<PAGE> 1
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 240.14a-11(c) or 240.14a-12
OroAmerica, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[ ] 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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
OROAMERICA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2000
TO THE STOCKHOLDERS OF OROAMERICA, INC.:
The Annual Meeting of Stockholders of OroAmerica, Inc., a Delaware
corporation, will be held on Thursday, June 8, 2000, at 10:00 a.m., P.D.T., at
the Regent Beverly Wilshire Hotel, 9500 Wilshire Boulevard, Beverly Hills,
California, for the following purposes:
(1) To elect a Board of Directors;
(2) To consider and act upon a proposal to ratify the selection of
auditors; and
(3) To transact any other business that may properly come before the
meeting.
Only stockholders of record at the close of business on April 28, 2000 are
entitled to notice of and to vote at the meeting and any adjournments of the
meeting.
All stockholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. The giving of
your proxy will not affect your right to vote in person should you later decide
to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
OROAMERICA, INC.
/s/ BETTY SOU
BETTY SOU
Secretary
Burbank, California
May 10, 2000
<PAGE> 3
OROAMERICA, INC.
443 NORTH VARNEY STREET
BURBANK, CALIFORNIA 91502
(818) 848-5555
PROXY STATEMENT
MAY 10, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of OroAmerica, Inc. ("OROAMERICA"), for the
Annual Meeting of Stockholders to be held on June 8, 2000 and any postponements
or adjournments of the Annual Meeting. This Proxy Statement and the accompanying
Notice of Annual Meeting and form of proxy were first mailed to stockholders on
or about May 10, 2000.
The execution and return of the enclosed proxy will not in any way affect a
stockholder's right to attend the Annual Meeting in person. Any stockholder
giving a proxy may revoke it before it is voted by notifying the Secretary of
OroAmerica in writing before or at the meeting, by providing a proxy bearing a
later date or by attending the meeting and expressing a desire to vote in
person. Your cooperation in promptly returning the enclosed proxy will reduce
OroAmerica's expenses and enable its management and employees to continue their
normal duties for your benefit with minimum interruption for follow-up proxy
solicitation.
Only stockholders of record at the close of business on April 28, 2000 are
entitled to receive notice of and to vote at the meeting. On that date,
OroAmerica had outstanding 5,857,298 shares of common stock, each of which is
entitled to one vote at the meeting, except as noted below with respect to the
election of directors. The presence at the Annual Meeting, either in person or
by proxy, of the holders of a majority of the shares of common stock outstanding
on the record date is necessary to constitute a quorum for the transaction of
business.
A plurality of the votes cast is required for the election of directors.
The affirmative vote of a majority of the votes cast is required to approve each
of the other matters to be acted upon at the Annual Meeting. Mr. Benhamou, who
owns 3,473,560 shares of common stock, representing 59.3% of the votes entitled
to be cast at the Annual Meeting, has advised the Board of Directors that he
intends to vote all of his shares for the election of each of the Board's
nominees and in favor of each of the other proposals identified in the
accompanying Notice of Annual Meeting.
Abstentions and broker non-votes (which occur if a broker or other nominee
does not have discretionary authority and has not received voting instructions
from the beneficial owner with respect to the particular item) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions are counted in tabulations of the votes cast on
proposals presented to the stockholders and have the same legal effect as a vote
against a particular proposal. Broker non-votes are not taken into account for
purposes of determining whether a proposal has been approved by the requisite
stockholder vote.
All proxies will be voted as directed by the stockholder on the proxy card.
IF NO CHOICE IS SPECIFIED, PROXIES WILL BE VOTED "FOR" THE DIRECTORS NOMINATED
BY THE BOARD OF DIRECTORS AND "FOR" THE RATIFICATION OF THE SELECTION OF
AUDITORS.
If any other matters are properly presented at the Annual Meeting,
including, among other things, consideration of a motion to adjourn the Annual
Meeting to another time or place for the purpose of soliciting additional
proxies, the persons named in the enclosed form of proxy and acting thereunder
will have discretion to vote on those matters in accordance with their best
judgment, subject to direction by the Board of Directors, to the same extent as
the person signing the proxy. It currently is not anticipated that any other
matters will be raised at the Annual Meeting.
