<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
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 part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(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 25, 1998
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 25,
1998 at 1:00 p.m., Mountain Daylight Time, for the following purposes:
1. To elect a board of six directors;
2. To consider approval of the Helen of Troy Limited 1998 Stock Option
and Restricted Stock Plan;
3. To consider approval of the Helen of Troy Limited 1998 Employee
Stock Purchase Plan;
4. 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 15, 1998. 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 23, 1998
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.
Helen of Troy(R)
<PAGE> 3
HELEN OF TROY LIMITED
PRINCIPAL EXECUTIVE OFFICE
6827 MARKET AVENUE
EL PASO, TEXAS 79915
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 25, 1998
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 25, 1998 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 24, 1998.
The Annual Report to Shareholders for the year ended February 28, 1998
("fiscal 1998"), 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 15, 1998 was the record date for
determination of shareholders entitled to notice of, and to vote at, the
Meeting. At the record date, there were 27,888,428 issued and outstanding shares
of Common Stock, entitled to one vote per share. On August 26, 1997, the Board
of Directors approved a 2-for-1 stock split which was paid as a 100% stock
dividend on September 22, 1997 to shareholders of record on September 8, 1997.
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.
2
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July 7, 1998, the beneficial
ownership of the Common Stock of the Directors, the named executive officers of
the Company, the named executive officers and the Directors of the Company as a
group, and each person known to the Company to be the beneficial owner of more
than 5% of the Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP PERCENT OF CLASS
<S> <C> <C>
Gerald J. Rubin (1)(2)(3)(4) 4,539,922 15.4 %
6827 Market Avenue
El Paso, Texas 79915
Byron H. Rubin (8) 24,000 *
Daniel C. Montano (7) 32,000 *
Gary B. Abromovitz (7) 36,000 *
Stanlee N. Rubin (1) (7) 32,000 *
Christopher L. Carameros (8) 24,000 *
H. McIntyre Gardner (3) 30,000 *
Sam L. Henry (3) 125,000 *
All Directors and officers as a group
(8 persons) (3) 4,842,922 16.5
Fidelity Management and Research
Company (5) 2,721,400 9.3
82 Devonshire Street
Boston, Massachusetts 02109
A I M Management Group Inc. (6) 2,311,600 7.9
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
</TABLE>
* ownership of less than 1% of the Common Stock.
3
<PAGE> 5
(1) Does not include 144,000 shares in a trust for the children of Gerald
J. Rubin and Stanlee N. Rubin in which they disclaim any beneficial
ownership.
(2) Includes 276,980 shares held beneficially through a partnership in
which Gerald J. Rubin is a partner.
(3) Includes 1,300,000 shares in the case of Gerald J. Rubin, 30,000 shares
in the case of H. McIntyre Gardner, 65,000 shares in the case of Sam L.
Henry, and 1,539,000 shares in the case of all directors and officers
as a group that are issuable pursuant to options that are exercisable
within sixty days of July 7, 1998.
(4) Includes 2,962,942 shares and all stock options granted that 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, 1998, by Fidelity
Management and Research Company, this represents sole investment power
for 2,271,400 shares and sole voting power for no shares.
(6) As extracted from Form 13G filed as of February 9, 1998, by A I M
Management Group Inc., this represents shared investment power for
2,311,600 shares and sole voting power for no shares.
(7) 32,000 of the shares for each individual represent options issued under
the 1995 Non-Employee Director Stock Option Plan and exercisable within
60 days of July 7, 1998.
(8) 24,000 of the shares for each individual represent options issued under
the 1995 Non-Employee Director Stock Option Plan and exercisable within
60 days of July 7, 1998.
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. Accordingly, the number of Director
positions has been set at seven. The Nominating Committee has identified six
candidates for election to the Board of Directors. 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 six persons named below are the nominating committee's nominees for
election as Directors. Gerald J. Rubin and Byron H. Rubin are brothers. Set
forth below are descriptions of the principal occupations during at least the
past five years of the nominees for membership on the Company's Board of
Directors.
Gerald J. Rubin, age 54, founder of Helen of Troy Texas Corporation,
has been the Chairman and Chief Executive Officer of the Company since December
1993 and of Helen of Troy Texas Corporation since 1984. Mr. Rubin has been a
Director of the Company since December 1993 and of Helen of Troy Texas
Corporation since 1969. Helen of Troy Texas Corporation has been a subsidiary of
the Company since February 1994.
Daniel C. Montano, age 49, 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 C&K 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 also serves as a director of ESSCO USA, a Greek
shipping company.
Byron H. Rubin, age 48, 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 & Rubin (formerly known as Integrated Financial of
Texas), an insurance and tax planning firm in Dallas, Texas since 1979.
Stanlee N. Rubin, age 53, 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
4
<PAGE> 6
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. Mrs. Rubin is also a
Partner for The Susan G. Komen Breast Cancer Foundation.
Gary B. Abromovitz, age 55, 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 44, has been a Director of the Company
since December 1993 and of Helen of Troy Texas Corporation since June 1993. From
August 1997 to the present Mr. Carameros has been President of L & M Asset
Management Inc., a financial services and asset management company. From
September 1993 to July 1997 he was an Executive Vice President of Cactus Apparel
Inc., an apparel manufacturing company.
Except as indicated above, none of the above nominees 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 SIX NOMINEES NAMED ABOVE.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Company's Executive Committee consisted of Mr. Gerald J. Rubin and
Mr. Aaron M. Shenkman for the first seven months of fiscal 1998 and of Mr.
Gerald J. Rubin and Mr. Byron H. Rubin for the remainder of the fiscal year. 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 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 1998.
The Company's Audit Committee consisted of Mr. Gary B. Abromovitz, Mr.
Daniel C. Montano and Mr. Christopher L. Carameros during fiscal 1998. The Audit
Committee is responsible for evaluating accounting and control procedures and
practices of the Company and for 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 twice during fiscal 1998.
The Company's Nominating Committee consisted of Mr. Gerald J. Rubin and
Mr. Aaron M. Shenkman for the first seven months of fiscal 1998 and of Mr.
Gerald J. Rubin and Mrs. Stanlee Rubin for the remainder of the fiscal year. 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
Committee positions, reviews and evaluates such candidates and makes
recommendations to the Board of Directors for nominations to fill Board and
Committee positions. The Nominating Committee meets periodically during the
year; but no resolutions were adopted nor were any formal meetings held during
fiscal 1998. 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 by March 6th of the year preceding the
next Annual Meeting to the Secretary of the Company, 6827 Market Avenue, El
Paso, Texas 79915.
5
<PAGE> 7
The Company's Stock Option and Compensation Committee consisted of Mr.
Daniel C. Montano and Mr. Gary B. Abromovitz during fiscal 1998. The Stock
Option and Compensation Committee generally oversees matters relating to
compensation of employees of the Company. In connection with this oversight, it
reviews and makes recommendations to the Board of Directors on officer and
senior employee compensation and on grants of stock options under the Company's
stock option plans. The Stock Option and Compensation Committee met or
unanimously voted on resolutions twice during fiscal 1998.
The full Board of Directors met or unanimously voted on resolutions six
times during fiscal 1998. Two of the six Board of Directors meetings were held
by telephone. Each of the Directors attended or acted upon at least seventy-
five percent of the aggregate number of Board of Director meetings, consents,
and Committee meetings or consents held or acted upon during the period for
which he or she acted as a Director during fiscal 1998.
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 1996 through 1998.
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> <C>
Gerald J. Rubin 1998 $625,003 $885,000(3) $ -0- 1,000,000 $16,414 (1)(2)
Chairman and Chief 1997 623,158 551,705 -0- -0- 15,821 (1)(2)
Executive Officer 1996 600,000 262,000 -0- 1,200,000 15,363 (1)(2)
H.McIntyre Gardner 1998 216,667 50,000 -0- 300,000 -0-
President and Chief
Operating Officer
Sam L. Henry 1998 215,636 28,240 -0- 20,000 4,517 (1)(2)
Senior Vice-President 1997 205,367 40,343 -0- -0- 4,517 (1)(2)
Finance 1996 188,343 24,485 -0- 80,000 3,761 (1)(2)
</TABLE>
(1) These amounts include the Company's contributions to Helen of Troy
Corporation's 401(k) Profit Sharing Plan.
(2) These totals include amounts representing premiums for life insurance
or the economic benefit of split dollar policies paid by the Company
for life insurance arrangements on behalf of the Executive Officer.
(3) Mr. Rubin's fiscal 1998 bonus was paid pursuant to the 1997 Cash Bonus
Performance Plan.
6
<PAGE> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- -------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDER- OPTIONS/
LYING SARS
OPTIONS/ GRANTED TO
SARS EMPLOYEES EXERCISE OF
GRANTED IN FISCAL BASE PRICE EXPIRATION
NAME (#) YEAR ($/SH) DATE 5%($) 10%($)
- ---- --------------- ---------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
G. Rubin 1,000,000 60.9% $15.9375 08/26/07 $10,023,008 $25,400,270
H. McIntyre 300,000 18.3% $ 16.75 09/02/07 $ 3,160,195 $ 8,008,556
Gardner
S. Henry 20,000 1.2% $ 12.50 05/27/07 $ 157,224 $ 398,436
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS AT OPTIONS/SARS AT
ON VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
EXERCISE REALIZED ---------------------- ----------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --- --- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G. Rubin -- -- 1,700,000 1,400,000 $20,735,240 4,325,200
H.M. Gardner -- -- -- 300,000 -- --
S. Henry 60,000 598,903 47,000 91,000 526,946 828,108
</TABLE>
(1) Based on the closing price of the Common Stock on the NASDAQ National
Market System - Composite Transactions on February 28, 1998 ($15.313).
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 and provides for a base
salary of $600,000. Mr. Rubin's employment contract has been amended to remove
the bonus previously provided under that contract and to substitute the bonus
payable thereunder for the bonus under the Helen of Troy 1997 Cash Bonus
Performance Plan, which was approved by the Company's shareholders. Under the
1997 Cash Bonus Performance Plan, Mr. Rubin's yearly bonus is contingent upon
the achievement of performance targets that are linked to the Company's income
from continuing operations before income taxes adjusted for extraordinary items
and capital gains and losses ("Earnings"). Mr. Rubin will receive a bonus if
five percent of the Earnings for the applicable year exceeds Mr. Rubin's base
salary and, if
7
<PAGE> 9
payable, such bonus will equal five percent of the excess of Earnings over Mr.
Rubin's salary. Because the bonus is linked to Earnings during each fiscal
year, the actual bonus to be received by Mr. Rubin for future fiscal years is
not currently determinable. Mr. Rubin's bonus for fiscal 1998 under the 1997
Cash Bonus Performance plan was $885,000. The amount of compensation awardable
under the 1997 Cash Bonus Performance Plan is not subject to any maximum
limitation. The Company has an employment contract with H. McIntyre Gardner.
Mr. Gardner's contract was effective September 1, 1997 and provides for a base
salary of $400,000 and a bonus that depends upon the Company achieving specific
pre-tax income levels.
In the event of the death of Messrs. Rubin or Gardner, all unpaid
benefits under their employment agreements are payable to their estates. Gerald
J. Rubin's contract renews itself monthly for a new five-year term. Gerald J.
Rubin's and H. McIntyre Gardner's contracts grant each of them the right to
elect a cash payment of the remainder of their contracts 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).
DIRECTOR COMPENSATION
Each member of the Company's Board of Directors 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. Directors did not receive a fee or any other payment for
the two meetings held by telephone during fiscal 1998. Additional payments of
$1,500 were made quarterly to each such Director. As approved by the Company's
shareholders in 1996, each non-employee Director receives 4,000 stock options on
September 1st of each year. As approved by the Company's shareholders in 1997,
each non-employee Director received a one-time grant on August 26, 1997 of
20,000 stock options. The stock options have an exercise price equal to the mean
of the high and low market prices on the day the stock options are issued. The
stock options vest after one year.
Aaron M. Shenkman was a Director and an employee of the Company for the
first seven months of fiscal 1998. As an employee of the Company Mr. Shenkman
was paid a salary of $87,500 and a bonus of $175,000.
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.
8
<PAGE> 10
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 Stock Option and Compensation
Committee has reviewed the Company's primary competitors in determining
competitive compensation. Some of these competitors are privately held and are
therefore not included in the stock performance graph.
