RONSON CORPORATION
Corporate Park III
Campus Drive
Post Office Box 6707
Somerset, New Jersey 08875
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 27, 1998
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Ronson Corporation (the "Company") will be held at the Quality
Inn, 1850 Easton Avenue, Somerset, New Jersey, on October 27, 1998, at 10
o'clock a.m. (Eastern Standard Time) for the following purposes:
1. To elect four (4) directors;
2. To ratify the appointment of Demetrius & Company, L.L.C., as
independent auditors for the Company for the year 1998;
3. To consider a shareholder proposal, unanimously opposed by the
Board of Directors and management; and
4. To consider and act upon such other business which may properly
come before the Meeting.
The Board of Directors has fixed the close of business on August 28, 1998,
as the time as of which the stockholders of record entitled to notice of and to
vote at the Meeting will be determined.
You are cordially invited to attend the Meeting in person or to send a
proxy so that your shares may be represented. Even though you have sent a proxy,
if you attend the Meeting in person, you may revoke the proxy and vote your
shares in person.
A proxy is enclosed with this notice, together with a postage-paid return
envelope. Please sign and date the proxy and mail it in the return envelope.
/s/Justin P. Walder
-------------------
Justin P. Walder
Secretary
Dated: September 29, 1998
<PAGE>
RONSON CORPORATION
Corporate Park III
Campus Drive
Post Office Box 6707
Somerset, New Jersey 08875
- --------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 27, 1998
- --------------------------------------------------------------------------------
The enclosed proxy is solicited by the Board of Directors (the "Board") of
Ronson Corporation (the "Company"), for use at the Annual Meeting of
Stockholders (the "Meeting") to be held on October 27, 1998, at 10 o'clock a.m.
(Eastern Standard Time), at the Quality Inn, 1850 Easton Avenue, Somerset, New
Jersey, and at any adjournment thereof. The Meeting has been called for the
following purposes:
1. To elect four (4) directors;
2. To ratify the appointment of Demetrius & Company, L.L.C., as
independent auditors for the Company for the year 1998;
3. To consider a shareholder proposal, unanimously opposed by the
Board of Directors and management; and
4. To consider and act upon such other business which may properly
come before the Meeting.
Stockholders are requested to date and execute the enclosed form of proxy
and return it in the postage-paid return envelope provided. If the enclosed
proxy is signed and returned prior to the Meeting, it will be voted, unless
subsequently revoked, in accordance with the specification made thereon or, if
no specification is made, in accordance with the recommendations of management.
The enclosed proxy may be revoked at any time prior to the voting thereof by
notifying the Secretary of the Company in writing of the revocation or by filing
with the Secretary another duly executed proxy bearing a later date. Even though
you have sent a proxy, if you attend the Meeting in person, you may revoke the
proxy and vote your shares in person. Under New Jersey law, your attendance at
the Meeting by itself does not revoke your proxy, a written notice of revocation
filed with the Secretary of the Meeting prior to the voting of the proxy is also
necessary.
This proxy statement and the accompanying form of proxy are first being
mailed to stockholders on or about September 29, 1998. The expenses of
preparing, assembling, printing and mailing these proxy materials will be paid
by the Company.
The Company will also reimburse brokers, fiduciaries and nominees for the
cost of forwarding proxies and proxy statements to the beneficial owners of
Common Stock. In addition to solicitation by mail, directors, officers and
regular employees of the Company may also solicit proxies in person, by
telephone or by telegraph. Directors and officers of the Company who may also
<PAGE>
solicit proxies will receive no additional compensation for rendering such
services. To assist in the solicitation of proxies from all stockholders,
including brokers, bank nominees, institutional holders and others, the Company
has engaged Morrow & Co. of New York City for a fee estimated to be
approximately $5,000 plus out of pocket expenses.
Quorum and Voting
The Company has outstanding only one class of voting securities, Common
Stock. Each share of Common Stock is entitled to one vote. Only stockholders of
record at the close of business on August 28, 1998, are entitled to vote at the
Meeting. There were 3,197,175 shares of the Company's Common Stock outstanding
at the close of business on September 18, 1998.
<PAGE>
The affirmative vote of holders of a majority of the Company's Common Stock
present at the Meeting in person or by proxy is required to elect four (4)
Company directors, to ratify the appointment of Demetrius & Company, L.L.C., as
the Company's independent auditors for the year 1998, and to approve the
shareholder proposal, provided that a quorum, consisting of at least a majority
of the Company's outstanding Common Stock, is present.
