SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
GENERAL HOUSEWARES CORP.
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
<PAGE>
[ ] $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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fees paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
GENERAL HOUSEWARES CORP.
1536 BEECH STREET, P.O. BOX 4066, TERRE HAUTE, INDIANA 47804 o(812)232-1000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1995
To the Holders of the Company's Common Stock:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of GENERAL
HOUSEWARES CORP., a Delaware corporation (the "Company"), will be held at the
Las Vegas Convention Center, 3150 Paradise Road, Las Vegas, Nevada, on Tuesday,
May 2, 1995, at 10:00 a.m. (local time) for the following purposes:
1. To elect three directors;
2. To transact such other business as may properly come
before the meeting.
Only holders of record of the Company's Common Stock at the close of
business on March 13, 1995 are entitled to notice of, and will be entitled to
vote at, the meeting and any adjournment or adjournments thereof.
Holders of Common Stock are urged to date, sign and return the enclosed
form of proxy at their earliest convenience, even if they plan to attend the
meeting. A return envelope is enclosed for this purpose which requires no
postage if mailed in the United States.
By Order of the Board of Directors,
GORDON R. ERICKSON,
Secretary.
Dated: March 31, 1995
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<PAGE>
GENERAL HOUSEWARES CORP.
1536 BEECH STREET, P.O. BOX 4066, TERRE HAUTE, INDIANA 47804 o(812)232-1000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1995
The accompanying proxy is solicited by the Board of Directors of General
Housewares Corp. (the "Company") for use at the Annual Meeting of Stockholders
to be held at the Las Vegas Convention Center, 3150 Paradise Road, Las Vegas,
Nevada, on Tuesday, May 2, 1995, at 10:00 a.m. (local time) (and at any
adjournment or adjournments thereof), for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders ("Annual Meeting"). The
approximate date on which this Proxy Statement and form of proxy will be first
given or mailed to stockholders is March 31, 1995.
Only holders of record of the Company's Common Stock, par value $.33 1/3
per share, at the close of business on March 13, 1995, will be entitled to vote
at the meeting. At that date there were issued and outstanding 3,743,414 shares
of Common Stock, the holders of which are entitled to one vote per share on all
matters, including the election of directors.
Any stockholder giving a proxy is empowered to revoke it at any time before
it is exercised. A proxy may be revoked by filing with the Secretary of the
Company a written revocation or a duly executed proxy bearing a later date. Any
stockholder may still attend the meeting and vote in person, regardless of
whether he has previously given a proxy, but presence at the meeting will not
revoke his proxy unless such stockholder votes in person.
PRINCIPAL HOLDERS OF VOTING SECURITIES
Except as otherwise indicated, the following table sets forth as of March
13, 1995, to the knowledge of the Company, information as to the beneficial
ownership of the Company's Common Stock by (i) persons that own beneficially
more than 5% of the outstanding Common Stock of the Company, (ii) each director
and nominee, (iii) each executive officer named in the Summary Compensation
Table, and (iv) all directors, nominees and all executive officers as a group.
Except as otherwise indicated, all beneficial ownership reflected in the table
represents sole voting and investment power as to Common Stock and information
is provided throughout this proxy statement only with respect to the periods of
time during which the indicated persons held the specified position or
relationship with the Company.
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<PAGE>
<TABLE>
<CAPTION>
AMOUNT
BENEFICALLY PERCENT OF
OWNED CLASS
(a) Holders of more than 5% of Common Stock
<S> <C> <C>
Gabelli Funds, Inc.
One Corporate Center
Rye, NY 10580-1434 607,000 16.21
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 244,280 6.31
Gangelhoff Enterprises Trust
1405 West Farm Road
Chaska, MN 55318 417,517 11.1
Investment Counselors of Maryland
803 Cathedral Street
Baltimore, MD 21201 195,000 5.0
<CAPTION>
(b) Directors and Nominees
<S> <C> <C>
Charles E. Bradley 4,100 <F1>
John S. Crowley 10,810 <F1>
Thomas L. Francis 3,512 <F1>
Joseph Hinsey IV 2,562 <F1>
Ann Manix 1,500 <F1>
John H. Muller, Jr. 10,078 <F2> <F1>
Phillip A. Ranney 3,434 <F1>
Paul A. Saxton 103,067 <F3> 2.7
<CAPTION>
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<PAGE>
(c) Named Executive Officers other than
Paul A. Saxton
<S> <C> <C>
Gordon R. Erickson 19,076 <F4> <F1>
Stephen M. Evans 13,176 <F5> <F1>
Scott A. Fawcett 2,000 <F6> <F1>
Robert L. Gray 26,666 <F7> <F1>
<CAPTION>
(d) All Directors, Nominees and Executive
Officers as a Group (12 persons
including the above)
<FN>
<F1> Less than 1% of class.
