<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
STANHOME INC.
__________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
__________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
______________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________
5) Total fee paid:
______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________
3) Filing Party:
______________________________________________________
4) Date Filed:
______________________________________________________
<PAGE>
STANHOME INC.
333 WESTERN AVENUE
WESTFIELD, MASSACHUSETTS 01085
________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 25, 1996
Notice is hereby given that the Annual Meeting of Stockholders of
Stanhome Inc. will be held at the principal executive offices of the
Company at 333 Western Avenue, Westfield, Massachusetts 01085, at 9:30 a.m.
on Thursday, April 25, 1996, for the following purposes:
1. To elect three Class I Directors for a three-year term.
2. To ratify the appointment by the Board of Directors of Arthur
Andersen LLP as independent accountants for 1996.
3. To take action with respect to the proposed 1996 Stock Option
Plan.
4. To transact such other business as may properly come before the
meeting and any postponement or adjournment thereof.
Stockholders of record as of the close of business on March 1, 1996
will be entitled to vote at the Annual Meeting and any postponement or
adjournment thereof.
By Order of the Board of Directors,
BRUCE H. WYATT, Clerk
Westfield, Massachusetts
March 15, 1996
________________________________________
IMPORTANT
All Stockholders are cordially invited to attend the meeting.
Whether or not you plan to attend in person, you are urged to complete,
date, and sign the enclosed Proxy card and return it promptly in the
envelope provided. This will assure your representation and a quorum for
the transaction of business at the meeting. If you do attend the meeting,
you may vote in person, if you desire to do so, even if you had returned a
Proxy card.
<PAGE>
STANHOME INC.
PROXY STATEMENT
March 15, 1996
SOLICITATION AND REVOCATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors for use
at the Annual Meeting of Stockholders of Stanhome Inc. (the "Company") to
be held at 9:30 a.m. on Thursday, April 25, 1996, at the principal
executive offices of the Company, 333 Western Avenue, Westfield,
Massachusetts 01085. Any Proxy given pursuant to this solicitation may be
revoked by the person giving it at any time before it is voted. Proxies
may be revoked by (i) filing with the Clerk, at or before the 1996 Annual
Meeting of Stockholders (the "Annual Meeting"), a written notice of
revocation bearing a later date than the Proxy; (ii) duly executing and
submitting a subsequent Proxy relating to the Annual Meeting; or (iii)
voting in person at the Annual Meeting (although attendance at the Annual
Meeting will not, in and of itself, constitute a revocation of a Proxy).
Any written notice revoking a Proxy should be sent to Bruce H. Wyatt,
Clerk, Stanhome Inc., 333 Western Avenue, Westfield, Massachusetts 01085.
The expense of solicitation of Proxies will be borne by the Company.
The Company has retained Morrow & Co., New York, New York, to aid in the
solicitation of Proxies. It is estimated that the cost of these services
will be approximately $6,500 plus expenses. Proxies will be solicited by
personal interview, mail, and telephone. Brokerage houses, other
custodians, and nominees will be asked whether other persons are the
beneficial owners of the Common Stock, par value $.125 per share, together
with the associated common stock purchase rights (the "Common Stock") which
they hold of record, and, if so, they will be supplied with additional
copies of the Proxy and Proxy materials for distribution to such beneficial
owners. The Company will, in addition, reimburse parties holding shares of
Common Stock in their names or in the names of their nominees for their
reasonable expenses in sending Proxies and Proxy materials to the
beneficial owners of the shares of Common Stock (the "Stockholders").
The matters to be considered and acted upon at the Annual Meeting are
referred to in the preceding Notice. If the enclosed Proxy is properly
executed and returned to the Company, all shares represented thereby will
be voted as indicated thereon.
The address of the Company's principal executive offices is 333
Western Avenue, Westfield, Massachusetts 01085, U.S.A. This Proxy
Statement and the accompanying Proxy card are being mailed on or about
March 15, 1996 to each Stockholder of record as of the close of business on
March 1, 1996.
ANNUAL REPORT
The Annual Report to Stockholders of the Company for the year ended
December 31, 1995, including the financial statements for the 1995 fiscal
year, is to be accompanied by this Proxy Statement and mailed on or about
March 15, l996 to each Stockholder of record as of the close of business on
March 1, 1996.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On March 1, 1996, there were outstanding 18,361,919 shares of the
Company's Common Stock, which is the only class of stock outstanding and
entitled to vote at the Annual Meeting and any postponement or adjournment
thereof. The holders of such shares will be entitled to cast one vote for
-2-
<PAGE>
each share held of record as of the record date. To the best knowledge of
the Company, the only beneficial owners of more than 5% of the Company's
Common Stock as of December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Title of Name and Address of Beneficial of
Class Beneficial Owner Ownership (1) Class
<S> <C> <C> <C>
Common Stock FMR Corp. 1,033,500 shares 5.64%
82 Devonshire Street with sole dis-
Boston, MA 02109 positive power (of
which FMR owns
130,000 shares with
sole voting power)
Common Stock GeoCapital Corporation 1,013,000 shares 5.53%
767 Fifth Avenue with sole dis-
New York, NY 10153 positive power (of
which Wilma J.
Engel, a managing
director of
GeoCapital, owns
200 shares with
sole voting power)
</TABLE>
Management of the Company beneficially owned, as of January 31, 1996,
shares of the Company's Common Stock as follows:
<TABLE>
<CAPTION>
Amount and Nature Percent
Title of Name of of Beneficial of
Class Beneficial Owner Ownership (1)(2) Class(3)
<S> <C> <C> <C>
Common Stock John F. Cauley, Jr. 6,650 shares owned directly --
and 0 shares owned indirectly
Common Stock Janet M. Clarke 1,675 shares owned directly --
and 0 shares owned indirectly
Common Stock Charles W. Elliott 2,575 shares owned directly --
and 0 shares owned indirectly
Common Stock Judith R. Haberkorn 2,550 shares owned directly --
and 0 shares owned indirectly
Common Stock Thomas R. Horton 5,650 shares owned directly --
and 0 shares owned indirectly
Common Stock Allan G. Keirstead 181,676 shares owned directly --
and 1,258 shares owned
indirectly
Common Stock Homer G. Perkins 22,920 shares owned directly --
and 14,000 shares owned
indirectly (4)
Common Stock G. William Seawright 143,375 shares owned directly --
and 69 shares owned indirectly
-3-
<PAGE>
Common Stock H. L. Tower 110,359 shares owned directly --
and 0 shares owned indirectly
Common Stock Anne-Lee Verville 4,550 shares owned directly --
and 0 shares owned indirectly
Common Stock John J. Dur 9,250 shares owned directly --
and 0 shares owned indirectly
Common Stock Eugene Freedman 182,134 shares owned directly 1.20%
and 40,353 shares owned
indirectly (5)
Common Stock Bruce H. Wyatt 55,459 shares owned directly --
and 7,003 shares owned
indirectly (6)
Common Stock All Directors and 835,888 shares owned directly 4.76%
Executive Officers and 64,866 shares owned
as a Group indirectly
(17 persons)
___________________________________________________________________________
<FN>
(1)Unless otherwise noted, the nature of beneficial ownership is sole
voting and/or dispositive power. Fractional amounts have been rounded to
the nearest whole share of Common Stock.
(2)Includes shares over which the Directors, the named Executive
Officers, and All Directors and Executive Officers as a Group are deemed to
hold sole voting and/or dispositive power by reason of options granted to
them under the Company's 1984 and 1991 Stock Option Plans and Special
Interim Chief Executive Officer Stock Option Plan which are exercisable on
January 31, 1996, or within 60 days thereafter, including as follows: Mr.
Cauley (5,250 shares), Ms. Clarke (1,125 shares), Mr. Elliott (375 shares),
Ms. Haberkorn (2,250 shares), Messrs. Horton (5,250 shares), Keirstead
(135,000 shares), Perkins (5,250 shares), Seawright (142,375 shares), and
Tower (32,250 shares), Ms. Verville (3,750 shares), and Messrs. Dur (8,750
shares), Freedman (150,400 shares), and Wyatt (44,450 shares).
(3)Unless otherwise noted, percent of class of each Director and
named Executive Officer is less than 1%.
(4)Includes 14,000 shares of Common Stock held by the residuary trust
established under the Will of Frank Stanley Beveridge. Mr. Perkins shares
voting and dispositive power over these shares and disclaims any beneficial
interest in all such shares.
(5)Includes 35,000 shares of Common Stock owned by the Eugene
Freedman Family Limited Partnership, of which Mr. Freedman is the General
Partner, and 5,000 shares owned by the Eugene Freedman Family Foundation,
of which Mr. Freedman is an officer and a director. Mr. Freedman shares
voting and dispositive power over these shares and disclaims any beneficial
interest in all such shares except to the extent of his beneficial interest
in the Limited Partnership and the Foundation.
(6)Includes 6,000 shares of Common Stock owned by the spouse of Mr.
Wyatt.
</TABLE>
ELECTION OF DIRECTORS
Effective as of the Annual Meeting, the Board of Directors of the
-4-
<PAGE>
Company (the "Board") consists of ten members who are constituted into
three separate classes serving three years each with one class being
elected each year. The term of office of the three incumbent Class I
Directors, Ms. Judith R. Haberkorn and Messrs. Thomas R. Horton and H.L.
