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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FIRST BRANDS CORPORATION
................................................................................
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(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-ll(c)(l)(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:(1)
.............................................................................
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:
............................................................................
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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[Logo]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
FIRST BRANDS CORPORATION
DANBURY, CONNECTICUT
September 30, 1996
To the Stockholders of
FIRST BRANDS CORPORATION:
The Annual Meeting of Stockholders of First Brands Corporation will be held
at the Danbury Hilton Hotel, 18 Old Ridgebury Road, Danbury, Connecticut on
Friday, November 1, 1996, commencing at 10:00 a.m., at which meeting only
holders of the common stock of record at the close of business on September 6,
1996, and those holding proxies from such stockholders will be entitled to vote,
for the following purposes:
1. To elect three directors;
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the Company's 1997 fiscal year;
3. To amend the Company's Certificate of Incorporation to increase the
number of authorized shares of the Company's common stock.
4. To transact such other business, if any, as may properly come
before the meeting.
We hope that you will be able to attend our annual meeting in person. If
you plan to do so, please return the enclosed ticket request and we will
promptly send your ticket to you. Please bring your ticket with you to the
meeting.
FIRST BRANDS CORPORATION
JOSEPH B. FUREY
Joseph B. Furey
Vice President, Secretary and
Controller
EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK, DATE
AND EXECUTE THE ENCLOSED PROXY AND MAIL IT PROMPTLY. SHOULD YOU ATTEND THE
MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU DESIRE. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED
FOR YOUR CONVENIENCE.
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FIRST BRANDS CORPORATION
83 WOOSTER HEIGHTS ROAD
DANBURY, CONNECTICUT 06813-1911
------------------------
PROXY STATEMENT
------------------------
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 1, 1996
This proxy statement is furnished to the stockholders of First Brands
Corporation ('First Brands' or the 'Company') in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders to be held
November 1, 1996, and at all adjournments thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders. This proxy statement
and the enclosed form of proxy are first being mailed on or about September 30,
1996 to stockholders of record on September 6, 1996.
Whether or not you expect to be personally present at the meeting, you are
requested to fill in, sign, date and return the enclosed form of proxy. Any
person giving such proxy has the right to revoke it at any time before it is
voted by giving notice to the Secretary of the Company. All shares represented
by duly executed proxies in the accompanying form will be voted unless proxies
are revoked prior to the voting thereof.
The close of business on September 6, 1996, has been fixed as the record
date for the determination of stockholders entitled to vote at the Annual
Meeting of Stockholders. As of the record date, there were outstanding and
entitled to be voted at such meeting 41,095,094 shares of common stock. The
holders of the common stock will be entitled to one vote on each matter
submitted to stockholders for each share of common stock held of record on the
record date.
The Company's Annual Report for the fiscal year ended June 30, 1996
accompanies this Proxy Statement. The solicitation of this proxy is made by the
Board of Directors of the Company. The solicitation will be by mail and the
expense thereof will be paid by the Company. The Company has retained Morrow &
Co. Inc. to assist in the solicitation of proxies at an estimated cost of
$9,000. In addition, solicitation of proxies may be made by telephone or
telegram by directors, officers or regular employees of the Company.
A majority of the outstanding shares entitled to vote must be present in
person or represented by proxy at the Annual Meeting of Stockholders to
constitute a quorum. The shares represented by a proxy which is timely returned
and marked 'Abstain' as to any matter as well as broker non-votes will be
considered present at the Annual Meeting of Stockholders and will be included in
the calculation of those shares needed to constitute a quorum. The shares
represented by such proxies, although considered present for quorum purposes,
will not be considered present and entitled to vote with respect to any proposal
which is abstained from or to which the broker non-vote relates.
Directors of the Company are elected by a plurality of the votes cast at
the Annual Meeting of Stockholders if a quorum is present at such meeting. The
ratification of the appointment of independent auditors requires the approval of
a majority of the votes cast at the Annual Meeting of Stockholders, assuming
that a quorum is present. The affirmative vote of the holders of a majority of
the shares of common stock of the Company represented and voting at the annual
meeting is required for the approval of the proposed increase in authorized
common stock.
I. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes of membership, with
terms expiring on different Annual Meeting dates. Three or four of the members
of the Board of Directors are elected each year to serve as directors for a term
of three years or such lesser term as consistent with the class. Directors are
elected for the terms specified and continue in office until their respective
successors have been elected and have qualified.
The Board of Directors at its meeting held August 7, 1996, selected the
following three nominees for election at the Annual Meeting of Stockholders each
for three-year terms expiring on the date of
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the Annual Meeting of Stockholders in 1999 and until their successors are
elected and qualified: Alfred E. Dudley, James R. McManus and Thomas H. Rowland.
Certain information with respect to the nominees for election as director and
with respect to directors whose terms extend beyond the date of the Annual
Meeting of Stockholders is set forth below.
Should any one or more of the nominees be unable or unwilling to serve
(which is not expected) the proxies (except proxies marked to the contrary) may
be voted for such other person or persons as the Board of Directors of the
Company may recommend.
NOMINEES FOR ELECTION FOR TERM ENDING IN 1999
<TABLE>
<S> <C>
[Photo] ALFRED E. DUDLEY, Age 68 Director since 1986
CHAIRMAN
FIRST BRANDS CORPORATION
Committees: *Executive and Nominating
Mr. Dudley has been Chairman of the Company since 1986. He was President and
Chief Executive Officer of the Company from 1986 until September 1992 and
September 1994, respectively, when he relinquished those titles to Mr. W. V.
Stephenson.
[Photo] JAMES R. MCMANUS, Age 62 Director since 1986
CHAIRMAN, CEO AND FOUNDER
MARKETING CORPORATION OF AMERICA (MARKETING SERVICES)
DIRECTOR, AU BON PAIN CO. INC.
