SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
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(Name of Registrant as Specified In Its Charter)
BLYTH INDUSTRIES, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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BLYTH INDUSTRIES, INC.
100 FIELD POINT ROAD
GREENWICH, CONNECTICUT 06830
(203) 661-1926
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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April 28, 2000
To the Stockholders of
Blyth Industries, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Blyth Industries, Inc. (the "Company") will be held at the
Greenwich Library, 101 West Putnam Avenue, Greenwich, Connecticut 06830 on
Wednesday, June 14, 2000, at 9:00 A.M., local time, for the following purposes:
1. To elect two directors, each to hold office until the Annual Meeting of
Stockholders to be held in 2003 or until a respective successor is elected
and qualified.
2. To ratify the appointment of independent accountants.
3. To consider and vote upon the Company's Amended and Restated 1994 Employee
Stock Option Plan (the "Employee Plan").
4. To consider and vote upon the Blyth Industries, Inc. Annual Incentive
Compensation Plan (2000) (the "Annual Incentive Compensation Plan").
5. To adopt an amendment to the Company's Restated Certificate of Incorporation
to change its name to "Blyth, Inc.".
6. To transact such other business as may properly come before the meeting or
any adjournments thereof.
The Board of Directors has fixed the close of business on April 17, 2000, as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting. A list of stockholders entitled to vote at the
Annual Meeting will be available for examination by any stockholder, for any
purpose relevant to the meeting, on and after June 2, 2000, during ordinary
business hours at the Company's principal executive offices located at the
address first set forth above.
STOCKHOLDERS ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
By Order of Board of Directors,
Bruce D. Kreiger,
SECRETARY
BLYTH INDUSTRIES, INC.
100 FIELD POINT ROAD
GREENWICH, CONNECTICUT 06830
(203) 661-1926
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2000
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INTRODUCTION
This proxy statement ("Proxy Statement") is being furnished to holders of
shares of common stock, par value $0.02 per share (the "Common Stock"), of Blyth
Industries, Inc., a Delaware corporation ("Blyth" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders (the "Annual Meeting") to
be held at the Greenwich Library, 101 West Putnam Avenue, Greenwich, Connecticut
06830 on Wednesday, June 14, 2000, at 9:00 A.M., local time, and at any
adjournments thereof. This Proxy Statement, the accompanying Notice of Annual
Meeting of Stockholders and the enclosed form of proxy are first being mailed to
stockholders on or about April 28, 2000.
The Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 2000 (the "Annual Report") also accompanies this Proxy Statement.
The Annual Report includes audited financial statements, a discussion by
management of the Company's financial condition and results of operations, and
other information.
At the Annual Meeting, stockholders will be asked:
1. To elect two directors, each to hold office until the Annual Meeting of
Stockholders to be held in 2003 or until a respective successor is elected
and qualified.
2. To ratify the appointment of independent accountants.
3. To consider and vote upon the Company's Amended and Restated 1994 Employee
Stock Option Plan (the "Employee Plan").
4. To consider and vote upon the Blyth Industries, Inc. Annual Incentive
Compensation Plan (2000) (the "Annual Incentive Compensation Plan").
5. To adopt an amendment to the Company's Restated Certificate of Incorporation
to change its name to "Blyth, Inc.".
6. To transact such other business as may properly come before the meeting or
any adjournments thereof.
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VOTING RIGHTS AND PROXY INFORMATION
Proxies in the accompanying form are solicited on behalf of and at the
direction of the Board of Directors, which has fixed the close of business on
Monday, April 17, 2000, as the record date (the "Record Date") for the
determination of holders of outstanding shares of Common Stock entitled to
notice of and to vote at the Annual Meeting or any adjournment(s) thereof. On
the Record Date, there were 49,313,820 shares of Common Stock issued and
outstanding. Each stockholder is entitled to one vote, exercisable in person or
by proxy, for each share of Common Stock held of record by such stockholder on
the Record Date with respect to each matter. A majority of the shares entitled
to vote, represented in person or by proxy, constitutes a quorum. If a quorum is
present, (i) a plurality vote of the shares present, in person or by proxy, at
the Annual Meeting and entitled to vote is required for the election of
directors and (ii) the affirmative vote of the majority of the shares present,
in person or by proxy, at the Annual Meeting and entitled to vote is required
for approval of Items 2 through 6. Abstentions are considered shares present and
entitled to vote, and therefore have the same legal effect as a vote against a
matter presented at the Annual Meeting. Any shares held in street name for which
the broker or nominee receives no instructions from the beneficial owner, and as
to which such broker or nominee does not have discretionary voting authority
under applicable New York Stock Exchange rules, will be considered as shares not
entitled to vote and will therefore not be considered in the tabulation of the
votes. Under New York Stock Exchange rules, a majority of the shares must vote
on certain matters (with abstentions being treated as votes and broker non-votes
not being treated as votes), including the proposed Employee Plan. Subject to
the foregoing, a broker non-vote will have no effect with respect to any of
Items 1 through 6 of this Proxy Statement.
When a proxy in the form of the accompanying proxy is returned properly
dated and signed, the shares represented thereby will be voted by the person
named as proxies therein in accordance with each stockholder's directions.
Proxies will also be considered to be confidential voting instructions to the
Trustees of the Blyth Industries, Inc. Profit Sharing Retirement Plan with
respect to shares of Common Stock held in accounts under such Plan.
Stockholders are urged to specify their choices by marking the appropriate
boxes on the enclosed proxy card. All shares of the Common Stock represented by
properly executed proxies will be voted at the Annual Meeting in accordance with
the direction indicated on the proxies unless such proxies have previously been
revoked. To the extent that no direction is indicated, the shares will be voted
FOR the election of all of the Company's nominees as directors, FOR the
ratification of the appointment of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), as the Company's independent accountants, FOR the
Employee Plan, FOR the Annual Incentive Compensation Plan, and FOR the adoption
of the amendment to the Company's Restated Certificate of Incorporation to
change its name to Blyth, Inc. (or, in the case of participants in the Profit
Sharing Retirement Plan referred to above, will be voted in the discretion of
the Trustees). If any other matters are properly presented at the Annual Meeting
for action, including a question of adjourning the meeting from time to time,
the persons named in the proxies and acting thereunder will have discretion to
vote on such matters in accordance with their best judgment.
Any stockholder who has executed and returned a proxy has the power to
revoke it at any time before it is voted. A stockholder who wishes to revoke a
proxy can do so by attending the Annual Meeting and voting in person, or by
executing a later-dated proxy relating to the same shares or a writing revoking
the proxy and, in the latter two cases, delivering such later-dated proxy or
writing to the Secretary of the Company prior to the vote at the Annual Meeting.
Any writing intended to revoke a proxy should be sent to the Company at its
principal executive offices, 100 Field Point Road, Greenwich, Connecticut 06830,
Attention: Bruce D. Kreiger, Secretary.
In addition to the use of the mail, proxies may be solicited via personal
interview and telephone or telegraph by the directors, officers and regular
employees of the Company. Such persons will receive no additional compensation
for such services. Arrangements will also be made with certain brokerage firms
and certain other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the Common Stock held of
record by such persons, and such brokers, custodians, nominees and fiduciaries
will be reimbursed by the Company for reasonable out-of-pocket expenses incurred
by them in connection therewith.
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ITEM 1 ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
Blyth's Board of Directors currently consists of nine members, divided into
three classes serving staggered terms of office.
It is intended that the persons named in the enclosed form of proxy as
proxies will, except as noted below, vote FOR the election of the following
nominees as directors, to serve until the 2003 Annual Meeting of Stockholders:
Roger A. Anderson
Pamela M. Goergen
Mr. Anderson and Mrs. Goergen currently serve as directors of Blyth.
Mr. Anderson and Mrs. Goergen were most recently elected as such at the Annual
Meeting of Stockholders held on June 4, 1997. The Board of Directors of the
Company does not contemplate that any of such nominees will become unable to
serve. If, however, any of such nominees should become unable to serve before
the Annual Meeting, proxies solicited by the Board of Directors will be voted by
the persons named as proxies therein in accordance with the best judgment of
such proxies.
INFORMATION REGARDING NOMINEES FOR ELECTION AS
DIRECTORS AND REGARDING CONTINUING DIRECTORS
The following table sets forth the name, age, business experience for the
past five years and other directorships of each of the Company's directors:
NAME, AGE AND CURRENT PERIOD SERVED AS DIRECTOR
POSITIONS, IF ANY, AND BUSINESS EXPERIENCE
WITH THE COMPANY DURING PAST 5 YEARS
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NOMINEES FOR ELECTION AT THE 2000 ANNUAL MEETING FOR TERMS EXPIRING IN 2003
Roger A. Anderson (62) Roger A. Anderson joined the Board of Directors in February
1994. Mr. Anderson has also served as a member of the Audit
Committee since 1994. From 1979 to the present, Mr. Anderson
has been the Chairman of Burlington Management Company and
Tair Ltd., investment companies with diversified holdings in
the United States and several foreign countries.
Pamela M. Goergen (58) Pamela M. Goergen joined the Board of Directors in 1984.
From 1979 to the present, Mrs. Goergen has been the Vice
President and Secretary of The Ropart Group Limited, a
private equity investment management firm.
3
NAME, AGE AND CURRENT PERIOD SERVED AS DIRECTOR
POSITIONS, IF ANY, AND BUSINESS EXPERIENCE
WITH THE COMPANY DURING PAST 5 YEARS
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CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2002
John W. Burkhart (62) John W. Burkhart joined the Board of Directors in 1983. Mr.
Burkhart has also served as Chairman of the Audit Committee
since 1994. Since July 1984, Mr. Burkhart has been the
Chairman of the Board of Directors of Breezy Hill
Enterprises, Inc., a management services company. Since June
1993, Mr. Burkhart has been the Chairman of the Board of
Directors and President of MWM Dexter, Inc., a specialty
printing company. Since January 1990, Mr. Burkhart has been
the Chairman of the Board of Directors of AS Hospitality,
Inc., a specialty printing company. Since March 1989, Mr.
Burkhart has been a director, since April 1991, the Chairman
of the Board of Directors, and since February 1993, the
President, of Wellstead Industries, Inc., an industrial
supply company ("Wellstead"), which is inactive. Since May
1996, Control Resource Systems, Inc., the sole subsidiary of
Wellstead, has been in liquidation under the United States
Bankruptcy Code.
John E. Preschlack (66) John E. Preschlack joined the Board of Directors in 1989.
Mr. Preschlack has also served as Chairman of the
Compensation Committee since 1994. From October 1996 through
the present, Mr. Preschlack has been the Chairman and
President of JEPCOR, Inc., a private investment company.
From 1987 to October 1996, Mr. Preschlack was a Senior
Director and Partner of SpencerStuart, an executive search
firm.
