SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by Registrant X
Filed by a party other
than the registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule
14a-11(c) or Rule 14a-12
LIFETIME HOAN CORPORATION
(Name of Registrant as Specified in Its Charter)
LIFETIME HOAN CORPORATION
(Name of Person(s) Filing Proxy Statement)
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 0-11:1
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part the fee is offset as provided by Exchange
Act Rule 0-11 (a)(2) and identify the filing of
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:
LIFETIME HOAN CORPORATION
One Merrick Avenue
Westbury, New York 11590
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on June 10, 1997
Notice is hereby given that the Annual Meeting of Stockholders
of Lifetime Hoan Corporation, a Delaware corporation (the "Company"),
will be held at the offices of the Company, One Merrick Avenue,
Westbury, New York 11590 on Tuesday June 10, 1997, at 10:30 a.m.,
local time, for the following purposes:
(1) To elect a board of five directors to serve until the
next Annual Meeting of Stockholders or until their successors are
duly elected and qualified;
(2) To approve and ratify the appointment of Ernst & Young
LLP as the independent auditors of the Company; and
(3) To transact such other business as may properly come
before the meeting, or any adjournment(s) or postponement(s)
thereof.
Stockholders of record at the close of business on April 16,
1997 are entitled to notice of and to vote at the Annual Meeting and
any adjournment(s) or postponement(s) thereof. A complete list of
the stockholders entitled to vote at the Annual Meeting will be
available for examination by any stockholder at the Company's
offices, One Merrick Avenue, Westbury, New York 11590, for any
purpose germane to such meeting, during ordinary business hours, for
a period of at least 10 days prior to the Annual Meeting.
By Order of the Board of Directors
Craig Phillips, Secretary
Westbury, New York
May 9, 1997
THE BOARD OF DIRECTORS EXTENDS A CORDIAL INVITATION TO ALL
STOCKHOLDERS TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN AS
PROMPTLY AS POSSIBLE THE ENCLOSED PROXY IN THE ACCOMPANYING REPLY
ENVELOPE. STOCKHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR
PROXIES AND VOTE IN PERSON.
LIFETIME HOAN CORPORATION
One Merrick Avenue
Westbury, New York 11590
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be held on June 10, 1997
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors
(the "Board") of Lifetime Hoan Corporation, a Delaware corporation
(the "Company"), for use at the Annual Meeting of Stockholders of the
Company (the "Meeting") to be held on the date, at the time and place
and for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. The Company's principal offices are located
at One Merrick Avenue, Westbury, New York 11590 and its telephone
number is (516) 683-6000. Stockholders of record at the close of
business on April 16, 1997 are entitled to notice of and to vote at
the Meeting. This Proxy Statement and the accompanying Proxy shall
be mailed to stockholders on or about May 12, 1997.
THE MEETING
Voting at the Meeting
On April 16, 1997, there were 12,429,649 shares of the Company's
common stock, $.01 par value (the "Common Stock"), issued and
outstanding. Each share of Common Stock entitles the holder thereof
to one vote on all matters submitted to a vote of stockholders at the
Meeting.
A majority of the Company's outstanding shares of Common Stock
represented at the Meeting, in person or by proxy, shall constitute a
quorum. Assuming a quorum is present, (1) the affirmative vote of a
plurality of the shares so represented is necessary for the election
of directors; and (2) the affirmative vote of a majority of the
shares so represented is necessary to approve and ratify the
appointment of Ernst & Young LLP as the independent auditors of the
Company.
