<PAGE>
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 Section 240.14a-11(c) or Section 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 on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO APPEARS HERE]
SAMSONITE CORPORATION
NOTICE OF
1999
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
May 13, 1999
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 June 30, 1999. 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
1999, which ended January 31, 1999. 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 June 30, 1999.
Sincerely,
Luc Van Nevel
President and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING
May 13, 1999
The Annual Meeting of Stockholders of Samsonite Corporation will be held in the
Embassy Suites Hotel, 4444 North Havana Street, in Denver, Colorado on June 30,
1999, at 10:00 A.M. local time for the following purposes:
1. To elect three Class I directors for a term of three years and until
their successors are elected and qualified;
2. To approve and ratify the appointment of KPMG LLP as independent
auditors for fiscal 2000; and
3. To transact such other business as properly may come before the
meeting.
Stockholders of record at the close of business on May 13, 1999, 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
Richard H. Wiley
Secretary
Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
May 13, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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
DIRECTORS................................................................ 4
EXECUTIVE OFFICERS....................................................... 5
EXECUTIVE COMPENSATION................................................... 6
PERFORMANCE GRAPH........................................................ 19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT........... 20
OTHER MATTERS............................................................ 22
</TABLE>
i
<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 June 30, 1999. This Proxy Statement, the accompanying proxy card
and the Company's Annual Report on Form 10-K for the fiscal year ended January
31, 1999 are being mailed to stockholders on or about May 18, 1999. 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 April 30,
1999, the record date for the meeting, was 10,508,457 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 April
30, 1999.
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 Steven R. Armstrong 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.
1
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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 2000
Annual Meeting, which is currently expected to be in June of 2000, 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,
2000. 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 April 3, 2000 and in order for a proposal
to be timely under the Company's Bylaws it must be received between April 2,
2000 and May 2, 2000.
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors is classified into three classes serving
staggered three-year terms. The terms of three directors expire in 1999.
Each nominee will be elected to serve a term of three years expiring in
2002 (Class I), 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 April 30, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES
LISTED BELOW.
Robert L. Rosen. Age 52. 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, Mariner
Post-Acute Networks, Inc. and WMC Finance Co., and Chairman of the Board of
National Financial Partners, Inc.
Marc J. Rowan. Age 36. Mr. Rowan is one of the founding principals of
Apollo Advisors, L.P. and of Lion Advisors, L.P. Mr. Rowan is also a director of
Vail Resorts, Inc., Quality Distribution, Inc., National Financial Partners,
Inc. and NRT Incorporated. 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 58. 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 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
2
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Directors of 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, IRI International, and the Santa Fe Corporation.
DIRECTORS MEETINGS AND COMPENSATION
During the Company's fiscal year 1999 (the year ended January 31,
1999), the Board of Directors met thirteen times, and acted by unanimous written
consent once. Each director attended 75% or more of the meetings of the Board of
Directors, except for Mr. Attal who attended 62% of the Board meetings, Mr.
Black who attended 62% of the Board meetings, and Mr. Solarz who attended 54% of
the Board meetings.
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 1999, based on the elections of the directors, approximately 87% 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 1999, the members of the Audit Committee were R.
Theodore Ammon, Richard R. Nicolosi, Mark H. Rachesky and Marc J. Rowan. In
January 1999, the Audit Committee was reconstituted to include Bernard Attal,
Mark H. Rachesky, Marc J. Rowan and Luc Van Nevel. Although the entire Audit
Committee did not meet during fiscal 1999, members of the Committee constituting
less than a quorum did meet at least three times in fiscal 1999.
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 1999, the members of the Executive
Committee were Robert H. Falk, Richard R. Nicolosi, Marc J. Rowan and Luc Van
Nevel. Mr. Van Nevel replaced Mr. Nicolosi on the Executive Committee effective
August 28, 1998. The Executive Committee met and acted by unanimous consent
fourteen times during fiscal 1999.
The Executive Committee has responsibility for the approval of
corporate governance matters requiring action by the Board of Directors.
COMPENSATION. The Compensation Committee acted by unanimous written
consent two times during fiscal 1999. The members of the Compensation Committee
during fiscal 1999 were R. Theodore Ammon, Robert H. Falk and Marc J. Rowan. Mr.
Ammon resigned from the Board of Directors on October 19, 1998 and his position
on the Compensation Committee was not replaced.
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 6.
3
<PAGE>
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, for fiscal 1999, all section 16(a)
requirements applicable to officers, directors and principal stockholders were
complied with.
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 LLP as independent auditors of the Company and its
subsidiaries for the Company's fiscal year 2000 (year ending January 31, 2000).
The Board of Directors reviewed the performance of KPMG 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 LLP as independent auditors.
Representatives of KPMG 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 LLP as independent auditors of the Company and its
subsidiary companies, for the fiscal year 2000, 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 2000 will be permitted to stand unless the Board finds other good reasons
for such a change.
