UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed
by the Registrant x
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Filed
by a Party other than the Registrant o
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a -
6(e)(2))
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x
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to §240.14a-12
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HELEN
OF TROY LIMITED
(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):
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x
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
_____________________________________________________________________________________
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(3)
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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)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials:
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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HELEN
OF TROY LIMITED
Clarendon
House
Church
Street
Hamilton,
Bermuda
June
29, 2006
Dear
Shareholders:
It
is my pleasure to invite you to the 2006 Annual General Meeting of the
Shareholders of Helen of Troy Limited. The meeting will be held at 1:00 p.m.,
Mountain Daylight Time, on Tuesday, August 8, 2006, at the Camino Real Hotel,
101 S. El Paso Street, El Paso, Texas. In addition to the business to be
transacted at the meeting, members of management will present information about
the Company's operations and will be available to respond to your questions.
We
encourage you to help us reduce printing and mailing costs by
signing
up for electronic delivery of our shareholder
communications.
For
more information, see "Electronic Delivery of Shareholder Communications."
At
our Annual Meeting, we will vote on proposals to set the number of director
positions at eight, elect eight directors, appoint KPMG LLP as the Company's
independent auditor and registered public accounting firm, and to authorize
the
Audit Committee of the Board of Directors to set the auditor’s remuneration. The
accompanying Notice of Annual General Meeting of Shareholders and Proxy
Statement contains information that you should consider when you vote your
shares. Also,
for your convenience, you can vote your shares via touch-tone telephone at
1-800-690-6903 or via the internet at WWW.PROXYVOTE.COM.
It
is important that you vote your shares whether or not you plan to attend the
meeting. Please sign, date and return the enclosed proxy card in the
accompanying envelope as soon as possible. If you plan to attend the meeting
and
wish to vote in person, you may revoke your proxy and vote in person at that
time. I look forward to seeing you at the meeting. On behalf of the management
and directors of Helen of Troy Limited, I want to thank you for your continued
support and confidence.
Sincerely,
/s/
Gerald J. Rubin
Gerald
J. Rubin
Chairman
of the Board,
Chief
Executive Officer and
President
HELEN
OF TROY LIMITED
Church
Street
Hamilton,
Bermuda
NOTICE
OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO
BE HELD AUGUST 8, 2006
Notice
is hereby given that the Annual General Meeting of the Shareholders (the "Annual
Meeting") of Helen of Troy Limited, a Bermuda Company (the "Company"), will
be
held at the Camino Real Hotel, 101 S. El Paso Street, El Paso, Texas, on
Tuesday, August 8, 2006, at 1:00 p.m., Mountain Daylight Time, for the following
purposes:
1.
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To
set the number of director positions at eight and to vote for the
election
of a board of eight directors;
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2.
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To
appoint KPMG LLP as the Company’s independent auditor and registered
public accounting firm to serve for the 2007 fiscal year and to
authorize
the Audit Committee of the Board of Directors to set the auditor’s
remuneration; and
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3.
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To
transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
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The
record date for determining shareholders entitled to receive notice of and
to
vote at the Annual Meeting is June 12, 2006. You are urged to read carefully
the
attached Proxy Statement for additional information concerning the matters
to be
considered at the Annual Meeting.
If
you do not expect to be present in person at the Annual Meeting, please sign
and
date the enclosed proxy and return it promptly in the enclosed postage-paid
envelope that has been provided for your convenience. The prompt return of
proxies will help ensure the presence of a quorum and save the Company the
expense of further solicitation. Also, for your convenience, you can vote your
shares via touch-tone telephone at 1-800-690-6903 or via the internet at
WWW.PROXYVOTE.COM. If you have internet access, we encourage you to record
your
vote on the Internet. It is convenient and saves the Company significant postage
and processing.
You
are cordially invited and encouraged to attend the Annual Meeting in person.
/s/
Vincent D. Carson
Vincent
D. Carson
Vice-President,
General Counsel and Secretary
El
Paso, Texas
June
29, 2006
IMPORTANT
WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE AS SOON
AS
POSSIBLE. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY AND
VOTE IN PERSON. MOST STOCKHOLDERS HAVE THREE OPTIONS FOR SUBMITTING THEIR VOTES
PRIOR TO THE ANNUAL MEETING: (1) VIA THE INTERNET, (2) BY PHONE OR (3) BY
MARKING, DATING AND SIGNING THE ENCLOSED PROXY AND RETURNING IT IN THE ENVELOPE
PROVIDED. IF YOU HAVE INTERNET ACCESS, WE ENCOURAGE YOU TO RECORD YOUR VOTE
ON
THE INTERNET. IT IS CONVENIENT, AND IT SAVES THE COMPANY SIGNIFICANT POSTAGE
AND
PROCESSING COSTS.
TABLE
OF CONTENTS
Page
Proxy
Statement
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1
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Solicitation
of Proxies
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1
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Voting
Securities and Record Date
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1
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Quorum;
Voting
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2
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Proposal
1:
Election of Directors
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2
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Corporate
Governance, The Board, Board Committees and Meetings
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3
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Shareholder
Communications to the Board of Directors
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6
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Compensation
Committee Interlocks and Insider Participation
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6
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Director's
Compensation
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6
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Security
Ownership of Certain Beneficial Owners and Management
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8
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Stock
Price Performance Graph
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9
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Executive
Officers
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10
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Executive
Compensation
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10
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Summary
Compensation Table
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10
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Option
Grants in Last Fiscal Year
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11
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Aggregated
Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
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12
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Equity
Compensation Plan Information
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12
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Employment
Contract for Chairman of the Board, Chief Executive Officer and
President
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12
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Report
of the Compensation Committee on Directors and Executive
Compensation
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14
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Certain
Relationships and Related Transactions
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16
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Report
of the Audit Committee of the Board of Directors
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17
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Audit
and Other Fees Paid to Our Independent Registered Public Accounting
Firm
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19
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Proposal
2:
Appointment of Independent Auditor and Registered Public Accounting
Firm
and Authorization of the Audit Committee of the Board of Directors
to set
the Auditor’s Remuneration
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19
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Shareholder
Proposals
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Section
16(a) Beneficial Ownership Reporting Compliance
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20
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Other
Matters
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20
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Householding
of Materials
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21
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Electronic
Delivery of Shareholder Communications
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21
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How
to Obtain Our Annual Report, Proxy Statement and Other Information
about
the Company
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21
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HELEN
OF TROY LIMITED
Clarendon
House
Church
Street
Hamilton,
Bermuda
FOR
ANNUAL
GENERAL MEETING OF SHAREHOLDERS
August
8, 2006
SOLICITATION
OF PROXIES
The
accompanying proxy is solicited by the Board of Directors of Helen of Troy
Limited (the "Company") for use at its Annual General Meeting of Shareholders
(the "Annual Meeting") to be held at the Camino Real Hotel, 101 S. El Paso
Street, El Paso, Texas, on Tuesday, August 8, 2006, at 1:00 p.m., Mountain
Daylight Time, and at any adjournment thereof, for the purposes set forth in
the
accompanying Notice of Annual General Meeting of Shareholders. A proxy may
be
revoked by filing a written notice of revocation or an executed proxy bearing
a
later date with the Secretary of our Company any time before exercise of the
proxy or by attending the Annual Meeting and voting in person. Forms of proxy
and proxy statements are to be distributed on or about June 29,
2006.
If
you complete and submit your proxy, the persons named as proxies will vote
the
shares represented by your proxy in accordance with your instructions. If you
submit a proxy card but do not fill out the voting instructions on the proxy
card, the persons named as proxies will vote the shares represented by your
proxy as follows:
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FOR
setting the number of director positions to eight and FOR the election
of
the director nominees set forth in “Proposal 1: Election of
Directors.”
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FOR
the appointment of KPMG LLP as the independent auditor and registered
public accounting firm of the Company set forth in “Proposal 2:
Appointment of Independent Auditor and Registered Public Accounting
Firm
and to authorize the Audit Committee of the Board of Directors to
set the
auditor’s remuneration.”
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In
addition, if other matters are properly presented for voting at the Annual
Meeting, the persons named as proxies will vote on such matters in accordance
with their judgment. We have not received notice of other matters that may
properly be presented for voting at the Annual Meeting. Your vote is important.
If you do not vote your shares, you will not have a say in the important issues
to be voted upon at Helen of Troy’s 2006 Annual General Meeting of Shareholders.
To pass, each proposal included in this year’s proxy statement requires a
majority of the votes cast at the Annual Meeting. To ensure that your vote
is
recorded promptly, please vote as soon as possible, even if you plan to attend
the Annual Meeting in person.
The
Annual Report to Shareholders for the year ended February 28, 2006 ("fiscal
2006"), including financial statements, is enclosed. It does not form any part
of the material provided for the solicitation of proxies.
The
cost of solicitation of proxies will be borne by the Company. In addition to
solicitation by mail, officers and employees of the Company may solicit the
return of proxies by telephone and personal interview. Forms of proxy and proxy
material may also be distributed through brokers, custodians and like parties
to
beneficial owners of our Common Shares, par value $.10 per share (the "Common
Stock"), for which we will, upon request, reimburse the forwarding
expense.
VOTING
SECURITIES & RECORD DATE
The
close of business on June 12, 2006, is the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting. As
of
June 12, 2006, there were 30,032,922 shares of Common Stock issued and
outstanding, each entitled to one vote per share.
QUORUM;
VOTING
The
presence in person of two or more persons, representing throughout the Annual
Meeting, in person or by proxy, at least a majority of the issued shares of
Common Stock entitled to vote is necessary to constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for purposes of
determining whether a quorum is present. If a quorum is present, the eight
nominees for Directors receiving a majority of the votes cast at the Annual
Meeting in person or by proxy shall be elected. The affirmative vote of the
majority of the votes cast at the Annual Meeting in person or by proxy shall
be
the act of the shareholders with respect to Proposal 1 and Proposal 2. If within
half an hour from the time appointed for the Annual Meeting a quorum is not
present or represented by proxy, the Annual Meeting shall stand adjourned to
the
same day one week later, at the same time and place or to such other day, time
or place the Board of Directors may determine, provided that at least two
persons are present at such adjourned meeting, representing throughout the
meeting, in person or by proxy, at least a majority of the issued shares of
Common Stock entitled to vote. At any such adjourned meeting at which a quorum
is present or represented, any business may be transacted that might have been
transacted at the Annual Meeting as originally called. Broker non-votes are
shares held by a broker or nominee that are represented at the Annual Meeting,
but with respect to which such broker or nominee is not empowered to vote on
a
particular proposal. Such broker non-votes will be counted towards a quorum.
