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 (Amendment No. )
Filed by the Registrant |x|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CONGOLEUM CORPORATION
- --------------------------------------------------------------------------------
(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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
<PAGE>
CONGOLEUM CORPORATION
P.O. Box 3127
Mercerville, New Jersey 08619
-------------------
NOTICE OF ANNUAL MEETING TO BE HELD
MAY 5, 1999
-------------------
TO THE STOCKHOLDERS OF
CONGOLEUM CORPORATION
Notice is hereby given that the Annual Meeting of the Stockholders (the
"Annual Meeting") of Congoleum Corporation (the "Company") will be held in the
Long Lane Room, 2nd Floor, The First National Bank of Boston, 100 Federal
Street, Boston, Massachusetts on Wednesday, May 5, 1999 at 10:00 A.M. local
time, for the following purposes:
1. To elect three Class C directors who will hold office until the
Annual Meeting of Stockholders in 2002 and until their successors
are duly elected and qualified.
2. To transact any other business that may properly come before the
Annual Meeting or any adjournment thereof.
The close of business on March 19, 1999 has been fixed as the record date
for determining the stockholders of the Company entitled to notice of, and to
vote at, the Annual Meeting and any adjournments thereof.
It is desirable that the stock of the Company should be represented as
fully as possible at the Annual Meeting. Please sign, date and return the
accompanying proxy in the enclosed envelope, which requires no postage if mailed
in the United States. If you should attend the Annual Meeting, you may vote in
person, if you wish, whether or not you have sent in your proxy.
By Order of the Board of Directors
CONGOLEUM CORPORATION
Howard N. Feist III
Secretary
Mercerville, New Jersey
March 24, 1999
<PAGE>
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation, by
and on behalf of the Board of Directors of Congoleum Corporation (the
"Company"), of proxies to be used in voting at the Annual Meeting of
Stockholders (the "Meeting") of the Company to be held on May 5, 1999 in the
Long Lane Room, 2nd Floor, The First National Bank of Boston, 100 Federal
Street, Boston, Massachusetts at 10:00 A.M. local time, and at any adjournments
thereof. The principal executive offices of the Company are located at 3705
Quakerbridge Road, Mercerville, New Jersey 08619. The cost of preparing and
mailing the notice, proxy statement and proxy will be paid by the Company. It is
expected that the solicitation of proxies will be by mail only, but may also be
made by personal interview, mail, telephone or telegraph by directors, officers
or employees of the Company. The Company will request banks and brokers holding
stock in their names or custody, or in the names of nominees for others, to
forward copies of the proxy material to those persons for whom they hold such
stock and to request authority for the execution of proxies and, upon request,
will reimburse such banks and brokers for their out-of-pocket expenses incurred
in connection therewith. This proxy statement and the accompanying proxy card
were first mailed to stockholders on or about April 1, 1999.
Proxies in the accompanying form, properly executed and duly returned to
the Company and not revoked, will be voted at the Meeting (including
adjournments). Where a specification is made by means of the ballot provided in
the proxies regarding any matter presented to the Meeting, such proxies will be
voted in accordance with such specification. If no instructions are specified in
a signed proxy with respect to the matters being voted upon, the shares
represented by such proxy will be voted (i) FOR the election of the nominees for
director listed below, and (ii) in the discretion of the proxy holder as to
other matters that may properly come before the Meeting. Proxies indicating
stockholder abstentions will be counted for purposes of determining whether
there is a quorum at the Meeting, but will not be voted in the election of
directors, and, therefore, will have no effect on the determination of the
outcome of the votes on these matters. Shares represented by "broker non-votes"
(i.e., shares held by brokers or nominees that are represented at the Meeting
but with respect to which the broker or nominee is not empowered to vote on a
particular proposal) will be counted for purposes of determining whether there
is a quorum at the Meeting, but will not be voted in the election of directors
and, therefore, will have no effect on the determination of the outcome of the
votes on these matters.
Any stockholder giving a proxy in the accompanying form retains the power
to revoke it at any time prior to the exercise of the powers conferred thereby
by filing a later dated proxy, by notice of revocation filed in writing with the
Secretary of the Company or by voting the shares subject to such proxy in person
at the Meeting. Attendance at the Meeting in person will not be deemed to revoke
the proxy unless the stockholder affirmatively indicates at the Meeting an
intention to vote the shares in person.
On March 19, 1999, there were 4,308,260 shares of the Company's Class A
common stock and 4,676,050 shares of the Company's Class B common stock
outstanding. Only stockholders of record at the close of business on that date
are entitled to notice of and to vote at the Meeting or any adjournment thereof,
and those entitled to vote will have one vote for each share of Class A common
stock held and two votes for each share of Class B common stock held.
<PAGE>
2
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1998 is enclosed with this proxy statement.
A quorum for the Meeting will consist of the holders of a majority of the
stock entitled to vote at the Meeting. A plurality of the shares represented at
the Meeting at which a quorum is present and voting is required to elect
directors and any other matters that may properly come before the Meeting,
except as otherwise required by the laws of Delaware.
PROPOSAL 1 - ELECTION OF DIRECTORS; SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Board of Directors of the Company is divided into three classes, as
nearly equal in size as possible, with staggered terms of three years which
expire at successive Annual Meetings of Stockholders. The accompanying proxy
will be voted for the election of the nominees named in Class C below unless
otherwise instructed. The term of those Class C directors elected at this
Meeting will expire at the Annual Meeting of Stockholders held in 2002 upon the
election and qualification of their successors. Should any person named below be
unable or unwilling to serve as a director, persons acting under the proxy
intend to vote for such other person as management may recommend. Each nominee
is currently a director of the Company. The persons named in the accompanying
proxy intend to vote for the election of the nominees identified below unless
authority to vote for one or more of such nominees is specifically withheld in
the proxy. The Board of Directors is informed that all the nominees are willing
to serve as directors, but if any of them should decline to serve or become
unavailable for election as a director at the Meeting, an event which the Board
of Directors does not anticipate, the persons named in the proxy will vote for
such nominee or nominees as may be designated by the Board of Directors unless
the Board of Directors reduces the number of directors accordingly.
