Mercury Shareholder Associates LLC – ‘DFRN14A’ on 10/20/98 re: Global Technologies Ltd

As of:  Tuesday, 10/20/98   ·   Accession #:  922423-98-1164   ·   File #:  0-25668

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Revised Definitive Non-Management Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DFRN14A     Definitive Proxy Statement                            21     90K 

Document Table of Contents

DFRN14A
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As filed, via EDGAR, with the Securities and Exchange Commission on October 20, 
1998.                                                                           
                                                               File No.:________
                                                              ICA No.: _________

SCHEDULE 14A
(Rule 14a-101)

 INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
 Securities Exchange Act of 1934

Filed by the registrant [ ]                                                     
Filed by a party other than the registrant [X]                                  

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  [As Distributed]                                
[ ]Definitive Additional Materials                                              
[ ]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12                

 INTERACTIVE FLIGHT TECHNOLOGIES, INC.
 -------------------------------------
(Name of Registrant as Specified in Its Charter)

MERCURY SHAREHOLDER ASSOCIATES LLC, BARINGTON CAPITAL GROUP, L.P.,
------------------------------------------------------------------
and BANNER AEROSPACE, INC.
--------------------------
(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:                           
(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.                                

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(1) Amount Previously Paid:                                           
(2) Form, Schedule or Registration Statement No.:                     
(3) Filing Party:                                                     
(4) Date Filed:                                                       

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 1998 ANNUAL MEETING OF STOCKHOLDERS
of
 INTERACTIVE FLIGHT TECHNOLOGIES, INC.
4041 N. Central Avenue, Suite 2000
Phoenix, Arizona 85012
 -----------------------------------------------------

 PROXY STATEMENT
of
MERCURY SHAREHOLDER ASSOCIATES LLC
 and
 BARINGTON CAPITAL GROUP, L.P.

 -----------------------------------------------------

         This Proxy Statement and the  accompanying  Letter to Stockholders  and
BLUE Annual Meeting proxy card are furnished in connection with the solicitation
of proxies by Mercury  Shareholder  Associates LLC ("Mercury") to be used at the
1998 Annual Meeting of Stockholders of Interactive Flight Technologies,  Inc., a
Delaware  corporation  (the  "Company"),  to be held at the  Metropolitan  Club,
located at One East 60th  Street,  New York,  New York,  on October 30, at 10:00
a.m., local time and at any  adjournments or postponements  thereof (the "Annual
Meeting").                                                                      

Management's Proposals                                                          

            At the Annual Meeting, management of the Company will seek approval:

              1.  To  elect  a  slate  of  five  Directors,  consisting  of  the
                  Company's  current  five  Directors,  who would  serve for the
coming year;                                

              2.  To amend the  Company's  Amended and Restated  Certificate  of
                  Incorporation  to divide  the Board of  Directors  into  three
classes (the "Board Classification");       

              3.  To amend the  Company's  Amended and Restated  Certificate  of
                  Incorporation to effect a reverse stock split of the Company's
                  outstanding shares of Class A and Class B Common Stock, on the
                  basis of one new share for every three outstanding shares (the
"Reverse Stock Split");                     

              4.  To approve the  appointment  by the Board of Directors of KPMG
                  Peat Marwick LLP, certified public accountants, as independent
                  auditors of the Company for the fiscal year ending October 31,
1998 ("the Appointment of Auditors").       

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Mercury's Proposals                                                             

         Mercury,  an affiliate of Barington Capital Group, L.P.  ("Barington"),
is soliciting  your proxy in support of the election of its five nominees  named
below (the "Mercury  Nominees")  and in opposition to the Company's  proposal to
divide and stagger the Company's Board of Directors.                            

         ALL MERCURY  NOMINEES ARE COMMITTED TO EXITING THE  COMPANY'S  EXISTING
BUSINESS  AND  REDIRECTING  THE  COMPANY'S  ASSETS TO  INVESTMENTS  IN OPERATING
BUSINESSES THAT WILL CREATE STOCKHOLDER VALUE.                                  

         Mercury favors the Reverse Stock Split and the Appointment of Auditors.

         MERCURY  URGES  YOU  NOT TO  SIGN  ANY  PROXY  CARD  SENT TO YOU BY THE
COMPANY.  IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PROXY BY DELIVERING A
WRITTEN  NOTICE OF REVOCATION  OR A LATER DATED PROXY FOR THE ANNUAL  MEETING TO
D.F.  KING & CO.,  INC.,  OR TO THE  SECRETARY OF THE  COMPANY,  OR BY VOTING IN
PERSON AT THE ANNUAL MEETING. SEE "PROXY PROCEDURES" BELOW.                     

         Mercury is a Delaware limited  liability company formed for the purpose
of this proxy  solicitation.  The members of Mercury include  Barington,  Banner
Aerospace,  Inc., an 82% subsidiary of The Fairchild Corporation ("Banner"), and
the Mercury  Nominees.  Barington  is a full  service  investment  banking  firm
focused on providing  capital and advisory services to small and emerging growth
companies.  Banner  is an  international  supplier  to the  aerospace  industry,
distributing a wide range of aircraft parts and related  support  services.  The
address of Mercury and Barington is 888 Seventh  Avenue,  17th Floor,  New York,
New York 10019,  and their telephone  number is (212)  974-5700.  The address of
Banner is 45025 Aviation Drive, Dulles, Virginia 20166, and its telephone number
is (703) 478-5790.                                                              

         In reliance  upon Rule 14a-5(c) of the  Securities  and Exchange Act of
1934,/1/  reference is made to the Company's  definitive  proxy  statement dated
October 15, 1998 (the  "Company  Proxy  Statement")  for a full  description  of
management's  proposals,  as well as information with respect to the record date
for the Annual  Meeting  (the  "Record  Date"),  the number of shares of Company
stock  outstanding  and  eligible to vote at the Annual  Meeting,  the number of
votes per share of each class of  Company  stock,  the  quorum,  the  securities
ownership  of  the  Company,   information  about  the  Company's  officers  and
directors,  including  compensation,  information  about  the  approval  of  the
appointment  of KPMG Peat Marwick LLP, and the date by which  stockholders  must
submit proposals for consideration at the next annual meeting.                  

         This Proxy Statement,  the accompanying  Letter to Stockholders and the
BLUE  Annual  Meeting  proxy  card are  first  being  furnished  to the  Company
stockholders on or about October 20, 1998.                                      

------------

--------                                                                        
         /1/ Rule 14a-5(c) provides that "any information contained in any other
proxy  soliciting  material which has been furnished to each person solicited in
connection with the same meeting or subject matter may be omitted from the proxy
statement,  if a clear reference is made to the particular  document  containing
such information."                                                              

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 IMPORTANT

         Mercury  urges you to mark,  sign,  date and return the  enclosed  BLUE
Annual  Meeting proxy card to vote FOR the Mercury  Nominees;  AGAINST the Board
Classification;  FOR  the  Reverse  Stock  Split;  and FOR  the  Appointment  of
Auditors.                                                                       

PROPOSAL 1
 ELECTION OF DIRECTORS

         According to the Company  Proxy  Statement,  the Company  currently has
five directors, all of whose terms will expire at the Annual Meeting.           

