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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HOME PRODUCTS INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter
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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.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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HOME PRODUCTS INTERNATIONAL, INC.
4501 WEST 47TH STREET
CHICAGO, ILLINOIS 60632
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2000
To the Stockholders of Home Products International, Inc.
The Annual Meeting of Stockholders of Home Products International, Inc. a
Delaware corporation (the "Company"), will be held on Wednesday, May 31, 2000 at
10:30 a.m., local time, at The Standard Club, 320 South Plymouth Court, Chicago,
IL 60604 for the following purposes, as more fully described in the accompanying
Proxy Statement.
1. To elect eight (8) directors for the next year.
2. To transact such other business as may properly come before the annual
meeting.
Stockholders of record of the Company's Common Stock at the close of
business on April 7, 2000, the record date fixed by the Board of Directors, are
entitled to notice of, and to vote at, the meeting, also as more fully described
in the Proxy Statement.
All stockholders are cordially invited to attend the meeting. Those who
cannot attend are urged to sign, date and otherwise complete the enclosed proxy
and return it promptly in the envelope provided. Any stockholder giving a proxy
has the right to revoke it at any time before it is voted.
For the Board of Directors,
/s/ JAMES R. TENNANT
James R. Tennant
Chairman of the Board
Chicago, Illinois
April 12, 2000
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HOME PRODUCTS INTERNATIONAL, INC.
4501 WEST 47TH STREET
CHICAGO, ILLINOIS 60632
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PROXY STATEMENT
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APPROXIMATE DATE PROXY MATERIAL
FIRST SENT TO STOCKHOLDERS:
APRIL 12, 2000
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The following information is provided in connection with the solicitation
of proxies for the Annual Meeting of Stockholders of Home Products
International, Inc., a Delaware corporation (the "Company" or "HPI"), to be held
on Wednesday, May 31, 2000 (the "Meeting"), for the purposes stated in the
attached Notice of Annual Meeting of Stockholders.
GENERAL INFORMATION
SOLICITATION OF PROXIES
A form of proxy is being furnished herewith by the Company to each
stockholder and, in each case, such proxy is solicited on behalf of the Board of
Directors of the Company for use at the Meeting. The entire cost of soliciting
these proxies will be borne by the Company. Solicitation will be made by mail,
and may also be made by telephone or facsimile by directors, officers and
regular employees of the Company, but these persons will not be separately
compensated for such solicitation services. The Company will reimburse brokerage
houses and other nominees for their expenses in forwarding proxy solicitation
material to beneficial owners of the Company's Common Stock.
AUTHORITY CONFERRED BY PROXIES
The shares represented by proxies duly executed and returned by
stockholders and received by the Company before the Meeting will be voted as
directed in the proxies. In the absence of specific direction, the shares
represented by proxies will be voted: FOR the election of all nominee directors
specified herein. As to the other matters, if any, to be voted upon at the
Meeting, the persons designated as proxies in the accompanying form of proxy
will take such action as they, in their discretion, may deem advisable. The
persons named as proxies were selected by the Board of Directors and one is a
director and executive officer of the Company and the other is an executive
officer of the Company.
REVOCABILITY OF PROXIES
Execution of the enclosed proxy will not affect your right as a stockholder
to attend the Meeting and to vote in person. Any stockholder giving a proxy has
the right to revoke it at any time by: (i) a later dated proxy, duly executed
and delivered or presented at the Meeting; (ii) a written revocation sent to and
received by the Secretary of the Company prior to the Meeting; or (iii)
attendance at the Meeting and voting in person.
VOTING SECURITIES AND RECORD DATE
The Company's voting securities consist of one class of Common Stock, par
value $0.01 per share (the "Common Stock"), and one class of Preferred Stock,
par value $0.01 per share (the "Preferred Stock"). The Company had 7,277,268
issued and outstanding shares of Common Stock and no shares of Preferred Stock
issued and outstanding as of the close of business on April 7, 2000 (the "Record
Date"). Only stockholders of record on the books of the Company at the close of
business on the Record Date will be entitled to vote at the Meeting. Each share
of Common Stock is entitled to one vote. Representation at the Meeting by the
holders
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of one-third of the shares of Common Stock outstanding on the Record Date,
either in person or by proxy, will constitute a quorum.
Votes for, against, abstentions and "broker non-votes" will each be counted
as present for purposes of determining the presence of a quorum. For the
election of directors, the eight nominees who receive the most votes will be
elected. Accordingly, abstentions and broker non-votes will not affect the
outcome of such election.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of April 7, 2000 (as
of December 31, 1999 with respect to Chase Venture Capital Associates, L.P.;
Samstock L.L.C.; SAFECO Corporation; Dimensional Fund Advisors, Inc. and Graver,
Bokhof, Goodwin & Sullivan, L.P.) with respect to the beneficial ownership of
the Company's issued and outstanding Common Stock by: (i) each stockholder known
by the Company to be the beneficial owner of more than 5% of its Common Stock,
(ii) each director, (iii) each executive officer named in the Summary
Compensation Table and (iv) all of the directors and executive officers of the
Company as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") which generally attribute beneficial
ownership of securities to persons which generally possess sole or shared voting
power and/or investment power with respect to those securities. Unless otherwise
indicated, the persons or entities identified in the table have sole voting and
investment power with respect to the shares shown as beneficially owned by them.
