SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant
Check the appropriate box:
(X) Preliminary Proxy Statement ( )Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Concord Camera Corp.
(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)(1) 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>
CONCORD CAMERA CORP.
35 Mileed Way
Avenel, New Jersey 07001
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------
April 17, 1997
---------------
To the Shareholders of Concord Camera Corp.:
Notice is hereby given that the Annual Meeting of Shareholders of
Concord Camera Corp. (the "Company") will be held at the Sheraton Woodbridge
Place Hotel, 515 Route 1 South (New Jersey Turnpike Exit 11), Iselin, New Jersey
08830, on Thursday, April 17, 1997, at 10:00 a.m., local time, for the following
purposes:
1. To elect directors for the ensuing year;
2. To approve amendments to the Company's Certificate of
Incorporation as follows:
a. To increase the authorized common stock from
20,000,000 shares to 40,000,000 shares; and
b. To authorize the Company to issue up to 1,000,000
shares of preferred stock;
3. To ratify the selection of Ernst & Young LLP (Ernst & Young)
as independent auditors of the Company for the fiscal year
ending June 30, 1997; and
4. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on February 28,
1997 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the meeting or any adjournments thereof.
Management requests all shareholders to sign and date the enclosed form
of proxy and return it in the postage paid, self-addressed envelope provided for
your convenience. Please do this whether or not you plan to attend the meeting.
Should you attend, you may, if you wish, withdraw your proxy and vote your
shares in person.
By Order of the Board of Directors
Brian King
Secretary
Avenel, New Jersey
March 13, 1997
<PAGE>
CONCORD CAMERA CORP,
---------------
PROXY STATEMENT
dated March 13, 1997
---------------
FOR ANNUAL MEETING OF SHAREHOLDERS
to be held Thursday, April 17, 1997
---------------
This Proxy Statement is furnished by the Board of Directors (the
"Board") of CONCORD CAMERA CORP. (the "Company") in connection with the
solicitation of proxies to be voted at the Annual Meeting of Shareholders which
will be held at the Sheraton Woodbridge Place Hotel, 515 Route 1 South (New
Jersey Turnpike - Exit 11), New Jersey 08830, on Thursday, April 17, 1997, at
10:00 a.m., local time, and all adjournments thereof (the "Annual Meeting"). The
Board has fixed the close of business on February 28, 1997 as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
Annual Meeting or any adjournments thereof.
Any shareholder giving a proxy will have the right to revoke it at any
time prior to the time it is voted. A proxy may be revoked by written notice to
the Company, Attention: Secretary, by execution of a subsequent proxy or by
attendance and voting in person at the Annual Meeting. Attendance at the Annual
Meeting will not automatically revoke the proxy. All shares represented by
effective proxies will be voted at the Annual Meeting or at any adjournment
thereof. Unless otherwise specified in the proxy (and except for "broker
non-votes" described below), shares represented by proxies will be voted (i) FOR
the election of management's nominees for directors, (ii) FOR both of the
proposed amendments to the Company's Certificate of Incorporation (each, a
"Proposed Amendment" and collectively the "Proposed Amendments"), (iii) FOR the
ratification of the selection of Ernst & Young LLP ("Ernst & Young") as
independent auditors of the Company for the fiscal year ending June 30, 1997
("Fiscal 1997"), and (iv) in the discretion of the proxy holders with respect to
such other matters as may come before the Annual Meeting.
The Company's executive offices are located at 35 Mileed Way, Avenel,
New Jersey 07001. On or about March 13, 1997, this Proxy Statement and the
accompanying form of proxy are to be mailed to each shareholder of record at the
close of business on February 28, 1997. On or about January 23, 1997, the Annual
Report of the Company for the fiscal year ended June 30, 1996 ("Fiscal 1996"),
including financial statements, was mailed to each shareholder of record at the
close of business on January 13, 1997.
As of January 31, 1997, the Company had issued and outstanding
10,880,473 shares of no par value, common stock (the "Common Shares"), the
Company's only class of voting securities outstanding. Each Common Share
entitles the holder thereof to one vote. The majority of all the outstanding
Common Shares constitutes a quorum at the Annual Meeting. Shares of Common Stock
represented by proxies that reflect abstentions and "broker non-votes" (i.e.,
Common Stock represented at the Annual Meeting by proxies held by brokers or
nominees as to which (i) instructions have not been received from the beneficial
owners or persons entitled to vote and (ii) the broker or nominee does not have
the discretionary voting power on a particular matter) will be counted as a vote
represented and voted at the Annual Meeting for purposes of determining the
number of votes required to approve a proposal. Shares of Common Stock
represented by proxies that withhold authority to vote for a nominee for
election as a director and broker non-votes will not be counted as a vote
represented and voted at the Annual Meeting for purposes of determining the
number of votes required to elect such nominee.
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<PAGE>
PROPOSAL ONE: ELECTION OF DIRECTORS
Nominees for Election of Directors
Pursuant to Article III of the Company's By-laws, as amended, the Board
has fixed the number of directors constituting the entire Board at eight. All
eight directors are to be elected at the Annual Meeting, each to hold office
until the next annual meeting of shareholders and until his successor is duly
elected and qualified. In voting for directors, each shareholder is entitled to
cast one vote for each share held of record, either in favor of or against the
election of each nominee, or to abstain from voting on any or all nominees. It
is intended that the Common Shares represented by the enclosed form of proxy
will be voted in favor of the election of all of the nominees named below as
directors, all of whom are now directors of the Company, unless otherwise
specified in such proxy. If any of the nominees should become unavailable for
election, the Common Shares represented by such proxies will be voted for such
substitute nominees as may be nominated by the Board. The election of directors
requires the affirmative vote of a plurality of the votes cast by the holders of
the Common Shares present or represented and entitled to vote at the Annual
Meeting.
The following table sets forth information with respect to each nominee
for director, all of whom are currently serving as directors of the Company. The
information has been furnished to the Company by the individual named.
<TABLE>
<S> <C> <C> <C>
Year First
Elected/
Nominated
Name of Nominee Age Director Positions and Offices with the Company
- --------------- --- -------- --------------------------------------
Ira B. Lampert (1).................... 51 1993 Chairman, Chief Executive Officer and Director;
Director of Concord Camera HK Limited, Concord
Camera GmbH, Concord Camera UK Limited,
Concord Camera Illinois Corp. and Concord Camera
France
Steve Jackel (2)...................... 61 1996 President, Chief Operating Officer and Director
Eli Arenberg (3)...................... 69 1988 Director
Joel L. Gold (4)...................... 55 1991 Director
Morris H. Gindi (5)................... 52 1988 Director
J. David Hakman (6)................... 55 1993 Director
Ira J. Hechler (7).................... 78 1992 Director
Kent M. Klineman (8).................. 64 1993 Director
</TABLE>
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<PAGE>
- ---------------
(1) On July 13, 1994, Ira B. Lampert was appointed to the positions of
Chairman and Chief Executive Officer of the Company. Mr. Lampert was
President and Chief Operating Officer from June 1, 1993 through January
1, 1996, and has been a Director of the Company since June 29, 1993.
Mr. Lampert is also a director of Concord Camera HK Limited, Concord
Camera GmbH, Concord Camera UK Limited, Concord Camera Illinois Corp.
and Concord Camera France. From April 1992 through May 30, 1993, Mr.
Lampert's services were made available to the Company under consulting
agreements with Whitehall Enterprises Inc. ("WEI"), an investment
banking company for the middle-market, of which Mr. Lampert was the
President since August 1990. During the 1980's through the early
1990's, Mr. Lampert also served as a director and/or officer of Summit
Ventures, Inc. and related entities which developed and managed
Ascutney Mountain Resort, a year-round destination resort located in
Vermont. Mr. Lampert is a Board Member of the Queens College Foundation
which is part of the City University of New York and is the Treasurer
of the Boys Brotherhood Republic, a non-profit organization for
underprivileged children in the New York City area.
(2) Effective January 1, 1996, Steve Jackel was appointed President, Chief
Operating Officer, and Director of the Company. From May 1, 1995 to
December 31, 1995, Mr. Jackel's services were rendered to the Company
pursuant to a consulting agreement dated May 1, 1995 between the
Company and Harjac Consulting Corp., a corporation owned by Mr. Jackel.
From February 1993 to November 1994, Mr. Jackel was President of
McCrory's Corporation and Chairman of McCrory Stores. From June 1992
through February 1993 he was Co-President of McCrory Stores. From
February 1991 through June 1992 he was Executive Vice President
Specialty Operation for McCrory Stores. Prior to that time Mr. Jackel
was an independent management consultant.