Frederick H. Stephens, Jr. Frederick H. Stephens, Jr. joined the Board of Directors in
(68) September 1994. Mr. Stephens has also been a member of the
Compensation Committee since 1994. From 1992 through June
1997, Mr. Stephens was a Vice President and Senior
Consultant at Lee Hecht Harrison, Inc., an executive career
transition firm. From January 1990 through December 1991,
Mr. Stephens was a partner at The Onstott Group, a
management consulting company specializing in executive
search services. From 1958 to 1989, Mr. Stephens was
employed by The Gillette Company, most recently as Vice
President of Business Relations and as a corporate officer.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2001
Robert B. Goergen (61) Robert B. Goergen has been the Chairman of the Company since
Chairman of the Board, Chief its inception in 1977. He has served as Chief Executive
Executive Officer Officer of the Company since 1978 and as President since
and President March 1994. From 1979 to the present, Mr. Goergen has also
served as Chairman of The Ropart Group Limited, a private
equity investment management firm, and from 1990 to the
present, as Chairman of XTRA Company, a publicly traded
trailer leasing company. Mr. Goergen is a director of
Bionutrics, a biotech company, and of several private
companies.
Neal I. Goldman (55) Neal I. Goldman joined the Board of Directors in 1991. Mr.
Goldman has also served on the Compensation Committee since
1994. From 1985 to the present, Mr. Goldman has been the
President of Goldman Capital Management, Inc., an investment
advisory firm.
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NAME, AGE AND CURRENT PERIOD SERVED AS DIRECTOR
POSITIONS, IF ANY, AND BUSINESS EXPERIENCE
WITH THE COMPANY DURING PAST 5 YEARS
--------------------- -------------------------
Howard E. Rose (53) Howard E. Rose joined the Board of Directors in April 1998.
Mr. Rose was also elected Vice Chairman of the Board in
April 1998. Mr. Rose served the Company as Vice President
and Chief Financial Officer from 1978 to April 1998, and
served as Secretary from 1993 to 1996.
DIRECTORS WITH TERMS EXPIRING IN 2000
Roger H. Morley (68) Roger H. Morley joined the Board of Directors in December
1996. Mr. Morley has also served as a member of the Audit
Committee since 1996. From 1983 to the present, Mr. Morley
has served as Vice President of Schiller International
University in Heidelberg, Germany. Mr. Morley is a director
of Biogen, Inc., and is also co-managing director of R&R
Inventions Ltd., Birmingham, U.K.
Other than Robert B. Goergen and Pamela M. Goergen, who are husband and
wife, there is no family relationship among any of the nominees for election as
directors, any continuing directors or any executive officers of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL
NOMINEES.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive an annual fee of $10,000, plus
reimbursement of out-of-pocket expenses, for their services as directors of the
Company. Each member of the Audit Committee and the Compensation Committee also
receives a fee of $750 for each meeting attended, and the chairman of each
committee receives a fee of $1,500 for each meeting attended by such chairman.
Upon each non-employee director's first election as a director, the non-employee
director receives stock options to acquire 3,000 shares of Common Stock under
the Company's Stock Option Plan for Non-Employee Directors for his or her
services as a director. In addition, each non-employee director who is in office
on November 15 of any year receives, on the immediately succeeding January 1, an
option to acquire 1,500 shares of Common Stock. Directors who are also employees
do not receive any additional compensation for their services as directors.
BOARD AND COMMITTEE MEETINGS
The Board of Directors has established two standing committees, the Audit
Committee and the Compensation Committee. The Audit Committee is comprised of
Messrs. Anderson, Burkhart and Morley, and oversees the activities of Blyth's
independent accountants and internal audit controls. The Audit Committee held
three meetings during fiscal year 2000.
The Compensation Committee is comprised of Messrs. Goldman, Preschlack and
Stephens and reviews and makes recommendations to the Board with respect to
general compensation and benefit levels, determines the compensation and
benefits for the Company's executive officers and administers the Blyth Amended
and Restated 1994 Employee Stock Option Plan and qualified and non-qualified
retirement plans. The Compensation Committee held three meetings during fiscal
year 2000.
Blyth does not have a standing nominating committee. Instead, the Board of
Directors selects nominees for directors.
The Board of Directors held five regularly scheduled meetings during fiscal
year 2000. In fiscal year 2000, each director attended at least 75% of the
meetings of the Board of Directors and all applicable committee meetings during
the period that such director served as a director.
5
EXECUTIVE OFFICERS
The following sets forth the name, age and business experience for the past
five years of each of Blyth's executive officers (other than Mr. Goergen),
together with all positions and offices held with Blyth by such executive
officers. Officers are appointed to serve until the meeting of the Board of
Directors following the next Annual Meeting of Stockholders and until their
successors have been elected and have qualified:
NAME AND AGE POSITIONS
- ------------ ---------
Richard T. Browning (51) Richard T. Browning joined the Company as Vice President,
Finance in 1997. In April 1998, Mr. Browning was elected
Chief Financial Officer. Previously Mr. Browning was
President and Chief Executive Officer of Lea & Perrins,
Inc., a subsidiary of Groupe Danone. Earlier, he was Chief
Financial Officer of the Dannon Yogurt Company, another
Groupe Danone subsidiary.
Bruce G. Crain (39) Bruce G. Crain joined the Company in 1997 as Vice President,
Strategic Market Development. From 1997 to March 1999, Mr.
Crain was the Senior Vice President of Operations for
PartyLite Gifts, Inc. In April 1999, Mr. Crain became
President of the Company's European Affiliate Group and Vice
President of the Company's Global Support Services. From
1994 to 1996, Mr. Crain held a variety of management
positions, including Chief Financial Officer for Home
Innovations, Inc. From 1989-1993, Mr. Crain was a consultant
with McKinsey & Company.
Elwood L. La Forge, Jr. (55) Elwood L. La Forge, Jr. served as Vice President of Business
Development from 1994 until April 1997. In April 1997, Mr.
La Forge became President of the Company's Worldwide
Affiliate Group and continued to serve as a Vice President
of the Company. From 1988 to 1994, Mr. La Forge was Senior
Vice President and Chief Financial Officer of Lenox, Inc., a
subsidiary of Brown-Forman.
Frank P. Mineo (46) Frank P. Mineo joined the Company in 1994 as Vice President,
Finance and Administration of PartyLite Gifts, Inc. Mr.
Mineo became President of PartyLite Central Europe in
September 1998. He later was named President of PartyLite
Europe. In October 1999, Mr. Mineo became Executive Vice
President of PartyLite Gifts, Inc. until being named
President of PartyLite Gifts, Inc. in April 2000. From 1976
until joining the Company in 1994, Mr. Mineo worked in many
capacities for The Gillette Company, most recently as
Controller in Europe.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
SECURITY OWNERSHIP OF MANAGEMENT. The following table sets forth, as of
April 17, 2000, the number of outstanding shares of the Common Stock
beneficially owned by each of the nominees for director; the other current
directors; Blyth's Chairman, Chief Executive Officer and President and Blyth's
four most highly compensated other executive officers (together, the "Named
Executive Officers") individually; Frank P. Mineo, who became an executive
officer in April 2000; and all directors and executive officers as a
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group. Except as otherwise indicated, each of the stockholders has sole voting
and investment power with respect to the shares reflected as beneficially owned
by such stockholder.
NO. OF PERCENT
NAME OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------ ---------- --------
Robert B. Goergen(1)........................................ 13,618,653 27.6%
Roger A. Anderson(2)........................................ 412,458 *
John W. Burkhart(3)......................................... 594,804 1.2%
Pamela M. Goergen(4)........................................ 12,876,667 26.1%
Neal I. Goldman(5).......................................... 127,500 *
Roger H. Morley(6).......................................... 6,000 *
John E. Preschlack(7)....................................... 176,710 *
Howard E. Rose(8)........................................... 80,509 *
Frederick H. Stephens, Jr.(9)............................... 9,600 *
Albert A. Bergeron(10)...................................... 158,732 *
Richard T. Browning(11)..................................... 20,300 *
Bruce G. Crain(12).......................................... 41,000 *
Elwood L. La Forge, Jr.(13)................................. 57,003 *
Frank P. Mineo(14).......................................... 45,191 *
All directors and executive officers as a group (14
persons).................................................. 15,348,460 31.1%
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* Less than 1%.
(1) Includes 12,464,787 shares held by Mr. Goergen, 74,997 shares held by
Mr. Goergen and Dennis P. Goergen as co-trustees of a trust for the benefit
of Alice B. McCool, 232,189 shares held by The Goergen Foundation, Inc., a
charitable foundation of which Mr. Goergen is a director, president and sole
investment manager, 411,880 shares and vested options held by Pamela M.
Goergen, Mr. Goergen's wife, and 434,800 shares held by Ropart Investments
LLC, a private investment fund of which Mr. Goergen shares voting and
investment power. Mr. Goergen disclaims beneficial ownership of the shares
held by Pamela M. Goergen (see footnote (4)). The address of Mr. Goergen is
c/o Blyth Industries, Inc., 100 Field Point Road, Greenwich, Connecticut
06830.
(2) Includes 404,958 shares held by Galena Partners, Ltd., a limited partnership
of which Mr. Anderson is a managing general partner. Mr. Anderson disclaims
beneficial ownership of the shares held by Galena Partners, Ltd. Also
includes 7,500 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 17, 2000.
(3) Includes 121,440 shares held by Mr. Burkhart, 189,300 shares held of record
by Breezy Hill Enterprises, Inc. Pension Plan, of which Mr. Burkhart is
trustee, and 276,564 shares held by Mr. Burkhart's wife. Mr. Burkhart
disclaims beneficial ownership of the shares held by his wife. Includes
7,500 shares issuable upon exercise of options which are exercisable or
become exercisable within 60 days of April 17, 2000.
(4) Includes 404,380 shares held by Mrs. Goergen and 12,464,787 shares held by
Robert B. Goergen, Mrs. Goergen's husband. Mrs. Goergen disclaims beneficial
ownership of the shares held by her husband, Robert B. Goergen (see footnote
(1)). Also includes 7,500 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 17, 2000. The
address of Mrs. Goergen is c/o The Ropart Group Limited, 100 Field Point
Road, Greenwich, Connecticut 06830.
(5) Includes 123,000 shares held by Mr. Goldman and 4,500 shares issuable upon
exercise of options which are exercisable or become exercisable within
60 days of April 17, 2000.
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(6) Includes 6,000 shares issuable upon exercise of options which are
exercisable or become exercisable within 60 days of April 17, 2000.
(7) Includes 151,210 shares held by Mr. Preschlack and 18,000 shares held by
Jaclyn Holdings, L.P., a limited partnership of which Mr. Preschlack is a
general partner. Mr. Preschlack disclaims beneficial ownership of the shares
held by Jaclyn Holdings, L.P. Also includes 7,500 shares issuable upon
exercise of options which are exercisable or become exercisable within
60 days of April 17, 2000.
(8) Includes 80,509 shares held by Mr. Rose.
(9) Includes 3,600 shares held by Mr. Stephens and 6,000 shares issuable upon
exercise of options which are exercisable or become exercisable within
60 days of April 17, 2000.
(10) Includes 82,732 shares held by Mr. Bergeron and 4,800 shares held by
Mr. Bergeron's wife and children. Mr. Bergeron disclaims beneficial
ownership of the shares held by his wife and children. Also includes 71,200
shares issuable upon exercise of options which are exercisable or become
exercisable within 60 days of April 17, 2000.
