<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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
ENESCO GROUP, 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:
- --------------------------------------------------------------------------------
<PAGE> 2
[ENESCO LOGO]
March 17, 2000
Dear Stockholder:
On behalf of the Enesco Group, Inc. Board of Directors, you are invited to
attend the Annual Meeting of Stockholders to be held on Thursday, April 27,
2000, at the Enesco Showroom Theater, One Enesco Plaza (corner of Busse and
Devon), Elk Grove Village, Illinois 60007. The meeting will start at 9:30 a.m.
In addition to the formal items of business to be conducted at the meeting,
we will report on the operations of Enesco and will respond to stockholder
questions.
It is important to ensure that your shares are represented at the Annual
Meeting. Whether or not you plan on attending the meeting, we hope you will vote
as soon as possible. You may vote over the Internet, as well as by telephone or
by returning the enclosed proxy card in the envelope provided. Voting over the
Internet, by phone or by written proxy will ensure your representation at the
meeting if you do not attend in person. Please review the instructions on the
proxy card regarding each of these voting options. Space limitations may make it
necessary to limit attendance only to Enesco stockholders. Accordingly,
admission to the meeting will be on a first-come, first-served basis.
We look forward to seeing you on April 27th, and thank you for your
continued support of Enesco Group, Inc.
Sincerely,
/s/JEFF HUTSELL SIG
JEFFREY A. HUTSELL
President and CEO
225 Windsor Drive, Itasca, Illinois 60143 - Telephone 630-875-5300
<PAGE> 3
ENESCO GROUP, INC.
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: April 27, 2000
Time: 9:30 a.m. Central
Place: Enesco Showroom Theater
One Enesco Plaza
Corner of Busse and Devon
Elk Grove Village, Illinois 60007
Purposes:
- To elect three Class II Directors for a three-year term.
- To ratify the appointment by the Board of Arthur Andersen LLP as Enesco's
independent accountants for 2000.
- To transact other business which may properly be presented at the meeting
and any postponement or adjournment of the meeting.
Stockholders of record as of the close of business on March 1, 2000 will be
entitled to vote at the meeting and any postponement or adjournment of the
meeting.
By Order of the Board of Directors,
ROBERT J. HIPPLE, Clerk
Itasca, Illinois
March 17, 2000
---------------------
IMPORTANT
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. PLEASE NOTE
THAT SPACE LIMITATIONS MAY MAKE IT NECESSARY TO LIMIT ATTENDANCE ONLY TO ENESCO
STOCKHOLDERS. ACCORDINGLY, ADMISSION TO THE MEETING WILL BE ON A FIRST-COME,
FIRST-SERVED BASIS. 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. YOU MAY ALSO VOTE OVER THE INTERNET OR
BY TELEPHONE. INSTRUCTIONS ARE PROVIDED ON THE PROXY CARD FOR VOTING OVER THE
INTERNET OR BY TELEPHONE. IF YOU DO ATTEND THE MEETING, YOU MAY VOTE IN PERSON,
EVEN IF YOU HAVE RETURNED A PROXY CARD.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Enesco Group, Inc........................................... 1
The Annual Meeting.......................................... 1
Voting Instructions......................................... 1
Annual Report............................................... 3
Our Largest Stockholders.................................... 4
Shares Held by Our Directors and Executive Officers......... 5
Proposal 1: Election of Directors........................... 6
Compensation of Non-Employee Directors...................... 9
Committees of the Board..................................... 10
Executive Compensation...................................... 12
Section 16(a) Beneficial Ownership Reporting Compliance..... 16
Compensation and Stock Option Committee Report on Executive
Compensation.............................................. 16
Performance Graphs.......................................... 18
Proposal 2: Independent Public Accountants.................. 20
Stockholder Proposals....................................... 20
</TABLE>
<PAGE> 5
ENESCO GROUP, INC.
PROXY STATEMENT
March 17, 2000
ENESCO GROUP, INC.
We are engaged in the sale of quality branded gifts, collectibles and
decorative accents, including designed and licensed collectible figurines and
ornaments, action musicals, decorative home accessories and other giftware,
principally at wholesale, to independent retailers, mass marketers, catalogers
and other direct response distributors. Our principal executive offices are
located at 225 Windsor Drive, Itasca, Illinois 60143, and our telephone number
is (630) 875-5300. Our website is located at www.enesco.com on the internet.
THE ANNUAL MEETING
Attending the Annual Meeting
Our meeting will be held on April 27, 2000 at 9:30 a.m., at the Enesco
Showroom Theater, One Enesco Plaza (corner of Busse and Devon), Elk Grove
Village, Illinois.
This Proxy Statement
We sent you these proxy materials because our Board of Directors is
soliciting your proxy to vote your shares at the meeting. If you own Enesco
common stock in more than one account, such as individually and also jointly
with your spouse, you may receive more than one set of these proxy materials. To
assist us in saving money and to provide you with better shareholder services,
we encourage you to have all your accounts registered in the same name and
address. You may do this by contacting ChaseMellon Consulting Services, LLC. In
order to vote all your shares by proxy, you should vote the shares in each
different account as described below.
On March 17, 2000, we began mailing these proxy materials to all
stockholders of record at the close of business on March 1, 2000. On the record
date there were 13,510,897 shares outstanding and approximately 2,695 holders of
record.
Quorum Requirement
A quorum is necessary to hold a valid meeting. The attendance by proxy or
in person or by telephone or over the Internet, of holders of a majority of the
shares entitled to vote at the meeting will constitute a quorum to hold the
meeting. [Abstentions and broker non-votes are counted as present for
establishing a quorum.] A broker non-vote occurs when a broker votes on some
matter on the proxy card but not on others because the broker does not have the
authority to do so.
