CCA INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 16, 2004
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of CCA
INDUSTRIES, INC., a Delaware corporation (hereinafter, the "Company") will be
held on June 16, 2004, at 2 p.m., at the American Stock Exchange (14th floor
boardroom), 86 Trinity Place, New York, NY, for the following purposes:
MANAGEMENT PROPOSALS
1. To elect directors to serve on the Board of Directors for the
ensuing year.
2. To approve management's appointment of Sheft Kahn & Company L.L.P.
as the Company's independent certified public accountants for the
fiscal year ending November 30, 2004.
Such other business, if any, as may properly come before the meeting or
any adjournment thereof, shall also be considered.
The identified proposals are more fully described, and related information
is presented, in the Proxy Statement accompanying this Notice.
Only shareholders of record at the close of business on May 1, 2004 are
entitled to notice of the meeting, and to vote at the meeting and at any
continuation or adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ira W. Berman
Ira W. Berman
Chairman of the Board
East Rutherford NJ
May 10, 2004
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WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, YOU ARE URGED TO COMPLETE,
SIGN AND RETURN THE ENCLOSED PROXY CARD. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES AND IN THE ENVELOPE PROVIDED THEREFOR.
- --------------------------------------------------------------------------------
CCA INDUSTRIES, INC.
EAST RUTHERFORD, NEW JERSEY 07073
-----------------------
PROXY STATEMENT
-----------------------
The enclosed proxy is solicited on behalf of the Board of Directors of CCA
INDUSTRIES, INC., a Delaware corporation (hereinafter, the "Company"), for use
at its Annual Meeting of Shareholders to be held on June 16, 2004 at 2 p.m.
Shareholders of record on May 1, 2004 will be entitled to vote. The meeting will
be held at the American Stock Exchange (14th floor boardroom), 86 Trinity Place,
New York, NY.
The Company intends to mail this Proxy Statement, and the Company's Annual
Report for the 2003 fiscal year, on or about May 10, 2004.
I. GENERAL
A. VOTING
The Company, as provided in and by its Certificate of Incorporation, has
two authorized classes of common stock, denominated Common Stock and Class A
Common Stock, and one authorized class of preferred stock, denominated Preferred
Stock.
On January 31, 2004, there were 6,630,316 shares of Common Stock and
958,230 shares of Class A Common Stock outstanding.
At the date of this statement, no Preferred Stock is issued, and the Board
has no pending negotiation or plan concerning any expected issuance of Preferred
Stock.
Owners of Common Stock and owners of Class A Common Stock are entitled to
one vote for each share of stock held, and the voting and other rights of each
class are equivalent except in respect to the election of directors.
In respect to the election of directors, the Class A Common Stock
shareholders have the right to elect four directors and the Common Stock
shareholders have the right to elect three. (In consequence, no proposal to
alter or change the right of Class A Common Stock shareholders to elect a
majority of directors could be effectively voted unless a separate majority of
Class A Common Stock shares were voted therefor.)
A quorum, counting proxies and shares represented in person, is necessary
to the voting upon proposals proposed by Management, and other business that may
properly come before the Annual Meeting. Fifty percent (50%) of all outstanding
shares constitutes a quorum for all purposes other than the election of
directors. In respect thereof, fifty percent (50%) of the outstanding shares of
Common Stock is a quorum for the election of directors to be elected by the
holders of Common Stock, and Fifty percent (50%) of the outstanding shares of
Class A Common Stock is a quorum for the election of directors to be elected by
holders of Class A Common Stock.
Nonvoting of shares (whether by abstention, broker non-vote or otherwise),
other than the potential effect of denying a quorum, has no impact on voting.
2
B. SHARE OWNERSHIP OF DIRECTORS, OFFICERS AND 5% OWNERS
The following table sets forth certain information regarding the ownership
of the Company's Common Stock and Class A Common Stock as of May 1, 2004 by (i)
all those known by the company to be owners of as much as five (5%) percent of
the outstanding shares of Common Stock and/or Class A Common Stock, (ii) Each
Officer and Director, and (iii) Officers and Directors as a group. Moreover, it
presents individual ownership of "Option Shares," and the aggregate Option
Shares ownership of Officers and Directors (with Option Shares representing the
number of shares purchasable upon exercise of options exercisable within 60
days). Unless otherwise indicated, each of the shareholders has sole voting and
investment power with respect to the shares owned (subject to community property
laws, where applicable), and is beneficial owner of them.
Ownership
As a
Percentage of
All Shares
Number of Shares Owned Outstanding/
---------------------------------- Assuming
Class A Ownership
Name and Address Common Stock Common Stock Option Shares Option Shares Exercise.
- ---------------- ------------ ------------ ------------- -----------------------
David Edell 406,405 484,615 112,500 12.2/12.9%
c/o CCA Industries, Inc.
Ira W. Berman 434,818 473,615 112,000 12.4/13.1%
c/o CCA
Drew Edell 51,250 - 90,000 0.7/1.8%
c/o CCA
Dunnan Edell 41,250 - 90,000 0.6/1.7%
c/o CCA
Jack Polak 27,700 - 25,000 .04/.07%
195 Beech Street
Eastchester, NY 10709
Stanley Kreitman - - 25,000 .00/.03%
c/o CCA
Robert Lage - - - .00/.00%
c/o CCA
John Bingman - - 10,000 .00/.01%
c/o CCA
Officers & Directors 961,423 958,230 464,500
As a Group (8 persons)
TABLE NOTES
The numbers shown as "Option Shares" assume that the unexercised options,
exercisable within 60 days have been exercised (and, that subject shares, not
actually owned, are actually owned). The percentage ownership figure, "Assumed
Ownership-Option Shares," aggregates the assumptions for the group of Officers
and Directors and, for each individual owner, presents a measurement which
assumes that the particular individual has exercised such options and purchased
subject shares, but that no other
3
owner of such options has "exercised and purchased." The category "as a group"
assumes exercise of all unexercised options by table-represented parties. See
Section IV with reference to the options outstanding.
David Edell and Ira Berman own all of the outstanding shares of Class A
Common Stock.
Messrs. David Edell, Dunnan Edell, Drew Edell and Ira Berman were officers
and directors in fiscal 2003. John Bingman is an officer. Messrs. Polak,
Kreitman and Lage are directors.
C. EXECUTIVE COMPENSATION
I. SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned in the 2003, 2002 and
2001 fiscal years by all of the executive officers whose fiscal 2003
compensation exceeded $100,000, including the Chief Executive Officer (the
"Named Officers").
