<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
A.T. Cross Company
(Name of Registrant as Specified In Its Charter)
A.T. Cross Company
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
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<PAGE> 2
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1994
TO THE STOCKHOLDERS OF A.T. CROSS COMPANY:
Notice is hereby given that the annual meeting of stockholders of A.T.
Cross Company (the "Company") will be held on Thursday, April 28, 1994 at 10:00
a.m. at the offices of the Company, One Albion Road, Lincoln, Rhode Island
02865, for the following purposes:
1. Fixing the number of directors at nine, of which three shall be Class A
directors and six shall be Class B directors (by holders of Class A and Class B
common stock voting together as a single class).
2. Electing three Class A directors (by holders of Class A common stock
only) and six Class B directors (by holders of Class B common stock only) to
hold office until the next annual meeting of stockholders or until their
successors are duly elected and qualified.
3. Appointing independent public accountants to audit the Company's books
and accounts for the year ending December 31, 1994 (by holders of Class B common
stock only).
4. Transacting such other and further business as may properly come before
said meeting upon which the holders of Class A common stock or Class B common
stock, respectively, are entitled to vote.
The stock transfer books will not be closed. The close of business on
February 28, 1994 has been fixed as the record date for determining stockholders
entitled to vote at the annual meeting or any adjournment thereof, and only
holders of record of Class A common stock or Class B common stock as of that
time are entitled to receive notice of and to vote at said meeting or any
adjournment thereof.
A proxy statement is set forth on the following pages.
By order of the Board of Directors
Tina C. Benik
Corporate Secretary
March 18, 1994
<PAGE> 3
A.T. CROSS COMPANY
PROXY STATEMENT
FOR ANNUAL STOCKHOLDERS' MEETING
APRIL 28, 1994
This statement is furnished in connection with the accompanying proxy which
is solicited by the Board of Directors of A.T. Cross Company (the "Company")
from holders of Class A common stock of the Company for use at the annual
meeting to be held April 28, 1994. Any shareholder giving a proxy may revoke the
same prior to its exercise by giving notice in writing or in person to the
Secretary. If not revoked, the committee named in the accompanying proxy will
vote such proxy in the manner specified therein and, in the discretion of the
committee, for or against any matter upon which holders of Class A common stock
are entitled to vote which properly comes before the meeting and which has been
omitted from the proxy and proxy statement. Where an opportunity to vote by
ballot is afforded to holders of Class A common stock, the accompanying proxy
will be voted in the manner specified in such ballot. The cost of solicitation
of proxies, including the cost of reimbursing brokerage houses and other
custodians, nominees, or fiduciaries for forwarding proxies and proxy statements
to their principals, will be borne by the Company. Solicitation may be made in
person or by telephone or telegraph by officers or regular employees of the
Company, who will not receive additional compensation therefor. In addition, the
Company has retained Georgeson & Co., New York, N.Y., to aid in the solicitation
of proxies. The charges of such firm, estimated at $5,000, excluding expenses,
will be paid by the Company. This proxy statement and the enclosed form of proxy
are being first sent to stockholders on March 18, 1994.
A copy of the Company's annual report for the year 1993 containing
financial statements for the year ended December 31, 1993 is also enclosed, but
is not to be considered a part of the proxy soliciting material.
As of February 28, 1994, the Company had outstanding 15,130,545 shares of
Class A common stock and 1,804,800 shares of Class B common stock. Only
stockholders of record at the close of business on that date are entitled to
vote at the annual meeting. Stockholders shall be entitled to one vote for each
share held on the foregoing record date with respect to matters on which shares
of that class are eligible to vote.
STOCKHOLDERS' PROPOSALS
Any proposal of a stockholder intended to be presented at the next annual
meeting of the Company, scheduled to be held April 27, 1995, must be received by
the Company's Corporate Secretary not later than November 25, 1994 for inclusion
in the proxy statement and form of proxy relating to that meeting.
VOTING RIGHTS
Holders of Class A common stock have the right to elect one-third of the
number of directors from time to time fixed by the holders of Class A and Class
B common stock voting together as a single class; provided, however, that if the
total number of directors is not evenly divisible by three, then the holders of
Class A common stock have the right to elect that number of directors which is
the nearest whole number when the total number of directors is divided by three.
Holders of Class B common stock have the right to elect the remaining directors.
It is proposed that the number of directors for the ensuing year be fixed at
nine (see "ELECTION OF DIRECTORS"), and if this proposal is adopted, holders of
Class A common stock will have the right to elect three directors.
In addition, holders of Class A and Class B common stock vote together as a
single class:
a) For the reservation in the future of shares to be issued pursuant to
options granted or to be granted to directors, officers or employees;
and
b) With respect to the acquisition of assets or shares of any other company
if:
(1) An officer, director or holder of ten percent or more of either
Class A or Class B common stock has an interest in the
transaction;
1
<PAGE> 4
(2) The transaction would, in the reasonable judgment of the Board of
Directors, presently or potentially increase by nineteen and
one-half percent or more the aggregate of the Class A or Class B
common stock outstanding immediately prior to such transaction; or
(3) The transaction would involve the issuance of any Class A or Class
B common stock and in the reasonable judgment of the Board of
Directors the value of the consideration furnished by the Company
is nineteen and one-half percent or more of the aggregate market
value of all Class A and Class B common stock outstanding
immediately prior to such transaction.