VOTING INSTRUCTIONS
You are entitled to one vote for each share of common stock that you own as
of the close of business on the record date. Please carefully read the
instructions below on how to vote your shares. Because the
<PAGE> 6
instructions vary depending on how you hold your shares, it is important that
you follow the instructions that apply to your particular situation.
If Your Shares are Held in Your Name
VOTING BY PROXY. Even if you plan to attend the meeting, you can vote
before the meeting by proxy. There are three ways to vote by proxy:
- you can vote by telephone by calling toll-free 1-800-840-1208 and
following the instructions on the proxy card;
- you can vote by Internet by following the instructions on the proxy card;
or
- you can vote by mail by signing, dating and mailing the enclosed proxy
card.
VOTING IN PERSON AT THE MEETING. If you plan to attend the meeting, you can
vote in person. In order to vote at the meeting, you will need to bring your
share certificates or other evidence of your share ownership with you to the
meeting.
REVOKING YOUR PROXY. As long as your shares are registered in your name,
you may revoke your proxy at any time before it is exercised. There are several
ways you can do this:
- by filing a written notice of revocation with our Clerk;
- by following appropriate Internet or telephone voting procedures;
- by signing and delivering another proxy that bears a later date; or
- by attending the meeting and voting in person.
If Your Shares are Held in "Street Name"
VOTING BY PROXY. If your shares are registered in the name of your broker
or nominee, you will receive instructions from the holder of record that you
must follow in order for your shares to be voted. Certain brokers and banks will
also offer telephone and Internet voting.
VOTING IN PERSON AT THE MEETING. If you plan to attend the meeting and vote
in person, you should contact your broker or nominee to obtain a broker's proxy
card and bring it and your account statement or other evidence of your share
ownership with you to the meeting
REVOKING YOUR PROXY. If your shares are held in street name, you must
contact your broker to revoke your proxy.
Voting Rules
By giving us your proxy, you authorize the individuals named on the proxy
card to vote your shares in the manner you indicate at the meeting or any
postponements or adjournments of the meeting. With respect to the election of
nominees for director, you may:
- vote "for" the election of all nominees for director named in this proxy
statement;
- "withhold" authority to vote for all nominees; or
2
<PAGE> 7
- "withhold" authority to vote for one or more of the nominees and vote
"for" the remaining nominee(s).
If a quorum is present at the meeting, a nominee will be elected to serve
as a Class II Director if a majority of the shares of Common Stock voting at the
meeting vote for the nominee, whether present, in person, by telephone or
Internet vote or represented by proxy. Because of this rule, non-voted shares
will not affect the outcome of the election of directors and will not prevent
that nominee from being elected.
With respect to the proposal to approve the ratification of the appointment
of Arthur Andersen LLP as Enesco's independent accountants for 2000, you may:
- vote "for" ratification;
- vote "against" ratification; or
- "abstain" from voting on the proposal
If a quorum is present at the meeting, the affirmative vote of a majority
of the shares represented at the meeting and entitled to vote on this proposal
will be required to ratify the appointment of Arthur Andersen LLP as Enesco's
independent accountants for 2000. Because of this rule, a vote to abstain from
voting on this proposal will have the effect of a vote against ratification.
If you return your proxy card with no votes marked, your shares will be
voted as follows:
- "for" the election of all nominees for director named in this proxy
statement; and
- "for" ratification of the appointment of Arthur Andersen LLP as Enesco's
independent accountants for 2000.
We actively solicit proxy participation. We will bear the cost of
soliciting proxies. In addition to this notice by mail, we request and encourage
brokers, custodians, nominees and others to supply proxy materials to
stockholders, and we will reimburse them for their expenses. Our officers and
employees may, by letter, telephone, electronic mail, or in person, make
additional requests for the return of proxies, although we do not reimburse our
own employees for soliciting proxies. In addition, we have hired ChaseMellon
Consulting Services, LLC. in New York, New York for approximately $5,500.
ANNUAL REPORT
The Annual Report to Stockholders of the Company for the year ended
December 31, 1999, including our financial statements for our 1999 fiscal year,
accompanies this proxy statement.
3
<PAGE> 8
OUR LARGEST STOCKHOLDERS
On March 1, 2000, there were outstanding 13,510,897 shares of our common
stock, which is the only class of stock outstanding and entitled to vote at the
annual meeting. The holders of these shares will be entitled to cast one vote
for each share of common stock held of record as of March 1, 2000. To the best
of Enesco's knowledge, the beneficial owners of more than 5% of the common stock
as of December 31, 1999 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")..................... 836,600 shares(1) 6.19%
Royce Management Company ("RMC")
1414 Avenue of the Americas
New York, NY 10019
Barclays Global Investors, N.A. ("Barclays")........... 768,083 shares(2) 5.68%
Barclays Global Fund Advisors ("BGF")
45 Freemont Street
San Francisco, CA 94105
David L. Babson and Company Incorporated............... 2,138,783 shares(3) 15.83%
One Memorial Drive
Cambridge, MA 02142
Dimensional Fund Advisors.............................. 1,087,000 shares(4) 8.04%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
</TABLE>
- ---------------
(1) Based on a statement on Schedule 13G filed with the Securities and Exchange
Commission (SEC) on February 9, 2000 by Royce, RMC and Charles M. Royce as a
group. Royce has sole voting and dispositive power over 831,600 shares, RMC
has sole voting and dispositive power over 5,000 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 information provided directly by Barclays Global Investors
reflecting that Barclays and BGF held 768,083 shares as a group on February
29, 2000. In a statement on Schedule 13G filed with the SEC on February 12,
1999 by Barclays and BCF, Barclays then had sole voting power over 952,283
shares and sole dispositive power over 976,203 shares and BGF had sole
voting and dispositive power over 14,600 shares.
