<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
BLYTH INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BLYTH INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
BLYTH INDUSTRIES, INC.
100 FIELD POINT ROAD
GREENWICH, CONNECTICUT 06830
(203) 661-1926
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
April 29, 1998
To the Stockholders of
Blyth Industries, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Blyth Industries, Inc. (the "Company") will be held in the Cole
Auditorium at Greenwich Public Library, 101 West Putnam Avenue, Greenwich,
Connecticut 06830, on Tuesday, June 9, 1998, at 9:00 A.M., local time, for the
following purposes:
1. To elect three directors, each to hold office until the Annual
Meeting of Stockholders to be held in 2001 or until his respective successor
is elected and qualified.
2. To consider and vote upon an amendment to the Company's Amended and
Restated 1994 Employee Stock Option Plan (the "Employee Plan") to increase
the number of shares of the Company's Common Stock authorized to be issued
under the Employee Plan from 1,380,000 to 1,880,000.
3. To consider and vote upon an amendment to the Employee Plan to limit
the maximum option grants that may be made to an employee in any one year.
4. To ratify the appointment of independent accountants.
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 13, 1998, as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting. A list of stockholders entitled to vote at the
Annual Meeting will be available for examination by any stockholder, for any
purpose relevant to the meeting, on and after May 29, 1998, during ordinary
business hours at the Company's principal executive offices located at the
address first set forth above.
STOCKHOLDERS ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY
IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
By Order of the Board of Directors,
Bruce D. Kreiger,
SECRETARY
<PAGE>
BLYTH INDUSTRIES, INC.
100 FIELD POINT ROAD
GREENWICH, CONNECTICUT 06830
(203) 661-1926
------------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 9, 1998
------------------------
INTRODUCTION
This proxy statement ("Proxy Statement") is being furnished to holders of
shares of common stock, par value $0.02 per share (the "Common Stock"), of Blyth
Industries, Inc., a Delaware corporation ("Blyth" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders (the "Annual Meeting") to
be held in the Cole Auditorium at Greenwich Public Library, 101 West Putnam
Avenue, Greenwich, Connecticut 06830, on Tuesday, June 9, 1998, at 9:00 A.M.,
local time, and at any adjournments thereof. This Proxy Statement, the
accompanying Notice of Annual Meeting of Stockholders and the enclosed form of
proxy are first being mailed to stockholders on or about April 29, 1998.
The Company's Annual Report to Shareholders for the fiscal year ended
January 31, 1998 (the "Annual Report") also accompanies this Proxy Statement.
The Annual Report includes audited financial statements, a discussion by
management of the Company's financial condition and results of operations and
other information.
At the Annual Meeting, stockholders will be asked:
1. To elect three directors, each to hold office until the Annual
Meeting of Stockholders to be held in 2001 or until his respective successor
is elected and qualified.
2. To consider and vote upon an amendment (the "Plan Shares Amendment")
to the Company's Amended and Restated 1994 Employee Stock Option Plan (the
"Employee Plan") to increase the number of shares of Common Stock authorized
to be issued under the Employee Plan from 1,380,000 to 1,880,000.
3. To consider and vote upon an amendment (the "162(m) Amendment") to
the Employee Plan to limit the maximum option grants that may be made to an
employee in any one year.
4. To ratify the appointment of independent accountants.
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
<PAGE>
------------------------
VOTING RIGHTS AND PROXY INFORMATION
Proxies in the accompanying form are solicited on behalf of and at the
direction of the Board of Directors, which has fixed the close of business on
Monday, April 13, 1998 as the record date (the "Record Date") for the
determination of holders of outstanding shares of Common Stock entitled to
notice of and to vote at the Annual Meeting or any adjournment(s) thereof. On
the Record Date, there were 49,120,027 shares of Common Stock issued and
outstanding, which were held of record on such date by 3,711 holders. Each
stockholder is entitled to one vote, exercisable in person or by proxy, for each
share of Common Stock held of record by such stockholder on the Record Date with
respect to each matter. A majority of the shares entitled to vote, represented
in person or by proxy, constitutes a quorum. If a quorum is present, (i) a
plurality vote of the shares present, in person or by proxy, at the Annual
Meeting and entitled to vote is required for the election of directors and (ii)
the affirmative vote of the majority of the shares present, in person or by
proxy, at the Annual Meeting and entitled to vote is required for approval of
Items 2, 3 and 4. Abstentions are considered shares present and entitled to
vote, and therefore have the same legal effect as a vote against a matter
presented at the Annual Meeting. Any shares held in street name for which the
broker or nominee receives no instructions from the beneficial owner, and as to
which such broker or nominee does not have discretionary voting authority under
applicable New York Stock Exchange rules, will be considered as shares not
entitled to vote and will therefore not be considered in the tabulation of the
votes. Under New York Stock Exchange rules, a majority of the shares must vote
on a particular matter (with abstentions being treated as votes and broker
non-votes not being treated as votes). Subject to the foregoing, a broker
non-vote will have no effect with respect to any of Items 1-4 of this Proxy
Statement.
When a proxy in the form of the accompanying proxy is returned properly
dated and signed, the shares represented thereby will be voted by the person
named as proxies therein in accordance with each stockholder's directions.
Proxies will also be considered to be confidential voting instructions to the
Trustees of the Blyth Industries, Inc. Profit Sharing Retirement Plan with
respect to shares of Common Stock held in accounts under such Plan.
Stockholders are urged to specify their choices by marking the appropriate
boxes on the enclosed proxy card. All shares of the Common Stock represented by
properly executed proxies will be voted at the Annual Meeting in accordance with
the direction indicated on the proxies unless such proxies have previously been
revoked. To the extent that no direction is indicated, the shares will be voted
FOR the election of all of the Company's nominees as directors, FOR the Plan
Shares Amendment, FOR the 162(m) Amendment, and FOR the ratification of the
appointment of Coopers & Lybrand L.L.P. ("Coopers & Lybrand") as the Company's
independent accountants (or, in the case of participants in the Profit Sharing
Retirement Plan referred to above, will be voted in the discretion of the
Trustees). If any other matters are properly presented at the Annual Meeting for
action, including a question of adjourning the meeting from time to time, the
persons named in the proxies and acting thereunder will have discretion to vote
on such matters in accordance with their best judgment.
Any stockholder who has executed and returned a proxy has the power to
revoke it at any time before it is voted. A stockholder who wishes to revoke a
proxy can do so by attending the Annual Meeting and voting in person, or by
executing a later-dated proxy relating to the same shares or a writing revoking
the proxy and, in the latter two cases, delivering such later-dated proxy or
writing to the Secretary of the Company prior to the vote at the Annual Meeting.
Any writing intended to revoke a proxy should be sent to the Company at its
principal executive offices, 100 Field Point Road, Greenwich, Connecticut 06830,
Attention: Bruce D. Kreiger, Esq., Secretary.
In addition to the use of the mail, proxies may be solicited via personal
interview and telephone or telegraph by the directors, officers and regular
employees of the Company. Such persons will receive no additional compensation
for such services. Arrangements will also be made with certain brokerage firms
and certain other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the Common Stock held of
record by such persons, and such brokers, custodians,
2
<PAGE>
nominees and fiduciaries will be reimbursed by the Company for reasonable
out-of-pocket expenses incurred by them in connection therewith.
------------------------
ITEM 1--ELECTION OF DIRECTORS
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
NOMINEES FOR ELECTION AS DIRECTORS
Blyth's Board of Directors currently consists of nine members, divided into
three classes serving staggered terms of office.
It is intended that the persons named in the enclosed form of proxy as
proxies will, except as noted below, vote FOR the election of the following
nominees as directors, to serve until the 2001 Annual Meeting of Stockholders:
Robert B. Goergen
Neal I. Goldman
Howard E. Rose
Messrs. Goergen, Goldman and Rose currently serve as directors of Blyth.
Messrs. Goergen and Goldman were most recently elected as such at the Annual
Meeting of Stockholders held on June 7, 1995 and Mr. Rose was elected by the
Blyth Board of Directors on April 8, 1998, when the Board of Directors resolved
to increase the size of the Board to nine members. The Board of Directors of the
Company does not contemplate that any of such nominees will become unable to
serve. If, however, any of such nominees should become unable to serve before
the Annual Meeting, proxies solicited by the Board of Directors will be voted by
the persons named as proxies therein in accordance with the best judgment of
such proxies.
3
<PAGE>
INFORMATION REGARDING NOMINEES FOR ELECTION AS
DIRECTORS AND REGARDING CONTINUING DIRECTORS
The following table sets forth the name, age, business experience for the
past five years and other directorships of each of the Company's directors:
<TABLE>
<CAPTION>
NAME, AGE AND CURRENT PERIOD SERVED AS DIRECTOR
POSITIONS, IF ANY, AND BUSINESS EXPERIENCE
WITH THE COMPANY DURING PAST 5 YEARS
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
NOMINEES FOR ELECTION AT THE 1998 ANNUAL MEETING FOR TERMS EXPIRING IN 2001
Robert B. Goergen (59)............... Robert B. Goergen has been the Chairman of the Company since its inception
Chairman of the Board, Chief in 1977 and has served as Chief Executive Officer of the Company since
Executive Officer and President 1978 and as President since March 1994. From 1979 to the present, Mr.
Goergen has also served as Chairman of The Ropart Group Limited, a group
of affiliated entities engaged in private equity investing, and from 1990
to the present, as Chairman of XTRA Corporation, a trailer leasing
company. Mr. Goergen is a director of Leading Edge Packaging, Inc., a
packaging company.
Neal I. Goldman (53)................. Neal I. Goldman joined the Board of Directors in 1991. From 1985 to the
present, Mr. Goldman has been the President of Goldman Capital Management,
Inc., an investment advisory firm.