Principal Holders of the Company's Voting Securities
Set forth below are the persons who, to the best of management's knowledge,
own beneficially more than five percent of any class of the Company's voting
securities, together with the number of shares so owned and the percentage which
such number constitutes of the total number of shares of such class presently
outstanding:
<TABLE>
<CAPTION>
Title of Name and Address of Amount and Nature of Percent of
Class Beneficial Owner Beneficial Ownership Class
----- ---------------- -------------------- -----
<S> <C> <C> <C>
Common Louis V. Aronson II ..................... 794,291 (1)(2) 24.7% (1)(2)
Campus Drive
P.O. Box 6707
Somerset, New Jersey 08875
Common Ronson Corporation
Retirement Plan ......................... 171,300 (2) 5.4% (2)
Campus Drive
P.O. Box 6707
Somerset, New Jersey 08875
Common Patrick Kintz ........................... 232,200 (3) 7.3% (3)
8323 Misty Vale
Houston, Texas 77075
Common Carl W. Dinger III ...................... 184,666 (4) 5.8% (4)
7 Lake Trail West
Morristown, New Jersey 07960
Common Steel Partners II, L.P. ................. 287,099 (5) 9.0% (5)
750 Lexington Avenue
27th Floor
New York, New York 10022
</TABLE>
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(1) Includes 22,500 shares of unissued Common Stock issuable to Mr. L.V.
Aronson upon exercise of stock options held by Mr. L.V. Aronson under the
Ronson Corporation 1996 Incentive Stock Option Plan and includes 44,136
shares to be received by Mr. L.V. Aronson under a purchase agreement dated
August 3, 1998, and to be voted by Mr. L.V. Aronson and Mr. Justin P.
Walder under an irrevocable proxy agreement dated August 3, 1998.
<PAGE>
(2) The Ronson Corporation Retirement Plan ("Retirement Plan") is the
beneficial owner of 171,300 shares. The shares held by the Retirement Plan
are voted by the Retirement Plan's trustees, Messrs. L.V. Aronson, E.M.
Ganz and I.M. Gedinsky. If the shares held by the Retirement Plan were
included in Mr. L.V. Aronson's beneficial ownership, Mr. L.V. Aronson's
beneficial ownership would be 965,591 shares, or 30.0% of the class. If the
shares held by the Retirement Plan were included in Mr. Ganz's beneficial
ownership, Mr. Ganz's beneficial ownership would be 198,442 shares, or 6.2%
of the class. If the shares held by the Retirement Plan were included in
Mr. Gedinsky's beneficial ownership, Mr. Gedinsky's beneficial ownership
would be 171,300 shares, or 5.4% of the class. The Retirement Plan's
holdings were reported in 1988 on Schedule 13G, as amended September 22,
1997.
(3) Owned directly by Mr. Kintz. This information was provided to the Company
by Mr. Kintz.
(4) Owned directly by Mr. Dinger. This information was provided to the Company
by Mr. Dinger.
(5) Owned by Steel Partners II, L.P. Steel Partners, L.L.C., the general
partner of Steel Partners II, L.P., and Mr. Warren G. Lichtenstein, the
sole executive officer and managing member of Steel Partners, L.L.C., are
also beneficial owners of the shares. This information was obtained from an
amended Schedule 13D filed with the SEC by Steel Partners II, L.P., and Mr.
Lichtenstein.
-2-
<PAGE>
Security Ownership of Management
The following table shows the number of shares of Common Stock beneficially
owned by each director and nominee, each named executive officer, and by all
directors and officers as a group as of September 18, 1998, and the percentage
of the total shares of Common Stock outstanding on September 18, 1998, owned by
each individual and by the group shown in the table. Individuals have sole
voting and investment power over the stock shown unless otherwise indicated in
the footnotes:
<TABLE>
<CAPTION>
Name of Individual or Amount and Nature of Percent of
Identity of Group Beneficial Ownership(2) Class
----------------- ----------------------- -----
<S> <C> <C>
Louis V. Aronson II ........................ 794,291 (3)(4) 24.7% (3)(4)
Robert A. Aronson .......................... 5,495 (1)
Albert G. Besser ........................... 200 (1)
Erwin M. Ganz .............................. 27,142 (3) (1)(3)
Gerard J. Quinnan .......................... 2,500 (1)
Justin P. Walder ........................... 44,503 1.4%
Saul H. Weisman ............................ 13,843 (1)
Daryl K. Holcomb ........................... 32,270 1.0%
All directors and officers as a group
(nine (9) individuals including
those named above) ....................... 924,944 28.5%
</TABLE>
- ---------------
(1) Shares owned beneficially are less than 1% of total shares outstanding.
(2) Shares listed as owned beneficially include 46,500 shares subject to option
under the Ronson Corporation 1987 and 1996 Incentive Stock Option Plans as
follows:
Number of
Common Shares
Under Option
-------------
Louis V. Aronson II ......................... 22,500
Justin P. Walder ............................ 5,000
Daryl K. Holcomb ............................ 15,500
All directors and officers as a group
(nine (9) individuals including
those named above) ........................ 46,500
(3) Does not include 171,300 shares of issued Common Stock owned by the
Retirement Plan. The shares held by the Retirement Plan are voted by the
Retirement Plan's trustees, Messrs. L.V. Aronson, Ganz and Gedinsky. If the
shares held by the Retirement Plan were included in Mr. L.V. Aronson's
beneficial ownership, Mr. L.V. Aronson's beneficial ownership would be
965,591 shares, or 30.0% of the class. If the shares held by the Retirement
Plan were included in Mr. Ganz's beneficial ownership, Mr. Ganz's
beneficial ownership would be 198,442 shares, or 6.2% of the class.
