<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C> <C>
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 under Rule 14a-12
</TABLE>
DEL LABORATORIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
</TABLE>
<PAGE>
DEL LABORATORIES, INC.
178 EAB PLAZA
UNIONDALE, NEW YORK 11556-0178
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 25, 2000
------------------------
April 27, 2000
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of DEL
LABORATORIES, INC. (the "Corporation"), will be held at the Garden City Hotel,
45 Seventh Street, Garden City, New York 11530 on Thursday, May 25, 2000, at
9:30 A.M. (local time) to consider the following matters:
1. To elect two members of the Board of Directors of the Corporation for
a term of three years; and
2. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 3, 2000 as
the record date for the determination of the stockholders entitled to notice of
and to vote at such meeting or any adjournment thereof. A complete list of
stockholders entitled to vote at the Annual Meeting will be maintained at the
Company's corporate offices at 178 EAB Plaza, Uniondale, New York 11556-0178,
for ten days prior to the meeting.
Stockholders are cordially invited to attend the meeting. If you are a
stockholder of record and plan to attend, please complete and return the
enclosed Request for Admission Card. If you are a stockholder whose shares are
not registered in your own name and you plan to attend, please request an
admission card by writing to Executive Vice President, Chief Financial Officer,
Del Laboratories, Inc., 565 Broad Hollow Road, Farmingdale, New York 11735.
Evidence of your stock ownership, which you can obtain from your bank,
stockbroker, etc., must accompany your letter.
A copy of the Annual Report for the year 1999 is enclosed herewith.
By Order of the Board of Directors,
Gene L. Wexler
SECRETARY
YOU ARE REQUESTED TO COMPLETE AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE-PAID RETURN ENVELOPE. THIS WILL ENSURE THAT YOUR SHARES ARE
VOTED IN ACCORDANCE WITH YOUR WISHES.
<PAGE>
DEL LABORATORIES, INC.
178 EAB PLAZA
UNIONDALE, NEW YORK 11556-0178
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 25, 2000
------------------------
Your proxy is hereby solicited on behalf of the Board of Directors of Del
Laboratories, Inc., a Delaware corporation (the "Corporation"), for use at the
2000 Annual Meeting of Stockholders, to be held on Thursday, May 25, 2000 at
9:30 A.M. at the Garden City Hotel, 45 Seventh Street, Garden City,
New York 11530, and at any adjournments thereof. The purposes of the meeting are
as set forth herein and in the accompanying Notice of Annual Meeting. It is
anticipated that these materials will be mailed on or about April 27, 2000 to
all stockholders entitled to vote at the Annual Meeting.
A proxy in the accompanying form, which is properly executed, duly returned
to the Board of Directors and not revoked, will be voted in accordance with the
instructions contained in the proxy. If no instructions are given with respect
to any matter specified in the Notice of Annual Meeting to be acted upon at the
Annual Meeting, the proxy will be voted FOR such matter. Each stockholder who
has executed a proxy and returned it to the Board of Directors may revoke the
proxy by notice in writing to the Secretary of the Corporation, by executing a
later proxy or by attending the Annual Meeting in person and requesting the
return of the proxy, in any case at any time prior to the voting of the proxy.
The cost of the solicitation of proxies will be paid by the Corporation. In
addition to the solicitation of proxies by the use of the mails, regularly
engaged employees of the Corporation may, without additional compensation
therefor, solicit proxies either personally, by telephone or by facsimile. The
Corporation will, upon request, reimburse banks, brokers and other nominees for
their reasonable expenses incurred in handling proxy materials for beneficial
owners.
The Board of Directors has fixed the close of business on April 3, 2000 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting (the "Record Date"). As of the Record Date, there
were outstanding and entitled to vote 7,543,726 shares of Common Stock, par
value $1.00 per share ("Common Stock"). Each share of Common Stock entitles the
holder thereof to one vote. One-third of all shares of Common Stock issued and
outstanding and entitled to vote constitutes a quorum. Election of directors is
by plurality vote, with the two nominees receiving the highest vote totals to be
elected as directors of the Corporation. Accordingly, abstentions and broker
non-votes will not affect the outcome of the election.
If a stockholder is a participant in the Corporation's Employee Stock
Ownership Plan (the "ESOP"), the participant will receive, with respect to the
number of shares held for his or her account under the ESOP on the Record Date,
a separate card which will serve as a voting instruction to the Trustee of the
Employee Stock Ownership Trust, a trust that holds the shares acquired for the
ESOP, with respect to shares held for the participant's account. Unless the card
is signed and returned, shares held in the participant's account under the ESOP
will be voted in the same proportion as the shares for which signed cards are
returned by other participants.
Attendance at the Annual Meeting will be limited to stockholders as of the
Record Date, their authorized representatives and guests of the Corporation.
Admission will be by admission card only. For stockholders of record who wish to
obtain an admission card, please complete and return the enclosed Request for
Admission Card. Beneficial owners with shares held through an intermediary, such
as a bank
<PAGE>
or stockbroker, should request admission cards by writing to Executive Vice
President, Chief Financial Officer, Del Laboratories, Inc., 565 Broad Hollow
Road, Farmingdale, New York 11735, and include proof of ownership, such as a
bank or brokerage firm account statement or a letter from the broker, trustee,
bank or nominee holding their stock, confirming beneficial ownership.