Howard E. Rose (51).................. Howard E. Rose joined the Board of Directors in April 1998. Mr. Rose was
Vice Chairman of the Board also elected Vice Chairman of the Company in April 1998. Mr. Rose served
the Company as Vice President and Chief Financial Officer from 1978 to
April 1998 and served as Secretary from 1993 to 1996.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 1999
John W. Burkhart (60)................ John W. Burkhart joined the Board of Directors in 1983. Since July 1984,
Mr. Burkhart has been the President and a director of Breezy Hill
Enterprises, Inc., a management services company. For over five years Mr.
Burkhart has also been a director, the Chairman of the Board of Directors,
and the President of Wellstead Industries, Inc., an industrial supply
company ("Wellstead"). Since May 1996, Control Resource Systems, Inc., the
sole subsidiary of Wellstead, has been operating under Chapter 11 of the
United States Bankruptcy Code.
John E. Preschlack (64).............. John E. Preschlack joined the Board of Directors in 1989. From October
1996 through the present, Mr. Preschlack has been the Chairman and
President of JEPCOR, Inc., a private investment company. From 1987 to
October 1996, Mr. Preschlack was a Senior Director and Partner of
SpencerStuart, executive search consultants.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND CURRENT PERIOD SERVED AS DIRECTOR
POSITIONS, IF ANY, AND BUSINESS EXPERIENCE
WITH THE COMPANY DURING PAST 5 YEARS
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
Frederick H. Stephens, Jr. (66)...... Frederick H. Stephens, Jr. joined the Board of Directors in September
1994. From 1992 through June 1997, Mr. Stephens was a Vice President and
Senior Consultant at Lee Hecht Harrison, Inc., an executive career
transition firm. From January 1990 through December 1991, Mr. Stephens was
a partner at The Onstott Group, a management consulting company
specializing in executive search services. From 1958 to 1989, Mr. Stephens
was employed by The Gillette Company, most recently as Vice President of
Business Relations and as a corporate officer.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2000
Roger A. Anderson (60)............... Roger A. Anderson joined the Board of Directors in February 1994. From
1979 to the present, Mr. Anderson has been the Chairman of Burlington
Management Company and Tair Ltd., investment companies with diversified
holdings in the United States and several foreign countries.
Pamela M. Goergen (56)............... Pamela M. Goergen joined the Board of Directors in 1984. From 1979 to
December 1994, Ms. Goergen was the Vice President and Secretary, and from
December 1994 to the present, Ms. Goergen has been the Treasurer and
Secretary, of The Ropart Group Limited, a private equity investment
management firm.
Roger H. Morley (66)................. Roger H. Morley joined the Board of Directors in December 1996. From 1983
to the present, Mr. Morley has served as Vice President of Schiller
International University in Heidelberg, Germany. Mr. Morley is also a
director of Biogen, Inc. Mr. Morley is also co-managing director of R&R
Inventions Ltd., Birmingham, U.K., and an advisory director of Bank of
America Illinois.
</TABLE>
Other than Robert B. Goergen and Pamela M. Goergen, who are husband and
wife, there is no family relationship among any of the nominees for election as
directors, any continuing directors or any executive officers of the Company.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive an annual fee of $10,000, plus
reimbursement of out-of-pocket expenses, for their services as directors of the
Company. Each member of the Audit Committee and the Compensation Committee also
receives a fee of $750 for each meeting attended, and the chairman of each
committee receives a fee of $1,500 for each meeting attended by such chairman.
Upon each non-employee director's first election as a director, the non-employee
director receives stock options to acquire 3,000 shares of Common Stock under
the Company's Stock Option Plan for Non-Employee Directors for his or her
services as a director. In addition, each non-employee director who is in office
on November 15 of any year receives, on the immediately succeeding January 1, an
option to acquire 1,500 shares of Common Stock. Directors who are also employees
do not receive any additional compensation for their services as directors.
5
<PAGE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors has established two standing committees. The Audit
Committee is comprised of Messrs. Anderson, Burkhart and Morley, and oversees
the activities of Blyth's independent accountants and internal audit controls.
The Audit Committee held three meetings during fiscal 1998.
The Compensation Committee is comprised of Messrs. Goldman, Preschlack and
Stephens and reviews and makes recommendations to the Board with respect to
general compensation and benefit levels, determines the compensation and
benefits for the Company's executive officers and administers the Employee Plan.
The Compensation Committee held five meetings during fiscal 1998.
Blyth does not have a standing nominating committee. Instead, the Board of
Directors selects nominees for directors.
The Board of Directors held five regularly scheduled meetings during fiscal
1998. In fiscal 1998, each director attended at least 75% of the meetings of the
Board of Directors and all applicable committee meetings during the period that
such director served as a director.
EXECUTIVE OFFICERS
The following sets forth the name, age and business experience for the past
five years of each of Blyth's executive officers (other than Messrs. Goergen and
Rose), together with all positions and offices held with Blyth by such executive
officers. Officers are appointed to serve until the meeting of the Board of
Directors following the next Annual Meeting of Stockholders and until their
successors have been elected and have qualified:
<TABLE>
<CAPTION>
NAME AND AGE POSITIONS
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
Albert A. Bergeron (57).............. Albert A. Bergeron joined the Company in 1991 as President of PartyLite
Gifts. Mr. Bergeron became a Vice President of Blyth in 1994. From August
1990 to January 1991, Mr. Bergeron was the President of Bergeron Inc.,
independent direct sales consultants. From July 1987 to July 1990, Mr.
Bergeron was the Vice President-New Ventures for Tupperware Home Parties.
Richard T. Browning (49)............. Richard T. Browning joined the Company as Vice President, Finance in 1997.
In April 1998, Mr. Browning was elected Chief Financial Officer.
Previously Mr. Browning was President and Chief Executive officer of Lea &
Perrins, Inc., a subsidiary of Groupe Danone. Earlier, he was Chief
Financial Officer of the Dannon Yogurt Company, another Groupe Danone
subsidiary.
Thomas K. Kreilick (61).............. Thomas K. Kreilick joined the Company in 1987 as the President of the
Lenox Division of Candle Corporation of America and became President of
Candle Corporation of America in 1988. Mr. Kreilick became a Vice
President of Blyth in 1994.
Elwood L. La Forge, Jr. (53)......... Elwood L. La Forge, Jr. served as Vice President of Business Development
from 1994 until April 1997. In April 1997, Mr. La Forge became President
of Blyth's Worldwide Affiliate Group and continued to serve as a Vice
President of Blyth. From 1988 to 1994, Mr. La Forge was Senior Vice
President and Chief Financial Officer of Lenox, Inc., a subsidiary of
Brown-Forman.
</TABLE>
6
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
SECURITY OWNERSHIP OF MANAGEMENT. The following table sets forth, as of
April 13, 1998, the number of outstanding shares of the Common Stock
beneficially owned by each of the nominees for director; the other current
directors; Blyth's Chairman, Chief Executive Officer and President and Blyth's
four most highly compensated other executive officers (together, the "Named
Executive Officers") individually; and by all directors and executive officers
as a group without naming them. Except as otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the shares
reflected as beneficially owned by such stockholder.
<TABLE>
<CAPTION>
NO. OF PERCENT
NAME OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------------------------------------------------------------------ ------------ -----------
<S> <C> <C>
Robert B. Goergen(1)................................................................ 13,962,971 28.4%
Roger A. Anderson(2)................................................................ 472,458 *
John W. Burkhart(3)................................................................. 591,804 1.2%
Pamela M. Goergen(4)................................................................ 13,449,310 27.3%
Neal I. Goldman(5).................................................................. 124,500 *
Roger H. Morley(6).................................................................. 3,000 *
John E. Preschlack(7)............................................................... 216,110 *
Frederick H. Stephens, Jr.(8)....................................................... 6,600 *
Albert A. Bergeron(9)............................................................... 204,600 *
Thomas K. Kreilick.................................................................. 374,661 *
Elwood L. La Forge, Jr.(10)......................................................... 33,003 *
Howard E. Rose(11).................................................................. 213,179 *
All directors and executive officers as a group (13 persons)........................ 16,203,886 33.0%
</TABLE>
- ------------------------
* Less than 1%.
(1) Includes 13,028,530 shares held by Mr. Goergen, 74,997 shares held by Mr.
Goergen and Dennis P. Goergen as co-trustees of a trust for the benefit of
Alice B. McCool, 438,664 shares held by The Goergen Foundation, Inc., a
charitable foundation of which Mr. Goergen is a director, president and sole
investment manager, and 420,780 shares and vested options held by Pamela M.
Goergen, Mr. Goergen's wife. Mr. Goergen disclaims beneficial ownership of
the shares held by Pamela M. Goergen (see footnote (4)). The address of Mr.
Goergen is c/o Blyth Industries, Inc., 100 Field Point Road, Greenwich,
Connecticut 06830.
(2) Includes 467,958 shares held by Galena Partners, Ltd., a limited partnership
of which Mr. Anderson is a managing general partner. Mr. Anderson disclaims
beneficial ownership of the shares held by Galena Partners, Ltd. Also
includes 4,500 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 13, 1998.
(3) Includes 189,300 shares held of record by Breezy Hill Enterprises, Inc.
Pension Plan, of which Mr. Burkhart is trustee, and 276,564 shares held by
Mr. Burkhart's wife. Mr. Burkhart disclaims beneficial ownership of the
shares held by his wife. Includes 4,500 shares issuable upon exercise of
options which are exercisable or become exercisable within 60 days of April
13, 1998.
(4) Includes 13,028,530 shares held by Robert B. Goergen, Mrs. Goergen's
husband. Ms. Goergen disclaims beneficial ownership of the shares held by
her husband, Robert B. Goergen (see footnote (1)). Also includes 4,500
shares issuable upon exercise of options which are exercisable or become
exercisable within 60 days of April 13, 1998. The address of Ms. Goergen is
c/o The Ropart Group Limited, 100 Field Point Road, Greenwich, Connecticut
06830.