Abstentions and broker non-votes are not counted in determining the total number
of votes cast and will have no effect with respect to Proposals 1 and 2.
PROPOSAL
1: ELECTION OF DIRECTORS
The
Bye-laws of the Company state that the number of our Directors shall be
established by the shareholders from time to time but shall not be less than
two. On June 20, 2006, Mr. Christopher L. Carameros notified the Company that
he
has elected not to stand for election as a director at the Annual Meeting.
The
Board of Directors has recommended that the number of director positions be
set
at eight. Accordingly, the Nominating and Corporate Governance Committee has
identified eight candidates for election to the Board of Directors.
The
eight persons named below are the nominees for election as Directors. One of
the
eight candidates, Mr. Gerald J. Rubin is a member of Helen of Troy's senior
management. Gerald J. Rubin and Stanlee N. Rubin are married. Gerald J. Rubin
and Byron H. Rubin are brothers. The Board of Directors has determined that
the
remaining five candidates, Gary B. Abromovitz, John B. Butterworth, Timothy
F.
Meeker, Adolpho R. Telles, and Darren G. Woody are independent directors as
defined in the applicable rules for companies traded on The NASDAQ Stock Market
("NASDAQ"), and therefore, the majority of persons nominated to serve on our
Board of Directors will be independent as so defined. Each Director elected
shall serve as a Director until the next annual general meeting of shareholders,
or until his or her successor is elected and qualified.
Set
forth below are descriptions of the principal occupations during at least the
past five years of the nominees for election to our Board of Directors:
GARY
B. ABROMOVITZ,
age 63, is Deputy Chairman of the Board, Lead Director, and chairs the
Compensation Committee and Nominating and Corporate Governance Committee. He
is
also a member of the Audit Committee and chairs the executive sessions of the
independent Directors. He has been a Director of the Company since 1990. Mr.
Abromovitz is an attorney and has been a consultant to several law firms
involving business related matters. He is active in real estate development
concentrating on industrial, commercial and historic properties. In March 2005,
he joined the Board of Directors of Cardiovascular Biotherapeutics, Inc. as
lead
Director and chair of the audit, compensation, and governance
committees.
JOHN
B. BUTTERWORTH,
age 54, has been a Director of the Company since August 2002. Mr. Butterworth
is
a Certified Public Accountant and, since 1982, has been a shareholder in a
public accounting firm located in El Paso, Texas.
TIMOTHY
F. MEEKER,
age 59, has been a Director of the Company since August 2004. Since 2002, Mr.
Meeker has served as President and principal in Meeker and Associates, a
privately-held management consulting firm. Mr. Meeker served as Senior
Vice-President, Sales & Customer Development for Bristol-Myers Squibb, a
consumer products and pharmaceutical company, from 1996 through 2002. From
1989
to 1996, Mr. Meeker served as Vice-President of Sales for Bristol-Myers' Clairol
Division.
BYRON
H. RUBIN,
age 56, has been a Director of the Company since 1981. Mr. Rubin has been a
partner in the firm of Daniels & Rubin, an insurance and tax planning firm
in Dallas, Texas, since 1979.
GERALD
J. RUBIN,
age 62, founder of the Company, has been the Chairman of the Board, Chief
Executive Officer and President of the Company since June 2000. From 1984 to
June 2000, Mr. Rubin was Chairman of the Board and Chief Executive Officer
of
the Company. Mr. Rubin has been a Director of the Company since 1969.
Mr.
Rubin
also serves on the Board of Directors of the El Paso Branch, Federal Reserve
Bank of Dallas, Texas.
STANLEE
N. RUBIN,
age 62, has been a Director of the Company since 1990. Mrs. Rubin is active
in
civic and charitable organizations. She is a Partner for the Susan G. Komen
Breast Cancer Foundation and Founder of the Center for the Visual Arts at the
University of Texas at El Paso.
ADOLPHO
R. TELLES, age
56,
has been a Director of the Company since June 2005 and chairs the Audit
Committee. Mr. Telles is a Certified Public Accountant. Since November of 2003,
Mr. Telles has been a business consultant providing advisory services to
entities in the area of corporate governance, internal auditing, and compliance
with the Sarbanes Oxley Act of 2002. Previously, Mr. Telles was a partner with
the accounting firm of KPMG LLP, and its predecessors for over 16
years.
DARREN
G. WOODY,
age 46, has
been
a director of the Company since August 2004. Mr.
Woody is President and Chief Executive Officer of C.F. Jordan, a construction
services firm. He has served in this capacity since August of 2000. Previously,
Mr. Woody was a partner in the law firm of Krafsur, Gordon, Mott and Woody
P.C.
VOTE
REQUIRED FOR ELECTION OF DIRECTORS
The
nominees receiving a majority of the votes cast at the Annual Meeting will
be
elected as Directors and the affirmative vote of the majority of votes cast
at
the Annual Meeting is required to set the number of directors at eight.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
SETTING THE NUMBER OF DIRECTORS AT EIGHT AND EACH OF THE EIGHT NOMINEES NAMED
ABOVE.
CORPORATE
GOVERNANCE, THE BOARD, BOARD COMMITTEES AND MEETINGS
Corporate
Governance.
Corporate governance is typically defined as the system that allocates duties
and authority among a company’s shareholders, Board of Directors and management.
The shareholders elect the Board and vote on extraordinary matters. The Board
is
the Company’s governing body, responsible for hiring, overseeing and evaluating
management, particularly the Chief Executive Officer; and management runs the
Company’s day-to-day operations.
Our
Corporate Governance Guidelines, as well as our Code of Ethics, and the charters
of the Audit Committee, Compensation Committee, and Nominating and Corporate
Governance Committee are available under the “Corporate Governance” heading of
the investor relations page of our website at the following address:
http://www.hotus.com.
Our
Company believes that it is in compliance with the corporate governance
requirements of the NASDAQ listing standards. The principal elements of these
governance requirements as implemented by our Company are:
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affirmative
determination by the Board of Directors that a majority of the Directors
is independent,
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regularly
scheduled executive sessions of independent
Directors,
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Audit
Committee, Nominating and Corporate Governance Committee, and Compensation
Committee comprised of independent Directors and having the purposes
and
charters described below under the separate committee headings,
and
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specific
Audit Committee authority and procedures outlined in the charter
of the
Audit Committee.
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Independence.
The
Board of Directors has determined that the following five Directors nominated
for election at the Annual Meeting are independent directors as defined in
the
NASDAQ listing standards: Gary B. Abromovitz, John B. Butterworth, Timothy
F.
Meeker, Adolpho R. Telles, and Darren G. Woody. Therefore, a majority of the
persons nominated to serve on our Company’s Board of Directors is independent as
so defined. The foregoing independence determination of our Board of Directors
included the determination that each of these five nominated Board members,
if
elected and appointed to the Audit Committee, Nominating and Corporate
Governance Committee, or Compensation Committee as discussed above,
respectively, is:
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independent
for purposes of membership on the Audit Committee under Rule 4350(d)
of
the NASDAQ listing standards, that includes the independence requirements
of Rule 4200 and additional independence requirements under SEC Rule
10A-3(b);
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independent
under the NASDAQ listing standards for purposes of membership on
the
Nominating and Corporate Governance Committee;
and
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independent
under the NASDAQ listing standards for purposes of membership on
the
Compensation Committee, as a “non-employee director” under SEC Rule 16b-3
of the Securities Exchange Act of 1934, as amended, and an “outside
director” as defined in regulations under Section 162(m) of the Internal
Revenue Code of 1986, as amended.
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Our
Board of Directors has three committees: The Audit Committee, the Nominating
and
Corporate Governance Committee and the Compensation Committee. The following
table shows the composition of these committees over the last fiscal
year:
Director
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Audit
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Nominating
&
Corporate
Governance
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Compensation
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Gary
B. Abromovitz
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M
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Chair
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Chair
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John B.
Butterworth |
M
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Timothy
F. Meeker
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M
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M
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James
C. Swaim *
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Chair
through
June
10, 2005
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Adolpho
R. Telles
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Chair
since June
10,
2005
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Darren
G. Woody
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M
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M
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M
= Current Member over the past Year
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* Resigned
from the Board of Directors on June 10,
2005.
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Audit
Committee.
Our Audit Committee is established in accordance with Section 3(a)(58)(A) of
the
Securities Exchange Act of 1934. The primary purposes of this committee are
to
oversee, on behalf of the Company’s Board of Directors: (1) the accounting and
financial reporting processes and integrity of our Company’s financial
statements, (2) the audits of our Company’s financial statements and
appointment, compensation, qualifications, independence and performance of
our
independent registered public accounting firm, (3) our compliance with legal
and
regulatory requirements, and (4) oversee the staffing, establishment and ongoing
operation of our internal audit function. The Audit Committee meets periodically
with our Chief Financial Officer and other appropriate officers in the discharge
of its duties. The Audit Committee also reviews the content and enforcement
of
the Company's Ethical Code of Conduct, consults with our legal counsel on
various legal compliance matters and on other legal matters if those matters
could materially affect our financial statements. The Audit Committee met
eight
times during fiscal 2006.
The
Board of Directors has determined that the members of the Audit Committee are
independent as previously described. In addition, the Board of Directors
determined that Mr. Telles qualified as an "audit committee financial expert"
as
defined by the SEC in Item 401(h) of Regulation S-K promulgated by the SEC
and
was independent within the meaning of Item 7(d)(3)(iv) of Schedule 14A of the
Securities Exchange Act of 1934. The Board of Directors also determined that
all
of the members of the Audit Committee meet the requirement of the NASDAQ listing
standards that each member be able to read and understand fundamental financial
statements, including a company’s balance sheet, income statement, and cash flow
statement.
