<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
WINDMERE-DURABLE HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
WINDMERE-DURABLE HOLDINGS, INC.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1998
------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Windmere-
Durable Holdings, Inc., a Florida corporation (the "Company"), will be held at
the University of Miami, James W. McLamore Executive Education Center, 5250
University Drive, Coral Gables, Florida 33124 on Tuesday, May 12, 1998, at 10:00
a.m. local time for the following purposes.
1. To elect five members to Class II of the Company's Board of Directors,
to serve until the 2001 Annual Meeting of Shareholders or until their successors
are duly elected and qualified;
2. To ratify the reappointment of Grant Thornton LLP, independent certified
public accountants, as the Company's auditors for the fiscal year ending
December 31, 1998; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on March 16, 1998 as
the record date for determining those shareholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournments thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed preaddressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
Jerald I. Rosen, Secretary
Miami Lakes, Florida
April 20, 1998
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. THOSE SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY
URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE.
SHAREHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING,
REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
<PAGE> 3
1998 ANNUAL MEETING OF SHAREHOLDERS
OF
WINDMERE-DURABLE HOLDINGS, INC.
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Windmere-Durable Holdings, Inc., a Florida corporation
(the "Company"), of proxies from the holders of the Company's Common Stock, par
value $.10 per share (the "Common Stock"), for use at the 1998 Annual Meeting of
Shareholders of the Company to be held on Tuesday, May 12, 1998, or at any
adjournment(s) or postponement(s) thereof (the "Annual Meeting"), pursuant to
the attached Notice of Annual Meeting. The approximate date that this Proxy
Statement and the enclosed form of proxy are first being sent to holders of
Common Stock is April 20, 1998. Shareholders should review the information
provided herein in conjunction with the Company's Annual Report to Shareholders
which accompanies this Proxy Statement. The Company's principal executive
offices are located at 5980 Miami Lakes Drive, Miami Lakes, Florida 33014-2467,
and its telephone number is (305) 362-2611.
INFORMATION CONCERNING PROXY
The enclosed form of proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person, at the Annual Meeting or by filing with the Company's
Secretary at the Company's principal executive offices a written revocation or
duly executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone, and the Company is using the
services of a proxy solicitation firm at a cost of up to $5,000. The Company's
employees will receive no compensation for soliciting proxies other than their
regular salaries. The Company may request banks, brokers and other custodians,
nominees and fiduciaries to forward copies of the proxy material to their
principals and to request authority for the execution of proxies. The Company
may reimburse such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
(1) The election of five members to Class II of the Company's Board of
Directors to serve until the 2001 Annual Meeting of Shareholders or until their
successors are duly elected and qualified;
(2) The ratification of the reappointment of Grant Thornton LLP,
independent certified public accountants, as the Company's auditors for the
fiscal year ending December 31, 1998; and
(3) Such other business as may properly come before the Annual Meeting,
including any adjournment(s) or postponement(s) thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (a) for the election of the four nominees for director named
below, and (b) for the ratification of the appointment of Grant Thornton LLP as
the Company's auditors. In the event a shareholder
<PAGE> 4
specifies a different choice by means of the enclosed proxy, his shares will be
voted in accordance with the specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on March 16, 1998 as
the record date (the "Record Date") for determining shareholders of the Company
entitled to notice of, and to vote at, the Annual Meeting. As of the Record
Date, there were 18,704,390 shares of Common Stock issued and outstanding, all
of which are entitled to be voted at the Annual Meeting. Each share of Common
Stock is entitled to one vote on all matters to be acted upon at the Annual
Meeting and neither the Company's Articles of Incorporation nor Bylaws provides
for cumulative voting rights.
The attendance, in person or by proxy, of the holders of a majority of the
shares of Common Stock entitled to vote at the Annual Meeting is necessary to
constitute a quorum. The affirmative vote of a majority of the shares of Common
Stock present in person or by proxy at the Annual Meeting is required for the
approval of each matter that is submitted to shareholders for approval, with the
exception of the vote for the Board of Directors, which shall be by a plurality
of the votes of the shareholders entitled to vote. An independent inspector
shall count the votes and ballots. Abstentions are considered as shares present
and entitled to vote but are not counted as votes cast in the affirmative on a
given matter. A broker or nominee holding shares registered in its name, or in
the names of its nominee, which are beneficially owned by another person and for
which it has not received instructions as to voting from the beneficial owner,
has, in the opinion of the Company, the discretion to vote the beneficial
owner's shares with respect to each of the matters presented at the Annual
Meeting. If a matter has been included in the proxy to which a broker or nominee
would not have discretionary voting power under applicable New York Stock
Exchange rules, any broker or nominee "non-votes" would not be considered as
shares entitled to vote on that subject matter and therefore would not be
considered by the inspector when counting votes cast on the matter. If less than
a majority of the outstanding shares of Common Stock are represented at the
Annual Meeting, a majority of the shares so represented may adjourn the Annual
Meeting from time to time without further notice.
