<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY REGISTRANT /X/ FILED BY A PARTY OTHER THAN A REGISTRANT / /
--------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
EKCO GROUP, INC.
(Name of Registrant as Specified in Its Charter)
EKCO GROUP, INC.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / 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
EKCO Group, Inc.
98 Spit Brook Road, Suite 102
Nashua, New Hampshire 03062
Telephone 603 888-1212
FAX 603 888-1427
EKCO GROUP, INC. [LOGO]
March 31, 1995
To Our Stockholders:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
which will be held at The Westin Hotel, Copley Place Boston, 10 Huntington
Avenue, Boston, Massachusetts, on Thursday, May 25, 1995 at 9:30 a.m., local
time. All holders of the Corporation's outstanding stock as of March 27, 1995
are entitled to vote at the Annual Meeting.
A current report on the business operations of the Corporation will be
presented after the Annual Meeting and stockholders will have an opportunity to
ask questions. Members of management will be present to answer any additional
questions you may have.
We hope you will be able to attend the Annual Meeting. Whether or not you
expect to attend, you are urged to complete, sign, date and return the proxy
card promptly in the enclosed envelope in order to make certain that your shares
will be represented at the Annual Meeting.
Sincerely,
/s/ Robert Stein
ROBERT STEIN
President and
Chief Executive Officer
<PAGE> 3
EKCO GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 25, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of EKCO
GROUP, INC. will be held on Thursday, May 25, 1995, at 9:30 a.m., local time, at
The Westin Hotel, Copley Place Boston, 10 Huntington Avenue, Boston,
Massachusetts, for the following purposes:
1. To elect seven directors to hold office until the next annual meeting
of stockholders and until their successors are chosen and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The close of business on March 27, 1995 has been fixed as the record date
for determining the stockholders entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. The transfer books will not be closed.
A list of the stockholders entitled to vote at the Annual Meeting will be
open to examination by stockholders for any purpose relevant to the Annual
Meeting, during ordinary business hours, for a period of ten days prior to the
Annual Meeting at the Company's Corporate Headquarters in Nashua, New Hampshire
and at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One
Financial Center, Boston, Massachusetts. The list will likewise be available at
the Annual Meeting.
It will assist us in keeping down the expenses of the Annual Meeting if
stockholders fill out, sign, date and return their proxies promptly in the
enclosed postage-paid return envelopes. The proxy is revocable by the person
giving it at any time prior to exercise by written notice received by the
Company, by delivery of a duly executed later dated proxy, or by voting the
shares in person at the Annual Meeting.
By order of the Board of Directors,
JEFFREY A. WEINSTEIN
Secretary
March 31, 1995
<PAGE> 4
EKCO GROUP, INC.
98 SPIT BROOK ROAD
NASHUA, NEW HAMPSHIRE 03062
PROXY STATEMENT
This Proxy Statement is being sent beginning on or about March 31, 1995 to
all holders of the common stock, $.01 par value per share ("Common Stock"), and
Series B ESOP Convertible Preferred Stock, par value $.01 per share ("ESOP
Preferred Stock"), of Ekco Group, Inc. (the "Company") entitled to vote at the
Annual Meeting of Stockholders to be held on May 25, 1995 (the "Annual Meeting")
in order to provide information on the business to be transacted. Stockholders
of record at the close of business on March 27, 1995 are entitled to vote at the
meeting. As of that date, the outstanding voting stock of the Company consisted
of 18,281,854 shares of Common Stock and 1,570,799 shares of ESOP Preferred
Stock, with each share being entitled to one vote.
A proxy card is enclosed for your use. YOU ARE SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY TO VOTE YOUR SHARES AND TO SIGN, DATE AND RETURN THE
PROXY CARD IN THE ENCLOSED SELF-ADDRESSED POSTAGE-PAID ENVELOPE.
The shares represented by the proxies received will be voted as you
specify, or, if no specification is made, will be voted for the election of each
of management's seven nominees for election as director. Shares of ESOP
Preferred Stock and Common Stock held by the trustee of the Company's Employees'
Stock Ownership Plan Trust and not allocated to the accounts of plan
participants will be voted in proportion to the votes of the shares of ESOP
Preferred Stock which have been allocated to the accounts of participants.
You may revoke your proxy at any time before it is voted at the Annual
Meeting by delivering written notice of revocation to the Secretary of the
Company before the meeting, by submitting a later dated proxy, or by voting the
shares in person at the Annual Meeting. The solicitation will be primarily by
mail, but may also include telephone, facsimile or oral communication by
directors, officers and employees of the Company who will receive no additional
compensation for any such solicitation. All costs of the solicitation of proxies
will be borne by the Company. The Company will reimburse brokerage companies and
others for their costs in forwarding proxy materials to the beneficial owners of
stock.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of capital stock entitled to vote is necessary to constitute
a quorum at the Annual Meeting. Under Delaware law, with respect to the
tabulation of votes, abstentions are treated as present or represented and
entitled to vote at the Annual Meeting, while non-votes are treated as not being
present or represented and entitled to vote at the Annual Meeting.
KPMG Peat Marwick LLP, who was the Company's independent auditor for the
fiscal year ended January 1, 1995 ("Fiscal 1994") and who has been reappointed
for the current fiscal year, is expected to have a representative present at the
Annual Meeting who will have an opportunity to make a statement if he or she so
desires and who will be available to respond to appropriate questions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 27, 1995, the number of shares
of Common Stock and ESOP Preferred Stock beneficially owned by each person known
by the Company to own more than 5% of either the outstanding Common Stock or
ESOP Preferred Stock, by each nominee for election as director, by each
executive officer named in the Summary Compensation Table on page 12 hereof, and
by all current executive
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<PAGE> 5
officers and directors as a group, and the percentage of the outstanding Common
Stock and ESOP Preferred Stock which such shares represent. Except as indicated
in the accompanying notes and except in the case of the Trust of the Ekco Group,
Inc. Employees' Stock Ownership Plan (the "ESOP") which holds shares of ESOP
Preferred Stock and Common Stock on behalf of participants in the ESOP and the
participants in the ESOP who have voting power and investment power as set forth
in the ESOP, the owners have sole voting and investment power with respect to
the shares. Attached to each share of Common Stock is a Preferred Share Purchase
Right to acquire one-hundredth of a share of the Company's Series A Junior
Participating Preferred Stock, par value $.01 per share, which rights are not
presently exercisable.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
AMOUNT AND NATURE OF PERCENT OF OF BENEFICIAL
BENEFICIAL OWNERSHIP COMMON OWNERSHIP OF ESOP PERCENT OF ESOP
BENEFICIAL OWNERS OF COMMON STOCK STOCK(1) PREFERRED STOCK PREFERRED STOCK
--------------------------- -------------------- ---------- ----------------- ---------------
<S> <C> <C> <C> <C>
The 1818 Fund, L. P. ...... 2,985,820(2)(3) 14.7% -0- --
Brown Brothers Harriman &
Co.
T. Michael Long
Lawrence C. Tucker
59 Wall Street
New York, NY 10005
Trust of the Ekco 2,541,757(4) 13.9% 1,570,799(4) 100%
Group Inc................
Employees' Stock
Ownership Plan
c/o Ekco Group, Inc.
98 Spit Brook Road
Nashua, NH 03062
Heine Securities Corp. .... 1,429,900(5) 7.8% -0- --
Michael F. Price
51 J.F.K. Parkway
Short Hills, NJ 07078
Robert Stein............... 1,015,306(6)(7) 5.3% 12,291 *
(8)(9)
Jeffrey A. Weinstein....... 690,824(6)(7)(8) 3.7% 11,565 *
(9)(10)
Ronald N. Fox.............. 198,115(7)(8)(9) 1.1% 10,564 *
Donato A. DeNovellis....... 142,118(6)(7)(8) * -0- --
Richard J. Corbin.......... 77,053(7)(8) * -0- --
Herbert M. Stein........... 138,915(11) * -0- --
Andrew D. Dunn............. 90,714(11) * -0- --
Bill W. Sorenson........... 45,714(11) * -0- --
Stuart B. Ross............. 34,373(11) * -0- --
Malcolm L. Sherman......... 5,000 * -0- --
All Current Directors...... 5,575,274(2)(3)(6) 25.4% 39,803 2.5%
and Executive Officers (7)(8)(9)
as a Group (11 persons) (10)(11)(12)
<FN>
---------------
* Represents holdings of less than one percent.