Nominating
and Corporate Governance Committee.
The primary purposes of the committee are to (1) recommend to our Board of
Directors individuals qualified to serve on our Board of Directors for election
by shareholders at each annual meeting of shareholders and to fill vacancies
on
the Board of Directors, (2) implement the Board’s criteria for selecting new
directors, (3) develop, recommend to the Board, and assess our corporate
governance policies, and (4) oversee the evaluation of our Board. The Nominating
and Corporate Governance Committee receives recommendations from its members
or
other members
of the Board of Directors for candidates to be appointed to the Board or
committee positions, reviews and evaluates such candidates and makes
recommendations to the Board of Directors for nominations to fill Board and
committee positions.
The
committee's current process for identifying and evaluating nominees for director
consists of general periodic evaluations of the size and composition of the
Board of Directors, applicable listing standards and laws, and other appropriate
factors with a goal of maintaining continuity of appropriate industry expertise
and knowledge of our Company. The
committee looks for a number of personal attributes in selecting candidates
including: sound reputation and ethical conduct; business and professional
activities, which are complementary to those of the Company; the availability
of
time and a willingness to carry out their duties and responsibilities
effectively; an active awareness of changes in the social, political and
economic landscape; an absence of any conflicts of interest; limited service
on
other boards; and, a commitment to contribute to the Company's overall
performance placing it above personal interests. The
committee held two meetings during fiscal 2006.
The
Nominating and Corporate Governance Committee will consider candidates
recommended by shareholders. Any candidate recommended by shareholders must
meet
the same general requirements outlined in the previous paragraph, to be
considered for election. Any shareholder who intends to present a director
nomination proposal for consideration at the 2007 Annual Meeting and intends
to
have that proposal included in the proxy statement and related materials for
the
2007 Annual Meeting, must deliver a written copy of the proposal to our
Company’s principal executive offices no later than the deadline, and in
accordance with the notice procedures, specified under "Shareholder Proposals"
in this Proxy Statement and in accordance with the applicable requirements
of
SEC Rule 14a-8.
If
a shareholder does not comply with the foregoing Rule 14a-8 procedures, the
shareholder may use the procedures set forth in our Company’s Bye-laws, although
our Company would in the latter case not be required to include the nomination
proposal as a proposal in the proxy statement and proxy card mailed to
shareholders. For shareholder nominations of directors to be properly brought
before an annual general meeting by a shareholder pursuant to the Bye-laws,
the
shareholder must have given timely notice thereof in writing to the Secretary
of
our Company. To be timely, written suggestions for candidates, accompanied
by a
written consent of the proposed candidate to serve as a director if nominated
and elected, a description of his or her qualifications and other relevant
biographical information, must be delivered for consideration by the Nominating
and Corporate Governance Committee prior to the next annual general meeting
to
the Secretary of the Company, Clarendon House, Church Street, Hamilton, Bermuda
not less than 60 days nor more than 90 days prior to the first anniversary
of
the preceding year’s annual general meeting. In the event that the date of the
annual general meeting is advanced by more than 30 days or delayed by more
than
60 days from such anniversary date, notice by the shareholder to be timely
must
be so delivered not earlier than the 90th day prior to such annual general
meeting and not later than the close of business on the later of the 60th day
prior to such annual general meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made.
Under
SEC Rule 14a-8 (and assuming consent to disclosure is given by the proponents
and nominee), our Company must disclose any nominations for director made by
any
person or group beneficially owning more than 5% of our outstanding common
stock
by the date that was 120 calendar days before the anniversary of the date on
which its proxy statement was sent to its shareholders in connection with the
previous year's annual general meeting. Our Company did not receive any such
nominations.
Compensation
Committee.
The primary purposes of the committee are to (1) review and approve corporate
goals and objectives relevant to the chief executive officer's compensation,
(2)
evaluate the CEO's performance in light of those goals and objectives, (3)
either as a committee or together with the other independent directors (as
directed by the Board), determine and approve the CEO's evaluation based on
this
evaluation, (4) make recommendations to the Board with respect to non-CEO
compensation, incentive compensation plans and equity-based plans, and (5)
produce
an annual report on executive compensation for inclusion in the Company's proxy
statement.
The Board of Directors has determined that the members of this committee are
independent as previously described. In fiscal 2006, the Compensation Committee
met nine times.
The
Committee also
conducted numerous informal telephonic discussions and consulted its advisors
throughout the year.
Meetings
of Board of Directors.
The Board of Directors met four times in person during fiscal 2006 and two
times
telephonically. Mrs. Stanlee Rubin, who was not in attendance at two board
meetings, and Mr. Jim Swaim, who was not in attendance at one board meeting.
Except for Mrs. Rubin and Mr. Swaim, all other Directors attended all Board
of
Directors meetings, committee meetings, or participated in required consents
during the period for which he or she acted as a Director during fiscal 2006.
The Company expects all Board members to attend its annual general meeting
of
the shareholders, unless circumstances would prevent a Board member from doing
so. All Board members, except for Stanlee N. Rubin, attended the prior year's
annual general meeting of the shareholders.
SHAREHOLDER
COMMUNICATIONS TO THE BOARD OF DIRECTORS
Any
record or beneficial owner of our shares of Common Stock who has concerns about
accounting, internal accounting controls, or auditing matters relating to our
Company may contact the Audit Committee directly. Any record or beneficial
owner
of our stock who wishes to communicate with the Board of Directors on any other
matter should also contact the Audit Committee. The Audit Committee has
undertaken on behalf of the Board of Directors to be the recipient of
communications from shareholders relating to our Company. If particular
communications are directed to the full Board, independent directors as a group,
or individual directors, the Audit Committee will route these communications
to
the appropriate directors or committees so long as the intended recipients
are
clearly stated.
Communications
intended to be anonymous may be made by calling our national hotline service
at
866-210-7649 or 866-210-7650, if you would prefer to communicate in Portuguese
or Chinese. When you call, please identify yourself as a shareholder of our
Company intending to communicate with the Audit Committee (this third party
service undertakes to forward the communications to the Audit Committee if
so
requested and clearly stated). You may also send communications intended to
be
anonymous by mail, without indicating your name or address, to Helen of Troy
Limited, 1 Helen of Troy Plaza, El Paso, Texas, 79912, USA, Attention: Chairman
of the Audit Committee. Communications not intended to be made anonymously
may
be made by calling the hotline number or by mail to that address, including
whatever identifying or other information you wish to communicate.
Communications
from employees or agents of our Company will not be treated as communications
from our shareholders unless the employee or agent clearly indicates that the
communication is made solely in the person’s capacity as a shareholder.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During
fiscal 2006, no executive officer of the Company served on the compensation
committee (or equivalent), or the board of directors, of another entity whose
executive officer(s) served on the Company’s Compensation Committee or Board.
DIRECTOR
COMPENSATION
The
following table presents the compensation provided by Helen of Troy to
non-employee directors during fiscal 2006:
Non-Employee
Director Compensation Table
Name
|
|
|
|
|
Board
and
Committee
Retainers
and
Meeting
Fees ($)
|
|
|
Committee
Chair
Retainers
($)
|
|
|
Deputy
Chairman
Retainer
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
Cash
Compensation
($)
(1)
|
|
|
Shares
Underlying
Options
Granted
(#)
(2)
|
|
Gary
B. Abromovitz
|
|
(3)
|
|
$
|
60,000
|
|
$
|
20,000
|
|
$
|
40,000
|
|
$
|
-
0 -
|
|
$
|
120,000
|
|
|
8,000
|
|
Adolpho
R. Telles
|
|
(4)
|
|
|
27,000
|
|
|
30,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
57,000
|
|
|
-
|
|
James
C. Swaim
|
|
(5)
|
|
|
18,000
|
|
|
20,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
38,000
|
|
|
4,000
|
|
John
B. Butterworth
|
|
(6)
|
|
|
60,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
60,000
|
|
|
8,000
|
|
Timothy
F. Meeker
|
|
(7)
|
|
|
48,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
48,000
|
|
|
96,000
|
|
|
8,000
|
|
Darren
G. Woody
|
|
(8)
|
|
|
48,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
48,000
|
|
|
8,000
|
|
Byron
H. Rubin
|
|
(9)
|
|
|
36,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
30,000
|
|
|
66,000
|
|
|
8,000
|
|
Stanlee
N. Rubin
|
|
|
|
|
33,000
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
33,000
|
|
|
8,000
|
|
|
|
|
|
$
|
330,000
|
|
$
|
70,000
|
|
$
|
40,000
|
|
$
|
78,000
|
|
$
|
518,000
|
|
|
52,000
|
|
______________
(1)
|
Includes
only cash fees and retainers paid. Each member of the Board of Directors
who is not an employee of the Company received quarterly retainers
of
$6,000 and fees of $3,000 for each quarterly meeting of the Board
of
Directors attended. Additionally, the Deputy Chairman of the Board
received quarterly retainers of $10,000, the Audit Committee Chair
received quarterly retainers of $10,000 and the Compensation Committee
Chair received quarterly retainers of $5,000. Non-chair members of
the
Audit Committee received fees of $6,000 for each quarterly Audit
Committee
meeting attended. Non-chair members of the Compensation Committee
received
fees of $3,000. The Board members also received reimbursement for
travel
and lodging expenses incurred in connection with attending all such
meetings.
|
(2)
|
Stock
options were granted at estimated per share fair values of $9.26
and $7.41
and exercise prices of $28.33 and $23.13 on March 1, 2005 and June
1,
2005, respectively. The estimated fair values of stock options as
of the
dates granted were determined consistent with the method of Statement
of
Financial Accounting Standards No. 123(R) "Accounting For Stock-Based
Compensation," using the Black-Scholes option pricing model, based
on the
following assumptions: a volatility of 41.6 to 42.3 percent; an expected
life of 3 years; risk-free interest rates of 3.55 to 3.76 percent;
and a
dividend yield of -0- percent. As of February 28, 2006, the closing
market
value of the Company's shares was $20.01 per share. At February 28,
2006,
the exercise prices of these options were greater than the market
value of
the underlying shares. Accordingly, they had no intrinsic value at
that
date. The stock option plan for non-employee directors expired by
its
terms on June 6, 2005.
|
(3)
|
Mr.
