[TOPPS LOGO]
THE TOPPS COMPANY, INC.
-----
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 2000
-----
To the Stockholders of
THE TOPPS COMPANY, INC.
You are cordially invited to attend the annual meeting of stockholders (the
"Annual Meeting") of The Topps Company, Inc., a Delaware corporation (the
"Company"), which will be held at Chase Manhattan Bank, 55 Water Street, New
York, New York, on June 29, 2000 at 10:30 A.M., New York time, for the following
purposes:
1. To elect three directors to serve for three-year terms until the annual
meeting of stockholders to be held in the year 2003;
2. To ratify the appointment by the Board of Directors of Deloitte & Touche
LLP as independent auditors for the Company for the fiscal year ending
March 3, 2001; and
3. To transact such other business as may properly be brought before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on May 15, 2000 as
the record date for the determination of stockholders entitled to receive notice
of, and to vote at, the Annual Meeting and any adjournment or postponement
thereof.
By order of the Board of Directors,
Arthur T. Shorin
Chairman, President and
Chief Executive Officer
Dated: May 26, 2000
Whether or not you expect to be present at the Annual Meeting, please date and
sign the enclosed proxy and return it promptly in the enclosed envelope. In the
event you attend the Annual Meeting and vote in person, the proxy will not be
used.
<PAGE>
THE TOPPS COMPANY, INC.
One Whitehall Street
New York, New York 10004
PROXY STATEMENT
GENERAL
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of The Topps Company,
Inc. (the "Company") to be voted at the annual meeting of stockholders of the
Company (the "Annual Meeting") to be held at Chase Manhattan Bank, 55 Water
Street, New York, New York, on June 29, 2000 at 10:30 A.M., New York time, and
at any adjournment or postponement thereof. A copy of the Company's Annual
Report to Stockholders for the fiscal year ended February 26, 2000 is being
mailed to all stockholders with this Proxy Statement. The approximate mailing
date of this Proxy Statement is May 26, 2000.
Proxy Information
- -----------------
All proxies received pursuant to this solicitation will be voted, except as
to matters where authority to vote is specifically withheld. Where a choice is
specified as to the proposals described in the foregoing notice, they will be
voted in accordance with such specification. If no instructions are given, the
persons named in the proxy solicited by the Company's Board of Directors (the
"Board of Directors") intend to vote (i) for the nominees for election as
directors of the Company listed herein and (ii) for the ratification of the
appointment by the Board of Directors of Deloitte & Touche LLP as auditors for
the Company for the fiscal year ending March 3, 2001. If any other matter should
be presented at the Annual Meeting upon which a vote may properly be taken, the
shares represented by the proxy will be voted with respect thereto at the
discretion of the persons holding such proxy.
Stockholders who execute proxies may revoke them at any time before they
are voted by written notice to the Company, by submitting a new proxy or by
personal ballot at the Annual Meeting.
Record Date and Voting
- ----------------------
As of May 15, 2000, the Company had outstanding 45,373,233 shares of common
stock, par value $.01 per share ("Common Stock"), entitled to be voted at the
Annual Meeting, each share being entitled to one vote on each matter submitted
to a vote of stockholders. Only stockholders of record at the close of business
on May 15, 2000 will be entitled to vote at the Annual Meeting. The presence in
person or by proxy of holders of a majority of the issued and outstanding Common
Stock will constitute a quorum for the transaction of such business as may
properly come before the Annual Meeting. For purposes of determining whether a
proposal has received the required number of votes for approval, abstentions
will be included in the vote totals with the result that an abstention has the
same effect as a negative vote. In instances where nominee recordholders, such
as brokers, are prohibited from exercising discretionary authority for
beneficial owners who have not returned a proxy ("broker non-votes"), those
shares of Common Stock will not be included in the vote totals and, therefore,
will have no effect on the vote. If a quorum should not be present, the Annual
Meeting may be adjourned from time to time until a quorum is obtained.
Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------
The following table sets forth information available to the Company as to
shares of Common Stock owned as of May 15, 2000 by (i) each person known to the
Company to be the beneficial owner of more than five percent of the outstanding
Common Stock, (ii) each director and nominee for election as a director, (iii)
each person designated in the section of this Proxy Statement captioned
"Executive Compensation" and (iv) all directors and executive officers as a
group. Except as otherwise indicated, each person named below has sole
investment and voting power with respect to the shares of Common Stock shown.