Committees: Compensation and Nominating
Mr. McManus has been Chairman and CEO of Marketing Corporation of America,
Westport, Connecticut (marketing consulting and marketing services) since
1971. On February 1, 1994, Mr. McManus resigned as President and Chief
Executive Officer of Business Express, Inc., a regional airline operating in
the Northeastern United States. On January 22, 1996, a petition for Chapter
XI Bankruptcy Protection was filed against Business Express, Inc. in Federal
Court in Manchester, New Hampshire by Saab Aircraft of America and two of its
operating subsidiaries.
[Photo] THOMAS H. ROWLAND, Age 51
EXECUTIVE VICE PRESIDENT
FIRST BRANDS CORPORATION
Mr. Rowland was elected Executive Vice President of the Company on August 11,
1992, and simultaneously was appointed President of the Home Products
Division. He was elected President of Himolene Incorporated, a wholly-owned
subsidiary of the Company on June 1, 1989, and continues to hold that title.
</TABLE>
2
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<TABLE>
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DIRECTORS CONTINUING IN OFFICE UNTIL 1997
[Photo] JAMES R. MAHER, Age 46 Director since 1988
PRESIDENT AND CEO
MAFCO CONSOLIDATED GROUP, INC. (DIVERSIFIED MANUFACTURER)
DIRECTOR
LABORATORY CORP. OF AMERICA (HEALTH SERVICES)
Committee: *Compensation
Mr. Maher has been President and Chief Executive Officer of MAFCO
Consolidated Group, Inc. (diversified manufacturer) since July, 1995. Mr.
Maher was Chairman of the Board of Laboratory Corporation of America (health
services) from April, 1995 to April 1996. He was President and Chief
Executive Officer of Laboratory Corporation of America from December, 1992 to
April 1995. Mr. Maher was Vice-Chairman of the First Boston Corporation
(financial services) from September, 1990 through June 30, 1992.
[Photo] DWIGHT C. MINTON, Age 61 Director since 1991
CHAIRMAN
CHURCH & DWIGHT CO., INC. (CONSUMER AND SPECIALTY PRODUCTS)
DIRECTOR, CRANE CO. AND MEDUSA CORPORATION
Committees: Audit and Pension
Mr. Minton is Chairman of Church & Dwight Co. Inc., manufacturers of ARM &
HAMMER'r' brand consumer and specialty products. On October 1, 1995 he
relinquished his position as President and Chief Executive Officer of Church
& Dwight Co., Inc. which he had held since January 1969.
[Photo] WILLIAM V. STEPHENSON, Age 55 Director since 1992
PRESIDENT AND CEO
FIRST BRANDS CORPORATION
Committees: Executive and Nominating
Mr. Stephenson has been President and Chief Executive Officer of the Company
since September 1, 1994. He was President and Chief Operating Officer from
August, 1992 to September, 1994. From October, 1991 to August, 1992 he was
Executive Vice President of the Company and President of the Home Products
Division. From January, 1990 through September, 1991 Mr. Stephenson was
Senior Vice President/General Manager, Home Products Division.
[Photo] ROBERT G. TOBIN, Age 58 Director since 1991
CHAIRMAN AND CEO
THE STOP & SHOP COMPANIES, INC. (RETAIL FOOD)
Committee: *Pension
Mr. Tobin has been Chairman and Chief Executive Officer of The Stop & Shop
Supermarket Companies, Inc. and The Stop & Shop Supermarket Company (retail
food) since January, 1995. He was President and Chief Executive Officer of
The Stop & Shop Supermarket Company from May, 1994 to January, 1995. He was
President and Chief Operating Officer of The Stop & Shop Companies, Inc. and
The Stop & Shop Supermarket Company a wholly-owned subsidiary, since March
1993 and November 1989, respectively.
</TABLE>
3
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DIRECTORS CONTINUING IN OFFICE UNTIL 1998
[Photo] DENIS NEWMAN, Age 66 Director since 1986
MANAGING DIRECTOR
MIDMARK MANAGEMENT, INC. (FINANCIAL SERVICES)
DIRECTOR, GMIS, INC.
Committees: *Audit and Executive
Mr. Newman has been Managing Director of MidMark Management, Inc. (financial
services) since December 1989. From April, 1988 until December, 1989, he was
President and a Director of the Dunmore Group, Inc., a merchant banking firm.
[Photo] ERVIN R. SHAMES, Age 56 Director since 1987
*CHAIRMAN
SELECT COMFORT CORPORATION (MATTRESS MANUFACTURER AND RETAILER)
VISITING LECTURER, UNIVERSITY OF VIRGINIA, DARDEN GRADUATE SCHOOL OF BUSINESS
Committees: Compensation and Nominating
Mr. Shames has been Chairman of Select Comfort Corporation (mattress
manufacturer and retailer) since April, 1996 and was appointed Visiting
Lecturer at the University of Virginia's Darden Graduate School of Business
in September, 1996. He was a private investor and consultant from January,
1995 to April, 1996. Mr. Shames was President and Chief Executive Officer of
Borden, Inc. (consumer products) from December, 1993 to January, 1995. Mr.
Shames was President and Chief Operating Officer of Borden, Inc. from July,
1993 to December, 1993. Mr. Shames was Chairman and Chief Executive Officer
of The Stride Rite Corporation (footwear manufacturer) from June, 1992 to
July, 1993, and President and Chief Executive Officer of The Stride Rite
Corporation from June, 1990 to June, 1992.
</TABLE>
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* Denotes Committee Chairman
------------------------
Alan C. Egler has been a Director of the Company since 1986, and was Vice
Chairman and a consultant to the Company from 1986 through 1991. He has decided
not to seek another term as a Director of the Company.
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BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table sets forth certain information concerning the
beneficial ownership of common stock by each stockholder who is known by the
Company to own beneficially in excess of 5% of the outstanding common stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- --------------------------------------------------------------- -------------------- ----------------
<S> <C> <C>
Harris Associates
2 North LaSalle Street
Chicago, IL 60602............................................ 6,170,086(a) 14.8%
Fidelity Management & Research Company
82 Devonshire
Boston, MA 02109............................................. 3,156,620(b) 7.7%
Ariel Capital Management, Inc.
