<PAGE>
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:
[ ] 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 ss.240.14a-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:
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3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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 - 6th Floor, North Tower
Hollywood, Florida 33021
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 18, 2001
The Annual Meeting of Shareholders of Concord Camera Corp. (the
"Company") will be held at the Hyatt Regency Pier 66, 2301 S.E. 17th Street
Causeway, Fort Lauderdale, Florida 33316, on January 18, 2001, 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 common stock authorized for
issuance under the Company's Incentive Plan from 6,000,000 to
8,000,000;
3. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending June 30, 2001;
and
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record at the close of business on November 30,
2000 are entitled to notice of, and to vote at, the meeting or any adjournments
thereof.
Please sign and date the enclosed form of proxy and return it in the
postage paid, self-addressed envelope provided for your convenience. Management
asks that you 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 F. King
Secretary
Hollywood, Florida
December 11, 2000
<PAGE>
CONCORD CAMERA CORP.
----------
PROXY STATEMENT
dated December 11, 2000
----------
FOR ANNUAL MEETING OF SHAREHOLDERS
to be held Thursday, January 18, 2001
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 Hyatt Regency Pier 66, 2301 S.E. 17th Street Causeway, Fort
Lauderdale, Florida 33316 on January 18, 2001, at 10:00 a.m., local time, and
all adjournments thereof (the "Annual Meeting").
The Board has fixed the close of business on November 30, 2000 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 27,190,542 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 holders 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 by (i) 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 authorized for issuance
under the Incentive Plan from 6,000,000 to 8,000,000, (iii) FOR the ratification
of the appointment of Ernst & Young LLP as independent auditors of the Company
for the fiscal year ending June 30, 2001 ("Fiscal 2001"), and (iv) in the
discretion of the proxy holders with respect to such other matters as may come
before the Annual Meeting.
All information in this Proxy Statement gives effect to a two-for-one
stock split effective on April 14, 2000 to shareholders of record on March 27,
2000.
The Company's executive offices are located at 4000 Hollywood
Boulevard, Presidential Circle - 6th Floor, North Tower, Hollywood, Florida
33021. Mailing of this Proxy Statement, the accompanying form of proxy and the
Company's Annual Report for the fiscal year ended July 1, 2000 ("Fiscal 2000"),
to shareholders will commence on or about December 11, 2000.
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 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 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. Although management does not anticipate that any nominee will be
unable or unwilling to serve as director, in the event of such an occurrence,
proxies may be voted in the discretion of the persons named in the proxy for a
substitute designated by the Board, unless the Board decides to reduce the
number of directors constituting 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 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 individuals 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 55 1993 Chairman of the Board, Chief Executive Officer and President
Eli Arenberg 72 1988 Director
Ronald S. Cooper 62 2000 Director
Morris H. Gindi 56 1988 Director
Joel L. Gold 58 1991 Director
J. David Hakman 59 1993 Director
Kent M. Klineman 68 1993 Director
William J. Lloyd 61 2000 Director
</TABLE>
Ira B. Lampert has been the Chairman and Chief Executive Officer of the
Company since July 13, 1994. For the calendar year 1995 and again from July 31,
1998 through the present, Mr. Lampert also served as President of the Company.
Mr. Lampert is a member of the Board of the Queens College Foundation of the
City University of New York and is the Treasurer of the Boys & Girls Republic, a
nonprofit organization for underprivileged children.
Eli Arenberg has been a director of the Company since 1988. From 1984
through February 1992, Mr. Arenberg held various positions in the Company,
including Senior Vice President of Sales. Following his retirement from
full-time employment with the Company, Mr. Arenberg has been a consultant to the
Company since July 1994.
Ronald S. Cooper has been a director of the Company since January 20,
2000. Mr. Cooper is a co-founder and principal of LARC Strategic Concepts, LLC,
a consulting firm focusing on emerging growth companies. Mr. Cooper retired from
Ernst & Young LLP in September 1998, having joined the firm in 1962. He became a
partner in 1973 and was Managing Partner of the firm's Long Island office from
1985 until he retired. He is also a director of Frontline Capital Group, a
publicly traded e-commerce company.
2
<PAGE>
Morris H. Gindi has been a director of the Company since 1988. Mr.
Gindi has served as the Chief Executive Officer of Notra Trading Inc., an import
agent in the housewares and domestics industry, since 1983.
Joel L. Gold has been a director of the Company since 1991. Mr. Gold
has been Executive Vice President of Berry Shino Securities since January 2000.
He has been employed as an investment banker at other investment banks: J.W.
Barclay & Co. Inc. from September 1999 to December 1999, Solid ISG Capital
Markets LLC from January 1999 to September 1999, Inter Bank Capital Group LLC
from October 1997 to January 1999, L.T. Lawrence & Co., Inc. from March 1996
through September 1997, Fector Detwiler from April 1995 through March 1996, and
Furman Selz Incorporated from January 1992 through April 1995. Mr. Gold is also
a director of PMCC Financial Corp. and Sterling Vision.
J. David Hakman has been a director of the Company since 1993. Mr.
Hakman owns Hakman Capital Corporation, an investment and merchant banking
concern, a subsidiary of which is a member of the National Association of
Securities Dealers, Inc. In addition to serving as a director of several closely
held companies, Mr. Hakman is a director of Hanover Direct, Inc., a direct
marketing business.
Kent M. Klineman, an attorney and private investor, has been a director
of the Company since 1993. In addition to serving as a director of several
closely held companies, Mr. Klineman is Chairman of Business Alliance Capital
Corp. a closely held asset-based finance company, and a Manager of 1270 Capital
LLC, the manager of UV Equities, LLC, a closely held investment fund.
William J. Lloyd has been a director of the Company since May 2, 2000.
Mr. Lloyd currently serves as co-chief executive of Phogenix Imaging, LLC, a new
Hewlett Packard/Eastman Kodak joint venture formed to develop photo finishing
solutions to offer retail customers a wide range of digital imaging capabilities
for both traditional photographic film and digital files. Previously, Mr. Lloyd
held various management positions at Hewlett Packard from 1969 to 2000, most
recently as Vice President, Chief Technology Officer for its Digital Media
Solutions and Personal Appliances and Services.
Meetings and Committees of the Board of Directors
In Fiscal 2000, the Board held four meetings. The Board has an Audit
Committee, a Compensation and Stock Option Committee, an Executive Committee, a
Nominating Committee and a Marketing and Product Development Committee.
The Audit Committee, consisting of Joel L. Gold (Chairman), Ronald S.
Cooper and Morris H. Gindi, 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. See the "Audit Committee Report" below. The
Audit Committee held four meetings in Fiscal 2000.
