<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
^--Enter Company Name Here--^
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
^--Enter Company Name Here--^
------------------------------------------------------------------------
(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 Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF TYCO
TOYS, INC.
APPEARS HERE]
TYCO TOYS, INC.
6000 MIDLANTIC DRIVE
MOUNT LAUREL, NEW JERSEY 08054
April 15, 1996
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders of Tyco Toys, Inc., to be held at 10:00 a.m.
local time at 200 Fifth Avenue, New York, New York 10010, on
Thursday, May 16, 1995. The accompanying Notice of Annual
Meeting of Stockholders and Proxy Statement describe the
matters to be acted upon at the meeting.
A proxy form is enclosed with the Notice of Annual Meeting
and Proxy Statement. Regardless of the number of shares you
own, it is important that your shares be represented.
Accordingly, we hope that you will complete and sign the proxy
form and return it to us promptly in the enclosed envelope
whether or not you are planning to be present.
We look forward to greeting personally as many of our
stockholders as possible at the meeting.
Sincerely yours,
/s/ Richard E. Grey
Richard E. Grey
Chairman
<PAGE>
TYCO TOYS, INC.
6000 MIDLANTIC DRIVE
MOUNT LAUREL, NEW JERSEY 08054
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 1996
----------------
The Annual Meeting of Stockholders of Tyco Toys, Inc., a Delaware
corporation (the "Company" or "Tyco"), will be held at 10:00 a.m. local time
at 200 Fifth Avenue, New York, New York 10010, on Thursday, May 16, 1996, for
the following purposes:
1. To elect three members to the Board of Directors to serve for a term
expiring at the Annual Meeting of Stockholders to be held in 1999.
2. To consider a stockholder proposal recommending that the Board of
Directors of the Company take steps to declassify the Board of Directors
and elect all directors annually.
3. To transact such other business as may properly be brought before the
Meeting, or any adjournment thereof.
Holders of record of the Company's Common Stock and Series B Preferred Stock
at the close of business on March 22, 1996 shall be entitled to notice of and
to vote at the Meeting and any adjournment thereof.
If you cannot be personally present at the Meeting, please date, complete
and promptly return the enclosed proxy. If you receive more than one proxy
because you own shares registered in different names or addresses, each proxy
should be completed and returned.
By Order of the Board of Directors
/s/ R. Michael Kennedy, Jr.
R. Michael Kennedy, Jr.,
Secretary
Mt. Laurel, New Jersey
April 15, 1996
<PAGE>
TYCO TOYS, INC.
6000 MIDLANTIC DRIVE
MOUNT LAUREL, NEW JERSEY 08054
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 1996
INTRODUCTION
This Proxy Statement is being mailed to stockholders of Tyco Toys, Inc. (the
"Company" or "Tyco") in connection with solicitation by the Company's Board of
Directors of proxies to be used at its Annual Meeting of Stockholders (the
"Annual Meeting"). The Annual Meeting will be held on Thursday, May 16, 1996,
at 10:00 a.m. local time at 200 Fifth Avenue, New York, New York 10010 for the
purposes set forth in the preceding notice. This Proxy Statement and the
accompanying proxy are first being sent to stockholders on or about April 15,
1996.
If a proxy in the enclosed form is duly executed and returned, the shares of
the Company's Common Stock, par value $.01 per share (the "Common Stock"), or
Series B Voting Convertible Exchangeable Preferred Stock ("Series B Preferred
Stock") represented thereby will be voted, where specification is made by the
stockholder on the form of proxy, in accordance with such specification. If no
directions to the contrary are indicated, the persons named in the enclosed
proxy will vote the shares represented thereby FOR the election of the named
nominees for Director and AGAINST Proposal 2. Any stockholder may revoke his
proxy by delivery of a later dated proxy or by providing written notice of
revocation to the Secretary of the Company at any time before it is voted. A
proxy will not be voted if the stockholder attends the meeting and elects to
vote in person.
Only stockholders of record at the close of business on March 22, 1996 have
the right to receive notice of and to vote at the Annual Meeting and any
adjournment thereof. As of that date, 34,813,766 shares of Common Stock and
52,839 shares of Series B Preferred Stock were outstanding.
On each matter to be voted on at the Annual Meeting, the Common Stock and
the Series B Preferred Stock will vote together, and holders of Common Stock
and Series B Preferred Stock will be entitled to one vote per share and 105
votes per share, respectively. The election of directors requires a plurality
of the votes cast. A majority of the votes cast is required to approve all
other matters that may properly come before the Annual Meeting. For purposes
of determining the number of votes cast with respect to any voting matter,
only those cast "for" or "against" are included. Abstentions and broker non-
votes are counted only for purposes of determining whether a quorum is present
at the meeting.
It is not anticipated that there will be presented at the Annual Meeting any
business other than the matters set forth in the enclosed notice. If any other
business should come before the Annual Meeting, the persons named on the
enclosed proxy card will have discretionary authority to vote all proxies in
accordance with their best judgment.
<PAGE>
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the Annual Meeting:
(a) matters which may be presented at the Annual Meeting at the request of
public stockholders and with respect to which the Company has not received
notice at the date hereof; (b) approval of the minutes of a prior meeting of
stockholders, if such approval does not amount to ratification of the action
taken at the meeting; (c) the election of any person to any office for which a
bona fide nominee is unable to serve or for good cause will not serve; (d) any
proposal omitted from the Proxy Statement and the form of proxy pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended; and (e)
matters incident to the conduct of the Annual Meeting.
The costs of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, certain Directors, officers, and employees of the
Company may solicit proxies in person or by telephone, telegraph, facsimile or
mail. The Company has also retained, on behalf of the Board of Directors,
Shareholder Communications Corporation to assist in soliciting proxies at a
fee estimated not to exceed $10,000, plus reasonable expenses. Further, the
Company will also request record holders of Common Stock who are brokerage
firms, custodians and fiduciaries to forward proxy material to the beneficial
owners of such shares and upon request will reimburse such record holders for
the costs of forwarding the material in accordance with customary charges.