<F2> Of such shares, Mr. Muller's wife, Marie S. Muller, owns 280 shares. Mr.
Muller disclaims beneficial ownership of such shares. Includes 5,000
shares of Common Stock which may be acquired currently or within 60 days
upon exercise of options; there is no voting or investment power with
respect to such shares until exercise.
<F3> Of such shares, Mr. Saxton's wife, Kathleen Saxton, owns 1,000 shares.
Mr. Saxton disclaims beneficial ownership of such shares. Includes 74,001
shares of Common Stock which may be acquired currently or within 60 days
upon exercise of options; there is no voting or investment power with
respect to such shares until exercise.
<F4> Of such shares, Mr. Erickson's wife, Eva Erickson, owns 500 shares.
Includes 11,666 shares of Common Stock which may be acquired currently or
within 60 days upon exercise of options; there is no voting or investment
power with respect to such shares until exercise.
<F5> Includes 11,666 shares of Common Stock which may be acquired currently or
within 60 days upon exercise of options; there is no voting or investment
power with respect to such shares until exercise.
<F6> Mr. Fawcett resigned on February 10, 1995.
<F7> Includes 22,666 shares of Common Stock which may be acquired currently or
within 60 days upon exercise of options; there is no voting or investment
power with respect to such shares until exercise.
</FN>
</TABLE>
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<PAGE>
ELECTION OF DIRECTORS
Under the Company's By-Laws, its directors are divided into three classes,
each class to be elected at successive annual meetings for terms of three years.
The number of directorships was fixed at eight at the Regular Meeting of the
Board of Directors held on February 8, 1994. The three directors whose terms
will expire at the 1995 Annual Meeting are John S. Crowley, John H. Muller, Jr.,
and Paul A. Saxton. John S. Crowley, John H. Muller, Jr., and Paul A. Saxton
have been nominated by the Board of Directors to stand for election as directors
at the Annual Meeting and until their successors are duly elected and shall
qualify. Pursuant to an Employment and Consulting Agreement dated July 1, 1990,
Mr. Muller is to serve as a director, subject to applicable law, through the
period ending June 30, 1995. While his nomination to continue as a member of the
Board of Directors is for the traditional 3-year term that is specified in the
Company's By-Laws, Mr. Muller has indicated an intention to step down as a
director when he reaches age 72 in May 1996. Upon his withdrawal, the Board will
either fill the vacancy thus created by electing a new director to serve for the
remainder of Mr. Muller's term or eliminate the vacancy by reducing the size of
the Board.
At the Annual Meeting, the accompanying proxy, if properly executed and
returned, will be voted (absent contrary instructions) in favor of electing as
directors these three nominees. Should any one or more of these nominees become
unable to accept nomination or election, which the Board of Directors has no
reason to believe will be the case, the persons named in the enclosed form of
proxy will vote for the election of such person or persons as the Board of
Directors may nominate. The other persons listed below will continue in office
as directors until the expiration of their terms and until their successors are
duly elected and shall qualify.
A plurality of the votes of the shares of Common Stock of the Company
present in person or represented by proxy and entitled to vote at the meeting on
the election of directors is required for the election of directors. For this
purpose, a stockholder voting through a proxy who withholds authority to vote as
to all nominees for election as directors is considered to be present and
entitled to vote on the election of directors at the meeting, and is in effect a
negative vote.
