<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
CONCORD CAMERA CORP.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
CONCORD CAMERA CORP.
4000 Hollywood Boulevard
Presidential Circle - Suite 650N
Hollywood, Florida 33021
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 22, 1999
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 Marriott Harbor Beach
Resort, 3030 Holiday Drive, Ft. Lauderdale, FL 33316 on April 22, 1999, at 10:00
a.m., local time, for the following purposes:
1. To elect directors for the ensuing year;
2. To increase the number of shares of the Common Stock authorized for
issuance under the Company's Incentive Plan from 2,000,000 shares to
3,000,000 shares;
3. To ratify the selection of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending June 30, 1999; 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 March 1,
1999, 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
March 12, 1999
<PAGE>
CONCORD CAMERA CORP,
------------
PROXY STATEMENT
dated March 12, 1999
---------------
FOR ANNUAL MEETING OF SHAREHOLDERS
to be held Thursday, April 22, 1999
---------------
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 Marriott Harbor Beach Resort, 3030 Holiday Drive, Ft.
Lauderdale, FL 33316 on April 22, 1999, at 10:00 a.m., local time, and all
adjournments thereof (the "Annual Meeting"). 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.
The Board has fixed the close of business on March 1, 1999 as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the Annual Meeting or any adjournments thereof. As of that date, there
were issued and outstanding 11,238,013 shares of common stock, no par value (the
"Common Stock"), the Company's only class of voting securities outstanding. Each
share of Common Stock entitles the holder thereof to one vote. The presence, in
person or by proxy, of a majority of all the outstanding Common Stock
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 for the
purpose of determining the existence of a quorum at the Annual Meeting, but will
not be counted as a vote cast for the purpose of determining the number of votes
required to approve a proposal.
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 (i) by written notice
to the Company, Attention: Secretary, (ii) execution of a subsequent proxy or
(iii) attendance and voting in person at the Annual Meeting. Attendance at the
Annual Meeting will not automatically revoke the proxy. All shares of Common
Stock 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 above), shares of Common Stock represented by
proxies will be voted (i) FOR the election of management's nominees for
directors, (ii) FOR increasing the number of shares of Common Stock authorized
for issuance under the Company's Incentive Plan from 2,000,000 shares to
3,000,000 shares, (iii) FOR the ratification of the appointment of Ernst & Young
LLP ("Ernst & Young") as independent auditors of the Company for the fiscal year
ending June 30, 1999 ("Fiscal 1999"), 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 4000 Hollywood
Boulevard, Presidential Circle - Suite 650N, Hollywood, Florida, 33021. On or
about March 12, 1999, this Proxy Statement, the accompanying form of proxy and
the Annual Report of the Company for Fiscal 1998, including financial
statements, are to be mailed to shareholders of record.
1
<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 seven. All
seven 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 of Common Stock held of record, either in favor of
or against the election of each nominee, or to abstain from voting on any or all
nominees. If any of the nominees should become unavailable for election, the
shares of Common Stock 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
shares of Common Stock present or represented and entitled to vote at the Annual
Meeting. The Board recommends a vote FOR each of the nominees. It is intended
that proxies that do not withhold the authority to vote for the nominees will be
voted FOR each of the nominees.
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>
<CAPTION>
Year First
Elected/
Nominated
Name of Nominee Age Director Positions and Offices with the Company
- --------------- --- -------- --------------------------------------
<S> <C> <C> <C>
Ira B. Lampert (1) ...................... 53 1993 Chairman, Chief Executive Officer,
President and Director; Director of Concord
Camera HK Limited, Concord Camera
GmbH, Concord Camera UK Limited,
Concord Camera Illinois Corp., Concord
Keystone Sales Corp., and Concord Camera
France
Eli Arenberg (2) ........................ 71 1988 Director
Joel L. Gold (3) ....................... 57 1991 Director
Morris H. Gindi (4)....................... 54 1988 Director
J. David Hakman (5) ..................... 57 1993 Director
Ira J. Hechler (6) ...................... 80 1992 Director
Kent M. Klineman (7) .................... 66 1993 Director
</TABLE>
2
<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 HK, Concord UK, Concord Germany
and Concord France. On July 31, 1998, Mr. Lampert was appointed to the
additional position of President. From April 1992 through May 30, 1993,
Mr. Lampert's services were made available to the Company under various
consulting agreements with Whitehall Enterprises Inc. ("WEI"), an
investment banking company for the middle-market, of which Mr. Lampert
was the President from August 1990 through May 1993. 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) 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.
(3) Joel L. Gold is currently Managing Director of ISG Capital and
Investment Bank. From September 1997 through December 1998, Mr. Gold
was Senior Managing Director of Inter Bank Capital Group LLC, an
investment bank. From March 1996 through September 1997 Mr. Gold was 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, Life Medical
Sciences and Sterling Vision.
(4) 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.
(5) 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.
(6) 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 is currently a member of the board of
directors of The Leslie Fay Companies, Inc. and United States Banknote
Corporation.
(7) 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 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.