Tower, expires at the Annual Meeting. The Board proposes their election
for a three-year term expiring at the annual meeting of Stockholders in
April 1999. The election of the three nominees named above requires the
affirmative vote of the holders of a majority of the Common Stock present
in person or represented by Proxy at the Annual Meeting at which there is a
quorum. Abstentions will be treated as votes cast and will have the effect
of votes against in the voting count for the election of Directors. Shares
of Common Stock that are represented by a broker and not voted with respect
to a particular matter are not treated as being present at the Annual
Meeting and will have no effect on the voting count.
The Board has adopted several policies concerning resignation and
retirement of Directors from the Board, one providing for review by the
Board of a Director's continued membership following a change in principal
employment, and another providing for retirement at age 72, excluding Mr.
Perkins who is not subject to this policy.
It is intended that Proxies of Stockholders containing no designation
to the contrary will be voted for the election of the three nominees named
above.
If for any reason any nominee is not available to serve when the
election occurs, the persons named in the Proxies will vote the Proxies in
accordance with their best judgment. The Board has no reason to believe
that any nominee will not be available.
INFORMATION AS TO BOARD OF DIRECTORS AND NOMINEES
NOMINEES FOR DIRECTOR IN CLASS I
Terms Expiring in 1999
___________________________________________________________________________
JUDITH R. HABERKORN Vice President, Individual
Communication Services, NYNEX
Corporation, New York, NY since
Director since 1993 [Photograph 1995. Formerly Vice President-
of Director Consumer Markets, NYNEX Corporation,
Age 49 omitted] New York, NY since 1994; Vice
President-Sales and Marketing, New
York Telephone Co. since 1992; and
Vice President - Materials Manage-
ment, Telesector Resources Group,
Inc., a NYNEX company, New York, NY
in 1990 after serving as General
Manager Access Markets, New England
Telephone Company, a NYNEX company,
Boston, MA since 1988. Member of
the Company's Audit and Organization
Committees.
___________________________________________________________________________
THOMAS R. HORTON Retired as Chairman and Chief Execu-
tive Officer of American Management
Association, New York, NY in 1992
Director since 1991 [Photograph and 1991, respectively, after serv-
-5-
<PAGE>
of Director ing since 1989 and 1982,
Age 69 omitted] respectively. Chairman of the
Company's Organization Committee and
member of the Audit Committee.
___________________________________________________________________________
H. L. TOWER Chairman of the Board since 1982 and
Chief Executive Officer from 1978 to
1990; retired as an associate from
Director since 1978 [Photograph the Company in 1992; served briefly
of Director in 1993 as interim President and
Age 63 omitted] Chief Executive Officer. Also,
Director of Tambrands, Inc., White
Plains, NY. Chairman of the
Company's Executive Committee and
member of the Audit and Organization
Committees.
___________________________________________________________________________
DIRECTORS CONTINUING IN OFFICE IN CLASS II
Terms expiring in 1997
___________________________________________________________________________
JANET M. CLARKE Senior Vice President, Information
Services Sector, R.R. Donnelley &
Sons Company ("Donnelley"),
Director since 1994 [Photograph New York, NY since 1994. Formerly
of Director Senior Vice President, Digital Print
Age 43 omitted] Division - Information Services
Group since 1995; Senior Vice
President, Manufacturing -Financial
Printing Services Group since 1992;
and Senior Vice President and Vice
President - Documentation Services
Group of Donnelley since 1990 and
1988, respectively. Also, Director
of Cox Communications, Inc.,
Atlanta, GA and 77 Capital
Corporation (a Donnelley venture
capital investment company),
Chicago, IL. Member of the
Company's Audit and Organization
Committees.
___________________________________________________________________________
CHARLES W. ELLIOTT Retired in 1995 as Executive Vice
President - Administration, Chief
Financial Officer, Kellogg Company,
Director since 1995 [Photograph Battle Creek, MI, after serving
of Director since 1987 and 1988, respectively.
Age 64 omitted] Also, Director of Munder Funds,
Detroit, MI and Cobra Golf, Inc.,
Carlsbad, CA. Member of the
Company's Audit and Compensation and
Stock Option Committees.
___________________________________________________________________________
-6-
<PAGE>
ALLAN G. KEIRSTEAD Executive Vice President and Chief
Administrative and Financial
Officer of the Company since 1988.
Director since 1985 [Photograph Member of the Company's Executive
of Director Committee.
Age 51 omitted]
___________________________________________________________________________
DIRECTORS CONTINUING IN OFFICE IN CLASS III
Terms expiring in 1998
___________________________________________________________________________
JOHN F. CAULEY, JR. Retired as President of Friendly Ice
Cream Corporation, a subsidiary of
Tennessee Restaurant Company,
Director since 1987 [Photograph Memphis, TN, in 1989. Chairman of
of Director the Company's Audit Committee and
Age 63 omitted] member of the Compensation and Stock
Option Committee.
___________________________________________________________________________
HOMER G. PERKINS Retired as Chairman of the Board of
the Company in 1982. Member of the
Company's Executive, Audit, and Com-
Director since 1954 [Photograph pensation and Stock Option
of Director Committees.
Age 79 omitted]
___________________________________________________________________________
G. WILLIAM SEAWRIGHT President and Chief Executive
Officer of the Company since 1993.
Formerly President and Chief Execu-
Director since 1990 [Photograph tive Officer of The Paddington Corp-
of Director oration, an importer of wines and
Age 54 omitted] spirits, Fort Lee, NJ, since 1990,
after having previously served as
President of Heublein International
and Senior Vice President of
Heublein, Inc. since 1986. Member
of the Company's Executive
Committee.
___________________________________________________________________________
ANNE-LEE VERVILLE General Manager - Worldwide
Education Industry of International
Business Machines Corporation
Director since 1991 [Photograph ("IBM"), White Plains, NY, since
of Director 1994. Formerly President-General
Age 50 omitted] Sector Division of IBM since 1991
and Assistant General Manager,
Financial Planning for IBM in 1990
after serving as Assistant General
Manager, Finance and Planning of IBM
US Marketing and Services since
1988. Chairman of the Company's
Compensation and Stock Option
Committee and member of the Audit
and Executive Committees.
-7-
<PAGE>
_____________________________________________________________________________
REMUNERATION OF NON-EMPLOYEE DIRECTORS
The Board establishes the compensation paid to each Director, who is
not also an employee of the Company, for all services in such capacity.
The current schedule of such amounts is as follows:
(1) For service as a member of the Board, a retainer of 200 shares
of the Company's Common Stock and $15,000 per annum, plus
$1,200 for attendance at each meeting of the Board;
(2) For service as Chairman of the Board, an additional retainer of
$50,000 per annum;
(3) For service as a Board Committee member, an attendance fee of
$800 for each Committee meeting and meeting held in connection
with the selection of potential nominees for positions on the
Board; and
(4) For service as Chairman of a Committee of the Board, an
additional attendance fee of $200 per Committee or other
meeting referred to above.
Payment of these cash amounts may be partially or fully deferred by
the Director at interest (at the Company's cost of borrowing) until a later
year, retirement from the Board, or in the event of a change in control of
the Company in which case the Director will also be reimbursed for any
excise or other taxes incurred as a result of such payment.
In addition, for the five-year period ended in 1995, as of the day
following the annual meeting of Stockholders each then serving non-employee
Director received a grant of 1,500 non-qualified options to purchase shares
of the Company's Common Stock at an exercise price equal to the fair market
value of the Common Stock on the grant date. The options vest in 25%
increments on February 1 in each of the four succeeding years after the
grant and expire on the tenth anniversary of the grant.
The Board has also adopted the 1996 Stock Option Plan, subject to the
Stockholders' approval, under which, for the three-year period ending in
1998, as of the day following the annual meeting of Stockholders each then
serving non-employee Director receives a grant of 1,500 non-qualified
options to purchase shares of the Company's Common Stock at an exercise
price equal to the fair market value of the Common Stock on the grant date.
The options vest on the eighth anniversary of the grant, unless they have
already vested as provided for in the Plan, and expire on the tenth
anniversary of the grant. The terms of the proposed 1996 Stock Option Plan
are more fully described elsewhere in this Proxy Statement.
Upon retirement of a non-employee Director at any time after age 60
with 5 years of service on the Board, he or she will become an "Advisory
Director" who may be called upon for advice by the Chief Executive Officer
of the Company as the occasion arises. For such services, an Advisory
Director shall receive, in addition to current attendance fees for his or
her requested participation at meetings, the annual retainer at the rate in
effect at the time of his or her retirement for a period of years equal to
the Director's years of service but not in excess of 10 years or until his
or her earlier death. In the event of a change in control of the Company,
each Advisory Director and each Director then eligible to retire and become
an Advisory Director will receive the balance of the retainer payments due
for his or her term, or remainder thereof, as an Advisory Director, plus
reimbursement for any excise or other taxes incurred as a result of such
payment.
-8-
<PAGE>
Directors receive reimbursement from the Company for expenses
incurred in connection with service in that capacity. Directors who are
also employees of the Company receive no additional compensation for their
services as Directors.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
Committees
The Audit Committee comprised of eight members previously identified
held three meetings during 1995. This Committee, which consists entirely
of non-employee Directors, provides oversight of the Company's audit,
accounting, reporting, and control practices and provides a non-management
link between the Board and the Vice President of the Company's internal
auditing department. This Committee reviews the activities of the internal
auditing department and the Company's independent accountants. It also
reviews the adequacy of the Company's accounting, financial, and operating
controls and reports to the full Board as necessary.