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<PAGE>
<TABLE>
<CAPTION>
INFORMATION ON NOMINEES AND INCUMBENT DIRECTORS
SERVED AS
DIRECTOR
NAME SINCE AGE
Nominees for Election to Term Expiring in 1998:
<S> <C> <C>
John S. Crowley...................................1980...........71
John H. Muller, Jr................................1967...........70
Paul A. Saxton....................................1987...........56
<CAPTION>
Directors Whose Term Expires in 1996:
<S> <C> <C>
Charles E. Bradley................................1967...........65
Thomas L. Francis.................................1990...........65
Phillip A. Ranney.................................1990...........58
<CAPTION>
Directors Whose Term Expires in 1997:
<S> <C> <C>
Joseph Hinsey IV..................................1992...........63
Ann Manix.........................................1994...........42
</TABLE>
Mr. Bradley has been President of Stanwich Partners, Inc. (private
investment banking firm) for more than five years. He is also a director of
The Triangle Corporation, DeVlieg Bullard, Inc., Sanitas, Inc., Texon Energy
Corporation, Consumer Portfolio Services, Inc. and Chatwins Group, Inc.
Mr. Crowley was President of Round Hill Associates Management Company
(private investment group) for more than five years and Managing Director of
Saugatuck Associates, Inc. (the management company of a private risk capital
partnership) from 1987 to 1993. Prior thereto, he was Executive Vice President
and a director of Xerox Corporation from 1977 until mid 1982. He is presently a
private investor. He is also a director of Morgan Products, Ltd.
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<PAGE>
Mr. Francis has been Chairman of the Board, Chief Executive Officer and
President of CDI, Inc. (a privately-owned firm engaged in general construction
and real estate development) for more than five years. He is also a director
of Merchants National Bank.
Mr. Hinsey is a Professor at the Harvard University Graduate School of
Business Administration holding the H. Douglas Weaver Professor of Business
Law Chair. Prior to joining the Harvard Business School senior faculty in
1987, he was a Partner of the law firm of White & Case for many years.
Ms. Manix has been President of M & C Enterprises, a marketing and
management consulting firm working with Fortune 500 companies, since January
1993. In 1992, Ms. Manix was General Manager of King, Chapman, Broussard &
Gallagher, a process management consulting firm. From 1988 until 1991, Ms. Manix
served as President and Chief Executive Officer of Hallen Company, a
Houston-based consumer products manufacturing and marketing company specializing
in wine and dining accessories.
Mr. Muller was Chairman of the Board of the Company from 1967 to June 24,
1992; was President from 1967 to August 1989 and Chief Executive Officer from
1967 to July 1990. He is also a director of Capital Cities/ABC, Inc.
Mr. Ranney has been a partner in the Cleveland, Ohio law firm of
Schneider, Smeltz, Ranney & LaFond for more than five years.
Mr. Saxton has been Chairman of the Company since June 24, 1992; Chief
Executive Officer since July 1, 1990 and President since August 1989. He was
Executive Vice President from September 1987 to August 1989. He is also a
director of AP&S Clinic LLC.
INFORMATION ON COMMITTEES OF THE BOARD OF DIRECTORS
During 1994, the Board of Directors held ten meetings and there were
thirteen meetings of committees of the Board. No incumbent director attended
fewer than 75 percent of the total number of meetings of the Board and of the
committees of which the director was a member. Management does not regard
attendance at meetings in a particular year to be an adequate criterion to
evaluate the contribution made by a director to the Company. In addition to
attending Board and committee meetings, directors studied matters and documents
affecting the Company and had numerous discussions with management at times
other than the meetings.
The standing committees of the Board of Directors include audit and
compensation committees but do not include a nominating committee.
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<PAGE>
The Audit Committee monitors the activities of the Company's independent
public accountants, receives reports concerning the Company's internal
accounting controls, reviews the fees to be paid to the Company's independent
public accountants, confers as to the financial statements when the audit is
completed and reports on such activities to the full Board of Directors. Its
members are Joseph Hinsey IV (Chairman), Ann Manix and John H. Muller, Jr.
During 1994, the Audit Committee held six meetings.
The Compensation Committee approves the compensation of officers of the
Company and has overall responsibility for the Company's compensation policies
for senior management. Its members are Charles E. Bradley (Chairman), John S.
Crowley and Phillip A. Ranney. The Compensation Committee held two meetings
during 1994.