(3) Eli Arenberg joined the Company in April 1984 as Vice President of
Sales and Marketing and in September 1989 was promoted to Senior Vice
President of Sales. In February 1992, Mr. Arenberg retired from such
positions and in July 1994 made his services available to the Company
under a consulting agreement with ELA Enterprises, Inc. (the "ELA
Enterprises Consulting Agreement"), a Florida corporation wholly-owned
by Mr. Arenberg.
(4) Joel L. Gold is currently an Executive Vice President at L.T. Lawrence
& Co., Inc., an investment bank. From April 1995 through March 1996,
Mr. Gold was a managing director at Fector Detwiler & Co, Inc. an
investment bank. From January 1992 through April 1995, Mr. Gold was a
director at Furman Selz Incorporated, an investment bank. From April
1990 through December 1991, Mr. Gold was a managing director at Bear,
Stearns & Co. Inc., New York, New York. From April 1971 through
February 1990, Mr. Gold was a managing director at Drexel Burnham
Lambert. Mr. Gold is currently a member of the board of directors of
BCAM International, Action Industries, Inc., Life Medical Sciences and
Sterling Vision.
(5) Morris H. Gindi is the Chief Executive Officer of Notra Trading Inc.,
located in Woodbridge, New Jersey, and has served in such capacity
since 1983. Notra Trading Inc. is an import agent in the housewares
and domestics industry. Mr. Gindi has over 27 years experience in
importing.
(6) J. David Hakman is the owner and Chief Executive Officer of Hakman and
Company, Inc., a merchant banking concern, and a member of the National
Association of Securities Dealers, Inc. Mr. Hakman has been a director
since 1989 and a member of the Audit and Nominating Committees since
1991 of Hanover Direct, Inc., a firm engaged in the direct marketing
business. Mr. Hakman was the Chairman and a director of AFD Acquisition
Corporation which filed for protection under Chapter 11 of the U.S.
Bankruptcy Laws in June 1991 and emerged from Chapter 11 in September
1993.
(7) Ira J. Hechler is a partner and a director of the investment firm Ira
J. Hechler & Associates located in New York, New York. Mr. Hechler has
been associated with such firm since June 1987. The firm's principal
business is holding stock, partnership interests and other property for
investment purposes. Mr. Hechler
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<PAGE>
is currently a member of the board of directors of The Leslie Fay
Companies, Inc. and United States Banknote Corporation. See "Certain
Relationships and Related Transactions."
(8) Kent M. Klineman has been an attorney and private investor and has
served as a director of several closely-held companies during the past
five years. Mr. Klineman is a director, Secretary and a member of the
Compensation Committee of EIS International, Inc., a director and
treasurer of Sonoma Cutrer Vineyards, Inc., and a director of Dealers
Alliance Credit Corp. and Dealers Alliance Capital Corp. Mr. Klineman's
initial nomination to serve as director of the Company in 1993 was made
by Mr. Hechler. See "Certain Relationships and Related Transactions."
Meetings and Committees
In Fiscal 1996, the Board held four meetings. The Board has a standing
Audit Committee, Compensation and Stock Option Committee, and Nominating
Committee.
The Audit Committee, consisting of Kent M. Klineman (Chairman), J.
David Hakman and Eli Arenberg, reviews and reports to the Board with respect to
various auditing and accounting matters, including recommendations to the Board
as to the selection of the Company's independent auditors, the scope of audit
procedures, general accounting policy matters and the performance of the
Company's independent auditors. The Audit Committee held four meetings in Fiscal
1996.
The Compensation and Stock Option Committee, consisting of Joel L. Gold
(Chairman), Ira J. Hechler, and Morris Gindi, was formed to review and make
recommendations to the Board regarding all executive compensation matters. The
Compensation Committee held three meetings in Fiscal 1996.
The Nominating Committee, consisting of Ira B. Lampert, Joel Gold, Ira
J. Hechler and Kent Klineman, was formed to nominate those persons who shall be
invited to stand for election to the Board of Directors as management nominees
at any and all ensuing meetings of the shareholders of the Company or pursuant
to any actions with respect to the election of directors to be taken by written
consent of the shareholders. The Nominating Committee held one meeting in Fiscal
1996. The Nominating Committee has proposed the slate of directors proposed
herein. Shareholder suggestions of one or more nominees for election to the
Board may be sent in writing to the Nominating Committee, Attention: Chairman,
c/o the Company, 35 Mileed Way, Avenel, New Jersey 07001.
In Fiscal 1996, all of the directors attended at least 75% of the
aggregate of the total number of meetings of the Board and committees of which
they were members.
Directors Compensation
Non-employee members of the Board receive (i) an annual fee of $10,000,
(ii) a $2,500 annual fee for serving on each committee of the Board with the
Chairman thereof receiving a $3,500 annual fee, and (iii) a meeting fee of $750
for each meeting attended in person and $250 for each meeting attended
telephonically. In addition, under the Company's Incentive Plan each
non-employee director is entitled to receive options pursuant to a formula to
purchase up to 20,000 Common Shares upon his/her appointment as director. The
Incentive Plan also provides for the grant of an immediately exercisable option
to purchase 1,000 Common Shares on the date of the original grant and on each
anniversary of the original grant. Pursuant to this plan each non-employee
director (other than Eli Arenberg) received options to purchase 24,000 Common
Shares and Eli Arenberg received options to purchase 23,000 Common Shares.
As of December 22, 1996, all outstanding options held by directors of
the Company having an exercise price of $4.00 a share or more were revised as
follows:
(a) The number of shares of Common Stock covered by each option
was reduced by 25% (the reduction was applied first on a pro rata basis
against the unvested installments of each option).
4
<PAGE>
(b) The exercise price for 50% of the shares covered by the
revised option were repriced to be $2.00 per share, 25% were repriced
to be $2.50 per share, and 25% to be $3.00 per share.
(c) Vesting of the repriced options remained unchanged.
Mr. Arenberg, through a company controlled by him, is a party to a
consulting agreement with the Company. See "Certain Relationships and Related
Transactions."
5
<PAGE>
<TABLE>
EXECUTIVE OFFICERS
The names of the current executive officers of the Company together
with certain biographical information for each of them (other than Mr. Lampert
and Mr. Jackel for whom biographical information is provided above) is set forth
below:
<S> <C> <C>
Name of Executive Officer Age Positions and Offices with the Company
Ira B. Lampert......................... 51 Chairman, Chief Executive Officer and Director
Steve Jackel........................... 61 President, Chief Operating Officer and Director
Eli Shoer.............................. 49 Executive Vice President
Brian F. King.......................... 44 Vice President of Corporate and Strategic
Development and Managing Director of Concord
Camera HK Limited
Lawrence Pesin......................... 51 Vice President Global Marketing
Len Easterbrook........................ 64 Managing Director, Europe
Joseph R. Fusco........................ 40 Vice President North American Sales
George Erfurt.......................... 52 Vice President National Account Manager
Barry M. Shereck....................... 54 Vice President and Chief Financial Officer
Harlan I. Press........................ 32 Corporate Controller and Assistant Secretary
</TABLE>
Eli Shoer is Executive Vice President of the Company and has held such
position since August 1995. From April 1991 to August 1995, Mr. Shoer was
Director of Operations of Concord HK and managed the Company's manufacturing
facilities in the Far East. Mr. Shoer worked as Senior Vice President for
Operations of Keystone Camera Corporation from November 1990 through February
1991.
Brian F. King is currently Vice President of Corporate and Strategic
Development, Secretary and Managing Director of Concord Camera HK Limited and
has held such positions since August 1996. Mr. King joined the Company in March
1996 as Vice President of Corporate and Strategic Development. From June 1991
through February 1996, Mr. King was Managing General Partner of Cripple Creek
Associates, a partnership that built and operated two casinos in Cripple Creek,
Colorado.
Lawrence Pesin was appointed Vice President Global Marketing in
February 1996. From December 1993 to January 1996 Mr. Pesin was Executive Vice
President of Pavion, Ltd., a cosmetics and fragrances manufacturer. From April
1992 to December 1993 Mr. Pesin was Chief Executive Officer of Alfin Inc., an
American Stock Exchange listed manufacturer of cosmetics and fragrances. From
December 1983 to April 1992, Mr. Pesin was Chief Executive Officer of Colonia
Inc. an international fragrance and cosmetics company.
Len Easterbrook is Managing Director/General Manager-European
Operations and has held such position since July 1995. Mr. Easterbrook joined
the Company in 1990 as Managing Director of Concord (UK) Ltd. and held such
position until October 1993. From October 1993 until July 1995 Mr. Easterbrook
was Managing Director of Trade Quota Ltd., a specialist marketing company
dealing with Eastern Europe.
