<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
NU-KOTE HOLDING, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NU-KOTE HOLDING, INC.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
July 12, 1996
Dear Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of Nu-kote Holding, Inc. to be held at the Stonebriar Country Club, 5050 Country
Club Drive, Frisco, Texas, on Wednesday, August 14, 1996, at 9:00 a.m., Central
Time.
At the meeting, stockholders will be asked to elect eight directors for the
ensuing year, to approve the Nu-kote Holding, Inc. Deferred Stock Compensation
Plan, to ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent auditors for fiscal 1997 and to transact such other business as may
properly come before the meeting. A proxy card on which to indicate your votes
and an envelope, postage prepaid, in which to return your proxy are enclosed.
While we would like to have each of you attend the meeting and vote your
shares in person, we realize this may not be possible. However, whether or not
you plan to attend the meeting, your vote is important. WE URGE YOU TO COMPLETE,
SIGN AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES WILL BE REPRESENTED. If
you decide later to attend the meeting, you may revoke your proxy at that time
and vote your shares in person. By promptly returning the enclosed proxy, you
help the Company avoid the necessity and expense of sending follow-up letters to
assure the attendance of a quorum at the meeting.
If you desire any additional information concerning the meeting or the
matters proposed for action at the meeting, we would be glad to hear from you.
Sincerely,
[SIG]
David F. Brigante
Chairman of the Board
<PAGE>
NU-KOTE HOLDING, INC.
17950 PRESTON ROAD, SUITE 690
DALLAS, TEXAS 75252
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 14, 1996
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Nu-kote
Holding, Inc. will be held at the Stonebriar Country Club, 5050 Country Club
Drive, Frisco, Texas 75034, on Wednesday, August 14, 1996, at 9:00 a.m., Central
Time, for the following purposes:
1. To elect eight directors to serve for the ensuing year;
2. To approve the Nu-kote Holding, Inc. Deferred Stock Compensation Plan;
3. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
auditors for fiscal 1997; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The close of business on Friday, June 28, 1996, has been fixed by the Board
of Directors as the record date for determining stockholders entitled to notice
of and to vote at the Annual Meeting. A list of stockholders eligible to vote at
the Annual Meeting will be available for inspection at the Annual Meeting and
during business hours from August 2, 1996 to the date of the Annual Meeting at
the Company's headquarters at the address set forth above.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend the Annual Meeting, you may ensure your representation by
completing, signing, dating and promptly returning the enclosed form of proxy. A
return envelope, which requires no postage if mailed in the United States, has
been provided for your use. If you attend the Annual Meeting and inform the
Secretary of Nu-kote Holding, Inc. in writing that you wish to vote your shares
in person, your proxy will not be used.
By Order of the Board of Directors,
ANTHONY G. SCHMECK
SECRETARY
July 12, 1996
<PAGE>
NU-KOTE HOLDING, INC.
17950 PRESTON ROAD, SUITE 690
DALLAS, TEXAS 75252
------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
------------------------
WEDNESDAY, AUGUST 14, 1996
ANNUAL MEETING AND PROXY SOLICITATION INFORMATION
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors (the "Board") of Nu-kote Holding, Inc. (the
"Company") of proxies for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Stonebriar Country Club, 5050 Country Club Drive,
Frisco, Texas 75034, on Wednesday, August 14, 1996, at 9:00 a.m., Central Time,
and at any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders.
This Proxy Statement, the accompanying form of proxy and the Company's 1996
Annual Report to Stockholders ("Annual Report") are first being mailed on or
about July 12, 1996, to all stockholders of the Company. Although the Annual
Report and this Proxy Statement are being mailed together, the Annual Report
shall not be deemed a part of this Proxy Statement.
Only holders of record of the Company's Class A Common Stock, par value $.01
per share ("Common Stock"), at the close of business on June 28, 1996, will be
entitled to vote at the Annual Meeting. As of that date, there were 21,773,609
shares of Common Stock outstanding. Each share of Common Stock entitles the
holder to one vote. A quorum for the Annual Meeting is a majority of the shares
of Common Stock outstanding. There is no cumulative voting and there are no
other voting securities of the Company outstanding.
If the accompanying form of proxy is properly signed and returned to the
Company prior to the Annual Meeting and not revoked, it will be voted in
accordance with the instructions contained therein. If no instructions are
given, the persons designated as proxies in the accompanying form of proxy will
vote "FOR" the election as directors of those persons named below and "FOR" all
other proposals set forth herein.
The Board is not currently aware of any matters, other than those referred
to herein, which will come before the Annual Meeting. If any other matter should
be presented at the Annual Meeting for action, the persons named in the
accompanying proxy card will vote the proxy in their own discretion.
You may revoke your proxy at any time before it is actually voted at the
Annual Meeting by delivering written notice of revocation to the Secretary of
the Company, by submitting a subsequently dated proxy, or by attending the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not,
in itself, constitute revocation of the proxy.
The expense of preparing, printing and mailing proxy materials to the
Company's stockholders will be borne by the Company. The Company has engaged
Chase Mellon Shareholder Services to assist in the solicitation of proxies from
stockholders at a fee of approximately $6,000, plus reimbursement of reasonable
out-of-pocket expenses. In addition, proxies may be solicited personally or by
telephone
<PAGE>
by officers or employees of the Company, none of whom will receive additional
compensation therefor. The Company will also reimburse brokerage houses and
other nominees for their reasonable expenses in forwarding proxy materials to
beneficial owners of Common Stock.
BOARD OF DIRECTORS
GENERAL INFORMATION
As set by the Board pursuant to the By-Laws of the Company, the authorized
number of directors to be elected to the Board is eight. The directors will hold
office from the time of their election until the next annual meeting of
stockholders of the Company and until their successors are duly elected and
qualify, or until their earlier resignation or removal. All of the nominees were
elected to the Board at the Company's last annual meeting and all are currently
serving as directors of the Company.
MEETINGS OF THE BOARD
The Company's Board held six regularly scheduled or special meetings during
the fiscal year ended March 31, 1996 (the "Fiscal Year"). The Board has three
standing committees: an Executive Committee, an Audit Committee and a
Compensation and Benefits Committee.
Except for Messrs. Dresdale, Kerrane and Rochon, who attended more than 60%,
each current member of the Board nominated for election at the Annual Meeting
attended at least 75% of the total number of meetings of the Board and of the
committees of the Board on which he served held during the Fiscal Year.
COMPENSATION OF DIRECTORS
Directors, who are also employees of the Company, are not compensated for
services as directors. Non-employee directors of the Company receive $20,000 per
year, plus $2,000 per year per committee membership and $2,000 per year per
committee Chairmanship. In addition, under the Nu-kote Holding, Inc. 1992 Stock
Option Plan, as amended and restated (the "1992 Plan"), the Company provides
non-employee directors one-time grants of non-qualified stock options for 30,000
shares of Common Stock upon his or her initial election or appointment to the
Board. During the Fiscal Year, Mr. Howe was paid $150,000 as Vice Chairman of
the Board in lieu of director's fees otherwise payable to him.
COMMITTEES OF THE BOARD
EXECUTIVE COMMITTEE. The Executive Committee of the Board has authority,
with certain exceptions, to take all actions that may be taken by the full
Board. It may meet between regularly scheduled meetings to take such action as
is necessary for the orderly conduct of the Company's business. During the
Fiscal Year, the Executive Committee acted twice by unanimous written consent.
Messrs. Brigante, Howe and Dresdale are members of the Executive Committee.
AUDIT COMMITTEE. The Audit Committee of the Board reviews and approves the
scope and results of any outside audit of the Company, and the fees therefor,
and makes recommendations to the Board of Directors or management concerning
auditing and accounting matters and the selection of outside auditors. During
the Fiscal Year, the Audit Committee of the Board met three times. Messrs.