The cost of preparing, printing and mailing the Proxy Statement, the Notice
and the enclosed form of proxy, as well as the cost of soliciting proxies
relating to the Annual Meeting, will be borne by OroAmerica. The original
solicitation of proxies by mail may be supplemented by telephone, telegram and
personal
<PAGE> 4
solicitation by officers and other regular employees of OroAmerica, but no
additional compensation will be paid to those individuals on account of those
activities. OroAmerica will reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expenses in forwarding
proxy materials to their principals.
ELECTION OF DIRECTORS
NOMINEES AND VOTING
OroAmerica is incorporated under the laws of the State of Delaware. Under
Delaware law and OroAmerica's Certificate of Incorporation and Bylaws,
OroAmerica's Board of Directors is divided into three classes, with one class of
directors elected at each annual meeting of stockholders for a three-year term
and until their respective successors are elected and qualified. However, since
OroAmerica's common stock is held by less than 800 stockholders, a majority of
the common stock is held by persons with California addresses and OroAmerica has
substantial business contacts with the State of California, OroAmerica is
subject to Section 2115 of the California Corporations Code. As a result,
certain legal matters, including provisions relating to the election of
directors, are governed by California law and not by Delaware law or
OroAmerica's Certificate of Incorporation and Bylaws. Under applicable
California law, all directors of OroAmerica are required to be elected each
year.
Cumulative voting also could apply under applicable California law. This
means that, in the election of directors, each stockholder is entitled to a
number of votes equal to the number of his or her shares of stock multiplied by
the number of directors to be elected. A stockholder may cast all of these votes
for a single nominee or distribute them among the nominees as he or she sees
fit. However, no stockholder is entitled to cumulate votes for a nominee unless
the nominee's name has been placed in nomination prior to the vote and a
stockholder has given notice at the meeting, prior to the voting, of the
stockholder's intention to cumulate his or her votes. If any one stockholder
gives this notice, all stockholders may cumulate their votes for nominees. The
persons named in the enclosed form of Proxy may, in their discretion, cumulate
votes pursuant to the proxies for any one or more nominees.
The Board of Directors has nominated for election as directors the five
persons named below, all of whom are incumbent directors, except John Arzoian,
who has been nominated to fill the vacancy in the Board caused by the
resignation of Ronald Katz in March 2000. Mr. Katz, who was a director of
OroAmerica since 1993, resigned from the Board to devote more attention to other
matters. All of the nominees have indicated that they are able and willing to
serve as directors.
If OroAmerica continues to be subject to Section 2115 of the California
Corporations Code at the time of the next annual meeting of stockholders, the
directors elected at the Annual Meeting will hold office until the next annual
meeting and until their respective successors are elected and qualified.
However, if at the time of the next annual meeting OroAmerica no longer is
subject to Section 2115, Mr. Benhamou and Mr. Rousso will be deemed to have been
elected as Class I directors to serve for a term of three years and until their
successors are elected and qualified, and Mr. Shao and Mr. Arzoian will be
deemed to have been elected as Class III directors to serve for a term of two
years and until their successors are elected and qualified. The term of Mr.
Massing will expire at the next annual meeting and upon the election and
qualification of his successor whether or not OroAmerica continues to be subject
to Section 2115.
The Board of Directors recommends that the stockholders vote "FOR" the
election of its nominees. Unless otherwise instructed, the Board's proxies
intend to vote the shares of common stock represented by the proxies in favor of
the election of these nominees. If for any reason any of these nominees will be
unable to serve, the Board's proxies will vote instead for such other person or
persons as the Board of Directors may recommend.
2
<PAGE> 5
The following table sets forth certain information as of April 28, 2000
with respect to the Board's nominees:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
---- --- --------
<S> <C> <C>
Class I
Guy Benhamou......................................... 48 1977
David Rousso......................................... 59 1995
Class II
Bertram K. Massing................................... 66 1987
Class III
Shiu Shao............................................ 48 1993
John Arzoian......................................... 50 --
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS DURING THE PAST FIVE YEARS
Guy Benhamou is a co-founder of OroAmerica and has been its President,
Chief Executive Officer and a member of its Board of Directors since its
inception in January 1977. Mr. Benhamou was appointed Chairman of the Board in
May 1993.
David Rousso was appointed to the Board of Directors in November 1995. Mr.