(11) Includes 1,000 shares held by Mr. Browning and 300 shares held by
Mr. Browning's wife. Mr. Browning disclaims beneficial ownership of the
shares held by his wife. Also includes 19,000 shares issuable upon exercise
of options which are exercisable or become exercisable within 60 days of
April 17, 2000.
(12) Includes 1,000 shares held by Mr. Crain and 1,000 shares held by Mr. Crain
as trustee of a trust for the benefit of Mr. Crain's sister. Also includes
39,000 shares issuable upon exercise of options which are exercisable or
become exercisable within 60 days of April 17, 2000.
(13) Includes 5,003 shares held by Mr. La Forge and 52,000 shares issuable upon
exercise of options which are exercisable or become exercisable within
60 days of April 17, 2000.
(14) Includes 591 shares held by Mr. Mineo, 10,458 shares held by Mr. Mineo and
his wife and 4,842 shares held by Mr. Mineo and his children. Also includes
29,300 shares issuable upon exercise of options which are exercisable or
become exercisable within 60 days of April 17, 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the knowledge of the
Company, the following table lists each party (other than Mr. Goergen and
Mrs. Goergen, whose respective beneficial ownership is disclosed in the
immediately preceding table) that beneficially owned more than 5% of the Common
Stock outstanding as of such party's Schedule 13G reporting date:
NO. OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------------------ --------- --------
Alex. Brown Investment Management (1)....................... 9,533,400 19.7%
Chieftain Capital Management, Inc. (2)...................... 4,257,225 8.9%
- ------------------------
(1) According to a statement on Schedule 13G dated February 15, 2000 and filed
with the Securities and Exchange Commission, Alex. Brown Investment
Management, a limited partnership which is 50% owned by Taunus Corporation,
beneficially owns 9,533,400 shares. The address of Alex. Brown Investment
Management is One South Street, Baltimore, Maryland 21202. According to a
separate statement on Schedule 13G dated February 11, 2000 and filed with
the Securities and Exchange Commission, Taunus Corporation has reported that
it is the beneficial owner of the 9,533,400 shares of Common Stock that are
beneficially owned by Alex. Brown Investment Management and that it and its
direct and indirect wholly-owned subsidiaries beneficially own an additional
299,695 shares. The address of Taunus Corporation is 31 West 52nd Street,
New York, New York 10019. The computation of the percentage of stock owned
by Alex. Brown Investment Management is based on the percentages reported in
the Schedule 13G.
8
(2) According to a statement on Schedule 13G dated February 14, 2000 and filed
with the Securities and Exchange Commission, Chieftain Capital
Management, Inc. ("Chieftain") has investment discretion with respect to the
4,257,225 shares and its clients are the direct owners of such securities.
Chieftain does not have any economic interest in such shares and its clients
have the sole right to receive dividends and proceeds from the sale of such
shares. No client of Chieftain has an interest that relates to more than 5%
of the shares. The address of Chieftain is 12 East 49(th) Street, New York,
New York 10017. The computation of the percentage of stock owned by
Chieftain is based on the percentages reported in the Schedule 13G.
EXECUTIVE COMPENSATION
The following table sets forth a summary of all compensation awarded to,
earned by or paid for services rendered to Blyth in all capacities during
Blyth's fiscal years ended January 31, 2000, 1999, and 1998 by the Named
Executive Officers.
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION LONG-TERM
------------------- COMPENSATION ALL OTHER
SALARY BONUS AWARDS COMPENSATION (1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS (#) ($)
- --------------------------- -------- -------- -------- ------------ ----------------
Robert B. Goergen, Chairman of the
Board, Chief Executive Officer and
President of the Company............ 2000 $584,615 $800,000 -- $ 7,700
1999 496,154 650,000 -- 7,702
1998 471,154 500,000 -- 7,700
Albert A. Bergeron, Vice President of
the Company and former President of
Partylite Gifts, Inc................ 2000 $370,769 $300,000 10,000 $ 7,700
1999 313,076 250,000 10,000 7,690
1998 271,154 130,000 12,000 7,612
Richard T. Browning, Vice President
and
Chief Financial Officer (2)......... 2000 $253,846 $104,000 65,000 $16,985
1999 216,923 90,000 -- 11,198
Bruce G. Crain, Vice President of the
Company and President of European
Affiliate Group (3)................. 2000 $232,500 $120,000 65,000 $ 7,700
Elwood L. La Forge, Jr., Vice
President
of the Company and President of
Worldwide Affiliate Group........... 2000 $258,462 $ 25,000 50,000 $57,700
1999 218,847 100,000 10,000 57,702
1998 181,923 90,000 -- 57,700
- ------------------------
(1) Amounts reported as All Other Compensation represent Company contributions
for the benefit of the Named Executive Officers to the profit sharing and
401(k) portions of the Company's Retirement Plan. Amounts reported for
Richard T. Browning as All Other Compensation also include $9,285 as payment
for premiums for long term disability for fiscal year 2000, and $3,498 as
payment for premiums for long term disability for fiscal year 1999. Amounts
reported for Mr. La Forge as All Other Compensation for fiscal years 1998,
1999 and 2000 also include $50,000 of indebtedness forgiven by the Company.
See "Certain Transactions."
(2) Mr. Browning became an executive officer in fiscal year 1999.
(3) Mr. Crain became an executive officer in fiscal year 2000.
9
INFORMATION REGARDING STOCK OPTIONS AND STOCK APPRECIATION UNITS
OPTION GRANTS IN FISCAL YEAR 2000
The following table sets forth certain information concerning grants of
stock options to each of Blyth's Named Executive Officers during the fiscal year
ended January 31, 2000.
INDIVIDUAL GRANTS (1) POTENTIAL REALIZABLE
-------------------------- -------------------------
VALUE AT ANNUAL RATES OF
% OF TOTAL STOCK
NUMBER OF OPTIONS PRICE APPRECIATION FOR
SHARES GRANTED TO OPTION
UNDERLYING EMPLOYEES IN EXERCISE OR TERM (2)
OPTIONS FISCAL BASE PRICE EXPIRATION -------------------------
NAME GRANTED (1) YEAR PER SHARE DATE 5% 10%
- ----------------------------------- ----------- ------------ ----------- ---------- ---------- ------------
Robert B. Goergen.................. -- -- -- -- -- --
Albert B. Bergeron................. 10,000 2.4% $28.63 9/7/09 $180,100 $ 456,300
Richard T. Browning................ 15,000 3.6% $21.88 4/13/09 $206,400 $ 523,050
50,000 11.9% $28.63 9/7/09 $900,500 $2,281,500
Bruce G. Crain..................... 15,000 3.6% $21.88 4/13/09 $206,400 $ 523,050
50,000 11.9% $28.63 9/7/09 $900,500 $2,281,500
Elwood L. La Forge, Jr............. 50,000 11.9% $28.63 9/7/09 $900,500 $2,281,500
- ------------------------
(1) Each of these options was granted pursuant to the Blyth Amended and Restated
1994 Employee Stock Option Plan and is subject to the terms of such plan.
These options were granted at an exercise price equal to the fair market
value of the Company's Common Stock as determined by the Company's
Compensation Committee on the date of grant and, as long as the optionee
maintains continuous employment with the Company, vest over a five year
period at the rate of 20% on each anniversary of the date of grant, except
for options in the amount of 50,000 granted on September 7, 1999 which vest
in the third, fourth and fifth years at a rate of 33 1/3% on each
anniversary date of the date of grant.
(2) In accordance with the rules of the Securities and Exchange Commission,
shown are the hypothetical gains or "option spreads" that would exist for
the respective options. These gains are based on assumed rates of annual
compounded stock price appreciation of 5% and 10% from the date the option
was granted over the full option term. The 5% and 10% assumed rates of
appreciation are mandated by the rules of the Commission and do not
represent the Company's estimate or projection of future increases in the
price of its Common Stock.
2000 FISCAL YEAR-END OPTIONS
The following table sets forth certain information with respect to
unexercised options held by each of the Company's Named Executive Officers as of
January 31, 2000.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED SHARES
OPTIONS IN-THE-MONEY OPTIONS ACQUIRED VALUE
AT FISCAL YEAR-END AT FISCAL YEAR-END ($) ON RECEIVED
NAME (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE EXERCISE (#) ($)
- ---- --------------------------- -------------------------- ------------ --------
Robert B. Goergen............ -- -- -- --
Albert A. Bergeron........... 54,800/37,200 $647,278/$162,164(1) -- --
Richard T. Browning.......... 16,000/89,000 $ 0/$23,438(1) -- --
Bruce G. Crain............... 36,000/89,000 $ 30,870/$44,018(1) -- --
Elwood L. La Forge, Jr....... 48,500/61,000 $ 753,375/$0(1) -- --
- ------------------------
(1) Messrs. Bergeron, Browning, Crain and La Forge hold options to purchase
Common Stock. The value of an "in the money" option represents the
difference between the exercise price of such option and $23.4375, the
closing price on the New York Stock Exchange, Inc. on January 31, 2000,
multiplied by the total number of shares subject to the exercisable or
unexercisable portion of the option, as the case may be.
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Goldman, Preschlack and Stephens served as members of the
Compensation Committee in fiscal year 2000. None of such committee members
(i) was, during fiscal year 2000, an officer or employee of the Company or any
of its subsidiaries, (ii) was formerly an officer of the Company or any of its
subsidiaries, or (iii) had any relationship requiring disclosure by the Company
pursuant to any paragraph of Item 404 of Regulation S-K promulgated by the
Securities and Exchange Commission. No executive officer served as an officer,
director, or member of a compensation committee of any entity for which an
executive officer or director is a member of the Compensation Committee of the
Company or the Company's Board of Directors.
OMISSION OF CERTAIN TABLES
Information that would be provided in tabular form with respect to
repricings of options or SAR's or awards under long-term incentive plans is not
applicable and has been omitted.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the directors and executive officers of the Company and holders of more than 10%
of the Company's Common Stock to file reports regarding beneficial ownership and
changes in beneficial ownership with the Securities and Exchange Commission and
the New York Stock Exchange, Inc. Based upon a review of the filings furnished
to the Company and on representations from its directors and executive officers,
all filing requirements of Section 16(a) of said Act were complied with during
fiscal year 2000, except that Albert A. Bergeron filed an amended Form 4 in
January 2000 to correct certain information on the original Form 4 filing for a
transaction in September 1999.
CERTAIN TRANSACTIONS
On March 17, 1995, the Company made a $350,000 loan to Elwood L. La Forge,
Jr., a Vice President of the Company and President of the Company's Worldwide
Affiliate Group, in order to facilitate Mr. La Forge's relocation and
acquisition of a residence. Interest on the loan accrues at 5% per annum and the
loan is secured by a second mortgage on Mr. La Forge's residence. The loan is
payable in seven annual installments, and is payable in full upon the
termination of Mr. La Forge's employment by the Company. To date, the Company
has forgiven each annual installment of principal payable by Mr. La Forge. The
largest amount outstanding during fiscal year 2000 was $250,000, and as of
April 28, 2000, the aggregate outstanding principal amount of the loan was
$150,000.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND
THE FOLLOWING COMPARISON OF TOTAL STOCKHOLDER RETURN SHALL NOT BE INCORPORATED
BY REFERENCE INTO ANY SUCH FILINGS, NOR SHALL THEY BE DEEMED TO BE SOLICITING
MATERIAL OR DEEMED FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
11
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") is responsible for developing
and overseeing compensation policies that are designed to attract, motivate,
reward and retain the broad-based management talent required to achieve the
Company's corporate objectives and increase stockholder value. The Committee
believes that corporate performance and, in turn, stockholder value will be
enhanced by a compensation system which supports and reinforces the Company's
key operating and strategic goals while aligning the financial interests of the
Company's management with those of the stockholders.