Dresdale, Finn and Rochon are members of the Audit Committee.
COMPENSATION AND BENEFITS COMMITTEE. The Compensation and Benefits
Committee of the Board reviews, considers and acts upon matters of salary and
other compensation and benefits of all
2
<PAGE>
officers and other key employees of the Company, as well as acts upon all
matters concerning, and exercises such authority as is delegated to it under the
provisions of any benefit, retirement or pension plan. During the Fiscal Year,
the Compensation and Benefits Committee of the Board met four times and acted
eight times by unanimous written consent. Messrs. Barry, Dresdale, Howe and
Rochon are members of the Compensation and Benefits Committee.
DIRECTORS AND NOMINEES
The Board has no reason to believe that any of the nominees will not serve
if elected, but if any of them should become unavailable to serve as a director,
and if the Board designates a substitute nominee, the persons named in the
accompanying form of proxy will vote for the substitute nominee designated by
the Board.
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each nominee during
the last five years has been furnished to the Company by such nominee. Except as
otherwise indicated, each of the nominees has had the same principal occupation
for the last five years.
DAVID F. BRIGANTE, AGE 44, CHAIRMAN OF THE BOARD SINCE 1994, CHIEF
EXECUTIVE OFFICER SINCE 1993, DIRECTOR OF THE COMPANY SINCE 1992
Mr. Brigante was elected Chairman of the Board in February 1994 and became
Chief Executive Officer of the Company in April 1993. Prior thereto, he served
as President and Chief Operating Officer of the Company from November 1992 and
Executive Vice President and General Manager-North American Supplies Group from
1991. Mr. Brigante joined the Company's North American Operations in 1980 and
served in positions of ever increasing responsibility in sales, marketing and
operations. Mr. Brigante was appointed to the position of Vice President, Sales
and Marketing in October 1988 and served in that capacity until April 1991.
HUBBARD C. HOWE, AGE 67, VICE CHAIRMAN OF THE BOARD SINCE 1994,
DIRECTOR OF THE COMPANY SINCE 1988
Mr. Howe has been a director of the Company since 1988, serving as Vice
Chairman from April 1991 to April 1992, Chairman of the Board from April 1992 to
February 1994 and Vice Chairman from February 1994. He was Chief Executive
Officer of the Company from March 1989 to April 1992. Mr. Howe has been a
professional employee of Clayton, Dubilier & Rice, Inc. ("Clayton, Dubilier &
Rice") since January 1991. He previously spent 12 years as an interim manager
and workout consultant. Mr. Howe is also Chairman and Chief Executive Officer of
Remington Arms Co., Inc., Chairman of APS Holding Corporation and a director of
Homeland Holding Corporation and Riverwood Holding, Inc.
THEODORE BARRY, AGE 74, DIRECTOR OF THE COMPANY SINCE 1992
Mr. Barry has been a director of the Company since May 1992. Mr. Barry is an
independent management consultant. He was President of Alondra Development, Inc.
from 1989 to 1990 and was Chairman Emeritus of Theodore Barry & Associates,
Management Consultants, from 1987 to 1989. Mr. Barry is also a director of APS
Holding Corporation.
DONALD A. BOLKE, AGE 57, DIRECTOR OF THE COMPANY SINCE 1994
Mr. Bolke has been a director of the Company since November 1994. Mr. Bolke
served as Senior Vice President of Customer Relations of United Stationers, Inc.
from June 1992 until his retirement in December 1993. Prior thereto, Mr. Bolke
served as Vice President of Stationers Distributing
3
<PAGE>
Company from January 1990 until its acquisition by United Stationers, Inc. in
June 1992. Mr. Bolke first joined Zellerbach Office Products in 1962, which was
acquired in 1985 by Stationers Distributing Company, and at which he held
positions of increasing responsibility.
RICHARD C. DRESDALE, AGE 40, DIRECTOR OF THE COMPANY SINCE 1986
Mr. Dresdale has been a director of the Company since 1986. He also served
as Assistant Secretary between 1987 and 1992 and as Vice President and Secretary
of the Company from 1986 to 1987. Since March 1994, Mr. Dresdale has been an
officer and principal shareholder of Fenway Partners, Inc. Prior thereto, he was
a professional employee of Clayton, Dubilier & Rice beginning in 1985. Mr.
Dresdale is also a director of Remington Arms Co., Inc.
BRIAN D. FINN, AGE 35, DIRECTOR OF THE COMPANY SINCE 1993
Mr. Finn has been a director of the Company since November 1993. He has been
a Managing Director of CS First Boston Corporation ("CS First Boston") since
January 1991. Mr. Finn was elected a Director of CS First Boston in January 1990
and a Vice President in 1989.
DANIEL M. KERRANE, AGE 55, EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER SINCE 1992, DIRECTOR OF THE COMPANY SINCE 1993
Mr. Kerrane has been Executive Vice President and Chief Financial Officer of
the Company since November 1992 and has been a director of the Company since
November 1993. From January 1992 to November 1992, he served as a consultant to
Clayton, Dubilier & Rice and to Homeland Stores, Inc. Mr. Kerrane was a
consultant to Lexmark International, Inc. from March 1991 to November 1992. He
served as Director of Finance and Planning of the Information Products Division
at International Business Machines Corporation from 1988 to 1991.
JOHN P. ROCHON, AGE 44, DIRECTOR OF THE COMPANY SINCE 1994
Mr. Rochon has been a director of the Company since 1994. Mr. Rochon has
been Chairman of the Richmont Corporation since 1990 and Chief Executive Officer
of Mary Kay Holding Corporation since 1991. Prior thereto, Mr. Rochon served in
positions of increasing responsibility with Mary Kay Corporation, including Vice
Chairman from 1987 to 1991. Through Richmont Corporation and its predecessor and
affiliated companies, Mr. Rochon has built a large, diversified portfolio of
companies and investments strongly focused on consumer goods and services. Mr.
Rochon is also a director of Royal Appliance Manufacturing Company.
Additional information about the current directors and officers of the
Company, including information with respect to their ownership of Common Stock
and their compensation, appears elsewhere herein.
4
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding each person
known to the Company to own beneficially more than 5% of the outstanding Common
Stock of the Company. Such information has been obtained from the most recent
public filings submitted, or other information made available to the Company, by
such holders.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE
NAME AND ADDRESS OF OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS
- - ------------------------------------------------------------------ ------------------ -------------
<S> <C> <C>
Ligapart AG 4,600,000 21.1%
Neuhofstrasse 4
6340 Baar, Switzerland
The Kaufmann Fund, Inc. 2,340,000 10.7%
140 East 45th Street
New York, New York 10017
Richmont Capital Partners I, L.P., 2,559,360 11.8%
4300 Westgrove,
Dallas, Texas 75248
Neuberger & Berman L.P. 1,232,093(2) 5.7%
605 Third Avenue,
New York, New York 10158
Joseph H. Reich, Peter K. Seldin 1,121,000(3) 5.1%
and Tracy S. Nagler
900 Third Avenue,
New York, New York 10022
</TABLE>
- - ------------------------
(1) Unless otherwise indicated, such shares of Common Stock are owned with sole
voting and investment power.
(2) Shared investment power with respect to 1,232,093 shares of Common Stock, or
5.7% of the shares of such class outstanding, and sole voting power with
respect to 410,560 shares of Common Stock, or 1.9% of the shares of such
class outstanding. These shares are owned by many unrelated clients of
Neuberger & Berman L.P., a registered broker-dealer, which disclaims any
economic interest in the shares.
(3) Represents the aggregate of shares of Common Stock held by Centennial
Associates, L.P. and Tercentennial Energy Partners, L.P., of which Messrs.
Reich and Seldin, and Ms. Nagler are general partners. Messrs. Reich and
Seldin, and Ms. Nagler have shared voting and shared investment power with
respect to such shares.