Base salaries for Gerald J. Rubin (Chief Executive Officer) and H.
McIntyre Gardner for fiscal 1998 were based on the long-term employment
contracts of such individuals with the Company. See "Executive
Compensation-Employment Contracts." Base salary for the remaining executive
officer 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.
Annual incentive compensation consists of cash bonuses. The amount of
the cash bonus for Gerald J. Rubin is based upon the 1997 Cash Bonus Performance
Plan. The amount of the cash bonus for H. McIntyre Gardner is based on his
employment contract with the Company. During fiscal 1998, the Company awarded
bonuses of $885,000 and $50,000 to Messrs. Gerald J. Rubin and H. McIntyre
Gardner, respectively.
The fiscal 1998 cash bonus for the remaining executive officer was
determined based on the Company's pre-tax earnings. The maximum fiscal 1998
bonus for this executive officer was 25% of the executive's annual base salary.
A portion of the bonus was earned as the Company's pre-tax earnings exceeded a
minimum base amount determined as of the beginning of fiscal 1998. The earned
portion of the bonus increased as pre-tax earnings exceeded this base amount.
The bonus listed in the Summary Compensation Table for fiscal 1998 for the
executive officer other than Messrs. Rubin and Gardner was earned during fiscal
1998 and was paid in fiscal 1999. It is anticipated that a bonus will be paid to
this executive officer for fiscal 1999. The fiscal 1999 bonus for this executive
officer will be determined based upon performance objectives set by the
Company's Chief Executive Officer and the Company's President.
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 1998 the Company granted
stock options to purchase 1,000,000 shares and 300,000 shares of the Common
Stock to Gerald J. Rubin and H. McIntyre Gardner, respectively.
Executive officers are provided with opportunities for ownership
positions in the 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 1998 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 1998.
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> 11
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.
ASSUMES $100 INVESTED March 1, 1993
[GRAPH]
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING FEB. 28, 1998
-----------------------------------------------------
(1) The Peer Group used was the Dow Jones Industry
Companies - Cosmetics, Personal Care Products.
-----------------------------------------------------
10
<PAGE> 12
The graph is comprised of the following data:
<TABLE>
<CAPTION>
Helen of NASDAQ Peer
Fiscal Troy Market Group
Year Limited Index Index
---- ------- ------ ------
<S> <C> <C> <C>
1993 100.00 100.00 100.00
1994 91.04 119.22 104.26
1995 110.45 119.50 122.76
1996 137.31 166.48 165.16
1997 295.52 197.67 223.83
1998 365.68 268.94 288.56
</TABLE>
TRANSACTIONS WITH MANAGEMENT
None.
APPROVAL OF THE HELEN OF TROY LIMITED 1998
STOCK OPTION AND RESTRICTED STOCK PLAN
(PROPOSAL 2)
On July 17, 1998, the Company's Board of Directors adopted, subject to
approval by the Company's shareholders, the Helen of Troy Limited 1998 Stock
Option and Restricted Stock Plan (the "1998 Plan") and reserved for issuance
thereunder 3,000,000 shares of common stock, par value $.10 per share, of the
Company (the "Common Stock"). The text of the 1998 Plan is attached hereto as
Appendix A. The material features of the 1998 Plan are discussed below, but the
description is subject to, and is qualified in its entirety by, the full text of
the 1998 Plan.
The purpose of the 1998 Plan is (i) to offer selected employees of the
Company or its subsidiaries an equity ownership interest in the financial
success of the Company, (ii) to provide the Company an opportunity to attract
and retain the best available personnel for positions of substantial
responsibility and (iii) to encourage equity participation in the Company by
eligible Participants (as hereinafter defined). The 1998 Plan provides for the
grant by the Company of (i) options ("Options") to purchase shares of Common
Stock, and (ii) awards of shares of Common Stock containing certain restrictions
("Restricted Stock"). Options granted under the Plan may include nonstatutory
options ("Nonstatutory Options") as well as incentive stock options ("Incentive
Stock Options") intended to qualify under Section 422 of the Internal Revenue
Code of 1986, as amended, and as interpreted by the regulations thereunder (the
"Code"). Shareholder approval of the 1998 Plan is necessary to permit the
deduction by the Company of compensation attributable to options issued pursuant
to the 1998 Plan that in certain instances would not otherwise be deductible
under Section 162(m) of 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 closing sale price of the Common Stock on July 15, 1998, as
reported by the NASDAQ Stock Market, was $24 per share.
AMOUNT OF STOCK SUBJECT TO THE 1998 PLAN
Under the terms of the 1998 Plan, the Company may grant (i) Options,
and (ii) awards of Restricted Stock (collectively, grants of Options and
Restricted Stock are referred to in this Proxy Statement as "Plan Awards") with
respect to an aggregate of 3,000,000 shares of Common Stock (the "Shares").
However, no more than 600,000 of the aggregate number of Shares available under
the 1998 Plan may be issued in connection with grants of Restricted Stock.
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ADMINISTRATION OF THE 1998 PLAN
The Company's Stock Option and Compensation Committee (the "Committee")
will administer the 1998 Plan. The Committee must consist of at least two
persons and each Committee member must be a member of the Board of Directors who
is both (a) a Non-Employee Director within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended from time to time (the
"Exchange Act"), and (b) an Outside Director, within the meaning of Section
162(m) of the Code.
ELIGIBILITY FOR PLAN AWARDS
Plan Awards may be granted to selected employees 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 Committee. The Company
currently has one person serving as a Director who is also an officer of the
Company. Actual participation in the 1998 Plan will be determined in the sole
discretion of the Committee. Therefore, the number of Participants participating
in the 1998 Plan cannot be determined precisely 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 the executive officers cannot be
determined at this time. At July 17, 1998, the Company had approximately 320
employees who would be eligible to participate in the 1998 Plan.
LIMITATIONS WITH RESPECT TO COVERED EMPLOYEES
The total number of Shares for which Options may be granted and which
may be awarded as Restricted Stock (under the 1998 Plan and any other plan of
the Company) to any "covered employee" within the meaning of Section 162(m) of
the Code during any one-year period shall not exceed 1,000,000 in the aggregate.
OPTIONS UNDER THE 1998 PLAN
The exercise price for any Option granted under the 1998 Plan shall be
such price as the Committee may determine in its sole discretion, but shall be
not less than 100% of the fair market value per share on the date of grant of
such Option. In the event that an Incentive Stock Option is granted to any
person who, at the time such Incentive Stock Option is granted, owns more than
10% of the total combined voting power of classes of shares of the Company or of
any subsidiary corporation of the Company (a "Ten Percent Shareholder"), then
the exercise price for the Option shall not be less than 110% of the fair market
value of the shares on the date the Option is granted.
Any Option granted under the 1998 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 Committee determines on the date such Option is
granted. 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 Option granted to a Ten Percent Shareholder, the Option 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 Committee, by delivery of
other Shares having a fair market value on the date of delivery equal to the
aggregate exercise price of the Shares as to which such 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 and authorized by the Committee.
With respect to Incentive Stock Options, Options that are granted to
Participants in the 1998 Plan, which allow such Participants to purchase in
excess of $100,000 (calculated as of the time the Option is granted) of the
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Company's Common Stock in any one calendar year under the 1998 Plan and all of
the Company's other plans, are considered Nonstatutory Options that are not
entitled to the favorable tax treatment provided under Section 422 of the Code.
In general, if an optionee ceases to be an employee of the Company for
reasons other than Permanent and Total Disability (as defined in the 1998 Plan)
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 general, upon the death of an optionee, any Option held by such
optionee will terminate; provided that if the optionee's death occurs during the
term of an Option and at the time of death such optionee was an employee the
optionee's estate or person who acquired the right to exercise the Option by
bequest or inheritance will have until the earlier of 12 months from the date of
such optionee's death 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
death, to take advantage of this provision.
Except as may be permitted by the Committee, an Option granted under
the 1998 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 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules thereunder, and is not assignable by operation
of law or subject to execution, attachment or similar process.
The Stock Option Agreement (as defined in the 1998 Plan) evidencing any
Incentive Stock Option granted under the 1998 Plan shall provide that if the
optionee makes a disposition, within the meaning of Section 424(c) of the Code,
of any share or shares issued to him pursuant to the exercise of the Incentive
Stock Option within the two-year period commencing on the day after the date
such Option is granted or within a one-year period commencing on the day after
the date of transfer of the share or shares to him pursuant to the exercise of
such Option, he shall, within ten days of such disposition, notify the Company
and immediately deliver to the Company any amount of federal income tax
withholding required by law.
RESTRICTED STOCK UNDER THE 1998 PLAN
The Committee may grant awards of Restricted Stock under the 1998 Plan
in accordance with the terms and conditions set forth in an agreement between
the Company and the Participant. Restricted Stock may be granted by the
Committee either separately or in combination with Options. Each grant of
Restricted Stock shall require a Participant to remain an employee 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 Committee must require as a
condition to awarding any Restricted Stock, that a Participant hold the
Restricted Stock for a period of (i) one year following the date of
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such acquisition in the event such Restricted Stock award vests upon the
achievement of performance goals or (ii) three years following the date of such
acquisition in the event such Restricted Stock award does not vest upon the
achievement of performance goals.
The Company must establish a restricted stock account for each
Participant, to which Restricted Stock granted to the Participant is credited.
Every credit of Restricted Stock shall be merely a bookkeeping entry and every
grant of Restricted Stock shall be considered contingent and unfunded until the
restrictions lapse. During the period of restriction 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.
The terms, conditions and restrictions of the Restricted Stock are
determined by the Committee on the date of grant. The restrictions shall lapse
based upon performance measures, targets, holding period requirements and other
criteria established by the Committee. Such criteria may vary among the 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 Committee, in its sole discretion, may establish procedures by
which a Participant may defer the transfer of Restricted Stock to the
Participant.
The 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 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 and Total Disability, the
restrictions applicable to the Participant's Restricted Stock shall lapse in
accordance with such determination as the 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 still under restriction.
TAX WITHHOLDING
No later than the date as of which the value of any Plan Award or any
Shares or other amount received thereunder first becomes includable in the gross
income of a Participant for federal income tax purposes, such Participant must
pay to the Company, or make arrangements satisfactory to the Committee regarding
payment of, any federal, state or local taxes of any kind required to be
withheld with respect to such income. The Company and its subsidiaries have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant to the extent permitted by law. Subject to approval by the
Committee, a Participant may elect to have such withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
Shares to be issued pursuant to any award, a number of Shares with an aggregate
fair market value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company Shares
owned by the Participant with an aggregate fair market value (as of the date the
withholding is effected) that would satisfy the withholding amount due.
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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 (as well as the exercise
price covered by any outstanding Option), the number of Shares of Restricted
Stock credited to a Participant's restricted stock account and the aggregate
number of Shares that have been authorized for issuance under the 1998 Plan will
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 effected without receipt of consideration by the Company.
In the event of the dissolution or liquidation of the Company, other
than pursuant to a Reorganization (as defined below), any Option granted under
the 1998 Plan shall terminate as of a date to be fixed by the Committee,
provided that not less than 30 days written notice of the date so fixed shall be
given to each optionee and each such optionee shall have the right during such
period to exercise his Options as to all or any part of the Shares covered
thereby including Shares as to which such Options would not otherwise be
exercisable by reason of an insufficient lapse of time.
In the event of a Reorganization in which the Company is not the
surviving or acquiring company, or in which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Reorganization, then (i) if there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the Reorganization Agreement
does not specifically provide for the change, conversion or exchange of the
Shares under outstanding unexercised Options for securities of another
corporation, then the Committee shall take such action, and the Options shall
terminate, as provided above; or (ii) if there is a Reorganization Agreement and
if the Reorganization Agreement specifically provides for the change, conversion
or exchange of the Shares under outstanding or unexercised options for
securities of another corporation, then the Committee shall adjust the Shares
under such outstanding unexercised Options (and shall adjust the Shares which
are then available to be optioned, if the Reorganization Agreement makes
specific provisions therefor) in a manner not inconsistent with the provisions
of the Reorganization Agreement for the adjustment, change, conversion or
exchange of such stock and such options.
