan by the affirmative vote
of the holders of a majority of the shares cast on the amendment is required.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE AMENDMENT TO THE 1990 PLAN.
PROPOSAL 3
APPOINTMENT OF AUDITORS
At the Annual Meeting of Stockholders, the stockholders will vote on the
ratification of the appointment of Deloitte & Touche LLP, certified public
accountants, as independent auditors to audit the accounts of the Company and
its subsidiaries for the fiscal year begun July 1, 1995. A representative of
Deloitte & Touche LLP will be present at the Annual Meeting of Stockholders and
will have an opportunity to make a statement if he desires. He will be available
to answer appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF THE AUDITORS.
OTHER MATTERS
So far as the Board of Directors is aware, only the aforementioned matters
will be acted upon at the meeting. If any other matters properly come before the
meeting, the accompanying proxy may be voted on such other matters in accordance
with the best judgment of the person or persons voting said proxy.
FILINGS UNDER SECTION 16(A)
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission. Executive officers, directors and greater than 10%
beneficial owners are required by applicable regulations to furnish the Company
with copies of all Section 16(a) forms they filed.
16
Based solely upon a review of the copies of the forms furnished to the
Company and any written representations from certain reporting persons that no
Forms 5 were required, the Company believes that during fiscal 1995 all filing
requirements applicable to its executive officers and directors were complied
with, except for a late filing in June 1995 by Michael W. Reece, Vice President,
Corporate Development, of a Form 4, Statement of Changes in Beneficial Ownership
of Securities, with respect to his sale of 1600 shares of the Company's Common
Stock on January 10, 1995.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1996 Annual Meeting
must be received by the Company for inclusion in the 1996 Proxy Statement no
later than May 25, 1996.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 1995, which
is not a part of the proxy soliciting material, is being mailed to the Company's
stockholders together with this proxy statement.
For the Board of Directors
Fred S. Lafer
SECRETARY
Roseland, New Jersey
September 25, 1995
17
[ADP Letterhead]
September 25, 1995
John Doe
123 Main Street
New York, New York 10005
Dear Shareholder:
You are cordially invited to join us at the 1995 Annual Meeting of
Stockholders of Automatic Data Processing, Inc. This year's meeting will be held
at the corporate offices of the Company at One ADP Boulevard, Roseland, New
Jersey, on Tuesday, November 14, 1995, starting at 10:00 a.m. I hope you will
be able to attend. At the meeting we will elect directors, and will vote on an
amendment to the Company's 1990 Key Employees' Stock Option Plan and on the
appointment of Deloitte & Touche LLP as independent auditors.
It is important that your shares be voted whether or not you plan to be
present at the meeting. You should specify your choices by marking the
appropriate boxes on the proxy form on the reverse side, and date, sign and
return your proxy form in the enclosed, postpaid return envelope as promptly as
possible. If you date, sign and return your proxy form without specifying your
choices, your shares will be voted in accordance with the recommendations of
your directors.
As in the past years, we will discuss the business of the Company and its
subsidiaries during the meeting. I welcome your comments and suggestions, and we
will provide time during the meeting for questions from shareholders. I am
looking forward to seeing you at the meeting.
Sincerely,
[Josh Weston]
YOUR PROXY ADP'S TELEPHONE PROXY VOTING SERVICE
VOTE COUNTS
CALL TODAY! QUICK - CONVENIENT - IMMEDIATE
Now you can vote your proxy right over the telephone. It's fast, convenient,
and your Proxy is immediately confirmed and posted.
Just dial 1-800-VOTE ADP and follow the 4 easy steps below. If you prefer, you
can send in your proxy vote by filling out the attached proxy form below.
Phone 1-800-VOTE ADP
1-800-868-3237
CONTROL NUMBER: 0000000000
--------------------------------------------------------------------------------
1. Read the accompanying Proxy Statement and the proxy form below.
2. Phone the toll free number printed above.
3. Once you've been connected, enter your Control Number printed on the top
center of the proxy form below.
4. Then follow the simple instructions the Vote ADP voice will provide you.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Director Nominees: (01) Joseph A. Califano, Jr., (02) Leon G. Cooperman,
(03) George H. Heilmeier, (04) Ann Dibble Jordan, (05) Harvey M. Krueger,
(06) Charles P. Lazarus, (07) Frederic V. Malek, (08) Henry Taub, (09) Laurence
A. Tisch, (10) Arthur F. Weinback, (11) Josh S. Weston
--------------------------------------------------------------------------------
[Form of Proxy -- Front]
[LOGO]
AUTOMATIC DATA PROCESSING, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROPERLY EXECUTED PROXIES WILL BE VOTED AS MARKED AND, IF NOT MARKED, WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN THE ACCOMPANYING PROXY
STATEMENT AND FOR PROPOSALS (2) AND (3) ON THE REVERSE SIDE.
The undersigned hereby appoints Henry Taub and Josh S. Weston, and each of
them, attorneys and proxies with full power of substitution, in the name, place
and stead of the undersigned, to vote as proxy at the 1995 Annual Meeting of
Stockholders of Automatic Data Processing, Inc. to be held at the corporate
offices of the Company, ONE ADP BOULEVARD, ROSELAND, NEW JERSEY 07068, on
Tuesday, November 14, 1995 at 10:00 A.M., or at any adjournment or adjournments
thereof, according to the number of votes that the undersigned would be entitled
to cast if personally present.
Either of said attorneys and proxies or substitutes, who shall be present at
such meeting or at any adjournment or adjournments thereof, shall have all the
powers granted to such attorneys and proxies.
PLEASE DATE, SIGN AND MAIL THE PROXY PROMPTLY IN THE SELF-ADDRESSED RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. WHEN SIGNING
AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR
FULL TITLE AS SUCH. IF SHARES ARE HELD JOINTLY, BOTH OWNERS SHOULD SIGN.
The nominees for Director are Joseph A. Califano, Jr., Leon G. Cooperman, George
H. Heilmeier, Ann Dibble Jordan, Harvey M. Krueger, Charles P. Lazarus, Frederic
V. Malek, Henry Taub, Laurence A. Tisch, Arthur F. Weinbach and Josh S. Weston.
------------------- -----------------
ACCOUNT NUMBER COMMON MARK VOTES LIKE THIS /X/
[Form of Proxy -- Back]
The Board of Directors Recommends a vote FOR the proposals regarding:
(1) Election of Directors FOR WITHHOLD
(INSTRUCTIONS: To withhold authority to vote for all nominees listed Authority to vote for all
any individual nominee, write that nominee's on the reverse side nominees on the reverse
name in the space provided below.) (except as marked to side / /
the contrary) / /
----------------------------------------- FOR AGAINST ABSTAIN
(2) Amendment to the Company's 1990 Key Employees / / / / / /
Stock Option Plan
(3) Appointment of Deloitte & Touche LLP / / / / / /
(4) Upon any and all other matters which may properly come before the meeting or any adjournment thereof.
John Doe
123 Main Street
New York, New York 10005 SIGNATURE DATE
---------------------- -------------------------
TO ELIMINATE DUPLICATE MAILINGS, PLEASE
MARK THIS BOX / / SIGNATURE DATE
---------------------- -------------------------