<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C>
PLAYTEX PRODUCTS, INC.
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
April 7, 2000
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and management of Playtex
Products, Inc., I cordially invite you to the Annual Meeting of Stockholders to
be held on Tuesday, May 16, 2000, at 9:30 a.m. at our Headquarters at 300 Nyala
Farms Road, Westport, Connecticut.
At the Annual Meeting, you will be asked to elect the Board of Directors,
ratify the selection of our independent auditors and approve an amendment to the
Management Incentive Plan. Each of these items is fully described in the
accompanying Notice of Annual Meeting and Proxy Statement. Your Board of
Directors recommends a vote "FOR' the proposals listed as items 1 through 4 in
the Notice and described in the enclosed Proxy Statement.
Whether or not you plan to attend in person, it is important that your stock
be represented at the meeting regardless of the number of shares you hold. After
reading the enclosed Notice and Proxy Statement, please sign, date and mail the
proxy card or voting instructions in the envelope provided. If you wish to vote
in accordance with the Board's recommendations, all you need do is sign and date
the card. If you plan to attend the meeting and wish to vote in person, you may
revoke your proxy at that time.
If your shares are not registered in your own name and you would like to
attend the meeting, please ask the broker, trust, bank or other nominee which
holds the shares to provide you with evidence of your share ownership, which
will enable you to gain admission to the meeting.
Sincerely,
/s/ Michael R. Gallagher
Michael R. Gallagher
Chief Executive Officer and Director
<PAGE>
PLAYTEX PRODUCTS, INC.
300 NYALA FARMS ROAD
WESTPORT, CONNECTICUT 06880
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 2000
The Annual Meeting of Stockholders of Playtex Products, Inc. (the "Company")
will be held at our Headquarters at 300 Nyala Farms Road, Westport, Connecticut,
on Tuesday, May 16, 2000, at 9:30 a.m., local time, for the following purposes:
ITEM 1. To elect eleven directors for a term of one year and until their
successors are duly elected and qualified;
ITEM 2. To ratify the selection of the firm of KPMG LLP as our independent
auditors for fiscal year 2000;
ITEM 3. To approve amendments to the Management Incentive Plan for Key
Employees; and
ITEM 4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of our common stock at the close of business on March 31, 2000,
the record date, are entitled to vote on the matters listed in this Notice of
Annual Meeting.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ Paul E. Yestrumskas
Paul E. Yestrumskas
Vice President, General Counsel and
Secretary
APRIL 7, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT THE
ENCLOSED PROXY CARD BE SIGNED, DATED, AND PROMPTLY RETURNED IN THE ENCLOSED
ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED.
<PAGE>
PLAYTEX PRODUCTS, INC.
300 NYALA FARMS ROAD
WESTPORT, CONNECTICUT 06880
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is being furnished to all stockholders of Playtex
Products, Inc. in connection with the solicitation of proxies by our Board of
Directors for use at the Annual Meeting. The meeting will be held at our
headquarters at 300 Nyala Farms Road, Westport, Connecticut, on Tuesday,
May 16, 2000, at 9:30 a.m. This Proxy Statement and the accompanying proxy card
are being mailed beginning on or about April 7, 2000 to our stockholders
entitled to vote at the Annual Meeting.
All of our stockholders are cordially invited to attend the Annual Meeting.
Whether or not you expect to attend, it is important that you complete the
enclosed proxy card, and sign, date and return it as promptly as possible in the
enclosed envelope. You have the right to revoke your proxy at any time prior to
its use by filing a written notice of revocation with the Secretary of the
Company prior to the convening of the Annual Meeting, or by presenting another
proxy card with a later date. If you attend the Annual Meeting and desire to
vote in person, you may request that your previously submitted proxy card not be
used. Attendance at the Annual Meeting will not by itself be a revocation of
your proxy.
The cost of soliciting proxies and the cost of the Annual Meeting will be
paid by the Company. In addition to the solicitation of proxies by mail, proxies
may be solicited by personal interview, telephone and similar means by our
directors, officers or employees, none of whom will be specially compensated for
such activities. We also intend to request that brokers, banks and other
nominees solicit proxies from their customers and will pay certain expenses
incurred by them for such activities.
A copy of our Annual Report to Stockholders for our fiscal year ended
December 25, 1999, including our financial statements, is being sent with this
Proxy Statement.
VOTING RIGHTS
As of March 31, 2000, our outstanding stock consisted of 60,776,163 shares
of common stock, par value $.01 per share (the "Common Stock"). Each share of
Common Stock is entitled to one vote on each matter that is voted on at the
Annual Meeting.
QUORUM; REQUIRED VOTE; VOTING PROCEDURES
A majority of the outstanding shares of Common Stock must be represented in
person or by proxy at the Annual Meeting in order for a quorum to be present.
Pursuant to applicable Delaware law, shares represented by proxies that reflect
abstentions or "broker non-votes" (i.e., shares held by a broker or nominee
which are represented at the meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular item) will be counted as shares
that are present and entitled to vote for purposes of determining a quorum.
Election of directors requires the approval of a plurality of the shares of
common stock present and entitled to vote. Each of the other items, as listed in
the Notice of Annual Meeting of Stockholders, requires the approval of a
majority of the shares of Common Stock present and entitled to vote, in person
or by proxy, at the Annual Meeting. Abstentions and broker non-votes as to the
election of directors will not affect the election results. Abstentions as to
any of the other items will have
2
<PAGE>
the same effect as votes against such item; however, broker non-votes will not
have any effect on the outcome of the matter.
Unless you specify otherwise on the proxy card, all of your shares of Common
Stock represented by valid proxies will be voted FOR each of the items listed on
the proxy card and described below, and will be voted in the discretion of the
proxies in respect of such other business, if any, as may properly be brought
before the Annual Meeting. As of March 24, 2000, we know of no other business
that will be presented for consideration at the Annual Meeting other than the
items listed on the proxy card and described below. If you give specific voting
instructions by marking the boxes on the proxy card, your shares of Common Stock
will be voted in accordance with those instructions.
ELECTION OF DIRECTORS
Pursuant to our By-laws, our Board of Directors has fixed at eleven the
number of directors constituting our Board of Directors. Directors are elected
annually by our stockholders and hold office until their successors are elected
and qualified or until death, resignation or removal.
Each of our nominees set forth below is currently a director of the Company.
Each nominee has agreed to serve as a Director, if elected, and we believe that
each nominee will be available to serve. If any nominee is unavailable to serve
as a Director, your shares may be voted for the election of a substitute nominee
as our Board of Directors or the Nominating Committee of our Board of Directors
may propose. Our Board of Directors may elect to reduce the number of directors
constituting our Board.
Assuming the presence of a quorum, the election of directors requires the
favorable vote of a plurality of the shares of Common Stock present and entitled
to vote, in person or by proxy, at the Annual Meeting. Under applicable Delaware
law, abstentions and broker non-votes as to the election of directors will be
counted as present for determining a quorum but will not affect the election of
candidates.
If you wish to withhold authority to vote for any nominee, you can do so by
following the directions set forth on the form of proxy solicited by the Board
of Directors or on the ballot distributed at the Annual Meeting if you wish to
vote in person.