Notwithstanding the foregoing, if the consummation of any transaction
described above would, with respect to either the Class A common stock or the
Class B common stock, result in a change in the designations, preferences,
limitations or relative rights of the shares of such class or have certain other
effects as specified in the Company's articles, the holders of Class A and Class
B common stock vote as separate classes on such transaction.
Except as stated above or otherwise required by law, all voting power is
vested in the holders of Class B common stock so long as any shares of Class B
common stock are outstanding.
VOTING PROCEDURES
The numbers of Class A and Class B directors will be fixed by vote of the
holders of a majority of the Class A and Class B shares present at the annual
meeting in person or represented by proxy, voting as a single class. The Class A
directors will be elected in each case by vote of the holders of a majority of
the Class A shares present or represented at the meeting, and the Class B
directors will be similarly elected by the holders of a majority of the Class B
shares.
Shares represented by proxies which are marked "abstain" with respect to
fixing the numbers of directors, "authority withheld" with respect to the
election of any particular nominee for director, or to deny discretionary
authority on any other matters will be counted as shares present and entitled to
vote, and accordingly any such marking of a proxy will have the same effect as a
vote against the proposal to which it relates.
Under the rules of the American Stock Exchange, on which the Class A shares
are listed, brokers who hold Class A shares in street name have the authority to
vote such shares on certain items, including fixing the number of and electing
directors, unless they have received instructions from the beneficial owners to
the contrary, in which case the shares are to be voted or the votes relating
thereto withheld, as directed by the beneficial owners. Such rules also provide
that brokers may not vote shares held in street name on certain other matters
without specific instructions from their customers. Shares subject to such
"broker non-votes" will not be treated as shares entitled to vote on the matters
to which they relate and therefore will be treated as not present at the meeting
for those purposes, but otherwise will have no effect on the outcome of the
voting on such matters. It is not presently anticipated that any matter which
might be the subject of a "broker non-vote" will come before the annual meeting.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The stockholders listed below were beneficial owners of more than 5% of the
outstanding Class A or Class B common stock of the Company at the close of
business January 12, 1994 (except as otherwise indicated) and may be deemed to
be "control persons" with respect to the Company.
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<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<C> <S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
A Bradford R. Boss 1,871,420 (232,500 directly; 480,000 indirectly as 12.4
P.O. Box 722 co-trustee of W. Russell Boss, Jr. Trust A; 560,000
Narragansett, RI indirectly as co-trustee of W. Russell Boss, Jr. Trust
02882 B; 500,000 indirectly as co-trustee of W. Russell Boss,
Jr. Trust C; 8 indirectly under the Company's Profit
Sharing Plan; 95,186 indirectly (stock subject to
options); and 3,726 indirectly, held by a minor child)
B Bradford R. Boss 1,804,800 (902,400 indirectly as co-trustee of W. 100.0
Russell Boss, Jr. Trust A; and 902,400 indirectly as
co-trustee of
W. Russell Boss, Jr. Trust B)
A Russell A. Boss 1,752,058 (86,694 directly; 560,000 indirectly as 11.6
29 Blackstone Avenue co-trustee of W. Russell Boss, Jr. Trust B; 480,000
Warwick, RI 02889 indirectly as co-trustee of W. Russell Boss, Jr. Trust
A; 500,000 indirectly as co-trustee of W. Russell Boss,
Jr. Trust C; 95,186 indirectly (stock subject to
options); 19,000 indirectly, held by his wife; and
11,178 indirectly, held by his children)
B Russell A. Boss 1,804,800 (902,400 indirectly as co-trustee of W. 100.0
Russell Boss, Jr. Trust B; and 902,400 indirectly as
co-trustee of
W. Russell Boss, Jr. Trust A)
A Edwin G. Torrance 480,000 indirectly as co-trustee of 3.2
129 Nayatt Road W. Russell Boss, Jr. Trust A
Barrington, RI 02806
B Edwin G. Torrance 902,400 indirectly as co-trustee of 50.0
W. Russell Boss, Jr. Trust A
A Noel M. Field, Jr. 560,300 (100 directly; 560,000 indirectly as co-trustee 3.7
50 Sakonnet Point of
Road W. Russell Boss, Jr. Trust B; 200 as trustee for
Little Compton, RI children)
02837
B Noel M. Field, Jr. 902,400 indirectly as co-trustee of 50.0
W. Russell Boss, Jr. Trust B
A Fleet Financial 1,781,748 indirectly as agent and as trustee of various 11.8
Group, Inc. trusts (as of December 31, 1993)
50 Kennedy Plaza
Providence, RI 02903
A John Hancock 897,291 (through its indirect, wholly owned subsidiary) 5.9
Mutual Life (as of December 31, 1993)
Insurance Company,
through its
indirect, wholly
owned subsidiary NM
Capital Management,
Inc.