Abromovitz is Deputy Chairman of the Board, Lead Director, and is
the
Chair of the Compensation Committee and Nominating and Corporate
Governance Committee. He is also a member of the Audit Committee
and
chairs the executive sessions of the independent Directors. Mr. Abromovitz
receives a quarterly retainer of $10,000 for his services as Deputy
Chairman of the Board and Lead Director, and a quarterly retainer
of
$5,000 for his services as Chair of the Compensation
Committee.
|
(4)
|
Mr.
Telles is Chair of the Audit Committee and is an Independent Director.
Mr.
Telles receives a quarterly retainer of $10,000 for his services
as Audit
Committee Chair.
|
(5)
|
Mr.
Swaim was Chair of the Audit Committee through June 10, 2005. Mr.
Swaim
received quarterly retainers of $10,000 for his services as Chair
of the
Audit Committee and for his assistance facilitating the transition
to a
new Audit Committee Chair.
|
(6)
|
Mr.
Butterworth is a member of the Audit Committee. Mr. Butterworth receives
fees of $6,000 for each quarterly Audit Committee meeting
attended.
|
(7)
|
Mr.
Meeker is a member of the Compensation Committee and the Nominating
and
Corporate Governance Committee. Mr. Meeker receives fees of $3,000
for
each quarterly Compensation Committee meeting attended. Mr. Meeker
also
received fees totaling $48,000 in connection with a separate marketing
and
consulting advisory services agreement he has with the Company. For
further information, see “Certain Relationships and Related
Transactions.”
|
(8)
|
Mr.
Woody is a member of the Compensation Committee and the Nominating
and
Corporate Governance Committee. Mr. Woody receives fees of $3,000
for each
quarterly Compensation Committee meeting
attended.
|
(9)
|
Other
compensation represents ordinary insurance agent's commissions received
by
Byron Rubin in connection with the Company's group health, life and
disability insurance policies as well as certain life insurance polices
on
its officers. For further information, see “Certain Relationships and
Related Transactions.”
|
During
fiscal 2007, each independent Director will also receive a fee of $6,000 for
each executive session of independent Directors that is attended.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth as of May 5, 2006, the beneficial ownership of the
Common Stock of the Directors, nominees for the Board of Directors, the
executive officers of the Company, the Directors and executive officers of
the
Company as a group, and each person known to the Company to be the beneficial
owner of more than five percent of the Common Stock:
Name
of Beneficial Owner
|
|
Common
Shares
Beneficially
Owned
|
|
Percent
*
|
Gerald
J. Rubin (1)(2)
|
|
7,569,922
|
|
20.66%
|
Stanlee
N. Rubin (1)(2)
|
|
|
|
|
One
Helen of Troy Plaza
|
|
|
|
|
El
Paso, Texas 79912
|
|
|
|
|
|
|
|
|
|
Christopher
L. Carameros (2)
|
|
168,976
|
|
**
|
|
|
|
|
|
Thomas
J. Benson (2)
|
|
58,471
|
|
|
|
|
|
|
|
Gary
B. Abromovitz (2)
|
|
54,500
|
|
|
|
|
|
|
|
John
B. Butterworth (2)
|
|
45,105
|
|
|
|
|
|
|
|
Byron
H. Rubin (2)
|
|
42,000
|
|
|
|
|
|
|
|
Darren
G. Woody (2)
|
|
18,000
|
|
|
|
|
|
|
|
Timothy
F. Meeker (2)
|
|
16,000
|
|
|
|
|
|
|
|
Vincent
D. Carson (2)
|
|
15,718
|
|
|
|
|
|
|
|
Adolpho
R. Telles
|
|
-
0
-
|
|
|
|
|
|
|
|
All
directors and executive officers as a group
|
|
7,988,692
|
|
21.80%
|
(11
persons)
|
|
|
|
|
|
|
|
|
|
FMR
Corp. (3)
|
|
3,115,900
|
|
8.50%
|
82
Devonshire Street
|
|
|
|
|
Boston,
Massachusetts 02109
|
|
|
|
|
|
|
|
|
|
Eton
Park Capital Management, L.P. (4)
|
|
2,900,000
|
|
7.91%
|
825
Third Avenue, 8th Floor
|
|
|
|
|
New
York, N.Y. 10022.
|
|
|
|
|
___________
*
|
Percent
ownership is calculated based on 30,029,072 shares of the Company's
Common
Stock outstanding on May 5, 2006 and 6,617,969 stock options held
by all
grantees exercisable within 60 days of May 5,
2006.
|
**
|
Ownership
of less than one percent of the outstanding Common Stock.
|
(1)
|
Does
not include 144,000 shares in a trust for the children of Gerald
J. Rubin
and Stanlee N. Rubin in which they disclaim any beneficial ownership
and
includes 276,980 shares held beneficially through a partnership in
which
Gerald J. Rubin and Stanlee N. Rubin are partners.
|
(2)
|
Includes
shares subject to stock options that are exercisable within 60
days of May
5, 2006 as follows:
|
Gerald
J. Rubin
|
|
5,625,000
|
Stanlee
N. Rubin
|
|
128,000
|
Christopher
L. Carameros
|
|
134,586
|
Thomas
J. Benson
|
|
56,883
|
Gary
B. Abromovitz
|
|
54,500
|
John
B. Butterworth
|
|
40,000
|
Byron
H. Rubin
|
|
32,000
|
Darem
G. Woody
|
|
16,000
|
Timothy
F. Meeker
|
|
16,000
|
Vincent
D. Carson
|
|
14,250
|
Total
|
|
6,117,219
|
(3)
|
Based
on the Schedule 13G/A filed on February 14, 2006, and Form 13F
filed on
February 14, 2006. According to those filings, FMR Corp. has sole
dispositive power for 3,115,900 shares and no voting power for
any shares.
|
(4)
|
Based
on the Schedule 13G/A filed on February 8, 2006, and Form 13F filed
on
February 8, 2006. According to those filings, Eton Park Capital
Management, L.P. has shared dispositive power for 2,900,000 shares
and
shared voting power for 2,900,000 shares.
|
HELEN
OF TROY FIVE-YEAR
STOCK
PRICE PERFORMANCE GRAPH
The
graph below compares the cumulative total return of the Company to the NASDAQ
Market Index and a peer group index, assuming $100 invested March 1, 2001.
The
Peer Group Index was the Dow Jones Industry Group - Cosmetics.
COMPARISON
OF FIVE-YEAR CUMULATIVE RETURN
FOR
HELEN OF TROY LIMITED, NASDAQ MARKET REFERENCE
AND
PEER
GROUP INDEX
|
|
Fiscal
Year ended the last day of February
|
|
|
|
2001
|
|
2002
|
|
2003
|
|
2004
|
|
2005
|
|
2006
|
|
HELEN
OF TROY LIMITED
|
|
|
100.00
|
|
|
197.19
|
|
|
204.92
|
|
|
456.52
|
|
|
442.23
|
|
|
309.91
|
|
DOW
JONES GROUP INDEX
|
|
|
100.00
|
|
|
100.55
|
|
|
91.90
|
|
|
112.98
|
|
|
129.33
|
|
|
127.01
|
|
NASDAQ
MARKET INDEX
|
|
|
100.00
|
|
|
80.22
|
|
|
61.11
|
|
|
93.08
|
|
|
94.04
|
|
|
104.97
|
|
EXECUTIVE
OFFICERS
The
executive officers of the Company are Gerald J. Rubin, Christopher L. Carameros,
Vincent D. Carson and Thomas J. Benson. Mr. Rubin is also a Director of the
Company. Mr. Carameros is currently also a Director of the Company, but has
chosen not to stand for re-election for fiscal 2007. See "Election of
Directors."
CHRISTOPHER
L. CARAMEROS,
age
52, has been a Director of the Company since June 1993. Mr. Carameros has
elected not to stand for re-election to the Board for fiscal 2007. Mr. Carameros
joined the Company as Executive Vice-President in January 2003. Mr. Carameros
is
a member of the Board of Directors of Verde Realty, a privately held real estate
development company, and has been an officer and Director of L & M Asset
Management Inc., a privately-held company which holds certain of his personal
investments, from August 1997 to the present.
THOMAS
J. BENSON,
age 48, has been Senior Vice-President of Finance and Chief Financial Officer
of
the Company since August 2003. Mr. Benson served as Chief Financial Officer
of
Elamex, S.A. de C.V., a provider of manufacturing and shelter services, from
June 2002 to August 2003, and as Chief Financial Officer of Franklin Connections
/ Azar Nut Company, a manufacturer, packager and distributor of candy and nut
products, from May 1994 to June 2002. He has served as an investments director
in two private investment firms and spent seven years in public accounting.
He
received his B.S. from St. Mary's College and his Masters Degree of Taxation
from DePaul University.
VINCENT
D. CARSON,
age 46, joined the Company on November 1, 2001, in the capacity of
Vice-President, General Counsel and Secretary, after a 16-year legal career
in
private practice. Prior to joining the Company, Mr. Carson was a shareholder
in
Brandys Carson & Pritchard, P.C. from 1993 to 2001, and was a shareholder at
Mounce, Green, Myers, Safi & Galatzan, P.C. during 2001. Both firms are
located in El Paso, Texas.
EXECUTIVE
COMPENSATION
The
following table sets forth the summary of compensation earned during fiscal
2004
through 2006 by the Company's Chief Executive Officer and its other executive
officers.