307 North Michigan Avenue
Chicago, Illinois 60601...................................... 2,401,210(c) 5.8%
</TABLE>
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(a) Information concerning beneficial ownership by Harris Associates is based
on a report on Form 13F filed with the Securities and Exchange Commission
(the 'SEC') as of June 30, 1996. To the Company's knowledge, Harris &
Associates has not filed a Schedule 13D or Schedule 13G with respect to any
changes in their ownership of the Company's common stock.
(b) Information concerning beneficial ownership by Fidelity Management &
Research is based on a report on Form 13G filed with the SEC as of August
31, 1996. To the Company's knowledge, Fidelity Management & Research
Corporation has not filed a Schedule 13D with respect to their ownership of
the Company's common stock.
(c) Information concerning beneficial ownership by Ariel Capital Management,
Inc. is based on a report on Form 13G filed with the SEC as of August 31,
1996. To the Company's knowledge, Ariel Capital Management, Inc. has not
filed a Schedule 13D with respect to their ownership of the Company's
common stock.
------------------------
The following table sets forth certain information concerning the
beneficial ownership of common stock as of September 6, 1996 by each Director,
the Chief Executive Officer, and the four other named executive officers of the
Company and all Directors and Executive Officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(c)(d)(e) PERCENT OF CLASS
- ---------------------------------------------------- ----------------------------- ----------------
<S> <C> <C>
Alfred E. Dudley.................................... 442,000 1.08
James R. Maher...................................... 4,270 .01
James R. McManus.................................... 10,000 .02
Dwight C. Minton.................................... 6,000 .01
Denis Newman........................................ 90,684 .22
Ervin R. Shames..................................... 14,164 .03
Robert G. Tobin..................................... 6,000 .01
William V. Stephenson............................... 384,121 .93
Thomas H. Rowland................................... 181,098 .44
Donald A. DeSantis.................................. 185,146 .45
Mark E. Haglund..................................... 89,446 .22
Patrick J. O'Brien.................................. 97,802 .24
All Directors and Executive Officers as a group..... 1,774,252 4.32
</TABLE>
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(c) Under rules of the Securities and Exchange Commission, persons who have
power to vote or dispose of securities, either alone or jointly with others,
are deemed to be the beneficial owners of such securities. Accordingly,
shares owned separately by spouses are not included. Each nominee,
(footnotes continued on next page)
5
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(footnotes continued from previous page)
continuing director and officer has both sole voting power and sole
investment power with respect to the shares set forth in the table.
(d) No nominee, continuing director or officer is the beneficial owner of more
than 1.08% of the outstanding shares of First Brands common stock.
(e) Includes 164,000, 196,000, 171,000, 122,000, 86,250, 95,500 and 985,550
shares which respectively Alfred E. Dudley, William V. Stephenson, Thomas H.
Rowland, Donald A. DeSantis, Mark E. Haglund, Patrick J. O'Brien, and all
Directors and Executive Officers as a group, have a right to acquire within
60 days of September 6, 1996 upon the exercise of stock options. The shares
issuable upon exercise of options included herein were deemed to be
outstanding for purposes of calculating the percentages of shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any officer, director or owner of more
than 10% of the First Brands Common Stock who during the last fiscal year failed
to file timely with the Securities and Exchange Commission a required report
under Section 16(a) of the Securities Exchange Act of 1934 relating to
beneficial ownership of First Brands Common Stock. Based solely on a review of
information provided to the Company, all persons subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934 filed the
required reports on a timely basis for fiscal year 1996.
BOARD OF DIRECTORS AND COMMITTEES
There were six regular meetings of the Board of Directors during fiscal
1996. All of the incumbent directors attended at least 80% of the total number
of meetings of the Board and committees on which they served. Directors who are
employees of the Company do not receive any compensation for service as
directors. Mr. Dudley, who retired from the Company on September 1, 1994,
receives an annual retainer of $300,000 for services as Chairman of the Board of
Directors. Each other director is currently paid an annual retainer of $20,000
and fees of $1,000 for attendance at each Board or committee meeting not held in
conjunction with a Board meeting. Board members are paid $500 for attendance at
each telephonic meeting or committee meeting held in conjunction with a Board
meeting. Pursuant to a resolution adopted on September 6, 1991, these Directors
are reimbursed for reasonable expenses involved in attending Board and Committee
Meetings of the Company.
The members of the Board of Directors are elected to various committees.
The standing committees of the Board are: Audit Committee, Compensation
Committee, Executive Committee, Nominating Committee and Pension Committee.
The functions of the Audit Committee are to recommend the firm of
independent auditors to perform the annual audit; review and approve the scope
of the independent and internal auditors' work; review the effectiveness of the
Company's internal controls; review and approve the fees of the independent
auditors and related matters. The Audit Committee met once in fiscal 1996. The
members of the Audit Committee are Denis Newman, Chairman; Alan C. Egler and
Dwight C. Minton.
The functions of the Compensation Committee are to review and approve the
salaries of senior officers and managers of the Company; approve the amount
authorized for the Annual Incentive Plan; approve awards under and administer
the Company's Long-Term Incentive Plans; and review additional compensation
arrangements. The Compensation Committee met twice in fiscal 1996. The members
of the Compensation Committee are James R. Maher, Chairman; James R. McManus and
Ervin R. Shames.
The function of the Executive Committee is to act for the Board between
regular meetings to the extent permitted by the Delaware General Corporation Law
on matters that need timely attention. The Executive Committee did not meet in
fiscal 1996. The members of the Executive Committee are Alfred E. Dudley,
Chairman; Alan C. Egler, Denis Newman and William V. Stephenson.
