SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SS240.14a-11(c) or SS240.14a-12
MACE SECURITY INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6)i)(3)
[ ] 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:
4) Proposed maximum aggregate value of transaction:
[ ] 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.:
Schedule 14A
------------
3) Filing Party:
Germaine Curtin, Esq., on behalf of
-----------------------------------
Registrant
----------
4) Date Filed:
August 12, 1998
---------------
<PAGE>
Proxy for 1998 Annual Meeting of Shareholders of
MACE SECURITY INTERNATIONAL, INC.
This Proxy is solicited by the Board of Directors.
Know all men by these presents, that I, the undersigned Shareholder
of Mace Security International, Inc., do hereby nominate, constitute and
appoint David Pollitzer and Germaine Curtin (neither being an officer or
employee of the Company) or any of them (with full power to act alone) my
true and lawful attorney(s) with full power of substitution, for me and in my
name, place and stead to vote all the Common Stock of said Company, standing
in my name on its books on August 14, 1998, at the Annual Meeting of its
Shareholders to be held at the Publyk House, located at Harwood Hill on Route
7A in Bennington, Vermont at 9:00 a.m. on September 18, 1998, or any
adjournment thereof, with all the powers the undersigned would possess if
personally present, as follows:
1. To elect the six (6) persons listed below as directors.
[ ] For [ ] Against [ ] Withheld
Jon E. Goodrich Marvin P. Brown R. David Garwood
Neil J. Campolungo Lewis C. Cohen Howard S. Edelman
Withhold authority to vote for __________________________________
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided above).
2. To ratify the selection of Urbach Kahn & Werlin P.C. to serve as
auditors for the fiscal year ending December 31, 1998.
[ ] For [ ] Against [ ] Withheld
This proxy, when properly executed, will be voted as directed ON THE
REVERSE SIDE OF THIS CARD. In the absence of any direction, the shares
represented hereby shall be voted for the matters specifically set forth
herein. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before such meeting or any adjournment
thereof.
The Board of Directors recommends a vote for each of the matters
STATED ON THE REVERSE SIDE OF THIS CARD. This proxy is solicited on behalf of
the Board of Directors and may be revoked prior to its exercise by delivery
of notice of revocation or a later dated proxy to Eduardo Nieves, Jr.,
Secretary of the Company at 160 BENMONT AVENUE, BENNINGTON, VERMONT 05201.
_________________ _____________________________________________ (L.S.)
Date
_____________________________________________ (L.S.)
Signature of Shareholder
<PAGE>
MACE SECURITY INTERNATIONAL, INC.
160 Benmont Avenue
Bennington, Vermont 05201
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held September 18, 1998
---------------
To the Shareholders of Mace Security International, Inc.:
The Annual Meeting of Shareholders of Mace Security International,
Inc. will be held at the Publyk House, located in Harwood Hill on Route 7A,
Bennington, Vermont, on September 18, 1998 at 11:00 o'clock in the forenoon,
Eastern time, for the following purposes:
1. To elect six directors to hold office until the next Annual
Meeting of Shareholders or until their successors have been elected and
qualified;
2. To ratify the selection of auditors for the fiscal year ending
December 31, 1998; and
3. To transact such other business as may properly come before the
Meeting.
Only Shareholders of record at the close of business on August 14,
1998 are entitled to notice of and to vote at the Meeting and at any
adjournment thereof. A complete list of Shareholders entitled to vote will be
available for inspection by Shareholders at the executive offices of the
Company at least ten days before the date of the Meeting.
By order of the Board of Directors,
/s/ Eduardo Nieves, Jr.
Eduardo Nieves, Jr.
Secretary
Dated: August 18, 1998
IMPORTANT--Please sign the enclosed proxy and mail it promptly in the postpaid
return envelope provided, particularly if you do not expect to attend the
Meeting in person.
<PAGE>
(This page is intentionally left blank.)
<PAGE>
MACE SECURITY INTERNATIONAL, INC.