Summary
Compensation Table
|
|
|
|
Annual
Compensation
|
|
|
Long-Term
Compensation
|
|
|
All
Other
|
|
|
Name
And Principal
Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
|
Granted
(#)
|
|
|
Compensation
($)
|
|
|
Gerald
J. Rubin
|
|
|
2006
|
|
|
600,000
|
|
|
4,140,229
|
|
(1) |
|
-
0 -
|
|
|
|
57,811
|
|
(3)(4) |
Chairman,
Chief Executive
|
|
|
2005
|
|
|
600,000
|
|
|
9,320,685
|
|
(1) |
|
-
0 -
|
|
|
|
73,203
|
|
|
Officer,
and President
|
|
|
2004
|
|
|
600,000
|
|
|
5,474,156
|
|
(1) |
|
625,000
|
|
|
|
117,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher
L. Carameros
|
|
|
2006
|
|
|
600,000
|
|
|
500,000
|
|
|
|
-
0 -
|
|
|
|
7,266
|
|
(3) |
Executive
Vice-President
|
|
|
2005
|
|
|
600,000
|
|
|
750,000
|
|
|
|
-
0 -
|
|
|
|
7,116
|
|
|
|
|
|
2004
|
|
|
498,000
|
|
|
269,154
|
|
|
|
300,000
|
|
|
|
6,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
J. Benson
|
|
|
2006
|
|
|
290,000
|
|
|
105,481
|
|
|
|
7,500
|
|
(2) |
|
6,930
|
|
(3) |
Senior
Vice-President
|
|
|
2005
|
|
|
267,500
|
|
|
109,615
|
|
|
|
-
0 -
|
|
|
|
6,780
|
|
|
Finance
and Chief Financial Officer
|
|
|
2004
|
|
|
135,417
|
|
|
37,306
|
|
|
|
56,883
|
|
|
|
1,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent
D. Carson
|
|
|
2006
|
|
|
191,000
|
|
|
41,873
|
|
|
|
4,000
|
|
(2) |
|
6,327
|
|
(3) |
Vice-President
and
|
|
|
2005
|
|
|
191,000
|
|
|
45,546
|
|
|
|
-
0 -
|
|
|
|
6,114
|
|
|
General
Counsel
|
|
|
2004
|
|
|
181,788
|
|
|
81,992
|
|
|
|
5,000
|
|
|
|
3,334
|
|
|
___________
(1)
|
Amounts
calculated and awarded pursuant to the Company’s 1997 Cash Bonus
Performance Plan, as amended and approved by the shareholders in
August
2003.
|
(2)
|
On
November 25, 2005, stock options with an exercise price of $18.00
were
granted to Mr. Benson and Mr. Carson. The estimated per share fair
value
of the options as of the date granted was $7.76. The estimated aggregate
fair values of these stock options granted to Mr. Benson and Mr.
Carson as
of the date granted were $58,200 and $31,040, respectively. The estimated
fair values were determined consistent with the method of Statement
of
Financial Accounting Standards No. 123(R) "Accounting For Stock-Based
Compensation," using the Black-Scholes option pricing model, based
on the
following assumptions: a volatility of 44.7 percent; an expected
life of
4.6 years; risk-free interest rate of 4.34 percent; and a dividend
yield
of zero percent.
|
(3)
|
Amounts
in this column for fiscal 2006 include the
following:
|
|
|
401(k)
Plan
|
|
Group
Life
Insurance
|
|
Disability
Insurance
|
|
Auto
Lease
|
|
Gerald
J. Rubin
|
|
$
|
6,300
|
|
$
|
2,772
|
|
$ |
5,798 |
|
$
|
16,297
|
|
Christopher
L. Carameros
|
|
|
6,300
|
|
|
966
|
|
|
-
0 - |
|
|
-
0 -
|
|
Thomas
J. Benson
|
|
|
6,300
|
|
|
630
|
|
|
-
0 - |
|
|
-
0 -
|
|
Vincent
D. Carson
|
|
|
5,730
|
|
|
597
|
|
|
-
0 - |
|
|
-
0 -
|
|
(4)
|
Includes
amounts attributable to the economic benefit received for executive
and
survivorship life insurance policies. The economic benefit of such
policies totaled $26,644 in fiscal 2006. During
fiscal 2006, 2005 and 2004, the Company paid annual premiums of $360,000
in respect of the policies. See “Certain Relationships and Related
Transactions.”
|
(5)
|
Mr.
Benson joined the Company in August 2003.
|
Option/SAR
Grants in Last Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual
Grants
|
|
Potential
Realizable Value
At
Assumed Annual Rates Of
Stock
Price Appreciation
For
Option Term
|
|
Name
|
|
Number
Of
Securities
Underlying
Options/Sars
Granted
(#)
|
|
%
Of Total
Options/Sars
Granted
To
Employees
In
Fiscal
Year
(%)
|
|
Exercise
Or
Base
Price
($/Sh)
|
|
Expiration
Date
|
|
5%
($)
|
|
10%
($)
|
|
G.
Rubin
|
|
|
-
0 -
|
|
|
0%
|
|
|
-
0 -
|
|
|
-
|
|
|
-
0 -
|
|
|
-
0 -
|
|
C.
Carameros
|
|
|
-
0 -
|
|
|
0%
|
|
|
-
0 -
|
|
|
-
|
|
|
-
0 -
|
|
|
-
0 -
|
|
T.
Benson
|
|
|
7,500
|
|
|
3%
|
|
|
18.00
|
|
|
11/25/2015
|
|
|
84,901
|
|
|
215,155
|
|
V.
Carson
|
|
|
4,000
|
|
|
2%
|
|
|
18.00
|
|
|
11/25/2015
|
|
|
45,280
|
|
|
114,749
|
|
________
Aggregated
Option/Sar Exercises In Last Fiscal Year And Fiscal Year-End Option/Sar
Values
|
|
Shares
Acquired
On
Exercise
|
|
Value
Realized |
|
Number
Of Securities
Underlying
Unexercised
Options/Sars
At Fiscal
Year-End
(#)
|
|
Value
Of Unexercised
In-The-Money
Options / Sars
At
Fiscal Year-End ($) (1)
|
|
NAME
|
|
|
|
($)
|
|
Exercisable
|
|
Unexercisable
|
|
Exercisable
|
|
Unexercisable
|
|
G.
Rubin
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
5,625,000
|
|
|
-
0 -
|
|
|
34,554,575
|
|
|
-
0 -
|
|
C.
Carameros
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
134,586
|
|
|
-
0 -
|
|
|
946,813
|
|
|
-
0 -
|
|
T.
Benson
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
56,883
|
|
|
7,500
|
|
|
-
0 -
|
|
|
15,075
|
|
V.
Carson
|
|
|
-
0 -
|
|
|
-
0 -
|
|
|
14,250
|
|
|
9,750
|
|
|
78,613
|
|
|
52,428
|
|
________
(1)
|
Represents
the difference between the last sale price of the Common Stock on
February
28, 2006 ($20.01) and the exercise price of the option, multiplied
by the
applicable number of options.
|
The
following table summarizes certain equity compensation plan information as
of
February 28, 2006:
Equity
Compensation Plan Information
|
|
Number
Of Securities To
Be
Issued Upon Exercise
Of
Outstanding Options,
Warrants,
And Rights
(a)
|
|
Weighted-Average
Exercise
Price Of
Outstanding
Options,
Warrants,
And Rights
(b)
|
|
Number
Of Securities
Remaining
Available For
Future
Issuance Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected In
Column
(a))
(c)
|
|
Equity
compensation plans approved
by security holders
|
|
|
6,923,094
|
|
$
|
14.83
|
|
|
887,002
|
(1) |
________
(1)
|
Includes
331,716 shares authorized and available for issuance in connection
with
the Helen of Troy Limited 1998 Employee Stock Purchase Plan 555,286
shares
authorized and available for issuance under the Helen of Troy Limited
1998
Stock Option and Restricted Stock
Plan.
|
EMPLOYMENT
CONTRACT FOR THE COMPANY’S
CHAIRMAN
OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
Mr.
Rubin’s employment contract (i) was amended on April 21, 2005 to reduce the term
from five years to three years, (ii) renews itself daily for a new three-year
term, (iii) provides for a base salary of $600,000, and (iv) provides for an
annual cash bonus payable in accordance with the Company’s 1997 Cash Bonus
Performance Plan. The formula for calculating the annual cash bonus for Mr.
Rubin was submitted to the Company’s shareholders for approval in 1997 and again
in 2003. The Company’s shareholders approved the formula on both occasions. The
annual cash bonus to Mr. Rubin is payable based on the earnings achieved by
the
Company in any applicable fiscal year according to the following
scale:
Amount
Of Bonus Payable
As
A Percent Of Earnings
|
|
Amount
Of Earnings Achieved By The Company
In
The Applicable Fiscal Year
|
|
5%
|
|
$
|
-
0 -
|
|
|
to
|
|
$
|
30,000,000
|
|
6%
|
|
$
|
30,000,001
|
|
|
to
|
|
$
|
40,000,000
|
|
7%
|
|
$
|
40,000,001
|
|
|
to
|
|
$
|
50,000,000
|
|
8%
|
|
$
|
50,000,001
|
|
|
to
|
|
$
|
60,000,000
|
|
9%
|
|
$
|
60,000,001
|
|
|
to
|
|
$
|
70,000,000
|
|
10%
|
|
$
|
70,000,001
|
|
|
or
more
|
|
|
|
|
For
the purposes of the bonus calculation, “earnings” means the sum of the
consolidated earnings from continuing operations before all income taxes of
the
Company and its subsidiaries, minus extraordinary income, plus extraordinary
expenses, minus capital gains, and plus capital losses. All components of the
calculation are required to be determined in accordance with accounting
principles generally accepted in the United States. The base salary paid to
Mr.
Rubin in the fiscal year then reduces the amount of the incentive bonus
calculated above. Mr. Rubin’s incentive bonus for any fiscal year cannot exceed
$15,000,000. In fiscal 2006, Mr. Rubin received an annual cash bonus of
$4,140,229.
Under
the
terms of his employment agreement, Mr. Rubin was entitled to receive options
to
purchase 125,000 shares of Common Stock on the last business day of each of
the
Company’s fiscal quarters and such options are immediately vested, assuming
there are options available under the Company’s plans. In the fourth quarter of
fiscal 2004, Mr. Rubin declined receipt of the balance of available options
remaining in the 1998 Stock Option and Restricted
Stock Plan totaling 67,011 shares so that these options
could be used during the balance of fiscal 2005 to reward selected members
of
the Company’s management and certain new management hires with an equity
ownership interest in the financial success of the Company. Mr.
Rubin received no stock options in fiscal year 2006 and there are no stock
options currently available to him under the Company's stock option
plans.
