SWANK, INC. 6 Hazel Street, Attleboro, Massachusetts 02703
Notice of Annual Meeting of Stockholders
The 1999 Annual Meeting of Stockholders of SWANK, INC. (the
"Company") will be held at the Company's offices at 6 Hazel
Street, Attleboro, Massachusetts, on April 22, 1999 at 11:00
o'clock A.M. local time, for the purpose of considering and
acting upon the following:
1. The election of two (2) Class I directors to serve on
the Company's Board of Directors;
2. The approval of the appointment of PricewaterhouseCoopers
LLP as the independent accountants of the Company for the
year 1999;
3. The transaction of such other business as may
properly come before the meeting.
Only holders of record of Common Stock at the close of business
on February 26, 1999 will be entitled to notice of, and to vote
at, the meeting or any adjournment thereof.
By Order of the Board of Directors
Christopher F. Wolf,
Secretary
Dated: March 22 , 1999
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF
YOU DO NOT EXPECT TO BE PRESENT, PLEASE DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
SWANK, INC. 6 Hazel Street, Attleboro, Massachusetts 02703
PROXY STATEMENT
1999 Annual Meeting of Stockholders
April 22, 1999
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of SWANK, INC. (the
"Company") of proxies in the form enclosed for use at the
Company's 1999 Annual Meeting of Stockholders (the "Meeting")
which will be held on the date, at the time and place and for the
purposes set forth in the foregoing notice, and at any
adjournment or postponement thereof. Any stockholder giving a
proxy has the power to revoke the same at any time before it is
voted. All expenses in connection with the solicitation of
proxies will be borne by the Company. Proxies may be solicited
by certain officers and employees of the Company by mail,
telephone, telecopier, telegraph or personal interview.
The outstanding voting securities of the Company at the close
of business on February 26, 1999, the record date for the
determination of stockholders entitled to notice of and to vote
at the Meeting, consisted of 16,569,423 shares of Common Stock,
$.10 par value per share ("Common Stock"), each of which is
entitled to one vote. A majority of the outstanding shares
entitled to vote, present in person or by proxy, constitutes a
quorum for the purposes of the Meeting. The affirmative vote of a
plurality of votes cast at the Annual Meeting is required to
elect directors. The affirmative vote of a majority of shares of
Common Stock present, in person or by proxy, and entitled to vote
at the Annual Meeting will be required to ratify the appointment
of PricewaterhouseCoopers LLP as the Company's independent
auditors for the year ending December 31, 1999. This Proxy
Statement and the accompanying form of proxy will be mailed or
otherwise furnished on or about March 22, 1999 to all
stockholders of record at the close of business on February 26,
1999.
OWNERSHIP OF VOTING SECURITIES
The following table sets forth information as of February 26,
1999 with respect to each person (including any "group" of
persons as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("the Exchange Act"))
who is known to the Company to be the beneficial owner of more
than 5% of the Common Stock:
Title of Class Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Owner Ownership of Class
Common Stock The New Swank, Inc. 9,886,024(1)(2) 59.7%
Retirement Plan
90 Park Avenue
New York, NY 10016
Common Stock Marshall Tulin 4,105,255(3)(4) 24.7%
90 Park Avenue
New York, NY 10016
Common Stock John Tulin 3,677,488(3)(5) 22.1%
90 Park Avenue
New York, NY 10016
Common Stock Raymond Vise 3,443,761(3)(6) 20.8%
8 El Paseo
Irvine, CA 92715
(1) The Company has merged its Employee Stock Ownership Plan No.
1 ("ESOP I"), Employee Stock Ownership Plan No. 2 ("ESOP II") and
Savings Plan into one plan, The New Swank, Inc. Retirement Plan
(the "Retirement Plan"). This amount includes (a) 6,473,669
shares of Common Stock allocated to participants' ESOP accounts
in the Retirement Plan and as to which such participants may
direct the trustees of the Retirement Plan as to voting on all
matters, and (b) an additional 130 of such shares allocated to
the accounts of former employees, subject to forfeiture, and able
to be voted by the trustees on all matters on which stockholders
may vote.
