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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
AMERICAN SAFETY RAZOR COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AMERICAN SAFETY RAZOR COMPANY
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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: .......................................................
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
AMERICAN SAFETY RAZOR COMPANY
P.O. BOX 500
STAUNTON, VIRGINIA 24402-0500
April 17, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of American Safety Razor Company. This meeting will be held at the Holiday Inn,
I-81 and the Woodrow Wilson Parkway, Staunton, Virginia, at 10:00 a.m., local
time, on May 20, 1997.
This year you are being asked to elect three directors, each to a
three-year term expiring at the 2000 Annual Meeting of Stockholders. In
addition, you are being asked (i) to approve an increase in the number of shares
reserved for issuance under the Company's Stock Option Plan and (ii) to ratify
the appointment of Coopers & Lybrand L.L.P. as the independent public
accountants of American Safety Razor Company. These matters are more fully
described in the accompanying proxy statement. The Board of Directors recommends
that you vote your shares in favor of the election of the three directors, the
increase in the number of shares reserved under the Stock Option Plan and the
appointment of Coopers & Lybrand L.L.P.
Some stockholders hold their stock in "street name" which means that the
shares are registered in a broker's name rather than in their own name. If your
shares are held in your broker's name and you want to vote them personally, you
MUST obtain a proxy issued to you by your broker. Brokers have different proxy
forms; please contact your broker directly if you want to vote the shares he or
she holds in a street name for you.
Your vote is very important and we hope you will be able to attend the
meeting. To ensure your representation at the meeting, even if you anticipate
attending in person, we urge you to mark, sign, date and return the enclosed
proxy card. If you attend, you will, of course, be entitled to vote in person.
Sincerely,
/s/ Thomas H. Quinn /s/ William C. Weathersby
Thomas H. Quinn William C. Weathersby
Chairman of the Board and President and
Chief Executive Officer Chief Operating Officer
<PAGE> 3
AMERICAN SAFETY RAZOR COMPANY
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of American Safety Razor Company:
The 1997 Annual Meeting of Stockholders (the "Annual Meeting") of American
Safety Razor Company, a Delaware corporation (the "Company"), will be held at
the Holiday Inn, I-81 and the Woodrow Wilson Parkway, Staunton, Virginia, on May
20, 1997, at 10:00 AM, local time, for the following purposes:
(1) To elect three members to the Board of Directors, each for a three-year
term expiring at the 2000 Annual Meeting of Stockholders;
(2) To approve an amendment to the Company's Stock Option Plan to increase
the number of shares of the Company's Common Stock reserved for
issuance thereunder by 250,000 shares;
(3) To ratify the appointment of Coopers & Lybrand L.L.P. as independent
public accountants for the Company for the fiscal year ending December
31, 1997; and
(4) To transact such other business as may properly be presented at the
Annual Meeting or any adjournment thereof.
A proxy statement with respect to the Annual Meeting accompanies and forms
a part of this Notice. The Annual Report of the Company for the fiscal year
ended December 31, 1996, also accompanies this Notice.
The Board of Directors has fixed the close of business on March 31, 1997,
as the record date for determining stockholders entitled to notice of, and to
vote at, the Annual Meeting.
By order of the Board of Directors,
/s/ G. Robert Fisher
G. ROBERT FISHER
Secretary
Staunton, Virginia
April 17, 1997
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
AMERICAN SAFETY RAZOR COMPANY
P.O. BOX 500, STAUNTON, VIRGINIA 24402-0500
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the board of directors (the "Board of Directors") of American Safety Razor
Company, a Delaware corporation (the "Company"), of proxies for use at the 1997
Annual Meeting of Stockholders of the Company to be held on May 20, 1997, and
any adjournment thereof (the "Annual Meeting"). This Proxy Statement and
accompanying form of proxy are first being mailed to stockholders on or about
April 17, 1997.
VOTING SECURITIES; PROXIES; REQUIRED VOTE
VOTING SECURITIES
The Board of Directors has fixed the close of business on March 31, 1997,
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting. As of the Record
Date, the Company had outstanding 12,092,849 shares of common stock, par value
$.01 per share (the "Common Stock") and no shares of class B common stock, par
value $.01 per share (the "Class B Common Stock"). Only the holders of Common
Stock are entitled to notice of and to vote at the Annual Meeting. Holders of
Common Stock are entitled to one vote per share.
PROXIES
Thomas H. Quinn and William C. Weathersby, the persons named as proxies on
the proxy card accompanying this Proxy Statement, were selected by the Board of
Directors of the Company to serve in such capacity. Messrs. Quinn and Weathersby
are directors of the Company. Each executed and returned proxy will be voted in
accordance with the directions indicated thereon, or if no direction is
indicated, such proxy will be voted in accordance with the recommendations of
the Board of Directors contained in this Proxy Statement. Each stockholder
giving a proxy has the power to revoke it at any time before the shares it
represents are voted. Revocation of a proxy is effective upon receipt by the
Secretary of the Company of either (i) an instrument revoking the proxy or (ii)
a duly executed proxy bearing a later date. Additionally, a stockholder may
change or revoke a previously executed proxy by voting in person at the Annual
Meeting.
REQUIRED VOTE
The holders of at least one-third of the outstanding shares of Common Stock
represented in person or by proxy will constitute a quorum at the Annual
Meeting. Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of a majority in interest of the stockholders present in person
or by proxy and entitled to vote thereon is required to elect directors, amend
the Company's Stock Option Plan and ratify the appointment of Coopers & Lybrand
L.L.P. as the independent public accountants of the Company's consolidated
financial statements for the fiscal year ending December 31, 1997.
The election inspectors appointed for the meeting will tabulate the votes
in person or by proxy at the Annual Meeting and will determine whether or not a
quorum is present. The election inspectors will treat abstentions as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to
<PAGE> 5
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
PROPOSAL 1:
ELECTION OF DIRECTORS
At the 1994 Annual Meeting of Stockholders, the stockholders of the Company
voted to "classify" the Board of Directors into three groups, with one-third of
the directors standing for election each year for an additional three year term.
Three directors are to be elected at the Annual Meeting for three-year terms
expiring at the 2000 Annual Meeting of Stockholders, and, in each case, until
his successor is duly elected and qualified unless or until his earlier death,
resignation, retirement, disqualification or removal.
The nominees for whom the enclosed proxy is intended to be voted are set
forth below. Each nominee for election as director currently serves as a
director of the Company. It is not contemplated that any of these nominees will
be unavailable for election, but if such a situation should arise, the proxy
will be voted in accordance with the best judgment of the proxyholder for such
person or persons as may be designated by the Board of Directors unless the
stockholder has directed otherwise.
The Company anticipates that its next annual meeting of stockholders will
be held in May 1998. If a stockholder desires to nominate persons for election
as directors at the 1998 Annual Meeting of Stockholders, written notice of such
stockholder's intent to make such a nomination must be given and received by the
Secretary of the Company at the principal executive offices of the Company
either by personal delivery or by United States mail not later than March 8,
1998. Each notice must describe the nomination in sufficient detail for the
nomination to be summarized on the agenda for the meeting and must set forth:
(i) the name and address, as it appears on the record books of the Company, of
the stockholder making the nomination, (ii) a representation that the
stockholder is a holder of record of stock in the Company and entitled to vote
at the annual meeting of stockholders and intends to appear in person or by
proxy at the meeting to present the nomination, (iii) a statement of the class
and number of shares beneficially owned by the stockholder, (iv) the name and
address of any person to be nominated, (v) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder, (vi) such other information as
would be required to be included in the proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission (the "SEC") and (vii) the
consent of such nominee to serve as a director of the Company if elected. The
presiding officer of the Annual Meeting shall, if the facts warrant, refuse to
acknowledge a nomination not made in compliance with the foregoing procedure,
and any such nomination not properly brought before the meeting will not be
considered.