3
<PAGE>
Meetings and Committees
In the fiscal year ending June 30, 1998 ("Fiscal 1998"), the Board held
four meetings, of which one was telephonic. The Board has an Audit Committee, a
Compensation and Stock Option Committee (the "Compensation Committee"), a Stock
Option Committee, an Executive Committee, an Ad Hoc Committee and a 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
1998.
The Compensation and Stock Option Committee, consisting of Joel L. Gold
(Chairman), Ira J. Hechler and Morris Gindi, reviews and makes recommendations
to the Board regarding all executive compensation. The Compensation Committee
held two meetings in Fiscal 1998.
The Nominating Committee, consisting of Ira B. Lampert, Joel Gold, Ira
Hechler and Kent Klineman nominates 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 1998.
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 Concord
Camera Corp., 4000 Hollywood Boulevard, Presidential Circle - Suite 650N,
Hollywood, Florida 33021.
In Fiscal 1998, 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
(increased to $15,000 as of January 1, 1999), (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 (increased to $1,000 as of
January 1, 1999) 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 shares of Common Stock upon his/her appointment as
director. The Incentive Plan also provides for the grant of an immediately
exercisable option to purchase 1,000 shares of Common Stock on the date of the
original grant and on each anniversary of the original grant. Commencing April
22, 1999, if Proposal Two is approved by the shareholders of the Company, each
director will receive an annual grant of options to purchase 6,500 shares of
Common Stock. Pursuant to the Incentive Plan, each non-employee director
received options to purchase 26,000 shares of Common Stock.
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:
(i) 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).
(ii) The exercise price for 50% of the shares covered by the revised
option was repriced to be $2.00 per share, for 25% of the shares was
repriced to be $2.50 per share and for 25% of the shares was repriced
to be $3.00 per share.
As of October 22, 1998, the expiration date of the initial options
granted to each director to purchase an aggregate of 15,750 shares was extended
from November 29, 1998 to January 31, 2004, except for Mr. Arenberg's option to
purchase 21,000 shares, which was extended from July 17, 1999 to July 17, 2004.
Mr. Arenberg, through a company controlled by him, is a party to a consulting
agreement with the Company. See "Certain Relationships and Related
Transactions."
4
<PAGE>
EXECUTIVE OFFICERS
The names of the current executive officers(1) of the Company
together with certain biographical information for each of them (other than Mr.
Lampert for whom biographical information is provided above) is set forth below:
<TABLE>
<CAPTION>
Name of Executive Officer Age Positions and Offices with the Company
- ------------------------- --- --------------------------------------
<S> <C> <C>
Ira B. Lampert 53 Chairman, Chief Executive Officer and Director
Steve Jackel 63 President, Chief Operating Officer and Director
Brian F. King 46 Senior Vice President of Corporate and Strategic Development and
Secretary; Managing Director of Concord Camera HK Limited
Urs W. Stampfli 47 Director of Sales and Global Marketing
Harlan I. Press 34 Corporate Controller and Assistant Secretary
</TABLE>
Steve Jackel was appointed President, Chief Operating Officer, and
Director of the Company on January 1, 1996. 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. Mr. Jackel resigned as President, Chief Operating Officer and Director
effective July 31, 1998.
Brian F. King was appointed to the position of Senior Vice President on
August 25, 1998. Mr. King is also Secretary of the Company and Managing Director
of Concord Camera HK Limited, and he 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.
Urs W. Stampfli was appointed Director of Sales and Global
Marketing in May 1998. From 1992 to April 1998, Mr. Stampfli was Vice President,
Marketing, Photo Imaging Systems of Agfa Division, Bayer Corporation.
Harlan I. Press is currently Corporate Controller and Assistant
Secretary of the Company and has held such positions since October 1, 1996. Mr.
Press was appointed as a Director of Concord Camera HK Limited on September 1,
1997. 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.
- --------
(1) Mr. Jackel resigned as President, Chief Operating Officer and Director
effective July 31, 1998. Eli Shoer resigned as Executive Vice President on April
30, 1998. Lawrence Pesin resigned as Vice President - Global Marketing on June
11, 1998. Barry M. Shereck resigned as Vice President and Chief Financial
Officer on October 31, 1997.
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
I. SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term
Compensation
Awards
- ------------------------------------------------------------------------------------------------------------------------------------
Securities
Other Annual Underlying All other
Name and Principal Fiscal Salary Bonus Compensation Options Compensation
Position Year ($) ($) ($) (#) ($)
- -------- ---- ---- ---- ---- ---- ----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ira B. Lampert 1998 $541,667 - - $210,383(4) - - $14,973(9)
Chief Executive Officer and 1997 545,205 - - 200,141(5) 695,000(7) 10,350(9)
Chairman 1996 551,282 $100,000(19) 220,432(6) 245,000(8) 18,289(9)
- ------------------------------------------------------------------------------------------------------------------------------------
Steve Jackel (1) 1998 438,462 - - 83,545(10) - - 42,415(9)
Chief Operating Officer and 1997 400,000 - - 66,210(11) 306,250(7) 26,821(9)
President 1996 377,346 25,000(19) 36,237(12) 300,000(8) 38,631(9)
- ------------------------------------------------------------------------------------------------------------------------------------
El Shoer (2) 1998 313,000 - - 66,527(13) - - 4,277(9)
Director of Operations - 1997 210,000 - - 75,000(14) 66,250(7) 1,600(9)
Concord HK 1996 214,039 42,000(19) 75,000(14) 10,000(8) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Brian F. King 1998 231,738 - - 78,938(15) - - 1,721(9)
Vice President of Corporate 1997 170,000 - - 73,000(16) 147,500(7) 783(9)
and Strategic Development; 1996 44,265 - - 3,105(17) 87,500(8) - -
Managing Director of
Concord HK
- ------------------------------------------------------------------------------------------------------------------------------------
Lawrence Pesin (3) 1998 195,833 - - 18,000(18) - - 3,669(9)
General Manager - Concord 1997 181,250 - - 18,000(18) 72,500(7) - -
Americas 1996 43,750 - - 4,500(18) 87,500(8) - -
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Jackel resigned from the Company on July 31, 1998.