(1) Computed on the basis of 18,281,854 shares of Common Stock outstanding,
plus, in the case of any person deemed to own shares of Common Stock as a
result of owning options or rights to purchase Common Stock exercisable
within 60 days or ESOP Preferred Stock which is presently convertible into
</TABLE>
2
<PAGE> 6
an equal number of shares of Common Stock by the record owner, the
additional shares of Common Stock which would be outstanding upon such
exercise, purchase or conversion by such person or group.
(2) The 1818 Fund, L. P. (the "Fund") acquired the securities pursuant to the
terms of a Securities Purchase Agreement dated as of December 22, 1992
between the Fund and the Company pursuant to which the Fund acquired from
the Company 881,542 shares of Common Stock and a Note which may be
converted into an aggregate of 2,095,238 shares of Common Stock, subject to
adjustment. The Company may, at its election, at any time and from time to
time during the period which began on November 30, 1994 and ends on
November 29, 1996, provided certain conditions described in the Note are
satisfied, redeem all or a portion of the Note. At any time on and after
November 30, 1996, the Company shall have the right, at its election, to
redeem the Note in whole, but not in part, for the redemption price as
provided in the Note. The Note may be converted, at any time and from time
to time, subject to compliance with any applicable government filings
requirements, in whole or in part, at the holder's option into a number of
shares of Common Stock equal to the principal amount of the Note being
converted divided by the Conversion Price, initially set at $10.50, subject
to anti-dilution adjustments described in the Note.
Brown Brothers Harriman & Co. is the general partner of the Fund, and Mr.
Long, a director of the Company, and Mr. Tucker, who are general partners
of Brown Brothers Harriman & Co., or either of them, have voting and
investment power, through the general partner, with respect to the shares
of Common Stock and the Note purchased by the Fund and the shares of Common
Stock into which the Note is convertible.
(3) Includes 9,040 shares of Common Stock currently issuable upon the exercise
of a stock option held by Mr. Long. Of such shares 6,036 are subject to
repurchase by the Company.
(4) The Trust of the ESOP disclaims beneficial ownership of the shares held by
it for the participants in the ESOP.
(5) Heine Securities Corporation ("HSC") is an investment adviser registered
under the Investment Advisers Act of 1940, one or more of whose advisory
clients is the legal owner of the shares. Pursuant to investment advisory
agreements with such clients, HSC has sole voting authority and investment
discretion with respect to all such shares. Mr. Michael F. Price is
President of HSC, in which capacity he exercises voting control and
dispositive power over the shares reported by HSC. Mr. Price, therefore,
may be deemed to have indirect beneficial ownership over the shares.
Neither Mr. Price nor HSC has any interest in dividends or proceeds from
the sale of such securities nor owns any such securities for his or its own
account. Mr. Price and HSC disclaim beneficial ownership of all such
shares.
(6) Includes 167,088 shares owned jointly by Mr. Robert Stein with his wife,
Elaine R. Stein, 7,500 shares owned jointly by Mr. DeNovellis with his
wife, and 19,040 shares owned jointly by another executive officer with his
wife as to which such persons may be deemed to share voting and investment
power, but excludes 200 shares owned by Mr. and Mrs. Stein's children,
6,000 shares owned by Mr. Weinstein's children and 1,500 shares owned by
another executive officer's children as to which Mr. Weinstein and such
other executive officer disclaim beneficial ownership. In addition, Mrs.
Elaine R. Stein will be deemed to beneficially own the remainder of Mr.
Robert Stein's shares.
(7) Includes the following number of shares purchased pursuant to the Company's
1984 and 1985 Restricted Stock Purchase Plans which are held in escrow, are
presently subject to repurchase by the Company and as to which certain
transfer restrictions apply: Mr. Robert Stein, 102,182 shares; Mr.
Weinstein, 30,444 shares; Mr. DeNovellis, 40,080 shares; Mr. Corbin, 47,765
shares; Mr. Fox, 2,540 shares; and all current executive officers and
directors as a group, 244,923 shares.
(8) Includes 731,359, 317,991, 74,538, 29,288, 148,500, and 1,536,605 shares of
Common Stock currently issuable upon the exercise of stock options held by
Mr. Robert Stein, Mr. Weinstein, Mr. DeNovellis,
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<PAGE> 7
Mr. Corbin, Mr. Fox, and all current executive officers and directors as a
group, respectively. Of the foregoing shares, the following number are
presently subject to repurchase by the Company: Mr. Robert Stein, 156,359
shares; Mr. Weinstein, 51,157 shares; Mr. DeNovellis, 57,871 shares; Mr.
Corbin, 29,288 shares; Mr. Fox, 30,666 shares; and all current executive
officers and directors as a group, 325,269 shares.
(9) Includes the number of shares of ESOP Preferred Stock listed in the table,
if any, and 2,386, 2,287, 2,102 and 8,004 shares of Common Stock allocated
to the ESOP accounts of Mr. Robert Stein, Mr. Weinstein, Mr. Fox and all
current executive officers and directors as a group, respectively. Mr. Neil
R. Gordon, an executive officer, is also the trustee of the ESOP, but the
1,570,799 shares of ESOP Preferred Stock and the 970,958 shares of Common
Stock held by the ESOP and not allocated to the accounts of executive
officers are not included in calculating the number of shares held by "All
Current Directors and Executive Officers as a Group," and Mr. Gordon
disclaims beneficial ownership of shares of ESOP Preferred Stock and Common
Stock held by the ESOP (other than shares specifically allocated to his
account under the ESOP).
(10) Includes 187,626 shares registered in the name of Mr. Robert S. Frem
acquired by Mr. Frem pursuant to the terms of a Stock Purchase and Sale
Agreement dated January 8, 1992 (the "Stock Purchase Agreement") among Mr.
Frem, Mr. Bruce Phillips, Frem Corporation, the Company and Ekco
Housewares, Inc., pursuant to which Mr. Frem and Mr. Phillips sold all of
the issued and outstanding capital stock of Frem Corporation to the Company
and Ekco Housewares, Inc. The foregoing shares were transferred by the
Company to Mr. Frem in accordance with the terms of the Stock Purchase
Agreement, an Escrow Agreement dated January 8, 1992 (the "Escrow
Agreement") and a related irrevocable proxy given to Mr. Weinstein. All
such shares are subject to the Escrow Agreement and a severance arrangement
between Mr. Frem and Frem Corporation, pursuant to which shares are
released from escrow to Mr. Frem at the accelerated rate of 16,000 shares a
month for thirteen months beginning in February 1995 and 11,626 shares in
March 1996. Mr. Frem's employment with Frem Corporation terminated in
January 1995. During the period in which such shares are subject to the
terms of the Escrow Agreement, Mr. Frem agreed to vote all such shares in
accordance with the recommendation of the Company's Board of Directors, or
in the absence of a recommendation, in the same proportion as the votes
cast by all other holders of the Company's securities with respect to the
matter. In order to effectuate this agreement with respect to the voting of
such shares, Mr. Frem granted an irrevocable proxy to Mr. Weinstein. Mr.
Weinstein has no economic interest in the foregoing shares and paid no
consideration for them. Mr. Weinstein disclaims beneficial ownership of all
such shares.
(11) Includes 45,714 shares of Common Stock currently issuable upon the exercise
of stock options held by each of Mr. Herbert Stein and Mr. Dunn, 35,714
shares currently issuable upon the exercise of a stock option held by Mr.
Sorenson, 31,373 shares currently issuable upon the exercise of a stock
option held by Mr. Ross, and Mr. Long's 6,036 shares referenced in Footnote
3 above.
(12) Includes 11,410 shares of Common Stock held by retirement plans of
subsidiary corporations of which Mr. Neil R. Gordon is trustee and as to
which Mr. Gordon disclaims beneficial ownership.
ELECTION OF DIRECTORS
Directors will hold office until the next annual meeting of stockholders
and until their successors are duly chosen and qualified or until their earlier
resignation or removal. The Board of Directors has inquired of each nominee and
determined that each will serve if elected. If any of the nominees becomes
unavailable for election, the Board of Directors may designate substitute
nominees, in which event shares of Common Stock and ESOP Preferred Stock,
pursuant to directions received from the ESOP participants, represented by
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<PAGE> 8
proxies will be voted for such substitute nominees unless an instruction to the
contrary is indicated on the proxy.
Biographical summaries and ages as of March 27, 1995 of those persons
nominated by the Board of Directors for election as directors are listed below.
No nominee for director or executive officer has any family relationship with
any other nominee or with any other executive officer of the Company.
ROBERT STEIN; AGE 55; PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY.
