<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
AMERICAN BILTRITE INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
AMERICAN BILTRITE INC.
57 RIVER STREET
WELLESLEY HILLS, MASSACHUSETTS 02181
----------------
NOTICE OF ANNUAL MEETING TO BE HELD
MAY 6, 1996
----------------
To The Stockholders of
American Biltrite Inc.:
Notice is hereby given that the Annual Meeting of the Stockholders of
American Biltrite Inc. will be held in the America Room, 2nd Floor, The First
National Bank of Boston, 100 Federal Street, Boston, Massachusetts, on Monday,
May 6, 1996 at 9:00 A.M. Boston time, for the following purposes:
1. To elect four directors who will hold office until the Annual Meeting of
Stockholders in 1999 and until their successors are duly elected and
qualified.
2. To consider and act upon a proposal to change the par value of the
Company's Common Stock and Preferred Stock.
3. To transact any other business that may properly come before the meeting
or any adjournment thereof.
The close of business on April 5, 1996 has been fixed as the record date for
determining the stockholders entitled to notice of, and to vote at, the Annual
Meeting and any adjournment thereof.
It is desirable that the stock of the Company should be represented as fully
as possible at the Annual Meeting. Please sign, date and return the
accompanying proxy in the enclosed envelope, which requires no postage if
mailed in the United States. If you should attend the Meeting, you may vote in
person, if you wish, whether or not you have sent in your proxy.
By Order of The Board of Directors
Henry W. Winkleman
Secretary
Wellesley Hills, Massachusetts
April 12, 1996
<PAGE>
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation, by
and on behalf of the Board of Directors of American Biltrite Inc. (the
"Company"), of proxies to be used in voting at the Annual Meeting of
Stockholders (the "Meeting") to be held on May 6, 1996 in the America Room,
2nd Floor, The First National Bank of Boston, 100 Federal Street, Boston,
Massachusetts at 9:00 A.M. Boston time, and at any adjournments thereof. The
principal executive offices of the Company are located at 57 River Street,
Wellesley Hills, Massachusetts 02181. The cost of preparing and mailing the
notice, proxy statement and proxy will be paid by the Company. It is expected
that the solicitation of proxies will be by mail only, but may also be made by
personal interview, mail, telephone or telegraph by Directors, officers or
employees of the Company. The Company will request banks and brokers holding
stock in their names or custody, or in the names of nominees for others, to
forward copies of the proxy material to those persons for whom they hold such
stock and to request authority for the execution of proxies and, upon request,
will reimburse such banks and brokers for their out-of-pocket expenses
incurred in connection therewith. This proxy statement and the accompanying
proxy card were first mailed to stockholders on or about April 12, 1996.
Proxies in the accompanying form, properly executed and duly returned to the
management and not revoked, will be voted at the Meeting (including
adjournments) and, where a specification is made by means of the ballot
provided in the proxies regarding any matter presented to the meeting, such
proxies will be voted in accordance with such specification.
Any stockholder giving a proxy in the accompanying form retains the power to
revoke it at any time prior to the exercise of the powers conferred thereby by
filing a later dated proxy or by notice of revocation filed in writing with
the Secretary of the Company. Attendance at the Meeting in person will not be
deemed to revoke the proxy unless the stockholder affirmatively indicates at
the Meeting an intention to vote the shares in person.
On April 5, 1996 there were issued and outstanding 3,653,636 shares of the
Company's Common Stock. Only stockholders of record at the close of business
on that date are entitled to notice of and to vote at the Meeting or any
adjournment thereof, and those entitled to vote will have one vote for each
share held.
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1995, is enclosed with this proxy statement.
A quorum for the consideration of any question at the Meeting will consist
of a majority of interest in all stock issued and entitled to vote upon such
question. A plurality of the shares represented at the Meeting and voting is
required to elect directors. The approval of a majority of the outstanding
shares entitled to vote is required to authorize the proposed change in the
par value of the Company's Common Stock and Preferred Stock. On all other
matters, a majority of the shares represented at the Meeting and voting is
required to decide the question.