ANNUAL COMPENSATION
-------------------
Name and Principal Position Year Salary Bonus Other (I)
- --------------------------- ---- ------ ----- ---------
David Edell, 2003 $619,205 $459,240 $39,476
Chief Executive 2002 584,155 332,060 40,152
Officer 2001 514,399 247,806 37,859
Ira. W. Berman, 2003 $619,205 $459,240 $29,499
Secretary and 2002 584,155 332,060 27,475
Executive 2001 514,399 247,806 27,905
Vice President
Dunnan Edell, 2003 $282,692 $ 50,000 $11,391
President 2002 253,172 45,000 7,281
2001 232,595 4,231 8,304
Drew Edell 2003 $200,000 $ 25,000 $ 5,081
Vice President 2002 203,845 25,000 1,178
Operations 2001 187,596 3,365 2,929
John Bingman 2003 $105,128 $ 25,000 $ 2,696
Treasurer 2002 99,843 20,000 3,037
2001 101,354 1,862 2,763
Joel Last, 2003 $160,000 $ 32,000 $ 4,833
Vice President 2002 160,000 15,000 5,984
Sales 2001 160,000 10,000 7,067
Patrick Haberman, 2003 $152,077 $ 31,350 $ 9,278
Vice President 2002 150,000 10,000 9,603
Sales 2001 150,000 7,500 8,484
- ---------------------------
(i) Includes the personal-use value of Company-leased automobile, the value of
Company-provided life insurance, and health insurance that is made
available to all employees.
4
II FISCAL 2003 OPTION GRANTS AND OPTION EXERCISES, YEAR-END OPTION VALUATIONS,
OPTION REPRICING
No New Options Were Issued to Any of the Named Officers in Fiscal 2003
The next table identifies 2003 fiscal-year option exercises by Named
Officers and reports a valuation of their options.
FISCAL 2003 AGGREGATED OPTION EXERCISES
AND NOVEMBER 30, 2003 OPTION VALUES
NUMBER OF SHARES VALUE OF
COVERED BY UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED OPTIONS AT OPTIONS AT
ON EXERCISE VALUE REALIZED NOV. 30, 2003 NOV. 30, 2003(1)
----------- -------------- ------------- ----------------
David Edell 60,000 $ 234,000 97,500 $683,475
Ira W. Berman 85,000 $ 331,500 117,500 $820,175
Dunnan Edell - - 75,000 $525,750
Drew Edell - - 75,000 $525,750
- --------------------------
(1) Represents the difference between market price and the respective exercise
prices of options at November 30, 2003.
The following table identifies the stock options held by the Named
Officers and all other officers and directors, the exercise prices of which have
been reduced during the past 10 years.
REPRICED OPTIONS
ORIGINAL
NUMBER OF SHARES GRANT DATE PRICE DATE REPRICED - NEW PRICES
---------------- ---------- ----- --------------------------
David Edell 100,000 Aug. 1 1997 $2.50 5/24/01 $.50
Ira W. Berman 100,000 Aug. 1 1997 $2.50 5/24/01 $.50
Dunnan Edell 50,000 Aug. 1 1997 $2.50 5/24/01 $.50
Drew Edell 50,000 Aug. 1 1997 $2.50 5/24/01 $.50
Stanley Kreitman 25,000 Aug. 1 1997 $2.50 5/24/01 $.50
Dunnan Edell 25,000 June 1 1995 $4.50 5/24/01 $.50
Drew Edell 25,000 June 1 1995 $4.50 5/24/01 $.50
Rami Abada 25,000 Aug. 1 1997 $2.50 5/24/01 $.50
Jack Polak 25,000 Aug. 1 1997 $2.50 5/24/01 $.50
- -------------------
(1) On November 3, 1998, the full Board of Directors authorized the repricing in
consequence of a declining market valuation, inconsistent with the Company's
realizable value. The market price of the Common Stock at the date of repricing
was $1.00; and, at that date, the original option terms (10 years from August 1,
1997) had approximately 8 years and 10 months to run. When the options were
originally issued, on August 1, 1997, the market price of the Company's Common
Stock was $2.50. On May 24, 2001, the company repriced the options again when
the market price was $.50.
(2) On June 10, 2000, the full Board of Directors authorized the repricing in
consequence of a declining market valuation, inconsistent with the Company's
realizable value. The market price of common stock at the date of repricing was
$1.10; and at that date the original terms (5 years from June 10, 1995) were
extended for an additional 5 years. When the options were originally issued on
June 10, 1995, the market price of the Company's common stock was $3. On May 24,
2001, the Company repriced the options again when the market price was $.50, and
changed the expiration date to August 1, 2007.
III. COMPENSATION OF DIRECTORS
Each outside director (Messrs. Kreitman, Polak, and Lage) was paid $3,000
per meeting for attendance of board meetings in fiscal 2003. Robert Lage,
Chairman of the Audit and Compensation committee, provided review services for
which he received $21,000 as aggregate compensation for attendance at board
meetings and audit and compensation review services. No other compensation was
paid to any director for directorship duties or meeting attendance. No new
options were granted to any director in 2003.
The full Board of Directors met four times in fiscal 2003.
5
IV. EXECUTIVE COMPENSATION PRINCIPLES; AUDIT AND COMPENSATION COMMITTEES
Until April I, 2003, the Audit Committee of the Board of Directors was
comprised of Ira W. Berman, Stanley Kreitman, Jack Polak and Rami Abada. They
met three times in fiscal 2002. On April 1, 2003, Mr. Abada resigned as a
director and Audit Committee member, and Mr. Berman (who is still a director)
resigned his Audit Committee membership, to assure compliance with "independent
" Audit Committee member regulations. (Mr. Berman's status as an
officer-employee director, and Mr. Abada's status as his son-in-law, under the
subject S.E.C. regulations, define each as not "independent" for Audit Committee
purposes.)
The Audit Committee is now comprised of Messrs. Kreitman and Polak, and
Mr. Robert Lage. Mr. Lage was appointed to the Board (and Audit Committee) to
serve `instead' of Mr. Abada, and is herewith proposed for election. (See
Proposal No. 1. Included there, in the biographies of the persons proposed for
election to the Board, are particular "Audit Committee Credentials" of Messrs.
Kreitman, Polak and Lage.)
(An Audit Committee Charter was adopted by the full Board of Directors in
fiscal 2000, and a copy of it was appended to the Proxy Statement disseminated
for and in respect of the Company's 2001 Annual Meeting and was subsequently
amended to conform to the current regulations.)
Regarding fiscal 2003, the Audit Committee (a) reviewed and discussed the
Company's audited financial statements, with management; (b) received and
discussed the information required to be discussed, pursuant to Auditing
Standards and S.E.C. regulations, with the Company's independent auditors; (c)
received written disclosures, and the letter concerning same, from the
independent auditors as required by S.E.C. regulations and described by
Independence Standard Board Standards; (d) discussed the independence of the
auditors, with the auditors; and (e) recommended that the audited financial
statements be included in the Company's Annual Report on Form 10-K.
V. EMPLOYMENT CONTRACTS/COMPENSATION PROGRAM
The Company's Executive Compensation Program, administered by the
Compensation Committee (the membership of which is the same as the Audit
Committee), is based on guiding principles designed to align executive
compensation with Company values and objectives, business strategy, management
initiatives, and financial performance, and has an established program to:
o Reward executives for long-term strategic management and the enhancement
of shareholder value.
o Integrate compensation programs with both the Company's annual and
long-term strategic planning.
o Support a performance-oriented environment that rewards performance not
only with respect to Company goals, but also Company performance as
compared to industry-performance levels.