6
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The functions of the Nominating Committee are to establish criteria for
Board membership, search for and screen candidates to fill vacancies on the
Board, recommend an appropriate slate of candidates for election each year,
assess the overall performance of the Board, and consider issues regarding the
composition, tenure and size of the Board. The Nominating Committee will
consider nominations by stockholders. Recommendations should be sent to the
Secretary at 83 Wooster Heights Road, Danbury, Connecticut 06813 no later than
May 5, 1997 with respect to the 1997 Annual Meeting of Stockholders and should
include the candidate's name and qualifications and a statement from the
candidate that he or she consents to being named in the Proxy Statement if
nominated and will serve if elected. The Committee, which was established at the
May 23, 1995 Board of Directors Meeting, met twice in fiscal 1996. The members
of the Nominating Committee are Alfred E. Dudley, James R. McManus, Ervin R.
Shames and William V. Stephenson.
The functions of the Pension Committee are to supervise the administration
of the Company's pension and savings plans; review the levels of funding and
allocation of funds invested in the plans; and review the performance of the
investments and investment managers against goals. The Pension Committee met
once in fiscal 1996. The members of the Pension Committee are Robert G. Tobin,
Chairman; and Dwight C. Minton.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board consists of three non-employee
directors who make decisions pertaining to executive compensation and benefits.
The Committee utilizes the services of an outside compensation consultant to
assist in making objective decisions based on data from consumer products
companies of similar size, some of which are in the peer group of companies
included in the stock performance graph. Additional similar data is provided by
the consultant as well as management.
COMPENSATION PHILOSOPHY
The Company's executive compensation program has three objectives:
1. To provide compensation that rewards executives for meeting and
exceeding internal performance goals and standards.
2. To maintain a compensation program that attracts and retains high
quality executives.
3. To create a link between the interests of the Company's
stockholders, the Company's financial performance and the total
compensation opportunities for its executive officers.
The executive compensation program consists of base salary, an annual cash
incentive plan, long-term stock option incentive plans, a non-qualified deferred
compensation plan, an executive life insurance plan, and qualified and
non-qualified retirement plans.
The Company maintains a benefit program that is competitive with other
consumer products companies of similar size. The program includes qualified
retirement, savings, and disability programs as well as medical, dental and
business travel insurance programs.
Base salaries are targeted slightly below the 50th percentile of
competitive salaries for executives of consumer products companies of similar
size. Salary ranges are established using published surveys and other external
data. Variation in compensation between individuals is based on position value,
experience level and performance against pre-established objectives. Individual
increases are typically given at twelve to sixteen month intervals, and the
amount is based on the individual's performance and place in the salary range.
Prior to approving individual increases, the Compensation Committee reviews each
senior executive's performance against previously established performance goals.
The Annual Incentive Plan provides for an annual cash award based on
attainment of operating income goals and the awards are targeted at slightly
above the 50th percentile for executives of consumer products companies of
similar size. The plan triggers if a pre-approved threshold is achieved.
Individual awards are determined by total corporate, business unit, and
individual performance levels. The performance level of the business unit is
measured on an unweighted basis by sales growth, market share, and operating
income. Individual performance goals are established for each senior executive
at the commencement of each year. The Compensation Committee approves the total
dollar pool available
7
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and the amount awarded to each senior executive participant. In respect of the
named executives in the Summary Compensation Table, the Compensation Committee
will also assess the Company's relative financial performance against peer
group consumer products companies considering such measures as earnings per
share growth, sales growth, improvement in return on equity and acquisition
success.
The Long Term Incentive Plans were established in 1989 and 1994. All option
shares available under the 1989 Long Term Incentive Plan have been granted. The
1989 plan provides for non-qualified stock options, limited stock appreciation
rights ('LSAR's') and restricted stock. LSAR's are exercisable only in change of
control situations. The 1994 Performance Stock Option and Incentive Plan
provides for stock options, LSAR's and restricted stock. Options may have an
exercise price of either 100 percent of the fair market value of the underlying
shares of common stock ('Market Priced Options') or more than 100% of such fair
market value ('Premium Priced Options'). Of the Market Priced Options, a portion
may vest as of specific dates and a portion may be subject to performance
vesting. At the time of the grant a 'trigger stock price' or other performance
criteria upon which the vesting of performance options will be based may be
established. These options will be exercisable at the earlier of the date that
the market price exceeds the trigger stock price or the ninth anniversary of the
grant. During fiscal year 1996, 637,000 options were granted and no restricted
stock has been granted under the 1994 Plan. The Compensation Committee approves
grants of a sufficient number and type of stock options to retain executives
based on its review of surveys of long-term incentive and long-term capital
accumulation plans available to similar positions at other consumer product
companies of similar size.
In addition to the qualified retirement plans, officers of the Company also
participate in a non-qualified retirement plan that alleviates the impact of tax
or legal restrictions imposed upon qualified plan limits when total compensation
is used in calculation of pension benefits.
The Company has established a non-qualified deferred compensation plan for
senior executives. This plan permits deferral of a portion of base salary and/or
annual incentive awards to a later date, normally until after retirement.
Interest on deferred compensation is based on 7-year U.S. Treasury Bond yields
plus a margin which is intended to approximate the margin First Brands would
incur if it were issuing a senior unsecured bond with a 7-year maturity. If the
participant defers salary or bonus for seven (7) or more years or until death,
disability or retirement, the interest on the deferred amount for the entire
period will be the Treasury Bond yield, plus the margin, plus 3%.
The Compensation Committee endorses the position that stock ownership by
management provides linkage in aligning management's and shareholder's interest
in enhancing shareholder value although the Committee does not set target
ownership levels for executive equity holdings. During the past fiscal year the
shareholders approved an amendment to the Annual Incentive Plan which permits
certain members of senior management to elect to receive all or a portion of
their annual incentive award in First Brands common stock instead of cash. Those
who elect stock instead of cash will receive a premium of 25% in stock thereby
encouraging management to increase stock ownership. The stock acquired under the
Annual Incentive Plan is restricted in its transferability or sale for a period
of two years from the date of issuance.