(3) Based on a statement on Schedule 13G filed with the SEC on January 25, 2000
by David L. Babson and Company Incorporated. David L. Babson and Company
Incorporated has sole voting power over 2,138,783 shares and sole
dispositive power over 2,138,783 shares.
(4) Based on a statement on Schedule 13G filed with the Securities and Exchange
Commission on February 4, 2000 by Dimensional Fund Advisors, Inc.
Dimensional Fund Advisors, Inc. has sole voting and dispositive power over
1,087,000 shares.
4
<PAGE> 9
SHARES HELD BY OUR DIRECTORS AND EXECUTIVE OFFICERS
Our management beneficially owned, as of March 1, 2000, shares of our
common Stock as follows:
<TABLE>
<CAPTION>
OUTSTANDING SHARES SHARES UNDERLYING
OF THE COMMON STOCK- STOCK OPTIONS-AMOUNT
NAME OF AMOUNT AND NATURE AND NATURE OF PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) BENEFICIAL OWNERSHIP(1)(2) OF CLASS(3)
---------------- -------------------------- -------------------------- -----------
<S> <C> <C> <C>
John F. Cauley.................. 4,200 21,500 --
Charles W. Elliott.............. 5,746 1,500 --
Eugene Freedman................. 77,934(4) 144,600 1.65%
Judith R. Haberkorn............. 1,846 4,500 --
Jeffrey A. Hutsell.............. 22,892 103,000 --
Allan G. Keirstead.............. 48,698 143,600 1.42%
Donna B. Lucas.................. 556 0 --
Homer G. Perkins................ 20,216 7,500 --
H. L. Tower..................... 79,455 134,500 1.58%
Anne-Lee Verville............... 3,346 6,000 --
Thomson J. Hudson............... 2,558 25,000 --
Josette V. Goldberg............. 275 6,250 --
Peter R. Johnson (5)............ 7,069 16,300 --
All Directors and Executive
Officers as a Group (15
persons)...................... 274,999 616,750 6.60%
</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 common stock which the Directors, executive
officers and Directors and executive officers as a group beneficially own by
reason of options which are exercisable within 60 days of March 1, 2000.
(3) Unless otherwise noted, the percent of class is less than 1%.
(4) Includes 66,734 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 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) Mr. Johnson resigned as an officer of Enesco in October 1999 and terminated
his employment with Enesco on December 31, 1999.
5
<PAGE> 10
PROPOSAL 1: ELECTION OF DIRECTORS
Effective as of the annual meeting, the Board consists of nine members who
are divided into three 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 mandatory
retirement at age 72, except for Messrs. Freedman and Perkins, who are not
subject to this policy.
Two current Class II Directors, Messrs. Eugene Freedman and Allan G.
Keirstead, are nominated for reelection to the Board. The third current Class II
Director, Mr. Charles W. Elliott, has advised the Chairman that he will retire
and does not wish to stand for re-election for personal and family reasons. One
current Class I Director, Ms. Donna Brooks Lucas, who was appointed as a
Director in October 1999 and whose term as a Class I Director would expire in
2002, is nominated as a Director in Class II. The Board proposes their
reelection for three-year terms scheduled to expire at the annual meeting of
stockholders in April 2003.
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 to serve as a Director.
INFORMATION AS TO BOARD OF DIRECTORS AND NOMINEES
NOMINEES FOR DIRECTORS IN CLASS II
TERMS EXPIRING IN 2003
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
EUGENE FREEDMAN [EUGENE FREEDMAN] Founding Chairman since 1998. Formerly Executive
Director since 1997 Vice President of the Company from 1988 until
Age 75 1998 and Vice Chairman from 1997 until 1998.
Also served as Founding Chairman of Enesco
Corporation, a former subsidiary of the Company,
of which he was a founder in 1959. Member of
Enesco's Executive Committee.
- -------------------------------------------------------------------------------------------------------------
ALLAN G. KEIRSTEAD [ALLAN G. KEIRSTEAD] Executive Vice President and Chief
Director since 1985 Administrative and Financial Officer of the
Age 55 Company since 1988 and Chief Executive Officer
of Enesco international businesses since 1998.
Formerly Vice Chairman of the Company from 1997
until 1998. Member of Enesco's Executive
Committee.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 11
<TABLE>
<S> <C> <C>
DONNA B. LUCAS [DONNA B. LUCAS] President and Chief Executive Officer of DBL
Director since 1999 Multi- Media Group, Chicago, Illinois (creative
Age 47 and strategic business communications) since
1995. Formerly President, BR&R Communications,
Inc., a public relations agency specializing in
African-American consumer and healthcare
marketing, having previously served as Senior
Vice President, Director of Marketing at
Burson-Marsteller. Member of the Economic Club
of Chicago, Northwestern University Medill
School of Journalism Board of Visitors, the
Executive Leadership Council, the Urban League,
the NAACP and The Links Incorporated. Member of
the Audit, Compensation and Governance
Committees.
- -------------------------------------------------------------------------------------------------------------
DIRECTORS CONTINUING IN OFFICE IN CLASS I
TERMS EXPIRING IN 2002
- -------------------------------------------------------------------------------------------------------------
JUDITH R. HABERKORN [JUDITH R. HABERKORN] President-Consumer Sales and Service, Bell
Director since 1993 Atlantic Corp. (telecommunications services),
Age 53 New York, NY, since 1998. Formerly
President-Public and Operator Services, at Bell
Atlantic Corp. from 1997 to 1998, having
previously served as Vice President, Individual
Communication Services, NYNEX Corporation, New
York, NY ("NYNEX"), from 1995 to 1997, and as
Vice President-Consumer Markets, at NYNEX, from
1994 to 1995. Also Director of Armstrong World
Industries Inc., Lancaster, PA. Chairman of the
Company's Audit Committee and Member of the
Executive, Governance and Compensation and Stock
Option Committees.