(2) Mr. Shoer resigned from the Company on April 30, 1998.
(3) Mr. Pesin resigned as an executive officer from the Company on
June 11, 1998 and is currently the General Manager - Concord Americas.
(4) Includes $30,939, $108,300 and $62,594 paid to Mr. Lampert for an auto
lease and costs, reimbursement of taxes and partial housing costs,
respectively.
(5) Includes $38,068, $102,036 and $45,360 paid to Mr. Lampert for an auto
lease and costs, reimbursement of taxes and partial housing costs,
respectively.
(6) Includes $35,012, $122,775 and $54,461 paid to Mr. Lampert for an auto
lease and costs, reimbursement of taxes and partial housing costs,
respectively.
(7) These options include options issued prior to Fiscal 1997 that were
canceled and repriced during Fiscal 1997.
(8) Includes shares purchased from the Company for $5.375 per share by a loan
from the Company and evidenced by full recourse promissory notes secured
by the Common Stock and does not include an equal number of shares
underlying a contingent restricted stock award ("restricted stock award")
which vest as follows: 33 3% upon the Common Stock reaching a market
price of $10.00 by August 31, 1997; 66 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.
(9) Represents amount paid by the Company for insurance premiums.
(10) Includes $26,969 and $56,576 paid to Mr. Jackel for an auto lease and
costs and reimbursement of taxes, respectively.
(11) Includes $33,825 and $32,385 paid to Mr. Jackel for an auto lease and
costs and reimbursement of taxes, respectively.
(12) Includes $27,414 and $8,823 paid to Mr. Jackel for an auto lease and
costs and travel expenses reimbursed to Harjac Consulting, of which Mr.
Jackel was a principal, respectively.
(13) Includes $62,594 paid to Mr. Shoer for housing allowance for living
arrangements in the Far East and $6,000 paid to Mr. Shoer for auto
allowances.
6
<PAGE>
(14) Represents housing allowance paid to Mr. Shoer for living arrangements in
the Far East.
(15) Includes $18,000 and $60,000 paid to Mr. King for an auto allowance and
housing allowance paid for living arrangements in the Far East,
respectively.
(16) Includes $18,000 paid to Mr. King for auto allowances and $55,000 for
housing allowance paid to Mr. King for living arrangements in the Far
East.
(17) Represents auto allowances paid to Mr. King.
(18) Represents auto allowances paid to Mr. Pesin.
(19) Represents bonus determined and paid by the Company in Fiscal 1996 on
account of Fiscal 1995 performance.
II. OPTION GRANTS IN FISCAL 1998
None.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
III. AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND FISCAL YEAR END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at FY End (#) Money Options at FY End ($)(1)
--------------------------------- --------------------------------
Shares
Acquired on Value Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ira B. Lampert ..... -- -- 686,250 18,750 2,502,442 $ 64,454
- ----------------------------------------------------------------------------------------------------------------------------------
Steve Jackel ....... -- -- 311,000 20,250 1,109,719 69,616
- ----------------------------------------------------------------------------------------------------------------------------------
Eli Shoer .......... 131,250 741,430 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Lawrence Pesin...... 2,500 15,845 35,000 7,500 93,594 51,563
- ----------------------------------------------------------------------------------------------------------------------------------
Brian F. King ...... -- -- 136,250 40,000 487,500 121,875
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The closing price of the Common Stock at 1998 Fiscal Year End was $5 13/16.
Executive Employment Contracts
The employment agreement between the Company and Ira B. Lampert dated
as of May 1, 1997, was amended as of January 1, 1999 (as amended, the "Lampert
Agreement"). The Lampert Agreement provides that Mr. Lampert serve in the
capacities of Chairman, Chief Executive Officer and President of the Company.
The Lampert Agreement provides for an annual salary of $650,000, has a term of
four years and provides for the term of employment to be automatically extended
for one additional day for each day of the term of employment that elapses in
the event that neither party notifies the other at any time during the term of
employment that it does not want the term of employment extended.
Under the Lampert Agreement, Mr. Lampert has been granted two sets of
options. The first set, options to purchase 340,000 shares of Common Stock, was
amended and restated to allow Mr. Lampert to purchase 127,500 shares at an
exercise price of $2.00 per share, 63,750 shares at an exercise price of $2.50
per share and 63,750 shares at an exercise price of $3.00 per share. These
options are currently exercisable as to all 255,000 shares.