The Compensation and Stock Option Committee, consisting of Morris H.
Gindi (Chairman), Ronald S. Cooper and Joel L. Gold, reviews and makes
recommendations to the Board regarding executive compensation. See the
"Compensation Committee Report on Executive Compensation" below. The
Compensation and Stock Option Committee held one meeting in Fiscal 2000.
The Nominating Committee, consisting of Kent M. Klineman (Chairman),
Ira B. Lampert and Joel L. Gold, nominates those persons who will 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. The Nominating
Committee held one meeting in Fiscal 2000. 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., Presidential Circle -
6th Floor, North Tower, 4000 Hollywood Boulevard, Hollywood, Florida 33021.
In Fiscal 2000, all of the directors attended at least 75% of the
aggregate of the total number of meetings of the Board and committees on which
they served.
3
<PAGE>
Director Compensation
Each non-employee member of the Board of Directors receives: (i) an
annual fee of $15,000 for serving on the Board; (ii) a $2,500 annual fee for
each Board committee on which he serves ($3,500 for serving as Chairman); and
(iii) $1,000 for each Board or committee meeting attended.
In addition, pursuant to the Company's Incentive Plan, each
non-employee director automatically receives the following options to purchase
shares of the Common Stock. Upon appointment to the Board, each non-employee
director receives: (i) an option to purchase up to 40,000 shares, vesting as to
8,000 shares on the following January 1 and on each January 1 thereafter
(provided that, if a director fails to attend at least 75% of the Board meetings
in any calendar year, then the options that would have vested on the next
January 1 are forfeited); and (ii) an immediately exercisable option to purchase
13,000 shares. On each anniversary of his appointment, each non-employee
director receives another immediately exercisable option to purchase 13,000
shares. All of the foregoing options have an exercise price equal to the closing
price of the Common Stock on the date of grant and expire on the earlier of: (i)
five years from the grant date; or (ii) one year after the grantee ceases to be
a member of the Board.
On April 24, 2000, the Company also made a one-time option grant to
each non-employee director who had served on the Board for the past five years,
namely Messrs. Arenberg, Gindi, Gold, Hakman and Klineman. The one-time grant
provided each such director with a fully vested option to purchase up to 25,000
shares at an exercise price of $22.1875 per share, which was the closing price
of the Common Stock on the date of the grant.
Executive Officers
Set forth below is the name, and age as of December 1, 2000, of each of
the Company's executive officers, together with certain biographical information
for each of them (other than Mr. Lampert, for whom biographical information is
provided above under "Nominees for Election of Directors"):
<TABLE>
<CAPTION>
Name of Executive Officer Age Positions and Offices with the Company
------------------------- --- --------------------------------------
<S> <C> <C>
Ira B. Lampert 55 Chairman of the Board, Chief Executive Officer and President
Brian F. King 47 Senior Vice President and Secretary
Harlan I. Press 36 Vice President, Treasurer and Assistant Secretary
Gerald J. Angeli 48 Vice President of OEM Product Supply
Keith L. Lampert 30 Vice President of the Company and Managing Director of Concord Camera HK Limited
Urs W. Stampfli 49 Vice President and Director of Global Sales and Marketing
</TABLE>
Brian F. King has been Senior Vice President of the Company since
August 1998. In addition, Mr. King has served as Secretary of the Company since
August 1996 and served as Managing Director of Concord Camera HK Limited
("Concord HK") from August 1996 through April 2000. Mr. King served as the
Company's Vice President of Corporate and Strategic Development from June 1996
to August 1998. Before joining the Company, Mr. King was Managing General
Partner of Cripple Creek Associates, a partnership that built and operated two
casinos in Cripple Creek, Colorado, from June 1991 through February 1996.
Harlan I. Press has been Vice President and Treasurer since April 2000,
Chief Accounting Officer since November 1994, and Assistant Secretary of the
Company since October 1996. Mr. Press served as the Corporate Controller of the
Company from October 1996 through April 2000. Mr. Press is a member of the
American Institute of Certified Public Accountants, the New York State Society
of Certified Public Accountants and the Financial Executives Institute.
4
<PAGE>
Gerald J. Angeli has been Vice President, OEM Product Supply, of the
Company since April 2000. From July 1997 to April 2000, Mr. Angeli was Vice
President, Global Manufacturing and Products Supply for NCR Corporation's
Systemedia Group, where he was responsible for manufacturing, customer service,
distribution and logistics. Before that, Mr. Angeli was employed by Eastman
Kodak for 20 years in various capacities, most recently as Manager of Worldwide
Manufacturing and Supply Chain and Vice President, Consumer Imaging.
Keith L. Lampert, who is a son of Ira B. Lampert, has been Vice
President of the Company since August 1998 and Managing Director of Concord HK
since April 2000. Among other things, Mr. Lampert is responsible for the
Company's operations in Hong Kong and the PRC. Mr. Lampert has been employed by
the Company since 1993. Mr. Lampert is also the Business Sub-Committee Chairman
of the Hong Kong Photographic and Optics Manufacturers Association.
Urs W. Stampfli has been Vice President and Director of Global Sales
and Marketing for the Company since April 2000. Mr. Stampfli joined the Company
in May 1998 as Director of Global Sales and Marketing. From 1990 to April 1998,
Mr. Stampfli was Vice President, Marketing, Photo Imaging Systems of Agfa
Division, Bayer Corporation.
Executive Compensation
The following table contains certain information regarding aggregate
compensation paid or accrued by the Company during Fiscal 2000 to the Chief
Executive Officer and to each of the other four highest paid executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Shares
Other Annual Underlying All Other
Name and Fiscal Salary Bonus* Compensation Options Compensation
Principal Position Year ($) ($) ($) (#) ($)
------------------ ------ ------ ------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ira B. Lampert 2000 $704,167 $400,000 $210,107(1) 350,672 $482,371(9)
Chairman, Chief 1999 616,668 350,000 148,595(2) -- 408,951(9)
Executive Officer 1998 541,667 -- 210,383(3) -- 14,973(10)
and President
Brian F. King 2000 327,147 175,000 18,000(4) 169,680 123,148(11)
Senior Vice 1999 322,460 150,000 48,000(5) -- 105,783(11)
President 1998 231,738 -- 78,000(6) -- 1,721(10)
Keith L. Lampert 2000 204,601 100,000 25,000(7) 101,808 83,520(12)
Vice President; 1999 167,052 75,000 25,000(7) -- 72,037(12)
Managing Director 1998 139,849 -- 25,000(7) -- 535(10)
of Concord HK
Urs. W. Stampfli 2000 192,500 45,000 12,000(8) 24,886 7,245(10)
Vice President and 1999 175,000 5,000 12,000(8) -- 7,245(10)
Director of Global 1998 23,275 -- -- 90,000 --
Sales and Marketing
Harlan I. Press 2000 155,000 50,000 6,000(8) 41,330 6,515(13)
Vice President and 1999 140,178 40,000 4,833(8) 40,000 790(10)
Treasurer 1998 115,000 -- -- 30,000 640(10)
</TABLE>
5
<PAGE>
-----------------
(*) Represents bonuses determined and paid by the Company in the fiscal
year, based on the Company's and the executive's performance in the
previous fiscal year.
