<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TAMBRANDS 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
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TAMBRANDS INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1997
The Annual Meeting of the shareholders of Tambrands Inc. (the "Corporation")
will be held at The Tarrytown Hilton Inn, 455 South Broadway, Tarrytown, New
York, on Tuesday, April 22, 1997, at 9:30 A.M., for the following purposes:
(1) To elect directors for the ensuing year;
(2) To vote upon an amendment to the 1991 Stock Option Plan as described
in the accompanying Proxy Statement; and
(3) To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on February 26, 1997
will be entitled to vote at the meeting. A list of shareholders eligible to
vote at the meeting will be available for inspection at the meeting and during
business hours from April 11, 1997 to the date of the meeting at The Tarrytown
Hilton Inn at the address set forth above.
Whether you expect to attend the Annual Meeting or not, your proxy vote is
important. To assure your representation at the meeting, please sign and date
the enclosed proxy card and return it promptly in the enclosed envelope, which
requires no additional postage if mailed in the United States or Canada.
By Order of the Board of Directors
Susan J. Riley,
Senior Vice President
Chief Financial Officer
777 Westchester Avenue
White Plains, New York 10604
March 17, 1997
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE COMPLETED AND RETURNED
PROMPTLY
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<PAGE>
TAMBRANDS INC.
PROXY STATEMENT
March 17, 1997
This Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Tambrands Inc. (the "Corporation") for use at the
Annual Meeting of its shareholders to be held on April 22, 1997.
Shares cannot be voted at the meeting unless the owner thereof is present in
person or by proxy. All properly executed and unrevoked proxies in the
accompanying form that are received in time for the meeting will be voted at
the meeting or any adjournment thereof in accordance with any specification
thereon, or if no specification is made, will be voted "FOR" the election of
the named nominees and approval of the proposal set forth in the Notice of
Annual Meeting of Shareholders of the Corporation. Any person giving a proxy
may revoke it by written notice to the Corporation at any time prior to
exercise of the proxy. In addition, although mere attendance at the meeting
will not revoke the proxy, a person present at the meeting may withdraw his or
her proxy and vote in person.
The Annual Report of the Corporation (which does not form a part of the
proxy solicitation material), including the financial statements of the
Corporation for the fiscal year 1996, is enclosed herewith.
The mailing address of the principal executive offices of the Corporation is
777 Westchester Avenue, White Plains, New York 10604. This Statement and the
accompanying form of proxy are being mailed to the shareholders of the
Corporation on or about March 17, 1997.
VOTING SECURITIES
The Corporation has only one class of voting securities, its Common Stock,
par value $.25 per share (the "Common Stock"). On February 26, 1997,
36,943,470 shares of Common Stock were outstanding. At the meeting, each
shareholder of record at the close of business on February 26, 1997 will be
entitled to one vote for each share of Common Stock owned on that date as to
each matter presented to the meeting.
ELECTION OF DIRECTORS
Unless otherwise directed, the persons named in the accompanying form of
proxy intend to vote at the Annual Meeting for the election of the nominees
named in the following table as directors of the Corporation to serve until
the next Annual Meeting and until their successors are duly elected and have
qualified.
To be elected, each nominee for director requires the affirmative vote of a
plurality of the votes cast.
If any nominee is unable to be a candidate when the election takes place,
the shares represented by valid proxies will be voted in favor of the
remaining nominees and for such person, if any, as shall be designated by the
Board of Directors to replace such nominee. The Board of Directors does not
presently anticipate that any nominee will be unable to be a candidate for
election.
<PAGE>
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each nominee during
the last five years has been furnished to the Corporation by such nominee.
Except as indicated, each of the nominees has had the same principal
occupation for the last five years.
INFORMATION REGARDING NOMINEES FOR ELECTION
AS DIRECTORS OF TAMBRANDS INC.
Lilyan H. Affinito
Director of Caterpillar Inc., Chrysler Corporation, Jostens, Inc., Kmart
Corp., Lillian Vernon Corporation and New England Telephone and Telegraph
Company and New York Telephone Company (NYNEX telephone subsidiaries);
director of the Corporation since 1986; age 65.
Anne M. Busquet
President of American Express Relationship Services, a unit of American
Express Travel Related Services, New York, New York (diversified financial
services) since October 1995; Executive Vice President of Charge Card
Marketing, American Express, from October 1993 to October 1995; Senior Vice
President and General Manager-Merchandise Services Division, American
Express, from before February 1992 to October 1993; director of the
Corporation since 1996; age 47.
Paul S. Doherty
Member of the law firm of Doherty, Wallace, Pillsbury & Murphy, P.C.,
Springfield, Massachusetts, from before February 1992; trustee of NWNL
Northstar Series Trust; director of the Corporation since 1979; age 62.
Edward T. Fogarty
Chairman, President and Chief Executive Officer of the Corporation since
September 1996; President and Chief Executive Officer of the Corporation
from May 1994 to September 1996; President-USA/Canada/Puerto Rico of
Colgate-Palmolive Company, New York, New York (consumer products) from
before February 1992 to May 1994; director of Avon Products; director of
the Corporation since 1994; age 60.
Janet Hill
Vice President of Alexander & Associates, Inc., Washington, D.C.
(management consulting) from before February 1992 and President of Staubach
Alexander Hill, Washington, D.C. (real estate consulting) since January
1995; director of First Union National Bank of Maryland, First Union
National Bank of Virginia and Washington, D.C., Progressive Corp. and
Wendy's International; director of the Corporation since 1996; age 49.
Robert P. Kiley
President of Neal Ward Realty Inc., Damariscotta, Maine (land development
and real estate) from before February 1992; director of ChemTrak Inc.;
director of the Corporation since 1981; age 61.
2
<PAGE>
John Loudon
Chairman of Caneminster Limited, London, United Kingdom (investment
company) from before February 1992; director of Exel, Ltd.; director of the
Corporation since 1991; age 61.
H.L. Tower
Chairman of the Board of Stanhome Inc., Westfield, Massachusetts (direct
selling, giftware and direct response) from before February 1992; director
of the Corporation since 1985; age 64.
Howard B. Wentz, Jr.
Chairman of the Board of Directors of the Corporation from June 1993 to
September 1996; Chairman of the Board of ESSEX Inc., New Haven, Connecticut
(manufacturing of architectural hardware) from August 1995 to January 1996;
Chairman of the Board of ESSTAR Incorporated, New Haven, Connecticut
(manufacturing of portable electric tools and architectural hardware) from
before February 1992 to July 1995; director of Colgate-Palmolive Company;
director of the Corporation since 1985; age 67.
Robert M. Williams
Chairman of the Board of RFE Management Corporation, New Canaan,
Connecticut (management corporation for five venture capital limited
partnerships of which Mr. Williams is also the managing partner) from
before February 1992; director of the Corporation since 1981; age 56.
Each of the nominees was elected to his or her present term of office at the
last Annual Meeting of Shareholders. The Board of Directors currently has
twelve members. Ruth M. Manton and John A. Meyers are currently directors of
the Corporation, but they are retiring from the Board, and they are not
nominees for election as directors at the Annual Meeting. The authorized
number of directors is being reduced to ten, effective immediately prior to
the election of directors at the Annual Meeting.
3
<PAGE>
INFORMATION REGARDING THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
The Board of Directors presently has standing Audit, Director Affairs
(formerly Nominating), Compensation, Executive and Investment Review
Committees, the membership and principal responsibilities of which are
described below:
Audit Committee
Members: Mr. Loudon (Chairman), Mrs. Busquet, Ms. Manton, Mr. Meyers and Mr.
Williams.
The Audit Committee's functions include recommending to the Board of
Directors the selection of the Corporation's independent public accountants
and reviewing with such accountants the plan for and results of their audit,
the adequacy of the Corporation's systems of internal accounting controls, any
material breakdown in such controls and any material violation of the
Corporation's Code of Conduct. In addition, the Audit Committee reviews the
independence of the independent public accountants and their fees for services
rendered to the Corporation.
Committee on Director Affairs
Members: Mr. Meyers (Chairman), Mr. Doherty, Mr. Loudon, Ms. Manton and Mr.
Tower.
In January 1995, the Nominating Committee was renamed the Committee on
Director Affairs and its functions were expanded to include additional matters
of Board organization and corporate governance, including reviewing and making
recommendations to the Board concerning the Board's size, composition,
compensation and tenure and the creation and composition of Board committees
and reporting to the Board on its evaluation of the Board's performance.