(5) Includes 4,500 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 13, 1998.
7
<PAGE>
(6) Include 3,000 shares issuable upon exercise of options which are exercisable
or become exercisable within 60 days of April 13, 1998.
(7) Includes 192,610 shares held by Mr. Preschlack and 19,000 shares held by
Jaclyn Holdings, L.P., a limited partnership of which Mr. Preschlack is a
general partner. Mr. Preschlack disclaims beneficial ownership of the shares
held by Jaclyn Holdings, L.P. Also includes 4,500 shares issuable upon
exercise of options which are exercisable or become exercisable within 60
days of April 13, 1998.
(8) Includes 3,000 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 13, 1998.
(9) Includes 2,400 shares held by Mr. Bergeron's spouse and children. Also
includes 38,400 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 13, 1998.
(10)Includes 33,000 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 13, 1998.
(11)Includes 12,000 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 13, 1998.
------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the knowledge of the
Company, the following table lists those parties (other than Mr. Goergen and Ms.
Goergen, whose respective beneficial ownership is disclosed in the immediately
preceding table) who beneficially owned more than 5% of the Common Stock
outstanding as of April 13, 1998:
<TABLE>
<CAPTION>
NAME AND ADDRESS NO. OF PERCENT
OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Alex. Brown Investment Management(1)................................................. 4,133,000 8.4%
The Kaufman Fund, Inc.(2)............................................................ 2,749,999 5.6%
</TABLE>
- ------------------------
(1) According to a statement on Schedule 13G dated February 12, 1998, Alex.
Brown Investment Management, a partnership which is 50% owned by Bankers
Trust New York Corporation, beneficially owns 4,133,000 shares. The address
of Alex. Brown Investment Management is One South Street, Baltimore,
Maryland 21202. According to a separate statement on Schedule 13G dated
February 17, 1998 filed with the Securities and Exchange Commission, Bankers
Trust New York Corporation and direct and indirect subsidiaries of Bankers
Trust New York Corporation own in the aggregate 441,450 additional shares.
The address of Bankers Trust New York Corporation is 130 Liberty Street, New
York, New York 10006.
(2) This information is based on a statement on Schedule 13G dated February 3,
1998 filed with the Securities and Exchange Commission. The address of The
Kaufman Fund, Inc. is 140 East 45th Street, Suite 2624, New York, New York
10017.
------------------------
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of all compensation awarded to,
earned by or paid for services rendered to Blyth in all capacities during
Blyth's fiscal years ended January 31, 1998, 1997 and 1996 by the Named
Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
---------------------- COMPENSATION ALL OTHER
SALARY BONUS AWARDS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS(#) ($)
- ------------------------------------------------ --------- ---------- ---------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Robert B. Goergen, Chairman and President of the 1998 $ 471,154 $ 500,000 -- $ 7,700
Company 1997 440,833 590,000 -- 7,342
1996 406,000 580,000 -- 6,550
Albert A. Bergeron, Vice President of the 1998 $ 271,154 $ 130,000 12,000 $ 7,612
Company and President of Partylite Gifts 1997 238,021 250,000 -- 6,242
1996 189,584 225,000 60,000 7,300
Thomas K. Kreilick, Vice President of the 1998 $ 228,462 $ 35,000 -- $ 7,616
Company and President of Candle Corporation of 1997 215,834 25,500 -- 7,342
America 1996 195,832 107,057 -- 7,300
Elwood L. La Forge, Jr., Vice President of the 1998 $ 181,923 $ 90,000 -- $ 57,700
Company and President of Worldwide Affiliate
Group (2)
Howard E. Rose, Vice President and Chief 1998 $ 208,462 $ 100,000 -- $ 7,616
Financial Officer 1997 171,875 100,000 -- 6,242
1996 158,333 75,000 30,000 7,300
</TABLE>
- ------------------------
(1) Amounts reported as All Other Compensation for fiscal 1998 represent Blyth
contributions for the benefit of the Named Executive Officers to the profit
sharing and 401(k) portions of Blyth's Retirement Plan.
(2) Mr. La Forge became an executive officer in fiscal 1998. Amounts reported
for Mr. La Forge as All Other Compensation for fiscal 1998 also include
$50,000 of indebtedness forgiven by Blyth. See "Certain Transactions."
------------------------
9
<PAGE>
INFORMATION REGARDING STOCK OPTIONS AND STOCK APPRECIATION UNITS
OPTION GRANTS IN FISCAL YEAR 1998
The following table sets forth certain information concerning grants of
stock options to each of Blyth's Named Executive Officers during the fiscal year
ended January 31, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1) POTENTIAL REALIZABLE
---------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
% OF TOTAL VALUE AT ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SHARES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES IN OR BASE OPTION TERM (2)
OPTIONS FISCAL PRICE EXPIRATION ----------------------
NAME GRANTED (#) YEAR PER SHARE DATE 5% 10%
- ---------------------------------------------- ------------- ----------------- ----------- ----------- ---------- ----------
Robert B. Goergen............................. -- -- -- -- -- --
Thomas K. Kreilick............................ -- -- -- -- -- --
Albert A. Bergeron............................ 12,000 4.5% $23.38 4/07/07 $176,443 $447,140
Elwood L. La Forge, Jr........................ -- -- -- -- -- --
Howard E. Rose................................ -- -- -- -- -- --
</TABLE>
- ------------------------
(1) Each of these options was granted pursuant to the Blyth 1994 Employee Stock
Option Plan and is subject to the terms of such plan. These options were
granted at an exercise price equal to the fair market value of the Company's
Common Stock as determined by Blyth's Compensation Committee on the date of
grant and, as long as the optionee maintains continuous employment with the
Company, vest over a five year period at the rate of 20% on each anniversary
of the date of grant.
(2) In accordance with the rules of the Securities and Exchange Commission,
shown are the hypothetical gains or "option spreads" that would exist for
the respective options. These gains are based on assumed rates of annual
compounded stock price appreciation of 5% and 10% from the date the option
was granted over the full option term. The 5% and 10% assumed rates of
appreciation are mandated by the rules of the Commission and do not
represent the Company's estimate or projection of future increases in the
price of its Common Stock.
1998 FISCAL YEAR-END OPTION AND STOCK APPRECIATION UNIT VALUES
The following table sets forth certain information with respect to
unexercised options and stock appreciation units held by each of Blyth's Named
Executive Officers as of January 31, 1998. Columns entitled "Shares Acquired on
Exercise (#)" and "Value Realized ($)" have been excluded because they are not
applicable with respect to Blyth's most recent fiscal year:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AND
OPTIONS AND STOCK STOCK
APPRECIATION UNITS APPRECIATION UNITS
AT FISCAL YEAR-END AT FISCAL YEAR-END ($)
NAME (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE
- -------------------------------------------------------- ------------------------- -----------------------------
<S> <C> <C>
Robert B. Goergen....................................... -- --
Albert A. Bergeron...................................... 24,000/48,000 $444,000/$727,440(1)
Thomas K. Kreilick...................................... 0/504,000 0/$2,318,400(2)
Elwood L. La Forge, Jr.................................. 31,500/30,000 $695,505/$574,020(1)
Howard E. Rose.......................................... 9,000/18,000 $166,500/$333,000(1)
</TABLE>
- ------------------------
(1) Messrs. Bergeron, La Forge and Rose hold options to purchase Common Stock,
but hold no stock appreciation units. The value of an "in the money" option
represents the difference between the exercise price of such option and
$28.50, the closing price on the New York Stock Exchange, Inc. on January
31, 1998, multiplied by the total number of shares subject to the
exercisable or unexercisable portion of the option, as the case may be.
(2) Thomas K. Kreilick, a Vice President of Blyth and the President of Candle
Corporation of America, holds 504,000 stock appreciation units which provide
that the vested portion of such stock appreciation units will be
automatically exercised upon the first to occur of (i) September 10, 2002,
(ii) the date
10
<PAGE>
of termination of Mr. Kreilick's employment (other than for cause) or (iii)
upon the effective date of a Corporate Transaction (defined to include the
merger or other sale of the Company) where the surviving or successor
corporation in such transaction does not assume the stock appreciation
units. Such stock appreciation units are fully vested. Upon exercise of the
stock appreciation units, Mr. Kreilick will receive a payment equal to (i)
the per-share book value of the Company's Common Stock on the exercise date
less (ii) the per-share book value of the Company's Common Stock on
September 10, 1992, the date of grant (in each case, as adjusted for stock
splits and the like). The value of the unexercised stock appreciation units
held by Mr. Kreilick ($2,318,400) was calculated using the book value per
share of the Common Stock as of January 31, 1998 ($5.03 per share), less the
book value per share as of September 10, 1992, the date of grant of such
stock appreciation units ($0.43 per share), multiplied by the number of
unexercisable stock appreciation units. Mr. Kreilick holds no options to
purchase Common Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Goldman, Preschlack and Stephens served as members of the
Compensation Committee in fiscal 1998. None of such committee members (i) was,
during fiscal 1998, an officer or employee of Blyth or any of its subsidiaries,
(ii) was formerly an officer of Blyth or any of its subsidiaries, or (iii) had
any relationship requiring disclosure by Blyth pursuant to any paragraph of Item
404 of Regulation S-K promulgated by the Securities and Exchange Commission. No
executive officer served as an officer, director, or member of a compensation
committee of any entity an executive officer or director of which is a member of
the Compensation Committee of Blyth or the Blyth Board of Directors.