ELECTION OF DIRECTORS; SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Board of Directors is divided into three classes, the terms of which
expire at successive Annual Meetings of Stockholders. The accompanying proxy
will be voted for the election of the nominees named in Class III below unless
otherwise instructed. The term of those Class III directors elected at this
meeting will expire at the Annual Meeting of Stockholders held in 1999 upon
the election and qualification of their successors. Should any person named
below be unable or unwilling to serve as a director, persons acting under the
proxy
<PAGE>
intend to vote for such other person as management may recommend. Each nominee
is currently a director of the Company.
The following tables set forth the name, age and principal occupation of
each of the nominees for election as director, and each current director in
the classes continuing in office, and the period during which he has served as
a director of the Company. The tables, together with the accompanying text and
footnotes, also set forth (a) the holdings of each director of the Company and
of each person nominated to become a director of the Company, (b) the holdings
of all officers and directors as a group and (c) the names, addresses and
holdings of the Company's Common Stock for each person who owns of record, or
is known by the Company to own beneficially, 5% or more of its Common Stock.
INFORMATION AS TO BOARD OF DIRECTORS AND NOMINEES
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE AND EXPIRATION OF
NAME (AGE) OTHER DIRECTORSHIPS PRESENT TERM
---------- ----------------------- -------------
<S> <C> <C>
NOMINEES
CLASS III
Mark N. Kaplan, Esq. Partner, Skadden, Arps, Slate, Meagher & Flom, 1996
(66)................... attorneys. Director of the Company since 1982.
Director of: Grey Advertising Inc.; Diagnostic
Retrieval Systems, Inc.; REFAC Technology
Development Corporation; The Harvey Group, Inc.;
Volt Information Sciences, Inc.; Movie Fone,
Inc.; and Congoleum Corporation.
Natalie S. Marcus (79).. Investor. Director of the Company since 1992. 1996
William M. Marcus (58).. Executive Vice President and Treasurer of the 1996
Company. Director of the Company since 1966.
Director of: Reebok International Ltd. and
Congoleum Corporation.
Kenneth I. Watchmaker Executive Vice President and Chief Financial 1996
(53)................... Officer of Reebok International Ltd., footware
manufacturer and marketer. Prior to 1992, Mr.
Watchmaker was a Partner at Ernst and Young,
accountants. Director of the Company since 1995.
INCUMBENT DIRECTORS
CLASS I
Gilbert K. Gailius (64). Vice President and Chief Financial Officer of 1997
the Company. Director of the Company since 1983.
Jack Gold, Esq. (85).... Principal, Gold and Gold, attorneys. Director of 1997
the Company since 1985.
Richard G. Marcus (48).. President and Chief Operating Officer of the 1997
Company. Director of the Company since 1982.
Vice Chairman of the Board of Congoleum
Corporation.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE AND EXPIRATION OF
NAME (AGE) OTHER DIRECTORSHIPS PRESENT TERM
---------- ----------------------- -------------
<S> <C> <C>
CLASS II
John C. Garrels, 3rd Director, Global Banking, First National Bank of 1998
(56)................... Boston. Director of the Company since 1977.
James S. Marcus (66).... Limited Partner, Goldman, Sachs & Co., 1998
investment bankers. Director of the Company
since 1971. Director of Kellwood Company.
Roger S. Marcus (50).... Chairman of the Board and Chief Executive 1998
Officer of the Company. Director of the Company
since 1981. Chairman of the Board and Chief
Executive Officer of Congoleum Corporation.
</TABLE>
Note: Natalie S. Marcus is the mother of Roger S. Marcus and Richard G. Marcus
and the aunt of William M. Marcus. James S. Marcus is not related to
Natalie, Roger, Richard or William Marcus.
CERTAIN BENEFICIAL OWNERS OF COMMON STOCK
The following table sets forth information relating to certain beneficial
owners of shares of the Common Stock of the Company as of April 5, 1996:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) COMMON STOCK
---------------------- ----------------------- ------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Natalie Marcus............................ 1,170,368(3)(4) 30.8%
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02181
Richard G. Marcus......................... 448,218(3)(5) 11.8
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02181
Roger S. Marcus........................... 445,572(3)(6) 11.7
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02181
William M. Marcus......................... 337,324(3)(7) 8.9
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, MA 02181
Gilbert K. Gailius........................ 27,600(8) --
J. Dennis Burns........................... 11,000(9) --
Mark N. Kaplan............................ 2,000 --
John C. Garrels, 3rd...................... 800 --
Jack Gold................................. 200 --
James S. Marcus........................... 200 --
All directors and executive officers as a 2,172,282 57.1
group (13 persons).......................