Proxies and Proxy Solicitation
All shares of Common Stock represented by properly executed
proxies will be voted at the Meeting in accordance with the
directions marked on the proxies, unless such proxies have previously
been revoked. If no directions are indicated on such proxies, they
will be voted for the election of each nominee named below under
"Election of Directors" and for the approval and ratification of the
appointment of Ernst & Young LLP as the independent auditors of the
Company. If any other matters are properly presented at the Meeting
for action, the proxy holders will vote the proxies (which confer
discretionary authority upon such holders to vote on such matters) in
accordance with their best judgment. Each proxy executed and
returned by a stockholder may be revoked at any time before it is
voted by timely submission of a written notice of revocation or by
submission of a duly executed proxy bearing a later date (in either
case directed to the Secretary of the Company), or, if a stockholder
is present at the Meeting, he may elect to revoke his proxy and vote
his shares personally. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for
the transaction of business. If a stockholder, present in person or
by proxy, abstains on any matter, the stockholder's shares of Common
Stock will not be voted on such matter. Thus, an abstention from
voting on any matter has the same legal effect as a vote "against"
the matter, even though the stockholder may interpret such action
differently. Except for determining the presence or absence of a
quorom for the transaction of business, broker non-votes are not
counted for any purpose in determining whether a matter has been
approved.
The Company will bear the cost of preparing, printing,
assembling and mailing the proxy, Proxy Statement and other material
which may be sent to stockholders in connection with this
solicitation. It is contemplated that brokerage houses will forward
the proxy materials to beneficial holders at the request of the
Company. In addition to the solicitation of proxies by use of the
mails, officers and regular employees of the Company may solicit
proxies by telephone without additional compensation. The Company
will reimburse such persons for their reasonable out-of-pocket
expenses in accordance with the regulations of the Securities and
Exchange Commission.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of April
16, 1997, regarding the beneficial ownership of Common Stock by each
stockholder known by the Company to be the beneficial owner of 5% or
more of the Common Stock, each director, each executive officer named
under "Executive Compensation" and all directors and executive
officers as a group. Unless otherwise noted, the persons names in
the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them.
Percent of
Outstanding
Shares
Amount and Nature of Beneficially
Name and Address Beneficial Ownership Owned (10)
Milton Cohen (1) 1,877,200(2) 15.1%
Jeffrey Siegel (1) 1,429,082(3) 11.5%
Ronald Shiftan 951,076(4) 7.5%
c/o Patriot Group LLC.
379 Thornall Street
Edison, NJ 08837
Pamela Staley (5) 962,423(5) 7.7%
1200 S. Gaylord
Denver, CO 80210
Craig Phillips (1)(6) 954,969(6) 7.7%
Howard Bernstein (1) -0- -
Robert Phillips (1)(6) 639,118(6) 5.1%
11 Red Drive North
Princeton Junction, NJ 08550
Fred Spivak (1) 46,451(7) *
Quest Advisory Corp. (8) 961,462(8) 7.7%
1414 Avenue of the Americas
New York, NY 10019
All Directors and Executive
Officers as a Group (6 persons) 5,266,478(9) 41.6%
* Less than 1%
(1)The address of such individuals is c/o the Company, One Merrick
Avenue, Westbury, NY 11590.
(2)Does not include 912,470 shares owned by nineteen separate
irrevocable trusts for the benefit of Mr. Cohen's children, their
spouses and his grandchildren and 44,000 options which are not
exercisable within 60 days. Mr. Cohen, who is not a trustee of such
trusts, disclaims beneficial ownership of said shares.
(3)Includes 27,679 shares issuable upon the exercise of options which
are exercisable within 60 days. Excludes 962,423 shares owned by ten
separate irrevocable trusts for the benefit of Mr. Siegel's children,
nieces and nephews as to which Mr. Siegel, who is not a trustee of
such trusts, disclaims beneficial ownership and 44,000 options which
are not exercisable within 60 days.
(4)Includes (i) 180,186 shares issuable upon the exercise of options
which are exercisable within 60 days; (ii) 143,256 shares held by
certain of the trusts referred to in footnote (2) above, over which
Mr. Shiftan has sole voting control and sole power to dispose of said
shares; and (iii) 627,634 shares held by certain of the trusts
referred to in footnote (2) above, over which Mr. Shiftan has shared
voting control and under certain circumstances, the sole power to
dispose of said shares. Mr. Shiftan disclaims beneficial ownership
of the shares held by the trusts.
(5) Includes 962,423 shares for which Ms. Staley is the sole
trustee of the trusts referred to in footnote (3) above over which
she has sole voting control and sole power to dispose of said shares.
Ms. Staley disclaims beneficial ownership of the shares held by the
trusts.