2
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth information as of March 22, 1996 with respect
to persons known by the Company to be beneficial owners of more than 5% of the
Common Stock and by each of the Company's Directors, each of the named
Executive Officers and all Directors and Executive Officers as a group:
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL
OWNERSHIP (1) PERCENT (1)(2)
------------- --------------
<S> <C> <C>
Corporate Advisors, L.P. (3)(4)................... 5,563,095 13.8%
One Rockefeller Plaza
New York, New York 10020
The Capital Group Companies, Inc. (3)............. 4,033,300 11.6
333 South Hope Street............................
Los Angeles, CA 90071
State of Wisconsin Investment Board (3)........... 3,454,800 9.9
121 East Wilson Street
Madison, Wisconsin 53708
Richard E. Grey (5)(6)............................ 313,500 *
Harry J. Pearce (5)(6)............................ 105,418 *
Gary S. Baughman (6)(7)........................... 53,225 *
Jerome I. Gellman (5)............................. 9,000 *
Joel M. Handel (5)................................ 9,000 *
Arnold Thaler (5)................................. 40,614 *
Timothy J. Danis (5).............................. 9,000 *
John A. Canning, Jr. (5)(8)....................... 200,337 *
Dr. LaSalle D. Leffall, Jr. (5)................... 5,200 *
Jonathan Kagan (4)................................ 5,548,095 13.7
David B. Golub (4)(5)............................. 5,563,095 13.8
Michael J. Lyden (5)(6)........................... 45,500 *
Karsten Malmos (5)(6)............................. 28,840 *
All Directors and Executive Officers as a group
(20 persons) (4)(5)(6)(7)(8)..................... 6,489,365 15.8
</TABLE>
* Represents less than 1% of the outstanding shares of Common Stock.
(1) The amount and percentage of securities "beneficially owned" by an
individual are determined in accordance with the regulations of the
Securities and Exchange Commission and, accordingly, may include
securities owned by or for, among others, the spouse and/or minor children
of the individual and any other relative who has the same home as such
individual, as well as other securities as to which the individual has or
shares voting or investment power or has the right to acquire within 60
days after March 22, 1996. Beneficial ownership may be disclaimed as to
certain of the securities. Unless otherwise indicated, the persons and
entities named have sole voting and dispositive power over their shares.
(2) Shares subject to outstanding stock options which the individual has the
right to acquire within sixty (60) days after March 22, 1996 and shares
issuable upon conversion of Series B Preferred Stock are deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by such individual, or any group including
such individual, but are not deemed outstanding for the purpose of
computing the percentage of the class owned by any other individual.
(3) Based on information filed with the Securities and Exchange Commission by
the reporting person.
3
<PAGE>
(4) Includes 52,839 shares of Series B Preferred Stock. Each share of Series B
Preferred Stock is currently convertible into 105 shares of Common Stock.
All such shares listed in the table as being beneficially owned by Messrs.
Kagan and Golub are beneficially owned by Corporate Advisors, L.P. which
is the general partner of Corporate Partners, L.P. and Corporate Offshore
Partners, L.P. and serves as investment manager over certain assets of the
State Board of Administration of Florida, including its Series B Preferred
Stock. Messrs. Kagan and Golub may be deemed to have shared voting and
investment power over such shares as Managing Directors of Corporate
Advisors, L.P. Messrs. Kagan and Golub disclaim beneficial ownership of
all such shares. The address of Messrs. Kagan and Golub is the address of
Corporate Advisors, L.P.
These stockholders may be deemed to be a "group" of persons acting
together for the purpose of acquiring, holding, voting or disposing of
shares of Series B Preferred Stock. Corporate Advisors, L.P. has sole
voting and dispositive power as to the shares of Series B Preferred Stock
held by Corporate Partners, L.P., Corporate Offshore Partners, L.P. and
the State Board of Administration of Florida.
(5) Includes 233,500, 85,000, 28,125, 9,000, 9,000, 9,000, 9,000, 40,000,
5,000, 45,500, 15,000 and 28,500 shares that are subject to options
granted pursuant to registered option plans of the Company and held by
Messrs. Grey, Pearce, Baughman, Gellman, Handel, Thaler, Danis, Canning,
Lefall, Lyden, Golub and Malmos, respectively; also includes 606,581
shares subject to options held by all Executive Officers and Directors as
a group, all of which options so included are presently exercisable.
(6) Does not include Restricted Shares which have not yet vested and will not
vest within 60 days after March 22, 1996.
(7) Includes 25,100 shares which vested in October, 1995.
(8) Includes 160,337 shares issuable upon the conversion of Convertible
Subordinated Debentures held by Madison Dearborn Partners IV. John A.
Canning, Jr., a Director of the Company, is a partner in Madison Dearborn
Partners IV.
4
<PAGE>
ELECTION OF DIRECTORS
Pursuant to the Company's By-laws, three members of the Board of Directors
(consisting of a total of eleven members) are to be elected at the Annual
Meeting for a term expiring at the Annual Meeting of Stockholders to be held
in 1999, and until their successors are elected and qualified. Except where
authority to so vote is withheld, the accompanying proxy will be voted FOR
Richard E. Grey, David B. Golub and Joel M. Handel. If a nominee should become
unavailable for election for any presently unforeseen reason, the persons
designated as proxies will have full discretion to cast votes for a substitute
nominee selected by the Board of Directors, unless the Board of Directors
reduces the number of Directors.
Listed below is certain information regarding the nominees for Director and
the continuing Directors and Executive Officers of the Company.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
<S> <C> <C>
Richard E. Grey....................................... 61 Chairman
David B. Golub........................................ 33 Director
Joel M. Handel........................................ 60 Director
</TABLE>
Richard E. Grey has served as Chairman since July 1991, and as a Director
since 1988. Mr. Grey also served as President and Chief Executive Officer of
the Company from December 1985 until December 1995 and as President, Chief
Executive Officer, Director and a member of the Executive Committee of the
Company's principal operating subsidiary from 1973 until December, 1995. Mr.