OMISSION OF CERTAIN TABLES
Information that would be provided in tabular form with respect to
repricings of options or SAR's or awards under long-term incentive plans is not
applicable and has been omitted.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the directors and executive officers of the Company and holders of more than 10%
of the Company's Common Stock to file reports regarding beneficial ownership and
changes in beneficial ownership with the Securities and Exchange Commission and
the New York Stock Exchange. The Company believes that during fiscal 1998 its
directors and executive officers complied with all applicable Section 16(a)
filing requirements.
CERTAIN TRANSACTIONS
On March 17, 1995, Blyth made a $350,000 loan to Elwood L. La Forge, Jr., a
Vice President of Blyth and President of Blyth's Worldwide Affiliate Group, in
order to facilitate Mr. La Forge's relocation and acquisition of a residence.
Interest on the loan accrues at 5% per annum and the loan is secured by a second
mortgage on Mr. La Forge's residence. The loan is payable in seven annual
installments, and is payable in full upon the termination of Mr. La Forge's
employment by Blyth. To date, Blyth has forgiven each annual installment of
principal payable by Mr. La Forge. The largest amount outstanding during fiscal
1998 was $350,000, and as of April 29, 1998, the aggregate outstanding principal
amount of the loan was $250,000.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND
THE FOLLOWING COMPARISON OF TOTAL STOCKHOLDER RETURN SHALL NOT BE INCORPORATED
BY REFERENCE INTO ANY SUCH FILINGS, NOR SHALL THEY BE DEEMED TO BE SOLICITING
MATERIAL OR DEEMED FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
11
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for developing and overseeing
compensation policies that are designed to attract, motivate, reward and retain
the broad-based management talent required to achieve the Company's corporate
objectives and increase stockholder value. The Committee believes that corporate
performance and, in turn, stockholder value will be enhanced by a compensation
system which supports and reinforces the Company's key operating and strategic
goals while aligning the financial interests of the Company's management with
those of the stockholders.
The Company's compensation program for management consists of a base salary,
an incentive bonus program, a stock option program plus a benefits package. The
base salary and annual incentive bonus program components of the compensation
program have been in effect for a number of years. The stock option component of
the compensation program was adopted by the Board of Directors in March 1994 and
approved by the stockholders at the March 1994 meeting as the Company was
preparing its initial public offering of Common Stock in May 1994. The annual
incentive bonus program for management is the principal short-term incentive
compensation program of the Company tied, for the most part, to achieving
specific financial and management objectives. Cash bonuses are paid following
the conclusion of the Company's fiscal year.
Under the Company's long-term incentive program, the Committee reviews and
approves proposed grants of long-term incentive compensation in the form of
stock options. The Committee considers stock options to be an important means of
ensuring that management focuses on achieving continuing increases in the
profitability of the Company which should enhance the value of its Common Stock.
Because the value of stock options is entirely a function of the value of the
Company's Common Stock, the Committee believes that this component of the
Company's compensation policy directly aligns the interests of management with
those of all of the Company's stockholders.
The process of determining base salary begins with establishing an
appropriate salary range for each officer. Each officer's range is based upon
the particular duties and responsibilities of the officer, as well as salaries
for comparable positions with other companies. No written or formal list of
specific companies is prepared. Instead, the Compensation Committee is provided
with various sources of information about executive compensation at other
companies, as reported in salary surveys published by various organizations. The
Committee, together with Robert B. Goergen, the Chairman, President and Chief
Executive Officer (the "CEO"), uses these sources and makes a determination of
appropriate ranges for each member of management. The base salary of each
individual is set within a range considered appropriate in the judgment of
management and the Committee, based on an assessment of the particular
responsibilities and performance of such officer, the compensation practices in
other companies, and trends in the economy in general during the immediately
preceding year. The salaries of the Company's management are believed, based on
the Committee's experience with respect to compensation practices, to be at
approximately the median of the range of the universe considered to be relevant
in the judgment of the Compensation Committee.
Annual incentive cash bonus awards are based upon the extent to which the
Company and its subsidiaries meet or exceed specified financial goals (such as
meeting or exceeding sales and operating budgets and achieving target levels of
earnings before interest and taxes and return on equity) established by
executive management and the Board of Directors at the beginning of the
Company's fiscal year. Incentive awards are also based on an individual's
performance in achieving specific, annual management objectives which may or may
not be quantifiable. Annually, the nature and extent of each individual's major
accomplishments and contributions for the year are determined through written
information compiled by the CEO, the Vice President-Organizational Development,
and others familiar with the individual's performance. With regard to all
members of management other than the CEO, the CEO evaluates the information and
makes appropriate recommendations to the Committee. The Committee then makes the
final determination of management bonuses.
12
<PAGE>
The compensation of the CEO is reviewed in a manner similar to the
foregoing. Based largely upon the Committee's experience with respect to
compensation practices and, to a lesser extent, on other information such as
salary surveys, the Committee first establishes a base salary for the CEO. An
incentive bonus plan for the CEO is structured in a similar manner as the plan
for other executive officers. Under this incentive plan, the incentive bonus
will be awarded annually as a percentage of base salary, depending on overall
corporate performance. This incentive plan is established with a total cash
compensation amount (base salary plus incentive bonus) in mind considering all
relevant information on comparable companies and available salary survey data.
Stock option grants are awarded by the Compensation Committee annually, with
the exception of executives who may be hired or promoted in the course of the
fiscal year, in which case the Committee may grant awards during the year.
Annual stock option grants take into account the individual executive's
performance, longer-term contributions to the Company, as well as the importance
of the position itself and external competitive practices. In fiscal 1998, the
Company awarded 268,500 options (in awards ranging from 1,500 options to 40,000
options) to 54 executives under the Employee Plan.
As discussed elsewhere in this Proxy Statement, the Compensation Committee
has recommended to the Board of Directors that it adopt the Plan Shares
Amendment and the 162(m) Amendment in order to ensure that sufficient shares are
available for issuance under the Employee Plan and that the Employee Plan
comports with Section 162(m) of the Internal Revenue Code of 1986, as amended.
In 1993, the federal income tax laws were amended to limit the deduction a
publicly held company is allowed for compensation paid in 1994 and thereafter to
its CEO and to the four most highly compensated executive officers other than
the CEO. Generally, under Section 162(m) of the Internal Revenue Code of 1986,
as amended, compensation in excess of $1 million in any year to a covered
executive, other than specified performance-based compensation, cannot be
deducted for federal income tax purposes. The Compensation Committee does not
believe that these law changes will have any effect on the Company in the
foreseeable future. Further, the Committee will consider ways to maximize the
deductibility of executive compensation, while retaining the discretion the
Company deems necessary to compensate executive officers in a manner
commensurate with their performance and the competitive environment for
executive talent.
John E. Preschlack, Neal I. Goldman Frederick H. Stephens, Jr.
Chairman
13
<PAGE>
COMPARISON OF TOTAL STOCKHOLDER RETURN
The performance graph set forth below reflects the cumulative total
stockholder returns (price appreciation and reinvestment of dividends) of Blyth
compared to the S&P 500 Index, the Russell 1000 Index and the Russell 2000 Index
for the period commencing May 18, 1994 (the date of Blyth's initial public
offering) through January 31, 1998. The graph assumes the investment of $100 in
Blyth stock and such indexes on May 18, 1994.
Blyth believes that it is unique and does not have comparable industry
peers. Because Blyth's competitors are not public companies or are themselves
subsidiaries or divisions of public companies engaged in multiple lines of
business, Blyth believes that it is not possible to compare Blyth's performance
against that of its competition. In the absence of a satisfactory peer group,
Blyth believes that it is appropriate to compare Blyth to companies comprising
the Russell 1000. Previously, Blyth compared its performance to the Russell
2000. The use of the Russell 1000 reflects an updated comparison to companies
which have a market capitalization similar to Blyth.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C> <C>
Blyth Industries S&P 500 Russell 1000 Russell 2000
5/18/94 100 100 100 100
1/31/95 171 104 103 100
1/31/96 339 140 140 128
1/31/97 450 173 172 150
1/31/98 518 216 213 174
</TABLE>
14
<PAGE>
ITEM 2--PLAN SHARES AMENDMENT TO THE EMPLOYEE PLAN
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
The Employee Plan provides for the grant of "incentive stock options"
intended to qualify as such under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and also permits nonqualifying options to be
granted.
On April 8, 1998, the Board of Directors unanimously approved the Plan
Shares Amendment to the Employee Plan, subject to stockholder approval, to
increase the number of shares reserved for issuance upon exercise of options by
an additional 500,000 shares. The Employee Plan is intended to further the
growth and success of Blyth and its subsidiaries by enabling officers and
employees of Blyth and any of its subsidiaries to acquire shares of Common Stock
of Blyth, thereby increasing their personal interest in such growth and success,
and to provide a means of rewarding outstanding performance by such persons to
Blyth and/or its subsidiaries. The Board of Directors believes that the granting
of options under the Employee Plan has been a significant factor in attracting
and retaining competent and experienced management. The Board of Directors
believes that additional shares of Common Stock should be made available for the
grant of future options to allow Blyth to continue to provide an incentive
program for employees.
The complete text of the Employee Plan, including the text constituting the
Plan Shares Amendment and the 162(m) Amendment, is attached as Exhibit A hereto
and the following description is qualified in its entirety by the text of the
Employee Plan.
DESCRIPTION OF THE EMPLOYEE PLAN. In 1994, the Board of Directors and
stockholders of Blyth adopted and approved the Employee Plan to issue an
aggregate of 1,380,000 options to purchase shares of Common Stock to officers
and key employees of Blyth and its subsidiaries, including employees who are
also directors. As of April 13, 1998, 1,211,150 shares were reserved for
issuance upon exercise of options previously granted under the Employee Plan and
486,927 shares were reserved for the grant of future options (in each case,
assuming stockholder approval of the Plan Shares Amendment). Through April 13,
1998, options for 181,923 shares granted under the Employee Plan have been
exercised.