         Mercury  proposes  that the  Company's  stockholders  elect the Mercury
Nominees as the directors of the Company at the Annual  Meeting.  If all Mercury
Nominees are elected,  the Mercury Nominees would constitute the entire Board of
Directors  of the  Company.  The  Mercury  Nominees  are  listed  below and have
furnished the following  information  concerning their principal  occupations or
employment and certain other matters.  Each Mercury Nominee,  if elected,  would
hold office until the 1999 Annual Meeting of Stockholders  and until a successor
has been  elected and  qualified  or until his  earlier  death,  resignation  or
removal.  Although  Mercury  has no reason to  believe  that any of the  Mercury
Nominees will be unable to serve as directors, if any one or more of the Mercury
Nominees is not  available  for  election,  the persons named on the BLUE Annual
Meeting  proxy card will vote for the election of such other  nominees as may be
proposed by Mercury.                                                            

Mercury Nominees for Directors                                                  

         Richard N. Daniel,  age 63, was Chairman and Chief Executive Officer of
Handy & Harman until April 1998. He was appointed  President and Chief Operating
Officer of Handy & Harman in 1979,  became President and Chief Executive Officer
in 1983, and on January 1, 1988 became Chairman of the Board.  Handy & Harman, a
diversified  manufacturer  providing engineered products,  system components and
precious metal fabrication, was founded in 1867. Mr. Daniel first joined Handy &
Harman in 1971 as Vice President and Corporate  Controller  with  responsibility
for Corporate Planning & Development. His primary mandate was the acquisition of
manufacturing  facilities to accelerate  the Company's  diversification  program
into  non-precious   metals.   His  prior  career  included   associations  with
manufacturing  divisions of industrial  companies,  including Texas Instruments,
Nabisco and Wheelabrator-Frye  Corp. He also served nine-year years in Corporate
Planning at Mobil Oil, as well as two years with the Wall Street firm of Laird &
Co.. Mr. Daniel is on the Board of Directors of the  Treasurer's  Fund,  Inc., a
member of the Gabelli Asset  Management  group of funds,  and is a member of the
Board of Directors of MarketSpan  Corporation.  Mr. Daniel's business address is
555 Madison Avenue, New York, New York 10022.                                   

         Seymour Holtzman, age 63, is the founder and Chief Executive Officer of
Jewelcor,  Inc. and Gruen Marketing Corporation and has managed public companies
for over 25 years. He has a total of more than 35 years of management experience
and has been featured in Forbes, Business Week, The Wall Street Journal, The New
York Times and other national business publications. In 1990, Mr. Holtzman led a
pioneering group of internationally prominent western businessmen to invest in  

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eastern and central  Europe.  This group  purchased the General  Banking & Trust
Co., Ltd., in Budapest,  Hungary,  which was the first bank in eastern Europe to
be  privatized.  Since  1990,  Mr.  Holtzman  has served as  Chairman  and Chief
Executive  Officer  of  Jewelcor  Management  &  Consulting,  Inc.,  located  in
Wilkes-Barre,  Pennsylvania;  C.D.  Peacock,  Inc., a Chicago,  Illinois  retail
jewelry establishment founded in 1837; Central European Capital Investors, Inc.,
an investment  company operating in eastern Europe;  and S.A. Peck & Company,  a
retail and mail order jewelry company based in Chicago,  Illinois.  Mr. Holtzman
is the President and founder of the Financial  Thrift Value Fund.  Mr.  Holtzman
served as the National Finance Co-Chairman for the 1980 Reagan-Bush Campaign. In
1981 he was  appointed by President  Reagan to the United  States  Department of
Commerce's  Industry  Policy Advisory  Committee for trade policy  matters.  Mr.
Holtzman's business address is 100 North Wilkes-Barre  Boulevard,  Wilkes Barre,
PA 18702.                                                                       

         Michael  A.  McManus,  Jr.,  age 55,  served  as  President  and  Chief
Executive  Officer New York Bancorp,  Inc., a bank holding company  operating in
Long  Island,  New  York  until  March  1998,  and  is  currently  serving  as a
consultant.   Previously,   he  was  Vice  President  -  Business  Planning  and
Development,  Consumer Division,  of Pfizer,  Inc., where he was responsible for
strategic planning,  new products,  licensing,  market research,  clinical,  and
scientific  affairs.  In 1985 and 1986,  he was an Executive  Vice  President of
Revlon Group (formerly  Pantry Pride)  responsible for day-to-day  operations of
the  Company's  Florida  headquarters.  He  was  actively  involved  in  several
acquisitions,  including the one billion dollar  acquisition of Revlon by Pantry
Pride.  From 1982 through  1985,  he was an  assistant  to the  President of the
United States  responsible  for managing five White House  functions and special
projects. He was a member of all senior policy and planning groups. From 1977 to
1982,  he was  corporate  counsel at Pfizer,  Inc.,  responsible  for  corporate
acquisitions  and  financings  while  also  serving  as  General  Counsel to the
Chemical  Division.  Prior  thereto,  he served as a  Special  Assistant  to the
Secretary of Commerce of the United States  Department of Commerce  where he was
responsible for working on economic  problems of the Northeastern  United States
and managing the  $70,000,000  funding for the 1980 Lake Placid Olympics and has
recently been  appointed to the Board of Directors of the United States  Olympic
Committee. Previously, he served as Executive Vice President and Chief Operating
Officer  of the  American  Freedom  Train  Foundation,  a  bicentennial  project
sponsored by General Motors, Kraft, Prudential, and Pepsi. Mr. McManus' business
address is 100 White Plains Road, Bronxville, NY 10108.                         

         Donald E.  Miller,  age 51, has been  Executive  Vice  President of The
Fairchild  Corporation  since  September  1998 and is continuing to serve as its
General Counsel, a position he has held since 1991. The Fairchild Corporation is
a leading  manufacturer of advanced aerospace fastening devices and holds an 82%
interest  in  Banner.  Mr.  Miller had served as Senior  Vice  President  of The
Fairchild Corporation since 1991, and its Corporate Secretary since 1995. He was
Vice President and General  Counsel of Fairchild  Industries,  Inc. from 1991 to
1996,  and has also served as a Director of Shared  Technologies  Fairchild Inc.
Prior to 1991,  he was a principal of the law firm of Temkin & Miller,  Ltd., of
Providence,  Rhode Island, where he practiced law from 1974 through 1991. He was
also a former law clerk to the  Honorable  Alfred H.  Joslin,  Supreme  Court of
Rhode Island. Mr. Miller's business address is 45025 Aviation Drive,  Dulles, VA
20166.                                                                          