DIRECTORS
Information regarding the three 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
1999 Annual Meeting. The terms of directors Robert H. Falk and Mark H. Rachesky
expire in 2000. The terms of directors Bernard Attal, Leon D. Black, Richard R.
Nicolosi and Luc Van Nevel expire in 2001.
Bernard Attal. Age 35. Mr Attal has been a director of the Company
since March 1996. Mr. Attal is a Director of Heights Advisors LLC, 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., the Florsheim Group, Inc, and Aurora National Life Insurance.
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., Apollo Investment Fund III, L.P.,
and Apollo Investment Fund IV, L.P. (the "Apollo Funds"), 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
4
<PAGE>
oriented investment funds. Mr. Black is also a director of Converse, Inc., Vail
Resorts, Inc., Telemundo Group, Inc., Sequa Industries, Inc., and United Rentals
Industries, Inc.
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 the Apollo Funds and a
limited partner of Lion Advisors, L.P. 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 Alliance Imaging, Inc., Converse, Inc., and the Florsheim Group, Inc.
Richard R. Nicolosi. Age 51. Mr. Nicolosi has been a director 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 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.
Mark H. Rachesky, M.D. Age 40. Dr. Rachesky has been a director of the
Company since 1993. Dr. Rachesky is the founder of various investment funds
which invest in distressed securities, including MHR Capital Partners LP and MHR
Institutional Partners LP. He is the principal owner and President of the
general partners and investment manager of such investment funds. From February
1, 1990 through June 11, 1996, Dr. Rachesky was employed by Icahn Holding
Corporation, where he served as the sole Managing Director the last three years,
and in such capacity, acted as Carl C. Icahn's chief investment advisor. From
June 1987 to January 1990, Dr. Rachesky was employed by an affiliate of the
Robert M. Bass Group, where he was involved in financing and investment
activity.
Luc Van Nevel. Age 52. 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.
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
April 30, 1999.
Thomas R. Sandler. Age 52. 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.
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 LLP, specializing in
corporate restructurings.
Mark A. Korros. Age 47. Mr. Korros was appointed President of Samsonite
USA and Canada in February 1999. Prior to that Mr. Korros was President of
Samsonite Company Stores and had responsibility for Samsonite's Canadian
operations. Mr. Korros joined Samsonite in June 1995 as Senior Vice President of
the American Tourister Retail Division. Prior to joining Samsonite, Mr. Korros
spent 5 1/2 years at Reebok as General Manager Reebok Retail Division. From 1976
to 1989, Mr. Korros was employed by Health-tex children's wear, where he held
several sales and marketing positions, including Vice President of Sales.
5
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Richard H. Wiley. Age 42. 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 LLP since 1982,
working in the audit and consulting areas.
Karlheinz Tretter. Age 56. 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.
Carlo Zezza. Age 63. 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.
Steven R. Armstrong. Age 40. Mr. Armstrong was appointed General
Counsel and Assistant Secretary of Samsonite in February 1999. From November
1997 until joining Samsonite, Mr. Armstrong engaged in the private practice of
law and taught at the University of Denver School of Law. Prior to that, Mr.
Armstrong was a partner in the national law firms, Paul, Hastings, Janofsky &
Walker and Baker & Hostetler, successively.
EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, 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 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 9. 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.
6
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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. At January 31, 1999, options to purchase 837,561 shares
were held by certain executive officers of the Company as described elsewhere
herein. At January 31, 1999, options to purchase 1,615,794 shares by all
executives and other employees were outstanding.
On June 24, 1998, the Company completed a recapitalization (the
"Recapitalization") involving the repurchase pursuant to a tender offer of 10.5
million shares of the Company's common stock at a purchase price of $40.00 per
share ($420 million in the aggregate), the issuance of $350 million of
subordinated notes, the issuance of $175 million of senior redeemable preferred
stock, and the refinancing of senior bank indebtedness. As a result of the
Recapitalization, the Company determined, with the approval of the Board of
Directors, to make an equitable adjustment of the terms of outstanding options
held by all employees, for options which remained unexercised after the
Recapitalization, including the Named Executives on page 9. The Company allowed
employees to accept a $12.50 per share reduction in the option exercise price,
or alternatively to surrender options held for a reduced number of options
(approximately 42.7% fewer options) at an exercise price equal to the price for
the ten trading day period following completion of the Recapitalization, which
turned out to be $10.00 per share. New options issued had the same proportionate
vesting schedule and performance criteria, if any, as the options surrendered.