7
<PAGE>
These options are exercisable through July 2003 and contain anti-dilution
provisions. The second set of options, to purchase 260,000 shares of the Common
Stock, was amended and restated to allow Mr. Lampert to purchase 97,500 shares
at an exercise price of $2.00 per share, 48,750 shares at an exercise price of
$2.50 per share and 48,750 shares at an exercise price of $3.00 per share. These
options are currently exercisable as to all 195,000 shares. These options are
exercisable through September 2004 and also contain anti-dilution provisions.
In the Lampert Agreement, the Company agreed to adopt a supplemental
executive retirement plan (as amended, the "SERP") for the benefit of Mr.
Lampert and shall cause to be credited to this account $14,167 ($18,333 as
amended on January 1, 1999) each month ("Monthly Credit") for the benefit of Mr.
Lampert. The balance in the SERP account will always be 100% vested and not
subject to forfeiture. Each time the Company credits a Monthly Credit to the
SERP account, the Company will simultaneously contribute an amount equal to such
credit to a trust established for the purpose of accumulating funds to satisfy
the obligations incurred by the Company pursuant to the establishment of the
SERP. The Lampert Agreement prohibits Mr. Lampert from competing with the
Company for a one-year period following the termination of Mr. Lampert's
employment.
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. Mr. Jackel resigned from
the Company on July 31, 1998, after the end of Fiscal 1998. Prior to entering
into the Jackel Agreement, Mr. Jackel rendered consulting services 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, 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.
Under the Jackel Agreement, Mr. Jackel has been granted options to
purchase shares of Common Stock. Options to purchase 211,000 shares of Common
Stock were amended and restated to allow Mr. Jackel to purchase 93,000 shares at
an exercise price of $2.00 per share, 46,486 shares at an exercise price of
$2.50 per share and 71,514 shares at an exercise price of $3.00 per share. These
options are currently exercisable as to all 211,000 shares of Common Stock. The
options are exercisable through February 2006 and contain anti-dilution
provisions.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Chief Executive Officer ("CEO"). As discussed in greater detail in this
Proxy Statement, the Lampert Agreement was amended as of January 1, 1999 to
increase Mr. Lampert's annual salary 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."
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 increase of Mr. Lampert's
salary, 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) the
extensive amount of time and world-wide travel that the CEO position entails
(Mr. Lampert spends 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.
Joel Gold
Ira J. Hechler
Morris Gindi
9
<PAGE>
BENEFICIAL OWNERSHIP
The following table sets forth certain information as of March 1, 1999, 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>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class(1)
- ------------------------------------ ----------------------- -----------
<S> <C> <C>
(i) Beneficial Owners of More than 5%
of the Common Shares
Theodore H. Kruttschnitt...................................... 1,205,000 10.7%
1350 Bayshore Blvd., Suite 850
Burlingame, California 94010
Deltec Asset Management....................................... 628,835 5.6%
535 Madison Avenue
New York, New York 10002
(ii) Directors and Nominees of the Company
Ira B. Lampert................................................ 1,813,790 (2)(3) 16.1%
Concord Camera Corp.
4000 Hollywood Boulevard
Presidential Circle - Suite 650N
Hollywood, Florida 33021
Steve Jackel.................................................. 1,813,790 (2)(4) 16.1%
Concord Camera Corp.
4000 Hollywood Boulevard
Presidential Circle - Suite 650N
Hollywood, Florida 33021
Eli Arenberg.................................................. 82,750(5) *
9578 Harbour Lake Circle
Boynton Beach, Florida 33437
Joel L. Gold.................................................. 31,250(6) *
Inter Bank
630 Fifth Avenue, Suite 1820
New York, New York 10111
Morris Gindi.................................................. 30,750(7) *
Notra Trading Inc.
One Woodbridge Center
Woodbridge, New Jersey 07095
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class(1)
- ------------------------------------ ----------------------- -----------
<S> <C> <C>
J. David Hakman............................................... 107,750(8) 1.0%
Hakman & Company, Inc.
1350 Bayshore Highway - Suite 300
Burlingame, California 94010
Ira J. Hechler................................................ 466,750(9) 4.2%
45 Rockefeller Plaza
New York, New York 10111
Kent M. Klineman.............................................. 129,000(10) 1.2%
c/o Klineman Assoc., Inc.
1270 Avenue of the Americas
New York, New York 10020
(iii) Executive officers
Brian F. King................................................. 1,813,790 (2)(11) 16.1%
Concord Camera Corp.
4000 Hollywood Boulevard
Presidential Circle - Suite 650N
Hollywood, Florida 33021
Keith Lampert................................................. 1,813,790 (2)(12) 16.1%
Concord Camera Corp.
4000 Hollywood Boulevard
Presidential Circle - Suite 650N
Hollywood, Florida 33021
Arthur Zawodny................................................ 1,813,790 (2)(13) 16.1%
Concord Camera Corp.
4000 Hollywood Boulevard
Presidential Circle - Suite 650N
Hollywood, Florida 33021
(iv) All executive officers and directors as a group (11 Persons) 2,662,040 23.7%
</TABLE>
- --------------------
* Indicates less than 1%.