         Joseph R. Wright,  Jr., age 59, is Chairman,  Chief Executive  Officer,
and  President of AmTec,  Inc., a U.S.  public  company  focused on  developing,
marketing, and financing telecommunications projects in the People's Republic of
China, founded in 1995. He also serves currently as Chairman and Director of GRC
International,  Inc., a knowledge-based information technology company primarily
servicing the U.S. Department of Defense; Co-Chairman of Baker & Taylor Holdings
Inc., an international book and video distribution company; and Vice Chairman of
The Jefferson  Group, a consulting  firm in Washington,  D.C. From 1989 to 1994,
Mr.  Wright  served in various  executive  capacities  for W.R.  Grace & Co., an
international  specialty  chemicals and health care company,  and its associated
companies,  including Executive Vice President and Vice Chairman of W.R. Grace &
Co., President of Grace Energy  Corporation and Chairman of Grace  Environmental
Inc.  From 1982 to 1989,  Mr.  Wright held the  position of Director  and Deputy
Director of the Office of Management and Budget, The White House, and was a     

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member of President Reagan's Cabinet. Prior to 1982, Mr. Wright served as Deputy
Secretary,  United States  Department of Commerce,  and as President of Citicorp
Retail  Services and Retail Consumer  Services;  held posts in the Department of
Agriculture, the United States Census Bureau and the Department of Commerce; and
was Vice President of Booz, Allen & Hamilton, a management  consulting firm. Mr.
Wright  currently serves on the Board of Directors of GRC  International,  Inc.,
Travelers Group, Inc., Baker & Taylor Holdings,  Inc., Netmatics,  Inc., and the
Washington  Scholarship  Fund.  He is a member of the Board of Advisors of Great
Lakes Pulp and Fiber Corporation;  trustee of Hampton University and chairman of
its  Investment  Committee;  a director of Citizens for a Sound  Economy and The
Freedom Foundation;  and a member of the Chief Executives Organization and Young
President's Organization. Mr. Wright's business address is 599 Lexington Avenue,
New York, New York 10022.                                                       

         It is anticipated that each of the Mercury Nominees,  upon his election
as a director of the Company,  will receive  director's fees consistent with the
Company's practices as set forth in the Company Proxy Statement.                

         If Mercury's  proxy  solicitation  is successful,  Barington may in the
future provide investment banking services to the Company. However, there are no
current  arrangements  or  understandings  between  Barington  and  the  Mercury
Nominees with respect to such services.                                         

         Except as set forth above, or under "Background of the Solicitation" or
Schedule  II  below,  none of  Mercury,  the  Mercury  Nominees  or any of their
respective associates (i) has any arrangements or understandings with any person
or  persons  with  respect  to  any  future  employment  by the  Company  or its
affiliates,  or with respect to any future  transactions to which the Company or
any of its  affiliates  may be a party;  (ii) has carried on any  occupation  or
employment with the Company or any corporation or organization which is or was a
parent,  subsidiary  or other  affiliate of the Company;  (iii) has received any
cash compensation, cash bonuses, deferred compensation, compensation pursuant to
plans, or other compensation, from, or in respect of, services rendered to or on
behalf of the  Company;  (iv) since  November  1, 1996,  has engaged in or has a
direct or indirect  material  interest in any  transaction  or series of similar
transactions to which the Company or any of its  subsidiaries  was or is to be a
party in which the dollar amount  involved  exceeded,  or is expected to exceed,
$60,000 in the  aggregate;  (v) since November 1, 1996, has been indebted to the
Company or any of its subsidiaries in an amount in excess of $60,000; or (vi) is
a party  adverse  to the  Company  or any of its  subsidiaries  in any  material
proceedings or has a material interest adverse to the interest of the Company or
any of its subsidiaries in any such proceedings.  No family  relationships exist
among the  Mercury  Nominees  or between  any of the  Mercury  Nominees  and any
director or executive officer of the Company.                                   

         Certain  additional  information  relating to, among other things,  the
ownership,  purchase  and sale of  securities  of the  Company by  Mercury,  the
Mercury Nominees and their respective  associates,or  arrangements  with respect
thereto,  is set forth in  "Security  Ownership  of Mercury and its  Affiliates"
below and in Schedule II.                                                       

         Each of the  outstanding  shares of the Company's Class A Common Stock,
par value $.01 per share (the "Class A Common  Stock"),  is entitled to one vote
per  share on all  matters  to be voted  upon at the  Annual  Meeting,  and each
outstanding  share of the  Company's  Class B Common  Stock,  par value $.01 per
share (the "Class B Common  Stock" and together  with the Class A Common  Stock,
the  "Company  Stock"),  is entitled to six votes per share on all matters to be
voted  upon  at  the  Annual  Meeting  (except  as  otherwise   discussed  under
"Background of the Solicitation"  below).  The election of directors  requires a
plurality  vote of those votes  represented  in person or by proxy at the Annual
Meeting. Accordingly, the                                                       

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five  nominees  receiving  the  highest  number  of votes of the  Company  Stock
represented  and  voting at the Annual  Meeting  will be elected to serve on the
Board.  Abstentions and broker  non-votes will have no effect on the election of
the directors listed above.                                                     

         The  accompanying  BLUE Annual  Meeting proxy card will be voted at the
Annual Meeting in accordance  with your  instructions on such card. You may vote
FOR the election of each of the Mercury  Nominees or withhold  authority to vote
for the  election of all the  Mercury  Nominees by marking the proper box on the
BLUE Annual  Meeting proxy card. You may also withhold your vote from any one or
more of the Mercury Nominees by writing the name of such nominee(s) in the space
provided on the BLUE Annual  Meeting proxy card. IF NO MARKING IS MADE, YOU WILL
BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE THE SHARES  REPRESENTED  BY THE BLUE
ANNUAL MEETING PROXY CARD FOR THE ELECTION OF ALL THE MERCURY NOMINEES  PROVIDED
THAT YOU HAVE SIGNED THE PROXY CARD.  Mercury and its  affiliates,  which in the
aggregate  own  390,126  shares of Class A Common  Stock (not  including  shares
issuable upon exercise of warrants),  will vote those shares FOR the election of
the Mercury Nominees and as otherwise recommended in this Proxy Statement.      

         Mercury  believes that it is in your best interest to elect the Mercury
Nominees at the Annual  Meeting.  All Mercury  Nominees are committed to exiting
the  Company's  existing  business  and  redirecting  the  Company's  assets  to
investments in operating  businesses  that will create  stockholder  value.  See
"Mercury's Plan for Enhancing Stockholder Value" below.                         

         MERCURY  STRONGLY  RECOMMENDS  A VOTE "FOR" THE ELECTION OF THE MERCURY
NOMINEES LISTED ABOVE.                                                          

PROPOSAL 2
OPPOSITION TO THE BOARD CLASSIFICATION

         Management  has  proposed  that  the  Company's  Amended  and  Restated
Certificate of  Incorporation  be amended to provide that the Board of Directors
be divided into three  classes,  with the directors to hold office for staggered
terms of three years each.  Mercury  opposes this proposal and  recommends  that
stockholders vote against it.                                                   

         If  the  proposal  for   classification   of  the  Board  is  approved,
stockholders  will be prevented from electing a majority of the directors for at
least two annual meetings.  Mercury believes that the Company's  existing system
in which all Board  members  stand for  election at each  annual  meeting of the
Company's  stockholders  is in  the  best  interests  of  the  Company  and  its
stockholders.  The election of directors is the primary avenue for  stockholders
to influence corporate  governance  policies and to hold management  accountable
for  implementation  of those  policies.  Requiring  each  director to stand for
election annually allows  stockholders an opportunity to register their views on
the performance of the Board collectively and each director individually.       