<PAGE>
(4) The shares held by Mr. L.V. Aronson include 44,136 shares subject to an
agreement dated August 3, 1998, for Mr. L.V. Aronson to purchase the shares
and, until the closing of the purchase, the shares are subject to an
irrevocable proxy voted by Mr. L.V. Aronson and Mr. Walder.
1. ELECTION OF DIRECTORS
Pursuant to the Company's Certificate of Incorporation and Bylaws, four (4)
directors are to be elected at this year's Meeting, three to fill Class II
director positions that will expire with the 2001 Annual Meeting of Stockholders
and one to fill a Class III position that will expire with the 1999 Annual
Meeting of Stockholders. The Nominating Committee of the Board has nominated
Messrs. Robert A. Aronson, Erwin M. Ganz and Justin P. Walder for election as
Class II directors and Mr. Albert G. Besser as the Class III director.
(Classification of the Board was adopted pursuant to an amendment to the
Company's Certificate of Incorporation which was approved by the stockholders of
the Company at an Annual Meeting of Stockholders held on November 8, 1983.)
-3-
<PAGE>
Proxies will be voted for the election of such nominees unless contrary
instructions are set forth on the proxy.
The Board of Directors recommends that stockholders vote FOR the three
nominated directors to fill the Class II positions and FOR the one nominated
director to fill the Class III position.
The following table contains information regarding the present Board,
including information regarding the nominees for election, who are currently
directors of the Company:
<TABLE>
<CAPTION>
Positions and Offices with Company
Presently Held (other than that of
Term as Director); Business Experience During
Period Served Director Past Five Years (with Company unless
Name of Director Age As Director Expires otherwise noted)
---------------- --- ----------- ------- ----------------
<S> <C> <C> <C> <C>
Louis V. Aronson II ....... 75 1952 - 1999 President and Chief Executive Officer;
Present Chairman of Executive Committee;
Member of Nominating Committee.
Robert A. Aronson ......... 49 1993 - 1998 Member of Audit Committee;
Present Managing Member of Independence Leather,
L.L.C., Mountainside, NJ, the principal
business of which is the import of leather
products, May 1996 to present; Senior Vice
President/Chief Financial Officer of Dreher,
Inc., Newark, NJ, the principal business of
which was the manufacture and import of
leather products, October 1987 to May 1996;
son of the President and Chief Executive
Officer of the Company.
Albert G. Besser (1) ...... 73 Sept. 15, 1998 Founder, former Director and of counsel
1998 - for Hannoch Weisman, Attorneys at Law,
Present Roseland, NJ, 1957 to present; Editor, New
Jersey Law Journal, 1970 to present; Arbitrator
for NASD, 1993 to present.
Erwin M. Ganz ............. 69 1976 - 1998 Chairman of Audit Committee; Member of
Present Executive Committee and Nominating
Committee; Consultant for the Company,
1994-present; Executive Vice President-
Industrial Operations, 1975-1993; Chief
Financial Officer, 1987-1993.
Gerard J. Quinnan ......... 70 June 2000 Consultant for the Company, 1990-present;
1996 - Vice President-General Manager of
Present Ronson Consumer Products Corporation,
1981-1990.
Justin P. Walder .......... 62 1972 - 1998 Secretary; Assistant Corporation Counsel;
Present Member of Executive Committee and
Nominating Committee; Principal in Walder,
Sondak & Brogan, P.A., Attorneys at Law,
Roseland, NJ.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Saul H. Weisman ........... 72 1978 - 2000 Member of Executive Committee and Audit
Present Committee; Retired President, Jarett Industries,
Inc., Cedar Knolls, NJ, the principal business
of which is the sale of hydraulic and pneumatic
equipment to industry, 1955-1997.
</TABLE>
No director also serves as a director of another company registered under
the Securities Exchange Act of 1934.
-4-
<PAGE>
- -----------------
(1) Mr. Besser was appointed on September 15, 1998, to the Class III director
position vacated due to the August 1998 resignation of Mr. Barton P.
Ferris, Jr.
The following table sets forth certain information concerning the executive
officers of the Company:
<TABLE>
<CAPTION>
Positions and Offices
Period Served with Company;
Name Age as Officer Family Relationships
---- --- ---------- --------------------
<S> <C> <C> <C>
Louis V. Aronson II ............. 75 1953 - Present President and Chief Executive Officer;
Chairman of the Executive Committee; Director.
Daryl K. Holcomb ................ 47 June 1996 - Present Vice President;
1993 - Present Chief Financial Officer;
1988 - Present Controller and Treasurer;
None.
Justin P. Walder ................ 62 1989 - Present Secretary;
1972 - Present Assistant Corporation Counsel;
Director; None.