Stockholders who do not obtain admission cards in advance may obtain them upon
verification of ownership at the Annual Meeting. Admission cards may be issued
to others at the discretion of the Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person who, to the
knowledge of the Corporation, as of the Record Date, was the beneficial owner of
more than 5% of the issued and outstanding Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OR IDENTITY OF GROUP OWNERSHIP(1) OF CLASS
- --------------------------------------------------------- ------------ --------
<S> <C> <C>
Dan K. Wassong......................................... 2,783,808(3) 32.9%(4)
Del Laboratories, Inc.
178 EAB Plaza
Uniondale, New York(2)
Martin E. Revson....................................... 1,197,446 15.9%
445 Park Avenue
New York, New York(2)
Del Laboratories, Inc. Employee Stock Ownership Plan... 469,117 6.2%
178 EAB Plaza
Uniondale, New York
Dimensional Fund Advisors Inc. ........................ 421,304(5) 5.6%
1299 Ocean Avenue, 11(th) floor
Santa Monica, California
</TABLE>
- ------------------------
(1) Except as noted below, each beneficial owner has sole voting power and sole
investment power.
(2) Mr. Wassong and Mr. Revson each has granted the other a right of first
refusal to purchase certain of his shares in the event one of them wishes to
dispose of such shares or upon his death, notwithstanding which each has the
right to dispose of a limited number of shares in any period of 12
consecutive months.
(3) Includes 1,796,407 shares owned individually by Mr. Wassong, 914,026 shares
issuable upon exercise of options (which are exercisable within 60 days)
held by Mr. Wassong and 73,375 shares held for Mr. Wassong's account under
the ESOP as of December 31, 1999.
(4) Based on 7,543,726 shares outstanding on April 3, 2000 plus, with respect to
Mr. Wassong, includes the number of shares he may acquire pursuant to the
exercise of options (see footnote (3) above).
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
adviser that is deemed to beneficially own 421,304 shares of the
Corporation's Common Stock as of December 31, 1999, furnishes investment
advice to four registered investment companies and serves as investment
manager to certain other investment vehicles, including commingled group
trusts. In its role as investment advisor and investment manager,
Dimensional possesses both voting and investment power over such shares. All
securities are owned of record by such investment vehicles, and Dimensional
disclaims beneficial ownership of all such shares.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information, as of the Record Date,
regarding the beneficial ownership of Common Stock by (i) each director of the
Corporation (other than Mr. Wassong and Mr. Revson, information with respect to
each of whom is presented above), (ii) each of the four most highly-compensated
executive officers of the Corporation during 1999 other than Mr. Wassong and
(iii) all directors and executive officers as a group:
<TABLE>
<CAPTION>
COMMON STOCK OWNED AS OF
APRIL 3, 2000
---------------------------
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP(1) OF CLASS
------------ --------
<S> <C> <C>
OUTSIDE DIRECTORS
Jack Futterman..................................... 8,590 0.1%
Robert A. Kavesh................................... 16,569 0.2%
Steven Kotler...................................... 79,971(2) 1.1%
George L. Lindemann................................ 105,496(3) 1.4%
Marcella Maxwell................................... 181 (4)
EXECUTIVE OFFICERS
Harvey P. Alstodt.................................. 147,778(5) 2.0%
Charles J. Hinkaty................................. 358,633(6) 4.8%
William McMenemy................................... 229,713(7) 3.0%
Enzo Vialardi...................................... 1,711(8) (4)
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
(11 persons)....................................... 4,929,896(9) 55.9%
</TABLE>
- ------------------------
(1) Except as noted below, each beneficial owner has sole voting power and sole
investment power.
(2) Includes 1,711 shares of Common Stock owned by Mr. Kotler's wife, 156 shares
owned by a pension trust for the benefit of Mr. Kotler and 2,244 shares
owned by a family foundation which Mr. Kotler may be deemed to control.
(3) Shares are owned by a partnership controlled by Mr. Lindemann.
(4) Less than 0.1%.
(5) Includes 82,886 shares which Mr. Alstodt may acquire through exercise of
options (which are exercisable within 60 days) currently outstanding and
6,192 shares held for Mr. Alstodt's account under the ESOP as of
December 31, 1999.
(6) Includes 181,422 shares which Mr. Hinkaty may acquire through exercise of
options (which are exercisable within 60 days) currently outstanding and
7,312 shares held for Mr. Hinkaty's account under the ESOP as of
December 31, 1999. Mr. Hinkaty is also a director of the Corporation.
(7) Includes 102,426 shares which Mr. McMenemy may acquire through exercise of
options (which are exercisable within 60 days) currently outstanding and
19,406 shares held for Mr. McMenemy's account under the ESOP as of
December 31, 1999.
(8) Includes 1,700 shares which Mr. Vialardi may acquire through exercise of
options (which are exercisable within 60 days) currently outstanding and 11
shares held for Mr. Vialardi's account under the ESOP as of December 31,
1999.
(9) Includes (i) 1,282,460 shares which such persons have rights to acquire
through the exercise of options (which are exercisable within 60 days)
currently outstanding, (ii) 106,296 shares held for the accounts
3
<PAGE>
of all executive officers and directors under the ESOP as of December 31
1999, (iii) 1,711 shares owned by Mr. Kotler's wife, (iv) 156 shares held by
a pension trust for the benefit of Mr. Kotler, (v) 2,244 shares owned by a
family foundation which Mr. Kotler may be deemed to control, and
(vi) 105,496 shares owned by a partnership controlled by Mr. Lindemann.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each director and executive officer of the Corporation and persons owning
more than 10% of the Corporation's equity securities are required by
Section 16(a) of the Securities Exchange Act of 1934, as amended, to report to
the Securities and Exchange Commission, by a specified date, his or her
beneficial ownership of, or transactions in, the Corporation's equity
securities. To the Corporation's knowledge (based solely on a review of the
copies of such reports furnished to the Corporation), all of the Corporation's
directors, executive officers and owners of greater than 10% of the
Corporation's equity securities timely made all required filings, with the
exception of Mr. Lindemann, who made one (1) late filing on Form 4 covering one
(1) transaction.