The Company's compensation program for management consists of a base salary,
an incentive bonus program, a stock option program plus a benefits package. The
base salary and annual incentive bonus program components of the compensation
program have been in effect for a number of years. The stock option component of
the compensation program was adopted by the Board of Directors in March 1994 and
approved by the stockholders at the March 1994 meeting as the Company was
preparing its initial public offering of Common Stock in May 1994. The annual
incentive bonus program for management is the principal short-term incentive
compensation program of the Company tied, for the most part, to achieving
specific financial and management objectives. Cash bonuses are paid following
the conclusion of the Company's fiscal year.
Under the Company's long-term incentive program, the Committee reviews and
approves proposed grants of long-term incentive compensation in the form of
stock options. The Committee considers stock options to be an important means of
ensuring that management focuses on achieving continuing increases in the
profitability of the Company which should enhance the value of its Common Stock.
Because the value of stock options is entirely a function of the value of the
Company's Common Stock, the Committee believes that this component of the
Company's compensation policy directly aligns the interests of management with
those of all of the Company's stockholders.
The process of determining base salary begins with establishing an
appropriate salary range for each officer. Each officer's range is based upon
the particular duties and responsibilities of the officer, as well as salaries
for comparable positions with other companies. No written or formal list of
specific companies is prepared. Instead, the Compensation Committee is provided
with various sources of information about executive compensation at other
companies, as reported in salary surveys published by various organizations. The
Committee, together with Robert B. Goergen, the Chairman, President and Chief
Executive Officer (the "CEO"), uses these sources and makes a determination of
appropriate ranges for each member of management. The base salary of each
individual is set within a range considered appropriate in the judgment of
management and the Committee, based on an assessment of the particular
responsibilities and performance of such officer, the compensation practices in
other companies, and trends in the economy in general during the immediately
preceding year. The salaries of the Company's management are believed, based on
the Committee's experience with respect to compensation practices, to be at
approximately the median of the range of the universe considered to be relevant
in the judgment of the Compensation Committee.
Annual incentive cash bonus awards are based upon the extent to which the
Company and its subsidiaries meet or exceed specified financial goals (such as
meeting or exceeding sales and operating budgets and achieving target levels of
earnings before interest and taxes and return on equity) established by
executive management and the Board of Directors at the beginning of the
Company's fiscal year. Incentive awards are also based on an individual's
performance in achieving specific annual management objectives which may or may
not be quantifiable. Annually, the nature and extent of each individual's major
accomplishments and contributions for the year are determined through written
information compiled by the CEO, the Vice President-Organizational Development,
and others familiar with the individual's performance. With regard to all
members of management other than the CEO, the CEO evaluates the information and
makes appropriate recommendations to the Committee. The Committee then makes the
final determination of management bonuses.
12
The compensation of the CEO is reviewed in a manner similar to the
foregoing. Based largely upon the Committee's experience with respect to
compensation practices and, to a lesser extent, on other information such as
salary surveys, the Committee first establishes a base salary for the CEO. An
incentive bonus plan for the CEO is structured in a similar manner as the plan
for other executive officers. Under this incentive plan, the incentive bonus
will be awarded annually as a percentage of base salary, depending on overall
corporate performance. This incentive plan is established with a total cash
compensation amount (base salary plus incentive bonus) in mind considering all
relevant information on comparable companies and available salary survey data.
The adoption of the Company's Annual Incentive Compensation Plan, assuming
it is approved by the stockholders (see Item 4, below), is not expected to have
a material impact on the procedures that are followed by the Compensation
Committee in determining annual incentive awards.
Stock option grants are awarded by the Compensation Committee annually, with
the exception of executives who may be hired or promoted in the course of the
fiscal year, in which case the Committee may grant awards during the year.
Annual stock option grants take into account the individual executive's
performance, longer-term contributions to the Company, as well as the importance
of the position itself and external competitive practices. In fiscal year 2000,
the Company awarded 419,500 options (in awards ranging from 1,000 options to
50,000 options) to 57 executives under the Employee Plan.
JOHN E. PRESCHLACK, NEAL I. GOLDMAN FREDERICK H. STEPHENS, JR.
CHAIRMAN
13
COMPARISON OF TOTAL STOCKHOLDER RETURN
The performance graph set forth below reflects the yearly change in the
cumulative total stockholder return (price appreciation and reinvestment of
dividends) on the Company's Common Stock compared to the S&P 500 Index, the
Russell 1000 Index, and the S&P 400 Midcap Index for the five fiscal years ended
January 31, 2000. The graph assumes the investment of $100 in Company stock and
such indexes over the five-year period.
The Company believes that it is unique and does not have comparable industry
peers. Since the Company's competitors are typically not public companies or are
themselves subsidiaries or divisions of public companies engaged in multiple
lines of business, the Company believes that it is not possible to compare the
Company's performance against that of its competition. In the absence of a
satisfactory peer group, the Company believes that it is appropriate to compare
the Company to companies comprising the Russell 1000 and the S&P 400 Midcap
Indexes.
BLYTH INDUSTRIES, INC. PERFORMANCE GRAPH
COMPARISON OF TOTAL STOCKHOLDER RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1/31/95 1/31/96 1/31/97 1/31/98 1/31/99 1/31/00
Blyth
Industries 100 199 264 304 297 250
S&P 500 100 135 167 208 272 296
S&P 400 Midcap 100 129 155 191 220 253
Russell 1000 100 135 166 206 266 294
Dollars
ITEM 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The proxy, unless otherwise directed thereon, will be voted for a resolution
ratifying the action of the Board appointing the firm of PricewaterhouseCoopers
as independent accountants to make an audit of the accounts of the Company for
fiscal year 2001. PricewaterhouseCoopers has audited the Company's financial
statements since fiscal year 1998. The names of the Directors currently serving
on the Audit Committee are set forth on page 5 under the heading "Board and
Committee Meetings." The vote required for ratification is a majority of shares
voting. If the resolution is rejected, or if PricewaterhouseCoopers declines to
act or becomes incapable of acting, or if their employment is discontinued, the
Board, on the Audit Committee's recommendation, will appoint other accountants
whose continued employment after the Annual Meeting may be, but is not required
to be, subject to ratification by the
14
stockholders. A representative of PricewaterhouseCoopers will be present at the
Annual Meeting to respond to appropriate questions of stockholders and to make a
statement if he or she so desires.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS.
ITEM 3 THE EMPLOYEE PLAN
The Employee Plan provides for the grant of "incentive stock options"
intended to qualify as such under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and also permits nonqualifying options to be
granted.
On December 9, 1999, the Board of Directors unanimously approved an
amendment to the Company's 1994 Employee Stock Option Plan, subject to
stockholder approval, to increase the number of shares reserved for issuance
upon exercise of options granted thereunder from 1,880,000 to 2,880,000. On
March 30, 2000, the Board of Directors unanimously approved an additional
amendment to such plan, subject to stockholder approval, to increase the number
of shares reserved for issuance upon exercise of options granted thereunder on
an annual basis during the term of the plan, commencing February 1, 2001. As so
amended, Section 3(A) of the Employee Plan now provides as follows (subject to
stockholder approval):
3. SHARES OF STOCK SUBJECT TO THE PLAN
(A) NUMBER OF SHARES.
Subject to the provisions of Section 9 (relating to adjustments upon
changes in capital structure and other corporate transactions), the number
of shares of Common Stock subject at any one time to Options granted under
the Plan, plus the number of shares of Common Stock theretofore issued and
delivered pursuant to the exercise of Options granted under the Plan shall
not exceed the sum of (i) 2,880,000 shares plus (ii) an additional number of
shares, which are to be added on February 1, 2001, and each anniversary
thereof during the term of the Plan (an "Anniversary Date"), equal to the
lesser of (A) three-quarters of one percent (0.75%) of the total outstanding
shares of Common Stock of the Company on the applicable Anniversary Date and
(B) 600,000 shares. In no event may the number of shares of Common Stock
subject at any one time to Options granted under the Plan, plus the number
of shares of Common Stock theretofore issued and delivered pursuant to the
exercise of Options granted under the Plan exceed 5,280,000 shares. If and
to the extent that Options granted under the Plan terminate, expire or are
cancelled without having been fully exercised, new Options may be granted
under the Plan with respect to the shares of Common Stock covered by the
unexercised portion of such terminated, expired or cancelled Options.
The Employee Plan is intended to further the growth and success of the
Company and its subsidiaries by enabling officers and employees of the Company
and any of its subsidiaries to acquire shares of Common Stock of the Company,
thereby increasing their personal interest in such growth and success, and to
provide a means of rewarding outstanding performance by such persons to the
Company and/or its subsidiaries. The Board of Directors believes that the
granting of options under the Employee Plan has been a significant factor in
attracting and retaining competent and experienced management. The Board of
Directors believes that additional shares of Common Stock should be made
available for the grant of future options to allow the Company to continue to
provide an incentive program for employees.
The complete text of the Employee Plan, as amended and restated, is
incorporated by reference to Exhibit 4.1 to the Company's Current Report on
Form 8-K filed April 17, 2000 and the following description is qualified in its
entirety by the text of the Employee Plan.
15
DESCRIPTION OF THE EMPLOYEE PLAN. In 1994, the Board of Directors and
stockholders of the Company adopted and approved the Company's 1994 Employee
Stock Option Plan, which then authorized the issuance of an aggregate of
1,380,000 options to purchase shares of Common Stock to officers and key
employees of the Company and its subsidiaries, including employees who are also
directors. In 1998, the Board of Directors and stockholders of the Company
subsequently adopted and approved an amendment to such plan to increase the
number of shares reserved for issuance upon exercise of options by an additional
500,000 shares. As of April 17, 2000, 2,090,707 shares were reserved for
issuance upon exercise of options previously granted under the Employee Plan and
427,001 shares were reserved for the grant of future options (in each case,
assuming stockholder approval of the Employee Plan). Through April 17, 2000,
options for 362,292 shares granted under the Employee Plan have been exercised.
If there is a stock split, stock dividend or other change in the Company's
capitalization during the term of outstanding options, the aggregate number of
shares of Common Stock for which options may be granted under the Employee Plan,
the number of shares of Common Stock subject to outstanding options and the
exercise price of outstanding options shall be appropriately and proportionately
adjusted to reflect the same. If any outstanding option, or a portion thereof,
expires or is terminated without having been exercised in full, the Common Stock
subject to the portion of such option not so exercised shall be available for
subsequent grants under the Employee Plan. The Employee Plan will terminate on
May 18, 2004.