160 BENMONT AVENUE
BENNINGTON, VERMONT 05201
---------------
PROXY STATEMENT
---------------
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Mace Security
International, Inc. (the "Company") to be used at the Annual Meeting of
Shareholders of the Company (the "Meeting") to be held on September 18, 1998
at 11:00 o'clock in the forenoon Eastern time, at the Publyk House located in
Harwood Hill on Route 7A, Bennington, Vermont, for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders. If the enclosed
form of proxy is executed and returned, it may nevertheless be revoked at any
time before it is exercised, either in person at the Meeting or by written
notice or by a duly executed proxy, bearing a later date, sent to the
Secretary of the Company. If no instructions are given on a proxy, it will be
voted as herein recommended by the Board of Directors. The Company
anticipates mailing this proxy statement and the accompanying proxy to
Shareholders on or about August 18, 1998. All expenses of proxy solicitation
will be borne by the Company.
As of August 14, 1998, there were 7,081,666 shares of Common Stock
issued and outstanding, held by approximately 240 holders of record. Each
share of Common Stock is entitled to one vote. Only holders of record of
Common Stock at the close of business on August 14, 1998 will be entitled to
vote at the Meeting.
Proxies will be received and tabulated by the Company's Secretary.
Votes cast in person at the Meeting will be tabulated by an election
inspector appointed by the Company. Abstentions and "broker non-votes" are
included in the determination of the number of shares present at the Meeting.
Abstentions are counted in tabulations of the vote cast on proposals
presented to the Shareholders, whereas "broker non-votes" are not counted in
tabulations of the votes cast. Neither are counted as votes cast "for" a
proposal.
ELECTION OF DIRECTORS
The Company's by-laws provide for directors to hold one year terms.
Directors are elected by a plurality of the Shareholders' votes at the Annual
Meeting of Shareholders and are to hold office until the next Annual Meeting
of Shareholders, or until their successors have been elected and qualified.
The Company's by-laws provide that there shall be not more than twenty-one
nor less than three directors of the Company, with the exact number to be
determined from time to time by the Board. In February 1998, in conjunction
with the appointment of R. David Garwood to the Board of Directors, the Board
resolved to increase the size of the Board from six (6) to seven (7). In
August 1998, in conjunction with Ms. de Ganahl Russell's decision to not
stand for reelection, the Board resolved to decrease the size of the Board as
of the date of the Meeting from seven (7) to six (6).
Proxies cannot be voted for a greater number of persons than the
number of nominees named.
The Board proposes that Jon E. Goodrich, Marvin P. Brown, Lewis C.
Cohen, Neil J. Campolungo, Howard S. Edelman, and R. David Garwood, whose
terms of office expire at the upcoming Annual Meeting of Shareholders, be
re-elected as directors, each to serve for terms to expire at the Meeting in
1999, or until their successors shall be elected and shall qualify. It is not
anticipated that any of these nominees will become unavailable for any
reason, but if that should occur before the Meeting, the appointees named in
the proxy reserve the right in the exercise of their sole discretion to
substitute and to vote for any other person of their choice as nominee in
place of such nominee or to vote for such lesser number of Directors as may
be prescribed by the Board of Directors in accordance with the Company's
Certificate of Incorporation and by-laws. In accordance with Securities and
Exchange Commission regulations, the enclosed proxy card provides
Shareholders with an opportunity to grant to, or withhold from, the
appointees named therein the authority to vote for the election of any
director nominee named above.
The Board of Directors recommends that Shareholders vote FOR the
foregoing nominees.
<PAGE>
The following information is furnished as to the nominees:
<TABLE>
<CAPTION>
Name Age Title Since
<S> <C> <C> <C>
Jon E. Goodrich 53 President and CEO 1987<F1>
Marvin P. Brown 69 Chairman 1997
Neil J. Campolungo 56 Director 1997
Lewis C. Cohen 51 Director 1997
Howard S. Edelman 61 Director and Vice President 1997
R. David Garwood 56 Director 1998
<FN>
<F1> Mr. Goodrich did not serve as President or CEO from January 15, 1996 until
March 14, 1997.
</FN>
</TABLE>
None of the foregoing or their associates have a substantial
interest, direct or indirect, in any matter to be voted on at the Annual
Meeting.
Jon E. Goodrich served as Chairman of the Board of Directors of the
Company from its inception in 1987 until June 1995. He served as President of
the Company from its inception until January 15, 1996 when he tendered his
resignation and was renamed Chairman of the Board. On March 14, 1997, he was
reappointed as President and CEO and resigned as Chairman of the Board. (See
"Employment/Consulting Contracts"). For more than the past five years he also
served as an officer and was a shareholder of two closely held entities that
had business relationships with the Company until January of 1997, at which
time he resigned from his positions and terminated his interest in both
companies.