INFORMATION REGARDING NOMINEES
The names and ages of our nominees, their principal occupations or
employment (including their position with us, if applicable) during the past
five years and other data regarding them are set forth below.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- ------------------------------------------
<S> <C> <C>
Robert B. Haas 52 Chairman and Director
Michael R. Gallagher 54 Chief Executive Officer and Director
Glenn A. Forbes 49 Executive Vice President, Chief Financial
Officer and Director
Richard C. Blum 64 Director
Michael R. Eisenson 44 Director
Timothy O. Fisher 50 Director
C. Ann Merrifield 49 Director
Jeffrey W. Ubben 38 Director
Wyche H. Walton 34 Director
Douglas D. Wheat 49 Director
Kenneth F. Yontz 55 Director
</TABLE>
Robert B. Haas has been Chairman and a director of the Company since 1995.
Mr. Haas has been actively involved in private business investments since 1978,
specializing in leveraged buyouts. He has served as Chairman of the Board and
Chief Executive Officer of Haas Wheat & Partners Incorporated
3
<PAGE>
("Haas Wheat") since 1995; he has also been Chairman of the Board and Chief
Executive Officer of Haas Wheat Advisory Partners Incorporated since 1992 (both
of which are private investment firms specializing in leveraged acquisitions).
Mr. Haas serves as Chairman and a director of Nebraska Book Company, Inc., NBC
Acquisition Corporation, Specialty Foods Acquisition Corporation, Specialty
Foods Corporation, Walls Holding Company, Inc., and AMN Holdings, Inc. Mr. Haas
also serves as a director of Sybron International Corporation.
Michael R. Gallagher has been the Chief Executive Officer and a director of
the Company since 1995. Prior to joining the Company, Mr. Gallagher was Chief
Executive Officer of North America for Reckitt & Colman PLC ("R&C") (a consumer
products company) from 1994 to 1995. Mr. Gallagher was President and Chief
Executive Officer of Eastman Kodak's L&F Products subsidiary from 1988 until the
subsidiary was sold to R&C in 1994. From 1984 to 1988, Mr. Gallagher held
various executive positions with the Lehn and Fink Group of Sterling Drug. From
1982 to 1984, he was Corporate Vice President and General Manager of the
Household Products Division of The Clorox Company ("Clorox"). Prior to that,
Mr. Gallagher had various marketing and general management assignments with
Clorox and with The Procter & Gamble Company. Presently he serves as a director
of Allergan, Inc. and the Grocery Manufacturers Association.
Glenn A. Forbes has been Executive Vice President, Chief Financial Officer
and director since March 2000. He has served the Company for the past 28 years
in various finance and accounting positions, including Vice President, Finance
from 1988 to 2000.
Richard C. Blum has been a director of the Company since 1998. Since 1975,
Mr. Blum has been Chairman and President of BLUM Capital Partners, L.P.,
formerly Richard C. Blum & Associates, Inc. ("RCBA Inc."). Since 1994 he has
been President of BLUM Capital Partners, L.P., formerly Richard C. Blum &
Associates, L.P. ("BLUM LP"), an investment firm that specializes in private
equity and strategic public investments. RCBA Inc. is the sole general partner
of BLUM LP. Mr. Blum also serves as a director of Northwest Airlines, Shaklee
Corporation, URS Corporation, CB Richard Ellis, Inc., and Glenborough Realty
Trust, Inc.
Michael R. Eisenson has been a director of the Company since 1997.
Mr. Eisenson is President and the Chief Executive Officer of Charlesbank Capital
Partners, LLC ("Charlesbank"), which is the investment advisor for the private
equity and real estate portfolios of the Harvard University endowment fund.
Prior to the formation of Charlesbank in 1998, Mr. Eisenson was President and
Chief Executive Officer of Harvard Private Capital Group, Inc., the predecessor
to Charlesbank, from 1986 to 1998. He was a Manager with The Boston Consulting
Group from 1981 to 1985. He serves on the Board of Directors of CCC Information
Services Group, Inc., Harken Energy Corporation, ImmunoGen, Inc., United Auto
Group, Inc., and The WMF Group, Ltd., as well as those of several private
companies.
Timothy O. Fisher has been a director of the Company since 1996. Mr. Fisher
has been employed by The Hillman Company (a company of diversified investments
and operations), in various capacities, since 1972. He has been a Vice President
of The Hillman Company since 1986 and is also a director of several private
companies.
C. Ann Merrifield has been a director of the Company since 1997.
Ms. Merrifield has been President of Genzyme Genetics, a wholly owned subsidiary
of Genzyme Corporation (a biotechnology company), since 1996. She previously
served as Vice President, Marketing and Business Development of Genzyme Genetics
from 1992 to 1996. Prior to that, Ms. Merrifield was a Partner with Bain and
Company (a consulting firm) from 1987 to 1992.
Jeffrey W. Ubben has been a director since 1998. Mr. Ubben was a Managing
Director of Richard C. Blum & Associates, Inc. ("RCBA Inc.") from 1995 to 1999,
a director since 1998, and a Managing Partner since 1999. Mr. Ubben was a
Managing Director of Richard C. Blum & Associates, L.P. ("RCBA LP") from 1995 to
1999 and a Managing Partner of BLUM Capital Partners, L.P. (formerly RCBA LP)
since
4
<PAGE>
1999. RCBA Inc. is the sole general partner of BLUM LP. Mr. Ubben held various
management and research positions with Fidelity Investments Inc. (an investment
fund company), including manager of the Fidelity Value Fund and Fidelity Utility
Fund. Mr. Ubben currently serves as a director of Kinetic Concepts, Inc., Smarte
Carte, Inc., Smarte Carte Corporation, and SMC Holdings Corp.
Wyche H. Walton has been a director of the Company since 1998. Mr. Walton
has served as a Senior Vice President of Haas Wheat (a private investment firm
specializing in leveraged acquisitions) since 1995. From 1994 to 1995, he was
Chief Financial Officer of McGarr Capital Management Corp. (a private investment
firm). Mr. Walton also serves as a director of Smarte Carte Corporation.
Douglas D. Wheat has been a director of the Company since June 1995.
Mr. Wheat has been President of Haas Wheat since 1995 and President of Haas
Wheat Advisory Partners Incorporated since 1992 (each of which is a private
investment firm specializing in leveraged acquisitions). He was Co-Chairman of
Grauer & Wheat, Inc. (a private investment firm) from 1989 to 1992 and Senior
Vice President of Donaldson, Lufkin & Jenrette Securities Corporation from 1985
to 1989. Mr. Wheat serves as a director of Specialty Foods Acquisition
Corporation, Specialty Foods Corporation, Smarte Carte Corporation, Walls
Holding Company, Inc., NBC Acquisition Corp., and AMN Holdings, Inc.
Kenneth F. Yontz has been a director of the Company since 1995. Mr. Yontz
has been Chairman of the Board, President, and Chief Executive Officer of Sybron
International Corporation (a manufacturer of dental and laboratory products)
since 1987. He previously served as Executive Vice President of the Allen-
Bradley Company. He is a director of Viasystems, Inc. (manufacturer of printed
circuit boards).