<PAGE>
<TABLE>
<CAPTION>
Name of Amount and Nature Percent of Shares
Beneficial Owner of Beneficial Ownership Outstanding
---------------- ----------------------- -----------------
<S> <C> <C>
Arthur T Shorin(1)(2)(3) ................... 3,115,655 6.7%
Ronald L. Boyum(3) ......................... 203,833 *
Michael Drewniak(3) ........................ 196,333 *
Allan A. Feder(2)(4) ....................... 136,000 *
Ira Freidman(3) ............................ 160,916 *
Stephen D. Greenberg(4) .................... 146,000 *
Ann Kirschner(4) ........................... 17,000 *
Wm. Brian Little(4) ........................ 912,914 2.0
David M. Mauer(4) .......................... 84,000 *
Jack H. Nusbaum(4).......................... 123,000 *
John Perillo(3) ............................ 218,333 *
Richard Tarlow(4) .......................... 117,000 *
Stanley Tulchin(4) ......................... 140,175 *
All directors and executive officers
as a group (18 persons)..................... 6,689,667 13.9
</TABLE>
____________________
*less than 1.0%
(1) Mr. Shorin is a director and an executive officer.
(2) Does not include 50,000 and 1,378 shares of Common Stock owned by immediate
family members of each of Messrs. Shorin and Feder, respectively. Messrs.
Shorin and Feder disclaim beneficial ownership of such shares.
(3) With respect to 849,166 shares of Common Stock beneficially owned by Mr.
Shorin, 193,833 shares of Common Stock beneficially owned by Mr. Boyum,
196,333 shares of Common Stock beneficially owned by Mr. Drewniak, 143,500
shares of Common Stock beneficially owned by Mr.Friedman and 145,000 shares
of Common Stock beneficially owned by Mr. Perillo, each of Messrs. Shorin,
Boyum, Drewniak, Friedman, and Perillo has the right to acquire such shares
upon the exercise of options.
(4) With respect to 86,000 shares of Common Stock beneficially owned by Mr.
Feder, 76,000 shares of Common Stock beneficially owned by Mr. Greenberg,
48,000 shares of Common Stock beneficially owned by Mr. Little, 17,000
shares of Common Stock beneficially owned by Ms. Kirschner, 69,000 shares
of Common Stock beneficially owned by Mr. Mauer, 79,000 shares of Common
Stock beneficially owned by Mr. Nusbaum, 117,000 shares of Common Stock
beneficially owned by Mr.Tarlow, 65,000 shares of Common Stock beneficially
owned by Mr. Tulchin, each of Messrs. Feder, Greenberg, Little, Mauer,
Nusbaum, Tarlow, Tulchin and Ms. Kirschner has the right to acquire such
shares upon the exercise of options.
<PAGE>
ELECTION OF DIRECTORS
There are currently nine members of the Board of Directors which is divided
into three classes (each with three members), with each class serving for a
period of three years. One class of directors is elected by the stockholders
annually. This year, Messrs. Arthur T. Shorin, Stanley Tulchin and Wm. Brian
Little have been nominated to stand for re-election for a term that expires at
the annual meeting of stockholders to be held in the year 2003.
Directors will be elected by the plurality vote of the holders of Common
Stock entitled to vote at the Annual Meeting and present in person or by proxy.
It is the intention of the persons named in the enclosed proxy to vote, unless
otherwise indicated, for the election as directors of the persons nominated in
the table below.
Should any one or more of these nominees become unable to serve for any
reason or, for good cause, will not serve, which is not anticipated, the Board
of Directors may, unless the Board of Directors by resolution provides for a
lesser number of directors, designate substitute nominees, in which event the
persons named in the enclosed proxy will vote for the election of such
substitute nominee or nominees.
The following table sets forth the name, age and principal business
experience during the past five years of each director of the Company.
<TABLE>
<CAPTION>
Business Experience Director of the
During Past 5 Years, Company or its
Name Age and Other Information Predecessors Since
---- ------------------------- ------------------
Nominees to Serve in Office
Until 2003
<S> <C> <C>
Arthur T. Shorin................... Chairman of the Board and Chief Executive Officer 1960
of the Company and its predecessor since 1980.
Mr. Shorin was appointed the President of the
Company in November 1997. Mr. Shorin is 64
years of age.
Wm. Brian Little.................... Private Investor since January 1995. Special 1984
Limited Partner of FLC Partnership, the General
Partner of Forstmann Little & Co., January 1994
to December 1994. Mr. Little was a General
Partner of FLC Partnership from 1978, when he
co-founded Forstmann Little & Co., until January
1994. Mr. Little is also a director of Aldila,
Inc., Department 56, Inc. and Screaming
Media.com, Inc. Mr. Little is 58 years of age.
Stanley Tulchin..................... Chairman of Stanley Tulchin Associates, Inc. (a 1987
commercial collection agency) since 1955. Mr.
Tulchin is also Chairman and Chief Executive
Officer of Reprise Capital Corporation (a
venture capital fund) for more than the past
five years. Mr. Tulchin is 73 years of age.
<PAGE>
Business Experience Director of the
During Past 5 Years, Company or its
Name Age and Other Information Predecessors Since
---- ------------------------- ------------------
Directors to Continue in Office
Until 2001
Allan A. Feder............... An independent business consultant for more than 1992
the past five years and Chief Executive Officer
of Vitarroz Corporation (a proprietary brand
food company) from 1988 to 1999. Mr. Feder is
also a director of Edward Don & Co., Inc. Mr.