(2) This amount also includes 2,852,269 shares of Common Stock
allocated to participants' ESOP accounts in the Retirement Plan
as to which participants may direct the trustees as to voting
only on Significant Corporate Events and as to which the trustees
may vote on all other matters in their discretion. Shares
allocated to such ESOP accounts as to which no voting
instructions are received are required to be voted in the same
proportion as shares allocated to ESOP accounts as to which
voting instructions are received. This amount also includes
559,956 shares held in the 401(k) accounts under the Retirement
Plan, as to which participants may direct the trustees as to
voting on all matters and may be disposed of in the discretion of
the trustees.
(3) The trustees of the Retirement Plan are Marshall Tulin,
Chairman of the Board and a director of the Company, John A.
Tulin, President and a director of the Company and Raymond Vise,
a director of the Company. This amount includes (a) 130 shares
of Common Stock allocated to the accounts of former employees but
voted by the trustees (see footnote 1 above), (b) 2,852,269
shares held in ESOP accounts as to which the trustees have sole
voting power (see footnote 2 above) and (c) 559,956 shares held
in the 401(k) accounts (see footnote 2 above).
(4) This amount includes 343,022 shares owned by Mr. Tulin's
wife. Mr. Tulin disclaims beneficial ownership of these shares.
This amount also includes 40,000 shares which Mr. Tulin has the
right to acquire within 60 days through the exercise of stock
options granted under the Company's 1987 Incentive Stock Option
Plan (the "1987 Plan") and 72 shares allocated to his ESOP
account under the Retirement Plan.
(5) This amount includes 3,180 shares owned by Mr. Tulin's wife
and 7,000 shares held by her as custodian for a child. Mr. Tulin
disclaims beneficial ownership of these shares. This amount also
includes 40,000 shares which Mr. Tulin has the right to acquire
within 60 days through the exercise of stock options granted
under the 1987 Plan and 73,194 shares allocated to his ESOP
account under the Retirement Plan.
(6) This amount includes 25,000 shares which Mr. Vise has the
right to acquire within 60 days through the exercise of stock
options granted under the 1994 Non-Employee Director Stock Option
Plan (the "1994 Plan").
The following table sets forth information at February 26, 1999
with respect to the beneficial ownership of the Company's Common
Stock by (a) each director and each nominee for election as a
director of the Company, (b) each executive officer named in the
Summary Compensation Table and (c) all directors and executive
officers of the Company as a group (12 persons). Unless otherwise
indicated, each person named below and each person in the group
named below has sole voting and investment power with respect to
the shares of Common Stock indicated as beneficially owned by
such person or such group.
Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Mark Abramowitz 27,600(1) Less than 1%
John J. Macht 20,000(2) Less than 1%
James Tulin 106,115(3) Less than 1%
John Tulin 3,677,488(4) 22.1%
Marshall Tulin 4,105,255(5) 24.7%
Raymond Vise 3,443,761(6) 20.8 %
Lewis Valenti 98,595(7) Less than 1%
Eric P. Luft 68,996(8) Less than 1%
All directors and
executive officers as a
group(12 persons) 5,109,461(9) 30.1 %
(1) Includes 25,000 shares which Mr. Abramowitz has the right to
acquire within 60 days through the exercise of stock options.
(2) Includes 20,000 shares which Mr. Macht has the right to
acquire within 60 days through the exercise of stock options.
(3) Includes 35,000 shares which Mr. Tulin has the right to
acquire within 60 days through the exercise of stock options
granted under the 1987 Plan, an aggregate of 428 shares held by
his children and an aggregate of 70,687 shares of Common Stock
allocated to his ESOP I account and 401(k) account under the
Retirement Plan.
(4) Includes the shares referred to in footnotes 3 and 5 to the
first table above under "Ownership of Voting Securities."
(5) Includes the shares referred to in footnotes 3 and 4 to the
first table above under "Ownership of Voting Securities."
(6) Includes the shares referred to in footnote 3 and 6 to the
first table above under "Ownership of Voting Securities."
(7) Includes 35,000 shares which Mr. Valenti has the right to
acquire within 60 days through the exercise of stock options
granted under the 1987 Plan and an aggregate of 63,595 shares of
Common Stock allocated to his ESOP account and 401(k) account
under the Retirement Plan.
(8) Includes 15,000 shares which Mr. Luft has the right to
acquire within 60 days through the exercise of stock options
granted under the 1987 Plan and an aggregate of 53,996 shares of
Common Stock allocated to his ESOP account and 401(k) account
under the Retirement Plan.
(9) Reference is made to footnotes (1) through (8) above. This
amount also includes 428,333 shares of Common Stock which
directors and executive officers as a group have the right to
acquire within 60 days through the exercise of stock options
granted under the 1987 Plan and the 1994 Plan.