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<PAGE> 6
NOMINEES FOR ELECTION AS DIRECTORS
Each for a Three-Year Term Expiring at the 2000 Annual Meeting of
Stockholders.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
NAME AGE AND OTHER INFORMATION
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<S> <C> <C>
Thomas H. Quinn.......... 49 Mr. Quinn became Chairman of the Board of Directors of the
Company in April 1989 in connection with the acquisitions by
the Company of its predecessor and Ardell Industries, Inc.
(collectively, the "Acquisitions"). Since 1988, Mr. Quinn
has been President, Chief Operating Officer and a director
of Jordan Industries, Inc. and Chairman of the Board and
Chief Executive Officer of Welcome Home, Inc. and a director
of AmeriKing, Inc. and Motors and Gears, Inc. On January 22,
1997, Welcome Home, Inc. filed a Chapter 11 petition in the
United States Bankruptcy Court for the Southern District of
New York.
John W. Jordan II........ 48 Mr. Jordan became a member of the Board of Directors in
April 1989 in connection with the Acquisitions. Mr. Jordan
is the managing partner of The Jordan Company, which he
founded in February 1982. Mr. Jordan is also a director of
Jordan Industries, Inc., AmeriKing, Inc., Carmike Cinemas,
Inc., Motors and Gears, Inc., Welcome Home, Inc. and Apparel
Ventures, Inc.
D. Patrick Curran........ 48 Mr. Curran became a member of the Board of Directors on June
15, 1993 in connection with the Company's initial public
offering of the Common Stock (the "Initial Public
Offering"). Mr. Curran is President and Chairman of Curran
Companies, a manufacturer and supplier of specialty
chemicals, which he has been associated with since 1968. He
has also served as Chairman of Cook Composites and Polymers,
Inc. since 1990. Mr. Curran also serves on the Board of
Directors of Applebee's International, Inc., Sealright Co.,
Inc. and UNITOG Company.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
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DIRECTORS CONTINUING IN OFFICE
Terms Expiring at the 1998 Annual Meeting of Stockholders.
<TABLE>
<S> <C> <C>
David W. Zalaznick....... 43 Mr. Zalaznick became a member of the Board of Directors in
April 1989 in connection with the Acquisitions. Since 1982,
Mr. Zalaznick has been a partner of The Jordan Company. Mr.
Zalaznick is also a director of Jordan Industries, Inc.,
AmeriKing, Inc., Carmike Cinemas, Inc., Marisa Christina,
Inc., Motors and Gears, Inc. and Apparel Ventures, Inc.
John R. Lowden........... 40 Mr. Lowden became a member of the Board of Directors in
April 1989 in connection with the Acquisitions. Mr. Lowden
has been a partner of The Jordan Company since March 1985
and is also an officer and a director of Apparel Ventures,
Inc.
Paul D. Rhines........... 53 Mr. Rhines became a member of the Board of Directors in
April 1989 in connection with the Acquisitions. Since 1980,
Mr. Rhines has been a founding general partner of R.W.
Allsop & Associates L.P. and R.W. Allsop & Associates II,
Limited Partnership and is also a founding general partner
of the general partner of the Allsop Venture Partners III,
L.P. all of which are engaged in financing growth-oriented
private companies and acquisitions.
</TABLE>
Terms Expiring at the 1999 Annual Meeting of Stockholders
<TABLE>
<S> <C> <C>
William C. Weathersby.... 55 Mr. Weathersby joined the Company in January 1990, and has
served as President and a director since that time. Prior to
joining the Company, Mr. Weathersby held senior executive
positions with Revlon Health Care and Squibb Corporation.
From 1985 through 1989, Mr. Weathersby was Group President,
Squibb Corporation, and a member of its Executive Committee.
William C. Ballard....... 56 Mr. Ballard became a member of the Board of Directors on
June 15, 1993 in connection with the Initial Public
Offering. Mr. Ballard has been of counsel to the law firm of
Greenebaum, Doll & McDonald in Louisville, Kentucky since
May 1992. From 1970 to April 1992, Mr. Ballard held various
positions with Humana Inc., an investor-owned hospital
company, including most recently as its Executive Vice
President and as a member of its Board of Directors. Mr.
Ballard is a director of LG&E Energy Corp., Mid-America
Bancorp, Vencor, Inc. and United Healthcare Corp.
Jonathan F. Boucher...... 40 Mr. Boucher became a member of the Board of Directors and
the Company's Vice President in April 1989 in connection
with the Acquisitions. Since June 1983, Mr. Boucher has been
a partner of The Jordan Company. Mr. Boucher is a director
of Jordan Industries, Inc. and Motors and Gears, Inc.
</TABLE>
4
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Prior to the 1989 Annual Meeting of Stockholders, Messrs. Quinn, Boucher,
Jordan, Zalaznick, Lowden and Rhines were nominated and appointed to serve on
the Board of Directors pursuant to the terms of a stockholders agreement, dated
April 14, 1989 (the "Stockholders Agreement"). Simultaneously with the
consummation of the Initial Public Offering, the Stockholders Agreement was
amended and certain sections of the Stockholders Agreement were terminated,
including those provisions providing for the nomination and appointment of
members to the Board of Directors. The Stockholders Agreement, as amended,
provides certain stockholders of the Company with demand and incidental
registration rights.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
In 1996, there were five meetings of the Board of Directors (including
regularly scheduled and special meetings), none of which were conducted by
teleconference. In addition, the Board of Directors took action by unanimous
written consent on one occasion in 1996. Each of Messrs. Jordan, Lowden, Rhines
and Zalaznick attended fewer than 75% of the aggregate of: (1) the total number
of meetings of the Board of Directors and (2) the total number of meetings held
by all committees of the Board of Directors on which he served in 1996.
The Board of Directors has established three standing committees: the Audit
Committee, the Compensation Committee and the Executive Committee. The Board of
Directors does not have a Nominating Committee.
Audit Committee
The Audit Committee (i) recommends to the Board of Directors the
appointment of a firm of independent public accountants to audit the Company's
financial statements, (ii) reviews and approves the scope, purpose and type of
audit services to be performed by the independent public accountants and (iii)
meets with the Company's internal auditor to review audit plans and other
matters related to the Company's internal control systems. The Audit Committee
is composed of Messrs. Ballard, Boucher and Curran. The Audit Committee held two
meetings in 1996.
Compensation Committee
The duties of the Compensation Committee are to make recommendations to the
Board of Directors concerning the salaries of the Company's officers and to
advise the Board of Directors on other compensation and benefit matters. The
Compensation Committee is composed of Messrs. Boucher, Quinn and Rhines. The
Compensation Committee held two meetings, one of which was conducted by
teleconference, in 1996.
Executive Committee
Except as expressly limited by applicable law or the Company's Amended and
Restated Certificate of Incorporation, the Executive Committee exercises all the
powers and authorities of the Board of Directors in the management of the
business and affairs of the Company between meetings of the full Board of
Directors. The Executive Committee is composed of Messrs. Boucher, Quinn and
Weathersby. The Executive Committee took action by unanimous written consent on
four occasions in 1996.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $15,000 per year for
serving as a director. In addition, the Company reimburses directors for their
travel and other expenses incurred in connection with attending meetings of the
Board of Directors. Each Independent Director of the Company (as defined in the
Company's Stock Option Plan) is also entitled to receive an option to purchase
10,000 shares of Common
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Stock upon his or her appointment to the Board of Directors, subject to the
terms and conditions contained in the Company's Stock Option Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Boucher, Quinn and Rhines are the members of the Compensation
Committee of the Board of Directors. As such, during 1996, certain of the
Company's executive officers served and currently serve as directors and members
of a compensation committee of another entity, one of whose executive officers
served and currently serves as a director and member of the Compensation
Committee of the Company. See "--Certain Transactions."