Feder is 68 years of age.
David M. Mauer...................... Chief Executive Officer and President of Riddell 1996
Sports Inc. (marketer and distributor of
sporting goods and school spirit products and
services) since 1993. Mr. Mauer was President
of Mattel U.S.A. from late 1990 through the
beginning of 1993 and was President of Tonka
U.S.A. Toy Group from 1988 until 1990. Mr.
Mauer is also a director of the National Center
for Missing and Exploited Children. Mr. Mauer
is 51 years of age.
Jack H. Nusbaum..................... Co-Chairman of the New York law firm of Willkie Farr 1992
& Gallagher and a partner in that firm for more
than twenty-five years. Mr. Nusbaum is also a
director of W. R. Berkley Corporation; Neuberger
Berman, Inc.; Pioneer Companies, Inc.; Prime
Hospitality Corp.; Strategic Distribution, Inc.;
and Hirschl & Adler Galleries, Inc. Mr. Nusbaum
is 59 years of age.
Directors to Continue in Office
Until 2002
Stephen D. Greenberg............... Chairman of Fusient Media Ventures, Inc. since 1993
January 2000. Private Investor from January
1999 to December 1999. President of Classic
Sports Network, Inc. from November 1993 through
December 1998. Mr. Greenberg is 51 years of age.
Ann Kirschner...................... Chief Executive Officer and President of FATHOM (the 1999
first interactive knowledge network) since March
1999. Ms. Kirschner was Vice President of
Programming and Media Development for the
National Football League from November 1994
through January 1999. Ms. Kirschner is also a
director of Onhealth.com, Inc. Ms. Kirschner is
49 years of age.
Richard Tarlow..................... President of Tarlow Advertising, a division of 1999
Revlon Inc., since 1987 and Executive Vice
President of Revlon Inc. since 1988. Mr. Tarlow
is also Chairman of Carlson & Partners since
1988. Mr. Tarlow is 58 years of age.
</TABLE>
<PAGE>
The Board of Directors met four times during the fiscal year ended February
26, 2000. Each of the directors who served during such period attended at least
75% of the aggregate number of meetings of the Board of Directors and any
committee of which they were members during such period.
The Company has a Compensation Committee responsible for recommending
officers' remuneration and administering The Topps Company, Inc. 1996 Stock
Option Plan and the 1987 Stock Option Plan. The members of the Compensation
Committee for the fiscal year ended February 26, 2000 were Messrs. Wm. Brian
Little and Stanley Tulchin, neither of whom is an employee of the Company. The
Compensation Committee held nine meetings during the fiscal year ended February
26, 2000.
The Company has an Audit Committee which makes recommendations regarding
the appointment of independent certified public accountants, monitors their
performance, reviews all reports submitted by them and consults with them with
regard to the adequacy of internal controls. The members of such committee for
the fiscal year ended February 26, 2000 were Messrs. Allan A. Feder, Stephen D.
Greenberg, David M. Mauer and Stanley Tulchin. During the fiscal year ended
February 26, 2000, there were two meetings of the Audit Committee. None of the
members of the Audit Committee are employees of the Company.
The Company does not have a nominating committee.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
The Company's executive officers, directors and ten percent stockholders
are required under the Securities Exchange Act of 1934, as amended, to file
reports of ownership and changes in ownership with the SEC. Based solely upon
its review of the copies of reports furnished to the Company through the date
hereof, or written representations that no reports were required to be filed,
the Company believes that all filing requirements applicable to its executive
officers, directors and ten percent stockholders were complied with during the
fiscal year ended February 26, 2000.
Compensation of Directors
- -------------------------
For the fiscal year ended February 26, 2000, pursuant to the Amended and
Restated 1994 Non-Employee Director Stock Option Plan, each of Messrs Allan A.
Feder, Stephen D. Greenberg, Wm. Brian Little, David M. Mauer, Jack H. Nusbaum
and Stanley Tulchin, none of whom is an employee of the Company, received
options to purchase 17,000 shares of Common Stock at a price of $7.00 per share.
These options become exercisable on June 28, 2000 and have a term of ten years
from the date of grant.
Upon their appointment to the Board on October 6, 1999, Ms. Ann Kirschner
and Mr. Richard Tarlow, neither of whom is an employee of the Company, received
options to purchase 17,000 shares of Common Stock at a price of $7.50 per share.
These options become exercisable on June 28, 2000 and have a term of ten years
from the date of grant.
Directors who are also officers of the Company are not compensated for
their duties as a director.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth for each of the last three fiscal years
information regarding the compensation of (i) the Company's Chief Executive
Officer, (ii) the four other most highly compensated persons who were executive
officers at the end of the fiscal year ended February 26, 2000 and (iii) any
other person who would have been among the four other most highly compensated
but was not an executive officer at the end of the last fiscal year (each, a
"Named Executive Officer").