2
<PAGE> 5
SECURITY OWNERSHIP
The following table sets forth, as of the Record Date, information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
director of the Company (certain of whom constitute nominees for election as
directors at the Annual Meeting), (ii) the Company's Chief Executive Officer and
four other most highly compensated officers of the Company during the year ended
December 31, 1997, (iii) each beneficial owner of more than 5% of the
outstanding Common Stock and (iv) all directors and executive officers of the
Company, as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(2)
--------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES PERCENT
--------------------------------------- --------- -------
<S> <C> <C>
Jerald I. Rosen............................................. 20,618(3) *
Harold Strauss.............................................. 32,104(4) *
Leonard Glazer.............................................. 1,552(5) *
David M. Friedson........................................... 753,489(6) 4.0
Barbara Friedson Garrett.................................... 160,315(7) *
Lai Kin..................................................... 1,783,000(8) 9.5
Felix S. Sabates............................................ 39,500(9) *
Arnold Thaler............................................... 45,472(10) *
Raymond So.................................................. 85,500(11) *
Susan J. Ganz............................................... 1,900(12) *
Thomas J. Kane.............................................. 8,500(13) *
Desmond Lai................................................. 38,500(14) *
Wendy Sager Pomerantz....................................... 17,807 *
All directors and executive officers as a group
(16 persons).............................................. 3,160,557(3)-(14) 16.4
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified above is c/o Windmere-Durable Holdings, Inc., 5980 Miami Lakes
Drive, Miami Lakes, Florida 33014-2467.
(2) Unless otherwise indicated, each person has sole voting and investment
power with respect to all such shares. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within
60 days from the Record Date upon the exercise of options.
(3) Includes the ownership of options to purchase 20,618 shares of Common Stock
that are exercisable within 60 days from the Record Date. Does not include
15,000 shares owned by the wife of Jerald I. Rosen, as to which shares Mr.
Rosen disclaims beneficial ownership.
(4) Includes the ownership of options to purchase 27,000 shares of Common Stock
that are exercisable within 60 days from the Record Date.
(5) Includes the ownership of options to purchase 500 shares of Common Stock
that are exercisable within 60 days from the Record Date.
(6) Includes the ownership of options to purchase 131,540 shares of Common
Stock that are exercisable within 60 days from the Record Date.
(7) Includes the ownership of options to purchase 114,000 shares of Common
Stock that are exercisable within 60 days from the Record Date.
(8) Includes the ownership of options to purchase 44,000 shares of Common Stock
that are exercisable within 60 days from the Record Date. Represents shares
owned by Ourimbah Investments, Limited, of which Mr. Lai Kin is Managing
Director. Mr. Lai Kin disclaims the ownership of any Common Stock owned by
his wife.
(9) Includes the ownership of options to purchase 39,500 shares of Common Stock
that are exercisable within 60 days from the Record Date.
(10) Includes the ownership of options to purchase 20,000 shares of Common Stock
that are exercisable within 60 days from the Record Date.
(11) Includes the ownership of options to purchase 59,000 shares of Common Stock
that are exercisable within 60 days from the Record Date.
3
<PAGE> 6
(12) Includes the ownership of options to purchase 1,500 shares of Common Stock
that are exercisable within 60 days from the Record Date.
(13) Includes the ownership of options to purchase 1,500 shares of Common Stock
that are exercisable within 60 days from the Record Date.
(14) Represents options to purchase 38,500 shares of Common Stock that are
exercisable within 60 days from the Record Date. Mr. Lai disclaims the
beneficial ownership of the shares of Common Stock held by his wife.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own more than ten percent of the Company's outstanding Common Stock,
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock. Such persons
are required by SEC regulation to furnish the Company with copies of all such
reports they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and verbal confirmations that no other reports
were required, all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners have been met.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE OFFICE
---- --- ------
<S> <C> <C>
Belvin Friedson...................... 73 Chairman Emeritus of the Board of Directors
David M. Friedson.................... 42 Chairman of the Board, President and Chief Executive
Officer
Arnold Thaler........................ 59 Senior Vice President
Barbara Friedson Garrett............. 45 Senior Vice President
Harry D. Schulman.................... 46 Senior Vice President
Lai Kin.............................. 67 Chairman of Durable
Raymond So........................... 48 Senior Vice President and Managing Director of Durable
Desmond Lai.......................... 33 Director of Durable
Burton A. Honig...................... 60 Vice President -- Finance
David W. O'Neill..................... 51 President, Windmere Consumer Products, Inc.
Jerald I. Rosen...................... 70 Secretary
</TABLE>
BELVIN FRIEDSON founded the Company and is currently Chairman Emeritus of
the Board of Directors and a consultant to the Company. Mr. Friedson was
Chairman of the Board from 1963 to January 1996. From 1963 to January 1987, Mr.
Friedson also served as Chief Executive Officer of the Company and from 1963 to
January 1985, he served as President of the Company.
DAVID M. FRIEDSON has served as Chairman of the Board of the Company since
April 1996, Chief Executive Officer of the Company since January 1987 and as
President of the Company since January 1985. From June 1976 to January 1985, Mr.
Friedson held various other management positions with the Company.
ARNOLD THALER has served as a Senior Vice President of the Company since
February 1996 and has served as an Executive Vice President -- Product
Development, Engineering and Manufacturing of the Company since December 1988.
For ten years prior thereto, Mr. Thaler held various other management positions
with the Company.