REMUNERATION OF NON-MANAGEMENT DIRECTORS
The directors of the Company who are not employees receive an annual
retainer of $10,000 per year, plus fees of $1,000 for each meeting of the Board
of Directors or meeting of the committees which they attend and $250 for each
meeting of the Board of Directors or meeting of the committees held by telephone
conference in which they participate.
Pursuant to the Addendum to 1993 Key Employees' Incentive Stock Plan,
adopted by the Board of Directors and approved by the stockholders of the
Company at the Annual Meeting held on May 10, 1994, the seven non-management
directors were each awarded 1,500 shares of restricted Common Stock. The
restricted period will end with respect to 500 shares on the dates on which the
Company's Annual Meeting is held in 1995, 1996 and 1997 for each of the
non-management directors who continue as directors on such dates.
In addition to remuneration as a non-management director, Mr. Muller has
another arrangement with the Company. In connection with Mr. Muller's decision
to reduce his day-to-day involvement in the business of the Company and, in
consideration of the Company's desire to utilize his experience while the duties
and responsibilities of the Chief Executive Officer were assumed by Mr. Saxton
and to prevent his competing with the Company following his employment by the
Company, the Company entered into an Employment and Consulting Agreement (the
"Agreement") with him on July 1, 1990. As of July 1, 1992, Mr. Muller began his
consulting role for the period ending June 30, 1995 at an annual fee of $50,000
for up to 50 days of consultation per annum. To the extent that consulting
services are provided by him in excess of 50 days, Mr. Muller is paid $1,000 per
day. During 1994, Mr. Muller did not provide consulting services in excess of 50
days. During the term of the Agreement, Mr. Muller is provided with the employee
benefits enjoyed by him during the 12 months ended June 30, 1990. In addition to
payments pursuant to the Company's pension plan for non-bargaining unit
employees, Mr. Muller began receiving, as of July 1, 1992, a supplemental
pension benefit of $3,424 monthly to compensate him for the benefit that would
otherwise be payable to him under the Company's pension plan, but for the
limitations contained in the Internal Revenue Code of 1986, as amended.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote "FOR" the nominees for director
named herein.
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<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received at the end of each year
for the three fiscal years ended December 31, 1994 by the Company's Chief
Executive Officer and the four most highly paid executive officers who were
serving as executive officers at the end of the year, other than the Chief
Executive Officer.
<TABLE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<CAPTION>
LONG TERM
COMPENSATION ALL OTHER
NAME AND OTHER ANNUAL OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) (#) ($)<F2>
<S> <C> <C> <C> <C> <C> <C>
Paul A. Saxton 1994 $252,000 $57,078 0 0 4,500
Chairman & CEO 1993 252,000 21,168 0 18,000 4,497
1992 222,000 29,082 0 9,500 4,364
Gordon R. Erickson 1994 102,000 19,635 0 0 115,524<F3>
General Counsel 1993 102,000 7,140 0 9,000 103,673<F3>
Secretary 1992 94,000 10,246 0 5,500 57,619<F3>
Stephen M. Evans 1994 109,000 20,983 0 0 3,499
Controller 1993 109,000 7,630 0 9,000 3,597
1992 100,000 10,900 0 5,500 3,852
Scott A. Fawcett 1994 148,000 28,490 0 0 4,500
Vice President 1993 148,000 10,360 0 12,000 4,497
1992 133,000 14,497 0 5,500 4,364
Robert L. Gray 1994 148,000 28,490 0 0 4,500
Vice President 1993 148,000 10,360 81,913 <F1> 12,000 4,497
1992 133,000 14,497 28,560 <F1> 5,500 4,364
<FN>
<F1> Includes $18,567 of relocation expenses in 1992 and $76,273 in 1993.
<F2> Amounts shown consist solely of the Company's matching 401(k) Plan
contributions unless otherwise noted.
<F3> Includes legal fees of $112,250, $100,306 and $54,000 paid with respect
to 1994, 1993 and 1992, respectively, pursuant to the arrangement
described under Certain Relationships and Related Transactions below.