The Employee Plan is administered by a Compensation Committee (the
"Compensation Committee"), which must consist of two or more disinterested
directors, as defined in the Employee Plan. The following persons presently
serve on the Compensation Committee: Neal I. Goldman, John E. Preschlack and
Frederick H. Stephens, Jr.
The Compensation Committee determines which of the Company's officers and
employees will receive options, the time when options are granted, whether the
options are to be incentive stock options or non-qualified stock options, the
terms of such options, the exercise date of any options and the number of shares
subject to options.
Members of the Compensation Committee are not eligible to receive options
under the Employee Plan. Directors who are also employees are eligible to
receive options under the Employee Plan. Non-employee directors are not eligible
to receive options under the Employee Plan. The class of eligible officers and
other employees of the Company and its subsidiaries consist of approximately 150
persons. Because the granting of options is within the discretion of the
Compensation Committee, the benefits or amounts to be received by each of the
classes of persons eligible for grants may not presently be determined.
The exercise price of incentive stock options granted under the Employee
Plan may not be less than 100% of the fair market value of the Common Stock at
the time of grant and the term of any option may not exceed ten years. With
respect to any employee who owns stock representing more than 10% of the voting
power of the outstanding capital stock of the Company, the exercise price of any
incentive stock option may not be less than 110% of the fair market value of
such shares at the time of grant and the term of such option may not exceed five
years.
The exercise price of a non-qualified stock option is determined by the
Compensation Committee on the date the option is granted. However, the exercise
price of a non-qualified stock option may not be less than 100% of the fair
market value of the Common Stock at the time of grant. The fair market value of
the Common Stock for purposes of the Employee Plan is generally based upon a
reasonable method of valuation using market quotations adopted in good faith by
the Compensation Committee, provided such method of valuation is permitted by
applicable law.
Options granted under the Employee Plan are nontransferable and, with
certain exceptions in the event of the death or disability of an optionee, may
be exercised by the optionee only during employment
16
and within three months thereafter. Options granted under the Employee Plan
typically vest over a five-year period and expire after ten years, but may be
subject to other vesting periods or other provisions regarding the time of
exercisability.
The maximum number of shares of Common Stock with respect to which options
may be granted under the Plan to any employee in any calendar year may not
exceed 100,000 shares (subject to adjustments for stock splits, reverse stock
splits, stock dividends, stock combinations or other similar events).
Upon the grant of either an incentive stock option or a nonqualifying
option, neither the Company nor the employee incurs any federal income tax
consequences. Furthermore, upon exercise of an incentive stock option, neither
the Company nor the employee incurs any federal income tax consequences. Rather,
the employee is taxed upon disposition of the stock acquired pursuant to the
exercise of the incentive stock option. If the employee sells the stock within
two years of the date of grant of the option and within one year of the date of
exercise, the sale of the stock is treated as a disqualifying disposition of the
option. In general, if the stock is sold in such a disqualifying disposition,
the employee will be deemed to have incurred ordinary income, and the Company
will be entitled to a corresponding deduction, in each case in an amount equal
to the gain on such sale of stock. Such gain will be equal to the lesser of
(x) the fair market value of the Common Stock on the date of exercise minus the
exercise price and (y) the amount realized upon disposition of the stock minus
the exercise price. If the applicable holding periods with respect to stock
acquired upon exercise of an incentive stock option are satisfied, the gain upon
the employee's sale of the stock will be treated as capital gain and the Company
will receive no deduction. In general, upon exercise of a nonqualifying option,
the employee incurs ordinary income measured by the difference between the
exercise price and the fair market value of the Common Stock as determined, with
certain exceptions, on the date of exercise, and the Company receives a
corresponding deduction as a compensation-related business expense. When the
employee subsequently disposes of the stock acquired upon exercise of a
nonqualifying option, he or she will recognize capital gain or loss (assuming
the shares are held as a capital asset) in an amount equal to the difference
between the fair market value of the Common Stock on the date of exercise and
the selling price. The foregoing paragraph is not intended to be a complete
statement of applicable law and it is based upon the federal income tax laws in
effect on the date of this Proxy Statement.
The Employee Plan is not an employee benefit plan which is subject to the
provisions of the Employee Retirement Income Security Act of 1974, and the
provisions of Section 401(a) of the Code are not applicable to the Employee
Plan.
The Board may at any time prior to May 18, 2004 modify and amend the
Employee Plan in any respect. However, the approval of the holders of a majority
of the votes that may be cast by all of the holders of shares of Common Stock
and preferred stock of the Company, if any, entitled to vote (voting as a single
class) must be obtained prior to any such amendment becoming effective if such
approval is required by law or is necessary to comply with regulations
promulgated by the Securities and Exchange Commission under Section 16(b) of the
Securities Exchange Act of 1934, as amended, or with Section 422 of the Code or
the regulations promulgated by the Treasury Department thereunder.
OPTIONS GRANTED UNDER THE EMPLOYEE PLAN. The chart below indicates the
number of options that have been granted as of April 17, 2000 pursuant to the
Employee Plan to (i) the Named Executive Officers, (ii) all current executive
officers (other than the Named Executive Officers), as a group, (iii) all
current
17
directors who are not executive officers, as a group, and (iv) all employees,
including all current officers who are not executive officers, as a group.
GRANTEE NUMBER OF OPTIONS GRANTED
- ------- -------------------------
Robert B. Goergen........................................... --
Albert A. Bergeron.......................................... 92,000
Richard T. Browning......................................... 105,000
Bruce G. Crain.............................................. 125,000
Elwood L. La Forge, Jr...................................... 127,500
All other executive officers as a group(1).................. 88,000
All non-employee directors as a group....................... --
All other employees as a group.............................. 1,410,999
- ------------------------
(1) This group is comprised of Frank P. Mineo only.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE EMPLOYEE PLAN.
ITEM 4 BLYTH INDUSTRIES, INC. ANNUAL INCENTIVE COMPENSATION PLAN (2000)
In order to enable the Company to continue to attract, reward and retain
employees whose efforts are largely responsible for the Company's overall
success and to qualify annual cash bonus payments to certain executive officers
for the tax treatment afforded to performance-based compensation under
Section 162(m) of the Code, the Board of Directors has adopted the Blyth
Industries, Inc. Annual Incentive Compensation Plan (2000) (the "Annual
Incentive Compensation Plan"), subject to stockholder approval.
SUMMARY OF THE ANNUAL INCENTIVE COMPENSATION PLAN. The following summary of
the Annual Incentive Compensation Plan is qualified in its entirety by reference
to the complete text of the Blyth Industries, Inc. Annual Incentive Compensation
Plan (2000), which is attached to this Proxy Statement as Exhibit A.
The Compensation Committee of the Board of Directors of the Company, which
is comprised solely of outside directors of the Company, is authorized to
administer the Annual Incentive Compensation Plan in accordance with its terms.
Each year, the Committee will select participants from amongst the officers and
key employees of the Company and its subsidiaries. The Committee will establish
target awards for the year by salary grade or other standards as well as a
target award pool, which is the sum of the target awards for such year for all
participants. The Committee will also establish target financial goals for such
year under which from 25% to 200% of the target award pool can become available
for payment. Target awards are based on the Company's net income, aggregate
sales, return on equity and/or earnings per share.
After the close of the fiscal year, the Compensation Committee will
determine what part of the target award pool is available for payment based on
the achievement of the target financial goals. Based upon these results and upon
management's assessments of each participant's individual performance during the
year, the Committee will determine what part, if any, of the participant's
target award shall be paid. The Committee is under no obligation to pay all of
the available target award pool for a year; in any event, the total amount paid
under the Annual Incentive Compensation Plan for a year may not exceed 200% of
the target award pool for such year. Moreover, no participant who is a "covered
employee" under Section 162(m) of the Code may receive an annual award under
this Plan greater than 150% of the lesser of such employee's base salary or
$1,000,000.
All payments under the Annual Incentive Award Plan will be made in cash as
soon as practicable after the close of a fiscal year, except to the extent that
a participant elects to defer a portion of such payment pursuant to the
Company's Non-Qualified Deferred Compensation Plan.
18
The affirmative vote of a majority of the votes cast by stockholders
entitled to vote at the Annual Meeting is required for approval of the proposal
to adopt the Annual Incentive Compensation Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE
ANNUAL INCENTIVE COMPENSATION PLAN.
ITEM 5 APPROVAL OF AMENDMENT TO COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION
The Board of Directors has unanimously adopted a resolution approving and
declaring the advisability of an amendment to the Company's Restated Certificate
of Incorporation that would change the name of the Company to "Blyth, Inc."
Specifically, the proposed amendment would amend Article I of the Company's
Restated Certificate of Incorporation to read in its entirety as follows:
The name of the Company is Blyth, Inc. (hereinafter referred to as the
"Company").
The Board is recommending that the name of the Company be changed since it
believes that the new name will more accurately reflect the business and purpose
of the Company and its position as the leading manufacturer and marketer of home
fragrance products, including scented candles, candle accessories, potpourri,
outdoor citronella candles, environmental fragrance products, decorative gift
bags and tags, and seasonal decorations, to consumers and institutional
customers. If the proposed amendment is adopted, stockholders will not be
required to exchange outstanding stock certificates for new certificates.
Approval of the proposed amendment requires the affirmative vote of a majority
of the outstanding shares of the Common Stock of the Company entitled to vote at
the Annual Meeting. If approved by the stockholders, the amendment to Article I
will become effective upon the filing with the Secretary of State of the State
of Delaware of a Certificate of Amendment to the Company's Restated Certificate
of Incorporation, which filing is expected to take place shortly after the
Annual Meeting. However, the Board of Directors will be authorized, without
further vote of the stockholders, to abandon the name change and determine not
to file the Certificate of Amendment if the Board concludes that such action
would be in the best interests of the Company and its stockholders. If the
proposed amendment is not approved by the stockholders, then the Certificate of
Amendment will not be filed and the Company's name will not be changed.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF AN
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 2001 Annual
Meeting of Stockholders must be received at the Company's principal executive
offices located at 100 Field Point Road, Greenwich, Connecticut 06830,
Attention: Bruce D. Kreiger, Secretary, on or before December 31, 2000 for
consideration for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting. In addition, if a stockholder fails to provide the
Company notice of any stockholder proposal on or before the 60th day prior to
the date of the Company's 2001 Annual Meeting of Stockholders, then the
Company's management proxies will be entitled to use their discretionary voting
authority if such stockholder proposal is raised at the Annual Meeting of
Stockholders without any discussion of the matter in the proxy statement.
OTHER MATTERS
As of the date of this Proxy Statement, the Company's management does not
know of any business, other than that mentioned above, which will be presented
for consideration at the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies in accordance with
their best judgment on such matters.
19
FINANCIAL STATEMENTS
The Company's audited consolidated financial statements as at January 31,
2000 and 1999, and for the periods ended January 31, 2000, 1999, and 1998, are
included as part of the Annual Report on Form 10-K which accompanies this Proxy
Statement.
By Order of the Board of Directors,
Bruce D. Kreiger, Secretary
April 28, 2000
20
EXHIBIT A
BLYTH INDUSTRIES, INC.
