STANHOME INC, DEFA14A, 1998-03-13

STANHOME INC
DEFA14A, 1998-03-13
MISCELLANEOUS NONDURABLE GOODS

Previous: STANDARD REGISTER CO, 8-K/A, 1998-03-13

Next: TANDY CORP /DE/, S-8, 1998-03-13

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 the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

1) Title of each class of securities to which transaction applies:

--------------------------------------------------

2) Aggregate number of securities to which transaction applies:

--------------------------------------------------

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

--------------------------------------------------

4) Proposed maximum aggregate value of transaction:

--------------------------------------------------

5) Total fee paid:

--------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act

Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

--------------------------------------------------

2) Form, Schedule or Registration Statement No.:

--------------------------------------------------

3) Filing Party:

--------------------------------------------------

4) Date Filed:

--------------------------------------------------

- -----------------------------------------------------------------------------

LOGO

March 13, 1998

Dear Stockholder:

On behalf of the Stanhome Inc. Board of Directors, we invite you to
attend the Annual Meeting of Stockholders to be held on Thursday, April 23,
1998, at the Le Meridien Boston, 250 Franklin Street, Boston,
Massachusetts. Information about the meeting is presented on the following
pages. Please note that the meeting is scheduled to start at 9:30 a.m.

In addition to the formal items of business to be conducted at the
meeting, management will report on the operations of the Company and will
answer stockholder questions.

It is important to ensure that your shares will be represented at the
Annual Meeting. Please complete, date, sign, and return your enclosed Proxy
card even if you plan to attend. Sending us your Proxy will not prevent you
from voting in person at the Annual Meeting should you wish to do so.
Please note that space limitations may make it necessary to limit
attendance only to stockholders of the Company. Accordingly, admission to
the meeting will be on a first-come, first-served basis, and "street name"
holders will need to bring a copy of a brokerage statement reflecting stock
ownership as of the Record Date referred to in the Proxy Statement.

We look forward to seeing you on April 23rd, and thank you for your
continued support of Stanhome Inc.

Sincerely,

/s/ H.L. TOWER
H.L. TOWER
Chairman, President and CEO

333 Western Avenue, Westfield, Massachusetts 01085 - Telephone 413-562-3631

STANHOME INC.

333 WESTERN AVENUE
WESTFIELD, MASSACHUSETTS 01085

------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 23, 1998

Notice is hereby given that the Annual Meeting of Stockholders of
Stanhome Inc. will be held at Le Meridien Boston, 250 Franklin Street,
Boston, Massachusetts 02110, at 9:30 a.m. on Thursday, April 23, 1998, for
the following purposes:

1. To elect four Class III Directors for a three-year term.

2. To approve proposed amendments to the Company's Restated Articles of
Organization, as amended, in connection with the ongoing restructuring
of the Company.

3. To vote upon a stockholder proposal described in the proxy
statement, if the proposal is presented at the meeting.

4. To ratify the appointment by the Board of Directors of Arthur Andersen
LLP as the Company's independent accountants for 1998.

5. 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 2, 1998
will be entitled to vote at the Annual Meeting and any postponement or
adjournment thereof.

By Order of the Board of Directors,

PETER R. JOHNSON, Clerk

Westfield, Massachusetts
March 13, 1998

------------------------

IMPORTANT

All stockholders are cordially invited to attend the meeting. Please
note that space limitations may make it necessary to limit attendance only
to stockholders of the Company. Accordingly, admission to the meeting will
be on a first-come, first-served basis, and "street name" holders will need
to bring a copy of a brokerage statement reflecting stock ownership as of
the Record Date referred to in the proxy statement. 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 have returned a proxy card.

STANHOME INC.

PROXY STATEMENT

March 13, 1998

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 23, 1998, at Le Meridien Boston,
250 Franklin Street, Boston, Massachusetts 02110. 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 1998 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 Peter R. Johnson, Clerk, Stanhome Inc., c/o Enesco
Corporation, 225 Windsor Drive, Itasca, IL 60143.

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 Company's 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 card and proxy materials for distribution to such beneficial
owners. The Company will, in addition, reimburse parties holding shares of
the Common Stock of record in their names or in the names of their nominees
for their reasonable expenses in sending proxy cards and proxy materials to
the beneficial owners of the shares of the Common Stock held of record by
them.

The matters to be considered and acted upon at the Annual Meeting are
referred to in the preceding Notice. If the enclosed proxy card is properly
executed and returned to the Company, all shares of the Common Stock
represented thereby will be voted by the persons named as proxies as
designated or, if no designation is indicated thereon, as described
hereinafter. Where applicable, abstentions from voting will be treated as
votes cast and will have the effect of votes against in the voting count.
Shares of the 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 address of the Company's principal executive offices is 333
Western Avenue, Westfield, MA 01085, U.S.A. This Proxy Statement and the
accompanying proxy card are being provided to the holders of record of the
Common Stock as of the close of business on March 2, 1998 (the "Record
Date").

ANNUAL REPORT

The Annual Report to Stockholders of the Company for the year ended
December 31, 1997, including the Company's financial statements for its
1997 fiscal year, accompanies this Proxy Statement, which is being mailed
on or about March 13, 1998.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

On the Record Date, there were outstanding 16,417,653 shares of the
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 each share of
the Common Stock held of record as of the Record Date. The only beneficial
owners of more than 5% of the Common Stock as of December 31, 1997 were as
follows:

<TABLE>
<CAPTION>
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
------------------- ----------------------- --------
<S> <C> <C>
Royce & Associates, Inc. ("Royce") 1,402,600 shares(1) 8.06%(1)
Royce Management Company ("RMC")
1414 Avenue of the Americas
9th Floor
New York, NY 10019

First Chicago NBD Corporation 874,865 shares(2) 5.00%(2)
One First National Plaza
Chicago, IL 60670
</TABLE>

- ---------------

(1) Based on a statement on Schedule 13G filed with the Securities and
Exchange Commission on February 5, 1998 by Royce, RMC and Charles M.
Royce as a group. Royce has sole voting and dispositive power over
1,347,600 shares, RMC has sole voting and dispositive power over 55,000
shares, and Charles M. Royce may be deemed to beneficially own the
shares beneficially owned by Royce and RMC. Charles M. Royce disclaims
beneficial ownership of the shares beneficially owned by Royce and RMC.

(2) Based on a statement on Schedule 13G filed with the Securities and
Exchange Commission on February 4, 1998 by First Chicago NBD
Corporation. First Chicago NBD Corporation has sole voting power over
858,845 shares, sole dispositive power over 874,340 shares and shared
dispositive power over 175 shares.