In
our
2005 annual general meeting, our shareholders approved a proposal to amend
our
1998 Stock Option and Restricted Stock Plan to permit the
grant of options to purchase an additional 750,000 shares
of Common Stock to be issued over a three-year period
to most officers and key employees pursuant to criteria set by our Compensation
Committee. Under the terms
of this amendment to the
plan, Messrs. Rubin and Mr. Christopher L. Carameros
are not entitled to receive grants
of any options with respect to these
shares.
Mr.
Rubin’s employment agreement also calls for the reimbursement of certain
expenses and taxes related to such reimbursements.
If
Mr. Rubin’s employment with the Company is terminated by an occurrence other
than death, disability or good cause, he will receive payments, each in an
amount equal to his monthly rate of basic compensation, which shall commence
on
the date of termination and shall continue until the date the employment
contract would have expired but for said occurrence. Mr. Rubin would also
receive payments, payable annually after the close of each fiscal year of the
Company, each in an amount of incentive compensation and bonuses that would
otherwise have been payable to him if he had continued in the employ of the
Company for the same period, provided, however, the incentive compensation
and
bonus payable with respect to any fiscal year shall not be less than the highest
annual incentive compensation and bonus award made to Mr. Rubin with respect
to
the Company’s most recent three fiscal years ending prior to the date of
termination. If Mr. Rubin’s employment had been terminated on February 28, 2006
by an occurrence other than death, disability or good cause, he would have
been
entitled to annual severance benefit payments (under the terms of his contract
which was amended on April 21, 2005) in an amount of not less than $9,873,811
for each of the three years following the date of termination.
Upon
the occurrence of a change in control of the Company, Mr. Rubin may elect to
terminate his employment with the Company, and upon such termination he would
receive a present-value lump sum payment of that amount due to him as basic
compensation if his employment contract had continued until the date the
employment contract would have expired but for said occurrence. In the event
of
a change in control, Mr. Rubin will also receive a lump sum payment in an amount
equal to the amount of incentive compensation and bonuses that would otherwise
have been payable to him under the employment agreement. Such lump sum payment
shall be calculated using Mr. Rubin’s highest incentive compensation and bonuses
payable with respect to the Company’s most recent three fiscal years ending
prior to the date of the termination, with present value calculated using the
applicable federal rate for the date of the termination of employment. His
employment agreement was amended in April 2005 to provide that upon termination
in no event will the severance payments to Mr. Rubin exceed 2.99 times his
base
amount, as defined in Section 280G of the Tax Code. If a change of control
had
occurred on February 28, 2006 and Mr. Rubin’s employment had been terminated
under the terms of his amended contract, he would have been entitled to a
lump-sum severance benefit of $27,194,022.
If
Mr. Rubin’s employment is terminated by an occurrence other than by death,
disability or good cause, including upon a change in control, Mr. Rubin will
also receive: (1) all amounts earned, accrued or owing but not yet paid to
him,
(2) immediate vesting of all options granted to him, (3) removal of all
restrictions on restricted stock awarded to him and immediate vesting of the
rights to such stock, if any, (4) medical benefits for him and his wife for
life
and (5) paid premiums of his life insurance policies, required under his
employment contract. At February 28, 2006, Mr. Rubin did not own any restricted
stock or options that were not already vested. Mr. Rubin will also continue
to
participate in all employee benefits plans, programs or arrangements available
to Company executives in which he was participating on the date of termination
until the date the employment contract would have expired but for said
occurrence or, if earlier, until he receives equivalent benefits and coverage
by
another employer.
In
the event of Mr. Rubin’s death, all unpaid benefits under these agreements are
payable to his estate. Mr. Rubin’s contract grants him the right to elect a cash
payment of the remainder of his contract in the event of a merger, consolidation
or transfer of all or substantially all of the Company’s assets to any
unaffiliated company or other person.
REPORT
OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The
Compensation Committee is composed of three directors. Each director is an
“independent” outside director as defined by NASDAQ rules. This Report discusses
the Committee’s compensation policies applicable to executive officers and
directors and other information required under SEC rules.
Overview
of Compensation of Our Chairman, Chief Executive Officer and
President
The
Committee reviews the compensation program for Mr. Gerald J. Rubin, our
Chairman, Chief Executive Officer and
President, and determines his compensation. Mr. Rubin is the founder of our
Company and served as President of the
Company
prior to it becoming public in 1971. Mr. Rubin served as President, CEO,
and
Chairman from 1971 to 1984. From 1984 to June 2000, he served as CEO and
Chairman. Since June 2000, Mr. Rubin, in addition to serving as CEO and
Chairman, served as President and assumed the associated responsibilities
required
of that title.
Mr.
Rubin’s compensation is governed by an employment agreement executed March 1,
1999, as amended, and the 1997
Cash
Bonus Performance Plan (the "Cash Plan"). The Cash Plan was
amended
in 2003 to provide for graduated percentage bonus based upon pre-tax earnings
performance of the Company. The shareholders approved this amendment to the
Cash
Plan providing for the pay for performance provision at the 2003 annual general
meeting of shareholders. In connection with the approval of this amendment,
Mr.
Rubin agreed to a reduction of stock options that he was otherwise entitled
to
receive under his employment agreement. Mr. Rubin received no stock options
in
fiscal year 2006 and there are no stock options currently available to him
under
the Company's stock option plans. Mr. Rubin’s compensation package is now
primarily based on performance, except for a limited amount of other
compensation described in greater detail in this Proxy Statement. See “other
compensation” in the "Summary Compensation Table." His employment agreement
provides for an annual base salary of $600,000; however, his cash bonus under
the Cash Plan, as amended, is reduced by that amount. In
fiscal
2006, Mr. Rubin received an annual cash bonus of $4,140,229. His total cash
compensation for base salary and bonus is approximately 8.5% of the Company’s
fiscal 2006 pre-tax earnings.
Each
year, the Committee reviews Mr. Rubin's compensation package. The Committee
prepares a tally sheet setting forth all components of Mr. Rubin's compensation
and retains a nationally recognized independent compensation consultant to
assist the Committee in its review. As a result of these reviews, modifications
have been made over the last several years to Mr. Rubin’s employment agreement
with his consent, which the parties believe is in the best interests of the
shareholders and compliant with good corporate governance. The Committee has
eliminated personal use of corporate jet aircraft by executive officers, and
substantially reduced any severance package by reducing the term of Mr. Rubin’s
employment agreement from five years to three years. The Committee has also
effectively eliminated the “gross up” provision in Mr. Rubin's employment
agreement applicable to a change of control by
limiting the aggregate present value of the payments and benefits provided
to
him under his employment agreement so that it does not exceed 2.99 times his
"base amount" as defined in Section 280G(b)(3)
of the Tax Code.
Review
of Compensation of our Executive Officers
The
compensation package for our executive officers, other than Mr. Rubin and Mr.
Carameros, is made up of three components consisting of base
salary, annual incentive compensation, and long-term incentive compensation
in
the form of stock options. In
addition, certain of our executive officers named in the "Summary Compensation
Table" included in this Proxy Statement
("NEO's") have also received certain other compensation that are described
more
fully in that table.
The
base salary component is arrived at based upon the salary range commanded by
the
position in the marketplace. The annual bonus incentive considers a merit and
review process against personal, divisional and organizational goals and
objectives.
At
our
2005 annual general meeting, the Company submitted to its shareholders and
the
shareholders approved, a proposal to amend the Helen of Troy Limited 1998 Stock
Option and Restricted Stock Plan. The amendment permitted the grant of options
to purchase an additional 750,000 shares of Common Stock to be issued over
a
three-year period to most officers and key employees pursuant to criteria set
by
the Committee. Under the terms of the amendment to the plan, Mr. Rubin and
Mr.
Christopher L. Carameros, a Company Executive Vice-President, are not
entitled to receive grants of any options with respect to these shares. In
addition, the amendment to the plan limited the maximum amount of shares of
Common Stock subject to awards that may be issued in any fiscal year to 250,000
and required that any restricted share granted under the plan will reduce the
available shares under the plan by three shares.
Careful
consideration is given to whom options were granted concentrating on individuals
whom exhibited high potential and made key contributions against the goals
and
objectives set for divisions, the organization, and personal performance. The
Committee reviews and discusses management’s proposals for option grants prior
to the Committee giving its approval.
On
February 24, 2006, the Compensation Committee of the Company’s Board of
Directors approved the immediate acceleration of vesting on unvested and
"out-of-the money" stock options previously awarded to officers and employees
with option exercise prices greater than $19.65. No options held by executive
officer or Directors of the Company were accelerated other than the unvested
options to purchase an aggregate of 46,412 shares of Common Stock. The affected
options held by officers and employees had a range of exercise prices between
$20.35 and $33.88, with a weighted average exercise price of $24.79. Vesting
of
options exercisable for a total of 285,217 shares was accelerated. The closing
price per share of the Company's Common Stock on February 24, 2006 was $19.65.
Except for the vesting change, all affected stock options will continue to
be
governed by their respective original terms and conditions. The accelerated
options represented 4.1% of all outstanding Company options.
The
Company took this action in order to reduce the future compensation expense
associated with unvested stock options following the adoption of SFAS No.123(R)
beginning with the first quarter of fiscal 2007. As a result of the
acceleration, the Company estimates that it will reduce future stock option
related compensation expense it otherwise would be required to record in
connection with the accelerated options by $1,641,000 on a pre-tax basis over
the original option remaining vesting periods.
No
options held by executive officers of the Company were accelerated other than
the unvested options to purchase an aggregate of 46,412 shares of Common Stock.
Additionally, no unvested options held by non-employee members of the Board
of
Directors were accelerated. The table below presents information concerning
the
affected option awards and option holders.