I. Nominees for Election as Directors
The Company's By-laws divide the Board of Directors into three
classes, designated as Class I, Class II and Class III, with each
class to be as nearly equal in number as possible. At each
annual meeting of stockholders, directors are elected for a term
of three years to succeed those in the class whose terms expire
at such annual meeting.
At the Meeting, stockholders will elect two Class I directors
to serve for a term of three years, until the annual meeting of
stockholders in the year 2002 and until the election and
qualification of their respective successors. Unless otherwise
indicated thereon, all proxies received will be voted in favor of
the election of the nominees for election as directors. Should
any of the nominees not remain a candidate at the time of the
Meeting (a situation which is not now anticipated), proxies
solicited hereunder will be voted in favor of those nominees who
do remain as candidates and may be voted for any substitute
nominees.
The following sets forth certain information about each nominee
for election as a director of the Company and each director whose
term of office will continue after the Meeting, including his
principal occupation or employment.
Nominees:
Mark Abramowitz (2)(3) - Class I
Mr. Abramowitz, who is 63 years old, has been a partner in the
law firm of Parker Chapin Flattau & Klimpl, LLP for more than the
past five years. The firm is general counsel to the Company.
Mr. Abramowitz became a director in 1987.
James Tulin (1) - Class I
Mr. Tulin, who is 48 years old, is a Senior Vice President of
the Company. He joined the Company in 1974, became a Regional
Sales Manager in 1978 and was elected a Vice President in 1985
and a Senior Vice President in 1986. Mr. Tulin became a director
in 1985.
Directors whose terms of office will continue after the Meeting:
John Tulin (1) - Class II
Mr. Tulin, who is 52 years old, is President of the Company.
He joined the Company in 1971. He was elected a Vice President
in 1974, a Senior Vice President in 1979, Executive Vice
President in 1982 and President on October 24, 1995. Mr. Tulin
became a director in 1975.
John J. Macht (4) - Class II
Mr. Macht, who is 62 years old, has been President of The Macht
Group, a marketing and retail consulting firm, since July 1992.
From April 1991 until July 1992 Mr. Macht served as Senior Vice
President of Jordan Marsh department stores, a division of
Federated Department Stores. Mr. Macht became a director in
December 1995.
Marshall Tulin (1) - Class III
Mr. Tulin, who is 81 years old, is Chairman of the Board of the
Company. He joined the Company in 1940, was elected a Vice
President in 1954, President in 1957 and Chairman of the Board on
October 24, 1995. Mr. Tulin became a director in 1956.
Raymond Vise (1)(2)(3)(4) - Class III
Mr. Vise, who is 77 years old, served as Senior Vice President
of the Company for more than five years prior to his retirement
in 1987. Mr. Vise became a director in 1963.
(1) Member of the Executive Committee of the Board.
(2) Member of the Audit Committee of the Board. There were 5
meetings of this committee during the last fiscal year. This
committee reviews the Company's financial statements with the
independent accountants prior to their submission to the Board,
recommends to the Board the appointment of the independent
accountants, reviews the performance and scope of services to be
provided by the independent accountants and reviews the adequacy
of internal accounting procedures and controls.
(3) Member of the Executive Compensation Committee of the Board.
There were 3 meetings of this committee during the last fiscal
year. This committee recommends the annual compensation,
including bonuses, for the 3 executive officers of the Company
who are also directors, each of whom has an employment agreement
with the Company (see "Remuneration and Related Matters"), and
for the Company's Chief Financial Officer and administers the
1998 Equity Incentive Compensation Plan.
(4) Member of the Stock Option Committee of the Board. There
were no meetings of this committee during the last fiscal year.
This committee administers the options which remain outstanding
under the Company's 1987 Incentive Stock Option Plan.
There were 8 meetings of the Board during the last fiscal year.
Each of the directors attended at least 75% of the aggregate of
all such Board meetings and all meetings held by committees of
the Board on which he served. The Company does not have any
nominating or similar committee.
There are no family relationships among any of the persons
listed above or among any of such persons and any of the other
executive officers of the Company, except that James Tulin and
John Tulin are sons of Marshall Tulin.