- -------------------------------------------------------------------------------------------------------------
HOMER G. PERKINS [HOMER G. PERKINS] Retired as Chairman of the Board of the Company
Director since 1954 in 1982. Member of the Audit and Governance
Age 83 Committees.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 12
<TABLE>
<S> <C> <C>
H. L. TOWER [H.L. TOWER] Retired as Chairman, President and Chief
Director since 1978 Executive Officer of the Company and as Chairman
Age 67 of the Board in 1998. Formerly Chief Executive
Officer from 1978 to 1990; retired as an
associate from the Company in 1992; and served
briefly in 1993 and again in 1997 and 1998 as
interim President and Chief Executive Officer.
Member of the Audit, Executive and Governance
Committees and Chairman of the Governance
Committee.
- -------------------------------------------------------------------------------------------------------------
DIRECTORS CONTINUING IN OFFICE IN CLASS III
TERMS EXPIRING IN 2001
- -------------------------------------------------------------------------------------------------------------
JOHN F. CAULEY [JOHN F. CAULEY] Chairman of the Board since 1998. Retired as
Director since 1987 President of Friendly Ice Cream Corporation, a
Age 67 subsidiary of The Restaurant Company
(restaurants and food products), Memphis, TN, in
1990. Also, Director of Imetrix Corporation,
Cataumet, MA. Chairman of the Executive
Committee and member of the Audit and Governance
Committees.
- -------------------------------------------------------------------------------------------------------------
JEFFREY A. HUTSELL [JEFFREY A. HUTSELL] President and Chief Executive Officer of the
Director since 1997 Company since 1998 and President and Chief
Age 46 Executive Officer of Enesco Corporation, a
former subsidiary of the Company, since 1997.
Formerly Vice President of the Company from 1997
until 1998 and 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. Member of the
Executive Committee.
- -------------------------------------------------------------------------------------------------------------
ANNE-LEE VERVILLE [ANNE-LEE VERVILLE] Retired as General Manager-Worldwide Education
Director since 1991 Industry of International Business Machines
Age 54 Corporation ("IBM") (advanced information
technologies), White Plains, NY, in 1997, after
30 years with IBM. Also, Trustee of Colonial
Mutual Funds Family, Boston, MA. Chairman of the
Company's Compensation and Stock Option
Committee and member of the Audit, Executive and
Governance Committees.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 13
COMPENSATION OF NON-EMPLOYEE DIRECTORS
The Board establishes the compensation paid to each Director who is not an
employee of Enesco. Effective at the Annual Meeting the current compensation
amounts are as follows:
(1) For service as a non-Chairman member of the Board, a retainer of
950 shares of common stock and an additional amount of common stock worth
$15,000 per annum, valued as of the day following the annual meeting plus
$1,200 for attendance at each meeting of the Board;
(2) For service as Chairman of the Board, $300,000 per annum in
addition to compensation otherwise payable as a Director;
(3) For service as a committee member, an attendance fee of $800
($1,000 for service as Chairman of a committee) 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.
In addition, each then serving non-employee Director receives a grant as of
the day following the annual meeting in that year, of 1,500 non-qualified
options to purchase Enesco common stock at an exercise price 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, and expire on the tenth anniversary of the grant.
Prior to the year 2000, upon retirement of a non-employee Director at any
time after age 60 with 5 years of service, he or she would become an "Advisory
Director" who could be called upon for advice by the Chief Executive Officer as
the occasion arose. For such services, an Advisory Director would receive in
cash, in addition to current attendance fees for 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 (up to
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 would receive in cash 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. During 1999, the Board terminated the Advisory Directors'
arrangement effective December 31, 1999, subject to the continuation of the cash
payments to the retired non-employee Directors who were currently receiving this
benefit. For the current non-employee Directors, the present value of the
accrued benefit under this arrangement was paid out to each of them in common
stock, as follows:
<TABLE>
<CAPTION>
DIRECTOR VALUE OF ACCRUED BENEFIT SHARES ISSUED
-------- ------------------------ -------------
<S> <C> <C>
John F. Cauley.............................................. $103,267 9,335
Charles W. Elliott.......................................... $ 62,172 5,621
Judith R. Haberkorn......................................... $ 53,674 4,852
Anne-Lee Verville........................................... $ 70,089 6,336
</TABLE>
The shares issued to Ms. Haberkorn and Ms. Verville are subject to
forfeiture in the event either of them does not remain a director until age 60,
and an appropriate transfer legend has been placed on the share certificates.
Directors receive reimbursement from Enesco for expenses incurred while
serving as Directors. Directors who are also employees of Enesco receive no
additional compensation for their services as Directors.
9
<PAGE> 14
COMMITTEES OF THE BOARD OF DIRECTORS
The following table shows the membership of Enesco's committees as of the
date of the annual meeting. An asterisk indicates chairperson.
<TABLE>
<CAPTION>
COMPENSATION AND
NAME AUDIT STOCK OPTION EXECUTIVE GOVERNANCE
---- ----- ---------------- --------- ----------
<S> <C> <C> <C> <C>
John F. Cauley..................................... X X* X
Eugene Freedman....................................