Grey was employed by the Company and its predecessor since 1958. Mr. Grey has
served as a Director and Chairman of the Board of Toy Manufacturers of
America, Inc., a toy industry trade organization.
David B. Golub was appointed a Director in April, 1994. Mr. Golub has been a
Managing Director of Corporate Advisors, L.P., investment advisors to three
entities who hold the Series B Preferred Stock, since April, 1995 and for more
than five years prior thereto, he served as a Senior Vice President of
Corporate Advisors, L.P.
Joel M. Handel has served as a Director of the Company since April 1987. He
has been for more than the past five years, a partner in the law firm of Baer
Marks & Upham, which has served as counsel to the Company.
5
<PAGE>
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
<S> <C> <C>
Gary S. Baughman(1).............. 49 President, Chief Executive Officer and
Director
Harry J. Pearce(2)............... 51 Vice Chairman, Chief Financial Officer
John A. Canning, Jr.(1).......... 51 Director
Jerome I. Gellman(2)............. 68 Director
Timothy J. Danis(2).............. 49 Director
Jonathan Kagan(1)................ 39 Director
LaSalle D. Leffall, Jr.(1)....... 64 Director
Arnold Thaler(2)................. 73 Director
Michael J. Lyden................. 53 Executive Vice President and President -
Tyco U.S.
Douglas G. Hartley(3)............ 51 Executive Vice President - Sales
Karsten Malmos(3)................ 51 President - Tyco International
Paul J. Weaver................... 45 Executive Vice President - International
Finance and Operations
B. James Alley(3)................ 46 Executive Vice President
R. Michael Kennedy, Jr........... 52 Senior Vice President, General Counsel and
Secretary
Anthony DiMichele, Jr. .......... 39 Senior Vice President - Finance, Treasurer
Martin Scheman(4)................ 64 Chairman, Tyco Preschool
Neil Friedman(4)................. 48 President - Tyco Preschool
</TABLE>
- --------
(1) Term will expire at the Annual Meeting of Stockholders to be held in 1997.
(2) Term will expire at the Annual Meeting of Stockholders to be held in 1998.
(3) Officer of the Company's principal operating subsidiary, Tyco Industries,
Inc.
(4) Officer of a wholly-owned subsidiary of the Company.
Gary Baughman was appointed President, Chief Operating Officer and a
Director in October, 1994 and Chief Executive Officer in January, 1996. For
more than five years prior to that time he was President of the Little Tikes
division of Rubbermaid, Inc.
Harry J. Pearce was appointed Executive Vice President in September 1987 and
has served as Senior Vice President - Finance and Chief Financial Officer of
the Company since December 1985. He has served as a Director of the Company
since September 1988, and was appointed Vice Chairman in April, 1993. Mr.
Pearce is a Director and former Chairman of Toy Manufacturers of America, Inc.
John A. Canning, Jr. was appointed to the Board in July 1991. He is the
President of Madison Dearborn Partners, Inc. During the last five years until
January 1993, he served as President of First Chicago Venture Capital, an
affiliate of First Chicago Investment Corporation (FCIC); FCIC and Madison
Dearborn Partners IV, of which he is a partner, provided the financing for the
purchase by the Company of the equity interest of the Selzer family members in
July 1991. Mr. Canning is also a director of Bayou Steel Corporation and the
Interlake Corporation.
Jerome I. Gellman has served as a Director of the Company since April 1987.
For over five years, until January 1988, he was a partner in the law firm of
Tucker, Gellman & Mulderig, P.C. In January 1988, he became Of Counsel to the
law firm of Cowan, Liebowitz & Latman, P.C.
Timothy J. Danis was appointed to the Board in December 1990. He is the
Chairman and Chief Executive Officer of Rollins Hudig Hall of Illinois. For
more than five years until January 1992, he served as President and Chief
Executive Officer of Corroon and Black of Missouri, Inc. In January 1992, he
joined the Rollins Burdick Hunter Group as Chief Executive Officer; Rollins
Burdick Hunter Group is an international insurance brokerage firm which became
Rollins Hudig Hall in January 1993.
6
<PAGE>
Jonathan Kagan was appointed Director in April, 1994. For more than five
years he has served as Managing Director of Corporate Advisors, L.P. He is
also a general partner of Lazard Freres & Co. and a Director of Continental
Cablevision, Inc.
Messrs. David Golub and Jonathan Kagan have been seated as Directors in
accordance with the terms of certain agreements entered into by the Company
and holders of the Series B Preferred Stock.
Dr. LaSalle D. Leffall, Jr. was appointed as a Director of the Company in
February 1993. For more than the last five years, he has been Chairman of the
Department of Surgery at Howard University College of Medicine in Washington,
D.C. Dr. Leffall also serves as a Director of the Warner Lambert Company and
Mutual of America.
Arnold Thaler was President of View-Master Ideal Group, Inc. ("View-Master")
from July 1981, when he purchased the View-Master line with a group of
investors, until his retirement in 1990. View-Master became a public company
in 1983, and was acquired by the Company in 1989. He was appointed as a
Director of the Company in February 1990. He also served previously as
President of Ekco Housewares Company and as an officer of its parent, American
Home Products Corporation. Mr. Thaler retired as an active officer on December
31, 1990 and now serves as a consultant to the Company.
Michael J. Lyden has been employed by the Company since 1987 as Vice
President, Business Development; he was appointed Senior Vice President in
1990, President - Tyco U.S. in January, 1994, and Executive Vice President in
January, 1996.
Douglas G. Hartley served as Vice President and President of the Company's
Canadian subsidiary until his appointment as Executive Vice President in
February, 1996.