The total compensation program consists of both cash and equity based
compensation. The Compensation Committee determines the level of salary and
bonuses, if any. The Committee determines the salary or salary range based upon
competitive norms. Actual salary changes are based upon performance.
On March 17, 1994, the Board of Directors approved l0-year employment
contracts (herein below, the "Edell/Berman Contracts") for David Edell and Ira
Berman (with Mr. Edell and Mr. Berman abstaining). Pursuant thereto, each was
provided a base salary of $300,000 in fiscal 1994, with a year-to-year CPI or 6%
increment, plus 2.5% of the Company's pre-tax income, less depreciation and
amortization (the "2.5% measure"), plus 20% of the base salary, as bonus.
In February 1999, the 2.5% measure in the bonus provisions of the
Edell/Berman Contracts was amended so as to calculate it against earnings before
income taxes, less depreciation, amortization, and expenditures for media and
cooperative advertising in excess of $8,000,000.
6
On May 24, 2001, the Edell/Berman Contracts were amended to increase their
base annual salaries to $400,000, and to extend the terms through November 30,
2007, and on October 16, 2002, their contracts (otherwise unamended), were
extended to December 1, 2010.
David Edell's sons, Dunnan Edell and Drew Edell have 5-year employment
contracts that expire November 30, 2007, providing base annual salaries of
$270,000 and $200,000, respectively. Both salaries were amended to $300,000 and
$222,900 respectively.
Long-term incentives are provided through the issuance of stock options.
VI. STOCK OPTION PLANS
The Company's 1994 Stock Option Plan covered 1,000,000 shares of its
Common Stock. (The 1994 Plan has expired; but there are 427,500 stock options
issued under the 1994 Plan outstanding, and yet exercisable to purchase 427,500
shares of Common Stock.)
On July 9, 2003, the Company's 2003 Stock Option Plan was approved by the
shareholders at the Company's annual Meeting. The Stock Option Plan covers
1,000,000 shares of the Company's stock. 100,000 options were issued on March 9,
2004, exercisable at $7.50 per share, 25,000 each to David Edell and Ira W.
Berman, 15,000 each to Dunnan Edell and Drew Edell, and 10,000 each to John
Bingman and Elias Ciudad.
The 1994 and 2003 Stock Option Plans provided:
(1) for the granting of two types of options: "Incentive Stock Options"
and "Nonqualified Stock Options". The Incentive Stock Options (but
not the Nonqualified Stock Options) are intended to qualify as
"Incentive Stock Options" as defined in Section 422(a) of The
Internal Revenue Code. The Plans are not qualified under Section
401(a) of the Code, nor subject to the provisions of the Employee
Retirement Income Security Act of 1974.
(2) For option grants to employees (including officers and directors who
are also employees) and consultants of the Company (provided,
however, that Incentive Stock Options may not be granted to any
non-employee director or consultant).
EQUITY COMPENSATION PLAN INFORMATION
(a) (b) (c)
- -------------------------------------------------------------------------------------------------------
Plan Category ............... No. of Securities to be Weighted average No. of securities
issued upon exercise exercise price of remaining available
of outstanding options outstanding options for future issuance
warrants and rights under equity
compensation plans
(excluding securities
reflected in column (a)
- -------------------------------------------------------------------------------------------------------
Equity Compensation ......... 427,500 $.50 -0-
1994 Plan approved
by security holders
- -------------------------------------------------------------------------------------------------------
Equity Compensation ......... 100,000 $7.50 -0-
2003 Plan approved
by security holders
- -------------------------------------------------------------------------------------------------------
Equity Compensation ......... -0- -0- -0-
plans not approved by
security holders
- -------------------------------------------------------------------------------------------------------
7
VII. PERFORMANCE GRAPH
Set forth below is a line graph comparing cumulative total shareholder
return on the Company's Common Stock, with the cumulative total return of
companies in the NASDAQ Stock Market (U.S.) and the cumulative total return of
Dow Jones's Cosmetics/Personal Care Index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CCA INDUSTRIES, INC, THE DOW JONES US COSMETICS INDEX
AND THE DOW JONES US TOTAL MARKET INDEX
[PEFORMANCE GRAPH]
CUMULATIVE TOTAL RETURN*
------------------------
12/98 12/99 12/00 12/01 12/02 12/03
CCA Industries, Inc. 100 90 45 103 159 693
DJ US Cosmetics Index 100 88 85 77 74 81
DJ US Total Market Index 100 123 111 98 76 88
8
D. THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Company's Board of Directors has no nominating committee. Its Audit
and Compensation Committee members are Messrs. Stanley Kreitman, Jack Polak, and
Robert Lage.
E. RELATED DIRECTORS AND/OR OFFICERS
David Edell is the Company's Chief Executive Officer. He is also a
director. Dunnan Edell and Drew Edell are his sons. Dunnan Edell is President of
the Company and Drew Edell is the Vice-President of Operations and Research and
Development. Both were directors of the Company in fiscal 2003.
F. AUDIT FEES
Sheft Kahn & Company LLP ("Sheft Kahn") served as the Company's
independent auditors for 2003. The services performed by Sheft Kahn in this
capacity included conducting an audit in accordance with generally accepted
auditing standards of, and expressing an opinion on, the Company's consolidated
financial statements.
Sheft Kahn's fees for professional services rendered in connection with
(a) the audit and review of Forms 10-K and all other SEC regulatory filings were
$177,614 for the 2003 fiscal year, (b) Federal and State tax return preparation
and other tax matters for the 2003 were $42,846, (c) Sheft Kahn's fees of
$23,008 for the 2003 fiscal year were related to work performed in conjunction
with PNC Capital Markets conducting due diligence on the Company for possible
future acquisitions of other companies . The Audit Committee considered all fees
paid to Sheft, Kahn & Company in recent years, and in the 2003 fiscal year, and
concluded that no fee-issue threatens their `independence.'
G. REVOCABILITY OF PROXIES
Any person giving a proxy in the form accompanying this statement has the
power to revoke it at any time before its exercise. Thus, it may be revoked
prior to its exercise by the filing of an instrument of revocation, or a duly
executed proxy bearing a later date, with the Secretary of the Company at the
Company's principal executive office. A proxy holder can also revoke a filed
proxy by attending the meeting and voting in person.
H. SOLICITATION OF PROXIES
It is estimated that the costs associated with proxy solicitation will be
approximately $15,000. The Company will bear the entire cost of solicitation,
including preparation, assembly, printing and mailing of this Proxy Statement,
the proxy, and any additional material furnished to shareholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others,
for forwarding of such material to beneficial owners. The Company may reimburse
such persons their forwarding costs. Original solicitation of proxies by mail
may be supplemented by telephone, telegram, or personal solicitation by
directors, officers or employees of the Company. No additional compensation will
be paid for any such services.
I. SHAREHOLDER PROPOSALS FOR THE YEAR 2005
Proposals of shareholders that are intended to be presented at the
Company's year 2005 Annual Meeting of Shareholders must be received by the
Company no later than February 13, 2005 in order to be included in the Company's
proxy materials relating to that meeting.
