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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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
[_] Confidential, for use of the Commission only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to (S)240.14a-11(c) or (S)240.14a-12
Samsonite Corporation
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to exchange Act Rule 0-11 (Set forth the amount of which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
- --------------------------------------------------------------------------------
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
[LOGO OF SAMSONITE CORPORATION]
SAMSONITE CORPORATION
NOTICE OF
1998
ANNUAL MEETING
AND
PROXY STATEMENT
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, SIGN, DATE AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE.
SAMSONITE CORPORATION
11200 East Forty-Fifth Avenue
Denver, Colorado 80239
<PAGE>
SAMSONITE CORPORATION
August 4, 1998
Dear Samsonite Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held at 10:00 A.M. Mountain Time at the Embassy Suites Hotel, 4444 North
Havana Street, Denver, Colorado on August 28, 1998. Information about the
meeting, the nominees for election as directors of the Company and the other
proposals to be considered at such meeting are presented in the Notice of Annual
Meeting and the Proxy Statement on the following pages.
In addition to the formal items of business to be brought before the
meeting, there will be a report on our Company's operations during fiscal year
1998, which ended January 31, 1998. This will be followed by a question and
answer period.
Your participation in the Company's affairs is important, regardless of the
number of shares you hold. To ensure your representation, even if you cannot
attend the meeting, please sign, date and return the enclosed proxy card
promptly.
We look forward to seeing you on August 28, 1998.
Sincerely,
Luc Van Nevel
President and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING
August 4, 1998
The Annual Meeting of Stockholders of Samsonite Corporation will be held in the
Embassy Suites Hotel, 4444 North Havana Street, in Denver, Colorado on August
28, 1998, at 10:00 A.M. local time for the following purposes:
1. To elect four Class III directors for a term of three years and until
their successors are elected and qualified;
2. To approve and ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for fiscal 1999; and
3. To approve the Samsonite Corporation FY 1999 Stock Option and Incentive
Award Plan; and
4. To transact such other business as properly may come before the meeting.
Stockholders of record at the close of business on August 4, 1998, are entitled
to receive notice of, and to vote at, the meeting. A list of stockholders
entitled to vote will be kept at the office of Corporate Secretary, Samsonite
Corporation, 11200 East 45th Avenue, Denver, Colorado 80239, for a period of ten
days prior to the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas R. Sandler
Secretary
Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
August 4, 1998
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PAGE
----
GENERAL INFORMATION............................................................... 1
VOTING OF PROXIES................................................................. 1
ATTENDANCE AT ANNUAL MEETING...................................................... 2
SHAREHOLDER PROPOSALS............................................................. 2
PROPOSAL 1. Election of Directors............................................ 2
Directors Meetings and Compensation.............................. 3
Certain Committees of the Board.................................. 3
Compliance with Exchange Act Requirements........................ 4
PROPOSAL 2. Approval and Ratification of Appointment of Independent Auditors. 4
PROPOSAL 3. Approval of the Samsonite Corporation FY 1999 Stock Option
and Incentive Award Plan......................................... 4
DIRECTORS......................................................................... 7
EXECUTIVE OFFICERS................................................................ 8
EXECUTIVE COMPENSATION............................................................ 8
PERFORMANCE GRAPH.................................................................20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....................21
OTHER MATTERS.....................................................................23
</TABLE>
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Samsonite Corporation ("Samsonite" or the "Company")
of proxies to be voted at the Annual Meeting of the Company's stockholders on
August 28, 1998. This Proxy Statement, the accompanying proxy card and the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1998
are being mailed to stockholders on or about August 10, 1998. Business at the
Annual Meeting will be conducted in accordance with the procedures determined by
the presiding officer and generally will be limited to matters properly brought
before the meeting by or at the suggestion of the Board of Directors or by a
stockholder pursuant to provisions of the Company's By-laws that require advance
notice and disclosure of relevant information.
The number of voting securities of the Company outstanding on August 4,
1998, the record date for the meeting, was 10,433,756 shares of common stock,
par value $.01 per share ("Common Stock"), each share being entitled to cast one
vote. Unless otherwise indicated, information presented herein is as of July
31, 1998.
VOTING OF PROXIES
Since many of the Company's stockholders are unable to attend the Company's
Annual Meeting, the Board of Directors solicits proxies to give each stockholder
an opportunity to vote on all matters scheduled to come before the meeting and
set forth in this Proxy Statement. Stockholders are urged to read carefully the
material in this Proxy Statement, specify their choice on each matter by marking
the appropriate boxes on the enclosed proxy card and sign, date and return the
card in the enclosed envelope.
By completing and returning the accompanying proxy card, the stockholder
authorizes Thomas R. Sandler and Richard H. Wiley, as designated on the face of
the proxy card, to vote all shares for the stockholder. All returned proxy
cards that are properly executed will be voted as the stockholder directs. If
no direction is given, the executed proxy cards will be voted FOR Proposals 1
and 2 described in this Proxy Statement. A proxy card may be revoked by a
stockholder at any time before it is voted at the Annual Meeting by giving
notice of revocation to the Company in writing, by execution of a later dated
proxy card, or by attending and voting at the Annual Meeting.
The holders of all outstanding shares of Common Stock are entitled to vote
in person or by proxy on all matters that may come before the meeting. The
holders of shares entitled to cast not less than a majority of the votes must be
present in person or represented by proxy at the meeting in order to constitute
a quorum for the transaction of business; all shares present in person or
represented by proxy are counted for quorum purposes.
Directors are elected by a plurality of the votes of the shares present or
represented at the meeting and entitled to vote. Under applicable Delaware law,
in tabulating the vote for the election of directors, broker non-votes and
directions to withhold will be disregarded and will have no affect on the
outcome of the vote.
The vote required with respect to each of the other matters to be presented
at the Annual Meeting, as well as the effect of abstentions and broker non-
votes, is set forth in connection with the description of each such matter set
forth herein.
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ATTENDANCE AT ANNUAL MEETING
To ensure the availability of adequate space for the Company's stockholders
wishing to attend the meeting, priority seating will be given to stockholders of
record, beneficial owners of the Company's stock having evidence of such
ownership, or their authorized representatives, and invited guests of
management. In addition, a stockholder may bring a guest. Those unable to
attend may request from the Secretary a copy of the report of the proceedings of
the meeting.
SHAREHOLDER PROPOSALS
Other than the matters to be presented by the Company as set forth in the
Notice of Annual Meeting, the Company knows of no other matters that properly
may be presented at the meeting. Proposals and suggestions received from
stockholders are given careful consideration. Stockholder proposals are
eligible for consideration for inclusion in the proxy statement for the 1999
Annual Meeting in accordance with Rule 14a-8 under the Securities Exchange Act
1934, as amended (the "Exchange Act") if they are received by the Company on or
before January 31, 1999. Any proposal should be directed to the attention of
the Corporate Secretary, Samsonite Corporation, 11200 East 45th Avenue, Denver,
Colorado 80239. In order for a shareholder proposal submitted outside of Rule
14a-8 to be considered "timely" within the meaning of Rule 14a-4(c), such
proposal must be received by the Company on or prior to the June 4, 1999 and in
order for a proposal to be timely under the Company's Bylaws it must be received
on or prior to June 4, 1999, but no earlier than May 5, 1999.
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors is classified into three classes serving staggered
three-year terms. The terms of four directors expire in 1998.
Each nominee will be elected to serve a term of three years expiring in
2001 (Class III), until a successor is elected and qualified.
Information concerning the nominees for election as directors is presented
below. Each nominee has consented to serve as a director if elected. Should
any nominee become unable to accept nomination or election, it is intended that
the enclosed proxy card will be voted for the election of a nominee designated
by the Board of Directors, unless the Board of Directors reduces the number of
directors.
The ages of directors listed below are as of July 31, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED
BELOW.
Bernard Attal. Age 34. Mr Attal has been a director of the Company since
March 28, 1996, when the Board of Directors elected him to the Board. Mr. Attal
is a Director of Heights Advisors, which acts as a financial advisor and a
representative for certain European institutional investors with respect to
their investments in the United States. From 1992 to 1995, Mr. Attal was a Vice
President at Credit Lyonnais Securities. Prior to 1992, Mr. Attal was Chief
Financial Officer of Altus Patrimoine & Gestion, a money management firm. Mr.
Attal is a director of New California Life Holdings, Inc. and the Florsheim
Group, Inc.
Leon D. Black. Age 47. Mr. Black has been a director of the Company
since 1993. Mr. Black is one of the founding principals of Apollo Advisors,
L.P., which, together with its affiliates, acts as managing general partner of
Apollo Investment Fund, L.P., AIF II, L.P. and Apollo Investment Fund III, L.P.,
private securities investment funds, and Lion Advisors, L.P., which acts as
financial advisor to and representative for certain institutional investors with
respect to securities investments, and of Apollo Real Estate Advisors, L.P.,
which serves as managing general partner of the Apollo Real Estate Investment
Funds, private real estate oriented investment funds. Mr. Black is a director
of Converse, Inc., Vail Resorts, Inc., Telemundo Group, Inc., and Sequa
Industries, Inc.
Richard R. Nicolosi. Age 50. Mr. Nicolosi has been Chairman of the Board
of Directors of the Company since May 15, 1996. He served as President and
Chief Executive Officer from May 15, 1996 to May 15, 1998. From 1994
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to 1996, Mr. Nicolosi was Senior Vice President of Scott Paper Company. From
1992 to 1994, Mr. Nicolosi was President of Nicolosi & Associates, a privately
owned business consulting firm. From 1969 to 1992, Mr. Nicolosi was employed by
Procter & Gamble in various positions, the latest being President, Pulp and
Paper Sector, Corporate Group Vice President, as well as a member of the
Executive Committee. He is a member of the Advisory Board of Directors of
Domino's Pizza, Inc.
Luc Van Nevel. Age 51. Mr. Van Nevel was elected as President of the
Company in February 1998 and became Chief Executive Officer and a Director in
May 1998. Prior to that time, Mr. Van Nevel held various positions including
Chief Operating Officer (since September 1997) and President of Samsonite Europe
N.V. (since 1989). Since 1984, he has held the additional position of Managing
Director of Samsonite Europe N.V. He joined Samsonite Europe N.V. in 1975 as
Manager, Financial Planning and progressed to the position of Controller before
being promoted to President of Samsonite Europe in 1989. Mr. Van Nevel worked
in audit positions with Touche Ross & Co. in Europe for five years before
joining Samsonite.
DIRECTORS MEETINGS AND COMPENSATION
During the Company's fiscal year 1998 (the year ended January 31, 1998),
the Board of Directors met eight times. Each director attended 75% or more of
the meetings of the Board of Directors and each committee of the Board on which
he served, except for Mr. Ammon who attended 25% of the Board meetings and 33%
of the meetings of committees on which he served. Mr. Rowan attended 67% of the
meetings of the Audit Committee.
Each member of the Board of Directors of the Company, other than a director
employed by the Company, is entitled to receive a fee of $25,000 per annum for
serving on the Board of Directors. In fiscal 1997, the Company adopted the 1996
Directors' Stock Plan whereby Board members may elect to receive a portion of
their fees in the Company's Common Stock rather than cash. During fiscal 1998,
based on the elections of the directors, approximately 88% of the aggregate
directors fees were paid solely in Company shares. In addition, directors are
reimbursed for all reasonable travel and other expenses of attending meetings of
the Board or a committee thereof.
CERTAIN COMMITTEES OF THE BOARD
The Board of Directors has standing Audit, Executive, and Compensation
Committees. The Board of Directors does not have a standing Nominating
Committee.
AUDIT. During fiscal 1998, the members of the Audit Committee were R.
Theodore Ammon, Richard R. Nicolosi, Mark H. Rachesky and Marc J. Rowan. The
Audit Committee met three times during fiscal 1998.
The Audit Committee is primarily concerned with the effectiveness of the
Company's accounting policies and practices, financial reporting and internal
controls. The Audit Committee is authorized (i) to make recommendations to the
Board of Directors regarding the engagement of the Company's independent
auditors, (ii) to review the plan, scope and results of the annual audit, the
independent auditors' letter of comments and management's response thereto and
the scope of any non-audit services that may be performed by the independent
auditors, (iii) to review the Company's policies and procedures with respect to
internal accounting and financial controls and (iv) to review any changes in
accounting policy.
EXECUTIVE. During fiscal year 1998, the members of the Executive Committee
were Robert H. Falk, Richard R. Nicolosi, and Marc J. Rowan. The Executive
Committee met twice and acted by unanimous consent nine times during fiscal
1998.
The Executive Committee has responsibility for the approval of corporate
governance matters requiring action by the Board of Directors.
COMPENSATION. The Compensation Committee met one time during fiscal 1998
and acted by unanimous written consent five times. The members of the
Compensation Committee during fiscal 1998 were R. Theodore Ammon, Robert H. Falk
and Marc J. Rowan.
3
<PAGE>
The Compensation Committee is authorized and directed to review and approve
the compensation and benefits of the executive officers, to review and approve
the annual salary plans, to review management organization and development, to
review and advise management regarding the benefits, including bonuses, and
other terms and conditions of employment of other employees, to administer any
stock option plans that may be adopted and the granting of options under such
plans, and to review and recommend for the approval of the Board the
compensation of directors.
The Compensation Committee Report begins on page 8.
COMPLIANCE WITH EXCHANGE ACT REQUIREMENTS
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities ("principal stockholders") to file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of equity securities of the
Company. Officers, directors and principal stockholders are required to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, during fiscal 1998, all section 16(a)
requirements applicable to officers, directors and principal stockholders were
complied with, except that the Form 5 with respect to annual changes in
ownership of equity securities with respect a purchase of 135 shares of common
stock by Mr. Solarz was filed late.
PROPOSAL 2. APPROVAL AND RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors desires to obtain from the Company's stockholders an
indication of their approval or disapproval of the Board's action in appointing
KPMG Peat Marwick LLP as independent auditors of the Company and its
subsidiaries for the Company's fiscal year 1999 (year ending January 31, 1999).