         Classifying the Board of Directors would maintain the incumbency of the
current  Board  and  therefore  of  current  management,  which  in turn  limits
management's  accountability to the Company's stockholders.  In addition,  under
Delaware law,  directors on a staggered  board cannot be removed  without cause,
even if a majority of the Company's  stockholders is in favor of such removal. A
staggered  board  may  also  prevent  consummation  of  a  business  combination
transaction  that offers  stockholders  premium value for their  shares,  and is
therefore  favored by a majority  of  stockholders,  but which is opposed by the
Board of Directors.                                                             

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         Mercury  also  believes  that  implementation  of a staggered  board is
particularly  inappropriate  for the Company at this time.  The Company does not
have a Board  that has been in  office  for any  length  of  time,  whose  prior
performance  might  justify  entrusting  the  directors  with  the  powers  of a
staggered board notwithstanding its disadvantages.                              

         Under Delaware law, the  affirmative  vote of the holders of a majority
of the votes entitled to be cast by all  outstanding  shares of Company Stock is
required  to adopt the Board  Classification  proposal.  Abstentions  and broker
non-votes  will therefore  count as if they were votes against the proposal.  If
less  than a  majority  of such  votes are  affirmatively  voted in favor of the
proposal, the proposal will be defeated.                                        

         MERCURY  RECOMMENDS  A VOTE  "AGAINST"  APPROVAL OF THE  CLASSIFICATION
BOARD PROPOSAL.                                                                 

PROPOSAL 3
 REVERSE STOCK SPLIT

         Management  has  proposed  a  reverse  stock  split of the  outstanding
Company Stock on the basis of one (1) new share of Class A Common Stock or Class
B Common  Stock,  as the case may be,  for each  three (3)  shares of  presently
outstanding  Class A Common Stock and Class B Common Stock.  Mercury agrees that
this  reverse  stock  split is  advisable  to avert  possible  delisting  of the
Company's  Class A Common  Stock from the NASDAQ Stock Market and to enhance the
marketability  of the Class A Common  Stock.  Reference  is made to the  Company
Proxy  Statement  for  additional  information  about the  Reverse  Stock  Split
Proposal.                                                                       

         Under Delaware law, the  affirmative  vote of the holders of a majority
of the votes entitled to be cast by all  outstanding  shares of Company Stock is
required to approve the Reverse Stock Split.  Abstentions  and broker  non-votes
will therefore count as if they were votes against the Reverse Stock Split.     

         MERCURY  RECOMMENDS  A VOTE "FOR"  APPROVAL OF THE REVERSE  STOCK SPLIT
PROPOSAL.                                                                       

PROPOSAL 4
 APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS

         The Company has  proposed the  appointment  of KPMG Peat Marwick LLP to
act as the Company's independent  accountants for the fiscal year ending October
31, 1998 and the financial statements relating thereto. Reference is made to the
Company Proxy Statement for information about this proposal.                    

         Under  Delaware  law  and  the  Company's   Bylaws,   approval  of  the
Appointment of Accountants proposal requires the affirmative vote of the holders
of a  majority  of the votes  represented  in person or by proxy and cast at the
Annual  Meeting.  For this  purpose,  abstentions  will have the effect of votes
against the proposal.  However, broker non-votes, like shares not represented at
the meeting,  will neither be counted in favor of or against the  proposal,  nor
increase or decrease the number of votes  required for  approval,  and therefore
will not affect on the outcome of the proposal.                                 

         MERCURY  RECOMMENDS  A  VOTE  "FOR"  APPROVAL  OF  THE  APPOINTMENT  OF
ACCOUNTANTS PROPOSAL.                                                           

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OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

         Mercury  is not  aware of any  proposals  other  than the  election  of
directors,   the  Board  Classification,   the  Reverse  Stock  Split,  and  the
Appointment of Accountants to be brought before the Annual  Meeting.  Should any
other  proposal be brought  before the Annual  Meeting,  the vote  required  for
approval of such proposal  would be as  prescribed  by the Company's  charter or
bylaws or by applicable law.  Generally,  approval of a proposal would require a
majority of the votes  represented at the Annual Meeting and entitled to vote on
the matter. Shares voted as abstentions would have the same effect as a negative
vote.  Shares with  respect to which a broker  submits a "broker  non-vote" on a
matter would not be counted in calculating the number of shares entitled to vote
on a matter.                                                                    

         Should  other  proposals  be brought  before the  Annual  Meeting,  the
persons named on the BLUE Annual  Meeting proxy card will abstain from voting on
such proposals.  However,  if such proposals  adversely  affect the interests of
Mercury as  determined  by Mercury in its sole  discretion  and  Mercury has not
received  notice of such  proposals a  reasonable  time in advance of the Annual
Meeting,  such persons will vote on such proposals in their  discretion,  unless
you mark the BLUE  Annual  Meeting  proxy card  against  authority  to cast such
discretionary votes.                                                            

PROXY PROCEDURES

         Stockholders  are urged to mark, sign and date the enclosed BLUE Annual
Meeting proxy card and return it to Mercury c/o D.F. King & Co.,  Inc., 77 Water
Street,  New York, NY 10005-4495 in the enclosed envelope in time to be voted at
the Annual  Meeting.  Execution of the BLUE Annual  Meeting  proxy card will not
affect your right to attend the Annual Meeting and to vote in person.  Any proxy
may be revoked at any time prior to the Annual  Meeting by  delivering a written
notice of  revocation  or a later dated proxy to D.F. King & Co., Inc. or to the
Secretary of the Company or by voting in person at the Annual Meeting. Only your
latest dated proxy for the Annual Meeting will count.                           

         Only  holders of record as of the close of  business on the Record Date
will be  entitled  to vote.  If you were a  shareholder  of record on the Record
Date,  you may vote your shares at the Annual Meeting even if you have sold your
shares before or after the Record Date. Accordingly, please vote the shares held
by you on the Record  Date,  or grant a proxy to vote such  shares,  on the BLUE
Annual Meeting proxy card, even if you have sold your shares before or after the
Record Date.                                                                    

         If any of your shares are held in the name of a brokerage  firm,  bank,
bank  nominee or other  institution  on the Record  Date,  only it can vote such
shares and only upon receipt of your specific instructions.  Accordingly, please
contact the person  responsible  for your  account and  instruct  that person to
execute on your behalf the BLUE Annual Meeting proxy card.                      

         Where you  indicate a choice on your BLUE  Annual  Meeting  proxy card,
your shares will be voted as specified.  If you indicate no choice,  your shares
will be  voted  FOR the  Mercury  Nominees,  the  Reverse  Stock  Split  and the
Appointment of Accountants, and AGAINST the Board Classification,  provided that
you have signed and dated the BLUE Annual Meeting proxy card.                   