The Compensation and Stock Option Committee comprised of four members
previously identified held six meetings during 1995. This Committee, which
consists entirely of non-employee Directors, determines compensation policy
for the Company, approves or recommends to the Board compensation of the
Directors and officers of the Company, reviews and acts on recommendations
from the Chief Executive Officer which concern awarding of stock options
and administering the stock option plans of the Company and the Non-
employee Director Stock Plan.
The Organization Committee comprised of four members previously
identified held two meetings during 1995. This Committee, which consists
entirely of non-employee Directors, provides the Board with Director and
corporate officer recommendations, including the Chief Executive Officer of
the Company, proposes to the Board each year a slate of Directors for
recommendation and submission to the Stockholders at the Company's next
annual meeting of Stockholders, and deals with all aspects of the Director
selection process, reviewing prospective Director candidates in the light
of anticipated resignations and retirements and the appropriate composition
of the Board.
In accordance with the Company's Restated Articles of Organization,
as amended, the Organization Committee will consider a nominee for election
to the Board recommended by a Stockholder if the Stockholder gives notice
in writing to the Secretary of the Company, at least 45 days in advance of
the anniversary of the date of the previous annual meeting of Stockholders,
which notice includes:
(a) The name and address of the Stockholder who intends to make the
nomination and the name and address of the person or persons to
be nominated;
(b) A representation that the Stockholder is a holder of record of
the Company and intends to appear in person or by proxy at the
Company's next annual meeting of Stockholders to nominate the
person or persons specified in the notice;
(c) A description of all arrangements or understandings between the
Stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the
nomination or nominations are to be made by the Stockholder;
(d) Such other information regarding each nominee proposed by such
Stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities
and Exchange Commission; and
-9-
<PAGE>
(e) The consent of each nominee to serve as a Director if so
elected.
In addition to the Committee meetings referred to above, the full
Board held seven regular meetings and two special meetings during 1995.
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended December
31, 1995, 1994, and 1993, the cash compensation paid by the Company and its
subsidiaries, as well as all other plan and non-plan compensation awarded
to, earned by, or paid to the Chief Executive Officer, and the four most
highly compensated Executive Officers of the Company, other than the Chief
Executive Officer, who were serving at the end of 1995 (all five persons
collectively, the "Named Executive Officers") for all services rendered in
all capacities to the Company and its subsidiaries:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compen-
Annual sation
Compensation (7) Awards (8)
Other Securities
Name Annual Under- All Other
and Compen- lying Compen-
Principal sation Options sation
Position Year Salary($) Bonus($)(9)($) (#) ($)(10)
<S> <C> <C> <C> <C> <C> <C>
G. W. Seawright, 1995 $533,750 $ 230,713 $ 58,865(11) 125,000 $41,295
President and 1994 500,000 341,900 72,030(12) 114,000 11,977
Chief Executive 1993 72,318 0 131,505(13) 101,500 31,228
Officer
J. J. Dur, 1995 249,167 38,621 348,852(14) 35,000 3,866
Vice President 1994 - - - - -
(Chief Executive 1993 - - - - -
Officer of
Stanhome
Worldwide
Direct Selling
Group)
E. Freedman, 1995 475,000 4,078,950 - 40,000 30,608
Executive Vice 1994 475,000 3,472,050 - 43,000 30,626
President 1993 475,000 2,615,650 - 20,000 30,626
(President of
Enesco Corpora-
tion and Chief
Executive Officer
of Enesco
Worldwide
Giftware Group)
A. G. Keirstead, 1995 348,250 121,888 - 40,000 21,511
Executive Vice 1994 331,000 156,695 - 42,000 6,991
President and 1993 325,750 50,000 - 20,000 7,766
Chief Administra-
tive and
Financial Officer
-10-
<PAGE>
B. H. Wyatt, 1995 189,313 57,930 - 15,000 5,026
Vice President, 1994 181,250 85,804 - 13,000 4,623
General Counsel, 1993 178,938 17,900 - 6,000 4,585
Secretary, and
Clerk
_____________________________________________________________________________
<FN>
(7)Annual compensation includes bonus compensation for the year,
whether paid in that year or in the succeeding year, under agreements with
Messrs. Seawright and Freedman, and pursuant to the Company's Management
Incentive Plan with respect to Messrs. Dur, Keirstead, and Wyatt, and,
except for Mr. Freedman, also includes salary compensation deferred through
the Company's Investment Savings Plan and Supplemental Investment Savings
Plan.
(8)All long term compensation awards to the Named Executive Officers
during the three-year period were made in the form of non-qualified stock
options granted under the Company's 1991 Stock Option Plan. No stock
appreciation rights ("SARs") were awarded either singly or in tandem with
the granted options.
(9)Totals for 1994 and 1993 have been restated to comport with the
format used in 1995 for reporting only performance-related bonuses in this
column.
(10)All other compensation in 1995 consisted of the following
items for each of the Named Executive Officers: G. W. Seawright,
$1,500 matching contribution under the Company's 401(k) Investment
Savings Plan and $25,778 matching contribution under the Company's
Supplemental Investment Savings Plan, $500 contribution under the
Company's Payroll-Based Stock Ownership Plan ("PAYSOP Contribution"),
and $13,517 insurance premiums paid by the Company with respect to
term life insurance for his benefit ("Insurance Premiums"); J. J. Dur,
$3,866 Insurance Premiums; E. Freedman, $22,500 contribution under the
Enesco Profit Sharing Plan and $7,500 contribution under the Enesco
Supplemental Profit Sharing Plan, $500 PAYSOP Contribution, and $108
Insurance Premiums; A. G. Keirstead, $1,500 matching contribution
under the Company's 401(k) Investment Savings Plan and $14,247
matching contribution under the Company's Supplemental Investment
Savings Plan, $500 PAYSOP Contribution, and $5,264 Insurance Premiums;
and B. H. Wyatt, $1,778 matching contribution under the Company's
401(k) Investment Savings Plan, $500 PAYSOP Contribution, and $2,748
Insurance Premiums.
(11)Includes $28,894 in automobile allowance and $24,521 in
reimbursed tax payments relating to relocation expenses for G. W.
Seawright.
(12)Includes $20,833 in relocation settling-in allowance paid to
G. W. Seawright.
(13)Includes $110,000 paid to G. W. Seawright upon commencement
of his employment.
(14)Includes $322,752 in total costs, including taxes, incurred
by the Company for J. J. Dur under the Company's Expatriate Policy.
</TABLE>
The following table contains information concerning individual grants
of stock options made by the Company to each of the Named Executive
Officers during the last fiscal year:
-11-
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Grant Date
Individual Grants (15) Value
Number
of Sec- % of
urities Total
Under- Options Grant
lying Granted to Exercise Date
Options Employees or Base Present
Granted in Fiscal Price Expiration Value
Name (#)(16) Year ($/Sh) Date $(17)
___________________________________________________________________________
<S> <C> <C> <C> <C> <C>
G. W. Seawright 125,000 15.4% $27.625 March 5, 2005 $967,500
J. J. Dur 35,000 4.3% 27.625 March 5, 2005 270,900
E. Freedman 40,000 4.9% 27.625 March 5, 2005 309,600
A. G. Keirstead 40,000 4.9% 27.625 March 5, 2005 309,600
B. H. Wyatt 15,000 1.8% 27.625 March 5, 2005 116,100
___________________________________________________________________________
<FN>
(15)The individual grants described herein were all made in the form
of non-qualified stock options under the Company's 1991 Stock Option Plan.
No SARs were granted by the Company during 1995.
(16)All Options granted have a ten-year term and become exercisable
in 25% annual increments on the next four consecutive anniversaries of
their date of grant.
(17)The Company used the Black-Scholes option pricing model to
determine the present value of the options granted as of their respective
date of grant. The assumptions used relating to the expected volatility,
risk-free rate of return, dividend yield and time of exercise were as
follows: (i) volatility was calculated based on the daily change in the
Company's stock price during the 250 trading days preceding the option
grant date; (ii) risk-free rate of return was the yield as of the option
grant date on U.S. Treasury bonds maturing in ten years; (iii) dividend
yield was computed based on the then most recent four quarterly dividends
paid on Company stock divided by the Company's stock price as of the option
grant date; and (iv) time of exercise was the full term of the option
granted. There were no adjustments made in the option pricing model for
non-transferability or risk of forfeiture of the options granted.
</TABLE>
The following table sets forth information concerning the exercise of
stock options by each of the Named Executive Officers during the last
fiscal year and the value of unexercised stock options held by each of them
as of the end of the fiscal year:
-12-
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired FY-End (#) FY-End ($)
on Value
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
__________________________________________________________________________
<S> <C> <C> <C> <C>
G. W. Seawright 0 $ 0 81,875/261,625 $ 26,313/$213,813
J. J. Dur 0 0 0/ 35,000 0/ 52,500
E. Freedman 0 0 119,250/ 87,650 322,600/ 60,000
A. G. Keirstead 0 0 104,100/ 86,900 138,800/ 60,000
B. H. Wyatt 9,950 203,353 34,450/ 29,250 112,563/ 22,500
__________________________________________________________________________
</TABLE>
Pension Plan. The Company maintains a qualified Pension Plan, a
supplemental retirement plan, and certain supplemental retirement
agreements requiring contributions in amounts determined annually by
independent actuaries. Of the Named Executive Officers, only Messrs.
Seawright and Keirstead are eligible to participate in both the Pension
Plan and their respective supplemental retirement agreements and to receive
reduced annual benefits prior to fully vesting therein in the event of an
involuntary termination without cause. Pension Plan benefit payments are
subject to a maximum allowed under Section 415 of the Internal Revenue Code
of $120,000 in 1996. For purposes of the Pension Plan, 1996 compensation
in excess of $150,000 is excluded. The following table has been prepared
without regard to these limitations, however, and it includes amounts
attributable to the supplemental retirement agreements in which Messrs.