Rousso has been a professional investor since January 1991 and is the President
and sole stockholder of DPR Investments, a financial consulting firm. Mr. Rousso
also is Chairman of the Board of CreditCheck, Inc., a privately held financial
software company.
Bertram K. Massing has been a partner in the law firm of Ervin, Cohen &
Jessup LLP, which represents OroAmerica in a variety of legal matters, for more
than the past five years.
Shiu Shao has been employed by OroAmerica since April 1981. Mr. Shao served
as Controller of OroAmerica from 1981 to 1984 and Vice President -- Finance from
1984 until September 1991, when he was appointed Chief Financial Officer. Mr.
Shao also has served as a director of OroAmerica since May 1993 and was
appointed a Vice President of OroAmerica in May 1994 and the Chief Operating
Officer of OroAmerica in October 1998.
John Arzoian founded Pace Enterprises, Inc., a privately held jewelry
manufacturing company specializing in gemstone jewelry, with his wife in 1977,
and was its General Partner from 1977 until it became a corporation in 1991. Mr.
Arzoian has been the Chief Executive Officer of Pace Enterprises since 1991.
No family relationships exist between any of the directors or officers of
OroAmerica.
3
<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
OroAmerica maintains an Audit Committee whose current members are Mr.
Massing and Mr. Rousso, and included Mr. Katz prior to his resignation as a
director in March 2000. The Audit Committee's responsibilities include approving
the selection and engagement of independent accountants and reviewing the plan
and scope of their audit for each year, the results of the audit when completed
and their fees for services performed. The Audit Committee also assists and
makes recommendations to the Board of Directors in fulfilling the Board's
responsibilities relating to OroAmerica's accounting, financial reporting and
internal control functions and reviews and passes upon all transactions with
affiliates and other persons having a material financial interest in OroAmerica.
The Audit Committee met twice during fiscal 2000. The Board anticipates that Mr.
Arzoian, if elected as a director, will be appointed to fill the current vacancy
on the Audit Committee.
OroAmerica maintains a Compensation Committee whose current member is Mr.
Rousso, and included Mr. Katz prior to his resignation in March 2000. The
Compensation Committee approves the compensation of the executive officers of
OroAmerica, formulates and reviews significant compensation policies and
decisions and administers OroAmerica's employee benefit plans. The Compensation
Committee met four times during fiscal 2000. The Board anticipates that Mr.
Arzoian, if elected as a director, will be appointed to fill the current vacancy
on the Compensation Committee.
OroAmerica's Board of Directors met five times during fiscal 2000. Each
director attended at least 75% of the meetings of the Board of Directors and of
any committees on which he served. OroAmerica does not maintain a nominating
committee.
COMPENSATION OF DIRECTORS
Since September 30, 1993, directors who are not employees of OroAmerica
have been paid an annual fiscal year retainer of $10,000 plus $1,000 for each
Board meeting attended. The same compensation arrangements will apply in fiscal
2001. All directors are reimbursed for their travel expenses incurred in
attending Board or committee meetings.
Pursuant to the provisions of the OroAmerica, Inc. 1994 Directors' Stock
Option Plan, each new non-employee director, on the date of his or her election
to the Board of Directors, whether elected by the stockholders or the Board of
Directors, automatically will be granted a stock option to purchase 10,000
shares of common stock at an exercise price equal to the fair market value of
the common stock on the date of grant. Only one grant may be made under the this
plan to each non-employee director. In accordance with the provisions of this
plan, assuming Mr. Arzoian is elected to the Board of Directors at the 2000
Annual Meeting, Mr. Arzoian will receive a 10,000 share option on June 8, 2000.
On April 14, 1998, the Board of Directors adopted the Supplemental
Non-Employee Directors' Stock Option Plan, which provides for automatic grants
to each non-employee director of stock options to purchase 1,000 shares of
common stock commencing on April 14, 1998, and continuing each time a
non-employee director is re-elected to the Board of Directors following the 1998
Annual Meeting. In accordance with the provisions of this plan, on June 14,
1999, the date of their re-election to the Board at the 1999 Annual Meeting, Mr.
Massing and Mr. Rousso were each granted a stock option to purchase 1,000 shares
of common stock at an exercise price of $6.9375 per share, the fair market value
of the common stock on the date of grant. Assuming their re-election to the
Board of Directors at the 2000 Annual Meeting, Mr. Massing and Mr. Rousso will
each receive an additional 1,000 share option on June 8, 2000.