Marvin P. Brown was elected President, Chief Executive Officer, and
director of the Company in January 1997. On March 14, 1997, Mr. Brown
resigned as President and CEO and assumed the position of Chairman of the
Board. He currently serves as a consultant to the Company on as needed basis.
(See "Employment/Consulting Contracts"). Since 1993 he has been associated
with Wolff Investment Company, Inc., a brokerage firm member of the National
Association of Securities Dealers, as Director of Corporate Finance and
Senior Vice President. From 1988 through 1992 he had been a senior vice
president of Tucker Anthony, a member of the New York Stock Exchange. Prior
to that period, he held senior officer positions with various members of the
New York Stock Exchange. He also has served as President of Zenith
Laboratories, Inc., formerly a leading independent manufacturer of generic
pharmaceuticals from 1968 to 1969. Wolff Investment Group, Inc. has served as
a financial consultant to the Company on several occasions from 1993 to 1996.
Lewis C. Cohen has been a director of the Company since August 7,
1997. Mr. Cohen is the President and sole shareholder of Apahouser Access
Systems, Inc. since 1976. Apahouser Access Systems, Inc. supplies and services
security hardware and electronic systems to industry, institutions and
governmental entities throughout New England and in the Middle East. Mr.
Cohen also serves as Treasurer and is on the Boards of Trustees of Sterling
College in Vermont, the Corporation at Babson College, Wellesley,
Massachusetts and the Institute for Community and Religion at Brandeis
University.
Neil Campolungo has been a Director of the Company since May 10, 1997.
Since 1991, Mr. Campolungo has been the CEO and sole shareholder of NJC
Associates, a consulting/marketing firm for public and private sector
companies. Prior to that, he was Division President of Prentice Hall Legal
and Financial Services, a division of Paramount Communications, a Fortune 100
company. Mr. Campolungo serves on numerous boards of directors.
Howard S. Edelman, CPA has been a director of the Company since
September 1997. He has been employed as a Vice President of the Company since
July 1, 1997 in connection with the acquisition by the Company of MSP, Inc.,
an importer and distributor of unique pepper gas and related personal
protection products primarily to civilian overseas markets, entrepreneurs,
small retail stores and mail order catalog firms. Mr. Edelman was the
president, a director and major stockholder of MSP, Inc. (formerly known as
Global International Security Products) from 1990 until its acquisition by
the Company (See "Certain Relationships and Related Transactions" and
"Employment/Consulting Contracts).
R. David Garwood was appointed a director in February 1998. Mr.
Garwood is, and has been since 1974, the President and founder of R.D.
Garwood, Inc. an Atlanta, Georgia based management firm that assists
manufacturing and marketing companies. Mr. Garwood's clients include
Coca-Cola, Eastman Kodak, Allied Signal, Georgia Pacific, M&M, Monsanto
and others.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table provides information concerning each person who
was an executive officer or director of the Company on August 14, 1998.
Directors hold office until the next Annual Meeting of Shareholders or until
their successors have been elected and qualified. Officers are appointed by
the Board of Directors to hold office until the first meeting of the Board
following the next Annual Meeting of Shareholders and until their successors
are elected and qualified unless sooner terminated.
<TABLE>
<CAPTION>
Name Age Title
<S> <C> <C>
Jon E. Goodrich 53 President and CEO and Director
Marvin P. Brown 69 Chairman
Neil J. Campolungo 56 Director
Lewis C. Cohen 51 Director
Virginia de Ganahl Russell 66 Director
R. David Garwood 56 Director
Howard S. Edelman, CPA 61 Director and Vice President Franchising
Mark A. Capone, CPA 49 Chief Financial Officer, Vice President
and Treasurer
Eric Craword 27 Vice President of Operations
Eduardo Nieves, Jr. 24 Secretary
</TABLE>
See "ELECTION OF DIRECTORS" for a description of the business
experience of each of the directors that are nominated for reelection.
Virginia de Ganahl Russell was appointed a director in January 1997.
Ms. Russell, who previously had served as a director of the Company in 1995, is
President of Natural Elegance, Inc., a leading nationwide marketer of marble
products. Ms. Russell is Chairman of the Board of the Vermont Leadership
Center of East Charleston, VT and is a member or serves on the board of
various organizations. Previously, she had been President of Classic Concepts
since 1993, a business which she subsequently sold. Ms. de Ganahl Russell has
declined to stand for reelection.