Seawright and Keirstead participate as Executive Officers who are also
Directors:
<TABLE>
PENSION PLAN TABLE (18)
<CAPTION>
Remuneration Years of Service
___________________________________________________________________________________
Final
Average
Compen-
sation 5 10 15 20 25 30 35 40
___________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000
400,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
500,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000
600,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000
700,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000
800,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000
900,000 450,000 450,000 450,000 450,000 450,000 450,000 450,000 450,000
1,000,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
1,100,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000
1,200,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000
__________________________________________________________________________________
-13-
<PAGE>
<FN>
(18)The information contained in this Pension Plan Table represents
the aggregate Pension Plan and supplemental retirement agreements'
estimated annual benefits payable to qualified participants who are also
Directors.
</TABLE>
The retirement plans to which Messrs. Dur and Wyatt are participants
have a qualified pension plan portion, as described below, and a
supplemental retirement plan portion. The supplemental portion represents
a Pension Plan benefit with no limits on compensation or benefit amounts
less the qualified Pension Plan benefit which limits compensation to
$150,000 per year pursuant to Internal Revenue Code Section 401(a)(17) and
a maximum benefit per Internal Revenue Code Section 415 of $120,000 in
1996. The following table has been prepared without regard to these
limitations or certain social security and profit sharing plan benefit
offsets, however, and it includes amounts attributable to the supplemental
retirement plan in which Messrs. Dur and Wyatt participate:
<TABLE>
PENSION PLAN TABLE (19)
<CAPTION>
Remuneration Years of Service
__________________________________________________________________________________
Final
Average
Compen-
sation 5 10 15 20 25 30 35 40
__________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 7,500 $15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 50,830 $ 53,333
200,000 15,000 30,000 45,000 60,000 75,000 90,000 101,660 106,667
300,000 22,500 45,000 57,500 90,000 112,500 135,000 152,490 160,000
400,000 30,000 60,000 90,000 120,000 150,000 180,000 203,320 213,333
500,000 37,500 75,000 112,500 150,000 187,500 225,000 254,150 266,667
600,000 45,000 90,000 135,000 180,000 225,000 270,000 304,980 320,000
__________________________________________________________________________________
<FN>
(19)The information contained in this Pension Plan Table represents
the aggregate Pension Plan and supplemental retirement plan estimated
annual benefits payable to qualified participants who are not also
Directors.
</TABLE>
For purposes of the qualified Pension Plan and the supplemental
retirement agreements and plan referred to above, "compensation" includes
total wage, salary, bonus, Company automobile benefit and any amount which
is contributed by the employer pursuant to a salary reduction agreement and
which is not includible in gross income under the Internal Revenue Code,
but it does not include other payments to benefit plans, other perquisite
compensation, or reimbursement for business expenses. For each of the
participating Named Executive Officers, substantially all of the items of
compensation covered by the Pension Plan and the supplemental retirement
agreements and plan are also included in the Summary Compensation Table
columns entitled "Salary ($)" and "Bonus ($)". The pension benefit is
based on the employee's "Final Average Compensation" which means the
highest average of annual compensation paid during any five consecutive
calendar years during the employee's last ten years of employment. The
number of credited years of service is currently as follows for each of the
Named Executive Officers (except for Mr. Freedman who instead participates
in the Enesco Profit Sharing Plan and Supplemental Profit Sharing Plan):
-14-
<PAGE>
Mr. Seawright, 2; Mr. Dur, 1; Mr. Keirstead, 26; and Mr. Wyatt, 19.
Messrs. Keirstead and Wyatt are fully vested in the Pension Plan. Mr.
Wyatt is fully vested in the supplemental retirement plan and Mr. Keirstead
will become fully vested in his supplemental retirement agreement upon
reaching age 55. Mr. Seawright will become fully vested in his
supplemental retirement agreement upon reaching age 57 and in the Pension
Plan on November 9, 1998. Mr. Dur will become fully vested in the Pension
Plan and the supplemental retirement plan upon completing his fifth year of
service.
The qualified Pension Plan's portion of the estimated annual benefits
shown above is based upon an assumed normal retirement in 1996 at age 65,
is payable on a straight-life annuity basis to participants under the
Pension Plan in specified compensation and years of service
classifications, and is equal to 1 1/2% of the participant's Final Average
Compensation multiplied by his years of service up to 33 1/3 years, plus
1/2% for each Year of Service beyond that. These benefits are reduced by a
percentage of the retired employee's primary Social Security benefit (not
to exceed 50% of that benefit) and also are offset by any benefits from
Company contributions under the Company's Profit Sharing Plan, to which
Company contributions were discontinued when the Pension Plan came into
existence on January 1, 1980. The retirement benefit is reduced in the
event of early retirement prior to age 62. The Pension Plan also provides
for a surviving spouse's benefit in the event of the death of a vested
participant.
The supplemental retirement agreements' portion of the estimated
annual benefits shown above is computed based upon an assumed normal
retirement in 1996 at age 65 and is equal to 50% of the participant's
average of annual compensation during the five highest compensated years
out of the last ten years of his employment prior to retirement, less the
following: (i) benefits from Company contributions under the Pension Plan;
(ii) benefits from Company contributions under the Company's Profit Sharing
Plan, to which Company contributions were discontinued when the Pension
Plan came into existence on January 1, 1980; and (iii) 50% of the retired
employee's Social Security benefits. The retirement benefit is reduced in
the event of early retirement, as specified under the supplemental
retirement agreements, prior to age 62. The supplemental retirement
agreements of Messrs. Seawright and Keirstead also include disability and
surviving spouse's benefits. These agreements provide for a monthly
retirement benefit in an amount subject to the individual taking a normal
or early retirement from the Company. An early retirement for any reason
other than a discharge for cause shall subject the monthly retirement
benefit to a stipulated percentage reduction.
Employment Contracts and Termination of Employment and Change in
Control Arrangements. Mr. Seawright, President and Chief Executive Officer
of the Company, received his annual base salary of $533,750 in 1995 and was
eligible for a bonus of up to 65% of his annual base salary under the
Company's Management Incentive Plan ("MIP") program pursuant to an
employment agreement which will expire in 1998. In addition to standard
executive officer fringe benefits, he is eligible to receive special
medical insurance coverage including his spouse, and has a spousal death
benefit. The Company has also entered into a retirement agreement with Mr.
Seawright which is more fully described elsewhere in this Proxy Statement.
Mr. Freedman, Executive Vice President of the Company and President
and Chief Executive Officer of Enesco Corporation, received an annual base
salary of $475,000 in 1995 and was entitled to a bonus in an amount equal
to the excess of five percent of Enesco's pre-tax net income over the paid
annual base salary pursuant to an employment agreement, as amended, which
will expire in 1997. His agreement also includes a severance benefit,
payable in a lump sum cash payment within five business days of
termination, equal to approximately three times his annual base amount as
-15-
<PAGE>
defined in Section 280G of the Internal Revenue Code if his employment
terminates within two years following a change in control of the Company
for any reason other than death, disability, retirement, or cause, or his
voluntary termination without good reason.
The Company has entered into both a supplemental retirement agreement
and a severance agreement with Mr. Keirstead, Executive Vice President of
the Company. The Company has also entered into a severance agreement with
Mr. Wyatt, Vice President of the Company, who also participates in a
supplemental retirement plan along with Mr. Dur. Each of the
aforementioned agreements and plan is more fully described elsewhere in
this Proxy Statement.
The Company has separate change in control agreements with Messrs.
Seawright, Dur, Keirstead, and Wyatt under which each of these individuals
is entitled to a severance benefit, payable on or before termination for
any reason (other than death, disability, retirement, termination for
substantial cause, or voluntary termination without good reason) occurring
within two years following a change in control of the Company, equal to
three times the annual base salary rate plus bonus under the MIP program
and to certain fringe benefits for a three-year term; in addition, the
individuals will be reimbursed for any excise or other taxes incurred as a
result of such payment. The type of events constituting a change in
control include those that require reporting under Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended, and certain other events specified in the change in
control agreements. Amounts received under this agreement with Mr.
Seawright, excluding payments for taxes, offset any payments to be made as
a result of his termination of employment under his employment agreement.
Terminations in non-change in control situations are governed by the
provisions of their employment agreements for each of Messrs. Seawright and
Freedman, and by the Company's general employee severance policy as
confirmed by the severance agreements with Messrs. Dur, Keirstead, and
Wyatt under which each of them is entitled to a severance benefit, payable
in a lump sum or over a period of time following termination for any reason
(other than death, disability, retirement, or termination for substantial
cause), equal to his annual base salary for a period of between one or two
years depending on his years of service and certain fringe benefits for up
to a fifteen-month term.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the following Directors, none of whom were then officers
or employees of the Company or any of its subsidiaries, served on the
Board's Compensation and Stock Option Committee: Ms. Verville, Messrs.
Cauley, Elliott, and Perkins. Of the Committee members, only Mr. Perkins
is a former officer of the Company or any of its subsidiaries, and only Ms.