Exercise prices for those options which received the $12.50 per share reduction
could not be reduced to less than 25% of the post tender offer trading price of
$10.00, or $2.50 per share. To the extent a $12.50 reduction would have resulted
in an exercise price of less than $2.50 per share, the option holder received
the right to receive a cash payment when the options become exercisable. The
following table summarizes adjustments to options as a result of the foregoing
for those Named Executive officers who received option amendments:
7
<PAGE>
<TABLE>
<CAPTION>
Market
Number of price of Exercise
securities stock at price at Length of
underlying time of time of original options
options repricing repricing New New term remaining at
repriced or or or number exercise date of repricing
Name Date amended (#) amendment amendment of options price (a) or amendment
---- ---- ----------- --------- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard R. Nicolosi July 16, 1998 425,532 $10.00 $18.250 425,532 $5.75 34 mos.
Luc Van Nevel July 16, 1998 98,619 10.00 $10.875 98,619 2.50 43 mos.
Thomas R. Sandler July 16, 1998 73,964 10.00 $12.875 73,964 2.50 43 mos.
Thomas R. Sandler July 16, 1998 24,655 10.00 $35.500 14,132 10.00 51 mos.
Karlheinz Tretter July 16, 1998 15,780 10.00 $10.875 15,780 2.50 43 mos.
Karlheinz Tretter July 16, 1998 50,000 10.00 $35.500 28,659 10.00 51 mos.
Carlo Zezza July 16, 1998 14,000 10.00 $13.875 14,000 2.50 44 mos.
Carlo Zezza July 16, 1998 15,000 10.00 $35.500 8,598 10.00 51 mos.
Richard H. Wiley July 16, 1998 7,737 10.00 $13.875 7,737 2.50 44 mos.
Richard H. Wiley July 16, 1998 12,263 10.00 $35.500 7,029 10.00 99 mos.
Richard H. Wiley July 16, 1998 10,000 10.00 $39.500 5,732 10.00 102 mos.
Mark Korros July 16, 1998 11,052 10.00 $13.875 11,052 2.50 45 mos.
Mark Korros July 16, 1998 23,948 10.00 $35.500 13,727 10.00 99 mos.
</TABLE>
(a) In lieu of reduction of option prices below $2.50 per share, Messrs.
Van Nevel, Sandler, Tretter, Zezza, Wiley and Korros were paid cash
compensation for options which vested and became exercisable through
January 31, 1999 of $325,441, $125,738, $32,546, $11,250, $6,962 and
$9,947, respectively.
Chief Executive Officer Compensation
In fiscal 1999, the compensation of Mr. Van Nevel was determined
pursuant to the Van Nevel Agreement described in "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements."
In fiscal 1999, the Compensation Committee of the Board of Directors
consisted of Robert H. Falk and Marc J. Rowan.
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid or awarded to the
Chief Executive Officer ("CEO") of the Company, and the other four most highly
compensated executive officers of the Company during the last fiscal year
(collectively, the "Named Executives") for services rendered in all capacities
for the last three fiscal years.
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
------------------------------------------------- ---------------------------------
Other Restricted
Annual Stock Securities All Other
Salary Bonus Compensation Awards Underlying Compensation
Name/Principal Position Year(a) ($) ($) ($) ($) Options/SARs (#)(i) ($)(j)
- ----------------------- ------- ------ ------- ------------ --------- ------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard R. Nicolosi(b)...... 1999 $175,385 $ -- $43,750(e) -- -- $ 3,980
1998 600,000 -- 150,000(e) -- -- 7,318
1997 425,000 500,000 112,500(e) 1,095,000(g) 425,532 109,034
Luc Van Nevel(c)............ 1999 422,797 650,000 50,000 (f) -- 40,000 414,548
President, Director and 1998 252,313 125,000 -- -- -- 96,726
Chief Executive Officer
1997 290,980 275,000 -- 709,724(h) 98,619 102,704
Thomas R. Sandler........... 1999 325,000 70,000 -- -- 20,000 132,514
President, Samsonite - 1998 200,000 192,000 -- -- -- 7,058
the Americas 1997 200,000 220,000 -- 709,724(h) 88,096 5,968
Karlheinz Tretter(d)........ 1999 325,000 105,000 -- -- 20,000 65,385
President, Samsonite 1998 168,023 120,000 -- -- -- 15,757
Europe and Asia 1997 192,667 69,710 -- -- 68,107 18,062
Carlo Zezza................. 1999 250,000 40,000 -- -- -- 18,031
Executive Vice-President 1998 200,000 70,000 -- -- -- 9,664
1997 200,000 90,000 -- -- 28,598 9,664
Richard H. Wiley............ 1999 206,250 100,000 -- -- 15,000 13,547
Chief Financial Officer, 1998 122,166 70,000 -- -- 5,732 5,079
Treasurer and Secretary 1997 107,497 38,983 -- -- 14,766 4,707
</TABLE>
- ----------------------
(a) Fiscal year ending January 31.
(b) Mr. Nicolosi was succeeded by Mr. Van Nevel as Chief Executive Officer on
May 15, 1998.
