<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Carlyle Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
CARLYLE INDUSTRIES, INC.
1 PALMER TERRACE
CARLSTADT, NEW JERSEY 07072
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 1999
TO THE STOCKHOLDERS OF CARLYLE INDUSTRIES, INC.
NOTICE is hereby given that the Annual Meeting (the "Meeting") of
Stockholders of CARLYLE INDUSTRIES, INC. (the "Company"), a Delaware
corporation, will be held at the offices of The Noel Group, Inc., 667 Madison
Avenue, New York, New York, on May 18, 1999, at 10:00 A.M. for the following
purposes:
1. To elect four directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected.
2. To ratify the selection of Arthur Andersen LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1999.
3. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
All of the above matters are more fully described in the accompanying Proxy
Statement.
The Board of Directors has fixed the close of business on April 16, 1999 as
the date for the determination of Stockholders entitled to notice of, and to
vote at, the Meeting. A list of Stockholders entitled to vote at the Meeting
will be open to examination by Stockholders during ordinary business hours for a
period of ten (10) days prior to the Meeting at the executive offices of the
Company, 1 Palmer Terrace, Carlstadt, New Jersey 07072. The list will also be
available at the Meeting.
By order of the Board of Directors,
EDWARD F. COOKE
Secretary
Carlstadt, New Jersey
April 20, 1999
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE DATE AND SIGN THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE
MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
CARLYLE INDUSTRIES, INC.
1 PALMER TERRACE
CARLSTADT, NEW JERSEY 07072
------------------------
ANNUAL MEETING OF STOCKHOLDERS
------------------------
PROXY STATEMENT
APPROXIMATE DATE OF MAILING: APRIL 20, 1999
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Carlyle Industries, Inc. (the "Company") for use at the Annual
Meeting of Stockholders to be held at the time and place set forth in the
foregoing notice and at any adjournments thereof (the "Meeting"). Proxies in the
accompanying form, which are properly executed and duly returned to the Company
and not revoked prior to exercise, will be voted in accordance with the
instructions contained therein. If a proxy is executed and returned without
instructions as to how it is to be voted, such proxy will be voted in favor of
all proposals contained in this Proxy Statement. Each proxy granted pursuant to
this solicitation is revocable and may be revoked at any time prior to its
exercise provided written notice of revocation is received by the Secretary of
the Company prior to the Meeting. A Stockholder who attends the Meeting in
person may, if he or she wishes, vote by ballot at the Meeting, thereby
canceling any proxy previously given by such Stockholder.
The Company has two classes of outstanding voting securities entitled to be
voted at the Meeting: common stock, $0.01 par value per share (the "Common
Stock") and Series B Preferred Stock, $0.01 par value per share (the "Preferred
Stock"). The Common Stock and the Preferred Stock are referred to herein
together as the "Capital Stock" of the Company. Each outstanding share of
Capital Stock (i.e. Preferred Stock and Common Stock) is entitled to one vote.
Unless otherwise stated, the Common Stock and the Preferred Stock will vote
together as a single class on all matters submitted for a Stockholders' vote at
the Meeting.
April 16, 1999 has been fixed by the Board as the record date for the
determination of Stockholders entitled to notice of, and to vote at, the
Meeting. At the close of business on March 19, 1999, there were outstanding and
entitled to vote 7,382,782 shares of Common Stock and 10,687,456 shares of
Preferred Stock.
The holders of a majority of the shares of Capital Stock issued and
outstanding and entitled to vote at the Meeting, present in person or
represented by proxy, shall constitute a quorum at the Meeting. Any Stockholder
present in person or by proxy at the Meeting who abstains from voting on any
particular matter described herein will nonetheless be counted for purposes of
determining a quorum. For purposes of voting on the matters described herein,
the affirmative vote of (i) a plurality of the shares of Capital Stock present
or represented by proxy at the Meeting and entitled to vote is required to elect
management's four nominees for election to the Board; and (ii) a majority of the
shares of Capital Stock present or represented by proxy at the Meeting and
entitled to vote is required to ratify the selection by the Board of Arthur
Andersen LLP as independent auditors of the Company for the fiscal year ending
December 31, 1999.
With respect to the election of directors, only shares that are voted in
favor of a particular nominee will be counted towards such nominee's achievement
of a plurality. Shares present at the Meeting that are not voted for a
particular nominee, shares present by proxy where the Stockholder properly
withholds authority to vote for such nominee and broker non-votes will not be
counted towards such nominee's achievement of a plurality. With respect to any
of the other matters to be voted upon, if the Stockholder abstains from voting
or directs his proxy to abstain from voting, the shares are considered present
at the Meeting for such matter but, since they are not affirmative votes for the
matter, they will have the same effect as votes against the matter. With respect
to broker non-votes on any such matter, the shares are not considered present at
the Meeting for such matter and they are, therefore, not counted in respect of
such matter. Such broker non-votes do have the practical effect of reducing the
number of affirmative votes required to achieve a majority for such matter by
reducing the total number of shares from which the majority is calculated.
<PAGE> 4
EXECUTIVE OFFICERS
The executive officers, and one former executive officer, of the Company
are identified in the table below. Each executive officer of the Company serves
at the pleasure of the Board.