BARBARA FRIEDSON GARRETT has served as Senior Vice President of the Company
since February 1996 and has served as an Executive Vice President-Sales and
Marketing of the Company since December 1988. For ten years prior thereto, Ms.
Garrett held various other management positions with the Company.
4
<PAGE> 7
HARRY D. SCHULMAN has served as Senior Vice President of the Company since
February 1996 and Executive Vice President-Finance and Administration of the
Company since February 1993. From March 1990 to January 1993, he served as
Senior Vice President -- Finance and Administration of the Company. From January
1989 to March 1990, he was Vice President -- Financial Analysis and
Administration of the Company. Mr. Schulman has served as Chief Financial
Officer of the Company since March 1990.
LAI KIN has been Chairman of Durable Electrical Metal Factory, Ltd.
("Durable"), a subsidiary of the Company, since 1995. From 1973 to 1995, Mr. Lai
was Managing Director of Durable. In addition, Mr. Lai Kin has been Managing
Director of Ourimbah Investment, Limited ("Ourimbah"), a holding and investment
company, since 1989.
RAYMOND SO has served as a Senior Vice President of the Company and
Managing Director of Durable since February 1996. Prior to his current positions
and beginning in 1986, Mr. So held various senior executive management positions
with Durable.
DESMOND LAI has served as a Director of Durable since March 1993 and has
held various senior management positions with Durable for more than the last
five years.
BURTON A. HONIG has served as Vice President -- Finance of the Company
since December 1982. He was also Treasurer of the Company from March 1987 to
March 1992 and from August 1981 to December 1982. Mr. Honig is a Certified
Public Accountant.
DAVID W. O'NEILL has served as President of Windmere Consumer Products,
Inc., a subsidiary of the Company, since October 1984.
JERALD I. ROSEN has served as Secretary of the Company since 1977. Mr.
Rosen has been engaged in the practice of law since 1969 and has been a
Certified Public Accountant since 1952.
There is no family relationship between any director, executive officer or
nominee, except that David M. Friedson and Barbara Friedson Garrett are the son
and daughter of Belvin Friedson, and Desmond Lai is the son of Lai Kin.
Executive officers serve at the pleasure of the Board of Directors, except
as otherwise provided below. See "Executive Officers -- Certain Agreements."
ELECTION OF DIRECTORS
The Board of Directors of the Company is presently composed of four Class I
directors, five Class II directors and four Class III directors, and on a
rotating basis the terms of office of all of the directors in any one class
expires each year.
At the Annual Meeting of Shareholders, five directors, Leonard Glazer,
Harold Strauss, Ph.D., Lai Kin, Raymond So and Arnold Thaler, are to be
nominated for election to Class II of the Board of Directors, to serve until the
2001 Annual Meeting of Shareholders or until their respective successors are
duly elected and qualified.
Each of the nominees for election as a director of the Company is presently
a member of the Board of Directors of the Company. The Board of Directors has no
reason to believe that any nominee will refuse to act or be unable to accept
election; however, in the event that a nominee is unable to accept election,
proxies solicited hereunder will be voted in favor of the remaining nominees, if
any, and for such other persons as may be designated by the Board of Directors,
unless it is directed by a proxy to do otherwise.
David M. Friedson, Barbara Friedson Garrett, Lai Kin, Raymond So, Desmond
Lai, Arnold Thaler and Jerald I. Rosen, each of whom is an executive officer of
the Company, are also directors of the Company. Reference is made to the
description of the business experience of such individuals set forth above under
"Executive Officers."
5
<PAGE> 8
The following table sets forth certain information regarding each director
and nominee for director:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH THE COMPANY SINCE
---- --- ------------------------- --------
<S> <C> <C> <C>
NOMINEES FOR ELECTION TO CLASS II OF THE
BOARD
CLASS II DIRECTORS
Leonard Glazer............................ 75 Director 1979
Harold Strauss, Ph.D...................... 75 Director 1972
Lai Kin................................... 68 Director and Chairman of Durable 1989
Raymond So................................ 48 Director and Senior Vice President 1995
Arnold Thaler............................. 59 Director and Senior Vice President 1996
CONTINUING MEMBERS OF THE BOARD
CLASS I DIRECTORS
Barbara Friedson Garrett.................. 45 Director and Senior Vice President 1984
Susan J. Ganz............................. 38 Director 1996
Thomas J. Kane............................ 56 Director 1996
Felix S. Sabates.......................... 56 Director 1991
CLASS III DIRECTORS
David M. Friedson......................... 42 Chairman of the Board, President and
Chief Executive Officer 1982
Jerald I. Rosen........................... 70 Director and Secretary 1963
Wendy Sager Pomerantz..................... 43 Director 1998
Desmond Lai............................... 33 Director and Director of Durable 1996
</TABLE>
CLASS I OUTSIDE DIRECTORS
SUSAN J. GANZ has served as President and Chief Executive Officer of each
of Lion Brothers Co., Inc., a manufacturer of embroidered emblems, and
Chesapeake Cap Company, Inc., a manufacturer of headware, for more than the last
five years.
THOMAS J. KANE has served as President of T.J.K. Sales, Inc., an
independent sales representative, since he founded such company in 1978.
FELIX S. SABATES has been Chief Executive Officer of Top Sales Company,
Inc., an independent sales representative, since he founded such company in
January 1965.