MERCURY'S PLAN FOR ENHANCING STOCKHOLDER VALUE                

         Affiliates of Mercury have repeatedly  expressed the view to management
that pursuit of the Company's inflight  entertainment  business,  which has been
consistently  unprofitable and has depleted the Company's capital, is not viable
in the current market climate. The Company has belatedly acknowledged this view,
and, in recent public filings,  has disclosed that it has sharply  curtailed its
sales and marketing efforts for the inflight entertainment business.            

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         Mercury   believes   that  the  Company   should   exit  the   inflight
entertainment  business as promptly as  practicable  and devote its resources to
the  acquisition of businesses  with strong profit  potential.  According to the
Company's  public  filings,  as of  July  31,  1998,  the  Company  had on  hand
approximately  $40,000,000 in cash and short term investment  securities.  As of
October  31,  1997,  the  Company  had  net  operating  loss   carryforwards  of
approximately $38,000,000 (the utilization of which may be limited by applicable
provisions of federal tax law).  These  resources can be used for investments in
operating  businesses  that will create  stockholder  value.  In light of recent
developments  in the public markets,  valuation of many operating  entities have
declined.   Accordingly,   there  are  likely  to  be   attractive   acquisition
opportunities  for the Company at this time.  Mercury also believes that, at the
currently  depressed  prices, it is in the best interests of the Company and its
stockholders to buy back shares of the Company's Class A Common Stock.          

         Stockholders  need to decide  which slate of nominees is best suited to
implementing an acquisition  program geared towards creating  stockholder value.
Mercury believes that its nominees have the experience and the track record that
justify your vote and confidence.                                               

         All  five  Mercury  Nominees  are or have  been  senior  executives  of
substantial  publicly held companies.  Michael  McManus,  as the chief executive
officer of New York Bancorp,  increased  total bank assets from $900  million in
1991 to $3.2 billion in 1998 and, during the same period,  increased stockholder
value twentyfold.  Richard Daniel,  during his tenure as chief operating officer
and later chief  executive  officer of Handy & Harman,  implemented a successful
diversification  program involving in excess of 30 acquisitions.  In addition to
senior  management  positions  with a variety of  financial,  manufacturing  and
consulting  firms,  Joseph  Wright  has  served  as  Director  of the  Office of
Management and Budget and Deputy Secretary of the Department of Commerce. Donald
Miller  is  Executive  Vice  President  and  General  Counsel  of The  Fairchild
Corporation,  a leading  aerospace  manufacturer with 1997 revenues in excess of
$700  million.  Seymour  Holtzman  has over 35 years of  management  experience,
including  25 years in public  company  management.  Collectively,  the  Mercury
Nominees bring to the Company  seasoned  expertise in a wide variety of business
environments and market climates.                                               

         In contrast to the Company's incumbent management, the Mercury Nominees
do not advocate a staggered  board for the Company.  The Mercury  Nominees  will
stand  on the  value  they  achieve  without  depriving  stockholders  of  their
corporate democracy rights.                                                     

BACKGROUND OF THE SOLICITATION

         In  mid-1997,  in  the  ordinary  course  of  its  brokerage  business,
Barington obtained certain  non-discretionary  customer accounts holding Company
Stock.  After  reviewing  the  Company's  public  filings and in order to gain a
better  understanding  of the Company's  business and  prospects,  in July 1997,
James  Mitarotonda,  Barington's  Chairman,  met with the Company's  management.
Barington  expressed the view that,  although the Company had a state-of-the-art
inflight   entertainment   product,  the  Company  was  unlikely  to  experience
significant  demand because of the high product cost and high airline  passenger
loads  obviating  the need for expensive  travel  inducements.  Mr.  Mitarotonda
suggested  that the Company exit the inflight  entertainment  business and apply
its capital to the acquisition of other  businesses.  The Company did not at the
time adopt Barington's suggestions.                                             

         As  a  result  of a  decline  in  the  Company's  share  price  and  in
consideration  of the  substantial  cash  balances  maintained  by the  Company,
Barington  began to acquire shares for its own account.  Barington  continued to
monitor the Company's public filings and announcements. Barington noted that the
Company's  Annual  Report on Form 10-KSB for the fiscal  year ended  October 31,
1997  reported  that the  Company  experienced  a $50  million  loss on sales of
approximately  $11 million,  that management had been awarded  bonuses  totaling
$572,000 and that management's  stock options had been repriced in response to a
steep drop in the Company's stock price.                                        

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         On March 6, 1998,  Barington  filed a derivative  action in the Supreme
Court of the State of New York  against the  Company's  officers  and  directors
alleging various breaches of fiduciary  duties.  In its earnings release of June
5, 1998,  the Company  stated that "because of the lack of prospects for success
in obtaining  additional  orders,  and in order to reduce expenses further,  the
company has terminated almost all sales and marketing efforts as of May 29th."  

         On August 12, 1998, representatives of Barington met with the Company's
management.  Barington  indicated that, as a stockholder with a meaningful stake
in the  Company,  it was  prepared  to take an  active  role in  developing  and
implementing  plans to  enhance  stockholder  value.  Barington  also  requested
representation on the Company's Board. The Company did not accede to Barington's
request.                                                                        

         On August 13, 1998, Ocean Castle Partners,  LLC ("Ocean Partners"),  an
entity  controlled by Irwin Gross, the Company's current Chief Executive Officer
and  Chairman  of  its  Board,  entered  into  a  proxy  agreement  (the  "Proxy
Agreement")  with certain  holders of the  Company's  Class B Common  Stock.  On
August 25, 1998,  Ocean  Partners  filed a lawsuit in the Chancery  Court of the
State of  Delaware  seeking to compel a meeting of the  Company's  stockholders.
Ocean  Partners  also  filed  preliminary   materials  with  the  United  States
Securities and Exchange Commission in respect of a proposed consent solicitation
to replace the  Company's  Board of Directors.  On September 15, 1998,  the then
current Board of Directors of the Company  resigned  after electing the nominees
of Ocean Partners as the Company's Board.                                       

         On September 9, 1998,  Barington  filed an action in the Superior Court
of the State of Arizona  against the Company's then current and former  officers
and directors,  repeating the allegations  made in Barington's New York lawsuit.
The Arizona  action added Ocean Partners as a defendant and, among other things,
sought a  declaration  that the  shares of Class B Common  Stock  whose vote was
controlled by Ocean Partners pursuant to the Proxy Agreement had been converted 
into Class A Common  Stock.  On  September  25,  1998,  the court in the Arizona
action issued a preliminary injunction,  the effect of which was to provide that
the 2,231,111 shares of Class B Common Stock subject to the Proxy Agreement had 
been  converted  into Class A Common Stock having one vote per share rather than
six votes per share. Ocean Partners has appealed the issuance of the preliminary
injunction, and a hearing on the appeal has been scheduled for October 27, 1998.