<TABLE>
<CAPTION>
Summary Compensation Table(1)
-----------------------------
Annual Compensation Long Term
------------------- ---------
Securities
Fiscal Underlying
Name and Year Salary Bonus Options/
Principal Position Ended ($) ($) SARs(#)
- ------------------ ------ ------ ----- ----------
<S> <C> <C> <C> <C>
Arthur T. Shorin....... 2000 $822,269 $493,361 250,000
Chairman, President 1999 614,115(3) 493,361 36,500
and Chief Executive 1998 784,423(3) 246,000(4)
Officer(2)
Ronald L. Boyum........ 2000 263,539 158,123 35,000
Vice President - 1999 253,846 152,307 25,000
Marketing and Sales 1998 249,159 35,000
John Perillo........... 2000 227,385 136,431 25,000
Vice President - 1999 163,077(3) 128,308 20,000
Operations 1998 199,843(3) 95,000(4)
Michael J. Drewniak 2000 215,769 129,461 20,000
Vice President - 1999 153,847(3) 122,769 12,000
Manufacturing 1998 198,461(3) 80,000(4)
Ira Friedman........... 2000 210,507 126,304 30,000
Vice President - 1999 172,123(3) 118,574 17,500
Publishing and 1998 185,699(3) 38,500(4)
New Product Development
- -----------------------
(1) Because none of the Named Executive Officers received (a) perquisites and
other personal benefits (including, for certain of the Named Executive
Officers, medical reimbursements, moving expenses and car use allowances)
in excess of the lesser of $50,000 or 10% of such officer's annual salary
and bonus, (b) any other compensation required to be reported or (c) any
restricted stock awards, information relating to "Other Annual
Compensation", "Restricted Stock Awards" and "LTIP Payouts" is inapplicable
and has therefore been omitted from the table.
(2) Mr. Shorin assumed the title of President on November 14, 1997.
(3) For calendar year 1998, as part of the Company's initiative to reduce
costs, all officers of the Company were given the right to elect to receive
stock options in lieu of up to 30% of their base salary, at the rate of one
stock option to purchase one share of Common Stock for every dollar of
salary waived. These options were issued pursuant to the Company's 1996
Stock Option Plan. The options have a term of ten years and become
exercisable in equal annual installments over two years from date of grant.
In accordance with the 1996 Stock Option Plan, the exercise price of each
stock option granted was equal to the closing price of the Common Stock on
the date prior to the date of the grant, which was $2.2187 per share.
Messrs. Shorin, Perillo, Drewniak, and Friedman, among others, elected to
waive a portion of their salary in exchange for these stock options.
(4) During the 1998 fiscal year, all of the options granted to Mr. Shorin,
60,000 of the options granted to Messrs. Perillo and Drewniak and 28,500 of
the options granted to Mr. Friedman were granted in exchange for a waiver
of salary. See footnote 3 above.
</TABLE>
<PAGE>
Option/SAR Grants in Last Fiscal Year
The following table sets forth information regarding grants of stock
options made during the fiscal year ended February 26, 2000 to each of the Named
Executive Officers. There were no stock appreciation rights granted in the last
fiscal year to the Named Executive Officers.
<TABLE>
<CAPTION>
Potential Realized Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term (1)
- -------------------------------------------------------------------------------- --------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Number of Options
Securities Granted to Exercise or
Underlying Options Employees in Base Price Expiration
Name Granted (2) Fiscal Year ($/Sh) Date 5% 10%
---- ------------------ ------------ ----------- ---------- -- --
<S> <C> <C> <C> <C> <C> <C>
Arthur T. Shorin . 250,000(3) 27.89% $ 4.3750 3/1/2009 $ 687,583 $1,743,156
Ronald L. Boyum .. 25,000(4) 2.79 4.5625 3/16/2009 73,008 183,816
7,296(5) 0.81 7.3125 9/24/2009 36,155 89,160
2,704(5) 0.30 7.3125 9/24/2009 13,400 33,063
John Perillo ..... 15,000(4) 1.67 4.5625 3/16/2009 43,805 110,290
8,375(5) 0.93 7.3125 9/24/2009 41,500 102,363
1,625(5) 0.18 7.3125 9/24/2009 8,055 19,860
Michael Drewniak . 10,000(4) 1.12 4.5625 3/16/2009 29,203 73,526
10,000(5) 1.12 7.3125 9/24/2009 49,555 122,223
Ira Friedman...... 20,000(4) 7.04 4.5625 3/16/2009 58,406 147,053
10,000(5) 1.12 7.3125 9/24/2009 49,555 122,223
</TABLE>
_____________________
(1) Grant date fair market value is based on the closing price of the Common
Stock on the immediately preceding date.