ELECTION OF DIRECTORS
The Corporation's Restated Certificate of Incorporation provides that the
Board of Directors shall consist of a minimum of three directors and a maximum
of ten directors, with the number to be fixed by the Board of Directors and such
number to be divided into three classes that will be nearly as equal as
possible. The Board currently consists of eight directors, three of whom are
designated as members of Class I, two of whom are designated as members of
Class II and three of whom are designated as members of Class III. The term of
office of each class of directors is three years, with one class of directors
expiring each year in rotation so that one class is elected at each annual
meeting.
Two directors for Class I are to be elected at the Annual Meeting and, when
elected, will serve until the Annual Meeting of Stockholders for 2003 and until
the election and qualification of their successors. Mr. Futterman will not be
standing for re-election to the Board of Directors.
It is the intention of the Board of Directors to nominate at the Annual
Meeting the individuals whose names are set forth in Class I below for election
to the Board of Directors for a three-year term. In the event that any of such
nominees for election at the Annual Meeting should become unavailable for
election for any reason, it is intended that votes will be cast pursuant to the
accompanying proxy for such substitute nominee as the Board of Directors may
designate. The proxies in the accompanying form, duly returned to the Board of
Directors, can only be voted for two directors to be elected at the Annual
Meeting.
INFORMATION CONCERNING DIRECTORS
The information set forth below, furnished to the Board of Directors by the
respective individuals, shows as to each nominee and each director of the
Corporation (i) his or her name and age; (ii) his or her principal occupation,
including positions or offices held with the Corporation, at present and for the
past five years; (iii) the year in which he or she began to serve as a director;
and (iv) the class of director to which he or she belongs.
4
<PAGE>
CLASS I
(TO SERVE UNTIL THE ANNUAL MEETING
OF STOCKHOLDERS FOR 2003)
TWO DIRECTORS ARE TO BE ELECTED TO THIS CLASS
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR SINCE
- ------------ ----------------------------------------------------- --------------
<S> <C> <C>
Martin E. Revson (89)... Private investor since August 1992; Chairman of the 1963
Board of the Corporation from July 1963 to August
1992
Dan K. Wassong (69)..... President and Chief Executive Officer of the 1968
Corporation; Chairman of the Board of the Corporation
since August 1992
Jack Futterman (69)*.... Private investor since March 1996; Chairman and Chief 1996
Executive Officer of Pathmark Stores, Inc. from
September 1989 to March 1996
</TABLE>
* Mr. Futterman will not be standing for re-election to the Board of
Directors.
CLASS II
(TO SERVE UNTIL THE ANNUAL MEETING OF
STOCKHOLDERS FOR 2001)
NO DIRECTORS ARE TO BE ELECTED TO THIS CLASS
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR SINCE
- ------------ ----------------------------------------------------- --------------
<S> <C> <C>
Charles J. Hinkaty Vice President of the Corporation and President of 1986
(50).................... Del Pharmaceuticals, Inc. since 1985
George L. Lindemann Chairman of the Board and Chief Executive Officer of 1998
(64).................... Southern Union Co. since 1986
</TABLE>
CLASS III
(TO SERVE UNTIL THE ANNUAL MEETING
OF STOCKHOLDERS FOR 2002)
NO DIRECTORS ARE TO BE ELECTED TO THIS CLASS
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR SINCE
- ------------ ----------------------------------------------------- --------------
<S> <C> <C>
Robert A. Kavesh (72)... Marcus Nadler Professor of Finance and Economics, 1976
Stern School of Business, New York University
Steven Kotler (53)...... Private investor; former Co-Chairman, Schroder & Co., 1987
Inc., an investment banking firm from 1999 to May 1,
2000; President and Chief Executive Officer of
Schroder & Co., Inc. from 1996 to 1999; President of
Schroder & Co., Inc. from 1987 to 1996 (1)
Marcella Maxwell (62)... Director of Development and Public Affairs, Miracle 1994
Makers, Inc., since February 1995; Director of
Special Projects, Community Affairs, Brooklyn Health
Center, from July 1994 to February 1995
</TABLE>
- ------------------------
(1) The Corporation has retained Schroder & Co., Inc. and certain of its
affiliates to perform investment advisory and other services.
Mr. Wassong is also a director of Southern Union Company and Moore Medical
Corp. Mr. Kotler is also a director of Moore Medical Corp. Mr. Futterman is also
a director of Party City Corp. and The Hain
Food Group, Inc.
5
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Corporation held seven meetings during 1999.
The Board of Directors currently has three committees, an Audit Committee, a
Compensation Committee and a Human Resources Committee. The Corporation has no
standing nominating committee or any committee performing similar functions. The
Board of Directors determines nominees for election to the Board.
The Audit Committee, which is comprised of Messrs. Kavesh and Kotler,
recommends to the Board of Directors the engaging of the independent auditors,
reviews with the independent auditors the scope and results of the audit
engagement, reviews the independence of auditors and considers the range of
audit and non-audit fees. It held two meetings in 1999.