CERTAIN TRANSACTIONS
The Jordan Company. On July 12, 1995, the Company and TJC Management
Corporation, an affiliate of The Jordan Company, entered into an advisory
agreement (the "Advisory Agreement"). The Advisory Agreement provides for the
payment by the Company to TJC Management Corporation of (a) up to 2% of the
aggregate consideration paid by the Company and/or its subsidiaries in
connection with acquisitions or paid to the Company in connection with a sale of
the Company and/or its subsidiaries and (b) up to 1% of the amount obtained
pursuant to any debt, equity or other refinancing. In accordance with Company
policy, the Advisory Agreement was (i) approved by a majority of the members of
the Board of Directors and by a majority of the disinterested members of the
Board of Directors and (ii) deemed by the Board of Directors to be subject to
terms and conditions no less favorable to the Company than could be obtained
from unaffiliated third parties.
Pursuant to the terms of the Advisory Agreement, on June 24, 1996, the
Company paid to TJC Management Corporation $315,000 as compensation for
providing investment banking and other consulting services rendered in
connection with the acquisition by a subsidiary of the Company of A.I. Blades,
Inc. and Bond-America Israel Blades, Ltd. Messrs. Jordan, Zalaznick, Boucher and
Lowden are directors of the Company and partners of The Jordan Company.
During the fiscal year 1996, the Company paid to The Jordan Company an
aggregate of $60,000 as compensation for Messrs. Jordan, Zalaznick, Boucher and
Lowden serving as members of the Board of Directors. See "--Director
Compensation."
Indemnification Agreements. The Company is party to indemnification
agreements with each of the members of the Board of Directors pursuant to which
the Company has agreed to indemnify and hold harmless each director from
liabilities incurred as a result of such director's status as a director of the
Company, subject to certain limitations.
SECURITY OWNERSHIP OF COMMON STOCK OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth as of the Record Date (except as otherwise
noted) certain information with respect to the number of shares of Common Stock
beneficially owned by (i) each director of the Company who beneficially owned
Common Stock, (ii) each executive officer of the Company named in the table
below under "Compensation of Executive Officers--Summary Compensation Table" who
beneficially owned Common Stock, (iii) all directors and executive officers of
the Company as a group and (iv) based on information available to the Company
and a review of statements filed with the SEC pursuant to Section 13(d) and
13(g) of the Securities Act of 1934, as amended (the "Exchange Act"), each
person or entity that beneficially owned (directly or together with affiliates)
more than 5% of the Common Stock. The
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Company believes that each individual or entity named has sole investment and
voting power with respect to shares of Common Stock indicated as beneficially
owned by them, except as otherwise noted.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY PERCENTAGE
NAME OWNED(1) OWNERSHIP(1)
---------------------------------------------------------- ------------ ------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
David W. Zalaznick(2)..................................... 353,140 2.9%
Jonathan F. Boucher(3).................................... 340,639 2.8
John W. Jordan II(4)...................................... 332,140 2.7
John R. Lowden(5)......................................... 183,860 1.5
William C. Weathersby(6).................................. 179,000 1.5
Thomas H. Quinn(7)........................................ 168,200 1.4
Thomas G. Kasvin(8)....................................... 52,600 *
William C. Ballard(9)..................................... 17,000 *
D. Patrick Curran(10)..................................... 11,000 *
Paul D. Rhines............................................ 10,343 *
Michael Piron(11)......................................... 10,000 *
All directors and executive officers as a group (18
persons)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)................ 1,739,822 14.3%
OTHER PRINCIPAL STOCKHOLDERS:
Southeastern Asset Management, Inc.(12)................... 1,548,700 12.8%
FMR Corp.(13)............................................. 794,900 6.6
</TABLE>
- ---------------
* Indicates beneficial ownership of less than 1% of shares of Common Stock.
(1) Calculated pursuant to Rule 13d-3(d) of the Exchange Act. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage owned
by such person, but not deemed outstanding for the purpose of calculating
the percentage owned by each other person listed.
The outstanding shares of Common Stock and Class B Common Stock were
aggregated for the purpose of calculating the percentage owned by each
person. As of the Record Date, the Company had 12,092,849 shares of Common
Stock and no shares of Class B Common Stock outstanding.
(2) Includes 7,000 shares of Common Stock held by Amy Y. Zalaznick 1995
Irrevocable Trust, 7,000 shares of Common Stock held by Jeffrey C.
Zalaznick 1995 Irrevocable Trust and 7,000 shares of Common Stock held by
Samantha M. Zalaznick 1995 Irrevocable Trust, for each of which Mr.
Zalaznick's wife is trustee and for each of which Mr. Zalaznick disclaims
beneficial ownership. Mr. Zalaznick is a partner of The Jordan Company, an
entity with which Messrs. Boucher, Jordan, Quinn and Lowden are also
affiliated. Mr. Zalaznick's address is c/o The Jordan Company, 9 West 57th
Street, New York, New York 10019.
(3) Includes 2,000 shares of Common Stock held by Thomas C. Boucher, 2,000
shares of Common Stock held by Peter C. Boucher, 2,000 shares of Common
Stock held by Hayden W. Boucher, each under the Uniform Gifts to Minors Act
and for each of which Mr. Boucher disclaims beneficial ownership, and 2,500
shares of Common Stock held by the Jonathan F. Boucher Profit Sharing Plan,
of which
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Mr. Boucher is trustee. Mr. Boucher is a partner of The Jordan Company, an
entity with which Messrs. Jordan, Zalaznick, Quinn and Lowden are also
affiliated.
(4) Includes 332,140 shares of Common Stock held by John W. Jordan II Revocable
Trust, of which Mr. Jordan is trustee. Mr. Jordan is a partner of The
Jordan Company, an entity with which Messrs. Boucher, Quinn, Zalaznick and
Lowden are also affiliated. Mr. Jordan's address is c/o The Jordan Company,
9 West 57th Street, New York, New York 10019.
(5) Includes 2,500 shares of Common Stock held by the Trust F/B/O John R.
Lowden, of which Mr. Lowden is co-trustee. Mr. Lowden is a partner of The
Jordan Company, an entity with which Messrs. Boucher, Jordan, Quinn and
Zalaznick are also affiliated.
(6) Includes 7,632 shares of Common Stock held by the William C. Weathersby
Irrevocable Trust F/B/O Marcus D. Weathersby, 7,632 shares of Common Stock
held by the William C. Weathersby Irrevocable Trust F/B/O William C.
Weathersby, Jr., and immediately exercisable options to purchase 10,000
shares of Common Stock.
(7) Mr. Quinn is President and Chief Operating Officer of Jordan Industries,
Inc., a company affiliated with The Jordan Company, an entity with which
Messrs. Boucher, Jordan, Zalaznick and Lowden are also affiliated.
(8) Includes 800 shares of Common Stock owned by Mr. Kasvin' s wife, which
shares Mr. Kasvin is deemed to beneficially own, and immediately
exercisable options to purchase 15,000 shares of Common Stock.
(9) Includes 4,000 shares of Common Stock held by the Charitable Remainder
Trust F/B/O Julie W. Ballard, 2,000 shares of Common Stock held by the
Charitable Remainder Trust F/B/O of Elizabeth Ballard Lebhor and 2,000
shares of Common Stock held by the Charitable Remainder Trust F/B/O William
C. Ballard, III, for each of which Mr. Ballard is trustee, and immediately
exercisable options to purchase 6,000 shares of Common Stock.