Based upon the SEC definition of beneficial ownership, outstanding stock
options exercisable by the executive officers and directors within 60 days of
the Record Date are included in the number of shares owned by such individuals.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
Chase Venture Capital Associates, L.P.(1)................... 1,334,521 18.3%
Samstock L.L.C.(2).......................................... 814,000 11.2
SAFECO Corporation(3)....................................... 570,500 7.8
Dimensional Fund Advisors, Inc.(4).......................... 455,150 6.3
Graver, Bokhof, Goodwin & Sullivan, L.P.(5)................. 401,854 5.5
Charles R. Campbell(6)...................................... 32,547 *
Joseph Gantz(7)............................................. 24,406 *
Stephen P. Murray(8)........................................ 1,348,918 18.5
Marshall Ragir(9)........................................... 250,531 3.4
Jeffrey C. Rubenstein(10)................................... 553,858 7.6
Daniel B. Shure(11)......................................... 30,277 *
Joel D. Spungin(12)......................................... 27,241 *
James R. Tennant(13)........................................ 786,533 9.8
James E. Winslow(14)........................................ 133,529 1.8
Jeffrey R. Dolan(15)........................................ 72,281 1.0
All directors and executive Officers as a group (10
persons)(16).............................................. 3,029,128 36.4
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* Less than 1%.
(1) Chase Venture Capital Associates, L.P. ("CVCA"), is a California limited
partnership whose address is 380 Madison Avenue, New York, NY 10017. The
general partner is Chase Capital Partners ("CCP"), a New York general
partnership, whose address is the same as CVCA. CVCA and CCP have shared
voting and investment power with respect to the 1,334,521 shares of Common
Stock.
(2) According to information contained in a report on Schedule 13D/A dated
November 5, 1999, filed by Samstock L.L.C. ("STK"), STK has sole voting
power with respect to 664,000 shares of Common Stock (which represents 9.1%
of the shares outstanding). In addition, Rod Dammeyer, an executive
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officer of STK, has sole voting power of 150,000 shares of Common Stock (which
represents 2.1% of the shares outstanding). Based upon the SEC rules of
beneficial ownership, STK is deemed to be the beneficial owner of Mr. Dammeyer's
shares; therefore, STK is deemed to beneficially own 814,000 shares of
Common Stock (which represents 11.2% of the shares outstanding). STK's
address is Two North Riverside Plaza, Suite 600, Chicago, IL 60606.
(3) According to information contained in a report on Schedule 13G/A dated
January 28, 2000, filed by SAFECO Common Stock Trust ("SCST"), SAFECO Asset
Management Company ("SAMC"), and SAFECO Corporation ("SAFECO") of which
SCST and SAMC are wholly owned subsidiaries, SCST beneficially owns 369,900
shares of Common Stock (which represents 5.1% of the shares outstanding)
and SAMC and SAFECO together beneficially owns 570,500 shares of Common
Stock (which represent 7.8% of the shares outstanding, and includes the
shares beneficially owned by SCST) as a result of acting as an investment
adviser for registered investment companies. SAFECO and the various
accounts to which they are advisers have shared power to vote and dispose
of 570,500 shares of Common Stock. SCST, SAMC and SAFECO expressly disclaim
that, they are in fact, the beneficial owners of such shares. SAMC's
address is 601 Union Street, Suite 2500, Seattle, WA 98101 and SAFECO's
address is SAFECO Plaza, Seattle, WA 98185.
(4) According to information contained in a report on Schedule 13G dated
February 11, 2000, filed by Dimensional Fund Advisors, Inc. ("DFA"), DFA
beneficially owns 455,150 (which represent 6.3% of the shares outstanding)
as a result of acting as an investment adviser for registered investment
companies. DFA and the various accounts to which they are advisers have
shared power to vote and dispose of 455,150 shares of Common Stock. DFA
expressly disclaims that, they are in fact, the beneficial owners of such
shares. DFA's address is 1299 Ocean Avenue, 11th floor, Santa Monica, CA
90401.
(5) According to information available to the Company, Graver, Bokhof, Goodwin
& Sullivan, L.P., ("GBGS") and the various accounts to which they are
advisers have shared power to vote and dispose of 401,854 shares of Common
Stock (which represent 5.5% of the shares outstanding). GBGS's address is
100 South Wacker Drive, Suite 2100, Chicago, IL 60645.
(6) Includes 15,000 shares of Common Stock subject to stock options exercisable
within 60 days of April 7, 2000.
(7) Includes 12,500 shares of Common Stock subject to stock options exercisable
within 60 days of April 7, 2000 and 2,376 shares of Common Stock deferred
pursuant to the Company's 1999 Directors' Restricted Stock Plan.
(8) Mr. Murray is a general partner of Chase Capital Partners, which is the
general partner of CVCA, and in such capacity exercises shared voting and
investment power with respect to the shares beneficially owned by CVCA
(1,334,521 shares). Mr. Murray expressly disclaims that he, is in fact, the
beneficial owner of such shares. Also includes 12,500 shares of Common
Stock subject to stock options exercisable within 60 days of April 7, 2000
and 1,897 shares of Common Stock deferred pursuant to the 1999 Directors'
Restricted Stock Plan. Mr. Murray's address is Chase Capital Partners, 380
Madison Ave., 12th Floor, New York, NY 10017.