The Compensation Committee, comprised of Messrs. Kotler, Kavesh and
Futterman, establishes the compensation of the Chief Executive Officer and
reviews on a periodic basis existing and proposed compensation plans, programs
and arrangements for executive officers and other employees. This Committee held
three meetings in 1999. The Stock Option Committee, a subcommittee of the
Compensation Committee, administers the Corporation's stock-based incentive
plans. The Stock Option Committee consists of Messrs. Kavesh and Futterman. This
subcommittee held five meetings during 1999.
The Human Resources Committee is comprised of Ms. Maxwell and Mr. Kotler.
The Human Resources Committee deals with all aspects of employee benefits,
complaints, employment practices and other matters involving the welfare of
employees and prospective employees of the Corporation (other than negotiation
of collective bargaining agreements and individual contracts of employment and
other matters expressly reserved for action by the Compensation Committee). This
Committee held one meeting during 1999.
No director attended fewer than 75% of the meetings of the Board of
Directors or the total number of meetings of the committees and subcommittees on
which such director served in 1999, except that Dr. Kavesh attended five of the
seven board meetings.
DIRECTORS' COMPENSATION
Directors of the Corporation who are not employees of the Corporation
receive an annual retainer of $25,000.
RECOMMENDATION OF BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR election as directors in
Class I the nominees identified above. Those nominees who receive the two
highest numbers of votes for their election as directors will be elected.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
for the years 1999, 1998 and 1997 of the Corporation's Chief Executive Officer
and each of the four other most highly compensated executive officers in 1999
(collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ---------------------
--------------------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- --------------------------- -------- -------- -------- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Dan K. Wassong........................ 1999 $723,000 $ 0 90,186 $324,258
Chairman, President and 1998 703,000 712,000 98,439 322,514
Chief Executive Officer 1997 688,000 890,000 117,782 353,747
Charles J. Hinkaty.................... 1999 339,000 0 17,889 10,017 10,641
Vice President and President of 1998 328,000 100,000 30,358 14,070
Del Pharmaceuticals, Inc. 1997 320,500 65,000 27,778
Harvey P. Alstodt..................... 1999 290,500 0 0 12,205
Executive Vice President, Sales-- 1998 280,000 160,000 0 12,658
Cosmetics Division, North America 1997 269,500 200,000 28,242 15,408
William McMenemy...................... 1999 290,500 0 46,379 11,144
Executive Vice Preaident, Marketing 1998 280,000 160,000 10,402 11,715
Cosmetics Division, North America 1997 269,500 200,000 33,007 14,970
Enzo J. Vialardi...................... 1999 260,000 0 0 7,978
Executive Vice President, 1998 108,333(2) 115,000 5,100 2,160
Chief Financial Officer
</TABLE>
- ------------------------------
(1) Includes for each Named Executive Officer (i) the insurance premiums paid in
each year in respect of such officer under the Corporation's Executive
Medical Reimbursement Plan (in 1999, the amounts paid were as follows:
Mr. Wassong--$7,978, Mr. Hinkaty--$7,978, Mr. Alstodt--$7,978,
Mr. McMenemy--$7,978, Mr. Vialardi--$7,978); and (ii) the dollar value
(calculated in accordance with SEC guidelines) of the premiums paid by the
Corporation with respect to "split dollar" life insurance policies
maintained by the Corporation for certain of such officers (in 1999, the
amounts were as follows: Mr. Wassong--$95,745, Mr. Hinkaty--$2,039,
Mr. Alstodt--$4,227, Mr. McMenemy--$3,166). Also includes for Mr. Wassong
indebtedness owed by him to the Corporation which was forgiven in each year
($220,535 in 1999). See "Description of Employment Agreements" below.
(2) Mr. Vialardi was appointed Executive Vice President and Chief Financial
Officer, August 1, 1998.
7
<PAGE>
STOCK OPTION GRANTS AND RELATED INFORMATION
STOCK OPTION GRANTS DURING 1999
The following table sets forth for each of the Named Executive Officers
information regarding individual grants of options during the year ended
December 31, 1999 and the present value of these options on their grant date.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL OPTIONS
UNDERLYING GRANTED TO EMPLOYEES EXERCISE OF EXPIRATION GRANT DATE
NAME OPTIONS GRANTED(1) IN FISCAL YEAR BASE PRICE DATE PRESENT VALUE(2)
- ---- ------------------ -------------------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Dan K. Wassong.......... 40,000 22.9% $14.500 7/29/09 $246,692
50,186 28.8% $14.250 6/23/06 $272,706
Charles J. Hinkaty...... 17,889 10.3% $15.375 9/27/06 $104,042
Harvey P. Alstodt....... 0 N/A N/A N/A N/A
William McMenemy........ 30,451 17.5% $14.250 6/23/06 $165,468
15,928 9.1% $ 9.125 12/23/06 $ 53,290
Enzo J. Vialardi........ 0 N/A N/A N/A N/A
</TABLE>
- ------------------------------
(1) Each of the options granted during 1999 has an exercise price equal to the
fair market value of a share of Common Stock on the date of grant, vests in
one-third annual increments commencing one year after the date of grant and
expires seven years from the date of grant, except for the 40,000 options
granted to Mr. Wassong which expire 10 years from the date of grant.