4
<PAGE> 7
OWNERSHIP OF COMMON STOCK
The following table sets forth information with respect to the beneficial
ownership of OroAmerica common stock as of April 28, 2000 by (i) each person who
is known by OroAmerica to be the beneficial owner of more than five percent (5%)
of the outstanding common stock (based on Schedules 13G filed with the
Securities and Exchange Commission), (ii) each director of OroAmerica, (iii)
each nominee for director of OroAmerica, (iv) the executive officers named in
the Summary Compensation Table below and (v) all directors and executive
officers as a group. Unless otherwise indicated, each of the entities and
persons named in the table has sole voting and investment power with respect to
all shares of common stock beneficially owned by it or him, except to the extent
that authority is shared by spouses under applicable law.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
--------------------
NAME AND ADDRESS NUMBER PERCENT
---------------- --------- -------
<S> <C> <C>
Guy Benhamou................................................ 3,473,560 59.30%
443 North Varney Street, Burbank, CA 91502
Dimensional Fund Advisors Inc............................... 428,700 7.32%
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401
Shiu Shao................................................... 149,083 2.51%
David Rousso................................................ 68,667 1.17%
David Wu.................................................... 41,830 *
Claudia Hollingsworth....................................... 35,000 *
Bertram K. Massing.......................................... 17,667 *
Marc Kesten................................................. 1,500 *
John Arzoian................................................ 0 --
All directors and executive officers as a group (10
persons).................................................. 3,802,307 62.75%
</TABLE>
- ---------------
* Indicates ownership of less than one percent.
(1) Includes shares which may be purchased upon the exercise of options which
are exercisable as of April 28, 2000, or become exercisable within 60 days
thereafter, for the following: Mr. Shao -- 88,333 shares; Mr.
Rousso -- 8,667 shares; Mr. Wu -- 40,000 shares; Ms. Hollingsworth -- 35,000
shares; Mr. Massing -- 13,667 shares; Mr. Kesten -- 1,500 shares; and all
directors and executive officers as a group -- 202,167 shares.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes all compensation paid by OroAmerica during
the fiscal years ended January 28, 2000, January 29, 1999 and January 30, 1998
to (a) OroAmerica's Chief Executive Officer and (b) OroAmerica's four other most
highly paid executive officers who were serving as executive officers at the end
of the fiscal year ended January 28, 2000.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION ----------------------
-------------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS(1) COMPENSATION(2)
--------------------------- ---- -------- -------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C>
Guy Benhamou..................... 2000 $748,094 $ 14,727 -- $7,475
Chairman of the Board, 1999 650,000 155,141 -- 7,469
President and Chief 1998 650,000 177,434 -- 7,421
Executive Officer
Shiu Shao........................ 2000 241,483 56,525 200,000 7,475
Chief Operating Officer, 1999 231,555 103,914 -- 7,469
Chief Financial Officer 1998 230,776 108,641 -- 7,421
and Vice President
Claudia Hollingsworth............ 2000 199,084 61,983 60,000 2,500
Senior Vice President -- Sales 1999 192,794 90,373 -- 3,333
1998 190,395 94,330 -- 3,167
David Wu......................... 2000 175,543 52,196 60,000 2,500
Senior Vice President -- 1999 161,550 78,264 -- 3,333
Manufacturing 1998 164,931 82,264 -- 3,167
Marc Kesten(3)................... 2000.. 121,311 14,228 -- 2,500
General Counsel and 1999 117,014 19,623 2,500 1,980
Assistant Secretary 1998 -- -- -- --
</TABLE>
- ---------------
(1) Number of shares of common stock underlying options granted under the
Amended and Restated OroAmerica, Inc. 1998 Incentive Stock Option Plan (the
"1998 Plan"). No SARs may be granted under the 1998 Plan.
(2) Consists of contributions by the Company to a defined contribution 401(k)
plan for each of the named executive officers. The amounts indicated for
each of Mr. Benhamou and Mr. Shao also include premiums for medical and
dental insurance coverage for their dependents of $4,975 for fiscal 2000,
$4,136 for fiscal 1999 and $4,254 for fiscal 1998.
(3) Mr. Kesten has been employed by OroAmerica since May 1997, and was appointed
General Counsel and Assistant Secretary in June 1998.