CLASS II OUTSIDE DIRECTORS
LEONARD GLAZER retired in 1992 and is a private investor. For more than 5
years prior thereto, Mr. Glazer was President of Professional Engineering
International, Inc., an engineering consulting firm.
HAROLD STRAUSS, Ph.D., has been a Professor of Business Management and
Organizational Behavior at the University of Miami since 1968.
CLASS III OUTSIDE DIRECTORS
WENDY SAGER POMERANTZ has been a professional lyricist for more than the
last five years. Ms. Pomerantz was appointed a director of the Company on April
6, 1998.
The Board of Directors held three meetings during 1997. All of the
Company's directors other than Messrs. Kin, Sabates, Desmond Lai and Ms. Ganz
attended more than 75% of the aggregate of (i) the total number of meetings of
the Board of Directors and (ii) the total number of meetings held by all
committees of the Board of Directors on which such person served.
6
<PAGE> 9
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has Audit, Nominating and
Compensation Committees. The members of each committee have been appointed by
the Board of Directors to serve until their respective successors are elected
and qualified.
Audit Committee. The Audit Committee reviews the scope and results of the
audit of the financial statements of the Company and reviews the internal
accounting, financial and operating control procedures of the Company. The Audit
Committee is composed of Dr. Strauss (Chairman) and Messrs. Glazer (as of March
13, 1998) and Rosen, each of whom, in accordance with the rules of the New York
Stock Exchange, is independent of management and free from any relationship
that, in the opinion of the Board of Directors, would interfere with the
exercise of independent judgment as a committee member. The Audit Committee met
three times in 1997.
Nominating Committee. The Nominating Committee considers nominees for
membership on the Board of Directors who are recommended by the Company's
shareholders. Any nomination by a shareholder of a person to serve as a director
of the Company may be made pursuant to notice in writing to the Secretary of the
Company delivered to or mailed and received at the principal executive offices
of the Company not less than 90 days prior to the meeting at which directors are
to be elected; provided, however, that in the event that less than 100 days'
notice or prior public disclosure of the date of such meeting is given or made
to shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of such meeting was mailed or such public disclosure was
made. Such shareholder's notice to the Secretary must set forth (a) as to each
person whom the shareholder proposes to nominate for election as a director (i)
the name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person, (iii) the class and number of
any shares of the Company or any subsidiary of the Company which are
beneficially owned by such person, (iv) any lawsuits to which such person is a
party, (v) the involvement of such person in or with any business which may be
competitive with the Company and (vi) any other information relating to such
person that is required to be disclosed in solicitations for proxies for
election of directors or in a Schedule 13-D pursuant to any then existing rule
or regulation promulgated under the Exchange Act; and (b) as to the shareholder
giving the notice (i) the name and record address of such shareholder and (ii)
the class and number of shares of the Company which are beneficially owned by
such shareholder. The Company may require any proposed nominee to furnish such
other information as may reasonably be required by the Company to determine the
eligibility of such proposed nominee as a director. The Nominating Committee is
composed of Mr. David M. Friedson (Chairman), Dr. Strauss and Messrs. Glazer (as
of March 13, 1998), Rosen and Sabates did not meet in 1997. The functions which
in the past have been performed by such committee were performed by the
Company's Board of Directors.
Compensation Committee. The Compensation Committee determines the cash and
other incentive compensation, if any, to be paid to the Company's executive
officers. The Compensation Committee is also responsible for the administration
and award of stock options under the Company's 1992 Employee Incentive Stock
Option Plan as well as the award of non-qualified stock options issued pursuant
to individual stock option agreements. The Compensation Committee is composed of
Messrs. Rosen (Chairman), Glazer (as of March 13, 1998) and Dr. Strauss (as of
March 13, 1998), each of whom is an "outside director" within the meaning of
Rule 162(m) ("Rule 162(m)") of the Internal Revenue Code of 1986, as amended.
The Compensation Committee met once in 1997. Each member of the Compensation
Committee is an "outside director" within the meaning of Rule 162(m).
7
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Philosophy. The Compensation Committee's executive compensation philosophy
is to provide competitive levels of compensation, integrate the compensation of
its executive officers with the achievement of the Company's annual and
long-term performance goals, reward above average corporate performance,
recognize individual initiative and achievement and assist the Company in
attracting and retaining qualified management. To meet these objectives, the
Compensation Committee attempts to set the compensation of its executive
officers at levels that it believes are competitive with other companies of the
same size in the Company's industry, in light of the Company's current and
anticipated performance. The Compensation Committee endorses the position that
equity interest in the Company by management is beneficial in aligning executive
officers' and shareholders' interests in the enhancement of shareholder value.
Components of Executive Compensation. Compensation of the Company's
executive officers consists of both cash payments and grants of stock options.
The annual cash compensation consists of a base salary and an annual bonus.
Long-term incentives are provided through the grant of qualified stock options
under the Company's 1996 Stock Option Plan and non-qualified stock options
issued pursuant to individual stock option agreements.
Base Salaries. The Compensation Committee attempts to set base salaries of
its executive officers at levels that it believes are competitive with other
companies of the same size in the Company's industry. Information about
appropriate salary levels has been determined by reviewing the public disclosure
of the Company's competitors and through the Company's recruiting activities.