Joseph R. Fusco was appointed Vice President North American Sales in
July 1996. From August 1993 to June 1996 Mr. Fusco was Director of Sales for
Sansui USA, Inc., the American consumer sales and marketing
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<PAGE>
division of Sansui International, a distributor of consumer electronic products.
From August 1991 to August 1993, Mr. Fusco was Vice President of Sales and
Marketing at Avenues, a manufacturer and importer of leather cases and business
planners.
George Erfurt is Vice President National Accounts Manager, a position
which he assumed in July 1996. Mr. Erfurt joined the Company in 1991 and has
held several management positions with the Company, including Managing
Director/General Manager-Americas. Prior to jointing the Company, he was
Executive Vice President of Sales and Marketing for Keystone Camera Corp.
Barry M. Shereck was appointed Vice President and Chief Financial
Officer of the Company effective August 5, 1996. From August 1995 to August
1996, Mr. Shereck was a Managing Director of Spring Investment Corporation, a
private management company and a director of Greater China Corporation, its
major client company. From February 1992 to August 1995, Mr. Shereck was Vice
President and Chief Financial Officer of Tyco Playtime, Inc., a subsidiary of
Tyco Toys, Inc.
Harlan I. Press was appointed Corporate Controller and Assistant
Secretary of the Company effective October 1,1996. Mr. Press joined the Company
in April 1994 and has held the position of Chief Accounting Officer since
November 1994. Mr. Press was a Senior Field Examiner for the CIT Group from
April 1993 through April 1994. From December 1991 through April 1993, Mr. Press
served as the Production Manager and Inventory Controller for Sandberg and
Sikorski Diamond Corp, a jewelry manufacturer. Prior to then Mr. Press was a
Senior Accountant in BDO Seidman's Audit Division.
Section 16 Beneficial Ownership Reporting Compliance
The following officers, directors and holders of more than 10% of the
outstanding Common Shares filed late reports under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") during the
period July 1, 1995 through June 30, 1996: (i) Lawrence Pesin, Vice President -
Global Marketing, late filing of a Form 5 due August 15, 1996, reporting a grant
of options to purchase 60,000 shares of the Company's Common Stock; (ii) Brian
King, Vice President, late filing of a Form 5 due August 15, 1996, reporting a
grant of options to purchase 60,000 shares of the Company's Common Stock; and
(iii) Steve Jackel, President and Chief Operating Officer, late filing of a Form
5 due August 15, 1996, reporting a grant of 100,000 shares of restricted stock
which was not reported on Mr. Jackel's Form 3. There are no known failures to
file a required Form 3, 4 or 5 during Fiscal 1996 by any person required to file
such forms with respect to the Company pursuant to Section 16 of the Exchange
Act.
7
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
I. SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C>
Long-Term
Compensation
Annual Compensation Awards
(a) (b) (c) (d) (e) (f) (g)
Securities
Other Annual Underlying All Other
Name and Principal Fiscal Salary Bonus Compensation Options Compensation
Position Year ($) ($) ($) (#) ($)
------------------- ------ ------ ----- ------------ ----------- ------------
Ira B. Lampert 1996 $551,282 $100,000(14) $220,432 (1) 245,000 (13) $18,289 (6)
Chief Executive Officer, 1995 495,515 -- 196,648 (2) 600,000 (4)(5) 11,477 (6)
and Chairman 1994 475,000 -- 78,475 (3) 340,000 47,200 (7)
Steve Jackel 1996 377,346 25,000(14) 36,237 (8) 300,000 (13) 38,631 (6)
Chief Operating Officer, 1995 87,500 -- 7,500 (8) 100,000 --
and President 1994 -- -- -- -- --
Eli Shoer 1996 214,039 42,000(14) 75,000 (9) 10,000 (13) --
Director of Operations -- 1995 207,037 -- 66,850 (9) 150,000 (4) --
Concord HK 1994 200,000 -- 60,000 (9) 25,000 --
Gary M. Simon (11) 1996 205,288 26,250(14) -- -- 2,261 (6)
Chief Financial Officer, 1995 175,000 -- 16,800 (10) 190,000 (4) 2,260 (6)
Secretary and Treasurer 1994 151,923 37,500 -- -- 2,260 (6)
George Erfurt 1996 175,657 (12) -- -- -- --
Managing Director -- 1995 208,184 (12) 20,000 4,800 (10) -- --
Americas 1994 178,692 (12) -- 4,800 (10) -- --
</TABLE>
(1) Includes $35,012, $122,775 and $54,461 paid for and to Mr. Lampert for
an auto lease and costs, reimbursement of taxes and partial housing
costs, respectively.
(2) Includes $46,558, $102,740 and $47,350 paid for and to Mr. Lampert for
an auto lease and costs, reimbursement of taxes and partial housing
costs, respectively.
(3) Includes $24,260, $25,179 and $22,210 paid for and to Mr. Lampert for
an auto lease and costs, reimbursement of taxes and partial housing
costs, respectively.
(4) These options include options previously issued, cancelled, repriced
and re-issued during Fiscal 1995.
(5) Does not include 150,000 options contingent upon the consummation of an
acquisition described in Mr. Lampert's employment agreement.
(6) Represents amount paid by the Company for insurance premiums.
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<PAGE>
(7) Includes $25,208 paid by the Company for insurance premiums and $21,992
paid to Mr. Lampert for consulting fees and expenses in connection with
consulting services provided by Mr. Lampert pursuant to the Company's
consulting agreement with WEI, which terminated upon Mr. Lampert's
employment with the Company.
(8) Represents $27,414 and $8,823 paid to Mr. Jackel for an auto lease and
costs and travel expenses reimbursed to Harjac Consulting,
respectively. For Fiscal 1995, represents amounts paid to Harjac for
auto expenses.
(9) Represents housing allowance paid to Mr. Shoer for living arrangements
in the Far East.
(10) Represents payment for auto allowances.
(11) Mr. Simon resigned from the Company effective July 31, 1996 and is
currently a consultant to the Company.
(12) Includes sales commissions of $51,233 in Fiscal 1996, $118,184 in 1995
and $88,692 in 1994.
(13) Includes shares purchased from the Company for $5.375 per share by a
loan from the Company and evidenced by full recourse promissory note
secured by the Common Stock, and does not include an equal number of
shares underlying a contingent restricted stock award which, as of
the end of Fiscal 1996, were to vest as follows: 33 1/3% upon the
Common Stock reaching a market price of $10.00 by August 31, 1997; 66
2/3% upon the Common Stock reaching a market price of $15.00 by
February 28, 1999; and 100% upon the Common Stock reaching a market
price of $20.00 by August 31, 2000. See "Certain Relationships
and Related Transactions" for information regarding substitution
of options to purchase Common Stock for contingent restricted
stock awards.
(14) Represents bonus determined and paid by the Company in Fiscal 1996 on
account of Fiscal 1995 performance.
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<PAGE>
<TABLE>
II. OPTION GRANTS IN FISCAL 1996
<S> <C> <C> <C> <C> <C> <C>
Individual Gains
(a) (b) (c) (d) (e) (f) (g) (h)
Market Price Potential Realizable Annual
Number of % of Total of Common Value at assumed Rates of
Securities Options Stock On Stock Price Appreciation
Underlying Granted to Exercise Date of for Option Term
Name of Executive Options Employees Price Grant Expiration
Officer Granted in 1996 (1) ($/Sh) ($/sh) (2) Date 5% ($) 10% ($)
- ---------------------- ------------ ----------- -------- ----------- ------------ ------ -------
Ira B. Lampert 245,000 (4) 25.51% $5.375 -- Aug. 23, 2006 828,176 2,098,760
Steve Jackel 200,000 (3) $4.00 -- Feb. 15, 2006 503,116 1,274,994
100,000 (4) 10.41% $5.375 -- Aug. 23, 2006 338,031 856,637
Eli Shoer 10,000 (4) 1.04% $5.375 -- Aug. 23, 2006 33,803 85,664
Gary M. Simon (5) 25,000 (4) 2.60% $5.375 -- Aug. 23, 2006 84,508 214,159
George Erfurt 2,000 (4) 0.21% $5.375 -- Aug. 23, 2006 6,761 17,133
</TABLE>
(1) The Company granted incentive stock options under the Company's
Incentive Plan to purchase an aggregate of 960,500 shares.
(2) The market price on date of grant was either above or equal to the
option price on the date of the grant.
(3) Mr. Jackel's grant of stock options is under a separate agreement and
is not issued under the Company's Incentive Plan.