If there is a stock split, stock dividend or other change in Blyth's
capitalization during the term of outstanding options, the aggregate number of
shares of Common Stock for which options may be granted under the Plan, the
number of shares of Common Stock subject to outstanding options and the exercise
price of outstanding options shall be appropriately and proportionately adjusted
to reflect the same. If any outstanding option, or a portion thereof, expires or
is terminated without having been exercised in full, the Common Stock subject to
the portion of such option not so exercised shall be available for subsequent
grants under the plan. The Employee Plan will terminate on May 18, 2004.
The Employee Plan is administered by a Compensation Committee (the
"Compensation Committee"), which must consist of two or more disinterested
directors, as defined in the Employee Plan. The following persons presently
serve on the Compensation Committee: Neal I. Goldman, John E. Preschlack and
Frederick H. Stephens, Jr.
The Compensation Committee determines which of the Company's officers and
employees will receive options, the time when options are granted, whether the
options are to be incentive stock options or non-qualified stock options, the
terms of such options, the exercise date of any options and the number of shares
subject to options.
Members of the Compensation Committee are not eligible to receive options
under the Employee Plan. Directors who are also employees are eligible to
receive options under the Employee Plan. Non-employee directors are not be
eligible to receive options under the Employee Plan. The class of eligible
officers and other employees of Blyth and its subsidiaries consists of
approximately 225 persons. Because
15
<PAGE>
the granting of options is within the discretion of the Compensation Committee,
the benefits or amounts to be received by each of the classes of persons
eligible for grants may not presently be determined.
The exercise price of incentive stock options granted under the Employee
Plan may not be less than 100% of the fair market value of the Common Stock at
the time of grant and the term of any option may not exceed 10 years. With
respect to any employee who owns stock representing more than 10% of the voting
power of the outstanding capital stock of the Company, the exercise price of any
incentive stock option may not be less than 110% of the fair market value of
such shares at the time of grant and the term of such option may not exceed five
years.
The exercise price of a non-qualified stock option is determined by the
Compensation Committee on the date the option is granted. However, the exercise
price of a non-qualified stock option may not be less than 100% of the fair
market value of the Common Stock at the time of grant. The fair market value of
the Common Stock for purposes of the Employee Plan is generally to be determined
by the average of the highest and lowest selling prices as reported for the date
in question.
Options granted under the Employee Plan are nontransferable and, with
certain exceptions in the event of the death or disability of an optionee, may
be exercised by the optionee only during employment and within three months
thereafter. Options granted under the Employee Plan typically vest over a five-
year period and expire after 10 years, but may be subject to other vesting
periods or other provisions regarding the time of exercisability.
Upon the grant of either an incentive stock option or a nonqualifying
option, neither Blyth nor the employee incurs any federal income tax
consequences. Furthermore, upon exercise of an incentive stock option, neither
Blyth nor the employee incurs any federal income tax consequences. Rather, the
employee is taxed upon disposition of the stock acquired pursuant to the
exercise of the incentive stock option. If the employee sells the stock within
two years of the date of grant of the option and within one year of the date of
exercise, the sale of the stock is treated as a disqualifying disposition of the
option. In general, if the stock is sold in such a disqualifying disposition,
the employee will be deemed to have incurred ordinary income, and Blyth will be
entitled to a corresponding deduction, in each case in an amount equal to the
gain on such sale of stock. Such gain will be equal to the lesser of (x) the
fair market value of the Common Stock on the date of exercise minus the exercise
price and (y) the amount realized upon disposition of the stock minus the
exercise price. If the applicable holding periods with respect to stock acquired
upon exercise of an incentive stock option are satisfied, the gain upon the
employee's sale of the stock will be treated as capital gain (mid-term or
long-term, depending on the actual holding period) and Blyth will receive no
deduction. In general, upon exercise of a nonqualifying option, the employee
incurs ordinary income measured by the difference between the exercise price and
the fair market value of the Common Stock as determined, with certain
exceptions, on the date of exercise, and Blyth receives a corresponding
deduction as a compensation-related business expense. When the employee
subsequently disposes of the stock acquired upon exercise of a nonqualifying
option, he or she will recognize capital gain or loss (assuming the shares are
held as a capital asset) in an amount equal to the difference between the fair
market value of the Common Stock on the date of exercise and the selling price.
The foregoing paragraph is not intended to be a complete statement of applicable
law and it is based upon the federal income tax laws in effect on the date of
this Proxy Statement.
The Employee Plan is not an employee benefit plan which is subject to the
provisions of the Employee Retirement Income Security Act of 1974, and the
provisions of Section 401(a) of the Code are not applicable to the Employee
Plan.
The Board may at any time prior to May 18, 2004 modify and amend the
Employee Plan in any respect. However, the approval of the holders of a majority
of the votes that may be cast by all of the holders of shares of Common Stock
and preferred stock of the Company, if any, entitled to vote (voting as a single
class) must be obtained prior to any such amendment becoming effective if such
approval is required by law or is necessary to comply with regulations
promulgated by the Securities and Exchange
16
<PAGE>
Commission under Section 16(b) of the Securities Exchange Act of 1934, as
amended, or with Section 422 of the Code or the regulations promulgated by the
Treasury Department thereunder.
OPTIONS GRANTED UNDER THE EMPLOYEE PLAN. The chart below indicates the
number of options that have been granted as of April 13, 1998 pursuant to the
Employee Plan to (i) the Named Executive Officers, (ii) all current executive
officers (other than the Named Executive Officers), as a group, (iii) all
current directors who are not executive officers, as a group, and (iv) all
employees, including all current officers who are not executive officers, as a
group.
<TABLE>
<CAPTION>
NUMBER OF OPTIONS
GRANTEE GRANTED
- -------------------------------------------------------------------------- ------------------
<S> <C>
Robert B. Goergen......................................................... --
Albert A. Bergeron........................................................ 82,000
Thomas K. Kreilick........................................................ --
Elwood L. La Forge, Jr.................................................... 77,500
Howard E. Rose............................................................ 30,000
All other executive officers as a group................................... 40,000
All non-employee directors as a group..................................... --
All other employees as a group............................................ 1,270,499
</TABLE>
ITEM 3--162(M) AMENDMENT TO THE EMPLOYEE PLAN
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
On April 8, 1998, the Board of Directors of Blyth, subject to stockholder
approval, unanimously adopted the 162(m) Amendment to the Employee Plan to limit
the maximum option grants which may be made to an employee in any calendar year
to 100,000 shares (subject to adjustment for capital changes). The purpose of
the 162(m) Amendment is to assure that any options granted under the Employee
Plan after the Annual Meeting of Stockholders will qualify as "qualified
performance-based compensation" under Section 162(m) ("Section 162(m)") of the
Code.
Under Section 162(m), no deduction is allowed in any taxable year of the
Company for compensation in excess of $1 million paid to each of its chief
executive officer and its four most highly paid other executive officers who are
serving in such capacities as of the last day of such taxable year. An exception
to this rule applies to compensation that is paid pursuant to a stock option
plan approved by the Company's stockholders and that specifies, among other
things, the maximum number of shares with respect to which options may be
granted to eligible employees under such plan during a specified period.
Compensation paid pursuant to stock options granted under such a plan is deemed
to be inherently performance-based, since such options provide value to
employees only if the stock price appreciates. While Section 162(m) generally
became effective in 1994, a special rule allows options granted under the
Employee Plan to be treated as qualifying under Section 162(m) until this Annual
Meeting without having a per-person share limit.
If stockholders do not approve the 162(m) Amendment, any compensation
expense of the Company associated with options granted under the Employee Plan
in excess of $1,000,000 for any of Blyth's five highest paid officers will not
be deductible under the Code.
ITEM 4--RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
The proxy, unless otherwise directed thereon, will be voted for a resolution
ratifying the action of the Board appointing the firm of Coopers & Lybrand as
independent accountants to make an audit of the accounts of the Company for
fiscal 1999. Coopers & Lybrand has audited the Company's financial
17
<PAGE>
statements for fiscal 1998. The names of the Directors serving on the Audit
Committee are set forth on page 6, under the heading "Board and Committee
Meetings." The vote required for ratification is a majority of shares voting. If
the resolution is rejected, or if Coopers & Lybrand declines to act or becomes
incapable of acting, or if their employment is discontinued, the Board, on the
Audit Committee's recommendation, will appoint other accountants whose continued
employment after the Annual Meeting may be, but is not required to be, subject
to ratification by the stockholders. A representative of Coopers & Lybrand will
be present at the Annual Meeting to respond to appropriate questions of
stockholders and to make a statement if he or she so desires.
On April 8, 1997, the Board of Directors of the Company, acting upon the
recommendation of its Audit Committee, appointed Coopers & Lybrand as the
primary independent accountants of the Company for the fiscal year ended January
31, 1998 and determined not to engage Grant Thornton LLP ("Grant Thornton") as
the independent certified public accountants of the Company for such fiscal
year. Grant Thornton had been previously engaged to audit the Company's
financial statements for seven years, including the fiscal year ended January
31, 1997. Grant Thornton's report on the financial statements of the Company for
the fiscal years ended January 31, 1996 and January 31, 1997 did not contain any
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. There were no disagreements
with Grant Thornton on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements would have caused Grant Thornton to make reference to the subject
matter of the disagreement(s) in connection with its reports on the Company's
financial statements. Pursuant to a letter from Grant Thornton to the Securities
and Exchange Commission (the "SEC"), dated May 2, 1997, a copy of which is
attached as Exhibit 16 to Blyth's Current Report on Form 8-K/A filed on the same
date with the SEC, Grant Thornton agrees with the above statements.