Except as described below, salaries are reviewed annually, and any increases are
based on competitive practices as well as the performance of the Company and the
executive officer.
Eight of the Company's executive officers, five of whom (including the
Chief Executive Officer) are named in the compensation tables following this
Report, are parties to Employment Agreements with the Company. Each of these
Employment Agreements provides for an annual salary increase equal to the
increase in the Consumer Price Index.
Bonuses. Cash bonuses have been a standard and expected component of
compensation at the Company when the Company has experienced particularly
positive financial results. Cash bonuses were not made to employees in the
United States. Cash bonuses of between one and three months' base salaries were
paid to almost all persons employed by the Company's subsidiaries in Hong Kong,
in accordance with the customary practice in Hong Kong.
Stock Options. The Compensation Committee grants stock options to the
Company's executive officers pursuant to the Company's 1996 Stock Option Plan
and individual stock option agreements. The Compensation Committee has the
authority to determine the individuals to whom stock options are awarded, the
terms at which option grants are made, the duration of the options and the
number of shares subject to each option. The size of the option grants are
generally based on the position level of the recipient. Through the award of
stock options, the objective of aligning executive officers' long range
interests with those of the shareholders is met by providing the executive
officers with the opportunity to build a meaningful stake in the Company.
It is the Compensation Committee's intention that, over time, compensation
opportunities from option grants will constitute a significant portion of each
executive officer's total compensation. However, there are not automatic grants
to each executive officer every year. Instead, the Compensation Committee
reviews the performance of the Company overall and of each individual executive
officer, as well as past option grants to each executive officer, and makes
decisions about recipients and grant sizes for the year. The Chief Executive
Officer received a grant of 1,500 options pursuant to the Company's 1988
Director Option Plan in June 1996.
8
<PAGE> 11
Compensation of Chief Executive Officer. The Compensation Committee
considered a number of factors in determining the compensation to be paid to the
Company's Chief Executive Officer, including levels generally paid to executives
in the Company's industry, the Company's performance to date, the Chief
Executive Officer's contribution to the Company's development and the Company's
short- and long-term prospects.
The Compensation Committee
Jerald I. Rosen
Leonard Glazer
Dr. Harold Strauss
9
<PAGE> 12
Summary Compensation Table. The following table sets forth the aggregate
compensation paid during each of the years ended December 31, 1997, 1996 and
1995 to the Company's Chief Executive Officer (the "CEO") and each of the four
most highly compensated executive officers of the Company other than the CEO
during 1996. The CEO and such other executive officers are sometimes referred to
herein as the "Named Executive Officers."
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) NUMBER ALL OTHER
FISCAL -------------------- OF OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) GRANTED(2) ($)
--------------------------- ------ --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
David M. Friedson.......................................... 1997 890,962 0 1,500 2,357(3)
Chairman, President and 1996 881,280 192,200 601,500 2,357
Chief Executive Officer 1995 745,028 0 1,500 2,357
Lai Kin.................................................... 1997 364,645 107,161 1,500 0
Chairman of Durable 1996 314,322 96,194 15,500 0
1995 359,444 0 1,500 0
Raymond So(5).............................................. 1997 300,903 92,064 1,500 0
Senior Vice President 1996 258,193 77,226 35,500 0
Arnold Thaler.............................................. 1997 288,956 0 1,500 3,575(4)
Senior Vice President 1996 295,192 37,663 51,500 3,575
1995 273,634 0 0 3,575
Barbara Friedson Garrett................................... 1997 286,556 0 1,500 2,357(3)
Senior Vice President 1996 290,640 62,252 51,500 2,357
1995 263,816 0 1,500 2,357
</TABLE>
- ---------------
(1) The column for "Other Annual Compensation" has been omitted because there is
no compensation required to be reported in such column. The aggregate
amount of perquisites and other personal benefits provided to each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the total
of annual salary and bonus of such officer.
(2) See "Option Grants Table" and "Aggregate Option Exercises and Year-End
Option Value Table" below for additional information about these options.
(3) The amount indicated consists of life insurance premiums of $357 paid by the
Company on a policy as to which the Named Executive Officer may designate
the beneficiary and matching contributions made by the Company of $2,000 to
its 401(k) Profit Sharing Plan.
(4) The amount indicated consists of life insurance premiums of $1,575 paid by
the Company on a policy as to which the Named Executive Officer may
designate the beneficiary and matching contributions made by the Company of
$2,000 to its 401(k) Profit Sharing Plan.
(5) First became one of the five most highly compensated executive officers in
1996.
Option Grants Table. The following table sets forth certain information
concerning grants of stock options made during 1997 to each of the Named
Executive Officers. The Company did not grant any stock appreciation rights in
1997.
<TABLE>
<CAPTION>
INDIVIDUAL OPTIONS GRANTS IN 1997
--------------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS OPTION EXPIRATION GRANTED TO ALTERNATIVE GRANT
NAME GRANTED PRICE($) DATE EMPLOYEES DATE VALUE($)(3)
---- ---------- -------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
David M. Friedson.................................... 1,500(1) 14.875 6/1/08 * 9,596
Barbara Friedson Garrett............................. 1,500(1) 14.875 6/1/08 * 9,596
Lai Kin.............................................. 1,500(1) 14.875 6/1/08 * 9,596
Arnold Thaler........................................ 1,500(1) 14.875 6/1/08 * 9,596
Raymond So........................................... 1,500(1) 14.875 6/1/08 * 9,596
</TABLE>
* Less than 1%
(1) The options were granted pursuant to the Company's 1988 Director Option Plan
on June 2, 1997.