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) COMMON STOCK
---------------------- ----------------------- ------------
<S> <C> <C>
5% BENEFICIAL OWNERS
Dimensional Fund Advisors, Inc............. 268,900(10) 7.1%
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90491
Wilen Management Corporation............... 213,560(11) 5.6
2360 West Joppe Road, Suite 226
Lutherville, MD 21093
</TABLE>
- - - --------
(1) Addresses are given only for beneficial owners of more than 5% of the
Common Stock.
(2) Unless otherwise noted, the nature of beneficial ownership is sole voting
and/or investment power.
(3) As of the date shown, these shares were among the 2,122,882 shares, or
55.8% of the Company's outstanding Common Stock beneficially owned by the
following persons, who have identified themselves as persons who have
taken, and reasonably anticipate continuing to take, actions which direct
or may cause the direction of the management and policies of the Company
and the voting of their shares of Common Stock in a manner consistent
each with the other, and who therefore may be deemed to constitute a
"group" within the meaning of Section 13(d)(3) of the Exchange Act;
Natalie S. Marcus, Richard G. Marcus, Roger S. Marcus, William M. Marcus
and Cynthia S. Marcus (c/o American Biltrite Inc., 57 River Street,
Wellesley Hills, MA 02181). Charles E. Heming (c/o Wormser, Kiely, Galef
& Jacobs, 711 Third Avenue, New York, NY 10017), trustee of certain
trusts established by Natalie S. Marcus, may also be deemed to be a
member of this group. Mr. Heming expressly disclaims his membership in
this group.
(4) Natalie S. Marcus has sole voting and investment power over 225,776
shares. Mrs. Marcus and Charles E. Heming, as co-trustees of certain
trusts established by Natalie S. Marcus, have shared voting and
investment power over 796,592 shares. Mrs. Marcus is also a co-trustee
with Richard G. Marcus and Roger S. Marcus over 144,000 shares and
trustee of a charitable trust which holds 4,000 shares.
(5) Richard G. Marcus has sole voting and investment power over 265,418
shares. Mr. Marcus is also a co-trustee with Natalie S. Marcus and Roger
S. Marcus over 144,000 shares. Mr. Marcus also has the right to acquire
38,800 shares which are issuable upon exercise of options exercisable
within 60 days of the date of this proxy statement. Richard G. Marcus's
wife, Beth A. Marcus, owns 1,450 shares; his daughter, Teri Marcus, and
son, Todd Marcus, each own 4,350 shares.
(6) Roger S. Marcus has sole voting and investment power over 262,772 shares.
Mr. Marcus is also a co-trustee with Natalie S. Marcus and Richard G.
Marcus over 144,000 shares. Mr. Marcus also has the right to acquire
38,800 shares which are issuable upon exercise of options exercisable
within 60 days of the date of this proxy statement.
(7) William M. Marcus has sole voting and investment power over 304,284
shares. Mr. Marcus also has the right to acquire 33,040 shares which are
issuable upon exercise of options exercisable within 60 days of the date
of this proxy statement. William M. Marcus's wife, Cynthia S. Marcus,
owns 9,400 shares.
(8) Gilbert K. Gailius has sole voting and investment power over 12,000
shares. Mr. Gailius has the right to acquire 15,600 shares which are
issuable upon exercise of options exercisable within 60 days of the date
of this proxy statement.
(9) J. Dennis Burns has sole voting and investment power over 3,000 shares.
Mr. Burns has the right to acquire 8,000 shares which are issuable upon
exercise of options exercisable within 60 days of the date of this proxy
statement.
(10) Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 7, 1996.
(11) Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 8, 1996.