------------------------
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at Blyth's 1999 Annual
Meeting of Stockholders must be received at Blyth's principal executive offices
located at 100 Field Point Road, Greenwich, Connecticut 06830 on or before
December 30, 1998 for consideration for inclusion in Blyth's Proxy Statement and
form of proxy relating to that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, Blyth's management does not know of
any business, other than that mentioned above, which will be presented for
consideration at the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies in accordance with
their best judgment on such matters.
18
<PAGE>
FINANCIAL STATEMENTS
Blyth's audited consolidated financial statements as at January 31, 1998 and
1997, and for the periods ended January 31, 1998, 1997, and 1996, are included
as part of the Annual Report which accompanies this Proxy Statement.
STOCKHOLDERS MAY OBTAIN, WITHOUT CHARGE, A COPY OF BLYTH'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1998, WHICH HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, BY WRITING TO INVESTOR RELATIONS DEPARTMENT,
BLYTH INDUSTRIES, INC., 100 FIELD POINT ROAD, GREENWICH, CONNECTICUT 06830.
By Order of the Board of Directors,
Bruce D. Kreiger, Secretary
April 29, 1998
19
<PAGE>
EXHIBIT A
[AMENDMENTS ARE SET FORTH IN BOLD ITALICS]
BLYTH INDUSTRIES, INC.
1994 EMPLOYEE STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF APRIL 8, 1998)
1. PURPOSE OF THE PLAN.
The purpose of the amended and restated BLYTH INDUSTRIES, INC. 1994 EMPLOYEE
STOCK OPTION PLAN (the "Plan") is (i) to further the growth and success of Blyth
Industries, Inc., a Delaware corporation (the "Company"), and its Subsidiaries
(as hereinafter defined) by enabling officers and employees of the Company and
any of its Subsidiaries to acquire shares of Common Stock, $.02 par value (the
"Common Stock"), of the Company, thereby increasing their personal interest in
such growth and success, and (ii) to provide a means of rewarding outstanding
performance by such persons to the Company and/or its Subsidiaries. Options
granted under the Plan may be either "incentive stock options" ("ISOs"),
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified stock options
("NSOs"). For purposes of the Plan, the terms "Parent" and "Subsidiary" shall
mean "Parent Corporation" and "Subsidiary Corporation", respectively, as such
terms are defined in Sections 424(e) and (f) of the Code. Unless the context
otherwise requires, any ISO or NSO shall hereinafter be referred to as an
"Option".
This amended and restated Plan (a) INCREASES THE NUMBER OF SHARES ISSUABLE
UPON EXERCISE OF OPTIONS GRANTED UNDER THE PLAN BY 500,000 SHARES TO 1,880,000
SHARES, (B) LIMITS THE MAXIMUM OPTION GRANTS TO AN EMPLOYEE IN ANY ONE YEAR TO
100,000 SHARES, and (c) makes certain other changes, including changes to
reflect a THREE-for-TWO stock split effected as a stock dividend in June 1997.
2. ADMINISTRATION OF THE PLAN.
(A) STOCK OPTION COMMITTEE.
So long as the Plan shall be required to comply with Rule 16b-3 ("Rule
16b-3") promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), in order to
permit transactions pursuant to the Plan by officers and employee directors of
the Company to be exempt from the provisions of Section 16(b) of the 1934 Act,
the Plan shall be administered by a committee (the "Committee") consisting of
two or more directors appointed to such Committee from time to time by the Board
of Directors of the Company (the "Board"), and each member of the Committee, at
the effective date of his or her appointment to the Committee, shall be a "non-
employee director" within the meaning of Rule 16b-3. The members of the
Committee may be removed at any time either with or without cause by the Board.
Any vacancy on the Committee, whether due to action of the Board or any other
cause, shall be filled by the Board. The term "Committee" shall, for all
purposes of the Plan other than this Section 2, be deemed to refer to the Board
if the Board is administering the Plan.
(B) PROCEDURES.
The Committee shall from time to time select a Chairman from among its
members and shall adopt such rules and regulations as it shall deem appropriate
concerning the holding of meetings and the administration of the Plan. A
majority of the entire Committee shall constitute a quorum and the actions of a
majority of the members of the Committee present at a meeting at which a quorum
is present, or actions approved in writing by all of the members of the
Committee, shall be the actions of the Committee; provided, however, that if the
Committee consists of only two members, both shall be required to constitute a
quorum and to act at a meeting or to approve actions in writing.
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(C) INTERPRETATION.
Except as otherwise expressly provided in the Plan, the Committee shall have
all powers with respect to the administration of the Plan, including, without
limitation, full power and authority to interpret the provisions of the Plan and
any Option Agreement (as defined in Section 5(b)), and to resolve all questions
arising under the Plan. All decisions of the Board or the Committee, as the case
may be, shall be conclusive and binding on all participants in the Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
(A) NUMBER OF SHARES.
Subject to the provisions of Section 9 (relating to adjustments upon changes
in capital structure and other corporate transactions), the number of shares of
Common Stock subject at any one time to Options granted under the Plan, plus the
number of shares of Common Stock theretofore issued and delivered pursuant to
the exercise of Options granted under the Plan, shall not exceed 1,880,000
shares. If and to the extent that Options granted under the Plan terminate,
expire or are cancelled without having been fully exercised, new Options may be
granted under the Plan with respect to the shares of Common Stock covered by the
unexercised portion of such terminated, expired or cancelled Options.
(B) CHARACTER OF SHARES.
The shares of Common Stock issuable upon exercise of an Option granted under
the Plan shall be (i) authorized but unissued shares of Common Stock, (ii)
shares of Common Stock held in the Company's treasury or (iii) a combination of
the foregoing.
(C) RESERVATION OF SHARES.
The number of shares of Common Stock reserved for issuance under the Plan
shall at no time be less than the maximum number of shares which may be
purchased at any time pursuant to outstanding Options.
4. ELIGIBILITY.
(A) GENERAL.
Options may be granted by the Committee under the Plan only to persons who
are officers or employees (including directors who are officers or employees) of
the Company or any of its Subsidiaries. Options granted under the Plan shall be,
in the discretion of the Committee, either ISOs or NSOs. Notwithstanding the
foregoing, Options may be conditionally granted to persons who are prospective
employees of the Company or any of its Subsidiaries; PROVIDED, HOWEVER, that any
such conditional grant of an ISO to a prospective employee shall, by its terms,
become effective no earlier than the date on which such person actually becomes
an employee.
(B) EXCEPTIONS.
Notwithstanding anything contained in Section 4(a) to the contrary:
(i) no ISO may be granted under the Plan to an employee who owns,
directly or indirectly (within the meaning of Sections 422(b)(6) and 424(d)
of the Code), stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its Parent or
Subsidiaries, if any, unless (A) the Option Price (as defined in Section
6(a)) of the shares of Common Stock subject to such ISO is fixed at not less
than 110% of the Fair Market Value on the date of grant (as determined in
accordance with Section 6(b)) of such shares and (B) such ISO, by its terms,
is not exercisable after the expiration of five years from the date it is
granted; and
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(ii) no Option may be granted to a person (A) who has been appointed
pursuant to Section 2(a) to serve on the Committee effective as of a future
date at any time during the period from the date such appointment is made to
the date such appointment is to become effective or (B) who is serving as a
member of the Committee.
5. GRANT OF OPTIONS.
(A) GENERAL.
Options may be granted under the Plan at any time and from time to time on
or prior to the Expiration Date (as defined in Section 12). Subject to the
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine:
(i) the persons (from among the class of persons eligible to receive
Options under the Plan) to whom Options shall be granted (the "Optionees");
(ii) the time or times at which Options shall be granted;
(iii) the number of shares subject to each Option;
(iv) the Option Price of the shares subject to each Option, which price
shall be not less than the minimum specified in Section 4(b)(i) or 6(a) (as
applicable); and
(v) the time or times when, or the occurrence of the event or events
upon which, each Option shall become exercisable and the duration of the
exercise period.
(B) OPTION AGREEMENTS.
Each Option granted under the Plan shall be designated as an ISO or an NSO
and shall be subject to the terms and conditions applicable to ISOs and/or NSOs
(as the case may be) set forth in the Plan. In addition, each Option shall be
evidenced by a written agreement (an "Option Agreement"), containing such terms
and conditions and in such form, not inconsistent with the Plan, as the
Committee shall, in its discretion, provide. Each Option Agreement shall be
executed by the Company and the Optionee.
(C) NO EVIDENCE OF EMPLOYMENT.
Nothing contained in the Plan or in any Option Agreement shall confer upon
any Optionee any right with respect to the continuation of his or her employment
by the Company or any of its Subsidiaries or interfere in any way with the right
of the Company or any such Subsidiary (subject to the terms of any separate
agreement to the contrary), at any time to terminate such employment or to
increase or decrease the compensation of the Optionee from the rate in existence
at the time of the grant of an Option.
(D) DATE OF GRANT.
The date of grant of an Option under the Plan shall be the date as of which
the Committee approves the grant; provided, however, that in the case of an ISO,
the date of grant shall in no event be earlier than the date as of which the
Optionee becomes an employee of the Company or one of its Subsidiaries.
6. OPTION PRICE.
(A) GENERAL.
Subject to Section 9, the price (the "Option Price") at which each share of
Common Stock subject to an Option granted under the Plan may be purchased shall
be determined by the Committee at the time the Option is granted; provided,
however, that in the case of an ISO (subject to Section 4(b)(i)) or an NSO, such
Option Price shall in no event be less than 100% of the Fair Market Value on the
date of grant (as determined in accordance with Section 6(b)) of such share of
Common Stock; and provided further,
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however, that, in the case of an Option granted effective on the Effective Date
(as defined in Section 7(a)), such Option Price shall be the initial public
offering price per share of the Common Stock.