(4) Represents shares purchased for $5.375 per share by a loan from the
Company and evidenced by a full recourse promissory note secured by the
Common Stock, and does not include an equal number of shares underlying
a contingent restricted stock award. See "Certain Relationships and
Related Transactions" for information regarding substitution of options
to purchase Common Stock for contingent restricted stock awards.
(5) Mr. Simon resigned from the Company effective July 31, 1996 and is
currently a consultant to the Company.
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<PAGE>
<TABLE>
III. AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION
VALUES (1)
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Shares Number of Securities Value of Unexercised In-
Acquired Value Underlying Unexercised the-Money Options at FY
on Exercise Realized Options at FY End (#) End ($) (2)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----- ----- ----------- ------------- ----------- -------------
Ira B. Lampert -- -- 400,000 95,000 (3) -- --
Steve Jackel -- -- 82,224 317,776 3,125 --
Eli Shoer -- -- 150,000 10,000 -- --
Gary M. Simon (4) -- -- 142,000 48,000 -- --
George Erfurt -- -- 25,000 2,000 -- --
</TABLE>
(1) Securities and Exchange Commission regulations require the information
regarding options set forth in this table to be disclosed for Fiscal
1996. However, because the Board reduced the number of shares covered
by each option and repriced certain options held by the persons listed
below as of December 22, 1996, the table does not reflect the number of
securities underlying the unexercised options or the value of the
unexercised, in-the-money options as of the date of this Proxy
Statement. See "Certain Relationships and Related Transactions" below
for information regarding amendments to options.
(2) The closing price of the Company's Common Stock at 1996 Fiscal Year end
was $3.125.
(3) Mr. Lampert's grants of stock options include a grant of 150,000 shares
at $6.00 that is contingent upon the consummation of an acquisition
described in Mr. Lampert's employment agreement.
(4) Mr. Simon resigned from the Company effective July 31, 1996 and is
currently a consultant to the Company.
Executive Employment Contracts, Termination of Employment and Change in Contract
Arrangements
The employment agreement between the Company and Ira B. Lampert
effective July 1, 1993 was amended and restated as of September 1, 1994 (the
"Lampert Agreement"). The Lampert Agreement provides that Mr. Lampert serve in
the additional capacities of Chairman and Chief Executive Officer of the
Company. The Lampert Agreement provides for an annual salary of $500,000, has a
term of four years and provides for automatic one year renewals, unless prior
written notice is given by either party. Under the Lampert Agreement, Mr.
Lampert's grant of an option to purchase 340,000 Common Shares was amended and
restated to an exercise price of $4.00 per share, of which 252,500 were
exercisable as of December 21, 1996 and the balance were exercisable in
allotments of 12,500 on each February 28 (or February 29 as the case may be),
May 31, August 31 and November 30 until exercisable as to the entire amount.
Such shares have anti-dilution provisions and are exercisable through July 2003.
In addition, the Lampert Agreement granted Mr. Lampert an additional option to
purchase 260,000 Common Shares at an exercise price of $4.00 per share, of which
172,500 were exercisable as of December 21, 1996 and the balance were
exercisable in allotments of 12,500 on each February 28 (or February 29, as the
case may be), May 31, August 31 and November 30 until exercisable as to the
entire amount. Such shares also have anti-dilution provisions and are
exercisable through September 2004. As of December 22, 1996, Mr. Lampert's
outstanding options having an exercise price of $4.00 or more were amended. See
"Certain Relationships and Related Transactions" below for information regarding
amendments to options.
The Lampert Agreement prohibits Mr. Lampert from competing with the
Company for a one-year period upon expiration of the Lampert Agreement. The
Lampert Agreement also provides that if the Company consummates an acquisition
identified in the Lampert Agreement during Mr. Lampert's term of employment with
11
<PAGE>
the Company, Mr. Lampert will receive a cash bonus of $300,000 and will be
granted an option to purchase 150,000 Common Shares at an exercise price of
$6.00 per share.
Effective October 1, 1994, the Company entered into an employment
agreement with Eli Shoer, whereby Mr. Shoer is employed as Managing Director of
Operations of the Company's Far East operations and as Senior Vice President of
the Company. The employment agreement has a term of three years and provides for
an annual salary of $210,000. In addition, Mr. Shoer receives an annual housing
allowance of $75,000. Mr. Shoer's employment agreement prohibits Mr. Shoer from
competing with the Company for a one-year period upon termination of such
employment agreement. The agreement also provides that previous stock option
agreements for an aggregate of 145,000 shares at varying prices ranging from a
high of $8.875 to a low of $4.4375 are relinquished by Mr. Shoer. In lieu of
such options he was granted options for 75,000 shares at an exercise price of
$3.25 and 75,000 shares at an exercise price of $4.00. The agreement described
in this paragraph supersedes the July 1, 1993 agreement between Mr. Shoer and
the Company. As of December 22, 1996, Mr. Shoer's outstanding options having an
exercise price of $4.00 or more were amended. See "Certain Relationships and
Related Transactions" below for more information regarding amendments to
options.
Effective June 1, 1994, the Company entered into an employment
agreement with Gary M. Simon whereby Mr. Simon was employed as Chief Financial
Officer and Treasurer of the Company. The Agreement is for a term of three years
and provided for an annual salary of $175,000. Under the Agreement Mr. Simon was
granted an option to purchase 30,000 Common Shares at an exercise price of $3.00
per share, 7,500 of which were presently exercisable with the balance
exercisable in allotments of 7,500 after the completion of the first, second and
third years of his term of employment. In addition, Mr. Simon was granted a
presently exercisable option to purchase 40,000 Common Shares at $3.00 per
share; and 120,000 Common Shares at an exercise price of $4.00 per share which
options vest as follows: 24,000 on June 1, 1995; 48,000 on June 1, 1996; and
48,000 on June 1, 1997. Options to purchase 50,000 Common Shares granted to Mr.
Simon prior to June 1, 1994 were canceled. Mr. Simon's employment agreement
prohibits Mr. Simon from competing with the Company for a one-year period upon
termination of such employment agreement. Mr. Simon resigned from the Company
effective July 31, 1996 and is currently a consultant to the Company. In
accordance with Mr. Simon's employment agreement all outstanding options were
canceled 90 days from the effective date of his termination.
As of January 1, 1996, the Company and Steve Jackel entered into an
Employment Agreement (the "Jackel Agreement"), whereby Mr. Jackel is employed as
President and Chief Operating Officer of the Company. Prior to entering into the
Jackel Agreement, Mr. Jackel rendered consulting services to the Company
pursuant to a Consulting Agreement (the "Harjac Agreement"), dated May 1, 1995,
between the Company and Harjac Consulting Corp., a corporation owned by Mr.
Jackel, which agreement was terminated upon the effective date of the Jackel
Agreement. The Jackel Agreement provides for an annual salary of $400,000, has a
term of three years commencing on January 1, 1996 and provides for automatic
one-year renewals unless prior written notice is given by either party. The
Jackel Agreement prohibits Mr. Jackel from competing with the Company for at
least one year following the termination of Mr. Jackel's employment.
Pursuant to the Jackel Agreement and an Option Agreement, dated as of
February 15, 1996 and executed by the Company and Mr. Jackel pursuant to the
Jackel Agreement, Mr. Jackel was granted stock options to purchase 200,000
shares of the Company's Common Stock at an exercise price of $4.00 per share, of
which approximately 95,000 were exercisable as of December 21, 1996, with the
balance becoming exercisable in equal allotments of 1,000 shares on the Thursday
of each successive week through and including December 31, 1998. In addition,
pursuant to the Harjac Agreement, Mr. Jackel, through Harjac Consulting Corp.,
was granted stock options to purchase 25,000 shares of the Company's Common
Stock at an exercise price of $3.00 per share and 75,000 shares of the Company's
Common Stock at an exercise price of $4.00 per share. These options to acquire a
total of 300,000 shares of Common Stock were not granted pursuant to the
Company's Incentive Plan. Prior to December 22, 1996, Mr. Jackel also owned
additional options to acquire 100,000 shares of Common Stock at $5.35, which
were granted pursuant to the Company's Incentive Plan. All options with an
exercise price of $4.00 or more were amended as of December 22, 1996. See
"Certain Relationships and Related Transactions" below for information regarding
amendments to options.
12
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Chief Executive Officer ("CEO"). The Lampert Agreement was amended and
restated as of September 1, 1994 to, among other matters, increase Mr. Lampert's
annual salary in connection with his appointment to the additional positions of
Chairman and CEO of the Company on July 14, 1994, and to provide additional
incentive to Mr. Lampert to continue to exert his utmost efforts to contribute
to the Company's success and prosperity and to thereby benefit the Company and
its shareholders. See "Executive Employment Contracts, Termination of Employment
and Change in Contract Arrangements."