Mark A. Capone is Chief Financial Officer, Vice President and
Treasurer and has been employed by the Company in those capacities since
September 1997. He is a Certified Public Accountant and a registered
representative (broker) of the NASD. Prior to joining the Company, Mr. Capone
operated his own accounting firm providing business consulting and tax
preparation services. He has over twenty five years experience in the
accounting profession which includes a Senior Financial position with
International Paper Company. Mr. Capone is responsible for all of the
Company's accounting and treasury functions, as well as corporate
development.
Eric Crawford is Vice President of Operations. He has been employed
by the Company since 1994 and has, during that time, held a variety of
positions including Assistant Plant Manager and Director of Law Enforcement
Sales. Prior to joining the Company, Mr. Crawford obtained a Bachelor of
Science degree from Castleton State College.
Eduardo Nieves, Jr., has been employed by the Company for more than
one year and has, during that time, managed the Investor Relations and
Corporate Communications departments. He served as the Company's Assistant
Secretary from May 1998 until August 1998 at which time he was appointed
Secretary. Prior to joining the Company, Mr. Nieves obtained a Bachelor of
Science degree from Southern Vermont College.
<PAGE>
The number of directors on the Board is currently fixed at seven. As
of the date of the Meeting, in conjunction with Ms. de Ganahl Russell's
decision to not stand for reelection, the Board resolved to decrease the size
of the Board from seven (7) to six (6). Each director serves for a term of
one year or until a successor is All directors who are not also employees are
entitled to receive for their attendance at Board meetings a fee of $500 per
meeting plus out-of-pocket travel, meals and lodging expenses. The Chairman
is entitled to receive $750 per meeting attended. For their attendance at
Committee meetings, Committee Chairman are entitled to receive $500 per
meeting and Committee members are entitled to receive $250 per meeting
attended. In addition, in August 1998, all directors, other than Jon E.
Goodrich, were granted options to purchase 10,000 shares of Common Stock
exercisable at any time following a change in a majority of the Company's
Board as it was constituted on May 1, 1998 (a "Change of Control"). The
exercise price of the options is $1.28 per share. The options expire on the
fifth anniversary of the Change of Control. These options are in addition to
the options to purchase 10,000 shares of Common Stock granted to each
director as a result of becoming a director.
R. David Garwood was appointed to the Board in February 1998. Mr.
Garwood received options to purchase 10,000 shares of the Company's common
stock in connection with his service as a director.
The Board of Directors has the following standing Committees, among
others; the Audit Committee, the Compensation Committee, the Planning
Committee and the Nominating Committee. The Audit Committee consists of
Messrs. Campolungo (Chair), Brown and Cohen. The Audit Committee recommends
matters involving the engagement and discharge of independent auditors,
reviews the plans for and results of the Company's procedures for internal
auditing, and reviews the continuing status of the Company's system of
internal accounting controls. The Compensation Committee consists of Messrs.
Cohen (Chair), Goodrich and Ms. de Ganahl Russell and makes recommendations
regarding management compensation and administers the Company's Non-qualified
Stock Option Plan. The Planning Committee consists of Messrs. Garwood
(Chair), Edelman, Goodrich, and Ms. de Ganahl Russell and is responsible for
recommending long term strategies to the Board. The Nominating Committee
recommends persons to serve as directors of the Company and consists of
Messrs. Garwood (Chair), Brown and Goodrich.
During the fiscal year ended December 31, 1997, the Board of
Directors held six meetings. During such fiscal year, no director, other than
Ms. de Ganahl Russell, attended fewer than 75% of the aggregate of all Board
meetings and meetings of all Committees on which he or she served.
Mr. Brown and the Company have a verbal agreement pursuant to which
Mr. Brown consults with the Company on an as needed basis and receives $500
per day and reimbursement of expenses.
