<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 (Amendment No.)
[X] Filed by registrant
[ ] 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
[X] Definitive proxy statement Rule 14a-6(e)(2)
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Armor Holdings, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount previously paid:
- --------------------------------------------------------------------------------
2) Form, schedule or registration statement No.:
- --------------------------------------------------------------------------------
3) Filing party:
- --------------------------------------------------------------------------------
4) Date filed:
- --------------------------------------------------------------------------------
<PAGE>
ARMOR HOLDINGS, INC.
1400 MARSH LANDING PARKWAY, SUITE 112
JACKSONVILLE, FLORIDA 32250
May 18, 2000
To Our Stockholders:
On behalf of your Company's Board of Directors, I cordially invite you to
attend the Annual Meeting of Stockholders to be held on June 15, 2000, at 10:00
A.M., New York City time, at The Metropolitan Club, One East 60th Street, New
York, New York 10022.
The accompanying Notice of Meeting and Proxy Statement cover the details
of the matters to be presented.
A copy of the 1999 Annual Report has been provided to you in a previous
mailing.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING, I URGE THAT
YOU PARTICIPATE BY COMPLETING AND RETURNING YOUR PROXY AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. YOU MAY REVOKE YOUR
PROXY AND VOTE IN PERSON IF YOU DECIDE TO ATTEND THE ANNUAL MEETING.
Cordially,
ARMOR HOLDINGS, INC.
Jonathan M. Spiller
President and
Chief Executive Officer
<PAGE>
ARMOR HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 15, 2000
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of the
Stockholders, and any adjournments or postponements thereof (the "Meeting"), of
Armor Holdings, Inc. (the "Company"), which will be held on June 15, 2000 at
10:00 A.M., New York City time, at The Metropolitan Club, One East 60th Street,
New York, New York 10022, for the following purposes:
1. To elect eight members to serve on the Board of Directors until the
next annual meeting of stockholders and until their successors are duly
elected and qualified (Proposal 1);
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000
(Proposal 2); and
3. To transact such other business as may properly be brought before the
Meeting.
Stockholders of record at the close of business on May 3, 2000 shall be
entitled to notice of and to vote at the Meeting. A copy of the Annual Report
of the Company for the fiscal year ended December 31, 1999 has been provided to
you in a previous mailing.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU
DECIDE TO ATTEND THE MEETING.
By order of the Board of Directors
Nicholas B. Winiewicz
Secretary
May 18, 2000
<PAGE>
ARMOR HOLDINGS, INC.
13386 INTERNATIONAL PARKWAY
JACKSONVILLE, FLORIDA 32218
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JUNE 15, 2000
INTRODUCTION
PROXY SOLICITATION AND GENERAL INFORMATION
This Proxy Statement and the enclosed form of proxy (the "Proxy Card") are
being furnished to the holders of common stock, par value $.01 per share (the
"Common Stock"), of Armor Holdings, Inc., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors (the "Board" or "Board of Directors") of the Company for use at the
Annual Meeting of Stockholders to be held on Thursday, June 15, 2000, at The
Metropolitan Club, One East 60th Street, New York, New York 10022, at 10:00
A.M., New York City time, and at any adjournment or postponement thereof (the
"Meeting"). This Proxy Statement and the Proxy Card are first being sent to
stockholders on or about May 18, 2000.
At the Meeting, holders of Common Stock (the "Stockholders") will be
asked:
1. To elect eight members to serve on the Board of Directors until the
next annual meeting of stockholders and until their successors are duly elected
and qualified (Proposal 1);
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000
(Proposal 2); and
3. To transact such other business as may properly be brought before the
Meeting.
The Board of Directors has fixed the close of business on May 3, 2000 as
the record date for the determination of Stockholders entitled to notice of and
to vote at the Meeting. Each such Stockholder will be entitled to one vote for
each share of Common Stock held on all matters to come before the Meeting and
may vote in person or by proxy authorized in writing.
Stockholders are requested to complete, sign, date and promptly return the
Proxy Card in the enclosed envelope. Common Stock represented by properly
executed proxies received by the Company and not revoked will be voted at the
Meeting in accordance with instructions contained therein. If the Proxy Card is
signed and returned without instructions, the shares will be voted FOR the
election of each nominee for director named herein (Proposal 1) and FOR the
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors (Proposal 2). A Stockholder who so desires may revoke his
proxy at any time before it is voted at the Meeting by: (i) delivering written
notice to the Company (attention: Corporate Secretary); (ii) duly executing and
delivering a proxy bearing a later date; or (iii) casting a ballot at the
Meeting. Attendance at the Meeting will not in and of itself constitute a
revocation of a proxy.
The Board of Directors knows of no other matters that are to be brought
before the Meeting other than as set forth in the Notice of Meeting. If any
other matters properly come before the Meeting, the persons named in the
enclosed form of proxy or their substitutes will vote in accordance with their
best judgment on such matters.
<PAGE>
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Only Stockholders as of the close of business on May 3, 2000 (the "Record
Date") are entitled to notice of and to vote at the Meeting. As of the Record
Date, there were 22,911,749 shares of Common Stock outstanding and entitled to
vote, with each share entitled to one vote. See "Security Ownership of Certain
Beneficial Owners and Management."
REQUIRED VOTES
The affirmative vote of a plurality of the votes cast in person or by
proxy is necessary for the election of directors (Proposal 1). The affirmative
vote of a majority of the votes cast in person or by proxy is necessary for the
approval and the ratification of the appointment of independent auditors
(Proposal 2).
Votes at the Meeting will be tabulated by an independent inspector of
election appointed by the Company or the Company's transfer agent. Since the
affirmative vote of a plurality of votes cast is required for the election of
directors, abstentions and "broker non-votes" will have no effect on the
outcome of such election. Since the affirmative vote of a majority of the votes
cast is necessary for the approval of the ratification and approval of the
appointment of independent auditors (Proposal 2), an abstention will have the
same effect as a negative vote, but "broker non-votes" will have no effect on
the outcome of the vote.