The Compensation Committee engaged the services of outside compensation
consultants to obtain information and advice about competitive levels of
compensation and particular compensation techniques of public companies of
comparable size (i.e., annual sales volume) for the installation of a new pay
package for Mr. Lampert as set forth in the Lampert Agreement. The Compensation
Committee approved the Lampert Agreement based on such subjective criteria as
(i) the complex international structure and operations of the Company, which are
equivalent to those of large international corporations although its revenues
are not, (ii) the contentious legal environment of the Company, (iii) the parity
of CEO pay with other existing executive officers of the Company and executive
officers to be hired in the future, (iv) the financial turn-around of the
Company, (v) prior pay practices of the Company for its former CEO, (vi) lack of
retirement plan, and (vii) the extensive amount of time and world-wide travel
that the CEO position entails (Mr. Lampert has spent, and continues to spend, a
significant amount of time at the Company's offices in Hong Kong, its
manufacturing facilities in China in addition to his travels to Japan, Eastern
and Western Europe and Central America).
Executive Officers Generally. The CEO recommends the level of
compensation of each executive officer to the Compensation Committee based on
such subjective criteria as the compensation of executives at corporations of
similar size and operations, years of service to the Company, the amount of time
and travel the position requires, the effort put forth during the past year and
the desire to encourage the long-term commitment of the executive. The
Compensation Committee considers each of these factors in determining whether to
approve or modify the CEO's recommendation. With respect to new executives, the
CEO and the Compensation Committee also take into consideration the results of
any arms-length negotiations between the Company and such executive. In
addition, as part of the compensation package of each executive, the CEO
recommends, and the Compensation Committee considers, the grant of stock options
to each executive based on the above factors. It is the Compensation Committee's
policy to make stock options as large a portion of an executive's gross
compensation package as is reasonable because of the benefits such long-term
incentives provide to the shareholders and the Company.
Following the end of Fiscal 1996, the Company's management stock
purchase provisions were amended to replace contingent stock awards with stock
options and all outstanding stock options with an exercise price of $4.00 or
more were amended to reduce the exercise price of, and the number of shares
underlying, such options. See "Directors Compensation" and "Certain
Relationships and Related Transactions".
Joel Gold
Ira J. Hechler
Morris Gindi
13
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPHS FOR
CONCORD CAMERA CORP.
The following graph reflects a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of an
initial $100 investment on June 30, 1991 in the Company's Common Stock, the
Nasdaq Stock Market - US Index and a Peer Group Index. The Peer Group Index
comprises the members of the SIC Code 3860 (Photographic Equipment and Supplies)
as listed in the Nasdaq Stock Market 1996 Fact Book. The comparisons in this
table are required by the Securities and Exchange Commission. The stock price
performance shown on the graph is not intended to forecast or be indicative of
future price performance.
[GRAPHIC OMITTED] (DETAILS LISTED BELOW)
6/91 6/92 6/93 6/94 6/95 6/96
Concord Camera Corp. 100 104 81 44 68 48
Peer Group 100 103 115 142 142 186
NASDAQ Stock Market - US 100 120 151 153 204 261
14
<PAGE>
BENEFICIAL OWNERSHIP
The following table sets forth certain information as of January 31,
1997 with respect to (i) those persons or groups known to the Company to
beneficially own more than 5% of the Common Stock, (ii) each of the directors
and nominees of the Company, (iii) the Company's executive officers named in the
summary compensation table, and (iv) the Company's directors and executive
officers as a group:
<TABLE>
<S> <C> <C>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class(1)
- ------------------------------------ ----------------------- -----------
(i) Beneficial Owners of More than 5%
of the Common Shares
Theodore H. Kruttschnitt................................... 1,205,000 11.1%
1350 Bayshore Blvd., Suite 850
Burlingame, California 94010
VC Holdings, Inc.(2)....................................... 927,306 8.5%
250 Park Avenue
New York, New York 10017
Deltec Asset Management..................................... 639,025 5.9%
535 Madison Avenue
New York, New York 10022
(ii) Directors and Nominees of the Company
Ira B. Lampert.............................................. 1,240,749(3)(4) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
Steve Jackel................................................ 1,240,749(3)(5) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
Eli Arenberg................................................ 72,750(6) *
9578 Harbour Lake Circle
Boynton Beach, Florida 33437
Joel L. Gold................................................ 26,250(7) *
L.T. Lawrence & Co. Inc.
3 New York Plaza
New York, New York 10004
Morris Gindi................................................ 15,750(8) *
Notra Trading, Inc.
One Woodbridge Center
Woodbridge, NJ 07095
J. David Hakman............................................. 15,750(8) *
Hakman & Co., Inc.
Suite 300
1350 Bayshore Highway
Burlingame, CA 94010
15
<PAGE>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class(1)
Ira J. Hechler.............................................. 461,750(9) 4.3%
Ira J. Hechler and Associates
45 Rockefeller Plaza
New York, New York 10111
Kent M. Klineman............................................. 124,000(10) 1.2%
c/o Klineman Assoc., Inc.
1270 Avenue of the Americas
New York, NY 10020
(iii) Executive Officers
Eli Shoer................................................... 1,240,749(3)(11) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
Brian F. King............................................... 1,240,749(3)(12) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
Lawrence Pesin.............................................. 1,240,749(3)(12) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
George Erfurt............................................... 1,240,749(3)(13) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
Gary M. Simon............................................... 1,240,749(3)(14) 11.4%
23 Lotus Street
Cedarhurst, NY 11516
Arthur Zawodny.............................................. 1,240,749(3)(15) 11.4%
Concord Camera Corp.
35 Mileed Way
Avenel, New Jersey 07001
(iv) All executive officers and directors as a group (14 Persons) 1,956,999 18.0%
* Indicates less than 1%.
</TABLE>
(1) All information is as of January 31, 1997 and was determined in
accordance with Rule 13d-3 under the Exchange Act based upon information
furnished by the persons listed or contained in filings made by them with
the Commission. As of January 31, 1997, the Company had issued and
outstanding 10,880,473 Common Shares, the Company's only class of voting
securities outstanding. Unless otherwise indicated, beneficial ownership
disclosed consists of sole voting and dispositive power.
(2) VC Holding, Inc. is the sole manager and holds 100% of the voting
interests of Venture Capital Equities, L.L.C. Dominion Capital, Inc.
contributed all of its interests in a specified portfolio of investments,
including the above described Company securities to Venture Capital
Equities, L.L.C.
16
<PAGE>
(3) Represents the total number of shares which are beneficially owned by a
group comprising Ira B. Lampert, Steve Jackel, Eli Shoer, Brian F. King,
Lawrence Pesin, George Erfurt, Gary M. Simon and Arthur Zawodny as a
result of the terms of an Amended and Restated Voting Agreement, dated as
of January ___, 1997 (the "Voting Agreement"), pursuant to which each
party to the Voting Agreement agreed to vote any purchased shares or
option shares acquired by such party under the Company's Incentive Plan
in accordance with the will of the holders of a majority of all the
shares issued under the Company's Incentive Plan.
(4) Includes 53,850 shares purchased in the open market, 245,000 shares
purchased pursuant to a purchase agreement with the Company and 402,833
shares underlying stock options, as to all of which such person has sole
dispostive power. Excludes 452,167 shares underlying options which will
not become exercisable within 60 days of January 31, 1997.
(5) Includes 100,000 shares purchased pursuant to a purchase agreement with
the Company and 188,917 shares underlying stock options, as to all of
which such person has sole dispostive power. Excludes 142,333 shares
underlying options which will not become exercisable within 60 days of
January 31, 1997.
(6) Represents 28,000 shares purchased in the open market and 44,750 shares
underlying stock options. Excludes 8,000 shares underlying options which
will not become exercisable within 60 days of January 31, 1997.
(7) Represents 10,500 shares purchased in the open market and 15,750 shares
underlying stock options. Excludes 3,000 shares underlying options which
will not become exercisable within 60 days of January 31, 1997.
(8) Represents shares underlying stock options. Excludes 3,000 shares
underlying options which will not become exercisable within 60 days of
January 31, 1997.
(9) Represents 446,000 shares purchased in the open market and 15,750 shares
underlying stock options. Excludes 3,000 shares underlying options which
will not become exercisable within 60 days of January 31, 1997.
(10) Represents 108,250 shares purchased in the open market and 15,750 shares
underlying stock options. Excludes 3,000 shares underlying options which
will not become exercisable within 60 days of January 31, 1997.