The Board of Directors reviewed the performance of KPMG Peat Marwick LLP in
prior years as well as the firm's reputation for integrity and competence in the
fields of accounting and auditing, and the status of litigation involving the
firm. Based on such review, the Board of Directors approved the appointment of
KPMG Peat Marwick LLP as independent auditors.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting and will have the opportunity to make such statements as they may
desire. They will also be available to respond to any questions from
stockholders.
The affirmative vote of a majority of the votes cast with respect to
Proposal 2 is required for its approval. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE FOLLOWING RESOLUTION, WHICH WILL BE PROPOSED AT THE MEETING:
"RESOLVED, that the appointment, by the Board of Directors of the Company,
of KPMG Peat Marwick LLP as independent auditors of the Company and its
subsidiary companies, for the fiscal year 1999, be and hereby is approved
and ratified."
In the event the resolution is defeated, the adverse vote will be
considered a direction to the Board of Directors to select other auditors for
the following year. However, because of the difficulty and cost of making any
substitution of auditors, it is contemplated that the appointment for the fiscal
year 1999 will be permitted to stand unless the Board finds other good reasons
for such a change.
PROPOSAL 3. A PROPOSAL TO APPROVE THE SAMSONITE CORPORATION FY 1999 STOCK
OPTION AND INCENTIVE AWARD PLAN
Effective July 31, 1998, the Board adopted, subject to stockholder
approval, the Samsonite Corporation FY 1999 Stock Option and Incentive Award
Plan (the "Stock Option Plan"). The Stock Option Plan is being submitted to the
stockholders for approval at the meeting so that the Stock Option Plan may
comply with the requirements of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code").
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The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote is required to adopt this Proposal.
In accordance with Delaware law, in determining whether the Proposal has
received the requisite number of affirmative votes, abstentions will be counted
as being present and will have the same effect as a vote against the Proposal.
Broker non-votes will not be counted as present and entitled to vote and,
accordingly, will not affect the vote on this Proposal.
The following description of the Stock Option Plan is not intended to be
complete and is qualified in its entirety by the complete text of the Stock
Option Plan, a copy of which is attached hereto as Exhibit A.
DESCRIPTION OF THE PRINCIPAL FEATURES OF THE STOCK OPTION PLAN
The purpose of the Stock Option Plan is to benefit the stockholders of the
Company by enabling the Company to attract and retain the services of the most
highly qualified professional and managerial employees and other persons
rendering services to the Company, which the Board considers essential to the
long-range success of the Company, by providing long-term incentives linked to
interests of the stockholders of the Company. The Stock Option Plan provides
for an initial authorization of 750,000 shares of Common Stock for issuance
thereunder.
The Stock Option Plan is administered by the Compensation Committee of the
Company's Board of Directors (the "Committee"). The Committee consists of two
or more persons, each of whom is a "non-employee director" within the meaning of
Rule 16b-3 under the Exchange Act and an "outside director" as defined in
Section 162 (m) of the Code. Subject to the terms of the Stock Option Plan, the
Committee has full authority to determine, among other things, the persons to
whom awards under the Stock Option Plan ("Awards") will be made, the number of
shares of Common Stock subject to Awards, and the specific terms and conditions
applicable to Awards, including, but not limited to, the duration, vesting and
exercise or other realization periods, performance criteria, if any, the
circumstances for forfeiture and the form and timing of payment with respect to
any Award.
Performance criteria are predetermined by the Committee and are based on
one or more of the following criteria (I) pre-tax income or after-tax income,
(ii) operating profit, (iii) return on equity, assets, capital or investment,
(iv) earnings or book value per share, (v) sales or revenues, (vi) operating
expenses, (vii) Common Stock price appreciation and (viii) implementation or
completion of critical projects of processes.
Where applicable, the performance criteria may be expressed in terms of
attaining a specific level of the particular criteria or the attainment of a
percentage increase or decrease in the particular criteria, and may be applied
to one or more of the Company, a subsidiary, or a division or strategic business
unit of the Company, or may be applied to the performance of the Company
relative to a market index, a group of other companies or a combination thereof,
all as determined by the Committee. Performance criteria may include threshold
levels of performance below which no payment will be made (or no vesting will
occur), levels of performance at which specified payments will be made (or
specified vesting will occur), and a maximum level of performance above which no
additional payment will be made (or at which full vesting will occur). Each of
the foregoing performance criteria shall be determined in accordance with
generally accepted accounting principles and shall be subject to certification
by the Committee; provided that the Committee shall have the authority to make
equitable adjustments to the performance criteria in recognition of unusual or
nonrecurring events affecting the Company or any subsidiary, in response to
changes in applicable laws or regulations, or to account for items of gain, loss
or expense determined to be extraordinary or unusual in nature or infrequent in
occurrence or related to the disposal of a segment of a business or related to a
change in accounting principles.
Grants of a variety of Awards, including stock options, stock appreciation
rights, restricted stock and restricted stock units may be made under the Stock
Option Plan to selected employees, independent contractors and directors of the
Company and its present or future subsidiaries, at the discretion of the
Committee. Stock options may be either "incentive stock options," as such term
is defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or nonqualified stock options. The exercise price of a nonqualified
stock option may be at or below the fair market value per share of Common Stock
on the date of grant; generally, the exercise price of an incentive stock option
may not be less than the fair market value per share of Common Stock on the date
of grant. The stock options will become exercisable in accordance with a
schedule established at the time of grant. The Committee will determine each
stock option's expiration date; provided that no incentive stock option may be
exercised more than ten years after the date of grant. The Stock Option Plan
provides that the exercise price for stock options granted thereunder may, as
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<PAGE>
determined by the Committee, be payable in cash, shares of Common Stock, a
combination of cash and Common Stock or by such other payment method as the
Committee may prescribe.
In addition to the foregoing Awards, the Committee may, in its sole
discretion, grant such other forms of stock-based and cash-based Awards as it
may determine to be consistent with the purpose of the Stock Option Plan.
Inasmuch as Awards under the Stock Option Plan will be granted at the sole
discretion of the Committee and that performance criteria may vary from year to
year and participant to participant, benefits under the Stock Option Plan are
not determinable.
The Stock Option Plan may, at any time and from time to time, be altered,
amended, suspended, or terminated by the Board of Directors, in whole or in
part; provided that no amendment that requires stockholder approval in order for
the Stock Option Plan to continue to comply with Section 162 (m) of the Code or
any applicable listing requirement shall be effective unless such amendment has
been approved by the Company's stockholders. In addition, no amendment may be
made that adversely affects any of the rights of a grantee under any Award
theretofore granted, without such grantee's consent.
In any year, no Stock Option Plan participant may be granted awards with
respect to more than one-third of the shares of Common Stock reserved for
issuance under the Stock Option Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a brief summary of certain United States
federal income tax consequences under current federal income tax laws relating
to an Award under the Stock Option Plan. This summary is not intended to be
exhaustive and, among other things, does not describe state, local or foreign
income and other tax consequences.
NONQUALIFIED STOCK OPTIONS ("NQSO"). An optionee will not recognize any
taxable income upon the grant of an NQSO. The Company will not be entitled to
tax deduction with respect to the grant of NQSO's.
Upon exercise of an NQSO, the excess of the fair market value of the Common
Stock on the exercise date over the exercise price will be taxable as
compensation income to the optionee and will be subject to applicable
withholding taxes. The Company will generally be entitled to a tax deduction at
that time in the amount of such compensation income. The optionee's tax basis
for the Common Stock received pursuant to the exercise of an NQSO will equal the
sum of the compensation income recognized and the exercise price.
In the event of a sale or other disposition of Common Stock received upon
the exercise of an NQSO, any appreciation or depreciation after the exercise
date generally will be taxed as capital gain or loss and will be long-term
capital gain or loss if the holding period for such Common Stock (which begins
upon such exercise) is more than one year.
INCENTIVE STOCK OPTIONS ("ISO"). An optionee will not recognize any
taxable income at the time of grant or timely exercise of an ISO and the Company
will not be entitled to a tax deduction with respect to such grant or exercise.
Exercise of an ISO may, however, give rise to taxable compensation income, and a
corresponding tax deduction to the Company, if the ISO is not exercised on a
timely basis (generally, while the optionee is employed by the Company (or
certain subsidiaries of the Company) or within 3 months after termination of
employment) or if the optionee engages in a "disqualifying disposition" as
described below. The excess of the fair market value, on the date of the
exercise of an ISO, of the Common Stock acquired pursuant to and over the
exercise price constitutes an item of tax preference for purposes of the federal
alternative minimum tax.
A sale or exchange by an optionee of Common Stock acquired upon the
exercise of an ISO more than one year after the transfer of such Common Stock to
such optionee and more than two years after the date of grant of the ISO
generally will result in any difference between the net sale proceeds and the
exercise price being treated as long-term capital gain or loss to the optionee.
If such sale or exchange takes place within two years after the date of grant of
the ISO or within one year from the date of transfer of the Common Stock to the
optionee, such sale or exchange will generally constitute a "disqualifying
disposition" of such Common Stock that will have the following results: any
excess of (i) the lesser of (a) the fair market value of the Common Stock at the
time of exercise of the ISO and (b) the amount realized on such disqualifying
disposition of the Common Stock over (ii) the exercise price of such ISO will be
taxable
6
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as compensation income to the optionee, and the Company will be entitled to a
tax deduction in the amount of such compensation income. Any further gain or
loss after the date of exercise generally will qualify as capital gain or loss
and will not result in any deduction by the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
DIRECTORS
Information regarding the four persons who are nominated for election is
provided under PROPOSAL 1 included elsewhere herein. The following directors are
serving terms expiring in future years and are not up for election at the 1998
Annual Meeting. The terms of directors Robert L. Rosen, Marc J. Rowan, and
Stephen J. Solarz expire in 1999. The terms of directors R. Theodore Ammon,
Robert H. Falk, and Mark H. Rachesky expire in 2000.
R. Theodore Ammon. Age 48. Mr. Ammon has been Chairman of the Board of
Big Flower Holdings, Inc. since 1993. Mr. Ammon was a General Partner of
Kohlberg Kravis Roberts & Co. (a New York and San Francisco-based investment
firm) from 1990 to 1992, and an executive of such firm prior to 1990. Mr. Ammon
is also a member of the Board of Directors of Host Marriott Corporation. In
addition, Mr. Ammon serves on the Board of Directors of the New York YMCA, Jazz
at Lincoln Center, the Institute of International Education, and on the Board of
Trustees of Bucknell University.
Robert H. Falk. Age 60. Mr. Falk has been an officer since April 1992 of
Apollo Capital Management, Inc. and Lion Capital Management, Inc., which
respectively act as general partners of Apollo Advisors, L.P. and Lion Advisors,
L.P. Mr. Falk is a limited partner of Apollo Advisors, L.P., which, together
with its affiliates, acts as managing general partner of Apollo Investment Fund,
L.P., AIF II, L.P. and Apollo Investment Fund III, L.P., private securities
investment funds, and a limited partner of Lion Advisors, L.P., which acts as
financial advisor to and representative for certain institutional investors with
respect to securities investments. Prior to 1992, Mr. Falk was a partner in the
law firm of Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Falk is a director of
Converse, Inc., the Florsheim Group, Inc. and Salant Corporation.
Mark H. Rachesky, M.D. Age 39. Dr. Rachesky has been a director of the
Company since 1993. Dr. Rachesky is the founder of MHR Capital Partners LP and
MHR Institutional Partners, LP, investment funds which invest in distressed
securities. Dr. Rachesky is the principal owner and investment manager of the
general partner and investment manager of these limited partnerships. Dr.
Rachesky has served as a director of Cadus Pharmaceutical Corporation since
September 1993.
Robert L. Rosen. Age 51. Mr. Rosen is Chief Executive Officer of RLR
Partners, LLC, a private investment partnership founded in April 1987. Mr.
Rosen is a director of the Municipal Advantage Fund, Inc., Municipal Partners
Fund, Inc., Municipal Partners Fund II, Inc., the Spring Mountain Group,
Dialysis Centers of America, Jewish Television Network, AFP Imaging Corp.,
Paragon Health Networks and WMC Finance Co.
Marc J. Rowan. Age 35. Mr. Rowan is one of the founding principals of
Apollo Advisors, L.P., which, together with its affiliates, acts as managing
general partner of Apollo Investment Fund, L.P., AIF II, L.P., Apollo Investment
Fund III, L.P. and Apollo Investment Fund IV, L.P., private securities
investment funds, and of Lion Advisors, L.P., which acts as financial advisor to
and representative for certain institutional investors with respect to
securities investment. Mr. Rowan is also a director of Vail Resorts, Inc., the
owner and operator of the Vail, Beaver Creek, Keystone and Breckenridge ski
areas; MTL, Inc., a national tank truck/carrier company; and NRT Incorporated, a
leading national real estate brokerage company. Mr. Rowan is also a founding
member and serves on the executive committee of the Youth Renewal Fund and is a
member of the board of directors of National Jewish Outreach Program and the
Undergraduate Executive Board of The Wharton School.
Stephen J. Solarz. Age 57. Mr. Solarz was elected, in 1974, to the House
of Representatives from Brooklyn's 13th Congressional District and was re-
elected eight times. In the House he served on four committees: Foreign
Affairs, Merchant Marine and Fisheries, Intelligence, and the Joint Economic
Committee. Mr. Solarz ranked second in seniority on the House Foreign Affairs
Committee, where he chaired the Subcommittee on Asian and Pacific Affairs.
