<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
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
Helen of Troy Limited
------------------------------------------------
(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)(1) 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 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:
4) Date Filed:
<PAGE> 2
HELEN OF TROY LIMITED
6827 MARKET AVENUE
EL PASO, TEXAS 79915
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 26, 1997
Notice is hereby given that the Annual Meeting of the Shareholders
(the "Meeting") of Helen of Troy Limited, a Bermuda company, will be held at
the Camino Real Hotel, 101 S. El Paso Street, El Paso, Texas on Tuesday, August
26, 1997 at 1:00 p.m., Mountain Daylight Time, for the following purposes:
1. To elect a board of seven directors;
2. To consider approval of an amendment to the Company's 1994
Stock Option and Restricted Stock Plan;
3. To approve a proposal to increase the number of common shares
subject to the Company's 1994 Stock Option and Restricted
Stock Plan;
4. To consider approval of a proposal to increase the Company's
authorized common shares;
5. To consider and vote upon the adoption of Helen of Troy's 1997
Cash Bonus Performance Plan and the performance goals included
therein;
6. To consider approval of certain amendments to the Company's
1995 Non-Employee Director Stock Option Plan;
7. To transact such other business as may properly come before
the Meeting or any adjournment thereof.
A record of shareholders who will be entitled to notice of or to vote
at the Meeting has been taken as of the close of business on July 3, 1997. You
are urged to read carefully the attached Proxy Statement for additional
information concerning the matters to be considered at the Meeting.
If you do not expect to be present in person at the Meeting, please
sign and date the enclosed proxy and return it promptly in the enclosed
postage-paid envelope which has been provided for your convenience. The prompt
return of proxies will insure a quorum and save the Company the expense of
further solicitation.
You are cordially invited and encouraged to attend the Meeting in
person.
GERALD J. RUBIN
Chairman of the Board
El Paso, Texas
July 10, 1997
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED. IF YOU DO
ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE> 3
HELEN OF TROY LIMITED
PRINCIPAL EXECUTIVE OFFICE
6827 MARKET AVENUE
EL PASO, TEXAS 79915
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 26, 1997
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Helen of
Troy Limited (the "Company") for use at its Annual Meeting of Shareholders (the
"Meeting") to be held at the Camino Real Hotel, 101 S. El Paso Street, El Paso,
Texas, on Tuesday, August 26, 1997 at 1:00 p.m., Mountain Daylight Time, and at
any adjournment thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders. A proxy may be revoked by filing written
notice of revocation or an executed proxy bearing a later date with the
Secretary of the Company any time before exercise of the proxy. A shareholder
giving a proxy may attend the Meeting and vote in person. Forms of proxy and
proxy statements are to be mailed on or about July 11, 1997.
The Annual Report to Shareholders for the year ended February 28, 1997
("fiscal 1997"), including financial statements, is enclosed. It does not form
any part of the material provided for the solicitation of proxies.
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, officers and employees of the Company may
solicit the return of proxies by telephone and personal interview. Forms of
proxy and proxy material may also be distributed through brokers, custodians
and like parties to beneficial owners of the Company's common shares, par value
$.10 per share (the "Common Stock") for which the Company will, upon request,
reimburse the forwarding expense.
VOTING SECURITIES
The close of business on July 3, 1997 was the record date for
determination of shareholders entitled to notice of, and to vote at, the
Meeting. At the record date, there were 13,291,666 issued and outstanding
shares of Common Stock, entitled to one vote per share. On June 4, 1996, the
Board of Directors approved a 2-for-1 stock split which was paid as a 100%
stock dividend on July 1, 1996 to shareholders of record on June 17, 1996. All
references in this Proxy Statement to number of shares of Common Stock and per
share amounts reflect the increased number of shares of Common Stock
outstanding.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 27, 1997, the beneficial
ownership of common stock of the directors, the named executive officers of
the Company, all executive officers and directors of the Company as a group,
and each person known to the Company to be the beneficial owner of more than 5%
of its outstanding common stock:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT
<S> <C> <C>
Gerald J. Rubin (1)(2)(3)(4) 2,229,772 15.5%
6827 Market Avenue
El Paso, Texas 79915
Byron H. Rubin 0 *
Aaron M. Shenkman (3) 292,640 2.0%
Daniel C. Montano (11) 2,000 *
Gary B. Abromovitz (11) 4,250 *
Stanlee N. Rubin (4) 2,000 *
Christopher L. Carameros (11) 2,000 *
Sam L. Henry (3) 51,500 *
All directors and officers as a group
(8 persons) (3) 2,583,912 18.0%
Fidelity Management and Research
Company (5) 1,361,100 9.5%
82 Devonshire Street
Boston, Massachusetts 02109
Neumeier Investment Counsel (6) 1,242,700 8.6%
26435 Carmel Rancho Blvd.
Carmel, California 93923
Brinson Partners (7) 937,700 6.5%
209 South LaSalle
Chicago, Illinois 60604
Neuberger & Berman (8) 872,600 6.1%
605 Third Avenue
New York, NY 10158
A I M Management Group Inc. (9) 750,000 5.2%
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
David L. Babson & Company, Inc. (10) 733,800 5.1%
One Memorial Drive
Cambridge, Massachusetts 02142
</TABLE>
* ownership of less than 1% of the outstanding Common Stock.
(1) Does not include 72,000 shares in a trust for the children of Gerald J.
Rubin and Stanlee N. Rubin in which they disclaim any beneficial ownership.
(2) Includes 138,490 shares in the case of Mr. Gerald J. Rubin held
beneficially through a partnership in which Gerald J. Rubin is a partner.
(3) Includes 850,000 shares in the case of Gerald J. Rubin, 177,780 shares in
the case of Aaron M. Shenkman, 21,500 shares in the case of Sam L. Henry,
and 1,057,280 shares in the case of all directors and officers which are
issuable pursuant to options which are exercisable within sixty days of
June 27, 1997.
(4) Includes 1,241,282 shares and all stock options granted which are subject
to a one-half undivided community property interest with Stanlee N. Rubin.
(5) As extracted from Form 13G filed as of February 14, 1997, by Fidelity
Management and Research Company, this represents sole investment power for
1,361,100 shares and sole voting power for no shares.
(6) As extracted from Form 13G filed January 30, 1997 by Neumeier Investment
Counsel, this represents sole investment power for 1,242,700 shares and
sole voting power for 571,700 shares.
(7) As extracted from Form 13G filed as of February 12, 1997, by Brinson
Partners, Inc., this represents shared investment power for 937,700 shares
and sole voting power for no shares.
(8) As extracted from Form 13G filed as of February 10, 1997, by Neuberger &
Berman L.P., this represents shared investment power for 872,600 shares and
sole voting power for 142,300 shares.
(9) As extracted from Form 13G filed as of February 12, 1997, by A I M
Management Group Inc., this represents shared investment power for 750,000
shares and sole voting power for no shares.
(10) As extracted from Form 13G filed as of February 7, 1997 by David L. Babson
& Company, Inc., this represents sole investment power for 733,800 shares
and sole voting power for 591,700.
(11) 2,000 of the shares for each individual represent options issued under
the 1995 Non-Employee Director Stock Option Plan, which are exercisable as
of June 27, 1997.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Bye-Laws of the Company state that the number of directors of the
Company shall not be less than two directors. Accordingly, the Board of
Directors has determined by resolution that the current number of directors
shall be seven; therefore, proxies cannot be voted for more persons than the
number of nominees named. Each director elected shall serve as a director
until the next annual meeting of shareholders, or until his or her successor is
elected and qualified.
The seven persons named below are the nominating committee's nominees for
election as directors. Further information with respect to each nominee is set
forth in the following:
Directors and executive officers each serve for a one year term or until
their successors are elected and qualified to serve. Gerald J. Rubin and Byron
H. Rubin are brothers.
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<PAGE> 6
Set forth below are descriptions of the principal occupations during at
least the past five years of the directors and executive officers of the
Company.
Gerald J. Rubin, age 53, founder of Helen of Troy Texas Corporation,
formerly known as Helen of Troy Corporation, has been the Chairman and Chief
Executive Officer of the Company since December 1993 and of Helen of Troy Texas
Corporation since 1984. Effective March 1, 1997, Mr. Rubin became the
Company's President. Mr. Rubin has been a Director of the Company since
December 1993 and of Helen of Troy Texas Corporation since 1969.
Aaron M. Shenkman, age 56, has been the Deputy Chairman, President and
Chief Operating Officer of the Company since December 1993 and President and
Chief Operating Officer of Helen of Troy Texas Corporation since 1984. Mr.
Shenkman has been a Director of the Company since December 1993 and of Helen of
Troy Texas Corporation since 1975. Effective March 1, 1997, Mr. Shenkman
retired as President and Chief Operating Officer. Mr. Shenkman now serves as
an employee of the Company.
Daniel C. Montano, age 48, has been a Director of the Company since
December 1993 and of Helen of Troy Texas Corporation since 1980. He has been
the managing Director of CK Capital since January 1997. From January 1995 to
December 1996, he was Director of Investment Banking at Brook Street
Securities. Mr. Montano was President and a Director of Montano Securities
Corporation from 1979 to January 1995. He is subject to a cease-and-desist
order pursuant to Section 8A of the Securities Act ordering him to permanently
cease and desist from committing or causing any violation, and from committing
or causing any future violation, of Sections 5(b)(1) and 17(a)(2) and (3) of
the Securities Act.
Byron H. Rubin, age 47, has been a Director of the Company since
December 1993 and of Helen of Troy Texas Corporation since 1981. He has been a
partner in the firm Daniels and Rubin, (formerly known as Integrated Financial
of Texas), an insurance and tax planning firm in Dallas, Texas since 1979.
Stanlee N. Rubin, age 52, is the wife of Gerald J. Rubin, Chairman of
the Board of Directors. She has been a Director of the Company since December
1993 and of Helen of Troy Texas Corporation since 1990. Mrs. Rubin is active
in civic and charitable organizations. She is a member of the University of
Texas at El Paso Board of Development. She is presently on the Board of
Directors of the Alumni Association of the University of Texas at El Paso, The
National Conference of Christians and Jews and the El Paso Symphony Guild.
Gary B. Abromovitz, age 54, has been a Director of the Company since
December 1993 and of Helen of Troy Texas Corporation since 1990. He has been a
partner in the law offices of Bonn/Abromovitz Law Firm in Phoenix, Arizona
since 1990. From 1985 to 1989, he was Of Counsel to the law firm Bonn &
Anderson in Phoenix, Arizona.
Christopher L. Carameros, age 43, has been a Director of the Company
since December 1993 and of Helen of Troy Texas Corporation since June 1993. He
currently is an officer, director and minority shareholder of Cactus Apparel
Inc., an apparel manufacturing company. He also serves as a Director of Farah
Incorporated.
Except as indicated above, none of the directors of the Company is a
director of any other publicly held company.
VOTE REQUIRED FOR ELECTION OF DIRECTORS
The nominees receiving a majority of the votes cast at the Meeting will
be elected as Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF
THE SEVEN NOMINEES NAMED ABOVE.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Company has an Executive Committee which during fiscal 1997 consisted
of Mr. Gerald J. Rubin and Mr. Aaron M. Shenkman. The Executive Committee has
the power to exercise all of the authority of the Board of Directors in the
management of the business and affairs of the Company, except to the extent
provided in the Company's bye-laws and by applicable law. All actions and
resolutions of the Executive Committee are reported to the Board of Directors
at the next
4
<PAGE> 7
meeting of the Board for its review, approval and ratification. The Executive
Committee meets periodically during the year but no resolutions were adopted
nor were any formal meetings held during fiscal 1997.
The Company has an Audit Committee which during fiscal 1997 consisted of
Mr. Gary B. Abromovitz, Mr. Daniel C. Montano and Mr. Christopher L.
Carameros. The Audit Committee is responsible for evaluating accounting and
control procedures and practices of the Company and reporting on such matters
to the Board of Directors. The Audit Committee serves as a direct liaison with
the Company's independent public accountants and recommends the engagement or
discharge of such accountants. The Audit Committee meets periodically with the
Chief Financial Officer, other appropriate officers of the Company and the
Company's independent public accountants to review the Company's financial and
accounting systems, accounting and financial controls, reports by the
independent public accountants, proposed accounting changes and financial
statements and opinions on such financial statements. The Audit Committee met
or unanimously voted on resolutions one time during fiscal 1997.