<TABLE>
<CAPTION>
YEAR BECAME AN
NAME AGE EXECUTIVE OFFICER POSITIONS
- ---- --- ----------------- ---------
<S> <C> <C> <C>
Robert A. Levinson.... 73 1998 Chairman of the Board, President and Chief
Executive Officer
Karen Brenner......... 43 1996 Former Chairman of the Board, President and
Chief Executive Officer
Ralph Langer.......... 64 1999 Vice Chairman of the Board
Edward F. Cooke....... 45 1994 Vice President, Chief Financial Officer and
Secretary
</TABLE>
ELECTION OF DIRECTORS
(PURPOSE 1)
At the Meeting, four directors are to be elected to serve until their
successors are elected and qualify. The Board has designated the individuals
named below as nominees. Proxies received from Stockholders of the Company will
be voted, unless authority to so vote is withheld, for the election of the
Board's nominees. Authority to vote for any or all of the nominees may be
withheld in the manner indicated on the enclosed proxy. If for any reason any of
the nominees for election to the Board becomes unavailable for election, the
proxies solicited will be voted for such other nominees as are selected by the
Board. The Board has no reason to believe that any of the nominees will not be
available or will not serve if elected. All of the nominees for election at this
Meeting were previously elected by the Company's Stockholders as directors of
the Company except for Messrs. Friedman and Langer both of whom were elected by
the Company's Board of Directors to fill vacancies on the Board. One such
vacancy was created by the resignation of Ms. Karen Brenner who was formerly the
Company's Chairman of the Board, President and Chief Executive Officer.
NOMINEES FOR DIRECTORS
<TABLE>
<CAPTION>
YEAR
FIRST BECAME
NAME AGE A DIRECTOR
- ---- --- ------------
<S> <C> <C>
Robert A. Levinson.......................................... 73 1993
Joseph S. DiMartino......................................... 55 1995
Herbert S. Friedman......................................... 67 1998
Ralph Langer................................................ 64 1999
</TABLE>
The Board recommends a vote FOR each of the nominees for election as
directors.
BIOGRAPHICAL INFORMATION
Certain information about the executive officers and the nominees for
election as directors is set forth below. This information has been furnished to
the Company by the individuals named.
Mr. Levinson was elected Chairman, President and Chief Executive Officer in
May 1998. He is also a consultant to Andrex Industries Corp., a company engaged
in textile manufacturing and processing, where he served as Chairman and
President from April 1979 to May 1995. Since June 1989, he has served as
Chairman of the Board of Levcor International Inc., a public company engaged in
textile converting and oil and gas production.
Mr. DiMartino is a director of The Noel Group Inc. ("Noel") and has served
as a director or Chairman of the Board of Noel since March 1995. Since January
1995, Mr. DiMartino has been Chairman of the Board,
2
<PAGE> 5
a director, a trustee or the Managing General Partner of various funds in the
Dreyfus Family of Funds. For more than five years prior thereto, he was
President, a director, and until December 1994, Chief Operating Officer, of the
Dreyfus Corporation (the "Fund Manager"), and Executive Vice President and a
director of Dreyfus Service Corporation, a wholly-owned subsidiary of the Fund
Manager and, until August 1994, the Fund's distributor. From August 1994 to
December 1994, he was a director of Mellon Bank Corporation. He is a director of
the Muscular Dystrophy Association, Staffing Resources, Inc., Century Business
Services, Inc., and HealthPlan Services, Inc.
Mr. Friedman has been, since April 1998, General Counsel for Brae Capital,
an investment Company. From 1967 to April 1998 he was Managing Partner at Zimet,
Haines, Friedman & Kaplan. Mr. Friedman is also a director of Swiss Army Brands,
Inc. (distributor), Connectivity Technologies, Inc. (wire and cable company);
Equities Enterprises, Inc. (holds interests in various industries), and Noel.
Mr. Langer was elected Vice Chairman of the Board of the Company on January
1, 1999. From January 1, 1993 to December 31, 1998 he served as President and
Chief Executive Officer of Blumenthal Lansing Company, a wholly-owned subsidiary
of Carlyle Industries, Inc.
Mr. Cooke was elected Chief Financial Officer, Secretary and Vice President
of the Company in February 1997, April 1996 and May 1996, respectively. Mr.
Cooke resigned from such positions in September 1997, was reappointed to such
positions in February 1998 and currently serves in such capacities. On January
1, 1999 Mr. Cooke was elected President and Chief Executive Officer of
Blumenthal Lansing Company, a wholly-owned subsidiary of the Company. From
October 1997 to January 1998, Mr. Cooke served as Chief Financial Officer for an
unaffiliated third party. Mr. Cooke served as Controller of the Company from
April 1994 until May 1996 and served as Chief Accounting Officer of the Company
from March 1995 until February 1997. From December 1993 to March 1994, he was a
consultant to the Company and advised the Company in connection with its
accounting and financial operations.
No family relationship exists among the officers and directors of the
Company.
COMMITTEES
COMMITTEES OF THE BOARD OF DIRECTORS
Mr. Levinson is Chairman of the Board, President and Chief Executive
Officer of the Company and Messrs. DiMartino and Friedman are or were affiliated
in one capacity or the other with Noel, the controlling stockholder of the
Company. See "Biographical Information".
