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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commision only (as permitted by
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
E&B MARINE INC.
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(Name of Registrant as Specified In Its Charter)
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Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 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.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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>
PRELIMINARY COPIES
E&B MARINE INC.
___________
Notice of Annual Meeting of Stockholders
to be held June 20, 1995
Edison, New Jersey
May 24, 1995
To the Holders of Common Stock
of E&B MARINE INC.:
The Annual Meeting of the Stockholders of E&B MARINE INC.
(the "Company") will be held at the Clarion Hotel & Towers, 2055
Lincoln Highway, Route 27, Edison, New Jersey on Tuesday, June
20, 1995 at 10:00 o'clock A.M., E.D.T., for the following
purposes, as more fully described in the accompanying Proxy
Statement:
1. To elect one Class A director of the Company for the
ensuing three years.
2. To consider and take action upon a proposal to approve
the Company's Amended and Restated 1983 Stock Option
Plan.
3. To consider and take action upon a proposal to approve
an amendment to the Company's Restated Certificate of
Incorporation to decrease the number of authorized
shares of Common Stock, $.001 par value per share, from
30,000,000 to 10,000,000.
4. To consider and take action upon a proposal to ratify
the Board of Directors' selection of KPMG Peat Marwick
LLP to serve as the Company's independent auditors for
the Company's fiscal year ending December 30, 1995.
5. To transact such other business as may properly come
before the Meeting or any adjournment or adjournments
thereof.
The close of business on May 19, 1995 has been fixed by the
Board of Directors as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting.
A list of the stockholders entitled to vote at the Meeting may be
examined at the Company's executive office located at 201 Meadow
Road, Edison, New Jersey during the ten-day period preceding the
Meeting.
By Order of the Board of Directors,
Robert G. Defonte, Secretary
You are cordially invited to attend the Meeting in person.
If you do not expect to be present, please mark, sign and date
the enclosed form of Proxy and mail it in the enclosed return
envelope, which requires no postage if mailed in the United
States, so that your vote can be recorded.
<PAGE>
PROXY STATEMENT
This Proxy Statement, which will be mailed commencing on or about
May 24, 1995 to the persons entitled to receive the accompanying
Notice of Annual Meeting of Stockholders, is provided in
connection with the solicitation of Proxies on behalf of the
Board of Directors of E&B Marine Inc. (the "Company") for use at
the Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, June 20, 1995 and at any adjournment or adjournments
thereof, for the purposes set forth in such Notice. The
Company's executive office is located at 201 Meadow Road, Edison,
New Jersey 08818.
At the close of business on May 19, 1995, the record date stated
in the accompanying Notice, the Company had X,XXX,XXX outstanding
shares of common stock, $.001 par value (the "Common Stock"), each
of which is entitled to one vote with respect to each matter to be
voted on at the Meeting. The Company has no class or series of voting
stock outstanding other than the Common Stock.
Directors are elected by plurality vote. Adoption of proposals 2
and 4 will require the affirmative vote of a majority of the
shares of Common Stock present and voting thereon at the Meeting.
Adoption of proposal 3 will require the affirmative vote of a
majority of the outstanding shares of Common Stock. Abstentions
and broker non-votes (as hereinafter defined) will be counted as
present for the purpose of determining the presence of a quorum.
For the purpose of determining the vote required for approval of
matters to be voted on at the Meeting, shares held by
stockholders who abstain from voting will be treated as being
"present" and "entitled to vote" on the matter and, thus, an
abstention has the same legal effect as a vote against the
matter. However, in the case of a broker non-vote or where a
stockholder withholds authority from his proxy to vote the proxy
as to a particular matter, such shares will not be treated as
"present" and "entitled to vote" on the matter and, thus, a
broker non-vote or the withholding of a proxy's authority will
have no effect on the outcome of the vote on the matter. A
"broker non-vote" refers to shares of Common Stock represented at
the Meeting in person or by proxy by a broker or nominee where
such broker or nominee (i) has not received voting instructions
on a particular matter from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on such matter.
I. ELECTION OF DIRECTOR
Only the director denominated as a Class A director will be
elected at the Meeting. This is in accord with the Company's
Certificate of Incorporation which provides for the division of
the Board of Directors into three classes with the term of office
of the Class A director expiring at the Meeting. Class B and
Class C directors will be elected at the Annual Meetings of
Stockholders to be held in 1996 and 1997, respectively.
Directors in each class are elected to serve for a term of three
years and until a successor shall have been chosen and qualified.
If the number of directors is increased, the increase will be
apportioned among the classes so as to make all classes as nearly
equal in number as possible.
<PAGE>
2
It is the intention of each of the persons named in the
accompanying form of Proxy to vote the shares represented thereby
in favor of William V. Roberti, the nominee listed in the table
under "Certain Information Concerning the Nominee and Directors"
below, unless otherwise instructed in such Proxy. The nominee is
presently serving as a director. In case the nominee is unable
or declines to serve, such persons reserve the right to vote the
shares represented by such Proxy for another person duly
nominated by the Board of Directors in such nominee's stead. The
Board of Directors has no reason to believe that the nominee will
be unable or will decline to serve.
Certain Information Concerning the Nominee and Directors
Certain information concerning the nominee for election as Class
A director and the other directors of the Company is set forth
below. Such information was furnished by them to the Company.
<TABLE>
<CAPTION>
Shares of
Common Stock
Owned Beneficially Percent
Name and Certain As of of
Biographical Information April 1, 1995 (1) Class
Nominee for Election:
<S> <C> <C>
WILLIAM V. ROBERTI (Class A Director), 3,750 (2) (3)
age 48; Visiting Professor at Sacred Heart
University in Fairfield, Connecticut since
January 1995. Mr. Roberti served as
President and Chief Executive Officer of
Brooks Brothers, a men's and women's
specialty retailer, from January 1990 to
December 1994 and President and Chief Operating
Officer from May 1987 to January 1990. Prior
to that, Mr. Roberti was employed by Zale
Corporation, a jewelry specialty retailer, from
1984 to 1987. Mr. Roberti is a director of Pivot
Rules, a privately held golf apparel company.
Director of the Company since May 1993.
Other Directors whose Term of Office Will
Continue After the Meeting:
BRADFORD R. KLATT (Class C Director), 23,308 (4) (3)
age 41; President of Metropolis Equities,
Inc., an investment firm, since June 1988
and Managing Director of Roseland Equity
Partners since 1993. Prior to that, Mr.
Klatt served as a Vice President of Goldman
Sachs & Co., an investment banking firm,
from 1984 to 1988. Director of the Company
since April 1989.
<PAGE>
3
<CAPTION>
Shares of
Common Stock
Owned Beneficially Percent
Name and Certain As of of
Biographical Information April 1, 1995 (1) Class
<S> <C> <C>
RICHARD E. KROON (Class C Director), 0 (5) (3)
age 52; Managing Partner of the Sprout
Group, a private equity firm, and President
and Chief Executive Officer of DLJ Capital
Corporation, the management company for
the Sprout Group, since 1981. Mr. Kroon
is a director of County Seat Holdings Inc.,
Loehmann's Holdings, Inc. and other private
companies. Director of the Company since
March 1989.
THEODORE A. PAMPERIN (Class B Director), 27,084 (6) (3)
age 54; Executive Vice President of Hanover
Direct, Inc., a direct mail company, since 1993.
Prior to that, Mr. Pamperin served as Chairman
of Tweeds, Inc., a direct mail apparel catalog,
from 1986 to 1992 and as Executive Vice
President and General Manager of J. Crew Outfitter,
a direct mail apparel catalog, from 1981 through
1985. Director of the Company since April 1989.
KENNETH G. PESKIN (Class B Director), 502,311 (7)(8) 13.0%
age 55; Chairman of the Board and Chief
Executive Officer of the Company since
November 1990. Prior to joining the
Company, Mr. Peskin was employed by
Supermarkets General Corporation from
1965 through September 1989. He was
Chairman and Chief Executive Officer from
June 1987 to September 1989 and President
and Chief Executive Officer of the Pathmark
Division from June 1986 to June 1987.
Director of a private company.