The Committee evaluates prospective candidates for election to the Board of
Directors and recommends specific nominees to fill any vacancy in the Board
that may occur. The Committee will consider a candidate for nomination as a
director of the Corporation upon receipt of a timely written notice of a
shareholder's recommendation, addressed to the Secretary or Assistant
Secretary of the Corporation at the Corporation's address set forth on the
first page of this Proxy Statement. In accordance with the Corporation's By-
Laws, no person may be nominated as a director by a shareholder at any Annual
Meeting of Shareholders unless written notice of such proposed nomination,
containing certain information required under the By-Laws, is delivered to the
Secretary or Assistant Secretary not less than 60 days nor more than 90 days
prior to the anniversary of the preceding year's Annual Meeting, subject to
certain exceptions set forth in the By-Laws.
Compensation Committee
Members: Ms. Affinito (Chairwoman), Mr. Doherty, Mrs. Hill and Mr. Tower.
The Compensation Committee's functions include reviewing and making
proposals to the Board of Directors with respect to matters having to do with
the compensation of senior executives of the Corporation and administering all
plans relating to the compensation of officers, including the 1981 Long Term
Incentive Program, the 1991 Stock Option Plan, the Annual Incentive Plan, the
Supplemental Executive Retirement Plan, the 1991 Employee Stock Purchase Plan
and the 1989 Restricted Stock Plan.
4
<PAGE>
Executive Committee
Members: Mr. Fogarty (Chairman), Ms. Affinito, Mr. Doherty, Ms. Manton, Mr.
Tower, Mr. Wentz and Mr. Williams.
The Executive Committee may, between meetings of the Board of Directors,
exercise all of the authority of the Board in the management of the business
and affairs of the Corporation, except with respect to certain significant
corporate matters reserved to the Board by Delaware law, such as amendments to
the Certificate of Incorporation or By-Laws of the Corporation.
Investment Review Committee
Members: Mr. Tower (Chairman), Mr. Kiley, Mr. Loudon, Mr. Wentz and Mr.
Williams.
The Investment Review Committee's functions include reviewing, monitoring
and reporting to the Board of Directors on each investment by the Corporation
in the amount of $2 million or more for new products or product improvements,
acquisitions or dispositions of other businesses or the construction,
alteration or purchase of property, plant or equipment. The Investment Review
Committee is authorized to approve any such investment of $2 million or more
that is less than $5 million.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During the 1996 fiscal year the Board of Directors held eight meetings. The
Audit Committee met three times, the Committee on Director Affairs met three
times, the Compensation Committee met seven times, the Executive Committee did
not meet and the Investment Review Committee met three times. During such
fiscal year each director other than Mr. Loudon attended at least 75% of the
aggregate of (i) the meetings of the Board and (ii) the meetings of the
committees of the Board on which such director served. Mr. Loudon, who resides
in England, attended 71% of such meetings.
COMPENSATION OF DIRECTORS
An annual cash fee of $20,000 is payable by the Corporation to each director
who is not also an officer of the Corporation ("Non-Employee Director"). No
per-meeting fees are payable for attendance at Board or committee meetings.
Under the 1995 Directors Stock and Deferred Compensation Plan (the
"Directors Plan"), each Non-Employee Director receives 500 shares of the
Corporation's Common Stock ("Annual Share Award") at or about the time of the
annual meeting of shareholders for each full year served as a Non-Employee
Director of the Corporation. If a Non-Employee Director serves less than a
full-year term, such director receives a pro rata award of shares for such
year. Non-Employee Directors also are eligible under the Directors Plan to
receive options to purchase 1,100 shares of the Corporation's Common Stock on
or about November 15 in each year from 1995 to 2004, inclusive. A Non-Employee
Director who is first elected to the Board after November 15 receives an
initial pro rata grant. The per share exercise price of the options is the
fair market value of a share of Common Stock on the date of grant, which is
determined as the mean between the high and low sales prices of a share of
Common Stock on such date as reflected in the report of consolidated trading
of New York Stock Exchange issues.
5
<PAGE>
Non-Employee Directors are also eligible to elect at fixed dates established
under the Directors Plan to exchange cash fees payable for services to be
performed as a director in calendar years after 1995 for additional share
awards ("Exchange Shares"). The number of Exchange Shares is determined by
dividing the amount of cash fees forgone for each quarter by the fair market
value of a share of Common Stock on the first day of such calendar quarter.
On or before December 31 of any calendar year ending on or before December
31, 2004, a Non-Employee Director may elect to defer receipt of all or any
part of any fees payable in cash or the value of any Annual Share Award (the
"Share Value") payable in respect of the calendar year following the year in
which such election is made. Any person who first becomes a director during a
calendar year may elect to defer payment of all or any part of his or her cash
fees payable for the remainder of that year.
The amounts deferred are deemed invested, in whole or in part, at the
director's election, in an interest account or a stock account, provided that
the Share Value must be credited to the stock account. Any cash fees allocated
to the stock account and any Share Value deferred shall be deemed to be
invested in a number of notional shares of the Common Stock of the
Corporation. Amounts attributable to a director's deferrals will generally be
distributed immediately following the cessation of the director's service as a
member of the Board in one lump-sum payment or in such number of annual
installments (not to exceed ten) as the director may designate. Distributions
will be made either in cash or in shares of Common Stock as elected by the
Non-Employee Director. Under certain circumstances, each director may elect to
receive a distribution of all or any portion of the amounts standing to his or
her credit while still a member of the Board.
Each Non-Employee Director participates in a phantom stock program (the
"Phantom Plan") that was adopted in 1996 to replace the Corporation's Pension
Plan for Non-Employee Directors. Under the Phantom Plan, each Non-Employee
Director elected to the Board prior to January 1, 1996 was awarded a fully
vested contractual right to receive the value of that number of shares of the
Corporation's Common Stock which, at the time of the 1996 Annual Meeting of
shareholders, were equal in value to the then present value of the retirement
benefits he or she could have received under such pension plan. Each Non-
Employee Director joining the Board on or after January 1, 1996 is awarded a
contingent contractual right to receive the value of 1,000 shares of the
Corporation's common stock (the "Commencement Award"). A Non-Employee
Director's rights to the Commencement Award will become vested upon the
earlier to occur of the completion of five years of service as a member of the
Board, a change of control of the Corporation or his or her death, permanent
and complete disability or retirement at the Corporation's mandatory
retirement age for directors.
The value of each Non-Employee Director's interest under the Phantom Plan
will be paid to such Director following his or her cessation of service as a
member of the Board in either a single lump sum or in a series of annual
installments, not to exceed ten, as elected by the Non-Employee Director.
Distributions will be made either in cash or in shares of Common Stock as
elected by the Non-Employee Director, except that no shares of Common Stock
may be delivered to such a Non-Employee Director earlier than six months
following the date on which he or she ceases to be a member of the Board.
Any director who is also an officer receives no additional compensation for
services as a director of the Corporation.
Mr. Wentz served as Chairman of the Board of the Corporation from January
until September 1996. For these additional services, Mr. Wentz was paid a
monthly fee of $10,000. Mr. Wentz exchanged these fees for Exchange Shares
under the Directors Plan.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid to the Chief Executive
Officer of the Corporation and each of the Corporation's four other most
highly compensated executive officers serving as executive officers on
December 31, 1996 (who, together with the Chief Executive Officer, are the
"Current Named Executives") for services to the Corporation and its
subsidiaries during 1996 and, where required, with respect to the previous two
fiscal years. Also included in the following table is the compensation paid
during the previous three fiscal years to a former executive officer of the
Corporation. The Current Named Executives and such former officer are
collectively referred to as the "Named Executives."
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
- -------------------------------------------------------------------- -------------------
(A) (B) (C) (D) (E) (F) (G) (H)
SECURITIES
RESTRICTED UNDERLYING
NAME AND OTHER ANNUAL STOCK OPTIONS / SARS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(1) COMPENSATION($) AWARD(S)($)(2) (# OF SHARES) COMPENSATION($)(3)
------------------ ---- ------------ ----------- --------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Edward T. Fogarty..... 1996 575,000 0 N/A 158,000 29,260 4,071
Chairman, President
and 1995 533,333 339,247 N/A 0 50,000 4,429
Chief Executive Offi-
cer 1994 306,250 0 N/A 480,938 199.097 1,342
Thomas J. Mason....... 1996 337,500 0 N/A 53,325 28,190 93,715
Executive Vice Presi-
dent 1995 304,167 166,934 N/A 35,100 21,320 67,868
and Chief Operating
Officer 1994 56,923 100,000 N/A 0 50,000 N/A
Thomas Soper, III..... 1996 270,000 0 N/A 34,563 5,670 4,500
Senior Vice Presi-
dent-- 1995 250,000 111,316 N/A 23,400 10,180 4,620
Corporate Human Re-
sources 1994 57,292 101,500 N/A 0 35,000 N/A
Michael K. Lorelli.... 1996 264,583 0 N/A 92,331 0 3,563
Former Executive Vice
President 1995 375,000 202,024 N/A 66,300 21,320 3,465
and President, North
America/ 1994 81,025 199,395 N/A 0 90,000 N/A
Latin America(4)
Michael S. Krause..... 1996 201,667 0 N/A 29,625 5,670 3,563
Senior Vice Presi-
dent-- 1995 84,103 84,000 N/A 0 29,850 N/A
Global Operations
Susan J. Riley........ 1996 193,333 0 N/A 29,625 5,670 3,563
Senior Vice Presi-
dent-- 1995 161,667 60,989 N/A 0 7,970 3,465
Chief Financial Offi-
cer 1994 146,875 26,500 N/A 0 16,268 4,384
</TABLE>
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(1) Includes, where applicable, amounts electively deferred by each Named
Executive under the Corporation's Savings Plan and Employee Stock Purchase
Plan, but excludes amounts forgone at the election of a Named Executive in
exchange for stock options. The number of options granted in exchange for
such amounts is included in column (g).