Verville had any relationship requiring disclosure in that the Company and
its subsidiaries purchased computers and related products from and had
various maintenance and service contracts with International Business
Machines Corporation ("IBM"). Ms. Verville, a Director of the Company, is
the General Manager - Worldwide Education Industry of IBM. During 1995,
IBM had worldwide sales and service payments from the Company and its
subsidiaries of $372,554.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation and Stock Option Committee of the Board of Directors. The
Committee is comprised of non-employee Directors who approve or recommend
to the Board salary and bonus amounts and other annual compensation and
long term compensation awards for the Executive Officers of the Company.
Ms. Alla O'Brien, a former Director of the Company, was a member of the
Committee during 1995 until her retirement on March 2, 1995.
-16-
<PAGE>
The Company's executive compensation program during 1995 had three
components which included base salary and fringe benefits, incentive bonus
opportunity, and option awards to purchase Company stock. The Committee's
compensation policies regarding these components are designed to provide a
compensation package which is targeted at the third quartile level of total
compensation for similarly situated executive officers in a comparator
group of other U.S. companies of comparable size and geographic diversity.
The comparator group used in establishing the Company's compensation levels
is composed of companies that participate in two well established and
nationally recognized annual executive compensation surveys. They are the
"Towers Perrin Executive Compensation Survey" and the "Management
Compensation Services Project 777 Executive Compensation Study". These
surveys include some of the companies included in the S&P 400 Midcap
Consumer Products Index shown in the Performance Graph. The Committee
believes that evaluating data from the broad group of companies and
industries represented in these two surveys is important in establishing
the true market for executive talent. To compete effectively in this
market, the Company must be aware of compensation levels in various
industries and companies of all sizes and does not limit its analysis to
the S&P 400 Midcap Consumer Products Index.
Base salaries and fringe benefits are set at the annual base salary
and fringe benefit amounts of comparable executive officers. Pay for
performance bonuses are determined under the Company's Management Incentive
Plan ("MIP") program which provides for annual incentive opportunities
amounting to a specified percentage of up to 65% of the Executive Officers'
annual base salaries and which is based on pre-selected personal
performance criteria and certain specified Company profitability and
performance goals. Options to purchase Company stock are granted in
amounts that are competitive with long term incentive award practices of
comparable U.S. companies, considering the amount of options that have been
previously granted to each of the Executive Officers. The options, which
correlate to executive grade levels, are granted generally on an annual
basis at the then market value of the Company's stock and are normally
exercisable under a four-year vesting schedule for a ten-year term, thus
providing a direct relationship between Executive Officers' potentially
realizable long term compensation amounts and actually recognizable
increases in Stockholder value. Executive Officer and Director stock
ownership guidelines have been adopted with the objective of further
aligning Executive Officers' and Directors' and Stockholders' interests.
The Committee's compensation policies are intended to reinforce the
Company's performance-oriented compensation practices and are not limited
by potential outcomes of nondeductibility of certain compensation amounts
for federal tax purposes under the provisions of Section 162(m) of the
Internal Revenue Code, as amended, and the regulations promulgated
thereunder.
Compensation for each of the Company's Executive Officers in 1995 was
determined by the foregoing program except for Mr. Freedman, whose annual
base salary, fringe benefit, and bonus compensation was established in a
negotiated employment agreement entered into during the acquisition of
Enesco Corporation, the terms of which are more fully described elsewhere
in this Proxy Statement.
Compensation for Mr. Seawright, President and Chief Executive Officer
of the Company, in 1995 included his base salary at the annual rate of
$545,000. His employment agreement provides that his annual base salary is
subject to increases from time to time at the discretion of the Board of
Directors. His 1995 MIP target opportunity of $346,938 was based 40% upon
achieving certain specified personal performance objectives relating to
strategic and financial goals and 60% upon achieving specified financial
objectives of the Company, including dollar sales volume, operating income,
earnings per share, net cash available, and return on equity. As a result
of his personal performance criteria achievements and the Company's
-17-
<PAGE>
financial results, Mr. Seawright's MIP bonus was $230,713. In 1995 the
Committee awarded Mr. Seawright a grant of 125,000 non-qualified options to
purchase Company stock. The size of the grant relative to all other 1995
option grants made by the Committee and based upon its projected value as
of the grant date was determined to be within the guidelines which were
developed by the Committee's executive compensation consulting firm,
William M. Mercer, Incorporated. This grant becomes exercisable in 25%
annual increments over the next four years and has a term of ten years from
the date of grant.
The Compensation and Stock Option Committee:
A. L. Verville (Chairman) J. F. Cauley, Jr. C. W. Elliott H. G. Perkins
___________________________________________________________________________
PERFORMANCE GRAPH
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
THE STANDARD & POOR'S ("S&P") MIDCAP 400 INDEX, AND THE S&P MIDCAP 400
CONSUMER PRODUCTS INDEX (20)
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Stanhome
Inc. $100.00 $112.36 $108.55 $109.31 $105.23 $100.32
S&P
Midcap
400 $100.00 $150.10 $167.98 $191.41 $184.55 $241.66
S&P
Midcap 400
Consumer
Products $100.00 $147.59 $146.37 $139.12 $107.83 $122.65
___________________________________________________________________________
<FN>
(20)This graphic presentation assumes one-time $100 investments in
the Company's Common Stock and in market capital base-weighted amounts
apportioned among all the companies whose equity securities constitute each
of the two above named board equity market indices made as of the market
close on the last trading day in 1990 and the automatic reinvestment of
dividends, if any, into additional shares of the same class of equity
securities constituting such investments at the frequency with which
dividends were paid on such securities during the applicable fiscal years.
(Source: Standard & Poor's Compustat - Custom Business Unit, a division of
McGraw-Hill.)
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and its subsidiaries purchased financial printing
services and related products from R.R. Donnelley & Sons Company
("Donnelley") whose Senior Vice President, Information Services Sector, Ms.
Clarke, is a Director of the Company. During 1995, Donnelley had worldwide
sales and service payments from the Company and its subsidiaries of
$73,284.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has been engaged by the Company as independent
public accountants since 1971. As recommended by its Audit Committee, the
Board has appointed that firm as independent accountants for the Company
-18-
<PAGE>
for 1996 subject to ratification by the Stockholders. The treatment and
effect of abstentions and broker non-votes will be as specified in the
Election of Directors section of this Proxy Statement. It is intended that
Proxies of Stockholders containing no designation to the contrary will be
voted for the appointment of that firm. Representatives of Arthur Andersen
LLP are expected to attend the Annual Meeting and will be available to
respond to appropriate questions and to make a statement if they so desire.
PROPOSAL TO APPROVE THE STANHOME INC. 1996 STOCK OPTION PLAN
At a meeting held on January 24, 1996, the Company's Board of
Directors adopted the Stanhome Inc. 1996 Stock Option Plan (the "Stock
Option Plan") and authorized the officers to implement it, subject to the
approval of the Stockholders. The Board believes that the adoption of the
Stock Option Plan will promote the success and enhance the value of the
Company by (i) strengthening the Company's ability to attract and retain
the services of experienced and knowledgeable persons as key employees and
Directors of the Company, and (ii) linking the personal interests of key
employees and Directors to those of the Stockholders. The Stock Option
Plan, if approved by the Stockholders, will have an effective date of
January 24, 1996.
The Compensation and Stock Option Committee will administer the Stock
Option Plan which provides for annual grants of 1,500 non-qualified stock
options to each Non-employee Director during each of the next three years
as part of the annual remuneration paid to the Non-employee Directors of
the Company. Currently, there are eight such Non-employee Directors.
Other grants of either incentive stock options or non-qualified stock
options may be made by the Committee to selected key employees from time to
time. Currently, the Committee contemplates making grants to approximately
125 such selected key employees. The total number of shares of the
Company's Common Stock subject to options granted under the Stock Option
Plan is 1,500,000 and no one individual may be granted more than 300,000
options under the Stock Option Plan. The following summary of the plan
benefits of the Stock Option Plan is qualified in its entirety by reference
to the Stock Option Plan, the full text of which is included at the end of
this Proxy Statement as Appendix A.
Summary of Plan Benefits
Subject to Stockholder approval at the Annual Meeting, commencing in
1996, on the day following the Annual Meeting of Stockholders for each of
the next three years, each person serving as a Director of the Company on
that date, who is not also an employee of the Company, will automatically
be granted 1,500 non-qualified stock options relating to the Company's
Common Stock. Each grant made under the Stock Option Plan to either Non-
employee Directors or key employees of the Company may not be exercised
until at least six months after the later of the date of grant or the date
of approval of the Stock Option Plan by the Stockholders, and (1) as to 50%
of the shares subject to the option if, generally speaking, the closing
price of the Company's Common Stock on the New York Stock Exchange is at
least 125% of the option price for at least ten consecutive trading days,
(2) as to the remaining 50% of said shares if the said closing price is at
least 150% of the option price for at least ten consecutive trading days,
or (3) after the eighth anniversary of the grant. Options granted to Non-
employee Directors under the Stock Option Plan shall be exercisable until
the tenth anniversary of the grant and shall be priced at the Fair Market
Value of the Company's Common Stock on the date of grant. Options granted
to key employees under the Stock Option Plan shall be exercisable for such
periods of time that the Compensation and Stock Option Committee determines
and shall be priced at not less than the Fair Market Value of the Company's
Common Stock on the date of grant. Payment may be made to the Company by
the recipient in the form of cash or shares of previously acquired Common
Stock. No grants will be made to Non-employee Directors or to eligible key
-19-
<PAGE>
employees unless the Stock Option Plan is approved by the Stockholders at
the Annual Meeting. The following table shows the grants that will be made
on April 26, 1996 to the then Non-employee Directors and the estimated
grants that may be on or about April 29, 1996 to the key employees selected
to receive option grants under the Stock Option Plan assuming that the
Stock Option Plan is approved by the Stockholders and that the current make
up of the Board does not change:
<TABLE>
NEW PLAN BENEFITS
Stanhome Inc. 1996 Stock Option Plan
<CAPTION>
Name and Position Dollar Value ($) (21) Number of Units (22)
__________________________________________________________________________
<S> <C> <C>
G. W. Seawright, $2,176,688 70,500
President and Chief Executive Officer
J. J. Dur, 463,125 15,000
Vice President
E. Freedman, 741,000 24,000
Executive Vice President
A. G. Keirstead, 648,375 21,000
Executive Vice President and
Chief Administrative and Financial Officer
B. H. Wyatt, 277,875 9,000
Vice President, General Counsel,
Secretary, and Clerk
Executive Officers as a Group (9 total) 5,307,413 171,900
Directors who are not Executive Officers 370,500 12,000
as a Group (8 total)
Each Nominee for election as a Director 46,313 1,500
Each associate of any Directors, Executive 0 0
Officers or Nominees
Each other person who is to receive 0 0
5 percent of such options
Non-Executive Officer employees as a Group 6,493,630 210,320
(116 total)
_________________________________________________________________________
<FN>
(21)Based upon the closing price for a share of the Company's Common
Stock on March 1, 1996 ($30.875). Actual dollar value will be determined
by using the closing price for a share of the Company's Common Stock on the
date of grant.