Section 162(m) of the Internal Revenue Code, enacted in 1993, limits the
tax deduction that corporations may take with respect to the compensation of
certain executive officers, unless the compensation is 'performance based' as
defined in the Code. The Committee believes that all compensation received by
the executive officers is performance based and in any event the deductibility
limits in the Code have not been reached. There is no loss of deduction for
fiscal year 1996.
RELATIONSHIP OF CORPORATE PERFORMANCE TO EXECUTIVE COMPENSATION
The Company has two types of executive compensation incentive plans, The
Annual Incentive Plan and the Long Term Incentive Plans (both previously
described), which reward executives based on the performance of the Company.
The Annual Incentive Plan provides compensation based on the attainment of
operating income objectives which are contained in the annual business plan. For
the named executives in the Summary Compensation Table, Company financial
performance relative to a peer group of companies is also considered in order to
validate incentive compensation in respect to these companies. The annual
8
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business plan is developed by Company management and approved by the Board of
Directors at the beginning of each fiscal year. The financial measures used to
validate incentive awards are approved by the Compensation Committee at the
beginning of each fiscal year.
The Long Term Incentive Plans use stock price appreciation as the incentive
to reward executives over the long term. Compensation gained as a result of this
program has a direct relationship to the gain achieved by investors in the
Company's stock.
1996 FISCAL YEAR COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Stephenson earned $379,167 in base salary during Fiscal Year 1996 and
received an annual incentive award of $300,000 for his overall performance for
the year. The Compensation Committee determined that these amounts were
justified when considering the company's financial performance for the fiscal
year as well as Mr. Stephenson's personal performance measured against
pre-determined measures including return on equity, sales growth, acquisition
success, market share, operating income, earnings per share growth and overall
management effectiveness. The committee also considered Mr. Stephenson's
compensation as compared to C.E.O.'s of the peer group of consumer products
companies that the company traditionally monitors. Mr. Stephenson's total cash
compensation (base salary and annual incentive) for fiscal year 1996 was 10.9%
higher than the preceding fiscal year.
COMPENSATION COMMITTEE
James R. Maher, Chairman
James R. McManus
Ervin R. Shames
9
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<PAGE>
SUMMARY COMPENSATION TABLE
Furnished below is a summary of the compensation paid and/or awarded to the
Chief Executive Officer and to each of the other four most highly compensated
executive officers of the Company for fiscal years 1994-1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
NAME AND --------------------------------- COMP.(1) ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OTHER(2) OPTIONS(#) COMPENSATION($)(3)
- ---------------------------------------- ---- --------- -------- -------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
William V. Stephenson .................. 1996 379,167 300,000 80,000 3,897
President and CEO 1995 312,500 300,000 100,000 5,175
1994 223,000 200,000 -- 5,018
Thomas H. Rowland ...................... 1996 195,030 120,000 48,000 27,273
Executive Vice President, Home 1995 184,535 120,000 60,000 4,251
Products 1994 164,000 80,000 -- 3,691
Donald A. DeSantis ..................... 1996 199,530 110,000 32,000 4,173
Senior Vice President 1995 188,160 120,000 40,000 4,262
CFO and Treasurer 1994 175,400 100,000 -- 3,947
Mark E. Haglund ........................ 1996 137,600 60,000 32,000 19,128
Vice President, 1995 113,483 75,000 40,000 2,985
President STP Products, Inc. 1994 101,200 45,000 -- 2,277
Patrick J. O'Brien ..................... 1996 137,600 60,000 32,000 15,378
Vice President, 1995 115,600 65,000 40,000 3,038
President A & M Products, Inc. 1994 110,137 60,000 -- 2,478
</TABLE>
- ------------
(1) There were 637,000 options granted under the 1994 Performance Stock Option
and Incentive Plan during 1996 fiscal year for executive officers and other
employees. All options under the 1989 Long Term Incentive Plan have
previously been granted. All options in this column have been adjusted to
reflect the February, 1996 stock split.
(2) Amounts under Other Annual Compensation are not shown since the value of
perquisites and other personal benefits does not exceed the lesser of
$50,000 or 10% of the total amount of annual salary and bonus for any named
individual.
(3) Compensation listed under 'all other compensation' is related to the
Company's employer match from the First Brands' savings plan. The total
amount of employer match for all executive officers for fiscal year 1996 is
$34,308. It also includes $22,500 for T.H. Rowland, $15,000 for M.E. Haglund
and $11,250 for P.J. O'Brien as a result of the premium they received by
electing to take First Brands stock rather than cash for all, or a portion,
of their 1996 fiscal year annual incentive award.
10
<PAGE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows the individual grant of non-qualified stock
options, pursuant to the 1994 Performance Stock Option and Incentive Plan, to
the Chief Executive Officer and the other named executive officers of the
Company for fiscal year 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES PRICE APPRECIATION
UNDERLYING % OF TOTAL FOR 10 YEAR OPTION
OPTIONS OPTIONS EXERCISE TERM
GRANTED GRANTED PRICE PER EXPIR. ----------------------
NAME (#)(3) IN FY 1996 SHARE($)(1) DATE 5%($)(2) 10%($)(2)
- ------------------------------------- ---------- ---------- ----------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
W.V. Stephenson...................... 80,000 12.5% 22.5313 11/05/05 1,133,600 2,872,800
T.H. Rowland......................... 48,000 7.5% 22.5313 11/05/05 680,160 1,723,680
D.A. DeSantis........................ 32,000 5.0% 22.5313 11/05/05 453,440 1,149,120
M.E. Haglund......................... 32,000 5.0% 22.5313 11/05/05 453,440 1,149,120
P.J. O'Brien......................... 32,000 5.0% 22.5313 11/05/05 453,440 1,149,120
</TABLE>
- ------------
(1) The exercise price was determined by averaging the high and low market price
on November 5, 1995, the day the options were granted.
(2) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's common stock over the full term of the
options.