(c) 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 BF36.32, BF35.67, and BF30.93 to the U.S. dollar for the years
ended January 31, 1999, 1998, and 1997, 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.
(d) In fiscal 1999, Mr. Tretter's base salary was paid in various European
currencies equivalent to ECU 300,147 (equivalent to US $325,000 at the
effective date of Mr. Tretter's employment contract). Prior to fiscal 1999,
Mr. Tretter's cash compensation was 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 and DM1.50 to
the U.S. dollar for the years ended January 31, 1998 and 1997,
respectively.
(e) Consists of amounts paid for a housing allowance at the rate of $12,500 per
month.
(f) Consists of amounts paid to Mr. Van Nevel to cover the cost of maintaining
a second residence in Denver, Colorado.
(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"). Mr. Nicolosi became fully vested in the shares effective
May 15, 1998. In connection with the Recapitalization, Mr. Nicolosi
tendered 30,897 of these shares to the Company at $40.00 per share. The
aggregate market value of the remaining 29,103 shares held by Mr. Nicolosi
at January 31, 1999 was $196,445.
9
<PAGE>
(h) Effective as of May 15, 1996, the Company entered into agreements with
Messrs. 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. In connection with the Recapitalization, the
Company determined to permit Mr. Van Nevel and Mr. Sandler to tender such
shares. As a result, 20,026 shares for each of Mr. Van Nevel and Mr.
Sandler were tendered to the Company at $40.00 per share. The remaining
shares are subject to the original vesting requirements and the aggregate
market value of the remaining stock award shares for each of Messrs. Van
Nevel and Sandler is $127,325 at January 31, 1999. 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 Recapitalization, 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. The number of Securities Underlying Options/SARs has been
adjusted to reflect options surrendered in exchange for a reduced number of
options.
(j) Represents the following amounts paid by the Company for the benefit of
each of the Named Executives:
<TABLE>
<CAPTION>
Life Cash paid in lieu
Company insurance of reduction in
contribution to premium and options exercise
Name Year(i) 401(k) Plan excess medical price (iii)
- ---- ------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Mr. Nicolosi ........... 1999 $3,500 $ 480 $ --
Mr. Van Nevel(ii) ...... 1999 -- -- 325,441
Mr. Sandler ............ 1999 5,000 1,776 125,738
Mr. Tretter(ii) ........ 1999 -- -- 32,546
Mr. Zezza .............. 1999 5,125 1,656 11,250
Mr. Wiley .............. 1999 5,187 1,308 6,962
</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
1999, $89,107 and $32,839 was contributed on behalf of Mr. Van Nevel and
Mr. Tretter, respectively.
(iii) In connection with the Recapitalization completed on June 24, 1998, the
Company determined to adjust all options that remained unexercised after
the Recapitalization by reducing the exercise price of each option by
$12.50, but not to less than 25% ($2.50) of the average trading price for
a specified period of time following completion of the Recapitalization
($10.00). If the $12.50 adjustment resulted in the exercise price of an
option being reduced to less than $2.50, the option holder has the right
to receive cash in lieu of further reduction of the option price as the
options vest and become exercisable.
10
<PAGE>
The following table discloses the grants of stock options during fiscal
1999 to Named Executives.
OPTION/SAR GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
Potential realizable
value at assumed
annual rates of stock
price appreciation for
Individual Grants option term
---------------------------------------------------------- -----------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- ----------- ----------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Mr. Luc Van Nevel 40,000 18.35% 9.375 July 15, 2008 236,000 598,000
Mr. Sandler 20,000 9.17% 9.375 July 15, 2008 118,000 299,000
Mr. Tretter 20,000 9.17% 9.375 July 15, 2008 118,000 299,000
Mr. Wiley 15,000 6.89% 9.375 July 15, 2008 88,000 224,000
</TABLE>
The following table discloses, for the Named Executives, information
regarding stock options that were held at January 31, 1999.
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 at in-the-money Options/SARs
Shares Acquired Value Fiscal Year-End (#) at Fiscal Year End ($)
Name on Exercise (#) Realized $ Exercisable/Unexercisable Exercisable/Unexercisable(a)
- ---- --------------- ---------- -------------------------- ----------------------------
<S> <C> <C> <C> <C>
Mr. Nicolosi -- -- 425,532/-0- 425,532/-0-
Mr. Van Nevel -- -- 86,895/51,724 335,000/176,000
Mr. Sandler -- -- 77,303/30,793 251,000/94,000
Mr. Tretter 23,668 334,311 40,549/23,890 34,000/66,000
Mr. Zezza -- -- 19,798/2,800 48,000/14,000
Mr. Wiley -- -- 13,146/22,352 26,000/8,000
</TABLE>
(a) Total value of options based on fair market value of common stock of $6.75
as of January 31, 1999. There were no awards under long-term incentive
plans other than stock options to any Named Executives in fiscal 1999.