Since his departure from the House, Mr. Solarz has been: Senior Counselor at
APCO Associates, an international public affairs firm; President of Solarz and
Associates, a global consulting firm; Chairman of the Central Asian American
Enterprise
7
<PAGE>
Fund; Vice Chairman of the International Crisis Group; a Distinguished Fellow at
the Carnegie Endowment for International Peace; Professor of International
Affairs at George Washington University; a Member of the Board of Directors of
the Brandeis University Board of Trustees as well as the National Endowment for
Democracy and National Democratic Institute; and a member of the Council on
Foreign Relations and the International Rescue Committee. Mr. Solarz is a
director of First Philippine Fund and IRI International.
EXECUTIVE OFFICERS
Executive officers of the Company are elected by and serve at the
discretion of the Board of Directors. Set forth below is certain information
regarding each named executive officer as of July 31, 1998, except Mr. Nicolosi
and Mr. Van Nevel who are also Directors. For information regarding Mr.
Nicolosi and Mr. Van Nevel, see "Proposal 1. Election of Directors." Ages given
are as of July 31, 1998.
Thomas R. Sandler. Age 51. Mr. Sandler was appointed President of the
Americas division of Samsonite effective March 1998. Prior to that Mr. Sandler
was the Chief Financial Officer and Treasurer of Samsonite since May 1, 1995.
Mr. Sandler also serves as the Secretary. Prior to joining Samsonite, Mr.
Sandler was the managing partner of the Denver office of BDO Seidman, an
international public accounting firm, since July 1, 1994. Prior to joining BDO
Seidman, Mr. Sandler was an audit and consulting partner in the international
public accounting firm of KPMG Peat Marwick LLP, specializing in corporate
restructurings.
Karlheinz Tretter. Age 55. Mr. Tretter was appointed President of
Samsonite Europe on October 16, 1997 and additionally as President of Samsonite
Asia on February 15, 1998. Prior to that Mr. Tretter was Vice President and
Managing Director of Samsonite Europe since May 1994. From 1990 until 1994, Mr.
Tretter has served as Vice President of Marketing and/or Sales for Samsonite
Europe.
D. Michael Clayton. Age 49. Mr. Clayton has been General Counsel of
Samsonite since 1985 and Vice President - Legal since 1989. Mr. Clayton joined
Samsonite in 1974.
Richard H. Wiley. Age 41. Mr. Wiley has been Chief Financial Officer and
Treasurer of Samsonite since March 1998. Prior to that Mr. Wiley was Chief
Financial Officer of the Americas division of Samsonite and Assistant Treasurer
since May 15, 1995. Prior to joining Samsonite, Mr. Wiley was an audit and
consulting senior manager with BDO Seidman, an international public accounting
firm, since July 1994. Prior to that, Mr. Wiley was with KPMG Peat Marwick LLP
since 1982, working in the audit and consulting areas.
Carlo Zezza. Age 62. Mr. Zezza has been Senior Vice President of
Samsonite since 1990, with responsibility for new products and licensing. Mr.
Zezza joined the Company in 1971 from the J. Walter Thompson advertising agency,
where he was Vice President serving Samsonite and other accounts. From 1976 to
1983, Mr. Zezza was President, Samsonite Europe, and in 1984 was responsible for
Samsonite USA marketing and operations. From 1985 to 1990, Mr. Zezza was
President, Delsey USA, a competitor luggage business in the United States.
EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1993, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following Report of the Compensation Committee and the
Performance Graph shall not be incorporated by reference into any such filing.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company (the
"Committee") reviews and approves the salaries and bonuses of the executive
officers of the Company as well as all grants of options to purchase shares of
Common Stock and other equity-based compensation awards.
Objectives.
The Committee's primary objectives are to retain the best qualified people
and to insure that they are properly
8
<PAGE>
motivated to have the Company prosper over the long term. In furtherance of the
foregoing, the Committee, in establishing the components and levels of
compensation for its executive officers, seeks (i) to enable the Company to
attract and retain highly qualified executives and (ii) to provide financial
incentives in the form of cash bonuses and equity compensation in order to align
the interests of executive officers more closely with those of the stockholders
of the Company and to motivate such executives to increase stockholder value by
improving corporate performance and profitability.
Employment Agreements.
The Company has entered into employment agreements with certain of its
executive officers, including certain of the named executive officers listed in
the Summary Compensation Table on page 11. The Committee has considered the
advisability of using employment agreements and has determined that the use of
employment agreements is in the best interest of the Company because it
facilitates (consistent with the Committee's overall objectives) the Company's
ability to attract and retain the services of the most highly qualified
executive officers. Each such employment agreement separately reflects the
terms that the Committee felt were appropriate and/or necessary to retain the
services of the particular executive.
Components of Executive Compensation.
There are two components of the Company's executive compensation program:
. Cash compensation.
. Equity compensation.
Cash Compensation.
Cash compensation is comprised of base salary and annual cash incentive
bonuses. Since, as noted above, certain of the named executive officers of the
Company were party to employment agreements with the Company effective during
the past fiscal year, their respective cash compensation levels were subject to
the provisions of such employment agreements. The Committee subjectively
arrived at appropriate base salary compensation levels in the process of
negotiating such agreements.
The Company offers each of its executive officers an opportunity to earn
additional cash compensation in the form of annual bonuses that are awarded if
the Company attains specified performance goals or if the officer satisfactorily
completes certain annual projects approved by the Committee. The Committee
believes that making a significant portion of executive officer compensation
subject to the Company attaining specified performance goals or the successful
completion of specified projects motivates the executive officers to increase
their individual efforts on behalf of the Company. The Committee also believes
that it is appropriate that the Company's executive officers receive lower
compensation when the Company does not attain its specified performance goals
and higher compensation when the Company attains such goals.
Annual bonus amounts for the named executive officers were determined
pursuant to terms provided in their respective employment agreements and, as
noted above, were conditioned on the Company's attainment of specified
performance goals or the officer's satisfactory completion of certain annual
projects approved by the Committee.
Equity Compensation.
Equity compensation is comprised of stock options, restricted stock awards,
and stock bonus awards. Stock option grants reflect the Committee's desire to
provide a meaningful equity incentive for the executive to have the Company
prosper over the long term. The Committee expects options to continue as a
significant component of the executive compensation arrangements of the Company
in the future. In that connection, options to purchase 895,837 shares have been
granted in prior fiscal years to certain executive officers of the Company as
described elsewhere herein, and options to purchase 213,953 shares were granted
to other officers and key employees of the Company and its subsidiaries in
fiscal 1998. At January 31, 1998, options to purchase 2,565,050 shares by all
executives and other employees were outstanding. As a result of the recent
self-tender offer whereby the Company purchased 10,500,000 shares of Common
Stock, the Company has determined to allow holders of options to either (i)
accept a $12.50
9
<PAGE>
reduction of the option exercise prices or (ii) voluntarily surrender such
options to the Company and in exchange receive new options to purchase a reduced
number of shares of Common Stock (which reflects the number of shares
outstanding after the tender offer) at exercise prices equal to the post self-
tender offer trading price, with the same proportional vesting schedule as the
options surrendered. The Company expects this will result in a reduction of the
number of options outstanding.
On July 15, 1998, the Committee approved a new stock option program, called
the "FY 1999 Stock Award Program", intended to create long term incentives for
key employees of the Company. The program recognizes, among other things, the
changes in the Company's capitalization resulting from the recently completed
self-tender offer and the realignment of certain management responsibilities.
On July 15, 1998, options to purchase an aggregate of 218,000 shares were
awarded to employees of the Company pursuant to the Company's FY 1999 Stock
Award Program. The options were granted from shares reserved under the Company's
1995 Stock Option and Incentive Award Plan. 20% of the options vest and become
exercisable on the date of the grant and an additional 20% of the options vest
and become exercisable on the first, second, third and fourth anniversaries of
the date of grant.
Chief Executive Officer Compensation
In fiscal 1998, the compensation of Mr. Nicolosi was determined pursuant to
the Nicolosi Agreement described in "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements."
In fiscal 1998, the Compensation Committee of the Board of Directors
consisted of:
R. Theodore Ammon
Robert H. Falk
Marc J. Rowan
10
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid or awarded to the
Chief Executive Officer ("CEO") of the Company, and the other four most highly
compensated executive officers of the Company during the last fiscal year
(collectively, the "Named Executives") for services rendered in all capacities
for the last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards
--------------------------------------------- ----------------------
Other Restricted
Annual Stock Securities All Other
Salary Bonus Compensation Awards Underlying Compensation
Name/Principal Position Year(a) ($) ($) ($) ($) Options/SARs (#)(i) ($)(j)
- ------------------------------- ------- --------- --------- --------------- ------------- ------------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard R. Nicolosi(b)......... 1998 $600,000 $ -- $150,000(f) -- -- $ 7,318
Chairman of the Board 1997 425,000 500,000 112,500(f) 1,095,000(g) 425,532 109,034
1996 -- -- -- -- --
Thomas J. Leonard(c)........... 1998 250,000 -- -- -- -- 7,318
President, Samsonite - the 1997 250,000 187,500 -- 709,724(h) 98,619 6,316
Americas 1996 250,000 125,000 -- -- 7,260
Luc Van Nevel(d)............... 1998 252,313 125,000 -- -- -- 96,726
President and Chief Executive 1997 290,980 275,000 -- 709,724(h) 98,619 102,704
Officer 1996 306,331 153,165 -- -- 31,001
Thomas R. Sandler(c)........... 1998 200,000 192,000 -- -- -- 7,058
President, Samsonite - 1997 200,000 220,000 -- 709,724(h) 98,619 5,968
the Americas 1996 150,000 100,000 -- -- 6,156
Karlheinz Tretter(e)........... 1998 168,023 120,000 -- -- -- 15,757
President, Samsonite 1997 192,667 69,710 -- -- 89,448 18,062
Europe and Asia 1996 202,097 79,907 -- -- -- 8,020
</TABLE>
- -----------------------
(a) Fiscal year ending January 31.
(b) Mr. Nicolosi served as Chief Executive Officer during fiscal 1998 and until
May 15, 1998 when he was succeeded by Mr. Van Nevel as Chief Executive
Officer.
(c) Effective February 1, 1998, Mr. Leonard left the Company's employ. Mr.
Sandler became President, Samsonite -the Americas in March 1998. Prior to
March 1998, Mr. Sandler served as the Company's Chief Financial Officer.
(d) A portion of Mr. Van Nevel's cash compensation is paid in Belgian francs.
His salary, bonuses, and all other compensation amounts, to the extent
denominated in Belgian francs ("BF"), have been translated to U.S. dollars
at rates of BF35.67, BF30.93, and BF29.38 to the U.S. dollar for the years
ended January 31, 1998, 1997, and 1996, respectively. Mr. Van Nevel was
president of Samsonite Europe until September 25, 1997 when he was appointed
Chief Operating Officer. Mr. Van Nevel was appointed President and Chief
Executive officer effective February 1, 1998.
(e) Mr. Tretter's cash compensation is paid in Deutschemarks (DM). His salary,
bonuses, and all other compensation amounts, to the extent denominated in
DM, have been translated to U.S. dollars at rates of DM1.72, DM1.50, and
DM1.43 to the U.S. dollar for the years ended January 31, 1998, 1997, and
1996, respectively.
(f) Consists of amounts paid during the year for a housing allowance at the rate
of $12,500 per month.
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<PAGE>
(g) The Company issued 60,000 shares of restricted stock to Mr. Nicolosi on May
15, 1996 pursuant to the terms of his employment agreement (see "Employment
Contracts and Termination of Employment and Change-in-Control
Arrangements"). The market value of the restricted stock at May 15, 1996
was $18.25 per share. The aggregate market value at January 31, 1998 of the
restricted stock was $1,905,000. Mr. Nicolosi became fully vested in the
shares effective May 15, 1998.
(h) Effective as of May 15, 1996, the Company entered into agreements with
Messrs. Leonard, Van Nevel, and Sandler that provide for stock bonuses to
each of them of 38,889 shares of common stock. The market value of the
stock at May 15, 1996 was $18.25 per share. At January 31, 1998, the
aggregate market value of the stock award for each of Messrs. Leonard, Van
Nevel, and Sandler was $1,234,726. See "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements" for vesting
provisions with respect to the stock bonus shares.
(i) As a result of the recent self-tender offer whereby the Company purchased
10,500,000 shares of Common Stock, the Company has determined to allow
holders of options to either (i) accept a $12.50 reduction of their option
exercise prices or (ii) voluntarily surrender such options to the Company
and in exchange receive new options to purchase a reduced number of shares
of Common Stock (which reflects the number of shares outstanding after the
tender offer) at exercise prices equal to the post tender offer trading
price, with the same proportion vesting schedule as the options surrendered.
(j) Represents the following amounts paid by the Company for the benefit of each
of the Named Executives:
<TABLE>
<CAPTION> Life
Company insurance
contribution to premium and
Name Year(i) 401(k) Plan excess medical
- ---- ------ ----------- --------------
<S> <C> <C> <C>
Mr. Nicolosi....................................... 1998 $4,750 $2,568
Mr. Leonard........................................ 1998 4,750 2,568
Mr. Van Nevel(ii).................................. 1998 -- --
Mr. Sandler........................................ 1998 4,750 2,308
Mr. Tretter(ii).................................... 1998 -- --
</TABLE>
(i) Fiscal year ending January 31.
(ii) Mr. Van Nevel and Mr. Tretter participate in an employee benefit
arrangement available to employees of the Company located in Belgium and
Germany, respectively, which combines retirement and life insurance
benefits based on salary. An amount is contributed by the Company on
behalf of such employees in order to purchase insurance contracts that
contain both a life insurance and retirement pension provision. In fiscal
1998, $96,726 and $15,757 was contributed on behalf of Mr. Van Nevel and
Mr. Tretter, respectively.
No grants of stock options or freestanding SARs were made during fiscal 1998 to
Named Executives.