The following table sets forth the name, age and principal occupation of
each of the nominees for election as director (all of whom currently serve as
directors), and each current director in the classes continuing in office, and
the period during which each has served as a director of the Company and when
such term expires. The tables, together with the accompanying text and
footnotes, also set forth the holdings of each director of the Company and of
each person nominated to become a director of the Company, as of March 19, 1999.
<PAGE>
3
(a) Security Ownership of Nominees and Directors
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Shares of Common Stock Percent of
During the Past 5 Years Director Term Owned Beneficially as of Percent of Combined
and Directorships Since Expires March 19, 1999 Class Voting Power
----------------- ----- ------- ------------------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Nominees for Director
Class C
- -------
Roger S. Marcus
Age 53. Chairman of the Board, Chief
Executive Officer and President of the
Company. Chairman of the Board, Chief
Executive Officer and Director of
American Biltrite. 1993 1999 4,395,605(1)(2)(3)(4) 94.0% 64.4%
120,000(5) 2.7% *
John N. Irwin III
Age 45. Managing Director of Hillside
Capital Incorporated. 1986 1999 213,340(1)(6) 4.6% 3.1%
Cyril C. Baldwin, Jr.
Age 71. Chairman of the Board of
Cambrex Corporation, Director of Church
& Dwight. 1995 1999 2,000 * *
Incumbent Directors
Class B
- -------
Mark N. Kaplan, Esq.
Age 69. Partner of Skadden, Arps,
Slate, Meagher & Flom LLP, Attorneys.
Director of American Biltrite, Grey
Advertising Inc., DRS Technologies,
Inc., REFAC Technology Development
Corporation, Volt Information Sciences,
Inc., Movie Fone, Inc., and
Autobytel.com, Inc. 1995 2001 1,000 * *
Richard G. Marcus
Age 51. Vice Chairman of the Company.
Director, President, and Chief
Operating Officer of American Biltrite. 1993 2001 4,395,605(1)(2)(3)(4)(7) 94.0% 64.4%
120,000(5) 2.7% *
David N. Hurwitz
Age 63. Former President and Chief
Executive Officer of Goodson Newspaper
Group. 1995 2001 -- * *
Class A
- -------
William M. Marcus
Age 61. Director, Executive Vice
President, and Treasurer of American
Biltrite. 1993 2000 4,395,605(1)(2)(3)(4) 94.0% 64.4%
C. Barnwell Straut
Age 73. Managing Director of Hillside
Capital Incorporated. 1986 2000 7,000 * *
</TABLE>
<PAGE>
4
- -----------------------
*Less than 1%
(1) The shares of Class B common stock are convertible into an equal number of
shares of Class A common stock without the requirement of any further
action upon their sale or other transfer by Hillside Capital or American
Biltrite Inc. ("American Biltrite") to a person or entity other than one
of its affiliates. In addition, shares of Class B common stock may be
converted into an equal number of shares of Class A common stock at any
time at the option of the holders thereof and shall be converted into an
equal number of shares of Class A common stock upon the adoption of a
resolution to such effect by a majority of the entire Board of Directors
of the Company and the holders of a majority of the outstanding shares of
Class B common stock voting as a separate class. In the event of a "change
in control" of American Biltrite, all of its shares of Class B common
stock shall be automatically converted into an equal number of shares of
Class A common stock without the requirement of any further action.
(2) Refers to the shares of Class B common stock shown as owned of record by
American Biltrite with respect to which each of the named individuals may
be deemed to be the beneficial owner. Each of the named individuals is a
director of the Company and a director, officer and stockholder of
American Biltrite. Each of the named individuals disclaims beneficial
ownership of such shares. The address of each of the named individuals is
c/o American Biltrite Inc., 57 River Street, Wellesley Hills, MA 02481.
(3) A majority of the outstanding shares of American Biltrite are beneficially
owned by Natalie S. Marcus, Cynthia S. Marcus and the named individuals,
who have identified themselves as persons who have in the past taken, and
may in the future take, actions which direct or cause the direction of the
management of American Biltrite and their voting of shares of American
Biltrite in a manner consistent with each other, and who therefore may be
deemed to constitute a "group" within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934. Natalie S. Marcus is the mother of
Roger S. Marcus and Richard G. Marcus and the aunt of William M. Marcus.
Cynthia S. Marcus is the wife of William M. Marcus.
(4) Richard G. Marcus and Roger S. Marcus are brothers and William M. Marcus
is their cousin.
(5) Refers to the shares of Class A common stock issuable upon the exercise of
options which are currently exercisable or exercisable within 60 days of
March 19, 1999.
(6) Refers to the shares of Class B common stock shown as owned of record by
Hillside Capital Incorporated ("Hillside Capital") with respect to which
Mr. Irwin may be deemed the beneficial owner. Mr. Irwin is a director of
the Company and a director and officer of Hillside Capital and indirectly
owns a majority of the issued and outstanding shares of its capital stock.
Mr. Irwin disclaims beneficial ownership of such shares. The address of
Mr. Irwin is c/o Brookside International Incorporated, 80 Field Point
Road, 3rd Floor, Greenwich, CT 06830.
(7) In February 1996, Mr. Richard G. Marcus entered into a settlement
agreement in the form of a consent decree with the Securities and Exchange
Commission (the "Commission") in connection with the Commission's
investigation covering trading in American Biltrite Inc.'s Common Stock by
an acquaintance of Mr. Marcus. Mr. Marcus, without admitting or denying
the Commission's allegations of securities laws violations, agreed, among
other things, to the entry of a permanent injunction against future
violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act
of 1934.
