Unassociated Document
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 [ ]
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Check
the appropriate box:
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x
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Preliminary
Proxy Statement
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o
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a -
6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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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
28,
2007
Dear
Shareholders:
It
is my
pleasure to invite you to the 2007 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 21, 2007, 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, and conserve natural
resources 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 elect eight directors, to approve
an amendment to the Company’s bye-laws to make the Company eligible for a direct
registration program, to appoint Grant Thornton LLP as the Company's auditor
and
independent registered public accounting firm, to authorize the Audit Committee
of the Board of Directors to set the auditor’s remuneration, and to transact
such other business as may properly come before the Annual Meeting. 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 appoint your proxy 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 complete, sign, date and return the enclosed proxy card in
the
accompanying envelope as soon as possible, or appoint your proxy by telephone
or
on the internet as set forth above. 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,
Gerald
J. Rubin
Chairman
of the Board,
Chief
Executive Officer and
President
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HELEN
OF TROY LIMITED
Church
Street
Hamilton,
Bermuda
NOTICE
OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO
BE HELD AUGUST 21, 2007
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 21, 2007, at 1:00 p.m., Mountain Daylight Time, for the
following purposes:
1. |
To
vote for the election of a board of eight directors;
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2. |
To
approve an amendment to the Company’s bye-laws to make the Company
eligible for a direct registration
program;
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3. |
To
appoint Grant Thornton LLP as the Company’s auditor and independent
registered public accounting firm to serve for the 2008 fiscal year
and to
authorize the Audit Committee of the Board of Directors to set the
auditor’s remuneration; and
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4. |
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 25, 2007. 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 complete,
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
appoint
your proxy
via
touch-tone telephone at 1-800-690-6903 or via the Internet at
WWW.PROXYVOTE.COM.
You
are
cordially invited and encouraged to attend the Annual Meeting in person.
Vincent
D. Carson
Vice
President,
General Counsel and Secretary
El
Paso,
Texas
June
28,
2007
IMPORTANT
WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY
AS SOON AS POSSIBLE. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE IN PERSON. MOST SHAREHOLDERS HAVE THREE OPTIONS FOR SUBMITTING
THEIR PROXIES 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
APPOINT
YOUR PROXY
ON THE INTERNET. IT IS CONVENIENT, AND IT SAVES THE COMPANY SIGNIFICANT POSTAGE
AND PROCESSING COSTS.
TABLE
OF CONTENTS
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Page
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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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2
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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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4
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Shareholder
Communications to the Board of Directors
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7
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Compensation
Committee Interlocks and Insider Participation
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7
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Director's
Compensation
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8
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Director
Summary Compensation for Fiscal 2007
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8
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Directors
Fees Earned or Paid in Cash for Fiscal 2007
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8
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Outstanding
Equity Awards for Directors at Fiscal Year-End 2007
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9
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Security
Ownership of Certain Beneficial Owners and Management
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10
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Executive
Officers
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11
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Report
of the Compensation Committee
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12
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Compensation
Discussion and Analysis
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12
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Executive
Compensation
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20
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Summary
Compensation Table for Fiscal Years 2007, 2006 and 2005
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20
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All
Other Compensation for Fiscal Year 2007
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21
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Outstanding
Equity Awards at Fiscal Year-End 2007
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22
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Option
Exercises in Fiscal Year 2007
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23
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Employment
Contract for Chairman of the Board, Chief Executive Officer and President
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23
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Potential
Payments Upon Termination or Change in Control
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27
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Equity
Compensation Plan Information
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30
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Certain
Relationships and Related Transactions
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30
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Report
of the Audit Committee
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32
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Audit
and Other Fees Paid to Our Independent Registered Public Accounting
Firm
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33
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Proposal
2:
Approve of an amendment to the Company’s bye-laws to make
the
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Company
eligible for a direct registration program
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34
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Proposal
3:
Appointment of Auditor and Independent Registered Public Accounting
Firm
and
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Authorization
of the Audit Committee of the Board of Directors to set the Auditor’s
Remuneration
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35
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Shareholder
Proposals
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35
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Section
16(a) Beneficial Ownership Reporting Compliance
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35
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Other
Matters
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35
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Householding
of Materials
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36
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Electronic
Delivery of Shareholder Communications
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36
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How
to Obtain Our Annual Report, Proxy Statement and Other Information
about
the Company
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36
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HELEN
OF TROY LIMITED
Clarendon
House
Church
Street
Hamilton,
Bermuda
FOR
ANNUAL
GENERAL MEETING OF SHAREHOLDERS
August
21, 2007
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 21, 2007, 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 July 6,
2007.
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
the
election of the Director nominees as set forth in Proposal
1.
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FOR
the proposal to approve an amendment to the Company’s bye-laws to make the
Company eligible for a direct registration program as set forth in
Proposal 2.
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FOR
the appointment of Grant Thornton LLP as the auditor and independent
registered public accounting firm of the Company and to authorize
the
Audit Committee of the Board of Directors to set the auditor’s
remuneration as set forth in Proposal 3.
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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 2007 Annual General Meeting of Shareholders.
To pass, each proposal included in this year’s proxy statement requires an
affirmative vote of a majority of the votes cast at the Annual Meeting. To
ensure that your vote is recorded promptly, please submit your proxy 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, 2007 ("fiscal
2007"), 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
materials 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 25, 2007, is the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting. As
of
June 25, 2007, there were _____________ 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. 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. 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 2 and Proposal 3. 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, 2, and 3. If within half an hour from the time appointed
for the Annual Meeting a quorum is not present in person or 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.
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. Presently, the number of director positions remains set at eight.
Accordingly, the Nominating and Corporate Governance Committee has nominated
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 the Company'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 LLC
(“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 64,
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. He is an attorney
and has acted as a consultant to several law firms in business related matters,
including trade secrets, unfair competition and commercial litigation. He also
has been active in various real estate development and acquisition transactions
for over 30 years in Arizona and California, with experience in the areas of
industrial buildings, medical offices and commercial, residential and historic
properties. In March 2005, he joined the Board of Directors of CardioVascular
BioTherapeutics, Inc., a biopharmaceutical company, where he currently serves
as
Lead Director, Chair of the Compensation, Audit, Corporate Governance, and
Conflict Resolution Committees, chairs the executive sessions of independent
directors, and is a member of the European Compliance Committee.
JOHN
B. BUTTERWORTH,
age 56,
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 60,
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 57,
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 63,
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 63,
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
57,
has been a Director of the Company since June 2005 and chairs the Audit
Committee. Mr. Telles is a Certified Public Accountant. Since November 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 47,
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.
The
nominees receiving a majority of the votes cast at the Annual Meeting will
be
elected as Directors.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
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.
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
are 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 (the
“Code”).
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The
Board
has designated an independent director as the Deputy Chairman and lead director,
who is currently Gary B. Abromovitz. The Deputy Chairman’s authority and
responsibilities include:
|
• |
presiding
at all meetings of the Board when the Chairman is not present and
over
executive sessions;
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• |
serving
as a liaison between the Chairman and the independent Directors;
and
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• |
calling
meetings of the independent
Directors.
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Our
Board
and its committees meet throughout the year on a set schedule, and hold special
meetings and act by written consent from time to time as appropriate.
Independent Directors regularly meet without management present, and the Board’s
lead director leads those sessions. Board members have access to all of our
employees outside of Board meetings. 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 and the number of
meetings held over the 2007 fiscal year:
Director
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Executive
Sessions of Independent Directors
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Audit
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Nominating
and Corporate Governance
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Compensation
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Gary
B. Abromovitz
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Chair
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M
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Chair
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Chair
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John
B. Butterworth
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M
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M
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Timothy
F. Meeker
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M
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M
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M
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Adolpho
R. Telles
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M
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Chair
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Darren
G. Woody
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M
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M
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M
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Number
of Meetings Held in Fiscal 2007
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|
5
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8
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4
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4
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M
=
Current Member during the 2007 fiscal year
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) the staffing 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
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 qualifies as an "audit committee financial expert"
as
defined by the SEC in Item 401(h) of Regulation S-K promulgated by the SEC
and
is 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 general 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
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 2008
Annual Meeting and intends to have that proposal included in the proxy statement
and related materials for the 2008 annual
general 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 for this year’s annual general meeting.
Compensation
Committee.
The
primary purposes of the committee are to (1) evaluate and approve the corporate
goals and objectives set by the CEO, (2) evaluate the CEO's performance in
light
of those goals and objectives, (3) make recommendations to the CEO with respect
to non-CEO compensation, (4) oversee the administration of our 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 addition to the meetings noted in the
table on the previous page, the
Committee also
conducted numerous informal telephonic discussions and consulted its legal
advisors throughout the year.
Meetings
of Board of Directors.
The
Board of Directors held four regularly scheduled meetings and one telephonic
meeting during fiscal 2007. Mrs. Rubin was not in attendance at one regularly
scheduled meeting. Mrs. Rubin, Mr. Butterworth and Mr. Carameros were not in
attendance at a telephonic meeting. Mr. Abromovitz was not in attendance at
one
Audit Committee meeting. With the exception of these absences, all Directors
attended all Board of Directors meetings or applicable committee meetings during
the period for which he or she acted as a Director during fiscal 2007. 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 Mrs. 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. When calling, 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 2007, 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 summarizes the total compensation earned by all non-employee
Directors during fiscal 2007:
Director
Summary Compensation for Fiscal
2007
|
|
|
Fees
Earned
|
|
|
|
|
|
|
|
or
Paid
|
|
All
Other
|
|
|
|
|
|
in
Cash
|
|
Compensation
|
|
Total
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
Gary
B. Abromovitz
|
|
|
150,000
|
|
|
-
|
|
|
150,000
|
|
John
B. Butterworth
|
|
|
90,000
|
|
|
-
|
|
|
90,000
|
|
Timothy
F. Meeker
|
|
|
78,000
|
|
|
48,000
|
(1)
|
|
126,000
|
|
Byron
H. Rubin
|
|
|
36,000
|
|
|
30,000
|
(2)
|
|
66,000
|
|
Stanlee
N. Rubin
|
|
|
33,000
|
|
|
-
|
|
|
33,000
|
|
Adolpho
R. Telles
|
|
|
106,000
|
|
|
-
|
|
|
106,000
|
|
Darren
G. Woody
|
|
|
78,000
|
|
|
-
|
|
|
78,000
|
|
(1) |
Represents
fees earned by Timothy Meeker in connection with a marketing and
consulting advisory services agreement with the Company. For further
information, see “Certain Relationships and Related
Transactions.”