PAUL B. QUEALLY (Class C Director), 0 (5) (3)
age 31; General Partner of the Sprout Group,
a private equity firm, since 1993. Prior to
that, Mr. Queally served in a variety of
capacities with the Sprout Group from 1987
to 1993. Mr. Queally is a director of
Champion Healthcare Corporation and
OccuSystems, Inc. and several other private
companies. Director of the Company since
April 1991.
<PAGE>
4
<CAPTION>
Shares of
Common Stock
Owned Beneficially Percent
Name and Certain As of of
Biographical Information April 1, 1995 (1) Class
<S> <C> <C>
JOHN H. WEILAND (Class B Director), 13,100 (9) (3)
age 39; Senior Vice President of The North
America Group, Dentsply International Inc.,
a manufacturer of dental supplies, since 1991.
Prior to that, Mr. Weiland served as President
and Chief Executive Officer of Pharmacia
Diagnostics Inc., from 1989 to 1991 and as
Vice President - General Manager of Baxter
International - Scientific Products Division
from 1988 to 1989. Mr. Weiland was a
White House Fellow from 1987 to 1988 and Vice
President East American Scientific Products
Division of Baxter Healthcare Corporation prior
to 1987. Director of the Company since October
1986.
(1) Except as indicated in the following footnotes, the nominee
and each of the other directors has sole voting and
investment power with respect to all shares shown in the
table as beneficially owned by him.
(2) Consists of 3,750 shares issuable upon the exercise of
presently exercisable options.
(3) Less than one percent.
(4) Includes 3,868 shares issuable upon the exercise of
presently exercisable warrants and 10,000 shares issuable
pursuant to presently exercisable options. Does not include
47,075 shares beneficially owned by Metropolis Two
Associates of which Mr. Klatt is a partner.
(5) See footnote 13 to the table included under the caption
"Information Concerning Certain Stockholders" below.
(6) Includes 4,422 shares issuable upon the exercise of
presently exercisable warrants and 11,875 shares issuable
pursuant to presently exercisable options.
(7) Includes 168,750 shares issuable upon the exercise of
presently exercisable options and 9,375 shares held in trust
for Mr. Peskin's daughters.
<PAGE>
5
(8) Does not include 19,243 shares held by the Employee Stock
Ownership Plan ("ESOP"), with respect to which Mr. Peskin,
as co-trustee of the ESOP, has shared voting and investment
power.
(9) Includes 2,475 shares issuable upon the exercise of
presently exercisable warrants and 10,500 shares issuable
pursuant to presently exercisable options.
</TABLE>
During the fiscal year ended December 31, 1994, the Board of
Directors of the Company met six times. Each of the persons
named in the table above attended at least 75% of the meetings of
the Board of Directors and of each committee of the Board on
which such person served which were held during the time that
such person served, except for Mr. Roberti who attend at least
70% of such meetings.
The Board of Directors has an Audit Committee, whose members
currently are Messrs. Klatt, Queally, Roberti and Weiland, and a
Compensation and Stock Option Committee, whose members currently
are Messrs. Kroon, Klatt and Pamperin. The Audit Committee is
authorized to review the results of auditors' examinations and
make recommendations with respect to accounting practices and
procedures and internal controls. The Compensation and Stock
Option Committee is authorized to make recommendations to the
Board of Directors regarding compensation to be paid to key
employees of the Company, administers the Company's 1983 Stock
Option Plan and determines the persons who are eligible to
receive options thereunder, the number of shares to be subject to
each option and the other terms and conditions upon which options
under such plan are granted and made exercisable. The Board of
Directors of the Company does not have a Nominating Committee.
During the fiscal year ended December 31, 1994, the Audit
Committee met once and the Compensation and Stock Option
Committee met three times.
The Company's Restated Certificate of Incorporation contains a
provision, authorized by Delaware corporation law, which
eliminates the personal liability of a director of the Company to
the Company or to any of its stockholders for monetary damages
for a breach of his fiduciary duty as a director, except in the
case where the director breached his duty of loyalty, failed to
act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved
a stock repurchase in violation of Delaware corporation law, or
obtained an improper personal benefit.
Section 16(a) Reporting Requirements
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own
more than ten percent of the Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock.
Directors, executive officers and greater than ten percent
stockholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) reports they file.
<PAGE>
6
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and
representations that no other reports were required, during the
fiscal year ended December 31, 1994 all Section 16(a) filing
requirements applicable to its directors, executive officers and
greater than ten percent stockholders were met.
Executive Compensation
The following table sets forth information concerning the
compensation during the fiscal years ended December 31,
1994, December 25, 1993 and December 26, 1992 of the Chief
Executive Officer and the four other most highly compensated
executive officers of the Company whose total annual salary and
bonus for the year ended December 31, 1994 exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM
COMPENSATION COMPENSATION
Options All Other
Fiscal Granted Compensation
Name and Principal Position Year (1) Salary Bonus (#) (2)
<S> <C> <C> <C> <C> <C>
Kenneth G. Peskin 1994 $238,846 - - $398
Chairman of the Board and 1993 229,038 $115,000 - 996
Chief Executive Officer 1992 227,115 112,500 - 349
Eugene R. Lear (3) 1994 186,865 - - 398
President and 1993 178,231 71,600 - 744
Chief Operating Officer 1992 144,711 70,000 50,000 -
Walfrido A. Martinez 1994 113,462 - - 383
Senior Vice President and 1993 98,750 33,000 18,750 516
Chief Financial Officer 1992 94,134 23,750 2,500 113
Robert G. Defonte 1994 150,240 - - 398
Senior Vice President, 1993 143,625 45,705 12,500 768
Merchandising and Secretary 1992 135,065 44,550 - 260
Patrick J. Melli 1994 109,615 - - 373
Senior Vice President, 1993 97,500 33,000 17,500 504
Inventory Management and 1992 89,711 22,500 1,250 162
Information Services
(1) The 1994 fiscal year contained 53 weeks.
(2) Consists of contributions made by the Company on behalf of
the executive officers to the Employee Stock Ownership Plan.
(3) Effective January 28, 1995, Mr. Lear resigned his positions
as President and Chief Operating Officer (see "Employment
Agreements" below).
</TABLE>
<PAGE>
7
The Company did not grant any options to purchase Common Stock to
the executive officers named in the Summary Compensation Table
during the fiscal year ended December 31, 1994. On February 15,
1995, the Company granted to each of Mr. Martinez, Mr. Defonte
and Mr. Melli options to purchase 12,000 shares of Common Stock
at an exercise price of $7.50 per share. Such options are
exercisable in full on November 15, 1999 and are subject to
acceleration in 1996, contingent upon the achievement of certain
performance goals by the Company for fiscal 1995. In addition,
see "Employment Agreements" below for information concerning
option grants subsequent to December 31, 1995 to Kenneth G.
Peskin. The following table sets forth information concerning
the number and value of options held by the executive officers
named in the Summary Compensation Table at December 31, 1994.
During the fiscal year ended December 31, 1994, none of the
executive officers named in the Summary Compensation Table
exercised any options to purchase Common Stock.
<TABLE>
<CAPTION>
OPTION VALUES AT DECEMBER 31, 1994
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS (#) IN-THE-MONEY OPTIONS (1)
Name & Principal Position Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Kenneth G. Peskin
Chairman of the Board and
Chief Executive Officer 168,750 43,750 $843,750 $93,750
Eugene R. Lear
President and
Chief Operating Officer 25,002 24,998 109,384 109,366
Walfrido A. Martinez
Senior Vice President and
Chief Financial Officer 12,625 12,375 35,844 34,781
Robert G. Defonte
Senior Vice President,
Merchandising and Secretary 13,750 11,250 47,813 36,563
Patrick J. Melli
Senior Vice President, Inventory
Management and Information
Services 13,000 12,000 38,875 34,406
(1) In-the-money options are those where the fair market value
of the underlying Common Stock exceeds the exercise price of
the option. The value of in-the-money options is determined
in accordance with regulations of the Securities and
Exchange Commission by subtracting the aggregate exercise
price of the option from the aggregate year-end value of the
underlying Common Stock.
</TABLE>
Retirement Plans
The Company provides retirement benefits for employees of the
Company and its subsidiaries, including officers and directors
who are employees, under three plans: the Profit Sharing Plan
(under Section 401(k) of the Code), the Employee Stock Ownership
Plan ("ESOP") and the Defined Benefit Plan.