Karsten Malmos joined the Company's principal operating subsidiary as Vice
President -International in 1980. He was appointed Senior Vice President -
International of the Company's principal operating subsidiary in December
1987, Executive Vice President in July 1992 and President - Tyco International
in April, 1993.
Paul J. Weaver has been employed by the Company's principal operating
subsidiary since 1975. He was appointed Vice President and Controller of the
Company in October 1987, Senior Vice President in 1990, and Executive Vice
President - International Finance and Operations in May, 1994.
B. James Alley has been employed by the Company's principal operating
subsidiary since December 1976, including service as Senior Vice President -
Marketing since October 1986 and as Vice President - Marketing from May 1981
until October 1986. He became Executive Vice President in June, 1994.
R. Michael Kennedy, Jr. was appointed Vice President and General Counsel of
the Company in October 1987 and Senior Vice President in 1990. He was
appointed Secretary in July 1991. For over five years prior to 1987, he was
Vice President and General Counsel of Wendy's International, Inc., an operator
and franchisor of fast-food hamburger restaurants in the United States and
other countries.
Anthony DiMichele, Jr. was appointed Senior Vice President - Finance in
November, 1994 and Treasurer in July, 1995. For more than five years prior to
that time he was Senior Vice President of AWT, an environmental services
company.
7
<PAGE>
Martin Scheman has, for more than the last five years, been President of
Tyco Preschool Toys, Inc. (formerly Illco Toy Co. U.S.A., Inc.), which the
Company acquired in June 1992. He was appointed Chairman of the Company's Tyco
Playtime and Preschool subsidiaries in June 1993 and CEO of Tyco Playtime in
December, 1994.
Neil Friedman was appointed President of Tyco Preschool in August, 1996. For
more than five years prior to that time he was President of MCA/Universal
Merchandising and President of Aviva/Hasbro.
OPERATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met ten times during 1995. Each
Director attended after his election more than 75% of the aggregate number of
meetings of the Board and the committees of which he was a member. There are
six standing Committees of the Board of Directors: the Executive Committee;
the Audit Committee; the Stock Option Committee; the Finance Committee; the
Compensation Committee; and the Nominating Committee.
The Executive Committee, comprised of Messrs. Grey, Pearce, Baughman,
Handel, Kagan and Thaler, meets on call and has the authority to act on most
matters during intervals between Board meetings. The Executive Committee met
four times during 1995.
The Audit Committee is comprised of Messrs. Gellman, Danis, and Kagan who
are outside Directors. The Committee evaluates and approves, among other
things, all transactions between the Company and related parties. The
Committee also reviews the internal controls of the Company, its financial and
accounting practices, the performance of the Company's accounting and
financial staff, and the performance and cost of its outside auditors. The
Audit Committee met twice during 1995.
The function of the Compensation Committee is to review and make
recommendations to the Board of Directors with respect to compensation of the
Company's executive officers. The Compensation Committee, which met three
times during 1995, consists of outside Directors, Messrs. Gellman, Canning and
Golub.
The Stock Option Committee is comprised of outside Directors Messrs. Golub
and Canning. The purpose of the Committee is to administer the stock option
plans of the Company. The Stock Option Committee met once during 1995.
The Finance Committee consists of Messrs. Pearce, Thaler and Canning. The
Committee's purpose is to make recommendations to the Board concerning the
securities and finance activities of the Company. The Finance Committee met
three times during 1995.
The Nominating Committee consists of Messrs. Thaler, Danis and Vituli. The
purpose of this Committee is to identify qualified candidates for the Board of
Directors of the Company. The Nominating Committee met once during 1995.
Stockholders who wish to suggest qualified candidates should write to the
Secretary of the Company at 6000 Midlantic Drive, Mount Laurel, New Jersey
08054, stating in detail the qualifications of such persons for consideration
by the Nominating Committee.
All required reports under Section 16 of the Securities Exchange Act of 1934
relating to ownership and changes in ownership by Directors and Executive
Officers of the Company's Common Stock were filed timely during 1995.
8
<PAGE>
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth remuneration paid or distributed to, or
accrued for, each of the five most highly paid current Executive Officers of
the Company during the Company's fiscal year ended December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------- ----------------------------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND BONUS COMPEN- STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) ($)(1) SATION ($)(2) AWARDS ($)(3) OPTIONS (#)(4) ($)(5)
- ------------------------ ---- ---------- ------- ------------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gary Baughman........... 1995 450,000 445,000 103,349(6) 517,256 84,375 1,566
President and 1994 137,180 0 24,420(6) 0 0 261
Chief Executive Officer
Richard E. Grey......... 1995 587,500 97,820 21,082 689,675 112,500 6,318
Chairman 1994 550,000 0 22,455 0 196,000 6,318
1993 550,000 0 18,192 0 0 4,050
Harry J. Pearce......... 1995 393,749 50,990 15,456 459,785 75,000 2,592
Vice Chairman, 1994 375,000 0 15,800 0 60,000 2,592
Chief Financial 1993 375,000 0 15,613 0 0 1,566
Officer
Karsten Malmos.......... 1995 246,000 41,330 12,386 334,985 22,500 2,592
President-Tyco 1994 240,000 0 12,014 0 21,000 2,592
International 1993 230,000 0 12,627 0 0 1,566
Michael J. Lyden........ 1995 249,000 44,000 13,210 334,985 22,500 2,592
Executive Vice 1994 238,062 38,400 12,043 0 38,000 2,592
President and 1993 168,031 18,000 13,721 0 0 2,370
President-Tyco US
</TABLE>
(1) Under the Company's Executive Bonus Plan, each of the named Executive
Officers received a portion of his 1995 annual bonus in Restricted Stock
Units. The 1995 bonuses include a cash value of $67,500, $29,346, $15,297,
$12,399 and $13,200 for Messrs. Baughman, Grey, Pearce, Malmos and Lyden,
respectively, which was satisfied by issuing Restricted Stock Units based
on the price of a share of Common Stock ($5.89) fixed in accordance with
the Plan. The Plan provides that in the event an executive terminates his
employment with the Company prior to vesting of the Restricted Stock
Units, he is entitled to receive the lesser of the amount awarded in cash
or the fair market value of the Restricted Stock Units on the date of
termination. Also includes the value of 40,000 shares of stock awarded to
Mr. Baughman which vested in 1995.