10
<PAGE> 13
(2) Based on the binomial option pricing model adapted for use in valuing
executive stock options. The estimated values under that model are based on
certain assumptions as to variables such as interest rates, stock price
volatility and future dividend yields. The actual value, if any, that an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is no
assurance that the value realized by an executive will be at or near the
value estimated by the binomial model.
Aggregate Option Exercises and Year-End Option Value Table. The following
table sets forth certain information concerning unexercised stock options held
by the Named Executive Officers as of the end of 1997.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT 1997 1997 FISCAL YEAR-
SHARES FISCAL YEAR-END END($)(1)
ACQUIRED VALUE EXERCISABLE(E) EXERCISABLE(E)
NAME ON EXERCISE REALIZED($) UNEXERCISABLE(U) UNEXERCISABLE(U)
---- ----------- ----------- ---------------- -----------------
<S> <C> <C> <C> <C>
David M. Friedson...................................... 289,243 4,537,500 508,257(E) 7,711,430(E)
201,500(U) 2,524,031(U)
Lai Kin(2)............................................. -- -- 30,000(E) 462,180(E)
1,500(U) 11,531(U)
Barbara Friedson Garrett............................... 100,500 1,519,437 84,000(E) 1,532,055(E)
81,500(U) 1,246,531(U)
Raymond So............................................. -- -- 51,000(E) 777,375(E)
21,500(U) 322,781(U)
Arnold Thaler.......................................... -- -- 108,500(E) 1,785,313(E)
81,500(U) 1,246,531(U)
</TABLE>
- ---------------
(1) Based on the closing price of the Company's Common Stock on the New York
Stock Exchange on December 31, 1997, which was $22.5625.
11
<PAGE> 14
Comparative Performance by the Company. Set forth below is a five-year
graphic comparison of the yearly percentage change in the Company's cumulative
shareholder return on its Common Stock with the cumulative total return of (i)
the Standard & Poor's 500 Stock Index (the "S&P Index") and (ii) appropriate
similar companies (the "Peer Group Index"). The companies included as part of
the Peer Group Index were selected on the basis of the similarity of such
companies to the Company, considering such factors as products sold, market
capitalization, existence of public market for the equity securities of such
companies and industry within which such companies operate.
(graphic omitted)
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Windmere Peer Group* S&P 500
<S> <C> <C> <C>
1992 $100.00 $100.00 $100.00
1993 $147.00 $84.00 $110.00
1994 $149.00 $75.00 $112.00
1995 $141.00 $81.00 $153.00
1996 $268.00 $115.00 $188.00
1997 $485.00 $124.00 $251.00
</TABLE>
- ---------------
* Peer companies include National Presto Industries Inc., Royal Appliance
Manufacturing Co., Helen of Troy Corp., Toastmaster Inc. and Rival Co.
NOTE: Assumes that $100 was invested on December 31, 1992 in Windmere's Common
Stock, the S&P 500 and the Peer Group and that dividends are reinvested
quarterly.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board of Directors consists of Jerald I. Rosen,
Leonard Glazer (since March 13, 1998) and Dr. Harold Strauss (since March 13,
1998). Mr. Rosen serves as Secretary of the Company, although he is not
compensated for his services in such capacity. Messrs. Rosen and Glazer and Dr.
Strauss are independent directors of the Company and each are not affiliated
with any principal shareholder of the Company.
Director Compensation. Directors of the Company who are salaried employees
of the Company do not receive any additional compensation for serving as a
director or committee member. In 1996, non-employee directors of the Company
received $1,500 per month for service on the Board of Directors and $750 for
each Board of Directors' meeting attended and for each committee meeting
attended. Pursuant to the Company's 1996 Stock Option Plan, each director of the
Company on June 1 of each year is entitled to the grant of an option to acquire
1,500 shares of Common Stock at a price of not less than 100% of the fair market
value of the Common Stock on the date of the particular option grant.
In June 1997, an automatic grant of 1,500 shares was made to each of the
Company's directors.
EMPLOYMENT CONTRACTS
The Company entered into an employment agreement with David M. Friedson,
dated July 18, 1983, which has been amended from time to time. Under this
agreement, among other things, Mr. Friedson is
12
<PAGE> 15
employed for a five-year term, which term is automatically extended each year
for an additional one-year period unless written notice of an intention not to
extend is given by either party. This agreement provides for a minimum annual
base salary which, as of December 31, 1997, was $890,962, which amount is
subject to adjustment in subsequent periods according to changes in the Consumer
Price Index, in addition to other benefits. If, at any time during the term of
the agreement, there shall be a change in control of the Company, then Mr.