(2) These amounts were determined using the modified Black-Scholes option
pricing model. The assumptions underlying the Black-Scholes value include
(a) expected volatility (based on the average of the one, three, five and
seven year historical volatilities of the Common Stock on the dates of grant
for options which expire on July 29, 2009, and average of the one, three and
five for the reload options); (b) the risk-free rate (the seven year
Treasury bond rate on date of grant for the options which expire on
July 29, 2009, and the five year Treasury bond rate for the other options);
(c) projected dividend yield based on an annual dividend of $0.137 per share
(i.e., the annual dividend rate in effect on the dates of grant of such
options): (d) a five year expected period to exercise; and (e) a discount
rate of 5% per annum during the vesting schedule for the options (one-third
vesting on each anniversary of the date of grant for all options). The
following table shows the factors used to value the options above (by option
expiration date):
<TABLE>
<CAPTION>
EXPECTED RISK-FREE DIVIDEND
EXPIRATION DATE VOLATILITY RATE YIELD
- --------------- ---------- --------- --------
<S> <C> <C> <C>
July 29, 2009........................................ 39.94% 5.81% 0.95%
June 23, 2006........................................ 42.41% 5.91% 0.96%
September 27, 2006................................... 41.98% 5.71% 0.89%
December 23, 2006.................................... 28.75% 6.31% 1.50%
</TABLE>
8
<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of stock options during 1999 and
unexercised stock options held as of December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS
DEC. 31, 1999 DEC. 31, 1999
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED(1) UNEXERCISABLE UNEXERCISABLE(2)
- ---- --------------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
Dan K. Wassong....... 81,221 $714,255 887,305 /195,073 $872,528/0
Charles J. Hinkaty... 27,651 224,275 168,954 / 47,387 6,930/0
Harvey P. Alstodt.... 0 0 75,784 / 9,414 0/0
William McMenemy..... 100,260 743,736 89,891 / 64,316 11,837/0
Enzo J. Vialardi..... 0 0 1,700 / 3,400 0/0
</TABLE>
- ------------------------------
(1) The value realized is determined by multiplying the number of shares
acquired by the closing market price of the Common Stock on the date of
exercise, less the aggregate exercise price for said options.
(2) Based upon the closing price of the Common Stock on December 31, 1999
($7.875 per share), less the exercise price for the aggregate number of
shares subject to the options.
PENSION BENEFITS
The following table shows the sum of the annual pension benefits payable to
the Named Executive Officers under the Pension Plan and the annual SERP benefits
assuming retirement at age 65 with election of a benefit payable as a life
annuity in various remuneration and years of service classifications:
<TABLE>
<CAPTION>
ANNUAL BENEFITS
YEARS OF CREDITED SERVICE AT RETIREMENT(2)
FINAL AVERAGE ---------------------------------------------
COMPENSATION(1) 15 20 25 30
- --------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
75,00$0......... $ 13,500 $ 18,000 $ 22,500 $ 27,000
100,0$00........ $ 18,000 $ 24,000 $ 30,000 $ 36,000
150,0$00........ $ 27,000 $ 36,000 $ 45,000 $ 54,000
200,0$00........ $ 36,000 $ 48,000 $ 60,000 $ 72,000
300,0$00........ $ 54,000 $ 72,000 $ 90,000 $108,000
400,0$00........ $ 72,000 $ 96,000 $120,000 $144,000(3)
500,0$00........ $ 90,000 $120,000 $150,000(3) $180,000(3)
600,0$00........ $108,000 $144,000(3) $180,000(3) $216,000(3)
800,0$00........ $144,000(3) $192,000(3) $240,000(3) $288,000(3)
900,0$00........ $162,000(3) $216,000(3) $270,000(3) $324,000(3)
1,000$,000...... $180,000(3) $240,000(3) $300,000(3) $360,000(3)
1,100$,000...... $198,000(3) $264,000(3) $330,000(3) $396,000(3)
</TABLE>
- ------------------------------
(1) The Pension Plan benefits are based on the highest five consecutive years
out of final ten years of employment before normal retirement date. The SERP
benefits are currently based on the yearly compensation for 1996. The
compensation for 1996 for Messrs. Wassong, Hinkaty, Alstodt and McMenemy was
$1,334,091, $387,957, $395,604 and $396,509 respectively.
(2) Messrs. Wassong, Hinkaty, Alstodt, McMenemy, and Vialardi have,
respectively, 34, 15, 13, 35 and 2 years of credited service under the
Pension Plan.
(3) The benefits payable under the Pension Plan are currently limited to
$135,000, which is the maximum currently allowable under the Internal
Revenue Code of 1986, as amended (the "Code"). Any pension benefit payable
in excess of the maximum permitted by the Code would, if applicable, be
payable under the SERP.
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dan K. Wassong sets the salaries and recommends the bonuses, subject to
Compensation Committee review and approval, of named executive officers other
than himself.