(2) Includes car allowances and medical expense reimbursements.
(3) Awards were made under the Long Term Incentive Plan which provides that
Restricted Stock Units vest over seven years, subject to acceleration in
the event the Company's performance meets targeted levels. At December 31,
1995, the number of Restricted Stock Units awarded under the Long Term
Incentive Plan and the value of such Units (based on the price of a share
of Common Stock on such date) were as follows: Mr. Baughman, 91,875 Units
($413,438); Mr. Grey, 122,500 Units ($551,250); Mr. Pearce, 81,667 Units
($367,502); and Messrs. Malmos and Lyden, each 59,500 Units ($267,750). An
amount equal to any cash dividends payable on Common Stock is added
annually to a participant's account based on the price of a share of
Common Stock at the end of the year.
(4) No preferential earnings or above market earnings, or discounts from fair
market value, were recognized by Executive Officers in connection with the
stock option plans of the Company.
(5) Represents the taxable cost of group life insurance payments.
(6) Includes reimbursement of relocation expenses of $89,459 in 1995.
9
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
Mr. Baughman entered into an Employment Agreement with the Company on
October 3, 1994. The Agreement expires on December 31, 1998 and will
automatically renew for a period of one additional year, unless either party
gives written notice of termination to the other at least ninety days in
advance of such date. Under the Agreement, Mr. Baughman is entitled to receive
an annual base salary of not less than $450,000 in 1995 and $550,000 beginning
in 1996 and following years. Pursuant to the Agreement, Mr. Baughman was
appointed the position of Chief Executive Officer of the Company on January 1,
1996. In addition, Mr. Baughman is entitled to receive annual incentive
compensation of up to 135% of his annual salary based on criteria established
by the Compensation Committee. In addition, he received 40,000 shares of
restricted Common Stock of the Company, which shares vested one year after
commencement of his employment, and he is entitled to participate in the Long
Term Incentive Plan. At any time on or before December 31, 1998, in the event
of a change in control of the Company (as defined in the Agreement) the
Company will pay to Mr. Baughman a sum equal to 2.99 times his average annual
base salary and annual bonus for the last five years (calculated as if his
employment had continued through December 31, 1996, if applicable), provided
that Mr. Baughman's employment is in then full force and effect, and the
change of control does not take place in a public offering, as defined in the
Agreement. The Company may terminate Mr. Baughman's employment for cause, as
defined in the Agreement.
Mr. Grey entered into an Employment Agreement with the Company in July,
1994. The Agreement expires December 31, 1997 and will automatically extend
for an additional one-year period unless either party gives the other written
notice of termination within six months of the expiration of the Agreement.
Under the Agreement, Mr. Grey was entitled to receive an annual base salary of
$600,000 for 1995 and is entitled to receive a base salary of $400,000 for
1996 and any year during which he is Chairman but does not serve as Chief
Executive Officer, plus annual incentive compensation of up to 90% of his
annual base salary based upon criteria established by the Compensation
Committee. In addition, he is entitled to participate in the Long Term
Incentive Plan. Under Mr. Grey's previous employment agreement, he was
entitled to a base salary of $600,000 during 1994. Mr. Grey voluntarily agreed
to keep his 1994 salary at $550,000, the 1993 level. Mr. Grey similarly agreed
to forego any salary increase during the first three months of 1995. At any
time on or before December 31, 1996, in the event of a change of control of
the Company, as defined in the Agreement, the Company will pay to Mr. Grey a
sum equal to 2.99 times his annual salary, plus a pro rata portion of
incentive compensation provided in the Agreement, provided Mr. Grey's
employment is then in full force and effect and the change of control does not
take place in a public offering, as defined in the Agreement. The Company may
terminate Mr. Grey's employment for cause as defined under the Agreement. If
the Company terminates the employment of Mr. Grey without cause or Mr. Grey
terminates his employment for good reason as such terms are defined in the
Agreement, then the Company is obligated to pay to Mr. Grey the sum of two
times his average annual salary and bonus over the prior five years, plus a
pro rata portion of his annual base salary accrued through the termination
date.
Mr. Pearce entered into an Employment Agreement with the Company in July,
1994. The Agreement expires December 31, 1997 and will automatically extend
for an additional one-year period unless either party gives the other written
notice of termination within six months of the expiration of the Agreement.
Under the Agreement, Mr. Pearce is entitled to receive an annual base salary
of $420,000 for 1996 plus annual incentive compensation of up to 135% of his
annual base salary based upon criteria established by the Compensation
Committee. In addition, he is entitled to participate in the Long Term
Incentive Plan. Under Mr. Pearce's previous
10
<PAGE>
employment agreement, he was entitled to a base salary of $400,000 during
1994. Mr. Pearce voluntarily agreed to keep his 1994 salary at $375,000, the
1993 level. Mr. Pearce similarly agreed to forego any salary increase during
the first three months of 1995. At any time on or before December 31, 1996, in
the event of a change of control of the Company, as defined in the Agreement,
the Company will pay to Mr. Pearce a sum equal to 2.99 times his annual
salary, plus a pro rata portion of Incentive Compensation provided in the
Agreement, provided Mr. Pearce's employment is then in full force and effect
and the change of control does not take place in a public offering, as defined
in the Agreement. The Company may terminate Mr. Pearce's employment for cause
as defined under the Agreement. In the event the Company terminates the
employment of Mr. Pearce without cause or Mr. Pearce terminates his employment
without good reason, as such terms are defined in the Agreement, the Company
is obligated to pay to Mr. Pearce the sum of two times his average annual
salary and bonus over the prior five years, plus a pro rata portion of his
annual base salary accrued through the date of such termination.