5
<PAGE>
MANAGEMENT
The following table sets forth, as of June 28, 1996, certain information as
to the shares of Common Stock beneficially owned by each director and nominee as
director of the Company, by each Named Executive, as defined herein, and by all
directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENTAGE OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS
- - --------------------------------------------------------------- ------------------ ---------------
<S> <C> <C>
John P. Rochon................................................. 2,571,360(2)(3) 11.8%
Hubbard C. Howe................................................ 202,356(3)(4) *
David F. Brigante.............................................. 150,094(5) *
Daniel M. Kerrane.............................................. 37,011 (5) *
Peter D. Kunoth................................................ 92,790 (5) *
Anthony G. Schmeck............................................. 36,140 (5) *
Hans Paffhausen................................................ 20,000 (5) *
Richard C. Dresdale............................................ 18,000 (3) *
Theodore Barry................................................. 12,000 (5) *
Brian D. Finn.................................................. 12,000 (5) *
Donald A. Bolke................................................ 6,000 (5) *
All directors and executive officers as a group
(12 persons).................................................. 3,165,751 (6) 14.3 %
</TABLE>
- - ------------------------
* Less than 1% of class
(1) Unless otherwise indicated, such shares of Common Stock are owned directly
with sole voting and sole investment power.
(2) Includes 2,559,360 shares owned by Richmont Capital Partners I, L.P., as to
which shares Mr. Rochon has shared voting and investment power.
(3) Includes 12,000 shares which may be acquired through the exercise of stock
options which are exercisable within 60 days of June 28, 1996.
(4) Includes 190,356 shares owned by Nevada Management Group, Inc. ("Nevada
Management Group"). Nevada Management Group is a Nevada corporation all the
capital stock of which is owned as separate property by Gene S. Howe, who is
married to Mr. Howe. Although Mr. Howe may be deemed beneficially to own
such shares because of his marriage to Gene S. Howe, Mr. Howe expressly
disclaims beneficial ownership of such shares.
(5) Represents shares which may be acquired through the exercise of stock
options which are exercisable within 60 days of June 28, 1996.
(6) Includes 410,035 shares which may be acquired through the exercise of stock
options exercisable within 60 days of June 28, 1996 and other shares deemed
beneficially owned by the Company's directors as described in the preceding
notes.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of a
registered class of the Company's equity
6
<PAGE>
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and the NASDAQ National Market
System. Executive officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file. Based solely on a review of the copies of such reports
furnished to the Company and written representations that no Forms 5 were
required for the Fiscal Year, the Company believes that during the Fiscal Year
no executive officer, director or greater than 10% stockholder was delinquent in
filing any such reports, except Mr. Rochon, who reported one purchase of 15,000
shares of Common Stock one month late.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to the Company's Chief
Executive Officer and the Company's other executive officers whose total salary
and bonus for the Fiscal Year exceeded $100,000 (the "Named Executives") with
respect to all services rendered to the Company during the previous three fiscal
years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
--------------------------------------------------- SECURITIES
FISCAL YEAR OTHER ANNUAL UNDERLYING ALL OTHER
ENDED MARCH SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION 31 ($)(1) ($) ($)(2) (#)(3) ($)(4)
- - ------------------------------- ------------- --------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
David F. Brigante ............. 1996 $ 450,000 $ 630,000 $ 30,720 720,000 $ 653,696
Chairman of the Board and 1995 $ 320,269 -- $ 13,179 36,454 $ 53,136
Chief Executive Officer 1994 $ 242,309 $ 196,000 -- 175,854 $ 53,567
Peter D. Kunoth ............... 1996 $ 250,000 $ 262,500 $ 84,820 -- $ 253,696
President and 1995 $ 220,077 -- $ 63,386 6,974 --
Chief Operating Officer 1994 $ 46,152 $ 37,500 -- 150,000 --
Daniel M. Kerrane ............. 1996 $ 250,000 $ 262,500 $ 44,901 240,000 $ 423,696
Executive Vice President and 1995 $ 220,173 -- $ 23,497 22,328 $ 3,275
Chief Financial Officer 1994 $ 175,000 $ 120,050 $ 7,290 82,734 $ 323
Anthony G. Schmeck ............ 1996 $ 185,000 $ 168,350 $ 16,843 160,000 $ 243,404
Senior Vice President -- 1995 $ 160,062 -- $ 8,368 63,932 $ 43,101
Finance, Corporate 1994 $ 119,231 $ 74,911 -- 44,278 $ 42,418
Controller and Secretary
Hans Paffhausen ............... 1996 $ 267,237 $ 133,610 $ 17,240 -- --
Managing Director of European
Operations
</TABLE>
- - ------------------------
(1) Includes, where applicable, amounts electively deferred by each Named
Executive under the Nu-kote International, Inc. Employees Savings Plan (the
"Savings Plan").
(2) Amounts listed in this column for fiscal 1996 include (a) automobile
allowances in the amounts of $7,651, $12,076, $7,853, $6,360 and $17,240
for each of the Named Executives; (b) club dues of $4,183 for each of the
Named Executives, except Mr. Paffhausen; (c) imputed interest on Pelikan
special award loans of $18,880, $7,875, $13,125 and $6,300 for each of the
Named Executives, except Mr. Paffhausen; (d) imputed interest on relocation
loans of $19,740 and $5,659 for Messrs. Kerrane and Kunoth, respectively;
and (e) reimbursement of housing expenses of $55,027 for Mr. Kunoth.
(3) See note 1 to the table below entitled "Option/SAR Grants in Last Fiscal
Year" for material terms of stock appreciation rights awards granted in
fiscal 1996.
7
<PAGE>
(4) Amounts listed in this column for fiscal 1996 include (a) special one-time
awards relating to the acquisition and integration of the worldwide
hardcopy supplies business of Pelikan Holding AG of $600,000, $250,000,
$420,000 and $200,000 for Messrs. Brigante, Kunoth, Kerrane and Schmeck,
respectively; (b) the Company's contributions to the Savings Plan
(exclusive of amounts deferred at the election of the Named Executive) on
behalf of each of the Named Executives, as follows: $3,696 for each of
Messrs. Brigante, Kunoth and Kerrane, and $3,403 for Mr. Schmeck; and (c)
insurance premiums paid by the Company under the Nu-kote International,
Inc. Key Executive Life Insurance Program in the amounts of $50,000 and
$40,000 for Messrs. Brigante and Schmeck, respectively.
The following table sets forth the stock options and stock appreciation
rights granted during the Fiscal Year to each of the Named Executives and
certain hypothetical values for such options and rights.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS/SARS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM (2)
OPTIONS/SARS IN FISCAL BASE EXPIRATION ------------------------------
NAME GRANTED(#)(1) YEAR PRICE($/SH) DATE 5%($) 10%($)
- - -------------------------------- --------------- --------------- ------------- ----------- ------------------ ----------
<S> <C> <C> <C> <C> <C> <C>
David F. Brigante............... 720,000 49.3% $ 10.50 3/24/05 $ 2,582,582 $6,999,682
Peter D. Kunoth................. -- -- $ -- -- $ -- $ --
Daniel M. Kerrane............... 240,000 16.4% $ 10.50 3/24/05 $ 860,860 $2,333,227
Anthony G. Schmeck.............. 160,000 11.0% $ 10.50 3/24/05 $ 573,907 $1,555,485
Hans Paffhausen................. -- -- -- -- $ -- $ --
</TABLE>
- - ------------------------
(1) Represents stock appreciation rights awards granted pursuant to the Nu-kote
Holding, Inc. Senior Management Stock Appreciation Rights Plan. These
awards entitle the executive to receive upon exercise an amount equal to a
percentage of the spread, ranging from zero to 100%, depending on the
compounded annual growth rate in the market price of the Common Stock over
a five-year performance period. The awards are exercisable only after the
expiration of the performance period and then only in equal annual
installments of 20% of the shares covered by the awards, subject to
acceleration upon death, disability, retirement at age 65, early retirement
with the consent of the Board, termination without cause, or resignation
for good reason.