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL THE
NOMINEES TO OUR BOARD OF DIRECTORS.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of
our Common Stock as of March 24, 2000 by (i) each director and each nominee for
director, (ii) each of our executive officers named in the Summary Compensation
table below, (iii) each person we believe to own beneficially more than five
percent of our outstanding Common Stock, and (iv) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED
AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT
- ------------------------ ----------------------- --------
<S> <C> <C>
Robert B. Haas.............................................. 20,000,000(2) 32.9%
Richard C. Blum............................................. 13,197,500(3) 21.7%
Michael R. Eisenson......................................... 2,915,963(4) 4.8%
Michael R. Gallagher........................................ 1,089,334(5) 1.8%
Glenn A. Forbes............................................. 146,487 *
Max R. Recone............................................... 210,002 *
John D. Leahy............................................... 145,335 *
Richard G. Powers........................................... 110,002 *
Michael F. Goss............................................. 100,635 *
Timothy O. Fisher........................................... 21,663(6) *
Kenneth F. Yontz............................................ 18,534 *
C. Ann Merrifield........................................... 8,267 *
Jeffrey W. Ubben............................................ -- --
Wyche H. Walton............................................. -- --
Douglas D. Wheat............................................ -- --
Partnerships managed by Haas Wheat & Partners Inc........... 20,000,000(2) 32.9%
Blum Capital Partners, LP., et al........................... 13,197,500(3) 21.7%
The Carpenters Pension Trust for Southern California........ 4,511,700(3) 7.4%
Shapiro Capital Management Company, Inc..................... 3,871,455(7) 6.4%
All current directors, director nominees and executive
officers as a group (15 persons).......................... 35,047,759 57.7%
</TABLE>
- ------------------------
* Indicates less than one percent.
(1) Except as otherwise indicated, all shares of Common Stock are directly
beneficially owned. Includes shares that may be acquired upon the exercise
of stock options granted by the Company that are exercisable within 60 days
of March 24, 2000. The shares beneficially owned include 1,033,334; 77,334;
170,002; 145,335; 110,002, 0; 18,534 and 8,267 shares subject to currently
exercisable options granted to Messrs. Gallagher, Forbes, Recone, Leahy,
Powers, Goss, Yontz, and Ms. Merrifield, respectively, and 1,562,808 shares
subject to currently exercisable options granted to all current directors
and executive officers as a group.
(2) Includes 8,055,555 shares (approximately 13.2% of the outstanding shares)
owned by HWH Capital Partners, L.P., 9,028,482 shares (approximately 14.9%
of the outstanding shares) owned by HWH Valentine Partners, L.P., and
2,915,963 shares (approximately 4.8% of the outstanding shares) owned by HWH
Surplus Valentine Partners, L.P. The address of each of the foregoing
partnerships is c/o Haas Wheat & Partners Incorporated, 300 Crescent Court,
Suite 1700, Dallas, Texas 75201. The sole general partner of each of such
partnerships is a limited partnership, and the sole general partner of each
of such limited partnerships is a corporation controlled by Mr. Haas. By
virtue of his control of
6
<PAGE>
such corporations, Mr. Haas has sole voting and dispositive power over
17,084,037 shares and shared voting and dispositive power over 2,915,963
shares.
(3) BLUM Capital Partners, L.P., formerly Richard C. Blum & Associates, L.P.
("BLUM LP"), reports ownership of an aggregate of 13,197,500 shares
(approximately 21.7% of the outstanding shares). These shares may be deemed
to be owned indirectly by the following parties (i) BLUM LP, (ii) Richard C.
Blum & Associates, Inc. ("RCBA Inc."), the general partner of BLUM LP,
(iii) RCBA GP, L.L.C. ("RCBA GP"), and (iv) Richard C. Blum, a significant
stockholder and chairman of RCBA Inc. and a managing member of RCBA GP.
These shares are owned directly as follows: (i) five limited partnerships
for which BLUM LP serves as the general partner, Stinson Capital Partners,
L.P. (1,509,700 shares--2.5% of the outstanding shares), Stinson Capital
Partners II, L.P. (802,200 shares--1.3% of the outstanding shares), Stinson
Capital Partners III (162,100 shares--0.3% of the outstanding shares), BK
Capital Partners IV, L.P. (414,600 shares--0.7% of the outstanding shares),
and RCBA-Playtex, L.P. (1,893,600 shares--3.1% of the outstanding shares);
(ii) four investment advisory accounts for which BLUM LP has voting and
investment discretion, The Carpenters Pension Trust for Southern California
(4,511,700 shares--7.4% of the outstanding shares), The Common Fund
(1,465,100 shares--2.4% of the outstanding shares), The United Brotherhood
of Carpenters Pension Plan (403,700 shares--0.7% of the outstanding shares)
and Stinson Capital Fund (Cayman), Ltd. (135,300 shares--0.2% of the
outstanding shares); and (iii) one limited partnership for which RCBA GP
serves as the general partner, RCBA Strategic Partners, L.P. (1,899,500
shares--3.1% of the outstanding shares). The Common Fund disclaims
membership in a group with any of the Reporting Persons and disclaims
beneficial ownership of any shares held by the Reporting Persons. As the
sole general partner of BLUM LP, RCBA Inc. is deemed the beneficial owner of
the securities over which BLUM LP has voting and investment power. As
Chairman and a substantial shareholder of RCBA Inc., and a Managing Member
of RCBA GP, Richard C. Blum might be deemed to be the beneficial owner of
the securities beneficially owned by RCBA Inc. and RCBA GP. BLUM LP,
RCBA Inc., RCBA GP and Mr. Blum disclaim beneficial ownership of these
shares, except to the extent of any pecuniary interest therein. The address
of BLUM Capital Partners, L.P. is 909 Montgomery Street, Suite 400, San
Francisco, California 94113.
(4) Represents shares owned by HWH Surplus Valentine Partners, L.P., of which
Phemus Corporation is the sole Limited Partner. Mr. Eisenson is the Managing
Director and Chief Executive Officer of Charlesbank Capital Partners, LLC,
which is the successor to Harvard Private Capital Group, the investment
advisor for Phemus Corporation. While Mr. Eisenson has shared voting and
dispositive power over the shares, he disclaims beneficial ownership of such
shares. The address of Phemus and Mr. Eisenson is c/o Charlesbank Capital
Partners, LLC, 600 Atlantic Avenue, 26(th) Floor, Boston, Massachusetts
02210.
(5) Includes 21,000 shares held by Mr. Gallagher's children. Mr. Gallagher
disclaims beneficial ownership of these shares.
(6) Includes 16,663 shares held of record by Mr. Fisher's spouse and children.
Mr. Fisher disclaims beneficial ownership of these shares.
(7) Shapiro Capital Management, Inc. is an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, and is considered to be
the "beneficial owner" of an aggregate of 3,871,455 shares of Common Stock.
Information contained in a Schedule 13G filed with the Securities and
Exchange Commission ("Commission"), by Shapiro Capital Management, Inc.
indicates that such shares were acquired solely for investment purposes. We
have not attempted to verify independently any of the information contained
in the Schedule 13G. The address of Shapiro Capital Management, Inc. is 3060
Peachtree Road, N.W., Atlanta, Georgia 30305.
7
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our executive officers, directors and persons who own
more than 10 percent of a registered class of our equity securities ("Reporting
Persons") to file reports of ownership and changes in ownership on Forms 3, 4
and 5 with the Commission and the New York Stock Exchange, Inc. (the "NYSE").
These Reporting Persons are required by Commission regulation to give the
Company copies of all Forms 3, 4 and 5 they file with the Commission and the
NYSE.
Based on our review of the forms we have received and written
representations from certain Reporting Persons, we believe that all of our
Reporting Persons complied with their filing requirements applicable to them
with respect to transactions in our Common Stock during fiscal year 1999.
BOARD MEETINGS, COMMITTEES AND ATTENDANCE
During 1999, our Board of Directors met four times. Each of our directors
attended at least 75% of the total number of meetings of the Board of Directors
and the committees of which he or she was a member, except for Mr. Forbes who
was appointed as a director, in March 2000, by unanimous consent of the Board.