<PAGE>
5
(b) Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the number of shares of Class A common
stock and Class B common stock beneficially owned by (a) each person who owns of
record, or is known by the Company to own beneficially, more than 5% of the
Company's Class A common stock and/or Class B common stock, (b) each person who
is named in the Summary Compensation Table hereinafter set forth as an executive
officer as of December 31, 1998 and (c) all executive officers and directors of
the Company as a group.
<TABLE>
<CAPTION>
Shares of
Common Stock Percent of
Name, and Address Title Owned Beneficially Percent of Combined
of Beneficial Owners of Class As of March 19, 1999 Class Voting Power
-------------------- ----------------- -------------------- -------------- ------------
<S> <C> <C> <C> <C>
American Biltrite Inc. Class B 4,395,605(1) 94.0% 64.4%
57 River Street
Wellesley Hills, MA 02481
Berger Associates, Inc. Class A 363,300(2)(3) 8.4% 2.7%
210 University Boulevard, Suite 900
Denver, CO 80206
David L. Babson & Co. Inc. Class A 1,002,800(3)(4) 23.3% 7.3%
One Memorial Drive
Cambridge, MA 02142
The TCW Group, Inc. Class A 468,100(3)(5) 10.9% 3.4%
865 South Figueroa Street
Los Angeles, CA 90017
Clark Estates, Inc. Class A 389,200(6) 9.0% 2.8%
30 Wall Street
New York, NY 10005
U.S. Bancorp Class A 274,500(7) 6.4% 2.0%
United States National Bank of Oregon
111 S.W. Fifth Avenue
Portland, OR 97204
Babson Enterprise Fund, Inc. Class A 279,800(3)(8) 6.5% 2.0%
BMA Tower, 12th Floor
700 Karnes Blvd.
Kansas City, MO 64108-3306
Marvin Schwartz Class A 375,000(9) 8.7% 2.7%
c/o Neuberger & Berman, LLC
605 Third Avenue
New York, NY 10158-3698
Neuberger & Berman, LLC Class A 487,700(3)(10) 11.3% 3.6%
605 Third Avenue
New York, NY 10158-3698
Roger S. Marcus(11) Class A 120,000(12) 2.7% *
Class B 4,395,605(1) 94.0% 64.4%
Robert N. Agate(11) Class A 1,850 * *
Howard N. Feist III(11) Class A 1,177 * *
Dennis P. Jarosz(11) Class A 2,500 * *
</TABLE>
<PAGE>
6
<TABLE>
<S> <C> <C> <C> <C>
Peter J. Rohrbacher(11) Class A -- * *
All directors and executive officers Class A 258,550(13) 5.7% 1.9%
as a group (16 persons) Class B 4,608,945 98.6% 67.5%
</TABLE>
- -----------------------
*Less than 1%
(1) Represents shares of Class B common stock held of record by American
Biltrite. See footnote 2 to the table above for a description of the
persons who may be deemed to be the beneficial owners of these shares.
(2) Berger Associates, Inc. is an investment adviser registered under Section
203 of the Investment Advisers Act of 1940 and is considered the
"beneficial owner" in the aggregate of 363,300 shares of Class A common
stock. Kansas City Southern Industries, Inc. is a parent holding company
as defined by Section 240.13d-1(b)(1)(ii)(G) of the Securities Exchange
Act of 1934 and owns 100% of Berger Associates, Inc. but disclaims
beneficial ownership of all of the shares of Class A common stock
beneficially owned by Berger Associates, Inc. The address of Kansas City
Southern Industries, Inc. is 114 West 11th Street, Kansas City, Missouri
64105.
(3) Based on information contained in a Schedule 13G filed with the Commission
which indicates that such shares were acquired solely for investment
purposes as of December 31, 1998.
(4) David L. Babson & Co. Inc. is an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, and is considered
"beneficial owner" in the aggregate of 1,002,800 shares of Class A common
stock.
(5) The TCW Group, Inc. (through certain wholly owned subsidiaries TCW Asset
Management Company and The Trust Company of the West) is considered the
"beneficial owner" in the aggregate of 468,100 shares of Class A common
stock. TCW Asset Management Company is an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940 and The Trust
Company of the West is a bank as defined in Section 3(A)(6) of the
Securities Exchange Act of 1934. Mr. Robert Day is an individual who may
be deemed to control the TCW Group, Inc. The address of Mr. Day is 200
Park Avenue, Suite 2200, New York, New York 10166.
(6) Clark Estates, Inc. is a New York corporation which provides management
and administrative services relating primarily to financial matters for
several individual members of the Clark family and to certain
institutional and trust accounts affiliated with the Clark family, and is
considered "beneficial owner" in the aggregate of 389,200 shares of Class
A common stock.
(7) U.S. Bancorp (together with certain wholly owned subsidiaries, Qualivest
Capital Management and United States National Bank of Oregon) is
considered "beneficial owner" in the aggregate of 274,500 shares of Class
A common stock based on information contained in a Schedule 13G filed with
the Commission as of December 31, 1997. U.S. Bancorp is a national bank as
defined in Section 3(A)(6) of the Securities Exchange Act of 1934.
(8) Babson Enterprise Fund, in its capacity as an investment company, may be
deemed the beneficial owner of 279,800 shares of Class A common stock of
the Company, the shares of which are owned by shareholders of the Fund.
(9) Based upon information contained in Schedule 13D filed with the Commission
as of July 28, 1998. Marvin Schwartz is the "beneficial owner" in the
aggregate of 375,000 shares of Class A common stock. Mr. Schwartz, is a
principal of Neuberger & Berman, LLC, but these shares are held
individually by Mr. Schwartz and others and Neuberger & Berman, LLC has no
voting or dispositive power regarding these shares.
(10) Neuberger & Berman, LLC is a registered broker/dealer registered under
Section 15 of the Securities Exchange Act of 1934 and an investment
adviser registered under Section 203 of the Investment Advisers Act of
1940, and is considered the "beneficial owner" in the aggregate of 487,700
shares of Class A common stock.