(2) Based upon the per share market price on the date of grant and on annual
appreciation of such market price through the expiration date of such
awards at the stated rates. These amounts represent assumed rates of
appreciation only and may not necessarily be achieved. Actual gains, if
any, are dependent on the future performance of the Common Stock, as well
as the continued employment of the Named Executives through the term of the
awards. The potential realizable values indicated have not taken into
account amounts required to be paid as income tax under the Internal
Revenue Code of 1986, as amended, and any applicable state laws.
The following table sets forth the number of and value realized on shares
acquired on exercise of stock options during the Fiscal Year and the number of
shares covered by exercisable and unexercisable options and stock appreciation
rights held, and the dollar values which would have been realized on exercise of
such options and stock appreciation rights, on March 31, 1996 by each of the
Named Executives.
8
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED "IN-THE-MONEY"
OPTIONS/SARS AT FY-END (#) OPTIONS/SARS
AT FY-END ($)(1)
SHARES ACQUIRED VALUE REALIZED -------------------------- --------------------------
NAME ON EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------------- ----------------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David F. Brigante..... -- -- 137,633 228,675 $2,425,782 $ 4,030,397
Peter D. Kunoth....... -- -- 92,790 -- $1,635,424 $ --
Daniel M. Kerrane..... 52,560 $ 563,085 28,000 117,502 $ 493,500 $ 2,070,973
Anthony G. Schmeck.... 20,000 $ 278,750 30,497 89,713 $ 537,510 $ 1,581,192
Hans Paffhausen....... -- -- 20,000 80,000 $ 352,500 $ 1,410,000
</TABLE>
- - ------------------------
(1) Based upon the closing price of the Common Stock ($17.625) on the NASDAQ
National Market System on March 31, 1996.
PENSION PLAN TABLE
The following table sets forth the estimated annual benefits payable to
hypothetical participants who are entitled to the maximum benefits under the
tax-qualified non-contributory defined benefit plan maintained by the Company
(the "Pension Plan") in the compensation and years-of-service categories
indicated in the table upon retirement at normal retirement age (65 years of
age). The amounts shown are based upon the assumption that such benefits will be
paid in the form of a single life annuity and assume offset for social security
benefits.
<TABLE>
<CAPTION>
ANNUALIZED 10 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
AVERAGE OF OF OF OF OF
FINAL PAY SERVICE SERVICE SERVICE SERVICE SERVICE
- - ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 6,793 $ 11,082 $ 12,563 $ 14,031 $ 15,479
$ 75,000 9,454 15,964 19,266 22,446 24,894
$ 100,000 12,579 22,214 27,068 31,821 35,269
$ 125,000 15,704 28,464 34,880 41,196 45,644
$ 150,000 18,829 34,714 42,693 50,571 56,019
$ 175,000 18,829 34,714 42,693 50,571 56,019
$ 200,000 18,829 34,714 42,693 50,571 56,019
$ 225,000 18,829 34,714 42,693 50,571 56,019
$ 250,000 18,829 34,714 42,693 50,571 56,019
</TABLE>
The Pension Plan provides retirement benefits on an employee's years of
service and such employee's average annual earnings (subject to a maximum of
$150,000 annually, as adjusted by the Internal Revenue Service for cost of
living increases after 1995) for the 60 highest consecutive months' compensation
during the 120 months prior to retirement (and if the employee has been employed
less than five years, the average of compensation during all months employed.)
Compensation includes all salary or wages, including commissions, shift
premiums, tax deferred contributions made to the Nu-kote International, Inc.
Employees Savings Plan on an employee's behalf and payments for non-work periods
during active employment, but does not include any other form of remuneration.
At March 31, 1996, the credited years of service and the compensation
covered under the Pension Plan of the participating Named Executives were as
follows:
<TABLE>
<CAPTION>
YEARS OF SERVICE COVERED COMPENSATION
------------------- ---------------------
<S> <C> <C>
Mr. Brigante 16 $ 150,000
Mr. Kunoth 2 $ 150,000
Mr. Kerrane 3 $ 150,000
Mr. Schmeck 9 $ 150,000
</TABLE>
9
<PAGE>
EMPLOYMENT AGREEMENTS
Messrs. Brigante and Kerrane are currently employed by the Company pursuant
to Supplemental Employment Agreements, and Mr. Schmeck is currently employed by
the Company pursuant to an Employment Agreement, which provide, among other
things, that they are to receive annual base salaries of not less than $320,000,
$220,000 and $160,000, respectively, and annual bonuses, incentive pay or other
similar payments of not less than $240,000, $120,000 and $99,000, respectively,
as well as other employment benefits (such as group health, life and disability
insurance, use of Company automobiles, country club membership and monthly dues,
and participation in retirement and long-term incentive programs and plans,
including stock option, stock appreciation rights, pension, savings, salary
continuation and the like), during a three-year period of employment, commencing
February 24, 1995, which is extended annually for an additional year unless the
executive or the Company gives notice to the contrary. The agreements also
provide that if the executive is terminated for reasons other than death,
disability or cause, as defined, or elects to terminate his employment because
of, among other things, the failure to elect him to the office or offices, which
he previously held, a significant adverse change in the nature or scope of his
authorities, powers, functions, responsibility or duties, a liquidation,
dissolution, merger, consolidation or reorganization of the Company or transfer
of all or a significant portion of its business and/or assets, or a relocation
of the Company's principal executive offices, he will receive a lump sum payment
equal to the present value of the sum of his (i) aggregate base salary (at the
highest rate in effect for any fiscal year prior to the termination date) for
each remaining year or partial year of the employment period, and (ii) aggregate
bonus, incentive or other similar payment (based upon the highest amount of
bonus, incentive or other similar payment paid or payable to him for any year
during the term but prior to the year of termination), which he would have
received during the remainder of his employment period; provided, however, that
such amount will be reduced to the minimum extent necessary so that no portion
of such lump sum payment will constitute an excess parachute payment as defined
in Section 280G of the Internal Revenue Code of 1986, as amended. Subject to the
foregoing limitations, he will also receive for the remainder of the employment
period substantially the same employee benefits as he was otherwise entitled
immediately prior to termination.
Mr. Kunoth is employed by Nu-Kote International, Inc. until February 4,
1997, pursuant to an agreement, which provides, among other things, that he will
receive a base salary at the rate of $250,000 per year and other customary
employee benefits. Mr. Kunoth is also entitled to exercise, on or before March
4, 1997, stock options to acquire 92,790 shares previously granted to him and to
receive reimbursement for certain relocation costs and expenses.
CERTAIN TRANSACTIONS
During fiscal 1995, the Company retained the services of CS First Boston, an
investment banking firm with which Mr. Finn is affiliated, to perform certain
investment advisory services in connection with the Company's acquisition of the
worldwide hardcopy supplies business of Pelikan Holding AG. CS First Boston was
paid $750,000 plus expenses for such services during the Fiscal Year. The
Company also paid Ballyglen Company, Inc., a corporation owned and controlled by
Mr. Barry and his family, $118,000 for performing various executive recruiting
services for the Company during the Fiscal Year. The Company believes such fees
were reasonable and no less favorable to the Company than those that would have
been paid to unaffiliated parties.
On May 20, 1994, the Company provided Mr. Kerrane with an interest-free loan
in the amount of $300,000 for the purpose of assisting Mr. Kerrane in relocating
to the Dallas area. The loan, as
10
<PAGE>
amended, is to be repaid from awards granted to Mr. Kerrane for the
contributions to future merger and acquisition transactions (excluding the
acquisition of the worldwide hardcopy supplies business of Pelikan Holding AG).