9
II. MANAGEMENT PROPOSALS
PROPOSAL NO. 1
NOMINATION AND ELECTION OF DIRECTORS
All seven seats on the Company's Board of Directors are subject to one -
year terms and annual election. Four are subject to election by holders of Class
A Common Stock and three by holders of Common Stock. Each director holds office
until the next Annual Meeting of Shareholders and until a successor is elected
and has qualified, or until death, resignation or removal.
The four nominees proposed for election by the holders of the Company's
Class A Common Stock (David Edell, Ira Berman, Jack Polak and Stanley Kreitman)
already serve as directors. The three proposed for election by the holders of
Common Stock, (Dunnan Edell, Gio Batta Gori, MD and Robert Lage) were
recommended by the nominating committee. Drew Edell was asked to step aside as a
director because he is not deemed a "disinterested party" under the new
regulations promulgated by the Security and Exchange Commission and the American
Stock Exchange. The New regulations require that the board of directors be
constituted by a majority of independent directors.
Set forth below is information regarding all nominees, including
information they have furnished concerning their principal occupations and
certain other directorships, and their ages as of May 1, 2004. (The stock
ownership of each of the nominees is presented above, under "Share Ownership of
Directors, Officers and 5% Owners.")
A. CLASS A COMMON STOCK NOMINEES
(No vote or proxy is solicited in respect of the Class A nominees, since
two of them - Messrs. Berman and David Edell - own all of the Class A Common
Stock shares, and they have jointly proposed themselves, Mr. Polak and Mr.
Kreitman, for re-election.)
David Edell, age 72, is a director, and the Company's Chief Executive
Officer. Prior to his association with the Company he was a marketing and
financial consultant; and, by 1983, he had extensive experience in the health
and beauty aids field as an executive director and/or officer of Hazel Bishop,
Lanolin Plus and Vitamin Corporation of America. In 1954, David Edell received a
Bachelor of Arts degree from Syracuse University.
Ira W. Berman, age 72, is the Company's Executive Vice President and
Corporate Secretary. He is also Chairman of the Board of Directors. Mr. Berman
is an attorney who has been engaged in the practice of law since 1955. He
received a Bachelor of Arts Degree (1953) and Bachelor of Laws Degree (1955)
from Cornell University, and is a member of the American Bar Association.
Jack Polak, age 91, has been a private investment consultant since April
1982. He was knighted by Queen Beatrix of the Netherlands for his efforts on
behalf of the Anne Frank Center, USA, for which he still actively works, and is
Chairman Emeritus. He is a member of the Association of Certified Tax
Consultants in The Netherlands. He was a director and member of the Audit and
Compensation Committee of K.T.I. Industries, Inc., from February 1995 until
1999, when K.T.I., a waste-to-energy business was `taken over' by Casella
Industries. From 2000 until 2002, he was a director of Oakhurst Industries, a
public company that owns an automotive accessories distributor, a
waste-to-energy tire facility, and a road construction company.
Stanley Kreitman, age 71, has been Vice Chairman of the Board of Manhattan
Associates, an equity investment firm, since 1994. He is also a director of
Medallion Financial Corp., an SBIC. Mr. Kreitman has been Chairman of the Board
of Trustees of the New York Institute of Technology since 1989, and of Crime
Stoppers Nassau County (NY), since 1994. Since February 1999 and June 1999,
respectively, he has been a member of the Board of Directors of K.S.W. Corp. and
P.M.C.C. Mortgage Corp. He is also a director and/or executive committee member
of the following organizations: The New York City Board of Corrections, Bank
Hapdalim USA (Signature Bank), The New York College of Osteopathic Medicine, and
the Police Athletic League. From 1975 until 1993, he was President of United
States Banknote Corporation, a securities printer.
10
B. COMMON STOCK NOMINEES
The board of directors' nominees, to be voted upon as directors and to be
approved by the common stock shareholders, were presented to and endorsed by the
Nominating Committee consisting of two independent directors for the Company,
Jack Polak and Stanley Kreitman.
Dunnan Edell, age 48, President, is the son of David Edell and the brother
of Drew Edell. He is graduate of George Washington University. He has been a
director since 1994. Appointed to President in 2003, he joined the Company in
1984 and was appointed Divisional Vice-President in 1986. He was employed by
Alleghany Pharmacal Corporation from 1982 to 1984, and by Hazel Bishop from 1977
to 1981.
Dr. Gori, 73, is president of the Health Policy Center, Bethesda,
Maryland, a consulting group in toxicology, epidemiology, nutrition, and related
scientific, industrial, and regulatory issues. Advisor to major corporations
worldwide, his previous experiences include directing the Franklin Institute
Policy Analysis Center, and executive positions at the National Cancer Institute
as Deputy Director of the Division of Cancer Causes and Prevention, Director of
the Smoking and Health Program, Director of the Diet, Nutrition and Cancer
Program. He held earlier positions in the pharmaceutical and biologics industry,
and in academia. Recipient of the U.S. Department of Health Education and
Welfare Superior Service Award, he is active in toxicology, carcinogenesis,
nutrition, tobacco, and environmental issues. He has been a two-term President
of the International Society of Regulatory Toxicology and Pharmacology, is a
member of scientific societies, fellow of the Academy of Toxicological Sciences,
funding and former editor of the journal Nutrition and Cancer, and editor of the
journal Regulatory Toxicology and Pharmacology.
Robert A. Lage, age 67, a retired CPA, was a partner at
PriceWaterhouseCoopers Management Consulting Service prior to his retirement in
1997. He has been engaged in the practice of public accounting and management
consulting since 1959. He received a BBA from Bernard Baruch College of The City
University of New York in 1958.
AUDIT, COMPENSATION AND NOMINATING COMMITTEE CREDENTIALS
Stanley Kreitman, former president of a national bank, will qualify as a
"financial expert" as the same is proposed by the S.E.C. in its Release No. 34 -
46701(October 22, 2002). Mr. Kreitman is "independent" as defined by Section
121(A) of The American Stock Exchange's Listing Standards and, thus, S.E.C.
Rules. (In fact, the subject definitions detail relationships etc. that `define'
non-independence. No issue `thereunder' is `presented' by Mr. Kreitman--or, see
below, by Mr. Polak, or Mr. Lage).
In any event, Mr. Kreitman qualifies `under' existing AMEX/Audit
Committee/financial `sophistication' rules as `having past employment experience
or background which results in financial sophistication...'-as do Mssrs. Polak
and Lage (as next presented).
Jack Polak is a certified Dutch tax consultant and a member of the
Association of Certified Tax Accountants. As shown above he is both
"independent" and AMEX-qualified as financially sophisticated.
Robert A. Lage, as shown above, is both "independent" and AMEX-qualified
as financially sophisticated.
Dr. Gio Batta Gori, recommended as a nominee by the nominating committee
is deemed "independent" as that term is defined under the new regulations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH OF THE COMMON
STOCK NOMINEES AS PROPOSED IN THIS PROPOSAL NO. 1. A MAJORITY OF THE COMMON
STOCK VOTE IS REQUIRED FOR APPROVAL.