(9) Includes 164,000 shares of Common Stock beneficially owned by the Ragir
Foundation with respect to which Mr. Ragir, in his capacity as a director,
exercises shared voting and investment power. These shares are deemed to be
beneficially owned by Mr. Ragir pursuant to the 1934 Act. Mr. Ragir
expressly disclaims that he is, in fact, the beneficial owner of such
shares. The number of shares reported in the table also includes 66,993
shares of Common Stock beneficially owned by the Meyer J. Ragir Family
Irrevocable Trust -- Marshall Ragir Separate Trust with respect to which
Mr. Ragir, in his capacity as a co-trustee, exercises shared voting and
investment power. Does not include 15,190 shares of Common Stock
beneficially owned by the MJR/NLR Gift Trust -- Marshall Ragir Separate
Trust with respect to which Mr. Ragir does not exercise sole or shared
voting or investment power. Includes 15,000 shares of Common Stock subject
to stock options exercisable within 60 days of April 7, 2000 and 173 shares
of Common Stock deferred pursuant to the 1999 Directors' Restricted Stock
Plan.
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(10) Mr. Rubenstein is the executor of the Norma L. Ragir Estate and in such
capacity exercises voting and investment power with respect to the shares
of Common Stock beneficially owned by the Norma L. Ragir Estate (221,501
shares). Mr. Rubenstein is a director of the Meyer and Norma Ragir
Foundation (the "Ragir Foundation") and in such capacity exercises shared
voting and investment power with respect to the shares of Common Stock
beneficially owned by the Ragir Foundation (164,000 shares). Mr. Rubenstein
is co-trustee of five separate trusts and, in such capacities exercises
shared voting and investment power with respect to the shares of Common
Stock beneficially owned by the five separate trusts. The five trusts, and
the respective number of shares held by each is as follows: MJR/NLR Gift
Trust -- Judith Ragir Separate Trust (15,189 shares); MJR/NLR Gift
Trust -- Robert Ragir Separate Trust (13,985 shares); MJR/NLR Gift
Trust -- Marshall Ragir Separate Trust (15,190 shares) (collectively, the
"Ragir Gift Trusts"); Meyer J. Ragir Family Irrevocable Trust -- Judith
Ragir (16,500 shares); and the Meyer J. Ragir Family Irrevocable
Trust -- Marshall Ragir Separate Trust (66,993 shares) (collectively, the
"Ragir Family Trusts"). All five trusts are collectively referred to herein
as the "Ragir Trusts". None of the Ragir Trusts individually owns more than
1% of the Common Stock of the Company. Mr. Rubenstein, as executor of the
Norma L. Ragir Estate and a director of the Ragir Foundation and co-trustee
of the Ragir Trusts, exercises either sole or shared voting and investment
power with respect to 513,358 shares of Common Stock (which represent 7.0%
of the outstanding shares). Mr. Rubenstein expressly disclaims that he is,
in fact, the beneficial owner of such shares. Includes 15,000 shares of
Common Stock subject to stock options exercisable within 60 days of April
7, 2000. The address for Mr. Rubenstein is 200 North LaSalle Street, Suite
2100, Chicago, IL 60601.
(11) Includes 15,000 shares of Common Stock subject to stock options exercisable
within 60 days of April 7, 2000 and 2,376 shares of Common Stock deferred
pursuant to the Company's 1999 Directors' Restricted Stock Plan.
(12) Includes 15,000 shares of Common Stock subject to stock options exercisable
within 60 days of April 7, 2000 and 4,741 shares of Common Stock deferred
pursuant to the Company's 1999 Directors' Restricted Stock Plan.
(13) Includes 730,100 shares of Common Stock subject to stock options
exercisable within 60 days of April 7, 2000. Includes 21,029 shares subject
to the Company's Executive Incentive Plan.
(14) Includes 104,267 shares of Common Stock subject to stock options
exercisable within 60 days of April 7, 2000. Includes 7,752 shares subject
to the Company's Executive Incentive Plan.
(15) Includes 500 shares which are owned by Mr. Dolan's minor aged children.
Includes 60,064 shares of Common Stock subject to stock options exercisable
within 60 days of April 7, 2000. Includes 4,717 shares subject to the
Company's Executive Incentive Plan.
(16) Includes 994,431 shares of Common Stock subject to stock options
exercisable within 60 days of April 7, 2000, 33,498 shares subject to the
Company's Executive Incentive Plan and 11,563 shares of Common Stock
deferred pursuant to the Company's 1999 Directors' Restricted Stock Plan.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The By-Laws of the Company currently provide that the Board of Directors
shall consist of eight directors to be elected at the annual meeting of
stockholders to hold office until the next annual meeting or until their
successors are elected and qualified. The proxies solicited by and on behalf of
the Board of Directors will be voted FOR the election of the eight nominees
listed below, unless authority to do so is withheld as provided in the proxy.
All nominees have served as directors since the last annual meeting. The proxies
cannot be voted for a greater number of persons than the number of nominees
named. If for any reason one or more of the nominees should be unable to serve
or refuse to serve as a director (an event which is not anticipated), the
persons named as proxies will vote for another candidate or candidates nominated
by the Board of Directors,
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and discretionary authority to cast such votes is included in the proxy. The
nominees receiving the highest number of votes of shares of Common Stock, up to
the number of directors to be elected, shall be elected.
NOMINEES FOR DIRECTORS
Information regarding the Board's nominees for election as directors is set
forth below.