|
(2) |
Represents
insurance agent's commissions earned by Byron Rubin paid by certain
of our
insurers directly to him in connection with the Company's group health,
life and disability insurance policies as well as certain life insurance
polices covering its officers. For further information, see “Certain
Relationships and Related Transactions.”
|
In
fiscal
2007, the following cash compensation was paid to our non-employee
Directors:
Directors
Fees Earned or Paid in Cash for Fiscal 2007
|
|
Name
|
|
Quarterly
Board
Retainers
($)
(1)
|
|
Quarterly
Board
Meeting
Fees
($)
(2)
|
|
Independent
Directors
Meeting
Fees
($)
(3)
|
|
Quarterly
Deputy
Chairman
Retainers
($)
(4)
|
|
Quarterly
Committee
Chair
Retainers
($)
|
|
|
|
Committee
Member
Meeting
Fees
($)
(5)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
B. Abromovitz
|
|
|
24,000
|
|
|
12,000
|
|
|
30,000
|
|
|
40,000
|
|
|
20,000
|
|
(6
|
)
|
|
24,000
|
|
|
150,000
|
|
John
B. Butterworth
|
|
|
24,000
|
|
|
12,000
|
|
|
30,000
|
|
|
-
|
|
|
-
|
|
|
|
|
24,000
|
|
|
90,000
|
|
Timothy
F. Meeker
|
|
|
24,000
|
|
|
12,000
|
|
|
30,000
|
|
|
-
|
|
|
-
|
|
|
|
|
12,000
|
|
|
78,000
|
|
Byron
H. Rubin
|
|
|
24,000
|
|
|
12,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
36,000
|
|
Stanlee
N. Rubin
|
|
|
24,000
|
|
|
9,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
33,000
|
|
Adolpho
R. Telles
|
|
|
24,000
|
|
|
12,000
|
|
|
30,000
|
|
|
-
|
|
|
40,000
|
|
(7
|
)
|
|
-
|
|
|
106,000
|
|
Darren
G. Woody
|
|
|
24,000
|
|
|
12,000
|
|
|
30,000
|
|
|
-
|
|
|
-
|
|
|
|
|
12,000
|
|
|
78,000
|
|
(1)
|
All
non-employee Directors receive a quarterly cash retainer of
$6,000.
|
(2) |
All
non-employee Directors receive a cash fee of $3,000 for each quarterly
meeting of the Board of Directors
attended.
|
(3) |
All
independent Directors receive a quarterly cash retainer of $6,000
for
participation in executive sessions. Amounts shown included one fee
for an
executive session held January 2006, which was not paid until May
2006.
|
(4) |
The
Deputy Chairman and lead director receives a quarterly cash retainer
of
$10,000.
|
(5) |
Each
non-chair member of a Board of Director’s committee receives a quarterly
cash retainer of $3,000.
|
(6) |
The
Compensation Committee Chairman receives a quarterly cash retainer
of
$5,000.
|
(7) |
The
Audit Committee Chairman receives a quarterly cash retainer of
$10,000.
|
In
addition to the amounts shown above, non-employee board members received
reimbursement for travel and lodging expenses incurred while attending Board
meetings and Board-related activities, such as visits to Company
locations.
The
following table provides information on the outstanding equity awards at fiscal
year-end 2007 for non-employee Directors.
Outstanding
Equity Awards for Directors at Fiscal Year-End 2007
|
|
|
|
Option
Awards
|
|
Name
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Option
Exercise
Price
($)/Sh
|
|
|
Option
Expiration
Date
|
|
Gary
B. Abromovitz
|
|
|
32,000
|
|
|
21.47
to 33.35
|
|
|
9/1/13
to 6/1/15
|
|
John
B. Butterworth
|
|
|
40,000
|
|
|
13.13
to 33.35
|
|
|
3/1/13
to 6/1/15
|
|
Timothy
F. Meeker
|
|
|
16,000
|
|
|
23.13
to 28.33
|
|
|
9/1/14
to 6/1/15
|
|
Byron
H. Rubin
|
|
|
32,000
|
|
|
21.47
to 33.35
|
|
|
9/1/13
to 6/1/15
|
|
Stanlee
N. Rubin
|
|
|
124,000
|
|
|
4.41
to 33.35
|
|
|
8/26/07
to 6/1/15
|
|
Adolpho
R. Telles
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Darren
G. Woody
|
|
|
16,000
|
|
|
23.13
to 28.33
|
|
|
9/1/14
to 6/1/15
|
|
All
options were issued in connection with the Company’s 1995 Non-Employee Stock
Option Plan. Under the plan, all options were issued at a price equal to the
fair market value of the Common Stock at the date of grant, vested one year
from
the date granted, and expire ten years after the options were granted.
Currently, all outstanding options under the plan are vested. This stock option
plan expired by its terms on June 6, 2005. Therefore, no additional options
have
been granted since that date.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth as of May 22, 2007, the beneficial ownership of
the
Common Stock of the 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
|
|
|
Number
of
Common
Shares
Beneficially
Owned
|
|
|
|
Percent
*
|
|
Gerald
J. Rubin
|
|
|
7,569,922
|
(1)(2) |
|
|
20.61
|
%
|
Stanlee
N. Rubin
|
|
|
|
|
|
|
|
|
One
Helen of Troy Plaza
|
|
|
|
|
|
|
|
|
El
Paso, Texas 79912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
J. Benson
|
|
|
60,848
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
Byron
H. Rubin
|
|
|
47,100
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
John
B. Butterworth
|
|
|
45,105
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
Gary
B. Abromovitz
|
|
|
34,000
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
Vincent
D. Carson
|
|
|
20,368
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
Darren
G. Woody
|
|
|
18,000
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
Timothy
F. Meeker
|
|
|
16,000
|
(2) |
|
|
**
|
|
|
|
|
|
|
|
|
|
|
Adolpho
R. Telles
|
|
|
-
|
|
|
|
**
|
|
|
|
|
|
|
|
|
|
|
All
directors and executive officers as a group (10 Persons)
|
|
|
7,811,343
|
|
|
|
21.27
|
%
|
|
|
|
|
|
|
|
|
|
FMR
Corp.
|
|
|
3,907,955
|
(3) |
|
|
10.64
|
%
|
82
Devonshire Street
|
|
|
|
|
|
|
|
|
Boston,
Massachusetts 02109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia
Wanger Asset Management, LP
|
|
|
1,920,000
|
(4) |
|
|
5.23
|
%
|
227
W. Monroe Street Suite 3000
|
|
|
|
|
|
|
|
|
Chicago,
Illinois 60606
|
|
|
|
|
|
|
|
|
* |
Percent
ownership is calculated based on 30,315,906 shares of the Company's
Common
Stock outstanding on May 22, 2007 and 6,417,381 stock options held
by all
grantees exercisable within 60 days of May 22,
2007.
|
** |
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
22, 2007 as follows:
|
Name
of Beneficial Owner
|
|
Options
(#)
|
|
Gerald
J. Rubin
|
|
|
5,625,000
|
|
Stanlee
N. Rubin
|
|
|
124,000
|
|
Thomas
J. Benson
|
|
|
57,633
|
|
John
B. Butterworth
|
|
|
40,000
|
|
Gary
B. Abromovitz
|
|
|
32,000
|
|
Byron
H. Rubin
|
|
|
32,000
|
|
Vincent
D. Carson
|
|
|
18,900
|
|
Daren
G. Woody
|
|
|
16,000
|
|
Timothy
F. Meeker
|
|
|
16,000
|
|
Total
|
|
|
5,961,533
|
|
(3) |
Based
on the Schedule 13G/A filed on February 14, 2007, and Form 13F filed
on
March 31, 2007. According to those filings, FMR Corp. has sole dispositive
power for 3,907,955 shares and shared voting power for 161,500 shares.
|
(4) |
Based
on the Schedule 13G filed on January 12, 2007, and Form 13F filed
on March
31, 2007. According to those filings, Columbia Wanger Asset Management,
LP
has shared dispositive power for 1,920,000 shares and shared voting
power
for 1,800,000 shares.
|
EXECUTIVE
OFFICERS
The
executive officers of the Company are Gerald J. Rubin, Thomas J. Benson and
Vincent D. Carson. Mr. Rubin is also a Director of the Company and his biography
is included above under “Proposal 1: Election of Directors.”
THOMAS
J. BENSON,
age 49,
has been Senior Vice President 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 47,
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.
REPORT
OF THE COMPENSATION COMMITTEE
The
Compensation Committee of the Board of Directors of the Company ("the
Compensation Committee") has reviewed and discussed with management the
Compensation Discussion and Analysis for the fiscal year ended February 28,
2007
to be included in the proxy statement for the Company's annual general meeting
of shareholders filed pursuant to Section 14(a) of the Securities Exchange
Act
of 1934. Based on its review and discussion referred to above, the Compensation
Committee recommended to the Board of Directors that the Compensation Discussion
and Analysis be included in the proxy statement for the Company's 2007 annual
general meeting of shareholders and incorporated by reference in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission
for
the fiscal year ended February 28, 2007.
Members
of the Compensation Committee:
Gary
B.
Abromovitz, Chairman
Darren
G.
Woody
Timothy
F. Meeker
COMPENSATION
DISCUSSION AND ANALYSIS
Throughout
this proxy statement, the following individuals are collectively referred to
as
the "named executive officers:"
· |
Gerald
J. Rubin, Chairman of the Board of Directors, Chief Executive Officer,
and
President;
|
· |
Thomas
J. Benson, Senior Vice President and Chief Financial
Officer;
|
· |
Vincent
D. Carson, Vice President and General Counsel;
and
|
· |
Christopher
L. Carameros, Executive Vice President (through August 31,
2006).
|
Oversight
of Our Executive Compensation Program
The
Compensation Committee oversees the compensation of our named executive officers
and is composed entirely of independent Directors as
defined under the listing standards of NASDAQ. The
Compensation Committee is responsible for reviewing, approving and evaluating
the Chief Executive Officer's performance in light of the goals and objectives
of the Company. It also makes compensation recommendations with respect to
our
other executive officers, including approval of awards for incentive
compensation and equity-based plans. The committee administers the 1997 Cash
Bonus Performance Plan (the "Bonus Plan"), in which the Chief Executive Officer
is currently the only participant. The Compensation Committee also administers
all of our stock-based and other incentive compensation plans. The committee
also assists the Board of Directors in developing succession planning for our
executive officers.