(6)The number of shares of Common Stock owned by Robert Phillips and
Craig Phillips includes 56,555 shares held under a trust of which
they are the sole beneficiaries. Robert Phillips and Craig Phillips
are brothers.
(7)Includes 14,276 shares issuable upon the exercise of options which
are exercisable within 60 days, but excludes 28,050 shares issuable
upon the exercise of options which are not exercisable within 60
days.
(8)The information available to the Company regarding the ownership
of the Company's Common Stock by Quest Advisory Corp. was as of
December 31, 1996 as set forth in Schedule 13G filed with the
Securities and Exchange Commission on February 6, 1997. The number
of shares was adjusted to reflect the 10% stock dividend in February
1997. Excludes 133,322 shares owned by an affiliated company.
(9)Includes 222,141 shares issuable upon the exercise of options
which are exercisable within 60 days, but excludes 123,750 shares
issuable upon the exercise of options which are not exercisable
within 60 days.
(10)Calculated on the basis of 12,429,649 shares of Common Stock
outstanding, except that shares underlying options exercisable within
60 days are deemed to be outstanding for purposes of calculating the
beneficial ownership of securities owned by the holders of such
options.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A board of five directors is to be elected at the Meeting to hold
office until the next Annual Meeting of Stockholders, or until their
successors are duly elected and qualified. The following nominees
have been recommended by the Board of Directors. It is the intention
of the persons named in the enclosed proxy to vote the shares covered
thereby for the election of the five persons named below, unless the
proxy contains contrary instructions:
Director or Executive
Officer of the Company
Name Age Position or its Predecessor Since
Milton L. Cohen 68 Chairman of the Board 1958
President and Director
Jeffrey Siegel 54 Executive Vice President 1967
and Director
Craig Phillips 47 Vice-President - Manufacturing, 1973
Secretary and Director
Ronald Shiftan 52 Director. Managing Director of 1991
Patriot Group, LLC, a financial
advisory firm. From 1992 to 1996
Mr. Shiftan was Vice Chairman of
HealthCare Investment Corporation, a
manager of private venture
capital partnerships. Prior thereto
he was Managing Director of
Sphere Capital Partners, a financial
advisory firm which acted as financial
advisor to the Company in connection
with its initial public offering
in 1991.
Howard Bernstein 77 Director. Member of a firm of 1992
Certified Public Accountants, Cole,
Samsel & Bernstein LLC (and its predecessors)
for approximately forty-seven years.
Jeffrey Siegel and Craig Phillips are cousins.
Should any of the foregoing nominees become unavailable for any
reason, the persons named in the enclosed proxy intend to vote for
such other persons as the present Board may nominate.
INFORMATION CONCERNING THE BOARD OF LIFETIME
The directors and officers of the Company are elected annually
by the stockholders and Board of Directors of the Company,
respectively. They will serve until the next annual meeting of the
stockholders and Board of Directors of the Company, respectively, and
until their successors have been elected and qualified or until their
earlier resignation or removal.
Directors who are not employees of the Company receive $5,000
per year, in addition to $1,000 for each meeting of the Board
attended, plus reimbursement of reasonable out-of-pocket expenses.
Directors who are employees of the Company do not receive
compensation for such services. The officers and directors of the
Company have entered into indemnification agreements with the
Company.
The Board has established an Audit Committee, the members of
which are Messrs. Ronald Shiftan (Chairman) and Howard Bernstein.
The Audit Committee meets with the Company's independent auditors
during the course of their audit to review audit procedures and
receive recommendations and reports from the auditors. In addition,
the Audit Committee monitors all corporate activities to assure
conformity with good practice and government regulations. The Audit
Committee held one meeting during the year ended December 31, 1996.
The Board has established a Compensation Committee, the members
of which are Messrs. Cohen (Chairman) and Siegel. The Compensation
Committee reviews and establishes the general employment and
compensation practices and policies of the Company and approves
procedures for the administration thereof, including such matters as
the total salary and fringe benefit programs.