Name
|
|
Position
|
|
Grant
Dates
|
|
Number
of
Shares
Accelerated
|
|
Range
of
Exercise
Prices
|
|
Thomas
J. Benson
|
|
|
Senior
VP, CFO
|
|
|
8/22/2003
|
|
|
42,662
|
|
|
$21.21
|
|
Vincent
D. Carson
|
|
|
Senior
VP, General Counsel
|
|
|
12/1/2003
|
|
|
3,750
|
|
|
$23.38
|
|
All
other officers and employees
|
|
|
Various
|
|
|
7/15/2003
to 9/29/2005
|
|
|
238,805
|
|
|
$20.35
- $33.88
|
|
|
|
|
|
|
|
|
|
|
285,217
|
|
|
|
|
Deductibility
of Compensation under Internal Revenue Code Section 162
(m)
Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Tax Code"), places
a limit of $1,000,000 on the amount of compensation that the Company may deduct
in any one year with respect to each of its five most highly paid executive
officers. Certain performance-based compensation approved by shareholders is
not
subject to the deduction limit. The Company's shareholder-approved 1998 Stock
Option and Restricted Stock Plan and the Cash Plan, in which awards under such
plans constitute performance-based compensation, are not subject to Section
162(m) of the Tax Code. To maintain flexibility in compensating NEO's in a
manner designed to promote varying corporate goals, the Committee has decided
that in making any compensation decisions they would not allow Section 162(m)
of
the Tax Code to
limit
compensation decisions where the best interest of the Company and its
shareholders dictate otherwise.
Review
of Compensation of our Directors
The
Committee reviews Director compensation taking into consideration the duties,
skill, time, and Board and Committee meetings required, as well as attendance
at
executive session meetings. The Committee also reviews the National Association
of Corporate Directors data on Director compensation in various industry
segments and reviews the amounts and components of the compensation package
with
its compensation consultant in
consideration of the work required by Directors. On
June
6, 2005, the Helen of Troy Limited 1995 Stock Option Plan for Non-Employee
Directors Stock expired by its terms with 280,000 shares still remaining
eligible to grant under the plan. The Directors did not seek approval from
our
shareholders for an extension of the plan term.
The
National Association of Corporate Directors compiles data and annually publishes
a report detailing director compensation according to business revenue and
industry segment. The 2006 report, based upon proxies filed in 2005, classifies
the Company as a small company (those with revenues of $200 million to $600
million) in the Consumer Products/Div. Manufacturers industry segment. The
average total director compensation in this segment in 2005 was $88,157. The
average total cash compensation for the Company's current Non-Employee Directors
for the fiscal year 2006 was $57,429. In addition, in fiscal year 2006, the
Company’s Directors received stock options as set forth in the Non-Employee
Directors Compensation Table in this Proxy Statement.
Respectfully
submitted,
COMPENSATION
COMMITTEE
June
28, 2005
Gary
B. Abromovitz (Chairman)
Timothy
F. Meeker
Darren
G. Woody
The
foregoing report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or
the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall
not
otherwise be deemed filed under such Acts.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
During
fiscal 2006, the Company continued an agreement (the "Lease") under which it
leases a 108,000 square foot warehouse facility in El Paso, Texas, from a real
estate partnership (the "Partnership") in which Gerald J. Rubin and Stanlee
N.
Rubin are limited partners. The Company entered into the Lease in order to
expand its inventory storage capacity in El Paso, Texas. Under the terms of
the
Lease, the Company paid $29,250 in monthly rent. The Company also paid certain
expenses associated with the operation of the facility. The Company leased
the
warehouse facility for the entire fiscal year and made a total of $507,120
in
payments for associated rent and operating expenses during fiscal 2006. The
Company obtained an appraisal from a third party confirming that the amount
of
rent under the Lease is comparable to that being paid by other companies for
similar facilities in El Paso. The Company obtained comparable rental
information on similar properties from an unaffiliated real estate company
at
the time of the Lease. This information was used to establish the rental rate
for this facility. The Lease was a month-to-month agreement. This Lease was
terminated on February 28, 2006.
In
July
1999, the Company entered into an agreement with the Partnership under which
the
Company currently leases 3,601 square feet of office space and certain office
equipment in El Paso, Texas to the Partnership. During fiscal 2006, the Company
recorded $62,744 in rental income associated with this agreement. The Company
has obtained an appraisal from a third party confirming that the amount of
rent
under such agreement is comparable to that being paid by other companies for
similar facilities in El Paso, Texas. The
Company and the Partnership terminated the lease on February 28,
2006.
Byron
H. Rubin, a member of the Company's Board of Directors, earns ordinary insurance
agent's commissions in connection with the Company's group health, life and
disability insurance policies as well as in connection with certain life
insurance policies on its officers. During fiscal 2006, he received commissions
of approximately $30,000
from
policies sold to the Company.
Timothy
F. Meeker, a member of the Company’s Board of Directors, was paid consulting
fees of $48,000 during fiscal 2006 in connection with marketing advisory
services provided to Idelle Labs, Ltd., the business unit in the Company’s
personal care segment that develops and distributes liquid hair styling
products, body powder and skin care products. Mr. Meeker is expected to continue
to provide and be compensated for such services in fiscal 2007 at a rate of
$4,000 per month.
All
of the above transactions have
been
reviewed, approved and ratified by the Company's Audit
Committee.
Prior
to July 2003, the Company had paid premiums for survivorship life insurance
policies on the lives of Gerald J. Rubin and Stanlee N. Rubin in the aggregate
insured amount of $29,000,000. The Company and a trust established for the
benefit of Gerald J. Rubin and Stanlee N. Rubin, which was the beneficiary
of
the life insurance policies (the “Trust”), entered into a Split Dollar Insurance
Agreement dated March 1994 whereby the Trust agreed to repay the Company all
of
the premiums paid under the policies from the proceeds of the policies. The
Trust owned the policies and collaterally assigned the proceeds from these
policies as collateral for the obligation to repay the aggregate premiums paid
by the Company under these policies. In July 2003, the Trust and the Company
entered into a Life Insurance Agreement under which the Trust transferred
ownership of the policies to the Company. The Company agreed to pay annual
premiums of up to $360,000 on the policies and upon the death of the second
to
die of Gerald J. Rubin or Stanlee N. Rubin, the Company shall receive the cash
surrender value of the policies and the Trust shall receive the balance of
the
proceeds. As of February 28, 2006, the total aggregate death benefit of the
policies was $32,112,325, the aggregate cash surrender value of the policies
was
$4,972,893, and the aggregate premiums paid by the Company since inception
of
the policies was $4,320,000.
Through
fiscal 2002, the Company paid premiums on an executive universal life insurance
policy on the life of Gerald J. Rubin in the initial insured amount of
$5,000,000. Under the split dollar agreement for this policy, entered into
in
June 2000, the Company is entitled to reimbursement for all premium payments
it
has made on the policy out of any death benefits paid on the life of Gerald
J.
Rubin. No
premiums have been paid on the policy since fiscal 2002. As of February 28,
2006, the total aggregate death benefit of the policies was $5,468,580, the
aggregate cash surrender value of the policies was $468,580, and the aggregate
premiums paid by the Company since inception of the policies was
$958,266.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Composition.
The
Audit Committee of the Board is composed of the three directors named below.
Each member of the Audit Committee meets the independence and financial
experience requirements under both SEC and NASDAQ rules. In addition, the Board
has determined that Adolpho R. Telles is an “audit committee financial expert”
as defined by SEC rules.
Responsibilities.
The
Audit Committee operates under a written charter that has been adopted by the
Board. The charter is reviewed annually for changes, as appropriate.
The
Audit Committee is responsible for oversight, on behalf of the Board of
Directors, of:
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·
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Helen
of Troy’s auditing, accounting and financial reporting processes, and the
integrity of its financial
statements;
|
|
·
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The
audits of the Company’s financial statements and the appointment,
compensation, qualifications, independence and performance of the
Company’s independent auditor and registered public accounting
firm;
|
|
·
|
The
Company’s compliance with legal and regulatory requirements,
and
|
|
·
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The
staffing, establishment and ongoing operation of the Company’s internal
audit function.
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The
Company’s management is responsible for: (a) maintaining the Company’s books of
account and preparing periodic financial statements based thereon; and (b)
maintaining the system of internal controls. The independent registered public
accounting firm is responsible for auditing Helen of Troy’s consolidated annual
financial statements.
The
Audit Committee’s function is one of oversight only and does not relieve
management of its responsibilities for preparing financial statements that
accurately and fairly present the Company’s financial results and condition, nor
the independent registered public accounting firm of their responsibilities
relating to the audit or review of the financial statements.
In
accordance with Audit Committee policy and the requirements of law, the Audit
Committee pre-approves all services to be provided by the Company’s independent
auditor and registered public accounting firm, KPMG LLP. Pre-approval includes
audit services, audit-related services, tax services and other services. In
some
cases, the full Audit Committee provides pre-approval for up to a year related
to a particular defined task or scope of work and subject to a specific budget.
In other cases, the chairman of the Audit Committee has the delegated authority
from the Audit Committee to pre-approve additional services, and the chairman
then communicates such pre-approvals to the full Audit Committee for
ratification. To avoid potential conflicts of interest, the law prohibits a
publicly traded company from obtaining certain non-audit services from its
independent registered public accounting firm. The Company obtains these
services from other service providers as needed. The Audit Committee has been
reducing the scope and amount of permissible non-audit services obtained from
KPMG LLP, and obtaining other providers for those services. For more information
about fees paid to KPMG LLP for services in fiscal years 2005 and 2006, see
""Proposal 2: Appointment of Independent Auditor and Registered Public
Accounting Firm and Authorization of the Audit Committee of the Board of
Directors to set the Auditor’s Remuneration.''
Review
with Management and Independent Registered Public Accounting Firm.
In
this context, the Audit Committee hereby reports as follows:
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1.
|
The
Audit Committee has reviewed and discussed with management and the
independent registered public accounting firm, together and separately,
the Company’s audited consolidated financial statements contained in Helen
of Troy’s Annual Report on Form 10-K for the 2006 fiscal year.
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|
2.
|
The
Audit Committee has discussed with the independent auditor and registered
public accounting firm matters required to be discussed by Statement
on
Auditing Standards No. 61 (Communication with Audit Committees).
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|
3.
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The
Audit Committee has received from the independent auditor and registered
public accounting firm, KPMG LLP, the written disclosures and the
letter
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee has discussed
with KPMG LLP the independence of the registered public accounting
firm.
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|
4.