Mr. Robert Stein has served as a director of the Company since 1982. He has
been President and Chief Executive Officer since 1986. Mr. Stein served as Chief
Financial Officer of the Company from July 1980 until July 1993.
JEFFREY A. WEINSTEIN; AGE 44; EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL
COUNSEL OF THE COMPANY.
Mr. Weinstein became a director of the Company in 1986. He has served as
Executive Vice President since 1985, as Secretary since 1988 and as General
Counsel since 1978.
T. MICHAEL LONG; AGE 51; GENERAL PARTNER, BROWN BROTHERS HARRIMAN & CO. (PRIVATE
BANK AND A MEMBER OF THE NEW YORK STOCK EXCHANGE AND OTHER STOCK EXCHANGES);
CO-MANAGER, THE 1818 FUND, L.P. (LIMITED PARTNERSHIP).
Mr. Long has served as a director of the Company since May 1993 pursuant to
the terms of the Securities Purchase Agreement described above in Footnote 2 to
the table in the section entitled "Security Ownership of Certain Beneficial
Owners and Management" above which provides that commencing with the annual
meeting held in 1993 (or upon the occurrence of certain specified events) and at
each annual meeting of stockholders of the Company thereafter, so long as The
1818 Fund L.P. (the "Fund") holds either (i) shares of voting stock acquired
upon the conversion or exchange of the Note or purchased under the Securities
Purchase Agreement, or (ii) the Note convertible or exchangeable (after giving
effect to any adjustments) into shares of voting stock that in either case in
the aggregate represent five percent or more of the total number of shares of
voting stock outstanding (assuming full conversion of the Note into Common
Stock), the Fund shall be entitled to designate one director to be nominated to
the Company's Board of Directors. The number of director nominees that may be
designated is subject to increase upon a change of control (as defined in the
Securities Purchase Agreement), certain events of default under the Note or a
recapitalization of the Company.
Mr. Long has served as a general partner of Brown Brothers Harriman & Co.
since 1984 and as co-manager of the Fund since 1989. He is a director of
Columbia Healthcare Corp. (acute care hospitals), Nuevo Energy Company (oil and
gas exploration and production company) and Gulf Canada Resources, Limited
(Canadian oil and gas exploration and production company).
STUART B. ROSS; AGE 57; EXECUTIVE VICE PRESIDENT, XEROX CORPORATION (WORLD-WIDE
DOCUMENT PROCESSING SERVICING COMPANY); CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
XEROX FINANCIAL SERVICES, INC. (FINANCIAL SERVICES COMPANY).
Mr. Ross has been a director of the Company since 1989. He has served in
his present positions with Xerox Corporation and Xerox Financial Services, Inc.
since May 1990. He was Senior Vice President of Xerox Corporation from June 1989
to May 1990, Chief Financial Officer from October 1985 to May 1990 and Vice
President, Finance from October 1985 to June 1989.
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<PAGE> 9
MALCOLM L. SHERMAN; AGE 63; CHAIRMAN AND DIRECTOR, K. T. SCOTT, LTD. (CHAIN OF
WALLPAPER AND WINDOW STORES); CHAIRMAN AND DIRECTOR OF GORDON BROTHERS, INC.
(JEWELRY DISTRIBUTOR AND FINANCIAL SERVICES COMPANY).
Mr. Sherman is a nominee for election as a director of the Company. He has
served in his present position with K. T. Scott, Ltd. since January 1991 and
with Gordon Brothers, Inc. since February 1993. Mr. Sherman has served as a
consultant to the Company from February 1993 to the present and receives a
current annual retainer of $50,000 for such services. He served as President and
Chief Executive Officer of Morse Shoe, Inc. (shoe manufacturer, importer and
retailer) from January 1992 until December 1993, and as Chairman and Chief
Executive Officer of Channel Home Centers, Inc. (do-it-yourself super stores)
from March 1989 until December 1991. Prior to 1988, Mr. Sherman served Zayre
Stores (chain of general merchandise discount stores) in a number of capacities,
including Chairman from 1982 to 1987, President from 1979 to 1982 and General
Manager from 1977 to 1979, and served as Executive Vice President of Zayre
Corporation (group of companies engaged in retail businesses) from 1973 to 1987.
Mr. Sherman is a director of Maxwell Shoe Co. (shoe importer) and One Price
Clothing, Inc. (chain of sportswear stores).
BILL W. SORENSON; AGE 63; CHAIRMAN AND DIRECTOR, MANAGEMENT RESOURCES OF
AMERICA, INC. (MANAGEMENT CONSULTING FIRM); CHAIRMAN AND DIRECTOR, AMERICAN
SPORTS PRODUCTS GROUP INC. (HOLDING COMPANY WHICH OWNS SPORTS EQUIPMENT
MANUFACTURING BUSINESSES).
Mr. Sorenson has served as a director of the Company since 1986. He has
held his present positions with Management Resources of America, Inc. since 1986
and with American Sports Products Group Inc. since May 1994. He served as Chief
Executive Officer of Management Resources of America, Inc. from 1987 to May
1994. Mr. Sorenson serves as a director of PDG Environmental, Inc.
(environmental services company).
HERBERT M. STEIN; AGE 66; CHAIRMAN, CHIEF EXECUTIVE OFFICER AND DIRECTOR,
ORGANOGENESIS, INC. (BIOTECHNOLOGY DEVELOPMENT COMPANY); PRESIDENT, H. M. STEIN
& CO., INC. (FINANCIAL MANAGEMENT FIRM).
Mr. Stein has served as a director of the Company since 1981. He has been
Chairman of Organogenesis, Inc. since February 1991, its Chief Executive Officer
and a director since 1987 and President of H. M. Stein & Co., Inc. since 1970.
Mr. Stein is a director of Biomedical Waste Systems, Inc. (biomedical waste
collection, processing and disposal company).
COMMITTEES OF BOARD OF DIRECTORS AND MEETING ATTENDANCE
Audit Committee. The Audit Committee consists of three non-employee
directors: Andrew D. Dunn, T. Michael Long and Herbert M. Stein. The Audit
Committee met once during Fiscal 1994. The Audit Committee reviews the
engagement of the Company's independent accountants and their independence. The
Audit Committee also reviews the audit fees of the independent accountants and
the adequacy of the Company's internal accounting procedures.
Compensation Committee. The Compensation Committee consists of three
non-employee directors: T. Michael Long, Stuart B. Ross and Bill W. Sorenson.
The Compensation Committee met eight times during Fiscal 1994. The Compensation
Committee reviews, approves and makes recommendations on the Company's
compensation policies, practices and procedures to ensure that legal and
fiduciary responsibilities of the Board of Directors are carried out and that
such policies, practices and procedures contribute to the success of the
Company. The Compensation Committee administers the Company's 1984 Restricted
Stock Purchase Plan, 1985 Restricted Stock Purchase Plan and 1987 Stock Option
Plan and it has made or recommended all grants or awards under these plans, as
well as administers the Company's 1984 Employee Stock Purchase Plan.
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<PAGE> 10
Executive Committee. The Executive Committee consists of two employee
directors, Robert Stein and Jeffrey A. Weinstein. The Executive Committee met
three times during Fiscal 1994. The Executive Committee has the authority to
take all actions that could be taken by the full Board of Directors with certain
exceptions. The Executive Committee meets as necessary between regularly
scheduled meetings to take such action as is advisable for the efficient
operation of the Company.
No Other Committees. The Company does not have a standing Nominating
Committee or any other committee.
Meeting Attendance. During Fiscal 1994, there were five meetings of the
Board of Directors, and the various committees of the Board of Directors met a
total of twelve times. All the incumbent members of the Board of Directors
attended at least 83% of the aggregate of all meetings held by the Board of
Directors and the Committees of the Board upon which they served. In addition,
from time to time, the members of the Board of Directors and its committees act
by unanimous written consent pursuant to Delaware law.
REQUIRED VOTE FOR APPROVAL -- The affirmative vote of holders of a majority
of the issued and outstanding shares of the capital stock of the Company present
in person or represented by proxy and entitled to vote at the Annual Meeting is
required to elect each director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF EACH PERSON
NOMINATED AS A DIRECTOR.
COMPENSATION OF DIRECTORS
DIRECTORS' FEES
Directors of the Company who are not employees receive an annual fee of
$10,000, a fee of $1,000 for each Board of Directors' meeting attended and
reimbursement of meeting travel expenses. Such directors also receive a fee of
$1,000 for attendance at each Committee meeting that is not held on the same day
as a Board of Directors' meeting. Employee directors do not receive additional
compensation for serving on the Board of Directors.