(11) Includes 10,000 shares purchased pursuant to a purchase agreement with
the Company and 90,167 shares underlying stock options, as to all of
which such person has sole dispostive power. Excludes 51,083 shares
underlying options which will not become exercisable within 60 days of
January 31, 1997.
(12) Includes 27,500 share purchased pursuant to a purchase agreement with the
Company and 7,333 shares underlying stock options, as to all of which
such person has sole dispostive power. Excludes 65,167 shares underlying
options which will not become exercisable within 60 days of January 31,
1997.
(13) Includes 1,000 shares purchased in the open market, 2,000 shares
purchased pursuant to a purchase agreement with the Company and 26,783
shares underlying stock options, as to all of which such person has sole
dispositive power. Excludes 1,467 shares underlying options which will
not become exercisable within 60 days of January 31, 1997.
(14) Includes 25,000 shares purchased pursuant to a purchase agreement with
the Company and 6,666 shares underlying stock options, as to all of which
such person has sole dispositive power. Excludes 18,334 shares
underlying options which will not become exercisable within 60 days of
January 31, 1997. Mr. Simon resigned from the Company effective July 31,
1996 and is currently a consultant to the Company.
(15) Includes 7,000 shares pursuant to a purchase agreement with the Company
and 11,867 shares underlying stock options, as to all of which such
person has sole dispositive power. Excludes 17,133 shares underlying
options which will not become exercisable within 60 days of January 31,
1997.
17
<PAGE>
Certain Relationships and Related Transactions
In connection with Ira J. Hechler's purchase of Common Shares in a
private placement completed on December 31, 1992 (the "Private Placement"), the
Company, Jack C. Benun (then Chairman and Chief Executive Officer of the
Company) and Mr. Hechler entered into a certain Management Agreement, dated
December 31, 1992 (the "Management Agreement"), which provided among other
matters that (i) Mr. Benun would retain, on and after the closing of a proposed
loan facility with a new lender, his position as Chairman and Chief Executive
Officer of the Company (Mr. Benun's employment with the Company was terminated
on July 13, 1994), (ii) Mr. Benun would propose, at any Meetings to elect
directors, a slate consisting of nominees for director chosen by Mr. Hechler
(the "Hechler Nominees"), Mr. Benun and other members of whom a majority would,
to the extent practical, be new "unaffiliated" or "independent" members of the
Board, (iii) Mr. Benun would vote all Common Shares over which he had sole
voting power on the date of the Management Agreement or acquired thereafter in
favor of the Hechler Nominees for election to the Board at all Meetings to Elect
Directors, (iv) Mr. Hechler would vote or cause to be voted all Common Shares
over which he has sole voting power on the date of the Management Agreement or
acquired thereafter and all Common Shares purchased by him or his designee in
the Private Placement in favor of Mr. Benun's nominees at all meetings to elect
directors, (v) neither Mr. Benun nor Mr. Hechler, Hechler & Associates or any of
their respective affiliates (the "Hechler Group"), without the consent of
two-thirds of the Board, from December 31, 1992 through December 1, 1994 would
(a) solicit proxies with respect to securities of the Company or become a
"participant" in any "election contest" relating to the election of directors of
the Company (as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act), or seek to advise or influence any person or entity with respect
to the voting of any voting securities of the Company, (b) make any public
announcement with respect to, or submit a formal proposal for a transaction
between any member of the Hechler Group and the Company or any of its securities
holders except proposals recommending transactions in the ordinary course of the
Company's business, (c) act to seek control of management, Board or policies of
the Company except in any such person's capacity as a director, or (d) form,
join or participate in a group for purposes of any transactions referred to in
(a), (b), or (c) above, and (vi) the Warrant be amended (a) to extend the
exercise period of the Warrant until December 1, 1993, (b) to eliminate the
mandatory exercise and early termination provisions of the Warrant and (c)
provide that the purchase by all purchasers in the Private Placement will not
trigger the anti-dilution provisions of the Warrant. The Company believes that
Mr. Benun no longer has any rights under the Management Agreement to nominate
directors of the Company. Mr. Benun has asserted that he continues to have such
rights and intends to enforce them. An action brought by Benun in Fiscal 1995 to
enforce such rights was dismissed in Fiscal 1996.
On August 1, 1994, ELA Enterprises, Inc., a company owned by Eli
Arenberg, was granted an option under the Company's Incentive Plan to purchase
10,000 Common Shares at an exercise price of $3.00 per share, 10,000 Common
Shares at an exercise price of $4.00 per share, and 10,000 Common Shares at an
exercise price of $5.00 per share, in connection with consulting services
provided by Mr. Arenberg to the Company pursuant to the ELA Enterprises, Inc.
Consulting Agreement. All options previously granted to Mr. Arenberg were
canceled. In addition, ELA Enterprises, Inc. will be paid at an hourly rate for
consulting services provided to the Company.
On August 23, 1995, the Compensation Committee of the Board approved
stock purchase awards under the Company's Incentive Plan pursuant to which
500,000 Common Shares were made available for purchase by senior management of
the Company at a price per share equal to $5.375 per share (the closing price of
the Common Stock on August 23, 1995) pursuant to binding commitments to be made
by such persons by August 31, 1995. The Company received commitments for the
purchase of 444,000 of such shares. Each purchaser was also granted the right to
receive a contingent restricted stock award covering a number of shares equal to
the number of shares purchased by such purchaser. The contingent restricted
stock was to be issued based upon attainment of increases in shareholder value
in accordance with the Incentive Plan as follows:
18
<PAGE>
Percentage of Restricted Stock Fair Market Value Latest Attainment Date
33 1/3% $10.00 August 31, 1997
66 2/3% $15.00 February 28, 1999
100% $20.00 August 31, 2000
If issued, such contingent restricted shares were to vest over a
three-year period and were subject to forfeiture prior to vesting under certain
conditions.
Pursuant to purchase agreements (the "Purchase Agreements"), members of
the Company's senior management purchased shares of Common Stock (the "Purchased
Shares") pursuant to the terms of the Management Equity Provisions of the
Company's Incentive Plan. As payment for such shares, each purchaser executed a
full recourse note for the purchase price of such shares (each a "Note";
collectively, the "Notes") and pledged the Purchased Shares as security for the
payment of the Note. The notes mature five years from the date of purchase (May
7, 1996 in the case of Notes executed by Brian King and Lawrence Pesin and
November 7, 1995 in the case of Notes executed by all other purchasers), and
bear interest at 6%.
Concurrently with the execution of their respective Purchase Agreements
and Notes, each purchaser entered into a Voting Agreement pursuant to which each
purchaser agreed to vote all of his Purchased Shares and contingent restricted
stock in accordance with the determination of the holders of a majority of all
of the Purchased Shares and contingent restricted stock held by the purchasers.
To effect the foregoing, each of the purchasers delivered to Mr. Lampert an
irrevocable proxy and agreed that prior to any transfer of Purchased Shares and
contingent restricted stock, such purchaser will cause the transferee (A) to
agree in writing with Mr. Lampert to be bound by the provisions of the Voting
Agreement and (B) to execute and deliver to Mr. Lampert an irrevocable proxy.
Pursuant to Amendments to each of the Purchase Agreements, dated
January __, 1997 (the "Amendments"), the Company was relieved of its obligation
to issue any contingent restricted stock. Instead, each member of the Company's
senior management received, as of December 22 ,1996, options to purchase that
number of shares of Common Stock (the "Option Shares") equal to the number of
Purchased Shares purchased by such person, which number is set forth opposite
each person's name on the following table:
Person Number of Options
George Erfurt 2,000
Steve Jackel 100,000
Brian King 27,500
Ira B. Lampert 245,000
Lawrence Pesin 27,500
Eli Shoer 10,000
Arthur Zawodny 7,000
Gary M. Simon 25,000
The options vested as to 20% of the Option Shares covered thereby as of December
22, 1996, and the balance of the shares covered thereby vest beginning December
31, 1996 in equal monthly installments over a four-year period during the term
of employment or consultancy. The unvested portion will immediately become
vested in the event that the average closing price of the Common Stock for any
consecutive 90 trading day period is at least $5.00. The unvested portion is
cancelable upon any termination of employment or consultancy (except for death,
disability or retirement).
Concurrently with the Amendments, the Voting Agreement and the
irrevocable proxies were amended and restated to include the Option Shares and
to delete the contingent restricted stock.
19
<PAGE>
As of December 22, 1996, all outstanding options held by senior
management and directors of the Company that previously had an exercise price of
up to $3.99 per share remained unchanged. All such options having an exercise
price at $4.00 a share or above (including those granted to ELA Enterprises,
Inc.) were revised as follows:
(a) The number of shares of Common Stock covered by each
option was reduced by 25% (the reduction was applied on a pro rata
basis first against the unvested installments of each option).