ANNUAL INCENTIVE COMPENSATION PLAN (2000)
1. PURPOSE. The purpose of the Blyth Industries, Inc. Annual Incentive
Compensation Plan (2000) (the "Plan") is to provide Blyth Industries, Inc. (the
"Company") and its subsidiaries with an effective means of attracting, retaining
and motivating officers and other key employees and to provide them with
incentives to enhance the growth and profitability of the Company.
2. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective as of
February 1, 2000, subject to approval by the Stockholders of the Corporation.
3. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors of the Company (which
Committee shall be comprised solely of outside directors as such term is used in
Section 162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as amended (the
"Code")). Subject to the provisions of the Plan, the Committee shall be
authorized to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan and to make all other determinations necessary
or advisable for the administration of the Plan. The determination of the
Committee in the administration of the Plan, as described herein, shall be final
and conclusive.
4. ELIGIBILITY. Incentive Compensation awards under the Plan for any fiscal
year of the Company ("Fiscal Year") may be granted to those key employees and
officers (including officers who are directors) of the Company and its
subsidiaries ("Participants"), who shall be selected by the Committee after
consideration of management's recommendations. Subsidiaries shall mean any
business entity in which the Company owns, directly or indirectly, 50% or more
of the total combined voting power of all classes of stock.
5. ANNUAL INCENTIVE POOL DETERMINATION. As soon as practicable either before
or after the beginning of each Fiscal Year, the Committee shall designate a list
of Participants for such Fiscal Year, designate target awards by salary grade or
such other standard determined by the Committee and establish a target award
pool, which shall be the sum of target awards for all Participants. Only
officers and other key employees shall be eligible to be included in the list of
Participants. The Committee shall also determine target financial goals for the
year which shall be based on a combination of one or more of the following
criteria: the Company's net income, aggregate sales, return on equity and/or
earnings per share. The Committee shall construct a schedule around such goals
that would result in the earning of up to 200% of the target award pool
depending upon what percentage of the financial goals was achieved. As soon as
practicable after the end of the Fiscal Year, the Committee shall determine the
percentage of the target award pool available for payment based upon such
schedule and after considering management's recommendations, if any, that the
effect of unusual items on the financial results for such Fiscal Year be
excluded from the calculations, provided, however, that no such adjustment in
the calculations shall be applied to any participant determined by the Committee
(i) to be a covered employee as defined in Section 162(m) of the Internal
Revenue Code for the preceding Fiscal Year or (ii) likely to be such a covered
employee for the current or next following Fiscal Year (hereafter referred to as
a "covered employee").
6. AWARD DETERMINATION. As soon as practicable after the end of the Fiscal
Year, the Committee shall certify in writing whether the target financial goals
have been met. If so, the Committee shall approve incentive award payments to
Participants which are based both on the size of the target award pool available
and upon management's assessment of the Participant's individual performance
during the Fiscal Year but in no event may the Committee increase an award to a
participant deemed to be a covered employee over such amounts payable based on
the objective criteria established at the outset of the Fiscal Year for which
the award is made, nor shall the maximum award for a Fiscal Year payable to any
such covered employee exceed 150% of the lesser of such employee's base salary
or $1,000,000. The Committee
A-1
shall have no obligation to pay out all of the award pool for a Fiscal Year, but
in no event can the total amount paid exceed 200% of the target award pool for
such Fiscal Year. Except as provided in Section 8 with respect to deferred
awards, Participants must be employed by the Company or one of its subsidiaries
as of the payment date under Section 7 to be eligible for award payments,
provided, that if the Participant's employment is terminated prior to the
payment date by reason of death, retirement, disability, or any other reason
with the consent of the Committee, the Committee, in its sole discretion, may
provide for an award payment to that Participant or the Participant's Designated
Beneficiary, if applicable.
7. FORM OF PAYMENT. All awards approved by the Committee for payment, unless
deferred under Section 8, shall be paid in cash as soon as practicable after the
end of the Fiscal Year.
8. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are
applicable to this Plan:
(a) Except in the event of the death of a Participant, the rights and
interests of a Participant under the Plan may not be assigned, encumbered or
transferred.
(b) No employee or other person shall have any claim or right to be
granted an award under the Plan. Neither the Plan nor any action taken
thereunder shall be construed as giving any employee or other person any
right to be retained in the employ of the Company.
(b) The Company shall have the right to deduct from all payments made
under the Plan any taxes required by law to be withheld with respect to such
payments.
(d) The Plan shall be construed in accordance with and governed by the
laws of the State of Delaware.
(e) Each Participant shall designate in a manner determined by the
Committee a beneficiary (the "Designated Beneficiary") to receive payments
due hereunder in the event of such Participant's death. If no Designated
Beneficiary survives the Participant, it shall be the surviving spouse of
the Participant or, if there is no surviving spouse, it shall be the estate
of the Participant.
(f) A Participant may elect to defer payment of an award pursuant to,
and to the extent permitted by, the Company's Non-Qualified Deferred
Compensation Plan.
9. TERMINATION. The Committee may amend, suspend, or terminate any or all
provisions of the Plan at any time, provided that no such amendment, suspension
or termination shall result in the disqualification of an award as "performance
based compensation" as such term is used in Section 162(m) of the Code nor shall
it adversely affect, without the Participants' consent, any awards previously
granted to them.
10. OTHER PLANS OR PAYMENTS. Nothing in this Plan shall be construed as
limiting the authority of the Committee, the Board of Directors, the Company or
any subsidiary, to establish any other deferred compensation plan or as in any
way limiting their authority to pay bonuses or other supplemental compensation
to any persons employed by the Company or a subsidiary, whether or not such
person is a Participant in this Plan and regardless of how the amount of such
compensation or bonus is determined.
A-2
BLYTH INDUSTRIES, INC.
1994 EMPLOYEE STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF MARCH 30, 2000)
1. PURPOSE OF THE PLAN.
The purpose of the amended and restated BLYTH INDUSTRIES, INC. 1994
EMPLOYEE STOCK OPTION PLAN (the "Plan") is (i) to further the growth and success
of Blyth Industries, Inc., a Delaware corporation (the "Company"), and its
Subsidiaries (as hereinafter defined) by enabling officers and employees of the
Company and any of its Subsidiaries to acquire shares of Common Stock, $.02 par
value (the "Common Stock"), of the Company, thereby increasing their personal
interest in such growth and success, and (ii) to provide a means of rewarding
outstanding performance by such persons to the Company and/or its Subsidiaries.
Options granted under the Plan may be either "incentive stock options" ("ISOs"),
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified stock options
("NSOs"). For purposes of the Plan, the terms "Parent" and "Subsidiary" shall
mean "Parent Corporation" and "Subsidiary Corporation", respectively, as such
terms are defined in Sections 424(e) and (f) of the Code. Unless the context
otherwise requires, any ISO or NSO shall hereinafter be referred to as an
"Option".
This amended and restated Plan increases the number of shares issuable
upon exercise of options granted under the Plan (i) by 1,000,000 shares to
2,880,000 shares, and (ii) on an annual basis commencing February 1, 2001.
2. ADMINISTRATION OF THE PLAN.
(a) STOCK OPTION COMMITTEE.
So long as the Plan shall be required to comply with Rule 16b-3 ("Rule
16b-3") promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), in order to
permit transactions pursuant to the Plan by officers and employee directors of
the Company to be exempt from the provisions of Section 16(b) of the 1934 Act,
the Plan shall be administered by a committee (the "Committee") consisting of
two or more directors appointed to such Committee from time to time by the Board
of Directors of the Company (the "Board"), and each member of the Committee, at
the effective date of his or her appointment to the Committee, shall be a
"non-employee director" within the meaning of Rule 16b-3. The members of the
Committee may be removed at any time either with
or without cause by the Board. Any vacancy on the Committee, whether due to
action of the Board or any other cause, shall be filled by the Board. The term
"Committee" shall, for all purposes of the Plan other than this Section 2, be
deemed to refer to the Board if the Board is administering the Plan.
(b) PROCEDURES.
The Committee shall from time to time select a Chairman from among its
members and shall adopt such rules and regulations as it shall deem appropriate
concerning the holding of meetings and the administration of the Plan. A
majority of the entire Committee shall constitute a quorum and the actions of a
majority of the members of the Committee present at a meeting at which a quorum
is present, or actions approved in writing by all of the members of the
Committee, shall be the actions of the Committee; PROVIDED, HOWEVER, that if the
Committee consists of only two members, both shall be required to constitute a
quorum and to act at a meeting or to approve actions in writing.
(c) INTERPRETATION.
Except as otherwise expressly provided in the Plan, the Committee shall
have all powers with respect to the administration of the Plan, including,
without limitation, full power and authority to interpret the provisions of the
Plan and any Option Agreement (as defined in Section 5(b)), and to resolve all
questions arising under the Plan. All decisions of the Board or the Committee,
as the case may be, shall be conclusive and binding on all participants in the
Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
(a) NUMBER OF SHARES.
Subject to the provisions of Section 9 (relating to adjustments upon
changes in capital structure and other corporate transactions), the number of
shares of Common Stock subject at any one time to Options granted under the
Plan, plus the number of shares of Common Stock theretofore issued and delivered
pursuant to the exercise of Options granted under the Plan shall not exceed the
sum of (i) 2,880,000 shares plus (ii) an additional number of shares, which are
to be added on February 1, 2001, and each anniversary thereof during the term of
the Plan (an "Anniversary Date"), equal to the lesser of (A) three-quarters of
one percent (0.75%) of the total outstanding shares of Common Stock of the
Company on the applicable Anniversary Date and (B) 600,000 shares. In no event
may the number of shares of Common Stock subject at any one time to Options
granted under the Plan, plus the number of shares of Common Stock theretofore
issued and delivered pursuant to the exercise of Options granted under the Plan
exceed 5,280,000 shares. If and to the extent that Options granted under the
Plan terminate, expire or are cancelled without having been fully exercised, new
Options may be granted under the Plan with respect to the shares of Common Stock
covered by the unexercised portion of such terminated, expired or
- 2 -
cancelled Options.
(b) CHARACTER OF SHARES.
The shares of Common Stock issuable upon exercise of an Option granted
under the Plan shall be (i) authorized but unissued shares of Common Stock, (ii)
shares of Common Stock held in the Company's treasury or (iii) a combination of
the foregoing.
(c) RESERVATION OF SHARES.
The number of shares of Common Stock reserved for issuance under the
Plan shall at no time be less than the maximum number of shares which may be
purchased at any time pursuant to outstanding Options.
4. ELIGIBILITY.
(a) GENERAL.
Options may be granted by the Committee under the Plan only to persons
who are officers or employees (including directors who are officers or
employees) of the Company or any of its Subsidiaries. Options granted under the
Plan shall be, in the discretion of the Committee, either ISOs or NSOs.
Notwithstanding the foregoing, Options may be conditionally granted to persons
who are prospective employees of the Company or any of its Subsidiaries;
PROVIDED, HOWEVER, that any such conditional grant of an ISO to a prospective
employee shall, by its terms, become effective no earlier than the date on which
such person actually becomes an employee.
(b) EXCEPTIONS.