The Company has a Nominating Committee which during fiscal 1997 consisted
of Mr. Gerald J. Rubin and Mr. Aaron M. Shenkman. The Nominating Committee
receives recommendations from its members or other members of the Board of
Directors for candidates to be appointed to the Board or Board Committee
positions, reviews and evaluates such candidates and makes recommendations to
the Board of Directors for nominations to fill Board and Board Committee
positions. The Nominating Committee meets periodically during the year, but no
resolutions were adopted nor were any formal meetings held during fiscal 1997.
The Nominating Committee will consider candidates recommended by employees and
shareholders. Written suggestions for candidates accompanied by a written
consent of the proposed candidate to serve as a director if nominated and
elected, a description of his or her qualifications and other relevant
biographical information should be sent in by March 6th of the year preceding
the next Annual Meeting to the Secretary of the Company, 6827 Market Avenue, El
Paso, Texas 79915.
The Company has a Stock Option and Compensation Committee which during
fiscal 1997 consisted of Mr. Daniel C. Montano and Mr. Gary Abromovitz. The
Stock Option and Compensation Committee reviews and makes recommendations to
the Board of Directors on officer and senior employee compensation, grants of
stock options under the Company's stock option plans and generally oversees
matters relating to compensation of employees of the Company. The Stock Option
and Compensation Committee met or unanimously voted on resolutions one time
during fiscal 1997.
The full Board of Directors met or unanimously voted on resolutions 4
times during fiscal 1997. Each of the directors attended or acted upon at
least seventy-five percent of the aggregate number of Board of Director
meetings, consents, and Board of Director Committee meetings or consents held
or acted upon during fiscal 1997.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth the summary of compensation paid to the
Company's Chief Executive Officer and its other Executive Officers during
fiscal years 1995 through 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION($)
--------------------------------------------------------------- ------------ ---------------
OTHER
NAME AND ANNUAL
Principal COMPENSATION OPTIONS/
POSITION YEAR SALARY ($) BONUS ($) $ SARS (#)
- -------- ---- ---------- --------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Gerald J. Rubin 1997 $623,158 $551,705 $ -0- -0- $15,821 (1)(2)(4)
Chairman and Chief 1996 600,000 262,000 -0- 600,000 15,363 (1)(2)(4)
Executive Officer 1995 571,403 -0- 2,389,238 (3) -0- 5,748 (2)
Aaron M. Shenkman (5) 1997 588,883 354,398 -0- -0- 14,097 (1)(2)
President and Chief 1996 540,071 150,000 1,105,640 (3) 300,000 4,481 (1)(2)
Operating Officer 1995 514,353 -0- 2,607,109 (3) -0- 3,234 (2)
Sam L. Henry 1997 205,367 40,343 603,671 (3) -0- 4,517 (1)(2)
Senior Vice-President 1996 188,343 24,485 -0- 40,000 3,761 (1)(2)
Finance 1995 179,375 17,900 65,813 (3) 10,000 2,558 (1)(2)
</TABLE>
(1) These amounts represent the Company's contributions to Helen of Troy
Corporation's 401(k) Profit Sharing Plan.
(2) Amounts representing premiums for life insurance or the economic benefit
of split dollar policies paid by the Company for life insurance
arrangements on behalf of the Executive Officer.
(3) The amounts represent the income attributable to the individuals for the
exercise of stock options. The Company did not make cash payments, but
instead issued shares of stock to the respective executive officers.
(4) Amounts representing the annual lease value of a vehicle provided by the
Company.
(5) Effective March 1, 1997, Mr. Shenkman retired from his positions as
President and Chief Operating Officer of the Company. Mr. Shenkman,
however, continues to serve as a director and as an employee of the
Company.
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<PAGE> 9
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
SHARES NUMBER OF UNEXERCISED
ACQUIRED UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS/SARS AT OPTIONS/SARS AT
EXERCISE REALIZED FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
-------------------- ----------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ---- ----- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G. Rubin - - 650,000 400,000 $12,590,640 $6,300,000
A. Shenkman - - 100,000 200,000 1,575,000 3,150,000
S. Henry 41,250 603,671 36,500 52,500 635,653 847,860
</TABLE>
(1) Based on the closing price of the NASDAQ National Market System -
Composite Transactions of the Company's Common Stock on February 28,
1997, which was $24.75.
EMPLOYMENT CONTRACTS
The Company has entered into contracts with each of its directors and
executive officers to indemnify them against certain fees and expenses incurred
in legal proceedings to which the officer or director is made a party by reason
of serving as an officer or director of the Company, so long as the party to be
indemnified acted in good faith or in a manner reasonably believed to be in or
not opposed to the best interests of the Company.
The Company has an employment contract with Mr. Gerald J. Rubin. The
contract for Mr. Rubin was effective March 1, 1995, provided for a base salary
of $600,000 and a bonus equal to 5% of adjusted earnings from continuing
operations less Mr. Rubin's base salary. Mr. Rubin has agreed to an amendment
to his employment contract to remove the bonus previously provided under his
contract and to substitute the bonus payable thereunder for the bonus under the
Helen of Troy 1997 Cash Bonus Performance Plan. The amendment to Mr. Rubin's
employment contract is subject to the Company's shareholders approving the
Helen of Troy 1997 Cash Bonus Performance Plan. In the event the Helen of Troy
1997 Cash Bonus Performance Plan is not approved, then Mr. Rubin's previous
bonus arrangement under his employment contract will continue in effect,
provided his total compensation under the employment contract (including his
bonus, if any) shall not exceed the limits imposed by Section 162(m) of the
Internal Revenue Code, as amended. See "Adoption of the Helen of Troy 1997
Cash Bonus Performance Plan."
In the event of the death of Mr. Rubin, all unpaid benefits under this
agreement are payable to his estate. Gerald J. Rubin's contract renews itself
monthly for a new five year term. Gerald J. Rubin's contract grants him the
right to elect a cash payment of the remainder of his contract in the event of
a merger, consolidation or transfer of all or substantially all of the
Company's assets to any unaffiliated company or other person.
The Company has purchased, pursuant to the terms of Mr. Rubin's
employment contract, life insurance in the amount of $5.0 million on the life
of Gerald J. Rubin payable in the event of death to his designees. The Company
has also purchased three "second to die" life insurance contracts in the
cumulative amount of $29.0 million on the lives of Gerald J. Rubin and Stanlee
N. Rubin, payable to their respective designee. All of the above policies
referred to in this paragraph are Split Dollar policies, which provide for the
return of premiums advanced by the Company to be reimbursed to the Company
upon death of the insured(s).
Effective March 1, 1997, Mr. Shenkman retired from his positions as
President and Chief Operating Officer of the Company and his employment
contract with the Company terminated as of such date. Mr. Shenkman, however,
continues to serve as a director and as an employee of the Company. Effective
March 1, 1997, Mr. Shenkman entered into a new employment contract with the
Company. Mr. Shenkman's contract has a one year term and provides for a base
salary of $150,000 for fiscal 1998 and a bonus equal to 1.5% of adjusted
earnings from continuing operations less the base salary. In the event of the
death of Mr. Shenkman, all unpaid benefits under this contract are payable to
his estate. Mr. Shenkman's contract also grants him the right to elect a cash
payment of the remainder of his contract in the event of merger, consolidation
or transfer of all or substantially all of the Company's assets to any
unaffiliated company or other person. The Company has
7
<PAGE> 10
purchased, pursuant to the terms of his contract, life insurance in the amount
of $2.5 million on the life of Aaron M. Shenkman, payable in the event of
death to his designees. This policy is a Split Dollar policy, which provides
for the return of premiums advanced by the Company to be reimbursed to the
Company upon death of the insured.
DIRECTOR COMPENSATION
Each director who is not an employee or officer of the Company received
a fee of $3,000 for each meeting of the Board of Directors attended, together
with travel and lodging expenses incurred in connection therewith. Additional
payments of $1,500 were made quarterly to each such director. As approved by
the Company's shareholders at the 1995 Annual Meeting of Shareholders, each
non-employee director receives 2,000 stock options on September 1st of each
year pursuant to the Company's 1995 Non-Employee Director Stock Option Plan
(the "Directors Plan"). The stock options have an exercise price equal to the
mean between the high and low market prices on the day the stock options are
issued. The stock options vest after one year. The Board of Directors and the
ineligible directors, as defined in the Directors Plan, have approved an
amendment to the Directors Plan, subject to shareholder approval, providing a
one-time grant of 10,000 options effective as of the date of shareholder
approval to each non-employee director participating under the Directors Plan.
See "Amendments to Helen of Troy Limited 1995 Non-Employee Director Stock
Option Plan".
STOCK OPTION AND COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
None.
STOCK OPTION AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Stock Option and Compensation Committee has submitted the following
report:
The Stock Option and Compensation Committee is responsible for developing
the Company's executive compensation strategy and for administering the
policies and programs that implement this strategy. The Committee is comprised
entirely of independent, non-employee directors.
The executive compensation strategy reflects the Company's fundamental
philosophy of aligning the interests of management with the long-term
performance of the Company and offering competitive compensation opportunities
based on each individual's contribution to the achievement of shareholder
value. This strategy is designed to attract and retain employees with
outstanding qualifications and experience.
The three elements of the Company's executive compensation strategy, all
determined by corporate and individual performance, are:
Base salary
Annual incentive compensation
Long-term incentive compensation
Total compensation opportunities are competitive with those offered by a
range of comparable companies and are intended to align management interests
more closely with shareholder interests. The companies which the Stock Option
and Compensation Committee has reviewed in determining competitive compensation
are those of its primary competitors. Some of these competitors are private
companies and are therefore not included in the stock performance graph.
Base salary for Gerald J. Rubin (Chief Executive Officer) and Aaron M.
Shenkman for fiscal 1997 was based on the long-term employment contracts of
such individuals with the Company. See "Executive Compensation-Employment
Contracts." Base salary for the remaining executive officers is determined by
the skills and experience required by the position, the impact of the
individual on the Company and the performance and potential of the individual.
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<PAGE> 11
Annual incentive compensation consists of cash bonuses. The amount of
cash bonuses for Gerald J. Rubin and Aaron M. Shenkman are based on their
employment contracts with the Company. During fiscal 1997, the Company awarded
bonuses of $551,705 and $354,398 to Messrs. Gerald J. Rubin and Aaron M.
Shenkman, respectively.
The amount of cash bonuses for the remaining executive officers is
determined based on the pre-tax earnings of the Corporation. A maximum bonus
amount up to 25% of the executive's annual base salary is determined for each
executive. A portion of the bonus is earned as the Corporation's pre-tax
earnings exceed a minimum base amount determined as of the beginning of each
fiscal year and the earned portion of the bonus increases as pre-tax earnings
exceed this base amount. The bonus listed in the Summary Compensation Table
for fiscal 1997 for executive officers other than Messrs. Rubin and Shenkman
are for bonuses earned during fiscal 1997 and paid in fiscal 1998. It is
anticipated that bonuses will be paid to these executive officers for fiscal
1998.
Long-term incentive compensation consists of the Company's stock option
plans. Stock options are granted based on the position of the executive
officer, and Company and individual performance. During fiscal 1997, no shares
of the Company's Common Stock were awarded pursuant to stock options to Gerald
J. Rubin and Aaron M. Shenkman.
Executive officers are provided with an opportunity for ownership
positions in the Company's Common Stock through the stock option plan. This
opportunity for ownership, combined with a significant performance-based
incentive compensation opportunity, forges a strong linkage between the
Company's management and shareholders.
As stated above, the compensation to the Company's Chief Executive
Officer, Gerald J. Rubin during fiscal 1997 consisted of base salary, annual
incentive compensation and long-term incentive compensation. All of the
factors discussed above in this report were taken into consideration by the
Stock Option and Compensation Committee in determining the total compensation
for Mr. Rubin for fiscal 1997.
Gary B. Abromovitz (Chairman)
Daniel C. Montano
The foregoing report of the Stock Option and Compensation Committee shall
not be deemed incorporated by reference by any general statement incorporating
by reference the Proxy Statement into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
9
<PAGE> 12
HELEN OF TROY FIVE YEAR PERFORMANCE GRAPH
The graph below compares the cumulative total return of the Company to
the NASDAQ Market Index and a Peer Group Index.