(1) All information is as of March 1, 1999, 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 March 1, 1999, the Company had issued and outstanding
11,238,013 shares of Common Stock, the Company's only class of voting
securities outstanding. Unless otherwise indicated, beneficial ownership
disclosed consists of sole voting and dispositive power.
11
<PAGE>
(2) Represents the total number of shares which are beneficially owned by a
group comprising Ira B. Lampert, Steve Jackel, Brian F. King, Keith
Lampert and Arthur Zawodny as a result of the terms of an Amended and
Restated Voting Agreement, dated as of February 28, 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.
(3) Includes 67,290 shares purchased in the open market, 245,000 shares
purchased pursuant to a purchase agreement with the Company, 55,000 shares
purchased in a private transaction from former employees of the Company
pursuant to the Management Equity Provisions of the Company's Stock
Incentive Plan and 705,000 shares underlying stock options, as to all of
which such person has sole dispositive power.
(4) Includes 262,667 shares underlying stock options, as to all of which such
person has sole dispositive power.
(5) Represents 28,000 shares purchased in the open market and 54,750 shares
underlying stock options.
(6) Represents 10,500 shares purchased in the open market and 20,750 shares
underlying stock options.
(7) Represents shares underlying stock options.
(8) Includes 55,000 shares purchased in the open market, 32,000 shares
underlying warrants which are currently exercisable pursuant to the Hakman
Agreement, and 20,750 shares underlying stock options. Excludes 98,000
shares underlying warrants which are not exercisable within 60 days of
March 1, 1999.
(9) Represents 446,000 shares purchased in the open market and 20,750 shares
underlying stock options.
(10) Represents 108,250 shares purchased in the open market and 20,750 shares
underlying stock options.
(11) Includes 27,500 shares purchased pursuant to a purchase agreement with the
Company, 52,500 shares purchased in private transactions from former
employees of the Company pursuant to the Management Equity provision of
the Company's Incentive Plan and 153,333 shares underlying stock options,
as to all of which such person has sole dispositive power. Excludes 40,000
shares underlying options which will not become exercisable within 60 days
of March 1, 1999.
(12) Includes 20,000 shares purchased in the open market, 55,000 shares
purchased in private transactions from former employees of the Company
pursuant to the Management Equity provision of the Company's Stock
Incentive Plan and 122,500 shares underlying stock options, as to all of
which such person has sole dispositive power. Excludes 22,500 shares
underlying options which will not become exercisable within 60 days of
March 1, 1999.
(13) Includes 7,000 shares pursuant to a purchase agreement with the Company
and 41,000 shares underlying stock options, as to all of which such person
has sole dispositive power. Excludes 8,000 shares underlying options which
will not become exercisable within 60 days of March 1, 1999.
12
<PAGE>
COMPARATIVE STOCK PERFORMANCE
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, 1993 in the Company's Common Stock, the
Nasdaq Stock Market - U.S. Index and a Peer Group Index. The Peer Group Index
comprises the members of the S.I.C. Code 3860 (Photographic Equipment and
Supplies) as listed in the Nasdaq Stock Market 1998 Fact Book. The stock price
performance shown on the graph is not intended to forecast or be indicative of
future stock performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CONCORD CAMERA CORP.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND A PEER GROUP
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------------------
6/93 6/94 6/95 6/96 6/97 6/98
<S> <C> <C> <C> <C> <C> <C>
CONCORD CAMERA CORP. # 100.00 54.76 84.52 59.52 47.62 110.71
PEER GROUP * 100.00 130.75 128.36 167.84 217.02 190.26
NASDAQ STOCK MARKET (U.S.) & 100.00 100.96 134.77 173.03 210.38 277.69
*$100 INVESTED ON 6/30/93 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
</TABLE>
(Graph produced by Research Data roup, Inc.
13
<PAGE>
Section 16 Beneficial Ownership Reporting Compliance
The following officers and directors of the Company filed late reports
under Section 16(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act") relating to Fiscal 1998: (i) Eli Arenberg, Director, late filing
of a Form 4 due June 10, 1998, reporting the purchase in an open market
transaction of 5,000 shares of Common Stock, (ii) Morris Gindi, Director, late
filing of a Form 4 due October 10, 1997, reporting the sale in an open market
transaction of 5,000 shares of Common Stock to Notra Trading and (iii) Morris
Gindi, Director, late filing of a Form 4 due November 10, 1997, reporting the
sale in an open market transaction of 5,000 shares of Common Stock to Notra
Trading. There are no known failures to file a required Form 3, 4 or 5 and no
other known late filings of a required Form 3, 4 or 5 during Fiscal 1997 by any
person required to file such forms with respect to the Company pursuant to
Section 16 of the Exchange Act.
Certain Relationships and Related Transactions
At June 30, 1998, the Company was indebted to Mr. Jack C. Benun, former
Chief Executive Officer, for certain loans made by him to the Company in the
principal amount of $100,000, which amount bears interest at an annual rate of
2% over the prime lending rate of the CIT Group/Credit Finance, Inc., with whom
the Company has a credit facility. The Company incurred approximately $11,000 in
interest expense in Fiscal 1998 in connection with the loans from Mr. Benun and
suspended payment of the loans. The Company believes that any amounts which may
otherwise have been due Mr. Benun will be offset by the amounts which Mr. Benun
will be found to owe the Company when legal claims that the Company has against
Mr. Benun are arbitrated or adjudicated.