One third of the principal amount of the loan will be forgiven when and if
Modular Ink Technology AB, a subsidiary of the Company, is deemed to have
achieved its financial objectives. In the event of a change in control of the
Company, the loan will be considered repaid in full. If Mr. Kerrane voluntarily
terminates his employment prior to the repayment or discharge of the loan, the
Company will offset any separation payments due Mr. Kerrane against the loan and
any remaining balance on the loan will be repaid by Mr. Kerrane within 36 months
after the date of termination. At July 1, 1996, the loan to Mr. Kerrane had an
outstanding principal balance of $300,000.
On July 17, 1994, the Company provided Mr. Kunoth with an interest-free loan
in the amount of $86,000 for the purpose of assisting Mr. Kunoth in relocating
to the Dallas area. As of July 1, 1996, the loan to Mr. Kunoth had been
discharged in full.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The Compensation and Benefits Committee currently consists of Messrs. Barry,
Dresdale, Howe and Rochon. Messrs. Dresdale and Howe are former executive
officers of the Company and Mr. Barry, through Ballyglen, performed various
executive recruiting services for the Company during the Fiscal Year. (See
"BOARD OF DIRECTORS -- Compensation of Directors" and "EXECUTIVE COMPENSATION --
Certain Transactions" for fees paid to Mr. Howe and Mr. Barry during the Fiscal
Year.)
COMPENSATION AND BENEFITS COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee (the "Committee") of the Board is
responsible for setting and administering the policies governing annual
compensation for the Company's executive officers, including the Chief Executive
Officer and other key members of management. The key elements of executive
compensation are base salary, annual incentive awards and stock based awards.
BASE SALARY
The Committee determines base salaries for executive officers by evaluating
the responsibilities of the position held and the experience of the individual,
and by reference to the competitive market place for executive talent, including
a comparison to base salaries for comparable positions at other companies deemed
by the Committee to be in the Company's peer group, and to historical levels of
salary paid by the Company and its predecessors. Salary adjustments are based on
a periodic evaluation of the performance of the Company and of each executive
officer, and also take into account new responsibilities as well as changes in
the competitive market place. Mr. Brigante, who served as Chairman of the Board
and Chief Executive Officer of the Company during the Fiscal Year, received a
base salary of $450,000.
INCENTIVE COMPENSATION
Each year, the Committee reviews and approves an incentive compensation plan
for executive officers and other key employees based on targeted levels of
earnings before interest and taxes ("EBIT") and cash flow for the year. If the
Company achieves at least 75% of its targeted EBIT, senior executive officers
receive as bonuses a percentage of their salaries ("Salary Percentage"), ranging
from 10% to 100% depending on their job level and responsibility, adjusted for
the ratios of the
11
<PAGE>
Company's actual EBIT and cash flow to targeted EBIT and cash flow. The maximum
bonus payable to any executive officer is limited to 1.5 times the executive
officer's Salary Percentage. This level would be reached if actual EBIT and cash
flow were greater than 115% (or, in the case of certain officers, 110%) of
established targets for the year. During the Fiscal Year, the Company exceeded
its EBIT and cash flow targets and bonuses were paid to all participating
officers of the Company. (See "EXECUTIVE COMPENSATION -- Summary Compensation
Table" for bonuses paid to the Chief Executive Officer and other Named
Executives.)
STOCK BASED AWARDS
During fiscal 1995, the Committee undertook a review of its stock option
award program for members of senior management and recommended to the Board that
it adopt the Nu-kote Holding, Inc. Senior Management Stock Appreciation Rights
Plan (the "Plan") and form of Appreciation Right Notification, grant awards
thereunder to each of Messrs. Brigante, Kunoth, Kerrane and Schmeck, and
eliminate such executive officers from further participation in the 1992 Plan.
The awards proposed for each of such officers were designed to allow them to
earn, in the aggregate, up to 6.3% of the incremental appreciation in the
Company's stock over a five-year performance period. The exact amounts payable
under the awards fluctuate with the compounded annual growth rate (ranging from
8% to 40%) in the value of the Common Stock (expressed as market value per share
at the end of the performance period in the awards) and range from 0% to 100% of
the spread in the shares subject to the awards. The Committee believed that this
type of arrangement would further align management's interests with those of the
Company's stockholders and would provide management with an added incentive to
achieve greater returns for the Company's stockholders. On June 22, 1995, the
Board approved the Plan and the Committee, pursuant to its delegated authority
and consistent with its prior recommendation, granted awards to Messrs.
Brigante, Kerrane and Schmeck in respect of 720,000 shares, 240,000 shares and
160,000 shares, respectively. The stockholders of the Company approved the Plan
on August 30, 1995. As of March 31, 1996, the Company had accrued $162,000 under
the awards, based on the increase in the value of the Company's Common Stock
since the date of grant.
OTHER COMPENSATION
Other compensation payable to the executives of the Company includes
contributions to the Company's savings plan and insurance premiums paid by the
Company under the Nu-kote International, Inc. Key Executive Life Insurance
Program. In addition, under the terms of their employment agreements, Messrs.
Brigante, Kunoth, Kerrane and Schmeck are furnished other customary employment
benefits, including the use of automobiles and reimbursement of club dues.
Compensation and Benefits Committee July 8,
1996
THEODORE BARRY, CHAIRMAN
RICHARD C. DRESDALE
HUBBARD C. HOWE
JOHN P. ROCHON
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return of the Company, the
S&P 500 Index the and a peer group composed of the following companies, weighted
by market value at each measurement point: American Business Products, Inc.,
Diebold, Inc., Duplex Products, Inc., Ennis Business Forms Inc., General Binding
Corp., Hunt Manufacturing Co., Moore Limited, New England Business Services
Inc., Nashua Corp., National Computer Systems Inc., Office Depot Inc., Pitney
Bowes Inc., Reynolds & Reynolds Co., Scitex Ltd., Smith Corona Corporation,
Standard Register Co., Staples Inc., Tab Products Co., United Stationers Inc.,
Wallace Computer Services Inc. and Xerox Corporation. The graph assumes $100 was
invested in the Company's Common Stock on October 1, 1992 or in shares
comprising the S&P 500 Index or the peer group on September 30, 1992 and also
assumes reinvestment of dividends. Other than for the above dates, the values
noted are as of March 31 of each year indicated.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
10/01/92 03/93 03/94 03/95 03/96
<S> <C> <C> <C> <C> <C>
NU-KOTE HOLDING, INC. 100 177 173 192 291
PEER GROUP 100 116 127 140 170
S&P 500 100 110 111 129 167
</TABLE>
13
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting. David F. Brigante,
Brian D. Finn, Hubbard C. Howe, Richard C. Dresdale, Theodore Barry, Daniel M.
Kerrane, John P. Rochon and Donald A. Bolke have been nominated by the Board for
election at the Annual Meeting. All of the nominees for election at the Annual
Meeting are currently serving on the Board.
SHARES REPRESENTED BY THE ACCOMPANYING FORM OF PROXY WILL BE VOTED "FOR" THE
ELECTION OF THE ABOVE NOMINEES UNLESS AUTHORITY TO VOTE FOR ONE OR MORE NOMINEES
IS WITHHELD. DIRECTORS MUST BE ELECTED BY A PLURALITY OF THE VOTES VALIDLY CAST
IN SUCH ELECTION AT THE ANNUAL MEETING. ABSTENTIONS ON THIS PROPOSAL WILL BE
COUNTED FOR QUORUM PURPOSES BUT NOT VOTED. BROKER NON-VOTES WILL HAVE NO EFFECT
ON THE OUTCOME OF THE ELECTION OF DIRECTORS.