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from beneficial owners. If
specific instructions are not received, brokers may be precluded from
exercising their discretion, depending on the type of proposal involved. Shares
as to which brokers have not exercised discretionary authority or received
instructions from beneficial owners are considered "broker non-votes," and will
be counted for purposes of determining whether there is a quorum.
PROXY SOLICITATION
The Company will bear the costs of the solicitation of proxies for the
Meeting. Directors, officers and employees of the Company may solicit proxies
from Stockholders by mail, telephone, telegram, personal interview or
otherwise. Such directors, officers and employees will not receive additional
compensation but may be reimbursed for out-of-pocket expenses in connection
with such solicitation. Brokers, nominees, fiduciaries and other custodians
have been requested to forward soliciting material to the beneficial owners of
Common Stock held of record by them and such custodians will be reimbursed for
their reasonable expenses.
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE
STOCKHOLDERS' INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU
INTEND TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ENCLOSED PROXY TO ENSURE THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE
PRESENT AT THE MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND
VOTE IN PERSON BY GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. PLEASE
RETURN YOUR EXECUTED PROXY PROMPTLY.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 2000 certain information
regarding the beneficial ownership of the common stock outstanding by (i) each
person who is known to the Company to own 5% or more of the common stock, (ii)
each director of the Company, (iii) certain executive offers of the Company and
(iv) all executive officers and directors of the Company as a group. Unless
otherwise indicated, each of the stockholders shown in the table below has sole
voting and investment power with respect to the shares beneficially owned.
Unless otherwise indicated, the address of each person named in the table below
is c/o Armor Holdings, Inc., 13386 International Parkway, Jacksonville, Florida
32218.
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP (1)
-------------------------
NAME NUMBER PERCENTAGE
- ---- ----------- -----------
<S> <C> <C>
Warren B. Kanders and Kanders Florida Holdings, Inc. (2) ................. 3,442,578 14.4%
Lord Abbett & Co. (3) .................................................... 2,986,195 13.0%
Nevis Capital Management, Inc. (4) ....................................... 2,680,150 11.7%
Jonathan M. Spiller (5) .................................................. 850,133 3.7%
Richmont Capital Partners I, L.P. (6) .................................... 625,000 2.7%
FS Partners, LLC (7) ..................................................... 1,439,924 6.3%
Stephen B. Salzman (8) ................................................... 1,443,257 6.3%
Burtt R. Ehrlich (9) ..................................................... 280,733 1.2%
Nicholas Sokolow (10) .................................................... 208,333 *
Thomas W. Strauss (11) ................................................... 128,333 *
Alair A. Townsend (12) ................................................... 83,849 *
Richard C. Bartlett (13) ................................................. 3,333 *
Robert R. Schiller (14) .................................................. 191,667 *
Stephen E. Croskrey (15) ................................................. 25,000 *
Nicholas B. Winiewicz (16) ............................................... 25,400 *
Stephen J. Loffler (17) .................................................. 50,000 *
All executive officers and directors as a group (12 persons) (18) ........ 6,732,216 29.3%
</TABLE>
- ----------
* Less than 1%
(1) As used in this table, a beneficial owner of a security includes any
person who, directly or indirectly, through contract, arrangement,
understanding, relationship or otherwise has or shares (a) the power to
vote, or direct the voting of, such security or (b) investment power
which includes the power to dispose, or to direct the disposition of,
such security. In addition, a person is deemed to be the beneficial owner
of a security if that person has the right to acquire beneficial
ownership of such security within 60 days.
(2) Of such shares, Kanders Florida Holdings, Inc., of which Mr. Kanders is
the sole stockholder and sole director, owns 3,057,178 shares; and
Kanders Florida Holdings, Inc. 1996 Charitable Remainder Unitrust, of
which Mr. Kanders is trustee, owns 185,400 shares. Mr. Kanders disclaims
beneficial ownership of the shares owned by the trust. Includes options
to purchase 200,000 shares of common stock.
(3) The address of Lord Abbett & Co. is 767 Fifth Avenue, New York, New York
10153.
(4) Snowden Limited Partnership of which Nevis Capital Management, Inc. is
the general partner, owns all such shares. The address of Nevis Capital
Management, Inc. is 1119 St. Paul Street, Baltimore, Maryland 21202.
(5) Includes options to purchase 495,141 shares of common stock. Also
includes 43,541 shares owned by Mr. Spiller's children, of which Mr.
Spiller disclaims beneficial ownership. Does not include 91,823 shares of
which Mr. Spiller may be deemed to have a beneficial ownership interest
pursuant to an agreement with Kanders.
(6) Includes options to purchase 300,000 shares of common stock. The address
of Richmont Capital Partners I, L.P. ("Richmont") is 4300 Westgrove
Drive, Dallas, Texas 75248.
(7) The address of FS Partners, LLC is 767 Fifth Avenue, New York, New York
10153.
(8) Comprised of shares of common stock beneficially owned by FS Partners,
LLC. Mr. Salzman serves as managing Member of FS Partners, LLC and owns
50% interest in FS Ventures Inc., the general partner of FS Partners II,
L.P. Mr. Salzman disclaims beneficial ownership of such shares except to
the extent of his proportional pecuniary interest therein. Includes
options to purchase 3,333 shares of common stock.
3
<PAGE>
(9) Includes options to purchase 78,333 shares of common stock. Also includes
13,400 shares owned by Mr. Ehrlich's children and 25,600 in trust for the
benefit of his children, of which Mr. Ehrlich's spouse is trustee, of
which he disclaims beneficial ownership. Also includes 400 shares owned
by Mr. Ehrlich's spouse's individual retirement account of which Mr.
Ehrlich disclaims beneficial ownership.
(10) Includes options to purchase 78,333 shares of common stock. Also includes
100,000 shares owned by S.T. Investors Fund, LLC, a limited liability
company of which Mr. Sokolow is a member, and 20,000 shares owned by Mr.