<PAGE>
OWNERSHIP OF SECURITIES
The following table sets forth certain information regarding the
number and percentage of Common Stock (being the Company's only voting
securities) beneficially owned by each director, director-nominee and
executive officer and all officers, directors and director nominees as a
group, as of August 14, 1998. The address for each director, director-nominee
and officer is the Company's principal office at 160 Benmont Avenue,
Bennington, Vermont 05201. The table also discloses information relating to
the only persons (including any "group" as that term if used in Section
13(d)(3) of the Securities Exchange Act of 1934) that, to the Company's
knowledge, owns more than 5% of the Common Stock of the Company:
<TABLE>
<CAPTION>
Amount & Nature of
Owner Beneficial Ownership Beneficial Ownership Percent<F2>
<S> <C> <C>
Jon E. Goodrich<F3> 2,259,246 31.9%
Marvin P. Brown<F4><F5> 380,388 5.3
Neil J. Campolungo<F5><F6> 30,000 <F1>
Lewis C. Cohen<F5><F6><F7> 63,500 <F1>
Howard S. Edelman<F5><F8> 162,700 2.3
Virginia de Ganahl Russell<F5><F6> 60,000 <F1>
R. David Garwood<F5><F6><F9> 57,500 <F1>
Mark A. Capone<F10> 15,000 <F1>
Eric Crawford<F11> 10,000 <F1>
Eduardo Nieves, Jr. 1,000 <F1>
All executive officers and
directors as a group (10 persons) 2,826,834<F12> 38.5%
Ronald I. Heller<F13> 695,375 9.8%
c/o M.H. Meyerson & Co., Inc.
525 Washington Boulevard, 34th Floor
Jersey City, NJ 07310
David and Bette Nagelberg<F14> 695,375 9.8%
Nagelberg Family Trust
c/o M.H. Meyerson & Co., Inc.
525 Washington Boulevard, 34th Floor
Jersey City, NJ 07310
TransTechnology Corporation 580,000 8.2%
700 Liberty Avenue
Union, New Jersey 07083
<FN>
<F1> Indicates beneficial ownership of less than 1%
<F2> Calculation based on 7,081,666 outstanding shares plus shares issuable
to the named person under options/warrants exercisable within 60 days.
Excludes shares held by the named persons' spouses. The named directors
and officers do not have shared voting or dispositive power with respect
to such shares.
<F3> Includes 300,000 shares that are the subject of options granted by Mr.
Goodrich to several individuals in private transactions.
<F4> Includes immediately exercisable options to purchase 300,000 shares of
Common Stock, 100,000 of which were granted by the Company in
consideration of his agreement to join the Company and 200,000 of which
were granted by individuals in private transactions.
<F5> Includes options to purchase 10,000 shares of Common Stock exercisable
in the event of a change in a majority of the Board as constituted on
May 1, 1998.
<F6> Includes immediately exercisable options to purchase 10,000 shares of
Common Stock granted to each director in recognition for serving as a
director.
<PAGE>
<F7> Includes 37,500 shares owned by a 501(c)(2) organization, of which Mr.
Cohen is Trustee, from which he will derive no personal benefit.
<F8> Includes 80,000 shares paid in connection with the acquisition of MSP,
Inc., which are held in escrow and subject to a put option by the
Company in the event MSP, Inc. does not achieve certain pre-tax profit
goals, 15,000 shares of stock paid in connection with the acquisition of
MSP, Inc. which are held in escrow and subject to forfeiture as a result
of the failure of MSP, Inc. to achieve certain pre-tax profit goals, and
options to purchase 20,000 shares of the Company's common stock issued
in connection with Mr. Edelman's employment agreement with the Company
that are subject to forfeiture as a result of the failure of MSP, Inc.
to achieve certain pre-tax profit goals(See "Certain Relationships and
Related Transactions").
<F9> Includes immediately exercisable options to purchase 12,500 shares of
Common Stock which were granted by an individual in a private
transaction.
<F10> Includes immediately exercisable options to purchase 15,000 shares of
Common Stock.
<F11> Includes immediately exercisable options to purchase 10,000 shares of
Common Stock.
<F12> The total number of shares deemed outstanding for the purpose of this
calculation is 7,341,666, which includes shares issuable to any of the
persons listed above under options exercisable within 60 days,
exclusive of shares underlying options granted by individuals on shares
already outstanding (to avoid duplication).
<F13> Includes 445,375 shares of Common Stock in the Ronald I. Heller
Individual Retirement Account and 250,000 shares of Common Stock
directly owned by his wife.
<F14> Reflects shared dispositive power of 695,375 shares of Common Stock as
Trustees of the Nagelberg Family Trust.