4
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Commission initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. The Company believes
that during the year ended December 31, 1995, its officers, directors and
holders of more than 10% of the Company's Common Stock complied with all
Section 16(a) filing requirements as set forth below. Richard G. Marcus, Roger
S. Marcus and William M. Marcus, all officers of the Company, had late filings
of Form 4 in connection with their exercise of stock options of American
Biltrite Inc. stock. Further, Roger S. Marcus had a late filing of Form 4 in
which he reported that he no longer had an indirect ownership of American
Biltrite Inc. stock owned by his daughter, Elissa G. Marcus. Kenneth I.
Watchmaker, a director of the Company, had a late filing of Form 3 upon his
appointment as a director.
In February 1996, Richard G. Marcus entered into a settlement agreement in
the form of a consent decree with the Securities and Exchange Commission (the
"Commission") in connection with the Commission's investigation covering
trading in the Company's Common Stock by an acquaintance of Mr. Marcus. Mr.
Marcus, without admitting or denying the Commission's allegations of
securities laws violations, agreed, among other things, to the entry of a
permanent injunction against future violations of Section 10(b) of, and Rule
10b-5 under, the Exchange Act.
DIRECTORS COMPENSATION AND COMMITTEES
During 1995, the Board of Directors of the Company held five meetings. Each
director who is not an officer and employee of the Company is entitled to
receive a director's fee of $10,000 per year and $1,250 for each Board meeting
and each Audit and Executive Committee meeting attended.
Directors may elect to defer the receipt of all or a part of their fees.
Amounts so deferred earn interest, compounded quarterly, at a rate equal to
the Bank of Boston base rate at the end of each quarter.
The Company has an Executive Committee consisting of five members. The
functions of the committee are to advise and aid the officers of the Company
in all matters concerning its interests and the management of its business
and, when the Board of Directors is not in session, to exercise all the powers
of the Board with reference to the conduct of the business of the Company
which may be lawfully delegated by the Board of Directors. During 1995, the
Executive Committee held no meetings. The members of the Executive Committee
are Messrs. William M. Marcus, Chairman, Roger S. Marcus, Richard G. Marcus
and Mark N. Kaplan.
The Company has an Audit Committee consisting of three members, all of whom
are non-employee directors. The Audit Committee recommends engagement of the
independent auditors, considers the fee arrangement and scope of the audit,
reviews the financial statements and the independent auditors' report, reviews
the activities and recommendations of the Company's internal auditors,
considers comments made by the independent auditors with respect to the
Company's internal control structure, and reviews internal accounting
procedures and controls with the Company's financial and accounting staff.
During 1995, the Audit Committee held one meeting. The members of the Audit
Committee are Messrs. Kenneth I. Watchmaker, James S. Marcus and John C.
Garrels, 3rd.
The Company has a Compensation Committee consisting of three members. The
committee met twice during 1995. The members of the Compensation Committee are
Messrs. John C. Garrels, 3rd, Jack Gold and Mark N. Kaplan. The Company does
not have a nominating committee of the Board of Directors.
5
<PAGE>
COMPENSATION COMMITTEE REPORT
OVERALL POLICY
The Company's executive compensation program is designed to reflect both
corporate performance and individual responsibilities and performance. The
Compensation Committee administers the Company's overall compensation strategy
in an attempt to relate executive compensation appropriately to the Company's
overall growth and success and to the executive's duties, demonstrated
abilities and, where appropriate, the performance of his division. The
objectives of this strategy are to attract and retain the best possible
executives, to motivate these executives to achieve the Company's business
goals and to provide a compensation package that recognizes individual
contributions as well as overall business results.
Each year the Compensation Committee conducts a review of the Company's
executive compensation. This review includes consideration of: the
relationship between an executive's current compensation and his current
duties and responsibilities; the compensation of executive officers with
similar duties and responsibilities; and inflationary trends. The annual
compensation reviews permit an ongoing evaluation of the relationship between
the size and scope of the Company's operations, its performance and its
executive compensation. The Compensation Committee also considers the legal
and tax effects (including without limitation the effects of Section 162(m) of
the Internal Revenue Code of 1986, as amended) of the Company's executive
compensation program in order to provide the most favorable legal and tax
consequences for the Company and its executive officers.