(2) All grants consisted of options that were granted under the 1996 Stock
Option Plan.
(3) The options to acquire shares of Common Stock were granted on March 1,
1999. One-third became exercisable upon grant, one-third became exercisable
on March 1, 2000 and the remainder will become exercisable on March 1,
2001.
(4) The options to acquire shares of Common Stock were granted on March 16,
1999. One-third became exercisable on March 16, 2000 and the remainder will
become exercisable on March 16, 2001.
(5) The options to acquire shares of Common Stock were granted on September 24,
1999 and will become exercisable in two equal installments on September 24,
2000 and September 24, 2001.
<PAGE>
Aggregate Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
The following table provides information regarding the exercise of
options/SARs during the fiscal year ended February 26, 2000 and the number and
value of unexercised options and SARs held at fiscal year end by each of the
Named Executive Officers.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End at FY-End ($)
------------------------ --------------------------
Shares Acquired Value
on Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
--------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Arthur T. Shorin 0 0 747,583 184,917 $1,617,909* $ 589,213*
Ronald L. Boyum 0 0 181,333 59,167 212,052 173,729
John Perillo ... 33,333 165,623 160,000 46,667 363,326* 134,191*
Michael Drewniak 0 0 191,333 32,667 441,323* 82,559*
Ira Friedman ... 0 0 171,416 42,084 245,039* 109,841*
</TABLE>
*The value does not reflect the fact that certain of these options were granted,
during calendar year 1998, in exchange for a salary waiver, at the rate of one
option for each dollar of salary waived. Giving effect to this salary waiver
would reduce the value of unexercised in-the-money options.
___________________
<PAGE>
Pension Benefits
- ----------------
The Company maintains a tax qualified non-contributory defined benefit
pension plan for its eligible employees (the "Retirement Plan"). The Summary
Compensation Table contained in this Proxy Statement does not include the
benefit accruals in respect of the Named Executive Officers under the Retirement
Plan. The estimated annual pension benefits under the Retirement Plan, assuming
retirement at age 65, at various levels of compensation and years of credited
service are illustrated by the following table:
<TABLE>
<CAPTION>
Annual Retirement Benefit for Specified
Years of Credited Service(1)(2)
Highest Average
Compensation(3) 15 20 25 30 35 40 50
___________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
$ 125,000........... $ 26,115 $ 35,656 $ 45,694 $ 55,811 $ 57,102 $ 58,635 $61,760
$ 160,000........... $ 34,865 $ 47,322 $ 60,278 $ 73,312 $ 75,010 $ 77,010 $81,010
$ 175,000........... $ 38,615 $ 52,323 $ 66,528 $ 80,812 $ 82,727 $ 84,885 $89,260
$ 200,000........... $ 44,865 $ 60,656 $ 76,945 $ 93,312 $ 95,540 $ 98,010 $103,010
$ 225,000........... $ 51,115 $ 68,990 $ 87,362 $105,812 $108,352 $111,135 $116,760
$ 250,000........... $ 57,365 $ 77,323 $ 97,779 $118,313 $121,165 $124,260 $130,510
$ 300,000........... $ 69,866 $ 93,990 $118,613 $143,313 $146,790 $150,510 $158,010
$ 400,000........... $ 94,866 $127,324 $160,280 $193,314 $198,040 $203,010 $213,010
$ 450,000........... $107,366 $143,991 $181,114 $218,315 $223,665 $229,260 $240,510
$ 500,000........... $119,867 $160,658 $201,948 $243,315 $249,290 $255,510 $268,010
$ 600,000........... $144,867 $193,992 $243,615 $293,316 $300,540 $308,010 $323,010
$ 800,000........... $194,868 $260,660 $326,950 $393,318 $403,040 $413,010 $433,010
$1,000,000........... $244,869 $327,328 $410,285 $493,320 $505,540 $518,010 $543,010
</TABLE>
________________
(1) These are hypothetical benefits based upon the Retirement Plan's normal
retirement benefit formula. The maximum annual benefit permitted under
Section 415 of the Internal Revenue Code of 1986, as amended (the "Code"),
is generally limited to $135,000 at present and will be adjusted to reflect
cost-of-living increases in 2001 and succeeding plan years.
(2) This table includes supplemental pension benefits payable to Mr. Shorin in
excess of the limitations on compensation and benefits under the Code and
other applicable laws, pursuant to an agreement entered into on May 19,
1986 and amended May 18, 1994 (the "Supplemental Pension Agreement"). These
benefits are computed in accordance with the same formula provided under
the Retirement Plan without regard to the aforementioned limitations.
However, compensation attributable to stock appreciation rights and stock
options is not taken into account in determining highest average
compensation for purposes of the Supplemental Pension Agreement.