(11) The address of each of the Chief Executive Officer and certain other
executive officers is c/o Congoleum Corporation, 3705 Quakerbridge Road,
P.O. Box 3127, Mercerville, New Jersey 08619.
(12) Includes 120,000 shares of Class A common stock issuable upon the exercise
of options which are currently exercisable or exercisable within 60 days
of March 19, 1999.
(13) Includes an aggregate of 240,000 shares issuable upon the exercise of
options which are currently exercisable or exercisable within 60 days of
March 19, 1999.
<PAGE>
7
(c) Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and the beneficial owners of more
than 10 percent of the Class A common stock to file reports of ownership and
changes in ownership of their equity securities of the Company. Directors and
executive officers of the Company and such beneficial owners file such reports
with the Commission and the New York Stock Exchange. Directors and executive
officers and such beneficial owners are required to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of Forms 3, 4 and 5 and
amendments thereto received by the Company, and written representations from
certain directors and executive officers and such beneficial owners of the
Company that no Forms 5 were required for such persons, the Company believes
that all Section 16(a) filing requirements applicable to its directors and
executive officers and such beneficial owners were complied with during 1998.
DIRECTOR COMPENSATION AND COMMITTEES
During 1998, the Board of Directors of the Company held four meetings.
Each director attended at least 75% of the aggregate of all meetings of the
Board of Directors plus the total number of meetings of all committees of the
Board on which he serves. Each director who is not an officer and employee of
the Company or American Biltrite received a director's fee of $10,000 per year
and $1,250 for each Board meeting and each Audit Committee meeting attended
during 1998. For 1999, these fees have been increased to $15,000 per year and
$2,000 for each Board Meeting and each Audit Committee Meeting attended.
Directors may elect to defer the receipt of all or a part of their fees.
Amounts so deferred earn interest, compounded quarterly, at a rate equal to the
Bank of Boston base rate at the end of each quarter.
The Company has an Audit Committee consisting of three members, all of
whom are non-employee directors. The Audit Committee recommends engagement of
the independent auditors, considers the fee arrangement and scope of the audit,
reviews the financial statements and the independent auditors' report, reviews
the activities and recommendations of the Company's internal auditors, considers
comments made by the independent auditors with respect to the Company's internal
control structure, and reviews internal accounting procedures and controls with
the Company's financial and accounting staff. During 1998, the Audit Committee
held three meetings. The members of the Audit Committee are David N. Hurwitz,
Chairman, Cyril C. Baldwin, Jr. and Mark N. Kaplan.
The Company has a Compensation Committee consisting of three members, all
of whom are non-employee directors. The Compensation Committee is responsible
for making recommendations to the Board concerning executive compensation
including base salaries, bonuses and criteria for their award, stock option
plans, stock option grants, health and life insurance and other benefits. The
Compensation Committee met one time during 1998. The
<PAGE>
8
members of the Compensation Committee are Mark N. Kaplan, Chairman, Cyril C.
Baldwin, Jr. and David N. Hurwitz. The Company does not have a Nominating
Committee.
COMPENSATION COMMITTEE REPORT
Overall Policy
The Company's executive compensation program is designed to reflect both
corporate performance and individual responsibilities and performance. The
Compensation Committee administers the Company's overall compensation strategy
in an attempt to relate executive compensation appropriately to the Company's
overall growth and success and to the executive's duties and demonstrated
abilities. The objectives of this strategy are to attract and retain the best
possible executives, to motivate these executives to achieve the Company's
business goals and to provide a compensation package that recognizes individual
contributions as well as overall business results.
Each year the Compensation Committee conducts a review of the Company's
executive compensation. This review includes consideration of the relationship
between an executive's current compensation and his current duties and
responsibilities; the compensation of executive officers with similar duties and
responsibilities; and inflationary trends. The annual compensation reviews
permit an ongoing evaluation of the relationship between the size and scope of
the Company's operations, its performance and its executive compensation. The
Compensation Committee also considers the legal and tax effects (including
without limitation the effects of Section 162(m) of the Internal Revenue Code of
1986, as amended) of the Company's executive compensation program in order to
provide the most favorable legal and tax consequences for the Company and its
executive officers.
The Compensation Committee determines the compensation of the individuals
whose compensation is detailed in this proxy statement and sets policies for and
reviews the compensation awarded to the most highly compensated corporate
executives. This process is designed to provide consistency throughout the
executive compensation program. In reviewing the individual performance of the
executives whose compensation is detailed in this proxy statement, the
Compensation Committee takes into account the views of Roger S. Marcus, the
Company's Chief Executive. Because Mr. Marcus provides his services to the
Company pursuant to a Personal Services Agreement between the Company and
American Biltrite Inc., the Compensation Committee does not review Mr. Marcus'
compensation, which is administered by the disinterested directors of the Board
as a whole.
The key elements of the Company's executive compensation consist of base
salary, annual bonus and stock options. The Compensation Committee's policies
with respect to each of these elements are discussed below. In addition,
although the elements of compensation described below are considered separately,
the Compensation Committee takes into account the full compensation package
afforded by the Company to the individual, including pension benefits, insurance
and other benefits, as well as the program described below.
<PAGE>
9
Base Salaries
Base salaries for executive officers are determined by considering
historical salaries paid by the Company to officers having certain duties and
responsibilities and then evaluating the current responsibilities of the
position, the scope of the operations under management and the experience of the
individual. Annual salary adjustments are determined by evaluating on an
individual basis new responsibilities of the executive's position, changes in
the scope of the operations managed, the performance of such operations, the
performance of the executive in the position and annual increases in the cost of
living.
Annual Bonus
The Company's executive officers are eligible for an annual cash bonus.
Annual bonuses are determined on the basis of corporate performance. The most
significant corporate performance measure for bonus payments is earnings of the
Company. In determining annual bonuses, the Compensation Committee also
considers the views of Mr. Marcus as Chief Executive Officer and discusses with
him the appropriate bonuses for all executives.