The Board of Directors has an Audit Committee, a Compensation and Stock
Option Committee (the "Compensation Committee"), a Purchaser Nominating
Committee and a Non-Purchaser Nominating Committee. The members of each of these
committees in 1999 are identified in the following table.
<TABLE>
<CAPTION>
PURCHASER NON-PURCHASER
AUDIT COMPENSATION NOMINATING NOMINATING
DIRECTOR COMMITTEE COMMITTEE COMMITTEE COMMITTEE
- -------- --------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Robert B. Haas................................ X
Michael R. Gallagher.......................... X
Michael F. Goss............................... X
Richard C. Blum...............................
Michael R. Eisenson...........................
Timothy O. Fisher............................. X
C. Ann Merrifield............................. X
Jeffrey W. Ubben.............................. X X
Wyche H. Walton............................... X
Douglas D. Wheat.............................. X X
Kenneth F. Yontz.............................. X X
</TABLE>
The Audit Committee recommends our independent auditors and meets with them
regarding our yearly audit and reviews the results of their examination. It also
reviews the auditors' fees and other terms of their engagement with us.
Furthermore, it reviews our internal financial controls and policies and
recommends changes where appropriate as suggested by the auditors. The Audit
Committee met two times during fiscal year 1999.
The Compensation Committee reviews new or modified programs concerning
executive salaries and other compensation matters relating to our executives and
other key employees. Such programs include incentive compensation (including the
Management Incentive Plan); deferred compensation and the Playtex 1994 Stock
Option Plan for Directors and Executive and Key Employees, as amended (the "1994
Stock Option Plan" or the "Plan"), as well as direct and indirect compensation
matters. The Compensation Committee met or acted by unanimous written consent
two times during fiscal year 1999. While serving on the Compensation Committee,
directors do not receive option awards (except, as to Mr. Yontz, pursuant to
formula grants) under the 1994 Stock Option Plan.
8
<PAGE>
Pursuant to our By-Laws, a Purchaser Nominating Committee and a
Non-Purchaser Nominating Committee nominate candidates for election to our Board
of Directors. Of the nominees for director set forth above, Messrs. Haas, Wheat,
Yontz, Fisher, Eisenson, and Walton were nominated by the Purchaser Nominating
Committee and Messrs. Gallagher, Forbes, Blum, Ubben and Ms. Merrifield were
nominated by the Non-Purchaser Nominating Committee. See "Certain Transactions"
and "Stockholder Nominations and Proposals."
DIRECTORS' COMPENSATION
Directors who are officers or former officers of the Company and those
affiliated with any stockholders owning more than five percent of our Common
Stock do not receive any fees for their services as directors. Mr. Yontz and
Ms. Merrifield receive an annual retainer of $10,000, fees of $2,500 for each
Board meeting attended in person or by telephone and $1,000 for each committee
meeting attended in person or by telephone, plus reimbursement of reasonable
out-of-pocket expenses. In addition, Mr. Yontz and Ms. Merrifield participate in
the 1994 Stock Option Plan.
CERTAIN TRANSACTIONS
Our business is unrelated to the business of Playtex Apparel, Inc.
("Apparel"), a wholly owned subsidiary of Sara Lee Corporation ("Sara Lee").
Sara Lee acquired all of the capital stock of Apparel from Playtex Apparel
Partners, L.P. (the "Apparel Partnership") in November 1991 in exchange for Sara
Lee common stock. The Apparel Partnership holds all of our 15 1/2% Junior
Subordinated Notes due December 15, 2003. Playtex Investment Corp., one of our
wholly-owned subsidiaries, holds a 15% debenture of the Apparel Partnership due
on the same day. Such amounts are reflected as "Due to related party" and "Due
from related party" in our consolidated financial statements.
We have agreed to indemnify the Apparel Partnership and Apparel with respect
to product liability (including any toxic shock syndrome liability) related to
our business and certain tax matters related to the Apparel business prior to
December 28, 1988.
On June 6, 1995, following the receipt of stockholder approval at our 1995
Annual Meeting of Stockholders (the "1995 Annual Meeting"), we completed the
sale of 20 million shares of our Common Stock at a price of $9.00 per share to
partnerships managed by Haas Wheat & Partners, pursuant to a Stock Purchase
Agreement, dated as of March 17, 1995 (the "Stock Purchase Agreement"), between
the Company and the Haas Wheat Partnerships (the "Haas Wheat Transaction"). The
Haas Wheat partnerships' shares constitute approximately 33% of our outstanding
Common Stock as of March 24, 2000. At the 1995 Annual Meeting, designees of the
Haas Wheat partnerships were elected by our stockholders as a majority of our
Board of Directors. Pursuant to the Stock Purchase Agreement, the Haas Wheat
partnerships have agreed that, for up to ten years from March 1995, so long as
they own at least 25% of our outstanding voting securities, unless any of
certain events have occurred (including in the event that nominees of the
Purchaser Nominating Committee were to cease to constitute a majority of our
Board of Directors), they will vote all of their voting securities of the
Company for a Board of Directors that will consist at all times of a simple
majority of nominees selected by the Purchaser Nominating Committee and the
remainder of nominees selected by the Non-Purchaser Nominating Committee. See
"Security Ownership of Certain Beneficial Owners and Management--Board Meetings,
Committees and Attendance". Pursuant to the Stock Purchase Agreement, (i) no
management fees or advisory fees will be paid to the Haas Wheat partnerships or
any of their affiliates until after June 6, 2000, other than for services
rendered to the Company in connection with specific transactions and approved in
advance by a majority of the Disinterested Directors (as defined) on our Board
of Directors, and (ii) until June 6, 2000, no director nominated by the
Purchaser Nominating Committee or officer of the Company who is a stockholder,
officer, director or employee of Haas Wheat & Partners will be paid any fees for
services rendered, including any salary, consulting fees, or outside directors'
fees.
9
<PAGE>
In connection with the Haas Wheat Transaction described in the preceding
paragraph, we granted to the Haas Wheat partnerships and certain of their
affiliates the right, under specified circumstances, to (i) cause us to register
under the Securities Act of 1933 ("Securities Act") certain shares of Common
Stock held by them, and (ii) include in a registration under the Securities Act
of shares of Common Stock to be sold by the Company or others, certain shares of
Common Stock held by them (the "HWH Registration Rights Agreement").
On January 28, 1998, in connection with our acquisition (the "PCH
Acquisition") of Personal Care Holdings, Inc. ("PCH"), we issued to J.W. Childs
Equity Partners, L.P. (the "Principal PCH Shareholder") and other holders of the
capital stock of PCH (collectively, the "PCH Holders") an aggregate of 9,257,345
shares of our Common Stock (of which 7,855,764 were issued to the Principal PCH
Shareholder) and cash in an aggregate amount of approximately $91.0 million. We
also entered into a Stockholders Agreement with the Principal PCH Shareholder
and the other PCH Holders, dated as of January 28, 1998 (the "PCH Stockholders
Agreement"). In satisfaction of an obligation under the PCH Stockholders
Agreement, our Board of Directors, effective January 28, 1998, increased the
size of our Board and filled the vacancies thus created by electing John W.
Childs and Wyche H. Walton as directors and approved an amendment to our By-laws
to provide that until the earlier of (i) January 28, 2008 and (ii) the date on
which the Principal PCH Shareholder holds fewer than 4,628,688 shares of our
Common Stock, that one of the nominees selected by the Non-Purchaser Nominating
Committee shall be designated by the Principal PCH Shareholder. The amendment to
our By-laws was approved by our stockholders at the 1998 Annual Meeting of
Stockholders. See "Security Ownership of Certain Beneficial Owners and
Management--Board Meetings, Committees and Attendance".