Friedson shall have the option of terminating his employment upon 60 days'
notice and, in such event, any outstanding options held by Mr. Friedson may be
exercised and sold without restrictions imposed by the Company, and the Company
shall pay Mr. Friedson a lump sum equal to three times Mr. Friedson's then
annual salary. Such lump sum payment would be in lieu of any compensation that
would otherwise be due and payable under this agreement. In consideration for
such lump sum payment, Mr. Friedson has agreed to consult with the Company and
its officers after termination of his employment, if requested to do so, for a
period of four years from the date of such termination, devoting such time to
such services as Mr. Friedson believes to be reasonable.
The Company entered into employment agreements with Barbara Friedson
Garrett and Arnold Thaler (collectively, the "Employees"). These agreements, as
amended from time to time, provide, among other things, for the employment of
Ms. Garrett and Mr. Thaler as Senior Vice Presidents, each for an initial term
of three years, which terms are each automatically extended each year for an
additional one-year period unless written notice of an intention not to extend
is given by either party. Under these agreements, the Employees are each
entitled to a minimum annual base salary which, as of December 31, 1997, was
$286,556 for Ms. Garrett, and $288,956 for Mr. Thaler, which amounts are subject
to adjustment in subsequent periods according to changes in the Consumer Price
Index, in addition to other benefits. If at any time during the term of these
agreements, there shall be a change in control of the Company, then each
Employee shall have the option of terminating his or her employment upon 60
days' notice and, in such event, any outstanding options held by the Employee
may be exercised and sold without restrictions imposed by the Company, and the
Company shall pay such Employee a lump sum equal to three times the Employee's
prevailing annual salary. Such lump sum payment would be in lieu of any
compensation that would otherwise be due thereafter under these agreements. In
consideration for such lump sum payment, each Employee has agreed to consult
with the Company and its officers after termination of his or her employment, if
requested to do so, for a period of four years from the date of such
termination, devoting only such time to such services as the Employee believes
to be reasonable.
Durable has entered into employment agreements with Lai Kin and Raymond So
(collectively, the "Durable Employees"). These agreements, as amended from time
to time, provide, among other things, for the employment of Messrs. Lai Kin and
Raymond So, as Chairman and Managing Director, respectively, of Durable, each
for an initial term of three years, which terms are each automatically extended
each year for an additional one-year period unless written notice of an
intention not to extend is given by either party. Under these agreements, the
Durable Employees are each entitled to a minimum annual base salary which, as of
December 31, 1997, was $364,645 for Lai Kin and $300,903 for Raymond So, which
amounts are subject to adjustment in subsequent periods according to changes in
the Consumer Price Index, in addition to other benefits. If at any time during
the term of these agreements, there shall be a change in control of the Company,
then each Durable Employee shall have the option of terminating his or her
employment upon 60 days' notice and, in such event, any outstanding options held
by the Durable Employee may be exercised and sold without restrictions imposed
by the Company, and the Company shall pay such Durable Employee a lump sum equal
to three times the Durable Employee's prevailing annual salary. Such lump sum
payment would be in lieu of any compensation that would otherwise be due
thereafter under these agreements. In consideration for such lump sum payment,
each Durable Employee has agreed to consult with the Company and its officers
after termination of his or her employment, if requested to do so, for a period
of four years from the date of such termination, devoting only such time to such
services as the Durable Employee believes to be reasonable.
Upon Mr. Lai's resignation or termination as Chairman of Durable, the
Company has agreed to employ Mr. Lai as a consultant to the Company and Durable
and any of their affiliates at a salary equal to 60% of Mr. Lai's annual base
salary from Durable in the fiscal year immediately preceding his resignation or
13
<PAGE> 16
termination from Durable. Pursuant to this agreement, Mr. Lai will be employed
as a consultant for a three-year period which is automatically extended by one
year on the first day of the second year of each three-year period unless two
years' prior written notice is given to terminate the agreement, in which event
the term of the agreement will be automatically extended for one additional year
beyond the expiration of the then current three year period.
CERTAIN TRANSACTIONS
The Company has agreed to use its best efforts to recommend to its
shareholders and directors that Lai Kin, Chairman of Durable and Managing
Director of Ourimbah, be appointed as, and remain a member of, the Company's
Board of Directors for such time as Mr. Lai continues to be an indirect
shareholder of the Company and continues to be employed by Durable and/or any
other affiliate of the Company.
In April 1994, in connection with the purchase by the Company of 20% of the
outstanding shares of capital stock of Durable from Ourimbah, which resulted in
Durable becoming a wholly-owned subsidiary of the Company, the Company agreed,
upon a Change of Control of the Company (as defined in said agreement), to make
an additional payment to Ourimbah in respect of shares of Durable being
purchased under such agreement equal to the greater of (i) the same multiple of
earnings per share paid for the shares of Common Stock of the Company received
in connection with such Change of Control or (ii) the same multiple of net asset
value per share paid for the shares of Common Stock of the Company received in
connection with such Change of Control. In addition, the Company agreed to use
its best efforts to recommend to the shareholders and directors of the Company
that two individuals to be nominated by Mr. Lai and deemed suitable by the
Company be appointed as members of the Company's Board of Directors. The Company
further agreed that the composition of Durable's Board of Directors shall
initially remain equally divided between each of the present designees of
Ourimbah and persons selected by the Company. Accordingly, for so long as such
designees of Ourimbah who are present members of the Board of Directors of
Durable (the "Durable Board"): (i) remains a shareholder of Ourimbah, and (ii)
Ourimbah remains a shareholder of the Company, the Company shall vote its shares
of Durable to appoint such designees of Ourimbah to the Durable Board. When any
member of the Durable Board who has been designated by Ourimbah ceases to be a
shareholder of Ourimbah, such designee shall no longer be entitled to serve on
the Durable Board, and the Company shall have the right to designate a
replacement member to the Durable Board in its sole discretion.