         Subsequent to the public disclosure of Ocean Partners'  interest in the
Company and the election of Ocean  Partners'  nominees to the  Company's  Board,
representatives of Barington have met or otherwise  communicated with Mr. Gross.
Barington  reiterated  its proposals to take an active role in  formulating  and
implementing  a business  plan for the Company.  Among other  things,  Barington
suggested that the Company implement a one-for-three reverse stock split instead
of a  one-for-two  split  originally  proposed  by  the  Company,  a  suggestion
subsequently  adopted  by the  Company.  Barington  further  suggested  that the
Company increase its stock buy-back program.  Barington also proposed  providing
investment  banking  services to the  Company.  Barington  and the Company  have
continued to engage as well in discussions  regarding  settlement of the pending
litigation  in Arizona  and New York.  Among  other  things,  counsel  for Ocean
Partners  discussed  with counsel for Barington a proposal to acquire  shares of
Company Stock held by Barington and/or its customers.  However, the parties have
not reached or entered into any arrangements or understandings in regard to this
or any other matters.                                                           

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         On October 19, 1998,  Mercury and Barington  commenced an action in the
Supreme  Court of the  State of New York to stay  uninstructed  voting of shares
held of record in broker or street name for  election of directors at the annual
meeting.  Mercury and Barington commenced this action to prevent such votes from
being cast before Mercury distributed its proxy materials.  Under relevant stock
exchange  rules,  brokers  are not  permitted  to vote  without  instruction  in
contested election contests.                                                    

SOLICITATION OF PROXIES                                                         

         Proxies  may  be  solicited  by  mail,   advertisement,   telephone  or
telecopier or in person.  Solicitations may be made by officers and employees of
Barington,   none  of  whom  will  receive  additional   compensation  for  such
solicitations.   Mercury  has  requested  banks,   brokerage  houses  and  other
custodians,  nominees and fiduciaries to forward all its solicitation  materials
to the beneficial owners of the Company Stock they hold of record.  Mercury will
cause these record holders to be reimbursed  for customary  clerical and mailing
expenses incurred by them in forwarding these materials to their customers.     

         Mercury  has  retained  D.F.  King  &  Co.,  Inc.  ("D.F.   King")  for
solicitation  and advisory  services in connection  with the  solicitation,  for
which  D.F.  King  is  to  receive  a  fee  of  up  to  $50,000,  together  with
reimbursement for its reasonable  out-of-pocket expenses.  Mercury and Barington
have also  agreed  to  indemnify  D.F.  King  against  certain  liabilities  and
expenses,  including liabilities and expenses under the federal securities laws.
D.F. King will solicit proxies for the Annual Meeting from individuals, brokers,
banks,  bank nominees and other  institutional  holders.  It is anticipated that
D.F. King will employ  approximately 30 persons to solicit  stockholders for the
Annual Meeting.                                                                 

         The entire  expense of  soliciting  proxies  for the Annual  Meeting is
being borne by  Barington.  Costs  incidental  to this  solicitation  of proxies
include expenditures for printing, postage, legal, accounting, public relations,
advertising and related expenses and are expected to be approximately $100,000; 
costs incurred to the date of this Proxy Statement are approximately $40,000.   

         Certain  information about associates of Barington who may be deemed to
be participants in this proxy solicitation is set forth in the attached Schedule
I.                                                                              

         If the Mercury  Nominees  are  elected,  Mercury will seek to cause the
Mercury  Nominees to have  Barington  reimbursed by the Company for all expenses
incurred in  connection  with this proxy  solicitation, as well as the  expenses
incurred by Barington in its litigation  against the Company and Ocean Partners,
but does not expect that the question of such reimbursement will be submitted to
a vote of stockholders.                                                         

         If Mercury  should  withdraw,  or materially  change the terms of, this
solicitation  of proxies prior to the Annual  Meeting,  Mercury will  supplement
this Proxy Statement or otherwise  publicly  disseminate  information  regarding
such  withdrawal  or change  and, in  appropriate  circumstances,  will  provide
stockholders with a reasonable  opportunity to revoke their proxies prior to the
Annual Meeting.                                                                 

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SECURITY OWNERSHIP OF MERCURY AND ITS AFFILIATES

         Mercury owns no securities of the Company.  The shares of the Company's
Class A Common Stock that Mercury's affiliates beneficially own as of the Record
Date are set forth in the following table:                                      

                                                        [Enlarge/Download Table]

=================================================================================================================           
                                                   CLASS A COMMON STOCK                       PERCENT OF                    
         NAME AND ADDRESS OF                                                                    TOTAL/1/                    
           BENEFICIAL OWNER                                                                                                 
                                  -------------------------------------------------------------------------------           
                                          NUMBER OF                   PERCENT OF                VOTING                      
                                           SHARES                       CLASS                   POWER                       

-----------------------------------------------------------------------------------------------------------------           
                                                                                                                            
Barington Capital Group, L.P.            298,626/2/                  1.9%                         1.1%                      
888 Seventh Avenue                                                                                                          
17th Floor                                                                                                                  
New York, New York  10019                                                                                                   
----------------------------------------------------------------------------------------------------------------------------
Banner Aerospace, Inc.                   229,000/3/                  1.4%                         *                         
45025 Aviation Drive                                                                                                        
Dulles, VA  20166                                                                                                           
----------------------------------------------------------------------------------------------------------------------------
Michael A. McManus, Jr.                  5,000                       *                            *                         
100 White Plains Road                                                                                                       
Bronxville, NY  10108                                                                                                       
----------------------------------------------------------------------------------------------------------------------------
Donald E. Miller                         20,500                      *                            *                         
45025 Aviation Drive                                                                                                        
Dulles, VA  20166                                                                                                           
----------------------------------------------------------------------------------------------------------------------------
James Mitarotonda/4/                     46,000                      *                            *                         
888 Seventh Avenue                                                                                                          
17th Floor                                                                                                                  
New York, New York  10019                                                                                                   
----------------------------------------------------------------------------------------------------------------------------
Marc Cooper/5/                           16,000                      *                            *                         
888 Seventh Avenue                                                                                                          
17th Floor                                                                                                                  
New York, New York  10019                                                                                                   
----------------------------------------------------------------------------------------------------------------------------
TOTAL                                    615,126                     3.8%                         2.2%                      
============================================================================================================================

--------                                                                        
/1/ Based on 3,733,334 shares of Class B Common Stock outstanding and 16,082,637
shares  of Class A Common  Stock  outstanding,  except  that  shares  underlying
exercisable  warrants  to  purchase  Class  A  Common  Stock  are  deemed  to be
outstanding for purposes of calculating the percentage owned by the holder(s) of
such warrants.                                                                  
/2/ Does not  include  shares  of Class A Common  Stock  held in  accounts  that
Barington, in the course of its broker-dealer  business,  maintains on behalf of
its customers.  Barington does not have or share the right to vote or dispose of
such shares and disclaims any beneficial ownership of such shares.              
/3/ Includes 112,500 Class C Warrants and 112,500 Class D Warrants, all of which
are  currently  exercisable  for one share of Class A Common Stock for each such
warrant.                                                                        
/4/ Mr. Mitarotonda is Chairman and Chief Executive Officer of Barington.       
/5/ Mr. Cooper is Vice Chairman of Barington.                                   
* Less than 1%                                                                  

         Except as set forth above, none of Mercury, any of the Mercury Nominees
or any of  their  respective  associates  owns  beneficially  or of  record  any
securities of the Company or any of its subsidiaries.                           