In connection with the PCH Acquisition, we granted to the PCH Holders the
right, under specified circumstances, to (i) cause us to register under the
Securities Act certain shares of Common Stock held by them, and (ii) include in
a registration under the Securities Act of shares of Common Stock to be sold by
the Company or others, certain shares of Common Stock held by them (the "PCH
Registration Rights Agreement").
On June 1, 1998, the Principal PCH Shareholder sold 6,000,000 shares of our
Common Stock at a price of $13.25 per share to RCBA (the "Blum & Associates
Sale"), pursuant to a Stock Purchase Agreement, dated as of June 1, 1998 (the
"RCBA Stock Purchase Agreement"), between the Principal PCH Shareholder, RCBA
and Richard C. Blum & Associates, Inc. As a result of the Blum & Associates
Sale, the Principal PCH Shareholder ceased to have the right to designate one of
the nominees for election as a director to be selected by the Non-Purchaser
Nominating Committee. See "Security Ownership of Certain Beneficial Owners and
Management--Board Meetings, Committees and Attendance".
In connection with the Blum & Associates Sale, we granted to RCBA the right,
under specified circumstances, to (i) cause us to register under the Securities
Act certain shares of Common Stock held by them, and (ii) include in a
registration under the Securities Act of shares of Common Stock to be sold by
the Company or others, certain shares of Common Stock held by them (the "RCBA
Registration Rights Agreement"). In addition, we amended the HWH Registration
Rights Agreement and the PCH Registration Rights Agreement to establish the
relative priorities of such holders in respect of public offerings of our Common
Stock. The PCH Registration Rights Agreement was also amended to eliminate the
demand registration rights for the PCH Holders and the Principal PCH
Shareholder.
In connection with the granting of certain registration rights to a third
party in January 1999, we entered into a further amendment of the HWH
Registration Rights Agreement and the RCBA Registration Rights Agreement, in
each case to establish the relative priorities of such holders in respect of
public offerings of our Common Stock.
We believe that the terms of all the arrangements with the Apparel
Partnership, Apparel, the Haas Wheat Partnerships, the Principal PCH Shareholder
and RCBA were and are fair to the Company.
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table details the total compensation paid to our Chief
Executive Officer and each of our four most highly compensated executive
officers who served the Company on December 25, 1999 (the "Named Executive
Officers") for services rendered to the Company for each of the last three
fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
COMPEN- OPTIONS/ COMPEN-
SALARY BONUS SATION SARS SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#)(1) ($)(2)
- --------------------------- -------- -------- ---------- --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Gallagher................. 1999 $857,692 $1,320,000(3) -- 50,000 $190,839(4)
Chief Executive Officer and 1998 750,000 1,969,375(3) -- 350,000 187,046(4)
Director 1997 699,615 634,600(3) -- -- 256,160(4)
Michael F. Goss...................... 1999 303,462 200,000 -- 30,000 61,407
Executive Vice President, Chief 1998 283,461 250,000 -- 100,000 47,896
Financial Officer and Director 1997 226,539 100,000 -- 30,000 47,606
Richard G. Powers.................... 1999 263,846 155,000 -- 20,000 44,695
President, Personal Products 1998 248,461 140,000 -- 80,000 29,504
Division 1997 203,846 47,000 -- 20,000 5,458
Max R. Recone........................ 1999 263,846 135,000 -- 20,000 43,217
President, Consumer Products 1998 247,077 120,000 -- 80,000 40,687
Division 1997 211,231 55,000 -- 20,000 38,275
John D. Leahy........................ 1999 239,000 135,000 -- 20,000 39,304
Senior Vice President, Corporate 1998 225,462 110,000 -- 60,000 32,455
Sales / International 1997 182,750 50,000 -- 15,000 27,321
</TABLE>
- ------------------------
(1) Options are exercisable starting 12 months after the grant date, with
one-third of the shares becoming exercisable at that time and an additional
one-third of the options becoming exercisable on each successive anniversary
date, with full vesting occurring on the third anniversary date.
(2) Except with respect to Mr. Gallagher in 1997, represents employer
contribution to the Playtex Products Profit-Sharing Retirement Plan (the
"Retirement Plan") and Deferred Benefit Equalization Plan (the "Deferred
Plan") and premiums paid for term life insurance.
(3) Represents $1,320,000, $969,375, and $334,600 paid pursuant to his annual
bonus for each of the fiscal years ended 1999, 1998 and 1997. In addition,
Mr. Gallagher received $1,000,000 in 1998 pursuant to his special
priced-based incentive compensation and $300,000 in 1997 pursuant to the
special bonus program established in his Memorandum of Understanding dated
July 10, 1995.
(4) Represents $190,839, $187,046, and $135,184 of employer contributions to the
Retirement Plan and the Deferred Plan and premiums paid for term life
insurance for each of the fiscal years ended 1999, 1998 and 1997. In fiscal
1997, he also received $120,976 in connection with his relocation to
Connecticut.
11
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information related to options exercised by our
Named Executive Officers during fiscal year 1999 and unexercised options held by
them at December 25, 1999. No SARs have been granted pursuant to the Plan.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 25, DECEMBER 25, 1999
1999 (#)(2) ($)(2)(3)
SHARES VALUE ----------------- --------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#)(1) ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------------- --------------------
<S> <C> <C> <C> <C>
Michael R. Gallagher............... -- -- 1,016,667/283,333 4,475,000/--
Michael F. Goss.................... -- -- 218,334/106,666 1,261,566/184,372
Richard G. Powers.................. -- -- 90,002/79,998 471,673/164,577
Max R. Recone...................... -- -- 150,002/79,998 728,548/164,577
John D. Leahy...................... -- -- 132,001/64,999 640,377/93,436
</TABLE>
- ------------------------
(1) None of the Named Executive Officers exercised any options during fiscal
year 1999.
(2) No SARs are outstanding.
(3) The closing price of our Common Stock as reported by the New York Stock
Exchange on December 23, 1999 (the last trading day of fiscal year 1999) was
$14.75.
OPTION GRANTS DURING FISCAL YEAR 1999
The following table provides information related to options granted to our
Named Executive Officers during fiscal year 1999. No SARs were granted during
the year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE
OPTIONS/ VALUE AT ASSUMED
SARS EXERCISE ANNUAL RATES OF STOCK
OPTIONS/ GRANTED TO OR PRICE APPRECIATION FOR
SARS EMPLOYEES BASE OPTION TERM (1)
GRANTED IN FISCAL PRICE EXPIRATION -----------------------
NAME (#)(2) YEAR ($/SH)(3) DATE 5% ($) 10% ($)
- ---- -------- ---------- --------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Gallagher................ 50,000 6.3% 15.50 May 17, 2009 487,393 1,235,150
Michael F. Goss..................... 30,000 3.8% 15.50 May 17, 2009 292,436 741,090
Richard G. Powers................... 20,000 2.5% 15.50 May 17, 2009 194,957 494,060
Max R. Recone....................... 20,000 2.5% 15.50 May 17, 2009 194,957 494,060
John D. Leahy....................... 20,000 2.5% 15.50 May 17, 2009 194,957 494,060
</TABLE>
- ------------------------
(1) The potential realizable value portion illustrates value that might be
realized upon the exercise of the options granted in 1999 immediately prior
to the expiration of their term. The potential realizable value assumes our
Common Stock price will grow at the specified compounded rates of
appreciation over the term of the options. Assumed rates of appreciation are
not necessarily indicative of future stock performance.