The Board has established a Stock Option Committee, the members
of which are Messrs. Cohen (Chairman) and Siegel. The Stock Option
Committee is responsible for administering the 1991 Stock Option
Plan. The Board also established the 1996 Incentive Stock Option Plan
Committee, the members of which are Messrs. Shiftan (Chairman) and
Bernstein. The 1996 Incentive Stock Option Plan Committee is
responsible for administering the 1996 Incentive Stock Option Plan.
The Board does not have a standing nominating committee; rather,
the Board as a whole performs the functions which would otherwise be
delegated to such committee.
The Board of Directors held one meeting and took action by
consent three times during the fiscal year ended December 31, 1996.
Each director attended every Board Meeting and every meeting of
the committee(s) on which he served.
CERTAIN TRANSACTIONS
On April 6, 1984, the Company, pursuant to its 1984 Stock Option
Plan, which has since been terminated, issued options to Messrs.
Milton L. Cohen, Jeffrey Siegel and Craig Phillips, officers and
directors of the Company. On December 17, 1985, the individuals
exercised their options and the following table reflects the numbers
of shares issued (the "Option Shares"), the aggregate purchase price,
average price per share and method of payment.
Number of
Shares of Average
Common Purchase Price per
Name Stock Price Share Cash Notes
Milton L. Cohen 1,713,204 $469,120 $.27 $46,912 $422,208
Jeffrey Sieg 1,390,860 382,720 .27 38,272 344,448
Craig Phil 519,334 149,120 .27 14,912 134,208
Total 3,623,398 $1,000,960 $100,096 $900,864
The promissory notes issued by Messrs. Cohen, Siegel, and Craig
Phillips all bear interest at the rate of 9% per annum, are secured
by the Option Shares and were originally due and payable on December
17, 1995. In December 1995, the Board of Directors determined to
extend the due dates of the notes to December 31, 2000. The interest
has been paid each year when due.
In May 1993, the Company loaned $140,000 to Ronald Shiftan for
the exercise of stock options. The loan bore interest at the rate of
three (3%) percent above prime per annum, payable quarterly, and was
due on ninety (90) days written notice. The note was repaid in April
1996. Mr. Shiftan also had a consulting agreement with the Company
payable monthly at the rate of $16,800 per annum, which agreement was
terminated on March 31, 1996. In April 1996, Mr. Shiftan was paid a
financial advisory fee of $292,500 in connection with the Company's
1996 acquisition of certain assets of Farberware, Inc.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning
the compensation of the Company's Chief Executive Officer and each of
its other most highly compensated executive officers whose annual
compensation exceeded $100,000 for the fiscal year ended December 31,
1996 (the "named executive officers") for services during the fiscal
years ended December 31, 1996, 1995 and 1994:
Long-Term
Compensation
Name and Annual Compensation Securities
Principal Underlying All Other
Position Year Salary Bonus Options Compensation
Milton L. Cohen 1996 $785,730 $364,000 44,000 $5,788 (1)
President and 1995 $996,160 -- -- $5,427 (1)
ChiefExecutive 1994 $894,129 $100,000 -- $5,529 (1)
Officer
Jeffrey Siegel 1996 $481,237 $364,000 44,000 --
Executive Vice 1995 $678,793 -- -- $101,888(2)
President 1994 $608,052 $70,000 -- --
Craig Phillips 1996 $154,852 -- 7,700 --
Vice President 1995 $400,896 -- -- --
Distribution 1994 $400,896 -- -- --
and Secretary
Fred Spivak
Vice President 1996 $162,036 -- 22,000 --
Finance and 1995 $150,849 -- 6,050 --
Treasurer 1994 $146,960 -- -- --
(1) Represents the current dollar value of premiums paid for split
dollar life insurance by the Company on behalf of Mr. Cohen.
(2) Represents compensation from the exercise of nonqualified stock
options.
Option/SAR Grants in Last Fiscal Year
The following table sets forth certain information with respect
to options granted to each of the named executive officers during the
year ended December 31, 1996:
Individual Grants
% of Total
# of Securities Options Granted Grant Date
Underlying to Employees in Exercise Expiration Present
Name Options Granted Fiscal Year Price Date Value
Milton L. Cohen 44,000 19.73% $9.77 7/24/2001 $116,600
Jeffrey Siegel 44,000 19.73% $9.77 7/24/2001 $116,600
Fred Spivak 22,000 9.86% $8.41 9/3/2006 $93,270
Craig Phillips 7,700 3.45% $8.41 9/3/2006 $32,802
(a) Option values reflect Black-Scholes model output for options.