The rates of appreciation are assumed rates established by the Securities
and Exchange Commission and are not intended as a forecast of future
appreciation. 5% annual appreciation results in a stock price appreciation
of $14.17 per share and 10% results in a stock price appreciation of $35.91
per share. The actual gain, if any, realized by the recipient will depend
upon the actual performance of the Company's common stock. There can be no
assurance that the amounts reflected in this table will be achieved.
(3) The exercise price of stock options is not less than the fair market value
of the Company's common stock on the date of grant; such stock options vest
over a period determined by the Compensation Committee. The stock options
granted in the fiscal year 1996 to the executive officers named above are
performance-based (using a trigger stock price in excess of $29.00 per
share) for all. LSAR's were granted in tandem with the stock option grants
to the named executive officers in amounts equal to the number of stock
options granted. LSAR's are exercisable only upon a change of control of the
Company. Upon exercise, the recipient would receive, in cancellation of the
underlying stock option, cash equal to the excess of the fair market value
of each share of common stock subject to the LSAR over the exercise price of
the underlying stock option. The Compensation Committee has discretion to
adjust the terms of outstanding awards, including the exercise price of
stock options, in the event of an extraordinary or unusual corporate event.
11
<PAGE>
<PAGE>
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table lists the shares acquired on exercise of options by the
Chief Executive Officer and the other named executive officers during the fiscal
year 1996 and certain information as to options unexercised at the end of fiscal
year 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR END FISCAL YEAR END(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W.V. Stephenson(2)........ 12,000 $164,500.00 196,000 80,000 $ 2,388,996 $ 357,496
T.H. Rowland(2)........... 11,000 $159,016.00 171,000 48,000 $ 2,119,683 $ 214,498
D.A. DeSantis............. -- -- 122,000 32,000 $ 1,602,622 $ 142,998
M.E. Haglund.............. -- -- 86,250 32,000 $ 1,091,124 $ 142,998
P.J. O'Brien.............. -- -- 95,500 32,000 $ 1,233,561 $ 142,998
</TABLE>
- ------------
(1) Values have been calculated based on the closing price of the Company's
common stock reported on the New York Stock Exchange Composite Tape on June
28, 1996, which was $27.00 per share.
(2) Options were exercised to acquire additional Company common stock.
RETIREMENT PLAN
First Brands currently maintains a non-contributory defined benefit
retirement plan (the 'Retirement Plan') covering 78% of all U.S. employees
including those of subsidiaries. The officers listed in the foregoing Summary
Compensation Table are covered by the Retirement Plan. Outside the United
States, certain of First Brands' subsidiaries have retirement programs that are
generally administered by trustees or insurance companies.
Under the Retirement Plan, the monthly amount of an employee's retirement
benefit upon retirement at age 65 is the greater of (a) 1.2% of average monthly
compensation received during the three year period preceding retirement, or 1.2%
of average monthly compensation received during the three best calendar years in
the final ten calendar years preceding retirement, if the latter average would
result in a higher pension benefit, multiplied by the number of years of
credited service plus $12 or (b) 1.5% of the average monthly compensation
computed as in (a) above, multiplied by the number of years of credited service,
less a percentage, based on service and not exceeding 50%, of the projected
primary Social Security benefit or such maximum percentage as is allowed under
the Internal Revenue Code. In January 1995, the Company announced a change in
this formula beginning January 2000, to a defined benefit based on years of
credited service and career average compensation.
An employee who is (i) age 62 or over with ten or more years of credited
service or (ii) whose age and years of credited service add up to 85, may
voluntarily retire earlier than age 65 with a retirement benefit, unreduced
because of early retirement. Employees may retire as early as age 50 with 10
years of credited service but will receive an actuarially reduced pension
benefit.
The amounts contributed by First Brands to the Retirement Plan are
calculated on a group basis that is actuarially determined. No specific amount
is set aside by First Brands for any individual officer or employee under the
Retirement Plan. The amounts shown in the following table are the estimated
annual retirement benefits payable at age 65 for the respective average annual
remuneration levels and years of service credit indicated. Actual benefits will
not exceed limits permitted under the Internal Revenue Code and applicable
regulations. Amounts shown are computed based upon straight life annuity amounts
and are reduced by 1.5% of the employee's primary Social Security benefit for
each year of the employee's credited service up to a maximum deduction of 50% of
such Social Security benefit. Annual retirement benefits are based on average
earnings.
For federal income tax purposes the amount of benefits that can be paid
from the qualified plan is restricted. First Brands maintains a nonqualified
plan ('Executive Retirement Plan') the effect of which is to award retirement
benefits to all employees on a uniform basis. The Executive Retirement Plan is
unfunded.
12
<PAGE>
<PAGE>
The Company also maintains a savings plan as part of its long term
retirement/savings program to which it contributes to the account of each
eligible employee who chooses to participate. Prior to January 1995, the Company
contributed 10, 20 or 30% of the first 7.5% of the amount contributed by the
employee in the form of basic deductions, depending upon length of service. Any
regular employee with one or more years of service was eligible to participate.
Effective January 1995, the Company contributes 50% of the first 6% of the
amount of employee basic 401(k) contributions. Any regular employee of First
Brands or its subsidiaries is eligible to participate. In fiscal year 1996, the
Company instituted a Profit Sharing contribution based on the Company's
operating performance. Profit Sharing will be contributed in shares of First
Brands common stock, allocated to separate employee 401(k) accounts based on
Company service credit.
As of June 30, 1996, the credited years of service (credited service is
combined from First Brands and Union Carbide Corporation) for the individuals
named in the Summary Compensation Table were as follows: William V. Stephenson,
32 years; Thomas H. Rowland, 22 years; Donald A. DeSantis, 10 years; Mark E.