Charles R. Campbell, age 60, has been a director of the Company since
September, 1994. Since 1996 Mr. Campbell has been a principal with the Everest
Group, a management consulting firm. From 1995 to 1996 Mr. Campbell was
President of C. R. Campbell & Associates, a management consulting firm. From
1985 to 1995, Mr. Campbell was Senior Vice President, Chief Financial and
Administrative Officer of Federal Signal Corporation, a diversified manufacturer
of capital goods.
Joseph Gantz, age 52, has been a director since February, 1998. Since
February, 1998 Mr. Gantz has been the Managing Partner of H3 Management L.L.C, a
management consulting firm. From 1996 to 1998 Mr. Gantz was the Chairman of the
Board of Seymour Housewares Corporation, a manufacturer of consumer laundry care
products. From 1994 to 1996, Mr. Gantz was President and General Manager of
Rubbermaid Cleaning & Maintenance Products, a manufacturer and marketer of
brooms, brushes and mops.
Stephen P. Murray, age 37, has been a director since February, 1998. Mr.
Murray is a general partner of Chase Capital Partners. Prior to joining Chase
Capital Partners, Mr. Murray was a Vice President with the Middle Market Lending
Division of Manufacturers Hanover. Mr. Murray is a director of several privately
held companies.
Marshall Ragir, age 55, has been a director of the Company since July,
1995. Since 1991, Mr. Ragir has been President and Chief Executive Officer of
Know Business Inc., a venture capital and investment company. Mr. Ragir is a
director of several charitable foundations and non-profit agencies.
Jeffrey C. Rubenstein, age 58, has been a director of the Company since
September, 1986. Since 1991, Mr. Rubenstein has been a senior principal with the
law firm of Much Shelist Freed Denenberg Ament & Rubenstein, P.C., an Illinois
professional corporation, which is counsel to the Company. Mr. Rubenstein is a
director of Miller Building Systems, Inc., Vita Food Products, Inc. and a number
of privately held companies.
Daniel B. Shure, age 42, has been a director of the Company since December,
1994. Since 1988, Mr. Shure has been President and Chief Executive Officer of
Strombecker Corporation, an international toy manufacturer and distributor. Mr.
Shure is a director of several privately held companies.
Joel D. Spungin, age 62, has been director of the Company since September,
1996. Since 1995 Mr. Spungin has been President of DMS Enterprises, a management
advisory and investment company. Mr. Spungin has been Chairman Emeritus of
United Stationers, Inc. since 1994. From 1981 to 1995, Mr. Spungin was employed
by United Stationers, Inc., in various capacities with his final position being
Chairman of the Board and Chief Executive Officer. Mr. Spungin is a director of
AAR Corporation and a number of privately held companies.
James R. Tennant, age 47, joined the Company as Chairman of the Board and
Chief Executive Officer in April, 1994. Mr. Tennant was elected a director of
the Company in December, 1992, and was a member of the Company's Compensation
Committee until April, 1994. From 1982 to 1994, Mr. Tennant was Division
President of True North Communications, an international marketing services
company. Mr. Tennant is a director of Hines Horticulture, Inc. and a number of
privately held companies.
BOARD AND COMMITTEES MEMBERSHIP
The Board of Directors met seven times during the 1999 fiscal year and had
three ongoing committees. Those committees consisted of an Audit Committee, an
Executive Compensation Committee and a Nominating Committee. All of the
directors attended at least 75% of the meetings of the Board of Directors and
the committees on which they served with the exception of Mr. Campbell and Mr.
Murray who each attended five of the seven Board of Directors' meetings.
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The table below provides membership and meeting information for each of the
Board committees in fiscal 1999.
EXECUTIVE
NAME AUDIT COMPENSATION NOMINATING
- ---- ----- ------------ ----------
Charles R. Campbell......................................... X*
Joseph Gantz................................................ X
Stephen P. Murray...........................................
Marshall Ragir.............................................. X
Jeffrey C. Rubenstein....................................... X X
Daniel B. Shure............................................. X
Joel D. Spungin............................................. X*
James R. Tennant............................................ X*
1999 Meetings............................................... 2 5 0
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* Committee Chairman
THE AUDIT COMMITTEE
The Audit Committee oversees the activities of the Company's independent
auditors. The Committee:
- Reviews with the outside auditors the scope of the audit, the auditor's
fees and related matters;
- Receives copies of the annual comments from the independent auditors on
accounting procedures and systems of control; and
- Reviews with the independent auditors any questions, comments or
suggestions they may have relating to our internal controls, accounting
practices and procedures and those of the Company's subsidiaries.
THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee is responsible for establishing annual
and long-term performance goals for the Executive Officers. This responsibility
includes establishing the compensation package and evaluating the performance of
the Chairman and Chief Executive Officer, the Chief Financial Officer and the
President and General Manager of Home Products International -- North America,
Inc. ("HPNA"), the Company's operating subsidiary. In addition, the Committee:
- Recommends the granting of options and awards under the various stock
option plans; and
- Publishes an annual Executive Compensation Committee Report for the
stockholders.
THE NOMINATING COMMITTEE
The Nominating Committee is responsible for recommending candidates for
membership on the Board of Directors and consulting with the Chairman on
committee assignments. The Nominating committee will not consider nominees
recommended by security holders.