</TABLE>
Messrs. L.V. Aronson and Holcomb have been employed by the Company in
executive and/or professional capacities for at least the five year period
immediately preceding the date hereof. Mr. Walder has been Secretary, Assistant
Corporation Counsel and Director of the Company and a principal in Walder,
Sondak & Brogan, P.A., Attorneys at Law, for at least the five year period
preceding the date hereof.
Certain Relationships and Related Transactions
Refer to Compensation Committee Interlocks and Insider Participation below
for information in response to this item.
During the year ended December 31, 1997, no director or officer of the
Company was indebted to the Company or its subsidiaries.
BOARD OF DIRECTORS
The Board of the Company held five (5) regular meetings during 1997. During
the year 1997, each of the directors in office during 1997, including those
standing for reelection, attended more than 75% of the total number of meetings
of the Board and Committees on which he served.
The Board currently has three standing Committees: Audit, Executive and
Nominating.
The Audit Committee consists of three individuals: Messrs. Ganz (Chairman),
R.A. Aronson and Weisman. The Audit Committee recommends the selection of
independent auditors for the Company, reviews the scope and timing of their
work, reviews with the auditors the financial accounting and reporting
principles used by the Company, the policies and procedures concerning audits,
<PAGE>
accounting and financial controls, and any recommendations to improve its
existing practices. It also reviews transactions with related parties and has
general powers relating to accounting and auditing matters and reviews the
results of the independent audit. The Audit Committee met one (1) time during
1997.
The Executive Committee consists of four individuals: Messrs. L.V. Aronson
(Chairman), Ganz, Walder and Weisman. The Executive Committee is empowered to
exercise all the powers of the Board when the Board is not in session or when a
quorum of the Board does not attend a meeting properly called, except that it
shall not act in conflict with any action or position previously taken by the
Board nor take certain other actions reserved to the Board. The Executive
Committee met thirteen (13) times during 1997.
The Nominating Committee consists of three individuals: Messrs. L.V.
Aronson, Ganz and Walder. The Nominating Committee makes recommendations to the
Board concerning the composition of the Board, including its size and the
qualification of its membership. It also recommends nominees to fill vacancies
or new positions on the Board and a slate of directors to serve as the Board's
nominees for election by the stockholders at the Annual Meeting. The Nominating
Committee met one (1) time during 1997. Nominations for the election of
directors may be made by stockholders entitled
-5-
<PAGE>
to vote in the election of directors, provided the stockholders give timely
Notice thereof in writing to the Secretary of the Company. To be timely, such
Notice must be delivered to, or mailed by United States Postal Service certified
first class, postage prepaid, and received at the principal executive offices of
the Company (1) with respect to an election at the 1999 Annual Meeting of
Stockholders (a) not later than July 29, 1999, ninety (90) days prior to the
first anniversary of the 1998 Annual Meeting, or (b) in the event the date of
the Annual Meeting is more than sixty (60) days before such anniversary date,
not later than ten (10) days after the earlier of the date on which public
announcement of the date of such Meeting is first made by the Company or the
date the Company first mails Notice of such Meeting to stockholders, and (2)
with respect to an election to be held at a Special Meeting of Stockholders, not
later than ten (10) days after the earlier of the date on which public
announcement of such Meeting is first made by the Company or the date the
Company first mails to stockholders Notice of the Special Meeting.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table presents compensation information for the
years ended December 31, 1997, 1996 and 1995 for the Chief Executive Officer and
the other executive officer of the Company whose base salary and bonus exceeded
$100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensa- All
Annual Compensation tion Other
--------------------------- ---------- Compen-
Salary Bonus Options/ sation
Name and Principal Position Year ($) ($) (1) SARS (#) ($) (2)
--------------------------- ---- --- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Louis V. Aronson II 1997 $462,405 $39,597 -- $10,446
President and Chief 1996 432,154 53,229 22,500 10,024
Executive Officer 1995 403,882 53,031 -- 9,264
Daryl K. Holcomb 1997 119,062 12,724 -- 2,701
Vice President and 1996 111,687 15,969 10,000 2,500
Chief Financial Officer, 1995 100,625 13,322 5,500 2,424
Controller and Treasurer
</TABLE>
- -----------------------------
(1) The compensation included in the bonus column is an incentive payment
resulting from the attainment by the Company's subsidiaries of certain
levels of net sales and profits before taxes.
(2) In 1997 All Other Compensation included matching credits by the Company
under its Employees' Savings Plan (Mr. L.V. Aronson, $3,200 and Mr.
Holcomb, $2,701); and the cost of term life insurance included in
split-dollar life insurance policies (Mr. L.V. Aronson, $7,246).
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
None.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table summarizes, for each of the named executive officers,
the number of stock options unexercised at December 31, 1997. All options held
by the named executives were exercisable at December 31, 1997. "In-the-money"
options are those where the fair market value of the underlying securities
exceeds the exercise price of the options.