(10) Includes immediately exercisable options to purchase 6,000 shares of Common
Stock.
(11) Includes immediately exercisable options to purchase 10,000 shares of
Common Stock.
(12) As of December 31, 1996, Southeastern Asset Management, Inc.
("Southeastern"), an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, beneficially owned 1,548,700 shares of
Common Stock. Such shares are held for the account of Southeastern's
various investment advisory clients. Southeastern (i) has sole voting power
with respect to 588,700 shares of Common Stock, (ii) shares voting power
with respect to 850,000 shares of Common Stock with Longleaf Partners
Small-Cap Fund ("Longleaf"), an open-end management investment company
registered under Section 8 of the Investment Company Act of 1940 as to
which Southeastern serves as advisor; (iii) has no voting power with
respect to 110,000 shares of Common Stock held in various discretionary
accounts; (iv) has sole dispositive power with respect to 698,700 shares of
Common Stock held in various discretionary accounts; and (v) shares
dispositive power with Longleaf with respect to 850,000 shares of Common
Stock. The address of Southeastern and Longleaf is 6075 Popular Avenue,
Suite 900, Memphis, Tennessee 38119.
(13) As of December 31, 1996, Fidelity Management & Research Company
("Fidelity"), a wholly-owned subsidiary of FMR Corp. ("FMR"), beneficially
owned 794,900 shares of Common Stock as a result of acting as investment
adviser to various investment companies registered under Section 8 of the
Investment Company Act of 1940. FMR, through its control of Fidelity, has
sole dispositive power with respect to 794,900 shares of Common Stock and
no voting power with respect to 794,900 shares of Common Stock. Such voting
power resides with the Boards of Trustees of the funds. FMR carries out
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the voting of the shares under written guidelines established by the funds'
Boards of Trustees. Included in the 794,900 shares are 773,900 shares of
Common Stock which are beneficially owned by Fidelity Low-Priced Stock Fund
("Stock Fund"). The address of Fidelity, FMR and Stock Fund is 82
Devonshire Street, Boston, Massachusetts 02109.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth a summary of certain information regarding
compensation paid or accrued by the Company for services rendered to the Company
for the fiscal year ended December 31, 1996, and the two prior fiscal years,
paid or awarded to those persons who were, at December 31, 1996: (i) the
Company's chief executive officer and (ii) the Company's four most highly
compensated executive officers other than the chief executive officer whose
total annual salary and bonus exceeded $100,000 during such period
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -------------
--------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION(3) OPTIONS
- --------------------------------------- --------- --------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Thomas H. Quinn........................ 1996 $125,000 0 0 0
Chairman and Chief 1995 125,000 0 0 0
Executive Officer 1994 125,000 0 0 0
William C. Weathersby.................. 1996 288,333 245,000 0 20,000
President, Chief Operating 1995 270,000 150,000 0 0
Officer and Director 1994 256,667 150,000 0 25,000
Thomas G. Kasvin....................... 1996 159,333 110,169 0 20,000
Senior Vice President--Chief 1995 146,102 89,458 0 0
Financial Officer 1994 133,333 77,018 0 15,000
Michael J. Piron....................... 1996 161,152 84,294 10,034(4) 15,000
Vice President--Technical and 1995 155,300 50,945 18,564(4) 0
Logistics Operations 1994 131,564 41,706 156,307(4) 25,000
James V. Heim.......................... 1996 113,750 117,000 19,358(5) 20,000
Senior Vice President-- 1995 0 0 0 0
Consumer and Personal Products 1994 0 0 0 0
<FN>
- ---------------
(1) Includes amounts deferred under the Company's 401(k) plan.
(2) The Company provides bonus compensation based on an individual's achievement
of certain specified objectives, with additional rewards if certain
operating objectives, including, among others, earnings per share, are met.
Employees are eligible to receive from 10% to 100% of their annual
compensation as a bonus under this program. The bonus plan is administered
by the Company's Compensation Committee.
(3) Except as indicated, no executive named in the table received any other
annual compensation in an amount in excess of the lesser of either $50,000
or 10% of the total of annual salary and loans reported for him in the two
preceding columns for the periods covered by this table.
(4) Represents the amount paid by the Company to Mr. Piron for certain
relocation expenses incurred in connection with the commencement of his
employment with the Company.
(5) Represents the amount paid by the Company to Mr. Heim for certain relocation
expenses incurred in connection with the commencement of his employment with
the Company
</TABLE>
9
<PAGE> 13
The following table shows stock options exercised by each of the Named
Executive Officers during the fiscal year ended December 31, 1996, including the
aggregate value of gains on the date of exercise. In addition, this table
includes the number of shares covered by both exercisable and non-exercisable
stock options as of fiscal year-end, and the values for unexercised options
based on the year-end price of the Common Stock. Except as listed in the table,
no other Named Executive Officer exercised any Company Stock options or
beneficially owned unexercised Company stock options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT DECEMBER 31, 1996 DECEMBER 31, 1996(1)
ACQUIRED ON VALUE ---------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
William C. Weathersby.... -- -- 10,000 35,000 $53,750 $140,625
Thomas G. Kasvin......... -- -- 15,000 35,000 80,625 140,625
Michael J. Piron......... -- -- 10,000 30,000 53,750 125,625
James V. Heim............ -- -- 0 20,000 0 60,000
<FN>
- ---------------
(1) Based on the difference between the closing market price on December 31,
1996, for the Common Stock, which was $14 per share, and the option exercise
price.
</TABLE>
EMPLOYMENT AGREEMENTS
On March 3, 1995, Sterile Products Holdings, Inc., a wholly-owned
subsidiary of the Company ("Holdings") and Sterile Products Corporation, d.b.a.
Absorbent Cotton Company, Inc., a wholly-owned subsidiary of Holdings ("ACCO"),
entered into an employment agreement with Mr. C.C. Van Noy (the "Van Noy
Employment Agreement"). Pursuant to the terms of the Van Noy Employment
Agreement, Mr. Van Noy served as the President of ACCO for two years and agreed
not to compete with Holdings or ACCO or disclose any confidential information
during the period in which the Annual Retirement Payments (as hereinafter
defined) are being paid to him. In exchange for his services and agreements not
to compete or disclose certain information, Mr. Van Noy, who has retired and no
longer performs services for the company, is entitled to receive an annual
payment of $75,000 (the "Annual Retirement Payments") for a ten year period. The
Van Noy Employment Agreement provides that the Annual Retirement Payments shall
be made to the beneficiary of Mr. Van Noy upon his death, subject to certain
adjustments.
Board of Directors Compensation Committee Report on Executive Compensation
COMPENSATION PHILOSOPHY
The Compensation Committee is responsible for making recommendations to the
Board of Directors concerning the salaries and the annual bonus and long-term
incentive plans that govern the compensation paid to all officers of the
Company. This report is provided by the Compensation Committee to assist
stockholders in understanding the Compensation Committee's objectives and
procedures in establishing the compensation of the Company's Chief Executive
Officer and other senior executives. The Compensation Committee has devoted
considerable attention to developing the Company's compensation philosophy which
embodies four primary objectives:
1. to provide incentives based on value delivered to the Company's
stockholders and customers;
10
<PAGE> 14
2. to clearly connect individual executive pay action with
performance;
3. to maintain a system of rewards that is competitive with industry
standards; and
4. to attract, motivate and retain executives of the highest quality.