In its 1995 annual review of executive compensation (which related to bonus
compensation for 1994 and salaries for 1995), the Compensation Committee also
considered the recent, successful accomplishment (in February 1995) of the
initial public offering of common stock and related recapitalization of
Congoleum Corporation ("Congoleum"), a corporation in which the Company has
had a minority equity interest since 1993, and the extraordinary increase in
the earnings of Congoleum in 1994. Specifically, the Compensation Committee
noted the key role of Roger S. Marcus and Richard G. Marcus in these
accomplishments and the additional responsibilities to be assumed by these
individuals as a result of the Congoleum financing transactions.
The Compensation Committee determines the compensation of the individuals
whose compensation is detailed in this proxy statement and sets policies for
and reviews the compensation awarded to the most highly compensated corporate
executives. This process is designed to provide consistency throughout the
executive compensation program. In reviewing the individual performance of the
executives whose compensation is described in this proxy statement (other than
Roger S. Marcus, the Company's Chief Executive Officer), the Compensation
Committee takes into account the views of Mr. Marcus.
The key elements of the Company's executive compensation consist of base
salary, annual bonus and stock options. The Compensation Committee's policies
with respect to each of these elements, including the bases for the
compensation awarded to Roger S. Marcus, the Company's Chief Executive
Officer, are discussed below. In addition, although the elements of
compensation described below are considered separately, the Compensation
Committee takes into account the full compensation package afforded by the
Company to the individual, including pension benefits, insurance and other
benefits, as well as the program described below.
BASE SALARIES
Base salaries for executive officers are determined by considering
historical salaries paid by the Company to officers having certain duties and
responsibilities and then evaluating the current responsibilities of the
position, the scope of the operations under management and the experience of
the individual. Annual salary
6
<PAGE>
adjustments are determined by evaluating on an individual basis new
responsibilities of the executive's position, changes in the scope of the
operations managed, the performance of such operations and the performance of
the executive in the position and annual increases in the cost of living.
With respect to the base salary of Roger S. Marcus in 1995, the Compensation
Committee took into account the Company's performance and the assessment by
the Compensation Committee of Mr. Marcus's individual performance. The
Compensation Committee also took into account the length of Mr. Marcus's
service to the Company and his increasing responsibilities in the course of
such service. Mr. Marcus's base salary of $395,000 for 1995 represents an
increase of 9.0% over his $362,500 base salary for 1994. The Compensation
Committee approved a base salary of $422,500 for Mr. Marcus for 1996, an
increase of 7.0% over his 1995 base salary.
ANNUAL BONUS
The Company's executive officers are eligible for an annual cash bonus.
Annual bonuses are determined on the basis of individual and corporate
performance. The most significant corporate performance measure for bonus
payments is earnings of the Company as a whole and then the relevant divisions
or subsidiaries, where appropriate. The Compensation Committee has adopted the
policy of paying bonuses to Roger S. Marcus and Richard G. Marcus of
approximately 3-4% of the Company's after-tax earnings, taking into account
significant non-operational occurrences and the actual level of profitability
for the relevant year. In determining annual bonuses, the Committee also
considers the views of Mr. Marcus as Chief Executive Officer and discusses
with him the appropriate bonuses for all executives, including Mr. Marcus.
For 1995, Roger S. Marcus was awarded an aggregate bonus of $550,000. For
1994, he was awarded a bonus of $925,000, a portion of which was paid in 1994
and a portion of which was paid in 1995. A portion of Mr. Marcus's 1995 bonus
was based on earnings for the Company as a whole in accordance with the
Compensation Committee policy set forth above. A substantial portion of Mr.
Marcus's 1995 bonus, however, was awarded to Mr. Marcus for his exceptional
performance as Chief Executive Officer of the Company and as Chief Executive
Officer of Congoleum, taking into account the extraordinary increase in the
earnings of Congoleum in 1994 and certain payments by Congoleum to the Company
relating to, among other things, Mr. Marcus's service as Chief Executive
Officer of Congoleum. In awarding Mr. Marcus's aggregate bonus, the Committee
also considered the performance of the Company's Common Stock and Mr. Marcus's
role in promoting the long-term strategic growth of the Company.
STOCK OPTIONS
Under the Company's 1993 Stock Award and Incentive Plan, stock options are
granted to the Company's executive officers. The Compensation Committee sets
guidelines for the size of stock option awards based on factors similar to
those used to determine base salaries and annual bonus. Stock options are
designed to align the interests of executives with those of the stockholders.