The graph is made of the following data:
[GRAPH]
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Helen of Troy Limited 345.17 160.38 129.00 106.34 116.80
Peer Group Index 243.05 182.54 136.68 116.20 114.30
NASDAQ Market Index 201.94 168.25 121.85 127.62 100.16
</TABLE>
ASSUMES $100 INVESTED ON MARCH 1, 1992
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING FEB. 28, 1997
(1) The peer group used was the Dow Jones Industry Companies -
Cosmetics, Personal Care Products.
TRANSACTIONS WITH MANAGEMENT
None.
10
<PAGE> 13
AMENDMENT TO THE HELEN OF TROY LIMITED
1994 STOCK OPTION AND RESTRICTED STOCK PLAN
(PROPOSAL 2)
The Board of Directors and the Stock Option and Compensation Committee have
determined that it is in the best interest of the Company and its shareholders
to amend the Helen of Troy Limited 1994 Stock Option and Restricted Stock Plan
(the "Plan"). The proposed amendment to the Plan consists of the establishment
of a provision in the Plan providing that no employee may receive in any one
fiscal year options under the Plan to acquire in excess of 500,000 shares of
Common Stock. Currently, the Plan provides that no employee may be granted an
option under the Plan, which when combined with all other options granted under
the Plan after February 28, 1995 to such employee, aggregates more than 600,000
shares of Common Stock in a three year period commencing February 28, 1995.
The Board of Directors and the Stock Option and Compensation Committee have
approved the proposed amendment to the Plan, to be effective as of the date of
approval thereof by the Company's shareholders. The Board of Directors and
the Compensation Committee also approved an amendment to the Plan effective of
the date of approval thereof by the Company's shareholders to increase the
number of shares of Common Stock subject to the Plan from 4,000,000 to
5,000,000. See "Proposal to Increase the Number of Shares of Common Stock
Subject to the Helen of Troy Limited 1994 Stock Option and Restricted Stock
Plan (Proposal 3)". If this Proposal 2 is approved and Proposal No. 3 is not
approved by the shareholders, Section 5(a) of the Plan will be amended as
provided in Exhibit A. If this Proposal 2 is not approved and Proposal 3 is
approved by the shareholders, Section 5(a) of the Plan will be amended as
provided in Exhibit B. If both this Proposal 2 and Proposal 3 are approved by
the shareholders, then Section 5(a) of the Plan will be amended as provided in
Exhibit C. The following summary of the Plan does not purport to be complete
and is subject in all respects to, and qualified by, the provisions of the
Plan.
The Board of Directors believes that the establishment of a provision in
the Plan providing that no employee of the Company or its subsidiaries may
receive in any one fiscal year options under the Plan to acquire in excess of
500,000 shares of Common Stock is necessary to afford flexibility to the Stock
Option and Compensation Committee in making grants under the Plan.
Shareholder's approval of the amendment to the Plan is necessary to permit the
deduction by the Company of compensation attributable to options issued
pursuant to the Plan that in certain instances would not otherwise be
deductible under Section 162(m) of the Internal Revenue Code, as amended (the
"Code"). Section 162(m) generally limits to $1 million the allowable deduction
for compensation (including compensation attributable to options) paid by a
publicly held company to its chief executive officer and to each of the other
four most highly compensated employees.
The Plan was approved by the shareholders of the Company at the 1994
Special Meeting of the Shareholders held in February 1994. The Plan was
established to offer selected employees and consultants of the Company grants
of (a) options ("Options") to purchase Common Stock, and (b) awards of Common
Stock containing certain restrictions ("Restricted Stock") (Options and
Restricted Stock are hereinafter referred to collectively as "Plan Awards")
with respect to an aggregate of 4,000,000 shares of Common Stock. The Options
granted under the Plan may be incentive stock options ("Incentive Stock
Options") meeting the requirements of Section 422 of the Code or may be Options
that do not meet the requirements for Incentive Stock Options ("Nonstatutory
Options"). No Incentive Stock Options may be granted to any individual who is
not an employee on the date of grant.
The closing sale price of the Company's Common Stock on July 3, 1997, as
reported by the NASDAQ Stock Market, was $28.375 per share.
ADMINISTRATION OF THE PLAN
The Plan is administered by the Stock Option and Compensation Committee,
which is comprised of at least two persons. All Stock Option and Compensation
Committee members shall be "disinterested," as such term is used in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
PRIOR GRANTS OF PLAN AWARDS
During fiscal 1997, Options to purchase 74,000 shares of Common Stock were
granted pursuant to the Plan, of which no shares represented grants of Options
to the Company's executive officers. No restricted stock awards have been made
under the Plan. The following table summarizes the Options outstanding under
the Plan as of July 3, 1997.
11
<PAGE> 14
<TABLE>
<CAPTION>
Named Executive Officers Number of Options
------------------------ -----------------
<S> <S>
Gerald J. Rubin . . . . . . . . . . . . . . . . . . . 1,050,000
Aaron M. Shenkman (1) . . . . . . . . . . . . . . . . 277,780
Sam L. Henry . . . . . . . . . . . . . . . . . . . . . 89,000
All Executive Officers as a Group (3 persons) . . . . . 1,416,780
Directors (who are not Executive Officers) as a
Group (no persons) . . . . . . . . . . . . . . . . . --
All Other Employees (including officers who are
not Executive Officers) as a Group (80 persons) . . . 590,945
</TABLE>
(1) Mr. Shenkman retired from his positions as President and Chief Operating
Officer of the Company effective March 1, 1997. Mr. Shenkman, however,
continues to serve as a director and as an employee of the Company.
ELIGIBILITY FOR PLAN AWARDS
Plan Awards may be granted to selected employees and consultants of the
Company or its subsidiaries (the "Participants") in consideration for services
provided to the Company or its subsidiaries; provided, however, that no
Incentive Stock Option may be granted to any individual who is not an employee
of the Company or one of its subsidiaries on the date of grant. Any
employee-director is eligible to receive Plan Awards, unless such person serves
on the Stock Option and Compensation Committee. Actual participation in the
Plan will be determined in the sole discretion of the Stock Option and
Compensation Committee. As a result, the number of Participants in the Plan
cannot be precisely determined nor can the benefits or amounts that will be
received by or allocated to each of the Participants. Similarly, the benefits
which will be allocated to executive officers cannot be determined at this
time. As of July 3, 1997, the Company had 260 employees and no consultants.
Subject to shareholder approval of this Proposal 2, the Stock Option and
Compensation Committee is considering approval after the Meeting of a grant to
the Company's Chief Executive Officer of an option to acquire shares of Common
Stock equal to the maximum annual award under the Plan, as amended, to be
effective as of the date of shareholder approval.
Upon approval of the amendment to Section 5(a) of the Plan by the Company's
shareholders as described in this Proposal 2, the Plan will provide that no
employee may receive in any one fiscal year Options under the Plan to acquire
in excess of 500,000 shares of Common Stock. Consequently, the maximum amount
of compensation payable to an employee attributable to the exercise of Options
granted under the Plan shall be equal to the maximum number of shares of Common
Stock for which Options can be granted to an employee under the Plan multiplied
by the difference between the fair market value of the Common Stock on the date
of exercise of the Option less the exercise price of the Option.
OPTIONS UNDER THE PLAN
The exercise price of an Option shall be such price as is determined by the
Stock Option and Compensation Committee in its sole discretion; provided,
however, that in the case of an Incentive Stock Option, the exercise price
shall not be less than 100% of the fair market value of the shares subject to
such Option on the date of grant (or 110% in the case of an Option granted to a
Participant who is a ten percent shareholder on the date of grant). However, a
particular Nonstatutory Option will satisfy the "performance-based"
requirements of Section 162(m) of the Code only if the exercise price is not
less than the fair market value of the stock at the time of the grant of the
particular Nonstatutory Option. The grant of an Option at fair market value
constitutes a performance goal under Section 162(m) of the Code, which was
approved by the Company's shareholders at the Company's 1995 Annual Meeting of
the Shareholders.
Any Option granted under the Plan is exercisable at such times, under such
conditions (including, without limitation, performance criteria with respect to
the Company and/or the optionee), in such amounts and during such period or
periods as the Stock Option and Compensation Committee determines on the date
of the grant of such Option. Such Options, however, shall not be exercisable
after the expiration of ten years from the date such Option is granted. In the
case of an Incentive Stock
12
<PAGE> 15
Option granted to a ten percent shareholder, the Options shall not be
exercisable after the expiration of five years from the date such Option is
granted.
Payment for the shares upon exercise of an Option shall be made in cash, by
certified check or, if authorized by the Stock Option and Compensation
Committee, by delivery of other shares of Common Stock having a fair market
value on the date of delivery equal to the aggregate exercise price of the
shares as to which Option is being exercised, or by any combination of such
methods or by any other method of payment as may be permitted by applicable
law.
To the extent that the aggregate fair market value (determined on the date
of grant) of the shares of Common Stock with respect to which an Incentive
Stock Option is exercisable for the first time by an individual during any
calendar year under the Plan and all other plans maintained by the Company
exceeds $100,000, the Option will not be treated as an Incentive Stock Option.
The Stock Option and Compensation Committee may establish procedures under
the Plan for an optionee: (a) to have withheld from the total number of shares
of Common Stock to be acquired upon exercise of an Option that number of shares
of Common Stock having a fair market value equal to the exercise price; (b) to
have withheld from the total number of shares of Common Stock to be acquired,
in the same manner as (a) above, the withholding obligation for federal and
state income and other taxes; and (c) to exercise a portion of the Option by
delivering already-owned shares of Common Stock in payment of the exercise
price.
In general, if an optionee ceases to be an employee or consultant of the
Company, as the case may be, for reasons other than Permanent and Total
Disability or Death, he will have until the earlier of 30 days or the date the
Option expires to exercise the Option, to the extent the optionee was entitled
to exercise the Option on the date of termination. If, however, the optionee
is an employee and is terminated without cause, the 30-day period described
above will be increased to 90 days, in the case of an Incentive Stock Option,
and 6 months, in the case of a Nonstatutory Option, to the extent the optionee
was entitled to exercise the Option on the date of termination.
If an optionee is unable to continue to perform services for the Company or
any of its subsidiaries as a result of Permanent and Total Disability he will
have until the earlier of 12 months from the date of such disability or the
date the Option expires to exercise the Option, in whole or in part,
notwithstanding that such Option may not be fully exercisable on such date. In
the case of an Incentive Stock Option, the optionee must have been an employee
since the date of grant and must be an employee on the date of Permanent and
Total Disability, to take advantage of this provision.
In the case of death of an optionee, the same rule applies as in the case
of Permanent and Total Disability, above.
An Option granted under the Plan may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I or ERISA, or the rules
thereunder, and is not assignable by operation of law or subject to execution,
attachment or similar process.
RESTRICTED STOCK UNDER THE PLAN
Under the Plan, awards of Restricted Stock may be granted by the Stock
Option and Compensation Committee separately or in combination with Options as
provided for by the Stock Option and Compensation Committee; provided, however,
each grant of Restricted Stock shall require the Participant to remain an
employee or consultant of the Company or any of its subsidiaries for at least
six months from the date of grant. Restricted Stock shall be granted to
Participants for services rendered to the Company, and at no additional cost to
the Participant; provided, however, that the value of such services must equal
or exceed the par value of the Restricted Stock granted to the Participant.
The Company establishes a restricted stock account for each Participant, to
which Restricted Stock granted to the Participant is credited. Every credit of
Restricted Stock is merely a bookkeeping entry and every grant of Restricted
Stock is considered contingent and unfunded until the restrictions lapse.
During the period of restrictions, such accounts shall be subject to the claims
of the Company's creditors. The Participant's rights to the restricted stock
account are no greater than that of a general creditor of the Company. On the
date the restrictions lapse, the Restricted Stock shall vest in the
Participant.
13
<PAGE> 16
The terms, conditions and restrictions of the Restricted Stock are
determined by the Stock Option and Compensation Committee on the date of grant.