During the fiscal year ended December 31, 1998 ("fiscal 1998"), the Board
had three standing committees: a Compensation Committee, an Audit Committee and
an Executive Committee.
The Compensation Committee is currently composed of Messrs. Joseph S.
DiMartino, Robert A. Levinson, Herbert S. Friedman and Ralph Langer. The
Compensation Committee establishes and implements the Company's compensation
policies and practices. See "Report of Board of Directors." Additionally, it or
the Board administers the Company's 1994 Incentive Program (the "Incentive
Program") under which employees, officers, directors, key executives,
consultants and advisors of the Company are eligible to receive stock options,
restricted stock and other benefits.
The Audit Committee is currently composed of Messrs. Robert A. Levinson,
Joseph S. DiMartino, Herbert S. Friedman and Ralph Langer. The functions of the
Audit Committee are to review the adequacy of systems and procedures for
preparing the financial statements of the Company as well as the suitability of
internal financial controls, and to review and approve the scope and performance
of the independent auditors' work.
The Executive Committee is currently composed of Messrs. Robert A.
Levinson, Joseph S. DiMartino, Herbert S. Friedman and Ralph Langer. The
Executive Committee has all the powers and authority granted to the full Board.
3
<PAGE> 6
The Company does not have a nominating committee.
MEETINGS OF THE BOARD
During fiscal 1998, the Board held seven meetings, the Compensation
Committee held no meetings, the Audit Committee held one meeting and the
Executive Committee held no meetings. In addition, during fiscal 1998, the Board
acted five times by written consent of its members and the Compensation
Committee acted once by written consent of its members. Each member of the Board
attended over 75% of the meetings of the Board held in 1998. In addition, all
Committee meetings held during fiscal 1998 were attended by all members. The
Company's directors discharge their responsibilities throughout the year, not
only at Board and committee meetings, but also through personal meetings and
other communications, including telephone contacts with the Chairman and Chief
Executive Officer and others regarding matters of interest and concern to the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None
PRINCIPAL STOCKHOLDERS
The following table sets forth each person known to the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock and/or
Preferred Stock of the Company as of March 19, 1999. Beneficial ownership has
been determined for purposes herein in accordance with Rule 13d-3 of the
Exchange Act, under which a person is deemed to be the beneficial owner of
securities if such person has or shares voting power or investment power in
respect of such securities or has the right to acquire beneficial ownership
within 60 days. On March 19, 1999, there were outstanding 7,382,782 shares of
Common Stock and 10,687,456 shares of Preferred Stock of the Company.
<TABLE>
<CAPTION>
COMMON STOCK SERIES B PREFERRED STOCK
------------------------ ------------------------ PERCENT OF
AMOUNT OF AMOUNT OF AGGREGATE
SHARES SHARES VOTING POWER
NAME AND ADDRESS OF BENEFICIALLY PERCENT BENEFICIALLY PERCENT OF CAPITAL
BENEFICIAL OWNER OWNED OF CLASS OWNED OF CLASS STOCK
- ------------------- ------------ -------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
The Noel Group, Inc.(1)............ -0- -0- 9,920,908.37 92.83% 54.9%
667 Madison Avenue
New York, NY 10021
GAMCO Investors, Inc.(2)........... 1,805,158 24.4% -0- -0- 9.9%
c/o Gabelli Funds, Inc.
One Corporate Center
Rye, New York 10580
</TABLE>
- ---------------
(1) Noel acquired the entire equity interest in the Company in October 1993. In
December 1997, Noel made an irrevocable distribution to its common
stockholders of 2,205,814 shares of the Company's Common Stock. In February
1994, Noel made an irrevocable distribution to its common stockholders of
3,542,404 shares of the Company's Common Stock. In a series of other
transactions, Noel sold, or caused the Company to issue, shares of the
Company's Common Stock and/or Preferred Stock to various affiliates of Noel
and certain members of the Company's management group. As Noel does not have
or share voting or investment power over the securities transferred to its
affiliates or members of the Company's management group, the shares reported
in this table reflect Noel's remaining equity interest in the Company as of
March 19, 1999. Messrs. Joseph S. DiMartino and Herbert S. Friedman are
Board nominees for election at the Meeting, and are affiliated with Noel.
See "Biographical Information."
4
<PAGE> 7
(2) Represents shares held by GAMCO Investors, Inc. and various other entities
which are directly or indirectly controlled by Mario J. Gabelli and for
which he acts as chief investment officer, including registered investment
companies and pension plans. This information is based solely upon the
contents of a filing on Schedule 13D dated February 25, 1999 made by Mario
J. Gabelli and related entities with the Securities and Exchange Commission.
EQUITY SECURITIES BENEFICIALLY OWNED BY THE DIRECTORS
AND NAMED EXECUTIVE OFFICERS
According to information furnished to the Company, as of March 19, 1999,
the nominees for election to the Board, the Company's current "named executive
officers" and one former executive officer (the "Named Executive Officers")
within the meaning of Item 402(a)(3) of Regulation S-K of the Securities Act of
1933, as amended (the "Act"), and all director nominees and executive officers
as a group, beneficially owned shares of Capital Stock of the Company as set
forth below. Beneficial ownership has been determined for purposes herein in
accordance with Rule 13d-3 of the Exchange Act under which a person is deemed to
be the beneficial owner of securities if such person has or shares voting power
or investment power in respect of such securities or has the right to acquire
beneficial ownership within 60 days.