-6-
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Value of
Unexercised In-the-Money
Options at Options at
FY-End FY-End
Name Exercisable (1) Exercisable (2)
---- --------------- ---------------
<S> <C> <C>
Louis V. Aronson II ............. 22,500 $ --
Daryl K. Holcomb ................ 22,500 (2) 14,694
</TABLE>
(1) The options held by the named executive officers at December 31, 1997, are
exercisable at any time and expire at various times from March 11, 1998 through
June 26, 2001.
(2) The value of the unexercised options was determined by comparing the average
of the bid and ask prices of the Company's Common Stock at December 31, 1997, to
the option prices. Options to purchase 12,500 shares held by Mr. Holcomb were
in-the-money at December 31, 1997. In March 1998 Mr. Holcomb exercised options
for 7,000 of these shares.
LONG-TERM INCENTIVE PLANS
None.
PENSION PLAN
No named executive is a participant in a defined benefit pension plan of
the Company.
COMPENSATION OF DIRECTORS
Effective August 26, 1997, directors who are not officers of the Company
receive an annual fee of $8,500 and, in addition, are compensated at the rate of
$650 for each Board meeting actually attended and $400 for each Committee
meeting actually attended. Officers of the Company receive no compensation for
their services on the Board or on any Committee.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
Mr. L.V. Aronson is a party to an employment contract with the Company
dated September 21, 1978, which, as amended on July 24, 1980, July 1, 1982,
October 11, 1985, July 7, 1988, May 10, 1989, August 22, 1991, May 22, 1995 and
June 11, 1997, provides for a term expiring December 31, 2000. The employment
contract provides for the payment of a base salary which is to be increased 7%
as of January 1 of each year. It also provides that the Company shall reimburse
<PAGE>
Mr. L.V. Aronson for expenses, provide him with an automobile, and pay a death
benefit equal to two years' salary. During 1990 Mr. L.V. Aronson offered and
accepted a 5% reduction in his base salary provided for by the terms of his
employment contract, and, in addition, a 7% salary increase due January 1, 1991,
under the terms of the contract was waived. During 1992 also, Mr. L.V. Aronson
offered and accepted a 7% reduction in his base salary. Effective September 1,
1993, Mr. L.V. Aronson offered and accepted a further 5% reduction in his base
salary. Under the employment contract, Mr. L.V. Aronson's full compensation will
continue in the event of Mr. L.V. Aronson's disability for the duration of the
agreement or one full year, whichever is later. The employment contract also
provides that if, following a Change in Control (as defined in the employment
contract), Mr. L.V. Aronson's employment with the Company terminated under
prescribed circumstances as set forth in the employment contract, the Company
will pay Mr. L.V. Aronson a lump sum equal to the base salary (including the
required increases in base salary) for the remaining term of the employment
contract.
REPRICING OF OPTIONS
No options were repriced during the year ended December 31, 1997.
-7-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of the Company, as a whole, provides overall guidance of the
Company's executive compensation program. All members of the Board participate
in the review and approval of each of the components of the Company's executive
compensation program described below, except that no director who is also a
Company employee participates in the review and approval of his compensation.
Directors of the Company who are also current employees of the Company are
Messrs. L.V. Aronson and Walder. Directors of the Company who are also former
employees of the Company are Messrs. R.A. Aronson, whose employment with the
Company ceased in 1987, Ganz, who retired from the Company in 1993, and Quinnan,
who retired from Ronson Consumer Products in 1990. Mr. Ganz has a consulting
agreement with the Company for the period ending December 31, 1998, which is
cancellable at any time by either party with 60 days notice and, effective
February 1, 1997, provides compensation at the annual rate of $77,500 for the
years ending December 31, 1997 and 1998, plus participation in the Company's
health and life insurance plans and the use of an automobile. Mr. Quinnan has a
consulting agreement with the Company for the period ending December 31, 1999,
which is cancellable at any time by either party with 60 days notice. The
agreement provides that Mr. Quinnan perform consulting services for the Company,
Ronson Consumer Products, and Prometcor at a specified daily rate. In 1997 Mr.
Quinnan was compensated $35,688 for his services, of which approximately $32,000
was deferred, and was provided the use of an automobile.
During the year ended December 31, 1997, the Company and Ronson Consumer
Products were provided printing services by Michael Graphics, Inc., a New Jersey
corporation, amounting to $70,094. A greater than 10% shareholder of Michael
Graphics, Inc. is the son-in-law of the Company's President, who also serves as
a director.
During the year ended December 31, 1997, Ronson Consumer Products, Ronson
Aviation and Prometcor (formerly Ronson Metals Corp.) retained the firm of
Walder, Sondak & Brogan, P.A., Attorneys at Law, to perform legal services.
Justin P. Walder, a principal in that firm, is a director and officer of the
Company.
Management believes that the terms received by the Company in these
transactions are as favorable to the Company as the Company could receive from
an unaffiliated third party.
REPORT ON EXECUTIVE COMPENSATION
As stated above, the Board, as a whole, provides overall guidance of the
Company's executive compensation program. The program covers the named executive
officers, all other executive officers and other key employees. The program has
three principal components: base salary, annual cash incentives under the
Company's Management Incentive Plan ("MIP"), and stock options under the
Company's 1987 and 1996 Incentive Stock Option Plans ("ISO Plans"). Mr. L.V.