</FN>
</TABLE>
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<PAGE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES TABLE
The following table provides information on stock options exercised during
1994 and the value of the unexercised options held at December 31, 1994 by the
named executive officers.
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS/SAR'S 12/31/94
AT 12/31/94 (#) ($)<F1>
SHARES
ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED($) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
<S> <C> <C> <C> <C> <C> <C>
Paul A. Saxton 8,333 $21,874 80,667 15,167 $349,755 $11,292
Gordon R. Erickson 11,666 7,834 21,667 5,709
Stephen M. Evans 11,666 7,834 21,667 5,709
Scott A. Fawcett 2,000 7,000 13,333 9,834 27,127 7,459
Robert L. Gray 22,666 9,834 54,542 7,459
<FN>
<F1> The closing price of the Company's Common Stock on December 31, 1994 was
$14.00. The numbers shown reflect the value of options accumulated over a
seven year period.
</FN>
</TABLE>
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<PAGE>
<TABLE>
PENSION PLAN TABLE
The table that follows shows the estimated annual benefits payable upon
retirement to the Company's employees not represented by a union under the
Company's defined benefit plan.
<CAPTION>
10 15 20 25
YEARS OF YEARS OF YEARS OF YEARS OF
REMUNERATION SERVICE SERVICE SERVICE SERVICE
<S> <C> <C> <C> <C>
$75,000 $13,300 $19,950 $26,600 $33,275
100,000 18,100 27,150 36,200 45,275
125,000 22,900 34,350 45,800 57,275
150,000 27,700 41,550 55,400 69,275
175,000 32,500 48,750 65,000 81,275
200,000 37,300 55,950 74,600 93,275
225,000 42,100 63,150 84,200 105,275
250,000 46,900 70,350 93,800 117,275
275,000 51,700 77,550 103,400 120,000
300,000 56,500 84,750 113,000 120,000
325,000 61,300 91,950 118,800 120,000
350,000 66,100 99,150 118,800 120,000
</TABLE>
Effective January 1, 1994, compensation used for benefit calculations is
limited to $150,000 per year (as adjusted from time to time by the Internal
Revenue Service). To the extent that the annual benefits payable as reflected in
the foregoing Pension Plan Table are so limited by the Internal Revenue Service,
the named executive officers will receive supplemental pension payments upon
retirement after January 1, 1995 equal to the amount of the annual benefit not
payable under the Plan because of the limitation imposed by the Internal Revenue
Service.
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<PAGE>
The above calculations used the covered compensation of someone born in
1929.
The Plan provides retirement benefits based upon Years of Service limited
to 25 years and Average Monthly Compensation. Average Monthly Compensation is
the average compensation (compensation means basic salary received, including
overtime, bonuses and incentive compensation received, and other similar types
of payment prior to any reduction pursuant to any Company profit-sharing plan)
for the highest five consecutive years of compensation during the last ten years
preceding retirement. The amount of compensation used for 1994 in determining
Average Monthly Compensation of each executive officer named in the Summary
Compensation Table is the aggregate amount shown in the salary and bonus columns
of the Table. Years of Service for retirement benefits purposes are: Mr. Saxton,
7 years; Mr. Erickson, 21 years; Mr. Evans, 25 years; Mr. Fawcett, 10 years, and
Mr. Gray, 5 years. Under the Plan's benefit formula, effective January 1, 1989,
at the Normal Retirement Age of 65, a participant may retire without any benefit
reduction due to age and would receive a monthly benefit equal to the sum of (i)
1.47% of the Average Monthly Compensation and (ii) .45% of the Average Monthly
Compensation in excess of Social Security Covered Compensation times Years of
Service. In no event, however, would the benefit under the formula stated above
be less than the benefit accrued under the terms of the Plan in effect as of
December 31, 1988. A participant is 100% vested in the pension benefit after
five years of service.
RETIREMENT AND TERMINATION ARRANGEMENTS
In connection with Mr. Saxton's employment, the Company agreed to
supplement the retirement benefits payable following his retirement by an amount
calculated as if each year of actual service equaled 1.5 Years of Service, less
the retirement benefits paid under the Plan.