<TABLE>
<CAPTION>
PERCENT OF
COMMON STOCK SERIES B PREFERRED STOCK AGGREGATE
---------------------------- ---------------------------- VOTING
AMOUNT OF SHARES AMOUNT OF SHARES POWER OF
NAME AND ADDRESS OF BENEFICIALLY PERCENT BENEFICIALLY PERCENT CAPITAL
BENEFICIAL HOLDER OWNED OF CLASS OWNED OF CLASS STOCK
- ------------------- ---------------- -------- ---------------- -------- ----------
<S> <C> <C> <C> <C> <C>
Robert A. Levinson............ 223,793(1) 3.03% 313,415.60(2) 2.93% 2.97%
c/o Andrex Industries Corp.
1071 Avenue of the Americas
New York, NY 10019
Karen Brenner................. 6,600(3) (6) -- -- (6)
50 East 77th Street
New York, NY 10021
Ralph Langer.................. 86,697(4) 1.17% -- -- (6)
c/o Carlyle Industries, Inc.
1 Palmer Terrace
Carlstadt, NJ 07072
Edward F. Cooke............... 47,767(5) (6) -- -- (6)
c/o Carlyle Industries, Inc.
1 Palmer Terrace
Carlstadt, NJ 07072
Joseph S. DiMartino........... 29,878(7) (6) 10,021,604.41(8) 93.77% 55.6%
c/o Dreyfus Corporation
200 Park Avenue
10th Floor
New York, NY 10166
Herbert S. Friedman........... 4,875 (6) -- -- (6)
c/o Hudson River Capital LLC
667 Madison Avenue
25th Floor
New York, NY 10121
All directors and............. 399,610(10) 5.4% 10,335,020.01(11) 96.70% 59.4%
executive officers as a
group(6 persons) (9)(10)
</TABLE>
- ---------------
(1) Includes: (i) 138,193 shares held of record by Mr. Levinson; (ii) 75,000
shares held by three trusts for the benefit of Mr. Levinson's children, as
to all of which trusts Mr. Levinson serves as co-trustee; and (iii) 10,600
shares of Common Stock which Mr. Levinson could acquire on or within 60
days after March 19, 1999 upon the exercise of director's stock options.
5
<PAGE> 8
(2) Includes 313,415.60 shares held by Swenvest Corp, as to which Mr. Levinson
has sole voting and investment power.
(3) Represents 6,600 shares which Ms. Brenner could acquire on or within 60
days after March 19, 1999 upon the exercise of stock options.
(4) Includes: (i) 40,750 shares held of record by Mr. Langer; and (ii) 45,947
shares which Mr. Langer could acquire on or within 60 days after March 19,
1999 upon the exercise of stock options.
(5) Includes: (i) 21,100 shares held of record by Mr. Cooke; and (ii) 26,667
shares which Mr. Cooke could acquire on or within 60 days after March 19,
1999 upon the exercise of stock options.
(6) Represents less than 1% of the aggregate votes entitled to be cast.
(7) Includes: (i) 9,400 shares which could be acquired on or within 60 days
after March 19, 1999 upon exercise of director's stock options; and (ii)
20,478 shares held by Mr. DiMartino as trustee under two Rabbi Trusts (the
"Rabbi Trusts") established by the Company for the benefit of former
executives under the Company's deferred compensation program.
(8) Includes: (i) 100,696.04 shares held by Mr. DiMartino as trustee under the
Rabbi Trusts and (ii) 9,920,908.37 shares held by Noel, of which Mr.
DiMartino is a director, as to all of which shares Mr. DiMartino disclaims
beneficial ownership.
(9) For purposes of computing the aggregate number of shares beneficially owned
by directors and Executive Officers of the Company as a group, the same
shares are not counted more than once.
(10) Includes 99,214 shares subject to stock options issued under the Incentive
Program which were exercisable on or within 60 days after March 19, 1999.
(11) Includes 9,920,908.37 shares held by Noel, as referred to in footnote (8)
above.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following summary compensation table sets forth certain information
concerning the compensation of the Named Executive Officers and one former
executive officer who would have been among the most highly compensated
executive officers had she not ceased serving as an executive officer in May
1998 for the fiscal years ending as of December 31, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
RESTRICTED
STOCK OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL OPTIONS AWARDS COMPENSATION COMPENSATION
POSITION YEAR SALARY($) BONUS($) (#)(1) ($) $(2) ($)
- ------------------ ----------- ---------- -------- ------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert A. Levinson,...... Fiscal 1996 N/A N/A N/A N/A N/A N/A
Chairman of the Fiscal 1997 N/A N/A N/A N/A N/A N/A
Board, President Fiscal 1998 72,917 65,884 0 0 0 0
and Chief Executive
Officer(3)
Karen Brenner,........... Fiscal 1996 0 150,000 211,000 0 (3) 210,355(9)
Former Chairman Fiscal 1997 250,000 305,814(5) 150,000 0 (3) 0
of the Board, President Fiscal 1998 125,000 0 0 0 (3) 83,333(9)
and Chief Executive
Officer(4)
Ralph Langer,............ Fiscal 1996 N/A N/A N/A N/A N/A N/A
Vice Chairman of Fiscal 1997 N/A N/A N/A N/A N/A N/A
the Board(6) Fiscal 1998 152,500 55,107 N/A N/A N/A 3,829(8)
Edward F. Cooke,......... Fiscal 1996 111,750 85,000 0 0 (3) 2,804(8)
Vice President, Fiscal 1997 102,997 110,767(5) 20,000 0 (3) 2,417(8)
Chief Financial Fiscal 1998 132,400 67,948 72,222 0 (3) 3,194(8)
Officer and
Secretary(7)
</TABLE>
- ---------------
(1) Stock options reported under this column were granted under the terms and
provisions of the Incentive Program. For a description of the stock options
granted in fiscal 1998, see "Option Grants in Last Fiscal Year."