</FN>
</TABLE>
<PAGE>
COMPENSATION OF DIRECTORS AND OFFICERS
Summary Compensation of Executive Officers
No executive officer receives any additional compensation for
serving as a director, and all directors who are not also employees are
entitled to receive for their attendance at Board meetings a fee of $500
per meeting attended plus out-of-pocket travel, meals and lodging expenses.
The Chairman receives a fee of $750 per meeting attended. For their attendance
at Committee meetings, Committee Chairman are entitled to receive $500 per
meeting and Committee members are entitled to receive $250 per meeting. Mr.
Brown is also a consultant to the Company on an as needed basis and receives
$500 per day and reimbursement of expenses. Mr. Edelman, who serves as a
director, also serves as Vice President pursuant to an employment contract
(See "Certain Relationships and Related Transactions" and
"Employment/Consulting Contracts"). All directors other than Mr. Goodrich
have been granted immediately exercisable options to purchase 10,000 shares
in conjunction with their becoming a director and options to purchase 10,000
shares of Common Stock exercisable in the event of a change in a majority of
the Board as constituted on May 1, 1998. Otherwise, no other directors who
are not also executive officers received any plan or non-plan compensation
from the Company during the last five fiscal years.
The following table sets forth certain information for 1997
concerning cash earned by, or awarded to, the President and CEO and all other
persons acting in similar capacities. No other executive officer received
annual compensation (consisting solely of base salary and bonus, if any) in
excess of $100,000 for the year ended December 31, 1997. None of the named
individuals received non-cash compensation, except for perquisites and other
personal benefits, securities or property, which did not exceed 10% of the
aggregate amount of the total annual salary and bonus reported for the named
executive officer.
<TABLE>
Annual Compensation Table
<CAPTION>
Year Ended Annual Other
Name and Principal Position December 31 Salary Bonus Compensation
<S> <C> <C> <C> <C>
Jon E. Goodrich<F1> 1997 $125,214 $ -- $ --
President and Chief 1996 124,023 25,000<F4> --
Executive Officer 1995 161,000 -- --
Marvin P. Brown<F2> 1997 $ 70,000 $ -- $ --
Former President and Chief 1996 -- -- --
Executive Officer 1995 -- -- --
Robert D. Norman<F3> 1997 $ 54,615 $ -- --
Former President and Chief 1996 71,655 -- $27,800<F4>
Executive Officer 1995 -- -- --
<FN>
<F1> Mr. Goodrich served as President and CEO until January 15, 1996,
and, for the remainder of 1996, served as an advisor to the Board of
Directors. He was reappointed as President and CEO on March 14, 1997.
<F2> Tendered his resignation as President and CEO effective March 14,
1997, at which time he was appointed Chairman of the Board.
Includes sums received by Mr. Brown as a consultant to the Company,
in addition to his salary for January through March of 1997.
(See "Employment/Consulting Agreements".)
<F3> Tendered his resignation effective 1/10/97.
<F4> Represents the issuance of 20,000 shares of the Company's Common Stock
in connection with his employment as President, valued at $1.39 per
share.
</FN>
</TABLE>
<PAGE>
Options/Warrants
In September 1993, the Board of Directors of the Company adopted the
Mace Security International, Inc. Non-qualified Stock Option Plan (the
"Plan"), which was approved by the stockholders of the Company. The Plan
provides for the issuance of up to 630,000 shares of Common Stock upon
exercise of the options. The options are considered non-qualified stock
options and are not transferable by the recipient.
The Plan is administered by the Compensation Committee of the Board
of Directors, which may grant options to employees, former employees,
directors and distributors for, and consultants to, the Company. The term of
each option may not exceed fifteen years from the date of grant. Immediately
exercisable options to purchase approximately 565,000 shares of Common Stock
are currently outstanding to employees, former employees, a consultant, a
former consultant, directors and former directors pursuant to the Plan. To
date no options have been exercised.
The following table shows certain information with respect to
options granted in 1997 to the named executive officers of the Company.
<TABLE>
Options Granted in last Fiscal Year
<CAPTION>
Number Percentage Exercise Expiration
Name of Options of Total Price Date
<S> <C> <C> <C> <C>
Jon E. Goodrich -- -- -- --
Marvin P. Brown 100,000 61.5% $1.50 5/10/12
Robert D. Norman -- -- -- --
</TABLE>
The following table shows certain information with respect to the
year-end value of options held by the named executive officers of the
Company. No options were exercised during 1997.