DIRECTORS' STOCK OPTIONS
As of March 27, 1995, the Company had 361,493 shares available for future
grants under its 1988 Directors' Stock Option Plan, which, as amended, is
hereinafter referred to as the "Directors' Plan." The Directors' Plan provides
for the granting of non-qualified stock options to purchase the Company's Common
Stock to non-employee directors of the Company. Under the terms of the
Directors' Plan, options are automatically granted to Outside Directors at the
time they so qualify. An "Outside Director" is a director who is not an employee
of the Company or an affiliate (as defined) of the Company, who has not been so
employed within one year before the time of grant, and has been elected as a
director by the stockholders of the Company. No Outside Director may be granted
more than one option pursuant to the Directors' Plan. The option exercise price
for each share of Common Stock covered by an option granted under the Directors'
Plan is the fair market value (as defined) of such share on the date the option
is granted. Each option granted under the Directors' Plan is for that number of
shares determined by dividing $100,000 by the fair market value (as defined) of
a share of Common Stock, but in no event may the number of shares be greater
than 50,000 shares. Each option is for a term of 10 years from the date of
grant, subject to earlier termination as provided in the Directors' Plan.
All outstanding options are exercisable at any time and from time to time
in accordance with the terms of the Directors' Plan. Shares purchased pursuant
to the exercise of any such option are subject to repurchase by the Company
within three years of the date of grant of the option at the option exercise
price upon termination
7
<PAGE> 11
of the Outside Director's directorship with the Company as follows: as to all
shares so purchased if termination occurs prior to the first anniversary of the
date of grant of the option; as to up to two-thirds of the shares purchased
pursuant to the option if termination occurs prior to the second such
anniversary; and as to up to one-third of the shares purchased pursuant to the
option if termination occurs prior to the third such anniversary. The shares
cease to be subject to the right of the Company to repurchase them if
termination of the directorship is due to the death of the Outside Director or
if a change of control (as defined) of the Company occurs at any time before the
Outside Director's directorship is terminated.
During Fiscal 1994, no options were granted and no options were exercised
pursuant to the Directors' Plan.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the three
member Compensation Committee of the Board of Directors, which has sole
responsibility for the executive compensation program. Membership in the
Compensation Committee has been limited to non-employee directors who qualify as
disinterested persons for purposes of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934. The decisions of the Compensation Committee
relating to salary and bonus compensation of the Company's executive officers
are reviewed and approved by all outside directors of the Board. Decisions
regarding awards under the Company's stock-based compensation plans are made by
the Compensation Committee.
The following is a report covering compensation paid or accrued in Fiscal
1994, which is submitted by the Board's Compensation Committee during Fiscal
1994, whose members were Stuart B. Ross, Bill W. Sorenson, Andrew D. Dunn (from
January 1, 1994 through May 17, 1994) and T. Michael Long (from and after May
17, 1994). This report addresses the elements of the executive compensation
program for Fiscal 1994, including a description of the decisions and actions
taken by the Compensation Committee with regard to Fiscal 1994 compensation and
a discussion of the decisions regarding the Fiscal 1994 compensation of the
Company's Chief Executive Officer (the "CEO") and the Company's other executive
officers (collectively, "Senior Management"). The report also includes a summary
of the changes made in fiscal 1995 which became effective in the current year.
The Compensation Committee is continuing its review of the implications of
proposed tax regulations which would impose a $1 million limit on deductions of
compensation.
GENERAL -- The executive compensation program was amended and fully
restated in fiscal 1995 to cover compensation beginning in the current year. The
intention of both the program in effect for Fiscal 1994 and the program as
amended and restated in fiscal 1995 is to enable the Company to attract and
retain highly qualified executive management for the Company and its
subsidiaries and to motivate such individuals by providing competitive total
compensation based in part on their performance and in part on the performance
of the Company. Both programs provide variable performance incentives based upon
the profitability and growth in earnings of the Company and the employee's
individual performance and contribution to the achievement of objectives
established by the Company.
The following is a brief summary of certain features of the 1995
Restatement of the Incentive Compensation Plan for Executive Employees of Ekco
Group, Inc. and its Subsidiaries (the "1995 Incentive Plan"): The 1995 Incentive
Plan consists of three components: Base compensation, annual incentive
compensation awards (bonuses), and long-term incentive awards (restricted stock
and stock options). With respect to annual incentive compensation awards, as of
the last day of each calendar year participants will be allocated awards from a
profit sharing pool to be determined by the Compensation Committee as follows:
At the beginning of each year, a target bonus amount will be specified for each
participant and the profit sharing
8
<PAGE> 12
pool will be comprised of the sum of all such target bonus amounts increased (or
reduced) by 10% of the positive (or negative) variance between actual Operating
Profit (as defined) for the fiscal year and the Operating Profit which would
have been earned if the Target Return on Capital (as defined and determined by
the Compensation Committee for the fiscal year) had been earned for such fiscal
year. One-half of the amount of the profit sharing pool will then be allocated
among eligible participants according to the ratios of the target bonus amounts
determined for them at the start of the year compared to the total of target
bonus amounts for all participants in the profit sharing pool. The balance of
the amounts in such profit sharing pool will be allocated to eligible
participants by the Compensation Committee in its discretion. The 1995 Incentive
Plan provides the participants with the option to have all or a portion of any
bonus and any increase in base compensation paid either (i) in cash, (ii)
deferred until a specified date or time with interest to be paid by the Company
at a rate agreed to by the Committee, (iii) in shares of restricted stock valued
at 130% of the foregone cash payment based upon the market price of such Common
Stock on the last trading day of the year preceding the year to which the
payment relates, or (iv) stock options valued at 250% of the foregone cash
payment according to the Black-Scholes method of valuation and calculated as of
the last trading day of the year preceding the year to which the payment
relates, with restricted stock and stock options subject to the terms of the
respective Company's shareholder-approved stock plans and such additional
restrictions as may be specified in the 1995 Incentive Plan. Long term incentive
awards of restricted stock will be subject to further restrictions which relate
to Target Return on Capital. In the event of a Change of Control (as defined),
the 1995 Incentive Plan provides for accelerated payment of unpaid annual
incentive compensation amounts, the lapsing of all restrictions on restricted
stock and of the Company's repurchase right on stock options.
The executive compensation program put in place in a prior year and
effective in Fiscal 1994 consisted of (i) base salaries which were structured in
a prior year to be set at levels consistent with median rates paid by other
companies for positions similar in importance and responsibility to those at the
Company, as reported by surveys compiled by Towers Perrin, an independent
consulting firm retained by the Compensation Committee (the "Independent
Consultant") as well as to reflect individual performance, and (ii) the
Incentive Compensation Plan for Executive Employees of Ekco Group, Inc. and its
Subsidiaries, as amended in October 1994 (the "1994 Incentive Plan"), which was
comprised of the following: (a) an annual incentive component based upon
measurement of the Company's performance over a one-year period and the
participant's individual performance as determined and recommended by the CEO
for approval by the Compensation Committee; (b) an incentive component based
upon the Company's attainment of intermediate term performance goals over three
three-year periods beginning in fiscal 1992, and (c) a long-term component of
awards of stock options and restricted stock grants pursuant to the Company's
shareholder-approved stock plans. The annual, intermediate and long-term
performance incentive opportunities were intended to be competitive with
incentive compensation opportunities of companies with revenues and operational
characteristics comparable to the Company as evaluated and recommended by the
Independent Consultant.
The annual incentive component of the 1994 Incentive Plan was amended in
Fiscal 1994 to better account for special individual and group contributions by
basing part of the award for Fiscal 1994 on such individual efforts, whether
made singularly or as part of a group. The total amount available for bonuses to
all participants in the 1994 Incentive Plan was not increased in the aggregate.
The 1994 Incentive Plan provided that the gross amount available for
distribution to all participants would be determined under the terms of the
existing plan, with the requirement that the predetermined earnings per share
("EPS") target be attained for full awards, and that 50% of such achieved total
pool amount would be allocated pursuant to the formula provided for in the 1994
Incentive Plan, with remaining amounts to be allocated among participants by the
Compensation Committee, taking into account the recommendations of the CEO for
participants other than himself.
9
<PAGE> 13
FISCAL 1994 ANNUAL COMPENSATION -- Annual cash compensation for the CEO and
Senior Management (except for that of Richard J. Corbin as discussed below)
consisted of base salary and the annual variable performance compensation earned
under the 1994 Incentive Plan. Total annual cash compensation has varied from
year to year based upon achievement of financial performance goals established
by the Compensation Committee under the annual incentive component of such plan
and changes in base salary. In January 1994, the Compensation Committee reviewed
the performance of the Company for fiscal 1993 against the target EPS
established in the Company's budget. The target was not achieved for that year.