For these purposes, the term "Reorganization" shall mean any statutory
merger, statutory consolidation, sale of all or substantially all of the assets
of the Company, or sale, pursuant to an agreement with the Company, of
securities of the Company pursuant to which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Reorganization.
Except as provided in the 1998 Plan and except as otherwise provided by
the Committee in its sole discretion, any Options shall terminate immediately
prior to the consummation of such proposed action.
Subject to the above, upon a Change in Control (as defined below) of
the Company, (i) all the outstanding Options shall immediately become fully
exercisable, and (ii) 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: (i) 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 (ii) a majority of the present members of the Company's Board
of Directors cease to be members of the Board of Directors.
AMENDMENT TO THE 1998 PLAN
The Board of Directors in its sole discretion may, from time to time,
amend the Plan; provided that no amendment will be made without the requisite
approval of the shareholders of the Company that will materially
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increase the benefits accruing to Participants under the 1998 Plan or will
change the aggregate number of Shares that may be issued under the 1998 Plan,
other than any increase or decrease in the number of issued Shares resulting
from a stock split, payment of a stock dividend or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company.
TERM AND TERMINATION OF THE 1998 PLAN
The 1998 Plan will continue in effect for a term of ten years, unless
sooner terminated. The Board of Directors may terminate the 1998 Plan at any
time in its sole discretion. Neither Restricted Stock nor Options may be granted
after the 1998 Plan is terminated. The termination of the 1998 Plan, or any
amendment thereto, shall not affect any Shares previously issued to a
Participant, any Option previously granted under the 1998 Plan or any Shares of
Restricted Stock previously granted to a Participant.
MISCELLANEOUS
The 1998 Plan is not qualified under the provisions of Section 401(a)
of the Code, and is not subject to any of the provisions of ERISA.
FEDERAL INCOME TAX CONSEQUENCES
The following general summary is based upon the 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 received upon exercise of an Incentive Stock
Option depends on the timing of the disposition. If the optionee does not
dispose of the Shares received upon exercise of an Incentive Stock Option within
two years from the date such Incentive Stock Option was granted, and does not
dispose of such shares within 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 capital gain or loss (at either the mid-
or long-term rate, depending on the Participant's holding period).
If an optionee disposes of the Shares 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 Shares 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 Shares 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.
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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
1998 Plan.
If an optionee exercises an Incentive Stock Option by delivering other
Shares of the Company that are substantially vested or with respect to which a
Section 83(b) Election has been filed, under proposed regulations, the optionee
will not recognize any compensation income or gain with respect to the Shares
surrendered. The portion of the Shares received equal in number to the Shares
surrendered will have a basis equal to the basis of the Shares surrendered in
payment (which generally will be the exercise price). The holding period of such
Shares will be determined in accordance with proposed regulations. The optionee
will recognize no gain with respect to the remaining portion of Shares received,
the basis of such Shares will be zero, and the holding period of such Shares
will begin on the date of receipt thereof by the optionee.
If an optionee exercises an Incentive Stock Option using Shares
received upon the prior exercise of an Incentive Stock Option (whether granted
under the Plan or under another plan of the Company) and the participant has not
held such stock for the applicable holding periods, under proposed regulations,
the participant will have made a disqualifying disposition of the number of
Shares of prior Incentive Stock Option stock used as payment for the exercise
price of the Incentive Stock Option. Generally, the optionee will recognize
ordinary compensation income with respect to the surrender of such Shares to the
extent of the excess of the fair market value of the Shares surrendered
(determined as of the date the Option relating to such Shares was exercised)
over the exercise price. The basis of the portion of the Shares received equal
in number to the Shares surrendered will equal the amount of ordinary
compensation income recognized by the optionee plus the optionee's basis in the
Shares surrendered. The basis of the remaining portion of Shares received will
be zero.
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 Shares at the time of
exercise over the exercise price. Upon the subsequent disposition of the Shares,
the optionee 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 optionee's holding period in the Shares, 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, executive officers, Directors and Ten Percent
Shareholders who have not yet held their 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 Shares 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 Shares 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 Shares. Any change in the value of
the Shares after the date of exercise would be recognized as capital gain or
loss only if and when the Shares 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 Shares 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.
If an optionee exercises a Nonstatutory Option by delivering other
Shares of the Company, the optionee will not recognize gain or loss with respect
to the Shares delivered by the optionee, even if the then fair market
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value of such Shares is different from the optionee's tax basis therein. The
portion of the Shares received equal in number to the Shares surrendered will
have a basis equal to the basis of the Shares surrendered, and the holding
period for such number of Shares received will include the holding period of the
Shares surrendered. The remaining portion of the Shares received will be taxable
to the employee as ordinary compensation income in an amount equal to the fair
market value of such Shares as of the exercise date, and the Company likewise
generally will be entitled to an equivalent tax deduction. The participant's tax
basis in the Shares received in excess of the number of Shares surrendered will
equal the amount of ordinary compensation income recognized by the employee, and
the holding period for such number of Shares received begins on the date such
Shares are acquired.
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 1998 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 upon
grant, notwithstanding that the Restricted Stock would otherwise not be
includable 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 Shares after the date of grant would be capital gain or
capital loss only if and when the Shares are 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 a loss the amount
previously included in gross income.
Dividends received on the Shares 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 1998 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.
In general, the Company will be entitled to a deduction for federal
income tax purposes at the same time and in an amount equal to the ordinary
income recognized by a Participant with respect to Shares of Restricted Stock
awarded pursuant to the 1998 Plan.
If, subsequent to the lapse of Restrictions on 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.
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VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION
The affirmative vote of the majority of the votes cast at the Meeting is
required to approve the Helen of Troy Limited 1998 Stock Option and Restricted
Stock Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE HELEN OF TROY LIMITED 1998 STOCK OPTION AND RESTRICTED STOCK
PLAN.
APPROVAL OF THE HELEN OF TROY LIMITED 1998
EMPLOYEE STOCK PURCHASE PLAN
(PROPOSAL 3)
On July 17, 1998, the Company's Board of Directors adopted, subject to
approval by the Company's shareholders, the Helen of Troy Limited 1998 Employee
Stock Purchase Plan (the "1998 Purchase Plan") and reserved for issuance
thereunder 500,000 shares of the Common Stock. The text of the 1998 Purchase
Plan is attached hereto as Appendix B. The material features of the 1998
Purchase Plan are discussed below, but the description is subject to, and is
qualified in its entirety by, the full text of the 1998 Purchase Plan.
The purpose of the 1998 Purchase Plan is to provide employees of the
Company or its subsidiaries designated by the Board of Directors or the
Committee (defined below) as eligible to participate in the 1998 Purchase Plan
("Designated Subsidiaries") an opportunity to purchase shares of Common Stock
and thereby have an additional incentive to contribute to the prosperity of the
Company. The 1998 Purchase Plan provides that eligible full-time employees of
the Company or its Designated Subsidiaries may purchase shares of Common Stock
with payroll deductions accumulated on behalf of such employee.
ADMINISTRATION
The 1998 Purchase Plan will be administered by a committee appointed by
the Board of Directors (the "Committee"). The Committee shall consist of at
least two members, each of whom shall be a member of the Board of Directors who
is both a (a) Non-Employee Director, within the meaning of Rule 16b-3
promulgated under the Exchange Act, and (b) an Outside Director, within the
meaning of Section 162(m) of the Code.
EFFECTIVE TIME AND TERM; AMENDMENT AND TERMINATION
The 1998 Purchase Plan will continue until July 17, 2008, unless sooner
terminated. The Board of Directors may amend or terminate the 1998 Purchase Plan
in its sole discretion; provided that no amendment will be made without the
requisite approval of the Company's shareholders that will (a) materially
increase the number of shares that may be issued under the 1998 Purchase Plan,
other than an increase or decrease resulting from a recapitalization or
reorganization, (b) materially modify the requirements as to eligibility for
participation, except as otherwise specified in the 1998 Purchase Plan, (c)
materially increase the benefits accruing to the participating employees, (d)
reduce the purchase price or (e) extend the term of the 1998 Purchase Plan.
ELIGIBILITY
Employees regularly employed on a full-time basis by the Company or a
Designated Subsidiary on the first day of any exercise period for an offering
are eligible to purchase Common Stock under the terms and conditions of such
offering of Common Stock under the 1998 Purchase Plan. An employee is considered
to be employed on a full-time basis unless his or her customary employment is
less than 20 hours per week or less than
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5 months during any year. An employee who immediately after a right to purchase
Common Stock under the 1998 Purchase Plan is granted owns or is considered to
own shares of stock possessing five percent or more of the total combined voting
power or value of all classes of stock of the Company or any of its subsidiaries
may not participate in the 1998 Purchase Plan. For purposes of determining stock
ownership pursuant to the immediately preceding sentence, any stock which an
employee may purchase by conversion of convertible securities or under
outstanding options shall be treated as owned by the employee and the
attribution rules of Section 424 of the Code will be applicable. The Committee
may (a) establish administrative rules requiring that employment commence some
minimum period (e.g., one pay period) prior to the first day of an exercise
period to be eligible to participate in an offering, (b) extend eligibility to
part-time employees, (c) impose an eligibility period on participation of up to
two years with respect to participation in the 1998 Purchase Plan or (d)
determine that a group of highly compensated employees are ineligible to
participate. At July 17, 1998, the Company had approximately 320 full-time
employees who would be eligible to participate in the 1998 Purchase Plan. At
this time, the number of employees that will participate in the 1998 Purchase
Plan cannot be determined precisely nor can the benefits or amounts that will be
received by or allocated to participating employees, including the Company's
executive officers or any other group of employees.
SECURITIES AND AMOUNT OF COMMON STOCK SUBJECT TO THE 1998 PURCHASE PLAN
The aggregate number of shares of Common Stock that may be sold
pursuant to all offerings of such Common Stock under the 1998 Purchase Plan
shall not exceed 500,000 shares, as adjusted for any recapitalization or
reorganization of the Company as set forth in the 1998 Purchase Plan. If the
total number of shares of Common Stock for which options are granted exceeds the
maximum number of shares offered, the number of shares which may be purchased
under the options granted shall be reduced on a pro rata basis.
METHOD OF EMPLOYEE PARTICIPATION IN THE 1998 PURCHASE PLAN
The Board of Directors shall designate the amount of shares available
for each offering and shall establish the duration for each offering, the first
day of each offering and the exercise periods for the offerings.
An eligible employee may elect to participate in any offering of Common
Stock under the 1998 Purchase Plan by filing a payroll deduction authorization
and 1998 Purchase Plan enrollment form within such time as is specified by the
Committee for that offering. An eligible employee may authorize payroll
deductions not to exceed 15% of that employee's compensation. The Company shall
maintain a stock purchase account for each participating employee and no
interest will be paid or credited with respect to amounts accrued in such
accounts except where required by local law. Upon the expiration date of each
offering, the funds accumulated in the stock purchase account of each
participating employee will be applied to the purchase of full shares of Common
Stock at a price per share equal to the lesser of (a) a percentage (not less
than 85%) established by the Committee (the "Designated Percentage") of the fair
market value per share of Common Stock on the date on which an option is
granted, or (b) the Designated Percentage of the fair market value per share of
Common Stock on the date on which the option is exercised and the Common Stock
is purchased. Upon the exercise of an option, the Company will deliver to the
participating employee the Common Stock purchased and the balance of any amount
of payroll deductions credited to the employee's account not used for the
purchase. The Committee may permit or require that shares be deposited directly
with a broker designated by the participating employee (or a broker selected by
the Committee) or to a designated agent of the Company, and the Committee may
utilize electronic or automated methods of share transfer. The Committee may
also require that shares be retained with such broker or agent for a designated
period of time (and may restrict dispositions during that period) and/or may
establish other procedures to permit tracking of disqualifying dispositions of
such shares or to restrict transfer of such shares.
An employee shall not be entitled to accrue rights to purchase shares
under the 1998 Purchase Plan (and other employee stock purchase plans, as
defined in Section 423 of the Code, of the Company and its subsidiaries) at a
rate which exceeds $25,000 of the fair market value of such stock (determined at
the time the option is granted) for any calendar year in which such option is
outstanding at any time. The maximum shares of Common Stock subject to any
option cannot exceed 2,000.