DESCRIPTION OF EMPLOYMENT AGREEMENTS
DAN K. WASSONG
Dan K. Wassong, Chairman of the Board, President and Chief Executive Officer
of the Corporation, is party to an amended and restated employment agreement
with the Corporation dated as of July 1, 1999 (the "Agreement"). The Agreement
provides for Mr. Wassong's full time employment until December 31, 2008 at an
annual base salary of not less than $723,000. In addition, Mr. Wassong may
receive bonuses under the Corporation's Amended and Restated Annual Incentive
Plan (the "Annual Incentive Plan"). The Corporation shall reimburse Mr. Wassong
for reasonable legal and accounting fees which he may incur in connection with
the preparation and periodic review of his estate plan, tax planning, tax
returns, the Agreement and related employment arrangements. Upon termination of
the Agreement except for death, disability or cause, Mr. Wassong shall have the
right, but not the obligation, to serve as a consultant to the Corporation for a
period of five years. During such time as he serves as a consultant,
Mr. Wassong will be paid an annual amount equal to 60% of his base salary at the
time of termination of the Agreement. In addition, during that time,
Mr. Wassong will be entitled to continue to participate in the Corporation's
medical reimbursement program or to receive substantially equivalent medical
insurance coverage, and Mr. Wassong will be provided, at the Corporation's
expense, with an office, support and secretarial services and use of an
automobile and chauffeur.
The Agreement also provides for payment, upon its termination for any reason
other than cause, of deferred compensation (the "Deferred Compensation") based
on one month of compensation at the Adjusted Compensation Rate (i.e., an annual
rate of compensation equal to the base annual salary in effect at the date of
termination plus 110% of the previous year's bonus) for each year of
Mr. Wassong's employment by the Corporation since 1965. The Deferred
Compensation shall be paid over the same number of months as the number of years
of Mr. Wassong's employment by the Corporation, except that if Mr. Wassong dies
during the term of this Agreement, the Deferred Compensation shall be paid to
his designated beneficiary over a period of six months. In addition to the
Deferred Compensation, in the event the Agreement is terminated without cause,
Mr. Wassong will also receive a lump sum payment equal to his base annual salary
at the time of termination multiplied by the greater of (i) the number of years
remaining in the term of the Agreement and (ii) four years. Furthermore, if the
Agreement terminates other than for cause, Mr. Wassong (or his representative,
as the case may be) may require the Corporation to pay as additional
compensation the excess of the market value of shares of stock which
Mr. Wassong had an option to acquire from the Corporation over the aggregate
exercise price for those options (in which case such options shall be
cancelled).
Under the Agreement, the Corporation consolidated loans made to Mr. Wassong
in 1984, 1988 and 1990. As of April 3, 2000, the outstanding principal balance
of the loan to Mr. Wassong was $1,062,250 (the "Existing Balance"). The Existing
Balance is to be repaid, with interest at the rate of 6% per annum, with a
principal payment of $140,000 on January 20 of each year through 2007 and a
final payment of $82,250 on January 20, 2008, provided that each payment of
principal and interest will be forgiven when due unless Mr. Wassong has been
terminated for cause. The Corporation may, at its option, forgive additional
amounts in excess of the scheduled principal and interest payments in any year.
During 1999, $140,000 of principal and $80,535 of interest were forgiven by the
Corporation. Whenever the Corporation forgives any principal or interest owed by
Mr. Wassong, the Corporation has agreed to pay to him such additional payment (a
"Gross-Up Payment") in an amount such that, after payment by Mr. Wassong of all
federal, state and local taxes and excise taxes, if any, including any such
taxes imposed on the Gross-Up Payment, Mr. Wassong retains an amount of the
Gross-Up Payment equal to such taxes imposed on the principal
10
<PAGE>
and interest forgiven. Mr. Wassong's indebtedness must be secured by shares of
Common Stock of the Corporation having a market value equal to not less than
110% of the principal amount of the Existing Balance then outstanding. If
Mr. Wassong's employment is terminated for cause, the Existing Balance shall be
repaid in accordance with the annual payment schedule described above, without
any forgiveness of principal or interest.
The Corporation has agreed to grant to Mr. Wassong options to purchase
40,000 shares of the Corporation's common stock each year during his employment
by the Corporation. The annual grant of 40,000 stock options is in addition to
any other options granted to replace shares of stock of the Corporation sold by
Mr. Wassong to pay the exercise price and withholding taxes on options
exercised. All such options, as well as any options held by Mr. Wassong pursuant
to the Amended and Restated 1994 Stock Plan (the "1994 Stock Plan") shall be
transferrable pursuant to whatever actions are required to be taken by the
Compensation Committee. The Corporation has agreed to lend, or cause to be
loaned, to Mr. Wassong (to the extent permitted by applicable law) amounts
sufficient to enable him to (i) exercise options and rights to purchase shares
of Common Stock of the Corporation heretofore or hereafter granted to him and
(ii) pay any applicable federal, state and local income taxes incurred by him as
a result of the exercise of such options and rights. Mr. Wassong also has been
granted certain rights for the registration of shares for public offering under
the Securities Act of 1933, as amended.
During 1993, the Corporation purchased $4,000,000 of life insurance policies
payable on the death of Mr. Wassong. Under the terms of a Life Insurance
Agreement by and among the Corporation and a trust established for the purpose
of owning the policies, the policies are subject to a "split dollar" arrangement
under which the Corporation will receive, upon Mr. Wassong's death, an amount
equal to the premiums paid by the Corporation, without interest. The Corporation
has agreed to pay all premiums due in respect of such insurance policies (and
any additional policies that may be required to be purchased in order to provide
an aggregate death benefit of no less than $4,000,000). In addition, in certain
circumstances, the Corporation is required to pay additional premiums to assure
that the amount payable to Mr. Wassong's beneficiaries will be no less than
$2,000,000. The annual premium under the policies is $170,363; it is anticipated
that the annual premium will be required to be paid until 2002, at which time it
is estimated that the policies will be fully paid up (although the period of
time over which the premiums will be required to be paid may vary depending upon
the investment performance of the insurers and other factors). Pursuant to the
Life Insurance Agreement, the Corporation will continue to be obligated to pay
the premiums during Mr. Wassong's employment with the Corporation and following
termination of his employment, unless termination is a result of a discharge for
cause, or unless Mr. Wassong voluntarily ceases employment with the Corporation
other than by voluntary retirement. Amounts payable to Mr. Wassong's
beneficiaries upon his death pursuant to the policies purchased under the Life
Insurance Agreement are in addition to benefits payable pursuant to the
Corporation's general life insurance coverage available to all employees.