<PAGE>
8
The compensation of the executive officers of the Company set
forth in the Summary Compensation Table above is the current
covered compensation of such executive officers under the Defined
Benefit Plan but not more than $150,000 for 1994, $235,840 for
1993 and $228,860 for 1992. Messrs. Peskin, Lear, Martinez,
Defonte and Melli have two, one, two, nine and two credited years
of service under the Defined Benefit Plan, respectively. The
following table shows the estimated annual retirement benefit in
the form of life annuity under the Defined Benefit Plan for
employees retiring at age 65 whose average annual compensation
and years of participation at retirement would be in the
classifications shown. The amounts shown in the table do not
take into account the additional benefit determined by reference
to Common Stock purchased under the Profit Sharing Plan or the
offset for benefits payable under the ESOP.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefit
Average Annual Years of Service
Compensation 10 15 20 25
<S> <C> <C> <C> <C>
$ 50,000 $ 7,500 $11,250 $15,000 $18,750
100,000 15,000 22,500 30,000 37,500
150,000 22,500 33,750 45,000 56,250
200,000 30,000 45,000 60,000 75,000
</TABLE>
Director Compensation
The Company pays its directors (other than employees) an annual
fee of $6,000 and an attendance fee of $1,000 for each meeting of
the Board of Directors of the Company attended together with
reasonable travel and other expenses incurred in connection with
such attendance.
Employment Agreements
By agreement dated as of January 28, 1995, the Company extended
and amended the employment agreement between the Company and
Kenneth G. Peskin dated as of February 26, 1991. As extended and
amended, this agreement (the "Employment Agreement") provides
for, among other items, (i) the employment of Mr. Peskin as the
Company's Chairman and Chief Executive Officer until January 28,
1997 (with automatic one-year extensions of the term effective as
of each anniversary of the date of the agreement unless either
the Company or Mr. Peskin gives a notice of non-extension at
least ninety days prior to such anniversary), (ii) an annual base
salary for 1995 of $240,000 and annual base salaries thereafter
to be agreed upon by the Company and Mr. Peskin, (iii) the
payment of an annual cash bonus of 50% or more of base salary
based upon the achievement by the Company of certain performance
goals for the applicable fiscal year, (iv) the grant to Mr.
Peskin of options to purchase up to 187,500 shares of Common
Stock of the Company at an exercise price of $2.00 per share, of
which 168,750 are currently vested, (v) the grant to Mr. Peskin
of options to purchase up to 75,000 shares of Common Stock of the
Company at an exercise price of $7.50, vesting on June 1, 2004
but subject to accelerated vesting based upon the achievement by
the Company of certain performance goals during fiscal years 1995
through 1997, (vi) the grant to Mr. Peskin of additional options
to purchase shares of
<PAGE>
9
Common Stock at an exercise price of $14.00 per share, with the
number of shares subject to these options to be determined in
accordance with a formula set forth in the Employment Agreement,
(vii) certain rights of co-sale with respect to sales of Common
Stock held by certain stockholders of the Company, (viii) certain
severance payments to Mr. Peskin of up to one year's base salary
and bonus in the event of his death, disability or upon
termination of the employment of Mr. Peskin under certain
circumstances, (ix) an agreement by Mr. Peskin not to compete
with the Company for up to one year following termination, and
(x) certain benefits for Mr. Peskin reasonably consistent with
those offered to similar executives by companies which are
substantially of the same size and economic condition as the
Company.
The Company had an employment agreement with Eugene R. Lear which
provided for, among other items (i) the employment of Mr. Lear as
the President and Chief Operating Officer of the Company for a
five year period commencing in March 1992 at an annual base
salary of $175,000 and at annual base salaries thereafter to be
agreed upon by the Company and Mr. Lear, (ii) the payment of cash
bonuses of up to a maximum of 40% of base salary based upon the
achievement by the Company of certain performance goals and,
(iii) the grant of options as of March 12, 1992 to purchase up to
50,000 shares of Common Stock of the Company at an exercise price
of $2.625, with 25,000 of such options (the "Lear Performance
Options") vesting contingent on the achievement by the Company of
certain performance goals. On July 31, 1992, the employment
agreement was amended to provide that the Lear Performance
Options are exercisable in full on March 1, 2002, which
exercisability may be accelerated based upon the achievement of
the Company of certain annual performance goals. On February 11,
1994, the Board of Directors of the Company increased Mr. Lear's
annual base salary to $184,000. Effective January 28, 1995, Mr.
Lear resigned as President and Chief Operating Officer of the
Company and his employment agreement was terminated.
Report of the Compensation and Stock Option Committee
The Compensation and Stock Option Committee of the Board of
Directors (the "Committee") determines the compensation
arrangements for executive officers of the Company. The
Company's philosophy and objectives in setting executive
compensation are to offer competitive levels of compensation
which will assist the Company in attracting and retaining
qualified executives, reward individual achievement and link
executive compensation with the Company's annual and long-term
performance goals.
The compensation program for the Company's executives consists of
base salary, an annual incentive bonus plan and stock options.
The Company's salary levels are intended to be competitive with
those offered by companies in similar businesses and commensurate
with the executive's level of responsibility. Salary
adjustments, which are normally made annually, are determined by
monitoring the overall financial performance of the Company, the
performance of the individual executive, as well as salaries at
other companies of similar size.
<PAGE>
10
The Company has an employment agreement with Kenneth G. Peskin,
Chairman and Chief Executive Officer. Pursuant to this
agreement, Mr. Peskin's annual base salary is subject to
increases at the discretion of the Board of Directors based upon
performance of the Company and performance of the executive. On
February 11, 1994, the Board of Directors approved an increase of
approximately 2% in the base salary payable to Mr. Peskin.
Effective January 28, 1995, the Company extended and amended Mr.
Peskin's employment agreement to provide for, among other things,
an annual base salary of $240,000. Salary increases of the other
executive officers of the Company are at the recommendation of
the Chief Executive Officer based upon individual performance and
Company performance.
The Company's annual incentive bonus plan provides participating
executives the opportunity to earn additional compensation based
upon the achievement by the Company of its annual financial plan.
The financial plan, which is established at the beginning of each
fiscal year by the Board of Directors after consultation with
management, focuses on achievement of certain levels of cash flow
from operating activities. Threshold and maximum levels are
established around a mid-point target in order to create a range
of cash flow that will be used to measure the potential award
opportunity for each executive under the annual incentive bonus
plan. A target bonus opportunity equal to a percentage of annual
salary is established for each executive based on his or her
level of responsibility, potential contribution to the success of
the Company and competitive considerations. Awards for senior
management are dependent on achievement of Company goals. Awards
to lower-level executives are in part based on Company
performance and in part based upon individual or group
performance as evaluated by the Chief Executive Officer.
The Company periodically grants stock options to its executive
officers and other key employees. Stock option grants are
intended to align the interests of the Company's executive
officers more closely with the interests of the Company's
shareholders by providing its executives and key employees who
have substantial responsibility for the management and growth of
the Company with an opportunity to profit from increases in the
value of the Company's stock. Options granted to senior
management often provide for accelerated exercise upon the
achievement of predetermined performance goals by the Company.
On February 15, 1995, pursuant to his employment agreement, Mr.
Peskin was awarded options to purchase 75,000 shares. Such
options were granted with an exercise price equal to the market
value of the Common Stock on the date of grant and are
exercisable on June 1, 2004 but subject to acceleration upon the
achievement by the Company of certain performance goals during
fiscal years 1995 through 1997.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
which became effective January 1, 1994, limits the deductibility
of compensation exceeding $1 million to each of the Company's
Chief Executive Officer and four other most highly compensated
executive officers. Qualifying performance-based compensation
meeting the requirements promulgated by the Internal Revenue
Service under Section 162(m) will not be subject to the deduction
limit. The Company intends to qualify its executive compensation
arrangements to comply with such requirements.