(2) The named executive officers receive certain perquisites; such perquisites,
however, do not exceed the lesser of $50,000 or 10% of such officer's salary
and bonus.
(3) Mr. Levinson was elected Chairman, President and Chief Executive Officer of
the Company on May 29, 1998.
(4) Ms. Brenner resigned as Chairman, President and Chief Executive Officer of
the Company on May 29, 1998.
(5) Includes special one-time bonuses during fiscal year 1997 of $150,000 and
$50,000 awarded to Ms. Brenner and Mr. Cooke, respectively, in recognition
of their extraordinary efforts in connection with the sale of the Company's
Thread Group to Hicking Pentecost PLC.
(6) Mr. Langer was elected Vice Chairman of the Company on January 1, 1999.
Compensation reported for fiscal year 1998 is compensation received as a
result of his employment with Blumenthal Lansing Company, a wholly-owned
subsidiary of the Company. See "Employment Agreements/Separation Agreements"
for a description of Mr. Langer's compensation arrangements beginning on
January 1, 1999.
(7) Mr. Cooke was elected Chief Financial Officer, Secretary and Vice President
of the Company effective in February 1997, April 1996, and May 1996,
respectively. Mr. Cooke resigned from such positions in September 1997, was
reappointed to such positions in February 1998 and currently serves in such
7
<PAGE> 10
capacities. From April 1994 until May 1996, Mr. Cooke served as Controller
of the Company, and from March 1995 until February 1997, he served as Chief
Accounting Officer of the Company.
(8) The amounts reported in this column include the matching Company
contributions to the Company's Deferred Compensation 401(k) Plan and the
Non-Qualified Deferred Compensation Program on behalf of the named executive
officer for fiscal years 1998, 1997 and 1996, as set forth below.
(9) Includes consulting fees for fiscal year 1996 and severance payment for
fiscal year 1998.
<TABLE>
<CAPTION>
QUALIFIED PLAN($) NON-QUALIFIED PLAN($)
----------------------- -----------------------
NAME 1998 1997 1996 1998 1997 1996
- ---- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Robert A. Levinson............................. 0 0 0 0 0 0
Karen Brenner.................................. 0 0 0 0 0 0
Ralph Langer................................... 3,829 N/A N/A 0 0 0
Edward F. Cooke................................ 3,194 2,417 2,023 0 0 781
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain summary information concerning
individual grants of stock options to purchase shares of Common Stock made to
Named Executive Officers during fiscal 1998. Except as set forth in the table
below, during fiscal 1998 the Company did not grant any stock options to any of
the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS RATES OF
--------------------------------------------------------- STOCK PRICE
NUMBER OF PERCENT OF TOTAL APPRECIATION
SHARES OPTIONS GRANTED FOR OPTION TERM
UNDERLYING TO EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME GRANT(1)(#) FISCAL YEAR(%) PRICE($) DATE 5%($) 10%($)
- ---- ----------- ---------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Levinson...... 0 0 0 -- 0 0
Karen Brenner........... 0 0 0 -- 0 0
Ralph Langer............ 0 0 0 -- 0 0
Edward F. Cooke......... 22,222 13% $1.313 2/25/08 18,349 35,416
50,000 29% $ 1.00 12/10/08 14,000 79,087
</TABLE>
- ---------------
(1) The stock options reported above were awarded pursuant to the Incentive
Program at exercise prices equal to the fair market value of the Common
Stock on the date of grant. The options granted to Mr. Cooke vest ratably
over a forty-eight-month period and terminate ten years after the grant
date, subject to early termination in the event of death or termination of
the optionee's employment for any reason. Payment for options exercised may
be in cash or shares of Common Stock, the fair market value of which is
determined by the Board of Directors or the Compensation Committee in
accordance with the terms of the Incentive Program.
(2) Amounts represent hypothetical gains that could be achieved from the
exercise of the respective stock options and the subsequent sale of the
Common Stock underlying such options if the options were exercised at the
end of the option terms. The gains are based upon assumed rates of stock
price appreciation of 5% and 10% compounded annually from the date the
respective options were granted. The rates of appreciation are mandated by
the rules of the Securities Exchange Act of 1934, as amended, and do not
represent the Company's estimate or projection of the future Common Stock
price.