Stock Options
Under the Company's 1995 Stock Option Plan, stock options may be granted
to the Company's executive officers. The Compensation Committee sets guidelines
for the size of stock option awards based on factors similar to those used to
determine base salaries and annual bonus. Stock options are designed to align
the interests of executives with those of the stockholders.
Under the 1995 Stock Option Plan, stock options are typically granted with
an exercise price equal to the market price of the Company's Class A common
stock on the date of grant and vest over time. This approach is designed to
encourage the creation of stockholder value over the long term since the full
benefit of the compensation package cannot be realized unless stock price
appreciation occurs over time.
During 1998, stock options previously granted to employees (other than
Roger S. Marcus and Richard G. Marcus) were repriced at the then current market
price and made subject to a new vesting schedule pursuant to which the repriced
options would vest in annual installments equal to 20% of the total options
granted on each of the first five anniversaries of the date the repriced options
were granted. In exchange for the repriced options, the option holders were
required to surrender the options previously granted to them. The total number
of repriced options granted was equal to the total number of previously granted
options surrendered. The Compensation Committee believes that stock options are
a valuable tool in incentivizing and retaining employees, but recognized that
the existing grants were of limited effectiveness given their exercise prices in
relation to the market price of the Company's common stock. In reaching the
decision to reprice, the Compensation Committee considered the views of Roger S.
Marcus, as well as a report from an outside compensation expert. The
Compensation Committee did not reprice options previously granted to Roger S.
Marcus and Richard G. Marcus because it felt such repricing was unnecessary in
view of their somewhat different circumstances.
<PAGE>
10
Conclusion
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance. The Compensation Committee intends to continue the policy of
linking executive compensation to corporate and individual performance,
recognizing that the ups and downs of the business cycle from time to time may
result in an imbalance for a particular period.
COMPENSATION COMMITTEE
Mark N. Kaplan, Chairman
Cyril C. Baldwin, Jr.
David N. Hurwitz
<PAGE>
11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1998 were Mark N. Kaplan,
Cyril C. Baldwin, Jr. and David N. Hurwitz, none of whom is or was at any time
during 1998 an officer or employee of the Company. Mark N. Kaplan is a partner
in Skadden, Arps, Slate, Meagher & Flom LLP, a law firm retained by the Company
in 1998 and proposed to be retained in 1999. Mr. Kaplan is also a director of
American Biltrite.
EXECUTIVE COMPENSATION
The table that follows sets forth information concerning the compensation
earned by or paid to the Company's Chairman of the Board and Chief Executive
Officer and the Company's four other most highly compensated executive officers
for services rendered to the Company in all capacities during each of the last
three years. The table also identifies the principal capacity in which each of
the named executives served the Company during 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ------------
------------------- Securities Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (Shares)(1) Compensation ($)(2)
- --------------------------- ---- ---------- --------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Roger S. Marcus 1998 * * 50,000 *
Chairman, President and Chief 1997 * * -- *
Executive Officer 1996 * * -- *
Robert N. Agate 1998 153,553 50,000 15,000 7,708
Executive Vice President 1997 148,074 30,000 5,000 8,913
1996 142,083 60,000 -- 7,132
Howard N. Feist III 1998 153,833 50,000 15,000 7,723
Senior Vice President - Finance 1997 148,393 30,000 5,000 8,933
and Chief Financial Officer 1996 142,833 60,000 -- 7,170
Dennis P. Jarosz 1998 148,600 50,000 15,000 7,443
Senior Vice President - 1997 142,966 30,000 5,000 8,606
Marketing 1996 137,500 60,000 6,500 6,858
Peter J. Rohrbacher 1998 148,270 50,000 15,000 7,443
Senior Vice President - 1997 138,783 30,000 5,000 8,354
Research and Engineering 1996 123,148 60,000 -- 6,182
</TABLE>
- ------------------
(1) With the exception of options granted to Roger S. Marcus, 1998 options
grants shown represent repriced options granted in exchange for the
surrender of an equal number of previously granted options. Repriced
options will vest based upon the date of repricing. Option grants shown
for 1996 and 1997 for each officer were surrendered for an equal number of
repriced options in 1998 and are included in the 1998 aggregate total.
(2) Amounts shown for each officer consist of amounts contributed by the
Company to the Company's 401(k) Plan for the designated fiscal year that
are allocated to such officer.
(*) Pursuant to the terms of a Personal Services Agreement between American
Biltrite and the Company, American Biltrite agreed that Roger S. Marcus
would devote substantially all of his business time to serving as Chief
Executive Officer of the Company and Richard G. Marcus would serve as Vice
Chairman of the Company. In consideration of this agreement, the Company
agreed to pay American Biltrite a personal services fee and a contingent
incentive fee, conditioned upon the attainment of financial and business
objectives as determined by the Board of Directors of the Company. The
Company paid $1,265,000, $1,030,000, and $1,291,000 in personal services
and incentive fees for the years ended December 31, 1996, 1997 and 1998,
respectively. The Company also granted options for 50,000 shares each to
Roger S. Marcus and Richard G. Marcus in 1998.
<PAGE>
12
1995 STOCK OPTION PLAN
The Company's 1995 Stock Option Plan became effective upon the
consummation of the Company's initial public offering in February 1995. Pursuant
to the 1995 Stock Option Plan, certain directors, employees and officers of the
Company may be given the opportunity to acquire shares of Class A common stock
through the grant of options. Such options may be either incentive stock options
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code"), or nonqualified stock options. A maximum of 550,000 shares of Class A
common stock were originally authorized for issuance with respect to options
granted under the 1995 Stock Option Plan, subsequently increased to 800,000 in
1997. The material features of the 1995 Stock Option Plan are described below.
The purpose of the 1995 Stock Option Plan is to promote the long-term
success of the Company by providing financial incentives to key employees who
are in positions to make significant contributions toward success. The 1995
Stock Option Plan is designed to attract individuals of outstanding ability to
employment with the Company, to provide key employees with a proprietary
interest in the Company, and to encourage such employees to continue their
employment with the Company and to render superior performance during such
employment.