John Hancock Place
Post Office Box 111
Boston, MA 02117
</TABLE>
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Bradford R. Boss and Russell A. Boss are, together with Edwin G. Torrance,
the co-trustees of Trust A referred to above; they are, together with Noel M.
Field, Jr., the co-trustees of Trust B referred to above; and they are, together
with Fleet National Bank, the co-trustees of Trust C referred to above. The
co-trustees of each trust jointly exercise investment and voting powers with
respect to the assets of the trust.
3
<PAGE> 6
The Class B shares held by Trusts A and B are convertible into Class A
shares on a share-for-share basis. If the Class B shares were all converted into
Class A shares, Bradford R. Boss and Russell A. Boss would be the beneficial
owners of 21.7% and 21.0%, respectively, of the outstanding Class A shares.
If the Class B shares held by Trust A were so converted, Edwin G. Torrance
would be the beneficial owner of 8.6% of the outstanding Class A shares, and if
the Class B shares held by Trust B were so converted, Noel M. Field, Jr. would
be the beneficial owner of 9.1% of the outstanding Class A shares.
<TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table reflects as of January 12, 1994 the beneficial
ownership of shares of common stock of the Company by directors, nominees, and
officers:
<CAPTION>
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TITLE OF AMOUNT AND NATURE OF PERCENT
CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
A Terrence Murray 2,000 directly; 3,102 indirectly(1)(2) *
A Jerry J. Burgdoerfer 200 directly; 28,318 indirectly(1) *
A Bradford R. Boss (See information above under
"SECURITY OWNERSHIP OF
B Bradford R. Boss CERTAIN BENEFICIAL OWNERS")
A Russell A. Boss (See information above under
"SECURITY OWNERSHIP OF
B Russell A. Boss CERTAIN BENEFICIAL OWNERS")
A Edward M. Watson 24,000 directly; 3,186 indirectly(1) *
A H. Frederick 3,116 indirectly(1) *
Krimendahl II
A John E. Buckley 19,650 directly; 97,086 indirectly(1) *
A Bernard V. Buonanno, Jr. 500 directly; 2,412 indirectly(1) *
A Thomas C. McDermott None *
A James C. Tappan 1,000 directly *
A Michael El-Hillow 200 directly; 30,334 indirectly(1) *
A Richard M. Feldt 100 directly; 23,834 indirectly(1) *
A All directors and 367,832 directly and 2,127,696 indirectly 16.5
officers as a group (including shares subject to options)
(20 persons)
B All directors and 1,804,800 100.0
officers as a group
(3 persons)
<FN>
(1) Shares subject to options
(2) Excludes shares held by Fleet Financial Group, Inc. in various fiduciary
capacities.
* Less than 1%
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</TABLE>
4
<PAGE> 7
<TABLE>
ELECTION OF DIRECTORS
It is proposed to fix the number of directors at nine, of which three will
be designated "Class A Directors" and six will be designated "Class B
Directors". Proxies will be voted for the nominees set forth below unless
authorization to do so is withheld. All nominees except Mr. Tappan are currently
directors of the Company. Should any nominee become unavailable for any reason
to accept nomination or election as a director, the persons named in the proxy
will vote for the election of such other person or persons as management may
recommend unless the stockholders vote to reduce the authorized number of
directors. The terms of all directors will expire when their successors are duly
elected at the annual meeting of stockholders scheduled to be held April 27,
1995. The following tables reflect information as of January 12, 1994.
CLASS A DIRECTORS
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NOMINEE AGE DURING PAST FIVE YEARS SINCE OTHER DIRECTORSHIPS1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Terrence Murray 54 Chairman, President and Chief Ex- 1982 Fleet Financial Group, Inc.;
ecutive Officer, Fleet Financial Stop & Shop Companies, Inc.;
Group, Inc. (diversified financial State Mutual Life Assurance
services corporation).2 3 Co.
Thomas C. McDermott 57 President and Chief Operating Of- 1992 Goulds Pumps, Inc.;
ficer of Bausch & Lomb, Inc. (1986 Revere Copper Products, Inc.
to February 1993) and thereafter
President, TCM Associates, Inc.
(executive search consultants).2
James C. Tappan 58 Group Vice President and Director, -- Columbian Mutual Life Insur-
General Foods Corporation (prior ance; The Milnot Company
to June 1988); since June 1988,
President, Tappan Capital Partners
(equity investment firm).
- ------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
CLASS B DIRECTORS
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NOMINEE AGE DURING PAST FIVE YEARS SINCE OTHER DIRECTORSHIPS1
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bradford R. Boss 60 Chairman of the Board and, to April 1960 Fleet Financial Group, Inc.;
1993, Chief Executive Officer4 5 6 Bausch & Lomb, Inc.
Russell A. Boss 55 President and, to April 1993, Chief 1962 Eastern Utilities Associates;
Operating Officer; thereafter Brown & Sharpe Manufacturing
President and Chief Executive Co.