(22)All amounts shown for Number of Units, other than for those of
Directors who are not Executive Officers as a Group and Each Nominee for
election as a Director, are estimates of potential grants that will not be
finalized until after this Proxy Statement is published.
</TABLE>
Generally, the Company and the recipients of options granted under
the Stock Option Plan will have the following summarized federal income tax
-20-
<PAGE>
consequences upon the grant and exercise of the options. Recipients of non-
qualified stock option grants will realize no taxable income, and no tax
deduction is available to the Company, upon grants of the options. Upon
exercise of such options, recipients will be taxed on the excess of the
Fair Market Value of the shares of Common Stock on the date of exercise
over the option price. This same amount will be deductible by the Company.
Recipients of incentive stock options will realize no taxable income, and
no tax deduction is available to the Company, upon either the grants or
exercises of the options unless the recipient fails to meet the applicable
holding period requirements and has a disqualifying disposition. Under the
Stock Option Plan, recipients of options are responsible for making
appropriate provisions for any taxes due in connection with the exercises
of their options, which payments may be made in cash or by the withholding
of shares of Common Stock.
The Stockholders' approval of the Stock Option Plan requires the
affirmative vote of the holders of a majority of the Common Stock present
in person or represented by Proxy at the Annual Meeting at which there is a
quorum. The treatment and effect of abstentions and broker non-votes will
be as specified in the Election of Directors section of this Proxy
Statement. The Board believes that the Stock Option Plan is in the best
interests of the Company and the Stockholders and recommends a vote FOR the
approval of the Stock Option Plan.
It is intended that Proxies of the Stockholders containing no
designation to the contrary will be voted for the approval of the Stock
Option Plan.
PROPOSALS OF SECURITY HOLDERS
Pursuant to rules of the Securities and Exchange Commission, a
Stockholder owning of record or being the beneficial owner of at least
$1,000 in market value of the Common Stock of the Company may present a
proposal to be voted on at the 1997 annual meeting of Stockholders; and,
provided such proposal meets all of the requirements of the rules and is
received by the Company on or before November 16, 1996, it will be included
in the proxy statement and form of proxy relating to such meeting.
OTHER BUSINESS
The Annual Meeting is called for the purposes set forth in the
Notice. The Board does not know of any matter for action by the
Stockholders at the meeting other than the matters described in the Notice.
However, the enclosed Proxy confers discretionary authority with respect to
matters which are not known to the Board at the date of printing hereof and
which may properly come before the meeting. It is the intention of the
persons named in the Proxy to vote the Proxy in accordance with their best
judgment on any such matter.
The Company files an Annual Report on Form 10-K with the Securities
and Exchange Commission. Stockholders may obtain a copy of the Annual
Report for the fiscal year ended December 31, 1995 without charge by
writing to the Clerk of the Company at 333 Western Avenue, Westfield,
Massachusetts 01085.
By order of the Board of Directors,
STANHOME INC.
BRUCE H. WYATT
Clerk
March 15, 1996
-21-
<PAGE>
Appendix A
STANHOME INC.
1996 STOCK OPTION PLAN
1. Purpose. The purpose of this 1996 Stock Option Plan (the "Plan")
is to advance the interests of Stanhome Inc. (the "Company") by encouraging
key management employees of the Company and its subsidiaries and non-
employee directors of the Company to acquire a proprietary interest in the
Company through ownership of common stock of the Company. Such ownership
will encourage the optionees to remain with the Company and will help
attract other qualified persons to become employees and directors.
2. Administration. The Plan shall be administered by the
Compensation and Stock Option Committee of the Board of Directors (the
"Committee") which shall be composed of not less than three directors of
the Company elected or to be elected as members of the Committee from time
to time by the Board of Directors of the Company. Each member of the
Committee shall be a "disinterested person" within the meaning of Rule 16b-
3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and an "outside director" within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"). Subject to the
provisions of the Plan and the approval of the Board of Directors of the
Company, except that the Board of Directors shall have no discretion with
respect to the selection of officers within the meaning of Rule 16a-1(f),
directors or 10% or more shareholders ("Insiders") for participation and
decisions concerning the timing, pricing and amount of a grant or award to
such "Insiders", the Committee is authorized to grant options under the
Plan and to interpret the Plan and such options, to prescribe, amend and
rescind rules and regulations relating to the Plan and the options, and to
make other determinations necessary or advisable for the administration of
the Plan, all of which determinations shall be conclusive. The Committee
shall act pursuant to a majority vote or by unanimous written consent.
3. Types of Options. Options granted pursuant to the Plan may be
either incentive stock options under Section 422 of the Code ("Incentive
Stock Options") or options not qualifying under that section of the Code
("Non-qualified Stock Options"). It is the intent of the Company that Non-
qualified Stock Options granted under the Plan not be classified as
Incentive Stock Options, that the Incentive Stock Options granted under the
Plan be consistent with and contain or be deemed to contain all provisions
required under Section 422 and the other appropriate provisions of the Code
and any implementing regulations (and any successor provisions thereof),
and that any ambiguities in construction shall be interpreted in order to
effectuate such intent.
4. Eligibility. Options shall be granted under the Plan to such
selected key full-time salaried and commissioned employees (including
officers and directors if they are employees) of the Company or any of its
subsidiaries as the Committee shall determine from time to time. Options
shall also be granted under the Plan to the non-employee directors of the
Company (the "Non-employee Directors") pursuant to Section 9 hereof.
5. Stock Subject to Options. The aggregate number of shares which
may be issued or sold under options granted pursuant to the Plan (the
"Shares") shall not exceed 1,500,000 shares of the Company's common stock
$0.125 par value each. Such Shares shall be either authorized but unissued
shares of said common stock or issued shares of said common stock which
shall have been reacquired by the Company. Such aggregate number of Shares
A-1
<PAGE>
may be adjusted under Sections 9 and 10 below. If any outstanding option
under the Plan expires or is terminated for any reason, the Shares
allocated to the unexercised portion of such option may again be subjected
to an option or options under the Plan.
6. Allotment of Shares. Except as provided under Section 9 hereof,
the Committee shall determine the total number of Shares to be offered to
each optionee under the Plan; provided, however, that no optionee may be
granted options which exceed 300,000 Shares under the Plan.
7. Option Price. The Shares shall be offered from time to time
under the Plan at a price which shall be not less than the greater of (i)
100 percent of the Fair Market Value of the Company's common stock on the
date the option is granted, or (ii) the par value of the Company's common
stock subject to the option; provided, however, that the price shall be not
less than 110 percent of such Fair Market Value in the case of Shares
offered under any Incentive Stock Option granted to an individual who, at
the time the option is granted, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Company
or of its subsidiaries.
8. Terms and Conditions of Options. The Committee shall have power,
subject to the limitations contained in the Plan, to prescribe the terms
and conditions of any option granted hereunder. Each such option shall be
evidenced by a certificate in such form as the Committee shall from time to
time determine, which certificate shall prescribe the following terms and
conditions and such other terms and conditions as the Committee may deem
necessary or advisable:
(a) Duration of Options. Except as hereinafter otherwise
provided, options granted under the Plan shall be exercisable for
such period of time as the Committee shall determine. An Incentive
Stock Option shall not be exercisable after the expiration of ten
years from the date it is granted; provided, however, that any
Incentive Stock Option granted to an individual who, at the time the
option is granted, owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or
of its subsidiaries shall by its terms not be exercisable after the
expiration of five years from the date of grant.
(b) Exercise of Options. Except as hereinafter otherwise
provided, each option granted under the Plan may be exercised only
after six months of continued employment by the Company or one of its
subsidiaries immediately following the date the option is granted, or
the date of Stockholder approval under Section 11 below if later, and
only during the continuance of the optionee's employment with the
Company or one of its subsidiaries and such additional period as may
be provided in subsection (e) below. No option shall be exercised
for less than 10 Shares except as a result of an adjustment under
Sections 9 or 10 below. Subject to the foregoing and to the
limitations set forth under subsection 8(e) below, each option
granted under the provisions of this Section 8 may be exercised at
any time after six months from the date the option is granted or, if
later, six months after the date of approval of the Plan by the
Stockholders of the Company,(1) as to 50% of the Shares subject to
the option if the Fair Market Value of the common stock is at or
above 125% of the Option Price on each of at least ten consecutive
Trading Days, (2) as to the remaining 50% of the Shares subject to
the option if, at any time at or after the initial 50% of said Shares
becomes exercisable, the Fair Market Value of the common stock is at
or above 150% of the Option Price on each of at least ten consecutive
Trading Days, or (3) after the eighth anniversary of the date the
option is granted.