11
<PAGE>
PENSION PLAN TABLE
The U.S. executives are participants in the Samsonite Retirement Income
Plan (the "Samsonite Pension Plan") and certain of the executives participate in
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 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 $24,429 $ 32,572 $ 40,715 $ 48,857 $ 57,411
150,000 30,054 40,072 50,090 60,107 70,536
175,000 35,679 47,572 59,465 71,357 83,661
200,000 41,304 55,072 68,840 82,607 96,786
225,000 46,929 62,572 78,215 93,857 109,911
250,000 52,554 70,072 87,590 105,107 123,036
300,000 63,804 85,072 106,340 127,607 149,286
400,000 75,054 100,072 125,090 150,107 175,536
450,000 75,054 100,072 125,090 150,107 175,536
500,000 75,054 100,072 125,090 150,107 175,536
550,000 75,054 100,072 125,090 150,107 175,536
600,000 75,054 100,072 125,090 150,107 175,536
</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. Sandler, Mr. Zezza, and Mr. Wiley have accrued 3, 27, and 3
year(s), respectively, of service credit under the Samsonite Pension Plan and
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 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 $5.75 per share (as adjusted for the Recapitalization as
described under Equity Compensation beginning on page 7) which are fully vested.
12
<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.
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 (the "1995 Plan") to
purchase 98,619 shares of the Company's Common Stock at a price of $2.50 per
share (as adjusted for the Recapitalization as described under Equity
Compensation beginning on page 7. The
13
<PAGE>
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 1999 Plan (the "1999 Plan"), 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 out of shares reserved for 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. The options granted on July 15, 1998
vest and become exercisable upon a Change in Control, as defined in the option
agreement. On March 24, 1999, pursuant to the 1999 Plan, Mr. Van Nevel was
awarded options to purchase 40,000 shares of our common stock at a price of
$5.00 per share, the market value at the date of grant. The options, which were
granted out of shares reserved for our 1995 Plan, have a ten-year term. 20% of
the options vest and become exercisable on April 30, 2000 and an additional 20%
become exercisable on each April 30, 2001, 2002, 2003, and 2004. The options
granted on March 24, 1999 vest and become fully exercisable upon a Change in
Control, as defined in the option agreement.
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 Disability, (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
provides 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 the Recapitalization in fiscal 1999, 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 for $40.00 per share 20,026
of the Bonus Shares from Mr. Van Nevel, representing the same percentage of
shares accepted in the Recapitalization 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.
14
<PAGE>
On February 20, 1996, Mr. Sandler was granted options under the
Company's 1995 Plan to purchase 73,964 shares of the Company's Common Stock at a
price of $2.50 per share (as adjusted for the Recapitalization as described
under Equity Compensation beginning on page 7). 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
Plan to purchase 14,132 shares of the Company's Common Stock at a price of
$10.00 per share (as adjusted for the Recapitalization as described under Equity
Compensation beginning on page 7). 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
1999 Plan, 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 out of shares reserved for the
Company's 1995 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. The options granted on July 15, 1998 vest and become fully exercisable
upon a Change in Control, as defined in the option agreement. On March 24, 1999,
pursuant to the 1999 Plan, Mr. Sandler was awarded options to purchase 20,000
shares of our common stock at a price of $5.00 per share, the market value at
the date of grant. The options, which were granted out of shares reserved for
our 1995 Plan, have a ten-year term. 20% of the options vest and become
exercisable on April 30, 2000 and an additional 20% become exercisable on each
April 30, 2001, 2002, 2003, and 2004. The options granted on March 24, 1999 vest
and become fully exercisable upon a Change in Control, as defined in the option
agreement.
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 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 the Recapitalization, 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 for $40.00 per
share 20,026 of the Bonus Shares from Mr. Sandler, representing the same
percentage of shares accepted in the Recapitalization from other stockholders.
The remainder of the Bonus Shares are subject to the original terms of the
Sandler Share Bonus Agreement (including the vesting provisions 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 (the equivalent of U.S. $192,500 at
February 1, 1998) 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
15
<PAGE>
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 Plan to purchase 39,448 shares of the Company's Common Stock at a
price of $2.50 per share (as adjusted for the Recapitalization as described
under Equity Compensation beginning on page 7). 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 Plan
to purchase 28,659 shares of the Company's Common Stock at a price of $10.00 per
share (as adjusted for the Recapitalization as described under Equity
Compensation beginning on page 7). 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 1999 Plan, 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 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. The options granted on July 15, 1998
vest and become fully exercisable upon a Change in Control, as defined in the
option agreement. On March 24, 1999, pursuant to the 1999 Plan, Mr. Tretter was
awarded options to purchase 20,000 shares of our common stock at a price of
$5.00 per share, the market value at the date of grant. The options, which were
granted out of shares reserved for our 1995 Plan, have a ten-year term. 20% of
the options vest and become exercisable on April 30, 2000 and an additional 20%
become exercisable on each April 30, 2001, 2002, 2003, and 2004. The options
granted on March 24, 1999 vest and become fully exercisable upon a Change in
Control, as defined in the option agreement.