11
PROPOSAL NO .2
APPROVAL OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Sheft Kahn & Company
LLP., independent certified public accountants (the "Auditors"), to audit the
accounts and certify the financial statements of the Company for the fiscal year
ending November 30, 2004. The appointment shall continue at the pleasure of the
Board of Directors, subject to approval by the shareholders. The Auditors have
acted as the Company's auditors since 1983.
The Board of Directors expects that one or more representatives of the
Auditors will be present at the meeting. The Auditors will then be given the
opportunity to make a statement, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL NO. 2. A
MAJORITY OF THE AGGREGATED CLASS A COMMON STOCK AND COMMON STOCK VOTE IS
REQUIRED FOR APPROVAL.
II. OTHER MATTERS
The Board of Directors knows of no other matters to be presented, but if
any other matters properly come before the Annual Meeting, it is intended that
the persons holding proxies will vote thereon in accordance with their best
judgments.
When a proxy in the form enclosed with this Proxy Statement is returned
properly executed, the shares represented thereby will be voted as indicated
thereon or, if no direction is indicated, in accordance with the recommendations
of the Board of Directors.
III. CERTAIN REPORTS
Based upon the reports furnished to the Company, all reports required to
be filed during or concerning the Company's 2003 fiscal year, by officers,
directors and principal shareholders, pursuant to Section 16 of the Securities
Exchange Act of 1934 (Form 3, Initial Statement of Beneficial Ownership; Form 4,
Statement of Changes of Beneficial Ownership; and Form 5, Annual Statement of
Beneficial Ownership), were timely filed with the Securities and Exchange
Commission.
The Standards of Business Ethics is annexed hereto as Exhibit "A."
By Order of the Board of Directors
/s/ Ira W. Berman
Ira W. Berman,
Chairman of the Board of Directors
East Rutherford,
New Jersey May 10, 2004
12
[LOGO] CCA INDUSTRIES, INC.
-----------------------------
SCHEDULE "A"
STANDARDS OF BUSINESS CONDUCT
-----------------------------
PURPOSE AND SCOPE
The purpose of the Code of Conduct is to set forth the general policy of
CCA Industries, Inc. ("CCA" or the "Company") to conduct its business with
the highest ethical standards and to comply with all applicable laws and
regulations. The Code of Conduct applies to all operations, employees and
representatives (collectively, "Employees") of CCA, each of whom will be
required to acknowledge that they are aware of its existence and will
abide by the policies it sets forth. The Code of Conduct is also intended
as a public statement to all persons and constituencies impacted by CCA's
business activities. As the Code of Conduct impacts a broad range,
individual policies may be issued from time to time dealing with specific
areas.
POLICY
CCA is committed to conducting its business with the highest ethical
standards and will comply with both the letter and the spirit of
all-applicable laws and regulations. CCA's business success depends on its
reputation for ethical conduct and on the trust and confidence of everyone
with whom it associates. The guiding principle is a firm commitment to
integrity and fairness.
I. COMPLIANCE WITH LAWS
CCA's employees are responsible for complying with all laws and
regulations applicable to their areas of responsibility. Each employee
shall immediately report possible violations of the Code of Conduct to
his/her immediate supervisor, unless the supervisor is the subject of the
violation (see reporting procedure reference in Section XVIII). If such
instances are associated with an immediate supervisor, the matter shall be
reported to CCA's Director of Human Resources. CCA's HR Director is
responsible for informing CCA management and employees of applicable laws
and regulations and for providing advice and compliance programs. If you
have any questions regarding the guidelines outlined in this document,
please contact CCA's Director of Human Resources.
IN THE MARKETPLACE
A. DEALING WITH CUSTOMERS AND SUPPLIERS
CCA is committed to developing, manufacturing, and delivering
products, which meet quality standards.
CCA will select and treat its suppliers of products and services
impartially without unlawful discrimination. Suppliers will be
evaluated on the basis of price, experience, quality, timely
performance, commitment, and reliability.
Every employee has an obligation to protect customer and supplier
relations by acting ethically and fairly.
13
B. CONTACTS WITH COMPETITORS
Employees of CCA, and its affiliates, in dealing with competitors
may from time to time meet, talk and attend trade association
meetings, seminars or other activities. CCA may sell to, or enter
into, licensing agreements with competitors or participate with
competitors in business or trade shows. Such contacts require the
utmost caution and conformance with CCA's written policies.
What is to be avoided in any contact with a competitor is discussion
of such things as pricing policy, terms of sales, cost, inventories,
customer list, product plans, market surveys or studies, or the
unauthorized exchange of any proprietary or confidential
information.
CCA employees must adhere to the strict letter and spirit of these
guidelines and report any questionable contact by competitors.
C. GIFTS AND ENTERTAINMENT
CCA employees and their family members may not give or accept any
gift, entertainment, transportation, or other business courtesies
either intended, or which might be perceived, as an attempt to
influence improperly the business relationship between CCA and any
current or prospective supplier, customer or other party doing
business with CCA.
When an employee receives a gift, the employee's immediate
supervisor must be notified and the gift must be discussed with
CCA's President to determine whether it can be accepted or needs to
be returned.
This does not apply to minor items of retail value not to exceed $50
commonly exchanged in business relationships and which are not
accepted by the employee on a regular or frequent basis.
The exchange between suppliers, customers and CCA employees of
customary business courtesies, including transportation or meals
provided in the normal course of business dealings, is permitted
when reasonable, if based on a clear business purpose. Excessive
entertainment of any sort is not acceptable.
PRESERVATION OF CORPORATE ASSETS
Every employee has the duty to preserve CCA's assets, its property and
equipment. CCA's assets may not be used by CCA personnel for their
personal benefit nor shall an CCA employee allow others to use CCA's
assets unless: (1) prior written approval is obtained from the executive
of CCA who is accountable and responsible for the CCA property proposed to
be used, and (2) the employee promptly reimburses CCA for CCA's
incremental costs incurred as a result of the personal use of CCA
property. Approval for use shall only be given under extraordinary
circumstances and then only if such use of the CCA property shall not
disrupt or interfere with the business activities of CCA, will not
diminish or impair the value of the CCA property, and is for a legal and
proper purpose.
PAYMENTS
No illegal or improper payments may be made to employees of CCA's
suppliers, vendors or customers or to any government official or
employees. Payments to government officials that are legal and proper
where made must conform to written CCA policies.
Direct or indirect payments to consultants, distributors, agents or other
intermediaries must be at prevailing customary rates and for actual
legitimate services performed.
14
Direct or indirect payments to a CCA employee or a member of the
employee's family in any form from a supplier, customer, or any other
party doing business with CCA are prohibited.
An employee shall neither solicit nor accept loans from any person or from
any financial institution doing, or seeking to do, business with CCA,
unless such loan is made at the prevailing interest rates and upon such
terms as are commonly offered to individual borrowers similarly situated.
An employee may not exploit his or her position with CCA, or CCA's
relationship with any financial institution, to make a personal loan to
the employees or to his/her designee or to make a loan to any business in
which the employee has an interest irrespective of whether such loan is to
be made at the prevailing interest rates and terms.