(2) On December 31, 1996, the Named Executives held the following number of
shares of restricted stock, which had the following aggregate values on
such date: Mr. Fogarty, 16,700 shares worth $682,613; Mr. Mason, 1,980
shares worth $80,933; Mr. Soper, 1,300 shares worth $53,138; Mr. Lorelli,
0 shares worth $0; Mr. Krause, 600 shares worth $24,525; and Ms. Riley,
600 shares worth $24,525. Dividends on restricted stock are paid to the
holders thereof at the same time and in the same manner as dividends are
paid to all other shareholders of the Corporation.
(3) Amounts listed in this column reflect the Corporation's contributions to
the Corporation's Savings Plan (exclusive of amounts deferred at the
election of the Named Executives). In the case of Mr. Mason, $89,215 of
the amount shown for 1996 reflects an assignment completion payment made
to him under the Corporation's International Assignment Policy in
connection with his relocation back to the United States at the conclusion
of his overseas assignment. The amount shown does not include amounts
payable to him as reimbursement of or compensation for certain moving and
other expenses related to such assignment pursuant to the terms of the
International Assignment Policy, which is generally applicable to all
salaried employees of the Corporation who accept an overseas assignment.
(4) Mr. Lorelli resigned from the Corporation effective August 31, 1996.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the stock options granted during the 1996
fiscal year to the Named Executives.
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE (1)
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(A) (B) (C) (D) (E) (F)
NUMBER OF % OF
SHARES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION PRESENT
NAME GRANTED (2) FISCAL YEAR PRICE ($/SH) DATE VALUE ($)
---- ----------- ------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Edward T. Fogarty....... 29,260 12.39 43.25 11/15/06 237,070
Thomas J. Mason......... 28,190(3) 11.94 43.25 11/15/06 228,401
Thomas Soper, III....... 5,670 2.40 43.25 11/15/06 45,939
Michael K. Lorelli...... 0 0 N/A N/A N/A
Michael S. Krause....... 5,670 2.40 43.25 11/15/06 45,939
Susan J. Riley.......... 5,670 2.40 43.25 11/15/06 45,939
</TABLE>
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(1) Based on the Black-Scholes option pricing model, which is an economic
model that commonly is used to estimate the present value of an option
grant. Like any economic model, the Black-Scholes option pricing model
produces different results depending on the assumptions made, and the
amounts shown above are merely good faith estimates of the present value
of such option grants. The amounts were estimated based upon the following
assumptions: a future volatility in the value of the Corporation's Common
Stock of 19.3576 percent, a risk-free rate of return of 6.19 percent and a
dividend yield on the Corporation's Common Stock of 4.25 percent. In
addition, it was assumed that the option would have an expected life of
6.3733 years, based on the Corporation's actual experience for the
exercise and forfeiture of options over a 10-year period. The actual
present value of such grants cannot be determined, principally because two
of the variables in this option pricing model are the future volatility in
the value of the Corporation's Common Stock and the time at which the
options may be exercised.
(2) The options generally must be exercised, if at all, not later than 90 days
following the termination of the optionee's employment with the
Corporation and its affiliates; however, in the event that the optionee's
employment terminates due to death, disability, normal retirement or
approved early retirement, the optionee (or his beneficiary) will be able
to exercise the options for five years following termination of
employment. The options generally become exercisable in approximately
equal installments on each of November 15, 1997, November 15, 1998 and
November 15, 1999, although they may become exercisable earlier upon the
occurrence of a change of control of the Corporation or upon the
optionee's death, disability, normal retirement or approved early
retirement.
(3) Of these options, 13,000 were granted to Mr. Mason in connection with his
promotion to the position of Executive Vice President and Chief Operating
Officer.
8
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUE
The following table sets forth information for each Named Executive with
regard to the aggregate stock options exercised during the 1996 fiscal year,
and the aggregate stock options held as of December 31, 1996.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
NUMBER OF OPTIONS AT FY-END FY-END ($)(1)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward T. Fogarty....... 0 0 174,095 104,262 463,971 100,000
Thomas J. Mason......... 0 0 40,438 59,072 11,458 5,730
Thomas Soper, III....... 0 0 26,724 24,126 45,935 22,971
Michael K. Lorelli...... 40,000 172,500 0 0 0 0
Michael S. Krause....... 0 0 9,948 25,572 0 0
Susan J. Riley.......... 0 0 35,425 17,524 43,837 14,888
</TABLE>
- --------
(1) Based on the fair market value of the Corporation's Common Stock on
December 31, 1996, minus the exercise price. A substantial percentage of
these options granted to Messrs. Fogarty, Mason, Soper and Krause were
granted at exercise prices in excess of the fair market value at the date
of grant.
PENSION PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Corporation maintains a qualified Pension Plan and a Supplemental
Executive Retirement Plan (the "SERP"). Subject to applicable vesting
requirements, the SERP as currently in effect provides two types of benefits:
the first restores for all employees any benefits that cannot be paid under
the Pension Plan because of certain Internal Revenue Code limits (the "Excess
Benefits"), and the second provides additional retirement benefits (the "Mid-
Career Benefits") to designated employees, including the Named Executives
other than Mr. Fogarty and Ms. Riley.
The Mid-Career Benefits are calculated under a formula that produces an
annual benefit equal to the product of (i) three percent of an eligible
participant's Highest Average Earnings and (ii) the participant's Years of
Service (not in excess of fifteen). Highest Average Earnings equals the
average of a participant's compensation during the plan year, which generally
includes wages for social security purposes determined without regard to
certain limitations (but adjusted to include certain compensation which, at
the participant's election, is not paid), for the five consecutive plan years
out of the last ten years that produce the highest average. The Mid-Career
Benefits payable to a participant are reduced by a percentage of the
participant's primary social security benefit and by the benefits payable to
the participant under the Pension Plan.
An eligible executive generally must complete at least ten Years of Service
and remain employed with the Corporation until at least age 55 to become
vested in any Mid-Career Benefits. The Excess Benefits will become vested
solely upon the completion of five Years of Service, which is the same
requirement as applies to benefits accrued under the Pension Plan.
If, within two years following a change of control of the Corporation, the
employment of a Named Executive is terminated by the Corporation or by a Named
Executive within 90 days following (i) a material reduction in his
compensation and benefits, (ii) a material change in his duties or
responsibilities or (iii) a transfer in his principal place of employment to a
location more than 35 miles from his previous principal place of employment,
he will automatically become vested in all benefits accrued under the SERP and
receive an additional two years of credited service thereunder.
9
<PAGE>
The first table that follows shows, for the compensation and years-of-
service categories indicated, the estimated annual benefits payable to
hypothetical participants who are entitled to the maximum benefits under the
Pension Plan, as supplemented by the Excess Benefits under the SERP. The
second table shows the amounts payable under the SERP's Mid-Career Benefit
formula, inclusive of the benefits shown in the first table. The benefits are
assumed to be payable at retirement at normal retirement age under the Pension
Plan.