Under the Stock Option Plan, stock options are typically granted with an
exercise price equal to the market price of the Common Stock on the date of
grant and vest over time. This approach is designed to encourage the creation
of stockholder value over the long term since the full benefit of the
compensation package cannot be realized unless stock price appreciation occurs
over time. No new options were granted to Roger S. Marcus in 1995.
7
<PAGE>
CONCLUSION
Through the programs described above, a significant portion of the Company's
executive compensation is linked directly to individual and corporate
performance. In 1995, 48.7% of the Company's executive compensation consisted
of performance-based variable elements. In the case of Roger S. Marcus,
approximately 58.2% of his 1995 compensation consisted of performance-based
variable elements. The Compensation Committee intends to continue the policy
of linking executive compensation to corporate and individual performance,
recognizing that the ups and downs of the business cycle from time to time may
result in an imbalance for a particular period.
COMPENSATION COMMITTEE
Mark N. Kaplan, Chairman
John C. Garrels, 3rd
Jack Gold
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mark N. Kaplan, a director of the Company, is a partner in Skadden, Arps,
Slate, Meagher & Flom, a law firm retained by the Company in 1995 and proposed
to be retained during 1996.
Jack Gold, a director of the Company, is a principal in Gold and Gold, a law
firm retained by the Company in 1995 and proposed to be retained during 1996.
In fiscal year 1995, the Company paid fees for professional services to such
firm in the amount of $41,438.
8
<PAGE>
EXECUTIVE COMPENSATION
The table that follows sets forth information concerning the compensation
earned by or paid to the Company's Chairman of the Board and Chief Executive
Officer and the Company's four other most highly compensated officers for
services rendered to the Company and its subsidiaries in all capacities during
each of the last three years. The table also identifies the principal capacity
in which each of the named executives served the Company at the end of 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- ------------
SECURITIES
UNDERLYING (1)
NAME AND PRINCIPAL OPTIONS/ ALL OTHER
POSITION YEAR SALARY$ BONUS$ SARS(#) COMPENSATION$
- - - ------------------ ---- ------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Roger S. Marcus................. 1995 395,000 550,000 16,000
Chairman of the Board and Chief 1994 362,500 925,000 14,500
Executive Officer 1993 342,500 400,000 36,000 7,075
Richard G. Marcus............... 1995 395,000 550,000 16,000
President and Chief 1994 362,500 925,000 14,500
Operating Officer 1993 342,500 400,000 36,000 17,075
William M. Marcus............... 1995 316,000 160,000 16,000
Executive Vice 1994 290,000 240,000 14,500
President and Treasurer 1993 274,000 160,000 28,800 17,075
Gilbert K. Gailius.............. 1995 237,500 100,000 16,000
Vice President--Finance and 1994 225,000 150,000 14,500
Chief Financial Officer 1993 215,000 100,000 12,000 16,450
J. Dennis Burns................. 1995 163,750 70,000 6,000
Vice President and General Man-
ager, 1994 156,250 85,000 4,500
Tape Division 1993 148,750 65,000 5,000 4,463
</TABLE>
- - - --------
(1) The amounts disclosed in this column include:
(a) Company contributions of the following amounts in 1995, 1994 and 1993
respectively under the Section 401(k) Savings Investment Plan on behalf
of Roger S. Marcus, Richard G. Marcus and William M. Marcus, $6,000,
$4,500 and $7,075 each; Gilbert K. Gailius $6,000, $4,500 and $6,450;
and J. Dennis Burns $6,000, $4,500, and $4,463.
(b) Payment by the Company in 1995, 1994 and 1993 to individual life
insurance trusts for Richard G. Marcus, William M. Marcus and Gilbert
K. Gailius and in 1995 and 1994 for Roger S. Marcus, $10,000 each year
for each individual.
9
<PAGE>
DEFINED BENEFIT PENSION PLAN
In addition to the remuneration set forth above, the Company contributes
annually to The Retirement Plan for Salaried Employees of American Biltrite
Inc. (the "Pension Plan"), a defined benefit pension plan. The annual
actuarial valuation of the Pension Plan is performed using the Projected Unit
Credit Cost Method as the actuarial cost method under which the Company's
contributions are determined for all participants as a group. Allocations of
the Company's contribution to individual participants are not readily
available. Remuneration under the Pension Plan is calculated on the basis of
final average compensation.