<TABLE>
Fiscal Year-End Option Values<F1>
<CAPTION>
Value of Unexercised Number of Unexercised In the Money<F2>
Options at 12/31/97 Options at 12/31/97 Options at 12/31/97
<S> <C> <C>
Jon E. Goodrich -- --
Marvin P. Brown<F3> 100,000 --
Robert D. Norman<F4> 10,000 --
<FN>
<F1> All options are immediately exercisable
<F2> Based upon a 12/31/97 closing price of $.875 per share
<F3> Options issued in connection with his role as President and Chief
Executive Officer
<F4> Options issued in connection with his role as a director
</FN>
</TABLE>
<PAGE>
In connection with the Company's initial public offering, the
Company granted C.L. King & Associates, Inc., its underwriter, warrants to
purchase 75,000 shares of the Company's Common Stock at a per share exercise
price of $6.60, and certain "demand" and "piggyback" registration rights with
respect to such shares, for a four year period which began November 12, 1994.
In connection with the acquisition of the trademarks and assets of
Kindergard Corporation, the Company granted to the stockholders of Kindergard
Corporation warrants to purchase 60,000 shares of the Company's Common Stock
at a per share exercise price equal to $4.25 exercisable until August 2004.
In connection with the sale of substantially all of the assets of
the Company's law enforcement division, the Company granted to Armor
Holdings, Inc. warrants to purchase 300,000 shares of the Company's Common
Stock at a per share exercise price equal to $1.25, and certain registration
rights with respect to such shares, exercisable until July 2001.
Employment/Consulting Contracts
The following is a description of employment/consulting agreements
for all executive officers of the Company named in the preceding table for
the fiscal year ended December 31, 1997.
Jon E. Goodrich was employed by the Company under an employment
agreement until January 1996. Thereafter he was retained as an advisor to the
Board under an advisory employment agreement. Mr. Goodrich is currently
employed as President and CEO under an employment agreement dated as of March
14, 1997. The agreement supersedes the September 1, 1993 employment agreement
between Mr. Goodrich and the Company as well as the Advisory Employment
Agreement dated as of January 17, 1996 and is effective until September 1,
1998. Mr. Goodrich is entitled to an annual salary of $125,000. The agreement
prohibits Mr. Goodrich from accepting employment with any other entity and
further prohibits him from competing with the Company for a two year period
following his voluntary termination of employment with the Company or
termination of his employment by the Company for cause, as defined in the
agreement. Should Mr. Goodrich's employment be terminated without cause, he
shall be entitled to all payments for the term of the agreement. The Board of
directors approved the extension of Mr. Goodrich's employment agreement for
one year, provided that such agreement will terminate in the event Mr.
Goodrich purchases any operating assets of the Company.
Mr. Brown, who serves as Chairman of the Board, and the Company have
a verbal agreement pursuant to which Mr. Brown consults with the Company on
an as needed basis and receives $500 per day and reimbursement of expenses in
consideration of his consulting services.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company entered into an employment agreement with Mr. Edelman, a
director and Vice President of the Company, pursuant to which Mr. Edelman is
responsible to develop and manage a franchise program for the Company. The
agreement was dated as of July 1, 1997, had a one-year term and provided Mr.
Edelman with an annual salary of $78,000 plus options to purchase 20,000
shares, exercisable for a five year period commencing with the one year
anniversary of his agreement at an exercise price of $1.25. The options are
subject to forfeiture as a result of the failure of MSP, Inc., a subsidiary
acquired from Mr. Edelman, to achieve certain pre-tax profit goals. The
Company and Mr. Edelman have continued this agreement on a month-to-month
basis since its expiration.
During 1997 the Company retained the law firm of Donovan & O'Connor,
LLP, a firm at which Mr. Goodrich's brother is a principal, to render legal
services in litigation matters and general corporate matters. The Company has
paid legal fees and disbursements of approximately $54,354 in 1997 and
$12,000 in 1998 through August 4, 1998.