8
<PAGE> 11
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides certain summary information concerning stock
option exercises during fiscal 1998 by the Named Executive Officers and the
value of unexercised stock options held by the Named Executive Officers as of
December 31, 1998.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED "IN THE MONEY"
OPTIONS AT FISCAL OPTIONS AT
YEAR END(2) FISCAL YEAR END(3)
# OF SHARES --------------------------- ---------------------------
ACQUIRED ON VALUE ANNUALIZED
NAME EXERCISE(1) REALIZED(1) GAIN(1)
- ---- ----------- ------------ ---------- EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C> <C>
Robert A. Levinson... 0 0 0 10,400 1,600 0 0
Karen Brenner........ 0 0 0 6,600 0 0 0
Ralph Langer......... 0 0 0 41,778 23,222 0 0
Edward F. Cooke...... 0 0 0 22,222 57,778 $1,250 $5,000
</TABLE>
- ---------------
(1) None of the Named Executive Officers exercised any stock options during
fiscal 1998.
(2) Represents the aggregate number of stock options held as of December 31,
1998 which could and could not be exercised on that date pursuant to the
terms and provisions of the stock options and the Incentive Program.
(3) With the exception of options granted to Mr. Cooke on December 10, 1998, all
of the unexercised stock options held by Named Executive Officers at the
1998 fiscal year end were "out of the money" (i.e., the exercise price of
the options exceeded the fair market value of the Common Stock). Of the
50,000 options granted to Mr. Cooke on December 10, 1998, 10,000 options are
exercisable and 40,000 options remained unexercisable on December 31, 1998.
COMPENSATION OF DIRECTORS
During fiscal 1998, each director who was not an officer or an employee of
the Company (an "Outside Director") received a director's fee of $10,000
(prorated, in equal monthly installments where applicable), plus $1,000 for
attendance at each meeting of the Board.
EMPLOYMENT AGREEMENTS/SEPARATION AGREEMENTS
From January 1, 1998 to May 29, 1998 Mr. Levinson was compensated as a
director at a monthly rate of $834 and effective upon his election as an officer
of the Company no longer received compensation as a director. Mr. Levinson's
employment agreement (the "Employment Agreement") commenced on January 1, 1999
and continues for a period of one year (the "Term of Employment"). The Term of
Employment shall be automatically renewed annually, unless Mr. Levinson or the
Company gives not less than thirty (30) days written notice to the other at any
time after December 1, 1999. The Employment Agreement provides for a base salary
of $150,000 per year (subject to increases as may be approved by the Board from
time to time). If Mr. Levinson's employment is terminated without cause by the
Company, Mr. Levinson will be entitled to receive the Base Salary for a period
equal to the remainder of the Term of Employment. In the event of a change in
control of the Company, Mr. Levinson would be entitled to the following: (1) if
employed for 5 entire calendar years, preceding the calendar year during which a
change in control occurred, a lump sum severance payment equal to 2.99 times his
average annual compensation for the 5 calendar years; or (2) if not employed for
5 entire calendar years, the lesser of (a) average annual compensation for
complete calendar years employed; or (b) average annual compensation for
complete calendar years employed plus annualizing compensation for any partial
calendar year; or (c) average annual compensation for complete and partial
calendar years including compensation income recognized as a result of stock
option exercises or sale of Company stock.
Pursuant to an employment agreement dated May 29, 1998 between Ms. Brenner
and the Company, Ms. Brenner received a severance payment in the amount of
$83,333.
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<PAGE> 12
Mr. Langer's employment agreement (the "Employment Agreement") commenced on
January 1, 1999 and continues for a period of one year ("Employment Term"). The
Employment Agreement provides for a base salary of $120,000 ("Base Salary"). Mr.
Langer is also eligible to participate in the Company's Management Incentive
Plan ("MIP") based on a target award percentage equal to fifty percent (50%) of
his Base Salary (or $60,000) payable at such time as payments are made by the
Company to its employees under the MIP ("MIP Bonus"), Mr. Langer is entitled to
receive a minimum MIP Bonus of $40,000. Mr. Langer will also be entitled to
participate in other plans and benefits afforded by the Company to its
management employees. In the event of a change in control, Mr. Langer would be
entitled to receive (1) a base salary at the same rate as the Base Salary for a
period of one (1) year from the effective date of a change in control; (2) a MIP
Bonus; (3) Accrued Vacation Payment; (5) continued lease payments; and (6) all
unvested options shall immediately vest in full.
Edward F. Cooke, the Company's Vice President, Chief Financial Officer and
Secretary entered into an agreement with the Company in March 1998 which sets
forth the terms under which Mr. Cooke's employment with the Company may be
terminated. Pursuant to such agreement, if within one year after a change in
control of the Company Mr. Cooke's employment is terminated for any reason, the
Company shall pay Mr. Cooke an amount equal to one year of his base salary then
in effect.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of the Common Stock of
the Company to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Executive officers, directors and more than
ten percent stockholders are required by regulations promulgated under the
Exchange Act to furnish the Company with copies of all Section 16(a) reports
filed. Based solely on the Company's review of copies of the Section 16(a)
reports filed for the fiscal year ended December 31, 1998, the Company believes
that all reporting requirements applicable to its executive officers, directors,
and more than ten percent stockholders were complied with for fiscal 1998.