The 1995 Stock Option Plan is administered by the Compensation Committee
of the Board of Directors, which has authority to determine the employees to
whom awards will be granted, the form and amount of the awards, the dates of
grant, vesting periods, and other terms of each award.
The 1995 Stock Option Plan provides for both incentive stock options, as
defined in Section 422 of the Code, and nonqualified stock options. All options
are granted at an exercise price per share equal to not less than 100% of the
fair market value of the Class A common stock on the date the option is granted.
The Company receives no consideration upon the granting of an option. Full
payment of the option exercise price must be made by the optionee when an option
is exercised. The exercise price may be paid in cash or in such other form as
the Company may approve, including shares of Class A common stock valued at
their fair market value on the date of option exercise. The proceeds received by
the Company from the sale of shares under the 1995 Stock Option Plan are used
for general corporate purposes. Options granted under the 1995 Stock Option Plan
are not exercisable sooner than 12 months after the date of grant, vest
incrementally over a five-year period, and are not exercisable later than 10
years after the date of grant. Options are not transferable by the holder other
than by will or applicable laws of descent and distribution.
The grant of an incentive stock option generally has no immediate federal
income tax consequences to the Company or the holder. If the holder of the
incentive stock option sells the shares of Class A common stock received on the
exercise thereof more than two years after the date the incentive stock option
was granted to the holder and more than one year after the date of exercise of
the incentive stock option, the difference between the sale proceeds and the
exercise price of the option will be eligible for long-term capital gain or loss
treatment. In such event, no amount will be taxable as ordinary income and the
Company will not be entitled to a deduction for federal income tax purposes.
However, in general, the difference between the fair market value of the
Class A common stock on the date of exercise and the exercise price will be
included in the holder's alternative
<PAGE>
13
minimum taxable income for alternative minimum tax purposes. Whether or not a
holder of such an option would be subject to alternative minimum tax depends on
such individual's particular tax situation. If the holder disposes of the shares
of Class A common stock acquired upon the exercise of an incentive stock option
or applies such stock to the exercise of another option prior to the end of the
holding periods described above (a "disqualifying disposition"), the difference
between the fair market value of the Class A common stock on the date of
exercise and the exercise price is taxable as ordinary income in the year of
disposition and any excess of the amount realized on disposition over the value
of the Class A common stock on the date of exercise is eligible for long-term or
short-term capital gain treatment depending on how long the shares were held.
If, in a disqualifying disposition, the holder sells the Class A common stock
for less than its fair market value on the date he or she exercised the
incentive stock option, then, generally, only the amount of the difference
between the amount realized on the disposition and the purchase price will be
treated as ordinary income. If the holder of an incentive stock option makes a
disqualifying disposition, the Company generally will be entitled to a deduction
equal to the amount treated as ordinary income to such holder for the Company's
taxable year in which such holder recognizes such income.
The grant of a nonqualified stock option has no immediate federal income
tax consequences to the Company or the holder. The exercise of a nonqualified
stock option will require the holder to include in the holder's gross income the
amount by which the fair market value of the acquired shares on the exercise
date (or, in the case of certain employees who are officers or directors subject
to the profit recapture provisions of Section 16(b) of the Securities Exchange
Act of 1934, in certain circumstances thereafter) exceeds the exercise price. An
officer or director may avoid this six-month deferral provision by electing
under Section 83(b) of the Code to realize the income with respect to the
exercise of the option at the time of exercise.
The Company is required by the Code to withhold income and employment
taxes from the employee's wages or to receive a payment from the employee to
provide for the taxes on the ordinary income which is considered to have been
paid in shares of Class A common stock to the holder upon exercise of the option
or, in the case of an employee subject to Section 16(b) of the Securities
Exchange Act of 1934 who does not make a Section 83(b) election, at the end of
the six-month period following such exercise.
The Company is entitled to an income tax deduction (provided applicable
withholding requirements are met) equal to the amount of ordinary income
included as compensation in the gross income of the holder for the taxable year
of the Company during which the holder includes such amount in the holder's
income.
The closing price of the Company's Class A common stock as reported on the
New York Stock Exchange on March 3, 1999 was $6.8125 per share. There is no
market for the Class B common stock (but shares of Class B common stock are
convertible, on a share-for-share basis, into shares of Class A common stock
under certain conditions).
At December 31, 1998 (the end of the Company's 1998 fiscal year), options
were outstanding under the 1995 Option Plan to purchase an aggregate of 626,000
shares of Class A common stock.
<PAGE>
14
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1998
Individual Grants
--------------------------------------------------------- Potential Realizable Value at
Number of Percent of Assumed Annual Rates of
Securities Total Stock Price Appreciation
Underlying Options Exercise or for Option Term(2)
Options Granted in Base Price Expiration -------------------------------
Name Granted#(1) Fiscal Year(1) (per share) Date 5% 10%
---- ----------- -------------- ----------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Roger S. Marcus 50,000 15.2% $9.00 11/17/08 $283,003 $717,184
Robert N. Agate 15,000 4.6% 9.00 11/17/08 84,901 215,155
Howard N. Feist III 15,000 4.6% 9.00 11/17/08 84,901 215,155
Dennis P. Jarosz 15,000 4.6% 9.00 11/17/08 84,901 215,155
Peter J. Rohrbacher 15,000 4.6% 9.00 11/17/08 84,901 215,155
</TABLE>
(1) All options granted in fiscal year 1998 were granted pursuant to the 1995
Stock Option Plan. All options granted to the named executive officers
vest over five years at the rate of 20% per year beginning on the first
anniversary of the date of the grant, subject to acceleration as the
Compensation Committee, in its sole discretion, deems appropriate.