The Compensation and Stock Option
Committee of the Board of Directors
Bradford R. Klatt
Richard E. Kroon
Theodore A. Pamperin
<PAGE>
11
Information Concerning Certain Stockholders
The stockholders (including any "group" as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934) who, to
the knowledge of the Board of Directors of the Company, owned
beneficially more than five percent of any class of the
outstanding voting securities of the Company as of April 1, 1995,
each director and each executive officer named in the Summary
Compensation Table of the Company who owned beneficially shares
of Common Stock and all directors and executive officers of the
Company as a group, and their respective stockholdings as of such
date (according to information furnished by them to the Company),
are set forth in the following table. Except as indicated in the
footnotes to the table, all of such shares are owned with sole
voting and investment power.
<TABLE>
<CAPTION>
Shares of
Common Stock
Owned Beneficially
as of Percent
Name and Address April 1, 1995 of Class
<S> <C> <C>
Sprout Growth L.P. 980,834 (1)(2) 24.8%
c/o Sprout Group
140 Broadway
New York, NY 10005-1102
Sprout Capital V 810,539 (2)(3) 20.7%
c/o Sprout Group
140 Broadway
New York, NY 10005-1102
Trustees of General Electric
Pension Trust 445,888 (4) 11.8%
3003 Summer Street
P.O. Box 7900
Stamford, CT 06905
Kenneth G. Peskin 502,311 (5)(6) 12.9%
201 Meadow Road
Edison, NJ 08818
DLJ Capital Corporation 289,083 (7)(8) 7.5%
c/o Sprout Group
140 Broadway
New York, NY 10005-1102
Corporate Life Insurance
Co., Inc. 195,819 (9) 5.2%
Suite 220
893 South Matlack Street
Westchester, PA 19382
<PAGE>
12
<CAPTION>
Shares of
Common Stock
Owned Beneficially
as of Percent
Name and Address April 1, 1995 of Class
<S> <C> <C>
Robert G. Defonte 19,602 (10) (11)
201 Meadow Road
Edison, NJ 08818
Bradford R. Klatt 23,308 (12) (11)
201 Meadow Road
Edison, NJ 08818
Richard E. Kroon 0 (13) (11)
c/o Sprout Group
140 Broadway
New York, NY 10005-1102
Walfrido A. Martinez 14,000 (6)(14) (11)
201 Meadow Road
Edison, NJ 08818
Patrick J. Melli 14,642 (15) (11)
201 Meadow Road
Edison, NJ 08818
Theodore A. Pamperin 27,084 (16) (11)
201 Meadow Road
Edison, NJ 08818
Paul B. Queally 0 (13) (11)
c/o Sprout Group
140 Broadway
New York, NY 10005-1102
William V. Roberti 3,750 (17) (11)
201 Meadow Road
Edison, NJ 08818
John H. Weiland 13,100 (18) (11)
201 Meadow Road
Edison, NJ 08818
All Directors and Executive
Officers as Group (10 persons) 617,797 15.5%
<PAGE>
13
(1) Includes 243,394 shares issuable upon the exercise of
presently exercisable ten-year warrants.
(2) Richard E. Kroon and Paul B. Queally, directors of the
Company, are managing partner and general partner,
respectively, of the general partner of Sprout Growth, L.P.
and of Sprout Capital V. DLJ Growth Associates and DLJ
Associates V are the general partners of Sprout Growth, L.P.
and Sprout Capital V, respectively, and as such have shared
voting and dispositive power with respect to such shares.
Does not include: 108,071 shares beneficially owned by
Sprout Growth, Ltd., of which Mr. Kroon is managing partner
of the investment manager; 48,687 shares beneficially owned
by DLJ Venture Capital Fund II, L.P., of which Mr. Kroon is
managing partner of the general partner. Does not include
289,083 shares beneficially owned by DLJ Capital
Corporation, of which Mr. Kroon is President and Chief
Executive Officer (see footnote 13 below).
(3) Includes 201,135 shares issuable upon the exercise of
presently exercisable ten-year warrants.
(4) Includes 55,261 shares issuable upon the exercise of
presently exercisable ten-year warrants.
(5) Includes 168,750 shares issuable upon the exercise of
presently exercisable options and 9,375 shares held in trust
for Mr. Peskin's daughters.
(6) Does not include 19,243 shares held by the ESOP, with
respect to which Mr. Peskin and Mr. Martinez, as trustees,
have shared voting and investment power.
(7) Includes 53,714 shares issuable upon the exercise of
presently exercisable ten-year warrants.
(8) Includes 72,625 shares issuable upon the exercise of
presently exercisable options. Richard E. Kroon, a Director
of the Company, is the President and Chief Executive Officer
of DLJ Capital Corporation. Does not include shares
beneficially owned by Sprout Growth L.P., Sprout Growth,
Ltd., DLJ Venture Capital Fund II, L.P. or Sprout Capital V.
(9) Includes 56,919 shares issuable upon the exercise of
presently exercisable ten-year warrants.
(10) Includes 16,250 shares issuable upon the exercise of
presently exercisable options.
(11) Less than one percent.
(12) Includes 3,868 shares issuable upon the exercise of
presently exercisable ten-year warrants and 10,000 shares
issuable pursuant to presently exercisable options. Does
not include 47,075 shares beneficially owned by Metropolis
Two Associates of which Mr. Klatt is a partner.
<PAGE>
14
(13) Mr. Kroon and Mr. Queally disclaim beneficial ownership of
the shares described in Footnotes 1, 2, 3, 7, and 8 above,
except for specific individual partnership interests.
(14) Includes 13,875 shares issuable upon the exercise of
presently exercisable options.
(15) Includes 14,500 shares issuable upon the exercise of
presently exercisable options.
(16) Includes 4,422 shares issuable upon the exercise of
presently exercisable ten-year warrants and 11,875 shares
issuable pursuant to presently exercisable options.
(17) Consists of 3,750 shares issuable upon the exercise of
presently exercisable options.
(18) Includes 2,475 shares issuable upon the exercise of
presently exercisable seven-year warrants and 10,500 shares
issuable pursuant to presently exercisable options.
</TABLE>
Performance Graph
The following graph compares the cumulative total return on the
Company's Common Stock to the Standard and Poor's 500 Index and
the Russell 2000 Index. The graph assumes that $100 was invested
in the Company's Common Stock and each Index on December 31, 1989
and that all dividends were reinvested.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
E&B Marine $100 36 29 63 145 85
S&P 500 Index $100 97 126 136 150 152
Russell 2000 Index $100 80 118 139 165 163
</TABLE>
<PAGE>
15
II. APPROVAL OF THE AMENDED AND RESTATED E & B MARINE INC.
1983 STOCK OPTION PLAN
The Company sponsors the E & B Marine Inc. 1983 Stock Option Plan
(the "Plan"). On May 19, 1995, the Board of Directors of the
Company adopted an amendment and restatement of the Plan (the
"Restated Plan"). The Restated Plan will not be made effective
unless approved by the holders of a majority of the shares of
Common Stock present or represented and voting thereon at the
Meeting. If the Restated Plan is not approved by the
stockholders, the Plan as in effect prior to the amendment and
restatement will continue in effect.
A description of the material amendments to the Plan is set forth
below. Such description is qualified by reference to the text of
the Restated Plan set forth in Exhibit A to this Proxy Statement.
Increase in Number of Shares. Under the Plan, 500,000 shares of
Common Stock are available for option grants. Presently, there
are only a limited number of shares remaining available for
option grants under the Plan. The Board of Directors believes
that the Company's stock option program has been of material
benefit to the Company and has enabled the Company to attract and
retain key employees. The Board of Directors also believes that
the best interests of the Company and its stockholders require
that the Company continue to be in a position to offer options to
present and prospective personnel. Under the Restated Plan, the
number of shares of Common Stock available for options is
increased from 500,000 to 650,000. This increase in the number
of shares will allow the Company to continue its stock option
program.
Eligibility to Participate. Under the Plan, options may be
granted only to persons who are employees of the Company,
including officers and directors. Under the Restated Plan,
persons eligible to receive options would include all directors,
officers, consultants and other individuals providing services to
the Company, as well as employees.
Exercise of Options Following Termination of Service. Under the
Plan, an Optionee whose service with the Company is terminated
may exercise options for a period of up to three months following
termination. Under the Restated Plan, the Compensation and Stock
Option Committee (the "Stock Option Committee") of the Board of
Directors, which will administer the Restated Plan, has
discretion to extend the period for exercise of options for up to
18 months following the date of termination.