6
<PAGE> 9
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information as of January 28, 2000,
and for the fiscal year then ended, with respect to stock options granted to the
individuals named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENTAGE OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION --------------------------------
NAME GRANTED(1) FISCAL 2000 SHARE(2) DATE 0% 5% 10%
---- ---------- ------------- --------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Guy Benhamou.................. -- -- -- -- -- -- --
Shiu Shao..................... 100,000 27.6% $7.5000 2/04/09 $244,000 $788,000 $1,792,000
100,000 27.6% $6.5625 12/15/09 -- 412,750 1,045,750
Claudia Hollingsworth......... 30,000 8.3% $7.5000 2/04/09 73,200 236,400 537,600
30,000 8.3% $6.5625 12/15/09 -- 123,825 313,725
David Wu...................... 30,000 8.3% $7.5000 2/04/09 73,200 236,400 537,600
30,000 8.3% $6.5625 12/15/09 -- 123,825 313,725
Marc Kesten................... -- -- -- -- -- -- --
</TABLE>
- ---------------
(1) The options were granted on February 5, 1999 and December 16, 1999, under
the 1998 Plan and are subject to vesting over a three-year period, with 1/3
of the options exercisable on the first anniversary of the date of grant and
an additional 1/3 of the options becoming exercisable on the second and
third anniversaries of the date of grant. The vesting of the options will be
accelerated upon a sale of substantially all of OroAmerica's assets, the
dissolution of OroAmerica or upon a change in the controlling stockholder
interest in OroAmerica resulting from a tender offer, reorganization, merger
or consolidation.
(2) At the discretion of the Compensation Committee, the exercise price may be
paid by delivery of shares of common stock owned by the executive and valued
at the fair market value on the date of exercise, and the tax withholding
obligations related to the exercise of the stock options, if any, may be
satisfied by offset of the underlying shares, subject to certain conditions.
The Compensation Committee retains the discretion, subject to plan limits,
to modify the terms of outstanding options and to reprice the options.
(3) The potential realizable values shown under these columns represent the
value of the stock options on the date of grant for those options that were
granted with an exercise price less than the current market price on the
date of grant and the future value of the options (net of exercise price)
assuming the market price of the common stock appreciates annually by 5% and
10%. The 5% and 10% rates of appreciation are prescribed by the Securities
and Exchange Commission and are not intended to forecast possible future
appreciation of OroAmerica's common stock.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END VALUE
The following table sets forth information for the named executive officers
regarding the unexercised stock options held by them as of January 28, 2000.
None of the executive officers exercised any stock options during the year ended
January 28, 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
JANUARY 28, 2000 AT JANUARY 28, 2000(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
Guy Benhamou..................................... -- / -- -- / --
Shiu Shao........................................ 53,000/202,000 $12,500/$3,125
Claudia Hollingsworth............................ 23,000/ 62,000 4,688/ 3,125
David Wu......................................... 28,000/ 62,000 12,500/ 3,125
Marc Kesten...................................... 1,000/ 1,500 0/ 0
</TABLE>
- ---------------
(1) Based on the closing price on the Nasdaq National Market of OroAmerica
common stock on that date ($6.25), minus the exercise price.
7
<PAGE> 10
EMPLOYMENT AGREEMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
Since September 30, 1993, Mr. Benhamou has served as Chairman of the Board,
Chief Executive Officer and President pursuant to an employment agreement that
automatically renews for successive one-year periods unless terminated by either
party. Under the terms of the agreement, Mr. Benhamou receives an annual salary
of $750,000 and a bonus in an amount determined by the Compensation Committee of
the Board of Directors. Mr. Benhamou also is entitled to a bonus pursuant to the
1994 Chief Executive Officer Bonus Plan approved by stockholders in July 1994.
See "Compensation Committee Report on Executive Compensation". In addition to
salary and bonus, OroAmerica is required to provide Mr. Benhamou with the use of
an automobile and pay all expenses incurred in connection with the automobile.
In August 1996, OroAmerica entered into agreements with Mr. Shao, Ms.
Hollingsworth and Mr. Wu, which provide for payments to them in the event of a
change in control of OroAmerica. Under the agreements, the executive officer
will be entitled to certain payments from OroAmerica if the executive officer's
employment is terminated following a change in control of OroAmerica, unless the
termination is (i) because of the executive officer's death or disability, (ii)
by OroAmerica for "Cause" (as defined in the agreements) or (iii) by the
executive officer other than for "Good Reason" (as defined in the agreements).