12
<PAGE>
The following table discloses, for the Named Executives, information regarding
stock options that were held at January 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Options/SARs in-the-money Options/SARs
Shares Acquired Value at Fiscal Year-End (#) at Fiscal Year End ($)
Name on Exercise (#) Realized $ Exercisable/ Unexercisable Exercisable/Unexercisable(a)
- ---- ---------------- ---------- -------------------------- ----------------------------
<S> <C> <C> <C> <C>
Mr. Nicolosi -- -- 93,085/332,447 1,257,000/4,488,000
Mr. Leonard -- -- 59,171/39,448 1,235,000/823,000
Mr. Van Nevel -- -- 59,171/39,448 1,235,000/823,000
Mr. Sandler -- -- 60,814/37,805 838,000/558,000
Mr. Tretter -- -- 57,002/32,446 494,000/329,000
</TABLE>
(a) Total value of options based on fair market value of common stock of $31.75
as of January 31, 1998. There were no awards under long-term incentive
plans to any Named Executives in fiscal 1998.
13
<PAGE>
PENSION PLAN TABLE
The U.S. executives are participants in the Samsonite Retirement Income
Plan (the "Samsonite Pension Plan") and the Supplementary Executive Retirement
Plan (the "SERP"). The Samsonite Pension Plan is a qualified defined benefit
plan which provides benefits to the participants retiring at normal retirement
age calculated based on years of service and average compensation (as defined by
the pension plan), net of offsets for Social Security benefits. The SERP, which
is a nonqualified unfunded plan, was adopted on December 1, 1995 and provides to
eligible executives retirement benefits on compensation and benefits in excess
of Internal Revenue Code maximums for qualified plans.
The following table shows the estimated hypothetical annual benefits
payable pursuant to the Samsonite Pension Plan and the SERP to persons retiring
at their normal retirement age in 1997 in specified eligible compensation and
years of service classifications.
<TABLE>
<CAPTION>
Years of Service
-------------------------------------------------
Remuneration 15 20 25 30 35
- -------------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $24,499 $ 32,665 $ 40,832 $ 48,998 $ 57,567
150,000 30,124 40,165 50,207 60,248 70,692
175,000 35,749 47,665 59,582 71,498 83,817
200,000 41,374 55,165 68,957 82,748 96,942
225,000 46,999 62,665 78,332 93,998 110,067
250,000 52,624 70,165 87,707 105,248 123,192
300,000 63,874 85,165 106,457 127,748 149,442
400,000 75,124 100,165 125,207 150,248 175,692
450,000 75,124 100,165 125,207 150,248 175,692
500,000 75,124 100,165 125,207 150,248 175,692
550,000 75,124 100,165 125,207 150,248 175,692
600,000 75,124 100,165 125,207 150,248 175,692
</TABLE>
Compensation covered by the above Plans is total cash compensation paid,
including any amount contributed under a Section 401(k) plan. The benefits
shown above are payable on a life annuity basis and are not subject to any
offset amounts.
Mr. Nicolosi, Mr. Leonard, Mr. Sandler and Mr. Zezza have accrued 1, 13, 2
and 26 year(s), respectively, of service credit under the Samsonite Pension Plan
and 0, 13, 2 and 21 years under the SERP.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Richard R. Nicolosi. The Company entered into an employment agreement,
effective as of May 15, 1996, with Richard R. Nicolosi (the "Nicolosi
Agreement"), pursuant to which Mr. Nicolosi served as President and Chief
Executive Officer of the Company. The Nicolosi Agreement was for a two-year
term and expired on May 15, 1998.
The Nicolosi Agreement provided Mr. Nicolosi with, among other things, an
annual base salary of $600,000 and an opportunity to receive an annual incentive
bonus of up to $500,000 (80% of which was guaranteed for the first year) if the
Company attained certain performance goals and Mr. Nicolosi completed certain
annual projects prescribed by the Board. In connection with the Nicolosi
Agreement, the Company granted Mr. Nicolosi options to purchase 425,532 shares
of Common Stock at an exercise price of $18.25 per share (subject to adjustment
for the self-tender offer as described under Equity Compensation on page 9)
which are fully vested.
14
<PAGE>
Also, in connection with the performance by Mr. Nicolosi of services
pursuant to the Nicolosi Agreement, the Company issued Mr. Nicolosi 60,000
shares of restricted Common Stock (the "Restricted Shares"). The Restricted
Shares vested on May 15, 1998.
Pursuant to a May 16, 1996 stock purchase agreement with Mr. Nicolosi, the
Company sold and issued to Mr. Nicolosi 55,000 shares of Common Stock at a
purchase price of $18.25 per share (the market price at the date of the sale),
for an aggregate purchase price of $1,003,750.
The Nicolosi Agreement provided Mr. Nicolosi with participation in certain
employee benefit plans and arrangements on the same basis as other executive
officers of the Company. The Nicolosi Agreement provided for a one-time
relocation allowance of $100,000 and a housing allowance at the rate of $12,500
per month.
The Nicolosi Agreement provides that during Mr. Nicolosi's employment with
the Company and for a period of two years thereafter, Mr. Nicolosi will not,
directly or indirectly, as a principal, officer, director, employee or in any
other capacity whatsoever, without the prior written consent of the Company,
engage in, or be or become interested or acquire any ownership of any kind in,
or become associated with, or make loans or advance property to any person
engaged in or about to engage in, any business activity which is competitive
with any of the businesses engaged in by the Company in any of the geographic
areas in which such businesses have been conducted by the Company during the
last twelve months of his employment. The Nicolosi Agreement also limits the
amount of additional shares of Common Stock that Mr. Nicolosi can purchase
without the consent of the Board of Directors of the Company, and it restricts
him from becoming involved in proxy contests or takeover proposals and certain
similar activities with respect to the Company, except on behalf of the Company.
Thomas J. Leonard. The Company entered into an employment agreement (the
"Leonard Agreement") with Mr. Leonard, effective as of April 18, 1995.
Effective February 1, 1998, Mr. Leonard left the employ of the Company.
The Leonard Agreement provided for an annual salary of $250,000, adjusted
annually for Consumer Price Index increases, and an annual incentive bonus of up
to $300,000 based on Company performance and Mr. Leonard's completion of certain
annual projects prescribed by the Board. The Leonard Agreement provided for the
participation of Mr. Leonard in all Company pension, welfare, savings, and other
benefit and insurance plans on the same basis as other executive officers. The
Leonard Agreement provided that if the Company terminated Mr. Leonard's
employment without Cause, or if Mr. Leonard terminated his employment for Good
Reason (each as defined in the Leonard Agreement), then (1) the Company would be
required to pay Mr. Leonard an amount equal to the greater of (a) $500,000 or
(b) the product of $41,667 times the lesser of 18 or the number of months
remaining in the term of the Leonard Agreement and (2) until Mr. Leonard becomes
eligible for coverage under another employer's benefit plans, the Company would
allow Mr. Leonard to continue to participate, for the number of months remaining
in the term of the Leonard Agreement, in all Company benefit plans, provided
such participation is permissible under the general terms and provisions of
those plans. The Company paid Mr. Leonard $750,000 upon Mr. Leonard's departure
from the Company on February 1, 1998.
On February 20, 1996, Mr. Leonard was granted options under the Company's
1995 Stock Option and Incentive Award Plan to purchase 98,619 shares of the
Company's Common Stock at a price of $10.875 per share, the market price per
share of Common Stock at the date of grant. The options became fully
exercisable upon Mr. Leonard's termination of employment on February 1, 1998 and
were exercised in May 1998.
Effective as of May 15, 1996, the Company entered into an agreement with
Mr. Leonard (the "Leonard Share Bonus Agreement") that provides for a stock
bonus of 38,889 shares of Common Stock (the "Bonus Shares"). The Bonus Shares
vest and are payable if Mr. Leonard remains continually employed by the Company
through the earlier of the third anniversary of the date of the Leonard Share
Bonus Agreement and the first anniversary of a Change of Con trol Event (as
defined in the Leonard Share Bonus Agreement); provided that if Mr. Leonard's
employment is terminated prior to such date (i) by reason of death, (ii) by the
Company other than for Cause or Disability, (each as defined in the Leonard
Share Bonus Agreement), or (iii) by Mr. Leonard for Good Reason (as defined in
the Leonard Share Bonus Agreement), then notwithstanding such termination of
employment, the Bonus Shares shall be payable not later than 30 days following
such termination. The Company issued the Bonus Shares to Mr. Leonard subsequent
to his termination of employment on February 1, 1998.
15
<PAGE>
Luc Van Nevel. The Company entered into an Executive Management Agreement,
effective February 1, 1998 (the "Van Nevel Agreement") with Mr. Van Nevel for a
four year term beginning on February 1, 1998. Under the Van Nevel Agreement,
Mr. Van Nevel is obligated to devote full time to the affairs of the Company,
except to the extent that he is required to provide services to Samsonite Europe
N.V. ("Samsonite Europe") and its subsidiaries pursuant to the Consulting
Agreement (described below). The Van Nevel Agreement provides for an annual
base salary of $175,000 and a living allowance not to exceed $50,000 per year to
cover actual expenses incurred to maintain a secondary residence near the
Company's headquarters in Denver, Colorado. Mr. Van Nevel is entitled to
receive an incentive bonus of up to $495,000 if the Company attains certain
performance goals and Mr. Van Nevel completes certain annual projects prescribed
by the Board. The Van Nevel Agreement provides for an additional bonus of
$400,000 payable on January 31, 1999, or such earlier date as the Company
terminates the assignment of Goldman, Sachs & Co. in connection with the
possible sale of the Company. This bonus was paid in June 1998. The Van Nevel
Agreement provides that upon termination by the Company without Cause or by Mr.
Van Nevel for Good Reason (each as defined in the Van Nevel Agreement), the
Company is required to pay Mr. Van Nevel severance compensation of $500,000. The
Van Nevel Agreement provides that during Mr. Van Nevel's employment with the
Company and for a period of one year thereafter (unless such employment is
terminated by the Company without Cause or by the Executive with Good Reason),
he shall not engage in any business activity that is in substantial competition
with any of the businesses engaged in by the Company in any of the geographic
areas in which business is conducted by the Company during the twelve months
preceding the termination of employment.
On February 1, 1998, Samsonite Europe entered into an Amended and Restated
Consulting Agreement (the "Consulting Agreement") with Mr. Van Nevel, which
amends and restates a consulting agreement effective January 1, 1990 and amended
and restated as of January 1992. Under the Consulting Agreement, Mr. Van Nevel
is required to provide consulting services to Samsonite Europe and certain of
its subsidiaries. The Consulting Agreement provides for an annual consulting
fee of BF9,000,000 (US $283,000 at February 1, 1998). The Consulting Agreement
may be terminated by Samsonite Europe with prior written notice. The notice
period is based on a formula which takes into consideration, among other things,
Mr. Van Nevel's age and length of service at the time the notice is given. If
Samsonite Europe fails to give the required notice, the Consulting Agreement
provides for the payment of liquidated damages equal to the aggregate consulting
fee to which Mr. Van Nevel would have been entitled had the notice period been
fully observed. Under certain circumstances the termination of the Van Nevel
Agreement will be deemed to be a termination of the Consulting Agreement by
Samsonite Europe.
On February 20, 1996, Mr. Van Nevel was granted options under the Company's
1995 Stock Option and Incentive Award Plan to purchase 98,619 shares of the
Company's Common Stock at a price of $10.875 per share (subject to adjustment
for the self-tender offer as described under Equity Compensation on page 9), the
market price per share of Common Stock at the date of grant. The options have a
six-year term. 20% of the options vest and become exercisable on the date of
grant and an additional 20% vest and become exercisable on the last day of each
fiscal year over a four-year period beginning on January 31, 1997. On July 15,
1998, pursuant to the FY 1999 Stock Award Program, Mr. Van Nevel was awarded
options to purchase 40,000 shares of the Company's Common Stock at a price of
$9.375 per share, the market price of the Common Stock at the date of the grant.
The options, which were granted under the Company's 1995 Stock Option and
Incentive Award Plan, have a ten year term. 20% of the options vest and become
exercisable on the date of the grant and an additional 20% vest and become
exercisable on the first, second, third, and fourth anniversaries of the date of
grant.
Effective as of May 15, 1996, the Company entered into an agreement with
Mr. Van Nevel (the "Van Nevel Share Bonus Agreement") that provides for a stock
bonus of 38,889 shares of Common Stock (the "Bonus Shares"). The Bonus Shares
vest and are payable if Mr. Van Nevel remains continually employed by the
Company through the earlier of the third anniversary of the date of the Van
Nevel Share Bonus Agreement and the first anniversary of a Change of Control
Event (as defined in the Van Nevel Share Bonus Agreement); provided that if Mr.
Van Nevel's employment is terminated prior to such date (i) by reason of death,
(ii) by the Company other than for Cause or Disabili ty, (each as defined in
the Van Nevel Bonus Shares Agreement), or (iii) by Mr. Van Nevel for Good Reason
(as defined in the Van Nevel Bonus Shares Agreement), then notwithstanding such
termination of employment, such Bonus Shares shall be payable not later than 30
days following such termination. The Van Nevel Shares Bonus Agreement also pro
vides that if a Change of Control Event occurs, all options to purchase Common
Stock granted to Mr. Van Nevel on February 20, 1996 vest and become exercisable
on the first anniversary of the date on which such event occurs (to the extent
such options shall not have otherwise vested as of such first anniversary date),
so long as Mr. Van Nevel remains continually employed by the Company through
such first anniversary date. In connection with the completion of a
16
<PAGE>
recent self-tender offer, the Van Nevel Share Bonus Agreement awarding the Bonus
Shares was amended to permit the tender of the Bonus Shares to the Company. As a
result, the Company purchased 20,026 of the Bonus Shares from Mr. Van Nevel,
representing the same percentage of shares accepted in the self-tender offer
from other stockholders. The remainder of the Bonus Shares are subject to the
original terms of the Van Nevel Share Bonus Agreement (including the vesting
provisions thereof).