Officer4 5 6 7
John E. Buckley 53 Executive Vice President to April 1980
1993; thereafter Executive Vice
President and Chief Operating
Officer.4 5
Bernard V. Buonanno, 56 Chairman (to 1989) and Director, 1986 Old Stone Corporation
Jr. Old Fox, Inc., manufacturer of
fertilizers and other agricultural
products; counsel (1988-1990) and
thereafter partner, Edwards &
Angell, Providence, RI,
attorneys-at-law.7 8
Edward M. Watson 76 Partner, Hinckley, Allen & Snyder, 1960
Providence, RI, attorneys-at-law
and counsel for the Company
(retired December 1987).9
H. Frederick 65 Limited Partner (to March 1989), 1972
Krimendahl II Goldman, Sachs & Co., New York, NY;
since March 1989: Limited Partner,
The Goldman Sachs Group L.P.;
Chairman (since March 1992) Petrus
Partners Ltd., New York, N.Y.2
- -------------------------------------------------------------------------------------------------------------
The Board of Directors of the Company has no standing Nominating Committee.
During 1993, the Audit Committee held two meetings and the Salary Committee held
two meetings.
<FN>
1 Includes only companies with a class of securities registered pursuant to
Section 12 or subject to the requirements of Section 15(d) of the
Securities Exchange Act of 1934 and any company registered as an
investment company under the Investment Company Act of 1940.
2 Member of Audit Committee.
3 The Company purchases gold and silver from and engages in other
transactions with Fleet National Bank, a wholly-owned subsidiary of Fleet
Financial Group, Inc., on substantially the same terms as those
prevailing at the time for comparable transactions with other persons.
4 Member of Executive Committee.
5 Member of Salary Committee. The Salary Committee sets general
compensation guidelines for the Company and sets the salary for certain
management employees.
6 Bradford R. Boss and Russell A. Boss are brothers.
7 Russell A. Boss and Bernard V. Buonanno, Jr. are cousins by marriage.
8 Edwards & Angell performed legal services for the Company during 1993.
9 Hinckley, Allen & Snyder performed legal services for the Company during
1993 and is expected to perform services for the Company in 1994.
</TABLE>
6
<PAGE> 9
DIRECTOR COMPENSATION
Members of the Company's Board of Directors were compensated for their
services during 1993 at the rate of $15,000 per annum, plus $900 for each Board
meeting attended. During 1993, the Board of Directors held five meetings. In
addition, members of the Audit Committee received $500 ($750 in the case of the
Committee Chairman) for each Committee meeting attended.
Directors also automatically participate in a non-qualified stock option
plan under a formula fixing the number of shares which are the subject of annual
option grants as the number derived by dividing, in each case, the compensation
payable to a director for his service to the Company as a director during each
calendar year by the closing market price for the Company's Class A common stock
on the last trading day of such year. Options under the non-qualified plan are
granted with exercise prices in each case 10% below the fair market value of the
Company's Class A common stock on the date of grant.
REPORTS TO SHAREHOLDERS ON
COMPENSATION MATTERS
The reports set forth below shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that A. T. Cross Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
The compensation of the Chairman, President and Chief Executive Officer,
and Executive Vice President and Chief Operating Officer of the Company is
established annually by the members of the Board of Directors who are not
employees of the Company (currently five directors). The compensation of the
remaining executive officers of the Company is fixed by the named officers, with
input from the Company's manager of compensation and benefits, who constitute
the Salary Committee of the Board of Directors, pursuant to authority delegated
to them by the Board.
The elements of compensation for each executive officer consist of base
pay, incentive bonus and stock option grants. In general, the decisions relating
to the incorporation of the several elements into the compensation of each
executive officer are based on three primary factors:
-- The external competitiveness of the Company's pay levels with those of
other manufacturing companies with similar revenues and scope of
operations.
-- The internal pay equity that exists among individual executives and
other Company employees.
-- The performance of the executive in meeting key strategic objectives or
increasing shareholder value.
The Company is privy to external compensation data through its
participation in, and analysis of, periodic compensation surveys which report on
salaries paid to other executives at companies of similar size. These companies,
which include various manufacturing companies with sales volumes generally less
than $500 million, are not represented in the peer group index used in the
Performance Graph. The peer group index is limited by the low number of publicly
traded fine writing instrument companies. The Company believes the larger sample
size of the compensation surveys provides more meaningful comparisons. There are
approximately 325 companies in the various survey groups. This number is subject
to occasional change from year to year. The Company extrapolates the survey
information using a combination of single and multiple regression analyses.
Factors used in the regression analyses include, but are not limited to,
corporate sales, Company assets, stockholders' equity, return on equity, Board
membership, and years of service. In addition, the Company also utilizes the
survey data to gauge its competitive position with other companies with respect
to bonus and stock option grants.
The Company also reviews its standing against other companies in a survey
that compares a number of financial performance criteria. The survey ranks
participating companies on one-and five-year returns on assets, equity and
capital. It also ranks their one-year return on sales and common stock
appreciation plus yield.
The following is a more specific discussion of each compensation component:
BASE SALARY:
The Company targets its base pay for the Chief Executive Officer and senior
management at the 50th to 65th percentile of executive officers of manufacturing
organizations of approximately the same size (less than $500 million in annual
sales) and scope of operations as the Company. Based on survey data, the Company
believes the base pay for its executives has been within this range for the last
several years.
