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1128916v.3
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
LIFETIME HOAN CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of filing fee (Check the appropriate box):
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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11
(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule and
the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
LIFETIME HOAN CORPORATION
One Merrick Avenue
Westbury, New York 11590
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on June 14, 2001
Notice is hereby given that the Annual Meeting of Stockholders
of Lifetime Hoan Corporation, a Delaware corporation (the "Company"),
will be held at the offices of the Company, One Merrick Avenue,
Westbury, New York 11590 on Thursday June 14, 2001, at 10:30 a.m.,
local time, for the following purposes:
(1) To elect a board of seven directors to serve
until the next Annual Meeting of Stockholders or
until their successors are duly elected and
qualified;
(2) To approve and ratify the appointment of Ernst & Young LLP as
the independent auditors of the Company;
(3) To transact such other business as may properly come before the
meeting, or any adjournment(s) or postponement(s) thereof.
Stockholders of record at the close of business on April 27,
2001 are entitled to notice of and to vote at the Annual Meeting and
any adjournment(s) or postponement(s) thereof. A complete list of
the stockholders entitled to vote at the Annual Meeting will be
available for examination by any stockholder at the Company's
offices, One Merrick Avenue, Westbury, New York 11590, for any
purpose germane to such meeting, during ordinary business hours, for
a period of at least 10 days prior to the Annual Meeting.
By Order of the Board of Directors
Craig Phillips, Secretary
Westbury, New York
April 27, 2001
THE BOARD OF DIRECTORS EXTENDS A CORDIAL INVITATION TO ALL
STOCKHOLDERS TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN AS
PROMPTLY AS POSSIBLE THE ENCLOSED PROXY IN THE ACCOMPANYING REPLY
ENVELOPE. STOCKHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR
PROXIES AND VOTE IN PERSON.
LIFETIME HOAN CORPORATION
One Merrick Avenue
Westbury, New York 11590
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be held on June 14, 2001
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors
(the "Board") of Lifetime Hoan Corporation, a Delaware corporation
(the "Company"), for use at the Annual Meeting of Stockholders of the
Company (the "Meeting") to be held on the date, at the time and place
and for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. The Company's principal offices are located
at One Merrick Avenue, Westbury, New York 11590 and its telephone
number is (516) 683-6000. Stockholders of record at the close of
business on April 27, 2001 are entitled to notice of and to vote at
the Meeting. This Proxy Statement and the accompanying Proxy shall
be mailed to stockholders on or about May 11, 2001.
THE MEETING
Voting at the Meeting
On April 27, 2001, there were 10,487,130 shares of the Company's
common stock, $.01 par value (the "Common Stock"), issued and
outstanding. Each share of Common Stock entitles the holder thereof
to one vote on all matters submitted to a vote of stockholders at the
Meeting.
A majority of the Company's outstanding shares of Common Stock
represented at the Meeting, in person or by proxy, shall constitute a
quorum. Assuming a quorum is present, (1) the affirmative vote of a
plurality of the shares so represented is necessary for the election
of directors and 2) the affirmative vote of a majority of the shares
so represented is necessary to approve and ratify the appointment of
Ernst & Young LLP as the independent auditors of the Company.
Proxies and Proxy Solicitation
All shares of Common Stock represented by properly executed
proxies will be voted at the Meeting in accordance with the
directions marked on the proxies, unless such proxies have previously
been revoked. If no directions are indicated on such proxies, they
will be voted for the election of each nominee named below under
"Election of Directors" and for the approval and ratification of the
appointment of Ernst & Young LLP as the independent auditors of the
Company. If any other matters are properly presented at the Meeting
for action, the proxy holders will vote the proxies (which confer
discretionary authority upon such holders to vote on such matters) in
accordance with their best judgment. Each proxy executed and
returned by a stockholder may be revoked at any time before it is
voted by timely submission of a written notice of revocation or by
submission of a duly executed proxy bearing a later date (in either
case directed to the Secretary of the Company), or, if a stockholder
is present at the Meeting, he may elect to revoke his proxy and vote
his shares personally. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for
the transaction of business. If a stockholder, present in person or
by proxy, abstains on any matter, such stockholder's shares of Common
Stock will not be voted on such matter. Thus, an abstention from
voting on any matter has the same legal effect as a vote "against"
the matter, even though the stockholder may interpret such action
differently. Except for determining the presence or absence of a
quorum for the transaction of business, broker non-votes are not
counted for any purpose in determining whether a matter has been
approved.