The restrictions shall lapse based upon performance measures, targets, holding
period requirements and other criteria established by the Stock Option and
Compensation Committee. The Restricted Stock criteria may vary among grants of
Restricted Stock; provided, however, that once the Restricted Stock has been
granted and the criteria are established, such criteria may not be further
modified with respect to such grant. The Restricted Stock may not be sold,
assigned, transferred, redeemed, pledged or otherwise encumbered during the
period that the restrictions apply.
The Stock Option and Compensation Committee, in its sole discretion, may
establish procedures by which a Participant may defer the transfer of
Restricted Stock to the Participant.
The Stock Option and Compensation Committee may provide from time to time
that amounts equivalent to dividends paid with respect to Common Stock be
payable with respect to the Restricted Stock held in the restricted stock
account. Such amounts shall be credited to the restricted stock account but
shall be payable to the Participant only when the restrictions lapse.
If a Participant, with the consent of the Stock Option and Compensation
Committee, ceases to be an employee or ceases to provide services to the
Company or any of its subsidiaries, or dies or suffers from permanent
disability, the restrictions applicable to the Participant's Restricted Stock
shall lapse in accordance with such determination as the Stock Option and
Compensation Committee, in its sole discretion, shall make. A Participant who
ceases to be an employee or to perform services for the Company or any of its
subsidiaries for any other reason shall forfeit all of his grants of Restricted
Stock which are under restriction.
CAPITALIZATION ADJUSTMENTS; MERGER; CHANGE IN CONTROL
Subject to any required action by the shareholders of the Company, the
number of shares covered by each outstanding Option, the aggregate number of
shares that have been authorized for issuance under the Plan and the number of
shares of Restricted Stock credited to any restricted stock account of a
Participant (as well as the exercise price covered by any outstanding Option),
shall be proportionately adjusted for any increase or decrease in the number of
issued shares resulting from a stock split, payment of a stock dividend with
respect to the Common Stock or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of consideration by the
Company.
In the event of the proposed dissolution or liquidation of the Company, or
a proposed sale of all or substantially all of the assets of the Company, or
the proposed merger of the Company with or into another corporation, any
Options and grants of Restricted Stock shall terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Stock
Option and Compensation Committee. The Stock Option and Compensation Committee
may, in the exercise of its sole discretion, in such instances declare that any
Option shall terminate as of a date fixed by the Stock Option and Compensation
Committee and give each optionee the right to exercise the optionee's option as
to all or any part of the shares covered by such Option, including shares as to
which the Option would not otherwise be exercisable.
Subject to the above paragraph, upon a Change in Control (as defined below)
of the Company, (a) all the outstanding Options shall immediately become fully
exercisable, and (b) any restrictions on the Restricted Stock will lapse and
such Restricted Stock shall immediately vest in the Participant. For these
purposes, a "Change in Control" shall have occurred if: (a) any person other
than the Company or its subsidiaries, or an employee benefit plan of the
Company or its subsidiaries, is or becomes the beneficial owner of 50% or more
of the Common Stock; or (b) a majority of the present members of the Company's
Board of Directors cease to be members of the Board of Directors.
TERM AND TERMINATION OF THE PLAN; AMENDMENT
The Plan will continue in effect until February 8, 2004, unless sooner
terminated. The Stock Option and Compensation Committee may terminate the Plan
at any time in its sole discretion. The Stock Option and Compensation
Committee in its sole discretion may, from time to time, amend the Plan;
provided, however, that no amendment will be made without the requisite
approval of the shareholders of the Company, that will (a) change the aggregate
number of shares of Common Stock that may be issued under the Plan, other than
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, payment of a stock dividend or any other increase
or decrease in the number of issued shares of
14
<PAGE> 17
Common Stock effected without receipt of consideration by the Company, (b)
change the designation of the Participants eligible to be granted Plan Awards,
(c) change the Plan so as to materially increase the benefits accruing to the
Participants under the Plan. Neither Restricted Stock nor Options may be
granted after the Plan is terminated. The termination of the Plan, or any
amendment thereto, shall not affect any shares previously issued to a
Participant, any Option previously granted under the Plan or any shares of
Restricted Stock previously granted to a Participant.
MISCELLANEOUS
The Plan is not qualified under the provisions of Section 401(a) of the
Code and is not subject to any of the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
FEDERAL INCOME TAX CONSEQUENCES
The following general summary is based upon the Internal Revenue Code and
does not include a discussion of any state or local tax consequences.
Incentive Stock Options
An optionee does not realize taxable income upon the grant or exercise of
an Incentive Stock Option.
The income tax treatment of any gain or loss realized upon an optionee's
disposition of shares of Common Stock received upon exercise of an Incentive
Stock Option depends on the timing of the disposition. If the optionee holds
the Common Stock received upon exercise of an Incentive Stock Option for at
least two years from the date such Incentive Stock Option was granted, or one
year from the date of exercise, the difference (if any) between the amount
realized from the sale of such shares and the optionee's tax basis will be
taxed as long-term capital gain or loss.
If an optionee disposes of the Common Stock before the end of the
applicable holding periods described above (i.e., he makes a "disqualifying
disposition"), such optionee may be deemed to be in receipt of taxable income
in the year of the disqualifying disposition, depending on the selling price.
If the selling price exceeds the fair market value of the Incentive Stock
Option on the date of exercise, the excess of the fair market value over the
exercise price is taxable to the optionee as ordinary income, and the excess of
the selling price over the fair market value is taxable to the optionee as
capital gain. If the selling price exceeds the exercise price but not the fair
market value on the date of exercise, the excess of the selling price over the
exercise price is taxable to the optionee as ordinary income. If the selling
price is less than the exercise price, the difference is treated as capital
loss.
The Company is not entitled to a deduction for federal income tax purposes
with respect to the grant or exercise of an Incentive Stock Option or the
disposition of Common Stock acquired upon exercise (if the applicable holding
periods have been met). In the event of a disqualifying disposition, however,
the Company is entitled to a federal income tax deduction in an amount equal to
the ordinary income recognized by the optionee.
Certain optionees may be subject to the alternative minimum tax which in
individual cases could reduce or eliminate any tax benefits to them under the
Plan.
Nonstatutory Stock Options
An optionee will not recognize any taxable income upon the grant of a
Nonstatutory Option. However, upon exercise of a Nonstatutory Option, an
optionee must recognize ordinary income in an amount equal to the excess of the
fair market value of the Common Stock at the time of exercise over the exercise
price. Upon the subsequent disposition of the Common Stock, the optionee will
realize a capital gain or loss, depending on whether the selling price exceeds
the fair market value of the Common Stock on the date of exercise. The
optionee's holding period in the Common Stock, for capital gains and losses
purposes, begins on the date of exercise.
Different rules may apply with respect to exercises by optionees subject to
the short-swing profit recapture provisions of Section 16(b) of the Exchange
Act (in general, officers, directors and ten percent shareholders who have not
held their
15
<PAGE> 18
options for at least six months). Section 83 of the Code provides that such an
optionee will not recognize ordinary income upon exercise (and the capital
gains holding period will not begin) if the sale of Common Stock acquired by
such optionee pursuant to an Option could subject the optionee to suit under
Section 16(b). Such an optionee would then recognize ordinary income (and the
capital gains holding period would begin) when the optionee is no longer
subject to suit under Section 16(b). Persons acquiring Common Stock subject to
such a restriction, however, may elect (within 30 days of exercise of the
Option) under Section 83(b) of the Code, to be taxed as of the date of
exercise, thereby fixing the ordinary income recognized from the exercise to
the spread between the fair market value on the date of exercise and the
exercise price paid for the Common Stock. Any change in the value of the
Common Stock after the date of exercise would be recognized as capital gain or
loss only if and when the Common Stock are disposed of by the optionee. If the
Section 83(b) election is made, the optionee's capital gains holding period
begins on the date of exercise.
An optionee's tax basis in the Common Stock received on exercise of a
Nonstatutory Option will be equal to the amount of consideration paid by the
optionee on exercise, plus the amount of ordinary income recognized as a result
of the receipt of such shares. The Company will be entitled to a deduction for
federal income tax purposes at the same time and in the same amount as the
optionee recognizes taxable income, provided that the Company satisfies its
withholding tax obligation with respect to such income.
If an optionee exercises a Nonstatutory Option by delivering other shares
of Common Stock of the Company, the optionee will not recognize gain or loss
with respect to the Common Stock delivered by the optionee, even if the then
fair market value of such shares is different from the optionee's tax basis
therein. The optionee, however, will be taxed as described above with respect
to the exercise of the Nonstatutory Option as if he had paid the exercise price
in cash, and the Company likewise generally will be entitled to an equivalent
tax deduction. The optionee's tax basis in the Common Stock received on such
exercise will be equal to his basis in the number of shares surrendered on such
exercise plus the fair market value of the number of shares of Common Stock
received in excess of the number of shares of Common Stock surrendered and the
holding period for such number of shares of Common Stock received will include
the holding period of the Common Stock surrendered.
Restricted Stock
The Participant will not recognize taxable income upon the grant of
Restricted Stock because the Restricted Stock will be nontransferable and
subject to a substantial risk of forfeiture. The Participant will recognize
ordinary income at the time at which the restrictions that impose a substantial
risk of forfeiture of such shares (the "Restrictions") lapse, in an amount
equal to the fair market value of such shares at such time. The ordinary
income recognized by a Participant with respect to shares awarded pursuant to
the Plan will be deemed compensation income subject to applicable wage
withholding.
A Participant may elect, pursuant to Section 83(b) of the Code, to include
in gross income the fair market value of the Restricted Stock, notwithstanding
that the Restricted Stock would otherwise not be includible in gross income at
that time. If such election is made within 30 days of the date of grant, then
the Participant would include in gross income the fair market value of the
Restricted Stock on the date of grant, and any change in the value of the
Common Stock after the date of grant would be capital gain or capital loss only
if and when the Common Stock is disposed of by the Participant. If the Section
83(b) election is made, the Participant's capital gains holding period begins
on the date of grant.
If a Section 83(b) election is made and the Participant then forfeits the
Restricted Stock, the Participant may not deduct as an ordinary loss the amount
previously included in gross income.
Dividends received on the Common Stock when the Restrictions on such shares
lapse will be treated as additional compensation, and not dividend income, for
federal income tax purposes and will be subject to applicable wage withholding.
A Participant's tax basis in shares of Restricted Stock received pursuant
to the Plan will be equal to the ordinary income recognized by such
Participant. Unless a Section 83(b) election is made, the Participant's
holding period for such shares for purposes of determining gain or loss on a
subsequent sale will begin on the date the Restrictions on such shares lapse.
16
<PAGE> 19
In general, the Company will be entitled to a deduction for federal income
tax purposes in an amount equal to the ordinary income recognized by a
Participant with respect to shares of Restricted Stock awarded pursuant to the
Plan, provided that the Company satisfies its withholding obligation with
respect to such income.
If, subsequent to the lapse of Restrictions on his or her shares, the
Participant sells such shares, the difference, if any, between the amount
realized from such sale and the tax basis of such shares to the Participant
will be taxed as long-term or short-term capital gain or loss, depending on
whether the Participant's holding period for such shares exceeds the applicable
holding period at the time of sale.
THE SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE TO ALL INDIVIDUALS. PARTICIPANTS
SHOULD CONSULT THEIR OWN TAX ADVISORS FOR A DETERMINATION AS TO THE SPECIFIC
TAX CONSEQUENCES APPLICABLE TO THEM.
SHAREHOLDER APPROVAL
The affirmative vote of the majority of the votes cast at the Meeting is
required to approve the amendment to Section 5(a) of the Plan described in this
Proposal 2. If the amendments described in this Proposal 2 and in Proposal 3
are not approved by the Company's shareholders, the Plan, as previously
approved, will continue in effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
SUBJECT TO THE HELEN OF TROY LIMITED
1994 STOCK OPTION AND RESTRICTED STOCK PLAN
(PROPOSAL 3)
The Board of Directors and the Stock Option and Compensation Committee have
determined that it is in the best interest of the Company and its shareholders
to amend the Plan to add 1,000,000 shares of Common Stock to the Plan. There
are currently 4,000,000 shares of Common Stock subject to the Plan, of which
2,960,220 shares of Common Stock were issued or are currently subject to
Options or awards of Restricted Stock under the Plan at July 3, 1997. The Board
of Directors and the Stock Option and Compensation Committee have approved this
proposed amendment to the Plan, to be effective as of the date of approval
thereof by the Company's shareholders. The Board of Directors and the
Compensation Committee also approved an amendment to the Plan effective of the
date of approval thereof by the Company's shareholders providing that no
employee may receive in any one fiscal year options under the Plan to acquire
in excess of 500,000 shares of Common Stock. See "Amendment to the Helen of
Troy Limited 1994 Stock Option and Restricted Stock Plan (Proposal 2)". If
this Proposal 3 is not approved and Proposal No. 2 is approved by the
shareholders, Section 5(a) of the Plan will be amended as provided in Exhibit
A. If this Proposal 3 is approved and Proposal 2 is not approved by the
shareholders, Section 5(a) of the Plan will be amended as provided in Exhibit
B. If both this Proposal 3 and Proposal 2 are approved by the shareholders,
then Section 5(a) of the Plan will be amended as provided in Exhibit C.