Payment of Exercise Price. The plan currently provides that the
exercise price of an option may be paid in cash or in shares of
Common Stock having a value on the date of exercise equal to the
exercise price, or in a combination of cash and shares. Under
the Restated Plan, Optionees are also permitted to pay the
exercise price of options by the surrender of options. Upon such
a surrender, the Optionee would receive that number of shares of
Common Stock having a value on the date of exercise equal to the
excess of the aggregate fair market value of the Common Stock
covered by the options so surrendered over the aggregate exercise
price of such options.
A description of the Restated Plan is set forth below. Such
description is qualified by reference to the preceding discussion
of the material amendments to the Plan and by reference to the
text of the Restated Plan set forth in Exhibit A to this Proxy
Statement.
<PAGE>
16
Under the Restated Plan, options to purchase shares of Common
Stock may be granted to key employees of the Company and its
subsidiaries and to directors, consultants and other individuals
providing services to the Company through January 25, 2001.
The Restated Plan is administered by the Stock Option Committee.
The Stock Option Committee determines the persons who are to
receive options and the number of shares to be subject to each
option. In selecting individuals for options and determining the
terms thereof, the Stock Option Committee may take into
consideration any factors it deems relevant including present and
potential contributions to the success of the Company. Options
granted under the Restated Plan may be exercised only within a
period fixed by the Stock Option Committee, which may not exceed
ten years from the date of grant of the option or, in the case of
incentive stock options granted to a holder of more than 10% of
the total combined voting power of all classes of stock of the
Company, five years from the date of grant of the option.
Options may be made exercisable immediately or in installments,
as determined by the Stock Option Committee.
Options granted under the Restated Plan generally are not
transferable other than by will or the laws of descent and
distribution and during the lifetime of the Optionee may be
exercised only by the Optionee. However, the Stock Option
Committee may provide that an option may be transferred in whole
or part by the optionee to members of his family or to trusts for
the benefit of, or partnerships or other entities beneficially
owned by, the Optionee or members of his family. The Restated
Plan provides that the exercise price of an option may not be
less than the lesser of (i) the tangible book value per share of
Common Stock, determined in accordance with generally accepted
accounting principles as of the end of the fiscal quarter of the
Company immediately preceding the fiscal quarter in which the
option is granted, or (ii) the fair market value of the Common
Stock on the date of grant of the option. In the case of
incentive stock options granted to any holder of more than 10% of
the total combined voting power of all classes of stock of the
Company, the exercise price may not be less than 110% of the fair
market value of the Common Stock on the date of grant. The
exercise price may be paid in cash, in shares of Common Stock
owned by the Optionee, by surrender of options or by a
combination of the foregoing.
The Restated Plan provides that in the event that any member of
the Stock Option Committee is not a "disinterested person" as
defined in Rule 16b-3 under the Securities Exchange Act of 1934,
as such Rule was in effect at April 30, 1991, the maximum number
of shares of Common Stock which may be subject to options granted
under the Restated Plan to all directors is 375,000, the maximum
number of shares of Common Stock which may be subject to options
granted under the Restated Plan to each director who is an
employee is 300,000, and the maximum number of shares of Common
Stock which may be subject to options granted to a director who
is not an employee is 15,000.
The Restated Plan provides that, in the event of changes in the
corporate structure of the Company or certain events affecting
the Common Stock, the Stock Option Committee, or the Board of
Directors in the case of options granted to directors, shall, in
its discretion, make adjustments with respect to the number or
kind of shares which may be issued under the Restated Plan or
which are covered by outstanding options, or in the exercise
price per share, or both.
<PAGE>
17
The Restated Plan provides that in connection with any merger or
consolidation in which the Company is not the surviving
corporation and which results in the holders of the outstanding
voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the
outstanding voting securities of the surviving corporation
(determined immediately following such merger or consolidation),
any sale or transfer by the Company of all or substantially all
its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of
all or a majority of the then outstanding voting securities of
the Company, all outstanding options under the Restated Plan
granted prior to June 20, 1995 will become exercisable in full on
and after (i) 15 days prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case
may be. This provision will apply to options granted on or after
June 20, 1995 only to the extent provided in the certificate
evidencing the specific option grant.
For Federal income tax purposes, an Optionee will not recognize
any income upon the grant of a non-qualified or incentive stock
option. Upon the exercise of a non-qualified option, the
Optionee will realize ordinary income equal to the excess (if
any) of the fair market value of the shares purchased upon such
exercise over the exercise price. The Company will be entitled
to a deduction from income in the same amount and at the same
time as the Optionee realizes such income. Upon the sale of
shares purchased upon such exercise, the Optionee will realize
capital gain or loss measured by the difference between the
amount realized on the sale and the fair market value of shares
at the time of exercise of the option. In the case of options
granted to executive officers and other principal officers,
directors and greater than 10% stockholders of the Company,
income will be recognized upon exercise of a non-qualified option
only if the option has been held for at least six months prior to
the exercise. If such option is exercised within six months
after the date of grant, an officer, director or greater than 10%
stockholder will recognize income on the date six months after
the date of grant, unless he or she files an election under
Section 83(b) of the Internal Revenue Code of 1986, as amended,
to be taxed on the date of exercise.
In contrast, an Optionee will not be taxed upon exercise of an
incentive stock option and the Company will not be entitled to a
deduction from income in respect thereof. If the Optionee
retains the shares transferred to him upon exercise of an
incentive stock option for more than one year after the date of
issuance of the stock and two years after the date of grant of
the option, any gain or loss realized on a subsequent sale of the
shares by the Optionee will be treated as long-term capital gain
or loss. If, on the other hand, the Optionee sells the shares
within one year after the date of transfer or two years after the
date of grant of the option, the Optionee will realize ordinary
income, and the Company will be entitled to a deduction from
income, to the extent of the excess of the value of the shares on
the date of exercise or the amount realized on the sale
(whichever is less) over the exercise price. Any excess of the
sale price over the value of the shares on the date of exercise
will be treated as capital gain. The spread between the fair
market value of the shares on the date of exercise and the
exercise price constitutes an item of tax preference for
purposes of the alternative minimum tax which, under certain
circumstances, could cause tax liability as a result of the
exercise.
<PAGE>
18
The following table sets forth information with respect to the
options granted under the Plan since its effective date to the
individual or group indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES AVERAGE
COVERED BY EXERCISE PRICE
NAME OF GRANTEE OPTIONS GRANTED PER SHARE
<S> <C> <C>
Kenneth G. Peskin 262,500 $3.57
Eugene R. Lear 50,000 2.62
Walfrido A. Martinez 37,000 5.25
Robert G. DeFonte 37,000 4.88
Patrick J. Melli 37,000 5.18
All current executive officers as a
group (5 persons) 423,500 3.86
All current directors who are not
executive officers as
a group (1 person) 3,750 3.00
All employees, including all current
officers who are not executive
officers, as a group (100 persons) 49,225 5.97
</TABLE>
The Board of Directors recommends that the Company's stockholders
vote FOR approval of the Amended and Restated 1983 Stock Option
Plan.
III. PROPOSAL TO APPROVE AN AMENDMENT OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO DECREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
On May 19, 1995, the Board of Directors unanimously approved an
amendment to the Company's Restated Certificate of Incorporation
which would decrease the number of authorized shares of Common
Stock from 30,000,000 to 10,000,000. The text of the proposed
amendment to the Restated Certificate of Incorporation is set
forth in Exhibit B to this Proxy Statement.
At present, the Company is authorized to issue 31,000,000 shares
of capital stock, consisting of 30,000,000 shares of Common
Stock, $.001 par value per share, and 1,000,000 shares of
Preferred Stock, $1.00 par value per share (the "Preferred
Stock"). The proposed amendment to the Company's Restated
Certificate of Incorporation would decrease the number of
authorized shares of Common Stock from 30,000,000 to 10,000,000,
thereby decreasing the total number of authorized shares of
capital stock of the Company from 31,000,000 to 11,000,000.
On May 19, 1995, there were X,XXX,XXX shares of Common Stock issued
and outstanding and no shares of Preferred Stock issued and
outstanding.