(B) DETERMINATION OF FAIR MARKET VALUE.
Subject to the requirements of Section 422 of the Code, for purposes of the
Plan, the "Fair Market Value" of shares of Common Stock shall be equal to:
(i) if such shares are publicly traded, (x) if the Common Stock is then
traded on a national securities exchange, the average of the high and low
prices on the date of grant or, if such date is not a business day on which
shares are traded, the next immediately preceding trading day, or (y) the
closing price, if applicable, or the average of the last bid and asked
prices on the date of grant or, if such date is not a business day on which
shares are traded, the next immediately preceding trading day, in the
over-the-counter market as reported by NASDAQ; or
(ii) if there is no public trading market for such shares, the fair
value of such shares on the date of grant as determined by the Committee
after taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices of the Common
Stock in private transactions negotiated at arms' length.
Anything contained in the Plan to the contrary notwithstanding, all
determinations pursuant to Section 6(b)(ii) shall be made without regard to any
restriction other than a restriction which, by its terms, will never lapse.
(C) REPRICING OF NSOS.
Subsequent to the date of grant of any NSO, the Committee may, at its
discretion and with the consent of the Optionee, establish a new Option Price
for such NSO so as to increase or decrease the Option Price of such NSO.
7. EXERCISABILITY OF OPTIONS.
(A) COMMITTEE DETERMINATION.
Each Option granted under the Plan shall be exercisable at such time or
times, or upon the occurrence of such event or events, and for such number of
shares subject to the Option, as shall be determined by the Committee and set
forth in the Option Agreement evidencing such Option; PROVIDED, HOWEVER, that no
Option granted under the Plan shall be exercisable during the 180-day period
immediately following the effective date (the "Effective Date") of the
registration statement filed by the Company under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the initial public offering
of the Common Stock. Subject to the proviso of the immediately preceding
sentence, if an Option is not at the time of grant immediately exercisable, the
Committee may (i) in the Option Agreement evidencing such Option, provide for
the acceleration of the exercise date or dates of the subject Option upon the
occurrence of specified events and/or (ii) at any time prior to the complete
termination of such Option, accelerate the exercise date or dates of such
Option.
(B) AUTOMATIC TERMINATION OF OPTION.
The unexercised portion of any Option granted under the Plan shall
automatically terminate and shall become null and void and be of no further
force or effect upon the first to occur of the following:
(i) the tenth anniversary of the date on which such Option is granted
or, in the case of any ISO granted to a person described in Section 4(b)(i),
the fifth anniversary of the date on which such ISO is granted;
(ii) the expiration of such period of time or the occurrence of such
event as the Committee in its discretion may provide in the Option
Agreement;
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(iii) the effective date of a Corporate Transaction (as defined in
Section 9(b)) to which Section 9(b)(ii) (relating to assumptions and
substitutions of Options) does not apply; PROVIDED, HOWEVER, that an
Optionee's right to exercise any Option outstanding prior to such effective
date shall in all events be suspended during the period commencing 10 days
prior to the proposed effective date of such Corporate Transaction and
ending on either the actual effective date of such Corporate Transaction or
upon receipt of notice from the Company that such Corporate Transaction will
not in fact occur; and
(iv) except to the extent permitted by Section 9(b)(ii), the date on
which an Option or any part thereof or right or privilege relating thereto
is transferred (otherwise than by will or the laws of descent and
distribution), assigned, pledged, hypothecated, attached or otherwise
disposed of by the Optionee.
Anything contained in the Plan to the contrary notwithstanding, unless
otherwise provided in an Option Agreement, no Option granted under the Plan
shall be affected by any change of duties or position of the Optionee (including
a transfer to or from the Company or one of its Subsidiaries), so long as such
Optionee continues to be an officer or employee of the Company or one of its
Subsidiaries.
(C) LIMITATIONS ON EXERCISE.
Anything contained in the Plan to the contrary notwithstanding, an ISO
granted under the Plan to an Optionee shall not be exercisable to the extent
that the aggregate Fair Market Value on the date of grant of such ISO (as
determined in accordance with Section 6(b)) of all stock with respect to which
incentive stock options are exercisable for the first time by such Optionee
during any calendar year (under all plans of the Company and its Subsidiaries)
exceeds $100,000.
8. PROCEDURE FOR EXERCISE.
(A) PAYMENT.
At the time an Option is granted under the Plan, the Committee shall, in its
discretion, specify one or more of the following forms of payment which may be
used by an Optionee upon exercise of his Option:
(i) cash or personal or certified check payable to the Company in an
amount equal to the aggregate Option Price of the shares with respect to
which the Option is being exercised;
(ii) stock certificates (in negotiable form) representing whole shares
of Common Stock having a Fair Market Value on the date of exercise (as
determined in accordance with Section 6(b) as if the date of exercise were
the date of grant) equal to the aggregate Option Price of the shares with
respect to which the Option is being exercised;
(iii) (x) by arrangements which are acceptable to the Committee whereby
the Optionee delivers irrevocable instructions to a broker promptly to
deliver to the Company the amount of sale proceeds from the sale of shares
subject to the Option as is necessary to pay the Option Price and, unless
otherwise allowed by the Committee, any applicable tax withholding
obligation (provided that, in the case of an ISO, if this form of payment is
approved by the Committee, and if this form of payment is utilized by the
Optionee, a Disqualifying Disposition (as defined in Section 15 below) will
be deemed to have occurred) or (y) in compliance with any other cashless
exercise program authorized by the Company for use in connection with the
Plan at the time of such exercise (provided that, in the case of an ISO, if
this form of payment is approved by the Committee, and if this form of
payment is utilized by the Optionee, a Disqualifying Disposition may be
deemed to have occurred); or
(iv) a combination of the methods set forth in clauses (i), (ii) and
(iii);
(B) NOTICE.
An Optionee (or other person, as provided in Section 10(b)) may exercise an
Option granted under the Plan in whole or in part (but for the purchase of whole
shares only), as provided in the Option
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Agreement evidencing his or her Option, by delivering a written notice (the
"Notice") to the Secretary of the Company. The Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the Option is
being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares (which method
must be available to the Optionee under the terms of his or her Option
Agreement);
(iv) state the date upon which the Optionee desires to consummate the
purchase (which date must be prior to the termination of such Option and no
later than 30 days from the delivery of such Notice);
(v) include any representations of the Optionee required pursuant to
Section 10(a);
(vi) if the Option is exercised pursuant to Section 10(b) by any person
other than the Optionee, include evidence to the satisfaction of the
Committee of the right of such person to exercise the Option; and
(vii) include such further provisions consistent with the Plan as the
Committee may from time to time require.
The exercise date of an Option shall be the date on which the Company
receives the Notice from the Optionee.
Within 30 days of the exercise of the Option, the Optionee shall deliver to
the Company a copy of any election filed by the Optionee with the Internal
Revenue Service under Section 83(b) of the Code.
(C) ISSUANCE OF CERTIFICATES.
The Company shall issue a stock certificate in the name of the Optionee (or
such other person exercising the Option in accordance with the provisions of
Section 10(b)) for the Optioned Shares as soon as practicable after receipt of
the Notice and payment of the aggregate Option Price for such shares. Neither
the Optionee nor any person exercising an Option in accordance with the
provisions of Section 10(b) shall have any privileges as a stockholder of the
Company with respect to any shares of stock subject to an Option granted under
the Plan until the date of issuance of a stock certificate pursuant to this
Section 8(c).
9. ADJUSTMENTS.
(A) CHANGES IN CAPITAL STRUCTURE.
Subject to Section 9(b), if the Common Stock is changed by reason of a stock
split, reverse stock split, stock dividend or recapitalization, or converted
into or exchanged for other securities as a result of a merger, consolidation or
reorganization, the Committee shall make such adjustments in the number and
class of shares of stock with respect to which Options may be granted under the
Plan as shall be equitable and appropriate in order to make such Options, as
nearly as may be practicable, equivalent to such Options immediately prior to
such change. A corresponding adjustment changing the number and class of shares
allocated to, and the Option Price of, each Option or portion thereof
outstanding at the time of such change shall likewise be made. Anything
contained in the Plan to the contrary notwithstanding, in the case of ISOs, no
adjustment under this Section 9(a) shall be appropriate if such adjustment (i)
would constitute a modification, extension or renewal of such ISOs within the
meaning of Sections 422 and 424 of the Code, and the regulations promulgated by
the Treasury Department thereunder, or (ii) would, under Section 422 of the Code
and the regulations promulgated by the Treasury Department thereunder, be
considered the adoption of a new plan requiring stockholder approval.
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(B) CORPORATE TRANSACTIONS.
The following rules shall apply in connection with the dissolution or
liquidation of the Company, a reorganization, merger or consolidation in which
the Company is not the surviving corporation or a sale of all or substantially
all of the assets of the Company to another person or entity (a "Corporate
Transaction"):
(i) each holder of an Option outstanding at such time shall be given (A)
written notice of such Corporate Transaction at least 20 days prior to its
proposed effective date (as specified in such notice) and (B) an
opportunity, during the period commencing with delivery of such notice and
ending 10 days prior to such proposed effective date, to exercise the Option
to the full extent to which such Option would have been exercisable by the
Optionee at the expiration of such 20-day period; PROVIDED, HOWEVER, that
upon the effective date of a Corporate Transaction, all Options granted
under the Plan not so exercised shall automatically terminate; and
(ii) anything contained in the Plan to the contrary notwithstanding,
Section 9(b)(i) shall not be applicable if provision shall be made in
connection with such Corporate Transaction for the assumption of outstanding
Options by, or the substitution for such Options of new options covering the
stock of, the surviving, successor or purchasing corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number, kind and
option prices of shares subject to such options; PROVIDED, HOWEVER, that in
the case of ISOs, the Committee shall, to the extent not inconsistent with
the best interests of the Company or its Subsidiaries (such best interests
to be determined in good faith by the Committee in its sole discretion), use
its best efforts to ensure that any such assumption or substitution will not
constitute a modification, extension or renewal of the ISOs within the
meaning of Section 424(h) of the Code and the regulations promulgated by the
Treasury Department thereunder.