(3) The benefits shown corresponding to these compensation ranges are
hypothetical benefits based upon the Retirement Plan's normal retirement
benefit formula. Under Section 401(a)(17) of the Code, compensation in
excess of $170,000 (as adjusted to reflect cost-of-living increases) is
disregarded for purposes of determining highest average compensation of
participants in the Retirement Plan for 2000. Benefits accrued as of the
last day of the plan year beginning in 1993 on the basis of compensation in
excess of the applicable dollar limit are preserved. The $170,000 limit
will be adjusted for cost-of-living increases in 2001 and succeeding plan
years.
<PAGE>
The normal retirement benefit under the Retirement Plan is payable in the
form of a "straight life" annuity and is equal to the greater of (i) 1.667% of a
participant's highest average W-2 compensation multiplied by the participant's
years of credited service not in excess of 30 years, plus .25% of the
participant's highest average compensation multiplied by the participant's years
of credited service in excess of 30 years, reduced by 50% of the participant's
estimated primary Social Security benefit determined on the basis of the
participant's earnings from the Company, or (ii) $204 multiplied by the
participant's years of credited service not in excess of 20 years, plus $144
multiplied by the participant's credited service in excess of 20 years (but not
to exceed 10 additional years). The "highest average compensation" for purposes
of determining the normal retirement benefit is equal to 1/5 of the total
compensation that is paid to a participant by the Company for the 60
consecutive-month period in which the participant's compensation was greatest
during the 120-month period prior to the participant's retirement or termination
of employment. Subject to the $170,000 compensation limit in the case of an
executive officer other than Mr. Shorin, such compensation includes all
compensation reflected in the Summary Compensation Table to the extent included
in gross income for the applicable base years, except for income attributable to
reimbursement of moving expenses.
As of March 1, 2000, the persons named in the Summary Compensation Table
were credited with the following years of service: Mr. Shorin - 41, Mr. Boyum -
10, Mr. Drewniak - 28, Mr. Perillo - 22, Mr. Friedman - 11.
Employment Agreements
- ---------------------
Effective March 1, 1999, the Company entered into an amended and restated
employment agreement (the "Agreement") with Arthur T. Shorin, Chairman of the
Board, President and Chief Executive Officer. The Agreement provides for a
three-year term ending on March 2, 2002. The Agreement continues the same annual
base salary of $822,269 subject to an increase at the discretion of the
Compensation Committee. Mr. Shorin's agreement provides for an annual target
bonus opportunity which is not less favorable than that provided for other
executive officers of the Company. During calendar year 1998, Mr. Shorin agreed
to waive $246,000 of salary in exchange for options to purchase 246,000 shares
of common stock. See "Summary Compensation Table".
If Mr. Shorin is terminated without "Cause" or resigns for "Good Reason"
(as defined in the Agreement), a lump sum severance payment will be made as
liquidated damages equal to three times Mr. Shorin's base salary plus his
highest annual bonus paid for the three fiscal years ended prior to the date of
termination. Unvested stock options vest and remain exercisable in accordance
with their terms.
The Agreement also requires that, in the event any payments made upon
termination of employment are treated as "parachute payments" subject to excise
taxes under federal tax law, the Company will make an additional payment to the
applicable tax authorities on behalf of Mr. Shorin so that his after-tax
position is the same as if the payments were not subject to an excise tax.
Mr. Shorin's Agreement also requires the Company to make annual
contributions, to an irrevocable Company trust account, of assets equal to the
present value of the supplemental pension benefits which accrue during each
fiscal year for Mr. Shorin under his Supplemental Pension Agreement. In the
event of a termination without Cause or for Good Reason, the Agreement also
counts severance compensation paid to Mr. Shorin in determining highest average
compensation and credits Mr. Shorin with three additional years of service for
pension purposes.
If Mr. Shorin works until the end of the term and is not offered a two-year
extension on equivalent terms with a minimum base salary adjustment for
increases in the cost of living since March 1, 1999 and a $500,000 signing bonus
(in lieu of an option grant), he will receive, for two years from March 2, 2002,
continued base salary and annual bonus equal to the highest annual bonus paid
with respect to the three fiscal years prior to termination, at the same time as
such compensation would otherwise have been paid. If an offer meeting the
foregoing terms is made and Mr. Shorin elects to retire at the end of the term,
Mr. Shorin will receive the severance compensation outlined above for one year
instead of two.
<PAGE>
Report of the Compensation Committee on Executive Compensation
The Compensation Committee is responsible for setting the Company's
compensation objectives and policies. It regularly approves compensation plans
and sets specific compensation levels for all executive officers. In addition,
the Compensation Committee administers the Company's 1996 Stock Option Plan (the
"Option Plan") and determines the degree and extent of awards granted
thereunder.