Mr. Wassong may elect to terminate the Agreement and receive all of the
compensation and benefits described above upon the occurrence of certain events,
including the following: (a) he is not elected and continued as a director of
the Corporation and appointed Chairman of the Board of Directors, President and
Chief Executive Officer; (b) his office is relocated outside of the Greater
Metropolitan Area of New York City; (c) the sale by the Corporation of all or
substantially all of its assets and business or a merger of the Corporation as a
result of which the shareholders of the Corporation prior to the merger will own
less than a majority of the company surviving such merger; and (d) a change in
control (defined as the acquisition, directly or indirectly, by any individual,
corporation or group, other than persons who are members of the Board of
Directors, of more than 40% of the voting power of the Corporation's common
stock).
11
<PAGE>
OTHER NAMED EXECUTIVE OFFICERS
The Corporation is party to an employment agreement with Charles J. Hinkaty,
Vice President and President of Del Pharmaceuticals, Inc., for a term expiring
on March 31, 2002. Under the employment agreement, Mr. Hinkaty's annual rate of
compensation shall not be less than $325,000.
The Corporation is party to an employment agreement with Harvey Alstodt,
Executive Vice President, Sales-Cosmetics Division, North America, for a term
expiring on March 31, 2001. Under the employment agreement, Mr. Alstodt's annual
rate of compensation shall not be less than $250,000.
The Corporation is party to an employment agreement with William McMenemy,
Executive Vice President, Marketing--Cosmetics Division, North America, for a
term expiring on March 31, 2003. Under the employment agreement, Mr. McMenemy's
annual rate of compensation shall not be less than $250,000.
The Corporation is party to an employment agreement with Enzo Vialardi,
Executive Vice President, Chief Financial Officer, for a term expiring on
July 31, 2000. Under the employment agreement, Mr. Vialardi's annual rate of
compensation shall not be less than $260,000.
The Corporation has agreed to provide to each of Messrs. Hinkaty, Alstodt
and McMenemy $500,000 of life insurance (including the insurance benefits
payable under the Corporation's group benefit plans), payable upon death to
their respective designees.
In accordance with the Corporation's policy regarding executives who have
been with the Corporation for at least ten years, Messrs. Hinkaty, Alstodt and
McMenemy will, upon termination of their employment without cause, be entitled
to receive, as severance compensation, one month's salary at the annual rate of
$325,000, $250,000 and $250,000, respectively, for every year of service with
the Corporation, up to a maximum of 24 months; Mr. Hinkaty has been with the
Corporation for 15 years, Mr. Alstodt has been with the Corporation for
13 years and Mr. McMenemy has been with the Corporation for 35 years.
Termination by the Corporation without cause, for purposes of each of the
compensation arrangements described in this paragraph, is deemed to include a
"change of control" as defined.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
As discussed below, the Compensation Committee considers a variety of
factors in arriving at the compensation paid to the Corporation's executive
officers. No specific weighting was assigned by the Compensation Committee to
any of the factors considered in determining the remuneration paid to the Chief
Executive Officer and the other Named Executive Officers for 1999.
GENERAL POLICIES
The Corporation's executive compensation program is intended to provide a
competitive total compensation package that enables the Corporation to attract
and retain key executives and that focuses executive behavior on the fulfillment
of both short-term (i.e., annual) and long-term business objectives and
strategies. The key components of the Corporation's executive compensation
program are base salary, annual incentive compensation and stock options. In
addition, with respect to Dan K. Wassong, the Corporation's Chief Executive
Officer, consideration is given to forgiveness of indebtedness to the
Corporation which Mr. Wassong has incurred in the past in connection with his
exercise of stock options, which forgiveness is provided for under his
employment agreement (as amended) on an annual basis through 2008 and which is
deemed to be valuable to the Corporation by enabling and encouraging him to have
a substantial position as a stockholder of the Corporation.
In determining compensation for its executive officers, the Corporation
generally seeks to remain competitive with compensation levels for executives of
companies of comparable size and profitability engaged in the health and beauty
business.
12
<PAGE>
Base salaries for each of the Named Executive Officers are (subject to
contractually stipulated minimums) based upon past and expected future
performance of the executive, the executive's responsibilities with the
Corporation and salaries for similar executive positions in companies that are
competitive with, and comparable in size to, the Corporation (including a number
of companies in addition to those reflected in the peer group index used in the
stock performance graph appearing below). The base salary of the Chief Executive
Officer is determined by the Compensation Committee. The base salaries of all
other Named Executive Officers are fixed by the Chief Executive Officer, subject
to review by the Compensation Committee. During 1999, the maximum increase in
base salary for any of the Named Executive Officers was approximately 4%. Annual
incentive compensation for each Named Executive Officer has been linked,
generally, to overall corporate performance and/or the performance of a
particular subsidiary or other business unit for which the executive may have
responsibility, but has also included a subjective assessment of the officer's
success in fulfilling the duties and responsibilities of his position.