The Company's compensation programs reflect the Compensation Committee's
commitment to the mission, values and performance of the Company. Continuous
review and refinement of the Company's compensation practices in response to the
changing business environment will serve to reinforce this commitment.
The most important performance yardstick in the Company's compensation
program is the Company's ability to deliver long-term value to stockholders
through appreciation in share price, cash flow and earnings. On an ongoing
basis, the Compensation Committee will test and refine the compensation program
to ensure a high correlation between the level of compensation and these
measures. Achieving desirable stockholder returns over a sustained period of
time requires management's attention to a number of financial, operational and
strategic elements which enables the Company to focus on the on-going
requirements of the customer. The Company's compensation program, therefore,
focuses executives on actions that directly impact stockholder return in the
long-term and serve the needs of the Company's customers.
The Compensation Committee uses multiple sources of information to evaluate
and establish appropriate compensation practices. The Compensation Committee
relies on data from benchmark companies within industry to assess the Company's
relative performance and compensation levels. Benchmark companies are selected
by meeting multiple criteria including product lines, markets served, revenue
size, revenue source and comparable operations. Consistent with the Compensation
Committee's objectives, the Compensation Committee will position its executive
compensation targets competitively with the benchmark companies. Annual
executive compensation will be below, at or above the competitive target
depending on individual and Company performance.
The Company's executive compensation program has three components -- base
salary, annual incentives and long-term incentives. Base salary and annual
incentives are primarily designed to reward current performance. Long-term
incentives are primarily designed to provide strong incentives for long-term
future performance.
The Compensation Committee strongly believes that incentive compensation
should only be rewarded with commensurate performance. The Compensation
Committee has approved compensation plans which include high minimum levels of
performance to ensure that incentives are paid only when truly earned.
DESCRIPTION OF COMPENSATION PROGRAMS
The following briefly describes the role of each element of compensation:
Base Salary
Base salary are at levels sufficient to attract and retain qualified
executives. To accomplish these goals, the Compensation Committee has generally
targeted base salaries within a competitive range of average base salaries for
similar positions in benchmark companies within industry. Aggregate base salary
increases are intended to parallel increases in the pay levels of industry as a
whole. Individual executive salary increases will strongly reflect the
individual's level of performance and, to a lesser extent, trends within the
industry.
11
<PAGE> 15
Annual Incentive
The Company's executive annual incentive plan serves to recognize and
reward executives for taking actions that build the value of the Company,
generate competitive total returns to stockholders, and provide value-added
services to the Company's customers. The formula for annual incentive awards is
based on an individual's achievement of certain specified objectives, with
additional rewards if certain operating objectives, including, among others,
earnings per share, are met. Employees are eligible to receive from 10% to 100%
of their annual compensation as an incentive under this program. The annual
incentive for the President of the Company is based on the above factors and the
discretion of the Compensation Committee.
Long-Term Incentives
The Company's current method of providing long-term incentive compensation
opportunities to its employees is through the use of stock options. The
Company's Stock Option Plan allows for the awarding of incentive stock options,
non-qualified stock options and SARs. The purposes of the Company's Stock Option
Plan are to encourage ownership of Common Stock by officers and other key
employees of the Company and its subsidiaries, to attract and retain highly
qualified personnel for positions of substantial responsibility and to provide
additional incentive to promote the success of the Company's business. The
incentive provided executives under the Stock Option Plan is directly related to
increases in the value of the Company to all stockholders, as measured by the
trading price of the Common Stock. During the fiscal year ended December 31,
1996, 151,500 stock options (net of forfeitures of 2,500 stock options) were
granted to employees of the Company.
COMPENSATION ADMINISTRATION
The Compensation Committee follows an annual cycle to administer each of
the three components of executive compensation. The integrity of the Company's
compensation program relies on a rigorous annual performance evaluation process.
DISCUSSION OF CEO COMPENSATION
Mr. Quinn's annual compensation for 1996 remained unchanged from the prior
year. Mr. Quinn is the Chief Operating Officer of Jordan Industries, Inc., an
affiliate of the Company. The amount of compensation paid to Mr. Quinn during
1996 was based in part on his responsibilities for and contribution to the
Company's over-all performance. Mr. Quinn is in contact on a frequent basis with
Company personnel regarding, among other things, marketing strategy, results of
operations, acquisition strategy and financial matters.
COMPENSATION DEDUCTIBLE UNDER SECTION 162(M) OF THE INTERNAL REVENUE CODE
On August 10, 1993, the Revenue Reconciliation Act of 1993 was enacted
which amended the Internal Revenue Code of 1986, as amended (the "Code"), by
adding Section 162(m), which eliminates the deductibility of most cash and
noncash compensation over $1 million paid to certain "covered employees" (which
generally is defined as a corporation's chief executive officer and the four
other highest compensated employees). Contributions to qualified plans, items
excluded from the employee's gross income, compensation paid pursuant to a
binding agreement entered into on or before February 17, 1993, commission-based
compensation, and certain "performance-based" compensation are types of
remuneration that are not affected by the deduction limitation. Based on
Treasury regulations issued in December 1995, grants of stock options under the
Stock Option Plan are not considered as compensation subject to the Section
162(m) limitation.
During the fiscal year ended December 31, 1996, none of the Named Executive
Officers received total compensation in excess of $1 million. However, it is
possible that in some future year some portion of the compensation paid to the
Company's chief executive officer and its four other highest compensated
employees
12
<PAGE> 16
will not be tax deductible under Section 162(m). When the compensation of any of
the Company's affected executives becomes closer to the $1 million deduction
limitation, the Compensation Committee plans to consider the requirements of
Section 162(m) and decide what actions, if any, will be taken when setting the
compensation levels for these executives.
REPORT ON REPRICING OF OPTIONS
On February 22, 1996, the Compensation Committee, consisting entirely of
non-employee directors, amended the exercise price of all stock options
previously issued (the "Repriced Options") under the Stock Option Plan. All
Repriced Options were originally authorized on various dates from June 23, 1993,
to December 20, 1994, at exercise prices ranging from $11.63 to $13.50 per
share, and were subsequently canceled, repriced and reissued on February 22,
1996, at an exercise price of $8.63, with 40% exercisable at the end of the
second year from the date of the original grant and an additional 20% becoming
exercisable at the end of each year thereafter. With respect to Messrs. Ballard
and Curran, 20% of the Repriced Options are exercisable at the end of the first
year from the date of the original grant and an additional 20% become
exercisable at the end of each year thereafter. The Compensation Committee
decided to issue the Repriced Options because the change in market price of the
Common Stock gave the Company's employees little incentive to exercise their
options.
The following table summarizes all repricings of stock options and stock
appreciation rights held by any executive officer during the last 10 completed
fiscal years:
<TABLE>
<CAPTION>
TEN-YEAR OPTION/SAR REPRICINGS
----------------------------------------------------------------------------------------
LENGTH OF
ORIGINAL
NUMBER OF MARKET PRICE OPTION
SECURITIES OF STOCK AT EXERCISE PRICE TERM REMAINING
UNDERLYING TIME OF AT TIME OF NEW AT DATE OF
OPTIONS/SARS REPRICING OR REPRICING OR EXERCISE REPRICING OR
REPRICED OR AMENDMENT AMENDMENT PRICE AMENDMENT
NAME DATE AMENDED ($/SH) ($/SH) ($/SH) (YEARS)
- --------------------------------- ------- ------------- ------------ -------------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
William C. Weathersby............ 2/22/96 25,000 $ 8.63 $13.50 $ 8.63 8.8
President and Chief
Operating Officer
Thomas G. Kasvin................. 2/22/96 15,000/15,000 8.63 (1) 8.63 7.8/8.8
Senior Vice President--Chief
Financial Officer
H. Vincent Nelson................ 2/22/96 3,000/7,500 8.63 (2) 8.63 7.8/8.8
Vice President--
Branded Products
John W. Paterson................. 2/22/96 5,000 8.63 11.63 8.63 7.8
Vice President--Medical
George Pineo..................... 2/22/96 10,000 8.63 13.50 8.63 8.8
Vice President--
International, Shaving
Michael J. Piron................. 2/22/96 10,000/15,000 8.63 (3) 8.63 7.9/8.8
Vice President--Technical
and Logistics Operations
William Robbins.................. 2/22/96 10,000/10,000 8.63 (4) 8.63 7.8/8.8
Vice President--
Private-Brands, Shaving
Gary Wade........................ 2/22/96 10,000/10,000 8.63 (4) 8.63 7.8/8.8
Vice President--Industrial
</TABLE>
13
<PAGE> 17
- ---------------
(1) Two grants of 15,000 shares of Common Stock were awarded at an exercise
price of $11.63 and $13.50.