Thomas R. Sandler. The Company entered into an employment agreement with
Mr. Sandler effective as of February 1, 1998 (the "Sandler Agreement") for a
four-year term. The Sandler Agreement provides for an annual salary of
$325,000. Mr. Sandler is also entitled to receive an incentive bonus of up to
$192,500 based on Company performance and Mr. Sandler's completion of certain
annual projects prescribed by the Board. The Sandler Agreement provides for
participation of Mr. Sandler in all Company pension, welfare, savings, and other
benefit and insurance plans on the same basis as other executive officers. The
Sandler Agreement provides that if the Company terminates Mr. Sandler's
employment without Cause, or if Mr. Sandler terminates his employment for Good
Reason (each as defined in the Sandler Agreement), then (1) the Company will be
required to pay Mr. Sandler an amount equal to the lesser of (a) $500,000 or (b)
the amount of the base salary which would have been paid from the date of
termination to the expiration of the Sandler Agreement had the Sandler Agreement
not been terminated and (2) until Mr. Sandler becomes eligible for coverage
under another employer's benefit plans, the Company will allow Mr. Sandler to
continue to participate, for the number of months remaining in the term of the
Sandler Agreement, in all Company benefit plans, provided such participation is
permissible under the general terms and provisions of those plans. The Sandler
Agreement provides that in the event the agreement continues in effect until the
end of its term, and the Company has not offered continued employment to Mr.
Sandler on substantially similar terms for an additional term of at least one
year, the Company will be required to pay Mr. Sandler $250,000. The Sandler
Agreement provides that during Mr. Sandler's employment with the Company and for
a period of one year thereafter, Mr. Sandler will not, directly or indirectly,
as a principal, officer, director, employee or in any other capacity whatsoever,
without the prior written consent of the Company, engage in, or be or become
interested or acquire any ownership of any kind in, or become associated with,
or make loans or advance property to any person engaged in or about to engage
in, any business activity which is competitive with any of the businesses then
engaged in by the Company in any of the geographic areas in which such
businesses have been conducted by the Company during the last twelve months of
his employment.
On February 20, 1996, Mr. Sandler was granted options under the Company's
1995 Stock Option and Incentive Award Plan to purchase 73,964 shares of the
Company's Common Stock at a price of $12.875 per share (subject to adjustment
for the self-tender offer as described under Equity Compensation on page 9), a
price above the market value at the date of grant. The options have a six-year
term. 20% of the options vest and become exercisable on the date of grant and
20% vest and become exercisable on the last day of each fiscal year over a four-
year period beginning on January 31, 1997. On October 29, 1996, Mr. Sandler was
granted options (the "Sandler Option Agreement") under the Company's 1995 Stock
Option and Incentive Award Plan to purchase 24,655 shares of the Company's
Common Stock at a price of $35.50 per share (subject to adjustment for the self-
tender offer as described under Equity Compensation on page 9), the market value
at the date of grant. The options have a six-year term. One third of the
options vest and become exercisable beginning on January 31, 1997 and an
additional one-third vest and become exercisable on January 31, 1998 and January
31, 1999. Under the Sandler Option Agreement, if a Change in Control Event (as
defined in the Sandler Option Agreement) occurs, the options vest and become
exercisable on the one-year anniversary of the Change in Control Event, provided
that Mr. Sandler remains employed through such date. In addition, if Mr.
Sandler's employment is terminated by the Company without Cause or by Mr.
Sandler for Good Reason (each as defined in the Sandler Option Agreement), all
unvested options vest and become exercisable. On July 15, 1998, pursuant to the
FY 1999 Stock Award Program, Mr. Sandler was awarded options to purchase 20,000
shares of the Company's Common Stock at a price of $9.375 per share, the market
value at the date of grant. The options, which were granted under the Company's
1995 Stock Option and Incentive Award Plan, have a ten year term. 20% of the
options vest and become exercisable on the date of grant and an additional 20%
vest and become exercisable on the first, second, third and fourth anniversaries
of the date of grant.
Effective as of May 15, 1996, the Company entered into an agreement with
Mr. Sandler (the "Sandler Share Bonus Agreement") that provides for a stock
bonus of 38,889 shares of Common Stock (the "Bonus Shares"). The Bonus Shares
vest and are payable if Mr. Sandler remains continually employed by the Company
through the earlier of the third anniversary of the date of the Sandler Share
Bonus Agreement and the first anniversary of a Change of Control Event (as
defined in the Sandler Share Bonus Agreement); provided that if Mr. Sandler's
employment is terminated prior to such date (i) by reason of death, (ii) by the
Company other than for Cause or Disability, (each as
17
<PAGE>
defined in the Sandler Share Bonus Agreement), or (iii) by the executive for
Good Reason, (as defined in the Sandler Share Bonus Agreement), then
notwithstanding such termination of employment, such Bonus Shares shall be
payable not later than 30 days following such termination. The Sandler Share
Bonus Agreement also provides that if a Change of Control Event (as defined in
the Sandler Share Bonus Agreement) occurs, all options to purchase Common Stock
granted to Mr. Sandler prior to May 15, 1996 vest and become exercisable on the
first anniversary of the date on which such event occurs (to the extent such
options shall not have otherwise vested as of such first anniversary date), so
long as Mr. Sandler remains continually employed by the Company through such
first anniversary date. In connection with the completion of a recent self-
tender offer, the Sandler Share Bonus Agreement awarding the Bonus Shares was
amended to permit the tender of the Bonus Shares to the Company. As a result,
the Company purchased 20,026 of the Bonus Shares from Mr. Sandler, representing
the same percentage of shares accepted in the self-tender offer from other
stockholders. The remainder of the Bonus Shares are subject to the original
terms of the Sandler Share Bonus Agreement (including the vesting provision
thereof).
Karlheinz Tretter. The Company has entered into an employment agreement
(the "Tretter Agreement") with Mr. Tretter, effective as of February 1, 1998.
Pursuant to the Tretter Agreement, Mr. Tretter will serve as President of
Samsonite GmbH for an indefinite term and will provide services to various
subsidiaries of Samsonite Europe, as mandated, until January 31, 2002. The
Tretter Agreement provides for an annual salary of ECU 300,147 (the equivalent
of U.S. $325,000 at February 1,1998). Mr. Tretter is also entitled to receive
an incentive bonus of up to ECU 177,779 based on Company performance and Mr.
Tretter's completion of certain annual projects prescribed by the Board. The
Tretter Agreement provides that if the Company terminates Mr. Tretter's
employment without Cause, or if Mr. Tretter terminates his employment for Good
Reason (each as defined in the Tretter Agreement), then the Company will be
required to pay Mr. Tretter the greater of (i) the amount of indemnity which
might be due under German local law and (ii) the lesser of (a) ECU 462,180 and
(b) the amount of base compensation due under the Tretter Agreement from the
date of termination to the expiration date of the Tretter Agreement. Unless
German local law changes, this indemnity is expected to exceed that required by
German local law. The Tretter Agreement provides that while working for the
Company and for a period of one year thereafter, Mr. Tretter will not become
active for another company which competes with the Company in Germany or Member
States of the European Union.
On February 20, 1996, Mr. Tretter was granted options under the Company's
1995 Stock Option and Incentive Award Plan to purchase 39,448 shares of the
Company's Common Stock at a price of $10.875 per share (subject to adjustment
for the self-tender offer as described under Equity Compensation on page 9), the
market value at the date of grant. The options have a six-year term. 20% of
the options vest and become exercisable on the date of grant and 20% vest and
become exercisable on the last day of each fiscal year over a four year period
beginning on January 31, 1997. On October 29, 1996, Mr. Tretter was granted
options (the "Tretter Option Agreement") under the Company's 1995 Stock Option
and Incentive Award Plan to purchase 50,000 shares of the Company's Common Stock
at a price of $35.50 per share (subject to adjustment for the self-tender offer
as described under Equity Compensation on page 9), the market value at the date
of grant. The options have a six-year term. One third of the options vest and
become exercisable beginning January 31, 1997 and an additional one-third vest
and become exercisable on January 31, 1998 and January 31, 1999. Under the
Tretter Option Agreement, if a Change in Control Event (as defined in the
Tretter Option Agreement) occurs and Mr. Tretter is terminated for any reason
other than for Cause (as defined in the Tretter Option Agreement), all the
options granted shall immediately vest and become exercisable.
On July 15, 1998, pursuant to the FY 1999 Stock Award Program, Mr. Tretter
was awarded options to purchase 20,000 shares of the Company's Common Stock at a
price of $9.375 per share, the market value at the date of the grant. The
options, which were granted under the Company's 1995 Stock Option and Incentive
Award Plan, have a ten year term. 20% of the options vest and become
exercisable on the date of grant and an additional 20% vest and become
exercisable on the first, second, third and fourth anniversaries of the date of
grant.
18
<PAGE>
1995 STOCK OPTION AND INCENTIVE AWARD PLAN
The Company has reserved 2,550,000 shares for issuance under the 1995 Stock
Option and Award Plan (as Amended in 1996) ("the 1995 Plan"). The 1995 Plan
provides for the issuance of a variety of awards, including tax qualified
incentive stock options, nonqualified stock options, stock appreciation rights,
restricted stock awards or other forms of awards consistent with the purposes of
the plan. Incentive stock options must be issued at exercise prices no less
than the fair market value of the Common Stock at the date of the grant.
Nonqualified options may be granted at exercise prices at or below the market
value, but not at less than 50% of the market value of the Common Stock at the
date of the grant. Options granted under the 1995 Plan will vest over a period
of not more than ten years as determined by the Compensation Committee.
At January 31, 1998, options for 2,139,518 shares were outstanding to
various executive officers and other employees under the 1995 Plan at option
exercise prices ranging from $10.875 to $47.875 per share, which prices were
greater than or equal to the market value of the Common Stock as of the date of
grant. As a result of the recent self-tender offer whereby the Company
purchased 10,500,000 shares of Common Stock, the Company has determined to allow
holders of options to accept a $12.50 reduction of the option exercise prices or
to voluntarily surrender such options to the Company and in exchange receive new
options to purchase a reduced number of shares of Common Stock (which reflects
the number of shares outstanding after the self-tender offer) at exercise prices
equal to the post self-tender offer trading price, with the same proportional
vesting schedule as the options surrendered. The Company expects this will
result in a reduction of the number of options outstanding.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No current or former officer of the Company served as a member of the
Compensation Committee.
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<PAGE>
PERFORMANCE GRAPH
The performance graph below compares the cumulative total return to
stockholders on June 24, 1994, the date on which the Common Stock was first
traded publicly through January 31, 1998, for a holder of Common Stock against
the cumulative total return of the Standard & Poor's Midcap 400 Index ("S&P
Midcap 400") and a group of peer companies over the same period. However, in
reviewing this graph, stockholders should keep in mind the possible affect that
the limited trading in the Common Stock may have on the price of such stock and
the fact that, in the Company's judgment, there are no directly comparable
companies which are publicly traded. The decline in the value of the Company's
Common Stock in fiscal 1996 can be partially attributed to the spinoff of
Culligan Water Technologies, Inc. on September 12, 1995. The stock price
performance depicted in the performance graph is not necessarily indicative of
future stock price performance.
The performance graph assumes $100 was invested on June 24, 1994 and is
based on an opening price for the Common Stock of $20.25 per share on June 24,
1994 and closing prices for the S&P Midcap 400 and the common stock of the
members of the industry peer group on June 23, 1994. The cumulative total
stockholder return is based on share price appreciation plus dividends. The
performance data is presented in the graph and in the table which follows the
graph.
<TABLE>
<CAPTION>
JUNE 24, 1994 JANUARY 31, 1995 JANUARY 31, 1996 JANUARY 31, 1997 JANUARY 31, 1998
<S> <C> <C> <C> <C> <C>
Samsonite $100 $116 $ 46 $195 $158
S&P Midcap 400 $100 $105 $137 $168 $211
Peer Group $100 $116 $115 $136 $170
</TABLE>
The peer group consists of the following publicly-held branded consumer
durables manufacturers: The Coleman Company, Inc., Sunbeam Corporation, The
Black & Decker Corporation, Premark International Inc., Rubbermaid Incorporated
and Toastmaster Inc.
20
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information about persons known to
the Company to be the beneficial owner of more that 5% of the Common Stock, and
as to the beneficial ownership of the Common Stock by each of the Company's
directors and executive officers and all of the Company's directors and
executive officers as a group, as of July 16, 1998. Except as otherwise
indicated, to the knowledge of the Company, the persons identified below have
sole voting and sole investment power with respect to shares they own of record.
<TABLE>
<CAPTION> Number of Shares
Name and Address of Beneficial Owner Beneficially Owned Percent
- ------------------------------------------------- ------------------- -------
<S> <C> <C>
Apollo Investment Fund, L.P.
c/o Apollo Advisors, L.P.
2 Manhattan Road
Purchase, New York 10577
and
Lion Advisors, L.P. 3,557,757 (a) 34.10%
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
CIBC Oppenheimer Corp. 724,830 (b) 6.50%
425 Lexington Avenue
New York, NY 10017
Richard R. Nicolosi 577,493 (c) 5.32%
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Mark H. Rachesky 36,960 *
Mark Capital Partners
335 Madison Avenue, 26th Floor
New York, New York 10017
Luc Van Nevel 71,141 (d) *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Thomas R. Sandler 74,814 (e) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Karlheinz Tretter 49,299 (f) *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Richard H. Wiley 12,094 (g) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION> Number of Shares
Name and Address of Beneficial Owner Beneficially Owned Percent
- ------------------------------------------------- ------------------- -------
<S> <C> <C>
D. Michael Clayton 8,527 (h) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Carlo Zezza 16,800 (i) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Bernard Attal 457 *
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
R. Theodore Ammon 402 *
Big Flower Press Holdings, Inc.
3 E. 54th Street, 19th Floor
New York, New York 10022
Leon D. Black 402 (j) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Robert H. Falk 402 (j) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Robert L. Rosen 402 *
RLR Partners, L.P.