Sokolow's children, of which he disclaims beneficial ownership. Also
includes 10,000 shares owned by Mr. Sokolow's profit sharing plan.
(11) Includes options to purchase 78,333 shares of common stock.
(12) Includes 5,516 shares of common stock and options to purchase 78,333
shares of common stock.
(13) Does not include 625,000 shares beneficially owned by Richmont Capital
Partners I L.P., of which Mr. Bartlett may be deemed to be an affiliate.
Mr. Bartlett disclaims ownership of such shares. Includes options to
purchase 3,333 shares of common stock.
(14) Includes options to purchase 191,667 shares of common stock.
(15) Includes options to purchase 25,000 shares of common stock.
(16) Includes options to purchase 25,000 shares of common stock.
(17) Includes options to purchase 50,000 shares of common stock.
(18) See footnotes (2), (5) and (8-17).
The Company is not aware of any material proceedings to which any
director, executive officer or affiliate of the Company or any security holder,
including any owner of record or beneficially of more than 5% of any class of
the Company's voting securities, is a party adverse to the Company or has a
material interest adverse to the Company.
The Company is not aware of any material pending legal proceedings, other
than ordinary routine litigation incidental to the business of the Company, to
which the Company or any of its subsidiaries is a party or of which any of
their property is the subject other than the following. As a result of the
Company's ArmorGroup Services division ceasing operations in Angola, the
division is involved in various disputes with SHRM S.A. ("SHRM"), its minority
joint venture partner relating to the Angolan business. SHRM has filed a
complaint against us, several of our subsidiaries, as well, as several current
and past members of the board of our subsidiary. Nicholas Sokolow, one of the
Directors of the Company, who served on the board of our subsidiary, has been
named as a defendant in the lawsuit in connection with such dispute both in his
capacity as a director of the Company and the subsidiary.
PROPOSAL 1
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the Company
shall have between three and fifteen directors, with such number to be fixed by
the Board of Directors. Effective at the time and for the purposes of the
Meeting, the number of directors of the Company, as fixed by the Board of
Directors pursuant to the By-laws of the Company is eight.
Directors of the Company are elected annually at the annual meeting of
stockholders. Their respective terms of office continue until the next annual
meeting of stockholders and until their successors have been elected and
qualified in accordance with the Company's By-laws. There are no family
relationships among any of the directors or executive officers of the Company.
Unless otherwise specified, each proxy received will be voted for the
election as directors of the eight nominees named below to serve until the next
annual meeting of stockholders and until their successors shall have been duly
elected and qualified. Each of the nominees has consented to be named a nominee
in the Proxy Statement and to serve as a director if elected. Should any
nominee become unable or
4
<PAGE>
unwilling to accept a nomination or election, the persons named in the enclosed
proxy will vote for the election of a nominee designated by the Board of
Directors or will vote for such lesser number of directors as may be prescribed
by the Board of Directors in accordance with the By-laws of the Company.
The following persons have been nominated as directors:
WARREN B. KANDERS, 42, has served as the Chairman of the Board of the
Company since January 1996. From October 1992 to May 1996, Mr. Kanders served
as Vice Chairman of the board of Benson Eyecare Corporation. From June 1992 to
March 1993, Mr. Kanders served as the President and a director of Pembridge
Holdings, Inc.
JONATHAN M. SPILLER, 48, has served as President and as a director of the
Company since July 1991 and as Chief Executive Officer since September 1993.
From June 1991 to September 1993, Mr. Spiller served as our Chief Operating
Officer. From 1989 to 1991 Mr. Spiller served as a partner with Deloitte &
Touche LLP, an international accounting firm, where he worked for 18 years. Mr.
Spiller is a chartered accountant and a certified public accountant.
BURTT R. EHRLICH, 60, has served as a director of the Company since
January 1996. Mr. Ehrlich served as Chairman and Chief Operating Officer of
Ehrlich Bober Financial Corp. (the predecessor of Benson Eyecare Corporation)
from December 1986 until October 1992 and as a director of Benson Eyecare
Corporation from October 1992 until November 1995.
NICHOLAS SOKOLOW, 50, has served as a director of the Company since
January 1996. Mr. Sokolow has been a partner in the law firm of Sokolow,
Dunaud, Mercadier & Carreras since 1994. From June 1973 until October 1994, Mr.
Sokolow was an associate and partner in the law firm of Coudert Brothers.
THOMAS W. STRAUSS, 58, has served as a director of the Company since May
1996. Since 1995, Mr. Strauss has been a principal with Ramius Capital Group, a
privately held investment management firm. From June 1993 until July 1995, Mr.
Strauss was co-chairman of Granite Capital International Group, an investment
banking firm. From 1963 to 1991, Mr. Strauss served in various capacities with
Salomon Brothers Inc., an investment banking and brokerage firm, including
President and Vice-Chairman.
RICHARD C. BARTLETT, 65, has served as a director of the Company since May
1996. Mr. Bartlett has also served as Vice Chairman of Mary Kay Holding
Corporation, a consumer branded products company, since January 1993 and as
President, Chief Operating Officer, and director of Mary Kay Inc. from 1987
through 1992. Mr. Bartlett has also served as Chairman of the board of
directors (from 1995 to 1999) and Chief Executive Officer (from 1994 to 1995)
of Richmont Group, Inc., an affiliate of Richmont Capital Partners I, L.P.
Richmont Group, Inc. and its affiliates own and operate portfolio businesses in
industries such as financial services, apparel, sports products, and food
services. On March 1, 1999, Mr. Bartlett resigned from his positions with
Richmont Group, Inc., but he continues to serve as Vice Chairman of Mary Kay
Holding Corporation.
ALAIR A. TOWNSEND, 58, has served as a director of the Company since
December 1996. Since February 1989, Ms. Townsend has been publisher of Crain's
New York Business, a business periodical. Ms. Townsend was a former governor of
the American Stock Exchange. Ms. Townsend served as New York City's Deputy
Mayor for Finance and Economic Development from February 1985 to January 1989.