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 OTHER INFORMATION

Security Ownership of Certain Beneficial Owners                                 

         Certain  information  regarding shares held by the Company'  directors,
nominees, management and other 5% stockholders is contained in the Company Proxy
Statement and is incorporated herein by reference.                              

Proposals of Security Holders                                                   

         Information  concerning the date by which proposals of security holders
intended to be  presented  at the next  annual  meeting of  stockholders  of the
Company  must be received by the Company for  inclusion in the  Company's  proxy
statement  and form of proxy for that meeting is contained in the Company  Proxy
Statement and is incorporated herein by reference.                              

         Mercury assumes no  responsibility  for the accuracy or completeness of
any information contained herein which is based on, or incorporated by reference
to, the Company Proxy Statement or the Company's public filings.                

         PLEASE INDICATE YOUR SUPPORT OF THE ABOVE RECOMMENDATIONS OF MERCURY BY
COMPLETING,  SIGNING AND DATING THE ENCLOSED BLUE ANNUAL  MEETING PROXY CARD AND
RETURN IT PROMPTLY TO D.F. KING & CO., INC. IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES.                    

                                              MERCURY SHAREHOLDER ASSOCIATES LLC

October 19, 1998                                                                

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SCHEDULE I

INFORMATION CONCERNING CERTAIN OFFICERS AND EMPLOYEES OF BARINGTON

         The  following  table  sets  forth the name and the  present  principal
occupation  or  employment  of the officers and  employees of Barington  who may
solicit proxies from the Company's stockholders.  The principal business address
of each of the such officers and employees is c/o Barington, 888 Seventh Avenue,
17th Floor, New York, NY 10019.                                                 

Name and Position                  Principal Occupation or Employment           
-----------------                  ----------------------------------           

James Mitarotonda                  Chairman and Chief                           
Chairman and Chief                 Executive Officer of                         
Executive Officer                  Barington                                    

Marc Cooper                        Vice Chairman of                             
Vice Chairman                      Barington                                    

Edwin Kantor                       Vice Chairman of                             
Vice Chairman                      Barington                                    

Kenneth Baronoff                   Managing Director                            
Managing Director                  of Barington                                 

Carl Kleidman                      Managing Director of                         
Managing Director                  Barington                                    

Gary Simon                         Senior Vice President                        
Senior Vice President              of Barington                                 

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 SCHEDULE II

 INFORMATION CONCERNING SHARES OF CLASS A COMMON STOCK HELD BY MERCURY
AND ITS AFFILIATES, INCLUDING THE MERCURY NOMINEES

         Except as  disclosed  in this  Schedule  or in the  accompanying  Proxy
Statement,  none of Mercury or the Mercury Nominees,  or any of their respective
affiliates and associates,  owns any securities of the Company or any subsidiary
of the Company,  beneficially  or of record,  has  purchased or sold any of such
securities  within  the past two years or is or was within the past year a party
to any contract,  arrangement or  understanding  with any person with respect to
any such securities.                                                            

Barington Capital Group, L.P.                                                   
--------------------------------------------                                    
Date                              Number of                                     
Shares    
Purchased   
--------------------------------------------                                    
10/20/97                             5,000                                      
10/21/97                             2,000                                      
10/22/97                             4,300                                      
10/23/97                            13,291                                      
10/24/97                             1,000                                      
11/18/97                            31,175                                      
11/21/97                             6,500                                      
11/24/97                             1,000                                      
11/25/97                            15,000                                      
12/2/97                              4,000                                      
12/10/97                            14,000                                      
12/11/97                             5,000                                      
12/12/97                             5,500                                      
12/15/97                             3,000                                      
12/17/97                               500                                      
12/19/97                             9,350                                      
12/22/97                            13,000                                      
12/23/97                             3,700                                      
12/29/97                            18,000                                      
4/29/98                             12,895                                      
5/4/98                              15,000                                      
5/4/98                               4,000                                      
5/19/98                             13,000                                      
6/16/98                             31,418                                      
6/17/98                              9,000                                      
6/22/98                             25,080                                      
7/27/98                             11,217                                      
7/30/98                              7,850                                      
9/29/98                             11,850                                      
9/30/98                              2,000                                      
============================================                                    

Banner Aerospace, Inc.                                                          
-------------------------------------------------------------                   
Date                           Number of Shares                     

        Purchased               Sold
-------------------------------------------------------------                   
12/24/96                     187,500/1/                                         
5/14/97                                                 500                     
5/22/97                                               3,000                     
6/26/98                                             180,000                     
=============================================================                   

Michael A. McManus, Jr.                                                         
--------------------------------------------                                    
Date                              Number of                                     
Shares    
Purchased   
--------------------------------------------                                    
9/16/98                              5,000                                      
============================================                                    

Donald E. Miller                                                                
--------------------------------------------                                    
Date                              Number of                                     
Shares    
Purchased   
--------------------------------------------                                    
11/6/96                              1,000                                      
9/22/98                              5,000                                      
9/22/98                              1,000                                      
9/22/98                              3,000                                      
9/23/98                              6,000                                      
============================================                                    

--------                                                                        
/1/Shares acquired by exercise of 187,500 Class B Warrants.                     

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James Mitarotonda                                                               
--------------------------------------------                                    
Date                              Number of                                     
Shares    
Purchased   
--------------------------------------------                                    
7/29/98                             14,000                                      
8/14/98                             15,000                                      
9/8/98                               9,000                                      
9/29/98                              6,000                                      
10/13/98                             2,000                                      
============================================                                    

Marc Cooper                                                                     
--------------------------------------------                                    
Date                              Number of                                     
Shares    
Purchased   
--------------------------------------------                                    
8/19/98                             10,000                                      
9/29/98                              6,000                                      
============================================                                    

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                                                        [Enlarge/Download Table]


                                                                                                                   
                      INTERACTIVE FLIGHT TECHNOLOGIES, INC.                                                        
                       1998 ANNUAL MEETING OF STOCKHOLDERS                                                         

         THIS PROXY IS SOLICITED BY MERCURY SHAREHOLDER ASSOCIATES LLC.,                                           

         The undersigned  stockholder of Interactive Flight  Technologies,  Inc.                                   
(the "Company")  hereby appoints each of James  Mitarotonda and Gary Simon,  and                                   
each of  them  with  full  power  of  substitution,  for and in the  name of the                                   
undersigned,  to represent and to vote, as designated below, all shares of Class                                   
A Common Stock and Class B Common Stock of the Company that the  undersigned  is                                   
entitled  to  vote  if  personally   present  at  the  1998  Annual  Meeting  of                                   
Stockholders of the Company, and at any adjournment or postponement thereof. The                                   
undersigned  hereby  revokes any  previous  proxies  with respect to the matters                                   
covered by this Proxy.                                                                                             