825 Third Avenue, 40th Floor
New York, New York 10022
Marc J. Rowan 402 (j) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Stephen J. Solarz 65 *
APCO Associates, Inc.
1615 L Street, N.W., Suite 900
Washington, DC 20036
All Directors and Executive Officers as a group 849,660 (k) 7.68%
</TABLE>
*Less than 1.0%
________________________
(a) Includes 1,779,234 shares held by Apollo Investment Fund, L.P. ("Apollo")
and 1,778,523 shares beneficially held by Lion Advisors, L.P. ("Lion") on
behalf of an investment account under management over which Lion has
exclusive investment, voting and dispositive power. Lion is affiliated with
Apollo Advisors, L.P., the general partner of Apollo Investments.
(b) Represents warrants to acquire Common Stock issued to purchasers of units
consisting of 13 7/8% Senior Redeemable Exchangeable Preferred Stock and
Warrants to purchase Common Stock, which units were issued on June 24,
1998.
22
<PAGE>
(c) Includes options to purchase 425,532 shares of Common Stock exercisable as
of July 16, 1998.
(d) Includes options to purchase 67,171 shares of Common Stock exercisable as
of July 16, 1998.
(e) Includes options to purchase 64,814 shares of Common Stock exercisable as
of July 16, 1998.
(f) Includes options to purchase 37,334 shares of Common Stock exercisable as
of July 16, 1998.
(g) Represents options to purchase 12,094 shares of Common Stock exercisable
as of July 16, 1998.
(h) Includes options to purchase 8,430 shares of Common Stock exercisable as
of July 16, 1998.
(i) Includes options to purchase 16,000 shares of Common Stock exercisable as
of July 16, 1998.
(j) Includes shares issued under the Directors Stock Plan. Does not include
shares held by Apollo or Lion. Each of Messrs. Falk and Rowan, directors of
the Company, together with Mr. Black, a director of the Company, who is
also a director of Apollo Capital Management, Inc., the general partner of
Apollo Advisors, L.P., and of Lion Capital Management, Inc., the general
partner of Lion, disclaims beneficial ownership of the securities held by
Apollo and Lion.
(k) Excludes shares listed above for Apollo Investment Fund, L.P., and Lion
Advisors, L.P. If such shares were included, the aggregate number of shares
beneficially owned by all directors and executive officers as a group would
be 4,407,417, representing 39.83%.
OTHER MATTERS
The Board knows of no other business which will be presented at the Meeting.
If other matters properly come before the Meeting, the persons named as proxy
holders will vote on them in accordance with their best judgment.
The costs of this solicitation of proxies will be borne by the Company. In
addition to the use of the mails, some of the officers or agents of the Company
may solicit proxies by telephone. The Company will request brokerage houses and
other custodians, nominees and fiduciaries to forward soliciting material to the
beneficial owners of Common Stock held of record by such persons and may verify
the accuracy or marked proxies by contacting record and beneficial owners of the
Common Stock. The Company will reimburse such persons for their reasonable
expenses incurred in forwarding such soliciting materials.
23
<PAGE>
EXHIBIT A
---------
SAMSONITE CORPORATION
FY 1999 STOCK OPTION AND INCENTIVE AWARD PLAN
1. Purpose.
-------
Samsonite Corporation ("Samsonite") hereby establishes the Samsonite
Corporation FY 1999 Stock Option and Incentive Award Plan (the "Plan"). The
purpose of the Plan is to align the interests of directors, officers, employees
and independent contractors of the Company and its subsidiaries with those of
its stockholders; to reinforce corporate, organizational and business-
development goals; to promote the achievement of year-to-year and long-range
financial and other business objectives; and to reward the performance of
directors, individual officers, employees and independent contractors in
fulfilling their personal responsibilities for long-range achievements.
2. Definitions.
-----------
The following terms, as used herein, shall have the following meanings:
a. "Annual Incentive Compensation Award" shall mean an Award, pursuant to
the Annual Incentive Compensation Program, contingent upon the attainment of
Performance Goals with respect to a Performance Period.
b. "Annual Incentive Compensation Program" shall mean the program set
forth in Section 8 of the Plan.
c. "Award" shall mean any Option, Restricted Stock, Stock Unit, Incentive
Unit, Annual Incentive Compensation Award or freestanding SAR granted
pursuant to the Plan.
d. "Award Agreement" shall mean any written agreement, contract, or other
instrument or document between the Company and a Participant evidencing an
Award.
e. "Board" shall mean the Board of Directors of the Company.
f. "Cause" shall mean, unless otherwise defined in the applicable Award
Agreement (i) the engaging by the Participant in willful misconduct that is
injurious to the Company or its Subsidiaries, (ii) the embezzlement or
misappropriation of funds or property of the Company or its Subsidiaries by
the Participant or the conviction of the Participant of a felony or the
entrance of a plea of guilty or nolo contendere by the Participant to a
felony, or (iii) the willful failure or refusal by the Participant to
substantially perform his duties or responsibilities that continues after
being brought to the attention of the Participant (other than any such
failure resulting from the Participant's incapacity due to Disability). For
purposes of this paragraph, no act, or failure to act, on the Participant's
part shall be considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission
was in the best interest of the Company. Determination of Cause shall be made
by the Committee in its sole discretion. Any such determination shall be
final and binding on a Participant.
g. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
h. "Committee" shall mean the committee of two or more persons,
established by the Board to administer the Plan. Each member of the Committee
shall be a non-employee director as defined in Rule 16b-3 and an outside
director as defined in Section 162(m) of the Code.
i. "Company" shall mean Samsonite Corporation, or any successor
corporation.
j. "DERS" shall mean dividend equivalent rights credited in respect of
Stock Units granted hereunder.
k. "Disability" shall mean a disability that would qualify as such under
the Company's then current long-term disability plan.
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<PAGE>
l. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.
m. "Fair Market Value" of a share of Stock on any date shall be the fair
market value of such Stock as determined by the Committee in its sole
discretion; provided that (A) if the Stock is admitted to trading on a
national securities exchange, Fair Market Value on any date shall be the last
sale price reported for the Stock on such exchange on such date or, if none,
the next earlier date on which a sale was reported, (B) if the Stock is
admitted to quotation on the NASDAQ Stock Market or other comparable quotation
system, Fair Market Value on any date shall be the last sale price reported
for the Stock on such system on such date or, if none, the next earlier date
on which a sale was reported, or (C) if the Stock is admitted to quotation on
a system other than the NASDAQ Stock Market or other comparable quotation
system, Fair Market Value on any date shall be the average of the highest bid
and lowest asked prices of the Stock on such system on such date.
n. "Incentive Stock Option" shall mean an Option that meets the
requirements of Section 422 of the Code, or any successor provision, and that
is designated by the Committee as an Incentive Stock Option.
o. "Incentive Unit" shall mean a unit that is assigned a dollar value and
that relates to a Long-Term Incentive Compensation Award.
p. "Long-Term Incentive Compensation Award" shall mean an Award, granted
pursuant to the Long-Term Incentive Compensation Program, the payment of which
is contingent upon the attainment of Performance Goals with respect to a
Performance Period.
q. "Long-Term Incentive Compensation Program" shall mean the program set
forth in Section 7 of the Plan.
r. "Nonqualified Stock Option" shall mean an Option other than an
Incentive Stock Option.
s. "Option" shall mean the right, granted pursuant to this Plan, of a
holder to purchase shares of Stock under the Stock Option and SAR Program at
an exercise price and upon the terms to be specified by the Committee.
t. "Participant" shall mean a director, officer, employee or independent
contractor of the Company or any of the Subsidiaries who is, pursuant to
Section 4 of the Plan, selected to participate herein.
u. "Performance Goal" shall mean the criteria and objectives, determined
by the committee, that must be met during the applicable Performance Period as
a condition of vesting or of the Participant's receipt of payment (or, in the
case of Restricted Stock, the lapse of restrictions) with respect to an Award.
Performance Goals shall be based on one or more of the following criteria: (i)
pre-tax income or after-tax income, (ii) operating profit, (iii) return on
equity, assets, capital or investment, (iv) earnings or book value per share,
(v) sales or revenues, (vi) operating expenses, (vii) Stock price appreciation
and (viii) implementation or completion of critical projects or processes.
Where applicable, the Performance Goals may be expressed in terms of attaining
a specific level of the particular criteria or the attainment of a percentage
increase or decrease in the particular criteria, and may be applied to one or
more of the Company, a Subsidiary, or a division or strategic business unit of
the Company, or may be applied to the performance of the Company relative to a
market index, a group of other companies or a combination thereof, all as
determined by the Committee. The Performance Goals may include a threshold
levels of performance below which no payment will be made (or no vesting will
occur), levels of performance at which specified payments will be made (or
specified vesting will occur), and a maximum level of performance above which
no additional payment will be made (or at which full vesting will occur).
Each of the foregoing Performance Goals shall be determined in accordance with
the generally accepted accounting principles and shall be subject to
certification by the Committee; provided that the Committee shall have the
--------
authority to make equitable adjustments to the Performance Goals in
recognition of unusual or non-recurring events affecting the Company or any
Subsidiary or the financial statements of the Company or any Subsidiary, in
response to changes in applicable laws or regulations, or to account for items
of gain, loss or expense determined to be extraordinary or unusual in nature
or infrequent in occurrence or related to the disposal of a segment of a
business related to a change in accounting principles.
25
<PAGE>
v. "Performance Period" shall mean (i) with respect to the Long-Term
Incentive Compensation Program, the period of three (3) consecutive Plan Years
or such other period (which in no case may be less than one (1) Plan Year) as
may be determined by the Committee, (ii) with respect to the Annual Incentive
Compensation Program, each Plan Year and (iii) with respect to all other
Awards, such period as the Committee shall determine.
w. "Plan" shall mean the Samsonite Corporation FY 1999 Stock Option and
Incentive Award Plan, as amended from time to time.
x. "Plan Year" shall mean the Company's fiscal year.
y. "Restricted Stock" shall mean any shares of Stock issued to a
Participant, without payment to the Company, pursuant to Section 7(a) of the
Plan that may be subject to certain transferability and other restrictions and
to a rule of forfeiture (including by reason of not satisfying certain
Performance Goals).
z. "Retirement" shall mean retirement of a Participant from the employ
or service of the Company or any of its Subsidiaries in accordance with the
terms of the Samsonite Retirement Income Plan or any successor plan thereto
or, if a Participant is not covered by such plan, such retirement on or after
such Participant's 65/th/ birthday.
aa. "Rule 16b-3" means Rule 16b-3, as from time to time in effect
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act, including any successor to such Rule.
bb. "SAR" shall mean a tandem or freestanding stock appreciation right,
granted to a Participant under Section 6(a) or 6(b), as the case may be, to be
paid in amount measured by the appreciation in the Fair Market Value of Stock
from the date of grant to the date of exercise of the right.
cc. "Stock" shall mean shares of common stock and the associated preferred
stock purchase rights, par value $.01 per share, of the Company.
dd. "Stock Option and SAR Program" shall mean the program set forth in
Section 6 hereof.
ee. "Stock Unit" shall mean a unit that represents a share of Stock and
that relates to a Long Term Incentive Compensation Award.
ff. "Subsidiary" shall mean any entity in which the Company directly or
through intervening subsidiaries owns at least a majority interest of the
total combined voting power or value of all classes of stock or, in the case
of an unincorporated entity, at least a majority in the capital and profits.
gg. "Ten Percent Stockholder" shall mean a Participant who, at the time an
Incentive Stock Option is to be granted to such Participant, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of its Subsidiaries.
3. Administration.
--------------
The Plan shall be administered by the Committee. The Committee shall have the
authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the type and
number of Awards to be granted, the number of shares of Stock to which an Award
may relate and the terms, conditions, restrictions and performance criteria
relating to any Award; to determine Performance Goals no later than such time as
is required to ensure that an underlying Award which is intended to comply with
Section 162(m) of the Code so complies; to determine whether, to what extent,
and under what circumstances an Award may be settled, canceled, forfeited,
exchanged or surrendered; to make adjustments in the Performance Goals in
recognition of unusual or non-recurring events affecting the Company or the
financial statements of the Company, or in response to changes in applicable
laws, regulations or accounting principles; to construe and interpret the Plan
and any Award; to prescribe, amend and rescind rules and regulations relating to
the Plan; to determine the terms and provisions of Award Agreements; and to make
all other determinations deemed necessary or advisable for the administration of
the Plan.
26
<PAGE>
All determinations of the Committee shall be made by a majority of its
members either present in person or participating by conference telephone at a
meeting or by written consent. The Committee may delegate to one or more of its
members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated such duties
may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. All
decisions, determinations and interpretations of the Committee shall be final
and binding on all persons, including the Company, the Participants (or any
person claiming any rights under the Plan from or through any Participant) and
any stockholder.
No member of the Board or the Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any Award
granted hereunder.
4. Eligibility.
-----------
Awards may be granted to directors, officers, employees and independent
contractors of the Company or any of its Subsidiaries in the sole discretion of
the Committee. In determining the persons to whom Awards shall be granted and
the type of Award, the Committee shall take into account such factors as the
Committee shall deem relevant in connection with accomplishing the purposes of
the Plan.
5. Stock Subject to the Plan; Limitation on Grants.
-----------------------------------------------
The maximum number of shares of Stock reserved for issuance pursuant to the
Plan shall be 750,000 shares, subject to adjustment as provided herein. In any
Plan Year the number of shares of Stock subject to Awards granted to any one
Participant shall not exceed one-third of the total number of shares of Stock
reserved for issuance pursuant to the Plan. Such shares may, in whole or in
part, be authorized but unissued shares or shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or
otherwise. If any shares subject to an Award are forfeited, cancelled,
exchanged or surrendered or if an Award otherwise terminates or expires without
a distribution of shares to the Participant, the shares of Stock with respect to
such Award shall, to the extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for Awards under the
Plan. Upon the exercise of any Award granted in tandem with any other Awards or
awards, the tandem Award shall be cancelled to the extent of the number of
shares of Stock as to which the Award is exercised and, notwithstanding the
foregoing, such number of cancelled shares shall no longer be available for
Awards under the Plan. Upon a cash payment made in respect of outstanding Stock
Units or freestanding SARs, the number of shares represented by such Stock Units
or SARs shall no longer be available for Awards under the Plan.