As a result, no increases in salary were made in the salaries of the CEO or the
three members of Senior Management who were employed by the Company at that
time. Richard J. Corbin, who was hired in May 1994 as President of Ekco
Housewares, Inc., a wholly-owned subsidiary of the Company, and became Executive
Vice President, Marketing and Sales, of the Company in October 1994, did not
participate in the 1994 Incentive Plan. Mr. Corbin's initial base salary was
negotiated by the CEO and approved by the Compensation Committee based upon the
evaluation of the position which he was filling and his experience and
qualifications. In October 1994 when Richard J. Corbin became an executive
officer of the Company and when Donato A. DeNovellis was promoted to Executive
Vice President, Finance and Administration, Mr. Corbin and Mr. DeNovellis each
received an increase in their salary commensurate with their expanded
responsibilities as determined by the Compensation Committee upon the
recommendation of the CEO.
In January 1994, the Compensation Committee reviewed and approved the 1994
annual variable incentive award formula for payment to the CEO and Senior
Management (except for Richard J. Corbin as discussed below). For Fiscal 1994,
the CEO based his recommendations upon the achievement of specific corporate
goals, including the corporate restructuring announced in the fourth quarter of
fiscal 1993. In Fiscal 1994, 93% of the target EPS goal was achieved, which
result entitled participants to 50% of their respective formula awards, i.e.,
25% of the potential full award, and the remaining 50% of the award, i.e., 25%
of the potential full award, was pooled and allocated based upon the
participants' individual contribution. The following awards were made under this
portion of the 1994 Incentive Plan as a percentage of the participant's 1993
base salary: The CEO, 25%; Jeffrey A. Weinstein, 15%; Donato A. DeNovellis, 21%;
and Ronald N. Fox, 8%. For Fiscal 1994, Mr. Corbin received a bonus negotiated
in the same manner as his base salary.
FISCAL 1994 INCENTIVE COMPONENT BASED ON INTERMEDIATE GOALS -- The portion
of the 1994 Incentive Plan involving the Company's attainment of intermediate
goals was based upon the growth in EPS over a rolling three-year period. As
amended, the 1994 Incentive Plan provided that accruals under this portion of
the plan were "frozen" as of December 31, 1994 and payment of awards, if any,
which were to be made in future years pursuant to the terms of the 1994
Incentive Plan were not accelerated. This portion of the 1994 Incentive Plan was
based on an approximate 25% compounded growth in EPS per year for fiscal years
1992 and 1993 and 15% for Fiscal Year 1994 in order for plan participants to
receive 100% of the award and a minimum 10% compounded growth in EPS per year
below which no award could be earned. The maximum award (100%) was determined on
the basis of a percentage of the executive officer's salary for each year in the
measuring period (for the CEO, the maximum award was 30%, and for Jeffrey A.
Weinstein, Ronald N. Fox and Donato A. DeNovellis, 20%.) In Fiscal 1994, 93% of
the target EPS growth rate was achieved and participants received payment for
the first three-year performance cycle (fiscal 1992 through Fiscal 1994) as a
percentage of the participant's Fiscal 1994 base salary as follows: The CEO,
15%, and Jeffrey A. Weinstein, Donato A. DeNovellis, and Ronald N. Fox, 10%.
Appropriate amounts were calculated for the second three-year performance cycles
(fiscal 1993 through fiscal 1995, of which only Fiscal 1994 was relevant because
the minimum level for fiscal 1993 was not met) and the third such performance
cycle (Fiscal 1994 through fiscal 1996, of which only Fiscal 1994 was relevant),
which awards will be paid in early fiscal 1996 and fiscal 1997, respectively,
when such awards would have been paid under this portion of the 1994 Incentive
Plan.
FISCAL 1994 INCENTIVE COMPONENT BASED ON LONG-TERM GOALS -- The incentive
component of the 1994 Incentive Plan based on long-term goals consisted of
awards of restricted shares of Common Stock pursuant to
10
<PAGE> 14
the Company's 1984 and 1985 Restricted Stock Purchase Plans (the "Restricted
Stock Plans") and of stock options pursuant to the 1987 Stock Option Plan (the
"Stock Option Plan"). In January 1994, stock options were awarded to the CEO and
three members of Senior Management pursuant to the Stock Option Plan, and in May
1994, Richard J. Corbin was awarded a stock option, all of which are more fully
described below. No awards of restricted stock were made to the CEO or Senior
Management in Fiscal 1994.
Stock option grants provide the right to purchase shares of Common Stock at
the fair market value (the average of the high and low trading prices) on the
date of grant. Each stock option for the CEO and three members of Senior
Management becomes exercisable immediately but is subject to repurchase by the
Company within three years of the date of grant of the option.
The Committee has typically granted stock options to the CEO, Senior
Management and other employees at its January meeting each year. In January
1994, the Stock Plan Committee granted the stock options, reflected in the
tables that follow, to the CEO and three members of Senior Management. In May
1994, the Compensation Committee granted a stock option to Richard J. Corbin
when he became employed by Ekco Housewares, Inc. Mr. Corbin's stock option is
exercisable in equal installments over a five-year period beginning on the first
anniversary of the date of grant of the option. The number of shares covered by
each such grant reflect median competitive industry practice as analyzed and
reported in a prior year by the Independent Consultant in its Long-Term
Incentive Compensation Survey. Approximately 160 general industrial companies
were surveyed at that time and were representative of those included in both
peer groups used for the performance graph below. The Independent Consultant
recommended that grants be made consistent with median grants made by other
companies for positions similar in importance and responsibility to those at the
Company. Actual grants were determined with additional consideration given to
individual performance contributions after review of grants made in prior years.
In the case of the CEO and three members of Senior Management, the stock options
were determined by formula (1993 base compensation multiplied by a percentage,
which for the CEO was 85% and for Senior Management was a weighted average of
35%, divided by future option value determined by multiplying the fair market
value on the grant date by a 5-year growth rate, less a present value discount
rate) plus a discretionary award of additional shares based upon fiscal 1993
performance, including improved financial performance over fiscal 1992, the
acquisition of Kellogg Brush Manufacturing Co. during fiscal 1993 and the
Company's restructuring/reorganization plan announced in fiscal 1993. With
respect to Richard J. Corbin, the stock option award was determined in
connection with his being employed as President of Ekco Housewares, Inc. after a
review of options held by other members of management and competitive industry
practice.
The tables below and the accompanying footnotes reflect the decisions
covered by the above discussion.
Stuart B. Ross Bill W. Sorenson Andrew D. Dunn T. Michael Long
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions. Mr. Dunn, who served on the Compensation Committee from the
beginning of Fiscal 1994 until May 17, 1994, is a member of a law firm which has
served as New Hampshire counsel to the Company during Fiscal 1994 and during the
current fiscal year.
11
<PAGE> 15
PERFORMANCE GRAPH
The following table compares the total shareholder return on the Company's
Common Stock with the Standard & Poors 500 Index and the Standard & Poors
Consumer Goods Index for a period of five years and assumes $1.00 was invested
on December 31, 1989. Total return assumes that dividends, if any, were
reinvested. The stock price performance in the table below is not necessarily
indicative of future price performance.