The assumptions used in the model were expected volatility of .35,
risk-free rate of return of 6.21%, a dividend yield of 0% and an
expected option life of 3 years
(b) Option values reflect Black-Scholes model output for options.
The assumptions used in the model were expected volatility of .35,
risk-free rate of return of 6.43%, a dividend yield of 0% and an
expected option life of 6 years.
Aggregated Option/SAR Exercises in the Last Fiscal Year and Fiscal
Year-End Options/SAR Values
The following table sets forth certain information with respect
to each exercise of stock options during the fiscal year ended
December 31, 1996 by each of the named executive officers and the
number and value of unexercised options held by each of the named
executive officers as of December 31, 1996:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Number of
Shares Number of Securities
Underlying Underlying Unexercised Value of Unexercised
Options Value Options/SAR's at In-The-Money Options at
Name Exercised Realized December 31, 1996 December 31, 1996 (1)
Exercisable Unexercisable Exercisable Unexercisable
Milton L. Cohen -- -- -- 44,000 -- $40,040
Jeffrey Siegel -- -- 27,679 44,000 $143,100 $40,040
Fred Spivak -- -- 14,276 28,050 $84,371 $67,062
Craig Phillips -- -- -- 7,700 -- $17,479
(1) Calculated based on the difference between the closing sale
price of the Common Stock, as reported on the Nasdaq National Market
on December 31, 1996, ($10.68), and the exercise price of the
options multiplied by the number of shares of Common Stock underlying
the options.
THE COMPENSATION COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION2
It is the responsibility of The Compensation Committee (the
"Committee") to advise the Board relative to the salaries, stock
options and bonuses granted to the individuals listed on the
executive compensation table.
Milton L. Cohen, Jeffrey Siegel, and Craig Phillips entered into
new employment agreements with the Company in April 1996. The
agreements replaced those entered into in 1984, which had been
amended in 1991.
The Committee determined that the new compensation packages
should include a significant portion of performance-based
compensation. Accordingly, the base salaries of these executives
were reduced and the Company adopted the 1996 Incentive Bonus
Compensation Plan. According to the plan, the President and the
Executive Vice President of the Company will be entitled to bonuses
based on a percentage of the Company's annual net income. The
Committee believes that net income is one indication of the
performance of the President and Executive Vice President. See "1996
Incentive Bonus Compensation Plan". The Company also adopted the
Lifetime Hoan Corporation 1996 Incentive Stock Option Plan which
authorizes the granting of options to Officers of the Company and
its subsidiary.
In determining the merit of the base salaries pursuant to the
new employment agreements, the Committee took into consideration that
these individuals were responsible for the development and
implementation of the strategies which have enabled the Company to
compete effectively in its market. Moreover, the Committee evaluated
the operating responsibility of each individual, his experience in
the housewares industry, his expertise in overseas purchasing and the
amount of time spent abroad. The Committee also examined the impact
each individual had on the profitability and future growth of the
Company.
The Board intends to provide other key executives with
compensation packages sufficient to attract and retain other such key
executives. Such compensation packages will provide for salaries at
levels which are commensurate with the responsibility of the
individual, and his or her prior experience. Such salaries should be
comparable to other companies of comparable size and nature. Salary
reviews are done annually. Bonuses and stock options may be awarded
in accordance with performance, results and competitive compensation
packages.
The Board has ratified the Compensation Committee's evaluation
of the 1996 compensation and performances of Mr. Cohen (Chief
Executive Officer), Mr. Siegel (Executive Vice-President), Mr.
Phillips (Vice President-Distribution) and Mr. Spivak (Vice
President-Finance), in light of the criteria outlined above. The
Committee and the Board believe that the Company's outstanding
performance in a challenging retail environment underscores the
contributions of these individuals and that their hands-on leadership
is an essential element in this success. Furthermore, these
individuals were responsible for the Company in 1996 acquiring a 200
year, royalty-free, exclusive right to use the Farberware name in
connection with the product lines covered by its then existing
license agreement. This acquisition will have a significant impact on
the Company's future profitability.