The Company will bear the cost of preparing, printing,
assembling and mailing the proxy, Proxy Statement and other material
which may be sent to stockholders in connection with this
solicitation. It is contemplated that brokerage houses will forward
the proxy materials to beneficial holders at the request of the
Company. In addition to the solicitation of proxies by the use of
the mails, officers and regular employees of the Company may solicit
proxies by telephone without additional compensation. The Company
will reimburse such persons for their reasonable out-of-pocket
expenses in accordance with the regulations of the Securities and
Exchange Commission.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial
ownership of the Common Stock as of April 27, 2001 (except where
otherwise noted) based on a review of information filed with the
United States Securities and Exchange Commission ("SEC") and the
Company's stock records with respect to (a) each person known to be
the beneficial owner of more than 5% of the outstanding shares of
Common Stock, (b) each Director or nominee for a directorship of the
Company, (c) each executive officer of the Company named in the
Summary Compensation Table, and (d) all executive officers and
directors of the Company as a group. Unless otherwise stated, each
of such persons has sole voting and investment power with respect to
such shares.
Percent of
Outstanding
Shares
Amount and Nature ofBeneficially
Name and Address Beneficial OwnershipOwned (14)
Milton L. Cohen (1) 1,799,149(2) 17.1%
Jeffrey Siegel (1) 1,433,905(3) 13.6%
Ronald Shiftan 180,186(4) 1.7%
c/o The Port Authority
of NY & NJ
One World Trade Center,
67 West
New York, NY 10048
Pamela Staley 962,423(5) 9.2%
1200 S. Gaylord
Denver, CO 80210
Craig Phillips (1) 938,142(6) 8.9%
Howard Bernstein (1) -0- -
Robert McNally (1) 110,000(7) 1.0%
Bruce Cohen (1) 911,686(8) 8.7%
Leonard Florence (1) 114,000 1.0%
Jodie Glickman 908,788(9) 8.7%
53 Bayberry Road
Lawrence, NY 11516
Laura Miller 918,875(10) 8.8%
1312 Harbor Road
Hewlett Harbor, NY 11598
Royce & Associates, Inc. 998,328(11) 9.5%
1414 Avenue of the Americas
New York, NY 10019
Wellington Management Co., LLP 863,000(12) 8.2%
75 State Street
Boston, MA 02109
Dimensional Fund Advisors, Inc. 676,345(13) 6.4%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
All Directors and Executive
Officers as a Group (8 persons)5,487,068(15) 50.3%
* Less than 1%
(1)The address of such individuals is c/o the Company, One Merrick
Avenue, Westbury, NY 11590.
(2) Includes 53,185 shares issuable upon the exercise of options
which are exercisable within 60 days. Does not include 40,000 shares
issuable upon the exercise of options which are not exercisable
within 60 days. Does not include 1,038,020, shares owned by nineteen
separate irrevocable trusts for the benefit of Mr. Milton L. Cohen's
children, their spouses and his grandchildren. Mr. Cohen, who is not
a trustee of such trusts, disclaims beneficial ownership of the
shares held by the trusts.
(3) Includes 80,864 shares issuable upon the exercise of options
which are exercisable within 60 days. Does not include 962,423
shares owned by ten separate irrevocable trusts for the benefit of
Mr. Siegel's children, nieces and nephews. Mr. Siegel, who is not a
trustee of such trusts, disclaims beneficial ownership of the shares
held by the trusts.
(4) Includes 180,186 shares issuable upon the exercise of options
which are exercisable within 60 days.
(5) Includes 962,423 shares for which Ms. Staley is the sole
trustee of the trusts referred to in footnote (3) above over which
she has sole voting control and sole power to dispose of said shares.
Ms. Staley disclaims beneficial ownership of the shares held by the
trusts.
(6)Includes 28,278 shares held by a trust of which Mr. Phillips is a
beneficiary and 11,450 shares issuable upon the exercise of options
which are exercisable within 60 days. Excludes 1,250 shares issuable
upon the exercise of options which are not exercisable within 60
days.
(7)Includes 96,000 shares issuable upon the exercise of options which
are exercisable within 60 days. Does not include 78,000 shares
issuable upon the exercise of options which are not exercisable
within 60 days.
(8) Includes 9,100 shares issuable upon the exercise of options which
are exercisable within 60 days. Does not include 7,500 shares
issuable upon the exercise of options which are not exercisable
within 60 days. Includes 215,963 shares held in an irrevocable trust
of which Mr. Cohen is the beneficiary. Also includes the following
shares, for which Mr. Cohen disclaims beneficial ownership: 276,601
shares held in an irrevocable trust for the benefit of Mrs. Jodie
Glickman, for which Mr. Cohen and Mrs. Miller are co-trustees,
306,448 shares held in an irrevocable trust for the benefit of Mrs.