<TABLE>
<CAPTION>
Measurement Period Ekco Group S&P 500 In- S&P Consumer
(Fiscal Year Covered) Inc. dex Goods Index
<S> <C> <C> <C>
12/89 1.00 1.00 1.00
12/90 1.05 0.98 1.04
12/91 3.67 1.27 1.42
12/92 3.76 1.37 1.52
12/93 2.62 1.51 1.51
12/94 2.43 1.53 1.50
</TABLE>
SUMMARY COMPENSATION TABLE
The table below sets forth summary information as to compensation received
by the Company's CEO and each of the four other most highly compensated persons
who were serving as executive officers of the Company at the end of Fiscal 1994
for services rendered in all capacities to the Company during the last three
fiscal years.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------- --------------------- PAYOUTS
OTHER RESTRICTED SECURITIES ------------
NAME AND ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) OPTIONS COMPENSATION
POSITION(S) YEAR ($)(1) ($)(2) ($)(3) ($)(4)(5) (#)(4)(6) ($)(7)
-------------------------------- ---- -------- -------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Stein.................... 1994 $370,000 $148,000 n/a -- 75,000 $ 78,486
President and 1993 $370,000 -0- n/a -- 120,000 $71,488
Chief Executive Officer 1992 $330,000 $288,750 n/a -- 77,000 $90,271
Jeffrey A. Weinstein............ 1994 $219,600 $ 53,910 n/a -- 22,000 $ 30,245
Executive Vice President, 1993 $219,600 -0- n/a -- 60,000 $34,866
Secretary and 1992 $191,000 $104,095 n/a -- 27,500 $43,848
General Counsel
</TABLE>
12
<PAGE> 16
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------- --------------------- PAYOUTS
OTHER RESTRICTED SECURITIES ------------
NAME AND ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) OPTIONS COMPENSATION
POSITION(S) YEAR ($)(1) ($)(2) ($)(3) ($)(4)(5) (#)(4)(6) ($)(7)
-------------------------------- ---- -------- -------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Donato A. DeNovellis............ 1994 $198,714 $58,492 n/a -- 20,000 $18,463
Executive Vice President, 1993 $ 85,385 -0- $14,328 $200,625 30,000 $15,155
Finance and Administration, 1992 -- -- -- -- -- --
and Chief Financial Officer
Ronald N. Fox................... 1994 $188,871 $33,400 $19,040 -- 16,000 $34,996
Senior Vice President, 1993 $184,000 -0- n/a -- 60,000 $39,310
Operations, Frem 1992 $164,800 $79,200 n/a -- 27,500 $50,234
Corporation (8)
Richard J. Corbin............... 1994 $152,875 $40,000 n/a -- 30,000 --
Executive Vice President, 1993 -- -- -- -- -- --
Marketing and Sales (9) 1992 -- -- -- -- -- --
<FN>
---------------
(1) The amounts shown include the individual's before-tax contributions to the
Company's 401(k) retirement plan.
(2) The amounts shown are bonuses paid pursuant to the annual and intermediate
portions of the Company's 1994 Incentive Plan.
(3) Unless included in the table, non-cash benefits were less than the lesser
of 10% of each such person's respective cash compensation or $50,000. The
amounts shown for Mr. Fox and Mr. DeNovellis are comprised of $14,875 and
$14,097, respectively, of relocation expenses and $4,165 and $231,
respectively, attributed to their personal use of Company-owned automobiles.
(4) Pursuant to the Company's Series A Junior Participating Preferred Stock
Purchase Rights Plan, with each share of Common Stock issued, including
shares of Common Stock issued in connection with a compensation plan, a
right to purchase one-hundredth of a share of the Company's Series A Junior
Participating Preferred Stock will be issued. Such rights are not currently
exercisable.
(5) On December 31, 1994, the following number of restricted shares which had
the following dollar values based upon the $6.625 closing price on December 30, 1994
of the Company's Common Stock on the New York Stock Exchange as reported by
The Wall Street Journal (net of the consideration paid), were held in escrow
for each individual pursuant to the Company's 1984 Restricted Stock Purchase Plan
(the "1984 Plan"): Robert Stein, 6,102 shares at a value of $39,816;
Jeffrey A. Weinstein, 3,544 shares at a value of $23,125; Donato A. DeNovellis,
20,000 shares at a value of $130,300; and Ronald N. Fox, 2,540 shares at a value
of $16,574.
Under the terms of the 1984 Plan (and the purchase agreement with Donato A. DeNovellis),
restrictions on disposition lapse at the rate of 20% per year on each of the first,
second, third, fourth and fifth anniversaries of the closing date (as defined),
provided that the purchaser is at each such anniversary date an employee or director
of the Company. The terms of purchase for Robert Stein, Jeffrey A. Weinstein and
Ronald N. Fox include the following additional terms: Restrictions on disposition
lapse either (i) upon the tenth anniversary of the closing date (as defined),
provided that the purchaser is an employee or director of the Company on such date,
or (ii) at an earlier date after the trading price (as defined) of a share of the
Company's Common Stock reaches or exceeds a specified target price for 20 consecutive
days after purchase of the shares, which condition has been met. The terms of purchase
which are presently operative for Messrs. Stein, Weinstein and Fox are those of the
1984 Plan described above.
</TABLE>
13
<PAGE> 17
Restrictions on disposition lapse as follows under the terms of purchase
for Donato A. DeNovellis pursuant to the 1984 Plan: 20% per year on each of
the first, second, third, fourth and fifth anniversaries of the closing
date.
Dividends will be paid on restricted stock purchased pursuant to the 1984
and 1985 Restricted Stock Plans beginning in fiscal 1995; however, the
Company did not declare any dividends on its Common Stock in Fiscal 1994.
(6) Options to purchase the number of shares shown were granted pursuant to the
Company's 1987 Stock Option Plan.
(7) The amounts shown consist of (i) the sum of the economic benefit to each
person for split dollar life insurance coverage plus the current dollar
value of the remaining premiums paid in 1994, as follows: Robert Stein,
$64,816; Jeffrey A. Weinstein, $16,471; Donato A. DeNovellis, $18,463;
Ronald N. Fox, $23,127; and Richard J. Corbin, -0- since no premiums were
paid on his behalf in Fiscal 1994; and (ii) the value of shares of ESOP
Preferred Stock and Common Stock allocated by the Company to the account of
each person for plan year 1994 pursuant to the ESOP, as follows: Robert
Stein, $13,670; Jeffrey A. Weinstein, $13,774; Ronald N. Fox, $11,869; and
Donato A. DeNovellis and Richard J. Corbin, each -0- as they were not
eligible to participate in the ESOP in Fiscal 1994.
(8) Mr. Fox became Senior Vice President, Operations, of Frem Corporation, a
wholly-owned subsidiary of the Company, effective February 12, 1995.
(9) Mr. Corbin became Executive Vice President, Marketing and Sales, on October
25, 1994 at a current annual salary of $248,000. Mr. Corbin joined the
Company as President of Ekco Housewares, Inc. in May 1994.
OPTION GRANTS TABLE
The following table sets forth information as to option grants made by the
Company during Fiscal 1994 to CEO and each of the four other most highly
compensated executive officers pursuant to the Company's 1987 Stock Option Plan:
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE GRANT DATE
OPTIONS IN FISCAL PRICE EXPIRATION PRESENT
NAME (#)(1) YEAR ($/SH) DATE VALUE ($)(2)
----------------------------------- --------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C>
Robert Stein....................... 75,000 19.4% $7.5625 02-25-04 $319,405
Jeffrey A. Weinstein............... 22,000 5.7% $7.5625 02-25-04 $ 93,692
Donato A. DeNovellis............... 20,000 5.2% $7.5625 02-25-04 $ 85,175
Richard J. Corbin.................. 30,000 7.8% $7.0000 05-09-04 $130,349
Ronald N. Fox...................... 16,000 4.1% $7.5625 02-25-04 $ 68,140
<FN>
---------------
(1) The options were granted pursuant to the Company's 1987 Stock Option Plan
and individual option agreements and are subject to adjustment for stock
splits or dividends, combinations, recapitalizations or similar
transactions. The options for Robert Stein, Jeffrey A. Weinstein, Donato A.
DeNovellis and Ronald N. Fox are exercisable at any time and from time to
time in accordance with the terms of the individual option agreements
between the Company and the optionees. Shares purchased pursuant to the
exercise of any such option are subject to repurchase by the Company within
three years of the date of grant of the option at the option exercise price
upon the termination of the employee's employment with the Company as
follows: as to all shares so purchased if such termination occurs prior to
the first anniversary of the date of grant of the option; as to up to
two-thirds of the shares which may be purchased pursuant to the option if
termination occurs prior to the second such anniversary; and as to up to
one-third
</TABLE>
14
<PAGE> 18
of the shares which may be purchased pursuant to the option if termination
occurs prior to the third such anniversary. The shares cease to be subject
to the right of the Company to purchase them if termination of employment
is due to the death or disability (as defined) of the employee, or if a
change of control (as defined) of the Company occurs at any time before the
employee's employment is terminated. The option for Mr. Corbin was made
pursuant to his employment as an executive of Ekco Housewares, Inc. and
provides for exercise in equal installments over a period of five years
beginning on the first anniversary of the date of grant by Mr. Corbin so
long as he is continuously employed by the Company or an Affiliate from the
date of grant through the date of exercise. Mr. Corbin's option will be
fully exercisable on and after the fifth anniversary of the date of grant.
Mr. Corbin's option becomes fully exercisable upon the occurrence of his
death or disability (as defined).