For employees retiring during 1995, the following are the approximate
maximum retirement benefits, subject to limitations, if any, imposed by law,
payable under the Pension Plan to persons whose highest average compensation
over a period of five consecutive years during the last ten years of service
is in the classification indicated.
APPROXIMATE ANNUAL PENSION AT AGE 65
<TABLE>
<CAPTION>
FINAL TOTAL YEARS OF SERVICE AS A PLAN MEMBER
AVERAGE ---------------------------------------
REMUNERATION 15 20 25 30 35
- - - ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$100,000................................ $12,000 $16,000 $20,000 $24,000 $29,000
200,000................................ 19,000 25,000 32,000 38,000 44,000
300,000................................ 19,000 25,000 32,000 38,000 44,000
400,000................................ 19,000 25,000 32,000 38,000 44,000
500,000................................ 19,000 25,000 32,000 38,000 44,000
</TABLE>
The table below sets forth certain information relating to the Pension Plan
with respect to the five most highly compensated executive officers of the
Company.
<TABLE>
<CAPTION>
1995 CREDITED
REMUNERATION YEARS
NAME COVERED BY PLAN OF SERVICE
---- --------------- ----------
<S> <C> <C>
Roger S. Marcus................................ $150,000 28
Richard G. Marcus.............................. 150,000 25
William M. Marcus.............................. 150,000 35
Gilbert K. Gailius............................. 150,000 17
J. Dennis Burns................................ 150,000 11
</TABLE>
10
<PAGE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
SHARES AT FISCAL YEAR--END (#) AT FISCAL YEAR-END($) (1)
ACQUIRED ON VALUE ------------------------- -------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger S. Marcus......... 26,000 $409,500 36,800 45,200 $258,400 $240,100
Richard G. Marcus....... 26,000 409,500 36,800 45,200 258,400 240,100
William M. Marcus....... 26,000 409,500 31,040 36,560 230,320 197,980
Gilbert K. Gailius...... -- -- 14,400 15,600 117,600 87,900
J. Dennis Burns......... -- -- 10,200 6,800 114,700 41,050
</TABLE>
- - - --------
(1) Based upon the difference between exercise price and closing price per
share on December 29, 1995.
11
<PAGE>
CUMULATIVE TOTAL SHAREHOLDER RETURN
The graph that follows compares the monthly cumulative total shareholder
return of the Company's common stock to the monthly cumulative returns of the
American Stock Exchange Market Value Index and a Peer Group Index which
includes companies in Standard Industrial Classification (SIC) code number
3089--Plastic Products, N.E.C.
(PERFORMANCE GRAPH APPEARS HERE)
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
--------------FISCAL YEAR ENDING---------------
COMPANY 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
AMERICAN BILTRITE INC 100 180.29 210.80 503.99 618.22 491.25
INDUSTRY INDEX 100 162.38 159.37 202.74 199.24 241.52
BROAD MARKET 100 123.17 124.86 148.34 131.04 168.90
</TABLE>
12
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Ernst & Young LLP as the
Company's independent public accountants for 1995. Representatives of Ernst &
Young LLP are expected to be present at the Meeting, will be given an
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next annual
meeting of the Company in May 1997 must be received by the Company at its
principal executive offices no later than December 6, 1996.
PROPOSAL TO CHANGE THE
PAR VALUE OF THE COMPANY'S COMMON STOCK
AND PREFERRED STOCK
The Board of Directors of the Company recommends that the stockholders
authorize an amendment to the Company's Restated Certificate of Incorporation,
as amended (the "Amendment"), changing (i) the par value of the Company's
authorized Common Stock, currently without par value, to a par value of $.01
per share and (ii) the par value of the Company's authorized Preferred Stock,
currently without par value, to a par value of $.01 per share.