Prior to 1992, base salary increases became effective on January 1 of each
year. In 1992, the Company began to delay base salary increases for senior
management. In 1993, these increases were delayed further to take effect on June
1, 1993.
In May 1993, Chairman Bradford R. Boss's base salary was reduced by
$100,000 to recognize his relinquishment of the Chief Executive Officer duties.
Russell A. Boss was promoted to President and Chief Executive Officer and
received a base pay increase of 3.6 percent in accordance with the surveys
referred to above. John E. Buckley was pro-
7
<PAGE> 10
moted to Executive Vice President and Chief
Operating Officer. Mr. Buckley received an increase of 3.7 percent in base
salary in accordance with the surveys referred to above. He and the remaining
three highest paid executives received a weighted average increase in base
salary of 6.2 percent as a group. The percentage increases of the group were
slightly above the average base salary increases provided to similar level
executives at comparable companies in 1993.
It was the consensus of the Board that the resulting base pay rates fell
within acceptable ranges at comparable companies.
BONUS:
Bonus payments to executives are predicated largely on the success the
Company has in meeting the incentive target ratio of pretax earnings, as
adjusted, of the Writing Instruments Division to net sales of the Division.
Under the plan in effect for 1993, the maximum bonus was payable if the maximum
ratio target of twenty five percent pre-tax earnings was met. No bonus was
payable unless the pretax earnings ratio of the Division was greater than 10
percent.
For 1993 corporate performance, the earnings formula yielded no bonus
accrual. As a result, Bradford R. Boss, Russell A. Boss, and John E.
Buckley received no additional compensation. At a meeting in December 1993, the
Board authorized the allocation of approximately $350,000 of special incentive
payments to 50 executive group managers and vice-presidents other than the
Messrs. Boss and Buckley.
The Company also analyzes its total cash compensation (base salary plus
bonus) in relation to other similarly sized companies and targets the seventy
fifth percentile as a competitive norm when the maximum pretax earnings ratio is
achieved. Applying the most recent survey data available to the Company (April
1993), the total compensation for all executive officers as a group was well
below the seventy fifth percentile for other companies included in the survey.
LONG-TERM INCENTIVES--STOCK OPTIONS:
The Company's long-term incentive compensation takes the form of incentive
and non-qualified stock option plans. The plans are intended to provide key
officers and managers with an ownership position in the Company, while fostering
a longer-term incentive to increase shareholder value. Options are granted at or
near the prevailing market prices and will have significant value only if the
market price for the Company's stock increases.
Periodically, the Stock Option Committee administering the plans approves
the granting of options to participants in the executive bonus plan, discussed
above. The options granted to the Chief Executive Officer and other key
employees are allocated primarily on the basis of performance and the bonus
group to which the recipient is assigned. The Committee compares the market
value of the shares covered by the grants to the market value of the shares
covered by the grants made by other companies that provide stock options as part
of their compensation packages. Comparisons are made for the Chief Executive
Officer position specifically, as well as for other positions, with grant value
reflected in each case as a percentage of base salary. The most recent
comparison (using February 1993 grants) reflected the options granted to Russell
A. Boss, as Chief Executive Officer and to Bradford R. Boss, as Chief Executive
Officer until April 1993, at the thirty second percentile, and the next four
highest-paid executives as an average at the fifty fourth percentile.
The foregoing reports are presented by the following:
As to matters relating to cash compensation:
Bradford R. Boss
Russell A. Boss
John E. Buckley
Bernard V. Buonanno, Jr.
H. Frederick Krimendahl II
Thomas C. McDermott
Terrence Murray
Edward M. Watson
As to matters relating to stock options:
Bernard V. Buonanno, Jr.
Terrence Murray
Edward M. Watson
8
<PAGE> 11
<TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the two
individuals who served as Chief Executive Officer of the Company during portions
of 1993 and the four other most highly compensated executive officers during
1993:
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION OTHER -----------------
-------------------------- ANNUAL SECURITIES UNDER- ALL OTHER
SALARY BONUS COMPENSATION LYING OPTIONS COMPENSATION
NAME & PRINCIPAL POSITION YEAR ($) ($) ($)(10) (#) ($)
------------------------- ---- ------ ----- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Russell A. Boss(1) 1993 $ 357,292 $ 0 $ 4,320 21,088 $25,872(4)
President and 1992 346,875 114,573 4,320 774 25,545
Chief Executive Officer 1991 337,500 194,100 2,965 12,812 24,372
Bradford R. Boss(1) 1993 283,333 0 2,775 21,088 26,213(5)
Chairman 1992 346,875 114,573 2,293 774 25,955
1991 337,500 194,100 1,234 12,812 24,745
John E. Buckley 1993 315,208 0 4,320 21,088 23,997(6)
Executive Vice President 1992 305,125 100,783 4,222 774 24,800
Chief Operating Officer 1991 295,000 169,600 3,368 16,812 23,700
Michael El-Hillow 1993 148,750 35,700 3,600 39,000 4,497(7)
Vice President, Finance 1992 137,500 50,500 3,600 0 4,400
Treasurer 1991 130,000 59,900 3,600 8,000 4,200
Chief Financial Officer
Richard M. Feldt(2) 1993 148,750 35,700 3,600 39,000 4,497(8)
Vice President, Operations 1992 138,750 29,700 3,600 0 4,400
1991 75,721 20,354 2,010 1,500 0
Jerry J. Burgdoerfer(3) 1993 144,052 0 3,600 8,588 62,591(9)
Vice President 1992 178,000 45,000 3,600 774 24,800
Corporate Marketing 1991 75,000 34,500 -- 26,812 19,500
(To October 1993)
- --------------------------------------------------------------------------------
<FN>
(1) Russell A. Boss was appointed Chief Executive Officer in April 1993. Prior
to April 1993, Bradford R. Boss served as Chairman and Chief Executive
Officer.