(b) The exercise price for 50% of the shares covered by the
revised option were repriced to be $2.00 per share, 25% were repriced
to be $2.50 per share, and 25% to be $3.00 per share.
(c) Vesting of the repriced options remained unchanged.
The following tables detail the above changes in options held by senior
management:
<TABLE>
OPTIONS HELD PRIOR TO CHANGES OF 12/22/96 TERMS OF ORIGINAL GRANT
----------------------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
# OF END OF
UNDERLYING OPTION VESTED UNVESTED GRANT VESTING VESTING
SHARES PRICE ($) SHARES SHARES DATE PERIOD METHOD
-------- ---------- -------- -------- ---- -------- -------- ---------
Ira B. Lampert 260,000 4.0000 172,500 87,500 9/30/94 8/31/98 quarterly
340,000 4.0000 252,500 87,500 7/1/93 8/31/97 quarterly
- --------------- -------- -------- --------- -------- ---- -------- -------- ---------
Steve Jackel 25,000 3.0000 25,000 0 5/1/95 12/31/95 100%
75,000 4.0000 75,000 0 5/1/95 4/30/96 100%
200,000 4.0000 95,000 105,000 2/15/95 12/31/98 weekly
- -------------- -------- -------- --------- -------- ---- -------- -------- ---------
Eli Shoer 75,000 4.0000 50,000 25,000 10/1/94 9/30/97 annual
75,000 3.2500 75,000 0 10/4/94 10/4/94 annual
- -------------- --------- -------- --------- -------- ---- -------- -------- ---------
Brian King 60,000 4.0000 0 60,000 5/7/96 5/7/99 annual
- -------------- --------- -------- --------- -------- ---- -------- -------- ---------
Lawrence Pesin 60,000 4.0000 0 60,000 5/7/96 5/7/99 annual
- -------------- --------- -------- --------- -------- ---- -------- -------- ---------
Arthur Zawodny 12,000 3.2500 12,000 0 10/21/94 10/21/94 annual
8,000 3.2500 4,000 4,000 10/21/94 5/31/98 annual
12,000 2.8125 6,000 6,000 5/15/96 5/15/97 annual
- -------------- --------- -------- --------- -------- ---- -------- -------- ---------
George Erfurt 25,000 7.6875 25,000 0 8/2/91 8/3/92 100%
10,000 5.5625 10,000 0 4/1/92 4/2/92 100%
- ------------- --------- -------- --------- -------- ---- -------- -------- ---------
</TABLE>
20
<PAGE>
<TABLE>
OPTIONS HELD AFTER 12/22/96 OPTIONS HELD AFTER 12/22/96 WITH
ORIGINAL EXERCISE PRICE
# OF NUMBER
OPTIONS OF SHARES SHARES
CANCELLED SHARES VESTED UNVESTED PRICE ($) VESTED UNVESTED
--------- ------ ------ -------- -------- ------- ------
Ira B. Lampert (65,000) 195,000 129,375 65,625 0.0000 0 0
(85,000) 255,000 189,375 65,625 0.0000 0 0
- -------------- --------- --------- -------- --------- --- -------- ------- ------
Steve Jackel 0 25,000 25,000 0 3.0000 25,000 0
(18,750) 56,250 56,250 0 0.0000 0 0
(50,000) 150,000 71,250 78,750 0.0000 0 0
- -------------- --------- --------- -------- --------- --- -------- ------- ------
Eli Shoer (18,750) 56,250 37,500 18,750 0.0000 0 0
0 75,000 75,000 0 3.2500 75,000 0
- -------------- --------- --------- -------- --------- --- -------- ------- ------
Brian King (15,000) 45,000 0 45,000 0.0000 0 0
- -------------- --------- --------- -------- --------- --- -------- ------- ------
Lawrence Pesin (15,000) 45,000 0 45,000 0.0000 0 0
- -------------- --------- --------- -------- --------- --- -------- -------- ------
Arthur Zawodny 0 12,000 12,000 0 3.2500 12,000 0
0 8,000 4,000 4,000 3.2500 4,000 4,000
0 12,000 6,000 6,000 2.8125 6,000 6,000
- -------------- --------- --------- -------- --------- --- -------- ------- ------
George Erfurt (6,250) 18,750 18,750 0 0.0000 0 0
(2,500) 7,500 7,500 0 0.0000 0 0
- -------------- --------- --------- -------- --------- --- -------- ------- ------
OPTIONS HELD AFTER 12/22/96 WITH NEW EXERCISE PRICE
- -----------------------------------------------------------------------------------------------------------------
$2.00 PRICE $2.50 PRICE $3.00 PRICE TOTAL OUTSTANDING
----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
VESTED UNVESTED VESTED UNVESTED VESTED UNVESTED VESTED UNVESTED
- --------------- -------- ---------- -------- --------- -------- --------- -------- --------
Ira B. Lampert 64,688 32,813 32,344 16,406 32,344 16,406 129,375 65,625
94,688 32,813 47,344 16,406 47,344 16,406 189,375 65,625
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
Steve Jackel 0 0 0 0 0 0 25,000 0
28,125 0 14,063 0 14,063 0 56,250 0
35,625 39,375 17,813 19,688 17,813 19,688 71,250 78,750
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
Eli Shoer 18,750 9,375 9,375 4,688 9,375 4,688 37,500 18,750
0 0 0 0 0 0 75,000 0
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
Brian King 0 22,500 0 11,250 0 11,250 0 45,000
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
Lawrence Pesin 0 22,500 0 11,250 0 11,250 0 45,000
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
Arthur Zawodny 0 0 0 0 0 0 12,000 0
0 0 0 0 0 0 4,000 4,000
0 0 0 0 0 0 6,000 6,000
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
George Erfurt 9,375 0 4,688 0 4,688 0 18,750 0
3,750 0 1,875 0 1,875 0 7,500 0
- --------------- --------- ---------- -------- --------- -------- --------- -------- --------
</TABLE>
21
<PAGE>
The following executive officers of the Company are indebted to the
Company for amounts in excess of $60,000 as a result of purchases pursuant to
the Purchase Agreements:
Ira B. Lampert............................................ $1,316,875.00
Steve Jackel.............................................. $537,500.00
Lawrence Pesin............................................ $147,812.50
Brian F. King............................................. $147,812.50
Gary M. Simon............................................. $134,375.00
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED COMMON SHARES FROM 20,000,000 TO 40,000,000
The Board of Directors of the Company has approved submission to the
stockholders proposed amendments to the Company's Certificate of Incorporation
which would (i) increase the authorized Common Stock from 20,000,000 shares to
40,000,000 shares, and (ii) authorize a class of preferred stock.
Increase of Authorized Capital
The Company's authorized capital stock currently consists of 20,000,000
Common Shares. On January 31, 1997, there were 10,880,473 Common Shares
outstanding. There are no preemptive or other subscription rights, conversion
rights, or redemption or sinking fund provisions with respect to Common Shares.
All outstanding Common Shares are fully paid and non-assessable.
The management of the Company believes that it is appropriate to have
additional Common Shares available for issuance in transactions which are in the
best interest of the Company. The Company is not presently involved in
substantive negotiations for any corporate acquisitions. The increase in
authorized Common Shares will provide the Company with the flexibility necessary
to achieve its desired growth by either financing such expansion through the
issuance of Common Shares in the public markets, to strategic investors or in
connection with acquisitions. The Company will not seek further authorization
from its stockholders prior to the issuance of its Common Shares, except as may
be otherwise required by law or by NASDAQ National Market rules.
The Board is seeking stockholder approval of the amendment to the
Certificate to increase the authorized Common Shares to 40,000,000. Stockholder
approval requires the affirmative vote of the votes cast by the holders of a
majority of the Common Shares present or represented and entitled to vote at the
Annual Meeting. The Board recommends a vote FOR the amendment to the Certificate
to increase the authorized Common Shares to 40,000,000 and it is intended that
Common Shares represented by the enclosed form of proxy will be voted in favor
of such amendment to the Certificate unless otherwise specified in such proxy.
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO AUTHORIZE PREFERRED STOCK
(Proposal No. 2(b))
The Board proposed and recommends that the Certificate be amended to
authorize 1,000,000 shares of preferred stock, no par value per share
("Preferred Stock"), which would have such voting powers, designations,
preferences, and relative, participating, optional and conversion or other
special rights, and such qualifications, limitations or restrictions, as the
Board may designate for each class or series issued from time to time. These
22
<PAGE>
would include, but not be limited to (A) the designation of each class or series
and the number of shares that will constitute each such class or series; (B) the
dividend rate for such class or series; (C) the price at which, and the terms
and conditions on which, the shares of such class or series may be redeemed, if
such shares are redeemable; (D) the voting rights, if any, of shares of such
class or series; and (E) the terms and conditions, if any, upon which shares of
such class or series may be converted into shares of other classes or series of
shares of the Company, or other securities.