<TABLE>
<CAPTION>
PENSION PLAN BENEFITS TABLE--PENSION PLAN AND SERP EXCESS BENEFITS
----------------------------------------------------------------------------
ANNUALIZED
AVERAGE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
EARNINGS OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000.............. $ 14,370 $ 21,555 $ 28,740 $ 35,925 $ 43,110 $ 50,295 $ 57,480
150,000.............. 21,870 32,805 43,740 54,675 65,610 76,545 87,480
200,000.............. 29,370 44,055 58,740 73,425 88,110 102,795 117,480
250,000.............. 36,870 55,305 73,740 92,175 110,610 129,045 147,480
300,000.............. 44,370 66,555 88,740 110,925 133,110 155,295 177,480
350,000.............. 51,870 77,805 103,740 129,675 155,610 181,545 207,480
400,000.............. 59,370 89,055 118,740 148,425 178,110 207,795 237,480
450,000.............. 66,870 100,305 133,740 167,175 200,610 234,045 267,480
500,000.............. 74,370 111,555 148,740 185,925 223,110 260,295 297,480
550,000.............. 81,870 122,805 163,740 204,675 245,610 286,545 327,480
600,000.............. 89,370 134,055 178,740 223,425 268,110 312,795 357,480
650,000.............. 96,870 145,305 193,740 242,175 290,610 339,045 387,480
700,000.............. 104,370 156,555 208,740 260,925 313,110 365,295 417,480
750,000.............. 111,870 167,805 223,740 279,675 335,610 391,545 447,480
800,000.............. 119,370 179,055 238,740 298,425 358,110 417,795 477,480
850,000.............. 126,870 190,305 253,740 317,175 380,610 444,045 507,480
900,000.............. 134,370 201,555 268,740 335,925 403,110 470,295 537,480
950,000.............. 141,870 212,805 283,740 354,675 425,610 496,545 567,480
1,000,000.............. 149,370 224,055 298,740 373,425 448,110 522,795 597,480
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN BENEFITS TABLE--PENSION PLAN, SERP EXCESS BENEFITS AND
SERP MID-CAREER FORMULA BENEFITS
----------------------------------------------------------------------------
HIGHEST
AVERAGE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
EARNINGS OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
-------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000.............. $ 25,495 $ 38,243 $ 38,243 $ 38,243 $ 43,110 $ 50,295 $ 57,480
150,000.............. 40,495 60,743 60,743 60,743 65,610 76,545 87,480
200,000.............. 55,495 83,243 83,243 83,243 88,110 102,795 117,480
250,000.............. 70,495 105,743 105,743 105,743 110,610 129,045 147,480
300,000.............. 85,495 128,243 128,243 128,243 133,110 155,295 177,480
350,000.............. 100,495 150,743 150,743 150,743 155,610 181,545 207,480
400,000.............. 115,495 173,243 173,243 173,243 178,110 207,795 237,480
450,000.............. 130,495 195,743 195,743 195,743 200,610 234,045 267,480
500,000.............. 145,495 218,243 218,243 218,243 223,110 260,295 297,480
550,000.............. 160,495 240,743 240,743 240,743 245,610 286,545 327,480
600,000.............. 175,495 263,243 263,243 263,243 268,110 312,795 357,480
650,000.............. 190,495 285,743 285,743 285,743 290,610 339,045 387,480
700,000.............. 205,495 308,243 308,243 308,243 313,110 365,295 417,480
750,000.............. 220,495 330,743 330,743 330,743 335,610 391,545 447,480
800,000.............. 235,495 353,243 353,243 353,243 358,110 417,795 477,480
850,000.............. 250,495 375,743 375,743 375,743 380,610 444,045 507,480
900,000.............. 265,495 398,243 398,243 398,243 403,110 470,295 537,480
950,000.............. 280,495 420,743 420,743 420,743 425,610 496,545 567,480
1,000,000.............. 295,495 443,243 443,243 443,243 448,110 522,795 597,480
</TABLE>
As of December 31, 1996, the credited Years of Service and the compensation
covered under the Pension Plan and the SERP of each of the Named Executives
eligible to participate therein are as follows: Mr. Fogarty, three years,
$803,434; Mr. Mason, three years, $507,781; Mr. Soper, three years, $390,183;
Mr. Lorelli, two years, $602,421; Mr. Krause, two years, $269,928; and Ms.
Riley, ten years, $167,349. The amounts shown in the above tables reflect the
effect of a social security offset and are based upon the assumption that
benefits will be paid in the form of a life annuity.
OTHER INFORMATION
The Corporation entered into employment agreements with each of Messrs.
Fogarty, Mason, Soper, Lorelli and Krause. Under his agreement, Mr. Fogarty is
to receive an annual base salary of $575,000 and an annual bonus opportunity
at target levels of performance equal to 60% of his annual base salary. In the
event the Corporation terminates Mr. Fogarty's employment for any reason other
than Cause (defined to include serious misconduct, conviction of a felony or
breach of his covenant not to disclose confidential information) or his
disability, or in the event Mr. Fogarty terminates his employment with the
Corporation for Good Reason (e.g., due to a diminution in his duties as Chief
Executive Officer or a material reduction in his annual base salary), the
Corporation will pay Mr. Fogarty severance benefits equal to three times his
then current annual base salary and shall deem Mr. Fogarty to be vested in his
benefits accrued under the Corporation's Pension Plan and SERP, if not
previously vested. The amount of the severance benefits will be paid in two
lump sum payments over two years, unless Mr. Fogarty and the Corporation agree
to pay all or a portion of the second payment in the first year.
11
<PAGE>
Under his agreement, Mr. Mason is to receive an annual base salary of
$375,000 and an annual bonus opportunity at target levels of performance equal
to 54% of his annual base salary. Mr. Mason is eligible to accrue benefits
under the Mid-Career Formula of the SERP. However, if his employment
terminates before such benefits vest, the Corporation will provide him a
special retirement benefit. This benefit will be equal to the amount
necessary, after taking into account the amounts payable to Mr. Mason under
his prior employer's pension plans, to provide him aggregate retirement
benefits equal to those that would have been payable to him, based on the
assumptions set forth in his agreement, had he worked for his prior employer
for up to five more years. This special benefit vests in five equal annual
installments over his first five years of employment with the Corporation. In
the event the Corporation terminates Mr. Mason's employment for any reason
other than Cause (defined to include serious misconduct, conviction of a
felony or breach of his covenant not to disclose confidential information) or
his disability, or in the event Mr. Mason terminates his employment with the
Corporation for Good Reason (e.g., due to a diminution in his duties or a
reduction in his annual base salary), the Corporation will pay Mr. Mason
severance benefits equal to a prorated target bonus (adjusted for corporate
performance) for the year of termination and one and one-half times his then
current annual base salary. The amount of the severance benefits will
generally be paid in a lump sum, unless Mr. Mason and the Corporation agree to
pay all or a portion of this amount over a period not to exceed 18 months.
The agreement between the Corporation and Mr. Soper is substantially similar
to the agreement between the Corporation and Mr. Mason as described above,
except in the following respects. Under his agreement, Mr. Soper is to receive
an annual base salary of $270,000 and an annual bonus opportunity at target
levels of performance equal to 42% of his annual base salary.
Under his agreement, Mr. Lorelli received an annual base salary of $400,000
and an annual bonus opportunity at target levels of performance equal to 54%
of his annual base salary. Additionally, such agreement entitled Mr. Lorelli
to receive payments in respect of certain retirement benefits calculated based
on the retirement benefits that he would have received (based on certain
assumptions set forth in his agreement) under his prior employer's pension
plans, had he continued to work for such employer during the period he worked
for the Corporation. Based on his service through the date of his resignation,
Mr. Lorelli had accrued a right to receive annual benefits of $10,450
commencing at age 65. The present value of this benefit ($18,527) was paid to
Mr. Lorelli in a lump sum following his resignation.
The agreement between the Corporation and Mr. Krause is substantially
similar to the agreement between the Corporation and Mr. Soper, except in the
following respects. Under his agreement, Mr. Krause is to receive an annual
base salary of $210,000 and an annual bonus opportunity at target levels of
performance equal to 42% of his annual base salary.
The Corporation has contracts with each of the Current Named Executives that
provide certain rights in the event of a change of control of the Corporation.
Under these contracts if there is a change of control and if, within two years
following the change of control, the employment of the employee is terminated
without "cause" by the Corporation or if the employee terminates his
employment for "good reason" (as such terms are defined in the contracts),
then the employee is entitled to receive either three times, in the case of
Messrs. Fogarty and Mason, or two times, in the case of Messrs. Soper and
Krause and Ms. Riley, the aggregate amount of the officer's then current base
salary, the employee's last annual bonus award and the present value of the
annual cost of the employee's participation in all employee benefit plans of
the Corporation. Any payments by the Corporation to any such Current Named
Executive would be grossed up on an after-tax basis with respect to certain
federal excise taxes, if applicable.
12
<PAGE>
The Corporation maintains a severance program that generally entitles an
executive officer of the Corporation to receive severance benefits in the
event that the officer's employment is involuntarily terminated by the
Corporation. The actual benefits payable to any executive officer under such
program will be based on several factors, including the executive officer's
age and years of service at the time of such termination. The minimum
severance benefit payable to an executive officer under the policy is one
year's base salary. A prorated target bonus, adjusted as appropriate for
performance, is also generally payable. In appropriate circumstances, the
determination may be made that an employee's performance does not warrant any
bonus payment.