Judith R. Haberkorn................................ X* X X X
Jeffrey A. Hutsell................................. X
Allan G. Keirstead................................. X
Donna B. Lucas..................................... X X X
Homer G. Perkins................................... X X
H.L. Tower......................................... X X X*
Anne-Lee Verville.................................. X X* X X
</TABLE>
Committees
The Audit Committee held three meetings during 1999. This Committee, which
consists entirely of non-employee Directors, provides oversight of the Enesco
audit, accounting, reporting and control practices and provides a non-management
link between the Board and the Enesco internal auditing department. This
Committee reviews the activities of the internal auditing department and the
Enesco independent accountants. It also reviews the adequacy of the Enesco
accounting, financial and operating controls and reports to the full Board as
necessary. Although the new audit committee rules of the New York Stock Exchange
relating to membership on the Audit Committee generally require that no former
officer may be a member until at least three years have passed since that
relationship ended, the Board has determined that Mr. Tower's membership on the
Audit Committee is in the best interests of Enesco and its shareholders. Mr.
Tower served as interim President and Chief Executive Officer and Chairman in
1998. Accordingly, Enesco has elected to take advantage of the override
provision of Section 303.02(D) of the Stock Exchange Rules and named Mr. Tower
to the Audit Committee. The Board has determined that Mr. Tower's knowledge of
Enesco, the industry, and his financial background and experience, are
invaluable to the Audit Committee's role and responsibilities.
The Compensation and Stock Option Committee held four meetings during 1999.
This Committee, which also consists entirely of non-employee Directors,
determines compensation policy for Enesco, approves or recommends to the Board
compensation of the Directors and officers of Enesco 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 Enesco and the
Non-employee Director Stock Plan.
The Executive Committee did not hold a meeting during 1999. 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 held one meeting during 1999. This Committee,
which consists entirely of non-employee Directors, provides the Board with
Director and corporate officer recommendations, proposes to the Board each year
a slate of Directors for recommendation and submission to the stockholders at
the 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.
10
<PAGE> 15
In accordance with Enesco's Restated Articles of Organization, nominations
for the election of Directors at an annual meeting of stockholders may be made
by the Board, the Governance Committee or any stockholder entitled to vote
generally in the election of Directors. However, a stockholder may nominate one
or more persons for election as a Director at an annual meeting of stockholders
only if the stockholder gives notice in writing to the Clerk 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
common stock and intends to appear in person or by proxy at the next annual
meeting of stockholders to nominate the person or persons identified 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 seven regular meetings and three special meetings during 1999.
11
<PAGE> 16
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 1999, 1998
and 1997, the compensation of the Chief Executive Officer, the four other most
highly compensated executive officers in office at the end of 1999, and one
other executive officer who was not in office at the end of 1999 (all six
persons being collectively referred to as the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL 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>
J. A. Hutsell...................... 1999 $ 495,000 $ -- $ -- 100,000 $33,964
President and Chief 1998 468,548 -- -- -- 11,204
Executive Officer 1997 450,000 -- -- 56,000 14,584
E. Freedman........................ 1999 1,000,000 -- -- 40,000 60,500
Founding Chairman 1998 1,000,000 -- -- -- 11,204
1997 475,000 2,761,100 -- 70,000 14,584
A. G. Keirstead.................... 1999 424,600 -- -- 40,000 31,346
Executive Vice President and 1998 398,867 -- -- -- 25,449
Chief Administrative and 1997 381,000 190,500 -- 50,000 22,725
Financial Officer
Thomson J. Hudson.................. 1999 309,000 -- 44,761(4) 50,000 9,770
Senior Vice President, 1998 -- -- -- -- --
Operations 1997 -- -- -- -- --
Josette V. Goldberg................ 1999 184,300 -- -- 12,500
Vice President, 1998 -- -- -- -- --
Human Resources 1997 -- -- -- -- --
Peter R. Johnson................... 1999 189,200 -- -- 10,000 11,852
Former Vice President, Secretary, 1998 185,000 -- -- -- 9,949
Clerk and General Counsel (5) 1997 -- -- -- -- --
</TABLE>
- ---------------
(1) Annual compensation includes bonus compensation for the year, whether paid
in the year indicated or in the succeeding year. Annual compensation also
includes amounts deferred under Enesco's retirement plans. Other Annual
Compensation is included only if it exceeds the lesser of $50,000 or 10
percent of annual salary plus bonus. Compensation information regarding 1997
for Mr. Johnson and both 1997 and 1998 for Mr. Hudson and Ms. Goldberg is
not provided because they were not Named Executive Officers 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. No stock
appreciation rights ("SARs") were awarded either singly or in tandem with
the granted options.
(3) All Other Compensation in 1999 consisted of the following items on an
accrual basis for each of the Named Executive Officers: J. A. Hutsell,
$9,600 matching and guaranteed money purchase contributions under the 401K
Plan, $20,100 matching contributions and guaranteed money purchase under the
Supplemental Retirement Plan, $500 contribution under the Payroll-Based
Stock Ownership Plan
12
<PAGE> 17
("PAYSOP Contribution") and $3,764 insurance premiums reimbursed with
respect to term life insurance for his benefit ("Insurance Premiums"); E.
Freedman, $9,600 matching and guaranteed money purchase contributions under
the 401K Plan, $50,400 matching and guaranteed money purchase contributions
under the Supplemental Retirement Plan, and $500 PAYSOP Contribution; A. G.
Keirstead, $9,600 matching and guaranteed money purchase contributions under
the 401K Plan, $15,876 matching and guaranteed money purchase contributions
under the Supplemental Retirement Plan, $500 PAYSOP Contribution and $5,370
Insurance Premiums; T. J. Hudson, $4,800 guaranteed money purchase
contributions under the 401K Plan, $4,470 contributions under the
Supplemental Retirement Plan, and $500 PAYSOP Contribution; J. V. Goldberg,
$9,600 matching and guaranteed money purchase contributions under the 401K
Plan, $1,458 profit sharing and matching contributions under the
Supplemental Retirement Plan, and $500 PAYSOP Contribution; and P. R.