The Company and Mr. Benun entered into and executed a Pledge Agreement
on each of March 7, 1994 and April 6, 1994 to secure the prompt payment of any
liability to the Company that Mr. Benun may incur as a result of the matters
then under investigation. Mr. Benun was terminated as Chief Executive Officer on
July 14, 1994. The Company holds 30,770 shares of the Common Stock owned by Mr.
Benun and pledged to the Company in connection with the Pledge Agreement.
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 shares of Common Stock at an exercise price of $3.00 per share, 10,000
shares at an exercise price of $4.00 per share and 10,000 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. is paid at an hourly rate for consulting
services provided to the Company. Selling expenses included $56,000 for such
consulting services and related expenses during Fiscal 1998.
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 shares of Common Stock 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 shares (the "Purchased 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 he/she had
purchased based upon attainment of increases in shareholder value in accordance
with the Incentive Plan. 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 dated November 7, 1995 (May 7, 1996 in
the case of purchase agreements executed by Brian King and Lawrence Pesin) (the
"Purchase Agreements"), 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
14
<PAGE>
and bear interest at an annual rate of 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 would cause the transferee (i) to agree in writing with Mr.
Lampert to be bound by the provisions of the Voting Agreement and (ii) to
execute and deliver to Mr. Lampert an irrevocable proxy.
Pursuant to Amendments to each of the Purchase Agreements dated
February 28, 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 individual. 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 began vesting December 31, 1996 in equal monthly
installments over a four-year period during the term of employment or
consultancy. The unvested portion became vested on August 19, 1998 when the
average closing price of the Common Stock was at least $5.00 for 90 consecutive
trading days. Concurrently with the Amendments, the Voting Agreement and the
irrevocable proxies were amended and restated to include the Option Shares and
delete any mention of the contingent restricted stock.
On September 25, 1997, the Company and J. David Hakman entered into an
agreement which was subsequently supplemented on March 11, 1998, April 10, 1998,
April 21, 1998, June 10, 1998 and September 30, 1998 (the "Hakman Agreement").
Pursuant to the Hakman Agreement, the Company granted warrants to purchase up to
130,000 shares of Common Stock at an exercise price of $4.50 per share to Hakman
and Company, Inc. (a corporation controlled by Mr. Hakman and of which he is the
Chief Executive Officer and President) in connection with consulting services
provided to the Company by Mr. Hakman. As of March 1, 1999, such warrants are
fully vested and currently exercisable as to 32,000 shares of Common Stock. The
remainder of the warrants vest upon the completion of certain services by Hakman
and Company, Inc. pursuant to the Hakman Agreement. Hakman and Company, Inc. can
earn additional fees under the Hakman Agreement by providing certain financial
services to the Company in connection with certain acquisitions by the Company
and certain debt and/or equity financings by the Company.
Indebtedness of Management
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 ............................ $1,588,272.74
Steve Jackel .............................. $622,852.05
Brian F. King ............................. $350,354.28
15
<PAGE>
PROPOSAL TWO:
INCREASING THE NUMBER OF SHARES OF THE COMMON STOCK
AUTHORIZED FOR ISSUANCE UNDER THE COMPANY'S INCENTIVE PLAN FROM
2,000,000 SHARES TO 3,000,000 SHARES
Proposed Amendment
On January 21, 1999, the Board adopted, subject to stockholder
approval, an amendment (the "Plan Amendment") to the Company's Incentive Plan,
as amended (the "Plan"), increasing the aggregate number of shares of Common
Stock authorized for issuance under the Plan from 2,000,000 to 3,000,000.
Commencing April 22, 1999, if this Proposal Two is approved by the shareholders
of the Company, the number of options granted to directors will increase from
options to purchase 1,000 shares of Common Stock per year to options to purchase
6,500 shares of Common Stock per year. Based on the recommendation of the
Compensation Committee, the Board believes that options have been, and will
continue to be, an important compensation element in attracting and retaining
key employees. As of March 1, 1999, options to purchase an aggregate of
1,279,338 shares of Common Stock were issued and outstanding under the Plan,
options to purchase 697,925 shares of Common Stock were previously exercised and
22,687 shares of Common Stock remained available for future grants of awards
under the Plan. If the Plan Amendment is approved, the Plan would cover an
aggregate of 3,000,000 shares of Common Stock having an aggregate market value
of $13,406,400 as of March 1, 1999. After taking into account awards made under
the Plan through March 1, 1999, an aggregate of 1,022,687 shares of Common Stock
having an aggregate market value of $4,570,184 as of March 1, 1999 would be
available for future issuance.
The Board believes that the increase in authorized shares is necessary
to enable it to continue to make awards under the Plan to attract and retain key
employees. The affirmative vote of a majority of shares of Common Stock cast at
the Annual Meeting is required for approval of the Plan Amendment. The Board
recommends a vote FOR the Plan Amendment.