Aronson's base salary is determined by the terms of his employment contract
discussed above, except for the reductions which have been offered and accepted
from time-to-time by Mr. L.V. Aronson. The amendments, also detailed above, to
Mr. L.V. Aronson's employment contract and the reductions offered and accepted
from time-to-time by Mr. L.V. Aronson have been reviewed and approved by the
Board. The Board also reviews and approves the salaries of all of the other
executive officers. Prior to the beginning of the fiscal year, the Board reviews
and approves which employees participate in the Company's MIP and the criteria
which will determine the cash awards under the plan to the participants after
the close of the fiscal year. The Board also reviews and approves all awards
under the Company's ISO Plans.
<PAGE>
The base salaries are intended to meet the requirements of the employment
contract in effect for Mr. L.V. Aronson and to fairly compensate all the
officers of the Company for the effective exercise of their responsibilities,
their management of the business functions for which they are responsible, their
extended period of service to the Company and their dedication and diligence in
carrying out their responsibilities for the Company and its subsidiaries. In
1997 and prior years, increases have been granted to Mr. L.V. Aronson in
accordance with terms of the employment contract, except for the above mentioned
salary reductions offered and accepted from time-to-time by him. In 1997 and
prior years, the Board, after review, has approved increases to the other
executive officers.
The Company's MIP is based on the financial performance of the Company's
subsidiaries and is adopted annually, after review, for the ensuing year by the
Board. Each year the Board sets the formula for determining incentive
compensation under the MIP for the Company and each subsidiary based upon (1)
the amount net sales exceed thresholds established by the Board and (2) pretax
profits as a percent of net sales. The Board determines who of the Company's and
its subsidiaries' key employees are eligible to participate in the MIP and what
each employee's level of participation may be. The thresholds set by the Board
must be met by the end of the fiscal year in order for each eligible employee to
receive an award under the MIP for that year.
-8-
<PAGE>
The stock options granted under the Company's ISO Plans are designed to
create a proprietary interest in the Company among its executive officers and
other key employees and reward these executive officers and other key employees
directly for appreciation in the long-term price of the Company's Common Stock.
The ISO Plans directly link the compensation of executive officers and other key
employees to gains by the stockholders and encourages the executive officers and
other key employees to adopt a strong stockholder orientation in their work. In
1997 no options were granted to the executive officers and other key employees
of the Company.
The above report is presented by the Board of Directors:
Louis V. Aronson II Gerard J. Quinnan
Robert A. Aronson Justin P. Walder
Erwin M. Ganz Saul H. Weisman
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
cumulative total stockholder returns on the Company's Common Stock during the
five fiscal years ended December 31, 1997, with the cumulative total returns of
the NASDAQ Stock Market (U.S. Companies) Index and the Russell 2000 Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS AMONG THE COMPANY,
NASDAQ STOCK MARKET INDEX AND RUSSELL 2000 INDEX
[GRAPHIC-GRAPH PLOTTED TO POINTS LISTED BELOW]
VALUE AS OF DECEMBER 31,
----------------------------------------------------------------
1992 1993 1994 1995 1996 1997
------ ------ ------ -------- ------ ------
RONSON CORP 100.00 300.00 383.33 1,000.00 641.68 683.33
NASDAQ 100.00 114.80 112.21 158.70 195.19 239.53
RUSSELL 100.00 118.91 116.74 149.94 174.67 213.73
2000
This graph assumes that $100 was invested in the Company's Common Stock on
December 31, 1992, in the NASDAQ Stock Market (U.S. Companies) Index and in the
Russell 2000 Index, and that dividends are reinvested.
-9-
<PAGE>
The Company has determined that it is not possible to identify a published
industry or line-of-business index or a peer group of companies since the
Company has two distinct lines of business. The Company has selected the Russell
2000 Index since it is composed of companies with small capitalizations.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under SEC rules, the Company is required to review copies of beneficial
ownership reports filed with the Company which are required under Section 16(a)
of the Exchange Act by officers, directors and greater than 10% beneficial
owners. Based solely on the Company's review of forms filed with the Company,
the Company believes that no information is required to be reported under this
item, except that a Form 4 filed by Mr. Weisman for June 1997 reporting one
transaction was filed six days after its due date.
2. INDEPENDENT AUDITORS
Demetrius & Company, L.L.C., has been selected and is recommended to
stockholders for ratification as auditors for the year ending December 31, 1998.
A representative of Demetrius & Company, L.L.C. is expected to attend the
Meeting with the opportunity to make a statement and/or respond to appropriate
questions from stockholders present at the Meeting.
The Board of Directors recommends that stockholders vote FOR the
ratification of the selection of Demetrius & Company, L.L.C.