The Corporation provides a number of benefits which require that a
participant perform a minimum period of service to receive some or all of such
benefits. Under the terms of the governing plans--the Supplemental Executive
Retirement Plan, the 1989 Restricted Stock Plan and the 1991 Stock Option
Plan--the requirement for additional service is waived upon the occurrence of
a "Change of Control" and the rights of participants to the previously accrued
or awarded benefits are accelerated. Additionally, as is described in greater
detail above, the Corporation has agreements with the Current Named Executives
that provide them with additional severance benefits in the event that their
employment is involuntarily or constructively terminated following a Change of
Control. For purposes of these various plans and agreements, a Change of
Control will generally be deemed to occur if (i) any third party acquires 20%
of the Corporation's Common Stock; (ii) the Corporation's shareholders approve
(1) a merger or other consolidation of the Corporation with another
corporation as a result of which the Corporation ceases to be a publicly
traded company or (2) a sale of substantially all of the Corporation's assets;
or (iii) the persons who constitute a majority of the members of the Board of
Directors at the beginning of any 24-month period (or successors to such
directors elected or nominated for election by such incumbent Board members)
cease to be a majority of the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During all or a portion of 1996, the following directors served as members
of the Compensation Committee: Lilyan H. Affinito, Paul S. Doherty, Janet
Hill, H.L. Tower and Howard B. Wentz, Jr.
The Compensation Committee operates independent of any interlocking
relationship with the board of directors, executive officers or committees of
any other corporation, the disclosure of which would be required under
applicable regulations of the Securities and Exchange Commission.
13
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report provides an explanation of the philosophy underlying the
Corporation's executive compensation programs and details on how decisions
were implemented during 1996 regarding the compensation paid to Edward T.
Fogarty, who served as Chief Executive Officer of the Corporation (the "CEO").
In developing the practices and policies described in this report, the
Compensation Committee has been advised by outside consultants experienced in
the design and implementation of executive compensation arrangements.
FRAMEWORK FOR COMPENSATION DECISIONS
Decisions with respect to the compensation of executive officers of the
Corporation generally are within the authority of the Compensation Committee
of the Board of Directors, which during 1996 was comprised of at least three
individuals each of whom met the requirements of Rule 16b-3, as promulgated by
the Securities and Exchange Commission. The Compensation Committee made
recommendations to the Board of Directors in 1996 with regard to the
compensation of the Chief Executive Officer. Pursuant to the Corporation's
normal practices, in 1996 the Board of Directors reviewed the Compensation
Committee's recommendations for Mr. Fogarty, and, after due consideration,
approved such recommendations.
The Compensation Committee regularly reviews the compensation paid to
executive officers and periodically conducts reviews of the Corporation's
compensation practices.
COMPARATIVE COMPANY DATA
The Corporation uses a group of 21 companies (the "Comparative Group") both
for purposes of determining the compensation it pays its executive officers
and for purposes of the performance graph set forth below. Each of the
companies in the Comparative Group has one or more of the following
characteristics:
. Widely recognized product brands.
. Significant presence in the health and beauty aid or food category.
. Significant market presence outside the United States.
. Leading market shares in significant markets.
. Similar caliber/experience of senior management.
The Comparative Group includes several of the Corporation's competitors, and
also includes other companies that are not engaged in the feminine protection
business. Because of the similarities among the Corporation and the members of
the Comparative Group with regard to the factors listed above, the Corporation
believes that comparing the Corporation's compensation practices and stock
performance to those of the Comparative Group is more reasonable than
comparing the Corporation solely to its competitors.
All Comparative Group data are adjusted to reflect differences in company
size and the scope of each executive's responsibilities.
14
<PAGE>
The companies that comprise the Comparative Group are:
American Home Products Corporation
Brown-Forman Corporation
Carter-Wallace, Inc.
CCH Incorporated
Church & Dwight Co. Inc.
The Clorox Company
Colgate-Palmolive Company
General Mills, Inc.
The Gillette Company
Helene Curtis Industries, Inc.
Hillenbrand Industries Inc.
International Flavors & Fragrances Inc.
Johnson & Johnson
Kimberly-Clark Corporation
Lance, Inc.
The Procter & Gamble Company
Schering-Plough Corporation
The J.M. Smucker Company
UST Inc.
Warner-Lambert Company
Wm. Wrigley Jr. Company
THE CORPORATION'S EXECUTIVE COMPENSATION PHILOSOPHY
The Compensation Committee has consistently applied the following philosophy
of the Corporation in making its recommendations or decisions on the
compensation paid or awarded to its executive officers:
. The principal management objective is to maximize shareholder value.
. Performance is the key determinant of pay for executive officers.
. Executive officers have clear management accountabilities.
Comparative Group data are used to determine rates of pay which are
competitive with compensation paid by the Comparative Group. The Corporation's
executive pay levels are intended to vary from Comparative Group standards in
accordance with the Corporation's performance. For example, if the
Corporation's performance exceeds its goals, then the incentive payouts, stock
option gains and ultimate restricted stock values paid to executives are
intended to result in total pay in excess of the Comparative Group median. If
the Corporation's performance falls below its goals, total pay is intended to
be below targeted levels. Thus, the relationship between the Corporation's
total pay package and that of the members of the Comparative Group will vary
based on year-to-year performance. The total pay of the Corporation's
executive officers for 1996 was below the fiftieth percentile of the
Comparative Group, since no bonuses were paid to such officers for 1996. See
"Implementation of the Philosophy in 1996" below.
15
<PAGE>
IMPLEMENTATION OF THE PHILOSOPHY IN 1996
Consistent with the above-stated philosophy, the Corporation's executive
compensation programs were administered in 1996 in accordance with the
following guidelines:
. Base salaries for executive officers were targeted at the median of
competitive practices with respect to base salaries.
. Target bonus opportunities for executive officers for 1996 services were
generally designed to provide such officers with total cash compensation
(inclusive of base salary) at the median of competitive practice, if the
requisite performance objectives were attained.
. Long-term performance pay opportunities for 1996 were intended to provide
compensation at the median of competitive practice, if the Corporation
were to achieve its projected performance over the long term.
. Benefits were consistent with competitive practice.
In 1996, the Corporation's executive officers were eligible to participate
in the Corporation's Annual Incentive Plan. The plan was structured to be
funded by an award pool of money that was determined based on the achievement
by the Corporation against an earnings per share target for 1996. The plan was
designed so that the Corporation's executive officers were eligible to
participate in the award pool only upon the achievement by the Corporation of
at least 90% of the target level of earnings per share. The Corporation did
not achieve this 90% earnings per share objective and, as a result, no
executive officer received a bonus award for 1996.
During 1996, the Corporation continued to place a substantial emphasis on
long-term performance pay. Under the Corporation's general compensation
practices, in 1996, the substantial majority of such long-term performance pay
opportunities was reflected in stock option grants, with the remainder awarded
through restricted stock grants.
The number of stock options granted to executive officers in 1996 was
determined with reference to initially-established target awards for each
grade level, which were derived by dividing a percentage of the salary
midpoint for the level by a per share value for each option share granted, as
determined by the Corporation's independent compensation consultants. The
target awards were established using the Black-Scholes valuation methodology
to determine the assumed value for each option share. Due to the Corporation's
financial performance in 1996, the awards to executive officers at the Senior
Vice President level and above were made in the amount of only 70% of target.
For the other executive officers, awards were made at target. In addition, Mr.
Mason received an award of 13,000 stock options in conjunction with his
promotion to the position of Executive Vice President and Chief Operating
Officer. Prior stock option awards were not taken into account in determining
the size of any stock option award made in 1996.
The number of shares of restricted stock granted to executive officers in
1996 was initially determined by dividing each executive officer's targeted
long-term performance pay opportunity attributable to restricted stock by an
estimated discounted present value of one share of Common Stock at the time of
the award. Such discounted present value was determined based on certain
assumptions regarding changes in the value of the Common Stock. Target awards
were then adjusted for each recipient to reflect an assessment of the
recipient's individual performance as well as future potential. Prior
restricted stock awards were not taken into account in
16
<PAGE>
determining the size of any restricted stock award made in 1996. Restricted
stock generally vests after four years of service with the Corporation after
the date of grant, unless otherwise provided by the Compensation Committee.
CEO COMPENSATION
The Corporation's Board of Directors must approve decisions regarding the
following elements of CEO compensation: (i) salary; (ii) target bonus and
bonus awards under the Annual Incentive Plan; (iii) stock option awards; and
(iv) restricted stock awards.
Base Salary. During 1996, Mr. Fogarty received a base salary at the rate of
$575,000 per year pursuant to the terms of his employment agreement.