The Plan's objectives are to offer selected employees and consultants of
the Company or its subsidiaries an equity ownership interest in the financial
success of the Company or its subsidiaries, to provide the Company an
opportunity to attract and retain the best available personnel for positions of
substantial responsibility and to equity participation in the Company by
eligible Participants.
As of July 3, 1997, there were 1,024,280 shares of Common Stock available
for the grant of stock options and restricted stock awards under the Plan. The
Board of Directors believes that this is not a sufficient number of shares of
Common Stock to accomplish the objectives described above. The inclusion of
1,000,000 additional shares of Common Stock subject to the Plan will enable the
Company to further promote these objectives.
17
<PAGE> 20
SHAREHOLDER APPROVAL
The affirmative vote of the majority of the votes cast at the Meeting is
required to approve the amendment to Section 5(a) of the Plan described in this
Proposal 3. If the amendments described in this Proposal 3 and in Proposal 2
are not approved by the Company's shareholders, the Plan, as previously
approved, will continue in effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
INCREASE OF THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
(PROPOSAL 4)
GENERAL
The Board of Directors has approved, subject to shareholder approval, a
resolution increasing the number of authorized shares of Common Stock from
25,000,000 to 50,000,000. The Company's shareholders are asked to approve the
following resolution (the "Resolution") at the Meeting:
RESOLVED, that the Company is hereby authorized to increase the
authorized share capital of the Company from US$4,500,000 to
US$7,000,000 by the creation of an additional 25,000,000 common shares
of a par value of US$0.10 each ranking pari pasu with the existing
common shares of the Company, and deposit a Memorandum of Increase of
Share Capital with the Registrar of Companies of Bermuda reflecting
such increase.
PURPOSE AND EFFECT OF INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK
The Company's Memorandum of Association currently authorize the issuance of
up to twenty-five million (25,000,000) common shares, par value US$.10 per
share, and two million (2,000,000) preference shares, par value US$1.00 per
share. As of July 3, 1997, 13,291,666 shares of Common Stock were issued and
outstanding and an additional 2,269,475 shares of Common Stock were reserved
for future issuance, including issuance in connection with the Company's
outstanding stock options, leaving a balance of 9,438,859 shares of Common
Stock available for other purposes. No preference shares have been issued by
the Company. If the Resolution is adopted by the shareholders at the Meeting,
the Company will have 34,438,859 shares of Common Stock available for issuance
in addition to the shares of Common Stock currently reserved for future
issuance. The Board of Directors believes it is desirable to have the
additional shares of Common Stock available for possible future acquisitions,
stock dividends, stock splits, or other stock distributions. Subject to
shareholder approval of this Proposal 4, the Board of Directors is
contemplating approval after the Meeting of a 2-for-1 stock split of the Common
Stock to be paid as a 100% stock dividend to the Company's shareholders. There
can be no assurance that the Board of Directors will approve a stock split of
the Common Stock, or if approved, such stock split will be effected as
described above. Other than the possible payment of this stock dividend, the
Company does not currently have any agreements or understandings regarding the
issuance of any additional shares of Common Stock at this time.
The Board of Directors believes that increasing the number of authorized
shares of Common Stock will provide the Company with additional flexibility for
possible future financing transactions, acquisitions, employee benefit plans,
and other corporate purposes. Having additional authorized shares of Common
Stock available may allow the Company to take advantage of opportunities that
arise and that require prompt action. In such cases, the Company can issue
available authorized shares of Common Stock without the delay and expense of
seeking shareholder approval each time. Future authorization for the issuance
of such Common Stock by a vote of the shareholders would not be solicited prior
to such issuance unless required by law or regulation of applicable authority.
In the event that shares of such Common Stock were issued, other than pursuant
to a stock split or stock dividend, the percentage ownership of the Company of
each shareholder would be proportionately reduced, but no other rights of
shareholders would be affected. Shareholders of the Company have no preemptive
right to subscribe for or purchase any additional shares of Common Stock issued
by the Company.
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<PAGE> 21
VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION
The Board of Directors believes that the Resolution is in the best interest
of the Company and the shareholders. Under Bermuda law, the Resolution must be
approved by an affirmative vote of the majority of the votes cast at the
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
ADOPTION OF THE HELEN OF TROY
1997 CASH BONUS PERFORMANCE PLAN
(PROPOSAL 5)
Effective March 1, 1997, the Company's Board of Directors has approved the
Helen of Troy 1997 Cash Bonus Performance Plan (the "Bonus Plan") and the
performance goals established therein, subject to shareholder approval. The
Bonus Plan is designed to recognize the significant contributions of the
Company's executive officers to the growth, profitability and success of the
Company by rewarding participating executive officers for the achievement of
preestablished annual performance goals. The following summary of the Bonus
Plan contains all material provisions of the Bonus Plan, but does not purport
to be complete, and is subject in all respects to, and qualified by, the
provisions of the Bonus Plan which appear as Exhibit D to this Proxy Statement.
In 1993, Section 162(m) of the Code was enacted to limit deductibility of
compensation in excess of $1,000,000 paid during the Company's taxable year to
the chief executive officer or any of the four other most highly compensated
officers unless the compensation is performance-based and paid pursuant to
plans approved by the shareholders. The Bonus Plan is intended to allow the
Stock Option and Compensation Committee to pay benefits that qualify as
performance- based compensation within the meaning of Section 162(m) of the
Code and the Board of Directors is submitting the Bonus Plan for shareholder
approval in order to permit full deductibility of all bonus awards under the
Bonus Plan. In furtherance of this purpose, the Bonus Plan authorizes the
Company's Stock Option and Compensation Committee to establish and administer
performance criteria pursuant to which eligible executives may receive
designated cash bonus (the "Incentive Bonus") compensation.
The Bonus Plan will be administered by the Stock Option and Compensation
Committee, which consists of two or more "outside directors" within the meaning
of Section 162(m) of the Code. The Stock Option and Compensation Committee has
the authority to construe and interpret the Bonus Plan, except as otherwise
provided in the Bonus Plan, and may adopt rules and regulations governing the
administration thereof. The Bonus Plan including the performance goals stated
therein can be amended by the Stock Option and Compensation Committee alone,
unless such amendment is required to be approved by the Company shareholders
under applicable law. At this time, the sole participant under the Bonus Plan
will be Mr. Gerald J. Rubin, the Chief Executive Officer of the Company. The
Stock Option and Compensation Committee in its sole discretion determines
additional executives (together with Mr. Rubin, the "Participating Executives")
eligible for Incentive Bonus awards and, subject to the terms of the Bonus
Plan, the amount of such Incentive Bonuses payable to such executives. Under
the Bonus Plan, the Board of Directors is entitled, in its sole discretion, to
approve or disapprove, but not amend, any proposed performance criteria
established by the Stock Option and Compensation Committee with respect to any
Participating Executive prior to such performance criteria becoming effective.
During the term of the Bonus Plan, each fiscal year's performance goal for
Mr. Rubin will be linked to earnings from continuing operations before income
taxes adjusted for extraordinary items and capital gains and losses
("Earnings"). Under the Bonus Plan, an Incentive Bonus will be payable to Mr.
Rubin for each fiscal year only if five percent of the Earnings for such fiscal
year exceeds Mr. Rubin's base salary and, if payable, such Incentive Bonus will
equal five percent of the excess of Earnings over Mr. Rubin's base salary.
Because the Incentive Bonus is linked to Earnings during each fiscal year in
which the Bonus Plan is in effect, the actual Incentive Bonus to be received by
Mr. Rubin for each such fiscal year pursuant to the Bonus Plan is not currently
determinable. If the Bonus Plan had been in effect during the fiscal year
ended February 28, 1997, Mr. Rubin would have received $551,705 as an Incentive
Bonus for that fiscal year. The Earnings formula described above constitutes a
performance goal under Section 162(m) of the Code for which the Company seeks
shareholder approval. Mr. Rubin's employment contract provided an incentive
bonus based on the same Earnings formula and for the same time periods
described above. Accordingly, Mr. Rubin will not be entitled to any additional
benefits under
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<PAGE> 22
the Bonus Plan than he was previously entitled to under his employment
contract, without regard to the amendments and limitations discussed below.
Mr. Rubin has agreed to an amendment to his employment contract to remove the
bonus previously provided under his contract and to substitute the bonus
payable thereunder for the bonus under the Bonus Plan. The amendment to Mr.
Rubin's employment contract is subject to the Company's shareholders approving
the Bonus Plan. In the event the Bonus Plan is not approved, then Mr. Rubin's
previous bonus arrangement under his employment contract will continue in
effect, provided his total compensation under the employment contract
(including his bonus, if any) shall not exceed the limits imposed by Section
162(m) of the Code. See "Executive Compensation; Employment Contracts." The
bonus provision under Mr. Rubin's employment contract has not been previously
submitted to the Company's shareholders for approval and therefore any bonuses
which might exceed the limitations of Section 162 (m) would not be deductible
for federal income tax purposes by the Company. The approval of the Bonus Plan
by the Company's shareholders will allow the bonus payments to Mr. Rubin
described above to be fully tax deductible.
With respect to Participating Executives other than Mr. Rubin, performance
goals established under the Bonus Plan may be, but need not be, different for
each fiscal year, and different performance goals may be applicable to
different Participating Executives. The specific performance criteria must be
established by the Stock Option and Compensation Committee in advance of the
deadlines applicable under Section 162(m) and while the performance relating to
the performance criteria remains substantially uncertain within the meaning of
Section 162(m). Each Participating Executive may receive an Incentive Bonus if
and only if the performance criteria established by the Stock Option and
Compensation Committee is attained.
The amount of compensation awardable under the Bonus Plan for Mr. Rubin is
not subject to any maximum limitation. With respect to any Participating
Executive other than Mr. Rubin, no such Participating Executive shall receive
an Incentive Bonus under the Bonus Plan for any fiscal year in excess of
$1,000,000. In addition, no Participating Executive shall receive any payment
under the Bonus Plan unless the Stock Option and Compensation Committee has
certified, by resolution or other appropriate action in writing, that the
amount thereof has been accurately determined in accordance with the terms,
conditions and limits of the Bonus Plan and that the performance criteria and
any other material terms previously established by the Stock Option and
Compensation Committee or set forth in the Bonus Plan were in fact satisfied.
Any Incentive Bonus granted by the Stock Option and Compensation Committee
under the Bonus Plan shall be paid as soon as practicable, unless the Stock
Option and Compensation Committee elects to defer such payment in its sole
discretion following the Stock Option and Compensation Committee's written
certification of its determination. Any such payment shall be in cash or cash
equivalents, subject to applicable withholding requirements.
No Incentive Bonus will be paid for any fiscal year unless the
Participating Executive is an employee of the Company at the end of that fiscal
year, except that if the Participating Executive's employment terminates during
a fiscal year by reason of death, disability, retirement or a Change in Control
(as defined in the Bonus Plan), the Participating Executive (or the
Participating Executive's beneficiary) will receive the Incentive Bonus for
that fiscal year, prorated to the date of termination of employment.
Because the other Participating Executives under the Bonus Plan are to be
determined from time to time by the Stock Option and Compensation Committee, in
its discretion, it is impossible at this time to indicate the precise number,
name or positions of the other executives who will receive Incentive Bonuses or
the amounts of such Incentive Bonuses.