Objectives
of Our Compensation Program
Our
compensation program is designed to attract, motivate and retain key leaders
and
to align the long-term interests of the named executive officers with those
of
our shareholders. The philosophy the Compensation Committee uses to set
executive compensation levels and structures is based on the following
principles:
· |
compensation
for our executive officers should be strongly linked to
performance;
|
· |
a
higher percentage of compensation should be at risk and subject to
performance-based awards as an executive officer's range of responsibility
and ability to influence the Company's results
increase;
|
· |
compensation
should be competitive in relation to the marketplace;
and
|
· |
outstanding
achievement should be recognized.
|
The
Role of Executive Officers in Determining Executive
Compensation
The
Compensation Committee, working with the Board of Directors, evaluates and
approves all compensation recommendations made by the Chief Executive Officer
regarding our named executive officers (other than himself). The Chief Executive
Officer makes recommendations to the Compensation Committee regarding salaries,
bonuses and equity awards for the other named executive officers and is required
to annually review our executive compensation program for the named executive
officers (other than himself). In making its decisions and any recommendations
to the Board of Directors regarding the compensation of the named executive
officers, the committee considers the Chief Executive Officer's evaluations
of
their performance and his recommendations regarding their compensation. In
deliberations or approvals regarding the compensation of the other named
executive officers, the committee may elect to invite the Chief Executive
Officer to be present but not vote. In any deliberations or approvals of the
committee regarding the Chief Executive Officer's compensation, the Chief
Executive Officer is not invited to be present.
Compensation
Consultant
The
Compensation Committee has the authority to hire compensation, accounting,
legal
or other advisors. In connection with any such hiring, the committee can
determine the scope of the consultant's assignments and their fees. The
Compensation Committee has retained an outside compensation consultant from
time
to time to advise the committee on compensation decisions regarding our Chief
Executive Officer and other compensation matters. While the Compensation
Committee did not retain an outside compensation consultant in fiscal 2007,
the
committee may retain a consultant in the future to provide the committee with
data regarding compensation trends, to assist the committee in the preparation
of market surveys or tally sheets or to otherwise help it evaluate compensation
decisions.
Our
Compensation Program for Our Chief Executive Officer
Mr.
Rubin
is the founder of the Company, and he served as President of the Company prior
to our initial public offering in 1971. Mr. Rubin served as President, Chief
Executive Officer, and Chairman of the Board of Directors from 1971 to 1984,
and
from 1984 to June 2000, he served as Chief Executive Officer and Chairman of
the
Board of Directors. Since June 2000, Mr. Rubin has served as Chief Executive
Officer, Chairman of the Board of Directors, and President of the Company.
Mr.
Rubin sets the overall strategic vision for our Company, and oversees the senior
management team and the Company’s growth and acquisition strategy. In making
discretionary compensation decisions regarding Mr. Rubin, the Compensation
Committee considers Mr. Rubin's leadership of the Company and his contributions
to increasing shareholder value.
Mr.
Rubin's compensation is governed by an employment agreement, which presently
has
a term of three years and renews on a daily basis. Since this agreement largely
dictates the terms of Mr. Rubin's compensation, decisions regarding his
compensation, other than discretionary compensation, are limited by the terms
of
the agreement. In 2005, the Company and Mr. Rubin entered into an amendment
to
Mr. Rubin's employment agreement reducing his employment term from five years
to
three years. The Compensation Committee determined that the term reduction
was
in the best interests of our shareholders in order to effectively eliminate
the
tax "gross-up" provision that otherwise would have been triggered in the event
of a change in control of the Company. By reducing the term of the employment
agreement, the amendment also effectively reduced Mr. Rubin's total change
of
control compensation. For a more detailed discussion of the terms of Mr. Rubin's
employment agreement, see "Employment
Contract for Chairman of the Board, Chief Executive Officer and
President."
A
significant portion of Mr. Rubin's total compensation is performance-based
and
tied to the profitability of the Company. Mr. Rubin is presently the sole
participant in the Bonus Plan, which provides for cash bonuses based on the
Company's achievement of pre-tax earnings. The Bonus Plan and the performance
targets for the Chief Executive Officer under the Bonus Plan were originally
approved by the shareholders of the Company at our 1997 annual general meeting.
The Bonus Plan was last amended in 2003 to change the performance targets from
a
fixed percentage of pre-tax earnings to a graduated percentage of pre-tax
earnings. The revised earnings formula under the Bonus Plan constitutes a
performance goal under Section 162(m) of the Code. The shareholders approved
the
amendment to the Bonus Plan at the 2003 annual general meeting of shareholders.
In connection with this amendment, Mr. Rubin agreed to a reduction in the number
of stock options he would otherwise have been entitled to receive under his
employment agreement. Since fiscal 2004, Mr. Rubin has received no stock options
or other equity awards.
Elements
of Our Compensation Program for Our Chief Executive Officer
The
principal current components of compensation for our Chief Executive Officer
are:
· |
Bonuses,
including performance-based incentive
bonuses;
|
· |
Perquisites
and other personal benefits; and
|
· |
Post-termination
benefits, including change of control triggers and
benefits.
|
In
the
past, the Company has included grants of stock options in the total compensation
package of our Chief Executive Officer. Mr. Rubin currently holds options
exercisable for an aggregate of 5,625,000 shares that he received under these
prior grants. These options are fully vested as of the end of fiscal year 2007.
See "Outstanding Equity Awards At Fiscal Year-End 2007." Currently, Mr. Rubin
is
not eligible to receive grants of stock options under the Company’s 1998 Stock
Option and Restricted Stock Plan, as amended. Mr. Rubin has received no stock
options or other equity awards since fiscal 2004.
The
Compensation Committee reviews total compensation for the Chief Executive
Officer annually and evaluates his performance and makes compensation
comparisons of chief executives of companies in similar business segments
throughout the year. Each year, the Compensation Committee also certifies that
the amount of any bonus payments under the Bonus Plan has been accurately
determined and that the performance targets and any other material terms
previously established by the Compensation Committee were in fact satisfied.
The
Compensation Committee believes that performance-based cash compensation that
is
directly related to the profitability of the Company should constitute a
substantial portion of our Chief Executive Officer's total compensation.
As
a
result, the Chief Executive Officer's base salary has historically represented
a
comparatively small percentage of the Chief Executive Officer's total
compensation. In addition, the Chief Executive Officer's base salary is deducted
from his performance-based incentive bonus when computing his total annual
cash
compensation.
Base
Salary of Our Chief Executive Officer
We
provide our named executive officers and other employees with a base salary
to
provide a fixed amount of compensation for regular services rendered during
the
fiscal year. Mr. Rubin's employment agreement sets his base salary at $600,000
per year. His salary has remained at this level since 1999, with no increases
for inflation or cost of living adjustments. The Compensation Committee has
not
sought to increase Mr. Rubin's salary because it believes that the majority
of
our Chief Executive Officer's compensation should primarily be attributed to
the
profitability of the Company.
Based
on its review of companies comparable to the Company and past discussions with
a
compensation consultant, the
Compensation Committee believes that Mr. Rubin's base salary is below the median
range for chief executive officers of similarly-situated companies.
Performance-Based
Incentive Bonuses for Our Chief Executive Officer
The
Compensation Committee believes that performance-based awards align our
executives' interests with our annual corporate goals. The Compensation
Committee recognizes that Mr. Rubin's base salary is below the median range
for
chief executive officers of similarly-situated companies. The Compensation
Committee believes, however, that
a
significant portion of "at risk" compensation at the Chief Executive Officer
level is
important to
the
success of the Company. Since
Mr.
Rubin presently does not receive equity awards under the Company's existing
equity incentive plan, the variable performance-based element of Mr. Rubin's
total compensation is his potential annual cash bonus under the Bonus Plan.
Under this plan, Mr. Rubin's total
compensation will fluctuate depending on the Company's financial performance.
Under
the
Bonus Plan, Mr. Rubin is entitled to receive an annual cash incentive bonus
based upon a graduated percentage ranging from 5% to 10% of the pre-tax annual
earnings of the Company. The potential bonus levels that Mr. Rubin is entitled
to receive, expressed as a percentage of the Company's "earnings" are shown
in
the table below. For purposes of the bonus calculation, "earnings" means the
sum
of the consolidated earnings from continuing operations before giving effect
to
Mr. Rubin’s bonus and 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 must be determined
in
accordance with United States generally accepted accounting principles.
Amount
Of Bonus Payable As
A Percent Of Earnings
|
|
|
Amount
Of Earnings Pre-Tax 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
|
|
|
|
|
Mr.
Rubin's incentive bonus is capped at $15,000,000 in any one fiscal year.
Further, the amount of his total incentive bonus is reduced by his base salary.
In addition to any bonus paid under the Bonus Plan, the Compensation Committee
has the authority to recommend to the Board of Directors that a discretionary
bonus be awarded to Mr. Rubin. The committee evaluates Mr. Rubin's performance
on an annual basis and reserves such discretionary bonus awards for
extraordinary performance or achievement. The committee did not approve a
discretionary bonus for the fiscal year ended February 28, 2007.
Perquisites
and Other Personal Benefits Provided to Our Chief Executive
Officer
The
Company provides our Chief Executive Officer with perquisites and other personal
benefits that the Compensation Committee believes are reasonable and consistent
with our overall compensation program. The Company is required to provide most
of these benefits pursuant to the terms of Mr. Rubin's employment agreement.
In
2004, the Compensation Committee, with Mr. Rubin's consent, eliminated the
Company's prior practice of making our corporate aircraft available for personal
use by executive officers. The perquisites provided to Mr. Rubin according
to
his employment agreement include the following:
Automobile.
We
provide Mr. Rubin with an automobile. All expenses of operating, maintaining,
and insuring the automobile are paid by the Company. Mr. Rubin is also entitled
to have a driver at company expense, but in fiscal 2007, he did not request
this
perquisite.
Legal
Assistance, Financial Planning, and Tax Return Preparation.
The
Company has agreed to pay for, or reimburse Mr. Rubin for, up to $10,000 per
year for expenses incurred in connection with his obtaining routine legal
assistance, financial planning and tax return preparation. In fiscal 2007,
Mr.
Rubin did not request this perquisite.
Medical
Care Reimbursement. Mr.
Rubin
is entitled to reimbursement for medical care for himself and his wife, to
the
extent those expenses are not reimbursed by insurance. In fiscal 2007, Mr.
Rubin
did not request this perquisite.
Disability
Insurance. The
Company provides Mr. Rubin with an individual disability insurance policy that
provides for a 360 day waiting period from the date on which Mr. Rubin may
become disabled, and pays a monthly benefit of $l4,038 thereafter. As long
as
Mr. Rubin remains employed by the Company and is paid the full compensation
specified in his employment agreement, any disability benefits payable to him
under this policy must be endorsed over to the Company. Mr.