PROPOSAL 2
APPROVAL OF DEFERRED STOCK COMPENSATION PLAN
On May 23, 1996, the Board adopted the Nu-kote Holding, Inc. Deferred Stock
Compensation Plan (the "Deferred Stock Plan"), subject to approval of the
Company's stockholders at the Annual Meeting. The purpose of the Deferred Stock
Plan is to provide non-employee directors with additional incentives to improve
the Company's performance by increasing their stock ownership in the Company, to
reinforce such directors' role in enhancing stockholder values, and to provide
an additional means of attracting and retaining non-employee directors.
The Deferred Stock Plan provides that each non-employee director may elect
to defer all or a portion of that director's fees, including fees for attendance
at regular and special Board and committee meetings, for any calendar year (the
"Deferred Amount"). Each Deferred Amount is credited by the Company to a
bookkeeping account (the "Stock Account") and then is converted into a stock
equivalent (a "Stock Equivalent") on the date the amount is credited. The number
of Stock Equivalents credited to the director is based upon the closing price of
the Common Stock in the principal market in which the Common Stock is traded
(the "Market Price"). The number of Stock Equivalents credited to each
participating director will be adjusted to reflect stock or cash dividends,
stock splits or as otherwise required by the Deferred Stock Plan. In the event
that the Company is a party to any consolidation, recapitalization, merger,
share exchange or other business combination in which all or a part of the
outstanding Common Stock is changed into or exchanged for stock or other
securities of any other entity or the Company, or for cash or other property,
the Stock Equivalents of each participating director will be converted,
exchanged or otherwise modified to give full effect to such transaction.
A participating director will be eligible to receive a distribution from his
or her Stock Account only upon termination of service, through death, retirement
or otherwise. Following departure from the Board, the distribution will occur,
at the director's election, either in one lump sum or in no more than five
annual installments. The distribution will be made, at the director's election,
either in Common Stock or in cash at the then-Market Price of the Common Stock.
Shares of Common Stock to be distributed under the Deferred Stock Plan will be
either authorized but unissued shares or treasury shares acquired by the
Company.
14
<PAGE>
The creation of a Stock Equivalent will not have any tax consequence to
either the Company or the participating director. The participating director
will not be taxed upon the Deferred Amount so credited to his Stock Account, but
will realize ordinary income upon receipt of cash or stock on distribution upon
termination from the Board. For these purposes, any Common Stock distributed
will be valued at the Market Price of such shares on the date of distribution.
The Deferred Stock Plan provides that it may be amended or terminated by the
Board at any time without further stockholder approval, except that no amendment
or termination may adversely affect any then-existing Stock Accounts or rights
under the Deferred Stock Plan.
The above summary of the Deferred Stock Plan is qualified in its entirety by
reference to the full text of the Deferred Stock Plan, a copy of which is
attached hereto as Exhibit A.
THE BOARD RECOMMENDS YOU VOTE "FOR" THE APPROVAL OF THE DEFERRED STOCK PLAN.
ADOPTION OF THIS PROPOSAL REQUIRES APPROVAL BY THE HOLDERS OF A MAJORITY OF THE
SHARES REPRESENTED, IN PERSON OR BY PROXY, AT THE ANNUAL MEETING. ABSTENTIONS ON
THIS PROPOSAL WILL BE COUNTED FOR QUORUM PURPOSES BUT NOT VOTED AND, THEREFORE,
WILL HAVE THE SAME EFFECT AS VOTES AGAINST THE PROPOSAL. BROKER NON-VOTES WILL
HAVE NO EFFECT ON THE OUTCOME OF THE VOTE ON THIS PROPOSAL.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The stockholders are asked to ratify the appointment by the Board of Coopers
& Lybrand L.L.P. as the Company's independent auditors for fiscal 1997. Coopers
& Lybrand L.L.P., a certified public accounting firm, has served as the
Company's independent auditors since 1987.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting to respond to appropriate questions and to make such
statements as they desire.
THE BOARD RECOMMENDS YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF
COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL YEAR
1997 AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE. ADOPTION OF
THIS PROPOSAL REQUIRES APPROVAL BY THE HOLDERS OF A MAJORITY OF THE SHARES
REPRESENTED, IN PERSON OR BY PROXY, AT THE ANNUAL MEETING. ABSTENTIONS ON THIS
PROPOSAL WILL BE COUNTED FOR QUORUM PURPOSES BUT NOT VOTED AND, THEREFORE, WILL
HAVE THE SAME EFFECT AS VOTES AGAINST THE PROPOSAL. BROKER NON-VOTES WILL HAVE
NO EFFECT ON THE OUTCOME OF THE VOTE ON THIS PROPOSAL.
PROPOSALS BY STOCKHOLDERS
Proposals by stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than April 16, 1997, to be included in the Company's proxy, notice of
meeting and proxy statement for such meeting. In addition, the By-Laws of the
Company provide that only stockholder proposals submitted in a timely manner to
the Secretary of the Company may be acted upon at an annual meeting of
stockholders. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive office of the Company not less
than 30 calendar days prior to the date of the originally scheduled meeting;
provided, however, that, if less than 40 calendar days' notice or prior public
disclosure of the date of the scheduled meeting is given or made by the Company,
notice by the stockholder to be timely must be so received not less than the
close of business on the tenth calendar day following the earlier of the day on
which
15
<PAGE>
such notice of the scheduled meeting was mailed or the day on which such public
disclosure was made. Any proposals by stockholders should be mailed to or
delivered at Nu-kote Holding, Inc., 17950 Preston Road, Suite 690, LB21, Dallas,
Texas 75252, Attention: Secretary.
ANNUAL REPORT
The Company's 1996 Annual Report to Stockholders (which does not form a part
of the proxy solicitation material) containing audited financial statements for
the fiscal year ended March 31, 1996, is being mailed to all stockholders of
record with this Proxy Statement.
The form of proxy and the Proxy Statement have been approved by the Board of
Directors and are being mailed and delivered to stockholders by its authority.
ANTHONY G. SCHMECK
SECRETARY
July 12, 1996
16
<PAGE>
EXHIBIT A
NU-KOTE HOLDING, INC.
DEFERRED STOCK COMPENSATION PLAN
SECTION 1
PURPOSE
The purpose of this Deferred Stock Compensation Plan is to provide
participating directors with additional incentives to improve the Company's
performance by increasing their stock ownership in Nu-kote Holding, Inc., to
reinforce the participating directors' role in enhancing stockholder values, and
to provide an additional means of attracting and retaining non-employee
directors.
SECTION 2
DEFINITIONS
2.1 DEFINITIONS. As used herein, the following terms shall have the
following meanings:
(a) "BENEFICIARY" means the person, persons or entity designated
pursuant to Section 6 to receive payments under the Plan after the death of
a Participant.
(b) "BOARD" means the Board of Directors of Nu-kote Holding, Inc.
(c) "COMMON STOCK" means Class A Common Stock of Nu-kote Holding, Inc.
as issued from time to time and registered with the Securities and Exchange
Commission, such shares to be authorized but unissued shares or treasury
shares.
(d) "COMPANY" means Nu-kote Holding, Inc., a Delaware corporation, and
any successor thereof.
(e) "DEFERRED AMOUNT" means an amount of Fees deferred under the Plan.
(f) "DIRECTOR" means any member of the Board who is not also an employee
of the Company.
(g) "FEES" mean payments which the Director receives or is entitled to
receive from the Company for services as a member of the Board. Such
payments shall include directors' regular and special board meeting fees and
committee meeting fees, but shall not include any reimbursement of expenses
for attending meetings of the Board or any committee thereof.
(h) "MARKET PRICE" means, at any date, the closing sales price of the
Common Stock on that date (or, if there are no sales on that date, the last
preceding date on which there was a sale) in the principal market in which
the Common Stock is traded, or if no market for the Common Stock exists, the
price determined by the Board in its sole discretion at the time of any
determination.