(2) Mr. Feldt was hired June 10, 1991.
(3) Jerry J. Burgdoerfer, who was hired in July 1991, served as Vice President,
Corporate Marketing through October 1993. Since October 1993, Mr.
Burgdoerfer has provided consulting services to the Company.
(4) Mr. Boss's All Other Compensation consisted of director fees ($19,500);
401(k) contributions ($4,497); and split dollar life insurance premiums
($1,875).
(5) Mr. Boss's All Other Compensation consisted of director fees ($19,500);
401(k) contributions ($4,497); and split dollar life insurance premiums
($2,216).
(6) Mr. Buckley's All Other Compensation consisted of director fees ($19,500);
and 401(k) contributions ($4,497).
(7) Mr. El-Hillow's All Other Compensation consisted of 401(k) contributions.
(8) Mr. Feldt's All Other Compensation consisted of 401(k) contributions.
(9) Mr.Burgdoerfer's All Other Compensation consisted of 401(k) contributions
($4,497); consulting fees ($38,594); and director fees ($19,500).
(10) All amounts listed under Other Annual Compensation consist of tax
reimbursement payments made to the named individuals relating to amounts
paid to these individuals as car allowances.
</TABLE>
9
<PAGE> 12
PERFORMANCE GRAPH
The following performance graph compares the market performance of the
Company's Class A common stock to the American Stock Exchange Market Value Index
and Peer Group Index over the Company's last five fiscal years. The graph
assumes that the value of the investment in the Company's Class A common stock
and each index was $100 at December 31, 1988 and that all dividends were
reinvested.
<TABLE>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
<CAPTION>
MEASUREMENT PERIOD A.T. CROSS PEER GROUP AMEX MARKET
(FISCAL YEAR COVERED) COMPANY INDEX INDEX
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 106.30 118.02 127.52
1990 73.75 78.53 108.14
1991 82.87 99.76 133.19
1992 65.76 137.26 135.02
1993 54.77 126.87 160.41
</TABLE>
On a worldwide basis, A. T. Cross Company is the only major manufacturer of
quality writing instruments that is not either privately held or part of a
consolidated group. Therefore, relative performance data for the Company's
primary competition is not readily available. The peer group included in this
performance graph represents four publicly-traded companies (Bic Corp.; Hunt
Manufacturing Company; Pentech International, Inc.; A.T. CROSS Company).based in
the United States included in Standard Industrial Classification (SIC) Code 3951
"Pens, Mechanical Pencils and Parts."
10
<PAGE> 13
<TABLE>
PENSION PLAN TABLE
<CAPTION>
AVERAGE YEARS OF SERVICE
PAY 15 20 25 30 35
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 6,000 $ 8,000 $ 10,000 $ 10,000 $ 10,000
50,000 12,000 16,000 20,000 20,000 20,000
75,000 18,000 24,000 30,000 30,000 30,000
100,000 24,000 32,000 40,000 40,000 40,000
150,000 36,000 48,000 60,000 60,000 60,000
200,000 48,000 64,000 80,000 80,000 80,000
300,000 72,000 96,000 120,000 120,000 120,000
400,000 96,000 128,000 160,000 160,000 160,000
500,000 120,000 160,000 200,000 200,000 200,000
</TABLE>
- --------------------------------------------------------------------------------
In each case, the indicated benefit will be reduced by the individual's
social security credit.
The Company maintains a non-contributory qualified retirement plan for the
benefit of its employees, including the individuals named in the Summary
Compensation Table. In addition, participants in the plan whose retirement
benefits would exceed amounts permitted under the Internal Revenue Code
participate in a non-qualified excess retirement plan which provides a
supplemental unfunded benefit equal to the amount of any benefit that would have
been payable under the qualified retirement plan but for certain limitations
under the Internal Revenue Code. The benefits set forth in the Pension Plan
Table reflect the aggregate of the benefits under both the qualified and
non-qualified plans. The qualified plan and the non-qualified plan are
collectively referred to as the "Plan".
Covered compensation under the Plan includes base salary, cash bonuses,
overtime pay, and amounts contributed by the employee to the A.T. Cross Savings
Plan maintained by the Company under Section 401(k) of the Internal Revenue
Code. All covered compensation of executive officers for 1993 is included in the
Salary and Bonus columns of the Summary Compensation Table set forth above.