Rubin
is also covered by our group disability insurance policy, which is generally
available to all our employees.
Life
Insurance.
Prior to
fiscal 2002, the Company paid premiums on an executive universal life insurance
policy on the life of Mr. Rubin in the initial insured amount of $5,000,000.
In
June 2000, the Company and Mr. Rubin entered into a split-dollar agreement,
pursuant to which the Company is entitled to reimbursement for all premiums
it
has paid on the policy out of any death benefits paid on the life of Mr. Rubin.
No premiums have been paid on the policy since fiscal 2002. As of February
28,
2007, the total aggregate death benefit of the policy was $5,399,127, the
aggregate cash surrender value of the policy was $399,127, and the aggregate
premiums paid by the Company since inception of the policy was $958,266.
Prior
to
July 2003, the Company had paid premiums for survivorship life insurance
policies on the lives of Mr. and Mrs. Rubin in the initial aggregate insured
amount of $29,000,000. The Company and a trust established for the benefit
of
Mr. and Mrs. Rubin, which was the owner of the life insurance policies (the
“Trust”), entered into a split dollar insurance agreement in 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 split dollar
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 Mr. and Mrs. Rubin, the Company shall receive the cash
surrender value of the policies, and the Trust shall receive the balance of
the
proceeds. The Company will also be entitled to the cash surrender value of
the
policies if the policies are cancelled. The Board of Directors decides annually
whether to pay annual premiums of up to $360,000 on the policies. In fiscal
2007, the Board of Directors elected to make a payment of $25,914 toward the
premiums on these policies and directed that the remainder of the premiums
be paid out of the accumulated cash surrender value. For
fiscal 2008, the
Board
of Directors decided to pay the entire premiums for these policies out of their
accumulated cash surrender value. As
of
February 28, 2007, the total aggregate death benefit of the policies was
$32,274,222, the aggregate cash surrender value of the policies was $5,248,465,
and the aggregate premiums paid by the Company since inception of the policies
was $4,345,914.
Mr.
Rubin's employment agreement also provides that the Company must pay or
reimburse Mr. Rubin for reasonable travel and other expenses incurred by him
in
performing his obligations under his employment agreement, including travel
expenses incurred by his spouse if she travels with him while he performs his
obligations under the employment agreement. Under the employment agreement,
the
Company will also reimburse Mr. Rubin for any taxes incurred by him with respect
to these payments. During fiscal 2007, their were no payments which resulted
in
reimbursable tax expense.
The
Company also provides other benefits to Mr. Rubin, such as a 401(k) plan, group
medical, group life and group dental insurance, as well as vacation and paid
holidays. These benefits are available to all our employees, including each
named executive officer, and we believe they are comparable to those provided
at
other companies.
Potential
Post-Termination
Benefits
Mr.
Rubin's employment agreement provides that the Company must make certain
payments to him if his employment is terminated as a result of a change in
control (as defined in the employment agreement). Under
Mr.
Rubin's employment agreement, he will receive the benefits provided under the
agreement if, after a change in control, his employment is terminated other
than
for cause (as defined in the agreement) or if he terminates his employment
after
certain actions (as specified in the agreement) that adversely affect him are
taken. Under the employment agreement, Mr. Rubin must remain employed with
the
Company for six months following
the
first potential change in control
to be
entitled to these benefits. These
benefits are more fully described under "Employment Contract for Chairman of
the
Board, Chief Executive Officer and President."
The
change in control provisions of Mr. Rubin's employment agreement are intended
to
ensure that we will retain the benefit of Mr. Rubin's services without
distraction in the face of a potential change in control and that Mr. Rubin
will
evaluate potential transactions on an objective basis. The Compensation
Committee believes the change in control provisions in Mr. Rubin's employment
agreement are reasonable and necessary considering the competitive conditions
of
the Company and its industry.
The
employment agreement also provides for the immediate vesting of all options
granted to Mr. Rubin if his employment is terminated by the Company without
"cause," if he terminates his employment for "good reason" or if his employment
is terminated for death or disability. As of the end of fiscal 2007, all of
Mr.
Rubin's options are fully vested.
Severance
The
employment agreement of the Chief Executive Officer provides that, if his
employment is terminated by the Company without "cause" or if he terminates
his
employment for "good reason" (as those terms are defined in his employment
agreement), then he will be entitled to, among other things, payment of an
amount equal to three years base salary plus three times the highest annual
bonus paid to him in the preceding three years. If such termination follows
a
change in control of the Company, Mr. Rubin will receive these amounts in one
lump sum payment. Otherwise he will receive his base salary in equal monthly
payments and his bonus annually after the close of each fiscal year for three
years. Our
Chief
Executive Officer would also be entitled to receive certain benefits following
a
termination of his employment by reason of death or disability. These benefits
are more fully described under "Employment Contract for Chairman of the Board,
Chief Executive Officer and President."
The
employment agreement also provides for the immediate vesting of all options
granted to Mr. Rubin if his employment is terminated by the Company without
"cause," if he terminates his employment for "good reason" or if his employment
is terminated for death or disability. As of the end of fiscal 2007, all of
Mr.
Rubin's options are fully vested.
The
Company's Compensation Program for Named Executive Officers Other Than Our
Chief
Executive Officer:
The
Company’s other named executive officers are not party to employment agreements.
As a result, their compensation is reviewed and determined by the Compensation
Committee on an annual basis.
The Compensation Committee may also review a named executive officer's
compensation if that executive officer is promoted or experiences a change
in
responsibilities.
Elements
of Our Compensation Program for Our Other Named Executive
Officers
The
principal components of compensation for named executive officers other than
our
Chief Executive Officer are:
· |
Bonuses,
including performance-based incentive
bonuses;
|
· |
Long-term
equity compensation; and
|
· |
Other
personal benefits.
|
The
Company has no pre-established policy or target for the allocation between
either cash and non-cash or short-term and long-term incentive compensation.
Rather, the Compensation Committee reviews the performance of the Company and
the individuals and determines the appropriate level and mix of compensation
elements.
Base
Salary of Our Other Named Executive Officers
The
Company provides our named executive officers with a base salary to provide
a
fixed amount of compensation for regular services rendered during the fiscal
year. In setting or increasing base salaries, the Compensation Committee
strongly considers the recommendations made by our Chief Executive Officer.
In
addition, the committee considers each
executive's job responsibilities, qualifications, experience, performance
history and
length of service with the Company and comparable
salaries
paid by our competitors.
Annual
Incentive Bonuses for Our Other Named Executive Officers
Performance-based
awards are intended to align executives' interests with our annual corporate
goals. Annual incentive bonuses take into account both individual and Company
performance, including the Company's earnings. While the amount of funds
available for distribution as bonuses varies with Company earnings, the actual
amount that may be distributed is subjectively determined each year considering
recommendations made by our Chief Executive Officer and reviewed by the
Compensation Committee.
Bonuses
are calculated as percentages of base salary, historically ranging from 20%
to
30% for named executive officers. Although incentive bonuses are primarily
based
on individual and corporate performance, in some circumstances the Compensation
Committee may provide additional discretionary bonus awards. The committee
believes that discretionary bonuses, where warranted, can be effective in
motivating, rewarding and retaining our executive officers.
Long
Term Equity Compensation for Our Other Named Executive Officers
The
Company grants equity awards to our named executive officers, other than our
Chief Executive Officer, and to key employees under our 1998 Stock Option and
Restricted Stock Plan (the "1998 Plan"). Equity-based compensation and ownership
give these individuals a continuing stake in the long-term success of the
Company, and the delayed vesting of stock options helps to encourage retention.
Since August 2005, Mr. Rubin and Mr. Carameros, who served as Executive Vice
President of the Company until August 31, 2006, have not been eligible to
receive grants under the 1998 Plan.
The
purposes of the 1998 Plan are to:
· |
offer
selected employees of the Company or its subsidiaries an equity ownership
interest in the financial success of the
Company;
|
·
|
provide
the Company an opportunity to attract and retain the best available
personnel for positions of substantial responsibility;
and
|
· |
encourage
equity participation in the Company by eligible participants.
|
The
1998
Plan is administered by the Compensation Committee as a long-term component
of
the Company’s compensation package. The number of equity awards granted to each
eligible named executive officer is made on a discretionary rather than formula
basis by the Compensation Committee with the recommendation of the Chief
Executive Officer. Historically, the Compensation Committee has only granted
stock options under the plan, but the committee may in the future elect to
grant
restricted stock.
According
to the terms of the 1998 Plan, any unvested options immediately vest upon death,
disability, or a change in control of the Company. In addition, if an
option holder's employment with the Company is terminated, any exercisable
options held by that employee may be exercised for a period of:
· |
for
both incentive stock options (“ISO’s”) and
nonstatutory options (“NSO’s”),
up
to twelve months if the termination of employment was due to the
employee's death or disability;
|
· |
for
ISO’s, up to ninety days, where the employee is terminated without
cause;
|
· |
for
NSO’s, up to six months, where the employee is terminated without cause;
or
|
· |
up
to thirty days, if the termination of employment was for any other
reason.
|
The
maximum number of shares the Compensation Committee may issue under the 1998
Plan in each fiscal year is 250,000 shares, but any shares of restricted stock
that may be granted under the plan will reduce the number of shares available
for grant by three shares for each share of restricted stock granted. In the
event that in any fiscal year less than 250,000 shares are granted, then the
amount of shares that can be granted in any future fiscal year will increase
by
the excess of 250,000 over the amount of shares actually granted in such year
until the excess number of shares have been granted. In addition, shares
available for grant as a result of cancellation or termination of previously
granted awards will also be available for grant in any fiscal year until such
shares have been granted. As of February 28, 2007, 478,886 shares remained
available for issuance under the 1998 Plan. For a more detailed discussion
of
the material terms of the 1998 Plan, see “Stock Option and Restricted Stock
Plan.”
We
also
maintain our 1998 Employee Stock Purchase Plan, which was approved by the
Company's shareholders at our 1998 annual general meeting. All employees are
eligible to participate in the plan, including the named executive officers.
Under the plan, employees are entitled to purchase shares of the Company's
Common Stock at a discount to market value. The purchase price is 85% of the
average of the highest and lowest sale prices of the Common Stock on NASDAQ
on
either the first day or last day of each option period, whichever is less.