COMPENSATION OF DIRECTORS
All non-employee directors will receive an annual retainer of $7,500
payable in Common Stock. The number of shares to be received by each
non-employee director will be based upon the closing price per share of the
Common Stock as reported on The NASDAQ National Market(sm) on the day of the
Meeting. Non-employee directors will receive a fee of $1,750 for each Board of
Directors' meeting attended and $500 for each committee meeting attended. All
non-employee directors that chair a committee will receive an annual fee of
$2,500. Each non-employee director has the option to receive these fees in cash
or in Common Stock. If a non-employee director elects to receive Common Stock,
the number of shares to be received will be based upon the closing price per
share of the Common Stock as reported on The NASDAQ National Market(sm) on the
day of the Board of Directors' meeting or the committee meeting. Each
non-employee director may defer
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payment of the retainer and/or director's fees (whether payable in cash or
shares of Common Stock) pursuant to the Directors' Restricted Stock Plan, until
termination of the director's services or the attainment of a certain age. Each
non-employee director was granted options to purchase 7,500 shares of Common
Stock in 1999. All of the stock options granted to the non-employee directors
will be at an exercise price equal to the closing price per share as reported on
The NASDAQ National Market(sm) on such date and will become exercisable
immediately.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
ELECTION OF THE NOMINEES SET FORTH HEREIN.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the 1934 Act requires the Company's directors and
executive officers, and persons who beneficially own more than 10% of the
Company's Common Stock, to file with the Securities & Exchange Commissions (the
"SEC") initial reports of beneficial ownership ("Form 3") and reports of changes
in ownership of the Company's Common Stock and other equity securities of the
Company ("Form 4"). Executive officers, directors, and greater than 10%
stockholders of the Company are required by SEC regulations to furnish the
Company with copies of all Section 16(a) reports that they file.
Based solely upon review of the copies of such reports furnished to the
Company, the Company believes that during the 1999 fiscal year, all Section
16(a) filing requirements applicable to its executive officers, directors and
greater than 10% beneficial owners were complied with except Charles R. Campbell
and Marshall Ragir, both directors of the Company, who each inadvertently
reported one transaction in a late Form 4 filing.
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and each other executive officer of the Company
(collectively, the "Named Executive Officers"), during each of the Company's
last three fiscal years. The Company named Jeffrey R. Dolan as President and
General Manager of HPNA, effective June 1999, and as such, Mr. Dolan's
compensation prior to 1999 is not required to be reported in the following
table.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARD
-------------------- ------------
SECURITIES LTIP ALL OTHER
UNDERLYING PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS# ($)(4) ($)(5)
- --------------------------- ---- --------- -------- ---------- -------- ------------
James R. Tennant(1)................. 1999 $391,758 $341,691 225,000 $115,013 $69,759
Chairman of the Board and Chief 1998 350,000 382,884 -0- 0 9,476
Executive Officer of HPI 1997 288,750 314,913 250,000 0 8,775
James E. Winslow(2)................. 1999 205,000 162,522 35,000 42,396 32,710
Executive Vice President, Chief 1998 205,000 164,652 -0- 0 9,476
Financial Officer and Secretary of
HPI 1997 185,785 143,714 20,000 0 8,775
Jeffrey R. Dolan(3)................. 1999 194,846 156,348 51,000 0 16,497
President & General Manager of 1998 n/a n/a n/a n/a n/a
HPNA 1997 n/a n/a n/a n/a n/a
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(1) The 1999 Bonus excludes $103,452 which was converted into 10,854 share Units
and deferred pursuant to the Company's Executive Incentive Plan ("EIP"). See
"Long-Term Incentive Plan -- Awards in Last Fiscal Year."
(2) The 1999 Bonus excludes $33,634 which was converted into 3,529 share Units
and deferred pursuant to the Company's EIP. See "Long-Term Incentive
Plan -- Awards in Last Fiscal Year."
(3) The 1999 Bonus excludes $31,968 which was converted into 3,354 share Units
and deferred pursuant to the Company's EIP. See "Long-Term Incentive
Plan -- Awards in Last Fiscal Year."
(4) The amounts appearing in this column are the December 25, 1999 values of the
Share Units converted to Common Stock pursuant to the EIP. The values were
calculated by multiplying the closing price of the Company's Common Stock as
of the last trading date of the Company's fiscal year (December 23, 1999) of
$10.938/sh by the total number of shares converted to Common Stock. Mr.
Tennant received 10,515 shares and Mr. Winslow received 3,876 shares. 1999
was the first year a payout was made under the EIP.
(5) The amounts appearing in this column represent amounts contributed to the
Company's Profit Sharing and 401(k) Plan and Trust and beginning in 1999,
contributions to the Company's deferred compensation plan and insurance
premiums paid on behalf of Mr. Tennant and Mr. Winslow. Each of the Named
Executives had $9,800 contributed to the Profit Sharing and 401(k) Plan for
1999 ($5,000 was the employer match for the 401(k) plan and $4,800
represents the Profit Sharing component). In addition, each of the Named
Executives received contributions under the Company's deferred compensation
plan in 1999. Mr. Tennant received $38,341, Mr. Winslow received $14,996 and
Mr. Dolan received $6,697. The Company paid insurance premiums totaling
$21,618 for Mr. Tennant and $7,914 for Mr. Winslow.