A-2
<PAGE>
(c) Payment. The purchase price of each Share purchased upon
the exercise of any option granted hereunder shall be paid in full at
the time of such purchase, and a stock certificate representing
Shares so purchased shall be delivered to the person entitled
thereto. Until the stock certificate for such Shares is issued in
the optionee's name, he or she shall have none of the rights of a
stockholder. Payment may be made in whole or in part in (i) cash or
(ii) whole shares of the Company's common stock acquired at least six
months previously by the optionee, for which the optionee has good
title, free and clear of all liens and encumbrances, and evidenced by
negotiable certificates, valued at their Fair Market Value on the
date preceding the date the option is exercised. If certificates
representing shares of common stock are used to pay all or part of
the purchase price of an option, separate certificates shall be
delivered by the Company representing the same number of shares as
each certificate so used and an additional certificate shall be
delivered representing the additional shares to which the option
holder is entitled as a result of exercise of the option. It shall
be a condition to the performance of the Company's obligation to
issue or transfer Shares upon exercise of an option or options that
the optionee pay, or make provision satisfactory to the Company for
the payment of, any taxes (other than stock transfer taxes) which the
Company is obligated to collect with respect to the issue or transfer
upon such exercise. With respect to the exercise of Non-qualified
Stock Options granted pursuant to this Section 8, optionees may elect
to have the Company withhold a designated number of Shares otherwise
issuable upon the exercise of such stock options, or, in the case of
"Insider" optionees, to commit irrevocably at a time acceptable under
the provisions of Section 16 of the Exchange Act to have the Company
withhold whole shares of common stock to cover Federal and State tax
obligations incident to such exercise, or such other maximum amounts
as may be determined by the Committee.
(d) Nontransferability of Options. No option shall be
transferable by the optionee otherwise than (1) by will or the laws
of descent and distribution or pursuant to beneficiary designation
procedures approved by the Committee, (2) as otherwise permitted
under Rule 16b-3 under the Exchange Act from time to time and allowed
by the Committee, or (3) pursuant to a qualified domestic relations
order as defined in Section 414(p) of the Code. Except to the extent
permitted by the foregoing sentence, each option shall be
exercisable, during his or her lifetime, only by the optionee or his
or her guardian or legal representative(s).
(e) Termination of Options. (i) Disability, Retirement at or
after age 55, Termination without Substantial Cause, or Death. If
the optionee's employment with the Company terminates by reason of
Disability, retirement at or after age 55, termination by the Company
without Substantial Cause, death, or for any other reason not set
forth under clauses (ii) and (iii) below, if not sooner terminated
pursuant to their terms and subject to subsections (a) and (b) above,
all outstanding options then held by the optionee shall be
exercisable during the three year period following any such
termination of employment by the optionee or his or her guardian or
legal representative(s), except further that in the case of Incentive
Stock Options the period for such exercise following such termination
shall be limited to three months, or, in the case of a termination of
employment by reason of disability, to twelve months; (ii)
Termination by Voluntary Resignation or Retirement before reaching
age 55. If the optionee's employment with the Company is terminated
either by voluntary resignation or retirement before reaching age 55,
all outstanding options then held by the optionee shall be
exercisable during the three month period following any such
A-3
<PAGE>
termination of employment by the optionee or his or her guardian or
legal representative(s); (iii) Termination for Substantial Cause. If
the optionee's employment with the Company is terminated for
Substantial Cause, all outstanding options then held by the optionee
shall thereupon be forfeited by the optionee and canceled by the
Company; and (iv) Termination within Six Months of Grant.
Notwithstanding the foregoing, upon the optionee's employment with
the Company or any subsidiary terminating at any time for any reason,
all outstanding options granted within the last six months prior to
the optionee's termination shall thereupon be forfeited by the
optionee and canceled by the Company.
Cessation of any corporation's relationship with the Company as
a subsidiary shall constitute a "termination without Substantial
Cause" hereunder as to individuals employed by that corporation, and
options held by such individuals shall be terminated in accordance
with paragraph (i) above. For purposes of this subsection, the
meaning of the word "disability" shall be determined under the
provisions of Section 422(c)(7) of the Code or any successor
provisions thereof.
(f) Fair Market Value. Fair Market Value shall mean the
closing transaction price of a share of common stock as reported in
the New York Stock Exchange Composite Transactions on the date as of
which such value is being determined, or, if the common stock is not
listed on the New York Stock Exchange, the closing transaction price
of a share of common stock on the principal national stock exchange
on which the common stock is traded on the date as of which such
value is being determined; or, if there shall be no reported
transaction for such date, on the next preceding date for which a
transaction was reported; provided, however, that if Fair Market
Value for any date cannot be so determined, Fair Market Value shall
be determined by the Committee by whatever means or method as the
Committee, in the good faith exercise of its sole discretion, shall
at such time deem appropriate.
(g) "Trading Day". A Trading Day shall be a day on which the
Company's common stock may be traded on a stock exchange or, if the
Company's common stock is not listed on any exchange, in the Over The
Counter market.
(h) "Substantial Cause". Substantial Cause shall mean (1) the
willful and continued failure by optionee to perform substantially
the optionee's duties with the Company or a subsidiary (other than
any such failure resulting from the optionee's incapacity due to
physical or mental illness) after a written demand for substantial
performance is delivered to the optionee by the Board, which demand
specifically identifies the manner in which the Board believes that
the optionee has not substantially performed the optionee's duties or
(2) the willful engagement by the optionee in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise. For purposes of clauses (1)
and (2) of this definition, no act or failure to act by a optionee
shall be deemed "willful" unless done, or omitted to be done, by the
optionee not in good faith and without reasonable belief that the
optionee's act or failure to act was in the best interests of the
Company.
9. Non-employee Directors' Options. The Committee shall not have
any discretion with respect to the options granted to the Non-employee
Directors under the provisions of this Section 9. Except as hereinafter
otherwise provided, options granted pursuant to this Section 9 shall be
subject to the terms and conditions set forth in Section 8.
A-4
<PAGE>
(a) Grant of Options. On the day following each of the 1996
through and including the 1998 annual stockholders' meetings, each
person who is a Non-employee Director immediately after such meeting
shall automatically be granted an option to purchase 1,500 Shares.
The maximum number of Shares for which options may be granted to any
Non-employee Director under the Plan shall be 4,500. All such
options shall be Non-qualified Stock Options. The price at which
each Share covered by such options shall be purchased shall be the
greater of (i) 100 percent of the Fair Market Value of the Company's
common stock on the date the option is granted, or (ii) the par value
of the Company's common stock subject to the option.
(b) Exercise of Options. (i) Except as hereinafter otherwise
provided, an option granted to the Non-employee Director may be
exercised only after six months of continued service as a Director of
the Company following the date the option is granted, or the date of
Stockholder approval under Section 11 below if later, and only during
the continuance of the optionee serving on the Board of Directors and
such additional period as is provided for below. The option may be
exercised by the Non-employee Director or his or her guardian or
legal representative(s) during the period that the Non-employee
Director remains a member of the Board of Directors and for a period
of three years thereafter, subject to subsection 8(a) and the
conditions of exercise set forth below in this subsection 9(b) and,
provided further, that in no event shall the option be exercisable
more than ten years after the date of grant. Subject to the
foregoing, each option granted to the Non-employee Directors under
the provisions of this Section 9 may be exercised at any time after
six months from the date the option is granted or, if later, six
months after the date of approval of the Plan by the Stockholders of
the Company, (1) as to 50% of the Shares subject to the option if the
Fair Market Value of the common stock is at or above 125% of the
Option Price on each of at least ten consecutive Trading Days, (2) as
to the remaining 50% of the Shares subject to the option if, at any
time at or after the initial 50% of said Shares becomes exercisable,
the Fair Market Value of the common stock is at or above 150% of the
Option Price on each of at least ten consecutive Trading Days, or (3)
after the eighth anniversary of the date the option is granted; and
(ii) Notwithstanding the foregoing, upon the Non-employee Director's
service as a Director of the Company terminating at any time for any
reason, all outstanding options granted within the last six months
prior to the Non-employee Director's termination shall thereupon be
forfeited by the Non-employee Director and canceled by the Company.
(c) Payment. An option granted to the Non-employee Director
shall be exercisable only upon payment to the Company in accordance
with the provisions of Section 8(c) of the full purchase price of the
Shares with respect to which the option is being exercised.
(d) Adjustment of Options. In the event of a stock dividend,
split-up or combination of shares, recapitalization, reclassification
or merger in which the Company is the surviving corporation, or other
similar capital or corporate structure change, the number of Shares
at the time of such change remaining subject to any option granted or
to be granted pursuant to the provisions of this Section 9 shall be
increased or decreased, as the case may be, in direct proportion to
the increase or decrease in the number of shares of common stock of
the Company by reason of such change in corporate structure, provided
that the number of Shares shall always be a whole number with any
fractional Shares being deleted therefrom, and the purchase price per
Share of any outstanding options shall, in the case of an increase in
the number of Shares, be proportionately decreased, and in the case
of a decrease in the number of Shares, be proportionately increased.