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The
Audit Committee has considered whether the provision of services
covered
by fees paid to KPMG LLP is compatible with maintaining the independence
of KPMG LLP.
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Based
on the review and discussions referred to in paragraphs 1-4 above, the Audit
Committee recommended to the Board, and the Board has approved, that the audited
consolidated financial statements be included in the Company’s Annual Report on
Form 10-K for fiscal 2006, for filing with the SEC.
The
Audit Committee has approved and recommends that the shareholders appoint KPMG
LLP as the Company’s independent auditor and registered public accounting firm
for fiscal 2007.
Respectfully
submitted,
AUDIT
COMMITTEE
June
28, 2006
Adolpho
R. Telles (Chairman)
Gary
B. Abromovitz
John
B. Butterworth
The
foregoing report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or
the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall
not
otherwise be deemed filed under such Acts.
AUDIT
AND OTHER FEES PAID TO OUR INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The
following table presents fees for professional audit services rendered by KPMG
LLP for the audit of the Company's annual financial statements for the years
ended February 28, 2006, and February 28, 2005, and fees billed for other
services rendered by KPMG LLP during those periods.
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|
2006
|
|
2005
|
|
|
|
|
|
|
|
Audit
Fees
|
|
$
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595,500
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|
$
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390,000
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|
Audit-Related
Fees
|
|
|
377,200
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|
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265,000
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|
Tax
Fees
|
|
|
22,800
|
|
|
28,000
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|
All
Other Fees
|
|
|
200
|
|
|
42,000
|
|
Total
|
|
$
|
995,700
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|
$
|
725,000
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|
Audit
Fees:
Consist of fees billed for professional services rendered for the audit of
the
Company’s consolidated financial statements and review of the interim condensed
consolidated financial statements included in quarterly reports and services
that are normally provided by KPMG LLP in connection with statutory and
regulatory filings or engagements, and attest services, except those not
required by statue or regulation.
Audit-Related
Fees:
Consist of fees billed by KPMG LLP for assurance and related services that
are
reasonably related to the performance of the audit or review of the Company’s
consolidated financial statements and internal control over financial reporting,
including services in connection with assisting the company in its compliance
with its obligations under Section 404 of the Sarbanes-Oxley Act and related
regulations, due diligence, accounting consultations concerning financial
accounting and reporting standards.
Tax
Fees:
Consist of tax compliance/preparation fees by KPMG LLP to the Company for
professional services and assistance to the Company’s in-house tax departments
related to federal, state and international tax compliance.
All
Other Fees:
Consist of fees billed by KPMG LLP to the Company for other permissible work
for
services not included in the first three categories. The Company intends to
minimize services in this category. In 2005 "all other fees" consisted
principally of assistance with the review of certain materials provided to
prospective lenders in connection with potential financing, selected due
diligence procedures in connection with an acquisition, and advice regarding
foreign statutory requirements in connection with the exercise of options.
These
services are actively monitored (both spending level and work content) by the
Audit Committee to maintain the appropriate objectivity and independence in
KPMG
LLP’s core work, which is the audit of the Company’s consolidated financial
statements.
The
Audit Committee pre-approved all of the services described above that were
provided in fiscal 2006 in accordance with the pre-approval requirements of
the
Sarbanes-Oxley Act. There were no services for which the de minimis exception,
as defined in Section 202 of the Sarbanes-Oxley Act, was
applicable.
PROPOSAL
2: APPOINTMENT
OF INDEPENDENT AUDITOR AND REGISTERED PUBLIC ACCOUNTING FIRM AND AUTHORIZATION
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS TO
SET
THE
AUDITOR’S REMUNERATION
Under
Bermuda law, our shareholders have the responsibility to appoint the independent
auditor and registered public accounting firm of the Company to hold office
until the close of the next annual general meeting and to authorize the Audit
Committee of the Board of Directors to set the auditors’ remuneration. KPMG LLP,
or a predecessor, has been our independent auditor and registered public
accounting firm since 1978, and is considered by the Company’s management to be
well qualified and independent. Among other matters, the Audit Committee has
concluded that current requirements for audit partner rotation, auditor
independence through limitation of services and other regulations affecting
the
audit engagement process will substantially assist in supporting auditor
independence. A representative of KPMG LLP is expected to be present at the
Annual Meeting with the opportunity to make a statement if such representative
desires to do so. The KPMG LLP representative is also expected to be available
to respond to appropriate questions.
Representatives
of KPMG LLP attended eight of the meetings held by the Audit Committee in fiscal
2006. The Audit Committee pre-approves and reviews audit and non-audit services
performed by KPMG LLP as well as the fees charged by them for such services.
In
its pre-approval and review of non-audit service fees, the Audit Committee
considers, among other factors, the possible effect of the performance of such
services on the independent auditor and registered public accounting firm’s
independence. To avoid certain potential conflicts of interest in maintaining
auditor independence, the law prohibits a publicly traded company from obtaining
certain non-audit services from its auditing firm. In recent years, we have
not
obtained any of these prohibited services from KPMG LLP, and we are able to
obtain such services from other Accounting firms and other service providers
of
requisite capability.
In
addition to the services provided by KPMG LLP, we used PricewaterhouseCoopers
LLP ("PwC LLP") principally to provide project direction and management
consulting services in connection with our implementation of a new Global
Enterprise Resource Planning System. In the aggregate, we paid PwC LLP $281,801
in fiscal 2006 in connection with these services.
SHAREHOLDER
APPROVAL
The
affirmative vote of a majority of the votes cast at the Annual Meeting is
required to appoint KPMG LLP as our independent auditor and registered public
accounting firm as described in this Proposal 2.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THIS PROPOSAL.
SHAREHOLDER
PROPOSALS
Shareholders
intending to present proposals at the 2007 Annual General Meeting of
Shareholders and desiring to have those proposals included in the Company's
proxy statement and form of proxy relating to that meeting must submit such
proposals, in compliance with Rule 14a-8 of the Securities Exchange Act of
1934,
as amended, to be received at the executive offices of the Company no later
than
March
1,
2007.
For proposals that shareholders intend to present at the 2007 Annual Meeting
of
Shareholders outside the processes of Rule 14a-8 of the Securities Exchange
Act
of 1934, as amended, unless the shareholder notifies the Company of such intent
by March
1,
2007,
any proxy solicited by the Company for such General Meeting will confer on
the
holder of the proxy discretionary authority to vote on the proposal so long
as
such proposal is properly presented at the meeting.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's
Directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes
in
ownership of Common Stock and other equity securities of the Company. Directors,
executive officers and greater than 10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Except
as noted below, to the Company's knowledge, based solely on review of the copies
of such reports furnished to the Company and written representations that no
other reports were required, during fiscal 2006 all Section 16(a) filing
requirements applicable to the Directors, executive officers and greater than
10% shareholders were satisfied.
Thomas
J. Benson
|
November
25, 2005 Stock Option Grants were filed late on December 2,
2005
|
Vincent
D. Carson
|
OTHER
MATTERS
Except
as described in this Proxy Statement, the Board of Directors knows of no other
matters to be presented at the Annual Meeting. If other matters properly come
before the Annual Meeting or any adjournment thereof, the holders of the proxies
are authorized to vote on these matters in accordance with management's
discretion.
HOUSEHOLDING
OF MATERIALS
Some
banks, brokers, and other nominee record holders may be participating in the
practice of "householding" proxy statements and annual reports. This means
that
only one copy of the Company's proxy statement or annual report may have been
sent to multiple shareholders in the same household. The Company will promptly
deliver a separate copy of either document to any shareholder upon request
by
writing the Company at the following address: Helen of Troy Limited, 1 Helen
of
Troy Plaza, El Paso, Texas 79912, Attention: Investor Relations; or by calling
the Company at the following phone number: (915) 225-4748. Any shareholder
who
wants to receive separate copies of the annual report and proxy statement in
the
future, or who is currently receiving multiple copies and would like to receive
only one copy for his or her household, should contact his or her bank, broker,
or other nominee record holder, or contact the Company at the above address
and
phone number.
ELECTRONIC
DELIVERY OF SHAREHOLDER COMMUNICATIONS
If
you received your Annual General Meeting materials by mail, we encourage you
to
conserve natural resources, as well as significantly reduce the Company’s
printing and mailing costs, by signing up to receive shareholder communications
via e-mail. With electronic delivery, you will be notified via e-mail after
the
annual report and the proxy statement are available on the Internet, and you
can
submit your shareholder votes online. Electronic delivery can also help reduce
the number of bulky documents in your personal files and eliminate duplicate
mailings. To sign up for electronic delivery:
1.
|
If
you are a registered holder (you hold your shares of Common Stock
in your
own name through our transfer agent, Computershare Investor Services,
LLC,
or you have stock certificates), you can elect to have next year's
communications sent to you electronically as part of this year’s on-line
voting process at WWW.PROXYVOTE.COM by following the instructions
that
will be provided to you on screen when you
vote.
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2.
|
If
you are a beneficial holder (your shares are held by a brokerage
firm, a
bank or a trustee), you may contact your broker or visit their
web-site.
Most brokers have made provisions for you to sign up on-line for
electronic delivery of shareholder reports and
mailings.
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Your
electronic delivery enrollment will be effective until you cancel
it.
HOW
TO OBTAIN OUR ANNUAL REPORT, PROXY STATEMENT
AND
OTHER INFORMATION ABOUT THE COMPANY
From
time to time, we receive calls from shareholders asking how they can obtain
more
information regarding the Company. The following options are
available.
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1.
|
Our
Investor Relations site, which can be accessed from our main Internet
website located at www.hotus.com,
contains Company press releases, earnings releases, financial information
and stock quotes, as well as corporate governance information and
links to
our SEC filings. This proxy statement and our 2006 Annual Report
to
Shareholders are both available at this
site.
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|
2.
|
You
may also request a free copy of our Annual Report or Proxy Statement
by
contacting Helen of Troy Investor Relations, Robert D. Spear, at
(915)
225-4748, or via e-mail at [email protected],
or send written correspondence to Helen of Troy Limited, Attn: Investor
Relations, One Helen of Troy Plaza, El Paso, Texas
79912.
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YOUR
VOTE IS IMPORTANT