STEPHEN B. SALZMAN, 34, has served as a director of the Company since June
1999. Mr. Salzman has been a principal of FS Partners, LLC since its inception
in 1994. FS Partners, LLC and its affiliates invest in public and private
companies through the purchase of equity and related securities.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE ABOVE-NAMED
DIRECTOR NOMINEES.
5
<PAGE>
INFORMATION CONCERNING MEETINGS OF THE BOARD OF DIRECTORS AND BOARD
COMMITTEES AND DIRECTOR COMPENSATION
During fiscal 1999, the Board of Directors held 11 meetings. The Board of
Directors has standing Audit, Compensation, Nominating and Option Committees.
During fiscal 1999, all of the directors then in office attended at least 75%
of the total number of meetings of the Board of Directors and the Committees of
the Board of Directors on which they served. The Audit, Compensation,
Nominating and Option Committees do not meet on a regular basis, but only as
circumstances require.
AUDIT COMMITTEE
The functions of the Audit Committee are to recommend to the Board of
Directors the appointment of independent auditors for the Company and to
analyze the reports and recommendations of such auditors. The committee also
monitors the adequacy and effectiveness of the Company's financial controls and
reporting procedures. During fiscal 1999, the Audit Committee consisted of Ms.
Townsend (Chairwoman), and Messrs. Sokolow and Strauss. The Audit Committee met
twice during fiscal 1999.
COMPENSATION COMMITTEE
The purpose of the Compensation Committee is to recommend to the Board of
Directors the compensation and benefits of the Company's executive officers and
other key managerial personnel. During fiscal 1999, the Compensation Committee
consisted of Messrs. Sokolow (Chairman), Kanders and Ehrlich. The Compensation
Committee met once during fiscal 1999.
NOMINATING COMMITTEE
The purpose of the Nominating Committee is to identify, evaluate and
nominate candidates for election to the Board of Directors. The Nominating
Committee will consider nominees recommended by stockholders. The names of such
nominees should be forwarded to Nicholas B. Winiewicz, Secretary, Armor
Holdings, Inc., 1400 Marsh Landing Parkway Suite 112, Jacksonville, Florida
32250, who will submit them to the committee for its consideration. During
fiscal 1999, the Nominating Committee consisted of Messrs. Kanders (Chairman),
Bartlett and Sokolow. The Nominating Committee met once during fiscal 1999.
OPTION COMMITTEE
The purpose of the Option Committee is to administer the Company's 1999
Option Plan (the "1999 Stock Option Plan"), 1998 Stock Option Plan (the "1998
Stock Option Plan"), Amended and Restated 1996 Stock Option Plan (the "1996
Option Plan") and Amended and Restated 1996 Non-Employee Directors Stock Option
Plan (the "1996 Directors Plan"), and to recommend to the Board of Directors
awards of options to purchase Common Stock of the Company thereunder. During
fiscal 1999, the Option Committee consisted of Mr. Ehrlich (Chairman). The
Option Committee did not meet during fiscal 1999.
The functions of the Option Committee were considered at and acted upon by
the entire Board of Directors during its meetings in fiscal 1999.
COMPENSATION OF DIRECTORS
In 1999, the non-employee directors of the Company were each given 10,000
shares of common stock for their services as directors. Directors who are not
employees of the Company ("Non-Employee Directors") are compensated for their
services as directors through their participation in the 1999 Stock Option
Plan. The 1999 Stock Option Plan is a formula plan pursuant to which qualified
options to acquire 10,000 shares of Common Stock are automatically granted to
each Non-Employee Director on the date of his or her initial election or
appointment to the Board of Directors in consideration for service as a
director. The exercise price for all 10,000 options granted to each
Non-Employee Director under the 1999 Stock Option Plan is the closing price of
the Common Stock on the date of the grant as quoted on the
6
<PAGE>
composite tape of the New York Stock Exchange, or on such exchange as the
Common Stock may then be trading. All of the 50,000 options outstanding under
the 1999 Stock Option Plan were granted to Non-Employee Directors in 1999.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No director, director nominee, executive officer, promoter or control
person has, within the last five years: (i) had a bankruptcy petition filed by
or against any business of which such person was a general partner or executive
officer either at the time of the bankruptcy or within two years prior to that
time; (ii) been convicted in a criminal proceeding or is currently subject to a
pending criminal proceeding (excluding traffic violations or similar
misdemeanors); (iii) been subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; (iv) been found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange Commission (the "Commission") or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended or vacated.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age and position of each of our
executive officers and significant employees as of May 18, 2000. The executive
officers of the Company are appointed by and serve at the discretion of the
Board of Directors of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Warren B. Kanders ........... 42 Chairman of the Board of Directors
Jonathan M. Spiller ......... 48 President, Chief Executive Officer and Director
Robert R Schiller ........... 37 Executive Vice President and Director of Corporate Development
Nicholas B Winiewicz ........ 51 Vice President--Finance, Chief Financial Officer, Secretary and
Treasurer
Stephen E. Croskrey ......... 40 President and Chief Executive Officer--Armor Holdings Products
Division
Stephen J. Loffler .......... 46 President and Chief Executive Officer--ArmorGroup Services
Division
</TABLE>
See the table of nominees for election as directors for biographical data
with respect to Messrs. Kanders and Spiller.
ROBERT R. SCHILLER has served as Executive Vice President and Director of
Corporate Development since January 1, 1999, and as Vice President of Corporate
Development from July 1996 to December 1998. From January 1995 to September
1995, Mr. Schiller served as Chief Financial Officer of Troma, Inc., an
independent film studio. From 1994 to July 1996, Mr. Schiller was a principal
in the merchant banking firm of Circadian Capital Corporation and from 1993 to
1995 he was a director of corporate finance for Jonathan Foster & Co. L.P., an
investment banking and financial advisory firm.
NICHOLAS B. WINIEWICZ has served as Vice President--Finance, Chief
Financial Officer, Secretary and Treasurer since February 1999. From 1994 and
to February 1999, Mr. Winiewicz served as Vice President and Chief Financial
Officer for Aladdin Industries, Inc., a consumer branded appliance company.