A-5
<PAGE>
In the event of a consolidation or merger in which the Company is not
the surviving corporation or of a "Change in Control" as defined in
Section 10, including, but not limited to, "Changes in Control" in
which the Company is the surviving corporation, and notwithstanding
the preceding sentence, each option outstanding under the provisions
of this Section 9 shall thereupon terminate, provided that within ten
days of the effective date of any such consolidation, merger, or
"Change in Control", the Company shall pay in cash the
difference between the exercise price of the unpurchased Shares
under the options and the value of consideration receivable in the
transaction by a holder of the number of shares of common stock
equal to the number subject to the options.
10. Changes in Stock. In the event of a stock dividend, split-up or
combination of shares, recapitalization, reclassification or merger in
which the Company is the surviving corporation, or other similar capital or
corporate structure change, the number and kind of Shares at the time of
such change remaining subject to the Plan and to any option granted or to
be granted pursuant to the Plan, except for options granted or to be
granted pursuant to Section 9, the option price and any other relevant
provisions shall be appropriately adjusted by the Board of Directors of the
Company, whose determination shall be binding on all persons. In the event
of a consolidation or merger in which the Company is not the surviving
corporation, (i) each option outstanding hereunder that is held by an
"Insider" optionee and that is not outstanding under the provisions of
Section 9 shall become immediately exercisable and (ii) each option
outstanding hereunder that is held by an optionee who is not an "Insider"
shall terminate, provided that at least twenty days prior to the effective
date of any such consolidation or merger, the Board of Directors of the
Company shall do one of the following with respect to options held by
optionees who are not "Insiders": (1) make such options immediately
exercisable, (2) arrange to have the surviving or consolidated corporation
grant replacement options to the optionees involved, or (3) pay in cash the
difference between the exercise price of the unpurchased Shares under the
options and the value of consideration receivable in the transaction by a
holder of the number of shares of common stock equal to the number subject
to the options. No adjustment provided for in this Section 10 shall
require the Company to issue or sell a fractional share under any option
hereunder and any fractional share resulting from any such adjustment shall
be deleted from the option involved.
Notwithstanding anything herein to the contrary, and without regard
to subsections 8(e)(iv) and 9(b)(ii) and clauses 1, 2 and 3 of subsections
8(b) and 9(b), in the event of a "Change in Control" as defined below,
including certain consolidation or merger events otherwise giving rise to
the adjustments or alternatives described in the above paragraph, each
option outstanding under this Plan shall thereupon terminate, provided that
within ten days of the effective date of such Change in Control, the
Company shall pay in cash the difference between the exercise price of the
unpurchased Shares under the options and the value of consideration
receivable in the transaction by a holder of the number of shares of common
stock equal to the number subject to the options. As used herein, "Change
in Control" means a Change in Control of a nature that would, in the
opinion of the Company counsel, be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange
Act; provided that, without limitation, such a Change in Control shall be
deemed to have occurred if: (i) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company or any
subsidiary of the Company, any trustee or fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries or
a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of the
stock of the Company)) becomes the "beneficial owner" (as defined in Rule
A-6
<PAGE>
13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities; or (ii) during any period of two
consecutive years (not including any period prior to the effective date of
this Plan), individuals who at the beginning of such period constitute the
Board of Directors and any new director (other than a director designated
by a Person who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii), or (iv) of this paragraph)
whose election by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved cease for any reason to constitute a majority
thereof; or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 75% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person acquires 25% or more of the
combined voting power of the Company's then outstanding securities; or (iv)
the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
With respect to all optionees other than the Non-employee Directors,
no Change in Control shall be deemed to have occurred if the optionee is a
member of a management group which first announces a proposal which
constitutes a Potential Change in Control, unless otherwise determined by a
majority of the members of the Board of Directors who are not members of
such management group. A "Potential Change in Control" shall be deemed to
have occurred if the conditions set forth in any one of the following
subsections shall have been satisfied: (i) the Company enters into an
agreement, the consummation of which would result in the occurrence of a
Change in Control; (ii) the Company or any Person publicly announces an
intention to take or to consider taking actions, which if consummated,
would constitute a Change in Control; (iii) any Person who is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's then
outstanding securities, increases such Person's beneficial ownership of
such securities by 5% or more over the percentage so owned by such Person
on the date hereof; or (iv) the Board of Directors adopts a resolution to
the effect that, for purposes of this Plan, a Potential Change in Control
has occurred.
11. Effective Date; Stockholder Approval; Term. The Plan was
adopted by the Board of Directors on January 24, 1996 and shall become
effective as of January 24, 1996 if the Plan is approved by the holders of
a majority of the common stock outstanding and entitled to vote at the
Annual Meeting of Stockholders scheduled for April 25, 1996. No option
hereunder shall be granted after January 23, 2006 or the earlier suspension
or termination of the Plan in accordance with its terms. The Plan shall
terminate on January 23, 2006 or on such earlier date as it may be
suspended or terminated under the provisions of Section 12 below or as of
which all Shares subject to options authorized to be granted under the Plan
shall have been acquired by exercise of such options.
A-7
<PAGE>
12. Amendment or Discontinuance of the Plan. The Board of Directors
of the Company may, insofar as permitted by law, at any time or from time
to time, suspend or terminate the Plan or revise or amend it in any respect
whatsoever except that, without appropriate approval of the stockholders of
the common stock, no such revision or amendment shall increase the maximum
number of Shares subject to the Plan, change the designation of the class
of employees eligible to receive options, decrease the price at which
options may be granted or otherwise change the provisions of this Plan to
the extent approval of the holders of the common stock of the Company is
required under applicable laws, rules or regulations. Notwithstanding the
preceding sentence, amendments to change the provisions of Section 9(a)
shall not be made more frequently than once every six months other than to
comply with the Code or the Employee Retirement Income Security Act.
13. Applicable Laws or Regulations and Notification of Disposition.
The Company's obligation to sell and deliver Shares under an option is
subject to such compliance as the Company deems necessary or advisable with
federal and state laws, rules and regulations applying to the
authorization, issuance, listing or sale of securities. The Company may
also require in connection with any exercise of an Incentive Stock Option
that the optionee agree to notify the Company when making any disposition
of the Shares, whether by sale, gift, or otherwise, within two years of the
date of grant or within one year of the date of exercise.
14. No Employment Right; No Obligation to Exercise Option. Nothing
contained in the Plan, or in any option granted under it, shall confer upon
any optionee any right to continued employment by the Company or any of its
subsidiaries or to continued membership on the Board of Directors of the
Company or limit in any way the right of the Company or any subsidiary to
terminate the optionee's employment at any time. The granting of any
option hereunder shall impose no obligation upon the optionee to exercise
such option.
A-8
<PAGE>
PROXY STANHOME INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 1996
This Proxy is solicited on behalf of the Board of Directors
The undersigned, having read the Notice of Annual Meeting of
Stockholders and Proxy Statement dated March 15, 1996, receipt of which is
hereby acknowledged, does hereby appoint and constitute H.L. TOWER, G. WILLIAM
SEAWRIGHT, and BRUCE H. WYATT, and each or any of them the attorneys and
proxies of the undersigned, with power of substitution to each, for and in the
name of the undersigned to vote and act at the Annual Meeting of Stockholders
of Stanhome Inc. to be held at the principal executive offices of the Company
at 333 Western Avenue, Westfield, Massachusetts, on Thursday, April 25, 1996
at 9:30 a.m. and at any postponement or adjournment thereof, with respect to
all shares of Common Stock, par value $.125 per share, together with
associated common stock purchase rights of said Company, standing in the name
of the undersigned or with respect to which the undersigned is entitled to
vote or act, with all the powers that the undersigned would possess if
personally present and acting, as follows:
(Continued and to be signed and dated on the reverse)
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED BUT IN THE Please mark -----
ABSENCE OF SUCH DIRECTION, IT WILL BE VOTED FOR your votes as X
ITEMS 1, 2, AND 3 BELOW. indicated in -----
this example
1. To elect Judith R. Haberkorn, Thomas R. Horton, and H.L. Tower as Class I
Directors for a three-year term. If any of such nominees should be
unavailable, the proxies or any of them may vote for substitute nominee(s)
at their discretion.
FOR all TO WITHHOLD (INSTRUCTION: To I plan to
nominees listed authority to withhold authority to attend the
above (except vote for all vote for one or more meeting.
as marked to nominees listed individual nominees, -----
the contrary) above write the nominee's
name in the space -----
provided below.)
______ ______
______ ______ ______________________
2. To ratify the appointment by the Board of Directors of Arthur
Andersen LLP as independent accountants for 1996.
FOR AGAINST ABSTAIN
______ ______ ______
______ ______ ______
3. To approve the Stanhome Inc. 1996 Stock Option Plan.
FOR AGAINST ABSTAIN
______ ______ ______
______ ______ ______
4. To transact such other business as may properly come before the
meeting and any postponement or adjournment thereof.
________________________________
(Signature)
_______________________________
(Signature)
Please sign above exactly
as name(s) appear(s)
hereon. (When signing as
attorney, executor,
administrator,trustee,
guardian, etc., give
title as such. If joint
account, each joint owner
should sign.)
_____________________,1996
(Please date)
_
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
STANHOME INC.
Annual Meeting of Stockholders
Thursday, April 25, 1996
9:30 a.m.
Corporate Headquarters
Stanhome Inc.
333 Western Avenue
Westfield, Massachusetts 01085