(2) Based on the Black-Scholes option pricing model adapted for use in valuing
executive stock options. The actual value, if any, an executive may realize
will depend on the excess of the stock price over the exercise price on the
date the option is exercised, so that there is no assurance that the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model. The estimated values under that model are based upon
the following assumptions: interest rate of 7.9% based on the 10-year Strip
Treasury yield on actively traded issues adjusted to constant maturities
for the week ending December 31, 1994; stock price volatility of .3732, and
a future dividend yield of 0.31%. In calculating the Grant Date Present
Value with respect to the options for Robert Stein, Jeffrey A. Weinstein,
Donato A. DeNovellis and Ronald N. Fox, it was assumed that one-third of
each such option had an effective option term of nine years and one month;
one-third, an effective option term of eight years and one month; and
one-third an effective option term of seven years and one month, based on
the effect of the repurchase provisions described in Footnote 1 above. In
calculating the Grant Date Present Value with respect to the option for Mr.
Corbin, the option term of 10 years was utilized.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
There were no option exercises during Fiscal 1994 by the CEO and each of
the four other most highly compensated executive officers. The following table
sets forth information as to the number of securities underlying options and
value of such securities held by each such person:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE (1) UNEXERCISABLE (2)
---------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Robert Stein.............................................. 665,000(3) $1,425,813
Jeffrey A. Weinstein...................................... 301,500(3) $ 713,750
Donato A. DeNovellis...................................... 50,000(3) $ -0-
Ronald N. Fox............................................. 148,500(3) $ 189,063
Richard J. Corbin......................................... 0/30,000 $ 0/0
<FN>
---------------
(1) All options are currently exercisable except for the option of Richard J. Corbin,
more fully described above in Footnote (1) to the Option Grants Table.
</TABLE>
15
<PAGE> 19
(2) Based upon the $6.625 closing price of the Company's Common Stock on
December 30, 1994 as reported by The Wall Street Journal. Each of the
options had an exercise price equal to the fair market value of the
Company's Common Stock on the dates the options were granted.
(3) Includes the following number of shares of Common Stock subject to
repurchase by the Company as of December 31, 1994: Robert Stein, 180,667
shares; Jeffrey A. Weinstein, 71,167 shares; Donato A. DeNovellis, 40,000
shares; and Ronald N. Fox, 65,167 shares.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Information as to the estimated annual benefits payable upon retirement to
the CEO and the following three most highly compensated executive officers
pursuant to the Company's Supplemental Executive Retirement Plan ("SERP") is as
follows: Robert Stein, $132,000; Jeffrey A. Weinstein, $47,151; Donato A.
DeNovellis, $41,782; Ronald N. Fox, $49,111; and Richard J. Corbin, $35,027. The
SERP is a non-qualified retirement plan which uses a defined benefit formula.
The basic formula allows each executive officer an annual retirement benefit
equal to his compensation as of the July 1, 1992 effective date of the SERP (or
as to Mr. DeNovellis, his July 13, 1993 date of employment by the Company, and
as to Mr. Corbin, his May 9, 1994 date of employment by Ekco Housewares, Inc.),
multiplied by each year of credited service up to a maximum of 20 years, and
further multiplied by the following designated accrual percentage for each
participant: Robert Stein, 2%; Jeffrey A. Weinstein, 1.25%; Donato A.
DeNovellis, 1.40%; Ronald N. Fox, 1.75%; and Richard J. Corbin, 1.50%. The
foregoing percentages were based upon a projected benefit as of July 1, 1992 (or
July 13, 1993 or May 9, 1994 for Mr. DeNovellis and Mr. Corbin, respectively),
which took into account social security benefits and employer-paid benefits,
including the ESOP. For increases in final average 3-year base compensation,
substantially similar accrual rates apply. The benefit is accrued over the
lesser of 20 years or total years of credited service until age 65. Under the
SERP, participants are entitled to payment upon age 65, early retirement, death,
disability (as defined), termination with vested benefits or in the event of
termination within three years of a change in control (as defined).
EMPLOYMENT, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
The Company has employment agreements with its CEO, Senior Management and
certain other management personnel, and Ekco Housewares, Inc. has an employment
agreement with Richard J. Corbin (collectively, "Employment Agreements").
Employment Agreements with Robert Stein, Jeffrey A. Weinstein, Donato A.
DeNovellis and Ronald N. Fox were amended and restated effective April 18, 1994
(and April 15, 1994 as to Mr. DeNovellis) and currently provide for base
salaries of $380,000, $225,000, $212,000, and $190,000, respectively. Mr.
Corbin's base salary is currently $253,000. Mr. Fox entered into an amended and
restated Employment Agreement with the Company and Frem Corporation ("Frem"), a
wholly-owned subsidiary of the Company, effective February 12, 1995, which
provides for the same terms and conditions as in his April 18, 1994 Employment
Agreement, except that Frem has assumed all obligations other than employment
benefits, such as health and life insurance, and certain other benefits, such as
payment following a change of control of the Company, which have remained with
the Company. The Company has guaranteed Frem's performance under Mr. Fox'
Employment Agreement.
The Employment Agreements provide for increases as determined by the Board
of Directors based on performance reviews performed at least annually. The terms
of the Employment Agreements began on April 18, 1994, with the exception of Mr.
Corbin's which began on May 20, 1994 and Mr. Fox' which was amended and restated
effective February 12, 1995, and continue until terminated by the executive or
the Company. The Employment Agreements provide for salary continuation for 36
months (as to Messrs. Stein and Weinstein), 24 months (as to Messrs. DeNovellis
and Fox) and 12 months (as to Mr. Corbin), in the event of the total and
permanent disability (as defined) of the executive, and for a lump sum payment
of one year's salary in addition to payment received under the Company's group
life plan in the event of the
16
<PAGE> 20
executive's death. In addition, in the event of the executive's termination of
employment as a result of death or permanent and total disability, the executive
shall have free title to all shares of stock of the Company which have been
granted, sold or optioned (subject to his obligation to pay the option exercise
price to the extent theretofore not paid) to the executive by the Company at any
time prior to such termination.
The Employment Agreements provide that if employment of the executive is
terminated by the Company without good cause (as defined) prior to a change of
control (as defined) of the Company, the Company is obligated to pay the
executive a lump sum (the "Aggregate Amount") equal to (i) the executive's then
current salary plus (ii) the maximum payable to him under all specified
compensation bonus plans and arrangements for the fiscal year in which the
termination occurs, plus (iii) an amount equal to the value of the securities,
cash or other property allocated to the executive's account in the ESOP for the
fiscal year preceding the fiscal year in which the termination occurs, in
addition to any distribution from the ESOP to which the executive may be
entitled (which, as to Mr. Stein, is equal to three times the Aggregate Amount,
as to Messrs. Weinstein, DeNovellis and Fox, two times, and as to Mr. Corbin,
one time), and the executive shall be entitled to the continuation of medical,
dental and life insurance coverage until the earlier of either his full time
employment by a third party or, as to Mr. Stein, three years, as to Messrs.
DeNovellis, Fox and Weinstein, two years, and as to Mr. Corbin, one year,
following such termination. In addition, the executive shall have free title to
all shares of stock of the Company which have been granted, sold or optioned
(subject to his obligation to pay the option exercise price to the extent
theretofore not paid) to the executive by the Company at any time prior to such
termination.
Following a change of control (as defined) and upon an event of
constructive termination (as defined) or termination of the executive's
employment by the Company without good cause, the Employment Agreements of
Messrs. Stein, Weinstein, DeNovellis and Fox require that the Company pay each
such executive three times the Aggregate Amount as well as the rights to shares
of the Company's stock described above.
If the executive elects to terminate his Employment Agreement after 6
months but within 24 months of the occurrence of a change of control of the
Company, unless such change of control was approved by resolution of the
Company's Board of Directors with at least two-thirds of the directors serving
as of April 1994 voting in favor (or if Mr. Corbin elects to terminate his
Employment Agreement within 180 days after a change of control), the Company is
obligated to pay the executive three times the Aggregate Amount (or as to Mr.
Corbin, one time the Aggregate Amount), and the executive shall be entitled to
the continuation of benefit coverage until the earlier of his full time
employment or three years (or as to Mr. Corbin, one year). In addition,
immediately upon a change of control, whether or not the executive's employment
is terminated or a constructive termination occurs at such time or thereafter,
the executive shall have free title to all shares of stock of the Company which
have been granted, sold or optioned to the executive by the Company at any time
prior thereto (subject to his obligation to pay the option exercise price to the
extent not theretofore paid), which provision also applies to Richard J. Corbin.