From 1984 to 1994, Mr. Winiewicz served as Vice President--Finance of Bentler
Industries, Inc., an auto parts manufacturer. Mr. Winiewicz is a Certified
Public Accountant.
STEPHEN E. CROSKREY has served as President and Chief Executive
Officer--Armor Holdings Products division since February 1999. From 1998 to
February 1999, Mr. Croskrey served as Director of Sales for Allied Signal,
Inc.'s global fibers business. From 1988 to 1998, Mr. Croskrey served in
various positions for Mobil Oil, most recently as its Central Regional Manager
for its Industrial Lubricant division.
7
<PAGE>
STEPHEN J. LOFFLER has served as President and Chief Executive
Officer--ArmorGroup Services division since April 1999. From April 1998 to
March 1999, Mr. Loffler served as Vice President and General Manager Europe at
Office Depot, an office product retailer, where he was responsible for European
operations. From August 1991 to March 1998, Mr. Loffler served as Deputy
Chairman of Acco Europe, an office product manufacture, where he led the
integration of Ofrex Group Holdings, an international distributor and
manufacturer of office products.
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth information concerning
the annual and long-term compensation earned by the Company's chief executive
officer and each of the other executive officers of the Company whose annual
salary and bonus during fiscal 1999 exceeded $100,000 (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION --------------
-------------------------------- SECURITIES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTION (#) COMPENSATION
- ---------------------------------------- -------- ---------- ---------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Warren B. Kanders 1999 $0 $0 200,000 $0(2)
Chairman, Board of Directors
Jonathan M. Spiller 1999 350,000 0 300,000 0
President, CEO and Director 1998 275,000 150,000 0 0
1997 200,000 250,000 250,000 0
Robert R. Schiller 1999 200,000 50,000 125,000 0
Executive Vice President and 1998 140,000 80,000 0 0
Director of Business Development 1997 130,000 60,000 0 0
Stephen E. Croskrey 1999 220,000 0 200,000 103,674(3)
President and CEO of Armor
Holdings Products Division
Stephen J. Loffler 1999 264,000 0 150,0000
President and CEO of ArmorGroup
Services Division
Nicholas Winiewicz 1999 165,000 0 75,000 50,000(4)
Vice President--Finance, CFO, Secretary
and Treasurer
</TABLE>
- ----------
(1) We have no long-term incentive compensation plan for our executive
officers and employees other than the 1994 Incentive Stock Option Plan
(which was discontinued for the purpose of further stock option grants in
March 1996), the 1996 Option Plan, the 1998 Stock Option Plan, the 1999
Stock Incentive Plan and various individually granted options. We do not
award stock appreciation rights, restricted stock awards or long term
incentive plan pay-outs.
(2) Mr. Kander was not an Executive Officer during 1998 and 1997. See
"Certain Relationships and Related Transactions" for a description of
consideration paid to an entity controlled by Mr. Kanders.
(3) Mr. Croskrey received reimbursement for moving expenses as part of his
employment agreement.
(4) Mr. Winiewicz received reimbursement for moving expenses as part of his
employment agreement.
9
<PAGE>
OPTIONS GRANTED IN FISCAL 1999
The following table contains certain information regarding stock options
we granted to our Named Executive Officers during fiscal 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
OPTION TERM
INDIVIDUAL GRANTS (2)
-------------------------------------------------------------- ---------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED YEAR ($/SHARE) (1) DATE 5% 10%
- -------------------- ------------ --------------------- --------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Warren Kanders 200,000 10.9% $ 11.3125 1/1/2009 $1,422,874 $3,605,842
Jonathan Spiller 300,000 16.5 11.3125 1/1/2009 2,134,311 $5,408,763
Robert Schiller 125,000 6.9 11.3125 1/1/2009 2,303,359 2,253,651
Stephen Croskrey 200,000 11.0 13.1875 2/8/2009 1,658,710 4,203,496
Stephen Loffler 150,000 8.2 12.6875 4/12/2009 1,196,865 3,033,091
Nicholas Winiewicz 75,000 4.0 12.1875 2/16/2009 574,849 1,456,780
</TABLE>
- ----------
(1) All options were granted at the market value on the date of grant based
generally on the last sale price on the date of grant of the our Common
Stock.
(2) The dollar amounts under these calculations are the result of
calculations at the 5% and 10% rates set by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, of the price of the Company's Common Stock or the
present or future value of the options
AGGREGATE OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR END OPTION VALUES
The following table contains certain information regarding stock options
exercised during and options to purchase Common Stock held as of December 31,
1999, by each of the Named Executive Officers. The stock options listed below
were granted without tandem stock appreciation rights. We have no freestanding
stock appreciation rights outstanding.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNDERLYING
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT 12/31/98 (#) 12/31/98 (1)
ACQUIRED VALUE ----------------------------- ----------------------------
ON EXERCISE REALIZED NON- NON-
NAME (#) (2)($) EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- ----------------------- ------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Warren B. Kanders -- $ -- 200,000 -- $ 362,500 $ --
Jonathan M. Spiller 118,943 1,488,792 395,142 383,333 3,135,448 722,915
Robert R. Schiller -- -- 150,000 125,000 1,059,375 226,563
Stephen E. Croskrey -- -- -- 200,000 -- --
Nicholas B. Winiewicz -- -- -- 50,000 -- 70,313
Stephen J. Loffler -- -- -- 150,000 -- 65,625
</TABLE>
- ----------
(1) Calculated on the basis of $13.125 per share, the last reported sales
price of the common stock on the New York Stock Exchange on December 31,
1999, less the exercise price payable for such shares.
(2) Calculated on the basis of the closing share price of the common stock on
the American Stock Exchange on the date of exercise, less the exercise
price payable for such shares. Based upon 3/31/00 closing price of
$11.00.