(2) Grants of 3,000 shares and 7,500 shares of Common Stock were awarded at an
exercise price of $11.63 and $13.50, respectively.
(3) Grants of 10,000 shares and 15,000 shares of Common Stock were awarded at an
exercise price of $12.00 and $13.50, respectively.
(4) Two grants of 10,000 shares of Common Stock were awarded at an exercise
price of $11.63 and $13.50.
COMPENSATION COMMITTEE,
Jonathan F. Boucher
Thomas H. Quinn
Paul D. Rhines
The Report of the Compensation Committee and the following performance
graphs shall not be deemed to be incorporated by reference as a result of any
general incorporation by reference of this proxy statement or any part thereof
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996.
14
<PAGE> 18
Performance Graph
The following graph compares the Company's cumulative total stockholder
return on its Common Stock with the cumulative total return of the Nasdaq
National Market and a composite peer index selected by the Company (the "New
Peer Issuer Group") for the period from June 8, 1993, the date the Common Stock
began trading on the Nasdaq National Market, through December 31, 1996. The
companies comprising the New Peer Issuer Group are Alberto Culver Co., Gillette
Co., INBRAND Corp., NutraMax Products, Inc., Paragon Trade Brands, Inc., Perrigo
Company and USA Detergents. Cumulative total returns are calculated assuming
that $100 was invested on June 8, 1993, in each of the Common Stock, the Nasdaq
National Market and the New Peer Issuer Group, and the reinvestment of all
dividends, if any.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD AMERICAN SAFETY NASDAQ NATIONAL NEW PEER ISSUER
(FISCAL YEAR COVERED) RAZOR COMPANY MARKET GROUP
<S> <C> <C> <C>
6/8/93 100.00 100.00 100.00
12/31/93 97.92 111.07 122.40
12/31/94 114.58 108.57 96.83
12/31/95 65.63 153.54 120.12
12/31/96 116.67 188.86 193.05
</TABLE>
In addition to charting the Company's performance against the Nasdaq
National Market, the performance graph in the Company's proxy statement relating
to the 1996 Annual Meeting of Stockholders compared the total return on the
Common Stock to a peer issuer group comprised of Alberto Culver Co., BIC Corp.,
Colgate Palmolive Co., Gillette Co., Guest Supply Inc., Paragon Trade Brands,
Inc., Perrigo Company and Warner Lambert Co. (the "Old Peer Issuer Group"). The
New Peer Issuer Group differs from the Old Peer Issuer Group in that INBRAND
Corp., NutraMax Products, Inc. and USA Detergents have been added to the group
and BIC Corp., Colgate Palmolive Co., Guest Supply Inc. and Warner Lambert Co.
have been excluded from the group. The Company made these changes because it
believes that the companies which now comprise the New Peer Issuer Group more
closely approximate the capitalization, product mix, and business activities of
the Company. BIC Corp. has been excluded from the group because its stock is no
longer listed on a U.S. stock exchange.
15
<PAGE> 19
As required by the rules and regulations of the SEC, the following graph
compares the total return on the Common Stock with the cumulative total return
on the Nasdaq National Market and the Old Peer Issuer Group for the period from
June 8, 1993, through December 31, 1996. For the reasons stated above, the
Company does not presently intend to include a comparison of the total return on
the Common Stock to the Old Peer Issuer Group in future proxy statements. The
1996 cumulative total return for the Old Peer Issuer Group does not include BIC
Corp. since its stock was not listed on a U.S. stock exchange at any time during
1996.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD AMERICAN SAFETY NASDAQ NATIONAL OLD PEER ISSUER
(FISCAL YEAR COVERED) RAZOR COMPANY MARKET GROUP
<S> <C> <C> <C>
6/8/93 100.00 100.00 100.00
12/31/93 97.92 111.07 130.67
12/31/94 114.58 108.57 120.45
12/31/95 65.63 153.54 170.73
12/31/96 116.67 188.86 204.70
</TABLE>
16
<PAGE> 20
PROPOSAL 2:
AMENDMENTS TO STOCK OPTION PLAN
General. Since the Company's adoption of the Stock Option Plan on May 24,
1993, and as of the Record Date, the Company has granted 380,000 stock options
to employees and directors of the Company, 367,500 of which remain outstanding.
As of the Record Date, there were 132,500 shares of Common Stock available for
grant under the Stock Option Plan. Accordingly, in order to continue to
implement the Company's policy of providing equity incentives to its employees
and directors, the Board of Directors has approved an amendment to the Stock
Option Plan to reserve an additional 250,000 shares of Common Stock for issuance
thereunder, thereby increasing the total number of shares available for issuance
under the Stock Option Plan to 382,500.
Purpose. Stock options and SARs are awarded under the Stock Option Plan for
the purpose of increasing stockholder value, advancing the interests of the
Company, strengthening the Company's ability to attract and retain the services
of experienced and knowledgeable independent directors, enhancing the Company's
ability to attract, retain and motivate employees, and providing such directors
and employees with an opportunity to acquire an equity interest in the Company.
Shares Subject to the Stock Option Plan. Subject to adjustment in the event
of certain transactions involving the Company, up to 250,000 shares of Common
Stock were reserved for issuance under the Stock Option Plan on the date of its
inception and an additional 250,000 shares of Common Stock were reserved for
issuance on May 24, 1995, for a total of 500,000 shares of Common Stock. As of
the Record Date, there were 132,500 shares of Common Stock available for grant
under the Stock Option Plan. Assuming the adoption by the Company's stockholders
of this Proposal, the total number of shares available for issuance under the
Stock Option Plan will be 382,500. If an award granted under the Stock Option
Plan expires or is terminated without having been exercised in full, the shares
of Common Stock subject to the award but not delivered are available again for
awards under the Stock Option Plan.
Who May Participate in the Stock Option Plan. Certain directors and
employees of the Company are eligible to receive awards pursuant to the terms of
the Stock Option Plan. Each Independent Director of the Company (as defined in
the Stock Option Plan) is entitled to receive Formula Options to purchase 10,000
shares of Common Stock upon his or her appointment to the Board of Directors,
subject to the terms and conditions contained in the Stock Option Plan. As of
the Record Date, two directors and approximately 32 employees were eligible to
receive awards. The number of options and SARs granted to directors and
employees under the Stock Option Plan is determined by the Compensation
Committee. The Compensation Committee recommends, subject to the approval of the
disinterested members of the Board of Directors, which individuals will be
granted options and SARs, the number of shares to be optioned and other terms
and conditions applicable to the grants: provided, that the maximum aggregate
number of shares which are available for option or underlying SAR awards for any
participant per annum cannot be greater than 100,000. Because awards are granted
at the discretion of the Compensation Committee, the Company is unable to
determine the benefits or amounts that may be received or allocated under the
Stock Option Plan to the eligible directors and employees of the Company.