Management of the Company beneficially owned, as of January 31, 1998,
shares of the Common Stock (whether currently outstanding or issuable upon
exercise of stock options) as follows:

<TABLE>
<CAPTION>
Shares Underlying
Outstanding Shares Stock Options-Amount
of the Common Stock- and Nature of
Name of Amount and Nature Beneficial Percent
Beneficial Owner of Beneficial Ownership(1) Ownership(1)(2) of Class(3)
---------------- -------------------------- -------------------- -----------
<S> <C> <C> <C> <C>
John F. Cauley 1,800 Direct 7,125 --
Charles W. Elliott 2,600 Direct 1,125 --
Eugene Freedman 31,734 Direct, 196,900 1.62%
40,391 Indirect(4)
Judith R. Haberkorn 700 Direct 4,125 --
Thomas R. Horton 1,600 Direct 6,325 --
Jeffrey A. Hutsell 4,000 Direct, 66,500 --
12,146 Indirect
Allan G. Keirstead 46,676 Direct, 181,000 1.38%
1,575 Indirect
Homer G. Perkins 18,070 Direct, 7,125 --
14,000 Indirect(5)
H. L. Tower 78,509 Direct 34,125 --
</TABLE>

<TABLE>
<CAPTION>
Shares Underlying
Outstanding Shares Stock Options-Amount
of the Common Stock- and Nature of
Name of Amount and Nature Beneficial Percent
Beneficial Owner of Beneficial Ownership(1) Ownership(1)(2) of Class(3)
---------------- -------------------------- -------------------- -----------
<S> <C> <C> <C> <C>
Anne-Lee Verville 1,700 Direct 5,625 --
G. William Seawright 0 Direct, 312,250 1.87%
38 Indirect
John J. Dur 500 Direct, 26,250 --
196 Indirect
All Directors and Executive Officers 209,291 Direct, 960,350 7.17%
as a Group (15 persons) 77,331 Indirect
</TABLE>

- ---------------

(1) Unless otherwise noted, the nature of beneficial ownership is sole
voting and/or investment power. Fractional amounts have been rounded to
the nearest whole share of the Common Stock.

(2) Reflects the number of shares of the Common Stock which the Directors,
the named Executive Officers and All Directors and Executive Officers
as a Group are deemed to beneficially own by reason of options granted
to them under the Company's 1984, 1991 and 1996 Stock Option Plans and
Special Interim Chief Executive Officer Stock Option Plan which are
exercisable within 60 days of January 31, 1998.

(3) Unless otherwise noted, Percent of Class of each Director and named
Executive Officer is less than 1% of the total number of shares of the
Common Stock outstanding as of, and acquirable by such person within 60
days of, January 31, 1998.

(4) Includes 35,000 shares of the 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
investment power over these shares and disclaims any beneficial interest in
all such shares, except to the extent of his direct and indirect pecuniary
interest in the Limited Partnership and the Foundation.

(5) Includes 14,000 shares of the Common Stock held by the residuary trust
established under the Will of Frank Stanley Beveridge. Mr. Perkins shares
voting and investment power over these shares and disclaims any beneficial
interest in all such shares.

ELECTION OF DIRECTORS

Effective as of the Annual Meeting, the Board of Directors of the
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 Board has adopted several policies concerning
resignation and retirement of Directors from the Board, one providing for
review by the Board of the continued membership of a Director following a
change in his or her principal employment, and another providing for a
Director's retirement at age 72, except for Messrs. Freedman and Perkins,
who are not subject to this policy.

The terms of office of the four incumbent Class III Directors, Messrs.
John F. Cauley, Jeffrey A. Hutsell and Homer G. Perkins and Ms. Anne-Lee
Verville, expire at the Annual Meeting. The Board proposes their reelection
for three-year terms expiring at the annual meeting of stockholders in
April 2001. The election of the four nominees named above requires the
affirmative vote of the holders of a majority of the shares of the Common
Stock voting at the Annual Meeting, whether present in person or
represented by proxy; provided, however, that a quorum is present or
represented.

Valid proxies of stockholders containing no designation to the contrary
will be voted for the election of the four nominees named above as proposed by
the Board.

If for any reason any nominee is not available to serve when the
election occurs, the persons named as proxies in the proxy cards 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 DIRECTORS IN CLASS III
Terms expiring in 2001
- ------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
JOHN F. CAULEY [PHOTO] Retired as President of Friendly Ice Cream
Director since 1987 Corporation, a subsidiary of The Restaurant Company
Age 65 (restaurants and food products), Memphis, TN, in
1990. Member of the Company's Audit, Executive,
Governance and Compensation and Stock Option
Committees.
- --------------------------------------------------------------------------------------------------------------

JEFFREY A. HUTSELL [PHOTO] Vice President of the Company and President and Chief
Director since 1997 Operating Officer of Enesco Corporation, a subsidiary
Age 44 of the Company, since 1997. Formerly Executive Vice
President-Worldwide Creative of Enesco Corporation
from 1992 until 1997, having previously served as a
Vice President of Enesco Corporation from 1985 to
1992.
- --------------------------------------------------------------------------------------------------------------

HOMER G. PERKINS [PHOTO] Retired as Chairman of the Board of the Company in
Director since 1954 1982. Member of the Company's Audit and Governance
Age 81 Committees.

- --------------------------------------------------------------------------------------------------------------
ANNE-LEE VERVILLE [PHOTO] Retired as General Manager-Worldwide Education
Director since 1991 Industry of International Business Machines
Age 52 Corporation ("IBM")(advanced information
technologies), White Plains, NY, in 1997, a position
which she had held since 1994. Formerly
President-General Sector Division of IBM from 1991 to
1994. Chair of the Company's Compensation and Stock
Option Committee and member of the Audit, Executive
and Governance Committees.
</TABLE>

- ------------------------------------------------------------------------------

DIRECTORS CONTINUING IN OFFICE IN CLASS I
Terms expiring in 1999
- ------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
JUDITH R. HABERKORN [PHOTO] President-Public and Operator Services, Bell Atlantic
Director since 1993 (telecommunications services), New York, NY, since
1997. Formerly Vice President, Individual
Age 51 Communication Services, NYNEX Corporation, New York,
NY ("NYNEX"), from 1995 to 1997, having previously
served as Vice President-Consumer Markets NYNEX, from
1994 to 1995 and Vice President-Sales and Marketing,
New York Telephone Co., New York, NY, from 1992 to
1994. Chair of the Company's
Governance Committee and Member of the Audit
and Compensation and Stock Option Committees.
- --------------------------------------------------------------------------------------------------------------

THOMAS R. HORTON [PHOTO] Retired as Chairman and Chief Executive Officer of
Director since 1991 American Management Association (management
Age 71 training), New York, NY, in 1992 and 1991,
respectively, positions which he had held since 1989
and 1982, respectively. Also, Director of The
Commercial Bank of Volusia County, Ormond Beach, FL.
Member of the Company's Audit, Executive and
Governance Committees.