Mr. Malmos has an employment agreement with the Company which provides for
an annual salary of $248,000 per year through 1996, and he is eligible for
additional incentive compensation of up to 105% of his base salary. Mr. Malmos
is also eligible to receive participate in the Long Term Incentive Plan. The
Company may terminate his employment at any time without cause, but in such
event the Company would then be obligated to make severance payments equal to
his annual salary, plus the pro-rata portion of the incentive compensation
that would have been paid to him for that year. In the event of a change of
control of the Company, as defined in the agreement, the Company will pay Mr.
Malmos a sum equal to one half of his annual base salary, provided his
employment is then in full force and effect.
Mr. Lyden has an employment agreement with the Company which provides for an
annual base salary of $280,000 through 1996, and he is eligible to receive
additional annual incentive compensation of up to 105% of his base salary. Mr.
Lyden is also eligible to participate in the Long Term Incentive Plan. The
Company may terminate Mr. Lyden's employment at any time, without cause, but
in such event the Company would be obligated to pay Mr. Lyden severance
payments equal to his annual salary, plus the pro-rata portion of the
incentive compensation that would have been paid to Mr. Lyden for that year.
In the event of a change of control of the Company as defined in the
agreement, the Company will pay Mr. Lyden a sum equal to one half of his
annual base salary, provided his employment is then in full force and effect.
Each of the executives referred to above has insurance policies providing
benefits of a maximum of $500,000 in the event of his death while employed by
the Company, and 60% of his annual income (up to $200,000 annual benefit) in
the event of disability.
KEY EMPLOYEE AGREEMENTS
The Company has entered into Key Employee Agreements with 15 other executive
officers of the Company; under the terms of the Agreements, the Company will
pay to such employees amounts equal to one half of their annual salary, in the
event of a change of control of the Company, as such term is defined in the
Agreements.
11
<PAGE>
STOCK OPTIONS GRANTED IN 1995
The following table sets forth information relating to the grants of stock
options to the named Executive Officers during 1995:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE AT ASSUMED
SECUTITIES OPTIONS ACCRUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OPTION TERM (1)
NAME GRANTED IN FISCAL PRICE EXPIRATION -----------------------
TITLE ($) (2) YEAR ($/SH) DATE 5%($) 10%($)
- ---------------------- ---------- ---------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard E. Grey
Chairman 112,500 15.71% $5.63 3/28/00 $174,990 $386,682
Gary S. Baughman
President & CEO 84,375 11.78% $5.63 3/28/00 $131,242 $290,011
Harry J. Pearce
Vice Chairman & CFO 75,000 10.47% $5.63 3/28/00 $116,660 $257,788
Karsten Malmos
President - Interna-
tional 22,500 3.14% $5.63 3/28/00 $ 34,998 $ 77,336
Michael J. Lyden
Executive Vice Presi-
dent &
President - Tyco US 22,500 3.14% $5.63 3/28/00 $ 34,998 $ 77,336
</TABLE>
- --------
(1) Illustrates value that might be realized upon exercise of options
immediately prior to the expiration of the term of the options. Assumed
rates of appreciation are not necessarily indicative of future stock
performance.
(2) Stock options vest in one-third (1/3) increments in January of 1996, 1997
and 1998.
12
<PAGE>
AGGREGATED STOCK EXERCISES IN 1995
The following table sets forth information relating to the exercise of stock
options by the named Executive Officers during 1995 and the value of options
held by the named executives at the end of the year.
AGGREGATED OPTION EXERCISES IN 1995 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
IN-THE-
SHARES ACQUIRED VALUE NUMBER OF UNEXERCISED MONEY OPTIONS AT
ON EXERCISE ($) REALIZED ($) OPTIONS AT F/Y END FISCAL YEAR END ($)(1)
--------------- ------------ ------------------------- ----------------------
EXERCISABLE
EXERCISABLE UNEXERCISABLE AND UNEXERCISABLE
----------- ------------- ----------------------
<S> <C> <C> <C> <C> <C>
Richard E. Grey 0 0 196,000 112,500 0
Gary S. Baughman 0 0 0 84,375 0
Harry J. Pearce 10,000 $28,750 60,000 75,000 0
Karsten Malmos 16,000 $37,000 21,000 22,500 0
Michael J. Lyden 0 0 38,000 22,500 0
</TABLE>
- --------
(1) Based on the difference between the share exercise price of all stock
options outstanding and $4.50, the closing price on the New York Stock
Exchange for a share of Common Stock on December 29, 1995.
13
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee, which consists of three outside Directors, has
responsibility for oversight of compensation to senior management by the
Company, including specifically annual incentive bonus and long-term incentive
compensation programs. The Committee reviews performance, compensation levels,
and other matters related to the executive officers of the Company. The
Committee reports directly to the Board on compensation of the Chairman,
President and Chief Executive Officer, and Vice-Chairman and Chief Financial
Officer of the Company. The Committee also oversees administration of the Long
Term Incentive Plan and Executive Bonus Plan approved by the stockholders in
1995. (Administration of the Company's Stock Option Plans are the
responsibility of the Stock Option Committee of the Board.)
In reviewing the compensation of the Executive Officers of the Company, the
Committee considers a number of factors such as the following: results of
operations of the Company; reasonableness; industry and other surveys of
compensation; compensation paid by competitors of the Company; and advice from
outside independent consultants specializing in executive compensation. In
1994, the Company entered into new agreements with the Chairman, Vice
Chairman - CFO and President-CEO. In reaching those new agreements, base
salary levels and incentive potentials were established considering a variety
of factors, including the potential contribution by individual executives to
the overall performance of the Company; the establishment of links between
incentives and operating income, asset utilization, and other performance
measurements; the capacity of individuals to meet targets established
annually; the levels of base and incentive compensation in the industry; and
the use of the new vesting schedules and restricted stock programs recommended
by outside consultants and the Board, and approved by the stockholders.