Description of Incentive Plan
General
The Plan was adopted January 18, 1994 and currently provides for the
grant of options to acquire an aggregate of 2,000,000 shares of the Common Stock
to employees, officers or directors of, or consultants to, the Company or its
subsidiaries. The Plan authorizes the Board to issue incentive stock options
("ISOs") as defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), stock options that do not conform to the requirements of
that Code section ("Non-ISOs"), stock appreciation rights ("SARs"), restricted
stock, stock awards and stock based awards. Directors who are not also employees
of the Company or any subsidiary thereof may only be granted Non-ISOs. As of
March 1, 1999, the Company had granted the following awards under the Plan:
813,337 to the current executive officers, 158,500 to the current directors, and
307,551 to all employees, consultants and officers other than the current
executive officers.
The Compensation Committee administers the Plan and has full power and
authority to take any and all actions deemed necessary or desirable for the
proper administration of the Plan and the effectuation of its purposes. The
Compensation Committee has authority to select those employees, officers, and
consultants whose performances it determines significantly promote the success
of the Company to receive discretionary awards under the Plan, grant the awards,
interpret and determine all questions of policy with respect thereto, and adopt
rules, regulations, agreements and instruments deemed necessary for its proper
administration.
16
<PAGE>
Awards
Discretionary Awards:
Non-Qualified and Incentive Stock Options. Options may be granted
under the Plan. Awards may be ISOs or Non-ISOs. The exercise price of options
will be set by the Compensation Committee and stated in the option agreement.
The exercise price may be paid (i) in U.S. dollars, (ii) by delivery of the
Company's Common Stock, (iii) pursuant to a broker-assisted "cashless exercise"
program if established by the Company, (iv) by a combination of the preceding
methods, or (v) by such other methods as the Compensation Committee may deem
appropriate. Options may also contain SARs permitting the recipient to receive
the difference between the exercise price per share and the market value on the
date of surrender.
Restricted Stock. Awards of Common Stock granted under the Plan may be
subject to forfeiture until such restrictions, terms and conditions as the
Compensation Committee may determine are fulfilled.
Dividend Equivalent Award. The Compensation Committee may grant an
award that represents the right to receive a dividend or its equivalent in value
in Common Stock, cash or a combination of both with respect to any new or
previously existing award, which will entitle the recipient to receive at the
time of settlement an amount equal to the actual dividends paid on the Common
Stock delivered to the recipient, calculated from the date of award and
accounted for as if reinvested in Common Stock on the dividend payment dates.
Other Stock and Stock Based Awards. The Compensation Committee may
grant Common Stock or other Common Stock based awards that are related to or
similar to the awards described above.
Formula Award: The Plan provides that each member of the Board who is
not an employee (a"Non- Employee Director") will be granted options in
accordance with the following formula: (i) an option to acquire 20,000 shares of
Common Stock will be granted on the Grant Date (defined below) at the Exercise
Price (defined below), which option will become exercisable, as to 4,000 shares
on the January 1 next following the Grant Date and as to an additional 4,000
shares on each January 1 thereafter through the fourth such January 1; and (ii)
an option to acquire 1,000 shares of Common Stock will be granted on the Grant
Date and on each anniversary thereof at the Exercise Price, which options will
be exercisable immediately upon grant. In the event a Non-Employee Director
fails to attend at least 75% of the Board meetings in any calendar year, such
person automatically forfeits his right to exercise that portion of the option
provided for in clause (i) above that would have otherwise become exercisable on
the next following January 1, which portion shall cease to be of any force or
effect. For purposes of the formula, "Grant Date" means, with respect to each
Non-Employee Director, the earlier of January 18, 1994 or the date of his or her
election to the Board, and "Exercise Price" means (x) the closing market price
of the Common Stock on the Grant Date, or, if there were no sales on such date,
then the next preceding date on which such closing market price was recorded,
with respect to each option granted pursuant to clause (i) above and (y) the
closing market price of the Common Stock on each date of grant (or if there were
no sales on such date, then on the next preceding date on which such closing
market price was recorded) with respect to options granted pursuant to clause
(ii) above. Options granted pursuant to the formula expire and cease to be of
any force or effect on the earlier of the fifth anniversary of the date any such
option was granted or the first anniversary of the date on which an optionee
ceases to be a member of the Board.
Federal Income Tax Consequences
The following summary generally describes the principal federal (and
not state and local) income tax consequences of awards granted under the Plan.
It is general in nature and is not intended to cover all tax consequences that
may apply to a particular employee or to the Company. The provisions of the Code
and the regulations thereunder relating to these matters are complicated and
their impact in any one case may depend upon the particular circumstances. This
discussion is based on the Code as currently in effect.
The Plan is not subject to any of the requirements of ERISA, nor is it
qualified under Section 401(a) of the Code.