Haglund 23 years; and Patrick J. O'Brien, 12 years.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
AT AGE 65 FOR YEARS OF SERVICE CREDIT
AVERAGE ANNUAL REMUNERATION --------------------------------------------------------
USED FOR CALCULATING RETIREMENT BENEFITS 25 30 35 40 45
- ------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000................................... $ 56,250 $ 67,500 $ 78,750 $ 90,000 $101,250
$200,000................................... 75,000 90,000 105,000 120,000 135,000
$250,000................................... 93,750 112,500 131,250 150,000 168,750
$300,000................................... 112,500 135,000 157,500 180,000 202,500
$350,000................................... 131,250 157,500 183,750 210,000 236,250
$400,000................................... 150,000 180,000 210,000 240,000 270,000
$450,000................................... 168,750 202,500 236,250 270,000 303,750
$500,000................................... 187,500 225,000 262,500 300,000 337,500
$550,000................................... 206,250 247,500 288,750 330,000 371,250
$600,000................................... 225,000 270,000 315,000 360,000 405,000
$700,000................................... 262,500 315,000 367,500 420,000 472,500
$800,000................................... 300,000 360,000 420,000 480,000 540,000
</TABLE>
SEVERANCE AGREEMENTS
The Company has also adopted an employment severance agreement with certain
management employees, including executive officers, generally providing
severance benefits if the employee is terminated for reasons other than 'cause'
within two years after a 'change in control.' The severance benefits include
cash payments equal to two year's salary and bonus, except for William V.
Stephenson, who would receive payments equal to three years salary and bonus,
and certain other employee and retirement benefits. Provision for a tax gross-up
payment is also included to cover excise taxes, if any, on payments paid under
these agreements.
13
<PAGE>
<PAGE>
FIVE YEAR STOCK PERFORMANCE GRAPH
The following table compares total shareholder returns for the Company to
the Standard & Poors 500 Stock Index ('S&P 500') and the Standard & Poors Midcap
400 Consumer Products Index ('S&P 400 CP')(1) for the five year period beginning
June 30, 1991 through the fiscal year end of June 30, 1996 (the 'Performance
Period'). Assuming $100 was invested on June 30, 1991 in the Company's common
stock and in each of the foregoing indices and reinvestment of dividends, if
any, on a quarterly basis, the total return for the Company's common stock
increased by 100% during the Performance Period as compared with total return
during the same period for the S&P 500 and S&P 400 CP of 108% and - 3%,
respectively. The corresponding compound annual growth rate for the Company's
stock was 14.9% for the five-year period.
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
below. The Company will not make or endorse any predictions as to the future
stock performance.
FIRST BRANDS CORPORATION
Total Return Performance
TOTAL SHAREHOLDER RETURNS
[GRAPH]
<TABLE>
<CAPTION>
COMPARISON SINCE JUNE 1991
6/91 6/92 6/93 6/94 6/95 6/96 CAGR(2)
<S> <C> <C> <C> <C> <C> <C> <C>
FBC 100 97 106 133 157 200 14.9%
S&P 500 100 113 129 131 165 208 15.7%
S&P 400
CP(1) 100 97 98 96 98 97 -.6%
</TABLE>
(1) The S&P Midcap 400 Consumer Products Index is comprised of the following
companies: Church & Dwight, A.T. Cross, First Brands, Gibson Greetings,
Lancaster Colony, National Presto, Stanhome, Tambrands, Perrigo and Carter
Wallace. First Brands has not been eliminated from this peer group for
purposes of this presentation.
(2) Compound Annual Growth Rate.
14
<PAGE>
<PAGE>
STOCK PERFORMANCE GRAPH SINCE DECEMBER 1989
The following table compares total shareholder returns for the Company to
the Standard & Poors 500 Stock Index ('S&P 500') and the Standard & Poors Midcap
400 Consumer Products Index ('S&P 400 CP')(1) for the six and a half year
period beginning on December 29, 1989, the end of the first month following the
Company's initial public offering ('IPO') through the fiscal year end of June
30, 1996. Assuming $100 was invested on December 29, 1989 in the Company's
common stock and in each of the foregoing indices and reinvestment of dividends,
if any, on a quarterly basis, the total return for the Company's common stock
increased by 199% as compared with total return during the same period for the
S&P 500 and S&P 400 CP of 129% and 28%, respectively. The corresponding compound
annual growth rate for the Company's stock was 18.3% for the six and a half
year period.
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
below. The Company will not make or endorse any predictions as to the future
stock performance.
FIRST BRANDS CORPORATION
Total Return Performance
TOTAL SHAREHOLDER RETURNS
[GRAPH]
<TABLE>
<CAPTION>
COMPARISON SINCE DECEMBER 1989
12/89 6/90 6/91 6/92 6/93 6/94 6/95 6/96 CAGR(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FBC 100 153.46 149.72 145.91 158.28 199.09 235.46 299.36 18.3%
S&P 500 100 103.09 110.72 125.57 142.68 144.69 182.41 229.83 13.6%
S&P 400
CP(1) 100 108.38 119.00 134.94 117.36 111.49 123.35 128.39 3.9%
</TABLE>
(1) The S&P Midcap 400 Consumer Products Index is comprised of the following
companies: Church & Dwight, A.T. Cross, First Brands, Gibson Greetings,
Lancaster Colony, National Presto, Stanhome, Tambrands, Perrigo and Carter
Wallace. First Brands has not been eliminated from this peer group for
purposes of this presentation.
(2) Compound Annual Growth Rate.
15
<PAGE>
<PAGE>
II. RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as the
independent auditors to examine the financial statements of the Company and its
consolidated subsidiaries for the fiscal year 1997. KPMG Peat Marwick LLP has
served First Brands in the capacity of independent auditors since its
incorporation in 1986.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting of Stockholders to answer any appropriate questions. They will have the
opportunity to make a statement if they so desire.
The Board of Directors recommends a vote FOR the appointment of KPMG Peat
Marwick LLP.