Options granted under the Stock Option Plan may be either incentive stock
options as defined in Section 422 of the Code or non-qualified stock options.
Incentive stock options may be granted only to employees of the Company and are
subject to the limitation that the aggregate fair market value (determined as of
the time the option is granted) of stock with respect to which incentive stock
options are exercisable for
17
<PAGE> 21
the first time by an optionee during any calendar year (under all option plans
of the Company) will not exceed $100,000. Options that do not meet this
qualification will be treated as non-qualified stock options.
Exercise of Awards; Exercise Price; Termination of Awards. Awards granted
pursuant to the Stock Option Plan are evidenced by agreements in such form as
the Compensation Committee may from time to time establish. Generally, each
agreement states the number of shares covered thereby, the exercise price
(which, in the case of incentive stock options, will not be less than the
closing price of the Common Stock on the NASDAQ-NMS on the date of grant of the
options), the time or times during which each award is exercisable, the
expiration date of the award, the form of payment which may be used upon
exercise of a stock option and whether a stock option is an incentive stock
option or a non-qualified stock option. Options granted under the Stock Option
Plan vest at a rate of 40% on the second anniversary of the date of grant and
20% each anniversary thereafter, such that all options are fully exercisable on
the fifth anniversary of the date of grant. Formula options vest at a rate of
20% on each anniversary of the date of the grant. On the Record Date, the
closing price of the Common Stock on the NASDAQ-NMS was $15.375 per share.
An award may be exercised in whole or in part (but for the purchase of
whole shares only) from time to time by written notice to the Chief Executive
Officer of the Company which states the number of shares being exercised.
Subject to the terms of the option agreement executed by the holder, payment of
the option price may be made in cash, check or in outstanding shares of Common
Stock (valued as of the date of exercise) or in a combination of such methods
and must accompany the exercise notice. The exercise date of an option is the
date on which the Company receives the notice from the optionee.
Neither an optionee nor any person holding a SAR has any privileges as a
stockholder of the Company with respect to any shares of Common Stock subject to
an award under the Stock Option Plan until the date of issuance of a stock
certificate.
All Stock Option Plan awards expire the earlier of 10 years from the date
of grant or the first to occur of the following:
(a) the expiration of three months from the date the holder ceases to
be an employee or director of, or independent consultant to, the
Company;
(b) the expiration of 12 months from the date the holder ceases to be
an employee or director of, or independent consultant to, the
Company if such termination is due to such holder's disability
(within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of such period of time or the occurrence of such
event as the Compensation Committee in its discretion may provide
in the agreement executed by the holder; or
(d) the date on which an award is transferred (other than by will or
the laws of descent and distribution), assigned, pledged,
hypothecated, attached or otherwise disposed of by the optionee.
All outstanding options and SARs become immediately exercisable if a person
or persons (other than a 5% or more stockholder as of the date of the Initial
Public Offering) acquires beneficial ownership of 51% or more of the Common
Stock outstanding and the Board of Directors determines that for purposes of the
Stock Option Plan a change in control has occurred.
Duration of the Stock Option Plan; Amendment; Certain Transactions. The
Stock Option Plan will remain in effect until all awards have either been
satisfied by the issuance of Common Stock or the payment of
18
<PAGE> 22
cash, or the awards have been terminated in accordance with the terms of the
Stock Option Plan or the award. The Compensation Committee may, at any time and
in any manner, amend, alter, suspend, discontinue, or terminate the Stock Option
Plan or any award outstanding under the Stock Option Plan; provided, however,
that no such amendment, alteration, suspension, discontinuance or termination
shall: (i) increase or decrease the number of shares reserved thereunder without
stockholder approval; (ii) be made without stockholder approval to the extent
such approval is required by law, agreement or the rules of any exchange or
automated quotation system upon which the Common Stock is listed or quoted;
(iii) alter or impair the rights of holders with respect to awards previously
made under the Stock Option Plan without the consent of the holders thereof or
(iv) make any change that would disqualify the Stock Option Plan, intended to be
so qualified, from the exemption provided by Rule 16b-3 of the Exchange Act.
If the Common Stock is changed by reason of a stock split, reverse stock
split, stock dividend or recapitalization, or converted into or exchanged for
other securities as a result of a merger, consolidation or reorganization, the
Compensation Committee will make such adjustments in the number and class of
shares of stock with respect to which awards may be granted under the Stock
Option Plan as will be equitable and appropriate in order to make such awards,
as nearly as may be practicable, equivalent to such awards immediately prior to
such change. A corresponding adjustment changing the number and class of shares
allocated to, and the exercise price of, each award or portion thereof
outstanding at the time of such change will likewise be made. In the case of
incentive stock options, no adjustment will be made if such adjustment (i) would
constitute a modification, extension or renewal of such incentive stock options
within the meaning of Sections 422 and 425 of the Code, or (ii) would, under
Section 422 of the Code, be considered as the adoption of a new plan requiring
stockholder approval.
Administration. The Stock Option Plan is administrated by the Compensation
Committee. Subject to the provisions of the Stock Option Plan, the Compensation
Committee has all powers with respect to the administration of the Stock Option
Plan, including without limitation, full power and authority to interpret the
provisions of the Stock Option Plan and any agreement executed thereunder and to
resolve all questions arising under the Stock Option Plan. The Compensation
Committee is composed of two or more directors who are "disinterested persons"
within the meaning of Rule 16b-3 of the Exchange Act who are also "outside
directors" within the meaning of Section 162(m) of the Code. Therefore, the
officers and directors of the Company are exempt from the short-swing profit
restrictions of Section 16(b) of the Exchange Act for transactions involving
grants under the Stock Option Plan and the Company is exempt from the Section
162(m) compensation deduction limitations imposed on certain of its executive
officers. Under Rule 16b-3, a "disinterested person" is, with certain limited
exceptions, a director who is not, during the one year prior to service in the
Compensation Committee or during such service, granted or awarded equity
securities of the Company pursuant to the Stock Option Plan or any other plan
of the Company or any of its affiliates. Under Section 162(m) of the Code, an
"outside director" is, with certain limited exceptions, a director who does not
receive any remuneration from the Company in any capacity except as a director.
Assignment; Death of Holder. During the lifetime of a holder, an award is
exercisable only by the holder and is not assignable or transferable. If the
holder dies, his or her award is thereafter exercisable (during the period
specified in "Exercise of Awards; Exercise Price; Termination of Awards" above)
by his or her executors or administrators to the full extent to which such award
was exercisable by the holder at the time of his or her death.
Options and SARs Granted. During the period from the inception of the Stock
Option Plan to the fiscal year ended December 31, 1996, Messrs. Weathersby,
Kasvin, Piron and Heim have been granted 45,000,
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<PAGE> 23
50,000, 40,000 and 20,000 stock options, respectively; all current executive
officers, as a group, have been granted 155,000 stock options; all current
directors who are not executive officers, as a group, have been granted 20,000
stock options; and all employees, including all current officers who are not
executive officers, as a group, have been granted 205,000 stock options. No SARs
have been awarded under the Stock Option Plan. A total of 12,500 stock options
have been forfeited.
Certain Federal Income Tax Consequences. The following summarizes the
federal income tax consequences to participants who may receive awards under the
Stock Option Plan. This description of tax consequences is based upon present
federal tax laws and regulations.