- --------------------------------------------------------------------------------------------------------------

H. L. TOWER [PHOTO] Chairman, President and Chief Executive Officer of
Director since 1978 the Company since 1997 and Chairman of the Board
Age 65 since 1982. Formerly Chief Executive Officer from
1978 to 1990; retired as an associate from the
Company in 1992; and served briefly in 1993 as
interim President and Chief Executive Officer. Chair
of the Company's Executive Committee.
</TABLE>

- ------------------------------------------------------------------------------

DIRECTORS CONTINUING IN OFFICE IN CLASS II
Terms expiring in 2000
- ------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
CHARLES W. ELLIOTT [PHOTO] Retired in 1995 as Executive Vice President-
Director since 1995 Administration and Chief Financial Officer, Kellogg
Age 66 Company (food products), Battle Creek, MI, positions
which he had held since 1987 and 1988, respectively.
Also, Director of Munder Funds, Detroit, MI. Chair of
the Company's Audit Committee and member of the
Compensation and Stock Option, Executive and
Governance Committees.
- --------------------------------------------------------------------------------------------------------------

EUGENE FREEDMAN [PHOTO] Vice Chairman of the Company since 1997 and Executive
Director since 1997 Vice President of the Company since 1988. Also serves
Age 73 as Chairman and Chief Executive Officer of Enesco
Corporation, a subsidiary of the Company, of which he
was a founder in 1959. Member of the Company's
Executive Committee.
- --------------------------------------------------------------------------------------------------------------

ALLAN G. KEIRSTEAD [PHOTO] Vice Chairman of the Company since 1997 and Executive
Director since 1985 Vice President and Chief Administrative and Financial
Age 53 Officer of the Company since 1988. Member of the
Company's Executive Committee.
</TABLE>

- ------------------------------------------------------------------------------

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
remuneration amounts are as follows:

(1) For service as a member of the Board, a retainer of 200
shares of the 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 for each other meeting attended by
any Director which is held in connection with the selection of
potential nominees for positions on the Board; except that for three
special meetings of the Organization Committee (now known as the
Governance Committee) during 1997, the attendance fee was increased to
$1,000 for each such meeting; and

(4) For service as Chairman of a Committee of the Board, an
additional attendance fee of $200 per Committee meeting or other
meeting referred to above.

Payment of these cash amounts may be partially or fully deferred by
the Director (with interest payable to the Director at the Company's cost
of borrowing) until a later year, retirement from the Board or 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, during the three-year period ending in 1998, as of the
day following the annual meeting, each then serving non-employee Director
receives a grant of 1,500 non-qualified options to purchase shares of the
Common Stock at an exercise price per share equal to the fair market value
per share of the Common Stock on the grant date. The options become
exercisable on the eighth anniversary of the grant, unless they have
already become exercisable under other provisions of the Company's 1996
Stock Option Plan (which are more fully described elsewhere in this Proxy
Statement) and expire on the tenth anniversary of the grant.

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.

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 six Board members, held three
meetings during 1997. 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 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 Board
members, held eight meetings during 1997. This Committee, which also
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 and reviews and acts on
recommendations from the Chief Executive Officer regarding the award of
stock options and administration of the stock option plans of the Company
and the Non-employee Director Stock Plan.

The Executive Committee, comprised of seven Board members, held two
meetings during 1997. This Committee, which consists of four non-employee
and three employee Directors, acts on behalf of the Board on important
matters that arise between meetings of the Board and performs other tasks
as delegated by the Board.

The Governance Committee, formerly known as the Organization
Committee, comprised of six Board members, held four meetings during 1997.
This Committee, which consists entirely of non-employee Directors, provides
the Board with Director and corporate officer recommendations, including
with respect to 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 Board composition.

In accordance with the Company's Restated Articles of Organization, as
amended, nominations for the election of Directors at an annual meeting of
stockholders may be made by the Board, the Governance Committee or by any
stockholder entitled to vote generally in the election of Directors.
However, any stockholder may nominate one or more persons for election as
Directors at an annual meeting of stockholders only 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 each person to be
nominated;

(b) A representation that the stockholder is a holder of record
of the Common Stock 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

(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 eight regular meetings and three special meetings during 1997.

EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ended December
31, 1997, 1996 and 1995, 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 present Chief Executive Officer, the former
Chief Executive Officer and the four most highly compensated Executive
Officers of the Company in office at the end of 1997, other than the Chief
Executive Officer (all six persons being collectively referred to herein as
the "Named Executive Officers"), for all services rendered in all
capacities to the Company and its subsidiaries:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term
Annual Compensation
Compensation(1) Awards(2)
--------------------------------------- ------------
Other Annual Securities All Other
Compensation Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) ($) Options (#) ($)(3)
- --------------------------- ---- --------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
H. L. Tower,.............. 1997 $180,000 $ -- $ -- 101,500 $ 8,967
Chairman, President 1996 -- -- -- 1,500 --
and Chief Executive Officer 1995 -- -- -- 1,500 --
G. W. Seawright,.......... 1997 429,750 -- -- -- 179,856
former President 1996 566,000 257,530 -- 70,500 37,571
and Chief Executive Officer 1995 533,750 230,713 58,865(4) 125,000 41,295
J. J. Dur,................ 1997 283,333 282,772 471,564(5) -- 22,660
Vice President 1996 271,000 -- 371,345(6) 15,000 13,792
(Chief Executive 1995 249,167 38,621 348,852(7) 35,000 3,866
Officer of Stanhome
Direct Selling Group)
E. Freedman,.............. 1997 475,000 2,761,100 -- 70,000 14,584
Vice Chairman and 1996 475,000 4,030,500 -- 24,000 30,590
Executive Vice President 1995 475,000 4,078,950 -- 40,000 30,608
(Chief Executive Officer
of Enesco Giftware Group)
J. A. Hutsell,............ 1997 450,000 -- -- 56,000 14,584
Vice President 1996 -- -- -- -- --
(President and Chief 1995 -- -- -- -- --
Operating Officer
of Enesco Corporation)
A. G. Keirstead,.......... 1997 381,000 190,500 38,696(8) 50,000 22,725
Vice Chairman, 1996 363,000 127,050 -- 21,000 21,642
Executive Vice President 1995 348,250 121,888 -- 40,000 21,511
and Chief Administrative
and Financial Officer
</TABLE>

- ---------------

(1) Annual compensation includes bonus compensation for the year, whether
paid in the year indicated or in the succeeding year, under agreements
with Messrs. Seawright and Freedman and pursuant to the Company's
Management Incentive Plan (the "MIP") with respect to Messrs. Tower,
Seawright, Dur, Hutsell and Keirstead and, except for Messrs. Tower,
Freedman and Hutsell, also includes salary compensation deferred
through the Company's Investment Savings Plan for 1995 and 1996 only
and through the Supplemental Investment Savings Plan for the entire
three-year period. For Mr. Tower, salary compensation includes amounts
deferred through the Company's Supplemental Investment Savings Plan,
but excludes amounts paid to him under the Company's Pension Plan and
his supplemental retirement agreement or in his capacity as the
non-employee Chairman of the Board until September 4, 1997 (other than
the option grants), all of which is more fully described elsewhere in
this Proxy Statement. Compensation information regarding 1995 and 1996
for Mr. Hutsell is not provided because he was not an Executive Officer
of the Company during those years.