A group of 18 senior executive managers of the Company (including the three
Executive Officers referred to above) participate in the Long Term Incentive
Plan approved by the stockholders in 1995. Under the new program, this broad
group of managers is eligible to receive Restricted Stock Units as well as
non-qualified stock options which vest over seven years, subject to
acceleration, under the Company's existing plan.
The new contracts for executive managers and the Annual Incentive and Long
Term Incentive Plans were designed to institute a series of new annual and
long-term targets more closely aligned with the interests of the stockholders
of the Company; provide incentives for senior managers to perform in a
critical period of the Company's efforts to return to profitability; increase
the stock ownership of senior managers; and provide value which accelerates
when the Company meets or exceeds its performance targets.
From April 1995 until April 1996, executive salaries did not generally
increase beyond a 4% guideline intended to keep pace with inflation and the
cost-of-living, except for (i) contractual obligations to the three named
Executive Officers above, and (ii) individual recognition to senior managers
who played a key role in the improvement of the Company's domestic performance
during 1995.
Pursuant to his existing employment agreement with the Company dated July
27, 1994, the base compensation of the Chairman, Richard E. Grey, was reduced
when Gary Baughman was appointed to the position of CEO in January, 1996. Mr.
Baughman's compensation was increased at the same time in keeping with the
terms of his agreement dated October 5, 1994.
During 1995, while the Company's overall financial performance was
unsatisfactory, the profitability of the Company's domestic business and cash
flow of the Company's international business improved significantly;
accordingly, bonuses were paid in 1996 to executive managers responsible for
that improvement in keeping with the achievement of individual financial
14
<PAGE>
objectives set for those managers, including division profitability, inventory
management, cash flow and other similar performance targets.
In the opinion of the Committee, the compensation of the CEO and other
executive officers of the Company is appropriate and reasonable in light of
the Company's performance on a consolidated basis in 1995. As a result of his
participation in the Long Term Incentive Plan, Mr. Baughman's total
compensation as CEO is contingent in greater part on the annual and long-term
performance of the Company than has been the case in prior years for the CEO
of the Company.
In December, 1995 the Compensation Committee determined, based on the
recommendation of management, that two senior executives of the Company were
deserving of special grants under the Long Term Incentive Plan based on their
contribution to the turnaround effort and the improvement in the results of
operations of the Company's domestic business.
No stock options were repriced in 1995; at the request of an institutional
stockholder, the Company has given an undertaking not to reprice out-of-the-
money stock options without stockholder approval.
The foregoing report on executive compensation is provided by the following
Directors, who comprise the Compensation Committee of the Board of Directors
of the Company:
John A. Canning, Jr.
Jerome I. Gellman
David B. Golub, Chairman
March 15, 1996
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, no executive officer of the Company served as a member of the
compensation committee, or its equivalent, of another entity, one of whose
executive officers served as a Director of the Company or a member of the
Company's Compensation Committee. No member of the Company's Compensation
Committee was an officer or employee of the Company during 1995. Mr. Arnold
Thaler, who served as a member of the Compensation Committee until December,
1994, has served as a consultant to the Company since his retirement in 1990
as President of the Company's View-Master Ideal Group subsidiary. He receives
annual fees of $85,000 and certain insurance benefits and expenses. Mr. Golub
is a Managing Director of Corporate Advisors, L.P., which advises three
institutions holding all of the Company's Series B Preferred Stock. Mr.
Canning is a partner in Madison Dearborn Partners IV, which holds some of the
Company's 7% Convertible Subordinated Debentures, and a partner in an entity
which renders advice to First Chicago Investors Corporation, which also holds
such Debentures.
No other member of the Committee was involved in or had any direct or
indirect material interest in any transaction, or series of transactions, or
currently proposed transaction in which the amount involved exceeded $60,000.
15
<PAGE>
COMPENSATION OF DIRECTORS
Each Director who is not an officer or employee of the Company receives an
annual fee of $16,000 for his services during the fiscal year as a Director
and $1,000 for each Board or Committee meeting attended. The Company
reimburses all Directors for their out-of-pocket expenses in attending such
meetings.
Pursuant to a formula approved by the Board and the stockholders in the
Stock Option Plan, the members of the Stock Option Committee received a grant
of 10,000 stock options at the time of their appointment to the Committee, and
an additional 5,000 stock options annually thereafter. No other grants of
stock options were made to outside Directors in 1995.
16
<PAGE>
STOCKHOLDER PROPOSAL
Mr. Kenneth Steiner, of 14 Stoner Ave., Great Neck, New York, 11021, owner
of 450 shares of Common Stock, has notified the Company of his intention to
introduce the proposal set forth below for consideration and action by the
stockholders at the Annual Meeting.
The affirmative vote of a majority of the shares of Common Stock and Class B
Preferred Stock, voting as a class, present or represented and entitled to
vote on the proposal at the Annual Meeting is required for adoption of the
proposal.
"BE IT RESOLVED, that the shareholders of Tyco Toys, Inc. (the "Company")
recommend to the Company's Board of Directors that it take the necessary
steps in accordance with state law, to declassify the Board of Directors of
the Company, so that all directors are elected annually, to be given effect
in such a manner that does not affect the unexpired terms of Directors
elected prior to the declassification."
The supporting statement of the proponent is:
"The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable
for its implementation of those policies. That the classification of the
Board of Directors, which results in only a portion of the Board being
elected annually, is not in the best interests of the Company and its
stockholders.
The Board of Directors of the Company is divided into three classes
serving staggered three-year terms. The Company's classified Board of
Directors maintains the incumbency of the current Board and therefore of
current management, which in turn limits management's accountability to
stockholders.