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LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
The table below represents the value as of December 25, 1999 of the
deferred portions of the awards earned in fiscal 1999 under the Executive
Incentive Plan ("EIP"). The awards are to be paid in three annual installments
as soon as practicable following the closing of fiscal 2000, 2001 and 2002. The
number of Share Units awarded for 1999 was determined by dividing the total
dollar amount of the deferred award by the average trading price of the
Company's Common Stock for the final twenty trading days of the fiscal year (as
defined in the EIP). It is presently estimated that 70% of the Share Units will
be converted to shares of the Company's Common Stock and 30% of the Share Units
will be converted to cash.
The value of the 1999 deferred awards as of December 25, 1999 is determined
by multiplying the number of Share Units awarded under the EIP by the last
reported sale price of the Company's Common Stock as reported on the NASDAQ
National Market(sm) on the last business day of the Company's fiscal year
(December 23, 1999, $10.938/sh).
LONG-TERM INCENTIVE PLAN -- AWARDS IN FISCAL 1999
VALUE OF DEFERRED
AWARD AS OF SHARE UNITS PERIOD OF
NAME OF EXECUTIVE 12/25/99 # PAYOUT
- ----------------- ----------------- ----------- --------------
James R. Tennant......... $118,721 10,854 2001/2002/2003
James E. Winslow......... 38,600 3,529 2001/2002/2003
Jeffrey R. Dolan......... 36,686 3,354 2001/2002/2003
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides information on option exercises in fiscal 1999
by the Named Executive Officers and the value of such officers' unexercised
options at December 25, 1999.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN
SHARES OPTIONS AT THE MONEY OPTIONS AT
ACQUIRED FISCAL YEAR-END(1) FISCAL YEAR-END(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
James R. Tennant........... 0 0 680,100 350,000 $2,897,340 $268,800
James E. Winslow........... 0 0 74,683 65,417 251,332 236,256
Jeffrey R. Dolan........... 0 0 54,814 35,786 141,775 98,721
- -------------------------
(1) Future exercisability is subject to vesting and the optionee remaining
employed by the Company.
(2) Value is calculated by subtracting the exercise price from the assumed fair
market value of the securities underlying the option at fiscal year end and
multiplying the result by the number of "in-the-money" options held. There
is no guarantee that if and when these options are exercised they will have
this value. Fair market value was calculated based upon the last reported
sale price per share of the Company's Common Stock as reported on the Nasdaq
National Market(sm) on the last business day of the Company's fiscal year,
December 23, 1999 ($10.938).
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OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1999 to
the Named Executive Officers.
INDIVIDUAL GRANTS
--------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENTAGE OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
GRANTED(1) FISCAL YEAR(2) ($/SHARE) DATE 5% 10%
---------- -------------- --------- ---------- ----------- -------------
James R. Tennant.......... 75,000 13.5% $8.94 12-14-09 $421,674 $1,068,604
150,000 27.0% $8.25 05-19-09 778,257 1,972,256
James E. Winslow.......... 10,000 1.8% $8.94 12-14-09 56,223 142,481
25,000 4.5% $8.25 05-19-09 129,710 328,709
Jeffrey R. Dolan.......... 30,000 5.4% $8.94 12-14-09 168,670 427,442
21,000 3.8% $8.25 05-19-09 108,956 276,116
- -------------------------
(1) These options, except the 150,000 granted to Mr. Tennant pursuant to the
terms of his employment contract, have a ten-year term and became
exercisable immediately upon grant.
(2) The Company granted a total of 554,850 stock options in 1999.
(3) Potential realizable value is based on an assumption that the stock price on
the date of grant appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the option term. These numbers are
based on the requirements of the SEC and do not reflect the Company's
estimate of future stock price performance.
EMPLOYMENT AGREEMENTS
James R. Tennant is employed as Chairman of the Board and Chief Executive
Officer of the Company pursuant to an employment agreement dated as of May 19,
1999, as amended. Such employment agreement expires on December 31, 2003, with
automatic one year extensions thereafter unless canceled by either party. The
employment agreement provides for an annual base salary of $400,000. Mr. Tennant
is also entitled to receive a discretionary bonus based on the Company's
financial performance (in the form of cash and/or stock options at the
discretion of the Board of Directors), as well as to receive incentive bonuses
subject to the terms of the Executive Incentive Plan and the Management
Incentive Plan. If the Company terminates Mr. Tennant's employment without cause
or does not renew Mr. Tennant's employment agreement for any renewal year after
December 31, 2003, Mr. Tennant will be entitled to receive a severance payment
in an amount equal to three times the average salary and bonus earned during the
two years immediately prior to the termination (the "Severance Payment"). If Mr.
Tennant's employment is terminated for any reason voluntarily or involuntarily
within 180 days after a change in control of the Company, Mr. Tennant is
entitled to receive (i) payments over a twenty-four month period following the
termination in an amount equal to the difference between (A) five million and
(B) the per share value of the Company's Common Stock at the closing of the
event which is the culmination of the transaction(s) resulting in the change of
control minus the exercise price per share of each stock option granted to Mr.