(2) 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 and 1996 Stock Option
Plans and, with respect to Mr. Tower, the Company's 1997 President and
Chief Executive Officer Stock Option Plan. No stock appreciation rights
("SARs") were awarded either singly or in tandem with the granted
options.

(3) All Other Compensation in 1997 consisted of the following items for
each of the Named Executive Officers: H. L. Tower, $5,700 matching
contribution under the Company's Supplemental Investment Savings Plan,
$500 contribution under the Company's Payroll-Based Stock Ownership
Plan ("PAYSOP Contribution") and $2,767 insurance premiums paid by the
Company with respect to term life insurance for his benefit ("Insurance
Premiums"); G. W. Seawright, $150,750 severance payments pursuant to
his employment agreement, $21,700 matching contribution under the
Company's Supplemental Investment Savings Plan, $500 PAYSOP
Contribution and $6,906 Insurance Premiums; J. J. Dur, $17,937 matching
contribution under the Company's Supplemental Investment Savings Plan,
$500 PAYSOP Contribution and $4,223 Insurance Premiums; E. Freedman,
$11,200 contribution under the Enesco Profit Sharing Plan, $2,800
contribution under the Enesco Supplemental Profit Sharing Plan, $500
PAYSOP Contribution and $84 Insurance Premiums; J. A. Hutsell, $11,200
contribution under the Enesco Profit Sharing Plan, $2,800 contribution
under the Enesco Supplemental Profit Sharing Plan, $500 PAYSOP
Contribution and $84 Insurance Premiums; and A. G. Keirstead, $16,442
matching contribution under the Company's Supplemental Investment
Savings Plan, $500 PAYSOP Contribution and $5,783 Insurance Premiums.

(4) Includes $28,894 in automobile allowance and $24,521 in reimbursed tax
payments relating to relocation expenses for G. W. Seawright.

(5) Includes $444,765 in total costs, including taxes, incurred by the Company
for J. J. Dur under the Company's Expatriate Policy.

(6) Includes $344,543 in total costs, including taxes, incurred by the Company
for J. J. Dur under the Company's Expatriate Policy.

(7) Includes $322,752 in total costs, including taxes, incurred by the Company
for J. J. Dur under the Company's Expatriate Policy.

(8) Includes $28,696 in automobile allowance for A. G. Keirstead.

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:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
Grant
Date
Individual Grants(1) Value
---------------------------------------------------------- ----------
Number of % of Total
Securities Options Grant
Underlying Granted to Exercise Date
Options Employees or Base Present
Granted in Fiscal Price Expiration Value
Name (#)(2) Year ($/Sh) Date $(3)
---- ---------- ---------- -------- ---------- -------
<S> <C> <C> <C> <C> <C>
H. L. Tower................... 1,500 .3% $ 29.375 April 24, 2007 $ 12,338
100,000 18.0% 27.3125 November 13, 2007 819,375
G. W. Seawright............... 0 0% -- -- --
J. J. Dur..................... 0 0% -- -- --
E. Freedman................... 70,000 12.6% 28.875 October 27, 2007 606,375
J. A. Hutsell................. 20,000 3.6% 31.9375 July 31, 2007 178,850
36,000 6.5% 28.875 October 27, 2007 311,850
A. G. Keirstead............... 50,000 9.0% 28.875 October 27, 2007 433,125
</TABLE>

- ---------------

(1) The individual grants described herein were all made in the form of
non-qualified stock options under the Company's 1996 Stock Option Plan,
except for the grant of 100,000 non-qualified stock options to Mr.
Tower (which was made under the Company's 1997 President and Chief
Executive Officer Stock Option Plan). No SARs were granted by the
Company during 1997.

(2) All options granted have a ten-year term and become exercisable only
(a) after six months from date of grant and upon the Company's
achievement of certain stock value performance criteria or (b) upon the
eighth anniversary of the date of grant, regardless of whether the
stock value performance criteria have been achieved, except for the
grant of 100,000 non-qualified stock options to Mr. Tower, of which
increments of 12,500 options vest monthly during his tenure as
President and Chief Executive Officer, that become exercisable after
May 14, 1998 and, to the extent not vested, will be forfeited following
his termination of employment at the Company.

(3) The Company used the Black-Scholes option pricing model to determine
the present value of each option granted as of its 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
Common 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 the Common Stock divided by the average of
the highest and lowest closing prices for the Common Stock during the
twelve-month period ending on the 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.

No stock options were exercised by each of the Named Executive
Officers during the last fiscal year. The following table sets forth
information concerning the value of unexercised stock options held by each
of them as of the end of the fiscal year:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End(#) at FY-End($)
-------------------------- --------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
<S> <C> <C>
H. L. Tower.................................. 33,375/ 29,125 $ 0/$0
G. W. Seawright.............................. 252,500/161,500 0/ 0
J. J. Dur.................................... 17,500/ 32,500 0/ 0
E. Freedman.................................. 176,150/124,750 122,375/ 0
J. A. Hutsell................................ 56,500/ 83,000 33,375/ 0
A. G. Keirstead.............................. 160,500/101,500 0/ 0
</TABLE>

Pension Plan

The Company maintains a qualified pension plan (the "Pension Plan"),
supplemental pension plans and certain supplemental retirement agreements
requiring contributions in amounts determined annually by independent
actuaries. In the case of the supplemental pension plans and, if
applicable, supplemental retirement agreements of Messrs. Tower, Seawright,
Dur and Keirstead, annual benefits generally will be paid on a monthly
basis commencing upon eligibility therefor; however, upon the occurrence of
a change in control of the Company (within the meaning of these plans and
agreements), the present value of the aggregate expected remaining annual
benefits will be paid to the executive in one lump sum. Of the Named
Executive Officers, only Messrs. Tower, Seawright and Keirstead have
supplemental retirement agreements. Mr. Tower is currently receiving annual
benefits pursuant to his agreement and in accordance with the Pension Plan.
Mr. Seawright will be receiving reduced annual benefits pursuant to his
agreement due to his involuntary termination without cause on September 30,
1997 and is currently receiving annual benefits in accordance with the
Pension Plan. Mr. Keirstead is eligible upon his reaching age 55 to receive
reduced annual benefits pursuant to his agreement in the event of an
involuntary termination without cause. Messrs. Tower, Seawright and
Keirstead did not accrue any benefits under the Pension Plan in 1997. The
following table has been prepared without regard to the Pension Plan
limitations described below and represents amounts attributable to the
supplemental retirement agreements of Messrs. Tower, Seawright and
Keirstead, all of whom have been Executive Officers who are or were also
Directors:

PENSION PLAN TABLE (1)

<TABLE>
<CAPTION>
Remuneration Years of Service
- ------------- -------------------------------------------------------------------------------------
Final Average
Compensation 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
</TABLE>

- ---------------

(1) The information contained herein represents the aggregate estimated annual
benefits payable to eligible employee Director participants under the
Pension Plan and the supplemental retirement agreements.