Remuneration and Related Matters
The following table sets forth certain summary information
concerning compensation during the fiscal year ended December 31,
1998 with respect to the Company's Chief Executive Officer and
each of the other 4 most highly compensated executive officers of
the Company:
Summary Compensation Table
ANNUAL COMPENSATION
OTHER ALL
NAME AND ANNUAL OTHER
PRINCIPAL COMPEN- COMPEN-
POSITION YEAR SALARY BONUS SATION(6) SATION(10)
Marshall Tulin (1) 1998 $360,000 $ 30,000 $ 88
Chairman of 1997 360,000 25,000 14,934
the Board 1996 360,000 -0- 7,442
John Tulin (2) 1998 355,833 150,000(9) 2,008
President, Chief 1997 303,333 125,000 14,234
Executive Officer 1996 220,000 50,000 $36,461(7) 7,442
Eric P. Luft (3) 1998 130,000 272,412(9) 2,008
Senior Vice 1997 130,000 235,145 15,334
President 1996 130,000 150,004 8,372
Lewis Valenti (4) 1998 160,000 231,276(9) 2,008
Senior Vice 1997 160,000 201,875 15,834
President 1996 160,000 121,328 8,372
James Tulin (5) 1998 250,000 75,000(9) 42,355(8) 88
Senior Vice 1997 245,833 65,000 41,802(8) 11,534
President 1996 190,000 40,000 41,217(8) 7,442
(1) Mr. Tulin has an employment agreement with the Company which
provides for automatic renewal for successive one-year periods
unless at least 30 days prior to the June 30 anniversary, either
the Company or Mr. Tulin determine not to further extend the term
and provides for a salary at the rate of $360,000 per annum.
(2) Mr. Tulin has an employment agreement with the Company which
terminates on December 31, 2001 providing for a salary at the
rate (commencing January 1, 1999) of $400,000 per annum.
(3) The bonus amounts shown for Eric P. Luft include sales
commissions in the amounts of $200,412, $175,145 and $120,004 for
the years 1998, 1997 and 1996, respectively.
(4) The bonus amounts shown for Lewis Valenti include sales
commissions in the amounts of $181,276, $161,875 and $96,328 for
the years 1998, 1997 and 1996, respectively.
(5) Mr. Tulin has an employment agreement with the Company which
terminates on December 31, 2001 providing for a salary at the
rate (commencing January 1, 1999) of $250,000 per annum.
(6) Except as set forth for James Tulin, perquisites and other
personal benefits during 1998 and 1997 did not exceed the lesser
of $50,000 or 10% of reported annual salary and bonus for any of
the executive officers named in the "Summary Compensation Table".
(7) These amounts include automobile lease payments of $18,927
and a travel allowance of $9,000 in 1996.
(8) These amounts include automobile lease payments of $19,582,
in 1998, $17,838 in 1997 and $17,394 in 1996 and a travel
allowance of $10,800 in each of 1998, 1997 and 1996.
(9) Excludes award granted in 1998 under the Swank, Inc. 1998
Equity Incentive Compensation Plan (the "Incentive Compensation
Plan") as set forth in the table herein under "Long-Term
Incentive Plans-Awards in Last Fiscal Year".
(10) The amounts set forth for 1998, 1997 and 1996 represent
allocations under certain benefit plans of the Company as
follows:
DEFERRED
RETIREMENT PLAN COMPEN-
ESOP I and ESOP II 401(k) SATION
ACCOUNTS ACCOUNTS PLAN TOTAL
1998
Marshall Tulin $88 $ 88
John Tulin 88 $1,920 2,008
Eric P. Luft 88 1,920 2,008
Lewis Valenti 88 1,920 2,008
James Tulin 88 88
1997
Marshall Tulin $3,734 $11,200 $14,934
John Tulin 3,734 10,500 14,234
Eric P. Luft 3,734 11,600 15,334
Lewis Valenti 3,734 12,100 15,834
James Tulin 3,734 7,800 11,534
1996
Marshall Tulin 7,292 $ 150 $7,442
John Tulin 7,292 150 7,442
Eric P. Luft 7,292 1,050 8,372
Lewis Valenti 7,322 1,050 8,372
James Tulin 7,292 150 7,442
Each director who is not also an employee of, or counsel to, the
Company receives a fee of $2,000 per meeting of the Board and of
committees of the Board attended by him. In addition, pursuant
to the terms of the 1994 Plan, each director who is not also an
employee of the Company or any subsidiary of the Company in
office immediately following each annual meeting of stockholders
at which directors are elected will, effective on the date such
annual meeting is held, automatically be granted an option to
purchase 5,000 shares of Common Stock. During the fiscal year
ended December 31, 1998, Messrs. Abramowitz, Macht and Vise were
each granted an option to purchase 5,000 shares of Common Stock
at an exercise price per share of $1.281, the fair market value
per share of Common Stock on the date of the grant. In February
1999 the Company made an additional payment of $5,000 to each of
Messrs. Macht and Vise in recognition of their contribution
during the preceding year.