The Company believes that all transactions with related individuals
and entities were on terms at least as favorable to the Company as those that
would have been reached with unrelated third parties.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Each director and executive officer of the Company who is subject to
Section 16 of the Securities Exchange Act of 1934, and each other person who
beneficially owns more than 10% of the Company's Common Stock, is required by
Section 16(a) of that Act to report to the Securities and Exchange Commission
by specified dates his or her ownership of, and transactions in, the
Company's Common Stock. Copies of such reports on Forms 3, 4 and 5 must also
be provided to the Company. All required filings have been made to date.
Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its fiscal year ended December 31, 1997, no
person known to be the beneficial owner of more than 10% of the Company's
outstanding Common Stock, failed to file on a timely basis, reports required
to be filed by Section 16(a) of the Exchange Act during the most recent
fiscal year.
Messrs. Cohen, Crawford and Nieves failed to file timely
Forms 3 to disclose their respective appointment as directors or officers.
The Form 3 filed for Mr. Garwood failed to include certain shares he owned at
the time he became a director. Mr. Cohen failed to file timely a report on
Form 4 regarding purchases of stock. Mr. Capone failed to file a Form 4 with
respect to options granted to him by the Company. Certain persons who had
been officers of the Company and have since resigned failed to file Forms 4
to disclose their termination as officers.
<PAGE>
AUDITORS
The Board of Directors has selected Urbach Kahn & Werlin, P.C. to
audit the Company's financial statements for the fiscal year ending December
31, 1998. Urbach Kahn & Werlin, P.C. audited the financial statements of the
Company for the fiscal year ended December 31, 1997. Representatives of
Urbach Kahn & Werlin, P.C. are expected to be present at the Meeting, with
the opportunity to make a statement and to be available to respond to
appropriate questions. At the meeting, the Shareholders will be asked to
ratify the selection.
The Board of Directors recommends that Shareholders vote FOR this
Proposal.
SHAREHOLDERS' PROPOSALS AND NOMINATIONS FOR DIRECTORS
FOR THE 1999 ANNUAL MEETING
Shareholder proposals intended for inclusion in the proxy material
for the 1999 Annual Meeting, and nominations for directors to be elected at
the 1999 Annual Meeting, must be received by the Secretary of the Company at
the Company's offices at 160 Benmont Avenue, Bennington, Vermont, 05201 not
later than April 18, 1999 in order for such proposals and nominations to be
included in the proxy material for the 1999 Annual Meeting of Shareholders.
The notice of nomination shall contain the following information: (a) the
full names and residence and business addresses of each of the proposed
nominees; (b) the business experience of each of the proposed nominees for
the most recent five (5) years, including principal occupations and
employment; (c) name, principal business and size of any entity in which such
occupations and employment were carried on; (d) the number of shares of the
Company's Common Stock owned directly or indirectly by each of the proposed
nominees; (e) a description of any legal or administrative proceedings or
order or decree any nominee is or has been a party to or is or was subject to
during the most recent five (5) years; (f) the name and residence and
business address of the Shareholder who makes the nomination; (g) the number
of shares of the Company's Common Stock owned directly or indirectly by the
Shareholder who makes the nomination; and (h) any other information regarding
each of the nominees required by Schedule 14A of the Securities Exchange Act
of 1934, as amended or any successor provision.
ADDITIONAL INFORMATION AND OTHER MATTERS
The Company's financial statements, and Management's Discussion and
Analysis of Financial Condition and Results of Operations, are incorporated
herein by reference to the Company's 1997 Annual Report on Form 10-KSB and
the Company's 1997 Annual Report on Form 10-KSB/A, which are being delivered
to Shareholders with this Proxy Statement.
Additional copies of the Company's Annual Report on Form 10-KSB and
the Company's 1997 Annual Report on Form 10-KSB/A as filed with the
Securities and Exchange Commission, together with a list describing the
exhibits filed therewith, may be obtained free of charge by writing to the
Company, 160 Benmont Avenue, Bennington, Vermont 05201. Any exhibit may be
obtained, at a reasonable charge, by writing to the same address.
Management is not aware of any matters to be presented for action at
the Meeting, other than the matters mentioned above, and does not intend to
bring any other matters before the Meeting. However, if any other matters
should come before the Meeting, it is intended that the holders of the
proxies will vote them in their discretion.
By order of the Board of Directors,
/s/ Eduardo Nieves, Jr.
Eduardo Nieves, Jr.
Secretary
Dated: August 18, 1998
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