         WHERE A CHOICE IS INDICATED,  THE SHARES REPRESENTED BY THIS PROXY WILL                                   
BE VOTED AS SPECIFIED. IF NO CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS                                   
PROXY WILL BE VOTED FOR  PROPOSALS 1, 3, AND 4;  AGAINST  PROPOSAL 2; AND IN THE                                   
DISCRETION SPECIFIED IN ITEM 5.                                                                                    

(Please mark each proposal with an "X" in the appropriate box)                                                     

1.     ELECTION OF DIRECTORS:                                                                                      

Election of Richard N. Daniel, Seymour Holtzman, Michael A. McManus, Jr., Donald                                   
E. Miller, and Joseph R. Wright, Jr.                                                                               

[ ] FOR all nominees except as marked below          [ ] WITHHOLD AUTHORITY for all nominees                       

(INSTRUCTION:  To withhold authority to vote for one or more nominees,  mark FOR                                   
above and print the name(s) of the  person(s)  with  respect to whom you wish to                                   
withhold authority in the space provided below.)                                                                   

------------------------------------------------------------------                                                 

MERCURY RECOMMENDS A VOTE FOR THE MERCURY NOMINEES.                                                                
                          ---                                                                                      

2.   Proposal  to amend  the  Company's  Amended  and  Restated  Certificate  of                                   
     Incorporation  to divide  the Board of  Directors  into three  classes,  as                                   
     described more fully in the Company Proxy Statement.                                                          

[ ] FOR                 [ ] AGAINST                  [ ] ABSTAIN                                                   

MERCURY RECOMMENDS A VOTE AGAINST PROPOSAL 2.                                                                      
                          -------                                                                                  

3.   Proposal  to amend  the  Company's  Amended  and  Restated  Certificate  of                                   
     Incorporation  so as to effect a one-for-  three reverse stock split of the                                   
     Company's  outstanding  shares  of  Class A and  Class B Common  Stock,  as                                   
     described more fully in the Company Proxy Statement.                                                          

[ ] FOR                 [ ] AGAINST                  [ ] ABSTAIN                                                   

MERCURY RECOMMENDS A VOTE FOR PROPOSAL 3.                                                                          
                          ---                                                                                      

DFRN14A
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4.   Proposal  to  approve  the  Board of  Directors'  appointment  of KPMG Peat                                   
     Marwick LLP, certified accountants,  as independent auditors of the Company                                   
     for the fiscal year ending October 31, 1998.                                                                  

[ ] FOR                 [ ] AGAINST                  [ ] ABSTAIN                                                   

MERCURY RECOMMENDS A VOTE FOR PROPOSAL 4.                                                                          
                          ---                                                                                      

5.   IN THEIR  DISCRETION,  THE PROXIES ARE  AUTHORIZED  TO VOTE UPON SUCH OTHER                                   
     PROPOSALS  AS MAY  PROPERLY  COME  BEFORE THE  MEETING  OR ANY  ADJOURNMENT                                   
     THEREOF IF SUCH  PROPOSALS  ADVERSELY  AFFECT  MERCURY  AND MERCURY HAS NOT                                   
     RECEIVED NOTICE THEREOF A REASONABLE TIME BEFORE THE MEETING.                                                 

               [ ] YES                       [ ] NO                                                                

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED                                        
ENVELOPE PROVIDED.                                                                                                 

                                                     Please  date and sign  this                                   
                                                     proxy  exactly as your name                                   
                                                     appears hereon.                                               

                                                     --------------------------------------------------------------

                                                                           (Signature)                             

                                                     --------------------------------------------------------------

                                                                       (Signature, if held jointly)                

                                                     --------------------------------------------------------------

                                                                             (Title)                               

                                                     Dated:                                                        
                                                              -----------------------------------------------------

                                                     When  shares  are  held  by                                   
                                                     joint tenants,  both should                                   
                                                     sign.   When   signing   as                                   
                                                     attorney-in-fact, executor,                                   
                                                     administrator,     trustee,                                   
                                                     guardian, corporate officer                                   
                                                     or  partner,   please  give                                   
                                                     full  title as  such.  If a                                   
                                                     corporation, please sign in                                   
                                                     corporate name by President                                   
                                                     or     other     authorized                                   
                                                     officer.  If a partnership,                                   
                                                     please sign in  partnership                                   
                                                     name by authorized person.                                    

To vote in accordance with the Mercury  recommendations, just sign and date this                                   
proxy; no boxes need to be checked.                                                                                

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 IMPORTANT

         Your proxy is important. No matter how many shares you own, please give
Mercury your proxy FOR the election of the Mercury  Nominees,  the Reverse Stock
Split and the  Appointment of Accountants  and AGAINST the Board  Classification
by:                                                                             

MARKING the enclosed BLUE Annual Meeting proxy card,        

SIGNING the enclosed BLUE Annual Meeting proxy card,        

DATING the enclosed BLUE Annual Meeting proxy card and      

        MAILING the enclosed  BLUE  Annual  Meeting  proxy card TODAY in the
          envelope  provided  (no  postage is  required  if mailed in the United
States).                                                    

         If you have  already  submitted  a proxy to the  Company for the Annual
Meeting,  you may change  your vote to a vote FOR the  election  of the  Mercury
Nominees  and AGAINST  the Board  Classification  Proposal by marking,  signing,
dating and  returning  the enclosed  BLUE  proxy card for the Annual  Meeting,  
which must be dated after any proxy you may have submitted to the Company.  Only
your latest dated proxy for the Annual Meeting will count at such meeting.      

         If you  have  any  questions  or  require  any  additional  information
concerning  this Proxy Statement or the proposals by Mercury  contained  herein,
please  contact D.F. King & Co., Inc. at the address set forth below.  IF ANY OF
YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK NOMINEE OR OTHER SUCH
INSTITUTION, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT OF YOUR SPECIFIC
INSTRUCTIONS.  ACCORDINGLY,  PLEASE  CONTACT  THE  PERSON  RESPONSIBLE  FOR YOUR
ACCOUNT AND  INSTRUCT  THAT PERSON TO EXECUTE THE BLUE  ANNUAL  MEETING  PROXY  
CARD.                                                                           

 D.F. KING & CO., INC.
 77 Water Street
 New York, NY 10005-4495
(212) 269-5550
or
 Call Toll-Free (800) 848-2998

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DFRN14A’ Filing		Date		First		Last			Other Filings
		10/31/98		3		20			10-K
		10/27/98		12					DEFA14A
Filed on:		10/20/98		1		4			DEFC14A,  DFAN14A
		10/19/98		13		15
		10/15/98		4					DEFR14A
		9/25/98		12
		9/15/98		12					10QSB,  NT 10-Q
		9/9/98		12
		8/25/98		12					DEF 14A,  PREC14A
		8/13/98		12
		8/12/98		12
		7/31/98		11					10QSB,  10QSB/A,  NT 10-Q
		6/5/98		12					10QSB
		3/6/98		12
		10/31/97		11					10KSB,  10KSB40/A
		11/1/96		7
									List all Filings