CONFLICT OF INTEREST
CCA respects its employees' rights of privacy in both their personal and
financial affairs. However, these rights must be balanced against the
interest of CCA in maintaining a reputation for the highest standards of
business ethics and conduct.
All CCA employees have a duty to avoid financial, business or other
relationships, which might be opposed to the interest of CCA, or might
cause a conflict with the performance of their duties as CCA employees.
Employees shall not have a financial interest in, be employees of, consult
with, be a director or an official of, hold an equivalent position of, or
have any other business relationship with, a competitor, customer,
contractor, vendor, or supplier of CCA or other enterprise with whom CCA
does business except with the prior written permission of the CEO or
Chairman of the Board. This permission can only be granted after the CEO
or Chairman of the Board is provided with full written disclosure of the
terms and the nature of the financial relationship in question. The
foregoing affiliations may constitute impermissible conflicts of interest
if the employee is in a position to render or influence a decision as to
whether CCA shall do business with such a person or entity or determine
the terms and conditions of a transaction with a purchase or sale by CCA.
CCA employees may not accept any payment, service or loan from any
enterprise with whom CCA does business without adequate consideration or
at other than regular commercial terms. This includes, but is not limited
to, gifts, trips, entertainment, or other benefits of more than nominal
value.
Ownership of stock or other financial interests in an outside concern
doing business, or in competition with CCA, and which might influence
adversely one's responsibility to CCA is prohibited by CCA employees and
their immediate family members. CCA personnel may invest in broadly
distributed stocks of such concerns if the stock is publicly traded on a
recognized stock exchange or the over-the-counter market; provided that
the investment does not exceed one percent of that outstanding stock of
the company or represents more than 5% of the net worth of the employee.
For purpose of this section, immediate family includes an employee's
spouse, parent, child, spouse's parent, brother and sister and their
spouses as well as any individual living in an employee's household.
An CCA employee should promptly notify his or her supervisor or the
Director of Human Resources in writing if the employee or a close family
member owns or has a financial interest in a proposed transaction between
CCA and a third party, other than a permitted investment in a publicly
traded stock.
An employee shall not use or disclose, any confidential or non-public
information about CCA's intention to acquire, invest or enter into
business relationships with another person or entity, to any person,
except for disclosure to those CCA employees who have the need to in order
to perform their duties; nor shall an employee disclose trade secrets,
proprietary product information or confidential financial data of CCA to
any person or entity other than authorized CCA employees, irrespective of
whether knowledge of such information and data is required as a result of
his or her duties and responsibilities or is otherwise acquired.
15
FINANCIAL AND ACCOUNTING RECORDS
CCA requires that:
o All payments and other transactions must be properly authorized, recorded
accurately, and in sufficient detail in accordance with generally accepted
accounting principles;
o An employee shall report any knowledge or suspicion of instances where (1)
a transaction in which CCA is a party, or an expense report of an employee
has not been or may not have been accurately or properly recorded, or not
recorded at all, on CCA's books and records, (2) documents supporting a
transaction were altered or falsified to disguise a transaction's true
purpose or for any other improper purpose, (3) any transaction recorded in
what seemed to be an incomplete or an unusual manner;
o There shall not be any unrecorded or undisclosed funds or assets;
o No false, incomplete, or misleading entries shall be made in the books and
records of the Company;
o No relevant information shall be concealed from management or from CCA's
independent accountants or counsel;
o An employee shall give full and accurate information in response to any
inquiry by an independent accountant, or counsel and shall provide such
accountants and attorneys all records and documents requested by them,
unless otherwise instructed by CCA's legal counsel.
OTHER COMPANY RECORDS
Employees are personally responsible for the reports and records
they write and the information they provide for computer systems.
All CCA accounts, research reports, sales reports, expense accounts,
time sheets, and other documents must be accurate, clear, and
unambiguous. The falsification of records is always unethical and
often illegal. Every employee's memos and letters should reflect
these same high standards.
EMPLOYEE RELATIONSHIPS
CCA requires that employees treat each other with respect, fairness,
and dignity. Employment decisions regarding selection, advancement,
retention, and termination will be made in accordance with all
applicable Equal Employment Opportunity laws.
Harassment of any employee, for any reason, will not be tolerated.
No employee, male or female, shall harass another employee by (1)
making unwelcome or unsolicited sexual advances or requests for
sexual favors, either explicitly or implicitly, (2) making
submission to, or acceptance of, such conduct the basis for
employment decisions affecting the employee's evaluation,
advancement, compensation, duties or other conditions of employment
or career development, or (3) creating an intimidating, hostile or
offensive working environment by such conduct.
CCA's employee handbook explains the procedure an employee should
follow if they feel they are a victim of such harassment. CCA is
committed to discuss employee job-related concerns in a fair,
prompt, and impartial manner while assuring employees the right of
review by senior management, without fear of reprisal or
retaliation. CCA believes that trust, sharing and respect for the
individual are essential to its continued success.
16
PROPRIETARY OR CONFIDENTIAL INFORMATION AND TRADE SECRETS
Proprietary or confidential information and technology, trade
secrets, client information, financial and operational plans or data
of CCA and CCA's clients must be protected for they are an asset of
CCA. Business strategies, pending contracts, unannounced products,
product improvements, or technical innovations of CCA and CCA's
clients all represent a substantial investment of resources. They
are essential to survival and growth in the competitive marketplace.
Remember that our clients share with us, and expect us to safeguard,
their marketplace plans, technical developments and other business
strategies. If an employee is unsure as to whether or not something
is proprietary or a trade secret, he or she should contact CCA's CEO
or Chairman of the Board for guidance.
Proprietary or confidential information should not be shared with
fellow employees unless they are specifically authorized to receive
it.
Proprietary or confidential information of other companies (vendors,
suppliers, and clients) also should be protected. Such information
should not be passed on to colleagues unless permission has been
ascertained from an appropriate authority to do so.
ENVIRONMENTAL COMMITMENT
We expect all employees to help assure that our facility is operated
in accordance with all applicable federal, state, and local
environment laws and regulations, and in a manner which preserves
the quality of the environment, conserves energy, minimizes the
creation of hazardous waste products and does not expose its
employees and the public to hazardous or toxic substances.
SAFETY COMMITMENT
CCA recognizes its commitment to provide a safe work place and
environment for its employees, free from recognized hazards, which
cause or are likely to cause, death, serious physical injury or
illness to its employees. It is the responsibility of all employees
of CCA to safeguard the work place from recognized hazards and
unhealthy working conditions.
Management employees shall take, and shall require all employees
under their supervision to take, the necessary actions to comply
with all occupational safety and health standards, rules, and
regulations issued under the Occupational Safety and Health Act of
1970 and under applicable occupational safety and health state and
local laws. Employees are required to conduct their activities in
the work place in a manner that will not endanger the welfare and
health of their fellow employees. Employees shall report all unsafe
and unhealthy conditions and incidents of injuries or illness which
occur in the work place to their supervisor or to the employee
responsible for safety and health programs.