10
<PAGE> 13
STOCK PERFORMANCE GRAPH
The quarterly changes in cumulative shareholder return for the period
commencing on December 16, 1994, when the Company's stock was unstapled from the
common stock of Noel, and ending on December 31, 1998, are shown on the
following graph. The assumption is that $100 was invested in shares of the stock
of each of the Company, a peer group comprised of Cone Mills, Springs Industries
and Dixie Yarns (with the amount pro-rated by market capitalization as of the
beginning of the period) (the "Peer Group"), and the Russell 2000 Index (and
that all dividends were reinvested). The Peer Group was used instead of a
published industry or line-of-business index because the Company was unable to
reasonably identify such an index. The total cumulative dollar returns shown in
the graph represent the value such investments would have had on December 31,
1998. The comparisons in the graph are required by the Securities and Exchange
Commission and are not intended to forecast or be indicative of possible future
performance of the Company's Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
CARLYLE INDUSTRIES, INC. PEER GROUP INDEX RUSSELL 2000 INDEX
------------------------ ---------------- ------------------
<S> <C> <C> <C>
'1994' 100.00 100.00 100.00
'1994' 106.67 102.18 100.00
'1995' 41.67 107.07 128.44
'1996' 31.67 107.18 149.77
'1997' 20.00 129.47 183.28
'1998' 15.00 103.18 178.09
</TABLE>
11
<PAGE> 14
REPORT OF BOARD OF DIRECTORS
OVERALL POLICY
The Company's executive compensation program is designed to be closely
linked to corporate performance and the total return to Stockholders over the
long-term. The overall objectives of this strategy are to attract and retain the
best possible executive talent, to motivate these executives to achieve the
goals inherent in the Company's business strategy, to link executive and
Stockholder interests and finally to reward individual contributions as well as
overall business results.
The key elements of the Company's executive compensation during the last
fiscal year consisted of base salary, an annual bonus and the grant of stock
options under the Incentive Program.
SALARIES
The Board or the Compensation Committee approves the salaries of the Chief
Executive Officer, the Vice Chairman and Chief Financial Officer of the Company
and exercises oversight over the compensation of the other executive officers of
the Company. All final determinations are subjective. In establishing salary
levels for fiscal 1998, the Board placed the most emphasis on management's
efforts in restructuring the Company's businesses and promoting greater
cost-efficiencies. The Board also afforded substantial weight to the Company's
long-term prospects and performance. The factors of lesser significance which
were considered were experience of the executive officers and a subjective
understanding of salary levels of executive management personnel of other
similarly situated companies.
BONUSES
Bonuses are determined in accordance with the Company's bonus plan. Under
the bonus plan, bonuses are awarded to executive officers based upon the
attainment by the Company of certain predetermined ROTC levels (i.e., return on
total capital) and the achievement by the executive officers of individual
performance objectives. The target levels and objectives are approved by the
Board or the Compensation Committee at the beginning of the fiscal year.
Notwithstanding the satisfaction of target levels and objectives, all final
determinations of bonuses require the approval of the Board or the Compensation
Committee. All persons serving as executive officers at fiscal year end were
awarded bonuses in fiscal 1998 (see "Summary Compensation Table").
STOCK OPTIONS
Under the Incentive Program, which was adopted by the Company in 1994, the
Company's employees and executive officers are eligible to receive stock
options, stock appreciation rights, restricted stock and other stock based
awards. The Board or the Compensation Committee is responsible for determining
the recipients and the size of the awards. In selecting the size and type of
awards under the Incentive Program, the Board or the Compensation Committee
considers the nature of the position held as well as the other factors used to
determine salaries and its subjective expectation of the potential for
appreciation in the market value of the Common Stock. All final determinations
are subjective.
Stock options awarded under the Incentive Program generally vest over a
period of several years from the date of grant. This approach is designed to
align the interests of the executive officers with those of the Stockholders
over the long-term since the full benefits of the compensation package cannot be
realized unless stock price appreciation occurs over a number of years.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Levinson, the current Chairman of the Board, President and Chief
Executive Officer of the Company, is paid a salary of $150,000 per annum as more
fully described in "Employment Agreements/ Separation Agreements" above.
12
<PAGE> 15
Ms. Karen Brenner, the former Chairman of the Board, Chief Executive
Officer and President of the Company, was paid a salary and severance payment of
$208,330, as more fully described in "Employment Agreements/Separation
Agreements" above.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION PLANS
It is the policy of the Board or the Compensation Committee to have the
executive compensation plans of the Company treated as fully tax deductible
under Section 162(m) of the Internal Revenue Code, as amended (the "Code")
whenever, in the judgment of the Board or the Compensation Committee, to do so
would be consistent with the business objectives of those plans. All
compensation paid during fiscal year 1998 was, in fact, fully tax deductible.
The Board or the Compensation Committee, however, reserves the right to grant
future compensation awards in such amounts as it may deem appropriate in the
exercise of its business judgment, notwithstanding whether those awards are
fully tax deductible.