Robert Tulin (who is the brother of Marshall Tulin and uncle of
John Tulin and James Tulin) was employed by the Company during
1998. Robert Tulin is the director of advertising and is
responsible for coordinating the production of the Company's
merchandise catalogs. Aggregate compensation paid Robert Tulin
by the Company for services rendered during 1998 amounted to
$90,000.
The Company has entered into termination agreements with
Messrs. Marshall Tulin, John Tulin, Lewis Valenti, Eric P. Luft
and James Tulin which expire on December 31, 2001 with an
automatic annual extension commencing on December 31, 2001 and on
each December 31 thereafter unless the Company shall have given
30 days' written notice prior to the then current expiration date
that there shall be no extension. In the event of a change in
control (as defined in such agreements) of the Company during the
term of such agreements followed by a significant change in the
duties, powers or conditions of employment of any such officer,
the officer may within 2 years thereafter terminate his
employment and receive a lump sum payment equal to 2.99 times
such officer's "base amount" (as defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986, as amended (the "Code")).
In 1983 the Company terminated its pension plans covering
salaried employees and salesmen and purchased annuities from the
assets of those plans to provide for the payment (commencing at
age 62) of accrued benefits of those employees who were not
entitled to or did not elect to receive lump sum payments. The
accrued annual benefits for Messrs. John Tulin, Lewis Valenti and
James Tulin are $13,116, $12,731, and $10,407, respectively.
During the Company's fiscal year ended December 31, 1998, no
stock options were granted to or exercised by any executive
officers named in the Summary Compensation Table. The following
table sets forth certain information with respect to the number
and value of unexercised options held by such executive officers
as of December 31, 1998:
1998 FISCAL YEAR END OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY -End (#) FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
Marshall Tulin 40,000 / 0 $35,020 / 0
John Tulin 40,000 / 0 35,020 / 0
Eric P. Luft 15,000 / 0 13,133 / 0
Lewis Valenti 35,000 / 0 30,643 / 0
James Tulin 35,000 / 0 30,643 / 0
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
The Company's Board of Directors has emphasized performance-
related incentives and short and long range performance goals as
a means of motivating executive officers and other key
employees. In March 1998, the Board adopted the Swank, Inc. 1998
Equity Incentive Compensation Plan (the "Incentive Compensation
Plan") which was subsequently approved by the Company's
stockholders at the 1998 Annual Meeting. The Incentive
Compensation Plan replaced the Company's incentive stock option
plan which had expired by its terms and provides for the grant of
stock options, stock appreciation rights, restricted stock
awards, restricted stock unit awards, performance awards and
other stock-based awards. In October 1998, the Board granted long-
term performance awards payable in cash and shares of the
Company's common stock to certain key employees.
Number of Performance
Shares, Units Or Other Period Estimated Future Payouts Under
Or Other Until Maturation Non-Stock Price-Based Plans(c)
Name Rights (a)(d) Or Payout (b) Threshold Target(d) Maximum
John Tulin, 40% Common Fiscal $588,000 10% In- $840,000
CEO Stock;60% cash 1998-2000 crements
Eric P. Luft 40% Common Fiscal $378,000 10% In- $540,000
Stock;60% cash 1998-2000 crements
Lewis Valenti 40% Common Fiscal $378,000 10% In- $540,000
Stock;60% cash 1998-2000 crements
James Tulin 40% Common Fiscal $302,400 10% In- $432,000
Stock;60% cash 1998-2000 crements
(a) Payout will be 40% in Common Stock and 60% in cash. The
number of shares will be determined by dividing 40% of the payout
as described in note (c) below by the closing market price of the
Company's Common Stock on the stock payout date. The amount of
cash will be equal to 60% of the payout. Neither the Award nor
the shares of Common Stock issuable pursuant to the Award have
been or will be registered under the Securities Act of 1933, as
amended, or any state securities or "blue sky" laws.