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In the event the fair market value of the Common Stock is lower on the
first day of an exercise period within an option period (subsequent
"Reassessment Date") than it was on the first day for such option period, all
employees participating in the 1998 Purchase Plan on the Reassessment Date shall
be deemed to have relinquished the unexercised portion of the option granted on
the first day of the option period and to have enrolled in and received a new
option commencing on such Reassessment Date unless the Committee determines
otherwise.
A participating employee may suspend or discontinue participation in
the 1998 Purchase Plan. If an employee suspends participation during an exercise
period, his or her accumulated payroll deductions will remain in the 1998
Purchase Plan for purchase of shares on the following exercise date, but the
employee must complete a new payroll deduction authorization and 1998 Purchase
Plan enrollment form to resume participation. If an employee discontinues
participation in the 1998 Purchase Plan, the amount credited to the
participating employee's individual account shall be paid to such employee
without interest (except where required by local law).
RECAPITALIZATION
If after the grant of an option, but prior to the purchase of Common
Stock under the option, there is any increase or decrease in the number of
outstanding shares of Common Stock because of a stock split, stock dividend,
combination or recapitalization of shares subject to options, the number of
shares to be purchased pursuant to an option, the share limits and the maximum
number of shares shall be proportionately increased or decreased and the terms
relating to the purchase price with respect to the option shall be appropriately
adjusted by the Committee, and the Committee shall take any further actions
which, in the exercise of its discretion, may be necessary or appropriate under
the circumstances.
The Committee, if it so determines in the exercise of its sole
discretion, also may adjust the number of shares available pursuant to the 1998
Purchase Plan, as well as the price per share of Common Stock covered by each
outstanding option and the maximum number of shares subject to any individual
option, in the event the Company effects one or more reorganizations,
recapitalizations, spin-offs, split-ups, rights offerings or reductions of
shares of its outstanding Common Stock.
MERGER, LIQUIDATION, OTHER COMPANY TRANSACTIONS
In the event of the proposed liquidation or dissolution of the Company,
the option period will terminate immediately prior to the consummation of such
proposed transaction, unless otherwise provided by the Committee in its sole
discretion, and all outstanding options shall automatically terminate and the
amounts of all payroll deductions will be refunded without interest to the
participating employees.
In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger or consolidation of the Company with or
into another corporation, then in the sole discretion of the Committee, (a) each
option shall be assumed or an equivalent option shall be substituted by the
successor corporation or parent or subsidiary of such successor corporation, (b)
a date established by the Committee on or before the date of consummation of
such merger, consolidation or sale shall be treated as an exercise date for the
options granted pursuant to the 1998 Purchase Plan, and all outstanding options
shall be deemed exercisable on such date or (c) all outstanding options shall
terminate and the accumulated payroll deductions shall be returned to the
participating employees.
TERMINATION OF EMPLOYMENT, DEATH AND TRANSFERABILITY
In the event a participating employee terminates employment with the
Company or a subsidiary for any reason (including death) prior to the expiration
of the offering, the employee's participation in the 1998 Purchase Plan will
terminate and all amounts credited to the employee's account will be paid to the
employee or the employee's estate without interest (except where required by
local law). The Committee may establish rules regarding when leaves of absence
or change of employment status will be considered termination of employment and
may establish termination of employment procedures with respect to the 1998
Purchase Plan which are independent of similar rules established by the Company
and its subsidiaries. Options granted under the 1998 Purchase Plan may not be
voluntarily or involuntarily assigned, transferred, pledged or otherwise
disposed of in any way.
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FEDERAL INCOME TAX CONSEQUENCES
If a participant under the 1998 Purchase Plan makes no disposition of
the shares purchased by him upon the exercise of such an option within one year
after the shares are transferred to him or within two years after the date of
the granting of the option, then (i) no income is realized by the participant at
the time he purchases such shares; (ii) if he thereafter sells or otherwise
disposes of such shares or if he dies while owning such shares, the participant
will include in his gross income as ordinary income (and not as gain upon the
sale or exchange of a capital asset) for the taxable year in which the date of
such disposition occurs or for the taxable year closing with his death,
whichever applies, an amount equal to the lesser of (1) the excess of the fair
market value of the shares at the time of such disposition or death over the
amount paid for the shares under the option, or (2) the excess of the fair
market value of the shares at the time the option was granted over the option
price; (iii) upon disposition of such shares by the participant, his basis in
such shares will be increased by an amount equal to the amount so includable in
his gross income; (iv) any gain realized by the participant upon sale or
exchange of such shares in excess of the amount of ordinary income described in
(iii) above is taxed to him as capital gain, and any loss sustained by him is a
capital loss provided the shares are held as capital assets; (v) if the
participant dies before the shares are sold, the basis of the shares in the
hands of the participant's heirs or estate shall be equal to the fair market
value of the shares on the date of the participant's death; and (vi) as to the
granting of such option and the sale of shares pursuant thereto, the Company is
allowed no deduction for federal income tax purposes for any portion of the
excess of the fair market value of the shares over the cost of the same to the
participant. However, if the participant makes a disposition of such shares
before the expiration of the requisite holding period above, (a) ordinary income
is realized by him in the amount of the difference between the option price and
the fair market value of the stock at the time the option was exercised; (b)
capital gain is realized by him on the difference between the sale price and
fair market value of the shares on the date the option was exercised and he will
have a capital loss if the sale price is less than the fair market value of the
shares on the date the option was exercised, and (c) the Company will be
allowed, for federal income tax purposes, a compensation expense deduction for
the difference between the fair market value of the shares at the time of
exercise by the participant and the option price.
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.
VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION
The affirmative vote of the majority of the votes cast at the Meeting
is required to approve the Helen of Troy Limited 1998 Employee Stock Purchase
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE HELEN OF TROY LIMITED 1998 EMPLOYEE STOCK PURCHASE PLAN.
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 5,
1999, 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 the
Company's independent public accountants. 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
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Shareholders with the opportunity to make a statement if he desires to do so.
The KPMG Peat Marwick LLP representative 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 1998, 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 six
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 and 3. 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 that 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 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, 2 and 3.
OTHER MATTERS
The Board of Directors knows of no matters to be presented at the Meeting
other than the election of Directors, consideration of the 1998 Stock Option and
Restricted Stock Plan and consideration of the 1998 Employee Stock Purchase
Plan. 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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APPENDIX A
HELEN OF TROY LIMITED
1998 STOCK OPTION AND RESTRICTED STOCK PLAN
SECTION 1
ESTABLISHMENT AND PURPOSE
This Plan is established (i) to offer selected Employees of the Company
or its Subsidiaries an equity ownership interest in the financial success of the
Company, (ii) to provide the Company an opportunity to attract and retain the
best available personnel for positions of substantial responsibility, and (iii)
to encourage equity participation in the Company by eligible Participants. This
Plan provides for the grant by the Company of (i) Options to purchase Shares,
and (ii) shares of Restricted Stock. Options granted under this Plan may include
nonstatutory options as well as ISOs intended to qualify under section 422 of
the Code.
SECTION 2
DEFINITIONS
"Board of Directors" shall mean the board of directors of the Company,
as duly elected from time to time.
"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" shall mean the Internal Revenue Code of 1986, as amended, and as
interpreted by the regulations thereunder.
"Committee" shall mean the Stock Option and Compensation Committee of
the Company, or such other Committee as may be appointed by the Board of
Directors from time to time.
"Company" shall mean Helen of Troy Limited, a Bermuda company.
"Confidential Information" shall mean all knowledge and information
pertaining to the business of the Company and its Subsidiaries obtained by a
Participant from any source whatever as a result of his or her Services to the
Company and/or its Subsidiaries and which is not a matter of public knowledge,
including, without limitation, any confidential records, documents, contracts,
customer lists, writings, data or other information, whether or not the same is
in written or other recorded form. Without limiting the generality of the
foregoing, Confidential Information shall be deemed to include any information
or knowledge which may now or hereafter be deemed a trade secret of the Company
and/or its Subsidiaries or information which relates to the Company's and/or its
Subsidiaries' personnel; present operations or future planning with respect to
suppliers or customers, the contents of any Company or Subsidiary manual,
practice or procedure, operating, revenue, expense or other statistics; private
or public debt or equity financing or concerning any banking, accounting or
financial matters; current or
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future advertising or promotion plans or programs; applications to or matters
pending or under the jurisdiction of any regulatory agency or court, including
those that are only threatened; any system, program, procedure or administrative
operations, including those pertaining to any matter relative to computer
operations of any type; information of the type mentioned above or of any other
type regarding affiliates of the Company; present or future plans for the
extension of the present business or the commencement of new business by the
Company and/or its Subsidiaries.
"Date of Grant" shall mean the date on which the Committee resolves to
grant an Option to an Optionee or grant Restricted Stock to a Participant, as
the case may be.
"Disinterested Director" shall mean a member of the Board of Directors
who is both (a) a Non-Employee Director, within the meaning of Rule 16b-3
promulgated under the Exchange Act and (b) an Outside Director, within the
meaning of Section 162(m) of the Code.
"Employee" shall include every individual performing Services to the
Company or its Subsidiaries if the relationship between such individual and the
Company or its Subsidiaries is the legal relationship of employer and employee.
This definition of "Employee" is qualified in its entirety and is subject to the
definition set forth in section 3401(c) of the Code and the regulations
thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and as interpreted by the rules and regulations promulgated thereunder.
"Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement, but in no event less than 100% of the Fair
Market Value of the Shares subject to such Option on the Date of Grant.
"Fair Market Value" shall mean such amount as the Board of Directors,
in its sole discretion, shall determine; provided, however, that if there is a
public market for the securities, the Fair Market Value shall be the mean of the
highest and lowest sale prices of the securities per share or unit, as the case
may be, as reported in the Wall Street Journal (or, if not so reported, as
otherwise reported by the National Association of Securities Dealers Automated
Quotation System) as of the date in question or, in the event the securities are
listed on a stock exchange, the Fair Market Value shall be the mean of the
highest and lowest sale prices of the securities per share or unit, as the case
may be, on such exchange, as reported in the Wall Street Journal, as of the date
in question.
"ISO" shall mean a stock option which is granted to an individual and
which meets the requirements of section 422(b) of the Code, pursuant to which
the Optionee has no tax consequences resulting from the grant or, subject to
certain holding period requirements, exercise of the option and the employer is
not entitled to a business expense deduction with respect thereto.
"Nonstatutory Option" shall mean any Option granted by the Committee
that does not meet the requirements of sections 421 through 424 of the Code, as
amended.
"Option" shall mean either an ISO or Nonstatutory Option, as the
context requires.
"Optionee" shall mean a Participant who holds an Option.
"Participants" shall mean those individuals described in Section 1 of
this Plan selected by the Committee who are eligible under Section 4 of this
Plan for grants of either Options or Restricted Stock under this Plan.
"Performance Goals" shall have that meaning set forth in Section
3(c)(xii) of this Plan.
"Permanent and Total Disability" shall mean that an individual is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. An individual shall not be considered to
suffer from Permanent and Total Disability unless such individual furnishes
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proof of the existence thereof in such form and manner, and at such times, as
the Committee may reasonably require. The scope of this definition shall
automatically be reduced or expanded to the extent that section 22(e)(3) of the
Code is amended to reduce or expand the scope of the definition of Permanent and
Total Disability thereunder.
"Plan" shall mean this Helen of Troy Limited 1998 Stock Option and
Restricted Stock Plan, as amended from time to time.
"Plan Award" shall mean the grant of either an Option or Restricted
Stock, as the context requires.
"Restricted Stock" shall have that meaning set forth in Section 7(a) of
this Plan.
"Restricted Stock Account" shall have that meaning set forth in Section
7(a)(ii) of this Plan.
"Restricted Stock Criteria" shall have that meaning in Section 7(a)(iv)
of this Plan.
"Restriction Period" shall have that meaning in Section 7(a)(iii) of
this Plan.
"Services" shall mean services rendered to the Company or any of its
Subsidiaries as an Employee.
"Share" shall mean one share of Stock, as adjusted in accordance with
Section 9 of this Plan (if applicable).
"Stock" shall mean the common stock of the Company, par value $.10 per
share.
"Stock Option Agreement" shall mean the agreement executed between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to the granting of an Option.