As of
February 28, 2007, 307,386 shares remain available for issuance under the
Employee Stock Purchase Plan. For an additional discussion of the material
terms
of the Employee Stock Purchase Plan, see “Employee Stock Purchase
Plan.”
Other
Personal Benefits Provided for Our Other Named Executive
Officers
We
provide other benefits to the named executive officers, such as a 401(k) plan,
group medical, group disability, group life and group dental insurance, as
well
as vacation and paid holidays. These benefits are available to all our employees
and we believe they are comparable to those provided at other companies.
Option
Grant Practices
Grants
of
stock options are made without regard to anticipated earnings or other material
announcements by the Company. The
exercise price of stock options is the average of the highest and lowest sale
price of our common shares on NASDAQ on the date of the grant. The vesting
period of options for officers has historically been over a five year period
at
the graduated rate per year of 10%, 15%, 20%, 25%, and 30%. The Compensation
Committee believes that these vesting terms encourage retention of our executive
officers. The Compensation Committee may, however, adjust the vesting of options
as it deems necessary under the circumstances. In January 2007, our Board of
Directors determined that we would begin making any annual grants of stock
options to current officers and employees on the first business day following
the public announcement of the fiscal year-end financial results.
Former
Executive Vice President
Mr.
Carameros
served as Executive Vice President until his resignation on August 31,
2006.
While
he was serving as Executive
Vice President,
Mr.
Carameros
received a monthly base
salary of $50,000. Mr. Carameros did not receive a bonus for fiscal 2007.
Since
August 2005, Mr. Carameros has not been eligible to receive grants under the
1998 Plan. In
exchange for certain transitional services provided by Mr. Carameros to the
Company from the date of his resignation through February 28, 2007, L & M
Asset Management Inc., a privately-held company that holds certain of Mr.
Carameros' personal investments, was paid $300,000 in consulting fees and $6,740
to cover the cost of his Cobra health insurance.
Tax
Implications of Executive Compensation
Section
162(m) of the Code places a limit of $1,000,000 on the amount of compensation
that a company may deduct in any one year with respect to its principal
executive officer and each of its other three most highly paid executive
officers. There is an exception to the $1,000,000 limitation for
performance-based compensation that meets certain requirements. Annual cash
incentive compensation and stock option awards are generally performance-based
compensation that meets those requirements and, as such, are fully deductible.
Incentive
cash bonus payments to our Chief Executive Officer under the Bonus Plan and
grants of stock options to our other named executive officers under our 1998
Plan are intended to comply with Section 162(m) for treatment as
performance-based compensation. Therefore, we expect to deduct compensation
of
the Chief Executive Officer and our other named executive officers related
to
compensation under each of these plans.
The
Compensation Committee has considered and will continue to consider tax
deductibility in structuring compensation arrangements. However, the
Compensation Committee retains discretion to establish executive compensation
arrangements that it believes are consistent with the principles described
earlier and in the best interests of our Company and its shareholders, even
if
those arrangements may not be fully deductible under Section
162(m).
EXECUTIVE
COMPENSATION
The
following table sets forth the summary of compensation earned during fiscal
2005
through 2007 by the Company's Chief Executive Officer and its other named
executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
and principal position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)(1)
|
|
Option
Awards
($)(2)
|
|
All
Other Compensation ($)(3)
|
|
Total
($)
|
|
Gerald
J. Rubin
|
|
|
2007
|
|
|
600,000
|
|
|
4,110,639
|
|
|
-
|
|
|
60,916
|
|
|
4,771,555
|
|
Chairman,
Chief Executive
|
|
|
2006
|
|
|
600,000
|
|
|
4,140,229
|
|
|
-
|
|
|
57,811
|
|
|
4,798,040
|
|
Officer,
and President
|
|
|
2005
|
|
|
600,000
|
|
|
9,320,685
|
|
|
-
|
|
|
73,203
|
|
|
9,993,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
J. Benson
|
|
|
2007
|
|
|
315,000
|
|
|
84,808
|
|
|
20,916
|
|
|
7,192
|
|
|
427,916
|
|
Senior
Vice President
|
|
|
2006
|
|
|
290,000
|
|
|
105,481
|
|
|
-
|
|
|
6,930
|
|
|
402,411
|
|
and
Chief Financial Officer
|
|
|
2005
|
|
|
267,500
|
|
|
109,615
|
|
|
-
|
|
|
6,780
|
|
|
383,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent
D. Carson
|
|
|
2007
|
|
|
191,000
|
|
|
3,673
|
|
|
17,306
|
|
|
6,239
|
|
|
218,218
|
|
Vice
President and
|
|
|
2006
|
|
|
191,000
|
|
|
41,873
|
|
|
-
|
|
|
6,327
|
|
|
239,200
|
|
General
Counsel
|
|
|
2005
|
|
|
191,000
|
|
|
45,546
|
|
|
-
|
|
|
6,114
|
|
|
242,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher
L. Carameros (4)
|
|
|
2007
|
|
|
300,000
|
|
|
-
|
|
|
4,222
|
|
|
307,079
|
|
|
611,301
|
|
Former
Executive Vice-President
|
|
|
2006
|
|
|
600,000
|
|
|
500,000
|
|
|
-
|
|
|
7,266
|
|
|
1,107,266
|
|
|
|
|
2005
|
|
|
600,000
|
|
|
750,000
|
|
|
-
|
|
|
7,116
|
|
|
1,357,116
|
|
(1) |
Mr.
Rubin’s bonuses were calculated and awarded pursuant to the Company’s 1997
Cash Bonus Performance Plan, as amended and approved by the shareholders
in August 2003.
|
(2) |
These
amounts reflect the expense of equity awards recognized in our fiscal
2007
financial statement reporting of two share-based compensation plans:
a
stock option and restricted stock plan adopted in fiscal 1998, as
amended,
and an employee stock purchase plan adopted in fiscal 1999. The expense
recognized for financial statement reporting was determined in accordance
with Statement of Financial Accounting Standards No. 123(R), and
includes
amounts from awards granted prior to fiscal 2007. Assumptions used
in the
calculation of these amounts are discussed in Note (9) to the Company’s
audited financial statements for the fiscal year ended February 28,
2007,
included in the Company’s Annual Report on Form 10-K for the year then
ended, filed with the SEC on May 14,
2007.
|
(3) |
This
column reports all other compensation for the covered fiscal year
that the
Company could not properly report in any other column of the Summary
Compensation Table. Details of amounts in this column are provided
in the
table entitled “All Other Compensation for Fiscal Year 2007” set forth
below.
|
(4) |
Mr.
Carameros served as Executive Vice
President
until August 31, 2006, the effective date of his resignation from
the
Company.
|
In
fiscal
2007, the following compensation was paid to our named executive officers,
which
comprises “All Other Compensation:”
All
Other Compensation for Fiscal Year 2007 |
|
Name
|
|
|
|
Cobra
Benefit Paid ($)(1)
|
|
401(k)
Plan
($)
|
|
Group
Life Insurance
($)
|
|
Disability
Insurance
($)
|
|
Auto
Lease
($)
|
|
Life
Insurance Benefit
($)(2)
|
|
Total
($)
|
|
Gerald
J. Rubin
|
|
|
|
|
|
|
|
|
6,600
|
|
|
2,360
|
|
|
5,798
|
|
|
16,297
|
|
|
29,861
|
|
|
60,916
|
|
Thomas
J. Benson
|
|
|
|
|
|
|
|
|
6,600
|
|
|
592
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,192
|
|
Vincent
D. Carson
|
|
|
|
|
|
|
|
|
5,730
|
|
|
509
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,239
|
|
Christopher
L. Carameros
|
|
|
300,000
|
|
|
6,740
|
|
|
-
|
|
|
339
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
307,079
|
|
(1) |
Mr.
Carameros served as Executive Vice
President
until August 31, 2006, the effective date of his resignation from
the
Company. In exchange for certain transitional services provided to
the
Company through February 28, 2007, L & M Asset Management Inc., a
privately-held company that holds certain of Mr. Carameros' personal
investments, was paid $300,000 in consulting fees and $6,740 to cover
the
cost of his Cobra health insurance
benefits.
|
(2) |
Includes
amounts attributable to the economic benefit received for executive
and
survivorship life insurance policies. The economic benefit of such
policies totaled $29,861 in fiscal 2007. In fiscal 2007, the Board
of
Directors elected to make a payment of $25,914 toward the premiums
on
these policies and directed that the remainder of the premiums
be paid out of the accumulated cash surrender value of the policies
(which
the Company owns). See “Certain Relationships and Related
Transactions.”
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END 2007
Outstanding
Equity Awards at Fiscal Year-End 2007
|
|
|
|
Option
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexerciseable
|
|
Option
Exercise
Price
($)
|
|
Expiration
Date
(1)
|
|
Gerald
J. Rubin (2)
|
|
|
1,000,000
|
|
|
|
-
|
|
|
15.94
|
|
|
8/26/07
|
|
|
|
|
500,000
|
|
|
|
-
|
|
|
17.63
|
|
|
1/29/09
|
|
|
|
|
500,000
|
|
|
|
-
|
|
|
13.47
|
|
|
2/26/09
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
15.78
|
|
|
5/28/09
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
14.47
|
|
|
8/31/09
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
10.63
|
|
|
11/30/09
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
7.09
|
|
|
3/1/10
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
9.17
|
|
|
5/31/11
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
12.53
|
|
|
8/31/11
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
10.75
|
|
|
11/30/11
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
12.63
|
|
|
2/28/12
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
13.03
|
|
|
5/31/12
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
11.84
|
|
|
8/31/12
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
10.08
|
|
|
11/30/12
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
13.13
|
|
|
2/28/13
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
14.94
|
|
|
5/31/13
|
|
|
|
|
250,000
|
|
|
|
-
|
|
|
21.47
|
|
|
8/31/13
|
|
|
|
|
125,000
|
|
|
|
-
|
|
|
22.81
|
|
|
11/30/13
|
|
Thomas
J. Benson
|
|
|
56,883
|
(3)
|
|
|
-
|
|
|
21.21
|
|
|
8/22/13
|
|
|
|
|
750
|
|
|
|
6,750
|
|
|
18.00
|
|
|
11/25/15
|
|
Vincent
D. Carson
|
|
|
10,000
|
|
|
|
-
|
|
|
10.71
|
|
|
11/1/11
|
|
|
|
|
3,500
|
|
|
|
1,500
|
|
|
14.02
|
|
|
11/1/12
|
|
|
|
|
5,000
|
(4)
|
|
|
-
|
|
|
23.38
|
|
|
12/1/13
|
|
|
|
|
400
|
|
|
|
3,600
|
|
|
18.00
|
|
|
11/25/15
|
|
(1)
|
All
options listed in this table have a ten year term from the date
of
grant.
|
(2) |
Mr.