<PAGE>
19
The Board of Directors believes that the adoption of the proposed
amendment is advantageous to the Company and its stockholders as
the proposed amendment would reduce annual state franchise taxes
payable by the Company.
The Board of the Directors recommends that the Company's
stockholders vote FOR approval of the amendment to decrease the
number of authorized shares of Common Stock.
IV. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to
serve as independent auditors for the Company for the fiscal year
ending December 30, 1995. The Board of Directors considers KPMG
Peat Marwick LLP to be eminently qualified.
Although it is not required to do so, the Board of Directors is
submitting its selection of the Company's auditors for
ratification at the Meeting, in order to ascertain the views of
stockholders regarding such selection. If the selection is not
ratified, the Board of Directors will reconsider its selection.
The Board of Directors recommends that stockholders vote FOR
ratification of the selection of KPMG Peat Marwick LLP to examine
the financial statements of the Company for the Company's fiscal
year ending December 30, 1995. It is the intention of the
persons named in the accompanying form of Proxy to vote the
shares represented thereby in favor of such ratification unless
otherwise instructed therein.
A representative of KPMG Peat Marwick LLP will be present at the
Meeting with the opportunity to make a statement if such
representative desires to do so and will be available to respond
to appropriate questions.
V. OTHER MATTERS
The Board of Directors of the Company does not know of any other
matters which may be brought before the Meeting. However, if any
such other matters are properly presented for action, it is the
intention of the persons named in the accompanying form of Proxy
to vote the shares represented thereby in accordance with their
judgment on such matters.
VI. MISCELLANEOUS
If the accompanying form of Proxy is executed and returned, the
shares of Common Stock represented thereby will be voted in
accordance with the terms of the Proxy, unless the Proxy is
revoked. If no directions are indicated in such Proxy, the
shares represented thereby will be voted in favor of the nominee
proposed by the Board of Directors in the election of director,
FOR the approval of the Company's Amended and Restated 1983 Stock
Option Plan, FOR the approval of the amendment to the Company's
Restated Certificate of Incorporation and FOR ratification of
the Board of Directors' selection of independent auditors. Any
Proxy may be revoked at any time before it is exercised. The
casting of a ballot at the Meeting by a stockholder who may
theretofore have given a Proxy will have the effect of revoking
that Proxy.
<PAGE>
20
All costs relating to the solicitation of Proxies will be borne
by the Company. Proxies may be solicited by officers, directors
and regular employees of the Company and its subsidiaries
personally, by mail or by telephone or telegraph, and the Company
may pay brokers and other persons holding shares of stock in
their names or those of their nominees for their reasonable
expenses in sending soliciting material to their principals.
It is important that Proxies be returned promptly. Stockholders
who do not expect to attend the Meeting in person are urged to
mark, sign and date the accompanying form of Proxy and mail it in
the enclosed return envelope, which requires no postage if mailed
in the United States, so that their votes can be recorded.
Stockholder Proposals
Stockholder proposals intended to be presented at the 1996 Annual
Meeting of Stockholders of the Company must be received by the
Company by January 25, 1996 in order to be considered for
inclusion in the Company's proxy statement relating to such
meeting.
Annual Report on Form 10-K
A copy of the Company's Annual Report on Form 10-K, including the
financial statements and financial statement schedules for the
fiscal year ended December 31, 1994, which has been filed with
the Securities and Exchange Commission, will be sent, without
charge, to stockholders to whom this Proxy Statement is mailed,
upon written request to the Secretary, E&B Marine Inc., 201
Meadow Road, Edison, New Jersey 08818.
May 24, 1995
<PAGE>
EXHIBIT A
E&B MARINE INC.
1983 STOCK OPTION PLAN
as Amended and Restated, Effective June 20, 1995
1. Purposes of Plan. The purposes of the Plan, which
shall be known as the E&B Marine Inc. 1983 Stock Option Plan and
is hereinafter referred to as the "Plan", are (i) to provide
incentives for key employees, directors, consultants and other
individuals providing services to E&B Marine Inc. (the "Company")
and its subsidiary corporations (within the meaning of Section
424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), and referred to herein as "Subsidiary") by encouraging
their ownership of the common stock, $.001 par value, of the
Company (the "Stock") and (ii) to aid the Company in retaining
such key employees, directors, consultants and other individuals
upon whose efforts the Company's success and future growth
depends, and attracting other such employees, directors,
consultants and other individuals.
2. Administration. The Plan shall be administered by
the Compensation and Stock Option Committee (the "Committee") of
the Board of Directors, as hereinafter provided. For purposes of
administration, the Committee, subject to the terms of the Plan,
shall have plenary authority to establish such rules and
regulations, to make such determinations and interpretations, and
to take such other administrative actions as it deems necessary
or advisable. All determinations and interpretations made by the
Committee shall be final, conclusive and binding on all persons,
including optionees and their legal representatives and
beneficiaries. Notwithstanding the foregoing, in the event that
there is no Compensation Committee, then the powers to be
exercised by the Compensation Committee hereunder shall be
exercised by the Board of Directors.
The Committee shall be appointed from time to time by the Board
of Directors and shall consist of not fewer than three of its
members. Unless otherwise determined by the Board of Directors,
no member of the Board of Directors who serves on the Committee
shall be eligible to participate in the Plan. The Board of
Directors shall designate one of the members of the Committee as
its Chairman. The Committee shall hold its meetings at such
times and places as it may determine. A majority of its members
shall constitute a quorum. All determinations of the Committee
shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all members shall
be as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a
secretary (who need not be a member of the Committee). No member
of the Committee shall be liable for any act or omission with
respect to his service on the Committee, if he acts in good faith
and in a manner he reasonably believes to be in or not opposed to
the best interests of the Company.
3. Stock Available for Options. There shall be
available for options under the Plan a total of 650,000 shares of
Stock, subject to any adjustments which may be made pursuant to
Section 5(f) hereof. Shares of Stock used for purposes of the
Plan may be either authorized and unissued shares, or previously
issued shares held in the treasury of the Company, or both.
Shares of Stock covered by options which have terminated or
expired prior to exercise shall be available for further options
hereunder.
<PAGE>
A-2
4. Eligibility. Options under the Plan may be granted
to key employees of the Company or any Subsidiary, including
officers or directors of the Company or any Subsidiary, and to
directors, consultants and other individuals providing services
to the Company or any Subsidiary. Options may be granted to
eligible employees whether or not they hold or have held options
previously granted under the Plan or otherwise granted or assumed
by the Company. In selecting employees for options, the
Committee may take into consideration any factors it may deem
relevant, including its estimate of the employee's present and
potential contributions to the success of the Company and its
Subsidiaries. Service as a director, officer or consultant of or
to the Company or any Subsidiary shall be considered employment
for purposes of the Plan (and the period of such service shall be
considered the period of employment for purposes of Section 5(d)
of the Plan); provided, however, that incentive stock options may
be granted under the Plan only to an individual who is an
"employee" (as such term is used in Section 422 of the Code) of
the Company or any Subsidiary.
5. Terms and Conditions of Options. The Committee
shall, in its discretion, prescribe the terms and conditions of
the options to be granted hereunder, which terms and conditions
need not be the same in each case, subject to the following:
(a) Option Price. The price at which each share of
Stock covered by an option granted under the Plan may be
purchased shall be determined by the Committee and shall not be
less than the lesser of (i) the tangible book value per share of
Stock, determined in accordance with generally accepted
accounting principles as of the end of the fiscal quarter of the
Company immediately preceding the fiscal quarter in which the
option is granted, or (ii) the market value per share of Stock on
the date of grant of the option. The date of grant of an option
shall be the date specified by the Committee in its grant of the
option.
(b) Option Period. The period for exercise of an
option shall in no event be more than ten years from the date of
grant, or in the case of any option intended to be an incentive
stock option granted to an individual owning, on the date of
grant, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any
Subsidiary, more than five years from the date of grant. Options
may, in the discretion of the Committee, be made exercisable in
installments during the option period. Any shares not purchased
on any applicable installment date may be purchased thereafter at
any time before the expiration of the option period. The
Committee shall have the authority at any time to accelerate the
exercisability of all or any portion of any option granted under
the Plan.