Management employees responsible for the operation of CCA facilities
shall maintain procedures and practices to accurately record
accidents, injuries, and illnesses of employees while on the job, as
required by applicable occupational safety and health laws and
regulations.
SECURITY
CCA's facility contain various machinery, equipment, furnishings,
merchandise, software, creative archives and other property. It is
important that all employees pay close attention to the security of
our facility as well as other property of CCA. Notify your
supervisor immediately if you see any suspicious or illegal activity
of any kind, including the presence of strangers on any CCA
premises.
17
ROLE OF INDIVIDUAL EMPLOYEES
Strict adherence to these Standards is vital. All employees are
expected to disclose immediately, or in advance if possible, any
situation in which they are involved or aware of which could be the
source of a conflict of interest or otherwise violate corporate
policies. Employees are expected to report any violation of these
Standards as outlined in Section III - COMPLIANCE WITH LAWS and
Section XVIII - CCA COMPLIANCE PROGRAM - Reporting of Criminal
Offenses.
DISCIPLINARY ACTION
CCA's purpose is to encourage compliance rather than to punish
violators. However, violation of these Standards will subject the
employee to disciplinary action up to and including termination.
ANTITRUST
CCA believes in competing in the marketplace based on free, open and
competitive markets. Consequently, sales of CCA products and
services should be based on product and service distinctiveness and
quality, a low cost position, fair pricing and promotional programs
and honest advertising and marketing practices. Compliance with the
antitrust and trade regulation laws and regulations of the United
States government and the various states is essential not only to
the preservation of CCA's market positions which have been attained
through legal and competitive means, but also to their vitality and
growth.
Sanctions, which may be imposed for violations of the antirust laws,
can be severe. These include possible criminal charges, substantial
civil monetary penalties and the imposition of restrictive decrees
or court orders, which adversely affect the future vitality, and
growth of CCA's business. Moreover, antitrust violations, or
possibly merely the public charge of an antitrust violation, could
create a long-term detriment to CCA's reputation as a premier
Company and have an adverse effect on the other businesses of CCA
which were not a party to such violation.
The analysis of the antitrust laws (i.e., the Sherman Act, The
Clayton Act, Robinson-Patman Act, Federal Trade Commission Act and
the comparable antitrust and trade regulation status of the various
states) can be extraordinarily complex. Consequently, CCA employees
are not expected to interpret these laws, but they should be aware
of the type of transactions, conduct and practices, which could
violate the antitrust laws. Employees should review with CCA's CEO
or Chairman of the Board proposed practices or conduct which
involve, or could be constructed to involve, the following
agreements or understandings, whether written or oral (include tacit
understandings): (i) agreements with a competitor to raise, lower,
fix or stabilize prices or the terms and conditions of the sale of
products or services; (ii) agreements with a competitor to limit or
restrict the production or distribution of products; (iii)
agreements with a competitor to limit product or service
characteristics or quality; (iv) agreements with a competitor to
allocate sales territories, products or product lines, customers or
suppliers; (v) agreements with a competitor or customer to either
boycott, or not deal with, a third party; (vi) agreements with a
customer to control the customer's resale pricing of CCA's products;
(vii) agreements with a customer which obligates the customer not to
sell products of CCA's competitors; (viii) agreements with a
customer that conditions the sale of one CCA product on the
customer's agreement to purchase another CCA product; (ix)
agreements to buy products or services from a company on the
condition that the company agrees to buy CCA's products and services
particularly if coercion or an abuse of market power is implicated;
and (x) agreements which obligate a customer to purchase a full line
of CCA products in order for the customer to be entitled to purchase
a desired individual CCA product.
Other business transactions, practices or conduct which may violate
the antitrust laws and should be reviewed with CCA's CEO or Chairman
of the Board to ascertain whether they may unreasonably restrain
trade or cause an antitrust injury to a competitor or a certain
class of competitors include any transaction or practice (i.) which
may result in CCA acquiring a substantial market share in any
product category or geographical area, including the acquisition of
shares or assets of a business entity, particularly if the entity is
in a business related to any of
18
CCA's businesses - a so-called horizontal acquisition; (ii) which
involves the pricing of products or services below cost, the purpose
or the result of which may be to force a competitor out of business;
(iii) which may be viewed as an unfair method of competition or a
deceptive practice; (iv) which obligates a customer to buy all of
its product requirements from CCA; or (v) which restricts a
customer's right to resell in a particular geographical area or to a
certain customer or class or group of customers.
CCA's President, CEO or Chairman of the Board, if they are not
uniform for competition customers, should review proposed pricing
practices. These practices may include: (i.) charging competing
customers different prices for the same product, if the price
differences are not cost or volume justified or are not charged in a
good fair effort to meet competition; (ii) not offering a customer
services, payments or other sales or promotional assistance on a
proportionally equal basis to those offered to that customer's
competitors; or (iii) knowingly receiving or including a
discriminatory price or terms of sale from a supplier.
CCA COMPLIANCE PROGRAM
PURPOSE
An effective compliance program is the key element in the effort to
assure that CCA conducts its business with the highest ethical
standards and complies with both the letter and spirit of all
applicable Federal and state laws and regulations. An effective
compliance program may lessen CCA's exposure to civil liabilities
and sanctions, which might arise as a result of a criminal act
committed by a CCA employee.
RESPONSIBILITY FOR THE COMPLIANCE PROGRAM
The CFO and in-house counsel of CCA have the overall responsibility
for the Compliance Program. As overseer of the Compliance Program,
the CFO and in-house counsel shall:
(i) Assure that the Compliance Program is effectively
communicated to CCA employees who are in positions to
cause CCA to be held criminally liable for acts
performed within the scope of their employment and, to
the extent practicable, to other employees, taking into
consideration the size and the organizational complexity
of CCA.
(ii) Assure that CCA has adopted reasonable measures through
the implementation and maintenance of monitoring and
auditing programs and systems which are reasonably
designed to prevent and, to the extent practicable, to
detect actual or prospective criminal conduct by CCA
employees, including the Compliance Program.
(iii) Encourage CCA employees, irrespective of their level or
position in the organizational structure of CCA, to
report actual or prospective criminal conduct by another
CCA employee without fear of retribution (i.e.,
demotion, termination, intimidation, or reduction in
compensation, duties or responsibilities).
(iv) Take reasonable and prompt action to appropriately
respond to a report of criminal conduct by an CCA
employee or agent by conducting or coordinating a
comprehensive and well-documented investigation of the
allegations contained in such report; and if the report
is found to be accurate, take immediate action as shall
be deemed necessary to prevent the same or similar
criminal conduct from occurring in the future, including
modifications to the Compliance Program and the Code, if
appropriate.
(v) Assure that any CCA employee who shall be found to have
engaged in, condoned or authorized, criminal conduct or
has known of such criminal conduct and failed to report
it, shall be appropriately disciplined including
demotion and termination of employment.