(1) Includes $35,911, $48,000 and $108,055 paid for auto allowances and
costs, partial housing costs and reimbursement of taxes, respectively.
(2) Represents $35,595, $48,000 and $65,000 paid for auto lease and costs,
partial housing costs and reimbursement of taxes, respectively.
(3) Includes $30,939, $62,594 and $108,300 paid for auto lease and costs,
partial housing costs and reimbursement of taxes, respectively.
(4) Represents auto allowances paid.
(5) Represents $12,000 and $36,000 for auto and overseas allowances paid,
respectively.
(6) Represents $18,000 and $60,000 for auto and overseas allowances paid,
respectively.
(7) Represents overseas allowances paid.
(8) Represents auto allowances paid.
(9) Includes indebtedness forgiven (including principal and interest) by the
Company as part of a conditional release program (see "Certain
Relationships and Related Transactions" below) in the amounts of
$389,827 for Fiscal 1999 and $452,371 for Fiscal 2000. The remainder
represents payments by the Company for insurance premiums.
(10) Represents insurance premiums paid by the Company.
(11) Includes indebtedness forgiven (including principal and interest) by the
Company as part of a conditional release program (see "Certain
Relationships and Related Transactions" below) in the amounts of
$103,954 for Fiscal 1999 and $120,632 for Fiscal 2000. The remainder
represents payments by the Company for insurance premiums.
(12) Includes indebtedness forgiven (including principal and interest) by the
Company as part of a conditional release program (see "Certain
Relationships and Related Transactions" below) in the amounts of $71,468
for Fiscal 1999 and $82,935 for Fiscal 2000. The remainder represents
payments by the Company for insurance premiums.
(13) Represents $5,615 of indebtedness forgiven (including principal and
interest) by the Company as part of a conditional release program (see
"Certain Relationships and Related Transactions" below) and $900 paid by
the Company for insurance premiums.
Stock Options
The following table sets forth information concerning stock option
grants made during Fiscal 2000 to the executive officers named in the "Summary
Compensation Table."
Stock Option Grants in Fiscal 2000
<TABLE>
<CAPTION>
Value at Potential Realizable
Grant Value at Assumed
% of Total Date Annual Rates of Stock
Number of Options Exercise Market Market Price Appreciation for
Shares Granted to Price Price Price Option Term
Underlying Employees Per on Grant ----- ----------------------
Options in Share Date Expiration 0% 5% 10%
Name Granted Fiscal 2000 ($) ($) Date ($) ($) ($)
---- ------- ----------- --- --- ---- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ira B. Lampert 350,672(1) 25.8 22.1875 22.1875 04/23/2010 -- 4,891,874 12,399,762
Brian F. King 169,680(1) 12.5 22.1875 22.1875 04/23/2010 -- 2,367,036 5,999,885
Keith L. Lampert 101,808(1) 7.5 22.1875 22.1875 04/23/2010 -- 1,420,222 3,599,931
Urs W. Stampfli 24,886(1) 1.8 22.1875 22.1875 04/23/2010 -- 347,160 879,969
Harlan I. Press 37,330(1) 2.7 22.1875 22.1875 04/23/2010 -- 520,754 1,319,989
Harlan I. Press 4,000(2) 0.3 0.9063 11.7190 12/21/2006 43,251 55,800 141,440
</TABLE>
----------------
(1) These stock options vested immediately as to one-third of the underlying
shares, with the balance vesting in three equal annual installments
commencing January 1, 2001.
(2) This stock option vested in 1998 under the terms of its original grant to
a former officer of the Company. Under the Management Equity Provisions
of the Company's Incentive Plan, the former officer's option was
cancelled upon his leaving the Company and it was re-issued to Mr.
Press. See "Certain Relationships and Related Transactions" below.
6
<PAGE>
The following table sets forth information concerning stock option
exercises during Fiscal 2000 by each of the executive officers named in the
"Summary Compensation Table" and the fiscal year-end value of unexercised
options held by such officers, based on the closing price of $20.875 for the
Common Stock on June 30, 2000.
<TABLE>
<CAPTION>
Aggregated Stock Option Exercises in Fiscal 2000
and Fiscal Year-End Option Values
Number of Shares
Underlying Value of Unexercised
Unexercised Options In-the-Money
Shares at FY End (#) Options at FY End ($)
Acquired on Value --------------------------------- -------------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
-------------------- ------------- --------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ira B. Lampert -- -- 1,526,890 233,782 $27,902,813 --
Brian F. King -- -- 443,226 113,120 7,625,362 --
Keith L. Lampert -- -- 315,936 75,872 5,574,765 $159,720
Urs W. Stampfli 30,000 $350,000 38,295 46,591 543,750 543,750
Harlan I. Press 44,000 598,688 82,443 54,887 1,334,843 577,500
</TABLE>
Executive Employment Contracts, Termination of Employment
and Change in Control Arrangements
Pursuant to the employment agreement between the Company and Ira B.
Lampert dated as of May 1, 1997 and amended as of January 1, 1999 and January 1,
2000 (as amended, the "Lampert Agreement"), Mr. Lampert serves in the capacities
of Chairman, Chief Executive Officer and President of the Company. The Lampert
Agreement provides for an annual salary of $800,000, 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 during which neither party
notifies the other that the term should not be extended. The Lampert Agreement
prohibits Mr. Lampert from competing with the Company for a one-year period
following the termination of his employment with the Company.
Pursuant to the Lampert Agreement, the Company adopted a supplemental
executive retirement plan (as amended, the "Lampert SERP") for the benefit of
Mr. Lampert and causes $33,333 to be credited to the Lampert SERP account each
month ("Monthly Credit") for the benefit of Mr. Lampert. The balance in the
Lampert SERP account will always be 100% vested and not subject to forfeiture.
Each time the Company credits a Monthly Credit to the Lampert 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 Lampert SERP.
The Terms of Employment between the Company and Urs W. Stampfli, Vice
President and Director of Global Sales and Marketing, dated effective as of
January 1, 2000, provide for an annual salary of $210,000. The agreement expires
after three years, unless renewed by mutual agreement of the parties, and may be
terminated by either party on ninety (90) days' notice. Under this agreement, if
the Company terminates Mr. Stampfli's employment without cause, he is entitled
to severance payments of up to twelve months' base salary. The agreement also
prohibits Mr. Stampfli from competing with the Company for one year following
the termination of his employment with the Company.