(b) Payout will be in March 2001 for any cash portion. The Common
Stock portion of any payout will vest and be issued over a three-
year period as follows: one-third of the shares on April 30,
2001, one-third on April 30, 2002 and the remainder on April 30,
2003.
(c) Payout is based upon Cumulative Pretax Income of the Company.
Cumulative Pretax Income is the sum of the income before income
taxes for each of the fiscal years ending December 31, 1998, 1999
and 2000, in each case as set forth on the Consolidated Statement
of Operations of the Company contained in the audited
consolidated financial statements of the Company for such years
as certified by the independent accounting firm as shall then be
retained by the Company to audit and report on its financial
statements. In calculating Cumulative Pretax Income of the
Company, income before income taxes of the Company shall be
reduced by all amounts required to be accrued pursuant to
generally accepted accounting principles, as in effect from time
to time, in respect of all compensation heretofore and hereafter
granted or awarded under the Incentive Compensation Plan for each
of the fiscal years ending December 31, 1998, 1999 and 2000. The
threshold for payout of 70% of the target is Cumulative Pretax
Income of $18,180,000. Additional increments of 10% of the target
are earned in steps at Cumulative Pretax Income of $19,475,000
and $20,765,000, respectively, with the maximum payout earned in
the event that Cumulative Pretax Income of $22,058,000 is
achieved. Payout will be 60% in cash and 40% in Common Stock.
(d) Increases in additional increments of 10% of the maximum
future payout.
For the year ended December 31, 1998, the Company has accrued
the following amounts for future payout under the Incentive
Compensation Plan: John Tulin-$78,260; Eric P. Luft -$50,330;
Lewis Valenti -$50,330 and James Tulin - $40,250.
Compensation Committee Interlocks and Insider Participation
The Company's Executive Compensation Committee consists of
Raymond Vise, a former Senior Vice President of the Company, and
Mark Abramowitz. The members of the Company's Stock Option
Committee are Mr. John J. Macht and Mr. Vise. Ronald Vise (who
is the son of Raymond Vise) was employed by the Company during
1998 as a commissioned salesman. Aggregate compensation paid to
Ronald Vise for services rendered during fiscal 1998 amounted to
$157,190. Mark Abramowitz is a partner in the law firm of Parker
Chapin Flattau & Klimpl, LLP, which is retained by the Company to
provide legal services. In addition, the Company and The Macht
Group, a marketing and retail consulting firm of which John J.
Macht serves as President, are parties to an agreement pursuant
to which The Macht Group is entitled to receive compensation
based on net sales of products under license agreements entered
into between the Company and licensors introduced to the Company
by The Macht Group. Aggregate compensation during fiscal 1998
earned by The Macht Group under this arrangement was $95,571.
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended,
that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following report and the
Performance Graph shall not be incorporated by reference into any
such filings.
REPORT OF BOARD OF DIRECTORS AND COMPENSATION COMMITTEES
The Executive Compensation Committee of the Board of Directors,
which is comprised of two non-employee directors, determines the
compensation (other than through the grant of stock-based
compensation) of the Chief Executive Officer of the Company,
other employee members of the Board of Directors and the
Company's Chief Financial Officer. The entire Board of
Directors, with the recommendation of the Company's Chief
Executive Officer, reviews and approves the salaries and bonuses
of the Company's other executive officers. No quantitative
factors were considered in determining executive compensation for
fiscal 1998. Factors considered in determining executive
compensation for fiscal 1998 included, among other things, the
Company's profits and revenues, together with licensing
arrangements entered into in fiscal 1998. The entire Board of
Directors, with the recommendation of the Company's Chief
Executive Officer, reviews and approves long-term performance
awards under the Swank, Inc. 1998 Equity Incentive Compensation
Plan. The Stock Option Committee, which is also comprised of two
non-employee directors, administers the Company's compensation
plans under which stock and stock-based compensation have been
awarded other than the Swank, Inc. 1998 Equity Incentive
Compensation Plan.
The main objectives of the Company's executive compensation
structure have included rewarding individuals for their
respective contributions to the Company's performance and
providing executive officers with a stake in the long-term
success of the Company (mainly through the grant of stock
options). The philosophy of the Board of Directors and each of
its compensation committees has been to utilize a combination of
salary as a base for compensation, annual bonuses as a means of
short-term incentive compensation, stock options to provide
longer term incentives and to link portions of compensation
directly with the performance of the Company's Common Stock, and
contractual protections against changes in or loss of employment
in the event of a change of control of the Company. The Board
and its compensation committees coordinate their efforts to
determine overall compensation of executive officers.