The elimination of the Company's classified Board would require each new
director to stand for election annually and allow stockholders an
opportunity to register their views on the performance of the Board
collectively and each director individually. This is the one of the best
methods available to stockholders to insure that the Company will be
managed in a manner that is in the best interests of the stockholders.
I believe that concerns expressed by companies with classified boards
that the annual election of all directors could leave companies without
experienced directors in the event that all incumbents are voted out by
stockholders, are unfounded. In my view, in the unlikely event that
stockholders vote to replace all directors, this decision would express
stockholder dissatisfaction with the incumbent directors and reflect the
need for change."
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS AGAINST THE ADOPTION OF
THIS PROPOSAL FOR THE FOLLOWING REASONS.
The current system of electing directors to three year terms had been in
place since 1986. This system is common, has been adopted by many companies,
and is permitted by the laws of the state of Delaware and by the rules of the
New York Stock Exchange.
The Board does not believe that directors who are elected annually would be
any more accountable to stockholders than they would be if elected for three
year terms, since the same standards of performance apply regardless of the
length of a director's term.
The system of three year terms promotes continuity and stability in the
conduct of business by the Board, since generally two-thirds of the directors
at all times will have had prior
17
<PAGE>
experience with the business affairs, strategies and policies of the Company.
This experience enables the directors to plan in a reasonable fashion for the
future business of the Company.
The use of three year terms is also intended to encourage any persons who
may seek to acquire control of the Company, or to further some other personal
goal, to initiate such action through negotiation with the Board--which is in
a position to act to protect all the stockholders of the Company. Although a
classified board does not necessarily discourage takeover offers, the Board
believes that de-classification does not enhance the ability to negotiate
favorable terms with a proponent of an unfriendly or unsolicited proposal. An
attempt to effect change of control of the Board at a single stockholders'
meeting, even if unsuccessful, can seriously disrupt the conduct of the
business of the Company, and cause it to incur substantial expense.
Moreover, adoption of the proposal would not in itself eliminate three year
terms. If adopted, the proposal would only serve as a recommendation to the
Board of Directors to take the steps necessary to require directors to stand
for election annually. Such steps would include the repeal of the provisions
relating to three year terms in the Company's Amended Certificate of
Incorporation, which requires the affirmative vote of two-thirds of the
outstanding shares entitled to vote at a subsequent meeting of stockholders,
unless approved by a majority of the continuing directors, in which case the
affirmative vote of a majority of the outstanding shares is required.
The Company's Board continued to believe that the present system of three
year terms is in the best interest of the stockholders, and that the
stockholders should oppose efforts to eliminate three year terms.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THE PROPOSAL.
18
<PAGE>
FIVE YEAR PERFORMANCE GRAPH (1990-1994)
The following graph presents a comparison of the cumulative annual
shareholder return based on the assumption that $100 was invested in Tyco
Common Stock on December 31, 1990 (as required by the rules of the Securities
and Exchange Commission) and that all quarterly dividends were reinvested each
quarter. The total cumulative return shown represents the value that such
investments would have had on December 31, 1995.
(CHART)
19
<PAGE>
INDEPENDENT AUDITORS
Deloitte & Touche LLP served as the Company's independent auditors for
fiscal year 1995 and will serve in that capacity for fiscal 1996.
Representatives of Deloitte & Touche are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
ADDITIONAL CONSIDERATIONS
STOCKHOLDER PROPOSALS TO BE PRESENTED AT THE NEXT ANNUAL MEETING
Any proposal submitted by a stockholder of the Company intended to be
presented at the next annual Meeting of Stockholders must be received by the
Secretary of the Company not later than December 18, 1996.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for 1995 has been
furnished to stockholders with the mailing of this Proxy Statement.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR 1995 REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, WITHOUT CHARGE EXCEPT FOR EXHIBITS TO THE REPORT, BY
SENDING A WRITTEN REQUEST THEREFOR TO:
SHAREHOLDER RELATIONS
TYCO TOYS, INC.
6000 MIDLANTIC DRIVE
MOUNT LAUREL, NEW JERSEY 08054
By Order of the Board of Directors,
R. Michael Kennedy, Jr.
Secretary
Mt. Laurel, New Jersey
April 15, 1996
20
<PAGE>
[LOGO OF TYCO TOYS, INC. APPEARS HERE]
Tyco Toys, Inc.
6000 Midlantic Drive
Mt. Laurel, New Jersey
08054
[RECYCLED PAPER LOGO APPEARS HERE]
Printed on recycled paper
This document is printed on recycled paper which contains at least 10% post
consumer waste.
<PAGE>
- --------------------------------------------------------------------------------
TYCO TOYS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 16, 1996
P R O X Y
The undersigned hereby appoints and authorizes Richard E. Grey, Gary Baughman
and Harry J. Pearce and each of them (with the Power of Substitution), Proxies
for the undersigned to represent and vote as designated below, all shares of
common stock of Tyco Toys, Inc. held of record by the undersigned on March 22,
1996, at the Annual Meeting of Stockholders to be held on May 16, 1996 or any
adjournment thereof.
Election of Directors, Nominees:
Richard E. Grey
David B. Golub
Joel M. Handel
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
[X] Please mark 9398
your votes as in
this example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION TO THE CONTRARY IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1, AND AGAINST PROPOSAL
2.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors [ ] [ ]
(see reverse)
Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. Proposal to recommend to the Board of Directors of the Company that each
director be required to stand for election each year.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
[ ] Change of Address/Comments on Reverse Side
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
SIGNATURE(S)___________________________________ DATED:____________________, 1996
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
This Proxy confers certain discretionary authority described in the Proxy
Statement. The undersigned hereby acknowledges receipt of the Proxy Statement
dated April, 1996 and the Annual Report to Stockholders for 1995.
Please mark, sign, date and return this Proxy promptly by using the enclosed
envelope.
- --------------------------------------------------------------------------------