The agreement with Mr. Shao provides for a payment of three times the average of
his annual salary and bonus for the three fiscal years immediately preceding the
change in control, reduced to the extent necessary to prevent the payments made
to Mr. Shao from exceeding the limits imposed by Section 280G of the Internal
Revenue Code of 1986. The agreements with Ms. Hollingsworth and Mr. Wu provide
for a payment of $150,000. No termination benefit is required to be paid if the
executive officer's employment terminates prior to a change in control. In
addition, the agreements may now be terminated by OroAmerica at any time.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was established on
September 30, 1993, and currently consists of Mr. Rousso, who is a non-employee
director, and included Mr. Katz prior to his resignation as a director in March
2000. The Compensation Committee sets OroAmerica's compensation policies
applicable to executive officers and administers OroAmerica's bonus plans and
stock option plans. The Compensation Committee does not administer the 1994
Directors' Stock Option Plan or the Supplemental Non-Employee Directors' Stock
Option Plan, both of which are administered by the Board. The Compensation
Committee has prepared the following report for inclusion in this Proxy
Statement.
Compensation Policy for Executive Officers
The policy of the Compensation Committee is to provide each executive
officer current cash compensation that is reasonable and consistent with
OroAmerica's size, industry and performance, and long-term incentive
compensation, in the form of stock options, based on the increase in value of
OroAmerica's common stock. In addition to salary, current cash compensation
includes a bonus based in part on OroAmerica's current annual performance and in
part on the executive's individual performance.
Compensation of Chief Executive Officer
Since the completion of OroAmerica's initial public offering in September
1993, Mr. Benhamou's salary has been fixed by his employment agreement.
Effective February 1, 1999, Mr. Benhamou's salary was increased from $650,000
per year to $750,000 per year, the first increase in Mr. Benhamou's salary since
1993. Mr. Benhamou also is entitled under the contract to a bonus determined by
the Board of Directors or the Compensation Committee in its discretion. The
Board has delegated this responsibility to the Compensation Committee.
In keeping with the Compensation Committee's objective of rewarding
executive officers based on corporate performance, and in order to assure the
deductibility to OroAmerica of amounts paid to Mr. Benhamou, in March 1994, the
Compensation Committee adopted the 1994 Chief Executive Officer Bonus Plan (the
"BONUS PLAN"), which was approved by stockholders in July 1994. The Bonus Plan
provides for the payment to Mr. Benhamou of an annual bonus based on a
percentage of the amount by which income
8
<PAGE> 11
before income taxes (before the payment of Mr. Benhamou's bonus) ("PRETAX
INCOME") for the applicable year exceeds $5.0 million, calculated as follows: 2%
of Pretax Income in excess of $5.0 million up to $8.0 million; plus 4% of Pretax
Income in excess of $8.0 million up to $15.0 million; plus 6% of Pretax Income
in excess of $15.0 million. A bonus of $14,727 was paid to Mr. Benhamou pursuant
to the Bonus Plan for fiscal 2000.
Mr. Benhamou has not been awarded any stock options by OroAmerica, although
he is eligible to participate in OroAmerica's option plans. Mr. Benhamou also
participates in OroAmerica's defined contribution plan.
Compensation of Other Executive Officers
For fiscal 2000, compensation paid to OroAmerica's executive officers other
than Mr. Benhamou consisted of a base salary, bonuses and contributions to a
defined contribution plan. The base salaries of executive officers other than
Mr. Benhamou for fiscal 2000 were determined by the Compensation Committee,
based on Mr. Benhamou's recommendations. In determining salaries, Mr. Benhamou
and the Compensation Committee considered available information about the pay
scales of other companies in the jewelry industry. The Compensation Committee
believes that the salaries of these executive officers are comparable to the
salaries of executives with similar experience and responsibilities in the
jewelry industry.