The Board of Directors, the Executive Compensation Committee and
the Stock Option Committee have determined to place additional
emphasis on motivating its executive officers and other employees
by means of performance-related incentives and short and long
range performance goals. To that end, the Board adopted the
Swank, Inc. 1998 Equity Incentive Compensation Plan which the
Company's stockholders approved at the 1998 Annual Meeting. The
Incentive Compensation Plan provides for the grant, in the
discretion of the Board of Directors or any committee appointed
by the Board to administer the Incentive Compensation Plan, of
stock options, stock appreciation rights, restricted stock
awards, restricted stock unit awards, performance awards and
other stock-based awards. The Board of Directors or such
committee may, in connection with each option or award, establish
one or more objective criteria (which may include, without
limitation, reference to the Company's or any of its division's
revenues, margins or profits) to determine whether, among other
things, options or awards shall vest or otherwise become
exercisable, and whether all or a portion of the compensation
under such options or awards shall become payable.
Base Salary. The Board of Directors and Executive Compensation
Committee review the base salary of each executive officer
annually. In determining the base salaries to be paid to
executive officers (other than those whose salaries are fixed
pursuant to the terms of applicable employment agreements), the
Board of Directors and Executive Compensation Committee consider,
among other factors, the executive's level of responsibility,
experience and expertise, length of service with the Company and
compensation levels in competing companies. The Board and the
Executive Compensation Committee, in consultation with the
Company's Chief Executive Officer, also review the performance of
each executive officer. These reviews have been qualitative in
nature, with no specific weight being assigned to the various
factors considered.
Annual Bonus Compensation. The Board and Executive Compensation
Committee continue to place emphasis on incentive compensation.
In determining the amount of annual bonuses, the Board and the
Executive Compensation Committee have considered such factors as
the Company's revenues and profitability, as well as an
individual executive's personal performance and contribution to
the Company's overall performance during that fiscal year. No
specific weight is generally assigned any particular factor,
although where the Company's overall financial results have not
been favorable, the Board and Executive Compensation Committee
have from time to time not awarded annual bonuses or have reduced
them to qualitatively reflect such results.
Other Incentive Compensation. The Company has in the past
utilized stock options as the primary method of providing stock-
based incentive compensation. However, the Company's remaining
stock option plan available to executives and employees expired
by its terms in fiscal 1997 and no further options may be granted
thereunder. As described above, the Board of Directors and its
compensation committees have determined to replace the 1987 Plan
and the Incentive Share Plan with the Incentive Compensation Plan
as the primary manner, along with annual bonuses, of motivating
its employees, providing employees a way of participating in the
growth of the Company, as well as of linking the interests of its
executives with the overall interests of stockholders.
Chief Executive Officer Compensation. The compensation of John
Tulin, the Company's President and Chief Executive Officer, for
fiscal 1998 was comprised of two components, salary of $355,833
and annual bonus. The Executive Compensation Committee awarded
Mr. Tulin a bonus of $150,000. Based on its review of Mr.
Tulin's performance, the Executive Compensation Committee noted,
among other things, Mr. Tulin's leadership in the substantial
improvement for the second consecutive year in the Company's
operating results with pretax earnings up over 25% from the
preceding year and the continuing effectiveness of programs
implemented by him to more closely monitor and control overhead.
Mr. Tulin's current salary of $400,000 per annum is fixed through
the end of fiscal 2001 pursuant to an employment agreement with
the Company.
Executive
Compensation
Board of Directors Committee Stock Option Committee
Mark Abramowitz Mark Abramowitz John J. Macht
John J. Macht Raymond Vise Raymond Vise
James Tulin
John A. Tulin
Marshall Tulin
Raymond Vise
PERFORMANCE GRAPH
COMPARISON OF 5 YEAR CUMULATIVE
TOTAL RETURN OF COMPANY, PEER
GROUP AND BROAD MARKET
1993 1994 1995 1996 1997 1998
Swank, Inc. 100.00 89.47 63.16 50.00 94.74 152.63
Peer Group Index 100.00 68.62 41.88 38.11 53.32 39.72
NASDAQ Market Index 100.00 104.99 136.18 169.23 207.00 291.96
ASSUMES $100 INVESTED ON JANUARY 1, 1994 AND THAT ALL DIVIDENDS
WERE REINVESTED
The peer group includes companies that compete with the Company
in one or more of its product categories as well as companies in
similar industries. The peer group includes: Jaclyn, Inc.,
Salant Corp. and Tandy Brands Accessories, Inc.