Rubin’s stock options are 100%
vested.
|
(3) |
Mr.
Benson’s options were granted with original vesting terms
over a five year period at the graduated rate per year of 10%,
15%, 20%,
25%, and 30%. However on February 24, 2006, 31,285 shares, then
unvested,
having an exercise price of $21.21 became 100% vested as discussed
further
below.
|
(4) |
Mr.
Carson’s options were granted with original vesting terms
over a five year period at the graduated rate per year of 10%,
15%, 20%,
25%, and 30%. However on February 24, 2006, 2,750 shares, then
unvested,
having an exercise price of $23.38 became 100% vested as discussed
further
below.
|
On
February 24, 2006, the Compensation Committee of the Company’s Board of
Directors approved the immediate acceleration of vesting on 285,217 of unvested
and "out-of-the-money" stock options previously awarded to officers and
employees with option exercise prices greater than $19.65 per share (the
closing
price per share of the Company’s Common Stock on NASDAQ on that date), including
certain options issued to Mr. Benson and Mr. Carson as discussed above. Except
for the acceleration of vesting, all such affected stock options continued
to be
governed by their respective original terms and conditions. The Company took
this action in order to reduce the future compensation expense associated
with
unvested stock options following the adoption of SFAS No.123(R) beginning
with
the first quarter of fiscal 2007.
OPTION
EXERCISES IN FISCAL YEAR 2007
Option
Exercises in Fiscal Year 2007
|
|
|
|
Option
Awards
|
|
Name
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
Value Realized
on
Exercise
($)
|
|
Gerald
J. Rubin
|
|
|
-
|
|
|
-
|
|
Thomas
J. Benson
|
|
|
-
|
|
|
-
|
|
Vincent
D. Carson
|
|
|
-
|
|
|
-
|
|
Christopher
L. Carameros (1)
|
|
|
134,586
|
|
|
1,083,949
|
|
(1)
Mr.
Carameros served as Executive Vice
President
until
August 31, 2006, the effective date of his resignation from the Company.
EMPLOYMENT
CONTRACT FOR CHAIRMAN OF THE BOARD,
CHIEF
EXECUTIVE OFFICER AND PRESIDENT
Under
Mr.
Rubin's employment agreement, Mr. Rubin serves as the Company’s Chief Executive
Officer. The term of Mr. Rubin's employment agreement is three years and
automatically renews daily for a three-year term. Mr. Rubin receives an annual
base salary of $600,000 and is eligible to receive 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 2003. 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 Pre-Tax 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 giving
effect to Mr. Rubin’s bonus and 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 2007, Mr. Rubin received an annual cash bonus
of
$4,110,639.
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 remainder of
fiscal
2005 to reward selected members of the Company’s management and certain new
management hires with an equity ownership interest in the Company. In connection
with the amendment to our
1998
Stock Option and Restricted Stock Plan approved by our shareholders at our
2005
annual general meeting, the plan was amended to increase the amount available
under the plan by 750,000 shares of Common Stock and to provide that Mr.
Rubin
was not entitled to receive grants of any additional options under the plan.
Mr.
Rubin received no stock options in fiscal years 2007, 2006 and 2005 and there
are no stock options currently available to him under the Company's stock
option
plans.
Mr.
Rubin's employment agreement also provides that the Company must pay or
reimburse Mr. Rubin for reasonable travel and other expenses incurred by
him in
performing his obligations under his employment agreement, including travel
expenses incurred by his spouse if she travels with him while he performs
his
obligations under the employment agreement. Under the employment agreement,
the
Company will also reimburse Mr. Rubin for any taxes incurred by him with
respect
to these payments.
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.
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 Code.
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 agreement. At February 28, 2007, 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 agreement 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 his employment agreement
are payable to his estate. Mr. Rubin’s employment agreement 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.
Stock
Option and Restricted Stock Plan
The
1998 Stock
Option and Restricted Stock Plan (“1998 Plan”) was approved by the Company's
shareholders at the 1998 annual general meeting. The purpose of the 1998
Plan is
(1) to offer selected employees of the Company or its subsidiaries an equity
ownership interest in the financial success of the Company, (2) to provide
the
Company an opportunity to attract and retain the best available personnel
for
positions of substantial responsibility and (3) to encourage equity
participation in the Company by eligible participants.
The
Compensation Committee administers the 1998 Plan. Under the 1998 Plan, the
Compensation Committee may grant incentive stock options, non-qualified options
and restricted stock to our named executive officers, other than our Chief
Executive Officer, and to other employees. The number and the nature of equity
awards granted to each eligible employee is made on a discretionary rather
than
formula basis by the Compensation Committee with the recommendation of the
Chief
Executive Officer. The exercise price for any option granted under the 1998
Plan
is at a price as the committee may determine, but cannot be less than
the
average of the highest and lowest sale price of our Common Stock on NASDAQ
on
the date of the grant. Any
award
granted under the 1998 Plan is exercisable or vests at such times, under
such
conditions and in such amounts and during such period or periods as the
Compensation Committee determines on the date the award is granted.
The
maximum number of shares the Compensation Committee may issue under the 1998
Plan in each fiscal year is 250,000 shares, but any shares of restricted
stock
that may be granted under the plan will reduce the number of shares available
for grant by three shares for each share of restricted stock granted. In
the
event that in any fiscal year less than 250,000 shares are granted, then
the
amount of shares that can be granted in any future fiscal year is increased
by
the excess of 250,000 over the amount of shares actually granted in such
year
until the excess number of shares have been granted. In addition, shares
available for grant as a result of cancellation or termination of previously
granted awards shall also be available for grant in any fiscal year until
such
shares have been granted. Historically, the Compensation Committee has only
granted stock options under the plan, but the committee may in the future
elect
to grant restricted stock. As of February 28, 2007, 478,886 shares remain
available for issuance under the 1998 Plan. The 1998 Plan terminates in August
2008.
Recipients
of stock option awards may exercise their options at any time after they
vest
and before they expire, except that no awards may be exercised after ten
years
from the date of grant. Awards are generally not transferable by the recipient
during the recipient's life. Awards granted under the plan are evidenced
by
either an agreement that is signed by us and the recipient or a confirming
memorandum issued by us to the recipient setting forth the terms and conditions
of the awards. Award recipients and beneficiaries of award recipients have
no
right, title or interest in or to any shares subject to any award or to any
rights as a shareholder, unless and until shares are actually issued to the
recipient.
According
to the terms of the 1998 Plan, any unvested options immediately vest upon
death,
disability, or a change in control (as defined in the 1998 Plan) of the Company.
In addition, if a participant's employment with the Company is terminated,
any
exercisable options held by that employee may be exercised for a period
of:
· |
for
both incentive stock options (“ISO’s”) and
nonstatutory options (“NSO’s”),
up
to twelve months if the termination of employment was due to the
employee's death or disability;
|
· |
for
ISO’s, up to ninety days, where the employee is terminated without
cause;
|
· |
for
NSO’s, up to six months, where the employee is terminated without cause;
or
|
· |
up
to thirty days, if the termination of employment was for any other
reason.
|
The
1998
Plan requires participants to comply with specified confidentiality and
non-competition provisions. If the participant violates these provisions,
then
the participant may be required to forfeit his or her rights and benefits
under
the 1998 Plan, return to the Company any unexercised options, forfeit the
rights
under any awards of restricted stock and return any shares held by the
participant received upon exercise of any option or the lapse of restrictions
relating to restricted stock.
Employee
Stock Purchase Plan
Our
1998
Employee Stock Purchase Plan (the “Stock Purchase Plan”) was approved by the
Company's shareholders at the 1998 annual general meeting. It is the intention
of the Company that this plan qualify as an "Employee Stock Purchase Plan"
under
Section 423 of the Code.
The
Stock
Purchase Plan allows full-time employees of the Company or certain of its
subsidiaries to purchase shares of Common Stock with accumulated payroll
deductions. Employees may authorize payroll deductions of up to 15% of their
compensation, which is accumulated over an option period and then used to
purchase Common Stock. Option periods end in July and January of each fiscal
year. The purchase price is 85% of the average of the highest and lowest
sale
prices of the Common Stock on NASDAQ on either the first day or last day
of each
option period, whichever is less. Employees may suspend or discontinue their
participation in the plan at any time.
As
of
February 28, 2007, 307,386 shares remain available for issuance under the
Stock
Purchase Plan. The Stock Purchase Plan terminates in July 2008.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The
information below describes certain compensation that would be paid under
Mr.
Rubin’s employment agreement in the event of a termination of his employment
with the Company and/or change in control of the Company. The amounts shown
in
the table below assume that such a termination of employment and/or change
in
control occurred on February 28, 2007 and thus includes amounts earned through
such time and are estimates of the amounts which would be paid out to Mr.
Rubin
upon his termination and/or a change in control (based upon his compensation
and
service levels as of such date and the closing price of the Common Stock
on
February 28, 2007 of $23.16). The actual amounts to be paid out can only
be
determined at the time of a change in control and/or termination of employment
with the Company. For further information regarding the terms of Mr. Rubin’s
employment agreement, see "Employment Contract for Chairman of the Board,
Chief
Executive Officer and President."