10
<PAGE>
REPORT ON EXECUTIVE COMPENSATION BY THE BOARD OF DIRECTORS
AND THE COMPENSATION COMMITTEE
COMPENSATION POLICY
The Compensation Committee of the Board of Directors is responsible for
setting and administering the policies which govern annual executive salaries,
raises and bonuses and certain awards of stock options (in the case of options
granted under the Company's 1999 Stock Option Plan and 1996 Option Plan, such
responsibility is generally limited to the actions taken by the Option
Committee of the Board of Directors, although at times the full Board will
grant options without having first received recommendations from the Option
Committee). During 1999, the Compensation Committee was composed of Messrs.
Sokolow, Kanders and Ehrlich, each of whom, except for Mr. Kanders, was a
Non-Employee Director.
The Company's executive compensation program emphasizes Company
performance, individual performance and an increase in stockholder value over
time in determining executive pay levels. The Company's executive compensation
program consists of three key elements; (i) low annual base salaries; (ii) a
performance-based annual bonus; and (iii) periodic grants of stock options. The
Compensation Committee believes that this three-part approach best serves the
interests of the Company and its stockholders by motivating executive officers
to improve the financial position of the Company, holding executives
accountable for the performance of the organizations for which they are
responsible and by attracting key executives into the service of the Company.
Under the Company's compensation program, annual compensation for the Company's
executive officers are composed of a significant portion of pay that is "at
risk" -- specifically, the annual bonus and stock options. Annual performance
bonuses also permit executive officers to be recognized on an annual basis.
Such bonuses are based largely on an evaluation of the contribution made by the
executive officer to the Company's overall performance. Stock options, which
are generally awarded under the Company's 1996 Option Plan, relate a
significant portion of long-term remuneration directly to stock price
appreciation realized by all the Company's stockholders.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
As President and Chief Executive Officer of the Company, Mr. Spiller was
compensated during fiscal 1999 pursuant to an employment agreement entered into
January 1999. Mr. Spiller's employment agreement during 1999 provided for an
annual base salary of $350,000, which may be increased, and for yearly bonuses
based upon the Company's net income. In addition, Mr. Spiller is entitled, at
the discretion of the Option Committee of the Board of Directors, to
participate in the 1999 Option Plan and other bonus plans adopted by the
Company based on his performance and the Company's performance.
MEMBERS OF THE COMPENSATION COMMITTEE
Nicholas Sokolow (Chairman)
Warren B. Kanders
Burtt R. Ehrlich
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Kanders, who was a non-compensated employee of the Company in fiscal
1999, served on the Compensation Committee in fiscal 1999. During fiscal 1999,
no executive officer of the Company, other than Mr. Kanders, (i) served as a
member of the compensation committee (or other board committee performing
similar functions or, in the absence of any such committee, the board of
directors) of another entity, one of whose executive officers served on the
Company's Compensation Committee, (ii) served as director of another entity,
one of whose executive officers served on the Company's Compensation Committee,
or (iii) served as member of the compensation committee (or other board
committee performing similar functions or, in the absence of any such
committee, the board of directors) of another entity, one of whose executive
officers served as a director of the Company.
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
(stock price appreciation plus reinvested dividends) of the Company's Common
Stock with the cumulative return (including reinvested dividends) of the
Standard & Poor's 500 Index, the Russell 2000 Index and certain companies
selected in good faith by management of the Company. In management's view, such
companies constitute a representative line-of-business comparison (the "Peer
Group"). Several of the companies comprising the Peer Group were not publicly
traded during the entire mandated comparison period. Returns for these
companies were therefore included in the presentation of the performance graph
for only those calendar years that such data was publicly available. Returns
for the Company for the period since March 1997 are as quoted on the New York
Stock Exchange, for the period prior to March 1997 but after March 1996 are as
quoted on the American Stock Exchange. Returns for the Company for the period
prior to March 1996 are based upon quoted bid prices as available on the OTC
Bulletin Board.
The companies comprising the Peer Group are Detection Systems, Inc.,
Pinkerton's Inc., Pittston Co.--Brink's Group, Simula Inc., Borg-Warner
Security, ITI Technologies, Wackenhut Corrections Corp., Vivid Technologies
Inc., Kroll-O'Gara Company, Firearms Training Systems, Cornell Corrections and
AHL Services.
PERFORMANCE GRAPH:
COMPARISON OF 5-YEAR CUMULATIVE RETURN AMONG
ARMOR HOLDINGS, ITS SELECTED PEER GROUP, AND CERTAIN INDEXES
[THE TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE REPRESENTATION OF GRAPHIC
OR IMAGE MATERIAL OMITTED FOR THE PURPOSE OF EDGAR FILING]
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Armor 133.33 366.67 1,050.00 1,425.00 1,525.33 1,750.00
Peer Group 93.24 114.67 113.90 226.87 167.49 79.17
Russell 2000 96.82 122.20 140.23 169.01 163.18 157.56
S&P 500 101.32 139.41 171.41 228.61 289.59 366.82
EMPLOYMENT AGREEMENTS
As of January 1, 1999, the Company entered into an Amended and Restated
Employment Agreement with Jonathan M. Spiller which provides that he will serve
as our President and Chief Executive Officer for a three year term that will
expire January 1, 2002, subject to early termination as described below. The
amended agreement provides for a base salary of $350,000. Mr. Spiller also
received options under 1998 Stock Option Plan effective as of January 1, 1999
to purchase 300,000 shares of common stock at an exercise price per share equal
to $11.40625. These options vest over a period of three years from the date of
grant. Pursuant to his employment agreement, Mr. Spiller may be entitled, at
the discretion of the Compensation Committee of the board, to participate in
the other option plans and other bonus plans the Company has adopted based on
his performance and the Company's overall performance. A "change in control" of
the Company will allow Mr. Spiller to terminate his employment agreement and to
receive payment equal to his base salary until the end of the term of his
employment or his base salary for two years, whichever is greater, as well as
the vesting of all 300,000 options granted to him under the
12
<PAGE>
employment agreement. Mr. Spiller will also be entitled to such payment and the
acceleration of such vesting on the 300,000 options upon the termination of his
employment agreement by the Company without cause. Such 300,000 options will
terminate in the event that Mr. Spiller's employment agreement is terminated by
the Company for cause. Mr. Spiller has also agreed to certain confidentiality
and non-competition provisions and, subject to certain exceptions and
limitations, to not sell, transfer or dispose of the shares of common stock or
options for the purchase of common stock of the Company owned by him until
January 1, 2002.