Note: The stock price performance shown on the graph above is
not necessarily indicative of future price performance.
I. Approval of Independent Accountants
There will also be brought up for consideration at the Meeting
the approval of the appointment of accountants to perform the
annual audit for the fiscal year ending December 31, 1999.
Subject to the action of the stockholders at the Meeting, the
Board has appointed the firm of PricewaterhouseCoopers LLP,
certified public accountants, as the independent accountants to
audit the financial statements of the Company for the current
fiscal year. They have been the Company's accountants since
1952. The Board recommends their approval. A representative of
PricewaterhouseCoopers LLP is expected to be present at the
Meeting. Such representative will have the opportunity to make a
statement if he or she so desires and will be available to
respond to appropriate questions.
MISCELLANEOUS
In order to be included in the proxy materials for the 2000
Annual Meeting of Stockholders of the Company, stockholder
proposals must be received by the Company on or before November
24, 1999. As to any proposal intended to be presented by a
stockholder without inclusion in the Company's proxy statement
and form of proxy for the 2000 Annual Meeting of Stockholders of
the Company, the proxies named in the Company's form of proxy for
that meeting will be entitled to exercise discretionary authority
on any such proposal unless the Company receives notice of the
matter on or before February 5, 2000. However, even if such
notice is timely received, such proxies may nevertheless be
entitled to exercise discretionary authority on such matter to
the extent permitted by Rule 14a-4(c)(2) of the Securities
Exchange Act of 1934, as amended.
The accompanying proxy will be voted as specified by
stockholders. If no specification is made, it is intended that
the proxy will be voted FOR the election of directors and FOR the
approval of the appointment of PricewaterhouseCoopers LLP as the
independent accountants of the Company.
Shares of Common Stock that are voted to abstain and broker
non-votes will be considered present at the Meeting in
determining the presence of a quorum. Shares abstaining with
respect to any matter will be considered entitled to vote and
cast with respect to that matter. Shares subject to broker
non-votes with respect to any matter will not be considered
entitled to vote with respect to such matter.
The Board does not know of any other matter to be brought
before the meeting. If any other matters are properly brought
before the meeting, the persons named in the enclosed proxy
intend to vote such proxy in accordance with their best judgment
on such matters.
By Order of the Board of Directors
Christopher F. Wolf
Secretary
March 22,1999
SWANK, INC.
6 Hazel Street, Attleboro, Massachusetts 02703
Proxy for Annual Meeting of Stockholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Marshall
Tulin and John Tulin, and each of them, with full power of
substitution, the attorneys and proxies of the undersigned, to
attend the 1999 Annual Meeting of Stockholders of SWANK, INC.
(the "Company") to be held at the Company's offices at 6 Hazel
Street, Attleboro, Massachusetts 02703, on April 22, 1999 at
11:00 A.M. local time, and all adjournments thereof, to vote all
shares of Common Stock of the Company which the undersigned may
be entitled to vote upon the following matters:
(Please Sign and Date on the Reverse Side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
SWANK, INC.
April 22, 1999
Please Detach and Mail in the Envelope Provided
A X Please mark your
votes as in this
example.
FOR WITHHOLD
(except as indicated to AUTHORITY
the contrary below) TO VOTE FOR
1. Election of ______ ______
two (2)
Class I
directors to serve on the Company's
Board of Directors;
Nominees: Mark Abramowitz
James Tulin
For, except vote withheld from the following nominee(s)
_____________________________________________
FOR AGAINST ABSTAIN
2. The approval of the appointment of _____ _____ _____
PricewaterhouseCoopers LLP as the
independent accountants of the Company for
the year 1999.
3. The transaction of such other business as may properly come
before the meeting.
UNLESS OTHERWISE INDICATED, THE PROXY WILL BE VOTED
"FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR, "FOR"
ITEM 2 AND WITH DISCRETION ON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING.
IF YOU DO NOT EXPECT TO BE PRESENT, PLEASE DATE AND SIGN THIS
FORM OF PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
SIGNATURE________________ DATE____ SIGNATURE________________ DATE ____
(SIGNATURE IF HELD JOINTLY)
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please
give full title as such.