During 1997, the Company continued to make a series of personal loans
bearing interest at prevailing market rates to David M. Friedson, the Company's
Chairman of the Board, President and Chief Executive Officer. As of March 16,
1998, the balance of such loans was approximately $249,100.
In 1986, the Company made a non-interest bearing loan of $78,000 to Mr.
Lai, a director of the Company. Such loan was outstanding as of the date of this
Proxy Statement.
In 1997, the Company made commission payments of $427,000 to an entity
whose President, Mr. Thomas J. Kane, is also a director of the Company.
Pursuant to an Agreement dated August 15, 1988 between the Company and Top
Sales Company, Inc. ("Top Sales"), Top Sales sells certain products manufactured
by the Company. In 1997, the Company paid Top Sales $693,300 pursuant to this
Agreement. Felix Sabates, a director of the Company, is the sole shareholder and
Chief Executive Officer of Top Sales.
RATIFICATION OF THE REAPPOINTMENT OF THE COMPANY'S AUDITOR
The Board of Directors recommends that the appointment of Grant Thornton
LLP independent certified public accountants, as the Company's auditors for the
fiscal year ending December 31, 1998, be ratified by the Company's shareholders.
Grant Thornton LLP has audited the books and records of the Company since 1976.
Although the appointment of Grant Thornton LLP as independent auditors of the
Company does not require ratification, the Board of Directors considers it
appropriate to obtain such ratification. Accordingly, the vote of
14
<PAGE> 17
shareholders on this matter is advisory in nature and has no binding effect upon
the Board of Directors' appointment of Grant Thornton LLP. A representative of
Grant Thornton LLP is expected to be present at the Annual Meeting to make a
statement, if he desires to do so, and to respond to appropriate questions.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business to be presented at the Company's 1998 Annual
Meeting of Shareholders. If any other business should properly come before the
Company's 1998 Annual Meeting of Shareholders, the persons named in the
accompanying proxy will vote thereon as in their discretion they may deem
appropriate, unless they are directed by a proxy to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, proposals of shareholders intended to be presented at the Company's
1999 Annual Meeting of Shareholders must be received in writing by the Company's
Secretary at the Company's principal executive offices not later than December
21, 1998 in order to be included in the Company's Proxy Statement and form of
Proxy relating to that Annual Meeting.
By Order of the Board of Directors
Jerald I. Rosen, Secretary
Miami Lakes, Florida
April 20, 1998
15
<PAGE> 18
Appendix A
WINDMERE-DURABLE HOLDINGS, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Burton A. Honig and Joann Ledbetter and
each of them, each with full power of substitution, proxies to vote at the
Annual Meeting of Shareholders of Windmere-Durable Holdings, Inc. (the
"Company") to be held at the University of Miami, James W. McLamore Executive
Education Center, 5250 University Drive, Coral Gables, Florida 33134 on Tuesday,
May 12, 1998, at 10:00 a.m. local time, and at any adjournments thereof, hereby
revoking any proxies heretofore given, to vote all shares of common stock of the
Company held or owned by the undersigned as directed below, and in their
discretion upon such other matters as may come before the meeting.
Proposal 1. Election of five members to Class II of the Company's Board of
Directors to serve until the 2001 Annual Meeting of
Shareholders or until their successors are duly elected and
qualified.
NOMINEES:
[ ] FOR ALL THE NOMINEES [ ] WITHHOLD AUTHORITY
LISTED BELOW to vote for all nominees
(except as marked to listed below.
the contrary below)
Leonard Glazer, Harold Strauss, Ph.D., Lai Kin, Raymond So
and Arnold Thaler
INSTRUCTIONS: To withhold authority for any individual
nominees, write that nominee's name in the space below.
--------------------------------------------------------------
Proposal 2. Ratification of the reappointment of Grant Thornton LLP,
independent certified public accountants, as the Company's
auditors for the fiscal year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the other side)
<PAGE> 19
The undersigned hereby acknowledges receipt of a Notice of Annual Meeting of
Shareholders of the Company called for May 12, 1998 and a Proxy Statement for
the Annual Meeting prior to the approving of this proxy.
This proxy when properly executed will be voted as specified above. If no
direction is made, this Proxy will be voted FOR Proposals 1 and 2.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY.
Dated: ,1998
--------------------------
-------------------------------------
(Signature)
-------------------------------------
(Signature)
Please date this proxy and sign your
name exactly as it appears hereon.
Where there is more than one owner,
each should sign. When signing as an
agent, attorney, administrator,
executor, guardian, or trustee, please
add your title as such. If executed by
a corporation, the proxy should be
signed by a duly authorized officer
who should indicate his office. Please
date, sign, and mail this proxy card
in the enclosed envelope. No postage
is required if mailed in the United
States.