(i) "PARTICIPANT" means any Director who is participating in the Plan
from time to time.
(j) "PLAN" means the Nu-kote Holding, Inc. Deferred Stock Compensation
Plan, as from time to time amended and in effect.
A-1
<PAGE>
(k) "STOCK ACCOUNT" means the bookkeeping account maintained by the
Company for a Participant pursuant to Section 3.3.
(l) "TERMINATION OF SERVICES" means the termination (by death,
retirement or otherwise) of a Participant's service as a Director of the
Company.
SECTION 3
DEFERRAL OF FEES
3.1 DEFERRAL ELECTION. Each Director may elect to have all or a portion of
his or her Fees for any calendar year deferred under the Plan, by delivering a
completed Election Form, in the form attached hereto as Annex A. Such election
shall be filed with the Secretary of the Company prior to the beginning of the
calendar year during which such Fees are earned.
3.2 SUSPENSION OR CONTINUATION OF PARTICIPATION. A deferred election made
pursuant to Section 3.1 shall be irrevocable for the first calendar year to
which such election relates, and it shall continue in effect for subsequent
calendar years until revoked or until it is increased or decreased prospectively
by the Participant before the beginning of the calendar year for which such
increase or decrease is effective. The termination or suspension of any
deferrals under this Section 3.2 shall not affect any amount theretofore
deferred.
3.3 ACCOUNTING FOR DEFERRED AMOUNTS. The Company shall maintain a separate
bookkeeping amount (hereinafter Stock Amount) for each Participant to record the
Company's liability to pay, in cash or in stock as the Participant shall have
elected, all Deferred Amounts. Each Deferred Amount shall be credited to the
Stock Account on the date the Fees represented thereby would have been paid but
for the Participant's deferral election and shall be converted into stock
equivalents at the Market Price on that date, including fractional shares
rounded to the nearest one-thousandth of a share. Thereafter, whenever a cash
dividend or other distribution is paid on, or with respect to, the Common Stock,
the Stock Account shall be credited with additional stock equivalents in an
amount equal to the number of shares, including fractional shares, that could
have been purchased, at the Market Price on the dividend or distribution payment
date, had such dividend or other distribution been paid on the stock equivalents
in the Stock Account on such date. The value of any such other distribution on,
or with respect to, the Common Stock not paid in cash shall, at the option of
the Board (or any authorized committee of the Board), be either determined by
the Board or independently established. If the outstanding shares of Common
Stock of the Company shall be split or the Company shall pay a stock dividend on
its outstanding shares of Common Stock, the stock equivalents, including
fractional shares, in the Stock Account on the effective date or payment date of
such stock split or stock dividend shall be appropriately adjusted to reflect
the effect of such event. All distributions to a Participant in accordance with
Section 4 shall be debited to the Participant's Stock Account.
3.4 ADJUSTMENTS. If the Company is a party to any consolidation,
recapitalization, merger, share exchange or other business combination and, in
connection with such transaction, all or part of the outstanding Common Stock
shall be changed into or exchanged for stock or other securities of any other
entity or of the Company or cash or any other property, then the stock
equivalents, including fractional shares, in the Stock Account on the effective
date of such transaction shall be converted, exchanged or otherwise modified to
give full effect to the transaction.
A-2
<PAGE>
3.5 STATEMENT OF STOCK ACCOUNT. Upon request, but no more frequently than
quarterly, the Company shall deliver to each Participant, within 30 days after a
written request, a statement in such form as the Company deems desirable,
setting forth the stock equivalents then credited to the Stock Account, and the
aggregate Market Price of those stock equivalents.
SECTION 4
DISTRIBUTIONS
Upon Termination of Service, a Director's Stock Account shall be distributed
to the Director either (i) in one lump sum, or (ii) in such number of annual
installments (not exceeding five), as the Director has elected on the last
Election Form submitted at least six months before the Termination of Service.
Such distribution shall be made in Common Stock or in cash at the then-Market
Price, as was elected by the Participant on the last Election Form submitted at
least six months before the Termination of Service, beginning no later than 30
days following the Termination of Service. If installment payments are elected
by a Participant on the Election Form, the first such installment shall be paid
within the aforesaid 30-day period and the remaining installments shall be paid
on each succeeding anniversary date of the first distribution, with each
installment equal to a fraction of the Stock Account at the beginning of the
distribution period, plus any additions to the Stock Account since the last
installment distribution. The fractional amount of the beginning Stock Account
to be distributed at each installment shall have a numerator of 1 and a
denominator equal to the number of annual installments elected by the
Participant. All amounts payable under this Section after the death of the
Participant shall be paid to the Participant's Beneficiary in the manner elected
by the Participant on the Election Form. In the absence of an election by the
Participant as to the form of payment, the payment shall be made in one
installment in the form of Common Stock. In any case in which shares of Common
Stock are to be delivered, cash shall be delivered in lieu of any fractional
shares at the then-Market Price of the Common Stock.
SECTION 5
AMENDMENT OR TERMINATION
5.1 AMENDMENT OR TERMINATION. The Board may amend or terminate the Plan at
any time; provided, however, that no amendment or termination shall adversely
affect any then existing Stock Accounts or rights under the Plan, and no such
amendment may, without approval of the stockholders of the Company:
(i) Change the class of persons eligible to receive Common Stock under
the Plan or otherwise modify the requirements as to eligibility for
participation in the Plan; or
(ii) Materially increase the benefits accruing to Participants under the
Plan.
SECTION 6
BENEFICIARIES
Each Participant shall have the right, at any time, to designate any person,
persons or entity as a Beneficiary or Beneficiaries (both principal as well as
contingent) to whom payments under the Plan in Common Stock or cash shall be
made. Such designation and any subsequent change in the Beneficiary designation
shall be made by the filing of a Designation of Beneficiary, in the form
attached as Annex B, with the Secretary of the Company. Such designation shall
be effective only when received by
A-3
<PAGE>
the Secretary of the Company. A new beneficiary form filed with the Secretary of
the Company shall serve to revoke all previous Beneficiary designations. Any
final decree of divorce of a Participant entered after the filing of a
Designation of Beneficiary designating a spouse as Beneficiary shall also revoke
such prior designation. If the Participant fails to designate a Beneficiary as
provided above, or if the Beneficiary designation is revoked by divorce without
execution of a new designation, or if all designated Beneficiaries predecease
the Participant, then the Participant's designated Beneficiary shall be deemed
to be the person or persons surviving the Participant in the first of the
following classes of which there is a survivor, share and share alike:
(a) Surviving spouse;
(b) Participant's children, except that if any of the children predecease
the Participant but leave issue surviving, then such issue shall take per
stirpes the share their parent would have taken if living; and
(c) Participant's estate.
In the event that it shall be found upon evidence satisfactory to the Board
that any Participant or Beneficiary to whom a benefit is payable under the Plan
is unable to care for their affairs because of illness or accident, any payment
due (unless prior claim therefor shall have been made by duly authorized
guardian or other legal representative) shall be paid, upon appropriate
indemnification of the Board, to the spouse or other person deemed by the Board
to have incurred expenses for the care of such Participant or Beneficiary. Any
payment shall be a payment for the account of the Participant or Beneficiary and
shall be a complete discharge of any liability of the Company therefor.
SECTION 7
MISCELLANEOUS
7.1 EXPENSES. The expenses of administering the Plan shall be borne by the
Company and shall not be charged against any Participant's Stock Account.
7.2 APPLICABLE LAW. The provisions of the Plan shall be construed,
administered and enforced according to the laws of the State of Delaware.