(c) Exercise of Options. In order to exercise an
option, the Optionee shall deliver to the Company written notice
specifying the number of shares of Stock to be purchased,
together with cash or a certified or bank cashier's check payable
to the order of the Company in the full amount of the purchase
price therefor; provided that, for the purpose of assisting an
Optionee to exercise an option, the Company may make loans to the
Optionee or guarantee loans made by third parties to the
Optionee, on such terms and conditions as the Board of Directors
may authorize; and provided further that such purchase price may
be paid in shares of Stock owned by the Optionee for a period of
at least six months having a market value on the date of exercise
equal to the aggregate purchase price, by the surrender of
options which are then exercisable, or in a combination of cash
and Stock and surrender of options.
<PAGE>
A-3
Upon surrender of options in payment of the purchase price the
optionee shall be entitled to receive that number of shares of
Stock determined by dividing (x) the difference between the
aggregate market value on the date of exercise of the shares of
Stock issuable in respect of the options so surrendered and the
aggregate exercise price of the options so surrendered by (y) the
market value per share of Stock on the date of exercise. For
purposes of this Section 5(c), the market value per share of
Stock shall be the last sale price regular way on the date of
reference, or, in case no sale takes place on such date, the
average of the high bid and low bid prices, in either case on the
principal national securities exchange on which the Stock is
listed or admitted to trading, or if the Stock is not listed or
admitted to trading on any national securities exchange, the last
sale price reported on the National Market System of the National
Association of Securities Dealers Automated Quotation System
("NASDAQ") on such date, or the average of the closing high bid
and low asked prices of the Stock in the over-the-counter market
reported on NASDAQ on such date, whichever is applicable, or if
there are no such prices reported on NASDAQ on such date, as
furnished to the Committee by any New York Stock Exchange member
selected from time to time by the Committee for such purpose. If
there is no bid or asked price reported on any such date, the
market value shall be determined by the Committee in accordance
with the regulations promulgated under Section 2031 of the Code,
or by any other appropriate method selected by the Committee. If
the Optionee so requests, shares of Stock purchased upon exercise
of an option may be issued in the name of the Optionee or another
person. An Optionee shall have none of the rights of a
stockholder until the shares of Stock are issued to him. An
option may not be exercised for less than ten shares of Stock, or
the number of shares of Stock remaining subject to such option,
whichever is smaller.
(d) Effect of Termination of Employment. An option may
not be exercised after the Optionee has ceased to be in the
employ of the Company or any Subsidiary, except in the following
circumstances:
(i) If the Optionee's employment is terminated by action
of his employer, or by reason of disability or retirement under
any retirement plan maintained by the Company or any Subsidiary,
the option may be exercised by the Optionee within three months
after such termination, but only as to any shares exercisable on
the date the Optionee's employment so terminates;
(ii) In the event of the death of the Optionee during the
three month period after termination of employment covered by (i)
above, the person or persons to whom his rights are transferred
by will or the laws of descent and distribution shall have a
period of one year from the date of his death to exercise any
options which were exercisable by the Optionee at the time of his
death;
(iii) In the event of the death of the Optionee while
employed, (a) any option granted prior to June 20, 1995 shall
thereupon become exercisable in full and (b) any option granted
on or after June 20, 1995 shall be exercisable only to the extent
exercisable by the Optionee at the time of his death, and, in the
case of either (a) or (b), the person or persons to whom the
Optionee's rights are transferred by and will or the laws of
descent and distribution shall have a period of one year from the
date
<PAGE>
A-4
of the Optionee's death to exercise such option. The provisions
of the foregoing sentence shall apply to any outstanding options
which are incentive stock options to the extent permitted by
Section 422(d) of the Code and such outstanding options in excess
thereof shall, immediately upon the occurrence of the event
described in the preceding sentence, be treated for all purposes
of the Plan as nonstatutory stock options and shall be
immediately exercisable as such as provided in the foregoing
sentence.
Notwithstanding any provision of the Plan to the contrary, the
Committee shall have the authority to extend the period during
which any option may be exercised; provided, however, that an
option may not be exercised more than eighteen (18) months after
termination of employment and in no event shall any option be
exercisable more than ten years from the date of grant thereof.
Nothing in the Plan or in any option granted pursuant to the Plan
(in the absence of an express provision to the contrary) shall
confer on any individual any right to continue in the employ of
the Company or any Subsidiary or interfere in any way with the
right of the Company to terminate his employment at any time.
(e) Nontransferability of Options. Except as provided in
the next sentence, (i) during the lifetime of an Optionee,
options held by such Optionee shall be exercisable only by him
and (ii) no option shall be transferable other than by will or
the laws of descent and distribution. The Committee shall have
the authority to make any option transferable in whole or part by
the optionee to members of the family of the optionee or to
trusts for the benefit of, or partnerships or other entities
beneficially owned by, the optionee or members of his family.
(f) Adjustments for Change in Stock Subject to Plan. In
the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation,
rights offering, extraordinary dividend or divestiture (including
a spin-off) or any other change in the corporate structure or
shares of the Company, (i) except as provided in (ii) below, the
Committee shall make such adjustments, if any, as it deems
appropriate in the number and kind of shares subject to the Plan,
in the number and kind of shares covered by outstanding options,
or in the option price per share, or both and (ii) the Board of
Directors of the Company shall make such adjustments, if any, as
it deems appropriate in the maximum number of shares which may be
subject to options granted to all directors of the Company and in
the maximum number of shares which may be subject to options
granted to each director, in each case pursuant to Section 5(j),
in the number and kind of shares covered by outstanding options,
or in the option price per share, or both, with respect to
options held by directors of the Company.
(g) Acceleration of Exercisability of Options Upon
Occurrence of Certain Events. In connection with any merger or
consolidation in which the Company is not the surviving
corporation and which results in the holders of the outstanding
voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the
outstanding voting securities of the surviving corporation
(determined immediately following such merger or consolidation),
or any sale or transfer by the Company of all or substantially
all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of
all or a majority of the then outstanding voting securities of
the
<PAGE>
A-5
Company, all outstanding options under the Plan shall become
exercisable in full, notwithstanding any other provision of the
Plan or of any outstanding options granted thereunder, on and
after (i) the fifteenth day prior to the effective date of such
merger, consolidation, sale, transfer or acquisition or (ii) the
date of commencement of such tender offer or exchange offer, as
the case may be. The provisions of the foregoing sentence shall
apply to any outstanding options which are incentive stock
options to the extent permitted by Section 422(d) of the Code and
such outstanding options in excess thereof shall, immediately
upon the occurrence of the event described in clause (i) or (ii)
of the foregoing sentence, be treated for all purposes of the
plan as nonstatutory stock options and shall be immediately
exercisable as such as provided in the foregoing sentence.
Notwithstanding the foregoing, in no event shall any option be
exercisable after the date of termination of the exercise period
of such option specified in Sections 5(b), 5(d) and 5(j)(2). The
provisions of this Section 5(g) shall apply to all options
granted under the Plan prior to June 20, 1995, but shall apply to
options granted after that date only if the option certificate
evidencing such grant so provides.
(h) Registration, Listing and Qualification of Shares of
Stock. Each option shall be subject to the requirement that if
at any time the Board of Directors shall determine that the
registration, listing or qualification of the shares of Stock
covered thereby upon any securities exchange or under any federal
or state law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or
in connection with, the granting of such option or the purchase
of shares of Stock thereunder, no such option may be exercised
unless and until such registration, listing, qualification,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. The
Company may require that any person exercising an option shall
make such representations and agreements and furnish such
information as it deems appropriate to assure compliance with the
foregoing or any other applicable legal requirement.
(i) Other Terms and Conditions. The Committee may impose
such other terms and conditions, not inconsistent with the terms
hereof, on the grant or exercise of options, as it deems
advisable.
(j) Terms and Conditions of Options Granted to Directors.
Notwithstanding any provision contained in the Plan to the
contrary, during any period when any member of the Committee
shall not be a "disinterested person" as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as such Rule was in
effect at April 30, 1991, then, the terms and conditions of
options granted under the Plan to any director of the Company
during such period shall be as follows:
(1) The price at which each share of Stock subject to an
option may be purchased shall, subject to any adjustments which
may be made pursuant to Section 5(f), in no event be less than
the market value per share of Stock on the date of grant, and
provided further that in the event the option is intended to be
an incentive stock option pursuant to Section 6 and the Optionee
owns on the date of grant securities possessing more than 10% of
the total combined voting power of all classes of securities of
the Company or of any Subsidiary, the price per share shall not
be less than 110% of the market value per share of Stock on the
date of grant.