As of January 1, 1999, the Company entered into an Amended and Restated
Employment Agreement with Robert R. Schiller which provides that he will serve
as our Executive Vice President and Director of Corporate Development for a
three year term expiring January 1, 2002, at a base salary of $200,000 per
year. In addition to his base salary, Mr. Schiller received options under the
1998 Stock Option Plan effective as of January 1, 1999 to purchase 125,000
shares of Common Stock at an exercise price per share equal to $11.40625. These
options vest over a period of three years from the date of the grant. Pursuant
to his employment agreement, Mr. Schiller will be entitled, at the discretion
of the Compensation Committee of the board, to participate in the incentive
stock option plan and other bonus plans the Company has adopted based on his
performance and the Company's overall performance. Upon a "change of control"
of the Company, Mr. Schiller will have the right to terminate his employment
agreement and to receive his base salary for twelve months, and the 125,000
options granted to him shall vest. Mr. Schiller will also be entitled to
receive his base salary for a period of twelve months, and the 125,000 options
granted to him shall vest, upon the termination of his employment agreement by
the Company without cause. Such 125,000 options will terminate in the event
that Mr. Schiller's employment agreement is terminated by the Company for
cause. Mr. Schiller has agreed to certain confidentiality and non-competition
provisions, and to not sell, transfer or dispose of the 125,000 options (and
underlying shares) granted to him under his employment agreement and 75,000
options (and underlying shares) previously granted to him until January 1,
2002.
As of January 1, 1999, the Company entered into an Employment Agreement
with Warren B. Kanders which provides that he will serve as the Chairman of the
Board of Directors of the Company for a three year term expiring January 1,
2002, for which Mr. Kanders will receive options under the 1998 Stock Option
Plan effective as of January 1, 1999 to purchase 200,000 shares of Common Stock
at an exercise price per share of $11.40625. All such options are fully vested
as of the date of grant. Mr. Kanders has agreed to certain confidentiality and
non-competition provisions. See "Certain Relationships and Related
Transactions" for a description of compensation paid to an entity controlled by
Mr. Kanders.
On February 8, 1999, the Company entered into an Employment Agreement with
Stephen E. Croskrey which provides that he will serve as President and Chief
Executive Officer of the Company's Armor Holdings Products division for a three
year term expiring January 1, 2002, at a base salary of $220,000 per year. In
addition to his base salary, Mr. Croskrey received options under the 1996
Option Plan effective as of February 8, 1999 to purchase 200,000 shares of
Common Stock at an exercise price per share equal to $13.28125. These options
vest over a period of three years from the date of the grant. Pursuant to his
employment agreement, Mr. Croskrey will be entitled, at the discretion of the
Compensation Committee of the board, to participate in the incentive stock
option plan and other bonus plans we have adopted based on his performance and
our overall performance. Upon a "change of control" of the Company, Mr.
Croskrey will have the right to terminate his employment agreement. Mr.
Croskrey will be entitled to receive his base salary for a period of six
months, and the 200,000 options granted to him shall vest, upon the termination
of his employment agreement by the Company without cause. Mr. Croskrey's
200,000 options will terminate in the event that Mr. Croskrey's employment
agreement is terminated by the Company for cause. Mr. Croskrey has agreed to
certain confidentiality and non-competition provisions, and to not sell,
transfer or dispose of the 200,000 options (and underlying shares) granted to
him under his employment agreement until January 1, 2002.
On February 16, 1999, the Company entered into an Employment Agreement
with Nicholas B. Winiewicz which provides that he will serve as the Company's
Chief Financial Officer for a three year term expiring January 1, 2002, at a
base salary of $165,000 per year. In addition to his base salary, Mr. Winiewicz
received options under the 1996 Option Plan effective as of February 16, 1999
to purchase 75,000 shares
13
<PAGE>
of Common Stock at an exercise price per share equal to $12.15625. These
options vest over a period of three years from the date of the grant. Pursuant
to his employment agreement, Mr. Winiewicz will be entitled, at the discretion
of the Compensation Committee of the board, to participate in the incentive
stock option plan and other bonus plans we have adopted based on his
performance and our overall performance. Upon a "change of control" of the
Company, Mr. Winiewicz will have the right to terminate his employment
agreement. Mr. Winiewicz will be entitled to receive his base salary for a
period of six months, and the 75,000 options granted to him shall vest, upon
the termination of his employment agreement by the Company without cause. Mr.
Winiewicz's 75,000 options will terminate in the event that Mr. Winiewicz's
employment agreement is terminated by the Company for cause. Mr. Winiewicz has
agreed to certain confidentiality and non-competition provisions, and to not
sell, transfer or dispose of the 75,000 options (and underlying shares) granted
to him under his employment agreement until January 1, 2002.
As of April 12, 1999, the Company entered into an Employment Agreement
with Stephen J. Loffler, which provides that he will serve as Chief Executive
Officer of the Company's ArmorGroup Services division. Mr. Loffler's employment
is subject to a trial period expiring on October 11, 1999, during which the
Company may terminate his employment. From October 12, 1999, Mr. Loffler's
employment will continue until terminated by the Company on not less than 12
months' written notice or by Mr. Loffler on not less than six months' written
notice. Mr. Loffler will receive a base salary of (pounds sterling) 160,000 per
year. In addition to his base salary, Mr. Loffler may, at the discretion of the
Compensation Committee of the Board of Directors of the Company, receive an
annual bonus payment not exceeding 40% of his base salary. The termination
provisions allow the Company to terminate Mr. Loffler's employment at any time
by paying to him within 14 days salary in lieu of his notice period or any
unexpired part thereof (subject to tax and National Insurance), including any
accrued holiday entitlement. Mr. Loffler has agreed to certain confidentiality,
protection of intellectual property and non-competition provisions. The
restricted area for non-competition covers the United Kingdom, Russia and the
former Soviet Union and the American Continent, with the restricted period
being six months from the termination date.