The pension plans of the Company in which Mr. Dur is a participant
have a Pension Plan portion, as described below, and a supplemental pension
plan portion. Mr. Dur did not accrue any benefits under the Pension Plan in
1997. If Mr. Dur's employment with the Company is involuntarily terminated
without cause, Mr. Dur will become eligible upon his reaching age 55 to
receive reduced annual benefits under the Pension Plan and his supplemental
pension plan. The supplemental pension plan portion represents his benefit
with no limits on compensation or benefit amounts less his Pension Plan
benefit which limits compensation to $160,000 per year pursuant to Section
401(a)(17) of the Internal Revenue Code of 1986, as amended (the "Code")
and a maximum benefit pursuant to Code Section 415 of $130,000 in 1998. The
following table has been prepared without regard to these limitations or
certain social security benefit offsets, however, and it includes amounts
attributable to the supplemental pension plan in which Mr. Dur
participates:

PENSION PLAN TABLE (1)

- ---------------

(1) The information contained herein represents the aggregate estimated annual
benefits payable to eligible employee non-Director participants under the
Pension Plan and the supplemental pension plan in which Mr. Dur
participates.

For purposes of the Pension Plan, supplemental retirement agreements
and supplemental pension 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 Code, but it does not
include other payments to benefit plans, other perquisite compensation or
reimbursement for business expenses. Except for Messrs. Freedman and
Hutsell, each of whose current covered compensation under the Enesco Profit
Sharing and Supplemental Profit Sharing Plans is $200,000, and Mr. Tower,
who is no longer accruing any additional benefits under said agreements and
plans, substantially all of the items of current compensation covered by
the Pension Plan, supplemental retirement agreements and supplemental
pension plan for each of the other participating Named Executive Officers
are included in the Summary Compensation Table columns entitled "Salary
($)" and "Bonus ($)". The Pension Plan 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 through December 31, 1996. For
purposes of the Pension Plan, and of the supplemental retirement agreements
and supplemental pension plan in the event of an involuntary termination,
the number of credited years of service is currently as follows for each of
the Named Executive Officers (except for Messrs. Freedman and Hutsell who
instead are fully vested participants in the Enesco Profit Sharing and
Supplemental Profit Sharing Plans): Mr. Tower, 15; Mr. Seawright, 9; Mr.
Dur, 8; and Mr. Keirstead, 33. Each of Messrs. Tower, Seawright, Dur and
Keirstead is fully vested in the Pension Plan and became or will become
(unless terminated for cause) fully vested in his supplemental retirement
agreement/plan upon the following respective dates: July 16, 1987;
September 30, 1997; January 16, 2000 or, if applicable, the date of his
earlier involuntary termination; and November 17, 1999 or, if applicable,
the date of his earlier involuntary termination.

The Pension Plan's annual benefit is based upon an assumed normal
retirement in 1998 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 participant'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 Pension Plan benefit is
reduced in the event of termination of employment prior to age 62. The
Pension Plan and supplemental pension plan also provide for a surviving
spouse benefit in the event of the death of a vested participant. None of
the Named Executive Officers was eligible to accrue any benefits under the
Pension Plan after December 31, 1996. Upon his retirement on December 31,
1992, Mr. Tower elected to receive annual benefits under the Pension Plan's
50% joint and survivor annuity option in the amount of $71,454. Upon his
termination of employment on September 30, 1997, Mr. Seawright elected to
receive annual benefits under the Pension Plan's 100% joint and survivor
annuity option in the amount of $12,384.

The supplemental retirement agreements' portion of the estimated
annual benefits set forth in the first Pension Plan Table above is computed
based upon an assumed normal retirement in 1998 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, or, in the case of Mr. Seawright, during the period of his
employment with the Company, 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
benefits. These agreements provide for a monthly retirement benefit in an
amount based upon the individual taking a normal or early retirement from
the Company. An early retirement prior to age 62 for any reason other than
a termination without cause at age 57 or later shall subject the monthly
retirement benefit to a stipulated percentage reduction. Upon his
retirement on December 31, 1992, Mr. Tower began to receive annual benefits
under his supplemental retirement agreement in the amount of $284,813 plus
an additional annual social security supplement until he reached age 65 in
the amount of $12,792, each of which was or is payable as 50% joint and
survivor annuities. Upon his termination of employment on September 30,
1997, Mr. Seawright became eligible to receive annual benefits under his
supplemental retirement agreement beginning on September 1, 1998 in the
amount of $379,983 plus an additional annual social security supplement
until he reaches age 66 in the amount of $15,840, both of which are payable
as 50% joint and survivor annuities.

Employment Contracts and Termination of Employment and Change in Control
Arrangements

Mr. Seawright, former President and Chief Executive Officer of the
Company, received an annual base salary of $573,000 in 1997 and was
eligible for a bonus of up to 65% of his annual base salary under the MIP
program pursuant to his employment agreement, under which certain
post-termination benefits continue to be paid for a three-year period
following his termination of employment on September 30, 1997. Mr.
Seawright has a supplemental retirement agreement with the Company which is
more fully described elsewhere in this Proxy Statement.

Mr. Freedman, Vice Chairman and Executive Vice President of the
Company and Chairman and Chief Executive Officer of Enesco Corporation,
received an annual base salary of $475,000 in 1997 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 his employment
agreement which expired on December 31, 1997. His agreement had also
included 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 defined in Section 280G of the Code if his employment
had terminated within two years following a change in control of the
Company for any reason other than death, disability, retirement, 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, Vice Chairman and Executive
Vice President of the Company. In addition, the Company has entered into a
severance agreement with Mr. Dur, a Vice President of the Company. Mr. Dur
also participates in a supplemental pension plan. Each of the
aforementioned agreements and plans is more fully described elsewhere in
this Proxy Statement.

The Company also has entered into a relocation letter agreement with
Mr. Keirstead providing for Mr. Keirstead's continuation as Stanhome's Vice
Chairman, Executive Vice President and Chief Administrative and Financial
Officer. In addition to summarizing his base salary, bonus opportunity and
other employee benefits, the letter agreement provides for the receipt by
Mr. Keirstead (subject to certain conditions) of the severance payments,
retention benefits and other related termination benefits (including
without limitation the post-termination insurance benefits) described in
this section and elsewhere in this Proxy Statement in connection with a
termination of his employment with the Company, whether voluntary or
involuntary, during a period of two years following any relocation of his
place of business to Illinois. The letter agreement also clarifies Mr.
Keirstead's eligibility for relocation and related reimbursements.

The Company has separate change in control agreements or commitments
with Messrs. Dur, Freedman, Hutsell and Keirstead under which each of these
individuals is entitled to both (i) a severance benefit, payable upon 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 (two in the case of Mr. Hutsell)
times the annual base salary rate plus bonus under the MIP program and (ii)
certain fringe benefits for up to a three-year term. In accordance with
their change in control agreements, Messrs. Dur and Keirstead also will be
reimbursed for any excise tax and other taxes incurred as a result of such
reimbursement. The types of events constituting a change in control under
these agreements 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 (the "Exchange Act"), and certain other events
specified in the change in control agreements.