3. SHAREHOLDER PROPOSAL
Mr. Warren G. Lichtenstein and Steel Partners II, L.P., who, according to
an amended Schedule 13D, represent 287,099 shares of Common Stock of the
Company, have informed the Company that they intend to introduce at the Meeting
the following resolution for action by the stockholders, and they have submitted
the following statement in support of the resolution below:
"Resolved, that the shareholders of Ronson Corporation ("Ronson"),
recommend that the board of directors of Ronson immediately take the
necessary steps to implement a plan to assess the market value of each
of the Company's operating divisions and to effect their sale, merger
or liquidation as a means to increase shareholder value. The plan
should be undertaken as promptly as possible."
Mr. Lichtenstein's Supporting Statement:
"In recent years, I believe Ronson has underperformed both industry and
broader market averages. In part, I believe, this reflects the absence of a
clearly focused strategic direction for Ronson. I find it highly unlikely that
Ronson Corporation is realizing any advantage by operating in two totally
unrelated divisions, namely consumer products and aviation services which have
shown little to no growth, supporting over $1.2 million of corporate overhead,
which is greater than the net income of the entire company.
"The value that may be achieved for shareholders through the sale, merger
or liquidation of the Company's assets, I believe, is significantly greater than
the market price of the common stock. In the case of a sale of assets, Ronson
could utilize its sizable net operating loss carryforwards to shelter any
capital gains incurred in a sale of one or both of the subsidiaries of Ronson.
<PAGE>
"I believe the Company's stock market record over the past two years is a
strong indictment of current management's performance. If this management cannot
maximize the stockholders' equity investments, it should either sell, merge or
liquidate the corporation in order to maximize the value of the Company.
"I believe the owners of Ronson Corporation should support this resolution
and recommend that the board of directors take the necessary steps to assess the
market value of each of the Company's operating divisions and the consequence of
their sale, merger or liquidation as a means to increase shareholder value.
"I urge a vote for this proposal."
Your Board strongly recommends that shareholders vote
"AGAINST" the Lichtenstein proposal.
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<PAGE>
Your Board of Directors consists of individuals thoroughly familiar with
the Company's business and with the industries in which the Company operates.
They are best qualified to determine if, when and under what conditions the
Board should consider a merger or sale of the Company or any of its assets.
In the exercise of their fiduciary duties, the Directors periodically
conduct an overall review of the Company's operations and progress. The Board,
on September 9, 1998, determined that a sale or merger would NOT be in the best
interests of the Company and its shareholders. Implementing the Lichtenstein
proposal is ill-advised. It would have a negative impact on the Company, its
shareholders, employees and customers. It would limit the Board's flexibility.
It would distract the Company's management from the critical day-to-day
operations and from the ongoing planning process of the Company.
In reaching your decision with respect to the Lichtenstein proposal, the
critical question you should answer to your complete satisfaction is whether the
proposer, Mr. Lichtenstein, operating through his financial arm, Steel Partners
II, L.P., is acting in YOUR best interests or in HIS personal best interests.
Contrary to Mr. Lichtenstein's statements in support of his proposal, the
Board suggests that all shareholders take the following into account:
1. Mr. Lichtenstein incorrectly contends that Ronson stock has been
performing poorly.
Using the Securities and Exchange Commission's mandated five year
comparative time span, Ronson stock has increased 2 1/2 times its
comparable indices. The stock continues to perform well even while the
Company has been contending with the financial burden of substantial
non-recurring charges associated with the cleanup of Prometcor's
environmental problems.
Ronson stock has, notably, outperformed both the NASDAQ and Russell
2000 Indexes over the past five years. An investment of $100 in Ronson
on December 31, 1992, would have been worth $683 at the end of 1997.
Extending the period to May 31, 1998, the value of the investment would
increase to $1,000. In comparison, $100 invested in the NASDAQ Index
would be worth $240 at December 31, 1997, and in the Russell 2000
Index, would be worth $214 at the same date.
2. Mr. Lichtenstein's managerial capabilities are of concern to your Board.
Reference is made to his performance at Gateway Industries, Inc.,
formerly known as Gateway Communications, Inc. ("Gateway") and Marsel
Mirror & Glass Products, Inc. ("Marsel"). In 1993 Mr. Lichtenstein and
Steel Partners made an investment in Gateway, whose shareholders'
equity was about $8.7 million on December 31, 1992. Prior to Mr.
Lichtenstein's involvement, Gateway was profitable. After his
involvement, in September l994, Gateway's business was sold for $2
million. In less than two years, after Mr. Lichtenstein took over the
Gateway management, Gateway's $8.7 million equity was greatly reduced
to a market value of $2 million representing a 77% decline in
shareholder value.
<PAGE>
Furthermore, in late l995 Gateway purchased Marsel in a transaction
arranged by Mr. Lichtenstein at a price of about $2.8 million for which
Mr. Lichtenstein received a fee of $175,000. Marsel did poorly after
that transaction, incurring substantial operating losses. By year end
l996, Marsel was sold for a token $l while under Mr. Lichtenstein's
management and control. Gateway's over 1,300 shareholders realized a
loss of over $3 million in less than l4 months.