Compensation Policy
- -------------------
The Compensation Committee seeks to provide a total compensation package
that is competitive and intended to retain and motivate the Company's executive
officers. In structuring the compensation package for executive officers, the
Committee seeks to provide financial incentives tied to the achievement of the
Company's short-term and long-term business objectives and intended to enhance
stockholder value.
Base Salary
- -----------
In setting base salary for the executive officers for fiscal 2000, the
Compensation Committee considered the base salary levels of executives with
similar responsibilities in companies of similar size, business and complexity.
The Committee also considered each executive officer's experience in his
position at the Company and his actual performance over the prior fiscal year.
Based on the above criteria, the Compensation Committee made subjective
determinations with respect to the compensation of all of the Company's
executive officers other than Mr. Shorin (whose compensation was governed by an
Employment Agreement).
Bonus Awards
- ------------
For fiscal 2000, bonuses were intended to reward achievements by the
executive officers and were contingent upon the Company's financial performance
during the year. The Company's Bonus Plan for fiscal 2000 was structured to
reward executive officers for increases in the Company's operating profits.
Bonus levels for fiscal 2000 were set by the Compensation Committee after
consideration of bonus levels for executives with similar responsibilities in
companies of similar size, business and complexity. Bonus payments for fiscal
2000 reflected attainment of the maximum earnings objectives for all executive
officers.
Stock Option Awards
- -------------------
Long-term incentive compensation opportunities are provided through grants
of stock options under the Option Plan. All options granted under the Option
Plan have exercise prices which are at least equal to the fair market value of
the Common Stock on the date of grant so as to directly align such incentive
compensation with an increase in stockholder value. In continuing its practice
of making discretionary grants of stock options to the Company's executive
officers and taking into consideration each executive officer's experience and
seniority within the Company, the Compensation Committee made grants of stock
options to certain executive officers of the Company on a subjective basis
during fiscal 2000.
Chief Executive Officer
- -----------------------
During fiscal 2000, in light of Mr. Shorin's previous waiver of salary
increases and the Company's increased performance, the Compensation Committee
agreed to an amendment to Mr. Shorin's employment agreement. While the base
salary remains the same, certain other terms were changed as discussed under the
caption "Employment Agreement."
Mr. Shorin's bonus for fiscal 2000 was determined entirely by reference to
uniform, preestablished earnings targets that were developed for all senior
executives at the beginning of the fiscal year. These targets were fully
attained.
<PAGE>
Section 162(m)
- --------------
Section 162(m) of the Code generally disallows a tax deduction to public
companies for annual compensation over $1 million paid to each of the Company's
Chief Executive Officer and four other most highly compensated executive
officers, except to the extent such compensation qualifies as
"performance-based." With one limited exception, none of the Named Executive
Officers has received compensation in excess of the Section 162(m) limits and
all such compensation has been fully deductible by the Company. While the
Committee's policy has always been to pursue a strategy of maximizing
deductibility of compensation for the Named Executive Officers, it also believes
it is important to maintain the flexibility to take actions it considers in the
best interests of the Company and its stockholders, which are necessarily based
on considerations in addition to Section 162(m).
The Compensation Committee:
Wm. Brian Little
Stanley Tulchin
CERTAIN RELATIONSHIPS
Jack H. Nusbaum, a director, is a partner in the law firm of Willkie Farr &
Gallagher, outside counsel to the Company. Richard Tarlow, a director, is
Chairman of Carlson & Partners, an advertising firm which produces commercials
for the Company.
Performance Graph
- -----------------
The graph set forth below shows the yearly percentage change in the
Company's cumulative total stockholder return against each of the S & P MidCap
400 and a composite index (the "Composite Index"), in each case assuming an
investment of $100 on February 27, 1995 and the accumulation and reinvestment of
dividends paid thereafter through February 26, 2000.
GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN
Assumes Initial Investment of $100 and Reinvestment of Dividends
<TABLE>
<CAPTION>
STARTING
BASIS
DESCRIPTION 1995 1996 1997 1998 1999 2000
- ----------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
TOPPS CO INC (%) -20.41 -12.82 -35.29 59.09 71.43
TOPPS CO INC ($) $100.00 $ 79.59 $ 69.39 $ 44.90 $ 71.43 $122.45
S & P 500 (%) 34.70 26.16 35.00 19.74 11.73
S & P 500 ($) $100.00 $134.70 $169.94 $229.43 $274.71 $306.93
S&P MIDCAP 400 (%) 29.17 16.93 36.52 2.12 30.99
S&P MIDCAP 400 ($) $100.00 $129.17 $151.04 $206.20 $210.58 $275.82
COMPOSITE INDEX (%) 20.49 1.70 49.27 57.53 16.89
COMPOSITE INDEX ($) $100.00 $120.49 $122.54 $182.91 $288.14 $336.80
INDEX + TOPPS (%) 20.13 1.61 48.91 57.53 16.99
INDEX + TOPPS ($) $100.00 $120.13 $122.07 $181.77 $286.34 $335.00
- -----------------------------------------------------------------------------
</TABLE>
The Composite Index is comprised of four industry groups reported in the
"Directory of Companies required to file Annual Reports with the Securities and
Exchange Commission," for the period ended September 30, 1993, and based upon
the Standard Industrial Classification ("SIC") codes developed by the Office of
Management and Budget, Executive Office of the President. The four industry
groups are Miscellaneous Publishing (SIC Code 2741), Sugar and Confectionery
Products (SIC Code 2060), Periodicals: Publishing or Publishing and Printing
(SIC Code 2721), and Wholesale - Miscellaneous Durable Goods (SIC Code 5090).