Bonuses to executive officers other than Mr. Benhamou are awarded pursuant
to OroAmerica's Executive/Key Employee Bonus Plan, which was adopted based on
the recommendations of a compensation consulting firm. Under this plan,
participating executives and key employees may receive a cash bonus calculated
as a percentage of their base salary, with the applicable percentage determined
by reference to the income before income taxes of OroAmerica for the applicable
fiscal year and individual performance measures which are intended to recognize
individual contributions as reflected by the level of the executive's
responsibilities, his or her effectiveness in overseeing the matters under his
or her supervision and the degree to which he or she has contributed to the
accomplishment of major corporate goals. For each of the named executive
officers, 50% of the bonus is based on company performance, and 50% of the bonus
is based on individual performance. For certain other executive officers, the
bonus is based 25% on company performance and 75% on individual performance. For
the fiscal year ended January 28, 2000, the income before income taxes targets
and the individual performance measures were determined by the Compensation
Committee, based on Mr. Benhamou's recommendations.
Stock Option Plan
OroAmerica's stock option program provides additional incentives to key
employees to maximize stockholder value and provides a link between the
interests of senior managers and stockholders. By utilizing vesting periods, the
option program encourages key employees to remain in the employ of OroAmerica
and provides a long-term perspective to the compensation available under the
option program. The Compensation Committee determines the number of option
shares to be granted to each participating employee based upon his or her level
of responsibility, a review of OroAmerica's overall performance and prior
grants. Stock options to purchase a total of 320,000 shares of common stock were
awarded to three executive officers during fiscal 2000, including a 30,000 share
stock option to each of Ms. Hollingsworth and Mr. Wu, and a 100,000 share stock
option to Mr. Shao, each with an exercise price below the current market price
on the date of grant. The lower exercise price was consistent with market
conditions on the effective date of the officer's appointment to additional
executive offices at OroAmerica, rather than the current market price of the
common stock on the date of grant.
Internal Revenue Code Provisions
The Compensation Committee will continue to consider the anticipated tax
treatment to OroAmerica regarding the compensation and benefits paid to the
Chief Executive Officer and the four other most highly compensated executive
officers of OroAmerica in light of the 1993 additions to Section 162(m) of the
Internal Revenue Code of 1986, ("SECTION 162(m)"). The Compensation Committee
from time to time will consider
9
<PAGE> 12
amendments to OroAmerica's compensation programs necessary to preserve the
deductibility of all compensation paid by OroAmerica which is subject to Section
162(m). While OroAmerica does not expect to pay its executive officers
compensation in fiscal 2001 in excess of the Section 162(m) deductibility limit,
the Board of Directors and the Compensation Committee retain discretion to
authorize the payment of compensation that does not qualify for income tax
deductibility under Section 162(m).
Ronald A. Katz David Rousso
PERFORMANCE GRAPH
The following graph compares the cumulative stockholder return on
OroAmerica common stock from January 27, 1995 through January 28, 2000, based on
the market price of the common stock, with the cumulative total return of the
Nasdaq Market Value Index and the Media General Recreational Goods -- Other
Index. The graph assumes that the value of the investment in OroAmerica common
stock and each index was $100 on January 27, 1995 and that all dividends, if
any, were reinvested. The comparisons in this table are not intended to forecast
or be indicative of possible future price performance.
COMPARISON OF CUMULATIVE STOCKHOLDER RETURN OF OROAMERICA, INC.,
NASDAQ MARKET VALUE INDEX AND MEDIA GENERAL RECREATIONAL GOODS -- OTHER INDEX
[OROAMERICA, INC. GRAPH]
ASSUMES $100 INVESTED ON JAN. 27, 1995 ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JAN. 28, 2000
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
---------------------------------------------------------------------
COMPANY/INDEX/MARKET 1/27/1995 2/02/1996 1/31/1997 1/30/1998 1/29/1999 1/28/2000
-------------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
OroAmerica Inc. 100.00 67.59 70.37 69.44 148.15 92.59
NASDAQ Market Index 100.00 140.02 184.26 217.04 338.74 506.71
MG Group Index 100.00 117.52 95.15 98.69 126.33 128.66
</TABLE>
10
<PAGE> 13
CERTAIN TRANSACTIONS
In August 1998, OroAmerica loaned $190,000 to Mr. Shao to assist him in
exercising an incentive stock option which was about to expire. The loan is
evidenced by a full recourse promissory note issued by Mr. Shao, is due and
payable in a lump sum in August 2001 and bears interest at 7.35% per annum. In
addition, the loan is secured by a security interest in the 60,750 shares of
common stock purchased by Mr. Shao upon the exercise of the stock option, and is
due in full upon the termination of Mr. Shao's employment with OroAmerica for
any reason, including termination without cause.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the accounting firm of
PricewaterhouseCoopers LLP to serve as independent auditors for the current
fiscal year, subject to ratification by the stockholders. PricewaterhouseCoopers
LLP has served as OroAmerica's independent auditors since 1983.