In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Stock or other property),
recapitalization, Stock split, reverse Stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange or other
corporate transaction or event affects the Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of
Participants under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (i)
the number and kind of shares of Stock or other property (including cash) that
may thereafter be issued in connection with Awards, (ii) the number and kind of
shares of Stock or other property (including cash) issued or issuable in respect
of outstanding Awards and (iii) the exercise price, grant price, or purchase
price relating to any Award; provided that, with respect to Incentive Stock
--------
Options, such adjustment shall be made in accordance with Section 424(h) of the
Code, (iv) the Performance Goals and (v) the individual limitations applicable
to Awards.
6. Stock Option and SAR Program.
----------------------------
Each Option or freestanding SAR granted pursuant to this Section 6 shall be
evidenced by an Award Agreement, in such form and containing such terms and
conditions as the Committee shall from time to time approve, which Award
Agreement shall comply with and be subject to the following terms and
conditions, as applicable.
a. Stock Options
-------------
(1) Number of Shares. Each Award Agreement shall state the number of
----------------
shares of Stock to which the Option relates.
27
<PAGE>
(2) Type of Option. Each Award Agreement shall specifically state
--------------
that the Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option. Incentive Stock Options shall be granted only to key
employees (including officers and directors who are also employees) of the
Company and its Subsidiaries. All other Awards may be granted to officers,
independent contractors, key employees and non-employee directors of the
Company or of any of its Subsidiaries.
(3) Exercise Price. Each Award Agreement shall state the exercise
--------------
price, which, with respect to an Incentive Stock Option, shall not be less
than one hundred percent (100%) of the Fair Market Value of the shares of
Stock covered by the Incentive Stock Option on the date of grant. The
exercise price shall be subject to adjustment as provided in Section 5
hereof. The date as of which the Committee adopts a resolution expressly
granting an Option shall be considered the day on which such Option is
granted.
(4) Method and Time of Payment. The exercise price shall be paid in
--------------------------
full at the time of exercise. The exercise price may be paid in cash or by
check, by the tender by the Participant to the Company of outstanding
shares of Stock, a copy of irrevocable instructions to a registered
broker/dealer to deliver promptly to the Company an amount of proceeds from
the sale of shares of Stock to be issued pursuant to the Options being
exercised or of a loan made with respect to shares of Stock to be issued
pursuant to the Options being exercised sufficient, in either case, to pay
the exercise price or a combination of any of the foregoing, in an amount
having a combined value equal to such exercise price. The value of any
Stock tendered pursuant to the preceding sentence shall be the Fair Market
Value of such Stock as of the last trading day prior to the date of
exercise.
(5) Term and Exercisability of Options. Each Award Agreement shall
----------------------------------
provide that each Option shall become vested and exercisable in accordance
with the vesting schedule that shall be established by the Committee at the
time that the Award is granted; provided that the Committee shall have the
--------
authority to accelerate the vesting and exercisability of any outstanding
Option at such time and under such circumstances as it, in its sole
discretion, deems appropriate. Options may be subject to such other
conditions including, but not limited to, restrictions on transferability
of the shares acquired upon exercise of such Options and Performance Goals
with respect to which the vesting of Options may be contingent, as the
Committee may prescribe in its discretion in the applicable Award
Agreement. The exercise period shall be ten (10) years from the date of
the grant of the Option or such shorter period as is determined by the
Committee. The exercise period shall be subject to earlier termination as
provided in Section 6(a)(6) hereof. An Option may be exercised, as to any
or all full shares of Stock as to which the Option has become vested and
exercisable, by written notice delivered in person or by mail to the
Secretary of the Company, specifying the number of shares of Stock with
respect to which the Option is being exercised, together with payment of
the exercise price. For purposes of the preceding sentence, the date of
exercise shall be deemed to be the date upon which the Secretary of the
Company receives such notification.
(6) Termination of Employment. Unless otherwise provided by the
-------------------------
Committee, in the event that a Participant ceases to be employed by (or, in
the case of non-employee, ceases to perform the services for the Company)
the Company or any Subsidiary (in each case, a "termination of
employment"), all the outstanding Options held by such Participant shall be
treated as follows:
(A) Cause. If the Participant is terminated from his employment with
-----
the Company or a Subsidiary for Cause, all the Options (whether vested or
unvested) shall automatically terminate and be cancelled (without any
action on the part of the Company) on the date of termination of
employment.
(B) Disability. If the Participant is terminated from his employment
----------
with the Company or a Subsidiary by reason of Disability, all unvested
Options shall automatically terminate and be cancelled (without any action
on the part of the Company) on the date of termination of employment. All
Options that have vested prior to such date shall remain exercisable for a
period of one year following such date.
(C) Death. If the Participant dies while employed by the Company or
-----
a Subsidiary, all unvested Options shall automatically terminate and be
cancelled (without any action on the part of the Company) on the date of
death. Following the Participant's death his executors, administrators,
legatees or distributees may exercise the Options that have vested prior to
the date of death for a period of one year following the date of death.
28
<PAGE>
(D) Other Terminations of Employment. If the Participant's
--------------------------------
employment is terminated for any other reason, all unvested Options shall
automatically terminate and be cancelled (without any action on the part of
the Company) on the date of termination of employment. All Options that
have vested prior to such date shall remain exercisable for a period of 90
days following such date.
(7) Tandem Stock Appreciation Rights. The Committee shall have
--------------------------------
authority to grant a tandem SAR to the grantee of any Option under the Plan
with respect to all or some of the shares of Stock covered by such related
Option. A tandem SAR shall, except as provided in this paragraph (7), be
subject to the same terms and conditions as the related Option. Each
tandem SAR granted pursuant to the Plan shall be reflected in the Award
Agreement relating to the related Option.
(a) Time of Grant. A tandem SAR may be granted either at the time of
-------------
grant or at any time thereafter during the term of the Option; provided
--------
that tandem SARs related to Incentive Stock Options may only be granted at
the time of grant of the related Option.
(b) Payment. A tandem SAR shall entitle the holder thereof, upon
-------
exercise of the tandem SAR or any portion thereof, to receive payment of an
amount computed pursuant to paragraph (d) below and payable in the form
determined pursuant to paragraph (f) below.
(c) Exercise. A tandem SAR shall be vested and exercisable at such time
--------
or times and only to the extent that the related Option is or has become
vested and exercisable and shall not be transferable except to the extent
the related Option is or has become transferable. A tandem SAR shall be
exercisable only if the Fair Market Value of a share of Stock on the date
of exercise exceeds the exercise price specified in the related Option.
(d) Amount Payable. Upon the exercise of a tandem SAR, the Participant
--------------
shall be entitled to receive an amount determined by multiplying (i) the
excess of the Fair Market Value of a share of Stock on the date of exercise
of such SAR over the exercise price of the related Option, by (ii) the
number of shares of Stock as to which such tandem SAR is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the
amount payable with respect to any tandem SAR by including such a limit at
the time it is granted.
(e) Treatment of Related Options and Tandem SARs Upon Exercise. Upon the
-----------------------------------------------------------
exercise of a tandem SAR, the related Option shall be cancelled to the
extent of the number of shares of Stock as to which the tandem SAR is
exercised and upon the exercise of an Option granted in connection with a
tandem SAR, the tandem SAR shall be cancelled to the extent of the number
of shares of Stock as to which the Option is exercised.
(f) Method of Exercise. Tandem SARs shall be exercised by a Participant
------------------
only by a written notice delivered in person or by mail to the Secretary of
the Company, specifying the number of shares of Stock with respect to which
the tandem SAR is being exercised. For purposes of this paragraph (f), the
date of exercise shall be deemed to be the date upon which the Secretary of
the Company receives such notification.
(g) Form of Payment. Payment of the amount determined under paragraph
---------------
(d) above may be made solely in whole shares of Stock in a number
determined based upon their Fair Market Value on the date of exercise of
the tandem SAR or, at the sole discretion of the Committee, solely in cash,
or in a combination of cash and shares of Stock as the Committee deems
advisable. If the Committee decides to make full payments in shares of
Stock, and the amount payable results in a fractional share, payment for
the fractional share shall be made in cash.
(8) Incentive Stock Options. Options granted as Incentive Stock
-----------------------
Options shall be subject to the following special terms and conditions, in
addition to the general terms and conditions specified in this Section 6.
(a) Value of Shares. The aggregate Fair Market Value (determined as of
---------------
the date of the Incentive Stock Option is granted) of the shares of Stock
with respect to which Incentive Stock Options granted under this Plan and
all other Plans of the Company become exercisable for the first time by
each Participant during any calendar year shall not exceed $100,000.
29
<PAGE>
(b) Exercise Price. The exercise price relating to any Incentive Stock
--------------
Option shall not be less than one hundred percent (100%) of the Fair Market
Value of the shares of Stock on the date of grant of such Incentive Stock
Option.
(c) Ten Percent Stockholder. In the case of an Incentive Stock Option
-----------------------
granted to a Ten Percent Stockholder, (x) the exercise price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the
shares of Stock on the date of grant of such Incentive Stock Option and (y)
the exercise period shall not exceed five (5) years from the date of grant
of such Incentive Stock Option.
b. Freestanding Stock Appreciation Rights. The Committee shall have
--------------------------------------
authority to grant a freestanding SAR that is not related to any Option.
Freestanding SARs shall be subject to the following terms and conditions:
(1) Number of Shares. Each Award Agreement shall state the number of
----------------
shares of Stock to which the freestanding SARs relate.
(2) Exercise Price. Each Award Agreement shall state the exercise
--------------
price, which shall not be less than one hundred percent (100%) of the Fair
Market Value of the shares of Stock (to which the freestanding SARs relate)
on the date of grant. The exercise price shall be subject to adjustment as
provided in Section 5 hereof.
(3) Term and Exercisability of Freestanding SARs. Each Award
--------------------------------------------
Agreement shall provide the exercise schedule for the freestanding SAR as
determined by the Committee, provided that the Committee shall have the
--------
authority to accelerate the exercisability of any freestanding SAR at such
time and under such circumstances as it, in its sole discretion, deems
appropriate. The exercise period shall be ten (10) years from the date of
the grant of the freestanding SAR or such shorter period as is determined
by the Committee. The exercise period shall be subject to earlier
termination as provided in paragraph 6(b)(7) hereof. A freestanding SAR
may be exercised, as to any or all full shares of Stock as to which the
freestanding SAR has become exercisable, by written notice delivered in
person or by mail to the Secretary of the Company, specifying the number of
shares of Stock with respect to which the freestanding SAR is being
exercised. For purposes of the preceding sentence, the date of exercise
shall be deemed to be the date upon which the Secretary of the Company
receives such notification.
(4) Payment. A freestanding SAR shall entitle the holder thereof,
-------
upon exercise of the freestanding SAR or any portion thereof, to receive
payment of an amount computed pursuant to paragraph (5) below.
(5) Amount Payable. Upon the exercise of a freestanding SAR, the
--------------
Participant shall be entitled to receive an amount determined by
multiplying (i) the excess of the Fair Market Value of a share of Stock on
the date of exercise of such SAR over the exercise price of such SAR by
(ii) the number of shares of Stock as to which such freestanding SAR is
being exercised. Notwithstanding the foregoing, the Committee may limit in
any manner the amount payable with respect to any freestanding SAR by
including such a limit at the time it is granted.
(6) Form of Payment. Payment of the amount determined under
---------------
paragraph (5) above may be made solely in whole shares of Stock in a number
determined based upon their Fair Market Value on the date of exercise of
the freestanding SAR or, at the sole discretion of the Committee, solely in
cash, or in a combination of cash and shares of Stock as the Committee
deems advisable. If the Committee decides to make full payment in shares
of Stock, and the amount payable results in a fractional share, payment for
the fractional share shall be made in cash.
(7) Termination. The terms and conditions set forth in Section
-----------
6(a)(6) hereof, relating to exercisability of Options in the event of
termination of employment with the Company, shall apply equally with
respect to the exercisability of freestanding SARs following termination of
employment.
30
<PAGE>
7. Long-Term Incentive Compensation Program.
----------------------------------------
Awards granted pursuant to this Section 7 shall be evidenced by an Award
Agreement in such form as the Committee shall from time to time approve and the
terms and conditions of such Awards shall be set forth therein. Awards may be
granted in the form of Restricted Stock, Stock Units or Incentive Units. In no
event may the Committee increase at its discretion the amount of an Award
payable to a "Covered Employee" (as defined in Section 162(m) of the Code) upon
attainment of the specified performance factors pursuant to this Section 7.
a. Restricted Stock. The Committee shall determine the number of shares
----------------
of Restricted Stock granted pursuant to the Award and the Performance Goals
for the Performance Period, the attainment of which shall cause the
restrictions to lapse in whole or in part and allow all or a specified portion
of the Restricted Stock to vest, as specified in the Award Agreement.
(1) Restrictions. During the Performance Period, shares of
------------
Restricted Stock may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution. Certificates for shares of Stock issued pursuant
to Awards of Restricted Stock shall bear an appropriate legend referring to
such restrictions, and any attempt to dispose of any such shares of Stock
in contravention of such restrictions shall be null and void and without
effect. During the Performance Period, such certificates shall be held in
escrow by an escrow agent appointed by the Committee.