Compensation Committee
of the Board of Directors
Milton L. Cohen
Jeffrey Siegel
Compensation Committee
Interlocks and Insider Participation
Milton L. Cohen and Jeffrey Siegel who are members of the
Compensation Committee are executive officers of the Company. Mr.
Cohen and Mr. Siegel issued promissory notes to the Company in
payment for shares purchased on exercise of certain stock options in
1985, the due dates of which were extended in 1995. The terms of
such promissory notes are described in "Certain Transactions" above.
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative
total return on the Common Stock with the Nasdaq Market Value Index
and the Housewares Index - Media General Industry Group. The
comparisons in this table are required by the Securities and
Exchange Commission and, therefore, are not intended to forecast or
be inductive of possible future performance of the Company's Common
Stock.
LIFETIME HOAN CORPORATION
Cumulative Total Stockholders Return for the Period December 31,
1991 through December 31, 1996. 3
Nasdaq Media
Lifetime Market General
Period Hoan Index Index
12/31/91 100.00 100.00 100.00
12/31/92 115.17 100.98 98.23
12/31/93 127.58 121.13 88.71
12/31/94 133.25 127.17 95.00
12/31/95 115.40 164.96 108.71
12/31/96 146.59 204.98 147.33
Employment Contracts and Termination of Employment and Change-in-
Control Arrangements
Effective April 7, 1996, the Company entered into new
employment agreements with Messrs. Cohen and Siegel providing for
annual salaries of $700,000 and $400,000, respectively, and for the
payment to them of bonuses pursuant to the Company's 1996 Incentive
Bonus Compensation Plan. The employment agreements will continue
in force until April 6, 1999, and thereafter for additional periods
of one year unless terminated by either the Company or the
executive. The agreements contain, among other things, standard
fringe benefit arrangements, such as disability benefits, insurance
and an accountable expense allowance. The employment agreements
also provide that if the Company is merged or otherwise
consolidated with any other organization or substantially all of
the assets of the Company are sold or control of the Company has
changed (the transfer of 50% or more of the outstanding stock of
the Company) which is followed by: (i) the termination of their
respective employment agreements, other than for cause; (ii) the
diminution of their duties or change in executive position; (iii)
the diminution of their compensation (other than a general
reduction to all employees); or (iv) the relocation of their
principal place of employment to other than the New York
Metropolitan Area, the Company is obligated to pay to such person
or his estate the base salary required pursuant to the employment
agreement for the balance of the term. The employment agreements
also contain restrictive covenants preventing each of them from
competing with the Company for a period of five years from the
earlier of the termination of such person's employment (other than
a termination by the Company without cause) or the expiration of
the employment agreement.
Effective April 7, 1996, Mr. Phillips and the Company entered
into an agreement providing for Mr. Phillip's employment by the
Company as its Vice-President-Manufacturing at an annual salary of
$150,000. The agreement contains, among other things, standard
fringe benefit arrangements, such as disability benefits, insurance
and an accountable expense allowance. The agreement was in effect
until April 6, 1997.
1996 Incentive Bonus Compensation Plan
The Company has adopted a 1996 Incentive Bonus Compensation
Plan (the "Bonus Plan"). The Bonus Plan provides for the award of
a bonus, with respect to each of the ten fiscal years of the
Company beginning with the 1996 fiscal year, to the President and
the Executive Vice President of the Company providing they are then
in the employ of the Company. The bonus payable to each executive
(an "Executive") is an amount equal to 3.5% of net income of the
Company for the year, before any provision for (i) compensation
payable to either of the Executives, including incentive bonus
compensation payable under the Bonus Plan for the year, or (ii)
stock options exercised during such year under the Company's ISO
Plan, (iii) extraordinary items, all as determined and calculated
by the Company's independent auditors using the same principles,
methods and conventions which shall then be used in the preparation
of the Company's audited financial statements, or (iv) any charges
for taxes. .