Carlo Zezza. The Company entered into an employment agreement with Mr.
Zezza effective as of February 1, 1998 (the "Zezza Agreement") and expiring on
March 12, 2001. The Zezza Agreement provides for an annual salary of $250,000.
Mr. Zezza is also entitled to receive an incentive bonus of up to $110,000 based
on Company performance and Mr. Zezza's completion of certain annual projects
prescribed by the Board. The Zezza Agreement provides for participation of Mr.
Zezza in all Company pension, welfare, savings, and other benefit and insurance
plans on the same basis as other executive officers. The Zezza Agreement
provides that if the Company terminates Mr. Zezza's employment without Cause, or
if Mr. Zezza terminates his employment for Good Reason (each as defined in the
Zezza Agreement), then (1) the Company will be required to pay Mr. Zezza an
amount equal to the lesser of (a) $350,000 or (b) the amount of the base salary
which would have been paid from the date of termination to the expiration of the
Zezza Agreement had the Zezza Agreement not been terminated and (2) until Mr.
Zezza becomes eligible for coverage under another employer's benefit plans, the
Company will allow Mr. Zezza to continue to participate, for the number of
months remaining in the term of the Zezza Agreement, in all Company benefit
plans, provided such participation is permissible under the general terms and
provisions of those plans. The Zezza Agreement provides that during Mr. Zezza's
employment with the Company and for a period of one year thereafter, Mr. Zezza
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, provided, however, that these
provisions shall not prevent Mr. Zezza, subsequent to his retirement from the
Company on his 65th birthday or such earlier date as mutually agreed upon by the
Company and Mr. Zezza, from being engaged by any person as a consultant in the
luggage industry so long as (i) certain confidentiality provisions of the Zezza
Agreement are not breached and (ii) the Company shall have given its prior
written consent, which shall not be unreasonably withheld.
On March 28, 1996, Mr. Zezza was granted options under the Company's
1995 Plan to purchase 20,000 shares of the Company's Common Stock at a price of
$13.875 per share, of which options for 6,000 shares were exercised on April 2,
1997. The option price for the remaining 14,000 shares was adjusted to $2.50 for
the Recapitalization as described under Equity Compensation beginning on page 7.
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. Zezza was granted options under the Company's 1995 Plan to
purchase 8,598 shares of the Company's Common Stock at a price of $10.00 per
share (as
16
<PAGE>
adjusted for the Recapitalization as described under Equity Compensation
beginning on page 7). The options have a ten-year term. 20% of the options vest
and become exercisable on the first anniversary of the date of the grant and an
additional 20% vest and become exercisable on the second, third, fourth and
fifth anniversaries of the date of grant. All the options granted to Mr. Zezza
vest and become exercisable upon a Change in Control, as defined in the October
29, 1996 option agreement.
Richard H. Wiley. The Company entered into an employment agreement with
Mr. Wiley effective as of February 1, 1998 (the "Wiley Agreement") for a
four-year term. The Wiley Agreement provides for an annual salary of $200,000
until February 1, 1999 and $250,000 per year thereafter until the end of the
term. Mr. Wiley is also entitled to receive an incentive bonus of up to $110,000
for the year ended February 1, 1999 and $137,500 per year thereafter based on
Company performance and Mr. Wiley's completion of certain annual projects
prescribed by the Board. The Wiley Agreement provides for participation of Mr.
Wiley in all Company pension, welfare, savings, and other benefit and insurance
plans on the same basis as other executive officers. The Wiley Agreement
provides that if the Company terminates Mr. Wiley's employment without Cause, or
if Mr. Wiley terminates his employment for Good Reason (each as defined in the
Wiley Agreement), then (1) the Company will be required to pay Mr. Wiley an
amount equal to the lesser of (a) $375,000 or (b) the amount of the base salary
which would have been paid from the date of termination to the expiration of the
Wiley Agreement had the Wiley Agreement not been terminated and (2) until Mr.
Wiley becomes eligible for coverage under another employer's benefit plans, the
Company will allow Mr. Wiley to continue to participate, for the number of
months remaining in the term of the Wiley Agreement, in all Company benefit
plans, provided such participation is permissible under the general terms and
provisions of those plans. The Wiley Agreement provides that during Mr. Wiley's
employment with the Company and for a period of one year thereafter, Mr. Wiley
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 March 28, 1996, Mr. Wiley was granted options under the Company's
1995 Plan to purchase 7,737 shares of the Company's Common Stock at a price of
$2.50 per share (as adjusted for the Recapitalization as described under Equity
Compensation beginning on page 7). 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. Wiley was granted
options under the Company's 1995 Plan to purchase 7,029 shares of the Company's
Common Stock at a price of $10.00 per share (as adjusted for the
Recapitalization as described under Equity Compensation beginning on page 7).