(2) Ownership. Except to the extent otherwise set forth in the
---------
Award Agreement, during the Performance Period the Participant shall
possess all incidents of ownership of such shares, subject to Section
7(a)(1), including the right to receive dividends with respect to such
shares and to vote such shares.
b. Incentive Units. The Committee shall determine the value of
---------------
Incentive Units granted pursuant to the Award and the Performance Goals for
the Performance Period with respect to such Award. Unless otherwise provided
by the Committee in connection with specified terminations of employment,
payment in respect of Incentive Units shall be made only if and to the extent
that the Performance Goals with respect to such Performance Period are
attained.
c. Stock Units. The Committee shall determine the number of Stock Units
-----------
granted pursuant to the Award and the Performance Goals for the Performance
Period with respect to such Award. Unless otherwise provided by the Committee
in connection with specified terminations of employment, payment in respect of
the Stock Units shall be made only if and to the extent that the Performance
Goals with respect to such Performance Period are attained. Performance Goals
may include a level of performance below which no payment shall be made and
levels of performance at which payment shall be made in respect of specified
percentages (not to exceed one hundred percent (100%)) of such Stock Units.
(1) DERS. (A) Outstanding Stock Units shall be credited with DERs
----
based upon dividends paid on outstanding shares of Stock between the date
such Stock Units are granted and the date of payment in respect of such
Stock Units. Such DERS, once credited, shall be converted into an
equivalent number of Stock Units (including fractional Stock Units).
(B) DERs based on dividends paid in cash shall be credited, as of
each dividend payment date, in accordance with the following formula:
(A x B)/C
in which "A" equals the number of shares to which the Stock Units relate,
"B" equals the cash dividend per share and "C" equals the Fair Market Value
per share of Stock on the dividend payment date.
(C) If a dividend is paid in property other than cash, DERs shall be
credited, as of the dividend payment date, in accordance with the formula
set forth above, except that "B" shall equal the fair market value per
share of the property that the holder of the Stock Unit would have received
in respect of the number of shares of Stock underlying such Stock Unit had
such shares been owned as of the record date for such dividend.
31
<PAGE>
d. Time and Form of Payment. Unless otherwise determined by the
------------------------
Committee, all payments in respect of Stock Units and Incentive Units granted
under this Section 7 shall be made within a reasonable period after the end of
the Performance Period. Payment in respect of Stock Units and Incentive Units
shall be made either in cash or in Stock, or in combination of cash and Stock,
as determined by the Committee. For purposes of the preceding sentence, (1)
the Fair Market Value of Stock (as of the date of payment) delivered in full
or partial payment of Incentive Units shall equal the portion of the value of
Incentive Units (determined as of the end of the Performance Period) with
respect to which such payment is being made and (2) the amount of cash
delivered in full or partial payment of Stock Units shall equal the Fair
Market Value (as of the end of the Performance Period) of the number of shares
of Stock relating to the Stock Units with respect to which such cash payment
is being made.
e. Termination and Missed Performance Goals. Subject to such exceptions
----------------------------------------
as may be determined by the Committee and subject to the first paragraph of
this Section 7, if the Participant's continuous employment with the Company or
any of its Subsidiaries shall terminate for any reason prior to the expiration
of the Performance Period of an Award, or to the extent any Performance Goals
for the Performance Period are not met, (i) any shares of Restricted Stock
remaining subject to restrictions shall thereupon be forfeited by the
Participant and transferred to, and reacquired by, the Company at no cost to
the Company and (ii) any and all rights to payment in respect of Incentive
Units and Stock Units shall be forfeited by the Participant.
8. Annual Incentive Compensation Program.
-------------------------------------
Awards granted pursuant to this Section 8 shall be evidenced by an Award
Agreement in such form as the Committee shall from time to time approve and the
terms and conditions of such Awards shall be set forth therein. In no event may
the Committee increase at its discretion the amount of an Award payable to a
"Covered Employee" (as defined in Section 162(m) of the Code) upon attainment of
the specified performance factors pursuant to this Section 8.
a. In General. The Committee shall determine the amount of each Annual
----------
Incentive Compensation Award and shall specify with respect to a Performance
Period the Performance Goals applicable to the Award. Unless otherwise
provided by the Committee in connection with specified terminations of
employment, payment in respect of Annual Incentive Compensation Awards shall
be made only if and to the extent that the Performance Goals with respect to
such Performance Period are attained. Performance Goals may include a level
of performance below which no payment shall be made and levels of performance
at which specified percentages of the Annual Incentive Compensation Award
shall be paid.
b. Time and Form of Payment. Unless otherwise determined by the
------------------------
Committee, all payments in respect of Annual Incentive Compensation Awards
granted under this Section 8 shall be made within a reasonable period after
the end of the Performance Period. Payments shall be made either in cash or
in Stock, or in a combination of cash and Stock, as determined by the
Committee. For purposes of the preceding sentence, the Fair Market Value of
Stock (as of the date of payment) delivered in full or partial payment of
Annual Incentive Compensation Awards shall equal the portion of the value of
Annual Incentive Compensation Awards (determined as of the end of the
Performance Period) with respect to which such payment is being made.
c. Termination and Missed Performance Goals. Subject to such exceptions
----------------------------------------
as may be determined by the Committee and subject to the first paragraph of
this Section 8, if the Participant's continuous employment with the Company or
any of its Subsidiaries shall terminate for any reason prior to the expiration
of the Performance Period of an Award, or to the extent that any Performance
Goals for the Performance Period are not met, any and all rights to payment in
respect of Annual Incentive Compensation Awards shall be forfeited by the
Participant.
9. General Provisions.
------------------
a. Compliance with Legal Requirements. The Plan and the granting and
----------------------------------
exercising of Awards, and the other obligations of the Company under the Plan
and any Award Agreement or other agreement shall be subject to all applicable
federal and state laws, rules and regulations, and to such approvals by any
regulatory or governmental agency as may be required. The Company, in its
discretion, may postpone the issuance or delivery of Stock under any Award as
the Company may consider appropriate and may require any Participant to make
such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Stock in compliance
with applicable laws, rules and regulations.
32
<PAGE>
b. Nontransferability. Upon the death of a Participant, outstanding
------------------
Options granted to such Participant may be exercised only by the executor or
administrator of the Participant's estate or by a person who shall have
acquired the right to such exercise by will or by the laws of descent and
distribution. No transfer of an Option by will or the laws of descent and
distribution shall be effective to bind the Company unless the Committee shall
have been furnished with (a) written notice thereof and with a copy of the
will and/or such evidence as the Committee may deem necessary to establish the
validity of the transfer and (b) an agreement by the transferee to comply with
all the terms and conditions of the Option that are or would have been
applicable to the Participant and to be bound by the acknowledgments made by
the Participant in connection with the grant of the Option.
During a Participant's lifetime, the Committee may permit the transfer,
assignment or other encumbrance of an outstanding Option unless such Option is
a Incentive Stock Option and the Committee and the Participant intend that it
shall retain such status. Notwithstanding the foregoing, subject to any
conditions as the Committee may prescribe, a Participant may, upon written
notice to the Secretary of the Company, elect to transfer any or all Options
granted to such Participant pursuant to the Plan to members of his or her
immediate family, including, but not limited to, children, grandchildren and
spouse or to trusts for the benefit of such immediate family members or to
partnerships in which such family members are the only partners; provided that
--------
no such transfer by any Participant may be made in exchange for consideration.
c. No Right To Continued Employment. Nothing in the Plan or in any Award
--------------------------------
granted or any Award Agreement or other agreement entered into pursuant hereto
shall confer upon any Participant the right to continue in the employ or
service of the Company or to be entitled to any remuneration or benefits not
set forth in the Plan or such Award Agreement or other agreement or to
interfere with or limit in any way the right of the Company to terminate such
Participant's employment or service.
d. Withholding Taxes. Where a Participant or other person is entitled to
-----------------
receive shares of Stock pursuant to the exercise of an Option or is otherwise
entitled to receive shares of Stock or cash pursuant to an Award hereunder,
the Company shall have the right to require the Participant or such other
person to pay to the Company the amount of any taxes that the Company may be
required to withhold before delivery to such Participant or other person of
cash or a certificate or certificates representing such shares.
Upon the disposition of shares of Stock acquired pursuant to the exercise
of an Incentive Stock Option, the Company shall have the right to require the
payment of the amount of any taxes that are required by law to be withheld
with respect to such disposition.
Unless otherwise prohibited by the Committee or by applicable law, a
Participant may satisfy any such withholding tax obligation by any of the
following methods or by a combination of such methods: (a) tendering a cash
payment, (b) authorizing the Company to withhold from the shares of Stock or
cash otherwise payable to such Participant (1) one or more of such shares
having an aggregate Fair Market Value, determined as of the date the
withholding tax obligation arises, less than or equal to the amount of the
total withholding tax obligation or (2) cash in an amount less than or equal
to the amount of the total withholding tax obligation and (c) delivering to
the Company previously acquired shares of Stock (none of which shares may be
subject to any claim, lien, security interest, community property right or
other right of spouses or present or former family members, pledge, option,
voting agreement or other restriction or encumbrance of any nature whatsoever
having an aggregate Fair Market Value, determined as of the date the
withholding tax obligation arises, less than or equal to the amount of the
total withholding tax obligation.
e. Amendment and Termination of the Plan. The Board or the Committee may
-------------------------------------
at any time and from time to time alter, amend, suspend, or terminate the Plan
in whole or in part; provided that no amendment that requires stockholder
--------
approval in order for the Plan to continue to comply with Section 162(m) of
the Code or any applicable listing requirement shall be effective unless the
same shall be approved by the requisite vote of the stockholders of the
Company. Notwithstanding the foregoing, no amendment shall affect adversely
any of the rights of any Participant, without such Participant's consent,
under any Award theretofore granted under the Plan. The power to grant
Options under the Plan shall automatically terminate ten (10) years after the
approval of the Plan by the stockholders. If the Plan is terminated, any
unexercised Option shall continue to be exercisable in accordance with its
terms and the terms of the Plan in effect immediately prior to such
termination.
33
<PAGE>
f. Participant Rights. No Participant shall have any claim to be granted
------------------
any Award under the Plan, and there is no obligation for uniformity of
treatment for Participants. Except as provided specifically herein, a
Participant or a transferee of an Award shall have no rights as a stockholder
with respect to any shares covered by any Award until the date of the issuance
of a Stock certificate to him for such shares.
g. Unfunded Status of Awards. The Plan is intended to constitute an
-------------------------
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
h. No Fractional Shares. No fractional shares of Stock shall be issued or
--------------------
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu
of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.
i. Governing Law. The Plan and all determinations made and actions taken
-------------
pursuant hereto shall be governed by the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof.
j. Effective Date. The Plan shall take effect upon its adoption by the
--------------
Board, but the Plan (and any grants of Awards made prior to the stockholder
approval mentioned herein) shall be subject to the approval of the
stockholders of the Company. In the absence of such approval, such Awards
shall be null and void.
k. Beneficiary. A Participant may file with the Committee a written
-----------
designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation. If no
designated beneficiary survives the Participant, the executor or administrator
of the Participant's estate shall be deemed to be the grantee's beneficiary.
l. Interpretation. The Plan is designed and intended to comply with
--------------
Section 162(m) of the Code and all provisions hereof shall be construed in a
manner to so comply.
34
<PAGE>
<TABLE>
<C> <S>
P SAMSONITE CORPORATION
R 11200 EAST 45TH AVENUE, DENVER, COLORADO 80239
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING ON
X AUGUST 28, 1998
Y
The undersigned shareholder hereby appoints Thomas R. Sandler and Richard H. Wiley and each of them, proxies, with the powers
the undersigned would possess if personally present and with full power of substitution, to vote all common shares of the
undersigned in Samsonite Corporation at the annual meeting of stockholders to be held at the Embassy Suites Hotel, 4444 North
Havana Street, Denver, Colorado, at 10:00 A.M. local time, on August 28, 1998, and at any adjournment or postponement thereof,
upon all subjects that may properly come before the meeting, including the matters described in the proxy statement furnished
herewith, subject to any directions indicated on the other side of this card. IF NO DIRECTIONS ARE GIVEN, THE EXECUTED PROXIES
WILL VOTE FOR PROPOSALS 1, 2, 3 AND AT THEIR DISCRETION, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. THIS
PROXY REVOKES THE AUTHORITY GIVEN WITH RESPECT TO ANY EARLIER DATED PROXY SUBMITTED BY THE UNDERSIGNED.
- ------------------------------------------------------------------------------------------------------------------------------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
</TABLE>
(Front Side)
[X] Please mark
- --- votes as in
this example
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS
1, 2, AND 3
----------------------------------------------------------
<S> <C> <C> <C> <C>
1. Election of Directors 2. Approval to ratify FOR ABSTAIN AGAINST
NOMINEES: BERNARD ATTAL, LEON D. BLACK, and approve the [ ] [ ] [ ]
RICHARD R. NICOLOSI AND LUC VAN NEVEL appointment of KPMG
Peat Marwick LLP as
FOR WITHHELD independent auditors of
[ ] [ ] the Company and its
subsidiaries for the
Company's fiscal year
ending January 31, 1999.
3. Proposal to approve FOR ABSTAIN AGAINST
the Samsonite [ ] [ ] [ ]
Corporation 1999 Stock
Option and Incentive
Award Plan.
[ ] _______________________________________ MARK HERE [ ]
For all nominees except as noted above. FOR ADDRESS
CHANGE AND
NOTE AT LEFT
</TABLE>
<TABLE>
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<S> <C>
Please sign this proxy and return it promptly whether or not you plan to
attend the meeting. If shares are registered in the names of joint tenants
for trustees, each tenant or trustee should sign. If signing for a
corporation or partnership or as agent, attorney or fiduciary, indicate the
capacity in which you are signing. If you do attend the meeting and decide to
vote by ballot, such vote will supersede this proxy.
</TABLE>
<TABLE>
<S> <C> <C> <C>
- --------------------------- --------------------- ------------------------------------------- ----------------------
Signature Date Signature Date
</TABLE>
(Back Side)