VOTE REQUIRED FOR ADOPTION
The proposal to adopt the Helen of Troy 1997 Cash Bonus Performance Plan
must receive the favorable vote of a majority of the votes cast at the Meeting
or any adjournment thereof for approval. An affirmative vote by a shareholder
shall also be deemed to be approval of the performance goals under the Helen of
Troy 1997 Cash Bonus Performance Plan for purposes of Section 162(m) of the
Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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AMENDMENTS TO THE HELEN OF TROY LIMITED
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(PROPOSAL 6)
The Board of Directors has determined that it is in the best interest of
the Company and its shareholders to amend the Directors Plan. The Board of
Directors has approved certain amendments to the Directors Plan, to be
effective as of the date of approval thereof by the Company's shareholders.
The following summary of the Directors Plan does not purport to be complete and
is subject in all respects to, and qualified by, the provisions of the
Directors Plan.
The Directors Plan currently provides for an automatic annual grant of
options for 2,000 shares of Common Stock to each director, who is not at the
time of the grant an officer or employee of the Company or any of its
affiliates (each an "Eligible Director"). Section 3(a) of the Directors Plan
has been amended, subject to shareholder approval, to provide for, in addition
to the automatic annual grant of options for 2,000 shares of Common Stock to
each Eligible Director, a one time grant of stock options to each Eligible
Director of 10,000 shares of Common Stock effective as of the date of
shareholder approval. The full text of this proposed amendment to Section 3(a)
of the Directors Plan is set forth as follows:
(a) The Company shall (i) automatically grant to each Director,
annually on the 1st day of September following the Director's appointment,
election, reappointment, or reelection as a member of the Board, a Stock
Option for 2,000 shares of Common Stock and (ii) grant to each Director on
August 26, 1997 a Stock Option for 10,000 shares of Common Stock; provided,
however, the aggregate number of shares of Common Stock issued under Stock
Options granted under the Plan shall not exceed 240,000.
Section 8(d)(i) of the Directors Plan has been amended, subject to
shareholder approval, to permit an Eligible Director who ceases to be a
director of the Company or one or more of its affiliates, for any reason other
than death or disability, and does not remain or thereupon become an employee
of the Company or one or more of its affiliates, to exercise all options to the
extent then exercisable for a period of six months after the date of cessation
of directorship or employment (if such director remained or became an employee
of the Company following the cessation of directorship). Currently, the
Directors Plan provides that in the event that an optionee ceases to be a
director of the Company or one or more of its affiliates, for any reason other
than death or disability, and such optionee does not remain or thereupon become
an employee of the Company or one or more of its affiliates, all unexercised
options (including any not yet vested) shall expire on the date the Eligible
Director ceases to be a director (or, if upon ceasing to be a director the
Eligible Director remained or became an employee of the Company or one or more
of its affiliates, on the date the Eligible Director ceases to be an employee).
The Company believes that this amendment will facilitate recruitment and
retention of qualified outside directors. The full text of this proposed
amendment to Section 8(d)(i) of the Directors Plan is set forth as follows:
(i) If a Director ceases, for any reason other than such Director's
death or disability (as defined in Section 22(e)(3) of the Code), to be a
director of at least one of the corporations in the group of corporations
consisting of the Company and its Affiliates and the Director does not
remain or thereupon become an employee of the Company or one or more of its
Affiliates, such Director shall have the right, for a period of six (6)
months after the date of the Director's ceasing to be a director (or, if
upon ceasing to be a director the Director remained or became an employee
of the Company or one or more of its Affiliates, on the date of the
Director's ceasing to be an employee), to exercise a Stock Option to the
extent such Stock Option is exercisable on the date of his cessation of
directorship or employment, and the Stock Option shall terminate and cease
to be exercisable as of the end of such six (6) month period.
If the amendments to the Directors Plan are not approved by the
shareholders of the Company, options will continue to be automatically granted
in accordance with the terms of the current Directors Plan.
GENERAL PLAN INFORMATION
The Directors Plan was adopted by the Board of Directors on June 6, 1995,
subject to shareholder approval, which was subsequently obtained on August 23,
1995 at the Annual Meeting of Shareholders. The purpose of the Directors Plan
is to attract and to retain the services of experienced and knowledgeable
independent individuals as members of the Board of
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<PAGE> 24
Directors, to extend to them the opportunity to acquire a proprietary interest
in the Company so that they will apply their best efforts for the benefit of
the Company, and to provide those individuals with an additional incentive to
continue in their position, for the best interest of the Company and its
shareholders. A total of 240,000 shares of Common Stock are reserved and
available for issuance under the Directors Plan, subject to adjustments to
reflect certain changes in capitalization.
Options will be awarded under the Directors Plan only to members of the
Board of Directors who are not at the time of the grant an officer or employee
of the Company or any of its affiliates.
ADMINISTRATION OF THE DIRECTORS PLAN
The Directors Plan is administered by the members of the Board of Directors
who are either an employee of the Company or one of its affiliates (the
"Ineligible Directors"). The Ineligible Directors have the authority and
discretion to interpret the Directors Plan and to make all other determinations
necessary for the administration of the Directors Plan and to prescribe, amend
and rescind any rules and regulations relating to the Directors Plan. However,
the Ineligible Directors have no discretion or authority to disregard or change
any of the terms and conditions under which options are granted to the Eligible
Directors or may be exercised under the Directors Plan.
PRIOR GRANTS OF PLAN AWARDS
During fiscal 1997, options to purchase 10,000 shares of Common Stock were
granted pursuant to the Directors Plan. The following table summarizes the
options outstanding under the Directors Plan as of July 3, 1997.
<TABLE>
<CAPTION>
Position Number of Options
-------- -----------------
<S> <C>
Non-Employee Directors as a
Group (5 persons) . . . . . . . . . . . . . . . . . 16,000
</TABLE>
OPTIONS UNDER THE DIRECTORS PLAN
An option granted under the Directors Plan becomes fully vested for one
hundred percent (100%) of the number of shares of Common Stock subject to the
option one year after the date such option was granted. The exercise price
under each option shall be equal to the mean between the high and low prices of
the Common Stock reported on the NASDAQ National Market System or other primary
market or exchange on the last trading day preceding the date on which such
option is granted to an Eligible Director. The option shall be deemed
exercised on the day when written notice of such exercise has been received by
the Company from the person entitled to exercise the option, accompanied by
full payment of the purchase price in cash or check. No option is exercisable
after the tenth anniversary of its grant.
Subject to shareholder approval of this Proposal 5, in the event that an
optionee ceases to be a director of the Company or one or more of its
affiliates, for any reason other than death or disability, and such optionee
does not remain or thereupon become an employee of the Company or one or more
of its affiliates, all options to the extent then exercisable may be exercised
for a period of six months after the date of cessation of directorship or
employment. In the event that the optionee dies while serving on the Board of
Directors of the Company or the Board of Directors of an affiliate of the
Company or while an employee thereof, all options granted to such optionee may
be exercised by the optionee's legal representatives, legatees or distributees
to the extent such options are exercisable at any time prior to the first
anniversary of his or her death, and his or her unexercised options shall
expire at the end of such period. If an option holder becomes disabled while a
director or an employee of the Company or one or more of its affiliates and
thereafter ceases to be such a director by reason of a disability, all options
to the extent then exercisable may be exercised for a period of 90 days after
the date of cessation of directorship or employment. In no event, however,
shall the period during which such options may be exercised extend beyond the
term of the options.
Under the Directors Plan, an option may not be transferred, assigned,
encumbranced, pledged or charged, other than by will or the laws of descent or
distribution.
CAPITALIZATION ADJUSTMENTS; MERGER; CHANGE IN CONTROL
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<PAGE> 25
Adjustments to prevent dilution will be made in the event of a stock
dividend, or split, combination, exchange of shares or other recapitalization,
merger, or otherwise, in which the Company is the surviving corporation. No
fractional shares of Common Stock shall be issued under the Directors Plan on
account of any such adjustments. Such adjustments shall be made by the
Ineligible Directors.
TERM AND TERMINATION OF THE DIRECTORS PLAN; AMENDMENT
The Directors Plan will continue in effect until June 6, 2005, unless
sooner terminated. The Board of Directors may make such changes in and
additions to the Directors Plan as it may deem proper; provided, however,
except for adjustments to reflect certain changes in capitalization permitted
under the Directors Plan, shareholder approval is required for any amendment
that (i) materially increases the benefits accruing to the Eligible Directors
under the Directors Plan; (ii) changes the class of persons eligible to receive
options under the Directors Plan; or (iii) increases the duration of the
Directors Plan. The Board of Directors may not, without the Eligible
Director's written consent, modify the terms and conditions of an option
previously granted under the Directors Plan. In addition, no amendment,
suspension or termination of the Directors Plan shall, without the Eligible
Director's written consent, alter, terminate or impair any right or obligation
under any option previously granted under the Directors Plan. An amendment
revising the price, date of exercisability, option term or amount of shares of
Common Stock covered by an option granted under the Directors Plan may not be
made more frequently than every six months, unless such an amendment is
required to comply with the Code, or the Employee Retirement Income Security
Act of 1974, as amended, or the rules promulgated thereunder.
In the event that regulations and rules of the Securities and Exchange
Commission cease to require shareholder approval as a condition of exemption
under Rule 16b-3 of the Exchange Act or any successor rule or regulation, and
shareholder approval is not required as a condition of registration or listing
with an applicable national market system or stock exchange, the Directors Plan
shall cease to be subject to shareholder approval, and any amendment,
suspension or termination of the Directors Plan shall be deemed to be effective
upon adoption by the Board of Directors.
MISCELLANEOUS
The Directors Plan is not qualified under the provisions of Section 401(a)
of the Code and is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
FEDERAL INCOME TAX CONSEQUENCES
The following general summary is based upon the Internal Revenue Code and
does not include a discussion of any state or local tax consequences.
A participant will not recognize any taxable income upon the grant of an
option. However, upon exercise of an option, a participant must recognize
ordinary income in an amount equal to the excess of the fair market value of
the shares of Common Stock at the time of exercise over the exercise price.
Upon the subsequent disposition of the shares, the participant will realize a
capital gain or loss, depending on whether the selling price exceeds the fair
market value of the shares on the date of exercise. The participant's holding
period in the shares, for capital gains and losses purposes, begins on the date
of exercise. A participant's tax basis in the shares received on exercise of
an option will be equal to the amount of consideration paid by the participant
on exercise, plus the amount of ordinary income recognized as a result of the
receipt of such shares. If a participant exercises an option by delivering
shares of Common Stock, the participant will not recognize gain or loss with
respect to the shares delivered by the participant, even if the then fair
market value of such shares is different from the participant's tax basis
therein. The participant, however, will be taxed as described above with
respect to the exercise of the option as if he had paid the exercise price in
cash. The participant's tax basis in the shares received on such exercise will
be equal to his basis in the number of shares surrendered on such exercise plus
the fair market value of the number of shares received in excess of the number
of shares surrendered and the holding period for such number of shares received
will include the holding period of the shares surrendered. The Company will
not be entitled to a deduction for federal income tax purposes for the
compensation paid to the participants under the Directors Plan.
THE SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE TO ALL INDIVIDUALS. PARTICIPANTS
SHOULD
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<PAGE> 26
CONSULT THEIR OWN TAX ADVISORS FOR A DETERMINATION AS TO THE SPECIFIC TAX
CONSEQUENCES APPLICABLE TO THEM.
SHAREHOLDER APPROVAL
The affirmative vote of the majority of the votes cast at the Meeting is
required to approve the amendments to the Directors Plan. If the amendments
thereto are not approved by the Company's shareholders, the Directors Plan, as
previously approved, will continue in effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next annual
meeting must be received at the executive offices of the Company by March 6,
1998, for inclusion in the proxy statement and form of proxy of the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
No action is to be taken with respect to the selection or approval of
independent public accountant for the Company. KPMG Peat Marwick LLP has
served as independent public accountants for the Company since 1978. A
representative of KPMG Peat Marwick LLP is expected to be present at the Annual
Meeting of Shareholders with the opportunity to make a statement if he desires
to do so, and he is also expected to be available to respond to appropriate
questions.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Executive officers, directors and greater than ten percent
shareholders are required by SEC Regulations 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 and written representations that no other
reports were required, during fiscal 1997, all Section 16(a) filing
requirements applicable to the officers, directors and greater than ten percent
beneficial owners were complied with.