3. Your Board has reason to be concerned about Mr. Lichtenstein's judgment.
As provided in Ronson Corporation's Bylaws, he exercised his right to
nominate two persons as Ronson directors to be voted on at this year's
Annual Meeting. Within one week, Ronson received notice from Mr.
Lichtenstein that his nominees were withdrawn by him.
Our initial cursory due diligence check of Mr. Lichtenstein's nominees
revealed that within the past year, one of his nominees, as President
and Chief Executive Officer of a company, signed a plea agreement and
entered a guilty plea on behalf of his company to five separate
criminal charges of "Knowingly or Purposely Release or Abandonment of
Toxic Pollutants; Unlawful Discharge of Pollutants; Creating a Risk of
Widespread Injury or Damage; Unlawful Discharge of a Pollutant and
Making False Representation to the Department of Environmental
Protection." This nominee's company is awaiting sentence for its
criminal conduct. Ronson should not be associated with a nominee whose
company he managed has pleaded guilty to deliberate violations of the
law.
-11-
<PAGE>
Your Board will continue to consider all reasonable avenues to increase
shareholder value. Ronson Corporation needs no prodding from Mr. Lichtenstein
whose interest is for his own personal short term gain rather than Ronson
Corporation's long term growth and prosperity. Therefore, for all the reasons
stated above, your Board urges shareholders to reject the Lichtenstein proposal.
Your Board strongly recommends a vote
"AGAINST" the Lichtenstein proposal.
FINANCIAL STATEMENTS
For financial statements of the Company and its subsidiaries, stockholders
are requested to refer to the Company's Annual Report for 1997 sent to
stockholders in August 1998.
MISCELLANEOUS
Financial and other reports will be presented at the Meeting, and minutes
of the previous meeting of stockholders will be made available for inspection by
stockholders present at the Meeting, but it is not intended that any action will
be taken in respect thereof.
At the time of filing this proxy statement with the SEC, the Board was not
aware that any matters not referred to herein would be presented for action at
the Meeting. If any other matters properly come before the Meeting, it is
intended that the shares represented by proxies will be voted with respect
thereto in accordance with the judgement of the persons voting them. It is also
intended that discretionary authority will be exercised with respect to the vote
on any matters incident to the conduct of the Meeting.
Proposals by stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Company no later than May 28,
1999, in order to be included in the proxy statement and on the form of proxy
which will be solicited by the Board in connection with that meeting.
/s/Justin P. Walder
-------------------
Justin P. Walder
Secretary
Date: September 29, 1998
Upon the written request of any record holder or beneficial owner of Common
Stock entitled to vote at the Meeting, the Company will provide without charge a
copy of its Annual Report on Form 10-K as filed with the SEC for the year 1997.
-12-
<PAGE>
REVOCABLE PROXY
RONSON CORPORATION
Corporate Park III, Campus Dr., P.O.Box 6707
Somerset, New Jersey 08875
[X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 27, 1998
The undersigned, revoking all previous proxies, hereby appoints LOUIS
V. ARONSON II, JUSTIN P. WALDER and ERWIN M. GANZ, and each of them, proxies of
the undersigned, with full power of substitution, to vote and act for the
undersigned at the Annual Meeting of Stockholders of the Corporation to be held
at 10:00 a.m. (Eastern Standard Time) on October 27, 1998, at the Quality Inn,
1850 Easton Avenue, Somerset, New Jersey, and at any adjournment thereof, as
indicated below on those matters described in the proxy statement and in
accordance with their discretion on such other matters as may properly come
before the meeting.
The Board of Directors RECOMMENDS
a vote "FOR" Proposals #1 and 2.
1. ELECTION OF DIRECTORS
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees:
Class II (term expires at 2001 Annual Meeting of Stockholders):
Robert A. Aronson Erwin M. Ganz Justin P. Walder
Class III (term expires at 1999 Annual Meeting of Stockholders):
Albert G. Besser
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. To ratify the appointment of DEMETRIUS & COMPANY, L.L.C., as independent
auditors for the year 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The Board of Directors strongly RECOMMENDS a vote "AGAINST" the Shareholder
Proposal, on page 10 of the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Please sign and date this proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder(s) sign above
Before signing, see statement on reverse side.
Detach above card, sign, date and mail in postage-paid envelope provided.
RONSON CORPORATION
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED IN THE MANNER DIRECTED BY
THE STOCKHOLDER(S). IF NO DIRECTION IS MADE, PROXY WILL BE VOTED (i) FOR THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR LISTED ON THIS PROXY; (ii) FOR
RATIFICATION OF THE APPOINTMENT OF DEMETRIUS & COMPANY, L.L.C., AS INDEPENDENT
AUDITORS FOR THE YEAR 1998 AND (iii) AGAINST THE SHAREHOLDER PROPOSAL.
Please sign your name (or names) exactly as it appears on your stock
certificate(s), indicating any official position or representative capacity.
When signing as an attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation or partnership, please sign in
full corporate or partnership name by authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