The options have a ten-year term. 20% of the options vest and become exercisable
on the first anniversary of the date of the grant and an additional 20% vest and
become exercisable on the second, third, fourth and fifth anniversaries of the
date of grant. On July 15, 1998, pursuant to the 1999 Plan, Mr. Wiley was
awarded options to purchase 15,000 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 out of shares reserved for the Company's 1995 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. All the options granted to
Mr. Wiley vest and become exercisable upon a Change in Control, as defined in
the option agreements. On March 24, 1999, pursuant to the 1999 Plan, Mr. Wiley
was awarded options to purchase 25,000 shares of our common stock at a price of
$5.00 per share, the market value at the date of grant. The options, which were
granted out of shares reserved for our 1995 Plan, have a ten-year term. 20% of
the options vest and become exercisable on April 30, 2000 and an additional 20%
become exercisable on each April 30, 2001, 2002, 2003, and 2004. The options
granted on March 24, 1999 vest and become fully exercisable upon a Change in
Control, as defined in the option agreement.
Mark A. Korros. The Company entered into an employment agreement (the
"Korros Agreement") with Mr. Korros, effective as of June 1, 1998 and expiring
on January 31, 2002.
The Korros Agreement provides for an annual base salary (currently
$225,000 per year) and provides for participation in the Company's incentive
bonus plan with a target bonus of up to 50% of base salary based on Company
performance. The Korros Agreement provides for the participation of Mr. Korros
in all Company pension, welfare, savings, and other benefit and insurance plans
on the same basis as other executive officers. The Korros Agreement provides
that if the Company terminated Mr. Korros's employment without Cause, or if Mr.
Korros terminated his employment for Good Reason (each as defined in the Korros
Agreement), then (1) the Company would be required to
17
<PAGE>
pay Mr. Korros an amount equal to the lesser of (a) 150% of the current based
salary or (b) the base salary through the expiration date of the Korros
Agreement and (2) until Mr. Korros becomes eligible for coverage under another
employer's benefit plans, the Company would allow Mr. Korros to continue to
participate, for the number of months remaining in the term of the Korros
Agreement, in all Company benefit plans, provided such participation is
permissible under the general terms and provisions of those plans.
On March 28, 1996, Mr. Korros was granted options under the Company's
1995 Plan to purchase 11,052 shares of the Company's Common Stock at a price of
$2.50 per share, as adjusted for the Recapitalization described under Equity
Compensation beginning on page 7. 20% of the options vest and become exercisable
on the date of the 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. Korros was granted options under the Company's 1995 Plan
to purchase 13,727 shares of the Company's Common Stock at a price of $10.00 per
share (as adjusted for the Recapitalization as described under Equity
Compensation beginning on page 7). The options have a ten-year term. 20% of the
options vest and become exercisable on the first anniversary of the date of
grant and an additional 20% vest and become exercisable on the second, third,
fourth, and fifth anniversaries of the date of grant. Upon a Change of Control
(as defined in the October 29, 1996 option agreement), the options, as well as
options granted on March 28, 1996, vest and become exercisable. On July 15,
1998, pursuant to the 1999 Plan, Mr. Korros was awarded options to purchase
8,000 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 out of shares
reserved for the Company's 1995 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
grant. On March 24, 1999, pursuant to the 1999 Plan, Mr. Korros was awarded
options to purchase 12,000 shares of our common stock at a price of $5.00 per
share, the market value at the date of grant. The options, which were granted
out of shares reserved for our 1995 Plan, have a ten-year term. 20% of the
options vest and become exercisable on April 30, 2000 and an additional 20%
become exercisable on each April 30, 2001, 2002, 2003, and 2004. The options
granted on March 24, 1999 vest and become fully exercisable upon a Change in
Control, as defined in the option agreement.
1995 STOCK OPTION AND INCENTIVE AWARD PLAN (THE "1995 PLAN")
The Company has reserved 2,550,000 shares for issuance under 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, 1999, options for 973,862 shares were outstanding to
various executive officers and other employees under the 1995 Plan at option
exercise prices ranging from $2.50 to $16.00 per share. As a result of the
Recapitalization in fiscal 1999 whereby the Company purchased 10,500,000 shares
of Common Stock, the Company 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 Recapitalization) at exercise prices equal to the post
Recapitalization trading price, with the same proportional vesting schedule as
the options surrendered.