"Subsidiary" shall mean any corporation, partnership, limited liability
company or other entity as to which more than fifty (50%) percent of the
outstanding voting stock, shares or equity interests shall now or hereafter be
owned or controlled, directly by a person, any Subsidiary of such person, or any
Subsidiary of such Subsidiary.
"Ten-Percent Shareholder" shall mean a person that owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company or any Subsidiary, taking into account the attribution
rules set forth in section 424 of the Code, as amended. For purposes of this
definition of "Ten Percent Shareholder" the term "outstanding stock" shall
include all stock actually issued and outstanding immediately after the grant of
an Option to an Optionee. "Outstanding stock" shall not include reacquired
shares or shares authorized for issuance under outstanding Options held by the
Optionee or by any other person.
"Vest Date" shall have that meaning in Section 7(a)(v) of this Plan.
SECTION 3
ADMINISTRATION
(a) General Administration. This Plan shall be administered by the
Committee, which shall consist of at least two persons, each of whom shall be
Disinterested Directors. The members of the Committee shall be appointed by the
Board of Directors for such terms as the Board of Directors may determine. The
Board of Directors may from time to time remove members from, or add members to,
the Committee. Vacancies on the Committee, however caused, may be filled by the
Board of Directors.
(b) Committee Procedures. The Board of Directors shall designate one of
the members of the Committee as chairman. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by a majority of all Committee members, shall be valid
acts of the Committee. A majority of the Committee shall constitute a quorum.
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(c) Authority of Committee. This Plan shall be administered by, or
under the direction of, the Committee constituted in such a manner as to comply
at all times with Rule 16b-3 (or any successor rule) under the Exchange Act. The
Committee shall administer this Plan so as to comply at all times with the
Exchange Act and, subject to the Code, shall otherwise have absolute and final
authority to interpret this Plan and to make all determinations specified in or
permitted by this Plan or deemed necessary or desirable for its administration
or for the conduct of the Committee's business including without limitation the
authority to take the following actions:
(i) To interpret this Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms
relating to this Plan;
(iii) To authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of this Plan;
(iv) To determine when Plan Awards are to be granted under this
Plan;
(v) To select the Optionees and Participants;
(vi) To determine the number of Shares to be made subject to
each Plan Award;
(vii) To prescribe the terms, conditions and restrictions of each
Plan Award, including without limitation the Exercise Price and the
determination whether an Option is to be classified as an ISO or a Nonstatutory
Option;
(viii) To amend any outstanding Stock Option Agreement (other than
the Exercise Price) or the terms, conditions and restrictions of a grant of
Restricted Stock, subject to Section 6(f) and applicable legal restrictions and
the consent of the Optionee or Participant, as the case may be, who entered into
such agreement;
(ix) To establish procedures so that an Optionee may obtain a
loan through a registered broker-dealer under the rules and regulations of the
Federal Reserve Board, for the purpose of exercising an Option;
(x) To establish procedures for an Optionee (1) to have withheld
from the total number of Shares to be acquired upon the exercise of an Option
that number of Shares having a Fair Market Value, which, together with such cash
as shall be paid in respect of fractional shares, shall equal the Exercise
Price, and (2) to exercise a portion of an Option by delivering that number of
Shares already owned by an Optionee having a Fair Market Value which shall equal
the partial Exercise Price and to deliver the Shares thus acquired by such
Optionee in payment of Shares to be received pursuant to the exercise of
additional portions of the Option, the effect of which shall be that an Optionee
can in sequence utilize such newly acquired shares in payment of the Exercise
Price of the entire Option, together with such cash as shall be paid in respect
of fractional shares;
(xi) To establish procedures whereby a number of Shares may be
withheld from the total number of Shares to be issued upon exercise of an
Option, to meet the obligation of withholding for federal and state income and
other taxes, if any, incurred by the Optionee upon such exercise;
(xii) To establish performance goals ("Performance Goals") in
connection with any grant of Restricted Stock, which Performance Goals may be
based on earnings, cash flow, stock price, return on capital, operating margins,
general and administrative expenses, safety or refinements of these measures;
provided that in any case, the Performance Goals may be based on either a single
period or cumulative results, aggregate or per share data or results computed
independently or with respect to a peer group; and
(xiii) To take any other actions deemed necessary or advisable for
the administration of this Plan.
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All interpretations and determinations of the Committee made with
respect to the granting of Plan Awards shall be final, conclusive, and binding
on all interested parties. The Committee may make grants of Plan Awards on an
individual or group basis. No member of the Committee shall be liable for any
action that is taken or is omitted to be taken if such action or omission is
taken in good faith with respect to this Plan or grant of any Plan Award.
(d) Holding Period. The Committee may in its sole discretion require as
a condition to the granting of any Option, that a Participant hold the Option
for a period of six months following the date of such acquisition; provided that
this condition shall be satisfied if at least six months elapse from the date of
acquisition of the Option to the date of disposition of the Option (other than
upon exercise or conversion) or its underlying equity security. The Committee
shall require as a condition to the awarding of any Restricted Stock, that a
Participant hold the Restricted Stock for a period of (i) one year following the
date of such acquisition in the event such Restricted Stock award vests upon the
achievement of Performance Goals or (ii) three years following the date of such
acquisition in the event such Restricted Stock award does not vest upon the
achievement of Performance Goals.
SECTION 4
ELIGIBILITY
(a) General Rule. Subject to the limitations set forth in subsection b
below or elsewhere in this Plan, Participants shall be eligible to participate
in this Plan.
(b) Non-Employee Ineligible for ISOs. In no event shall an ISO be
granted to any individual who is not an Employee on the Date of Grant.
SECTION 5
SHARES SUBJECT TO PLAN
(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 three million (3,000,000) Shares, subject to adjustment pursuant to
Section 9 of this Plan; provided that no more than six hundred thousand
(600,000) Shares, subject to adjustment pursuant to Section 9 of this Plan, may
be issued under this Plan in connection with grants of Restricted Stock. 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.
(b) Additional Shares. In the event any outstanding Option for any
reason expires, is canceled or otherwise terminates, the Shares allocable to the
unexercised portion of such Option shall again be available for issuance under
this Plan. In the event that Shares issued under this Plan revert to the Company
prior to the Vest Date under a grant of Restricted Stock, such Shares shall
again be available for issuance under this Plan.
SECTION 6
TERMS AND CONDITIONS OF OPTIONS
(a) Term of Option. The term of each Option shall be ten (10) years
from the Date of Grant or such shorter term as may be determined by the
Committee; provided, however, in the case of an ISO granted to a Ten-Percent
Shareholder, the term of such ISO shall be five (5) years from the Date of Grant
or such shorter time as may be determined by the Committee.
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(b) Exercise Price and Method of Payment.
(i) Exercise Price. The Exercise Price shall be such price as is
determined by the Committee in its sole discretion and set forth in the Stock
Option Agreement; provided, however, 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 ISO granted to a Participant who is a
Ten-Percent Shareholder on the Date of Grant).
(ii) Payment of Shares. Payment for the Shares upon exercise of an
Option shall be made in cash, by certified check, or if authorized by the
Committee, by delivery of other Shares having a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Shares as to which said
Option is being exercised, or by any combination of such methods of payment or
by any other method of payment as may be permitted under applicable law and this
Plan and authorized by the Committee under Section 3(c) of this Plan.
(c) Exercise of Option.
(i) Procedure for Exercise; Rights of Shareholder. Any Option
granted hereunder shall be exercisable at such times under such conditions as
shall be determined by the Committee, including without limitation performance
criteria with respect to the Company and/or the Optionee, and in accordance with
the terms of this Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Stock
Option Agreement by the Optionee entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Committee,
consist of any form of consideration and method of payment allowable under
Section 6(b)(ii) of this Plan. Upon the receipt of notice of exercise and full
payment for the Shares, the Shares shall be deemed to have been issued and the
Optionee shall be entitled to receive such Shares and shall be a shareholder
with respect to such Shares, and the Shares shall be considered fully paid and
nonassessable. No adjustment will be made for a dividend or other right for
which the record date is prior to the date on which the stock certificate is
issued, except as provided in Section 9 of this Plan.
Each exercise of an Option shall reduce, by an equal number, the total
number of Shares that may thereafter be purchased under such Option.
(ii) Termination of Status as an Employee. Except as provided in
Subsections 6(c)(iii) and 6(c)(iv) below, an Optionee holding an Option who
ceases to be an Employee of the Company may, but only until the earlier of the
date (x) the Option held by the Optionee expires, or (y) thirty (30) days after
the date such Optionee ceases to be an Employee, exercise the Option to the
extent that the Optionee was entitled to exercise it on such date; provided,
however, that in the event the Optionee is an Employee and is terminated without
cause (as determined in the sole discretion of the Committee) then the thirty
(30) day period described in this sentence shall be automatically extended to
ninety (90) days (and in the case of a Nonstatutory Option, such period shall be
automatically extended to six (6) months), unless the Committee further extends
such period in its sole discretion. To the extent that the Optionee was not
entitled to exercise an Option on such date, or if the Optionee does not
exercise it within the time specified herein, such Option shall terminate. The
Committee shall have the authority to determine the date an Optionee ceases to
be an Employee.
(iii) Permanent and Total Disability. Notwithstanding the
provisions of Section 6(c)(ii) above, in the event an Optionee is unable to
continue to perform Services for the Company or any of its Subsidiaries as a
result of such Optionee's Permanent and Total Disability (and, for ISOs, at the
time such Permanent and Total Disability begins, the Optionee was an Employee
and had been an Employee since the Date of Grant), such Optionee may exercise an
Option in whole or in part notwithstanding that such Option may not be fully
exercisable, but only until the earlier of the date (x) the Option held by the
Optionee expires, or (y) twelve
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(12) months from the date of termination of Services due to such Permanent and
Total Disability. To the extent the Optionee is not entitled to exercise an
Option on such date or if the Optionee does not exercise it within the time
specified herein, such Option shall terminate.
(iv) Death of an Optionee. Upon the death of an Optionee, any
Option held by an Optionee shall terminate and be of no further effect;
provided, however, notwithstanding the provisions of Section 6(c)(ii) above, in
the event an Optionee's death occurs during the term of an Option held by such
Optionee and, at the time of death, the Optionee was an Employee (and, for ISOs,
at the time of death, the Optionee was an Employee and had been an Employee
since the Date of Grant), the Option may be exercised in whole or in part
notwithstanding that such Option may not have been fully exercisable on the date
of the Optionee's death, but only until the earlier of the date (x) the Option
held by the Optionee expires, or (y) twelve (12) months from the date of the
Optionee's death, by the Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance. To the extent the Option is
not entitled to be exercised on such date or if the Option is not exercised
within the time specified herein, such Option shall terminate.
(d) Non-Transferability of Options. Except as may be permitted by the
Committee in its sole discretion, any Option granted under this 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 of the
Employee Retirement Income Security Act, or the rules thereunder, and is not
assignable by operation of law or subject to execution, attachment or similar
process. Any Option granted under this Plan can only be exercised during the
Optionee's lifetime by such Optionee. Any attempted sale, pledge, assignment,
hypothecation or other transfer of the Option contrary to the provisions hereof
and the levy of any execution, attachment or similar process upon the Option
shall be null and void and without force or effect. No transfer of the Option by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished written notice thereof and
an authenticated copy of the will and/or such other evidence as the Committee
may deem necessary to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions of the Option. The
terms of any Option transferred by will or by the laws of descent and
distribution shall be binding upon the executors, administrators, heirs and
successors of Optionee.
(e) Time of Granting Options. Any Option granted hereunder shall be
deemed to be granted on the Date of Grant. Written notice of the Committee's
determination to grant an Option to an Employee, evidenced by a Stock Option
Agreement, dated as of the Date of Grant, shall be given to such Employee within
a reasonable time after the Date of Grant.
(f) Restriction on Repricing. The Exercise Price of outstanding Options
may not be altered or amended, except with respect to adjustments for changes in
capitalization as provided in Section 9(a). Within the limitations of this Plan,
the Committee may otherwise modify outstanding Options, provided that no
modification of an Option shall, without the consent of the Optionee, alter or
impair the Optionee's rights or obligations under such Option. The foregoing
notwithstanding, the Committee may, in its sole discretion, and without the
consent of the Optionee or any other person, accelerate the vesting of all or
part of any Option.