The terminations of Messrs. Dur and Keirstead absent a change in
control will be governed by the Company's employee severance policy as
confirmed by severance agreements with each of them, under which each of
them may be entitled to a severance benefit, payable in 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 two and three years depending on
designated criteria, specified relocation reimbursements and certain fringe
benefits for up to a 36-month term. The termination of Mr. Tower will be
governed by the Company's employee severance policy under which he may
(subject to certain conditions) be entitled to a severance benefit of at
least one year, but no more than two years, of annual base salary depending
on designated criteria and to certain other continuing group medical, life
and accidental death and dismemberment insurance coverage. The terminations
of Messrs. Freedman and Hutsell absent a change in control of the Company
will be governed by the employee severance policy of Enesco Corporation
under which each of them may (subject to certain conditions) be entitled to
a severance benefit of at least one year, but no more than two years, of
annual base salary depending on designated criteria and to certain other
continuing group medical, life and accidental death and dismemberment
insurance coverage.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1997, 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 and
Elliott and Ms. Haberkorn. No current member of the Committee is a former
officer of the Company or any of its subsidiaries, and none had any other
relationship requiring disclosure.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on Company records and other information, the Company believes that
all Securities and Exchange Commission filing requirements under Section 16(a)
of the Exchange Act applicable to its Directors and Executive Officers with
respect to the Company's fiscal year ending December 31, 1997 were complied
with.

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. 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.

The Company's executive compensation program during 1997 had three
components: base salary and fringe benefits; incentive bonus opportunity;
and option awards to purchase shares of the Common Stock. The Committee's
compensation policies regarding these components are designed to provide a
compensation package which is targeted between the median and 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
the "Towers Perrin Executive Compensation Survey," a well established and
nationally recognized annual executive compensation survey. This survey
includes some of the companies included in the indices shown in the
Performance Graph set forth below. The Committee believes that evaluating
data from the broad group of industries and companies represented in this
survey is important in establishing the true market for executive talent.
To compete effectively in this market, the Company believes that it must be
aware of compensation levels in various industries and companies of all
sizes and, accordingly, does not limit its compensation analyses to those
constituting the indices shown in the Performance Graph.

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 MIP program, which
provides for annual incentive opportunities amounting to pre-determined
percentages of the respective Executive Officers' annual base salaries with
the amount of the actual bonus payment being based on the achievement of
pre-selected personal performance criteria and certain specified Company
profitability and performance goals. Options to purchase shares of the
Common Stock are granted in amounts that are competitive with long-term
incentive award practices of comparable U.S. companies, considering the
number of options that have been previously granted to each of the
Executive Officers. With the exception of the special grant noted below,
the options, which correlate in number to executive grade levels, are
granted generally on an annual basis at the then market value of the Common
Stock and are exercisable at any time after six months from the date of
grant, subject to the Company's achievement of certain stock value
performance criteria, or upon the eighth anniversary of the date of grant
under the provisions of the Company's 1996 Stock Option Plan, for a
ten-year term, thus providing a direct relationship between the 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 the Executive Officers' and Directors' interests with
those of the Company's stockholders. The Committee's compensation policies
are intended to reinforce the Company's performance-oriented compensation
practices and are not impacted by potential non-deductibility of certain
compensation amounts for federal tax purposes under the provisions of
Section 162(m) of the Code and the regulations promulgated thereunder.

Compensation for each of the Company's Executive Officers in 1997 was
determined by the foregoing program, except for Mr. Tower, whose special grant
noted below vests monthly in increments of 12,500 options and becomes
exercisable after six months from the date of grant, and Mr. Freedman, who did
not participate in the Company's MIP program but received bonus compensation
determined under a negotiated employment agreement that was originally entered
into during the acquisition of Enesco Corporation, the terms and expiration of
which are more fully described elsewhere in this Proxy Statement.

Compensation paid to Mr. Seawright, former President and Chief Executive
Officer of the Company, from January 1, 1997 until September 30, 1997 included
his base salary at the annual rate of $573,000 and an annualized MIP target
opportunity of $372,450. Mr. Seawright did not receive any MIP bonus for 1997.

Compensation for Mr. Tower, President and Chief Executive Officer of
the Company since September 4, 1997 included his base salary at the annual
rate of $540,000 and an annualized MIP target opportunity of $351,000. Mr.
Tower did not receive any MIP bonus for 1997. Following his return to the
Company as President and Chief Executive Officer, the Committee awarded Mr.
Tower a special grant of 100,000 non-qualified options to purchase shares
of the Common Stock under the 1997 President and Chief Executive Officer
Stock Option Plan. The size of the grant relative to all other 1997 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. Apart from normal employment benefits provided to the
other Executive Officers, Mr. Tower received no other remuneration from the
Company, except for amounts paid to him under the Company's Pension Plan
and his supplemental retirement agreement and his remuneration as the
non-employee Chairman of the Board from January 1, 1997 until September 4,
1997, all of which is more fully described elsewhere in this Proxy
Statement.

The Compensation and Stock Option Committee:
A. L. Verville (Chair) J. F. Cauley C. W. Elliott J. R. Haberkorn

PERFORMANCE GRAPH

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
THE STANDARD & POOR'S ("S&P") MIDCAP 400 INDEX AND THE COMPANY'S PEER
GROUP INDEX (1)

<TABLE>
<CAPTION>
Measurement Period Stanhome S&P Midcap Company's
(Fiscal Year Covered) Inc. 400 Peer Group
<S> <C> <C> <C>
12/31/92 $ 100.00 $ 100.00 $ 100.00
12/31/93 100.71 113.95 98.75
12/31/94 96.94 109.87 70.34
12/31/95 92.42 143.86 80.00
12/31/96 87.38 171.49 84.16
12/31/97 88.15 226.80 96.83
</TABLE>

- ---------------

(1) This graphic presentation assumes (a) one-time $100 investments in the
Common Stock and in market capital base-weighted amounts apportioned
among all the companies whose equity securities constitute the above
named board equity market index and the Company's selected peer group
index, in each case made as of the market close on the last trading day
in 1992 and (b) the automatic reinvestment of dividends, if any, in
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. The Company has
chosen to present a peer group index composed of the companies that
formerly constituted the former S&P Midcap 400 Consumer Products Index
in order to maintain continuity with comparisons provided in prior
years' proxy statement Performance Graph presentations. Tambrands Inc.,
however, is unable to be used for such an index after 1996 because it
is no longer publicly traded. Therefore, for years commencing after
December 31, 1996, the Company's peer group is made up of the following
nine companies: Carter-Wallace, Inc.; Church & Dwight Co., Inc.; A.T.
Cross Company; First Brands Corporation; Gibson Greetings, Inc.;
Lancaster Colony Corp.; National Presto Industries, Inc.; Perrigo
Company; and Stanhome Inc. (Source: Standard & Poor's Compustat Custom
Products Division, a Division of The McGraw-Hill Companies.)

PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S RESTATED
ARTICLES OF ORGANIZATION, AS AMENDED

In connection with the Company's previously announced corporate
restructuring, at a meeting held on January 21, 1998, the Board voted to
approve amendments to the Company's Restated Articles of Organization, as
amended, to:

- change Article 1 to provide that the name by which the Company shall be
known is "Enesco Group, Inc."

- change Article 2 to provide that the purpose of the Company shall read
as follows:

"To manufacture, process, assemble, warehouse, buy, sell,
distribute and otherwise engage in and carry on the business of
marketing giftware and collectible products and other items,
materials, articles, goods and merchandise and otherwise dealing
in real, personal and intellectual or industrial property of all
kinds and descriptions; to exercise all of the powers conferred
upon business corporations by, and from time to time permitted
to be exercised by business corporations under, the laws of the
Commonwealth of Massachusetts; and to engage in and carry on any
other lawful business or transaction which may now or hereafter
be permitted under the laws of the Commonwealth of Massachusetts
to be conducted, whether in that Commonwealth or elsewhere, by a
business corporation organized under Chapter 156B of the
Massachusetts General Laws."

- change Article 6 to provide that meetings of stockholders of the
Company shall be held anywhere within the United States, as
determined by the Board, as permitted by the provisions of the
Massachusetts Business Corporation Law.

The Board also voted to authorize the officers of the Company to make,
execute and file with the Massachusetts Secretary of State Articles of
Amendment embodying these changes, to make, execute, file or deliver other
appropriate documents relating thereto and to take such other necessary or
desirable actions to effectuate the resulting change in the Company's
corporate name, the corporate purpose of the Company and the allowable
places for meetings of stockholders of the Company at or as soon as
practicable following the close of business on the second Friday after the
Annual Meeting, subject to the approval of the stockholders. The Board
believes that the foregoing changes will be beneficial to the Company at
this time in that they will better reflect the true image and nature of the
Company as it continues its ongoing corporate restructuring, announced in
the Spring of 1997. In that restructuring, the Company (a) sold
substantially all of the business and operations of its Hamilton Direct
Response Group and Stanhome Direct Selling Group; (b) refocused its
business and operations around the Enesco Giftware Group; and (c) announced
the closure of its corporate headquarters in Westfield, Massachusetts and
the relocation of those headquarters to Itasca, Illinois, the current
location of the headquarters of the Enesco Giftware Group.

In the restructuring, the Company agreed to transfer all rights to the
"Stanhome" name to the buyer of substantially all the business and
operations of the Stanhome Direct Selling Group. In that connection, and in
light of the refocusing of its operations away from business and operations
conducted under the Stanhome name and toward business and operations
conducted under the Enesco name, the Company has determined it now is
appropriate to change its corporate name. The Company believes that the
proposed change in its name to "Enesco Group, Inc." fully aligns its
corporate name with the name of the sole business in which it will now
operate.

Similarly, the Company's newly refocused operations made inaccurate
the existing corporate purpose clause in its Restated Articles of
Organization, as amended, which includes references to the Company's former
direct response and direct selling businesses. Moreover, the form of the
existing corporate purpose clause is cumbersome and outdated. The proposed
change in the Company's corporate purpose corrects the inaccuracies
resulting from the restructuring and updates the form of that clause to
conform more closely to forms currently utilized by most public companies.

Finally, the relocation of the Company's headquarters from
Massachusetts to Illinois may make it most efficient to hold future
meetings of the Company's stockholders in Illinois or elsewhere in the
United States. Currently, the Company's Restated Articles of Organization,
as amended, do not permit the Company to hold meetings of its stockholders
outside the Commonwealth of Massachusetts. Accordingly, the Company is
recommending that the Restated Articles of Organization, as amended, be
modified to permit meetings of stockholders to be held anywhere in the
United States, as determined by the Board.

The Articles of Amendment reflecting the foregoing amendments, if
approved by the stockholders, are planned to have an effective date on or
about May 1, 1998.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR THE PROPOSED AMENDMENTS TO THE COMPANY'S
RESTATED ARTICLES OF ORGANIZATION, AS AMENDED.

Approval of the foregoing amendments requires the affirmative vote of
the holders of a majority of all of the shares of the Common Stock
outstanding and entitled to vote thereon at the Annual Meeting; provided,
however, that a quorum is present or represented. The Board believes that
the proposed changes to the Company's Restated Articles of Organization, as
amended, are in the best interests of the Company and the stockholders and
recommends a vote FOR the approval of the foregoing amendments.

Valid proxies of stockholders containing no designation to the
contrary will be voted for the approval of the foregoing amendments as
recommended by the Board.

STOCKHOLDER PROPOSAL

The following proposal was submitted by Ralph F. Kanders, 330 Madison
Avenue, Convent, NJ 07961. Based upon information available to the Company, as
of January 31, 1998, Dr. Kanders held or controlled through various trusts an
aggregate of 161,670 shares of the Common Stock.

Stockholder Proposal

RESOLVED: That the shareholders of Stanhome, Inc. recommend to the
directors that they seek the sale of company and its subsidiaries (USA and
foreign [Lilliput]).

Stockholder's Supporting Statement

In 1997, Stanhome, Inc. including Enesco and foreign subsidiaries
continue to report continued record low earnings for this decade. This
involves the second restructuring in the past four years and a new low for
shareholder equity.

At the 1991 shareholder meeting, I had stated that Enesco is a
secondary player in giftware and accessories to Disney, Time Warner, and
MCA of the motion picture industry. Since 1989, Disney and Warner have been
opening between 40-50 new stores, USA and foreign. MCA has 1000 Spencer
Gift Stores in the USA. All this is in addition to the theme park sales.

Currently, the growth of the motion picture consumer products
(giftware and sundry) has been a most important factor to the bankers when
addressing loans for the sky-rocketing new film costs.

Since 1990, the growth of Enesco sales has been 4-5% per annum
compared to 15-16% in the '80s with gross profits reduced by the same
magnitude. We are losing our share, percentage-wise, of the total market.
This is a fiercely competitive market.

In 1994, in an effort to enlarge our gross sales in Europe, Lilliput
and some smaller companies were purchased; this although "thatch cottages"
have a small market in the USA. This, combined with the strong dollar and
high unemployment in Europe, has resulted in a negative profit factor in
relation to the outstanding loan and higher floating rates in 1998 which
could be to a greater disadvantage.

The examination of Enesco "high end" of sales is Cherished Teddies and
Precious Moments; the latter has had declining sales as a result of QVC
discount TV promotions since July 1993 and periodically thereafter. In
1995, Marshall's nationwide discount stores (450) sold Precious Moments
circa 1979-93.

The green book representing after market value of P.M. has been
discontinued. In all collector sales meetings with the public, the regional
salesmen introductory remarks concern the appreciation in the aftermarket
of the items.

The low end of the business, more than 50%, is Christmas ornaments and
other items as they appear in catalogers, Wal-Mart, Kmart, etc. This is a
commodity operations.

Enesco advertising and public relation expense involves about 3
million dollars in the annual Easter Seal promotion of which 50% consists
of merchandise, collector magazines and a partial expense if a dealer is on
a local spot TV, usually pre-holiday.