Johnson, $9,600 matching and guaranteed money purchase contributions under
the Retirement Plan, $1,752 matching contributions under the Supplemental
Retirement Plan, and $500 PAYSOP Contribution.
(4) Includes $29,761 in relocation expense reimbursement and $15,000 car
allowance.
(5) Mr. Johnson resigned as an officer of Enesco in October 1999 and terminated
his employment with Enesco on December 31, 1999.
The following table contains information concerning individual grants of
stock options made by the Company to each of the Named Executive Officers during
1999:
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) GRANT DATE
----------------------------------------------------- ----------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES OR BASE PRESENT
GRANTED IN FISCAL PRICE EXPIRATION VALUE
NAME (#)(2) YEAR ($/SH) DATE $(3)
- ---- ---------- ---------- -------- ------------- ----------
<S> <C> <C> <C> <C> <C>
J.A. Hutsell........................... 100,000 17.0% $16.50 March 2, 2009 $544,000
E. Freedman............................ 40,000 6.8% 16.50 March 2, 2009 217,600
A.G. Keirstead......................... 40,000 6.8% 16.50 March 2, 2009 217,600
T.J. Hudson............................ 50,000 8.5% 16.50 March 2, 2009 272,000
J.V. Goldberg.......................... 12,500 2.1% 16.50 March 2, 2009 68,000
P.R. Johnson........................... 10,000 1.7% 16.50 March 2, 2009 54,400
</TABLE>
- ---------------
(1) The individual grants described were all made in the form of non-qualified
stock options under Enesco's 1996 Stock Option Plan. No SARs were granted
during 1999.
(2) All options granted have a ten-year term and become exercisable only (a)
after six months from date of grant and upon Enesco's achievement of certain
stock value performance criteria or (b) on the eighth anniversary of the
date of grant, regardless of whether the stock value performance criteria
have been achieved.
(3) Enesco used the Black-Scholes option pricing model to determine the present
value of each option granted as of its 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;
13
<PAGE> 18
(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 any of the Named Executive Officers
during 1999. The following table sets forth information concerning the value of
unexercised stock options held by each of them as of the end of 1999:
1999 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT YEAR-END(#) AT YEAR-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
J. A. Hutsell..................................... 109,490/118,000 $0/$0
E. Freedman....................................... 176,600/114,000 0/ 0
A.G. Keirstead.................................... 175,600/ 91,000 0/ 0
T.J. Hudson....................................... 25,000/ 40,000 0/ 0
J.V. Goldberg..................................... 6,250/ 11,250 0/ 0
P.R. Johnson...................................... 18,800/ 14,100 0/ 0
</TABLE>
Pension Plan
Enesco maintained a qualified defined benefit pension plan (the "Pension
Plan") which it terminated effective November 15, 1998, and it maintains certain
supplemental retirement agreements requiring contributions in amounts determined
annually by independent actuaries. Under the supplemental retirement agreement
of Mr. Keirstead, annual benefits generally will be paid on a monthly basis
commencing upon eligibility; however, upon the occurrence of a change in control
of the Company (within the meaning of this agreement), the present value of the
aggregate expected remaining annual benefits will be paid in one lump sum. Of
the Named Executive Officers, only Mr. Keirstead has such a supplemental
retirement agreement. Mr. Keirstead is eligible to receive reduced annual
benefits pursuant to the Pension Plan and his supplemental retirement agreement
following his termination from Enesco. Mr. Johnson is eligible upon his reaching
age 55 to receive reduced annual benefits pursuant to the Pension Plan due to
his termination from Enesco. Mr. Johnson's employment with Enesco terminated on
December 31, 1999. Messrs. Keirstead and Johnson did not accrue any benefits
under the Pension Plan in 1999. Under the Pension Plan and the supplemental
retirement agreement of Mr. Keirstead, he will be entitled to a benefit equal to
fifty percent of his final average compensation, which includes total wage,
salary, bonus, automobile benefit and any amount which is contributed 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. Substantially all of the items of current compensation covered by the
Pension Plan and supplemental retirement agreement for Mr. Keirstead are
included in the Summary Compensation Table columns entitled "Salary ($)" and
"Bonus ($)". Mr. Keirstead became fully vested in his supplemental retirement
agreement on November 17, 1999. Mr. Johnson will be entitled to a benefit equal
to $222,754 at age 65.
14
<PAGE> 19
The supplemental retirement agreement of Mr. Keirstead also includes
disability and surviving spouse benefits. This agreement provides 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 subjects
the monthly retirement benefit to a stipulated percentage reduction.
The named Executive Officers except Mr. Hudson and Ms. Goldberg are each
fully vested participants in Enesco's Retirement and Supplemental Retirement
Plans for which covered compensation was not limited in 1999. The Enesco
Retirement and Supplemental Retirement Plans require five years of service
before vesting.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Mr. Hutsell, President and Chief Executive Officer, received his annual
base salary of $495,000 in 1999 and was eligible for a target bonus of 65% of
his annual base salary under Enesco's Management Incentive Plan ("MIP") program
pursuant to an employment agreement which has a rolling three-year term. In
addition to standard executive officer fringe benefits, he is eligible to
receive special medical insurance coverage, including his spouse. The employment
agreement also contains confidentiality, non-compete and non-solicitation
convenants.