QUORUM; VOTING
The presence in person of two or more persons, representing throughout the
Meeting, in person or by proxy, at least a majority of the issued shares of
Common Stock entitled to vote is necessary to constitute a quorum at the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining whether a quorum is present. If a quorum is present, the seven
nominees for directors receiving a majority of the votes cast at the Meeting in
person or by proxy shall be elected. The affirmative vote of the majority of
the votes cast at the Meeting in person or by proxy shall be the act of the
shareholders with respect to Proposals 2 through 6. If within half an hour
from the time appointed for the Meeting a quorum is not present or represented
by proxy, the Meeting shall stand adjourned to the same day one week later, at
the same time and place or to such other day, time or place the Board of
Directors may determine, provided that at least two persons are present at such
adjourned meeting, representing throughout the meeting, in person or by proxy,
at least a majority of the issued shares of Common Stock entitled to vote. At
any such adjourned meeting at which a quorum is presented or represented, any
business may be transacted that might have been transacted at the Meeting as
originally called.
Broker non-votes are shares held by a broker or nominee which are
represented at the Meeting, but with respect to which such broker or nominee is
not empowered to vote on a particular proposal. Such broker non-votes will be
counted towards
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<PAGE> 27
a quorum. Abstentions and broker non-votes are not counted in determining the
total number of votes cast and will have no effect with respect to Proposals 1
through 6.
OTHER MATTERS
The Board of Directors knows of no matters to be presented at the Meeting
other than the election of directors. If other matters properly come before the
Meeting or any adjournment thereof, the holders of the proxies are authorized
to vote on these matters in accordance with management's discretion.
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by completing and
returning the enclosed proxy card.
Gerald J. Rubin
Chairman of the Board
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<PAGE> 28
EXHIBIT A
(a) Basic Limitation. Shares offered under this Plan may be
authorized but unissued Shares or Shares that have been reacquired by the
Company. The aggregate number of Shares that are available for issuance
under this Plan shall not exceed four million (4,000,000) Shares, subject
to adjustment pursuant to Section 9 of this Plan. The Committee shall
not issue more Shares than are available for issuance under this Plan.
The number of Shares that are subject to unexercised Options at any time
under this Plan shall not exceed the number of Shares that remain
available for issuance under this Plan. The Company, during the term of
this Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of this Plan. Notwithstanding
anything herein to the contrary, and subject to potential changes
specified in Section 9(a), no Participant may be granted an Option which,
in combination with all other Options granted after February 28, 1997 to
such Participant under the Plan (regardless of whether they have been
exercised or canceled) aggregates more than 500,000 Shares in any one (1)
year period commencing on or after February 28, 1997.
1
<PAGE> 29
EXHIBIT B
(a) Basic Limitation. Shares offered under this Plan may be
authorized but unissued Shares or Shares that have been reacquired by the
Company. The aggregate number of Shares that are available for issuance
under this Plan shall not exceed five million (5,000,000) Shares, subject
to adjustment pursuant to Section 9 of this Plan. The Committee shall
not issue more Shares than are available for issuance under this Plan.
The number of Shares that are subject to unexercised Options at any time
under this Plan shall not exceed the number of Shares that remain
available for issuance under this Plan. The Company, during the term of
this Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of this Plan. Notwithstanding
anything herein to the contrary, and subject to potential changes
specified in Section 9(a), no Participant may be granted an Option which,
in combination with all other Options granted after February 28, 1995 to
such Participant under the Plan (regardless of whether they have been
exercised or canceled) aggregates more than 600,000 Shares in a three (3)
year period commencing on or after February 28, 1995.
1
<PAGE> 30
EXHIBIT C
(a) Basic Limitation. Shares offered under this Plan may be
authorized but unissued Shares or Shares that have been reacquired by the
Company. The aggregate number of Shares that are available for issuance
under this Plan shall not exceed five million (5,000,000) Shares, subject
to adjustment pursuant to Section 9 of this Plan. The Committee shall
not issue more Shares than are available for issuance under this Plan.
The number of Shares that are subject to unexercised Options at any time
under this Plan shall not exceed the number of Shares that remain
available for issuance under this Plan. The Company, during the term of
this Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of this Plan. Notwithstanding
anything herein to the contrary, and subject to potential changes
specified in Section 9(a), no Participant may be granted an Option which,
in combination with all other Options granted after February 28, 1997 to
such Participant under the Plan (regardless of whether they have been
exercised or canceled) aggregates more than 500,000 Shares in any one (1)
year period commencing on or after February 28, 1997.
1
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EXHIBIT D
HELEN OF TROY
1997 CASH BONUS PERFORMANCE PLAN
Section 1. PURPOSE OF PLAN
The purpose of the Plan is to promote the success of the Company and its
Subsidiaries by providing to the participating executives of the Company and
its Subsidiaries bonus incentives that qualify as performance-based
compensation within the meaning of Section 162(m) of the Code. Subject to the
approval of the shareholders of the Company, the Plan shall be effective as of
March 1, 1997.
Section 2. DEFINITIONS AND TERMS
2.1. Accounting Terms. Except as otherwise expressly provided or
the context otherwise requires, financial and accounting terms are used as
defined for purposes of, and shall be determined in accordance with, GAAP.
2.2. Specific Terms. The following words and phrases as used
herein shall have the following meanings:
"Base Salary" with respect to any Performance Period means the
aggregate base salary of an Executive for that Performance Period.
"Bonus" means a cash payment or payment opportunity as a context
requires.
"Business Criteria" means any one or any combination of financial
goals or other objective goals, which may be Company-wide, on an
individual basis or otherwise, and (i) with respect to financial goals,
may be expressed, for example, in terms of Net Income, EPS, ECO, cash
flow, Return on Equity, Return on Assets or other return ratios, or stock
price of the Company, and (ii) with respect to objective goals, may
include the attainment of various productivity and long term growth
objectives, including for example, reductions in the Company's overhead
ratio and expenses to sales ratios.
"CEO" means Gerald J. Rubin.
"Change in Control" shall mean to have occurred at such time as either
(i) any "person", as such term is used in section 14(d) of the Exchange
Act, other than the Company, a wholly-owned Subsidiary of the Company or
any employee benefit plan of the Company, or its Subsidiaries, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act (or any successor rule), directly or indirectly, of fifty
percent (50%) or more of the combined voting power of the Company's
common stock, or (ii) individuals who constitute the Board of the
Directors on the effective date of this Plan (the "Incumbent Board")
cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose
election or nomination for election by the Company's shareholders was
approved by a vote of at least three quarters of the directors comprising
the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee
for the director without objection to such nomination) shall be, for
purposes of this clause (ii) considered as though such person was a
member of the Incumbent Board.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Stock Option and Compensation Committee of the
Company which has been established to administer the Plan in accordance
with Section 3.1 and Section 162(m) of the Code.
"Company" means Helen of Troy Limited, a Bermuda company, and any
successor whether by merger, ownership or all or substantially all of its
assets or otherwise.
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"Disability" shall have such meaning attributed thereto in the
Company's long-term disability plan, or, if no such plan exists, shall
mean a "Permanent and Total Disability" as defined in Code Section 22(e).
"ECO" shall mean the sum of (i) the consolidated earnings from
continuing operations before all income taxes of the Company and its
Subsidiaries for each Year, (ii) minus extraordinary income, plus
extraordinary expenses (as defined by GAAP), and (iii) minus capital
gains, plus capital losses (as defined by GAAP).
"EPS" for any Year means earnings per share of the Company as reported
in the Company's Consolidated Statement of Income set forth in the
audited consolidated financial statements of the Company for the Year.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and as interpreted by the rules and regulations promulgated
thereunder.
"Executive" means a key employee (including any officer) of the
Company or the Subsidiaries.
"GAAP" shall mean generally accepted accounting principles used and
applied in the United States of America.
"Net Income" for any Year means the consolidated net income of the
Company as reported in the audited consolidated financial statements of
the Company for the Year.
"Participant" means an Executive selected to participate in the Plan
by the Committee.
"Performance Period" means the Year or Years with respect to which the
Performance Targets are set by the Committee.
"Performance Target(s)" means the specific objective goal or goals
(which may be cumulative and/or alternative) that are timely set in
writing by the Committee for each Executive for the Performance Period
with respect to any one or more of the Business Criteria.
"Plan" means the Helen of Troy 1997 Cash Bonus Performance Plan as
amended from time to time.
"Return on Assets" means Net Income divided by the average of the
total assets of the Company at the end of the fiscal quarters of the Year
as reported by the Company in its consolidated financial statements.
"Return on Equity" means the Net Income divided by the average of the
common shareholders equity of the Company at the end of each of the
fiscal quarters of the Year as reported by the Company in its
consolidated financial statements.
"Section 162(m)" means Section 162(m) of the Code, and the regulations
promulgated thereunder, all as amended from time to time.
"Subsidiary" means any corporation, partnership or other entity as to
which more than fifty percent (50%) of the voting securities or other
voting ownership interests shall now or hereafter be owned or controlled,
directly by a person, any Subsidiary of such person, or any Subsidiary
of such Subsidiary.
"Year" means any one or more fiscal years of the Company commencing on
or after March 1, 1997, that represent(s) the applicable Performance
Period.
Section 3. ADMINISTRATION OF THE PLAN
3.1. The Committee. The Plan shall be administered by a Committee
consisting solely of at least two members of the Board of Directors of the
Company, duly authorized by the Board of Directors of the Company to administer
the Plan, who (i) are not eligible to participate in the Plan and (ii) are
"outside directors" within the meaning of Section 162(m).
3.2. Powers of the Committee. The Committee shall have the sole
authority to establish and administer the Performance Target(s) and, subject to
the right of the CEO to participate in the Plan, the responsibility of
determining from
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among the Executives those persons who will participate in and receive Bonuses
under the Plan and, subject to Sections 4 and 5 of the Plan, the amount of such
Bonuses and shall otherwise be responsible for the administration of the Plan,
in accordance with its terms. The Committee shall have the authority to
construe and interpret the Plan (except as otherwise provided herein) and any
agreement or other document relating to any Bonus under the Plan, may adopt
rules and regulations governing the administration of the Plan, and shall
exercise all other duties and powers conferred on it by the Plan, or which are
incidental or ancillary thereto. Subject to the right of the CEO to
participate in the Plan as provided in Section 4.4, for each Performance
Period, the Committee shall determine, at the time the Business Criteria and
the Performance Target(s) are set, those Executives who are selected as
Participants in the Plan. The Board of Directors shall be entitled, in its
sole discretion, to approve or disapprove, but not amend, any proposed
Performance Target and Performance Period established by the Committee with
respect to any Participant. Absent any disapproval by the Board of Directors
of the proposed Performance Target and Performance Period, the Committee's
establishment of such Performance Target and Performance Period shall become
effective.
3.3. Requisite Action. A majority (but not fewer than two) of the
members of the Committee shall constitute a quorum. The vote of a majority of
those present at a meeting at which a quorum is present or the unanimous
written consent of the Committee shall constitute action by the Committee.
3.4. Express Authority (and Limitations on Authority) to Change
Terms and Conditions of Bonus. Without limiting the Committee's authority
under other provisions of the Plan, but subject to any express limitations of
the Plan and Section 5.8, the Committee shall have the authority to accelerate
a Bonus (after the attainment of the applicable Performance Target(s)) and to
waive restrictive conditions for a Bonus (including any forfeiture conditions,
but not Performance Target(s)), in such circumstances as the Committee deems
appropriate. In the case of any acceleration of a Bonus after the attainment
of the applicable Performance Target(s), the amount payable shall be discounted
to its present value using an interest rate equal to Moody's Average Corporate
Bond Yield of the month preceding the month in which such acceleration occurs.
Section 4. BONUS PROVISIONS
4.1. Provision for Bonus. Each Participant may receive a Bonus if
and only if the Performance Target(s) established by the Committee, relative to
the applicable Business Criteria, are attained. The applicable Performance
Period and Performance Target(s) shall be determined by the Committee
consistent with the terms of the Plan and Section 162(m).