Non-Incentive Stock Options. If a Non-ISO is granted in accordance with
the terms of the Plan, no income will be recognized by the recipient at the time
the option is granted. On exercise of a Non-ISO, the amount by
17
<PAGE>
which the fair market value of the Common Stock on the date of exercise exceeds
the purchase price of such shares will generally be taxable to the holder as
ordinary income, and will be deductible for tax purposes by the Company (or one
of its subsidiaries) in the year in which the holder recognizes the ordinary
income. The disposition of shares acquired upon exercise of a Non-ISO will
ordinarily result in long-term or short-term capital gain or loss (depending on
the applicable holding period) in an amount equal to the difference between the
amount realized on such disposition and the sum of the purchase price and the
amount of ordinary income recognized in connection with the exercise of the
stock option.
Incentive Stock Options. If an ISO is granted in accordance with the
terms of the Plan, no income will be recognized by the recipient at the time the
ISO is granted. On exercise of an ISO, the holder will generally not recognize
any income and the Company (or one of its subsidiaries) will generally not be
entitled to a deduction for tax purposes. However, the difference between the
purchase price and the fair market value of the shares received on the date of
exercise will be treated as a positive adjustment in determining alternative
minimum taxable income, which may subject the holder to the alternative minimum
tax or to an increase in such tax. The disposition of shares acquired upon
exercise of an ISO will ordinarily result in long-term capital gain or loss.
However, if the holder disposes of shares acquired upon exercise of an ISO
within two years after the date of grant or within one year after the date of
exercise (a "disqualifying disposition"), the holder will generally recognize
ordinary income, and the Company (or one of its subsidiaries) will generally be
entitled to a deduction for tax purposes, in the amount of the excess of the
fair market value of the Common Stock on the date the ISO is so exercised over
the purchase price (or the gain on sale, if less). Any excess of the amount
realized by the holder on the disqualifying disposition over the fair market
value of the shares on the date of exercise of the ISO will ordinarily
constitute long-term or short-term capital gain (depending on the applicable
holding period).
Stock Appreciation Rights. The amount of any cash (or the fair market
value of any Common Stock) received upon the exercise of SARs under the Plan
will be includible in the holder's ordinary income and the Company will be
entitled to a deduction for such amount.
Restricted Shares. If restricted shares are awarded in accordance with
the terms of the Plan, no income will be recognized by such holder at the time
such award is made. A Plan participant who is awarded restricted shares will be
required to include in his ordinary income, as compensation, the fair market
value of such restricted shares upon the lapse of the forfeiture provisions
applicable thereto, plus the amount of any dividend equivalents on such
restricted shares, less any amount paid therefor, except that at the time the
restricted shares are first issued the holder may elect to include in his
ordinary income, as compensation, the fair market value of such restricted
shares at the time of receipt, less any amount paid therefor. Absent the making
of the election referred to in the preceding sentence, any cash dividends or
other distributions paid with respect to restricted shares prior to lapse of the
applicable restriction will be includible in the holder's ordinary income as
compensation at the time of receipt. In each case, the Company (or one of its
subsidiaries) will be entitled to a deduction in the same amount as the holder
realizes compensation income.
PROPOSAL THREE:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has reappointed the independent accounting firm of Ernst &
Young as auditors of the Company for Fiscal 1999. Shareholder approval requires
the affirmative vote of a majority of shares of the Common Stock cast at the
Annual Meeting. A representative of Ernst & Young is expected to attend the
Annual Meeting, make a statement (should he desire to do so) and 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 1999 at the Annual Meeting, the Board,
on recommendation of its Audit Committee, may reconsider the selection.
18
<PAGE>
The Board recommends a vote FOR the ratification of the appointment of
Ernst & Young as independent auditors for the Company for Fiscal 1999.
YEAR 2000 SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for action at the
Company's Year 2000 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 Year 2000 Annual Meeting of
Shareholders be received by the Company at its executive offices, 4000 Hollywood
Boulevard, Presidential Circle - Suite 650N, Hollywood, Florida 33021 by
November 12, 1999.
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.
BY ORDER OF THE BOARD OF DIRECTORS
Brian King
Secretary
March 12, 1999
19
<PAGE>
PROXY
CONCORD CAMERA CORP.
4000 Hollywood Boulevard, Presidential Circle - Suite 650N,
Hollywood, Florida 33021
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - APRIL 22, 1999
The undersigned hereby appoints Harlan I. Press as Proxy of the
undersigned with full power of substitution to attend and represent the
undersigned at the Annual Meeting of Stockholders of Concord Camera Corp. (the
"Company") to be held on April 22, 1999, 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:_______________________________________________, 1999
________________________________________________________
________________________________________________________
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, 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. RATIFICATION OF INCREASING THE NUMBER OF SHARES OF THE COMMON STOCK
AUTHORIZED FOR ISSUANCE UNDER THE COMPANY'S INCENTIVE PLAN FROM 2,000,000
SHARES TO 3,000,000 SHARES.
[ ] FOR increasing the number of shares of Common Stock issuable
under the Plan.
[ ] AGAINST increasing the number of shares of Common Stock issuable
under the Plan.
[ ] ABSTAIN
<PAGE>
3. RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE FISCAL YEAR ENDING JUNE 30, 1999.
[ ] FOR the ratification of Ernst & Young LLP.
[ ] AGAINST the ratification of Ernst & Young LLP.
[ ] ABSTAIN
If no specification is made, this proxy will be voted FOR Proposals 1 through 3
listed above.
4. ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