The Board of Directors recommends a vote "FOR" ratification of this
selection. Stockholder ratification of the selection of auditors is not required
under the laws of the State of Delaware, but the Board has determined to
ascertain the position of the stockholders on the selection. The Board of
Directors will reconsider the selection if it is not ratified by the
stockholders.
It is anticipated that representatives of PricewaterhouseCoopers LLP will
be present at the Annual Meeting, and these representatives will be given the
opportunity to make a statement, if they so desire, and to answer appropriate
questions.
MISCELLANEOUS
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2001 Annual Meeting
of Stockholders must be received by OroAmerica by January 11, 2001 to be
considered by OroAmerica for inclusion in OroAmerica's proxy statement and form
of proxy relating to that meeting. These proposals should be directed to the
attention of the Secretary, OroAmerica, Inc., 443 North Varney Street, Burbank,
California 91502.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires OroAmerica's
executive officers and directors, and persons who own more than ten percent of a
registered class of OroAmerica's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten percent stockholders are required by Securities
and Exchange Commission regulations to furnish OroAmerica with copies of all
Section 16(a) forms they file.
Based solely on a review of the copies of these forms furnished to
OroAmerica, or written representations that no Forms 5 were required, OroAmerica
believes that all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than ten-percent beneficial owners were complied
with during fiscal 2000.
OTHER MATTERS
Neither OroAmerica nor any of the persons named as proxies knows of any
matters to be voted on at the Annual Meeting other than as described in this
Proxy Statement. However, if any other matters are properly presented at the
meeting, it is the intention of the persons named as proxies to vote in
accordance with their judgment on such matters, subject to direction by the
Board of Directors.
The 2000 Annual Report to Stockholders accompanies this Proxy Statement,
but is not to be deemed a part of the proxy soliciting material.
WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND RETURN THE
ENCLOSED PROXY CARD.
11
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4830-PS-00
<PAGE> 15
OROAMERICA, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 8, 2000
The undersigned, revoking any previous proxies for such stock, hereby
appoints Guy Benhamou and Shiu Shao, and each of them, proxies of the
undersigned with full power of substitution to each, to vote all shares of
common stock of OROAMERICA, INC., which the undersigned is entitled to vote at
the Annual Meeting of Stockholders of OroAmerica, Inc., to be held on June 8,
2000, and all postponements or adjournments thereof, with all the power the
undersigned would possess if personally present, with authority to vote (i) as
specified by the undersigned below and (ii) in the discretion of any proxy upon
such other business as may properly come before the meeting.
Vote this proxy as follows:
1. Election of directors:
FOR THE NOMINEES LISTED BELOW [ ] WITHHOLD VOTE [ ]
(except as marked to the contrary below) (for all nominees)
Guy Benhamou, Shiu Shao, Bertram K. Massing, David Rousso and John
Arzoian
INSTRUCTION: TO WITHHOLD VOTE FOR A NOMINEE, MARK THROUGH THE NOMINEE'S NAME IN
THE ABOVE LIST.
2. Proposal to ratify the selection of PricewaterhouseCoopers LLP
as independent auditors:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES OF THE BOARD OF DIRECTORS, FOR THE
RATIFICATION OF AUDITORS AND OTHERWISE IN THE DISCRETION OF ANY OF THE PERSONS
ACTING AS PROXIES.
IMPORTANT: Please date this proxy and sign exactly as your name or names appear
hereon. If stock is held jointly, each should sign. Executors, administrators,
trustees, guardians and others signing in a representative capacity, please give
your full title(s). If this proxy is submitted to a corporation or partnership,
it should be executed in the full corporate or partnership name by a duly
authorized person.
Dated: , 2000
---------------- ---------------------------------------
---------------------------------------
(Signature of stockholder)
IMPORTANT: PLEASE SIGN PROXY EXACTLY AS
YOUR NAME OR NAMES APPEAR HEREON.