(2) Options that were granted to the Named Executive Officers in fiscal year
1999 are exercisable starting 12 months after the grant date. One-third of
those shares are exercisable at that time and an additional one-third of
those options will be exercisable on each successive anniversary date, with
full vesting occurring on the third anniversary date.
12
<PAGE>
(3) The exercise price was equal to the fair market value of the Common Stock on
the date of grant. The option exercise price and any tax withholding
obligations related to the exercise of options may be paid in cash, by
delivery of already owned shares, by offset of the underlying shares, or in
any other form of valid payment as determined by the Compensation Committee
in its discretion.
1994 PLAYTEX STOCK OPTION PLAN
The 1994 Stock Option Plan, which has been approved by our stockholders,
authorizes the grant of long-term incentive share awards to our directors,
executives and other key employees in the form of options ("Options") to
purchase our Common Stock and stock appreciation rights ("SARs"). The Plan is
administered by our Compensation Committee. The total number of shares of Common
Stock which may be issued upon the exercise of Options and SARs may not exceed
7,047,785 shares (subject to further adjustments). The total number of shares of
stock which may be issued upon the exercise of Options and SARs granted to any
single director, executive officer or other employee (as defined in the Plan)
may not exceed 2,000,000, as adjusted. As of March 24, 2000, the number of
remaining shares available for issuance under the Plan was 2,212,832. Options
and SARs may not be granted under the Plan after October 2003.
BENEFIT PLANS FOR TERMINATED EMPLOYEES
Each of our Named Executive Officers has an agreement with respect to
termination of employment. In the event Mr. Gallagher is terminated without
Cause (as defined in such agreement) prior to a Change of Control (as defined in
such agreement), Mr. Gallagher is entitled to receive two years' salary, bonus
and fringe benefits. In the event the other Named Executive Officers are
terminated without Cause prior to a Change of Control, they are entitled to
receive one year's salary, bonus and fringe benefits. Additionally, in the event
of termination of employment prior to a Change of Control due to death or
"Disability" (as defined in our Long Term Disability Policy), Mr. Gallagher or
his estate is entitled to receive two years' salary, bonus and fringe benefits.
In the event employment is terminated within three years following a Change of
Control, each Named Executive Officer except Mr. Gallagher would receive one
year's salary, bonus and fringe benefits. Mr. Gallagher would enter into a five
year non-compete agreement following termination arising from a Change of
Control for total payment equal to three years' salary, bonus and fringe
benefits. In the event of a Change of Control, each Named Executive Officer is
entitled to receive a one-time payment equal to the highest annual bonus
received in the last three fiscal years, whether or not employment is
terminated. Mr. Goss voluntarily terminated his employment effective January 7,
2000, and any agreement in respect of termination of employment between him and
the Company has been canceled.
We maintain a Severance Payment Policy under which employees (excluding our
Named Executive Officers and other executive officers) who are "terminated" from
service without cause are entitled to receive compensation for a period of two
to twelve months, depending on their years of accrued service.
ARRANGEMENTS WITH FORMER CHIEF EXECUTIVE OFFICER
We have retained Joel E. Smilow, our former Chairman and Chief Executive
Officer, as a consultant for a five-year period beginning July 10, 1995 (the
"Consulting Period") at an annual fee of $250,000 plus expenses and certain
benefits. In August 1999, we amended the consulting agreement to extend it an
additional five-years at no additional cost to us. Rather, we agreed to pay
office and secretarial support costs during the five-year extension period in
place of the final one and one quarter years of consulting fees. The consulting
agreement does not require him to devote any minimum amount of time to the
performance of consulting services. Under the agreement, Mr. Smilow may not
directly or indirectly carry on any business in competition with us for the
duration of the Consulting Period. Furthermore, Mr. Smilow agrees not to
disclose, make use of, or make accessible any confidential information which he
obtained from us during the Consulting Period and for a five-year period
thereafter.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
REPORT ON EXECUTIVE COMPENSATION
IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE COMMISSION, THE
FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
IMMEDIATELY THEREAFTER SHALL NOT BE DEEMED TO BE "SOLICITING MATERIAL" OR TO BE
"FILED" WITH THE COMMISSION OR SUBJECT TO REGULATION 14A OR 14C OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), OR TO THE
LIABILITIES OF SECTION 18 OF THE EXCHANGE ACT AND SHALL NOT BE DEEMED
INCORPORATED BY REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE EXCHANGE ACT, NOTWITHSTANDING ANY GENERAL INCORPORATION BY
REFERENCE OF THIS PROXY STATEMENT INTO ANY OTHER FILED DOCUMENT.
The foundation of our compensation policies is the view that our success is
attributable to the efforts of our employees, including our executive officers.
We structure executive compensation in a manner designed to provide competitive
levels of compensation and to assist us in attracting and retaining qualified
executives. We endorse the position that stock ownership by management is
beneficial in aligning management's and stockholders' interests in the Company.
The compensation paid to our executive officers consists primarily of base
salary, cash bonuses under the Management Incentive Plan, and grants of options
pursuant to the 1994 Stock Option Plan. In addition, we provide all executive
officers with term life insurance and contributions to the Retirement Plan and
the Deferred Plan.
Base salaries of executive officers are reviewed annually. In establishing
base salaries during fiscal year 1999, the Compensation Committee made
subjective determinations that were not subject to specific criteria. The
Compensation Committee considered such variables as the executive officer's
relative responsibilities, expertise, past year's compensation, and past year's
performance. The Compensation Committee also considered the compensation levels
of other executives of consumer products companies.
Amounts payable under our Management Incentive Plan were calculated based
upon (i) annual base salary; (ii) each employee's targeted percentage (a
percentage of base salary that increases for higher positions within the
Company, thereby placing a greater percentage of compensation at risk for those
with greater responsibility); and (iii) Company results with respect to net
sales, operating profit and cash flow (each as defined in the Management
Incentive Plan). The corporate results are measured against objectives
established at the beginning of the year by our Board, and (iv) except for our
Chief Executive Officer ("CEO"), an individual performance factor based on
measured accomplishment of goal-oriented projects, to be weighted equally with
each other component of the corporate performance factor.
The option incentive component of our total compensation package is intended
to retain and motivate our executives to improve our long-term stock market
performance and to increase value for all of our stockholders. The Compensation
Committee generally grants options under the 1994 Stock Option Plan with an
exercise price equal to the market price at the date of the grant and, as a
result, the options will have value only if our stock price increases from the
time of the award. Grants are made to executive officers based on salary,
responsibility, and performance of the individual officer. Grants generally
become exercisable over the succeeding three years.
Mr. Gallagher was named our Chief Executive Officer effective July 10, 1995.