In connection with a one-time grant of deferred compensation to the
following executive officers, effective as of April 19, 2000, the Company
adopted a Supplemental Executive Retirement Plan and Agreement for the benefit
of each of Brian F. King, Keith L. Lampert, Urs W. Stampfli and Harlan I. Press
(the "Executive SERPs"). The Company simultaneously contributed the following
amounts to trusts established for the purpose of holding funds to satisfy the
Company's obligations under each of the Executive SERPs: (i) under the plan for
Brian F. King, $750,000; (ii) under the plan for Keith L. Lampert, $450,000,
7
<PAGE>
(iii) under the plan for Harlan I. Press, $165,000, and (iv) under the plan for
Urs W. Stampfli, $110,000. The amounts in the Executive SERP accounts vest, so
long as the executive continues to be employed by the Company, in three equal
annual installments beginning January 1, 2001 or immediately upon a change of
control of the Company. The Company simultaneously approved a one-time grant of
deferred compensation to Ira B. Lampert in the amount of $1,549,999 with the
same vesting as under the Executive SERPs. The Lampert SERP has been amended to
include appropriate terms to govern the one-time grant of deferred compensation
to Mr. Lampert.
Compensation Committee Report on Executive Compensation
The Compensation and Stock Option Committee of the Board of Directors
(hereinafter, the "Committee") is composed of three non-employee directors. The
Committee seeks to ensure that the Company's compensation policies are designed
and implemented to promote the goal of enhancing long-term shareholder value.
The Committee believes that the key to achieving this goal is to attract, retain
and motivate qualified and experienced executive officers and employees. The
Committee therefore favors forms of compensation that encourage and reward
long-term service to the Company, and enable those who succeed in building
shareholder value to share in the value they have helped to create. As such, the
Committee believes that critical components of compensation for executives are:
(i) the award of stock options at the time the executive joins the Company and
periodically thereafter and (ii) the payment of annual cash incentive
compensation based upon the attainment by the Company of a specified return on
equity set by the Board of Directors each fiscal year. The Committee believes
that providing executives with opportunities to acquire significant stakes in
the Company's growth and prosperity through the grant of stock options and other
incentive awards will enable the Company to attract and retain qualified and
experienced executive officers.
Executive Officers (other than the CEO). The compensation of the CEO,
and that of any executive who is a member of the CEO's family, is determined by
the Board of Directors based on the Committee's recommendation. In these
instances, the CEO recommends the level of compensation to the Committee based
on several factors which are then reviewed by the Committee in determining
whether to approve or modify the CEO's recommendation before presenting it to
the Board. The CEO determines the compensation of all other executive officers.
The factors taken into consideration (many of which are subjective) by the CEO
and the Committee in determining an executive's compensation include: individual
performance; the Company's financial performance; the compensation of executives
at corporations of similar size and operations; years of service to the Company;
the executive's responsibilities; the amount of time and travel required by the
position; and the desire to encourage the long-term commitment of the executive.
With respect to new executives, the CEO and the Committee also take into
consideration the results of any arms-length negotiations between the Company
and such executive. In determining the appropriate level of compensation for the
executive officers named in the "Summary Compensation Table," outside
compensation consultants were engaged to obtain information and advice about
competitive levels of compensation and particular compensation techniques used
by public companies of comparable size (i.e., with comparable annual sales
volume).
Executive officers may also participate in an annual bonus pool equal
to a percentage of the Company's pre-tax net income provided that the Company's
return on shareholders' equity (after giving effect to allocation of the bonus
pool) is not less than a percentage established by the Board of Directors for
each fiscal year.
In addition, as part of the compensation package of each executive, the
CEO recommends, and the Committee considers, the grant of stock options to each
executive based on the above factors. For the reasons discussed above, it is the
Committee's policy to make stock options as large a portion of an executive's
total compensation package as is reasonable. Options are generally awarded to
executive officers at the time that they join the Company and periodically
thereafter, with vesting over a number of years.
In order to further the Company's interest in retaining the services of
certain of its executive officers, and in order to provide additional long-term
incentive to such executives, in April 2000 the Committee approved deferred
compensation awards and additional stock options grants to such executives. See
"Executive Compensation."
Chief Executive Officer. In determining the appropriate level of
compensation for Mr. Lampert, the Committee engaged the services of outside
compensation consultants to obtain information and advice about competitive
levels of compensation and particular compensation techniques used by public
companies of comparable size (i.e., with comparable annual sales volume). As
8
<PAGE>
discussed in greater detail elsewhere in this Proxy Statement, the annual salary
of Ira B. Lampert was increased effective as of January 1, 2000 and, in April
2000, he received an award of deferred compensation and additional stock
options. See "Executive Compensation - Executive Employment Contracts,
Termination of Employment and Change in Control Arrangements" and "Executive
Compensation - Stock Options." The Committee approved his compensation 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 in which the Company operates; (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) the
Company's financial performance in meeting and exceeding certain targets and
benchmarks; and (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 and its manufacturing facilities in the People's
Republic of China, in addition to his travels to other parts of the Far East and
Europe. These actions were taken in order to provide additional incentive to Mr.
Lampert to continue to exert his utmost efforts in contributing to the Company's
success and prosperity, thereby benefiting the Company and its shareholders.
Morris H. Gindi, Chairman
Ronald S. Cooper
Joel L. Gold
Audit Committee Report
The Audit Committee of the Board of Directors (the "Audit Committee")
is comprised of Messrs. Gold, Cooper and Gindi. Mr. Gold and Mr. Gindi qualify
as independent members of the Audit Committee under Rule 4200(a)(15) of the
National Association of Securities Dealers' ("NASD") listing standards. Prior to
his October 1998 retirement from Ernst & Young LLP, Mr. Cooper served as the
Senior Advisory Partner through Fiscal 1998 on the Company's engagement, and
therefore he does not qualify as an independent member of the Audit Committee
under NASD rules. Mr. Cooper was approved by the Board of Directors as a
non-independent member of the Audit Committee following a determination by the
Board that Mr. Cooper's relationship as a retired partner with Ernst & Young LLP
would not interfere with his exercise of independence from management and the
Company, and in light of his invaluable years of experience as a certified
public accountant.
The Audit Committee is primarily responsible for the effectiveness of
the Company's accounting policies and practices, financial reporting and
internal controls. The Board of Directors has adopted a written charter for the
Audit Committee which is attached to this Proxy Statement as Appendix A.