FY 1999 STOCK OPTION AND INCENTIVE AWARD PLAN (THE "1999 PLAN")
The Company has reserved 750,000 shares for issuance under the 1999
Plan. The 1999 Plan provides for the issuance of a variety of awards, including
tax qualified incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock and restricted stock units. The 1999 Plan
is administered by the compensation Committee which has full authority to
determine, among other things, the persons to whom awards under the 1999 Plan
will be made, the number of shares of Common Stock subject to the awards, and
the specific terms and conditions applicable to awards. Stock options granted
under the 1999 Plan will have an exercise period of not more than ten years.
At January 31, 1999, options for 216,400 shares were outstanding
pursuant to the 1999 Plan at an exercise price of $9.375 per share out of shares
reserved for the 1995 Plan. At January 31, 1999, options for a total of
1,190,262 shares had been granted out of shares reserved for the 1995 Plan
pursuant to the terms of either the 1995 Plan or the 1999 Plan.
18
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No current or former officer of the Company served as a member of the
Compensation Committee.
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, 1999, 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 index for Samsonite at January 31, 1999 includes the return to an
investor for the Recapitalization transaction completed in fiscal 1999. The
performance data is presented in the graph and in the table which follows the
graph.
[LINE GRAPH APPEARS HERE]
[PLOT POINTS TO COME]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
June 24, January 31, January 31, January 31, January 31, January 31,
1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Samsonite $100 $116 $ 46 $195 $158 $118
- ---------------------------------------------------------------------------------------------------------------
S&P Midcap 400 $100 $105 $137 $168 $211 $247
- ---------------------------------------------------------------------------------------------------------------
Peer Group $100 $116 $115 $136 $170 $166
- ---------------------------------------------------------------------------------------------------------------
</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.
19
<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 April 30, 1999. 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) 33.86%
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
CIBC Oppenheimer Corp. 724,830 (b) 6.45%
425 Lexington Avenue
New York, NY 10017
Richard R. Nicolosi 577,493 (c) 5.28%
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Mark H. Rachesky 39,384 *
Mark Capital Partners
335 Madison Avenue, 26th Floor
New York, New York 10017
Luc Van Nevel 90,865 (d) *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Thomas R. Sandler 87,303 (e) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Karlheinz Tretter 52,514 (f) *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Carlo Zezza 24,723 (g) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Name and Address of Beneficial Owner Beneficially Owned Percent
------------------------------------ ------------------ -------
<S> <C> <C>
Mark Korros 19,323 (h) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Richard H. Wiley 14,292 (i) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Bernard Attal 2,881 *
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
Leon D. Black 2,826 (j) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Robert H. Falk 2,826 (j) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Robert L. Rosen 2,826 *
RLR Partners, L.P.
825 Third Avenue, 40th Floor
New York, New York 10022
Marc J. Rowan 2,826 (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 920,147 (k) 8.22%
</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. Does not
give effect to the issuance of Series Z Convertible Preferred Stock to
Apollo in April 1999 that is convertible into 4,235,000 shares of Common
Stock. The conversion of such shares is subject to certain conditions.
(b) Represents warrants to acquire Common Stock issued to purchasers of units
consisting of 13f% Senior Redeemable Exchangeable Preferred Stock and
Warrants to purchase Common Stock, which units were issued on June 24,
1998.
(c) Includes options to purchase 425,532 shares of Common Stock exercisable as
of April 30, 1999.
(d) Includes options to purchase 86,895 shares of Common Stock exercisable as
of April 30, 1999.
21
<PAGE>
(e) Includes options to purchase 77,303 shares of Common Stock exercisable as
of April 30, 1999.
(f) Includes options to purchase 40,549 shares of Common Stock exercisable as
of April 30, 1999.
(g) Includes options to purchase 19,798 shares of Common Stock exercisable as
of April 30, 1999.
(h) Includes options to purchase 15,931 shares of Common Stock exercisable as
of April 30, 1999.
(i) Represents options to purchase 14,292 shares of Common Stock exercisable as
of April 30, 1999.
(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 and Lion. If such shares were
included, the aggregate number of shares beneficially owned by all
directors and executive officers as a group would be 4,477,905,
representing 40.02%.
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.
22
<PAGE>
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
X Meeting on June 30, 1999
Y
The undersigned shareholder hereby appoints Steven R. Armstrong 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 June 30,
1999, 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 and 2 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
---------------
(Front Side)
<PAGE>
Please mark
[X] votes as in
this example
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The Board of Directors recommends a vote FOR Proposals 1 and 2
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1. Election of Directors
NOMINEES: ROBERT L. ROSEN, MARC J. ROWAN,
STEPHEN J. SOLARZ
FOR WITHHELD
[_] [_]
[_] _______________________________________
For all nominees except as noted above.
2. Approval to ratify and approve the FOR AGAINST ABSTAIN
appointment of KPMG LLP as independent [_] [_] [_]
auditors of the Company and its
subsidiaries for the Company's fiscal
year ending January 31, 2000.
MARK HERE [_]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
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.
____________________________ __________ __________________________ _________
Signature Date Signature Date
(Back Side)