The Bonus Plan Committee may authorize the advance to the
Executive of an amount equal to 80% of the incentive bonus
compensation that was payable to the Executive (after any
applicable withholding) with respect to the immediately prior
fiscal year. In the event the Executive's incentive bonus
compensation, as finally determined with respect to the fiscal
year, is less than the amount advanced to the Executive, the excess
shall be promptly refunded to the Company be the Executive or shall
be credited to the incentive bonus compensation due the Executive
for the following fiscal year, as determined by the Bonus Plan
Committee.
Limitation on Directors' Liability
The Company's Restated Certificate of Incorporation contains
provisions which eliminate the personal liability of its directors
for monetary damages resulting from breaches of their fiduciary
duty of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
violations under Section 174 of the Delaware General Corporation
Law or for any transaction from which the director derived an
improper personal benefit.
The Company has entered into indemnification agreements with
its officers and directors which provide that the Company will
indemnify the indemnitee against expenses, including reasonable
attorney's fees, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with any civil or criminal action or administrative proceeding
arising out of the performance of his duties as an officer,
director, employee or agent of the Company. Such indemnification
is available if the acts of the indemnitee were in good faith, if
the indemnitee acted in a manner he reasonably believed to be in or
not opposed to the best interests of the Company and, with respect
to any criminal proceeding, the indemnitee had no reasonable cause
to believe his conduct was unlawful.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
To the Company's knowledge, based upon the review of the copies
of such reports furnished to the Company, all reports under Section
16(a) of the Securities Exchange Act of 1934 were timely filed during
the fiscal year end December 31, 1996.
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF APPOINTMENT OF AUDITORS
Subject to stockholder approval and ratification, the Board has
reappointed the firm of Ernst & Young LLP as the independent auditors
to audit the Company's financial statements for the fiscal year
ending December 31, 1997. Ernst & Young LLP has audited the Company's
financial statements since 1984. If the stockholders do not approve
and ratify this appointment, other independent auditors will be
considered by the Board.
Representatives of Ernst & Young LLP are expected to be present
at the annual meeting and will have the opportunity to make a
statement if they desire and to respond to appropriate questions.
The Board recommends that stockholders vote FOR such approval
and ratification.
STOCKHOLDER PROPOSALS
A stockholder proposal intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received by the Company
at its principal executive offices on or before January 6, 1998, to
be included in the Company's proxy statement and proxy relating to
that meeting.
OTHER MATTERS
The Board does not intend to bring any matters before the
Meeting other than those specifically set forth in the Notice of
Annual Meeting of Stockholders and knows of no matters to be brought
before the Meeting by others.
The Financial Statements for the Company are included in the
Annual Report of the Company for the fiscal year ended December 31,
1996 which accompanies this Proxy Statement.
Upon the written request of any person who on the record date
was a record owner of Common Stock of the Company, or who represents
in good faith that he or she was on such date a beneficial owner of
such Common Stock, the Company will send to such person, without
charge, a copy of its Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, including financial statements and
schedules, as filed with the Securities and Exchange Commission.
Requests for this report should be directed to Fred Spivak, Vice
President, Treasurer and CFO, Lifetime Hoan Corporation, One Merrick
Avenue, Westbury, New York 11590.
By Order of the Board of
Directors,
Craig Phillips, Secretary
Dated: May 9, 1997
_______________________________
1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
2 The material in this report is not soliciting material, is not
deemed filed with the Securities and Exchange Commission and is not
incorporated by reference in any filing of the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, whether or not made before or after the date of this Proxy
Statement and irrespective of any general incorporation language in
such filing.
3 Assumes $100 invested on December 31, 1991 and assumes dividends
reinvested. Measurement points are at the last trading day of the
fiscal years ended December 1996, 1995, 1994, 1993, and 1992. The
material in this chart is not soliciting material, is not deemed
filed with the Securities and Exchange Commission and is not
incorporated by reference in any filing of the Company under the
Securities Act of 1993, as amended, or the Securities Exchange Act of
1934, whether or not made before or after the date of this Proxy
Statement and irrespective of any general incorporation language in
such filing.
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