Pursuant to its Charter, the Audit Committee is authorized to: (i) establish and
review the activities of the independent certified accountants; (ii) review and
approve the format of the financial statements to be included in the annual
report to the shareholders; (iii) review recommendations of the independent
certified accountants and responses of management; (iv) review and discuss the
Company's financial reporting, loss exposures and asset control with the
independent certified accountants and management; (v) monitor the Company's
program for the compliance with policies on business ethics; (vi) annually
obtain from the independent certified accountants a written delineation of their
relationships and professional services, and take, or recommend that the Board
of Directors take, appropriate action to ensure the continuing independence of
the independent certified accountants; (vii) review with the independent
certified accountants and the Company's financial and accounting personnel the
adequacy and effectiveness of the Company's financial and accounting controls;
(viii) review quarterly and annual financial statements of the Company to
determine that the independent certified accountants do not take exception to
the disclosure and content of the quarterly financial statements, and that they
are satisfied with the disclosure and content of the annual financial
statements; (ix) inquire about significant risks and exposures to the Company
and assess steps to minimize such risks; (x) review with financial management of
the Company and the independent certified accountants the results of their
timely analysis of significant financial reporting issues and practices; (xi)
review legal and regulatory matters that may have a material effect on the
financial statements or Company compliance policies; (xii) review any
transactions among the Company, its subsidiaries and their employees or
affiliates; (xiii) receive reports from the Company's compliance officer
regarding related party transactions and compliance with corporate policies; and
(xiv) direct and supervise any special investigations the Audit Committee deems
necessary.
9
<PAGE>
In conjunction with its activities during the Company's 2000 fiscal
year, the Audit Committee reviewed and discussed the Company's audited financial
statements with management of the Company. The members of the Audit Committee
also discussed with the Company's independent certified accountants the matters
required to be discussed by SAS 61 (Codification of Statements on Auditing
Standards, AU Section 380). The Audit Committee received from the Company's
independent certified accountants the written disclosures and the letter
required by Independence Standards Board No. 1, and discussed with the
independent certified accountants the independent certified accountants'
independence. Based on the foregoing review and discussions, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
Company's fiscal year ended July 1, 2000.
Joel L. Gold, Chairman
Ronald S. Cooper
Morris H. Gindi
Beneficial Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of November 30,
2000, with respect to: (i) those persons or groups known to the Company to
beneficially own more than 5% of the Common Stock; (ii) each director and each
nominee for director; (iii) each executive officer 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 of Beneficial Owner Beneficial Ownership(1) of Class(1)
------------------------ ----------------------- -----------
<S> <C> <C>
(i) Beneficial Owners of More than 5% of the Common Stock
"MEP Group" of Company Officers or
Employees as described in (2) below.................................. 3,063,847(2) 10.3%
Concord Camera Corp.
4000 Hollywood Boulevard
Presidential Circle - 6th Floor, North Tower
Hollywood, Florida 33021
(ii) Directors and Nominees
Ira B. Lampert....................................................... 1,997,217(2)(3) 6.9%
Eli Arenberg......................................................... 127,600(4) *
Ronald S. Cooper..................................................... 34,000(5) *
Morris H. Gindi...................................................... 101,500(6) *
Joel L. Gold......................................................... 113,500(7) *
J. David Hakman ..................................................... 315,500(8) 1.2%
Kent M. Klineman..................................................... 92,500(9) *
William J. Lloyd..................................................... 21,000(10) *
(iii) Named Executive Officers
Brian F. King........................................................ 480,932(2)(11) 1.7%
Keith L. Lampert..................................................... 406,560(2)(12) 1.5%
Harlan I. Press...................................................... 148,738(2)(13) *
Urs W. Stampfli...................................................... 53,825(14) *
(iv) All executive officers and directors as a group (13 persons) 3,924,472 13.0%
</TABLE>
--------------------
* Indicates less than one percent (1%).
10
<PAGE>
(1) For purposes of this table, beneficial ownership was determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") based upon information furnished by the persons
listed or contained in filings made by them with the Securities and Exchange
Commission; the inclusion of shares as beneficially owned should not be
construed as an admission that such shares are beneficially owned for
purposes of Section 16 of the Exchange Act. As of November 30, 2000, the
Company had 27,190,542 shares of Common Stock issued and outstanding. All
shares were owned directly with sole voting and investment power unless
otherwise indicated.
(2) As of November 30, 2000, a group comprised of five officers or employees of
the Company (Messrs. Ira B. Lampert, Brian F. King, Keith L. Lampert, Harlan
I. Press and Arthur Zawodny) (collectively, the "MEP Group") beneficially
owned, in the aggregate, 516,800 shares and 2,547,047 options to purchase
Common Stock, or 10.3% of 29,737,589 (the number of shares outstanding on
that date plus the number of shares that would have been outstanding if all
options exercisable within 60 days of November 30, 2000 were exercised). Of
that total, 316,400 shares and 780,666 options were purchased under the
Management Equity Provisions ("MEP") of the Company's Incentive Plan and are
subject to the terms of an Amended and Restated Voting Agreement, dated
February 28, 1997, as amended (the "Voting Agreement") pursuant to which MEP
shares are voted in accordance with the will of the holders of a majority of
the shares governed by the Voting Agreement. The balance of 200,400 shares
and 1,766,381 options were purchased or held outside the MEP. See "Certain
Relationships and Related Transactions" below.
(3) Represents 1,596,817 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000, 375,400 shares owned, as to
all of which Mr. Lampert has sole dispositive power, and 25,000 shares held
by a ss.501(c)(3) charitable trust of which Mr. Lampert is a trustee with
voting and dispositive power. Since Mr. Lampert is part of the MEP Group,
the shares beneficially owned by him are included in footnote (2) above; the
MEP Group is deemed to have acquired the shares beneficially owned by any
member of the MEP Group described in footnote (2) above.
(4) Includes 99,000 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000 and 15,000 shares held by
his wife.
(5) Includes 21,000 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000.
(6) Includes 38,000 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000, 1,000 shares held by his
son, and 25,000 shares held by the Notra Trading Inc. Profit Sharing Plan &
Trust, a retirement plan of which Mr. Gindi is a co-trustee and participant.
(7) Includes 88,500 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000 and 21,000 shares held by
his wife.
(8) Represents: (i) 38,000 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000; and (ii) 84,500 shares held
by the Hakman Family Trust, of which Mr. Hakman is a trustee and
beneficiary, 30,000 shares held by the Hakman Capital Corporation Profit
Sharing Plan and Trust, and 163,000 shares held by a corporation controlled
by Mr. Hakman.
(9) Includes 88,500 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000.
(10) Represents 21,000 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000.