Commencing in 1994, incentive compensation for each Named Executive Officer
in any year has been established under the Annual Incentive Plan, pursuant to
which the Compensation Committee establishes performance objectives for use in
determining all or a portion of amounts payable to such persons. The
Compensation Committee also has the discretion to award bonus payments to
executive officers in addition to or in lieu of amounts authorized under the
Annual Incentive Plan. For 1999, the Corporation did not pay any bonuses to its
executive officers.
The principal mechanism for rewarding executives for long-term performance
has been the grant of stock options under the Corporation's stock-based
incentive plans. The plan currently employed by the Corporation for this purpose
is the 1994 Stock Plan. Under the 1994 Stock Plan, the Stock Option Committee
may grant to executive officers and other key employees stock options, as well
as other stock-based awards, including restricted stock grants, deferred stock
and performance-based stock awards. To date, awards under the 1994 Stock Plan
have consisted only of stock options. Under the terms of the 1994 Stock Plan,
all grants of stock options must be made at no less than market value, so that
the person receiving options will benefit from appreciation of the price of the
stock to the same extent as other stockholders.
COMPENSATION FOR CHIEF EXECUTIVE OFFICER
Mr. Wassong's salary and bonus are determined in accordance with the same
general standards applied to other executives as outlined above. In determining
Mr. Wassong's 1999 base salary, the Committee considered the financial results
of the Company in 1998 as well as Mr. Wassong's individual performance. In 1999,
Mr. Wassong's base salary was increased to $723,000, a 2.8% increase.
Mr. Wassong was not awarded any bonus for 1999. During 1999, $140,000 of
principal and $80,535 of interest of Mr. Wassong's indebtedness to the
Corporation was forgiven in accordance with his employment agreement.
STOCK OPTIONS
Generally, stock options are granted to officers based upon the officer's
ability to influence the Corporation's long-term growth and profitability. The
Stock Option Committee receives recommendations from the Chief Executive Officer
concerning option grants for executive officers other than himself. All options
have been granted at exercise prices which are not less than the fair market
value of the Common Stock on the date of grant. Options to purchase a total of
154,454 shares were granted to the Corporation's Named Executive Officers during
1999, including options to purchase 40,000 shares granted to Mr. Wassong. All of
the options granted to the Named Executive Officers in 1999 (except for those
granted to Mr. Wassong) were granted to replace shares utilized by such persons
to satisfy the exercise prices of options previously granted to them by the
Corporation (and the tax liability arising therefrom, if any).
13
<PAGE>
COMPENSATION COMMITTEE
Steven Kotler
Robert A. Kavesh
14
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph charts the total stockholder return over a five-year
period commencing on December 31, 1994, with respect to an investment in the
Corporation's Common Stock as compared to the Amex Market Value Index, which was
discontinued at the end of 1998, the S&P Midcap Consumer Products Index (which
has replaced the Amex Market Value Index) and a peer group of companies selected
by the Corporation for purposes of comparison (the "Peer Group"). The Peer Group
consists of Playtex Products, Inc., Carter-Wallace, Inc., Helen of Troy Limited,
NBTY, Inc. and Windmere-Durable Holdings, Inc. Dividend reinvestment has been
assumed and, with respect to companies in the Peer Group, the returns of each
such company have been weighted to reflect relative stock market capitalization.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Del Laboratories 100.00 110.80 151.80 292.20 242.30 79.20
Peer Group 100.00 95.80 151.90 209.60 199.80 213.10
S&P Midcap Consumer Products Index 100.00 111.30 114.10 140.90 160.40 150.70
AMEX Market Value Index 100.00 126.40 134.50 163.10 166.00
</TABLE>
<TABLE>
<CAPTION>
YEAR END
--------------------------------------------------------------- COMPOUND ANNUAL
1994 1995 1996 1997 1998 1999 RETURN RATE
-------- -------- -------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Del Laboratories, Inc....... $100.0 $110.8 $151.8 $292.2 $242.3 $ 79.2 -4.56%
Peer Group.................. 100.0 95.8 151.9 209.6 199.8 213.1 16.34%
S&P Midcap Consumer Products
Index..................... 100.0 111.3 114.1 140.9 160.4 150.7 8.55%
AMEX Market Value Index..... 100.0 126.4 134.5 163.1 166.0 N/A N/A
</TABLE>
15
<PAGE>
AUDITORS
KMPG LLP, Certified Public Accountants, is the Corporation's independent
auditors and has served in such capacity since 1968. The Board of Directors has
appointed KPMG for the current fiscal year. A representative of KPMG is expected
to be present at the Annual Meeting, will have the opportunity to make a
statement if he or she desires to do so and will respond to appropriate
questions.
OTHER BUSINESS
The Board of Directors does not know of any matter to be brought before the
Annual Meeting other than the matters specified in the Notice of Annual Meeting
accompanying this Proxy Statement. The persons named in the form of proxy
solicited by the Board of Directors will vote all proxies which have been
properly executed. If any matters not set forth in the Notice of Annual Meeting
are properly brought before the Annual Meeting, such persons will vote thereon
in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the proxy materials for the 2001
Annual Meeting of Stockholders must be received at the Corporation's offices at
178 EAB Plaza, Uniondale, New York 11556-0178 by December 21, 2000.
By Order of the Board of Directors
Gene L. Wexler
SECRETARY
Uniondale, New York
April 27, 2000
16