The Severance Compensation Plan provides for special severance benefits to
employees, designated by the Board, in the event of their termination of
employment, for whatever reason, during the 24-month period following the
acquisition by any person or group of beneficial ownership of 21% of the
Company's outstanding shares or change in the composition of the Board during
any two-year period resulting in a majority turnover where election or
nomination of the new directors was not approved by at least two-thirds of the
directors then still in office who were directors at the beginning of such
period. The benefit, which is payable within ten days of termination of
employment, shall equal three times (i) current base salary, (ii) the highest
bonus received during the past five years, and (iii) certain annual medical
insurance premiums; provided, however, such amount may not exceed the maximum
amount that may be paid without incurring the adverse tax consequences imposed
upon such benefits by the Internal Revenue Code of 1986, as amended (in general,
approximately 300% of the employee's average total compensation income for the
five preceding calendar years). In certain circumstances, the Plan may be
amended or terminated at any time by the Board. The Board has designated all of
the executive officers named in the Summary Compensation Table to participate in
the Plan.
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<PAGE>
In connection with Mr. Saxton's becoming an employee in September 1987, the
Company agreed to continue payments to him for a period up to 12 months equal to
his annualized basic salary in effect prior to the Company's termination of his
employment before attaining age 64. In addition, the Company agreed to continue
his medical and life insurance benefits for the same period to the extent that
he could be continued as an employee. These payments would not be paid if
benefits are paid under the Severance Compensation Plan described above or the
Company's long term disability plan. The payments would terminate upon Mr.
Saxton's death or his entering a new employment relationship. In connection with
Mr. Gray's becoming an employee in April 1990, the Company agreed to continue
payments for a period up to 12 months equal to his annualized basic salary in
the event of the Company's termination of his employment.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Report of the
Compensation Committee and the Performance Graph on page 12 shall not be
incorporated by reference into any such filings.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is composed of three
non-executive directors. The Committee is responsible for determination of the
executive officers' salaries, the annual cash bonus and long term incentive
plans. The Committee has prepared the following report for inclusion in this
proxy statement describing the policies and process of compensating the
executive officers of the Company.
COMPENSATION POLICIES
The Company's compensation policies are designed to offer executive
officers competitive salaries and additional compensation opportunities based on
each executive officer's contribution to the Company's performance. Competitive
compensation packages are designed to enable the Company to attract and retain
individuals with superior abilities. Commensurate with his responsibilities, the
Chief Executive Officer's annual compensation is more dependent on the Company's
performance than is that of the other executive officers.
APPLICATION AND ADMINISTRATION OF COMPENSATION POLICIES
The compensation of the Company's executive officers is determined and
administered annually by the Committee. The Company's executive officer
compensation program has been designed to:
* Provide compensation opportunities which are comparable to those
offered by similar companies, thus allowing the Company to
compete for and retain talented executives who are critical to
its long term success;
* Motivate executive officers to achieve specific business goals
annually and reward them for their achievements; and
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<PAGE>
* Align the interests of executive officers with the long term
interests of stockholders by providing opportunities that can
result in significant ownership of the Company's Common Stock.
The Company did not pay compensation in 1994 to any of its executive
officers or its Chief Executive Officer in excess of the tax deduction limits
allowable under the Internal Revenue Code of 1986, as amended.
At present, the executive officers' compensation packages are comprised of
base salaries, an annual cash incentive bonus plan and long term incentive
opportunities in the form of grants of stock options and awards of restricted
stock, as well as other benefit plans typically offered to executive officers by
comparable companies, including a supplemental Executive Retirement Plan which
was adopted in 1994 for the Company's executive officers and Chief Executive
Officer. The Plan, which became effective on January 1, 1995, provides for
supplemental pension payments to compensate for the benefits that would have
been payable under the Company's pension plan, but for the limitations imposed
by the Internal Revenue Code of 1986, as amended.
BASE COMPENSATION
Base salary ranges are established by the Committee for each executive
officer after considering industry comparisons, the executive's position and
responsibilities, his tenure and the size of the Company. Salaries are reviewed
annually and adjusted as warranted to reflect sustained individual officer
performance. The Committee focuses primarily on total annual compensation,
including incentive awards, rather than salary alone, as an appropriate measure
of an executive officer's performance and contribution. No changes in base
salaries were made during 1994.