(11) Represents 480,932 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000. Since Mr. King is part
of the MEP Group, the shares beneficially owned by him are included in
footnote (2) above; the MEP Group is deemed to have acquired the shares
beneficially owned by any member of the MEP Group described in footnote (2)
above.
11
<PAGE>
(12) Represents 346,560 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000 and 60,000 shares owned, as
to all of which Keith Lampert has sole dispositive power. Since Mr. Lampert
is part of the MEP Group, the shares beneficially owned by him are included
in footnote (2) above; the MEP Group is deemed to have acquired the shares
beneficially owned by any member of the MEP Group described in footnote (2)
above.
(13) Represents 100,738 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000 and 48,000 shares owned, as
to all of which Mr. Press has sole dispositive power. Since Mr. Press is
part of the MEP Group, the shares beneficially owned by him are included in
footnote (2) above; the MEP Group is deemed to have acquired the shares
beneficially owned by any member of the MEP Group described in footnote (2)
above.
(14) Includes 43,825 shares that may be acquired pursuant to stock options
exercisable within 60 days of November 30, 2000.
Comparative Stock Performance
The graph and table set forth below compare the cumulative total
shareholder return on the Common Stock for the years ended June 30, 1996 through
June 30, 2000 with the Nasdaq Stock Market - U.S. Index and a Peer Group Index
for the same periods. The Peer Group Index is comprised of the members of the
S.I.C. Code 3860 (Photographic Equipment and Supplies) as listed in the Nasdaq
Stock Market 2000 Fact Book. The graph and table assume an investment of $100 in
the Common Stock and each index on June 30, 1995 and the reinvestment of all
dividends. The stock performance shown is not intended to forecast, and may not
be indicative of, future stock performance.
[GRAPH OMITTED]
<TABLE>
<CAPTION>
6/95 6/96 6/97 6/98 6/99 6/00
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Concord Camera Corp. 100 70 56 131 118 941
Nasdaq Stock Market - U.S. Index 100 128 156 206 296 437
Peer Group Index 100 130 170 145 166 238
</TABLE>
12
<PAGE>
Section 16 Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires directors, executive
officers and ten percent (10%) shareholders of the Company ("Reporting Persons")
to file initial reports of ownership and reports of changes in ownership of the
Common Stock and any other equity securities with the Securities and Exchange
Commission ("SEC"). Reporting Persons are required to furnish the Company with
copies of all Section 16(a) reports they file. Based on a review of the copies
of the reports furnished to the Company and written representations from the
Reporting Persons that no other reports were required, with respect to Fiscal
2000 the Company believes that: (i) the Reporting Persons complied with all
Section 16(a) filing requirements applicable to them, except that Morris Gindi
filed a late Form 4 in June 2000 relating to an option exercise, and Theodore
Kruttschnitt filed a late Form 4 in April 2000 relating to a sale of shares on
the open market; and (ii) there were no failures to file a report required under
Section 16(a) by any of the Reporting Persons.
Certain Relationships and Related Transactions
Consulting Arrangements with Directors
Following Eli Arenberg's retirement from the Company in 1992, he began
consulting with the Company in 1994. ELA Enterprises, Inc., a company owned by
Eli Arenberg, is paid for the consulting services Mr. Arenberg provides to the
Company. The Company paid approximately $27,000 for such consulting services and
related expenses during Fiscal 2000.
A corporation controlled by J. David Hakman has provided consulting
services to the Company since 1997 pursuant to an engagement agreement entered
into on September 25, 1997, as later amended and supplemented (the "Hakman
Agreement"). Pursuant to the Hakman Agreement, the Company granted a warrant to
purchase up to 260,000 shares of Common Stock at an exercise price of $2.25 per
share to the corporation controlled by Mr. Hakman. In October 2000, the
corporation exercised the warrant as to the 113,000 shares that were vested. As
of December 1, 2000, 147,000 shares remained subject to the warrant, none of
which were vested or exercisable.
Transactions under the Management Equity Provisions of the Incentive Plan
On August 23, 1995, the Compensation Committee of the Board approved
stock purchase awards under the Management Equity Provisions of the Company's
Incentive Plan pursuant to which 1,000,000 shares of Common Stock were made
available for purchase by senior management of the Company at a price per share
equal to $2.6875 per share (the closing price of the Common Stock on August 23,
1995, as adjusted for the two-for-one stock split paid on April 14, 2000)
pursuant to binding commitments to be made by such persons by August 31, 1995.
The Company received commitments for the purchase of 888,000 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 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.
In November 1995, members of the Company's senior management entered
into purchase agreements (the "Purchase Agreements") for the Purchased Shares.
Pursuant to 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 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 an irrevocable proxy to Ira B. Lampert 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 with respect
to such shares and (ii) to execute and deliver to Mr. Lampert an irrevocable
proxy.
13
<PAGE>
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 participating 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, at an exercise price of
$0.9063 per share. 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 (pre-split adjustment) 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.
Pursuant to the Company's Management Equity Provisions, so long as a
person remains a member of the management group, such person is required to own
shares of Common Stock in an amount equal to not less than 50% of such person's
shares issued pursuant to the Management Equity Provisions plus shares issuable
upon the exercise of options thereunder.
In April 1999, the Board approved a conditional release program whereby
the Company agreed to forgive a portion of the indebtedness represented by each
Note and concurrently release a proportionate number of Purchased Shares held by
the Company as security for payment of the Notes. The debt forgiveness and share
release program (the "Release Program") began on May 1, 1999 and will continue
on January 1 each year through January 1, 2003. The total principal sum subject
to forgiveness under the Release Program is $2,386,500, together with interest
owed under the Notes. The debt forgiveness is conditioned upon the person's
continued employment with the Company. If a person ceases to be an employee or
consultant of the Company prior to full forgiveness of the debt, the principal
amount of the Note will immediately become due and payable, including any
amounts scheduled to be forgiven at a future date.
As contemplated by the Management Equity Provisions, subsequent to 1995
certain Purchased Shares and the related options were transferred to other
eligible members of the Company's senior management upon their execution of the
required agreements and Notes. Notes previously delivered to secure payment for
such shares were canceled upon delivery of new Notes by current members. The
Purchased Shares and options awarded pursuant to the Management Equity
Provisions are presently held by Ira B. Lampert, Brian F. King, Keith L.
Lampert, Harlan I. Press and Arthur Zawodny.
In January 2000, the Board further provided that a participant in the
Management Equity Provisions would have the right to prepay all or any portion
of the indebtedness represented by a Note issued in connection with the purchase
of shares, and that the amount so prepaid would be repaid to the participant as
deferred compensation at such time as the amount would otherwise have been
forgiven in accordance with the Release Program.