Chief
Executive Officer - Gerald J. Rubin
|
|
|
|
|
|
Triggering
Event
|
Compensation
Component
|
Payout($)
|
|
|
|
|
Death
|
|
$5,000,000
life insurance benefit
|
4,440,861
|
|
|
Any
accrued payroll to date of death (1)
|
-
|
|
|
Any
accrued incentive compensation prorated to date of death (2)
|
4,110,639
|
|
|
Medical
benefits for Mr. Rubin's Spouse for her life (3)
|
291,452
|
|
Total
|
8,842,952
|
|
|
|
|
Disability
(9)
|
|
Short-term
and long-term disability benefits (4)
|
11,596
|
|
|
Any
accrued payroll to date of termination (1)
|
-
|
|
|
Any
accrued incentive compensation prorated to date of termination
(2)
|
4,110,639
|
|
|
Company
payment of premiums on $5,000,000 life insurance policy (5)
|
528,118
|
|
|
Medical
benefits for Mr. Rubin and his spouse for life (6)
|
460,091
|
|
|
Continued
participation in employee benefit plans in which Mr. Rubin
|
|
|
|
was
participating through the end of the fiscal year of termination,
|
|
|
|
or
payment of the after-tax economic equivalent of any such plans
(7)
|
4,615
|
|
Total
|
5,115,059
|
|
|
|
Termination
With Cause (9)
|
|
Any
accrued payroll to date of termination (1)
|
-
|
|
|
Any
accrued incentive compensation prorated to date of termination
(2)
|
4,110,639
|
|
Total
|
4,110,639
|
|
|
|
Voluntary
Termination (9)
|
|
Any
accrued payroll to date of termination (1)
|
-
|
|
|
Any
accrued incentive compensation prorated to date of termination
(2)
|
4,110,639
|
|
|
Medical
benefits for Mr. Rubin and his spouse for life (6)
|
460,091
|
|
Total
|
4,570,730
|
Chief
Executive Officer - Gerald J. Rubin (Continued)
|
|
|
|
|
|
Triggering
Event
|
Compensation
Component
|
Payout($)
|
|
|
|
|
Termination
Without Cause
|
|
Three
years of annual base salary, paid monthly
|
1,800,000
|
by
the Company or For Good
|
|
Three
years of annual incentive compensation and cash bonuses,
|
|
Reason
by the Employee (9)
|
|
as
computed per existing agreement, but never less than the
|
|
|
|
highest
annual incentive compensation and cash bonus paid
|
|
|
|
in
the latest three fiscal years prior to termination, paid annually
|
|
|
|
after
the close of each fiscal year, at a date consistent with previous
|
|
|
|
year's
payments (usually 75 days after year-end)
|
27,962,055
|
|
|
Any
accrued payroll to date of termination (1)
|
-
|
|
|
Any
accrued incentive compensation prorated to date of termination
(2)
|
4,110,639
|
|
|
Company
payment of premiums on $5,000,000 life insurance policy (5)
|
528,118
|
|
|
Medical
benefits for Mr. Rubin and his spouse for life (6)
|
460,091
|
|
|
Continued
participation in employee benefit plans in which Mr. Rubin
|
|
|
|
was
participating through the earlier of three years from the date
of
|
|
|
|
termination,
or on the date he receives equivalent benefits under
|
|
|
|
similar
plans provided by a subsequent employer; or payment of
|
|
|
|
the
after-tax economic equivalent of any such plans (8)
|
30,462
|
|
Total
|
34,891,365
|
|
|
|
Change
in Control -
|
|
Three
years of annual base salary, paid as a lump sum (computed on
|
|
Termination
Without
|
|
the
present value basis defined by the terms of the agreement).
|
1,643,487
|
Cause
by the Company
|
|
Three
years of annual incentive compensation and cash bonuses,
|
|
or
Constructive
|
|
computed
using the highest annual incentive compensation and
|
|
Termination
(9)
|
|
cash
bonus paid in the latest three fiscal years prior to termination,
|
|
|
|
paid
as a lump sum (computed on the present value basis defined
|
|
|
|
by
the terms of the agreement).
|
25,530,701
|
|
|
Any
accrued payroll to date of termination (1)
|
-
|
|
|
Any
accrued incentive compensation prorated to date of termination
(2)
|
4,110,639
|
|
|
Company
payment of premiums on $5,000,000 life insurance policy (5)
|
528,118
|
|
|
Medical
benefits for Mr. Rubin and his spouse for life (6)
|
460,091
|
|
|
Continued
participation in employee benefit plans in which Mr. Rubin
|
|
|
|
was
participating through the earlier of three years from the date
of
|
|
|
|
termination,
or on the date he receives equivalent benefits under
|
|
|
|
similar
plans provided by a subsequent employer; or payment of
|
|
|
|
the
after-tax economic equivalent of any such plans (8)
|
30,462
|
|
Total
|
32,303,498
|
(1) |
Accrued
wages due were estimated using actual amounts that would have
been payable
had termination occurred at February 28,
2007.
|
(2) |
Accrued
incentive compensation due used actual amounts that would have
been
payable had termination occurred at February 28, 2007. The amount
due is
the annual cash bonus for fiscal 2007, which would normally be
paid in May
of the following fiscal year.
|
(3) |
Medical
benefits were estimated using the actuarial present value of the
accumulated cost of medical insurance premiums plus an estimate
of
expenses not covered by insurance (estimated as the projected value
of
deductibles and insurance co-payments the insured’s would normally be
responsible for). Key assumptions used in this computation
were:
|
• |
Current
annual premium cost (one individual) -
$6,250
|
• |
Additional
medical payments not covered by insurance, including deductibles
and
co-payments - $3,500
|
• |
Expected
annual medical insurance cost inflation -
8.0%
|
• |
Mortality
of the executive's wife - 21.7 years from the date of
termination
|
• |
Risk
free discount rate - 5.00%
|
(4)
|
Mr.
Rubin’s disability benefit is comprised of three components: group
short-term disability, group long-term disability, and supplemental
long-term disability. Group short-term disability provides ten
weeks of
benefits. Group long-term disability provides benefits to age
65, after a
90 day waiting period. Suppletmental long-term disability will pay
benefits after a 360 day waiting period for up to two years after
age 65.
The computation of total benefits upon disability at February
28, 2007
presumes Mr. Rubin would avail himself of the maximum allowed
payouts
under each of the plans, which would require the Company to pay
additional
premiums on his supplemental long-term disability for two years.
The
amount shown represents the undiscounted value of two year’s supplemental
long-term disability premium
payments.
|
(5) |
Life
Insurance benefits were estimated using the present value of the
accumulated cost of the insurance premiums payable under the policy.
Key
assumptions used in this computation
were:
|
• |
Annual
fixed premium cost - $43,431
|
• |
Expected
number of years of insurance premium payments - 18.5 years from
date of
termination
|
• |
Risk
free discount rate - 5.00%
|
(6) |
Medical
benefits were estimated using the actuarial present value of the
accumulated cost of medical insurance premiums plus an estimate
of
expenses not covered by insurance (estimated as the projected value
of
deductibles and insurance co-payments the insured’s would normally be
responsible for). Key assumptions used in this computation
were:
|
• |
Current
annual premium cost (two individuals) -
$9,688
|
• |
Current
annual premium cost (one individual) -
$6,250
|
• |
Expected
annual medical insurance cost inflation -
8.0%
|
• |
Additional
medical payments for each individual which was
not
covered
by
insurance,
including deductibles - $3,500
|
• |
Mortality
of the executive - 18.5 years from the date of
termination
|
• |
Mortality
of the executive's wife - 21.7 years from the date of
termination
|
• |
Risk
free discount rate - 5.00%
|
(7) |
Includes
the current after tax benefit afforded by participation in the
Company’s
benefits for 401(k) employer matching contributions. In the case
of a
disability assumed to occur at fiscal year-end, two months of matching
contributions would be due.
|
(8) |
Includes
the current after tax benefit afforded by participation in the
Company’s
benefits for 401(k) employer matching contributions. The amounts
were
computed as the undiscounted after tax value of the continuing
cash outlay required by the Company, assuming the benefits would
be
received for the full three year commitment.
|
(9) |
The
terms “Disability,” “Termination With Cause,” “Termination Without Cause,”
“Good Reason,” “Voluntary Termination,” “Change in Control,” and
“Constructive Termination,” have the same meanings as defined in Mr.
Rubin’s employment agreement.
|
Other
Named Executive Officers
The
other
named executive officers stock options are subject to all
terms
of the 1998 Plan that govern all employees who receive options. Under the
1998
plan, any unvested options immediately vest upon a change in control of the
Company (as defined in the 1998 Plan). In addition, if an option holder's
employment with the Company is terminated due to his death or disability,
all of
his options will immediately vest and will remain exercisable for one year
after
such termination. If an option holder's employment is terminated voluntarily
or
with cause, all of his options that are exercisable as of the date of
termination will remain exercisable for thirty days. If an option holder’s
employment is terminated without cause, all of his options that are exercisable
as of the date of termination will remain exercisable for ninety days, if
ISO’s
or six months if NSO’s.
If
Mr.
Benson or Mr. Carson died or suffered a disability or the Company experienced
a
change
in control on February 28, 2007, the benefits to them, by reason of the
immediate vesting of their options would be $34,830 and $32,286, respectively.
These amounts are calculated based upon the difference between the market
price
per share of the Company’s common stock on February 28, 2007 ($23.16) and the
applicable exercise price of the stock options held by the named executive
that
would become immediately vested under such circumstances.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table summarizes certain equity compensation plan information as
of
February 28, 2007:
Equity
Compensation Plan Information |
|
Plan
Category
|
|
Number
of securities to
be
issued upon exercise
of
outstanding options,
warrants,
and rights
|
|
Weighted-average
exercise
price of
outstanding
options,
warrants,
and rights
|
|
Number
of securities
remaining
available
for
future
issuance
under
equity
compensation
plans
(excluding
securities
reflected in
the
first column) (1)
|
|
Equity
compensation plans approved by security
holders
|
|
|
6,750,758
|
|
$
|
15.01
|
|
|
786,272
|
|
(1) |
Includes
307,386 shares authorized and available for issuance in connection
with
the Helen of Troy Limited 1998 Employee Stock Purchase Plan and
478,886
shares authorized
and available for issuance
under the Helen of Troy Limited 1998 Stock Option and Restricted
Stock
Plan.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Procedures
for the Approval of Related Person Transactions
The
Audit
Committee Charter provides that the Audit Committee has the authority to
establish, and communicate to the full board and management, policies that
restrict the Company and its affiliates from entering into related person
transactions without the Audit Committee's prior review and approval. In
accordance with these policies, the Audit Committee on a timely basis reviews
and, if appropriate, approves all related person transactions.
At
any
time in which an executive officer, director or nominee for director becomes
aware of any contemplated or existing transaction that, in that person's
judgment may be a related person transaction, the executive officer, director
or
nominee for director is expected to notify the Chairman of the Audit Committee
of the transaction. Generally, the Chairman of the Audit Committee reviews
any
reported transaction and may consult with outside legal counsel regarding
whether the transaction is, in fact, a related person transaction requiring
approval by the Audit Committee. If the transaction is considered to be a
related person transaction, then the Audit Committee will review the transaction
at its next scheduled meeting or at a special meeting of the
committee.
Related
Person Transactions
Byron
H.
Rubin, a member of the Company's Board of Directors, earns insurance agent's
commissions paid by certain of our insurers directly to him in connection
with
the Company's group health, life and disability insurance policies as well
as
certain life insurance policies covering its officers. During fiscal 2007,
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 2007 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. In addition to his fees, during
fiscal 2007 Mr. Meeker was reimbursed $2,657 for travel and lodging expenses
incurred while performing services in this capacity. We expect Mr. Meeker
to
continue to provide such services and in fiscal 2008 to be compensated at
a rate
of $4,000 per month plus reimbursement for any associated travel and lodging
expenses.