Annual Incentive Plan. The CEO did not receive a bonus award for 1996 since
the Corporation's earnings per share threshold for funding awards to executive
officers under the Annual Incentive Plan was not attained. See the discussion
above under the caption "Implementation of the Philosophy in 1996."
Stock Options. The CEO received an award of 29,260 stock options during
1996, which was equal to 70% of the target award for the CEO position. See the
discussion above under the caption "Implementation of the Philosophy in 1996."
Restricted Stock. The CEO received an award of 3,200 restricted shares of
Common Stock effective February 15, 1996, which was equal to 100% of the
target award for the CEO position. The award was determined using the
methodology described earlier under the caption "Implementation of the
Philosophy in 1996" and was based on a subjective evaluation by the
Compensation Committee of Mr. Fogarty's individual performance and the
Corporation's performance in 1995.
Other. No other actions were taken concerning the CEO's compensation for
services rendered in 1996.
OTHER
Section 162(m) of the Internal Revenue Code prohibits the Corporation from
deducting any compensation in excess of $1 million paid to certain of its
executive officers, except to the extent that such compensation is paid
pursuant to a shareholder approved plan upon the attainment of specified
performance objectives. The Corporation has not paid any compensation to any
executive officer that was not deductible by reason of the prohibition in
Section 162(m). The Committee believes that tax deductibility is an important
factor, but not the sole factor, to be considered in setting executive
compensation policy. Accordingly, the Committee generally intends to take such
reasonable steps as are required to avoid the loss of a tax deduction due to
Section 162(m), but reserves the right, in appropriate circumstances, to pay
amounts which are not deductible. The Corporation is proposing to shareholders
an amendment to the 1991 Stock Option Plan (the "1991 Plan") to limit the
maximum number of shares of the Corporation's Common Stock that may be subject
to a stock option awarded to any single employee in any twelve-month period to
500,000 shares. If approved by shareholders, this amendment will assure that
options granted under the 1991 Plan after the Annual Meeting of Shareholders
will qualify as "other performance-based compensation" under Section 162(m)
and, as such, will continue to be excluded from
17
<PAGE>
the compensation paid in determining whether the $1 million threshold has been
exceeded. See "Proposal to Approve an Amendment to the 1991 Stock Option
Plan."
The Compensation Committee
of the Board of Directors
Lilyan H. Affinito, Chairwoman
Paul S. Doherty
Janet Hill
H.L. Tower
18
<PAGE>
PERFORMANCE COMPARISON
The following graph illustrates the return that would have been realized
(assuming quarterly reinvestment of dividends) by an investor who invested
$100 on December 31, 1991 in each of (i) the Standard & Poor's Composite Index
of 500 Stocks (the "S&P 500"), (ii) the Corporation's Common Stock and (iii) a
fund making investments in the common stock of each of the companies in the
Comparative Group based on their relative market capitalization determined at
the beginning of each quarter.
The companies that comprise the Comparative Group are:
American Home Products Corporation
Brown-Forman Corporation
Carter-Wallace, Inc.
CCH Incorporated
Church & Dwight Co. Inc.
The Clorox Company
Colgate-Palmolive Company
General Mills, Inc.
The Gillette Company
Helene Curtis Industries, Inc. *
Hillenbrand Industries Inc.
International Flavors & Fragrances Inc.
Johnson & Johnson
Kimberly-Clark Corporation
Lance, Inc.
The Procter & Gamble Company
Schering-Plough Corporation
The J.M. Smucker Company
UST Inc.
Warner-Lambert Company
Wm. Wrigley Jr. Company
- --------
* Helene Curtis Industries, Inc. ceased to be a publicly-traded company during
the first quarter of 1996. Accordingly, its performance is reflected in the
following graph through December 31, 1995.
19
<PAGE>
Comparison of Total Return to Shareholders
(12/31/91 - 12/31/96)
[CHART APPEARS HERE]
- -------------------------------------------------------------------------------
Tambrands S&P 500 Comparative Group
- -------------------------------------------------------------------------------
December 31, 1991 $100.00 $100.00 $100.00
December 31, 1992 98.40 107.61 100.14
December 31, 1993 70.22 118.41 101.73
December 31, 1994 64.10 120.01 113.23
December 31, 1995 82.44 164.95 160.10
December 31, 1996 73.67 202.73 202.19
- --------------------------------------------------------------------------------
20
<PAGE>
SECURITY OWNERSHIP BY MANAGEMENT AND OTHERS
SECURITY OWNERSHIP OF MANAGEMENT
The following table gives information concerning the beneficial ownership of
the Corporation's Common Stock as of February 18, 1997 by all directors,
nominees for election as directors, the Named Executives and all directors,
Named Executives and other executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
----------------------------------------------------
TOTAL SHARES
BENEFICIALLY DIRECT RIGHT TO PERCENT OF
BENEFICIAL OWNERS OWNED (2) OWNERSHIP (3) ACQUIRE (4) CLASS (5)
- ----------------- ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Lilyan H. Affinito......... 34,395(6) 7,374(7) 26,721 0.09
Anne M. Busquet............ 3,289 1,364(8) 1,925 0.01
Paul S. Doherty............ 20,848 13,148(9) 7,700 0.06
Edward T. Fogarty.......... 198,795(10) 21,144(11) 174,095 0.54
Janet Hill................. 3,045 1,120(12) 1,925 0.01
Robert P. Kiley............ 31,672(13) 14,240(14) 16,672 0.09
John Loudon................ 17,150 2,345(15) 14,805 0.05
Ruth M. Manton............. 34,093(16) 9,905(17) 22,188 0.09
John A. Meyers............. 35,142 8,421(18) 26,721 0.10
H.L. Tower................. 38,062 13,285(19) 24,777 0.10
Howard B. Wentz, Jr........ 26,202 24,002(20) 2,200 0.07
Robert M. Williams......... 56,292(21) 14,431(22) 26,721 0.15
Michael S. Krause.......... 10,667(23) 700(24) 9,948 0.03
Michael K. Lorelli......... 0 0 0 0.00
Thomas J. Mason............ 43,990(25) 3,468(26) 40,438 0.12
Susan J. Riley............. 37,674(27) 1,419(28) 35,425 0.10
Thomas Soper, III.......... 29,683(29) 1,868(30) 26,724 0.08
All directors, Named
Executives and other
executive officers as a
group..................... 731,970(31) 138,856(32) 561,699 1.95
</TABLE>
- --------
(1) The information as to beneficial ownership is based on statements
furnished to the Corporation by the Named Executives, its other executive
officers and directors. The directors, nominees for election as directors
and Named Executives have sole voting and sole investment power with respect
to all shares listed above except as indicated in the footnotes which
follow.
(2) Includes shares listed under the captions "Direct Ownership" and "Right to
Acquire."
(3) The information as to shares of the Corporation's Common Stock owned under
the Employee Stock Purchase Plan is as of December 31, 1996.
(4) Individuals currently have the right to acquire these shares within 60
days of February 18, 1997 by the exercise of stock options.
(5) For the purposes of this table, the percent of the issued and outstanding
shares of Common Stock of the Corporation held by each individual or group
has been calculated on the basis of 36,937,456 shares of Common Stock issued
and outstanding (excluding treasury shares) on February 18, 1997 and
assuming that all shares of Common Stock subject to stock options
exercisable within 60 days of February 18, 1997 held by that individual or
group are owned thereby.
(Footnotes continued on following pages)
21
<PAGE>
(Footnotes continued from preceding page)
(6) Includes 300 shares held by a self-directed SEP established by Ms.
Affinito.
(7) Includes 1,100 shares credited to the benefit of Ms. Affinito under the
deferred compensation component of the Directors Plan and 2,774 shares
credited to her benefit under the Phantom Plan, in each case held in a
grantor trust, and as to which Ms. Affinito has the right to direct the
trustee as to how to vote such shares, but no investment power.
(8) Includes 331 shares credited to the benefit of Mrs. Busquet under the
deferred compensation component of the Directors Plan and 1,033 shares
credited to her benefit under the Phantom Plan, in each case held in a
grantor trust, and as to which Mrs. Busquet has the right to direct the
trustee as to how to vote such shares, but no investment power.
(9) Includes 2,172 shares credited to the benefit of Mr. Doherty under the
Phantom Plan and held in a grantor trust, as to which Mr. Doherty has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(10) Includes 3,556 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which Mr. Fogarty has sole voting but,
as to 90 shares, has no investment power.
(11) Includes 16,700 shares awarded under the 1989 Restricted Stock Plan (the
"1989 Plan") with respect to which Mr. Fogarty has sole voting but no
investment power.
(12) Includes 1,033 shares credited to the benefit of Mrs. Hill under the
Phantom Plan and held in a grantor trust, as to which Mrs. Hill has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(13) Includes 760 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which Mr. Kiley has sole voting but no
investment power.