The following are the scheduled release dates, and the total amounts
that are (or were, as the case may be) to be forgiven* on such dates, under the
Release Program.
<TABLE>
<CAPTION>
Total Principal Total Purchased
Indebtedness Forgiven Shares Released
Releasee Release Dates or to be Forgiven or to be Released
-------- ------------- ----------------- -----------------
<S> <C> <C> <C>
Brian F. King................ May 1, 1999, and January 1st of $430,000* 160,000
2000, 2001, 2002 and 2003
Ira B. Lampert............... May 1, 1999, and January 1st of $1,612,500* 600,000
2000, 2001, 2002 and 2003
Keith L. Lampert............. May 1, 1999, and January 1st of $295,625* 110,000
2000, 2001, 2002 and 2003
Harlan I. Press.............. January 6, 2000, and January 1st of $10,750 4,000
2001, 2002 and 2003
Arthur Zawodny............... May 1, 1999, and January 1st of $37,625 14,000
2000, 2001, 2002 and 2003
</TABLE>
-----------
* After the January 1, 2000 release date, the balance of these amounts were
repaid in full.
14
<PAGE>
Ira B. Lampert, Brian King and Keith Lampert have each prepaid in full
the balance of the debts represented by their Notes and, assuming their
continued employment with the Company, will be entitled to receive deferred
compensation in lieu of the amounts scheduled to be forgiven under the Release
Program.
Indebtedness of Management
Ira B. Lampert, Brian King and Keith Lampert are the only executive
officers who owed more than $60,000 to the Company under the Notes at any time
since the beginning of Fiscal 2000. The largest amount of indebtedness
(including principal and interest) that was outstanding at any time since the
beginning of Fiscal 2000 under the Note of each was as follows: (i) Ira B.
Lampert - $1,214,650; (ii) Brian King - $328,699; and (iii) Keith Lampert -
$223,181. As stated above, the amounts owed to the Company by these executive
officers have been repaid in full.
INCREASING THE NUMBER OF SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE UNDER THE COMPANY'S INCENTIVE PLAN FROM
6,000,000 SHARES TO 8,000,000 SHARES
(Proposal Two)
Proposed Amendment
On December 6, 2000, the Board adopted, subject to shareholder
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 6,000,000 to 8,000,000. 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 November 30, 2000, options to
purchase an aggregate of 3,075,548 shares of Common Stock were issued and
outstanding under the Plan, options to purchase 2,121,626 shares of Common Stock
were previously exercised and 802,826 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 8,000,000 shares of Common Stock having an
aggregate market value of $160,000,000 as of November 30, 2000. After taking
into account awards made under the Plan through November 30, 2000, an aggregate
of 2,802,826 shares of Common Stock having an aggregate market value of
$56,056,520 as of November 30, 2000 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 the votes cast by the holders
of shares present or represented and entitled to vote 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, as amended, it currently
provides for the grant of options to acquire an aggregate of 6,000,000 shares of
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 of its subsidiaries may only be
granted Non-ISOs. As of November 30, 2000, the Company had granted the following
awards under the Plan: 3,189,048 to the current executive officers, 576,500 to
the current directors who are not executive officers, and 1,431,626 to all
employees, consultants and officers other than the current executive officers.
15
<PAGE>
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 performance it determines significantly promotes 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.
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 an 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 Awards
The Plan provides that each non-employee member of the Board will be
granted options in accordance with the following formula: (i) an option to
purchase 40,000 shares of Common Stock on the Grant Date (defined below),
becoming exercisable as to 8,000 shares on the following January 1 and as to an
additional 8,000 shares on each January 1 thereafter (provided that, if such
director fails to attend at least 75% of the Board meetings in any calendar
year, then the portion of the option that would have vested on the next January
1 is forfeited); and (ii) an immediately exercisable option to purchase 13,000
shares of Common Stock, both on the Grant Date and on each anniversary thereof.
For purposes of the formula, "Grant Date" means, with respect to each
non-employee director, the later of January 18, 1994 or the date of such
director's election to the Board. The foregoing numbers of shares have been
adjusted to reflect the two-for-one stock split paid to shareholders of record
on March 27, 2000. Prior to April 22, 1999, the annual grant provided for in
clause (ii) above was for 1,000 (pre-split) shares of Common Stock. All options
granted pursuant to the formula have an exercise price equal to the closing
price of the Common Stock on the Grant Date (or if the market was closed on the
Grant Date, then on the next preceding date on which the closing price was
recorded), and expire on the earlier of: (i) five years from the Grant Date; or
(ii) one year after the recipient 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 person 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.
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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 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 includable 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.
17
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RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal Three)
Ernst & Young LLP ("Ernst & Young"), independent public accountants,
was appointed by the Board to audit the Company's financial statements for
Fiscal 2001. This firm has acted as independent public accountants for the
Company since 1996. A representative of Ernst & Young is expected to attend the
Annual Meeting, will have an opportunity to make a statement if he desires to do
so, and will 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 2001 at the Annual Meeting, the Board,
on recommendation of its Audit Committee, may reconsider the selection.
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 is
required for shareholder approval. The Board recommends a vote FOR the
ratification of the appointment of Ernst & Young as independent auditors for the
Company for Fiscal 2001.
OTHER INFORMATION
Shareholder Proposals for 2002 Annual Meeting
Under the rules of the SEC, any shareholder proposal intended to be
presented at the Company's 2002 annual meeting of shareholders must be received
by the Secretary of the Company at its executive offices no later than August
11, 2001, in order to be considered for inclusion in the Company's proxy
statement and form of proxy relating to such meeting.
If a shareholder notifies the Company of an intent to present a
proposal at the Company's 2002 annual meeting of shareholders less than 60 days
before the meeting (and for any reason the proposal is voted on at that annual
meeting), the Company's proxy holders will have the right to exercise
discretionary voting authority with respect to the proposal, if presented at the
meeting, without including information regarding the proposal in its proxy
materials.
Expenses of Solicitation
The cost of this proxy solicitation will be borne by the Company. In
addition to the use of the mails, some regular employees of the Company, without
additional remuneration, may solicit proxies personally or by telephone or
facsimile. The Company will reimburse brokers, dealers, banks, and other
custodians, nominees and fiduciaries for their reasonable expenses in forwarding
solicitation materials to beneficial owners of Common Stock.
Other Business
As of the date of this proxy statement, the Board knows of no business
to be presented at the Annual Meeting other than as set forth in this proxy
statement. If other matters properly come before the Annual Meeting, or any of
its adjournments, the persons named as proxies will vote on such matters in
their discretion.