III. RATIFY THE INCREASE IN AUTHORIZED COMMON STOCK
Of the 50,000,000 shares of authorized Common Stock, after the Company's
two-for-one stock split effective February 5, 1996, there are 41,095,094 issued
and outstanding and 3,907,000 shares reserved for the Company's incentive stock
programs as of September 6, 1996. The increase in the Company's authorized
Common Stock proposed by the Board of Directors would be large enough to permit
the Company to effect additional stock splits or stock dividends in the future
if the Board determines at such time that such action would be in the best
interests of the Company. While the proposed amendment is intended to facilitate
such future stock splits or stock dividends, such shares could also be used for
other purposes such as future financing and acquisitions of property, including
stock or assets of other businesses that the Board determines to be in the best
interests of the Company. Although the Company considers potential acquisitions
from time to time, the Board has no present plans to use any of the authorized
unissued shares of the Company for such purpose. Additional shares could also be
used to render more difficult or discourage an attempt to obtain control of the
Company, although the Company is not aware of any pending or threatened efforts
to obtain control of the Company. The number of shares of Preferred Stock which
the Company is authorized to issue would be unchanged.
The additional shares of Common Stock for which authorization is sought
would be the same class as and identical to the shares of Common Stock the
Company now has authorized. Holders of Common Stock do not have preemptive
rights to subscribe to additional securities which may be issued by the Company.
The issuance of Common Stock otherwise than on a pro-rata basis to all current
stockholders would reduce the current stockholders' proportionate interests.
However, in any such event, stockholders wishing to maintain their interests may
be able to do so through normal market purchases.
The Board of Directors considers the amendment advisable to provide
flexibility for future stock splits, stock dividends, and other general
corporate purposes. Approval of this amendment by the stockholders at the Annual
Meeting would avoid the expensive procedure of calling and holding a special
meeting of stockholders for such a purpose at a later date.
This summary of the proposal is qualified in its entirety by reference to
the entire text of the amended Fourth Article of the Corporation's Restated
Certificate of Incorporation which is attached hereto as Exhibit I. Approval of
this Amendment to increase the Authorized Common Stock requires that the number
of shares voting in favor of this Amendment exceeds the number of shares voting
against this Amendment. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum exists but are not counted as voting
either for or against and therefore have no effect on the results of the vote.
The Board of Directors recommends a vote FOR the amendment to the fourth
Article of the Company's Certificate of Incorporation, to increase the Company's
authorized Common Stock from 50,000,000 to 120,000,000 shares.
16
<PAGE>
<PAGE>
IV. OTHER MATTERS
The Company knows of no other matters to come before the meeting. If any
other matters properly come before the meeting, the proxies solicited hereby
will be voted on such matter in accordance with the judgement of the persons
voting such proxies and will be determined by the vote of a majority of the
shares voting thereon at the meeting.
V. STOCKHOLDER PROPOSALS
Stockholders wishing to submit proposals for inclusion in the Board of
Directors' proxy material for the Annual Meeting of Stockholders tentatively
scheduled for October 31, 1997 should submit them in writing to the Secretary of
the Company, First Brands Corporation, 83 Wooster Heights Road, P.O. Box 1911,
Danbury, CT 06813-1911 no later than May 5, 1997.
17
<PAGE>
<PAGE>
EXHIBIT I
AMENDMENT TO
RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST BRANDS CORPORATION
FOURTH. The total number of shares of capital stock which the Corporation
shall have authority to issue is 130,000,000 consisting of 120,000,000 shares of
Common Stock, par value $0.01 per share ('Common Stock'), and 10,000,000 shares
of Preferred Stock ('Preferred Stock'), par value $1.00 per share.
<PAGE>
<PAGE>
[Logo]
<PAGE>
<PAGE>
PROXY
FIRST BRANDS CORPORATION
83 WOOSTER HEIGHTS ROAD
DANBURY, CT 06813-1911
[LOGO]
ANNUAL MEETING OF STOCKHOLDERS -- FRIDAY, NOVEMBER 1, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ALFRED E. DUDLEY and JOSEPH B. FUREY, and
each of them, with power of substitution, as proxies to represent the
undersigned at the Annual Meeting of Stockholders to be held at the Danbury
Hilton Hotel, 18 Old Ridgebury Road, Danbury, Connecticut on Friday, November 1,
1996 at 10:00 a.m., local time and at any adjournment thereof, and to vote the
shares of common stock the undersigned would be entitled to vote if personally
present, as indicated on the reverse side hereof.
THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED AS DIRECTED. IF NO
CONTRARY INSTRUCTION IS GIVEN, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR SET FORTH BELOW, FOR THE RATIFICATION OF KPMG PEAT MARWICK
LLP AS INDEPENDENT AUDITORS FOR FISCAL 1997, AND FOR THE RATIFICATION TO
INCREASE THE COMPANY'S AUTHORIZED COMMON STOCK FROM 50,000,000 TO 120,000,000
SHARES AND AT THE DISCRETION OF THE PROXY UPON SUCH OTHER BUSINESS, IF ANY, AS
MAY BE PROPERLY BROUGHT BEFORE THE MEETING.
PLEASE MARK BOXES [*] OR [x] IN BLUE OR BLACK INK.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote for all
indicated to the contrary below) [ ] nominees listed below [ ]
A.E. Dudley, J.R. McManus, T.H. Rowland
</TABLE>
(Continued and to be signed on the other side)
<PAGE>
<PAGE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
2. Proposal to ratify the selection of KPMG Peat 3. Proposal to ratify an increase in the Company's
Marwick, LLP as independent auditors for the authorized Common Stock from 50,000,000 to
fiscal year 1997. 120,000,000 shares.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
4. In their discretion, to vote upon such other
business, if any, as may be properly brought before
the meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
</TABLE>
If no direction is made, this proxy will be voted for Proposals 1, 2, 3, and 4.
Please sign exactly as
name appears below.
When shares are held by
joint tenants, both
should sign. When
signing as attorney, as
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.
Dated:..........., 1996
.......................
Signature
.......................
Signature if held
jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as 'r'
The section mark symbol shall be expressed as ss.
The solid square shall be expressed as [*]