Tennant prior to the change in control multiplied by the number of shares of the
Company's common stock underlying each option granted and (ii) a one time
Severance Payment. Mr. Tennant's employment agreement provided for the granting
of 350,000 options to purchase Common Stock, (100,000 options at $6.00/share;
175,000 options at $7.00/share; and 75,000 at $8.00/share). The 350,000 options
vest one-third each year beginning on January 1, 1997 and expire on April 30,
2005. Mr. Tennant was granted additional stock options for 200,000 shares at a
price of $5.00 per share, which vest in equal increments over a three year
period beginning on September 9, 1996. Mr. Tennant may exercise the vested
portion of these options at any time prior to April 30, 2005. Mr. Tennant's
employment agreement also calls for the granting of 150,000 options to purchase
Common Stock at a price of $8.25 per share. These options shall vest on a pro
rata basis, one-third on May 19, 1999, 2000 and 2001. All of Mr. Tennants
options are immediately vested upon a change of control. Mr. Tennant's
employment agreement also contains a provision to reimburse him for any excise
tax that may be due under section 4999 of the
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Internal Revenue Code of 1986, as amended, or any similar tax payable under any
federal, state or local law, caused by a distribution by the Company to or for
the benefit of Mr. Tennant, plus additional income or excise tax due by Mr.
Tennant from the Company's payment of such taxes (collectively, "4999
Compensation") which 4999 Compensation is in consideration of Mr. Tennant's
agreement not to compete against the Company or solicit its customers or
employees for a period of three years after his voluntary termination or
termination by the Company for cause. The Board of Directors of the Company
adopted a resolution on December 14, 1999 to provide Mr. Tennant the following
additional consideration for his agreement to extend his covenant not to compete
to three years: (i) a substantial bonus for his services to the Company during
the Company's strategic planning process; (ii) certain other rights and benefits
and (iii) the 4999 Compensation.
RETENTION AGREEMENTS
The Company has entered into Retention and Non-Competition Agreements with
each of Messrs. Dolan and Winslow. These agreements provide that if Messrs.
Dolan and Winslow remain with the Company for 180 days following a change in
control of the Company, or are terminated without cause or die before the end of
such period, such executive will receive a payment equal to two times the
average yearly salary and bonus compensation paid to such executive over the
past two fiscal years. Additionally, each executive agrees that he will not
compete against the company or solicit its customers or employees for a period
of one year after the termination of his employment with the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Jeffrey C. Rubenstein, a director of the Company, and a member of the
Compensation Committee is a senior principal with the law firm Much Shelist
Freed Denenberg Ament & Rubenstein, P.C., which serves as general counsel to the
Company. Legal fees paid to Mr. Rubenstein's firm were neither material to the
Company or to his firm. Mr. Rubenstein, as executor of the Meyer J. Ragir
Estate, executor of the Norma L. Ragir Estate, a director of the Ragir
Foundation, and co-trustee of the Ragir Trusts, exercises either sole or shared
voting and investment power with respect to 513,358 shares of the Company's
Common Stock, or 7.0% of the outstanding shares of Common Stock as of April 7,
2000. The Company's principal office and a manufacturing facility in Chicago,
Illinois is owned by the Ragir Gift Trust, of which Mr. Rubenstein serves as
co-trustee.
COMPENSATION COMMITTEE REPORT
The Compensation Committee ("Committee") determines and administers the
compensation of the Company's executive officers. The Committee is comprised
entirely of non-employee directors.
COMPENSATION PHILOSOPHY
At the direction of the Board of Directors and pursuant to the charter of
the Committee, the Committee endeavors to ensure that the compensation programs
for executive officers of the Company are effective in attracting and retaining
key executives responsible for the success of the Company and are administered
in an appropriate fashion in the long-term interests of the Company. The
Committee actions related to the compensation of the chief executive officer of
the Company, the chief financial officer of the Company and the president and
general manager of HPNA are submitted to the full Board of Directors for
ratification.
The Committee believes that the Company's overall financial performance
should be an important factor in the total compensation of the Company's
executive officers. At the executive officer level, the Committee has a policy
that a significant portion of the total compensation should consist of variable,
performance-based components, such as stock awards and bonuses, which can
increase or decrease to reflect changes in corporate and individual
performances. These incentive compensation programs are intended to reinforce
management's commitment to enhancement of profitability and stockholder value.
The Committee takes into account various qualitative and quantitative
indicators of Company and individual performance in determining the level and
composition of compensation for the chief executive
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officer and other executive officers. While the Committee considers such Company
performance measures as net income, earnings per share, return on average
stockholders' equity, return on capital employed and return on average total
assets, the Committee does not apply any specific quantitative formula in making
compensation decisions. However, the Executive Incentive Plan and the Management
Incentive Plan are based on specific Company performance measures of return on
capital employed and the attainment of certain budgeted goals, respectively. The
Committee also appreciates the importance of achievements that may be difficult
to quantify and, accordingly, recognizes qualitative factors, such as successful
supervision of major corporate projects, demonstrated leadership ability and
contributions to the industry.
Where possible, the Committee will attempt to evaluate the total
compensation of the Company's chief executive officer and other executive
officers in light of information regarding the compensation practices and
corporate financial performance of a peer group consisting of competitive
companies of similar asset size. From time to time, the Committee also receives
assessments and advice regarding the Company's compensation practices from
independent compensation consultants.
BASE SALARY
Base salaries for the chief executive officer and other executive officers
are established at levels considered appropriate in light of the duties and
scope of responsibilities of each executive officer's position. Salaries are
reviewed periodically and adjusted as warranted to reflect sustained individual
executive officer's performance. The Committee focuses primarily on total annual
compensation, including incentive awards, rather than base salary alone, as the
appropriate measure of executive officer performance and contribution.