We entered into a Memorandum of Understanding, dated as of June 21, 1995 (the
"Memorandum"), with Mr. Gallagher, providing for his employment as Chief
Executive Officer for a five-year period, unless earlier terminated or extended
in accordance with the Memorandum or by agreement. The Memorandum, which was
approved by the Compensation Committee, provides for a base salary, certain
incentive bonuses and the grant of stock options. On May 18, 1999, the
Memorandum, with the approval of the Compensation Committee, was amended:
(i) to extend the term of his employment agreement to June 30, 2003; (ii) to
increase his base salary to $900,000 per year as of June 1, 1999 through
May 31, 2000, subject to upward adjustment
14
<PAGE>
thereafter at the discretion of our Board of Directors; (iii) to provide for
incentive bonuses which shall be no more than 187.5% of his base salary as in
effect as of the first day of such calendar year, with a target incentive bonus
equal to 125% of his base salary as in effect on the first day of the calendar
year; and, (iv) to give consideration to further grants of stock options at our
Board's discretion. In addition, prior to the approval of the amended
Memorandum, Mr. Gallagher was eligible to receive special price-based incentive
bonuses (the "Stock Price Bonus") of up to $4 million if the closing price of
our Common Stock equaled or exceeded certain specified prices for 30 consecutive
trading days at any time prior to June 30, 1999. The amended Memorandum changed
the terms of the Stock Price Bonus as follows: as long as Mr. Gallagher is
employed as our Chief Executive Officer, he will receive the following special
cash bonuses when our Common Stock, for 30 consecutive trading days, closes at
or above the following thresholds at any time prior to June 30, 2003: a
$1 million cash payment at a trading price level of $20, a $1.5 million cash
payment at each of a trading price level of $25 and $30, and a $2 million cash
payment at each of a trading price level of $35 and $40. The amended terms of
the Stock Price Bonus are subject to stockholder approval. See "Approval of
Amendments to the Management Incentive Plan for Key Employees" below.
During fiscal year 1998, Mr. Gallagher received $1 million pursuant to the
original special price-based incentive bonus under the Memorandum dated as of
June 21, 1995 as the closing price of our Common Stock, as reported by the New
York Stock Exchange, was above $15 per share for 30 consecutive days. In
addition, Mr. Gallagher received 50,000 stock options during fiscal 1999 and
350,000 during fiscal 1998. At March 24, 2000, Mr. Gallagher held 1,300,000
stock options which were granted to him pursuant to the 1994 Stock Option Plan.
The Compensation Committee has structured Mr. Gallagher's compensation in
order to link it to his individual performance. We have granted substantial
incentives to him tied to our performance measured with respect to sales,
profitability and cash flow and to our long-term growth as measured by increases
in the value of our Common Stock. The Committee also considered the compensation
packages available to chief executives of comparable companies and our need to
attract, retain and incentivize a chief executive officer of Mr. Gallagher's
caliber.
The Compensation Committee has considered the potential future effects on
the Company's executive compensation program of Section 162(m) of the Internal
Revenue Code. Section 162(m) limits the deductibility by public companies of
certain executive compensation in excess of certain amounts per executive per
year, but excludes from the calculation of such limit certain elements of
compensation, including performance-based compensation, provided that certain
requirements are met. The 1994 Stock Option Plan has been designed and
administered to qualify awards made thereunder as performance-based compensation
excepted from such limitation on the deductibility of executive compensation.
The Company has also attempted to structure other elements of its executive
compensation program, including the Management Incentive Plan or portions
thereof, to qualify as performance-based compensation for purposes of
Section 162(m).
March 8, 2000
The Compensation Committee
Douglas D. Wheat
Jeffrey W. Ubben
Kenneth F. Yontz
15
<PAGE>
PERFORMANCE GRAPH
The following graph compares our Common Stock performance to the performance
of the Standard & Poor's Stock 400 Index ("S&P 400") and a weighted composite
index of certain peer companies (the "Peer Index") selected by us, on a fiscal
year basis for the period beginning on December 31, 1994 through December 25,
1999 (the "Performance Period"). The comparison assumes $100.00 was invested on
December 31, 1994 in our Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends, if any. The total return for our Common Stock
was 101.8% during the Performance Period as compared with a total return during
the same period for the Peer Index of 88.5% and for the S&P 400 of 233.9%. The
comparisons in the graph below are provided in response to Commission disclosure
requirements, and therefore are not intended to forecast or be indicative of
future performance of our Common Stock.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
12/31/94 12/30/95 12/28/96 12/27/97 12/26/98 12/25/99
<S> <C> <C> <C> <C> <C> <C>
PLAYTEX PRODUCTS, INC. 100.0 105.3 107.0 137.7 216.7 201.8
PEER GROUP 100.0 114.8 157.2 186.4 176.9 188.5
S&P 400 100.0 131.7 162.2 197.8 268.8 333.9
</TABLE>
The Peer Index is comprised of the following companies:
Carter-Wallace, Inc., Alberto-Culver Company, Church & Dwight Co., Inc., and
Paragon Trade Brands Inc. The returns for each issuer within the Peer Index have
been weighted according to the issuer's respective stock market capitalization
at the beginning of the period presented. We selected the issuers that comprise
the Peer Index on the basis that each had lines of business and/or stock market
capitalization comparable to us.
RATIFICATION OF SELECTION OF AUDITORS
The auditing firm of KPMG LLP has examined our financial statements since
1986 and our Board of Directors wishes to utilize their services again for the
fiscal year ending December 30, 2000. A resolution will be presented to the
meeting to ratify the appointment of KPMG LLP as independent accountants to
examine our financial statements and our subsidiaries for the fiscal year ending
December 30, 2000, and to perform other appropriate accounting services.
Representatives of KPMG will be present at the meeting, will have the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions asked by stockholders.
16
<PAGE>
If our stockholders do not ratify the selection of KPMG LLP by a favorable
vote of a majority of the Common Stock represented and entitled to vote at the
Annual Meeting, the selection of independent accountants will be reconsidered by
our Board of Directors. Under applicable Delaware law, in determining whether
this item has received the required number of favorable votes, abstentions will
have the same effect as votes against this item; however, broker non-votes will
be treated as not entitled to vote for purposes of determining approval of this
item and will not have any effect on the outcome of the matter.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG LLP.
APPROVAL OF AMENDMENTS TO THE MANAGEMENT INCENTIVE PLAN
FOR KEY EMPLOYEES
In 1996, the Compensation Committee of our Board of Directors adopted, and
our stockholders approved, the Management Incentive Plan for Key Employees (the
"MIP"). Under the MIP, management and other key executive employees may receive
a cash bonus of up to $1.5 million each fiscal year (the "Annual Bonus") based
on our annual performance and the individual participant's performance during
such fiscal year. The MIP also sets a percentage of base salary limit on the
amount of Annual Bonus payable to any participant. In addition, prior to the
approval by the Compensation Committee of the amended Memorandum, our CEO was
eligible to receive a Stock Price Bonus of up to a maximum of $4 million in cash
payments if the closing price of our Common Stock equaled or exceeded certain
specified prices for 30 consecutive trading days at any time prior to June 30,
1999 (see "Report on Executive Compensation", above). The amended Memorandum
increased, subject to stockholder approval, the maximum Stock Price Bonus to
$8 million as described under "Report on Executive Compensation", above. The
basic elements of the Annual Bonus awards represent aspects of management
performance that have been in place as a determinant of total compensation for
key management employees for a number of years. The purpose of the MIP is to
recognize and reward individual performance that contributes to our overall
profitability and growth and to provide eligible employees with incentives to
maximize our success. For all participants other than our CEO, the MIP is
administered by the Corporate Human Resources Department, subject to the control
and supervision of our CEO. Administration of the MIP with respect to our CEO is
the responsibility of the Compensation Committee. Except with respect to the
CEO's Annual Bonus and the Stock Price Bonus, we may, acting through our Board
of Directors or CEO, amend or terminate the MIP at any time and rescind at any
time any employee's participation in the MIP.