4.2. Preestablished Performance Target for CEO. Subject to
Sections 4.1, 4.8, 5.1 and 5.8, with respect to the CEO, the preestablished
Performance Target for each Year during the term of the Plan, and related Bonus
for the CEO, shall be based on the Adjusted ECO (as herein defined below) for
such Year. For each Year during the term of the Plan, the CEO shall receive a
Bonus equal to five percent (5%) of the Adjusted ECO less the CEO's Base Salary
for such Year. The Adjusted ECO, for the purpose of computing the Bonus
payable to the CEO under the provisions hereof, shall be determined in
accordance with GAAP applied on a consistent basis, commencing as of the Year
beginning March 1, 1997 and continuing each Year thereafter though the date of
termination of the Plan. For purposes hereof, the term "Adjusted ECO" for any
Year shall mean the ECO for such Year plus the Bonus to the CEO under this
Section 4.2 in respect of such Year and any incentive bonus for such Year for
Aaron M. Shenkman.
4.3. Selection of Performance Target(s) for Participants other than
CEO. The specific Performance Target(s) with respect to the Business Criteria
must be established by the Committee in advance of the deadlines applicable
under Section 162(m) and while the performance relating to the Performance
Target(s) remains substantially uncertain within the meaning of Section 162(m).
With respect to the Participants other than the CEO, at the time the
Performance Target(s) are selected, the Committee shall provide, in terms of an
objective formula or standard for each such Participant, and for any person who
may become a Participant after the Performance Target(s) are set, the method of
computing the specific amount that will represent the maximum amount of Bonus
payable to such Participant if the Performance Target(s) are attained, subject
to Sections 4.1, 4.8, 4.11, 5.1 and 5.8.
4.4. Selection of Participants. During the term of the Plan, the
CEO shall be a Participant under the Plan. With respect to Executives other
than the CEO, for each Performance Period, the Committee shall determine, at
the time the Business Criteria and the Performance Target(s) are set, those
other Executives who will participate in the Plan.
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4.5. Effect of Mid-Year Commencement of Service. To the extent
compatible with Sections 4.3 and 5.8, if services as an Executive commence
after the adoption of the Plan and the Performance Target(s) are established
for a Performance Period, the Committee may grant a Bonus that is
proportionately adjusted based on the period of actual service during the Year;
the amount of any Bonus paid to such person shall not exceed that proportionate
amount.
4.6. Termination of Employment During Year. Unless otherwise
determined by the Committee or required by applicable law or pursuant to any
written agreement between the Company and the Executive:
(a) no Bonus shall be payable to an Executive if the Executive is
not employed by the Company or any Subsidiary of the Company on the last
day of the Performance Period for which the Bonus is otherwise payable,
unless the Executive's employment with the Company and its Subsidiaries
terminates during the Performance Period by reason of the Executive's
death or Disability or following a Change in Control, and
(b) in the event of the Executive's death or Disability during the
Performance Period, or in the event of the termination of the Executive's
employment for any reason following a Change in Control that occurs
during the Performance Period, the Executive (or the Executive's legal
representative or beneficiary) shall receive a Bonus equal to the product
of (i) the Bonus he would have received for the entire Performance
Period, multiplied by (ii) a fraction, the numerator of which is the
number of days during the Performance Period in which the Executive was
an employee of the Company or its Subsidiaries, and the denominator of
which is the number of days in the Performance Period.
Payment of such Bonus shall be made in accordance with Section 4.10 hereof. In
the event of any conflict between the terms of any written agreement between
the Company and the Executive and this Plan regarding the payment of the Bonus
upon termination of employment with the Company, the terms of the written
agreement shall be deemed to control.
4.7. Accounting Changes. Subject to Section 5.8, if, after the
Performance Target(s) are established for a Performance Period, a change occurs
in the applicable accounting principles or practices, the amount of the Bonuses
paid under this Plan for such Performance Period shall be determined without
regard to such change.
4.8. Committee Discretion to Determine Bonuses. With respect to
Participants other than the CEO, the Committee has the sole discretion to
determine the standard or formula pursuant to which each such Participant's
Bonus shall be calculated (in accordance with Section 4.3), subject in all
cases to the terms, conditions and limits of the Plan and of any other written
commitment authorized by the Committee. To this same extent, with respect to
Participants other than the CEO, the Committee may at any time establish
additional conditions and terms of payment of Bonuses (including, but not
limited to the achievement of other financial, strategic or individual goals,
which may be objective or subjective) as it may deem desirable in carrying out
the purposes of the Plan and may take into account such other factors as it
deems appropriate in administering any aspect of the Plan. The Committee may
not, however, increase the maximum amount permitted to be paid to any
individual under Section 4.2, 4.3 or 4.11 of the Plan or award a Bonus under
this Plan if the applicable Performance Target(s) have not been satisfied.
4.9. Committee Certification. No Executive shall receive any
payment under the Plan unless the Committee has certified, by resolution or
other appropriate action in writing, that the amount thereof has been
accurately determined in accordance with the terms, conditions and limits of
the Plan and that the Performance Target(s) and any other material terms
previously established by the Committee or set forth in the Plan were in fact
satisfied.
4.10. Time of Payment. Any Bonuses granted by the Committee under
the Plan shall be paid as soon as practicable following the Committee's
determinations under this Section 4 and the certification of the Committee's
findings under Section 4.9. Any such payment shall be in cash or cash
equivalents, subject to applicable withholding requirements. If and to the
extent permitted by the Committee, and in accordance with such rules as the
Committee may from time to time adopt, Participants may, prior to the beginning
of any Performance Period, elect to defer the payout of all or any portion of a
Bonus relating to such Performance Period. In the case of the delay of a Bonus
otherwise payable at or after the attainment and certification of the
applicable Performance Target(s), any additional amount payable shall be based
on Moody's Average Corporate Bond Yield over the deferral period.
4.11. Maximum Individual Bonus. Notwithstanding any other provision
hereof, with respect to Executives other than the CEO, no such Executive shall
receive a Bonus under the Plan for any fiscal year in excess of $1,000,000.
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Section 5. GENERAL PROVISIONS
5.1. No Right to Bonus or Continued Employment. Neither the
establishment of the Plan nor the provision for or payment of any amounts
hereunder nor any action of the Company (including, for purposes of this
Section 5.1, any predecessor or Subsidiary), the Board of Directors of the
Company or the Committee in respect of the Plan, shall be held or construed to
confer upon any person any legal right to receive, or any interest in, a Bonus
or any other benefit under the Plan, or any legal right to be continued in the
employ of the Company. The Company expressly reserves any and all rights to
discharge an Executive in its sole discretion, without liability of any person,
entity or governing body under the Plan or otherwise, except to the extent
otherwise provided in any written employment agreement between the Company and
the Executive.
5.2. Discretion of the Company, Board of Directors and Committee.
Any decision made or action taken by the Company or by the Board of Directors
of the Company or by the Committee arising out of or in connection with the
creation, amendment, construction, administration, interpretation and effect of
the Plan shall be within the absolute discretion of such entity and shall be
conclusive and binding upon all persons. No member of the Committee shall have
any liability for actions taken or omitted under the Plan by the member or any
other person.
5.3. Absence of Liability. A member of the Board of Directors of
the Company or a member of the Committee or any officer of the Company shall
not be liable for any act or inaction hereunder, whether of commission or
omission.
5.4. No Funding of Plan. The Company shall not be required to fund
or otherwise segregate any cash or any other assets which may at any time be
paid to Participants under the Plan. The Plan shall constitute an "unfunded"
plan of the Company. The Company shall not, by any provisions of the Plan, be
deemed to be a trustee of any property, and any obligations of the Company to
any Participant under the Plan shall be those of a debtor and any rights of any
Participant or former Participant shall be limited to those of a general
unsecured creditor.
5.5. Non-Transferability of Benefits and Interests. Except as
expressly provided by the Committee, no benefit payable under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any such attempted action shall be void and
no such benefit shall be in any manner liable for or subject to debts,
contracts, liabilities, engagements or torts of any Participant or former
Participant. This Section 5.5 shall not apply to an assignment of a
contingency or payment due after the death of the Executive to the deceased
Executive's legal representative or beneficiary.
5.6. Law to Govern. All questions pertaining to the construction,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance with the laws of the State of Texas.
5.7. Non-Exclusivity. Subject to Section 5.8, the Plan does not
limit the authority of the Company, the Board or the Committee, or any
Subsidiary of the Company, to grant awards or authorize any other compensation
under any other plan or authority, including, without limitation, awards or
other compensation based on the same Performance Target(s) used under the Plan.
In addition, Executives not selected to participate in the Plan may participate
in other plans of the Company.
5.8. Section 162(m) Conditions; Bifurcation of Plan. It is the
intent of the Company that the Plan and Bonuses paid hereunder satisfy and be
interpreted in a manner, that, in the case of Participants who are or may be
persons whose compensation is subject to Section 162(m), satisfies any
applicable requirements as performance-based compensation. Any provision,
application or interpretation of the Plan inconsistent with this intent to
satisfy the standards in Section 162(m) of the Code shall be disregarded.
Notwithstanding anything to the contrary in the Plan, the provisions of the
Plan may at any time be bifurcated by the Board or the Committee in any manner
so that certain provisions of the Plan or any Bonus intended or required in
order to satisfy the applicable requirements of Section 162(m) are only
applicable to persons whose compensation is subject to Section 162(m).
Section 6. EFFECTIVE DATE, AMENDMENTS, SUSPENSION OR TERMINATION OF PLAN
The Plan shall be effective as of March 1, 1997, subject to its approval
by shareholders of the Company at the annual meeting of shareholders to be held
August 26, 1997, or any adjournment or postponement thereof. The Board of
Directors or the Committee may from time to time amend, suspend or terminate in
whole or in part, and if suspended or terminated, may
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<PAGE> 36
reinstate, any or all of the provisions of the Plan. Notwithstanding the
foregoing, no amendment may be effective without Board of Directors and/or
shareholder approval if such approval is necessary to comply with the
applicable rules under Section 162(m) of the Code. No additional Bonuses may
be payable after termination of the Plan. Termination of the Plan shall not
affect any Bonuses due and outstanding on the date of termination and such
Bonuses shall continue to be subject to the terms of the Plan notwithstanding
its termination.
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HELEN OF TROY LIMITED
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 26, 1997
===========
PROXY
===========
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes Gerald J. Rubin and Aaron M. Shenkman or
either of them as Proxies with power of substitution, to represent the
undersigned at the Annual Meeting of Shareholders of the Company to be held on
Tuesday, August 26, 1997 at 1:00 p.m. Mountain Daylight Time, at the Camino
Real Hotel, 101 S. El Paso Street, El Paso, Texas and any adjournment thereof,
and to vote all the shares of Common Stock of the Company that the undersigned
is entitled to vote on the following matters:
1. To elect a board of seven directors
FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below) [ ]
WITHOUT AUTHORITY
to vote for all nominees below [ ]
(INSTRUCTION: To withhold authority to vote for any individual, strike
a line through the nominee's name on the list below.)
Gerald J. Rubin Daniel C. Montano Gary B. Abromovitz
Aaron M. Shenkman Stanlee N. Rubin
Byron H. Rubin Christopher Carameros
2. To consider approval of an amendment to the Company's 1994 Stock Option
and Restricted Stock Plan;
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To approve a proposal to increase the number of common shares subject
to the Company's 1994 Stock Option and Restricted Stock Plan;
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To consider approval of a proposal to increase the Company's authorized
common shares;
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To consider and vote upon the adoption of Helen of Troy's 1997 Cash
Bonus Performance Plan and the performance goals included therein;
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. To consider approval of certain amendments to the Company's 1995
Non-Employee Director Stock Option Plan;
FOR [ ] AGAINST [ ] ABSTAIN [ ]
7. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
<PAGE> 38
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is given, this proxy will be
voted for Proposals 1 through 6 and in accordance with management's discretion
as to any other matters.
_________________________________________IMPORTANT: Please date this proxy and
sign exactly as your name appears
thereon. If stock is held jointly,
signature should include both names.
Executors, administrators, trustees,
guardians, and others signing in the
representative capacity, please so
indicate when signing.
DATE____________________, 1997 ____________________________________
SIGNATURE
PLEASE SIGN, DATE AND RETURN THIS PROXY ____________________________________
PROMPTLY IN THE ACCOMPANYING ENVELOPE. SIGNATURE IF HELD JOINTLY