(g) Restrictions on Transfer of Shares. Any Shares issued upon exercise
of an Option shall be subject to such rights of repurchase and other transfer
restrictions as the Committee may determine in its sole discretion. Such
restrictions shall be set forth in the applicable Stock Option Agreement.
(h) Special Limitation on ISOs. To the extent that the aggregate Fair
Market Value (determined on the Date of Grant) of the Shares with respect to
which ISOs are exercisable for the first time by an individual during any
calendar year under this Plan, and under all other plans maintained by the
Company, exceeds $100,000, such Options shall be treated as Options that are not
ISOs.
(i) Leaves of Absence. Leaves of absence approved by the Committee
which conform to the policies of the Company shall not be considered termination
of employment if the employer-employee relationship as defined under the Code or
the regulations promulgated thereunder otherwise exists.
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(j) Limitation on Grants of Options to Covered Employees. Subject to
potential changes specified in Section 9(a) the total number of Shares for which
Options may be granted and which may be awarded as Restricted Stock to any
"covered employee" within the meaning of Section 162(m) of the Code during any
one (1) year period shall not exceed 1,000,000 in the aggregate.
(k) Disqualifying Dispositions. The Stock Option Agreement evidencing
any ISO granted under this Plan shall provide that if the Optionee makes a
disposition, within the meaning of Section 424(c) of the Code, of any share or
shares issued to him pursuant to the exercise of the ISO within the two (2) year
period commencing on the day after the Date of Grant of such Option or within
the one (1) year period commencing on the day after the date of transfer of the
share or shares to him pursuant to the exercise of such Option, he shall, within
ten (10) days of such disposition, notify the Company thereof and immediately
deliver to the Company any amount of federal income tax withholding required by
law.
SECTION 7
RESTRICTED STOCK
(a) Authority to Grant Restricted Stock. The Committee shall have
the authority to grant to Participants Shares that are subject to certain terms,
conditions and restrictions (the "Restricted Stock"). The Restricted Stock may
be granted by the Committee either separately or in combination with Options.
The terms, conditions and restrictions of the Restricted Stock shall be
determined from time to time by the Committee without limitation, except as
otherwise provided in this Plan; provided, however, that each grant of
Restricted Stock shall require the Participant to remain an Employee of (or
otherwise provide Services to) the Company or any of its Subsidiaries for at
least six (6) months from the Date of Grant. The granting, vesting and issuing
of the Restricted Stock shall also be subject to the following provisions:
(i) Nature of Grant. Restricted Stock shall be granted to
Participants for Services rendered and at no additional cost to Participant;
provided, however, that the value of the Services performed must, in the opinion
of the Committee, equal or exceed the par value of the Restricted Stock to be
granted to the Participant.
(ii) Restricted Stock Account. The Company shall establish a
restricted stock account (the "Restricted Stock Account") for each Participant
to which Restricted Stock is granted, and such Restricted Stock shall be
credited to such account. No certificates will be issued to the Participant with
respect to the Restricted Stock until the Vest Date as provided herein. Every
credit of Restricted Stock under this Plan to a Restricted Stock Account shall
be considered "contingent" and unfunded until the Vest Date. Such contingent
credits shall be considered bookkeeping entries only, notwithstanding the
"crediting" of "dividends" as provided herein. Such accounts shall be subject to
the general claims of the Company's creditors. The Participant's rights to the
Restricted Stock Account shall be no greater than that of a general creditor of
the Company. Nothing contained herein shall be construed as creating a trust or
fiduciary relationship between the Participants and the Company, the Board of
Directors or the Committee.
(iii) Restrictions. The terms, conditions and restrictions of the
Restricted Stock shall be determined by the Committee on the Date of Grant. The
Restricted Stock may not be sold, assigned, transferred, redeemed, pledged or
otherwise encumbered during the period in which the terms, conditions and
restrictions apply (the "Restriction Period"). More than one grant of Restricted
Stock may be outstanding at any one time, and the Restriction Periods may be of
different lengths. Receipt of the Restricted Stock is conditioned upon
satisfactory compliance with the terms, conditions and restrictions of this Plan
and those imposed by the Committee.
(iv) Restricted Stock Criteria. At the time of each grant of
Restricted Stock, the Committee in its sole discretion may establish certain
criteria to determine the times at which restrictions placed on Restricted Stock
shall lapse (i.e., the termination of the Restriction Period), which criteria
may include without limitation performance measures and targets (which may
include any Performance Goals established by the Committee) and/or
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holding period requirements (the "Restricted Stock Criteria"). The Committee may
establish a corresponding relationship between the Restricted Stock Criteria and
(x) the number of Shares of Restricted Stock that may be earned, and (y) the
extent to which the terms, conditions and restrictions on the Restricted Stock
shall lapse. Restricted Stock Criteria may vary among grants of Restricted
Stock; provided, however, that once the Restricted Stock Criteria are
established for a grant of Restricted Stock, the Restricted Stock Criteria shall
not be modified with respect to such grant.
(v) Vesting. On the date the Restriction Period terminates, the
Restricted Stock shall vest in the Participant (the "Vest Date"), who may then
require the Company to issue certificates evidencing the Restricted Stock
credited to the Restricted Stock Account of such Participant.
(vi) Dividends. The Committee may provide from time to time that
amounts equivalent to dividends shall be payable with respect to the Restricted
Stock held in the Restricted Stock Account of a Participant. Such amounts shall
be credited to the Restricted Stock Account and shall be payable to the
Participant on the Vest Date.
(vii) Termination of Services. If a Participant (x) with the
consent of the Committee, ceases to be an Employee of, or otherwise ceases to
provide Services to, the Company or any of its Subsidiaries, or (y) dies or
suffers from Permanent and Total Disability, the vesting or forfeiture
(including without limitation the terms, conditions and restrictions) of any
grant under this Section 7 shall be determined by the Committee in its sole
discretion, subject to any limitations or terms of this Plan. If the Participant
ceases to be an Employee of, or otherwise ceases to provide Services to, the
Company or any of its Subsidiaries for any other reason, all grants of
Restricted Stock under this Plan shall be forfeited (subject to the terms of
this Plan).
(b) Deferral of Payments. The Committee may establish procedures by
which a Participant may elect to defer the transfer of Restricted Stock to the
Participant. The Committee shall determine the terms and conditions of such
deferral in its sole discretion.
SECTION 8
ISSUANCE OF SHARES; TAX WITHHOLDING
(a) Issuance of Shares. As a condition to the transfer of any Shares
issued under this Plan, the Company may require an opinion of counsel,
satisfactory to the Company, to the effect that such transfer will not be in
violation of the Securities Act of 1933, as amended, or any other applicable
securities laws, rules or regulations, or that such transfer has been registered
under federal and all applicable state securities laws. The Company may refrain
from delivering or transferring Shares issued under this Plan until the
Committee has determined that the Participant has tendered to the Company any
and all applicable federal, state or local tax owed by the Participant as the
result of the receipt of a Plan Award, the vesting of a Plan Award, the exercise
of an Option or the disposition of any Shares issued under this Plan, in the
event that the Company reasonably determines that it might have a legal
liability to satisfy such tax. The Company shall not be liable to any person or
entity for damages due to any delay in the delivery or issuance of any stock
certificate evidencing any Shares for any reason whatsoever.
(b) Tax Withholding. Each Participant shall, no later than the date as
of which the value of any Plan Award or of any Shares or other amounts received
thereunder first becomes includable in the gross income of such Participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, or local
taxes of any kind required to be withheld with respect to such income. The
Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant. Subject to approval by the Committee, a Participant may elect to
have such tax withholding obligation satisfied, in whole or in part, by (i)
authorizing the Company to withhold from Shares to be issued pursuant to any
award, a number of Shares with an aggregate Fair Market Value (as of the date
the withholding is effected) that would satisfy the withholding amount
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due, or (ii) transferring to the Company Shares owned by the Participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due.
SECTION 9
CAPITALIZATION ADJUSTMENTS; MERGER; CHANGE IN CONTROL
(a) Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of Shares covered by each
outstanding Option (as well as the Exercise Price covered by any outstanding
Option), the aggregate number of Shares that have been authorized for issuance
under this Plan and the number of Shares of Restricted Stock credited to any
Restricted Stock Account of a Participant, 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 Stock or any other
increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company. Such adjustment shall be made by the Committee in
its sole discretion, which adjustment shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to an Option.
(b) Dissolution, Liquidation, Sale of Assets or Merger. In the event of
the dissolution or liquidation of the Company, other than pursuant to a
Reorganization (hereinafter defined), any Option granted under the Plan shall
terminate as of a date to be fixed by the Committee, provided that not less than
30 days written notice of the date so fixed shall be given to each Optionee and
each such Optionee shall have the right during such period to exercise his
Options as to all or any part of the Shares covered thereby including Shares as
to which such Options would not otherwise be exercisable by reason of an
insufficient lapse of time.
In the event of a Reorganization in which the Company is not the
surviving or acquiring company, or in which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Reorganization, then
(i) if there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the Reorganization Agreement
does not specifically provide for the change, conversion or exchange of the
Shares under outstanding unexercised Options for securities of another
corporation, then the Committee shall take such action, and the Options shall
terminate, as provided above; or
(ii) if there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change, conversion or
exchange of the shares under outstanding or unexercised options for securities
of another corporation, then the Committee shall adjust the Shares under such
outstanding unexercised Options (and shall adjust the Shares which are then
available to be optioned, if the Reorganization Agreement makes specific
provisions therefor) in a manner not inconsistent with the provisions of the
Reorganization Agreement for the adjustment, change, conversion or exchange of
such stock and such options.
The term "Reorganization" as used in this Subsection 9(b) shall mean
any statutory merger, statutory consolidation, sale of all or substantially all
of the assets of the Company, or sale, pursuant to an agreement with the
Company, of securities of the Company pursuant to which the Company is or
becomes a wholly-owned subsidiary of another company after the effective date of
the Reorganization.
Except as provided above in this Section 9(b) and except as otherwise
provided by the Committee in its sole discretion, any Options shall terminate
immediately prior to the consummation of such proposed action.
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(c) Change in Control. Subject to Section 9(b), in the event there
occurs a Change of Control, (i) the Optionees shall have the right to exercise
from and after the date of the Change in Control the Option held by such
Optionee in whole or in part notwithstanding that such Option may not be fully
exercisable, and (ii) any and all restrictions on any Restricted Stock credited
to a Restricted Stock Account shall lapse and such stock shall immediately vest
in the Participants notwithstanding that the Restricted Stock held in such
account was unvested.
SECTION 10
NO EMPLOYMENT RIGHTS
No provision of this Plan, under any Stock Option Agreement or under
any grant of Restricted Stock shall be construed to give any Participant any
right to remain an Employee of, or provide Services to, the Company or any of
its Subsidiaries or to affect the right of the Company to terminate any
Participant's service at any time, with or without cause.
SECTION 11
CONFIDENTIALITY AND NON-COMPETITION
By accepting Options or Restricted Stock under this Plan and as a
condition to the exercise of Options and the enjoyment of any of the benefits of
this Plan, each Participant agrees as follows:
(a) Confidentiality. During the period that each Participant provides
Services (or the Participant's engaging in any other activity with or for the
Company) and for a two year period thereafter, such Participant shall treat and
safeguard as confidential and secret all Confidential Information received by
such Participant at any time. Without the prior written consent of the Company,
except as required by law, such Participant will not disclose or reveal any
Confidential Information to any third party whatsoever or use the same in any
manner except in connection with the businesses of the Company and its
Subsidiaries. In the event that a Participant is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or other process) to disclose (i) any Confidential
Information or (ii) any information relating to his opinion, judgment or
recommendations concerning the Company or its Subsidiaries as developed from the
Confidential Information, each Participant will provide the Company with prompt
written notice of any such request or requirement so that the Company may seek
an appropriate protective order or waive compliance with the provisions
contained herein. If, failing the entry of a protective order or the receipt of
a waiver hereunder, such Participant is, in the reasonable opinion of his
counsel, compelled to disclose Confidential Information, such Participant shall
disclose only that portion and will exercise best efforts to obtain assurances
that confidential treatment will be accorded such Confidential Information.