The Compensation Committee has discretion to select MIP participants from
among salaried employees of the Company at and above certain pay grade levels
(approximately 117 employees as of February 29, 2000). For purposes of
determining Annual Bonuses, the Compensation Committee (with respect to our CEO)
or our CEO (with respect to all other participants) assigns each participant a
target bonus percentage that is a percentage of the participant's base salary;
provided that the Annual Bonus payable to any participant currently cannot
exceed $1.5 million. Subject to our CEO's discretion to set the amount of any
Annual Bonus (other than his own), Annual Bonuses under the MIP are calculated
as a percentage of the applicable target bonus, based on a weighted index of
four factors: our attainment of specified performance goals with respect to net
sales, profit and cash flow, and, except as to our CEO, the individual's
attainment of specified performance goals. Performance targets for the CEO are
specified by the Compensation Committee each year; performance goals for all
other participants are determined by the CEO each year, who retains discretion
to amend our performance goals and the performance goals for individual
participants. Each MIP participant may elect to defer payment of all or a
portion of his or her Annual Bonus, if any, to a date selected by such
participant, together with interest on the amount deferred compounded each
quarter at the prime rate as in effect each quarter at Wells Fargo Bank, N.A.
We are seeking stockholder approval of amendments to the MIP to increase the
current $1.5 million maximum Annual Bonus payable under the MIP to a participant
to a new maximum of $5 million; to
17
<PAGE>
increase the $4 million maximum Stock Price Bonus payable to our CEO to a
maximum of $8 million, as described above; and to grant the Compensation
Committee the discretion to determine the percentage of base salary limitations
on the amount of Annual Bonus payable to each participant in the MIP.
Our Board of Directors has adopted, subject to your approval, the foregoing
amendments to the MIP in order to provide added flexibility in attracting,
rewarding and retaining key employees whose services are crucial to our success.
Because (i) the Annual Bonuses are subject to our and each individual
participant's future performance results, which are not known at present,
(ii) individual performance goals may include subjective factors, (iii) our CEO
retains the discretion to determine the amount of Annual Bonus for participants
other than our CEO, and (iv) the Stock Price Bonus depends on the future price
of our Common Stock, future amounts to be paid under the MIP are not
determinable at this time. Approval of the MIP requires the affirmative vote of
the holders of a majority of our outstanding Common Stock present in person or
represented by proxy at the Annual Meeting and duly entitled to vote on this
matter. Abstentions as to this matter will have the same effect as votes against
the matter; however, broker non-votes will be treated as not entitled to vote
for purposes of determining the vote required for approval of this matter and
will not have any effect on the outcome of this matter.
From a federal income tax perspective, a participant will recognize income
on amounts paid pursuant to the MIP, and we will be entitled to a corresponding
deduction, subject however, to the application of Section 162(m) of the Internal
Revenue Code. We have structured the MIP, and are submitting these amendments
for your approval, so that payments made under the MIP will be treated as
performance-based compensation for purposes of Section 162(m).
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE
AMENDMENTS TO THE MANAGEMENT INCENTIVE PLAN FOR KEY EMPLOYEES.
OTHER MATTERS
Our Board of Directors and our management know of no other matters to be
brought before the Annual Meeting. If other matters should arise at the Annual
Meeting, shares of Common Stock represented by proxies will be voted at the
discretion of the proxy holder.
STOCKHOLDER NOMINATIONS AND PROPOSALS
If you intend to present a proposal (other than with respect to the election
of directors) at the 2001 Annual Meeting of stockholders and want your proposal
to be included in the Proxy Statement for that meeting, you must submit your
proposal in writing to the Secretary of the Company, at our address listed on
the first page of this Proxy Statement. The proposal must be received on or
before December 8, 2000, or, if the 2001 annual meeting is changed by more than
thirty (30) calendar days from May 16, your proposal must be received a
reasonable time before the solicitation is made.
In addition, the form of proxy issued with our 2001 proxy statement will
confer discretionary authority to vote for or against any proposal made by a
shareholder at the 2001 annual meeting and which is not included in our proxy
statement. However, under the rules of the Commission, such discretionary
authority may not be exercised if the shareholder proponent has given the
Secretary of the Company notice of such proposal prior to February 24, 2001 and
certain other conditions provided for in the Commission's rules have been
satisfied.
In addition, if you intend to nominate any person for election as a director
at the 2001 annual meeting you must make your nomination by written notice given
by or on behalf of a stockholder of record (the "Notice of Nomination"). The
Notice of Nomination must be received at our principal executive office,
addressed to the attention of the Secretary, no later than ten (10) days after
the first date of public disclosure by us of the date of the annual meeting or
special meeting of stockholders. Public disclosure shall be deemed to be first
made when disclosure of the date of the annual meeting or special meeting of
18
<PAGE>
stockholders is first made in a press release or in a document publicly filed by
us with the Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
The Notice of Nomination shall detail (i) your name and address, assuming you
are the person proposing to make nominations, (ii) the class and number of
shares of capital stock held of record by you, held beneficially and represented
by proxy as of the record date for the meeting and as of the date of your Notice
of Nomination, (iii) all information regarding each stockholder nominee that
would be required to be listed in a definitive proxy statement filed with the
Commission pursuant to Section 14 of the Exchange Act, and the written consent
of each stockholder nominee to serve if elected, and (iv) all other information
that would be required to be filed with the Commission if the person proposing
such nominations were a participant in a solicitation subject to Section 14 of
the Exchange Act or any successor thereto. The chairman of the meeting shall, if
the facts warrant, determine and declare to the meeting that any proposed
nomination of a stockholder nominee was not made in accordance with the proper
procedures and, if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
By Order of the Board of Directors
/s/ Paul E. Yestrumskas
Paul E. Yestrumskas
Vice President, General Counsel and
Secretary
April 7, 2000
19
<PAGE>
Playtex Products, Inc.
300 Nyala Farms Road, Westport, CT 06880
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of Playtex Products, Inc. hereby constitutes and
appoints Michael R. Gallagher and Glenn A Forbes, and each of them, the true and
lawful attorneys, agents and proxies of the undersigned, each with full power of
substitution, to vote at the Annual Meeting of Stockholders of the Company to be
held on May 16, 2000 (or, if only one shall be present and acting at the Meeting
then that one) all of the shares of stock of the Company that the undersigned
would be entitled, if personally present, to vote at the Annual Meeting and at
any adjournment thereof.
- --------------------------------------------------------------------------------
Fold and Detach Here
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted "FOR" Items 1, 2 and 3.
/X/ PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE
1. Election of directors.
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.
<TABLE>
<CAPTION>
NOMINEE
-------------------------------------------------
<S> <C> <C> <C> <C>
FOR all nominees WITHHOLD AUTHORITY R. Haas M. Gallagher G. Forbes
listed to the right to vote for all R. Blum M. Eisenson T. Fisher
(Except as marked to nominees listed to C. Merrifield J. Ubben W. Walton
the contrary) / / the right / / D. Wheat K. Yontz
</TABLE>
2. The ratification of the appointment of KPMG LLP as independent auditors for
the Company for fiscal year 2000.
FOR / / AGAINST / / ABSTAIN / /
3. The approval of amendments to the Management Incentive Plan for Key
Employees.
FOR / / AGAINST / / ABSTAIN / /
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
RECEIPT IS ACKNOWLEDGED OF THE
NOTICE AND PROXY STATEMENT FOR
THE FOREGOING ANNUAL MEETING AND
OF THE ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED
DECEMBER 25, 1999.
PLEASE SIGN EXACTLY AS NAME
APPEARS BELOW. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH
<PAGE>
SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
__________________________________
SIGNATURE
__________________________________
SIGNATURE IF HELD JOINTLY
DATED ______________________, 2000
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