If the Company's stockholders authorize the Amendment and it becomes
effective under the General Corporation Law of the State of Delaware, the
first and second sentences of Article FOURTH of the Company's Restated
Certificate of Incorporation, as amended, which set forth the Company's
currently authorized capital stock, will be amended to read as follows:
FOURTH: The total number of shares of capital stock of all classes which
the Corporation shall have the authority to issue is sixteen million
(16,000,000) shares. Fifteen million (15,000,000) shares shall be Common
Stock, par value $.01 per share, and one million (1,000,000) shares shall
be Preferred Stock, par value $.01 per share.
The purpose of the Amendment is to reduce the annual franchise taxes
currently payable by the Company to the State of Delaware. Except for the
change in par value, the Amendment does not alter the presently authorized
shares of the Company's Common Stock (whether issued or unissued) or the
authorized but unissued shares of the Company's Preferred Stock. Specifically,
the Amendment will not result in any change in the number of shares of Common
Stock or Preferred Stock which the Company is authorized to issue and neither
increases nor decreases the number of the Company's issued and outstanding
shares of Common Stock. Furthermore, existing certificates representing the
Company's Common Stock will continue to represent the same number of shares as
such certificates currently represent, but will be deemed to represent shares
of the Company's Common Stock with the new par value.
The Company's Board of Directors believes that it is in the best interests
of the Company and its stockholders to change the par value of the Company's
Common Stock and Preferred Stock and, in accordance with the General
Corporation Law of the State of Delaware, the Board of Directors has adopted a
resolution setting forth the Amendment, declaring the Amendment advisable,
directing that the Amendment be considered at the Meeting and recommending
that the stockholders of the Company authorize the Amendment.
13
<PAGE>
OTHER MATTERS
The management has no knowledge of any other matters which may come before
the Meeting and does not itself intend to present any such other matters.
However, if any such other matters shall properly come before the Meeting or
any adjournment thereof, the persons named as proxies will have discretionary
authority to vote the shares represented by the accompanying proxy in
accordance with their best judgment.
By Order of the Board of Directors
Henry W. Winkleman
Secretary
Wellesley Hills, Massachusetts
April 12, 1996
14
<PAGE>
AMERICAN BILTRITE INC.
ANNUAL MEETING OF STOCKHOLDERS MAY 6, 1996
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O The undersigned hereby appoints Roger S. Marcus, Richard G. Marcus, and
X William M. Marcus and each of them, as attorneys and proxies, with full
Y power of substitution, to represent and to vote, as designated below, at the
Annual Meeting of Stockholders of American Biltrite Inc. (the "Company") to
be held in the America Room, 2nd floor, at The Bank of Boston, 100 Federal
Street, Boston, Massachusetts on Thursday, May 6, 1996 at 9:00 A.M., Boston
time, and at any adjournment thereof, all shares of Common Stock of the
Company which the undersigned could vote if present in such manner as such
proxies may determine on any matters which may properly come before the
meeting and to vote on the following as specified on the reverse side.
(IMPORTANT -- PLEASE SIGN AND DATE ON REVERSE SIDE)
-------------
SEE REVERSE
SIDE
-------------
- - - -------------------------------------------------------------------------------
DETACH HERE
[X] Please mark
votes as in
this example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER, IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH NOMINEE
1. ELECTION OF CLASS II DIRECTORS
Nominees: Mark N. Kaplan, Natalie S. Marcus,
William M. Marcus, Kenneth L. Watchmaker
FOR WITHHELD
[_] [_]
For, except vote withheld from the following nominee(s).
- - - -------------------------------------------------------
FOR AGAINST ABSTAIN
2. Change the par value of the [_] [_] [_]
Company's Common Stock and
Preferred Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" EACH PROPOSAL ABOVE.
MARK HERE
FOR ADDRESS [_]
CHANGE AND
NOTE AT LEFT
PLEASE FILL IN DATE, SIGN AND MAIL THIS PROXY IN
THE ENCLOSED POST-PAID RETURN ENVELOPE
NOTE: Signature(s) should agree with name(s) as printed
hereon. All joint owners and fiduciaries should sign. When
signing as attorney, executor, administrator, trustee,
guardian or custodian for a minor, please give full title as
such. If a corporation, please sign full corporate name and
indicate the signer's office of authority. If a partner, sign
in partnership, name by authorized person.
Signature:_________________________ Date: _______________________
Signature:_________________________ Date: _______________________