ANNUAL BONUS PLAN
A cash bonus plan is formulated annually by the Committee. The potential
1994 cash bonus for the Chief Executive Officer and the other executive officers
could have equaled 80% and 68% of their base salaries, respectively. The cash
bonus plan was based in part on achievement of specific quantitative goals,
measured in terms of increases in the Company's net income and return on average
assets. These two measures accounted for sixty percent (60%) of the potential
1994 cash bonus. The Company did not meet either of these goals; therefore, no
bonus was paid under those provisions of the plan. There were four other
specific goals, each of which account for ten percent (10%) of the potential
1994 cash bonus. These goals included achievement of increases in customer
service level (i.e., the Company's performance in filling orders on a timely
basis), implementation of a new computer system, improvement in an expense to
sales ratio and certain sales increases from new products. These goals were
achieved in part, as a result of which the Committee authorized the payment of a
1994 cash bonus of nineteen and one-quarter percent (19 1/4%) of the base salary
of each executive officer other than the Chief Executive Officer.
-14-
<PAGE>
LONG-TERM INCENTIVE COMPENSATION
Stock based incentives are an important element of the executive officers
compensation package. To provide such incentives the Company maintains a stock
plan for key employees which includes the granting of options or awards of
restricted stock until January 31, 2003. The Committee believes the granting of
stock based incentives is the best mechanism for aligning the financial
interests of the Company's executive officers with interests of shareholders
since both gain through the appreciation of the Company's stock. Unexercised
stock options held by the Company's executive officers and Chief Executive
Officer are listed in the Aggregated Option/SAR Exercises In Last Fiscal Year
And Fiscal Year-End Option/SAR Values Table set forth on page 7. No stock
options were granted and no awards of restricted stock were made in 1994.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In accordance with the compensation philosophy and cash bonus criteria
described above, the Committee authorized the payment of a cash bonus of
twenty-two and sixty-five hundredths percent (22.65%) of his base salary to Paul
A. Saxton, Chairman of the Board and Chief Executive Officer. No change was made
in his base salary and no stock based incentives were awarded to Mr. Saxton
during 1994.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
tax deduction to $1 million for compensation paid to the named executive
officers unless certain requirements are met. At this time, it is not
anticipated that any named executive officer of the Company will receive any
such compensation in excess of this limit during 1995. Therefore, during 1994,
the Committee did not take any action to comply with the new limit. The
Committee will continue to monitor this situation and will take appropriate
action if it is warranted in the future. The Committee's present intention is to
comply with the requirements of Section 162(m) unless the Committee feels that
required changes would not be in the best interests of the Company or its
stockholders.
Compensation Committee
Charles E. Bradley, Chairman
John S. Crowley
Phillip A. Ranney
-15-
<PAGE>
The following graph compares the yearly percentage change in the cumulative
total return on the Company's Common Stock during the five fiscal years ended
December 31, 1994, with cumulative total return on the S&P 500 Index and the S&P
Housewares Composite Index. The comparison assumes $100 was invested on January
1, 1990 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends. The stock price performance shown on the
graph below is not necessarily indicative of future price performance.
<TABLE>
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG GENERAL HOUSEWARES CORP., S&P 500 INDEX
AND S&P HOUSEWARES COMPOSITE INDEX
<CAPTION>
Cumulative Total Return Summary
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
GHC 154.34 174.95 202.14 272.04 210.91
S&P 500 131.69 127.6 166.47 179.15 197.21
S&P Housewares 137.01 142.04 270.77 237.17 283.88
GHC 100 113 131 176 137 150
S&P 500 100 97 126 136 150 151
S&P Housewares 100 104 198 173 207 201
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In addition to his employment by the Company, Mr. Erickson is engaged in
the private practice of law in Connecticut. To the extent that his services for
the Company exceeds half of his time, he bills the Company for legal fees on the
basis of $1,500 for eight hours or more per day and $750 for more than four but
less than eight hours per day.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected Price Waterhouse as its independent public
accountants for the current fiscal year. The firm has audited the Company's
financial statements annually since 1967. Representatives of Price Waterhouse
are expected to be present at the Annual Meeting with the opportunity to make a
statement, if they desire to do so, and are expected to be available to respond
to appropriate questions from the stockholders.