Notwithstanding anything contained in Section 4(a) to the contrary:
(i) no ISO may be granted under the Plan to an
employee who owns, directly or indirectly (within the meaning of
Sections 422(b)(6) and 424(d) of the Code), stock possessing more than
10% of the total combined voting power of all classes of stock of the
Company or of its Parent or Subsidiaries, if any, unless (A) the Option
Price (as defined in Section 6(a)) of the shares of Common Stock
subject to such ISO is fixed at not less than 110% of the Fair Market
Value on the date of grant (as determined in accordance with Section
6(b)) of such shares and (B) such ISO, by its terms, is not exercisable
after the expiration of five years from the date it is granted; and
(ii) no Option may be granted to a person (A) who has
been appointed pursuant to Section 2(a) to serve on the Committee
effective as of a future date at any time during the period from the
date such appointment is made to the date such appointment is to become
effective or (B) who is serving as a member of the Committee.
- 3 -
5. GRANT OF OPTIONS.
(a) GENERAL.
Options may be granted under the Plan at any time and from time to time
on or prior to the Expiration Date (as defined in Section 12). Subject to the
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine:
(i) the persons (from among the class of persons
eligible to receive Options under the Plan) to whom Options shall be
granted (the "Optionees");
(ii) the time or times at which Options shall be
granted;
(iii) the number of shares subject to each Option;
(iv) the Option Price of the shares subject to each
Option, which price shall be not less than the minimum specified in
Section 4(b)(i) or 6(a) (as applicable); and
(v) the time or times when, or the occurrence of the
event or events upon which, each Option shall become exercisable and
the duration of the exercise period.
(b) OPTION AGREEMENTS.
Each Option granted under the Plan shall be designated as an ISO or an
NSO and shall be subject to the terms and conditions applicable to ISOs and/or
NSOs (as the case may be) set forth in the Plan. In addition, each Option shall
be evidenced by a written agreement (an "Option Agreement"), containing such
terms and conditions and in such form, not inconsistent with the Plan, as the
Committee shall, in its discretion, provide. Each Option Agreement shall be
executed by the Company and the Optionee.
(c) NO EVIDENCE OF EMPLOYMENT.
Nothing contained in the Plan or in any Option Agreement shall confer
upon any Optionee any right with respect to the continuation of his or her
employment by the Company or any of its Subsidiaries or interfere in any way
with the right of the Company or any such Subsidiary (subject to the terms of
any separate agreement to the contrary), at any time to terminate such
employment or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the grant of an Option.
- 4 -
(d) DATE OF GRANT.
The date of grant of an Option under the Plan shall be the date as of
which the Committee approves the grant; PROVIDED, HOWEVER, that in the case of
an ISO, the date of grant shall in no event be earlier than the date as of which
the Optionee becomes an employee of the Company or one of its Subsidiaries.
6. OPTION PRICE.
(a) GENERAL.
Subject to Section 9, the price (the "Option Price") at which each
share of Common Stock subject to an Option granted under the Plan may be
purchased shall be determined by the Committee at the time the Option is
granted; PROVIDED, HOWEVER, that in the case of an ISO (subject to Section
4(b)(i)) or an NSO, such Option Price shall in no event be less than 100% of the
Fair Market Value on the date of grant (as determined in accordance with Section
6(b)) of such share of Common Stock; and PROVIDED FURTHER, HOWEVER, that, in the
case of an Option granted effective on the Effective Date (as defined in Section
7(a)), such Option Price shall be the initial public offering price per share of
the Common Stock.
(b) DETERMINATION OF FAIR MARKET VALUE.
Subject to the requirements of Section 422 of the Code, for purposes of
the Plan, the "Fair Market Value" of shares of Common Stock shall be equal to:
(i) if such shares are publicly traded, such price as
may be determined based upon a reasonable method of fair market
valuation using market quotations adopted in good faith by the
Committee for any given grant or set of grants, provided such method of
valuation is permitted by applicable law; or
(ii) if there is no public trading market for such
shares, the fair value of such shares on the date of grant as
determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions negotiated
at arms' length.
Anything contained in the Plan to the contrary
notwithstanding, all determinations pursuant to Section 6(b)(ii) shall be made
without regard to any restriction other than a restriction which, by its terms,
will never lapse
- 5 -
(c) REPRICING OF NSO'S.
Subsequent to the date of grant of any NSO, the Committee may, at its
discretion and with the consent of the Optionee, establish a new Option Price
for such NSO so as to increase or decrease the Option Price of such NSO.
7. EXERCISABILITY OF OPTIONS.
(a) COMMITTEE DETERMINATION.
Each Option granted under the Plan shall be exercisable at such time or
times, or upon the occurrence of such event or events, and for such number of
shares subject to the Option, as shall be determined by the Committee and set
forth in the Option Agreement evidencing such Option; PROVIDED, HOWEVER, that no
Option granted under the Plan shall be exercisable during the 180-day period
immediately following the effective date (the "Effective Date") of the
registration statement filed by the Company under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the initial public offering
of the Common Stock. Subject to the proviso of the immediately preceding
sentence, if an Option is not at the time of grant immediately exercisable, the
Committee may (i) in the Option Agreement evidencing such Option, provide for
the acceleration of the exercise date or dates of the subject Option upon the
occurrence of specified events and/or (ii) at any time prior to the complete
termination of such Option, accelerate the exercise date or dates of such
Option.
(b) AUTOMATIC TERMINATION OF OPTION.
The unexercised portion of any Option granted under the Plan shall
automatically terminate and shall become null and void and be of no further
force or effect upon the first to occur of the following:
(i) the tenth anniversary of the date on which such
Option is granted or, in the case of any ISO granted to a person
described in Section 4(b)(i), the fifth anniversary of the date on
which such ISO is granted;
(ii) the expiration of such period of time or the
occurrence of such event as the Committee in its discretion may provide
in the Option Agreement;
(iii) the effective date of a Corporate Transaction
(as defined in Section 9(b)) to which Section 9(b)(ii) (relating to
assumptions and substitutions of Options) does not apply; PROVIDED,
HOWEVER, that an Optionee's right to exercise any Option outstanding
prior to such effective date shall in all events be suspended during
the period commencing 10 days prior to the proposed effective date of
such Corporate Transaction and ending on either the actual effective
date
- 6 -
of such Corporate Transaction or upon receipt of notice from the
Company that such Corporate Transaction will not in fact occur; and
(iv) except to the extent permitted by Section
9(b)(ii), the date on which an Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or
the laws of descent and distribution), assigned, pledged, hypothecated,
attached or otherwise disposed of by the Optionee.
Anything contained in the Plan to the contrary
notwithstanding, unless otherwise provided in an Option Agreement, no Option
granted under the Plan shall be affected by any change of duties or position of
the Optionee (including a transfer to or from the Company or one of its
Subsidiaries), so long as such Optionee continues to be an officer or employee
of the Company or one of its Subsidiaries.
(c) LIMITATIONS ON EXERCISE.
Anything contained in the Plan to the contrary notwithstanding, an ISO
granted under the Plan to an Optionee shall not be exercisable to the extent
that the aggregate Fair Market Value on the date of grant of such ISO (as
determined in accordance with Section 6(b)) of all stock with respect to which
incentive stock options are exercisable for the first time by such Optionee
during any calendar year (under all plans of the Company and its Subsidiaries)
exceeds $100,000.
8. PROCEDURE FOR EXERCISE.
(a) PAYMENT.
At the time an Option is granted under the Plan, the Committee shall,
in its discretion, specify one or more of the following forms of payment which
may be used by an Optionee upon exercise of his Option:
(i) cash or personal or certified check payable to
the Company in an amount equal to the aggregate Option Price of the
shares with respect to which the Option is being exercised;
(ii) stock certificates (in negotiable form)
representing whole shares of Common Stock having a Fair Market Value on
the date of exercise (as determined in accordance with Section 6(b) as
if the date of exercise were the date of grant) equal to the aggregate
Option Price of the shares with respect to which the Option is being
exercised;
(iii) (x) by arrangements which are acceptable to the
Committee whereby
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the Optionee delivers irrevocable instructions to a broker promptly to
deliver to the Company the amount of sale proceeds from the sale of
shares subject to the Option as is necessary to pay the Option Price
and, unless otherwise allowed by the Committee, any applicable tax
withholding obligation (provided that, in the case of an ISO, if this
form of payment is approved by the Committee, and if this form of
payment is utilized by the Optionee, a Disqualifying Disposition (as
defined in Section 15 below) will be deemed to have occurred) or (y) in
compliance with any other cashless exercise program authorized by the
Company for use in connection with the Plan at the time of such
exercise (provided that, in the case of an ISO, if this form of payment
is approved by the Committee, and if this form of payment is utilized
by the Optionee, a Disqualifying Disposition may be deemed to have
occurred); or
(iv) a combination of the methods set forth in
clauses (i) (ii) and (iii);
(b) NOTICE.
An Optionee (or other person, as provided in Section 10(b)) may
exercise an Option granted under the Plan in whole or in part (but for the
purchase of whole shares only), as provided in the Option Agreement evidencing
his or her Option, by delivering a written notice (the "Notice") to the
Secretary of the Company. The Notice shall:
(i) state that the Optionee elects to exercise the
Option;
(ii) state the number of shares with respect to which
the Option is being exercised (the "Optioned Shares");
(iii) state the method of payment for the Optioned
Shares (which method must be available to the Optionee under the terms
of his or her Option Agreement);
(iv) state the date upon which the Optionee desires
to consummate the purchase (which date must be prior to the termination
of such Option and no later than 30 days from the delivery of such
Notice);
(v) include any representations of the Optionee
required pursuant to Section 10(a);
(vi) if the Option is exercised pursuant to Section
10(b) by any person other than the Optionee, include evidence to the
satisfaction of the Committee of the right of such person to exercise
the Option; and
(vii) include such further provisions consistent with
the Plan as the Committee may from time to time require.
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The exercise date of an Option shall be the date on which the Company
receives the Notice from the Optionee.
Within 30 days of the exercise of the Option, the Optionee shall
deliver to the Company a copy of any election filed by the Optionee with the
Internal Revenue Service under Section 83(b) of the Code.
(c) ISSUANCE OF CERTIFICATES.
The Company shall issue a stock certificate in the name of the Optionee
(or such other person exercising the Option in accordance with the provisions of
Section 10(b)) for the Optioned Shares as soon as practicable after receipt of
the Notice and payment of the aggregate Option Price for such shares. Neither
the Optionee nor any person exercising an Option in accordance with the
provisions of Section 10(b) shall have any privileges as a stockholder of the
Company with respect to any shares of stock subject to an Option granted under
the Plan until the date of issuance of a stock certificate pursuant to this
Section 8(c).
9. ADJUSTMENTS.
(a) CHANGES IN CAPITAL STRUCTURE.
Subject to Section 9(b), if the Common Stock is changed by reason of a
stock split, reverse stock split, stock dividend or recapitalization, or
converted into or exchanged for other securities as a result of a merger,
consolidation or reorganization, the Committee shall make such adjustments in
the number and class of shares of stock with respect to which Options may be
granted under the Plan as shall be equitable and appropriate in order to make
such Options, as nearly as may be practicable, equivalent to such Options
immediately prior to such change. A corresponding adjustment changing the number
and class of shares allocated to, and the Option Price of, each Option or
portion thereof outstanding at the time of such change shall likewise be made.