19
RESPONSIBILITY FOR PROGRAMS AND SYSTEMS TO PREVENT AND
DETECT CRIMINAL CONDUCT
The CEO or Chairman of the Board, in collaboration with legal
counsel, shall have the principal responsibility to devise,
implement, amend or supplement, when appropriate, and to maintain
monitoring and audit programs and systems reasonably designed to
prevent and, to the extent practicable considering the size and
organizational complexity of CCA, detect criminal conduct by CCA
employees or agents, including the compliance programs; and, when
appropriate, they shall request the assistance and advice of legal
counsel and independent public accountants in the evaluation of the
effectiveness of such programs and systems.
REPORTING OF CRIMINAL OFFENSES
All CCA employees shall promptly report to his/her immediate
supervisor (unless the supervisor is the subject of the violation)
any actual or prospective act or activity by another CCA employee
when the reporting employee knows or reasonably believes the act or
activity constitutes or will constitute criminal conduct. If such
instances are associated with an immediate supervisor, the matter
shall be reported to CCA's Director of Human Resources, or in her
absence, to CCA's legal counsel,
If an employee knows, or reasonably believes, that the criminal
conduct has occurred, or is about to occur, and does not promptly
report the act or activity as directed above, he or she shall be
subject to appropriate disciplinary action, up to and including
termination.
There is no circumstance in which criminal conduct by a CCA employee
or agent will be considered to be within the scope of his or her
employment or authority. Because the distinction between criminal
conduct and conduct which may violate a civil statute is not always
clear, if an employee knows of any act or activity by another
employee or agent which violates, or which appears to violate, any
provision of the Code, the employee is encouraged to discuss the act
or activity with the Director of Human Resources to determine if a
criminal act has occurred.
CONFIDENTIALITY OF UNLAWFUL CONDUCT REPORTS
The identity of a reporting employee and the contents of any reports
or discussions shall be kept in strict confidence and shall be
disclosed by the CEO or Chairman of the Board or Human Resources
Director only (i.) to such third parties, including legal counsel
and independent public accountants, as shall be determined by the
CEO or Chairman of the Board, and (ii) to such officers of CCA who
are not the subject of the act or activity in question and whose
duties and responsibilities, in the opinion of the CEO or Chairman
of the Board, require them to be appraised of the report or the
result of the investigation, if the report discloses allegations for
which he is organizationally responsible to investigate, and (iii)
as may be required to investigate, remediate and redress the matters
raised by the reporting employee. The reporting employee shall not
disclose the contents of a report or discussions to any third party
other than to the CEO or Chairman of the Board, Human Resources
Director or legal counsel.
REPORTING PROCEDURES
Reporting employees are encouraged to communicate a questionable act
or activity directly and personally to the Director of Human
Resources, whenever practicable. If an incident is communicated in
writing, it should be delivered to the Director of Human Resources
by the reporting employee in the most expeditious manner in an
envelope marked "Personal and Confidential - To Be Opened Only By
The Director of Human Resources." To assure its confidentiality, the
utilization of a telecopy machine is not authorized for
communicating a questionable act or activity. CCA's Director of
Human Resources is Veronica J Pouch. CCA's legal counsel is Ira W.
Berman.
20
If the questionable act or activity involves the Director of Human
Resources, the reporting employee should contact CCA's CFO or legal
counsel.
TREATMENT AND ANONYMOUS REPORTS
The CEO or Chairman of the Board and/or Director of Human Resources
shall treat and investigate anonymous communication as seriously and
fully as any filed or communicated by an identified reporting
employee.
NO RETRIBUTION AGAINST REPORTING EMPLOYEES
No retribution or retaliation shall be taken against any CCA
employee who has communicated a questionable act or activity based
on a good faith belief that an CCA employee or agent has engaged, or
is about to engage, in a criminal conduct. Any CCA employee who
shall take (or attempt to take) retaliatory action against a
reporting employee shall be subject to appropriate disciplinary
action, up to and including termination.
21
[LOGO] CCA INDUSTRIES, INC.
-----------------------------
STANDARDS OF BUSINESS CONDUCT
I, ____________________________________, acknowledge receipt of the STANDARDS OF
(Print Name)
BUSINESS Conduct pertaining to CCA Industries, Inc. I have reviewed this
document and understand and agree to abide by its content. I further understand
that my compliance with the STANDARDS OF BUSINESS CONDUCT is a requirement
associated with my employment by CCA Industries, Inc.
Date: _________________________ Signature: ______________________________
22
ANNUAL MEETING OF SHAREHOLDERS OF
CCA INDUSTRIES, INC.
JUNE 16, 2004
PLEASE DATE, SIGN AND MAIL
YOUR PROXY CARD IN THE
ENVELOPE PROVIDED AS SOON
AS POSSIBLE.
--> Please detach along perforated line and mail in the envelope provided. <--
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A "FOR" VOTE FOR ALL PROPOSALS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
- ------------------------------------------------------------------------------------------------------------------------------------
1. Election of Directors: FOR AGAINST ABSTAIN
2. Ratification of the Board of Directors / / / / / /
NOMINEES: appointment of Sheft Kahn & Company
/ / FOR ALL NOMINEES O Gio Batta Gori, M.D. L.L.P. as the Company's independent
O Robert Lage certified public accountants.
/ / WITHHOLD AUTHORITY O Dunnan Edell
FOR ALL NOMINEES To grant the proxy the power to vote in his discretion upon such other
matters as may properly come before the Meeting or any adjournment
/ / FOR ALL EXCEPT thereof
(See instructions below)
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS
PROXY WILL BE VOTED FOR ALL PROPOSALS.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DA
YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOU
COUNTED. FOR AGAINST ABSTAIN
INSTRUCTION: To withhold authority to vote for any
- ----------- individual nominee(s), mark "FOR ALL EXCEPT"
and fill in the circle next to each nominee
you wish to withhold, as shown here: O
- ------------------------------------------------------------
- ------------------------------------------------------------
To change the address on your account, please check the
box at right and indicate your new address in the address
space above. Please note that changes to the registered
name(s) on the account may not be submitted via this
method. / /
- ------------------------------------------------------------
------------------------ --------- ------------------------ ---------
Signature of Shareholder Date Signature of Shareholder Date
------------------------ --------- ------------------------ ---------
NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
CCA INDUSTRIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints David Edell and Ira W. Berman, and each of them, proxies and
attorneys in fact, with power of substitution, to vote all shares the undersigned is entitled to vote at the Annual Meeting of
Shareholders of CCA INDUSTRIES, INC., to be held at The American Stock Exchange (14th Floor Boardroom), 86 Trinity Place, New York,
NY, on June 16, 2004 at 2:00 p.m., and to vote as directed on the reverse side upon the proposals, and in their discretion upon such
other business as may properly come before the meeting or any adjournment thereof (all as more fully set forth in the Notice of
Meetng and Proxy Statement, receipt of which is hereby ackowledged).
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. UNLESS OTHERWISE SPECIFIED, IT WILL BE VOTED "FOR" THE ELECTION OF GIO BATTA
GORI, M.D., ROBERT LAGE AND DUNNAN EDELL AS DIRECTORS, AND "FOR" THE APPOINTMENT OF SHEFT KAHN & COMPANY L.L.P.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)