As of December 31, 1993, each of the individuals named in the Summary
Compensation Table was credited with ten years of service under the Plan with
the exception of Jerry J. Burgdoerfer, who was credited with two years of
service, and Michael El-Hillow and Richard M. Feldt, who were credited with
three years of service.
The amounts payable shown in the above Table are based on the following
assumptions:
(i) The individual shall have retired at the normal retirement age of
65,
(ii) "Average pay" is the average of the covered compensation paid to
such individual over the five consecutive years immediately preceding
retirement, and
(iii) Benefits are paid in the form of a straight-life annuity. Payment
options for spousal benefits are available.
11
<PAGE> 14
<TABLE>
STOCK OPTIONS
The following tables set forth, as to the two individuals who served as
Chief Executive Officer of the Company during portions of 1993 and the four most
highly compensated other executive officers of the Company, information with
respect to stock option grants in 1993 and year-end values of unexercised
options. None of these executive officers exercised any options in 1993. The
Company does not grant any stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR THE
INDIVIDUAL GRANTS OPTION TERM
- ---------------------------------------------------------------------------------------------- ------------------------------
NUMBER PERCENTAGE
OF OF TOTAL MARKET
SECURITIES OPTIONS PRICE
UNDERLYING GRANTED TO EXERCISE PER SHARE
OPTIONS EMPLOYEES PRICE ON DATE EXPIRATION
NAME GRANTED IN 1993 (PER SHARE) OF GRANT DATE(1) 0% 5% 10%
---- ---------- ---------- ----------- --------- ---------- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bradford R. Boss 15,000 3.01% $ 17.6063 $ 19.5625 February 7, 2003 $ 29,344 $ 213,885 $ 497,008
5,000 1.00% $ 19.5625 $ 19.5625 February 7, 2003 $ 0 $ 61,514 $ 155,888
1,088 0.22% $ 11.7563 $ 13.0625 September 30, 2003 $ 1,421 $ 10,359 $ 24,071
Russell A. Boss 15,000 3.01% $ 17.6063 $ 19.5625 February 7, 2003 $ 29,344 $ 213,885 $ 497,008
5,000 1.00% $ 19.5625 $ 19.5625 February 7, 2003 $ 0 $ 61,514 $ 155,888
1,088 0.22% $ 11.7563 $ 13.0625 September 30, 2003 $ 1,421 $ 10,359 $ 24,071
John E. Buckley 15,000 3.01% $ 17.6063 $ 19.5625 February 7, 2003 $ 29,344 $ 213,885 $ 497,008
5,000 1.00% $ 19.5625 $ 19.5625 February 7, 2003 $ 0 $ 61,514 $ 155,888
1,088 0.22% $ 11.7563 $ 13.0625 September 30, 2003 $ 1,421 $ 10,359 $ 24,071
Jerry J. Burgdoerfer 3,500 0.70% $ 17.6063 $ 19.5625 February 7, 2003 $ 6,847 $ 49,907 $ 115,968
4,000 0.80% $ 19.5625 $ 19.5625 February 7, 2003 $ 0 $ 49,211 $ 124,710
1,088 0.22% $ 11.7563 $ 13.0625 September 30, 2003 $ 1,421 $ 10,359 $ 24,071
Michael El-Hillow 6,000 1.21% $ 17.6063 $ 19.5625 February 7, 2003 $ 11,738 $ 85,554 $ 198,803
4,000 0.80% $ 19.5625 $ 19.5625 February 7, 2003 $ 0 $ 49,211 $ 124,710
4,000 0.80% $ 11.3813 $ 13.3125 August 17, 2003 $ 7,725 $ 41,214 $ 92,592
25,000(2) 5.02% $ 12.0938 $ 13.4375 October 20, 2003 $ 33,594 $ 244,863 $ 568,992
Richard M. Feldt 6,000 1.21% $ 17.6063 $ 19.5625 February 7, 2003 $ 11,738 $ 85,554 $ 198,803
4,000 0.80% $ 19.5625 $ 19.5625 February 7, 2003 $ 0 $ 49,211 $ 124,710
4,000 0.80% $ 11.3813 $ 13.3125 August 17, 2003 $ 7,725 $ 41,214 $ 92,592
25,000(2) 5.02% $ 12.0938 $ 13.4375 October 20, 2003 $ 33,594 $ 244,863 $ 568,992
- ---------------
<FN>
(1) Subject to earlier termination in the event of termination of the grantee's
employment.
(2) These options vest at 33.33% on January 1, 1994, 1995 and 1996.
</TABLE>
<TABLE>
OPTION VALUES AT DECEMBER 31, 1993
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1993 DECEMBER 31, 1993
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Bradford R. Boss...................... 95,186 1,088 $ 0 $ 3,665
Russell A. Boss....................... 95,186 1,088 0 3,665
John E. Buckley....................... 97,086 1,088 0 3,665
Jerry J. Burgdoerfer.................. 28,318 1,088 0 3,665
Michael El-Hillow..................... 22,000 25,000 14,975 75,780
Richard M. Feldt...................... 15,500 25,000 14,975 75,780
</TABLE>
12
<PAGE> 15
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER
PARTICIPATION
The Board of Directors of the Company does not have a compensation
committee denominated as such. As indicated under "Reports to Shareholders on
Compensation Matters" at page 7, above, the compensation of Messrs. Bradford R.