Non-Qualified Stock Options. The grant of a non-qualified stock option to
an optionee will not itself be a taxable event, and the optionee will not be
subject to any income tax consequences with respect to such option unless and
until the option is exercised. Upon the exercise of a non-qualified stock
option, the optionee will generally recognize ordinary compensation income equal
to the "spread" between the exercise price and the fair market value of the
Common Stock on the date of exercise, and the Company generally will be entitled
to a corresponding deduction. Upon a subsequent disposition of the Common Stock,
the optionee will recognize a short-term or long-term capital gain or loss equal
to the difference between the fair market value of the shares on the date of
exercise and the fair market value at disposition, depending on the length of
time the shares are held.
Incentive Stock Options. There are no federal income tax consequences
associated with the grant of an incentive stock option to an employee. However,
in contrast to the exercise of a non-qualified stock option, the exercise of an
incentive stock option will not cause an optionee to recognize taxable income
for regular income tax purposes. If the optionee holds the shares acquired upon
exercise of the incentive stock option for a minimum of two years from the date
of the grant of the incentive stock option and for at least one year after
exercise, any gain realized by the optionee on the subsequent sale of such
shares will be treated as long-term capital gain. Under such circumstances, the
Company will not be entitled to any deduction for federal income tax purposes.
If the shares are sold or otherwise disposed of prior to the expiration of such
periods, then the optionee will recognize ordinary income in an amount equal to
the difference between the fair market value of the Common Stock on the date of
exercise over the amount paid for such shares, and the Company generally will be
entitled to a corresponding deduction. Any loss recognized upon a taxable
disposition of the shares generally would be characterized as a capital loss.
The excess of the fair market value on the date of exercise of an incentive
stock option over the exercise price is an adjustment which increases
alternative minimum taxable income, the base upon which alternative minimum tax
is computed. In determining the amount of gain or loss recognized on the later
disposition of stock acquired pursuant to the exercise of an incentive stock
option, the tax basis of the stock for alternative minimum tax purposes (but not
regular tax purposes) is increased by the excess of the fair market value of the
stock over the option price at the time of exercise.
Stock Appreciation Rights. An employee will not realize taxable income at
the time of the grant of a SAR. Upon exercise, however, the employee will
generally realize ordinary income in the amount that the fair market value of
the Common Stock on the date of exercise exceeds its fair market value on the
date of grant. The Company generally will be entitled to a corresponding
deduction in the year of exercise.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AMENDING THE COMPANY'S STOCK
OPTION PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK RESERVED FOR
ISSUANCE THEREUNDER BY 250,000 SHARES.
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PROPOSAL 3:
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P. as the
independent public accountants of the Company for the fiscal year ending
December 31, 1997. Representatives of Coopers & Lybrand L.L.P. will be present
at the Annual Meeting and will be given the opportunity to make a statement if
they so desire. They will also be available to respond to appropriate questions.
If stockholders do not ratify the appointment of Coopers & Lybrand L.L.P.,
other certified public accountants will be considered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
OTHER MATTERS
PROXY SOLICITATION EXPENSE
The expense of the proxy solicitation will be paid by the Company. In
addition to the solicitation of proxies by use of the mails, solicitation also
may be made by telephone, telegraph or personal interview by directors, officers
and regular employees of the Company, none of whom will receive additional
compensation for any such solicitation. The Company does not anticipate that the
costs and expenses incurred in connection with this proxy solicitation will
exceed those normally expended for a proxy solicitation for an election of
directors and appointment of accountants in the absence of a contest. The
Company will, upon request, reimburse brokers, banks and similar organizations
for out-of-pocket and reasonable clerical expenses incurred in forwarding proxy
material to their principals.
STOCKHOLDER PROPOSALS
Proposals of stockholders must be received in writing by the Secretary of
the Company no later than 120 days in advance of the first anniversary of the
date of the mailing of this proxy statement, in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to the
1998 Annual Meeting of Stockholders.
The Company anticipates that its next annual meeting of stockholders will
be held in May 1998. If a stockholder desires to submit a proposal for
consideration at the 1998 Annual Meeting of Stockholders, written notice of such
stockholder's intent to make such a proposal must be given and received by the
Secretary of the Company at the principal executive offices of the Company
either by personal delivery or by United States mail not later than March 8,
1998. Each notice must describe the proposal in sufficient detail for the
proposal to be summarized on the agenda for the 1998 Annual Meeting of
Stockholders and must set forth: (i) the name and address, as it appears on the
books of the Company, of the stockholder who intends to make the proposal; (ii)
a representation that the stockholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at such meeting to present such proposal; and (iii) the class and number
of shares of the Company which are beneficially owned by the stockholder. In
addition, the notice must set forth the reasons for conducting such proposed
business at the 1998 Annual Meeting of Stockholders and any material interest of
the stockholder in such business. The presiding officer of the 1998 Annual
Meeting of Stockholders will, if the facts warrant, refuse to acknowledge a
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<PAGE> 25
proposal not made in compliance with the foregoing procedure, and any such
proposal not properly brought before the 1998 Annual Meeting of Stockholders
will not be considered.
OTHER BUSINESS
The Board of Directors is not aware of any matters to be presented at the
Annual Meeting other than those enumerated in the Company's Notice of 1997
Annual Meeting of Stockholders enclosed herewith. If any other matters do come
before the meeting, it is intended that the holders of the proxies will vote
thereon in their discretion. Any such other matter will require for its approval
the affirmative vote of a majority in interest of the Stockholders present in
person or by proxy at the Annual Meeting, provided a quorum is present or such
greater vote as may be required under the Company's Amended and Restated
Certificate of Incorporation, the Company's Amended and Restated By-laws or the
General Corporation Law of the State of Delaware.
By order of the Board of Directors,
/s/ G. Robert Fisher
G. Robert Fisher
Secretary
Staunton, Virginia
April 17, 1997
Each stockholder, whether or not he or she expects to be present in person at
the Annual Meeting, is requested to MARK, SIGN, DATE and RETURN THE ENCLOSED
PROXY in the accompanying envelope as promptly as possible. A stockholder may
revoke his or her proxy at any time prior to voting.
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PROXY AMERICAN SAFETY RAZOR COMPANY PROXY
P.O. BOX 500, STAUNTON, VIRGINIA 24402-0500
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) hereby appoint(s) William C. Weathersby and
Thomas H. Quinn, and each of them, with power of substitution, as attorneys and
proxies for and in the name and place of the undersigned, and hereby authorizes
them to represent and to vote all of the shares of Common Stock of American
Safety Razor Company held of record as of March 31, 1997 which the undersigned
is entitled to vote at the Annual Meeting of Stockholders of American Safety
Razor Company to be held on May 20, 1997 at the Holiday Inn, I-81 and the
Woodrow Wilson Parkway, Staunton, Virginia, at 10:00 AM local time, and at any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL THE DIRECTOR NOMINEES LISTED IN
PROPOSAL 1 AND A VOTE FOR PROPOSAL 2 AND PROPOSAL 3.
<TABLE>
<CAPTION>
<S> <C>
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below) nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN
THE LIST BELOW.)
THOMAS H. QUINN JOHN W. JORDAN II D. PATRICK CURRAN
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S COMMON
STOCK RESERVED FOR ISSUANCE THEREUNDER BY 250,000 SHARES
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
(continued, and to be signed, on reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(continued from other side)
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THIS ANNUAL MEETING OF STOCKHOLDERS.
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 Proposals 1, 2 and 3.
Please sign exactly as the
name appears on your stock
certificate. When shares are
held by joint tenants, both
should sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give title as
such. When signing as a
corporation, please sign in
full corporate name by
President or other authorized
officer. If you sign for a
partnership, please sign in
partnership name by an
authorized person.
Dated: _______________, 1997
------------------------------
Signature
------------------------------
Signature (if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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