(14) Includes 2,002 shares credited to the benefit of Mr. Kiley under the
Phantom Plan and held in a grantor trust, as to which Mr. Kiley has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(15) Includes 1,845 shares credited to the benefit of Mr. Loudon under the
Phantom Plan and held in a grantor trust, as to which Mr. Loudon has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(16) Includes 2,000 shares owned by Ruth McCarthy Manton IRRA, of which Ms.
Manton is the trustee and sole beneficiary.
(17) Includes 2,597 shares credited to the benefit of Ms. Manton under the
Phantom Plan and held in a grantor trust, as to which Ms. Manton has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(18) Includes 1,100 shares credited to the benefit of Mr. Meyers under the
deferred compensation component of the Directors Plan and 2,721 shares
credited to his benefit under the Phantom Plan, in each case held in a
grantor trust, and as to which Mr. Meyers has the right to direct the
trustee as to how to vote such shares, but no investment power.
(Footnotes continued on following page)
22
<PAGE>
(Footnotes continued from preceding page)
(19) Includes 2,557 shares credited to the benefit of Mr. Tower under the
Phantom Plan and held in a grantor trust, as to which Mr. Tower has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(20) Includes 2,749 shares credited to the benefit of Mr. Wentz under the
Phantom Plan and held in a grantor trust, as to which Mr. Wentz has the
right to direct the trustee as to how to vote such shares, but no
investment power.
(21) Includes 3,360 shares held by a trust of which Mr. Williams is the
beneficiary, 11,280 shares held by trusts of which Mr. Williams is a
trustee and 500 shares held by Mr. Williams's wife.
(22) Includes 1,100 shares credited to the benefit of Mr. Williams under the
deferred compensation component of the Directors Plan and 1,331 shares
credited to his benefit under the Phantom Plan, in each case held in a
grantor trust, and as to which Mr. Williams has the right to direct the
trustee as to how to vote such shares, but no investment power.
(23) Includes 19 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which Mr. Krause has sole voting but, as
to 17 shares, has no investment power.
(24) Includes 600 shares awarded under the 1989 Plan with respect to which Mr.
Krause has sole voting but no investment power.
(25) Includes 84 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which Mr. Mason has sole voting but, as
to 14 shares, has no investment power.
(26) Includes 1,980 shares awarded under the 1989 Plan with respect to which
Mr. Mason has sole voting but no investment power.
(27) Includes 830 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which Ms. Riley has sole voting but, as
to 734 shares, has no investment power.
(28) Includes 600 shares awarded under the 1989 Plan with respect to which Ms.
Riley has sole voting but no investment power.
(29) Includes 1,091 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which Mr. Soper has sole voting but, as
to 77 shares, has no investment power.
(30) Includes 1,300 shares awarded under the 1989 Plan with respect to which
Mr. Soper has sole voting but no investment power.
(31) Includes 9,670 shares vested in the Corporation's Savings Plan as of
December 31, 1996 with respect to which this group has sole voting but, as
to 2,736 shares, has no investment power.
(32) Includes 21,616 shares awarded under the 1989 Plan with respect to which
this group has sole voting but no investment power.
23
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information concerning those persons who, to the
Corporation's knowledge, are beneficial owners of more than 5% of the Common
Stock.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAME AND ADDRESS COMMON STOCK CLASS
- ---------------- ------------ ----------
<S> <C> <C>
Delaware Management Holdings, Inc. 3,676,204(1) 9.96
2005 Market Street
Philadelphia, PA 19103
The Capital Group Companies, Inc. 3,349,000(2) 9.10
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
- --------
(1) Based solely on a Schedule 13G dated December 31, 1996 filed with the
Securities and Exchange Commission ("SEC") jointly by Delaware Management
Holdings, Inc. ("Holdings") and Delaware Management Company, Inc.
("Management"). Holdings reported sole voting power with respect to
265,710 shares of Common Stock, sole dispositive power with respect to
3,562,204 shares and shared dispositive power with respect to 114,000
shares. Management reported beneficial ownership of 3,676,029 shares of
Common Stock, and that it had sole voting power with respect to 265,710
shares, sole dispositive power with respect to 3,562,029 shares and shared
dispositive power with respect to 114,000 shares.
(2) Based solely on a Schedule 13G dated February 12, 1997 filed with the SEC
jointly by The Capital Group Companies, Inc. ("Capital Group") and Capital
Research and Management Company ("Research"). Capital Group reported sole
voting power with respect to 386,500 shares of Common Stock and sole
dispositive power with respect to 3,349,000 shares. Research reported sole
dispositive power with respect to 2,817,800 shares or 7.6% of the Common
Stock.
Each of the above beneficial owners stated in its Schedule 13G that these
shares were acquired in the ordinary course of business and not for the
purpose of changing or influencing the control of the Corporation.
To the best knowledge of the Corporation's management, there is no other
beneficial owner of more than 5% of the single class of voting security of the
Corporation.
24
<PAGE>
PROPOSAL TO APPROVE AN AMENDMENT
TO THE 1991 STOCK OPTION PLAN
On January 28, 1997, the Board of Directors unanimously approved, subject to
approval by the Corporation's shareholders, an amendment to the Corporation's
1991 Stock Option Plan (the "1991 Plan") to limit the maximum number of shares
of the Corporation's Common Stock that may be subject to a stock option
awarded to any single employee in any twelve-month period to 500,000 shares.
The purpose of this amendment is to assure that any options granted under the
1991 Plan after the Annual Meeting of Shareholders will qualify as "other
performance-based compensation" under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code").
Under Section 162(m) of the Code, no deduction is allowed in any taxable
year of the Corporation for compensation in excess of $1 million paid to each
of its chief executive officer and its four most highly paid other executive
officers who are serving in such capacities as of the last day of such taxable
year. An exception to this rule applies to certain performance-based
compensation that is paid pursuant to a plan or program approved by the
Corporation's shareholders and that specifies the performance objectives to be
obtained, the class of employees eligible to receive awards and the maximum
amount that can be paid to eligible employees under such plan or program.
Stock options are inherently performance based, since they provide value to
employees only if the stock price appreciates. While Section 162(m) generally
became effective in 1994, a special rule stated that options granted under the
1991 Plan would be treated as performance based until the 1997 Annual Meeting
of Shareholders without having a per-person share limit.
To be approved, this proposal requires the affirmative vote of the holders
of a majority of the shares of Common Stock present in person or represented
by proxy at the Annual Meeting and entitled to vote thereon. Abstentions from
voting on this proposal (including broker non-votes) will have the effect of
votes against this proposal. If shareholders do not approve the amendment to
the 1991 Plan, no further option grants will be made to the Corporation's
executive officers under the 1991 Plan following the 1997 Annual Meeting of
Shareholders.
The Board of Directors unanimously recommends that shareholders vote "FOR"
approval of the amendment to the 1991 Plan.
1991 Stock Option Plan. The 1991 Plan provides for the purchase by key
employees of up to 4,500,000 shares of the Corporation's Common Stock pursuant
to the exercise of options granted thereunder. Options granted under the 1991
Plan may be either options intended to qualify as "incentive stock options" or
nonqualified options. The per share exercise price of options granted under
the 1991 Plan may not be less than 100% of the fair market value of a share of
the Corporation's Common Stock on the date of grant. No options may be granted
under the 1991 Plan after December 10, 2000.
Under the 1991 Plan, the Compensation Committee of the Board of Directors
(the "Committee") has sole authority to determine the individuals to whom
options are granted, the date or dates of grant, the number of shares covered
by the options granted and the basis on which such grants are to be made. The
Committee also has the power to interpret the 1991 Plan and to determine the
terms, exercise price and form of exercise payment for each option granted
under the 1991 Plan.
Except as provided below, options granted under the 1991 Plan may not be
exercised until the second anniversary of the date of grant, and thereafter
may be exercised, in whole or in part, at any time before the
25
<PAGE>
tenth anniversary of the date of grant, but only while the recipient continues
to be employed by the Corporation or its subsidiaries. The Committee may, in
its sole discretion, prescribe shorter or longer periods, or additional
requirements or conditions, for the exercise of options granted under the 1991
Plan, and may, either at the time of grant or thereafter, provide for
acceleration of exercisability. The 1991 Plan also generally provides for the
acceleration of exercisability upon a change of control of the Corporation (as
defined in the 1991 Plan).