The Company currently does not have any shares of preferred stock
authorized. All 1,000,000 shares of Preferred Stock would be available for
issuance without further action by the stockholders of the Company, and the
Company does not intend to seek stockholder approval prior to any issuance of
Preferred Stock, unless otherwise required by law or by NASDAQ National Market
rules. The Board has no present plans for issuance of any shares of Preferred
Stock, nor does it have any present plans to apply for the listing of the
Preferred Stock on a national securities exchange or quotation on a securities
quotation system.
The proposed authorization of Preferred Stock is deemed desirable in
that it would enhance the Company's flexibility in connection with possible
future actions, such as stock splits, stock dividends, financings, mergers,
acquisitions, or other purposes. Having such authorized shares available for
issuance in the future would allow shares to be issued without the expense and
delay of a special stockholders' meeting.
The authorized but unissued shares of Preferred Stock also could be
used to impede a change in control of the Company. Under certain circumstances,
such shares could be used to deter persons seeking to effect a takeover or
otherwise gain control of the Company. For example, a class or series of
Preferred Stock could be designated that would be convertible into Common Shares
upon the acquisition by a third party of a specified percentage of the Company's
voting stock. The conversion of the Preferred Stock would dilute the voting
power of the acquiror, and would make subsequent transactions the acquiror may
wish to effect more difficult or costly. Use of the Preferred Stock in the
foregoing manner may be disadvantageous to stockholders who would deem the
attempted takeover efforts as desirable. (The Board is not currently aware of
any planned takeover efforts.) Further, this proposal may be disadvantageous to
stockholders in that Preferred Stock with disproportionate voting rights may be
used to entrench management, making it more difficult to remove directors at a
time when the stockholders would prefer to do so. Preferred Stock also may be
used to prevent or discourage offers to purchase blocks of Common Shares, the
results of which purchases may cause uncharacteristic or artificial changes in
the market place of Common Shares.
The Board is seeking stockholder approval of the amendment to the
Certificate to authorize Preferred Stock. Stockholder approval requires the
affirmative vote of a majority of the votes cast by the holders of shares
present or represented and entitled to vote at the Annual Meeting. The Board
recommends a vote FOR the amendment to the Certificate to authorize Preferred
Stock and it is intended that shares represented by the enclosed form of proxy
will be voted in favor of such amendment to the Certificate unless otherwise
specified in such proxy.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has reappointed the independent accounting firm of Ernst &
Young as auditors of the Company for Fiscal 1997. Shareholder approval requires
the affirmative vote of the holders of a majority of Common Shares represented
and entitled to vote at the Annual Meeting. A representative of Ernst & Young is
expected to attend the Annual Meeting, will have the opportunity to make a
statement should he desire to do so and is expected to be available to respond
to appropriate questions.
The Board is seeking shareholder approval of its selection of Ernst &
Young since it is customary for a public company to obtain shareholder approval
of its auditors. If shareholders do not approve the appointment of Ernst & Young
as the auditors of the Company for Fiscal 1997 at the Annual Meeting, the Board,
on recommendation of its Audit Committee, may reconsider the selection.
23
<PAGE>
On the recommendation of its Audit Committee and by action of its Board
of Directors, on May 18, 1995, the Company terminated the engagement of the firm
of Deloitte & Touche LLP ("Deloitte & Touche") as independent public accountants
for the Company and retained Ernst & Young independent public accountants,
effective immediately. During the two most recent fiscal years and for the
period through May 18, 1995, the Company has not consulted with Ernst & Young on
items which (1) were or should have been subject to SAS 500 or (2) concerned the
subject matter of a disagreement or reportable event with the former auditor (as
described in Regulation S-K Item 304(a)(2)).
Deloitte & Touche's report on the Registrant's financial statements for
the fiscal years ended June 30, 1994 and 1993 contained no adverse opinion or a
disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit
scope, or accounting principles.
In connection with its audits for the fiscal years ended June 30, 1994
and 1993 and in the subsequent interim period preceding the termination of
Deloitte & Touche's engagement and the engagement of Ernst & Young, there have
been no disagreements with Deloitte & Touche on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the satisfaction of Deloitte & Touche would
have caused it to make a reference to the subject matter of the disagreements in
connection with its report.
No "Reportable event," as defined in Regulation S-K, Item 304 (a)(1)(v)
has occurred within the last two fiscal years and in the subsequent interim
period preceding the termination of Deloitte & Touche.
The Company has requested that Deloitte & Touche furnish the Company
with a copy of its letter to the Securities and Exchange Commission stating
whether Deloitte & Touche agreed with the foregoing statements. The letter
provided by Deloitte & Touche stated that it did agree with the foregoing
statements. A copy of said letter was filed as an exhibit to a report of Form
8-K filed by the Company, dated May 18, 1995.
1998 SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for action at the
Company's 1998 Annual Meeting of Shareholders must comply with and meet the
requirements of Regulation 14a-8 of the Exchange Act. That regulation requires,
among other things, that any proposal to be included in the Company's proxy
statement and form of proxy for the Company's 1998 Annual Meeting of
Shareholders be received by the Company at its executive offices, 35 Mileed Way,
Avenel, New Jersey 07001, by August 14, 1997.
GENERAL AND OTHER MATTERS
Management knows of no matter other than the matters described above
which will be presented at the Annual Meeting. However, if any other matters
properly come before the Annual Meeting, or any of its adjournments, the persons
voting the proxies will vote them as they deem in the best interest of the
Company.
24
<PAGE>
SOLICITATION OF PROXIES
The cost of proxy solicitations will be borne by the Company. In
addition to solicitations of proxies by use of the mails, some officers or
employees of the Company, without additional remuneration, may solicit proxies
personally or by telephone. The Company will also request brokers, dealers,
banks and their nominees to solicit proxies from their clients, where
appropriate, and will reimburse them for reasonable expenses related thereto.
By Order of the Board of Directors
Brian King
Secretary
Avenel, New Jersey
March 13, 1997
25
<PAGE>
PROXY CONCORD CAMERA CORP.
35 Mileed Way, Avenel, New Jersey 07001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - April 17, 1997
The undersigned hereby appoints Barry M. Shereck and Harlan I.Press,
or either of them, as Proxy or Proxies of the undersigned with full power of
substitution to attend and to represent the undersigned at the Annual
Meeting of Stockholders of Concord Camera Corp. (the "Company") to be
held on April 17, 1997, and at any adjournments thereof, and to vote
thereat the number of shares of stock of the Company the undersigned would be
entitled to vote if personally present, in accordance with the instructions
set forth on this proxy card. Any proxy heretofore given by the
undersigned with respect to such stock is hereby revoked.
Dated:____________________________________________________, 1997
--------------------------------------------------------------
--------------------------------------------------------------
Please sign exactly as name appears above. For joint accounts,
each joint owner must sign. Please give full title if signing in a
representative capacity.
[ ] PLEASE CHECK IF YOU PLAN TO ATTEND THE MEETING
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
1. ELECTION OF DIRECTORS.
NOMINEES: Ira B. Lampert, Steve Jackel, Eli Arenberg, Joel L. Gold,
Morris H. Gindi, J. David Hakman, Ira J. Hechler and Kent M. Klineman.
[ ] FOR ALL nominees listed above.
[ ] FOR ALL nominees listed above EXCEPT: ___________________________.
(Instruction: To withhold authority to vote on any individual nominee,
write the name above.)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
2.a. AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION (THE
"CERTIFICATE") TO INCREASE THE AUTHORIZED COMMON STOCK FROM 20,000,000
SHARES TO 40,000,000 SHARES.
[ ] FOR the Amendment to the Certificate.
[ ] AGAINST the Amendment to the Certificate.
[ ] ABSTAIN
2.b. AMENDMENT TO THE COMPANY'S CERTIFICATE TO AUTHORIZE THE COMPANY TO
ISSUE UP TO 1,000,000 SHARES OF PREFERRED STOCK.
[ ] FOR the Amendment to the Certificate.
[ ] AGAINST the Amendment to the Certificate.
[ ] ABSTAIN
3. RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1997.
[ ] FOR the ratification of Ernst & Young LLP.
[ ] AGAINST the ratification of Ernst & Young LLP.
[ ] ABSTAIN
4. ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
If no specification is made, this proxy will be voted FOR Proposals 1 through 3
listed above.
26