7.3 NO TRUST OR FUND. No action by the Company or the Board under the Plan
shall be construed as creating a trust, escrow or other secured or segregated
fund or other fiduciary relationship of any kind in favor of any Participant,
Beneficiary, or any other persons otherwise entitled to a Stock Account. The
status of Participants and Beneficiaries with respect to any liabilities assumed
by the Company hereunder shall be solely those of unsecured creditors of the
Company. Any asset acquired or held by the Company in connection with
liabilities assumed by it hereunder shall not be deemed to be held under any
trust, escrow or other secured or segregated fund or other fiduciary
relationship of any kind for the benefit of a Participant or Beneficiary or to
be security for the performance of the obligations of the Company, but shall be
and remain a general, unpledged, unrestricted asset of the Company at all times
subject to the claims of general creditors of the Company.
7.4 NO ASSIGNABILITY AND BINDING EFFECT. Neither the Participant nor any
other person shall acquire any right to, or interest in, any amount awarded to
the Participant, otherwise than by actual payment in accordance with the
provisions of the Plan, or have any power, voluntarily or involuntarily,
A-4
<PAGE>
to transfer, assign, anticipate, pledge, mortgage or otherwise encumber,
alienate or transfer any rights hereunder in advance of any of the payments to
be made pursuant to the Plan, or any portion thereof. The obligations of the
Company hereunder shall be binding upon any and all successors and assigns of
the Company.
7.5 WITHHOLDING. The Company shall comply with all Federal and state laws
and regulations respecting the withholding, deposit and payment of any income or
employment taxes relating to Deferred Amounts under the Plan.
7.6 NO IMPACT ON DIRECTORSHIP. The Plan shall not be construed to confer
any right on the part of a Participant to be or remain a director, or to receive
any, or any particular rate of, Fees in such capacity.
7.7 INTERPRETATIONS. Interpretations of, and determinations related to,
the Plan made by the Company in good faith, including any determinations of
Deferred Amounts or a Stock Account balance, shall be conclusive and binding
upon all parties; and the Company and the members of the Board shall not incur
any liability to a Participant or his or her Beneficiary for any such
interpretation or determination so made or for any other action taken by it in
connection with the Plan.
7.8 STOCKHOLDER RIGHTS. Non-employee Directors shall not be deemed for any
purpose to be or have rights as stockholders of the Company with respect to any
stock equivalents credited to a Participant's Stock Account, until and unless a
certificate for Common Stock is issued upon distribution hereunder.
7.9 SECURITIES LAWS. Common Stock shall not be distributed to Participants
upon distribution from their Stock Accounts unless the issuance complies with
all relevant provisions of law, including without limitation, (i) securities
laws of the State of Delaware, or any other appropriate state, (ii)
restrictions, if any, imposed by the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder, and
(iii) until such stock has been approved for listing on any national stock
exchange on which the Common Stock is traded.
7.10 EFFECTIVE DATE. The Plan shall be effective from and after May 23,
1996, provided, however, that if the stockholders of the Company do not approve
the Plan at the Annual Meeting of Stockholders held in 1996, Deferred Amounts
shall not be converted into stock equivalents in a Stock Account but rather
shall remain as a bookkeeping account and be credited with interest at a rate
equal to the prime rate published in the WALL STREET JOURNAL, as in effect at
the beginning of each calendar year, until such Deferred Amounts, plus interest,
are distributed to the Participants either in accordance with their Election
Forms (but always in cash as opposed to Common Stock) or, at the Board's
election, upon termination of the Plan.
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<PAGE>
ANNEX A
TO
NU-KOTE HOLDING, INC.
DEFERRED STOCK COMPENSATION PLAN
DEFERRAL ELECTION FORM
Pursuant to Section 3.1 of the Nu-kote Holding, Inc. Deferred Stock
Compensation Plan, I hereby elect to defer for the period commencing January 1,
199__ and ending at the end of any calendar year in which I change or revoke my
election, the following portions of Fees payable to me as a Director.
____% (0 to 100) of my Monthly Regular and Special Board Meeting
Attendance Fees
____% (0 to 100) of my Committee Meeting Attendance Fees
I understand that the amounts deferred under the Plan are not actually
invested in Common Stock of the Company, and that such stock is merely an index
for the calculation of a bookkeeping account related to my deferrals, and that
no representation has been made to me to the contrary.
I hereby elect the following form for distribution of all amounts due under
the Plan: (please check one)
____ A lump sum in cash
____ One payment in Common Stock
____ Installments over ____ (not to exceed 5) years in cash
____ Installments over ____ (not to exceed 5) years in Common Stock
I acknowledge that the method for distribution of amounts under the Plan may
be changed by me at any time, but that the last election submitted at least 6
months prior to my Termination of Service shall control.
<TABLE>
<S> <C>
(Signature)
Name:
(Please print)
Date:
Received:
NU-KOTE HOLDING, INC.
By:
Title:
Date:
</TABLE>
A-6
<PAGE>
ANNEX B
TO
NU-KOTE HOLDING, INC.
DEFERRED STOCK COMPENSATION PLAN
DESIGNATION OF BENEFICIARY
I, the undersigned Participant in the Nu-kote Holding, Inc. Deferred Stock
Compensation Plan, hereby designate the following person(s) or entities as my
primary and contingent beneficiaries under the Plan, the primary beneficiary to
be paid all amounts due me and not yet paid at my death, with the contingent
beneficiary receiving such amounts should the primary Beneficiary not survive
me:
PRIMARY BENEFICIARY: (List name and address)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
CONTINGENT BENEFICIARY: (List name and address)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Unless otherwise indicated above, more than one primary or contingent
beneficiary will share in equal amounts.
<TABLE>
<S> <C>
(Signature)
Name:
(Please print)
Date:
Received:
NU-KOTE HOLDING, INC.
By:
Title:
Date:
</TABLE>
A-7
<PAGE>
PROXY
NU-KOTE HOLDING, INC.
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 14, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints David F. Brigante and Anthony
G. Schmeck, or either of them, as the true and lawful attorneys and proxies
of the undersigned, with full power of substitution, to represent the
undersigned and to vote all of the shares of Class A Common Stock of Nu-kote
Holding, Inc. (the "Company"), that the undersigned is entitled to vote at
the Annual Meeting of Stockholders of the Company to be held on August 14,
1996 and at any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO SPECIFIC
DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS, "FOR" EACH OF THE PROPOSALS SET FORTH HEREIN AND IN THE DISCRETION
OF THE PROXY HOLDERS ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING.
See Reverse
Side
- - -------------------------------------------------------------------------------
FOLD AND DETACH HERE
Please mark X
your votes as
indicated in
this example
1. Election of Directors.
WITHHOLD
FOR all nominees AUTHORITY
listed to the right to vote for all
(except as marked nominees named
to the contrary) to the right
/ / / /
NOMINEES:
David F. Brigante, Brian D. Finn, Hubbard C. Howe, Richard C. Dresdale,
Theodore Barry, Daniel M. Kerrane, John P. Rochon, Donald A. Bolke
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name on the line below.)
- - -------------------------------------------------------------------------------
2. A proposal to approve the Nu-kote Holding, Inc. Deferred Stock
Compensation Plan
FOR AGAINST ABSTAIN
/ / / / / /
3. Ratification of Appointment of Coopers & Lybrand L.L.P. as Independent
Auditors for fiscal year 1997.
FOR AGAINST ABSTAIN
/ / / / / /
4. In their discretion, to vote upon such other business as may properly
come before the meeting or any adjournment thereof.
Please sign exactly as the name appears on the certificate or certificates
representing shares to be voted by this proxy. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized person. If a partnership, please sign in partnership name by
authorized person.
Signature of Stockholder _______________________________
Signature (if jointly owned) ___________________________
Dated: ____________________ , 1996
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
- - -------------------------------------------------------------------------------
FOLD AND DETACH HERE