<PAGE>
A-6
(2) The option may be exercised to purchase shares of Stock
covered by the option not sooner than six months following the
date of grant. The option shall terminate and no shares of Stock
may be purchased thereunder more than ten years after the date of
grant, provided that if the option is intended to be an incentive
stock option pursuant to Section 6 and the Optionee owns on the
date of grant stock possessing more than 10% of the total
combined voting power of all classes of securities of the Company
or of any Subsidiary, the option shall terminate and no shares of
Stock may be purchased thereunder more than five years after the
date of grant.
(3) The maximum number of shares of Stock which may be
subject to options granted to all directors pursuant to this
Section 5(j) shall be 375,000 shares in the aggregate. The
maximum number of shares of Stock which may be subject to options
granted to any director who is an officer or employee of the
Company is 300,000. The maximum number of shares of Stock which
may be subject to options granted to any director who is not an
officer or employee of the Company shall be 15,000 shares.
6. Additional Provisions Applicable to Incentive Stock
Options. The Committee may, in its discretion, grant options
under the Plan to eligible employees which constitute "incentive
stock options" within the meaning of Section 422 of the Code,
provided, however, that (a) the aggregate market value of the
Stock with respect to which incentive stock options are
exercisable for the first time by the Optionee during any
calendar year shall not exceed the limitation set forth in
Section 422(d) of the Code, (b) if the Optionee owns on the date
of grant securities possessing more than 10% of the total
combined voting power of all classes of securities of the Company
or of any Subsidiary, the price per share shall not be less than
110% of the market value per share on the date of grant and (c)
Section 5(d)(ii) hereof shall not apply to any incentive stock
option.
7. Amendment and Termination. Unless the Plan shall
theretofore have been terminated as hereinafter provided, the
Plan shall terminate on, and no option shall be granted hereunder
after, January 25, 2001; provided, however, that the Board of
Directors may at any time prior to that date terminate the Plan.
The Board of Directors may at any time amend the Plan or the
terms of any option outstanding under the Plan; provided,
however, that, except as contemplated in Section 5(f), the Board
of Directors shall not, without approval by a majority of the
votes cast by the stockholders of the Company at a meeting of
stockholders at which a proposal to amend the Plan is voted upon,
(i) increase the maximum number of shares of Stock for which
options may be granted under the Plan, (ii) amend the Plan to
change the minimum option price, (iii) amend the Plan to extend
the period during which options may be granted or exercised, or
(iv) except as otherwise provided in the Plan, amend the
requirements as to the class of employees eligible to receive
options. No termination or amendment of the Plan or any option
outstanding under the Plan may, without the consent of an
Optionee, adversely affect the rights of such Optionee under any
option held by such Optionee.
8. Stockholder Approval. The Plan, as hereby amended and
restated, is subject to approval by a majority of the votes cast
thereon by the stockholders of the Company at a meeting of
stockholders duly called and held for such purpose or by
unanimous written consent of such stockholders. If such approval
is not obtained, the Plan as in effect prior to its amendment and
restatement as herein set forth shall continue in full force and
effect.
<PAGE>
A-7
9. Withholding. It shall be a condition to the obligation
of the Company to issue shares of Stock upon exercise of an
option, that the Optionee (or any beneficiary or person entitled
to act under Section 5(d) hereof) pay to the Company, upon its
demand, such amount as may be requested by the Company for the
purpose of satisfying any liability to withhold federal, state or
local income or other taxes. If the amount requested is not
paid, the Company may refuse to issue such shares of Stock.
10. Other Actions. Nothing contained in the Plan shall be
construed to limit the authority of the Company to exercise its
corporate rights and powers, including but not by way of
limitation, the right of the Company to grant or assume options
for proper corporate purposes other than under the Plan with
respect to any employee or other person, firm, corporation or
association.
<PAGE>
EXHIBIT B
CERTIFICATE OF AMENDMENT
OF
RESTATED
CERTIFICATE OF INCORPORATION
OF
E & B MARINE INC.
E&B Marine Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), pursuant to
the provisions of the General Corporation Law of the State of
Delaware (the "GCL"), DOES HEREBY CERTIFY as follows:
FIRST: The Restated Certificate of Incorporation of the
Corporation is hereby amended by deleting the first sentence of
ARTICLE FOURTH of the Restated Certificate of Incorporation in
its present form and substituting therefor a new first sentence
of ARTICLE FOURTH in the following form:
FOURTH: The total number of shares of capital stock
which the Corporation shall have authority to issue is
1,000,000 shares of Preferred Stock, $1.00 par value
(the "Preferred Stock"), and 10,000,000 shares of
Common Stock, $.001 par value.
SECOND: The amendment to the Restated Certificate of
Incorporation of the Corporation set forth in this Certificate of
Amendment has been duly adopted in accordance with the applicable
provisions of Section 242 of the GCL (a) the Board of Directors
of the Corporation having duly adopted a resolution setting forth
such amendment and declaring its advisability and submitting it
to the stockholders of the Corporation for their approval, and
(b) the stockholders of the Corporation having duly adopted such
amendment by vote of the holders of a majority of the outstanding
stock entitled to vote thereon at the annual meeting of
stockholders called and held upon notice in accordance with
Section 222 of the GCL.
<PAGE>
B-2
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be hereunto affixed and this Certificate of Amendment to
be signed by Kenneth G. Peskin, its Chairman of the Board, and
attested by Robert G. Defonte, its Secretary, this XX day of June
1995.
E & B MARINE INC.
BY:
----------------------------
Kenneth G. Peskin
Chairman of the Board
[Corporate Seal]
ATTEST:
BY:
- - --------------------------
Robert G. Defonte
Secretary
<PAGE>
PROXY
E&B MARINE INC.
PROXY-Annual Meeting of Stockholders-June 20, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, a stockholder of E&B Marine Inc., does hereby
appoint Kenneth G. Peskin and Walfrido A. Martinez or either of
them, with full power of substitution, his proxies, to appear and
vote all shares of Common Stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held on Tuesday, June 20, 1995 at 10:00 A.M.,
local time, or at any adjournments thereof, upon such matters as
may properly come before the Meeting.
The undersigned hereby instructs said proxies or their
substitutes to vote as specified below on each of the following
matters and in accordance with their judgement on any other
matters which may properly come before the Meeting.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN PROMPTLY
<PAGE>
The shares represented by this Proxy will be voted as directed.
If no direction is indicated, they will be voted for the
nominee for Director and for Items 2, 3 and 4.
______________________ ___________ PLEASE MARK YOUR CHOICE LIKE
ACCOUNT NUMBER COMMON THIS [ ] IN BLUE OR BLACK INK
The Board of Directors recommend a vote "FOR" each item.
- - ----------------------------------------------------------------------------
1. ELECTION OF DIRECTOR FOR the nominee listed below WITHHOLD AUTHORITY
to vote for the
nominee listed below
[ ] [ ]
WILLIAM V. ROBERTI
2. Approval of the Company's Amended and Restated 1983 Stock Option Plan.
FOR _____ AGAINST ______ ABSTAIN ____
3. Approval of an amendment to the Company's Restated Certificate
of Incorporation to decrease the number of authorized
shares of Common Stock from 30,000,0000 to 10,000,000.
FOR _____ AGAINST ______ ABSTAIN ____
4. Ratification of appointment of KPMG Peat Marwick LLP as
independent auditors for fiscal 1995.
FOR _____ AGAINST ______ ABSTAIN ____
[ ] IMPORTANT: Before returning this Proxy,
please sign your name or names on the line(s)
below exactly as shown hereon. Executors,
administrators, trustees, guardians or
corporate officers should indicate their full
titles when signing. Where shares are
registered in the name of joint tenants or
trustees, each joint tenant or trustee
should sign.
[ ] Dated:_____________________________1995
_____________________________(L.S.)
_____________________________(L.S.)
Stockholder(s) Sign Here