PERFORMANCE BASED COMPENSATION
EXECUTIVE INCENTIVE PLAN. The Executive Incentive Plan ("EIP") applies to
the Company's senior executive management. The purpose of the EIP is to make
available to the participants, a portion of their total compensation in the form
of an incentive opportunity when they discharge their duties in a manner which
makes a measurable contribution to the Company's earnings and achieves a
predetermined return on capital employed goal. While the EIP provides annual
incentive opportunity, it also focuses on long-term results.
MANAGEMENT INCENTIVE PLAN. The Management Incentive Plan, ("MIP") applies
to executive officers and key employees of the Company. Participants are
eligible to earn an annual incentive award based on the attainment of
pre-approved Company and subsidiary goals. Participants are assigned a target
incentive award stated as a percent of their salary, based on a participant's
duties and responsibilities. The target incentive award is calculated at the end
of the fiscal year based upon the attainment of predetermined goals.
STOCK OPTIONS
In recommending grants under the various stock option plans, the Committee
considers various quantitative and qualitative factors. The number of options
previously awarded to and held by executive officers and key employees is
reviewed but is only one factor in determining the size of current option
grants.
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CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation of the Chief Executive Officer for the 1999 fiscal year was
determined pursuant to the terms of Mr. Tennant's employment agreement. Mr.
Tennant also participates in the Executive Incentive Plan for senior executives
as well as the Management Incentive Plan.
Compensation Committee
Marshall Ragir
Jeffrey C. Rubenstein
Joel Spungin
The report of the Compensation Committee and the performance graph included
in "Company Stock Performance" shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filings under either the 1933 Act or the 1934 Act (together, the "Acts"), except
to the extent that the Company specifically incorporates such report or graph by
reference; and further, such report and graph shall not be deemed filed under
the Acts.
COMPANY STOCK PERFORMANCE
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return on the NASDAQ Market Index and a
selected industry index (SIC code 3089 -- Plastics Products N.E.C.). The graph
is for a period of five years and assumes $100 was invested on December 31,
1994. Cumulative total return assumes that dividends, if any, were reinvested.
The cumulative total return set forth in the graph is not necessarily indicative
of future returns.
ASSUMES $100 INVESTED ON DEC. 31, 1994
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DEC. 25, 1999
PERFORMANCE GRAPH
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12/31/94 12/30/95 12/28/96 12/27/97 12/26/98 12/25/99
-------- -------- -------- -------- -------- --------
Home Products $100.00 $125.00 $ 183.33 $ 261.11 $220.83 $230.56
SIC Code Index 100.00 121.22 156.12 191.49 190.43 183.87
NASDAQ Market Index 100.00 129.71 161.18 197.16 278.08 490.46
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed Arthur Andersen LLP,
independent public accountants, as independent auditors to examine the annual
consolidated financial statements of the Company and its subsidiary companies
for 2000. Arthur Andersen LLP has served as the Company's independent auditors
since 1996. A representative of Arthur Andersen LLP will be present at the
meeting to make a statement, if such representative so desires, and to respond
to stockholders' questions.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders has accompanied this
Proxy Statement. The Company's Annual Report on Form 10-K for the fifty-two
weeks ended December 25, 1999, as filed with the Securities and Exchange
Commission, is available without charge to any stockholder upon written request
to Jeffrey A. Kastelic, Investor Relations, Home Products International, Inc.,
4501 West 47th Street, Chicago, Illinois 60632. Copies of exhibits filed with
the Form 10-K will be furnished, if requested, upon payment of the Company's
reasonable expenses in furnishing those materials.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted for evaluation as to inclusion in the proxy
materials for the Company's 2001 annual meeting of stockholders must be received
by the Company not later than 5:00 pm central standard time on December 21,
2000, at the Company's principal executive offices at 4501 West 47th Street,
Chicago, Illinois 60632.
OTHER MATTERS
Management is not aware of any other matters to be presented for action at
the Meeting. If any other matters are properly brought before the Meeting, it is
the intention of the persons named as proxies in the accompanying form of proxy
to vote the shares represented thereby in accordance with their best judgment.
For the Board of Directors,
JAMES R. TENNANT
James R. Tennant
Chairman of the Board
Chicago, Illinois
April 12, 2000
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PROXY
HOME PRODUCTS INTERNATIONAL, INC.
4501 West 47th Street
Chicago, Illinois 60632
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James R. Tennant and James E. Winslow
as Proxies, (jointly and severally), each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
on the reverse side, all the shares of Common Stock of Home Products
International, Inc. held of record by the undersigned on April 7, 2000 at the
Annual Meeting of Stockholders to be held on May 31, 2000 or any adjournment
thereof.
In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE
SHARES WILL BE VOTED "FOR" ALL NOMINEES FOR DIRECTOR
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Stockholders and the related proxy statement.
(continued on reverse side)
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-----------------------
I plan to
attend meeting
[ ]
-----------------------
1. ELECTION OF DIRECTORS.
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below)___ to vote for all nominees listed below_____
(Instructions: To withhold authority to vote for any individual nominee, strike a line through a nominee's
name in the list below.)
Charles R. Campbell, Joseph Gantz, Stephen P. Murray, Marshall Ragir, Jeffrey C. Rubenstein, Daniel B. Shure,
Joel D. Spungin, James R. Tennant.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.
Date:___________________, 2000
------------------------------
Signature
-------------------------------
Signature (if held jointly)
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee, or guardian,
please give full 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.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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