If a participant becomes disabled or dies while employed by the Corporation,
generally all unexercised options held by the participant will become
immediately exercisable and will remain exercisable by the participant or the
participant's estate, heirs or legal representatives, as the case may be, for
a period of five years (or such shorter period of time that the Committee
shall specify at the time of grant) after the termination of the participant's
employment. Upon a participant's retirement at or after age 65 (or, with the
consent of the Committee, before age 65), each previously unexercised option
held by the participant will generally become immediately exercisable and may
be exercised for a period of five years (or such shorter period of time that
the Committee shall specify at the time of grant) after the termination of the
participant's employment.
If a participant's employment is terminated for cause, or is terminated by
the participant in violation of an employment agreement with the Corporation,
or it is discovered after termination of the participant's employment that
such participant engaged in conduct that would have justified his or her
termination for cause, each outstanding option held by such participant will
immediately terminate. If a participant's employment with the Corporation
terminates for any reason other than those described above, outstanding
options held by the participant will remain exercisable for a period of three
months after such termination but only to the extent exercisable on the date
of termination.
26
<PAGE>
AMENDED PLAN GRANT TABLE
It is not possible to determine the awards that will be made to various
employees in the future under the 1991 Plan. The table below shows stock
options actually granted under the 1991 Plan in 1996 to each of the Named
Executives, all current executive officers of the Corporation as a group, and
all employees of the Corporation as a group. (Directors who are not officers
or employees of the Corporation are not eligible to receive grants under the
1991 Plan.)
<TABLE>
<CAPTION>
NAME OF RECIPIENT OR GROUP NUMBER OF OPTIONS
- -------------------------- -----------------
<S> <C>
Edward T. Fogarty 29,260
Chairman, President and Chief Executive Officer
Thomas J. Mason 28,190
Executive Vice President and Chief Operating Officer
Thomas Soper, III 5,670
Senior Vice President-Corporate Human Resources
Michael K. Lorelli 0
Former Executive Vice President and President, North
America/Latin America
Michael S. Krause 5,670
Senior Vice President-Global Operations
Susan J. Riley 5,670
Senior Vice President-Chief Financial Officer
All current executive officers as a group 84,127
All employees as a group 236,064
</TABLE>
During 1996, there were 131 key employees who received options under the
1991 Plan. The number of key employees who will participate in the 1991 Plan
in the future will vary from year to year. The fair market value of a share of
the Corporation's Common Stock on February 18, 1997 was $44.1875 (the mean
between the high and low reported sales prices on such date as reflected in
the report of consolidated trading of New York Stock Exchange issues).
FEDERAL INCOME TAX CONSEQUENCES
A participant will not recognize income upon the grant of an option that
does not qualify as an incentive stock option under the Internal Revenue Code.
The participant may recognize ordinary income upon the exercise of a
nonqualified option, in which event the Corporation will receive a tax
deduction equal to the amount of income recognized, provided that the
applicable withholding tax requirements are satisfied. Except as noted below,
the amount of such ordinary income and deduction is the excess, if any, of the
fair market value on the exercise date of the shares of Common Stock acquired
over the aggregate exercise price paid. Any ordinary income recognized by a
participant upon the exercise of a nonqualified option will increase the
participant's tax basis for the shares received. Upon a subsequent sale or
exchange of such shares, the participant will recognize capital gain or loss
to the extent of the difference between the selling price of such shares and
the participant's tax basis in such shares. Such gain or loss will be long-
term or short-term capital gain or loss, depending on the participant's
holding period for such shares.
27
<PAGE>
A participant will not recognize income upon either the grant or exercise of
an incentive stock option. The participant will recognize gain or loss,
depending on his or her basis in the stock (which is generally equal to the
exercise price paid for the shares), upon the sale or other disposition of
shares of Common Stock acquired upon exercise. If certain statutory holding
periods are met, such gain or loss will be long-term capital gain or loss and
the Corporation will not be entitled to any deduction. If the holding periods
are not met, the optionee may be required to recognize ordinary income and the
Corporation will be entitled to a tax deduction equal to the amount of
ordinary income recognized, provided that applicable withholding tax
requirements are satisfied.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the period from September 1990 through December 1996, Ms. Manton
participated in an automatic dividend reinvestment program maintained by her
custodial broker, whereby quarterly dividends on the Corporation's Common
Stock were used to concurrently purchase additional shares of such stock.
These transactions, which involved the acquisition of an aggregate of 1,104
shares, were inadvertently not reported on the appropriate Section 16(a) form
on a timely basis.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP, which served as the Corporation's independent public
accountants in 1996, have been designated by the Board of Directors as the
Corporation's independent public accountants for 1997. A representative of
that firm will be present at the Annual Meeting and will have an opportunity
to make a statement if he or she desires to do so. He or she also will be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
In accordance with regulations issued by the Securities and Exchange
Commission, shareholder proposals intended for presentation at the 1998 Annual
Meeting of Shareholders must be received by the Secretary or Assistant
Secretary of the Corporation no later than November 17, 1997 if such proposals
are to be considered for inclusion in the Corporation's Proxy Statement. In
accordance with the Corporation's By-Laws, shareholder proposals intended for
presentation at the 1998 Annual Meeting of Shareholders that are not intended
to be considered for inclusion in the Corporation's Proxy Statement must be
received by the Secretary or Assistant Secretary of the Corporation not
earlier than January 22, 1998 and not later than February 21, 1998.
28
<PAGE>
OTHER MATTERS
Management knows of no matters that are to be presented for action at the
meeting other than those set forth above. If any other matters properly come
before the meeting, the persons named in the enclosed form of proxy will vote
the shares represented by proxies in accordance with their best judgment on
such matters.
Proxies will be solicited by mail and may also be solicited in person or by
telephone by some regular employees of the Corporation. The Corporation has
engaged D.F. King & Co., Inc. to assist in the solicitation of proxies for an
estimated fee of $8,000 plus expenses. All expenses in connection with the
preparation of proxy material and the solicitation of proxies will be borne by
the Corporation.
By Order of the Board of Directors
Susan J. Riley,
Senior Vice President
Chief Financial Officer
777 Westchester Avenue
White Plains, New York 10604
March 17, 1997
29
<PAGE>
- --------------------------------------------------------------------------------
[LOGO]
ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1997
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TAMBRANDS INC.
PROXY
The undersigned hereby (a) appoints LILYAN H. AFFINITO, PAUL S. DOHERTY and
HOWARD B. WENTZ, JR., and each of them, the proxies of the undersigned, with
power of substitution to each, to vote all the shares of Common Stock of
Tambrands Inc. (the "Corporation") that the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Corporation to be held at The
Tarrytown Hilton Inn, 455 South Broadway, Tarrytown, New York, on April 22, 1997
at 9:30 A.M., and at any adjournment thereof (the "Annual Meeting"), on all
matters coming before the Annual Meeting as indicated on the reverse side
hereof, and (b) if applicable, instructs Putnam Fiduciary Trust Company, as
trustee (the "Trustee") of the Tambrands Savings Plan (the "Plan"), (i) to vote,
in the manner indicated in this Proxy, all shares of Common Stock of the
Corporation credited to the account of the undersigned as of February 26, 1997
under the Plan which the Trustee is entitled to vote at the Annual Meeting on
all matters coming before the Annual Meeting as indicated on the reverse side
hereof and (ii) to appoint the foregoing proxies in accordance with clause (a)
hereof to so vote such shares.
Election of Directors, Nominees:
Lilyan H. Affinito, Anne M. Busquet, Paul S. Doherty, Edward T. Fogarty,
Janet Hill, Robert P. Kiley, John Loudon, H.L. Tower, Howard B. Wentz, Jr.
and Robert M. Williams
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
(Continued on reverse side)
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
[X] PLEASE MARK YOUR 1873
VOTES AS IN THIS
EXAMPLE.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no contrary instructions are indicated, this
Proxy will be voted FOR the election of the nominees listed, and FOR the other
Proposal, except that any shares credited to the account of the undersigned
under the Plan as to which no specific instructions are indicated on this Proxy
will be voted in the same proportion as all other shares held under the Plan as
to which timely instructions have been received are voted.
- --------------------------------------------------------------------------------
The Board of Directors favors a vote FOR election of the nominees listed on the
reverse side and FOR the other Proposal.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors [ ] [ ]
(see reverse)
FOR, except vote withheld from the following nominee(s):
-------------------------------------------------------
FOR AGAINST ABSTAIN
2. Amendment to the 1991 Stock Option [ ] [ ] [ ]
Plan to provide for an annual limit
on the number of options that may be
granted to any one employee.
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the Annual Meeting or any adjournment
thereof.
- --------------------------------------------------------------------------------
Do you plan to attend the Annual Meeting? [ ]
Please sign name(s) exactly as printed hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, give
full title as such. If a corporation, sign in full corporate name by President
or other authorized officer. If a partnership, sign in partnership name by
authorized person.
------------------------------
------------------------------
SIGNATURE(S) DATE
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