Board of Directors
ROBERT A. LEVINSON
JOSEPH S. DIMARTINO
HERBERT S. FRIEDMAN
RALPH LANGER
13
<PAGE> 16
INDEPENDENT AUDITORS
(PURPOSE 2)
Arthur Andersen LLP ("Arthur Andersen"), certified public accountants, have
been appointed by the Board, as independent auditors for the Company to examine
and report on its financial statements for the fiscal year ending December 31,
1999, which appointment is being submitted to the Stockholders for ratification
at the Meeting. Representatives of Arthur Andersen are expected to be present at
the Meeting, with the opportunity to make a statement if they desire to do so,
and to be available to respond to appropriate questions. The appointment of the
independent auditors will be ratified if it receives the affirmative vote of the
holders of a majority of shares of the Capital Stock of the Company present at
the Meeting, in person or by proxy, and entitled to vote thereon. Submission of
the appointment of Arthur Andersen to the Stockholders for ratification will not
limit the authority of the Board to appoint another accounting firm to serve as
independent auditors if the auditors resign or their engagement is otherwise
terminated.
The Board recommends a vote FOR the appointment of Arthur Andersen LLP as
independent auditors of the Company.
STOCKHOLDERS' PROPOSALS
Any proposal by stockholders of the Company intended to be presented at the
2000 Annual Meeting of Stockholders must be received by the Company at its
principal executive office not later than December 6, 1999 for inclusion in the
Company's proxy statement and form of proxy relating to that meeting. Any such
proposal must also comply with the other requirements of the proxy solicitation
rules of the Securities and Exchange Commission.
ANNUAL REPORT
Concurrently with the mailing of these proxy materials, the Company is
mailing a copy of its Annual Report to Stockholders for the fiscal year ended
December 31, 1998. Such Annual Report is not to be regarded as proxy
solicitation material.
UPON WRITTEN REQUEST BY A STOCKHOLDER ENTITLED TO VOTE AT THE 1999 ANNUAL
MEETING, THE COMPANY WILL FURNISH THAT PERSON WITHOUT CHARGE WITH A COPY OF THE
FORM 10-K ANNUAL REPORT FOR 1998 WHICH IS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO. If the
person requesting the report was not a Stockholder of record on April 16, 1999,
the request must contain a good faith representation that the person making the
request was a beneficial owner of the Common Stock of the Company at the close
of business on such date. Requests should be addressed to Carlyle Industries,
Inc., One Palmer Terrace, Carlstadt, New Jersey 07072 (Attn: Edward F. Cooke).
OTHER BUSINESS
(PURPOSE 3)
Management does not know of any other matters to be presented at the
Meeting for action by the Stockholders. If any other matters requiring a vote of
the Stockholders arise at the Meeting or any adjournment thereof, it is intended
that votes will be cast pursuant to the proxies with respect to such matters in
accordance with the best judgment of the persons acting under the proxies.
SOLICITATION AND EXPENSES OF SOLICITATION
Officers and employees of the Company may solicit proxies by personal
interview, mail, telegraph and telephone. No compensation will be paid by the
Company to any person in connection with the solicitation of
14
<PAGE> 17
proxies. Brokers, bankers and other nominees will be reimbursed for
out-of-pocket and other reasonable clerical expenses incurred in obtaining
instructions from beneficial owners of the Company's stock. The cost of
preparing this Proxy Statement and all other costs in connection with
solicitation of proxies for the Annual Meeting of Stockholders are being borne
by the Company.
Even if you plan to attend the Meeting in person, please sign, date and
return the enclosed proxy promptly. If you attend the Meeting, your proxy will
be voided at your request and you can vote in person. A postage-paid
return-addressed envelope is enclosed for your convenience. Your cooperation in
giving this matter your immediate attention and in returning your proxies will
be appreciated.
By order of the Board of Directors,
EDWARD F. COOKE
Secretary
April 20, 1999
15
<PAGE> 18
CARLYLE INDUSTRIES, INC.
PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CARLYLE
INDUSTRIES, INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 18, 1999
The undersigned appoints Edward F. Cooke and Robert A. Levinson, and each
of them, with full power of substitution in each, the proxies of the
undersigned, to represent the undersigned and vote all shares of Carlyle
Industries, Inc. Common Stock which the undersigned may be entitled to vote at
the Annual Meeting of Stockholders to be held on May 18, 1999, and at any
adjournment or postponement thereof, as indicated on the reverse side.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.
(Continued, and to be signed and dated on reverse side.)
CARLYLE INDUSTRIES, INC.
P.O. Box 11424
New York, N.Y. 10203-0424
<PAGE> 19
1. Election of Directors FOR all nominees listed below.
WITHHOLD AUTHORITY to vote *EXCEPTIONS
for all nominees listed below.
Nominees: Robert A. Levinson, Joseph S. DiMartino, Herbert S. Friedman and
Ralph Langer (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE
PROVIDED BELOW.)
*Exceptions __________________________________________________________
2. To ratify the selection of Arthur Andersen LLP as the independent auditors
of the Company for the fiscal year ending December 31, 1999.
FOR / / AGAINST / / ABSTAIN / /
3. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
CHANGE OF ADDRESS OR
COMMENTS MARK HERE
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign full corporate name by an authorized officer. If a partnership, please
sign in partnership name by any authorized person.
Date: _________________, 1999
_____________________________
signature
_____________________________
signature if held jointly
Votes must be indicated
(x) in black or blue ink [x]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING ENCLOSED
ENVELOPE.