Boss, Russell A. Boss and John E. Buckley, all of whom are members of the Board
of Directors of the Company, is fixed by the remaining directors, with the
exception of Jerry J. Burgdoerfer, who served as Vice President, Corporate
Marketing, of the Company to October 1993, and currently serves as a consultant
to the Company. The compensation of the remaining
executive officers of the Company is fixed by the Messrs. Boss and Mr. Buckley.
Edward M. Watson, a director of the Company, served as Secretary of the Company
from 1964 to 1991.
Bradford R. Boss is a member of the compensation committees of the boards
of directors of Fleet Financial Group, Inc. and Bausch & Lomb, Inc. Terrence
Murray, a director of the Company, is Chairman and Chief Executive Officer of
Fleet Financial Group, Inc., and Thomas C. McDermott, also a director of the
Company, was President and Chief Operating Officer of Bausch & Lomb, Inc.
through February 10, 1993.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
At the annual meeting, holders of Class B common stock will appoint the
auditors to examine the financial statements of the Company and its subsidiaries
for the year 1994. Ernst & Young have been nominated by the Board of Directors
as such auditors. One or more representatives of the auditors plan to attend the
annual meeting and will be afforded the opportunity to make a statement and
answer questions.
At least twice a year the Audit Committee reviews and approves the services
that may be provided by Ernst & Young during the year, considers the effect that
performing such services might have on audit independence, and approves
guidelines under which management may engage Ernst & Young to perform non-audit
services. It also reviews the services performed to see that they are consistent
with its guidelines.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10 percent of
the Company's Class A common stock ("Insiders"), to file with the Securities and
Exchange Commission and the American Stock Exchange reports of ownership and
changes in ownership of such stock. Insiders are required by Securities and
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on a review of the copies of such
reports furnished to the Company, the Company believes that during 1993 all
Section 16(a) filing requirements applicable to its Insiders were complied with,
except for the following: David A. Rogers, an Insider during 1991, inadvertently
failed to disclose in the appropriate Form 5 filed in 1993 the acquisition of
162 shares of Class A common stock pursuant to an election made in 1991 under
the Company's Profit Sharing Plan.
OTHER MATTERS
The Board of Directors and management know of no matter of business to be
brought before the meeting which is not referred to above. However, if other
business upon which holders of Class A common stock are entitled to vote shall
properly come before the meeting, it is the intention of the persons named in
the enclosed proxy or any substitute to vote said proxy in accordance with their
best judgment.
IMPORTANT
NO MATTER HOW SMALL YOUR HOLDINGS, YOU ARE RESPECTFULLY REQUESTED TO SIGN,
DATE, AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED, PREPAID ENVELOPE AT YOUR
EARLIEST CONVENIENCE.
Tina C. Benik
Corporate Secretary
Dated: March 18, 1994
13
<PAGE> 16
CROSS(R)
SINCE 1846
<PAGE> 17
PROXY
A.T. CROSS COMPANY
The undersigned holder of Class A common stock of A.T. Cross Company does hereby
constitute and Bradford R. Boss, Russell A. Edward M. Watson, or any one
as attorneys and proxies of the undersigned, with full power of for, and in the
name and undersigned to appear and vote all shares of Class A common stock of
A.T. Cross Company held of record in the name of the undersigned at the annual
meeting of A.T. Cross Company to be held at the offices of the Company, One
Albion Road, Lincoln, Rhode Island 02865 on Thursday, April 28, 1994 at
10:00 A.M. and at any and all adjournments thereof as designated.
- -------------------------------------------------------------------------------
1. NUMBER OF DIRECTORS: FOR / / AGAINST / / ABSTAIN
fixing the number of Class A directors at three
and Class B directors at six
- -------------------------------------------------------------------------------
2. ELECTION OF CLASS A DIRECTORS:
Terrence Murray / / FOR / / AUTHORITY WITHHELD
James C. Tappan / / FOR / / AUTHORITY WITHHELD
Thomas C. McDermott / / FOR / / AUTHORITY WITHHELD
- -------------------------------------------------------------------------------
3. OTHER BUSINESS: In their discretion, the proxies are authorized to vote
upon such other business as may properly come before said meeting or any
adjournment thereof upon which Class A common stockholders are entitled to
vote. This proxy when properly executed will be voted in the manner directed
herein by the undersigned. If no direction is made, this proxy will be voted
FOR proposals 1 and 2. THIS PROXY IS BEING SOLICITED ON BEHALF OF THE
COMPANY'S BOARD OF DIRECTORS. Please date, sign and mail promptly in the
enclosed envelope. This proxy will not be used if you attend the
meeting in person and so request.
(over)
Dated 1994
-------------------------------------
Signature:
-------------------------------------
Signature:
-------------------------------------
Important: Please sign exactly as your name or names appear above. When signing
as attorney, executor, administrator, trustee, guardian, or in any other
representative capacity, give full title as such. Corporate stockholders sign
with full corporate name by a duly authorized officer. If a partnership, sign in
partnership name by authorized person.