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 15, 1996, we issued options to purchase 300,000 shares of common
stock to Richmont Capital Partners I, L.P. ("Richmont"), at an exercise price
of $7.50 per share, subject to adjustment (the "Richmont Options"). The Company
may call the Richmont Options and the underlying shares, whether vested or
unvested, in the event that the closing price per share of the common stock is
equal to or greater than $10.00 for a period of ten consecutive trading days
after December 31, 1997, upon written notice to Richmont given within 30 days
of the conclusion of such ten consecutive trading days during which the closing
price per share of the common stock was equal to or greater than $10.00. In
such event, the Company may require Richmont to exercise the Richmont Options
in whole with respect to all such shares within ten days of such notice to
Richmont. In the event that Richmont does not exercise the Richmont Options,
the Richmont Options will lapse.
On April 21, 1998, the Company amended the Richmont Option. Richmont sold
200,000 shares of our common stock and in exchange Richmont agreed not to sell,
transfer, assign or otherwise dispose of any shares of our common stock (other
than the 200,00 shares previously described) until April 21, 1999. The
restrictions on sale will not apply to Richmont if the common stock is trading
below $5.00 per share or above $15.00 per share.
The Company agreed that until April 21, 1999, it would not use its right
to force Richmont to exercise the Option. After April 21, 1999, the Company
could use its right to force Richmont to exercise the Option, at any time
regardless of the price per share of common stock, if Richard C. Bartlett is
not a director of the Company and at any time that Richard C. Bartlett is a
director of the Company if the priced per share of common stock is greater than
$7.50 on the preceding business day.
In addition, the Company agreed that Richmont would have certain co-sale
rights with Kanders, and that it could participate on a pro rata basis in the
event of an underwritten public offering.
Effective as of March 8, 1999, Kanders & Company, Inc. ("Kanders & Co."),
a corporation controlled by Warren B. Kanders, the Chairman of the Board of the
Company, entered into an agreement with the Company to provide certain
investment banking, financial advisory and related services to the Company. The
specific details of the services and the compensation to be paid to Kanders &
Co. will be determined by the Company and Kanders & Co. on a case by case basis
as the Company identifies specific projects for Kanders & Co. On May 12, 1999,
Kanders & Co. earned a fee of $300,000 from the Company for services rendered
in connection with the Company's completion of the public offering of 6,125,000
shares of common stock.
Stephen E. Croskrey, President of the Company's Armor Holdings Products
division, borrowed $111,000 from the Company in connection with his relocation
to Jacksonville, Florida. As of May 18, 2000, there was no outstanding balance
under this loan.
15
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP has audited the financial
statements of the Company for the fiscal year ended December 31, 1999. The
Board of Directors desires to continue the services of PricewaterhouseCoopers
LLP for the current fiscal year ending December 31, 2000. Accordingly, the
Board of Directors will recommend to the Meeting that the stockholders ratify
the appointment by the Board of Directors of the firm of PricewaterhouseCoopers
LLP to audit the financial statements of the Company for the current fiscal
year. Representatives of that firm are expected to be present at the Meeting,
shall have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions. In the event the
stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, the
appointment will be reconsidered by the Audit Committee and the Board of
Directors.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present any other matter for action at the Meeting other than as set
forth in the Notice of Annual Meeting and this Proxy Statement. If any other
matters properly come before the Meeting, it is intended that the shares
represented by the proxies will be voted, in the absence of contrary
instructions, in the discretion of the persons named in the proxy.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
any persons who own more than 10% of the Company's capital stock to file with
the Commission (and, if such security is listed on a national securities
exchange, with such exchange), various reports as to ownership of such capital
stock. Such persons are required by Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Stephen Salzman, who was appointed as one of our directors on June 24,
1999, inadvertently did not file the required Form 3 by the required time. The
Form 3 has since been filed. Additionally, in June 1999, the Company granted
stock options to Directors Sokolow, Bartlett, Strauss, Townsend, and Ehrlich.
The required Form 5s reporting such grants were inadvertently not filed by the
required time but have since been filed. Except as identified above, based
solely upon reports and representations submitted by the directors, executive
officers and holders of more than 10% of the Company's capital stock, all Forms
3, 4 and 5 showing ownership of and changes of ownership in the Company's
capital stock during the 1999 fiscal year were timely filed with the Commission
and the New York Stock Exchange.
ANNUAL REPORT
A copy of the Company's 1999 Annual Report to Stockholders was mailed
prior to this Proxy Statement. Any Stockholder who has not received a copy of
the 1999 Annual Report to Stockholders and wishes to do so should contact the
Company's Corporate Secretary by mail at the address set forth on the notice of
annual meeting or by telephone at (904) 741-5400.
FORM 10-K (AS AMENDED)
The Company will provide, without charge, to each Stockholder as of the
Record Date, on the written request of the Stockholder, a copy of the Company's
Annual Report on Form 10-K (as amended) for the year ended December 31, 1999,
including the financial statements and schedules, as filed with the Commission.
Stockholders should direct the written request to the Company's Corporate
Secretary at c/o Armor Holdings, Inc., 13386 International Parkway,
Jacksonville, Florida 32218.
16
<PAGE>
PROPOSALS BY STOCKHOLDERS
Any proposal of a Stockholder intended to be presented at the annual
meeting of stockholders to be held in 2001 must be received by the Company no
later than December 15, 2000 to be considered for inclusion in the Proxy
Statement and form of proxy for the 2001 annual meeting. Proposals must comply
with Rule 14a-8 promulgated by the Commission pursuant to the Exchange Act.
FOR THE BOARD OF DIRECTORS
NICHOLAS B. WINIEWICZ
SECRETARY
17