(b) Non-Competition. During the period that each Participant provides
Services to the Company or its Subsidiaries, and for a two-year period
thereafter, such Participant shall not, without prior written consent of the
Committee, do, directly or indirectly, any of the following:
(i) own, manage, control or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise affiliated
or associated with, any other corporation, partnership, proprietorship, firm,
association or other business entity, or otherwise engage in any business which
competes with the business of the Company or any of its Subsidiaries (as such
business is conducted during the term such Participant provides Services to the
Company or its Subsidiaries) in the geographical regions in which such business
is conducted; provided, however, that the ownership of a maximum of one percent
of the outstanding stock of any publicly traded corporation shall not violate
this covenant; or
(ii) employ, solicit for employment or assist in employing or
soliciting for employment any present, former or future employee, officer or
agent of the Company or any of its Subsidiaries.
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In the event any court of competent jurisdictions should determine that
the foregoing covenant of non-competition is not enforceable because of the
extent of the geographical area or the duration thereof, then the Company and
the affected Participant hereby petition such court to modify the foregoing
covenant to the extent, but only to the extent, necessary to create a covenant
which is enforceable in the opinion of such court, with the intention of the
parties that the Company shall be afforded the maximum enforceable covenant of
non-competition which may be available under the circumstances and applicable
law.
(c) Failure to Comply. Each Participant acknowledges that remedies at
law for any breach by him of this Section 11 may be inadequate and that the
damages resulting from any such breach are not readily susceptible to being
measured in monetary terms. Accordingly, each Participant acknowledges that upon
his or her violation of any provision of this Section 11, the Company will be
entitled to immediate injunctive relief and may obtain an order restraining any
threatened or future breach. Each Participant further agrees, subject to the
proviso at the end of this sentence, that if he or she violates any provisions
of this Section 11, such Participant shall immediately forfeit any rights and
benefits under this Plan and shall return to the Company any unexercised Options
and forfeit the rights under any awards of Restricted Stock and shall return any
Shares held by such Participant received upon exercise of any Option or the
termination of the Restriction Period relating to Restricted Stock granted
hereunder, together with any proceeds from sales of any Shares received upon
exercise of such Options or the termination of the Restriction Period of such
Restricted Stock; provided, however, that upon violation of subsection (b) of
this Section 11, the forfeiture and return provisions contained in this sentence
shall apply only to Options which have become exercisable, and Restricted Stock,
the Restriction Period with respect to which has terminated, and in any such
case the proceeds of sales therefrom, during the two year period immediately
prior to termination of the Participant's Services. Nothing in this Section 11
will be deemed to limit, in any way, the remedies at law or in equity of the
Company, for a breach by a Participant of any of the provisions of this Section
11.
(d) Notice. Each Participant agrees to provide written notice of the
provisions of this Section 11 to any future employer of such Participant, and
the Company expressly reserves the right to provide such notice to such
Participant's future employer(s).
(e) Severability. If any provisions or part of any provision of this
Section 11 is held for any reason to be unenforceable, (i) the remainder of this
Section 11 shall nevertheless remain in full force and effect and (ii) such
provision or part shall be deemed to be amended in such manner as to render such
provision enforceable.
SECTION 12
TERM OF PLAN; EFFECT OF AMENDMENT OR TERMINATION
(a) Effective Date; Term of Plan. This Plan shall be submitted to the
shareholders of the Company for approval and ratification at the next regular or
special meeting thereof to be held after August 1, 1998. Unless at such meeting
this Plan is approved and ratified by the shareholders of the Company in the
manner provided by the Company's By-Laws, then, and in such event, this Plan and
any then outstanding Options or Incentive Stock that may have been conditionally
granted prior to such shareholder meeting shall become null and void and of no
further force or effect. Subject to the immediately preceding sentence, this
Plan shall become effective upon its adoption by the Board of Directors. This
Plan shall continue in effect for a term of ten (10) years unless sooner
terminated under this Section 12.
(b) Amendment and Termination. The Board of Directors in its sole
discretion may terminate this Plan at any time. The Board of Directors may amend
this Plan at any time in such respects as the Board of Directors may deem
advisable; provided, that (i) any change in the aggregate number of Shares that
may be issued under this Plan, other than in connection with an adjustment under
Section 9 of this Plan, or (ii) any change in this Plan that would materially
increase the benefits accruing to Participants under this Plan, shall require
approval of the shareholders of the Company in the manner provided by the
Company's By-Laws, as amended.
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(c) Effect of Termination. In the event this Plan is terminated, no
Shares shall be issued under this Plan nor shall any Shares of Restricted Stock
be credited to a Restricted Stock Account, except upon exercise of an Option
granted prior to such termination or issuance of Shares of Restricted Stock
previously credited to a Restricted Stock Account. The termination of this Plan,
or any amendment thereof, shall not affect any Shares previously issued to a
Participant, any Option previously granted under this Plan or any Restricted
Stock previously credited to a Restricted Stock Account.
SECTION 13
GOVERNING LAW
THIS PLAN AND ANY AND ALL STOCK OPTION AGREEMENTS AND AGREEMENTS RELATING
TO THE GRANT OF RESTRICTED STOCK EXECUTED IN CONNECTION WITH THIS PLAN SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
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APPENDIX B
HELEN OF TROY LIMITED
1998 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The purpose of this Plan is to provide an opportunity for Employees of the
Company and its Designated Subsidiaries to purchase Common Stock of the Company
and thereby to have an additional incentive to contribute to the prosperity of
the Company. It is the intention of the Company that this Plan qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Code although the
Company makes no undertaking nor representation to maintain such qualification.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
(c) "Committee" shall mean the committee appointed by the Board in
accordance with Section 12 of this Plan.
(d) "Common Stock" shall mean the common stock of the Company, par value
$.10 per share, or any stock into which such common stock may be converted.
(e) "Company" shall mean Helen of Troy Limited, a Bermuda corporation.
(f) "Compensation" shall mean an Employee's wages or salary and other
amounts payable to an Employee on account of personal services rendered by the
Employee to the Company or a Designated Subsidiary and which are reportable as
wages or other compensation on the Employee's Form W-2, plus pre-tax
contributions of the Employee under a cash or deferred arrangement (401(k) plan)
or cafeteria plan maintained by the Company or a Designated Subsidiary, but
excluding, however, (a) non-cash fringe benefits, (b) special payments as
determined by the Committee (e.g., moving expenses, unused vacation, severance
pay), (c) income from the exercise of stock options or other stock purchases and
(d) any other items of Compensation as determined by the Committee.
(g) "Designated Subsidiary" shall mean a Subsidiary which has been
designated by the Board or the Committee as eligible to participate in this
Plan.
(h) "Employee" shall mean an individual classified as an employee (within
the meaning of Section 3401(c) of the Code and the regulations thereunder) by
the Company or a Designated Subsidiary on the Company payroll records during the
relevant participation period.
(i) "Entry Date" shall mean the first day of each Option Period.
(j) "Exercise Date" shall mean the last business day of each Exercise
Period.
(k) "Exercise Period" shall mean a three-month, six-month or other period
as determined by the Committee. The first Exercise Period during an Option
Period shall commence on the first day of such Option Period. Subsequent
Exercise Periods, if any, shall run consecutively after the termination of the
preceding Exercise Period. The last Exercise Period in an Option Period shall
terminate on the last day of such Option Period.
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(l) "Fair Market Value" shall mean such amount as the Board, in its sole
discretion, shall determine; provided, however, that if there is a public market
for the securities, the Fair Market Value shall be the mean of the highest and
lowest sale prices of the securities per share or unit, as the case may be, as
reported in the Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
System) as of the date in question or, in the event the securities are listed on
a stock exchange, the Fair Market Value shall be the mean of the highest and
lowest sale prices of the securities per share or unit, as the case may be, on
such exchange, as reported in the Wall Street Journal, as of the date in
question.
(m) "Option Period" shall mean a period of up to twelve (12) months as
determined by the Committee. The Committee may determine that the Option Period
and the Exercise Period are the same.
(n) "Participant" shall mean a participant in this Plan as described in
Section 4 of this Plan.
(o) "Plan" shall mean this Helen of Troy Limited 1998 Employee Stock
Purchase Plan, as amended from time to time.
(p) "Shareholder" shall mean a record holder of shares entitled to vote
shares of Common Stock under the Company's Bye-Laws.
(q) "Subsidiary" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, as described in
Section 424(f) of the Code.
3. Eligibility.
Any Employee regularly employed on a full-time basis by the Company or by
any Designated Subsidiary on an Entry Date shall be eligible to participate in
this Plan with respect to the Option Period commencing on such Entry Date,
provided that the Committee may establish administrative rules requiring that
employment commence some minimum period (e.g., one pay period) prior to an Entry
Date to be eligible to participate with respect to that Entry Date and provided
further that (a) the Committee may extend eligibility to part-time Employees
pursuant to criteria and procedures established by the Committee and (b) the
Committee may impose an eligibility period on participation of up to two years
with respect to participation on any prospective Entry Date. The Committee may
also determine that a designated group of highly compensated Employees (e.g.,
Employees subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) are ineligible to participate in this Plan. An
Employee shall be considered employed on a full-time basis unless his or her
customary employment is less than 20 hours per week or five months per year. No
Employee may participate in this Plan if immediately after an option is granted
the Employee owns or is considered to own (within the meaning of Section 424(d))
of the Code, shares of stock, including stock which the Employee may purchase by
conversion of convertible securities or under outstanding options granted by the
Company, possessing five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Company or of any of its Subsidiaries.
All Employees who participate in this Plan shall have the same rights and
privileges under this Plan except for differences which may be mandated by local
law and which are consistent with Section 423(b)(5) of the Code. Subject to
continued compliance with Section 423 of the Code, the Committee may impose
other restrictions on eligibility and participation of Employees who are
officers and directors to facilitate compliance with federal or state securities
laws or foreign laws.
4. Participation.
4.1 An Employee who is eligible to participate in this Plan in accordance
with Section 3 may become a Participant by filing, on a date prescribed by the
Committee prior to an applicable Entry Date, a completed payroll deduction
authorization and Plan enrollment form provided by the Company. An eligible
Employee may authorize payroll deductions at the rate of any whole percentage of
the Employee's Compensation, not to exceed fifteen percent (15%) of the
Employee's Compensation, or such lesser percentage as specified by the Committee
as applied to an Entry Date or Option Period. All payroll deductions may be held
by the Company and commingled
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with its other corporate funds. No interest shall be paid or credited to the
Participant with respect to such payroll deductions except where required by
local law as determined by the Committee. A separate bookkeeping account for
each Participant shall be maintained by the Company under this Plan and the
amount of each Participant's payroll deductions shall be credited to such
account. A Participant may not make any additional payments into such account.
4.2 Under procedures established by the Committee, a Participant may
suspend or discontinue participation in this Plan at any time during an Exercise
Period by completing and filing a new payroll deduction authorization and Plan
enrollment form with the Company. A Participant may increase or decrease his or
her rate of payroll deductions only effective on an Entry Date by filing a new
payroll deduction authorization and Plan enrollment form. If a new payroll
deduction authorization and Plan enrollment form is not filed with the Company,
the rate of payroll deductions shall continue at the originally elected rate
throughout the Option Period unless the Committee determines to change the
permissible rate.
If a Participant suspends participation during an Exercise Period, his or
her accumulated payroll deductions will remain in this Plan for purchase of
shares as specified in Section 6 on the following Exercise Date, but the
Participant will not again participate until he or she completes a new payroll
deduction authorization and Plan enrollment form. The Committee may establish
rules limiting the frequency with which Participants may suspend and resume
payroll deductions under this Plan and may impose a waiting period consistent
with Section 423 of the Code on Participants wishing to resume suspended payroll
deductions. If a Participant discontinues participation in this Plan, the amount
credited to the Participant's individual account shall be paid to the
Participant without interest (except where required by local law). In the event
any Participant terminates employment with the Company or any Subsidiary for any
reason (including death) prior to the expiration of an Option Period, the
Participant's participation in this Plan shall terminate and all amounts
credited to the Participant's account shall be paid to the Participant or the
Participant's estate without interest (except where required by local law).