Enesco has entered into both a supplemental retirement agreement and a
severance agreement with Mr. Keirstead. Enesco also has entered into a
relocation letter agreement with Mr. Keirstead providing for Mr. Keirstead's
continuation as 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 the post-termination
insurance benefits already described) in connection with a termination of his
employment, whether voluntary or involuntary, during a period of two years
following the relocation of his employment to Illinois on March 1, 1999. The
letter agreement also clarifies Mr. Keirstead's eligibility for relocation and
related reimbursements.
Enesco also entered into a separation agreement with Mr. Johnson, former
Vice President, Secretary, Clerk and General Counsel, in connection with his
transfer to Illinois, which summarized his severance, pension, group insurance
and other related termination benefits (subject to certain conditions) based
upon his subsequent involuntary termination after the end of 1999. Mr. Johnson's
employment with Enesco terminated on December 31, 1999.
Enesco has separate change in control agreements or commitments with
Messrs. Hutsell, Freedman, Keirstead and Hudson and Ms. Goldberg 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, up to three (two in the case of each of Mr. Hudson and Ms. Goldberg)
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. Hutsell 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 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and certain other events specified in the change in control
agreements.
15
<PAGE> 20
The termination of Mr. Keirstead absent a change in control will be
governed by a severance agreement under which he may be entitled to a severance
benefit, payable in one 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 three years
and certain fringe benefits for up to a 36-month term. The terminations of the
remaining Named Executive Officers (other than Mr. Johnson who has been
terminated) absent a change in control of the Company will be governed by the
employee severance policy of Enesco under which each of them may (subject to
certain conditions) be entitled to a severance benefit of up to one year 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 1999, Ms. Verville, Mr. Elliott and Ms. Haberkorn served on the
Board's Compensation and Stock Option Committee. None of them were then an
officer or employee of Enesco or any of its subsidiaries. No current member of
the Committee is a former officer of Enesco or any of its subsidiaries, and none
had any other relationship requiring disclosure.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on Enesco records and other information, Enesco believes that all SEC
filing requirements under Section 16(a) of the Exchange Act applicable to its
Directors and executive officers with respect to the year ending December 31,
1999 were satisfied.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Enesco'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.
Enesco's executive compensation program during 1999 consisted of three
components: base salary and fringe benefits; incentive bonus opportunity; and
option awards to purchase shares of 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 Enesco's compensation levels is composed of companies
that participate in the "Watson Wyatt 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, Enesco 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 Enesco's MIP program,
16
<PAGE> 21
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 profitability
and performance goals. Options to purchase shares of 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. The options, which
correlate to executive grade levels, are granted generally on an annual basis at
the then market value of common stock and are exercisable at any time after six
months from the date of grant, subject to the achievement of certain stock value
performance criteria or upon the eighth anniversary of the date of grant under
provisions of the 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' and stockholders' interests. The Committee's compensation
policies are intended to reinforce Enesco'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 Internal Revenue Code.
Compensation paid to Mr. Hutsell, President and Chief Executive Officer,
included his base salary at the annual rate of $495,000 and an annualized MIP
target opportunity of $321,750. Mr. Hutsell did not receive any MIP bonus for
1999. The Committee also awarded Mr. Hutsell a grant of 100,000 non-qualified
stock options to purchase common stock. The size of the grant relative to all
other 1999 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, Watson
Wyatt. This grant was made under Enesco's 1996 Stock Option Plan, becomes
exercisable after eight years or sooner if certain specified stock value
performance criteria are achieved and has a term of ten years from the date of
grant.
The Compensation and Stock Option Committee:
A. L. Verville (Chair) C. W. Elliott J. R. Haberkorn
17
<PAGE> 22
PERFORMANCE GRAPHS
During 1999, Enesco common stock was moved from the Standard & Poors Midcap
400 Stock Index to the S&P Small Cap 600 Index. Therefore, performance graphs
comparing Enesco common stock performance with the performance of both stock
indexes is provided.
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>
ENESCO GROUP, INC. S&P MIDCAP 400 COMPANY'S PEER GROUP
------------------ -------------- --------------------
<S> <C> <C> <C>
12/31/94 100.00 100.00 100.00
12/31/95 95.34 130.94 113.72
12/31/96 90.14 156.08 119.65
12/31/97 90.93 206.43 137.65
12/31/98 85.89 245.87 138.48
12/31/99 43.85 282.06 138.82
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Enesco Group, Inc. $100.00 95.34 90.14 90.93 85.89 43.85
- ---------------------------------------------------------------------------------------------------------------------
S&P Midcap 400 $100.00 130.94 156.08 206.43 245.87 282.06
- ---------------------------------------------------------------------------------------------------------------------
Company's Peer Group $100.00 113.72 119.65 137.65 138.48 138.82
- ---------------------------------------------------------------------------------------------------------------------
</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 1994 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. Enesco 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
18
<PAGE> 23
Company; and Enesco Group, Inc. (Source: Standard & Poor's Compustat Custom
Products Division, a Division of The McGraw-Hill Companies.)
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
THE STANDARD & POOR'S ("S&P") SMALL CAP 600 INDEX AND THE COMPANY'S PEER
GROUP INDEX (1)
<TABLE>
<CAPTION>
ENESCO GROUP, INC. S&P SMALLCAP 600 COMPANY'S PEER GROUP
------------------ ---------------- --------------------
<S> <C> <C> <C>
12/31/94 100.00 100.00 100.00
12/31/95 95.34 129.96 60.14
12/31/96 90.14 157.67 72.96
12/31/97 90.93 198.01 80.47
12/31/98 85.89 195.42 65.79
12/31/99 43.85 219.66 38.90
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Enesco Group, Inc. $100.00 95.34 90.14 90.93 85.89 43.85
- ---------------------------------------------------------------------------------------------------------------------
S&P Smallcap 600 $100.00 129.96 157.67 198.01 195.42 219.66
- ---------------------------------------------------------------------------------------------------------------------
Company's Peer Group $100.00 60.14 72.96 80.47 65.79 38.90
- ---------------------------------------------------------------------------------------------------------------------
</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 1994 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. Enesco has chosen to present a peer group index
composed of the companies that constitute the S&P SmallCap 600 Products
Index, in which Enesco is now included. Enesco's peer group is made up of
the following eleven companies:
S&P Consumer (Jwlry & Novelty) -- Small Cap 600
Action Performance Cos Inc.