December 11, 2000
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APPENDIX A
Audit Committee Charter
Purpose; Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling its responsibilities to shareholders, potential shareholders, and the
investment community relating to corporate accounting, reporting practices of
the Company, and the quality and integrity of the financial reports of the
Company. In so doing, it is the responsibility of the Audit Committee to
maintain free and open means of communication among the directors, the
independent accountants, internal auditors, and the financial management of the
Company. The Committee shall review and report to the Board on the performance
of the Company's internal and external accountants and auditors, the reliability
of its financial information, and the adequacy of its financial controls and
policies, initiating and/or approving appropriate changes in any or all of these
areas when necessary. The Audit Committee will fulfill these responsibilities
primarily by carrying out the activities enumerated in this Charter.
Membership and Qualifications
The Audit Committee shall be comprised of three (3) or more directors as
determined by the Board, each of whom shall be independent(1) directors, and
free from any relationship that, in the opinion of the Board, would interfere
with the exercise of independent judgment in carrying out the responsibilities
of a director. All members of the Committee shall have a working familiarity
with basic finance and accounting practices and shall have the ability to read
and understand financial statements. At least one member of the Committee shall
have past employment experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or background
resulting in the person's financial sophistication (including service as a chief
executive officer, chief financial officer, or other senior officer with
financial oversight responsibilities).
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to better react to changing
conditions and to ensure to the Board and the shareholders that the Company's
corporate accounting and reporting practices comply with all requirements and
maintain the highest standard of quality.
In carrying out these responsibilities, the Audit Committee will:
--------
(1) In accordance with NASD rules, a director will not be considered
"independent" if, among other things, he or she:
(i) is or has been employed by the Company or any of its affiliates for the
current year or in the past three years;
(ii) has accepted any compensation from the Company or its affiliates in
excess of $60,000 during the previous fiscal year (except for board
service, retirement benefit plans, or non-discretionary compensation);
(iii) has an immediate family member who is, or has been in the past three
years, employed by the Company or its affiliates as an executive
officer;
(iv) is a partner, controlling shareholder or an executive officer of any
for-profit business to which the Company made, or from which it
received, payments (other than those arising solely from investments in
the Company's securities) that exceed five percent (5%) of the
Company's or the organization's consolidated gross revenues for that
year, or $200,000, whichever is more, in any of the past three years;
or
(v) is employed as an executive of another entity where any of the
Company's executives serve on that entity's compensation committee.
A-1
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o Review and recommend to the Board of Directors the selection of the
independent accountants, considering independence and effectiveness and
approve the fees and other compensation to be paid to the independent
accountants. On an annual basis, the Committee should review and discuss
with the accountants all significant relationships the accountants have
with the Company to determine the accountants' independence. The Committee
shall have a clear understanding with management and the independent
accountants that the independent accountants are ultimately accountable to
the Board and the Committee, as representatives of the Company's
shareholders.
o Review the written disclosures and the letter from the independent
accountants required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and discuss with the
independent accountants the independent accountants' independence.
o Discuss with the independent accountants the matters required by SAS 61 to
be discussed.
o Meet with the independent accountants and financial management of the
Company to review the scope of the proposed audit for the current year and
the audit procedures to be utilized, and at the conclusion thereof review
such audit, including any comments or recommendations of the independent
accountants.
o Review with the independent accountants, and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the Company, and elicit any recommendations for the improvement
of such internal control procedures or particular areas where new or more
detailed controls or procedures are desirable. Particular emphasis should
be given to the adequacy of such internal controls to expose any payments,
transactions, or procedures that might be deemed illegal or otherwise
improper.
o Review the internal audit function of the Company when appropriate
including the independence and authority of its reporting obligations, the
proposed audit plans for the coming year, and the coordination of such
plans with the independent accountants, when applicable.
o Review the financial statements contained in the annual report on Form 10-K
and the annual report to shareholders with management and the independent
accountants to determine that the independent accountants are satisfied
with the disclosure and content of the financial statements to be presented
to the shareholders. Any changes in accounting principles should be
reviewed. The Committee should review with management and the independent
accountants their judgment about the quality, not just acceptability, of
accounting principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements.
o The Committee shall review the interim financial statements with management
and with the independent accountants prior to the filing of the Company's
Quarterly Report on Form 10-Q. Also, the Committee shall discuss the
results of the quarterly review and any other matters required to be
communicated to the Committee by the independent accountants under
generally accepted auditing standards.
o Provide sufficient opportunity for the independent accountants to meet with
the members of the Audit Committee without members of management present.
Among the items to be discussed in these meetings are the independent
accountants' evaluation of the Company's financial, accounting, and
auditing personnel, and the cooperation that the independent accountants
received during the course of the audit.
o Submit the minutes of all meetings of the Audit Committee to, or discuss
the matters discussed at each committee meeting with, the Board of
Directors.
o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose, if, in
its judgment, that is appropriate
Meetings; Agenda Items
The Committee shall meet at least four times annually or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups, believe should be discussed privately. In
addition, the Committee should communicate with independent accountants and
management quarterly to review the Company's financials.
A-2
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PROXY
CONCORD CAMERA CORP.
4000 Hollywood Boulevard, Presidential Circle -- 6th Floor, North Tower
Hollywood, Florida 33021
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS -- JANUARY 18, 2001
The undersigned hereby appoints Brian F. King and Harlan I. Press, and
each of them severally, as proxies of the undersigned, each with full power to
appoint his substitute, to attend and represent the undersigned at the Annual
Meeting of Shareholders of Concord Camera Corp. (the "Company") to be held on
January 18, 2001, and at any adjournments thereof, and to vote thereat the
number of shares of common 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.
/ / 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, Ronald S. Cooper, Morris H.
Gindi, Joel L. Gold, J. David Hakman, Kent M. Klineman and
William J. Lloyd.
/ / FOR ALL nominees listed above (except as indicated to the contrary).
/ / WITHHOLD AUTHORITY to vote for all nominees listed above.
-------------------------------------------------------------------------------
(Instruction: To withhold authority to vote on any individual nominee, write
the name above.)
(Continued and to be signed on reverse side)
<PAGE>
2. AMENDMENT TO THE COMPANY'S INCENTIVE PLAN TO INCREASE THE NUMBER OF
SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER THE PLAN FROM
6,000,000 TO 8,000,000.
/ / FOR / / AGAINST / / ABSTAIN
3. RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING JUNE 30, 2001.
/ / FOR / / AGAINST / / 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.
Dated:--------------, 2000
Signature:----------------
--------------------------
Signature if jointly held
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.
<PAGE>
Appendix B
Incentive Plan
The Company's Incentive Plan is incorporated herein by reference to Exhibit
10.19 to the Company's annual report on Form 10-K for the year ended July 1,
2000.