OTHER MATTERS
Management of the Company is not aware of any matters, other than those
specified in the Notice of Annual Meeting and discussed above in this Proxy
Statement, that are to be presented for action at the meeting. Should any other
matters properly come before the meeting or any adjournment or adjournments
thereof, the persons named as proxies in the enclosed form of proxy will have
discretionary power to vote, pursuant to the proxies hereby solicited, with
respect to such matters in accordance with their judgment on such matters.
-16-
<PAGE>
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone, telegraph or facsimile transmission by regular employees of the
Company or others affiliated with the Company. In addition, the Company will
reimburse brokers and other persons holding stock in their names or in the names
of nominees for their expenses in sending or forwarding proxy material to
principals in obtaining their proxies.
In order to be considered for inclusion in the Company's Proxy Statement
and form of proxy for next year's Annual Meeting, any proposals by stockholders
intended to be presented at the 1996 Annual Meeting must be received by the
Company on or before December 1, 1995.
All stockholders are urged to execute, date and return promptly the
enclosed form of proxy in the enclosed return envelope, regardless of whether
they intend to be present in person at the Annual Meeting.
By Order of the Board of Directors,
GORDON R. ERICKSON,
Secretary.
Terre Haute, Indiana
Dated: March 31, 1995
FORM 10-K AVAILABLE
THE FORM 10-K ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
PROVIDES CERTAIN ADDITIONAL INFORMATION, A COPY OF WHICH MAY BE OBTAINED WITHOUT
CHARGE BY WRITING TO: TERESA BURNS, ASSISTANT SECRETARY, GENERAL HOUSEWARES
CORP., P.O. BOX 4066, TERRE HAUTE, INDIANA 47804.
-17-
<PAGE>
[Form of Proxy -- front]
GENERAL HOUSEWARES CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints PAUL A. SAXTON and GORDON R. ERICKSON, and
P each of them, his proxies with full power of substitution, to vote all
shares of Common Stock of General Housewares Corp. which the undersigned is
R entitled to vote at the Annual Meeting of the Stockholders of the Company
to be held at 10:00 A.M. on Tuesday, May 2, 1995, at the Las Vegas
O Convention Center, 3150 Paradise Road, Las Vegas, Nevada, and at any
adjournments therof, with all powers the undersigned would possess if
X personally present, upon and in respect of the following matter and, in
their discretion for the transaction of such other business as may properly
Y come before the meeting; all as set forth in the Proxy Statement dated
March 31, 1995.
COMMENTS:(change of address)
Election of Directors
Nominees:
-----------------------------------
John S. Crowley
-----------------------------------
John H. Muller, Jr.
-----------------------------------
Paul A. Saxton
-----------------------------------
(If you have written in the above space,
please mark the corresponding box on
the reverse side of this card)
You are encouraged to specify your choice by marking the appropriate box, SEE
REVERSE SIDE, but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendation. The Proxy Committee cannot vote
your shares unless you sign and return this card.
SEE REVERSE SIDE
<PAGE>
[Form of Proxy -- Back]
X Please mark your
vote as in this example
This proxy will be voted FOR the election of the nominees for directors
named on reverse.
The Board of directors recommends a vote FOR proposal 1.
FOR WITHHELD For, except vote withheld from the following
nominee(s):
1. Election of
directors ---- ----- --------------------------------------------
(see reverse)
--------------------------------------------
Change of Address
-----Comments on
Reverse Side
This proxy may be revoked by the undersigned
as provided in the accompanying Proxy
Statement.
The undersigned hereby acknowledges receipt
of the Notice of Annual Meeting of
Stockholders and related Proxy Statement,
both dated March 31, 1995.
The undersigned hereby revokes any proxy or
proxies heretofore given by the undersigned
to any other person or persons.
SIGNATURE(S): DATE
---------------------------------- ------------------------------
NOTE: Corporations are requested to sign their name by their president or other
officer, and partnerships in their firm name by a general partner. When signing
as attorney, executor, administrator, trustee, fiduciary, guardian, or in any
other representative capacity, please give full title. If shares are held
jointly, each holder should sign.