Cross (A.T.) & Co -- CLA
Cyrk Inc.
Department 56, Inc -- Ser A
Enesco Group, Inc.
Fossil Inc.
Franklin Covey Co.
Gibson Greetings Inc.
Jan Bell Marketing Inc.
Russ Berrie & Co. Inc.
Swiss Army Brands Inc.
19
<PAGE> 24
PROPOSAL 2: INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has been engaged by Enesco as independent public
accountants since 1971. As recommended by its Audit Committee, the Board has
appointed that firm as independent accountants for 2000, 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.
STOCKHOLDER PROPOSALS
The annual meeting is called for the purposes set forth in the Notice.
Although Enesco knows of no items of business which will be presented at the
annual meeting other than those described, proxies in the accompanying form will
confer discretionary authority to Enesco's management proxy holders to use in
accordance with their best judgment with respect to any such items which may
come before the Annual Meeting to the extent permitted by the applicable rules
of the SEC. In order to be considered under Rule 14a-8 for inclusion in Enesco's
proxy materials to be distributed in connection with the annual meeting of the
stockholders in 2001, stockholder proposals for that meeting must be received by
Enesco on or before November 18, 2000. In order for a stockholder proposal
submitted outside of Rule 14a-8 to be considered "timely" within the meaning of
Rule 14a-4(c) for possible presentation at that meeting (other than a proposal
with respect to the nomination for election of one or more directors, for which
procedures are set forth above under the caption "Committees of the Board"),
such a proposal must be received by the Clerk of Enesco on or before January 31,
2001. Enesco's management proxy holders will be permitted to use their
discretionary voting authority, as conferred by any valid proxy, in accordance
with their best judgment when such a proposal is raised at that meeting.
ENESCO 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, 1999 WITHOUT CHARGE BY WRITING TO THE CLERK OF ENESCO,
AT 225 WINDSOR DRIVE, ITASCA, ILLINOIS 60143.
By order of the Board of Directors,
ENESCO GROUP, INC.
ROBERT J. HIPPLE
Clerk
March 17, 2000
20
<PAGE> 25
<TABLE>
<CAPTION>
<S> <C>
THIS PROXY WILL BE VOTED AS DIRECTED BUT IN THE ABSENCE OF SUCH DIRECTION, IT PLEASE MARK
WILL BE VOTED FOR ITEMS 1 AND 2 BELOW. THIS PROXY REVOKES AND PROXY PREVIOUSLY YOUR VOTES AS [X]
GIVEN. INDICATED IN
THIS EXAMPLES
1. To elect 01 Donna B. Lucas, 02 Eugene Freedman and 03 Allan G. Keinstead as
Class II Directors for a three-year term. If any such nominees should be
available, the proxies or any of them may vote for substitute nominee(s) at
their discretion.
For all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote
listed above AUTHORITY for one or more individual nominees write
(except as marked to vote for the nominee's name in the space provided
to the contrary) all nominees below.)
listed above
[ ] [ ] ------------------------------------------ I plan to attend the meeting.[ ]
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
2. To ratify the appointment by the Board of Directors of Arthur 3. To transact such other business as may come before
Andersen LLP as the Company's independent accountants for 2000. the meeting and any postponement or adjournment thereof.
FOR AGAINST ABSTAIN PLEASE SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
[ ] [ ] [ ]
Signature Signature Date ,2000
----------------------------- ----------------------------- ----------------------
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.)
</TABLE>
FOLD AND DETACH HERE
VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE
YOUR VOTE IS IMPORTANT!-YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone
telephone 24 hours a day-7days a week
There is NO CHARGE to you for this call. - Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in the
lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on ALL proposals, press 1
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2: If you choose to vote on each proposal separately, press O. You will
hear these instructions:
Proposal 1 - to vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen to the instructions
Proposal 2 - To vote FOR, PRESS 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OR
2. VOTE BY INTERNET: Follow the instructions at our Website Address:http://www.
eproxy.com/enc
OR
3. VOTE BY PROXY: Mark, sign and date your proxy card and return promptly in
the enclosed envelope.
NOTE: IF YOU VOTE BY INTERNET OR TELEPHONE, THERE IS NO NEED TO MAIL BACK YOUR
PROXY CARD.
THANK YOU FOR VOTING.
<PAGE> 26
PROXY ENESCO GROUP, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
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 17, 2000, receipt of which is hereby acknowledged,
does hereby appoint and constitute JEFFREY A. HUTSELL, ALLAN G. KEIRSTEAD and
ROBERT J. HIPPLE, 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 Enesco
Group, Inc. to be held at the Enesco Showroom Theater, One Enesco Plaza
(corner of Busse and Devon), Elk Grove Village, Illinois, on Thursday, April 27,
2000 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, 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)
/\ FOLD AND DETACH HERE /\
ENESCO GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, APRIL 27, 2000
9:30 A.M.
Enesco Showroom Theater
One Enesco Plaza (corner of Busse and Devon)
Elk Grove Village, Illinois 60007