In order to move Enesco sales ahead in double digits as in the '80s, we
must have an entertainment affiliation for much wider exposure to the public.

Reducing expenses with the elimination of the Westfield, MA office and
repurchase of additional shares will not be the answer to higher sales and
gross profits. Getting the message to the public takes time and a new sales
tactic.

We shareholders will never recoup the losses of the '90s compared to
the phenomenal growth of the S&P and it requires a company with deep
pockets and an entertainment division; nothing short will be most
productive.

The errors of the past cannot be covered by simply being patient.

The institutions own 62% of the total shares, let us put a halt to
continued promises and lack of profitability. We are entitled to complete
action now.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE AGAINST THE STOCKHOLDER PROPOSAL.

Statement of the Board in Opposition to the Stockholder Proposal

The Stockholder Proposal calls for the Board to seek the sale of the
Company. Over the course of the last twelve months, as set forth elsewhere
in this Proxy Statement, the Company has divested itself of substantially
all of its former Hamilton Direct Response Group and Stanhome Direct
Selling Group and refocused the Company's business and operations on its
Enesco Giftware Group worldwide operations. The Company also has announced
the closure of its Massachusetts corporate headquarters and the planned
relocation of those headquarters to Illinois. In short, the Board has
already taken substantial and important steps to reorganize its business
and operations and focus the attention of Company management on enhanced
revenue expansion and increased operating profitability in the Company's
Enesco Giftware Group worldwide operations. Accordingly, the Board believes
that the forced sale of the Company is not in the best interests of the
Company and its stockholders at this time.

As with a similar proposal submitted by Dr. Kanders last year, the
Stockholder Proposal fails to recognize that the Company has never
foreclosed the possibility of any strategic transaction that is in the best
interests of the Company and its stockholders. In fact, the Company's
officers and directors are committed to the exploration and consideration
of such transactions and their pursuit, when appropriate, in order to
enhance stockholder value. The Board maintains regular, frequent and
substantial contact with various outside advisors, including management
consultants, public accountants, legal counsel and investment bankers.
These outside advisors assist the Company in continually monitoring the
marketplace, evaluating potential opportunities and pursuing transactions
that the Board believes to be in the best interests of the Company and its
stockholders.

Moreover, adoption of the Stockholder Proposal would neither alter
nor, in the Board's view, promote the Directors' appropriate exercise of
their fiduciary duties under applicable law and could decrease the Board's
leverage in negotiating a transaction benefiting all stockholders. For
example, the Stockholder Proposal neglects to articulate clearly or even
provide for the exercise of the statutorily-mandated fiduciary duties of
each member of the Company's management to act in good faith and with due
care. The Board, however, is aware of its fiduciary duties and is mindful
of the interests of the Company's constituencies and, consequently, it
remains open to all opportunities with the potential to enhance stockholder
value and otherwise realize the best interests of the Company and its
stockholders. In addition, the Board firmly believes that the adoption of
the Stockholder Proposal at this time could create an uncertain public
atmosphere which, in its judgment, would disadvantage the Company in any
future efforts to pursue successfully the sale recommendation mentioned in
the Stockholder Proposal. Simply put, such an environment could result in
the Company having diminished bargaining power in negotiating for the best
price and for other favorable terms of any such transaction for the benefit
of its stockholders. The uncertain atmosphere that could be created by the
adoption of the Stockholder Proposal also could result in damage to the
Company's employee, supplier, creditor and customer relationships, further
jeopardizing the Company's available business opportunities.

FOR THE REASONS STATED ABOVE, THE COMPANY'S BOARD OF
DIRECTORS BELIEVES THAT THE STOCKHOLDER PROPOSAL IS
NOT IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS. ACCORDINGLY, THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE
STOCKHOLDER PROPOSAL.

The proposal requires for adoption the affirmative vote of the holders
of a majority of the shares of the Common Stock voting at the Annual
Meeting, whether present in person or represented by proxy; provided,
however, that a quorum is present or represented.

Valid proxies of stockholders containing no designation to the
contrary will be voted against the approval of the Stockholder Proposal as
recommended by the Board.

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
for 1998, subject to ratification by the stockholders. Valid proxies of
stockholders containing no designation to the contrary will be voted for
the reappointment of that firm as recommended by the Audit Committee.
Representatives of Arthur Andersen LLP are expected to attend the Annual
Meeting and be available to respond to appropriate questions and to make a
statement if they so desire.

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 may present a proposal to be
voted on at the 1999 annual meeting of stockholders. Provided such proposal
is received by the Company on or before November 13, 1998 and meets all of
the other requirements of those rules, 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
Annual Meeting other than the matters described in the Notice. However, the
enclosed proxy card 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 Annual Meeting and any postponement or
adjournment thereof. Except as expressly provided for hereinabove, it is
the intention of the persons named as proxies in the proxy card to vote
shares represented by 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, 1997 without charge by
writing to the Clerk of the Company, c/o Enesco Corporation, at 225 Windsor
Drive, Itasca, Illinois 60143.

By order of the Board of Directors,

STANHOME INC.

PETER R. JOHNSON
Clerk

March 13, 1998

PROXY STANHOME INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1998

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 13, 1998, receipt of which is hereby
acknowledged, does hereby appoint and constitute H.L. TOWER and ALLAN G.
KEIRSTEAD, and each or either 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 Le Meridien Boston, 250 Franklin Street,
Boston, Massachusetts, on Thursday, April 23, 1998 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)

THIS PROXY WILL BE VOTED AS DIRECTED BUT IN THE ABSENCE OF SUCH DIRECTION,
IT WILL BE VOTED FOR ITEMS 1, 2 AND 4, AND AGAINST ITEM 3, BELOW.

1. To elect John F. Cauley, Jeffrey A. Hutsell, Homer G. Perkins and
Anne-Lee Verville as Class III 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
nominees listed authority to withhold authority to
above (except vote for all vote for one or more
as marked to nominees listed individual nominees,
the contrary) above write the nominee's
name in the space
provided below.)

------ ------

------ ------ --------------------

2. To approve amendments to the Restated Articles of Organization, as
amended, of the Company.

FOR AGAINST ABSTAIN

------ ------ ------

3. To approve the stockholder proposal recommending that the Board of
Directors seek the sale of the Company and its subsidiaries.

FOR AGAINST ABSTAIN

------ ------ ------

4. To ratify the appointment by the Board of Directors of Arthur Andersen
LLP as the Company's independent accountants for 1998.

FOR AGAINST ABSTAIN

------ ------ ------

5. To transact such other business as may properly come before the meeting
and any postponement or adjournment thereof.

-----------------------------

-----------------------------
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.)

_______________________, 1998
(Please date)

I plan to attend the meeting.

_______
_______

PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

STANHOME INC.

Annual Meeting of Stockholders
Thursday, April 23, 1998
9:30 a.m.

Le Meridien Boston
250 Franklin Street
Boston, Massachusetts 02110