(C) SPECIAL RULES.
The following rules shall apply in connection with Section 9(a) and (b)
above:
(i) no fractional shares shall be issued as a result of any such
adjustment, and any fractional shares resulting from the computations
pursuant to Section 9(a) or (b) shall be eliminated without consideration
from the respective Options;
(ii) no adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional shares of Common Stock or
other securities; and
(iii) any adjustments referred to in Section 9(a) or (b) shall be made by
the Committee in its sole discretion and shall be conclusive and binding on
all persons holding Options granted under the Plan.
10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.
(A) COMPLIANCE WITH SECURITIES LAWS.
No Options shall be granted under the Plan, and no shares of Common Stock
shall be issued and delivered upon the exercise of Options granted under the
Plan, unless and until the Company and/or the Optionee shall have complied with
all applicable Federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
The Committee in its discretion may, as a condition to the exercise of any
Option granted under the Plan, require an Optionee (i) to represent in writing
that the shares of Common Stock received upon exercise of an Option are being
acquired for investment and not with a view to distribution and (ii) to make
such other representations and warranties as are deemed appropriate by counsel
to the Company.
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Stock certificates representing shares of Common Stock acquired upon the
exercise of Options that have not been registered under the Securities Act
shall, if required by the Committee, bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN
OPINION OF COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT."
(B) NONASSIGNABILITY OF OPTION RIGHTS.
No Option granted under the Plan shall be assignable or otherwise
transferable by the Optionee except by will or by the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee. If an Optionee dies, his or her Option shall thereafter be
exercisable, during the period specified in the Option Agreement, by his or her
executors or administrators to the full extent to which such Option was
exercisable by the Optionee at the time of his or her death.
(C) MAXIMUM OPTION GRANT.
THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK WITH RESPECT TO WHICH OPTIONS
MAY BE GRANTED UNDER THIS PLAN MAY BE MADE TO AN EMPLOYEE OF THE COMPANY IN ANY
CALENDAR YEAR SHALL NOT EXCEED 100,000 SHARES (SUBJECT TO ADJUSTMENT FOR STOCK
SPLITS, REVERSE STOCK SPLITS, STOCK DIVIDENDS AND STOCK COMBINATIONS, AND THE
LIKE).
11. EFFECTIVE DATE OF PLAN.
The Plan became effective on the Effective Date.
This amendment and restatement of the Plan is effective as of APRIL 8, 1998;
PROVIDED, HOWEVER, THAT NO OPTION GRANTED ON OR AFTER APRIL 7, 1998 (BUT AS TO
OPTIONS GRANTED ON APRIL 7, 1998, ONLY THOSE OPTIONS DESIGNATED BY THE COMMITTEE
AS BEING EXERCISABLE FOR SHARES IN EXCESS OF THE 1,380,000 SHARES ORIGINALLY
RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS GRANTED HEREUNDER) SHALL BE
EXERCISABLE BY AN OPTIONEE UNLESS AND UNTIL THE AMENDMENT TO SECTION 3(A) HEREOF
INCREASING THE NUMBER OF SHARES SUBJECT TO THE PLAN FROM 1,380,000 TO 1,880,000
SHALL HAVE BEEN APPROVED BY THE STOCKHOLDERS OF THE COMPANY IN ACCORDANCE WITH
THE PROVISIONS OF ITS CERTIFICATE OF INCORPORATION AND BY-LAWS, WHICH APPROVAL
SHALL BE OBTAINED WITHIN 12 MONTHS AFTER THE ADOPTION OF SUCH AMENDMENT BY THE
BOARD.
12. EXPIRATION AND TERMINATION OF THE PLAN.
Except with respect to Options then outstanding, the Plan shall expire on
the date (the "Expiration Date") which is the first to occur of (i) the later of
(a) the tenth anniversary of the Effective Date and (b) the tenth anniversary of
the date on which the Plan is approved by the stockholders of the Company and
(ii) the date as of which the Board, in its sole discretion, determines that the
Plan shall terminate. Any Options outstanding as of the Expiration Date shall
remain in effect until they have been exercised or terminated or have expired by
their respective terms.
13. AMENDMENT OF PLAN.
The Board may at any time prior to the Expiration Date modify and amend the
Plan in any respect; PROVIDED, HOWEVER, that the approval of the holders of a
majority of the votes that may be cast by all of the holders of shares of Common
Stock and preferred stock of the Company, if any, entitled to vote (voting as a
single class) shall be obtained prior to any such amendment becoming effective
if such approval is required by law or is necessary to comply with regulations
promulgated by the SEC under Section 16(b) of
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the 1934 Act or with Section 422 of the Code or the regulations promulgated by
the Treasury Department thereunder.
14. CAPTIONS.
The use of captions in the Plan is for convenience. The captions are not
intended to provide substantive rights.
15. DISQUALIFYING DISPOSITIONS.
If Optioned Shares acquired by exercise of an ISO granted under the Plan are
disposed of within two years following the date of grant of the ISO or one year
following the transfer of the Optioned Shares to the Optionee (a "Disqualifying
Disposition"), the holder of the Optioned Shares shall, immediately prior to
such Disqualifying Disposition, notify the Company in writing of the date and
terms of such Disqualifying Disposition and provide such other information
regarding the Disqualifying Disposition as the Company may reasonably require.
16. WITHHOLDING TAXES.
Whenever under the Plan shares of Common Stock are to be delivered to an
Optionee upon exercise of an Option, the Company shall be entitled to require as
a condition of delivery that the Optionee remit or, in appropriate cases, agree
to remit when due, an amount sufficient to satisfy all current or estimated
future Federal, state and local withholding tax and employment tax requirements
relating thereto. At the time of a Disqualifying Disposition, the Optionee shall
remit to the Company in cash the amount of any applicable Federal, state and
local withholding taxes and employment taxes.
17. OTHER PROVISIONS.
Each Option granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Committee,
in its sole discretion. Notwithstanding the foregoing, each ISO granted under
the Plan shall include those terms and conditions which are necessary to qualify
the ISO as an "incentive stock option" within the meaning of Section 422 of the
Code and the regulations thereunder and shall not include any terms or
conditions which are inconsistent therewith.
18. NUMBER AND GENDER.
With respect to words used in the Plan, the singular form shall include the
plural form, the masculine gender shall include the feminine gender, and
vice-versa, as the context requires.
19. GOVERNING LAW.
The validity and construction of the Plan and the instruments evidencing the
Options granted hereunder shall be governed by the laws of the State of
Delaware.
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PROXY BLYTH INDUSTRIES, INC. PROXY
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders to be Held on June 9, 1998
The undersigned appoints Robert B. Goergen and Howard E. Rose, or either
of them, proxies for the undersigned, each with full power of substitution,
to attend the Annual Meeting of Stockholders of Blyth Industries, Inc., to be
held on June 9, 1998 at 9:00 A.M., EDT, and at any adjournments or
postponements of the Annual Meeting, and to vote as specified in this Proxy
all of the Common Stock of the Company which the undersigned would be
entitled to vote if personally present. This Proxy also provides confidential
voting instructions to the Trustees of the Blyth Industries, Inc. Profit
Sharing Retirement Plan with respect to shares of Common Stock held in
accounts under such Plan. This Proxy when properly executed will be voted in
accordance with your indicated directions. If no direction is made, this
Proxy will be voted FOR the election of Directors, FOR the ratification of
the Company's independent accountants, FOR the Plan Shares Amendment (as
defined on the reverse) and FOR the 162(m) Amendment (as defined on the
reverse). On any other matters which may come before the Annual Meeting, and
any adjournments or postponements thereof, this Proxy will be voted in the
discretion of the persons named as proxies or the Trustees (in the case of
participants in the Plan referred to above).
The Board of Directors recommends a vote FOR the election of Directors,
FOR the ratification of the Company's independent accountants, FOR the Plan
Shares Amendment and FOR the 162(m) Amendment.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(Continued and to be signed on reverse side.)
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PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Withhold
1. Election of Directors: For Authority For all 3. Amendment to the Company's Amended and
Nominees: Robert B. Goergen, All For All Except* Restated 1994 Employee Stock Option Plan For Against Abstain
Neal I. Goldman and (the "Employee Plan'') to increase the / / / / / /
Howard E. Ross / / / / / / number of shares of the Company's Common
Stock authorized to be issued under the / / / / / /
Employee Plan by 500,000 shares (the "Plan
_________________________________ Shares Amendment").
*(Except nominee(s) written above)
2. Ratification of the appointment For Against Abstain 4. Amendment to the Employee Plan to limit the
Coopers & Lybrand L.L.P. as the / / / / / / the maximum option grants that may be made / / / / / /
Company's independent accountants to an employee in any one year (the "162(m)
for the upcoming year. Amendment").
5. In their discretion upon such other matters
as may properly come before the meeting and
any adjournments or postponements thereof.
Please complete, sign and mail this proxy promptly in the enclosed
envelope. No postage is required for mailing in United States.
Dated:__________________________, 1998
Signatures(s)__________________________________________________________
Important: Please date this proxy and sign exactly as your name appears
on this proxy. If shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give title as such. If corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
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FOLD AND DETACH HERE
ANNUAL MEETING
OF
Blyth Industries, Inc.
Tuesday, June 9, 1998
9:00 A.M.
The Greenwich Public Library
Cole Auditorium
101 West Putnam Avenue
Greenwich, Connecticut 06830