Anything contained in the Plan to the contrary notwithstanding, in the case of
ISOs, no adjustment under this Section 9(a) shall be appropriate if such
adjustment (i) would constitute a modification, extension or renewal of such
ISOs within the meaning of Sections 422 and 424 of the Code, and the regulations
promulgated by the Treasury Department thereunder, or (ii) would, under Section
422 of the Code and the regulations promulgated by the Treasury Department
thereunder, be considered the adoption of a new plan requiring stockholder
approval.
(b) CORPORATE TRANSACTIONS.
The following rules shall apply in connection with the dissolution or
liquidation of the Company, a reorganization, merger or consolidation in which
the Company is not the
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surviving corporation or a sale of all or substantially all of the assets of the
Company to another person or entity (a "Corporate Transaction"):
(i) each holder of an Option outstanding at such time
shall be given (A) written notice of such Corporate Transaction at
least 20 days prior to its proposed effective date (as specified in
such notice) and (B) an opportunity, during the period commencing with
delivery of such notice and ending 10 days prior to such proposed
effective date, to exercise the Option to the full extent to which such
Option would have been exercisable by the Optionee at the expiration of
such 20-day period; PROVIDED, HOWEVER, that upon the effective date of
a Corporate Transaction, all Options granted under the Plan not so
exercised shall automatically terminate; and
(ii) anything contained in the Plan to the contrary
notwithstanding, Section 9(b)(i) shall not be applicable if provision
shall be made in connection with such Corporate Transaction for the
assumption of outstanding Options by, or the substitution for such
Options of new options covering the stock of, the surviving, successor
or purchasing corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number, kind and option prices of
shares subject to such options; PROVIDED, HOWEVER, that in the case of
ISOs, the Committee shall, to the extent not inconsistent with the best
interests of the Company or its Subsidiaries (such best interests to be
determined in good faith by the Committee in its sole discretion), use
its best efforts to ensure that any such assumption or substitution
will not constitute a modification, extension or renewal of the ISOs
within the meaning of Section 424(h) of the Code and the regulations
promulgated by the Treasury Department thereunder.
(c) SPECIAL RULES.
The following rules shall apply in connection with Section 9(a) and (b)
above:
(i) no fractional shares shall be issued as a result
of any such adjustment, and any fractional shares resulting from the
computations pursuant to Section 9(a) or (b) shall be eliminated
without consideration from the respective Options;
(ii) no adjustment shall be made for cash dividends
or the issuance to stockholders of rights to subscribe for additional
shares of Common Stock or other securities; and
(iii) any adjustments referred to in Section 9(a) or
(b) shall be made by the Committee in its sole discretion and shall be
conclusive and binding on all persons holding Options granted under the
Plan.
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10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.
(a) COMPLIANCE WITH SECURITIES LAWS.
No Options shall be granted under the Plan, and no shares of Common
Stock shall be issued and delivered upon the exercise of Options granted under
the Plan, unless and until the Company and/or the Optionee shall have complied
with all applicable Federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
The Committee in its discretion may, as a condition to the exercise of
any Option granted under the Plan, require an Optionee (i) to represent in
writing that the shares of Common Stock received upon exercise of an Option are
being acquired for investment and not with a view to distribution and (ii) to
make such other representations and warranties as are deemed appropriate by
counsel to the Company. Stock certificates representing shares of Common Stock
acquired upon the exercise of Options that have not been registered under the
Securities Act shall, if required by the Committee, bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER
THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
(b) NONASSIGNABILITY OF OPTION RIGHTS.
No Option granted under the Plan shall be assignable or otherwise
transferable by the Optionee except by will or by the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee. If an Optionee dies, his or her Option shall thereafter be
exercisable, during the period specified in the Option Agreement, by his or her
executors or administrators to the full extent to which such Option was
exercisable by the Optionee at the time of his or her death.
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(c) MAXIMUM OPTION GRANT.
The maximum number of shares of Common Stock with respect to which
Options may be granted under this Plan may be made to an employee of the Company
in any calendar year shall not exceed 100,000 shares (subject to adjustment for
stock splits, reverse stock splits, stock dividends and stock combinations, and
the like).
11. EFFECTIVE DATE OF PLAN.
The Plan became effective on the Effective Date. This amendment and
restatement of the Plan is effective as of March 30, 2000; provided, however,
that no Option granted on or after December 9, 1999 (but as to Options granted
on or after December 9, 1999, only those Options designated by the Committee as
being exercisable for shares in excess of 1,880,000 shares originally reserved
for issuance upon exercise of Options granted hereunder) shall be exercisable by
an Optionee unless and until the amendment to Section 3(a) hereof increasing the
number of shares subject to the Plan shall have been approved by the
stockholders of the Company in accordance with the provisions of its Certificate
of Incorporation and Bylaws, which approval shall be obtained within 12 months
after the adoption of such amendment by the Board.
12. EXPIRATION AND TERMINATION OF THE PLAN.
Except with respect to Options then outstanding, the Plan shall expire
on the date (the "Expiration Date") which is the first to occur of (i) the later
of (a) the tenth anniversary of the Effective Date and (b) the tenth anniversary
of the date on which the Plan is approved by the stockholders of the Company and
(ii) the date as of which the Board, in its sole discretion, determines that the
Plan shall terminate. Any Options outstanding as of the Expiration Date shall
remain in effect until they have been exercised or terminated or have expired by
their respective terms.
13. AMENDMENT OF PLAN.
The Board may at any time prior to the Expiration Date modify and amend
the Plan in any respect; PROVIDED, HOWEVER, that the approval of the holders of
a majority of the votes that may be cast by all of the holders of shares of
Common Stock and preferred stock of the Company, if any, entitled to vote
(voting as a single class) shall be obtained prior to any such amendment
becoming effective if such approval is required by law or is necessary to comply
with regulations promulgated by the SEC under Section 16(b) of the 1934 Act or
with Section 422 of the Code or the regulations promulgated by the Treasury
Department thereunder.
- 12 -
14. CAPTIONS.
The use of captions in the Plan is for convenience. The captions are
not intended to provide substantive rights.
15. DISQUALIFYING DISPOSITIONS.
If Optioned Shares acquired by exercise of an ISO granted under the
Plan are disposed of within two years following the date of grant of the ISO or
one year following the transfer of the Optioned Shares to the Optionee (a
"Disqualifying Disposition"), the holder of the Optioned Shares shall,
immediately prior to such Disqualifying Disposition, notify the Company in
writing of the date and terms of such Disqualifying Disposition and provide such
other information regarding the Disqualifying Disposition as the Company may
reasonably require.
16. WITHHOLDING TAXES.
Whenever under the Plan shares of Common Stock are to be delivered to
an Optionee upon exercise of an Option, the Company shall be entitled to require
as a condition of delivery that the Optionee remit or, in appropriate cases,
agree to remit when due, an amount sufficient to satisfy all current or
estimated future Federal, state and local withholding tax and employment tax
requirements relating thereto. At the time of a Disqualifying Disposition, the
Optionee shall remit to the Company in cash the amount of any applicable
Federal, state and local withholding taxes and employment taxes.
17. OTHER PROVISIONS.
Each Option granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Committee,
in its sole discretion. Notwithstanding the foregoing, each ISO granted under
the Plan shall include those terms and conditions which are necessary to qualify
the ISO as an "incentive stock option" within the meaning of Section 422 of the
Code and the regulations thereunder and shall not include any terms or
conditions which are inconsistent therewith
- 13 -
18. NUMBER AND GENDER.
With respect to words used in the Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine gender, and
vice-versa, as the context requires.
19. GOVERNING LAW.
The validity and construction of the Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of Delaware.
- 14 -
- --------------------------------------------------------------------------------
PROXY PROXY
BLYTH INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 14, 2000
The undersigned appoints Robert B. Goergen and Richard T. Browning, or
either of them, proxies for the undersigned, each with full power of
substitution, to attend the Annual Meeting of Stockholders of Blyth Industries,
Inc., to be held on June 14, 2000 at 9:00 A.M. EDT, and at any adjournments or
postponements of the Annual Meeting, and to vote as specified in this Proxy all
of the Common Stock of the Company which the undersigned would be entitled to
vote if personally present. This Proxy also provides confidential voting
instructions to the Trustees of the Blyth Industries, Inc. Profit Sharing
Retirement Plan with respect to shares of Common Stock held in accounts under
such Plan. This Proxy when properly executed will be voted in accordance with
your indicated directions. If no direction is made, this Proxy will be voted FOR
the election of Directors, FOR the ratification of the Company's independent
accountants, FOR the Company's Amended and Restated 1994 Employee Stock Option
Plan, FOR the Blyth Industries, Inc. Annual Incentive Compensation Plan (2000),
and FOR the adoption of the amendment to the Company's Restated Certificate of
Incorporation (or, in the case of participants in the Profit Sharing Retirement
Plan referred to above, will be voted in the discretion of the Trustees). On any
other matters which may come before the Annual Meeting, and any adjournments or
postponements thereof, this Proxy will be voted in the discretion of the persons
named as proxies or the Trustees (in the case of participants in the Plan
referred to above).
The Board of Directors recommends a vote FOR the election of Directors,
FOR the ratification of the Company's independent accountants, FOR the Company's
Amended and Restated 1994 Employee Stock Option Plan, FOR the Blyth Industries,
Inc. Annual Incentive Compensation Plan (2000), and FOR the adoption of the
amendment to the Company's Restated Certificate of Incorporation.
YOUR VOTE IS IMPORTANT! PLEASE MARK SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
BLYTH INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors For Withhold For All
All All Except*
NOMINEES: / / / / / /
01 Roger A. Anderson 02 Pamela M. Goergen
____________________________________________________________
* (Write the nominee's name(s) in the space provided above.)
For Against Abstain
2. Ratification of the appointment of / / / / / /
PricewaterhouseCoopers LLP as the
Company's independent accountants
for the upcoming year.
For Against Abstain
3. Approval of the Company's Amended and / / / / / /
Restated 1994 Employee Stock Option Plan.
For Against Abstain
4. Approval of the Blyth Industries, Inc. Annual / / / / / /
Incentive Compensation Plan (2000).
For Against Abstain
5. Adoption of an amendment to the Company's / / / / / /
Restated Certificate of Incorporation to
change its name to Blyth, Inc.
6. In their discretion upon such
other matters as may properly
come before the meeting and
any adjournments or
postponements thereof.
Dated: ____________,2000
Signature(s) ______________________
______________________
IMPORTANT: Please date this proxy and sign exactly as name appears on this
proxy. If shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian please give title as
such. If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
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FOLD AND DETACH HERE
Please complete, sign and mail this proxy promptly in
the enclosed envelope. No postage is required for mailing in the United States
ANNUAL MEETING
OF
BLYTH INDUSTRIES, INC.
WEDNESDAY, JUNE 14, 2000
9:00 A.M.
GREENWICH LIBRARY
101 WEST PUTNAM AVENUE
GREENWICH, CONNECTICUT 06830