The Employment Agreements with Messrs. Stein, Weinstein, DeNovellis and Fox
provide that in order to assure prompt payment of amounts due upon termination
and as necessary to secure the Company's obligations under any stock
appreciation rights plan or other equity-linked plan (excluding stock options,
restricted stock subject to repurchase rights, or any equity plan, of which
there is currently none, which gives the executive ownership of shares), the
Company has agreed to keep in place irrevocable letters of credit in amounts
equal to at least four times the annual salary of such individuals. The
Employment Agreements include a covenant against competition with the Company
extending for a period of 36 months as to Mr. Stein, 24 months as to Messrs.
Weinstein, DeNovellis and Fox, and 12 months as to Mr. Corbin, after termination
for any reason.
17
<PAGE> 21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
THE 1818 FUND, L.P. SHARE PURCHASE
The 1818 Fund, L. P. (the "Fund") entered into a Securities Purchase
Agreement dated as of December 22, 1992 between the Fund and the Company
pursuant to which the Fund acquired from the Company 881,542 shares of Common
Stock and a Note which may be converted into an aggregate of 2,095,238 shares of
Common Stock, subject to adjustment, for an aggregate purchase price of
approximately $30 million. The Company may, at its election, at any time and
from time to time during the period which began on November 30, 1994 and will
end on November 30, 1996, provided certain conditions described in the Note are
satisfied, redeem all or a portion of the Note. In addition, at any time on and
after November 30, 1996, the Company shall have the right, at its election, to
redeem the Note in whole, but not in part, for the redemption price as provided
in the Note. The Note may be converted, at any time and from time to time,
subject to compliance with any applicable government filings requirements, in
whole or in part, at the holder's option into a number of shares of Common Stock
equal to the principal amount of the Note being converted divided by the
Conversion Price, initially set at $10.50, subject to anti-dilution adjustments
described in the Note.
Brown Brothers Harriman & Co. is the general partner of the Fund, and Mr.
Long, a general partner in the firm of Brown Brothers Harriman & Co. and a
director of the Company, shares voting and investment power with another such
partner, through the general partner, with respect to the shares of Common Stock
and the Note which were purchased by the Fund and the shares of Common Stock
into which the Note is convertible.
As a result of the private placement, as of March 27, 1995, the Fund
beneficially owned 14.7% of the Company's outstanding shares of Common Stock. In
connection with the transaction, the Fund, Brown Brothers Harriman & Co. and the
general partners of Brown Brothers Harriman & Co. agreed to certain standstill
provisions limiting their ability to purchase additional securities of the
Company.
ESOP LOANS
On February 23, 1989, the Company's Board of Directors adopted the ESOP.
Simultaneously with the adoption of the ESOP, the Board of Directors authorized
1.8 million shares of ESOP Preferred Stock. On February 28, 1989, the Company
sold 1.8 million shares of ESOP Preferred Stock at a price of $3.61 per share to
the ESOP trust in exchange for an approximately $6.5 million 25-year
non-recourse note bearing interest at 11% per annum (the "ESOP Note").
On May 24, 1989, the trustee of the ESOP (who is an executive officer of
the Company) entered into a loan agreement with a bank pursuant to which the
ESOP borrowed $6,426,000 (the "ESOP Bank Loan") and the Company agreed to
guarantee the ESOP Bank Loan and to purchase the note from the bank on four
business days notice. The proceeds of the ESOP Bank Loan were used to repay the
ESOP Note to the Company. The Company is required to maintain investments (as
defined) held or pledged as collateral with the bank in an amount equal to the
outstanding ESOP Bank Loan balance. The ESOP Bank Loan bears interest at either
78% of the bank's commercial base rate or at negotiated rates, and matures in
May 2009.
On October 1, 1990, the Board of Directors of the Company authorized the
Company to lend funds to the trustee to make purchases of 1,000,000 shares of
Common Stock on the open market or from the Company as he deemed appropriate,
and as of April 18, 1994, the trustee of the ESOP had acquired 1,000,000 shares
of Common Stock for the ESOP. The Company and the trustee of the ESOP entered
into a twenty-year term loan effective October 1, 1990 pursuant to which the
Company has loaned approximately $3.3 million to the ESOP at an interest rate of
10% per annum. Through January 1, 1995, 212,418 of such shares have been
allocated to employee accounts.
18
<PAGE> 22
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Under Rule 14a-8 promulgated under the Securities Exchange Act of 1934,
shareholders of the Company may present proper proposals for inclusion in the
Company's proxy statement and for consideration at the next annual meeting of
stockholders by submitting their proposals to the Company in a timely manner. In
order to be considered for inclusion in the proxy statement distributed to
stockholders prior to the annual meeting in 1996, a stockholder proposal must be
received by the Company no later than December 2, 1995 and must otherwise comply
with the requirements of Rule 14a-8. Requests should be delivered in writing to
Jeffrey A. Weinstein, Executive Vice President, Secretary and General Counsel,
Ekco Group, Inc., 98 Spit Brook Road, Nashua, New Hampshire 03062.
The Board of Directors does not know of any other business to be acted upon
at the Annual Meeting other than that which is explained in this Proxy
Statement. If any other business calling for a vote of the stockholders is
properly presented at the Annual Meeting, the persons holding the proxies will
vote your shares in accordance with their best judgment on such matters.
In order that your shares may be represented if you do not plan to attend
the Annual Meeting, and in order to assure the required quorum, please fill out,
sign, date and return your proxy promptly.
By Order of the Board of Directors
JEFFREY A. WEINSTEIN
Secretary
Dated: March 31, 1995
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY
1, 1995 (OTHER THAN THE EXHIBITS THERETO) FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WHICH PROVIDES ADDITIONAL INFORMATION ABOUT THE COMPANY, IS
AVAILABLE TO BENEFICIAL HOLDERS OF THE COMPANY'S COMMON STOCK AND ESOP PREFERRED
STOCK WITHOUT CHARGE UPON WRITTEN REQUEST TO NEIL R. GORDON, TREASURER, EKCO
GROUP, INC., 98 SPIT BROOK ROAD, NASHUA, NEW HAMPSHIRE 03062.
19
<PAGE> 23
APPENDIX
PROXY PROXY PROXY
----- ----- -----
EKCO GROUP, INC.
98 Spit Brook Road
Nashua, New Hampshire 03062
PROXY FOR MAY 25, 1995 ANNUAL STOCKHOLDERS' MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned stockholder of Ekco Group, Inc. hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and the accompanying
Proxy Statement, and does hereby appoint Robert Stein and Jeffrey A. Weinstein,
and each of them, as attorneys-in-fact and proxies of the undersigned, with
full power of substitution, to attend the Annual Meeting of Stockholders to be
held May 25, 1995 at The Westin Hotel, Copley Place Boston, 10 Huntington
Avenue, Boston, Massachusetts, at 9:30 a.m., local time, and all adjournments
thereof, and to vote the shares of capital stock of Ekco Group, Inc. held in the
name of the undersigned on the record date for said meeting for the election of
directors. Said attorneys-in-fact shall vote in accordance with their best
judgment as to any other matter which may properly come before the meeting or
any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED ON THE RESERVE SIDE. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF EACH OF MANAGEMENT'S NOMINEES FOR DIRECTOR. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE
FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR. IN THEIR DISCRETION, THE PROXIES
ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENTS THEREOF.
PLEASE MARK YOUR PROXY, DATE AND SIGN IT ON THE REVERSE SIDE AND RETURN
IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
<PAGE> 24
________ Please mark your
X votes as in this
________ example.
<TABLE>
<S> <C> <C> <C>
(1) ELECTION FOR all nominees WITHHOLD NOMINEES: T. Michael Long
OF listed to the right AUTHORITY to vote Stuart B. Ross
DIRECTORS (except as marked for all nominees Malcolm L. Sherman
to the contrary below). listed to the right. Bill W. Sorenson
________ ________ Herbert M. Stein
________ ________ Robert Stein
Jeffrey A. Weinstein
</TABLE>
INSTRUCTION: To withhold authority to vote for any
individual nominee(s), write the
the nominee(s) names below.
------------------------------------------------------------------------------
(2) OTHER The Proxies shall vote in their discretion upon such other
MATTERS: business as may properly come before the meeting or any
adjournment thereof.
Signature____________________ Date_____
Signature_____________________ Date_____
IF HELD JOINTLY
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S)
APPEAR HEREON. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full title as
such. Joint owners should each sign this
Proxy if the account is registered in the
name of a corporation, partnership or
other entity, a duly authorized individual
must sign on its behalf and give their
title. PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