Whether a termination of employment has occurred shall be determined by the
Committee. The Committee may also establish rules regarding when leaves of
absence or change of employment status (e.g., from full-time to part-time) will
be considered to be a termination of employment, and the Committee may establish
termination of employment procedures for this Plan which are independent of
similar rules established under other benefit plans of the Company and its
Subsidiaries.
In the event of a Participant's death, any accumulated payroll deductions
will be paid, without interest, to the estate of the Participant.
5. Offering.
5.1 The maximum number of shares of Common Stock which may be issued
pursuant to this Plan shall be 500,000 shares. The Committee may designate any
amount of available shares for offering for any Option Period determined
pursuant to Section 5.2.
5.2 Each Option Period, Entry Date and Exercise Period shall be determined
by the Committee. The Committee shall have the power to change the duration of
future Option Periods or future Exercise Periods, and to determine whether or
not to have overlapping Option Periods, with respect to any prospective
offering, without shareholder approval, and without regard to the expectations
of any Participants.
5.3 With respect to each Option Period, each eligible Employee who has
elected to participate as provided in Section 4.1 shall be granted an option to
purchase that number of shares of Common Stock which may be purchased with the
payroll deductions accumulated on behalf of such Employee (assuming payroll
deductions at a rate of fifteen percent (15%) of Compensation) during each
Exercise Period within such Option Period at the purchase price specified in
Section 5.4 below; provided, however, (a) in no event shall the Employee be
entitled to accrue rights to purchase shares under this Plan (and all other
employee stock purchase plans, as defined in Section 423 of the Code, of the
Company and its subsidiaries) at a rate which exceeds $25,000 of the Fair Market
Value of such stock (determined at the time the option is granted) for any
calendar year in which such option is outstanding at any time, and (b) the
maximum shares subject to any option shall in no event exceed 2,000.
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<PAGE> 41
5.4 The option price under each option shall be the lower of: (a) a
percentage (not less than eighty-five percent (85%)) established by the
Committee ("Designated Percentage") of the Fair Market Value of the Common Stock
on the Entry Date on which an option is granted, or (b) the Designated
Percentage of the Fair Market Value on the Exercise Date on which the Common
Stock is purchased. The Committee may change the Designated Percentage with
respect to any future Option Period, but not below eighty-five percent (85%).
5.5 If the total number of shares of Common Stock for which options granted
under this Plan are exercisable exceeds the maximum number of shares offered on
any Entry Date, the number of shares which may be purchased under options
granted on the Entry Date shall be reduced on a pro rata basis in as nearly a
uniform manner as shall be practicable and equitable. In this event, payroll
deductions shall also be reduced or refunded accordingly. If an Employee's
payroll deductions during any Exercise Period exceeds the purchase price for the
maximum number of shares permitted to be purchased under Section 5.3, the excess
shall be refunded to the Participant without interest (except where otherwise
required by local law).
5.6 In the event that the Fair Market Value of the Company's Common Stock
is lower on the first day of an Exercise Period within an Option Period
(subsequent "Reassessment Date") than it was on the Entry Date for such Option
Period, all Employees participating in this Plan on the Reassessment Date shall
be deemed to have relinquished the unexercised portion of the option granted on
the Entry Date and to have enrolled in and received a new option commencing on
such Reassessment Date, unless the Committee has determined not to permit
overlapping Option Periods or to restrict such transfers to lower price Option
Periods.
6. Purchase of Stock.
Upon the expiration of each Exercise Period, a Participant's option shall
be exercised automatically for the purchase of that number of full shares of
Common Stock which the accumulated payroll deductions credited to the
Participant's account at that time shall purchase at the applicable price
specified in Section 5.4.
7. Payment and Delivery.
Upon the exercise of an option, the Company shall deliver to the
Participant the Common Stock purchased and the balance of any amount of payroll
deductions credited to the Participant's account not used for the purchase. The
Committee may permit or require that shares be deposited directly with a broker
designated by the Participant (or a broker selected by the Committee) or to a
designated agent of the Company, and the Committee may utilize electronic or
automated methods of share transfer. The Committee may require that shares be
retained with such broker or agent for a designated period of time (and may
restrict dispositions during that period) and/or may establish other procedures
to permit tracking of disqualifying dispositions of such shares or to restrict
transfer of such shares. To the extent the unused cash balance represents a
fractional share, the unused cash balance credited to the Participant's account
shall be carried over to the next Exercise Period, if the Participant is also a
Participant in this Plan at that time or refunded to the Participant, as
determined by the Committee. The Company shall retain the amount of payroll
deductions used to purchase Common Stock as full payment for the Common Stock
and the Common Stock shall then be fully paid and non-assessable. No Participant
shall have any voting, dividend, or other shareholder rights with respect to
shares subject to any option granted under this Plan until the option has been
exercised and shares issued.
8. Recapitalization.
If after the grant of an option, but prior to the purchase of Common Stock
under the option, there is any increase or decrease in the number of outstanding
shares of Common Stock because of a stock split, stock dividend, combination or
recapitalization of shares subject to options, the number of shares to be
purchased pursuant to an option, the share limit of Section 5.3 and the maximum
number of shares specified in Section 5.1 shall be proportionately increased or
decreased, the terms relating to the purchase price with respect to the option
shall be appropriately adjusted by the Committee, and the Committee shall take
any further actions which, in the exercise of its discretion, may be necessary
or appropriate under the circumstances.
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<PAGE> 42
The Committee, if it so determines in the exercise of its sole discretion,
also may adjust the number of shares specified in Section 5.1, as well as the
price per share of Common Stock covered by each outstanding option and the
maximum number of shares subject to any individual option, in the event the
Company effects one or more reorganizations, recapitalizations, spin-offs,
split-ups, rights offerings or reductions of shares of its outstanding Common
Stock.
The Committee's determinations under this Section 8 shall be conclusive and
binding on all parties.
9. Merger, Liquidation, Other Company Transactions.
In the event of the proposed liquidation or dissolution of the Company, the
Option Period will terminate immediately prior to the consummation of such
proposed transaction, unless otherwise provided by the Committee in its sole
discretion, and all outstanding options shall automatically terminate and the
amounts of all payroll deductions will be refunded without interest to the
Participants.
In the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger or consolidation of the Company with or into
another corporation, then in the sole discretion of the Committee, (a) each
option shall be assumed or an equivalent option shall be substituted by the
successor corporation or parent or subsidiary of such successor corporation, (b)
a date established by the Committee on or before the date of consummation of
such merger, consolidation or sale shall be treated as an Exercise Date, and all
outstanding options shall be deemed exercisable on such date or (c) all
outstanding options shall terminate and the accumulated payroll deductions shall
be returned to the Participants.
10. Transferability.
Options granted to Participants may not be voluntarily or involuntarily
assigned, transferred, pledged, or otherwise disposed of in any way, and any
attempted assignment, transfer, pledge, or other disposition shall be null and
void and without effect. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under this Plan,
other than as permitted by the Code, such act shall be treated as an election by
the Participant to discontinue participation in this Plan pursuant to Section
4.2.
11. Amendment or Termination of the Plan.
11.1 This Plan shall continue until, July 17, 2008, unless previously
terminated in accordance with Section 11.2.
11.2 The Board may, in its sole discretion, insofar as permitted by law,
terminate or suspend this Plan, or revise or amend it in any respect whatsoever,
except that, without approval of the shareholders, no such revision or amendment
shall:
(a) materially increase the number of shares subject to this Plan,
other than an adjustment under Section 8 of this Plan;
(b) materially modify the requirements as to eligibility for
participation in this Plan, except as otherwise specified in this Plan;
(c) materially increase the benefits accruing to Participants;
(d) reduce the purchase price specified in Section 5.4, except as
specified in Section 8;
(e) extend the term of this Plan beyond the date specified in Section
11.1; or
(f) amend this Section 11.2 to defeat its purpose.
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12. Administration.
The Board shall appoint a Committee consisting of at least two members,
each of whom shall be a member of the Board who is both a (a) Non-Employee
Director, within the meaning of Rule 16b-3 promulgated under the Exchange Act
and (b) an Outside Director, within the meaning of Section 162(m) of the Code.
The members of the Committee will serve for such period of time as the Board may
specify and may be removed by the Board at any time. This Plan shall be
administered by, or under the direction of, the Committee constituted in such a
manner as to comply at all times with Rule 16b-3 (or any successor rule) under
the Exchange Act. The Committee will have the authority and responsibility for
the day-to-day administration of this Plan, the authority and responsibility
specifically provided in this Plan and any additional duty, responsibility and
authority delegated to the Committee by the Board, which may include any of the
functions assigned to the Board in this Plan. The Committee shall have full
power and authority to promulgate any rules and regulations which it deems
necessary for the proper administration of this Plan, to interpret the
provisions and supervise the administration of this Plan, and to take all action
in connection with administration of this Plan as it deems necessary or
advisable, consistent with the delegation from the Board. Decisions of the Board
and the Committee shall be final and binding upon all Participants. Any decision
reduced to writing and signed by a majority of the members of the Committee
shall be fully effective as if it had been made at a meeting of the Committee
duly held. The Company shall pay all expenses incurred in the administration of
this Plan. No Board or Committee member shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
thereunder.
13. Committee Rules for Non-United States Jurisdictions.
The Committee may adopt rules or procedures relating to the operation and
administration of this Plan in non-United States jurisdictions to accommodate
the specific requirements of local laws and procedures. Without limiting the
generality of the foregoing, the Committee is specifically authorized to adopt
rules and procedures regarding handling of payroll deductions, payment of
interest, conversion of local currency, withholding procedures and handling of
stock certificates which vary with local requirements.
14. Securities Laws Requirements.
The Company shall not be under any obligation to issue Common Stock upon
the exercise of any option unless and until the Company has determined that: (a)
it and the Participant have taken all actions required to register the Common
Stock under the United States Securities Act of 1933, as amended, or to perfect
an exemption from the registration requirements thereof; (b) any applicable
listing requirement of any stock exchange on which the Common Stock is listed
has been satisfied; and (c) all other applicable provisions of state, federal
and applicable foreign law have been satisfied.
15. Governmental Regulations.
This Plan and the Company's obligation to sell and deliver shares of its
stock under this Plan shall be subject to the approval of any governmental
authority required in connection with this Plan or the authorization, issuance,
sale, or delivery of stock hereunder.
16. No Enlargement of Employee Rights.
Nothing contained in this Plan shall be deemed to give any Employee the
right to be retained in the employ of the Company or any Designated Subsidiary
or to interfere with the right of the Company or Designated Subsidiary to
discharge any Employee at any time.
17. Governing Law.
THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
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18. Effective Date.
This Plan shall be submitted to the Shareholders for approval and
ratification at the next regular or special meeting thereof to be held after
August 1, 1998. Unless at such meeting this Plan is approved and ratified by the
Shareholders in the manner provided by the Company's By-Laws, then, and in such
event, this Plan and any then outstanding options that may have been
conditionally granted under this Plan prior to such shareholder meeting shall
become null and void and of no further force or effect. Subject to the
immediately preceding sentence, this Plan shall become effective upon its
adoption by the Board.
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HELEN OF TROY LIMITED
Annual Meeting of Shareholders
August 25, 1998
-----
PROXY
-----
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes Gerald J. Rubin as Proxy with power of
substitution, to represent the undersigned at the Annual Meeting of
Shareholders of the Company to be held on Tuesday, August 25, 1998 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 six 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 Stanlee N. Rubin
Byron H. Rubin Christopher Carameros
Daniel C. Montano Gary B. Abromovitz
2. To consider approval of the Helen of Troy Limited 1998 Stock Option and
Restricted Stock Plan:
For [ ] Against [ ] Abstain [ ]
3. To consider approval of the Helen of Troy Limited 1998 Employee Stock
Purchase Plan:
For [ ] Against [ ] Abstain [ ]
<PAGE> 46
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is given, this proxy will be
voted for Proposals 1 through 3 and in accordance with management's discretion
as to any other matters.
IMPORTANT: Please date this proxy and sign
- --------------------------------- exactly as your name or names appear
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 , 1998 SIGNATURE
- -------------------------------
PLEASE SIGN, DATE AND RETURN --------------------------------------------
THIS PROXY PROMPTLY IN THE SIGNATURE IF HELD JOINTLY
ACCOMPANYING ENVELOPE.
- -------------------------------