(2) These amounts represent certain assumed rates of appreciation which are
provided for illustrative purposes only. Actual gains, if any, on stock
option exercises and Class A common stock holdings are dependent on the
future performance of the Class A common stock and overall stock market
conditions. There is no assurance that the amounts reflected will be
realized.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In The Money Options
Shares Options at 12/31/98 at 12/31/98
Acquired on Value ---------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger S. Marcus -- -- 90,000 110,000 $ -- $ --
Robert N. Agate -- -- -- 15,000 -- --
Howard N. Feist III -- -- -- 15,000 -- --
Dennis P. Jarosz -- -- -- 15,000 -- --
Peter J. Rohrbacher -- -- -- 15,000 -- --
</TABLE>
In November 1998, the Company issued repriced options in exchange for the
surrender of all outstanding common stock options held by the Company's officers
and employees, with the exception of Roger S. Marcus and Richard G. Marcus. The
repriced options have an exercise price of $9.00 per share, which the Company
deemed to be the fair market value of a share of Class A common stock on the
date thereof and vest in annual installments equal to 20% of the total number of
options granted on each of the first five anniversaries of the date the repriced
options were granted. The Company has not repriced stock options in the past ten
years, except as described above. The following table sets forth certain
information concerning the repricing of the options held by any executive
officer during the last ten fiscal years:
<PAGE>
15
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
Number of Market Price Length of
Securities of Stock at Exercise Price Original Option
Underlying Time of at time of New Term Remaining
Options/SAR's Repricing or Repricing or Exercise at Date of
Repriced or Amendment Amendment Price Repricing or
Name and Principal Position Date Amended (#) ($) ($) ($) Amendment
- --------------------------- ---- ----------- -------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Agate 11/17/98 10,000 9.00 13.00 9.00 6 years
Executive Vice President 11/17/98 5,000 9.00 14.25 9.00 8 years
David W. Bushar 11/17/98 3,500 9.00 13.00 9.00 6 years
Senior Vice President -
Manufacturing
Howard N. Feist III 11/17/98 10,000 9.00 13.00 9.00 6 years
Senior Vice President - 11/17/98 5,000 9.00 14.25 9.00 8 years
Finance and Chief
Financial Officer
Dennis P. Jarosz 11/17/98 3,500 9.00 13.00 9.00 6 years
Senior Vice President - 11/17/98 6,500 9.00 10.63 9.00 7 years
Marketing 11/17/98 5,000 9.00 14.25 9.00 8 years
James K. Morando 11/17/98 1,000 9.00 13.00 9.00 6 years
Senior Vice President - 11/17/98 1,000 9.00 10.63 9.00 7 years
Sales 11/17/98 1,000 9.00 14.25 9.00 8 years
Peter J. Rohrbacher 11/17/98 10,000 9.00 13.00 9.00 6 years
Senior Vice President - 11/17/98 5,000 9.00 14.25 9.00 8 years
Research and Engineering
Thomas A. Sciortino 11/17/98 10,000 9.00 13.00 9.00 6 years
Senior Vice President - 11/17/98 5,000 9.00 14.25 9.00 8 years
Administration
Merrill M. Smith 11/17/98 10,000 9.00 13.00 9.00 6 years
Senior Vice President - 11/17/98 5,000 9.00 14.25 9.00 8 years
Technology
</TABLE>
DEFINED BENEFIT PENSION PLAN
In addition to the remuneration set forth above, the Company maintains a
tax-qualified defined benefit pension plan (the "Pension Plan") for all salaried
(non-hourly) employees. The Pension Plan provides non-contributory benefits
based upon years of service and average annual earnings for the 60 consecutive
calendar months in which the participating employee had the highest level of
earnings during the 120 consecutive calendar months preceding retirement.
<PAGE>
16
The table below sets forth certain information relating to the Pension
Plan with respect to the five most highly compensated executive officers of the
Company at December 31, 1998. Roger S. Marcus is not eligible to participate in
the Pension Plan because he is an employee of American Biltrite.
1998 Credited
Remuneration Years
Name Covered by Plan of Service
---- --------------- ----------
Roger S. Marcus -- --
Robert N. Agate $160,000 17
Howard N. Feist III 160,000 17
Dennis P. Jarosz 160,000 26
Peter J. Rohrbacher 160,000 25
The following table is based on the present Pension Plan formula. Actual
benefits will differ depending on the employee's years of service and whether
the employee was previously employed by the Company or the Tile Division of
American Biltrite.
The compensation used to determine a person's benefits under the Pension
Plan includes such person's salary (including amounts deferred as salary
reduction contributions to any applicable tax-qualified plans maintained under
Sections 401(k) or 125 of the Code) and annual bonuses. The Internal Revenue
Service has limited the maximum compensation for benefit purposes to $160,000.
The following table shows, for various income and service levels, the annual
benefits payable under the Pension Plan, commencing at normal retirement at age
65. These benefits are presented on a five years certain and life thereafter
basis.
APPROXIMATE ANNUAL PENSION AT AGE 65
Total Years of Service as a Plan Member
---------------------------------------------------------------
Final Average 15 20 25 30 35
Compensation -------- --------- -------- --------- --------
- -------------
$100,000 $11,600 $15,500 $19,400 $23,300 $27,100
125,000 15,000 20,000 25,000 30,000 35,000
150,000 18,400 24,500 30,600 36,800 42,900
175,000 19,700 26,300 32,900 39,500 46,000
200,000 19,700 26,300 32,900 39,500 46,000
225,000 19,700 26,300 32,900 39,500 46,000
250,000 19,700 26,300 32,900 39,500 46,000
<PAGE>
17
EMPLOYMENT ARRANGEMENTS
Pursuant to the terms of a Personal Services Agreement dated March 11,
1993, as amended, between the Company and American Biltrite, American Biltrite
agreed that Roger S. Marcus would serve as the Chief Executive Officer of the
Company and in connection therewith, would devote substantially all of his time
to his duties in such capacity; provided, however, that Mr. Marcus would be
entitled to remain as a director and executive officer of American Biltrite. The
Personal Services Agreement has an initial term of five years and has been
extended for an additional five years, subject to earlier termination in the
event of death, disability, cause or the termination of Mr. Marcus' affiliation
with American Biltrite, and may be further extended for successive one-year
periods if the parties so elect. Effective February 8, 1995, the Personal
Services Agreement was amended to provide, among other things, that Richard G.