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 Mr. Gerald J. Rubin and Mrs. Stanlee N. Rubin in
the
initial aggregate insured amount of $29,000,000. The Company and a trust
established for the benefit of Mr. and Mrs. Rubin, which was the owner of
the
life insurance policies (the “Trust”), entered into a split dollar insurance
agreement in 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 split dollar 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 Mr. and Mrs. Rubin, the Company shall receive the cash surrender value
of
the policies, and the Trust shall receive the balance of the proceeds. The
Company will also be entitled to the cash surrender value of the policies
if the
policies are cancelled. The Board of Directors decides annually whether to
pay
annual premiums of up to $360,000 on the policies. In fiscal 2007, the Board
of
Directors elected to make a payment of $25,914 toward the premiums on these
policies and directed that the remainder of the premiums
be paid out of the accumulated cash surrender value. For
fiscal 2008, the
Board
of Directors decided to pay the entire premiums for these policies out of
their
accumulated cash surrender value. As
of
February 28, 2007, the total aggregate death benefit of the policies was
$32,274,222, the aggregate cash surrender value of the policies was $5,248,465,
and the aggregate premiums paid by the Company since inception of the policies
was $4,345,914.
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,
2007, the total aggregate death benefit of the policies was $5,399,127, the
aggregate cash surrender value of the policies was $399,127, and the aggregate
premiums paid by the Company since inception of the policies was
$958,266.
REPORT
OF THE AUDIT COMMITTEE
Composition.
The
Audit
Committee of the Board of Directors of the Company (the “Audit Committee”) 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:
· |
The
Company’s auditing, accounting and financial reporting processes, and the
integrity of its financial
statements;
|
· |
The
audits of the Company’s financial statements and the appointment,
compensation, qualifications, independence and performance of the
Company’s auditor and independent registered public accounting
firm;
|
· |
The
Company’s compliance with legal and regulatory requirements;
and
|
· |
The
staffing and ongoing operation of the Company’s internal audit
function.
|
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 the Company’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 auditor and
independent registered public accounting firm. 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.
Review
with Management and Independent Registered Public Accounting Firm.
In
this
context, the Audit Committee hereby reports as follows:
|
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 the
Company’s Annual Report on Form 10-K for the 2007 fiscal year.
|
|
2. |
The
Audit Committee has discussed with the auditor and independent
registered
public accounting firm matters required to be discussed by Statement
on
Auditing Standards No. 61 (Communication with Audit Committees).
|
|
3. |
The
Audit Committee has received from the auditor and independent registered
public accounting firm the written disclosures and the letter required
by
Independence Standards Board Standard No. 1 (Independence Discussions
with
Audit Committees), and the Audit Committee has held such discussions
regarding independence with its auditor and independent registered
public
accounting firm.
|
|
4. |
The
Audit Committee has considered whether the provision of services
covered
by fees paid to the independent registered public accounting firm
are
compatible with maintaining the independence of that firm.
|
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 2007, for filing with the SEC.
Members
of the Audit Committee:
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, 2007, and February 28, 2006, and fees billed for other
services rendered by KPMG LLP during those periods.
Type
of Fee
|
|
2007
|
|
2006
|
|
Audit
Fees
|
|
$
|
594,000
|
|
$
|
595,500
|
|
Audit-Related
Fees
|
|
|
325,600
|
|
|
377,200
|
|
Tax
Fees
|
|
|
18,000
|
|
|
22,800
|
|
All
Other Fees
|
|
|
-
|
|
|
200
|
|
Total
|
|
$
|
937,600
|
|
$
|
995,700
|
|
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 statute 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. 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 2007 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: APPROVAL OF AN AMENDMENT TO THE COMPANY'S BYE-LAWS TO MAKE THE COMPANY
ELIGIBLE FOR A DIRECT REGISTRATION PROGRAM.
The
Board
of Directors has recommended and asks that you approve a resolution to amend
the
Company's bye-laws to make the Company eligible for a direct registration
program ("DRP"), which is operated by a securities depository.
We
are
proposing to amend our bye-laws in response to recent changes to the listing
standards of NASDAQ, which require that all equity securities listed on NASDAQ
be eligible for a DRP by January 1, 2008. A DRP permits a shareholder's
ownership to be recorded and maintained on the books of the issuer or the
transfer agent without the issuance of a physical stock certificate. It also
allows shares to be transferred between a transfer agent and a broker
electronically. The change to the NASDAQ rule does not require issuers to
actually participate in a DRP or to eliminate physical stock certificates.
The
change only requires that the listed securities be eligible for such a
program.
Presently,
our bye-laws generally require that requests for transfers of shares of our
stock be accompanied by written instructions and the certificates representing
the shares to be transferred. If the proposed amendment to our bye-laws is
approved, we would have the ability, but not the obligation, to issue
uncertificated shares transferable only on the books of the Company. Even
if the
amendment is approved, we currently intend to permit any shareholders who
so
desire to have their shares represented by share certificates. The amendment
to
our bye-laws, if approved by our shareholders, will replace bye-law 60, which
will then read as follows:
(1) |
Shares
may be transferred either by an instrument of transfer in the form
of Form
"C" in the Schedule hereto (or as near thereto as circumstances
admit) or
in such other common form as the Board may accept or by such electronic
means as may be consistent with the rules or regulations of any
exchange
or quotation system on which shares are listed or quoted, PROVIDED
that
shares may only be transferred without a written instrument if
transferred
by an appointed agent or otherwise in accordance with the Act.
Any
physical instrument of transfer shall be signed by or on behalf
of the
transferor and transferee provided that, in the case of a fully
paid
share, the Board may accept the instrument signed by or on behalf
of the
transferor alone. The transferor shall be deemed to remain the
holder of
such share until the same has been transferred to the transferee
in the
Register of Members.
|
(2) |
The
Board may refuse to recognize any instrument of transfer unless
it is
accompanied by the certificate in respect of the shares to which
it
relates or by such other evidence as the Board may reasonably require
to
show the right of the transferor to make the
transfer.
|
The
approval of this amendment to our bye-laws, as described in Proposal 2, requires
the affirmative vote of a majority of the votes cast at the Annual Meeting.
THE
BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS
A VOTE "FOR"
THIS PROPOSAL.
PROPOSAL
3: APPOINTMENT
OF AUDITOR AND INDEPENDENT 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 auditor
and
independent 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.
The
Audit
Committee nominated Grant Thornton LLP as the Company’s auditor and independent
registered public accounting firm for the 2008 fiscal year. Representatives
of
Grant Thornton LLP and KPMG LLP, the Company’s auditor and independent
registered public accounting firm for the 2007 fiscal year are expected to
be
present at the Annual Meeting with the opportunity to make a statement if
such
representatives desire to do so. The Grant Thornton LLP and KPMG LLP
representatives are also expected to be available to respond to appropriate
questions.
The
affirmative vote of a majority of the votes cast at the Annual Meeting is
required to appoint Grant Thornton LLP as our auditor and independent registered
public accounting firm and authorize the Audit Committee to set the auditor’s
remuneration as described in this Proposal 3.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THIS PROPOSAL.
SHAREHOLDER
PROPOSALS
Shareholders
intending to present proposals at the 2008 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
April
23,
2008.
For
proposals that shareholders intend to present at the 2008 annual general
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 April
23,
2008,
any
proxy solicited by the Company for that annual 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 SEC
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. 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 2007, all Section 16(a) filing requirements applicable to the Directors,
executive officers and greater than 10% shareholders were satisfied.
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 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 proxy appointment and instruction 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
proxy appointment and instruction process at WWW.PROXYVOTE.COM
by
following the instructions that will be provided to you on screen
when you
submit your proxy.
|
|
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.
|
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:
|
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 2007 Annual Report
to
Shareholders are both available at this
site.
|
|
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.
|
YOUR
VOTE IS IMPORTANT
PRELIMINARY COPY
HELEN
OF TROY LIMITED
ANNUAL
GENERAL MEETING OF SHAREHOLDERS
PROXY
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby authorizes each of Gerald J. Rubin and Vincent D. Carson
as
Proxy with power of substitution, to represent the undersigned at the Annual
General Meeting of Shareholders of the Company to be held on Tuesday, August
21,
2007, at 1:00 p.m., Mountain Daylight Time, at the Camino Real Hotel, 101
S. El
Paso Street, El Paso, Texas, and any adjournment thereof, and to vote all
the
common shares of the Company that the undersigned is entitled to vote on
the
following matters:
1.
To
elect a board of eight directors:
FOR
ALL NOMINEES LISTED BELOW
(except
as marked to the contrary below) o
WITHHOLD
AUTHORITY
to
vote
for all nominees below o
INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, STRIKE A LINE THROUGH THE
NOMINEE'S NAME ON THE LIST BELOW
|
Gary
B. Abromovitz
|
|
Gerald
J. Rubin
|
|
John
B. Butterworth
|
|
Stanlee
N. Rubin
|
|
Timothy
F. Meeker
|
|
Adolpho
R. Telles
|
|
Byron
H. Rubin
|
|
Darren
G. Woody
|
2. |
To
approve an amendment to the Company’s bye-laws to make the Company
eligible for a direct registration
program
|
For
o
Against o Abstain o
3. |
To
appoint Grant Thornton LLP as the Company’s auditor and independent
registered public accounting firm to serve for the 2008 fiscal
year and to
authorize the Audit Committee of the Board of Directors to set
the
auditor’s remuneration
|
For
o Against
o
Abstain o
This
proxy, when properly executed, will be voted in the manner directed herein
by
the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED
FOR PROPOSALS 1, 2 AND 3.
THIS
PROXY ALSO GRANTS AUTHORITY TO VOTE SUCH SHARES AS TO ANY OTHER MATTER WHICH
MAY
BE BROUGHT BEFORE THE MEETING IN THE SOLE DISCRETION OF THE HOLDERS OF THIS
PROXY.
IMPORTANT:
Please date this proxy and sign exactly as your name or names appear hereon.
If
shares are held jointly, signature should include both names. Executors,
administrators, trustees, guardians, and others signing in the representative
capacity, please so indicate when signing.
DATE: |
___________________,
2007
|
SIGNATURE: |
_______________________________________________________
|
SECOND
SIGNATURE, IF HELD JOINTLY: |
_______________________________________________________
|
PLEASE
SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ACCOMPANYING
ENVELOPE.