<PAGE>
APPOINTMENT OF AUDITORS
The Board of Directors has retained Deloitte & Touche LLP as independent
certified public accountants to report on the consolidated financial statements
of the Company for the fiscal year ending March 3, 2001 and to perform such
other services as may be required of them. The Board of Directors has directed
that management submit the appointment of auditors for ratification by the
stockholders at the Annual Meeting. An affirmative vote of the holders of a
majority of the Common Stock, represented in person or by proxy and entitled to
vote at the Annual Meeting, is necessary for ratification. Representatives of
Deloitte & Touche LLP 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 stockholder questions.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE TOPPS COMPANY, INC. AUDITORS
STOCKHOLDER PROPOSALS - 2001 ANNUAL MEETING
Any proposals of stockholders of the Company intended to be included in the
Company's proxy statement and form of proxy relating to the Company's next
annual meeting of stockholders must be in writing and received by the Assistant
Treasurer of the Company at the Company's office at One Whitehall Street, New
York, New York 10004-2109 no later than January 24, 2001. In the event that the
next annual meeting of stockholders is called for a date that is not within 30
days before or after June 29, 2001, in order to be timely, notice by the
stockholder must be received no later than the close of business on the tenth
day following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date of the annual meeting was made,
whichever first occurs.
Any stockholder interested in making a proposal is referred to Article II,
Section 4 of the Company's Restated By-Laws.
OTHER MATTERS
Management does not know of any matters other than the foregoing that will
be presented for consideration at the Annual Meeting. However, if other matters
properly come before the Annual Meeting, it is the intention of the persons
named in the enclosed proxy to vote thereon in accordance with their best
judgment.
SOLICITATION OF PROXIES
The entire cost of soliciting management proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited
personally by directors, officers or regular employees of the Company, who will
not be compensated for their services. Management of the Company intends to
request banks, brokerage houses, custodians, nominees and fiduciaries to forward
soliciting material to the beneficial owners of the Common Stock held of record
by such persons and entities.
The Company will provide to any stockholder of record at the close of business
on May 15, 2000, without charge upon written request to its Assistant Treasurer
at One Whitehall Street, New York, New York 10004, a copy of the Company's
Annual Report on Form 10-K for the fiscal year ended February 26, 2000.
By order of the Board of Directors,
Arthur T. Shorin
Chairman, President and
Chief Executive Officer
<PAGE>
THE TOPPS COMPANY, INC.
The undersigned hereby appoints SCOTT A. SILVERSTEIN and WARREN E. FRISS,
each of them, the attorneys and proxies of the undersigned, with full power of
substition, to vote on behalf of the undersigned all the shares of stock of THE
TOPPS COMPANY, INC., which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of the Company to be held at Chase Manhattan Bank, 55
Water Street, New York, New York on Thursday, June 29, 2000 at 10:30 a.m. (local
time) and at any adjournment or postponement thereof, hereby revoking any proxy
heretofore given with respect to such stock.
This proxy when properly executed will be voted in the manner directed
herein and in the discretion of the aforementioned proxies on all other matters
which may properly come before the meeting. If no instruciton to the contrary is
indicated, this proxy will be voted FOR proposals 1 and 2.
Please return this proxy in the accompanying business reply envelope even if you
expect to attend in person.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
- --------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
THE TOPPS COMPANY, INC.
(Please read both sides before signing)
The Board of Directors recommends a vote FOR items 1 and 2.
The undersigned authorizes and instructs said proxies to vote as follows:
<TABLE>
<CAPTION>
For Withold For All To withhold authority to vote, mark "For All Except"
Election of Directors All All Except: and write the nominee's number, on the line below:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 01) Arthur T. Shorin
02) Wm. Brian Little and
02) Stanley Tulchin ___ ____ ____ ______________________
Vote On Proposal
For Against Abstain
2. To ratify the apppointment of Deloitte & Touche LLP, as independent auditors
for The Topps Company, Inc. for the fiscal year ending March 3, 2001. ___ ___ ___
Please sign exactly as your name appears above.
_____________________________________________ ____________________________________________
/____________________________________/________/ /___________________________________/_______/
Signature (Please sign within box) Date Signature (Joint Owners) Date
</TABLE>