Marcus will serve as Vice Chairman of the Company. For the year ended December
31, 1998, the Company paid $541,000 pursuant to the amended Personal Services
Agreement and accrued $750,000 for the 1998 contingent incentive fee, which was
paid in January 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the terms of a Business Relations Agreement between the
Company and American Biltrite (i) the Company granted American Biltrite the
right to purchase the Company's vinyl and vinyl composition tile at a price
equal to the lower of 120% of the Company's fully absorbed manufacturing costs
for such tile and the lowest price paid by any of the Company's other customers
and the exclusive right and license (including the right to sublicense) to
distribute such tile in Canada, (ii) American Biltrite granted the Company the
non-exclusive right to purchase floor tile and urethane from American Biltrite
at a price equal to the lower of 120% of American Biltrite's fully absorbed
manufacturing costs for such products and the lowest price paid by any of
American Biltrite's other customers, (iii) the Company agreed to provide
American Biltrite with data processing services for a period of 18 months
following the consummation of the transactions contemplated by the Acquisition
at a cost equal to American Biltrite's internally allocated costs for such data
processing services immediately prior to such consummation, (iv) the Company
agreed to reimburse American Biltrite for any insurance premiums retroactively
imposed relating to claims against American Biltrite in connection with the
business or operation of the Tile Division (other than certain specified claims)
and (v) American Biltrite agreed to have its tape division supply paper slitting
services to the Company at a cost equal to American Biltrite's internally
allocated costs for providing such services immediately prior to the
consummation of the transactions contemplated by the Acquisition. The agreements
referred to clauses (i) and (ii) above terminate on the fifteenth anniversary of
the date of the Business Relations Agreement, subject to renewal for successive
one-year periods if the parties so elect. The agreement referred to in clause
(v) above is terminable at any time by the Board of Directors of the Company or
American Biltrite. The Business Relations Agreement has an initial term of
fifteen years and may be extended for successive one-year periods if the parties
so elect. For the twelve months ended December 31, 1998, the Company had
purchases of $7.1 million from American Biltrite and sales of $0.9 million
pursuant to this Business Relations Agreement.
<PAGE>
18
CUMULATIVE TOTAL SHAREHOLDER RETURN
The graph that follows compares the monthly cumulative total shareholder
return of the Company's Class A common stock to the monthly cumulative returns
of the New York Stock Exchange Market Value Index and a Peer Group Index which
includes companies in Media General Financial Services Industry Group 058 -
Other Building Materials.
Measurement Period Congoleum Corporation MG Group Index NYSE Market Index
- ------------------ --------------------- -------------- -----------------
02/02/95 100.00 100.00 100.00
12/31/95 80.37 130.76 128.55
12/31/96 103.74 145.30 154.85
12/31/97 82.24 170.07 203.72
12/31/98 63.55 194.10 242.41
<PAGE>
19
RELATIONSHIP WITH INDEPENDENT PUBLIC AUDITORS
The Board of Directors of the Company has selected Ernst & Young LLP as
the Company's independent public auditors for 1999. Representatives of Ernst &
Young LLP are expected to be present at the Meeting and will be given an
opportunity to make a statement if they desire to do so, and are expected to be
available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the year 2000 Annual
Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must be
received by the Company at the Company's principal executive offices by December
2, 1999. In order for stockholder proposals made outside of Rule 14a-8 under the
Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c) under
the Exchange Act, such proposals must be received by the Company at the
Company's principal executive offices by February 4, 2000.
OTHER MATTERS
The management has no knowledge of any other matters which may come before
the Meeting and does not itself intend to present any such other matters.
However, if any such other matters shall properly come before the Meeting or any
adjournment thereof, the persons named as proxies will have discretionary
authority to vote the shares represented by the accompanying proxy in accordance
with their best judgment.
By Order of the Board of Directors
CONGOLEUM CORPORATION
Howard N. Feist III
Secretary
Mercerville, New Jersey
March 24, 1999
<PAGE>
|X| PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CONGOLEUM CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, MAY 5, 1999
The undersigned hereby appoints Roger S. Marcus, Richard G. Marcus and
Howard N. Feist III, jointly and severally, proxies, with full power of
substitution and with discretionary authority, to vote all the shares of Class A
common stock, par value $.01 per share, of Congoleum Corporation, a Delaware
corporation ("Congoleum"), which the undersigned is entitled to vote at the 1999
Annual Meeting of Stockholders of Congoleum to be held on Wednesday, May 5, 1999
in the Long Lane Room, 2nd Floor, The First National Bank of Boston, 100 Federal
Street, Boston, Massachusetts at 10:00 A.M., local time, or at any adjournments
or postponements thereof (the "Annual Meeting"), hereby revoking any proxy
heretofore given:
With- For All
For hold Except
PROPOSAL 1.
ELECTION OF DIRECTORS |_| |_| |_|
The nominees are:
Roger S. Marcus John N. Irwin III Cyril C. Baldwin, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IN THE ABSENCE OF SPECIFIC DIRECTIONS TO THE CONTRARY, THIS PROXY WILL
BE VOTED IN FAVOR OF THE PROPOSAL LISTED ABOVE AND IN THE DISCRETION OF THE
PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
Please sign, date and return this proxy card promptly in the enclosed
envelope. Please sign exactly as your name appears hereon. When shares are held
by join tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
-------------------------------------
Please be sure to sign and date Date
this Proxy in the box below
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
- --------------------------------------------------------------------------------
[UP ARROW] Detach above card, sign, date and [UP ARROW]
mail in postage paid envelop provided.
CONGOLEUM CORPORATION
- --------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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