Laura Miller, for which Mr. Cohen and Mrs. Glickman are co-trustees
and 94,906 shares held in the irrevocable trusts referred to in
footnote (2) for the benefit of members of Mr. Cohen's immediate
family, for which he is the sole trustee.
(9) Amount and Nature of Beneficial Ownership and Percent of
Outstanding Shares Beneficially Owned is based on Schedule 13D dated
April 27, 2001 filed with the SEC reporting beneficial ownership of
securities of the Company held by Jodie Glickman. Includes 276,601
shares held in an irrevocable trust of which Mrs. Glickman is the
beneficiary. Also includes the following shares, for which Mrs.
Glickman disclaims beneficial ownership: 215,963 shares held in an
irrevocable trust for the benefit of Mr. Bruce Cohen, for which Mrs.
Glickman and Mrs. Miller are co-trustees, 306,448 shares held in an
irrevocable trust for the benefit of Mrs. Laura Miller, for which Mr.
Cohen and Mrs. Glickman are co-trustees and 57,330 shares held in the
irrevocable trusts referred to in footnote (2) for the benefit of
members of Mrs. Glickman's immediate family, for which she is the
sole trustee.
(10) Amount and Nature of Beneficial Ownership and Percent of
Outstanding Shares Beneficially Owned is based on Schedule 13D dated
April 27, 2001 filed with the SEC reporting beneficial ownership of
securities of the Company held by Laura Miller. Includes 306,448
shares held in an irrevocable trust of which Mrs. Miller is the
beneficiary. Also includes the following shares, for which Mrs.
Miller disclaims beneficial ownership: 215,963 shares held in an
irrevocable trust for the benefit of Mr. Bruce Cohen, for which Mrs.
Miller and Mrs. Glickman are co-trustees, 276,601 shares held in an
irrevocable trust for the benefit of Mrs. Glickman, for which Mrs.
Miller and Mr. Cohen are co-trustees and 89,262 shares held in the
irrevocable trusts referred to in footnote (2) for the benefit of
members of Mrs. Miller's immediate family, for which she is the sole
trustee.
(11) Amount and Nature of Beneficial Ownership and Percent of
Outstanding Shares Beneficially Owned is based on Schedule 13G dated
February 6, 2001 filed with the SEC reporting beneficial ownership of
securities of the Company held by Royce and Associates, Inc. as of
December 31, 2000.
(12) Amount and Nature of Beneficial Ownership and Percent of
Outstanding Shares Beneficially Owned is based on Schedule 13G dated
February 13, 2001 filed with the SEC reporting beneficial ownership
of securities of the Company held by Wellington Management Co., LLP
as of December 31, 2000.
(13) Amount and Nature of Beneficial Ownership and Percent of
Outstanding Shares Beneficially Owned is based on Schedule 13G dated
February 13, 2001 filed with the SEC reporting beneficial ownership
of securities of the Company held by Dimensional Fund Advisors, Inc.
as of December 31, 2000.
(14) Includes 430,785 shares issuable upon the exercise of options
which are exercisable within 60 days. Does not include 86,750 shares
issuable upon the exercise of options which are not exercisable
within 60 days.
(15) Calculated on the basis of 10,917,915 shares of Common Stock
outstanding, except that shares underlying options exercisable within
60 days are deemed to be outstanding for purposes of calculating the
beneficial ownership of securities owned by the holders of such
options.
To the knowledge of the Company, no arrangement exists, the
operation of which might result in a change of control of the
Company.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A board of seven directors is to be elected at the Meeting to hold
office until the next Annual Meeting of Stockholders, or until their
successors are duly elected and qualified. The following nominees
have been recommended by the Board of Directors. It is the intention
of the persons named in the enclosed proxy to vote the shares covered
thereby for the election of the seven persons named below, unless the
proxy contains contrary instructions:
Director or Executive
Officer of the
Company or its
Name Age Position Predecessor Since
Milton L. Cohen 72
Chairman Emeritus of the Board 1958
and a Director. Prior to April 6,
2001, Milton Cohen held the
position of chairman of
the Board since 1958.
Prior to December 8, 2000,
Mr. Milton Cohen was also
Chief Executive Officer
of the Company since 1958. Mr.
Milton Cohen was President of
the Company from 1958 to 1998.
Jeffrey Siegel 58
Chief Executive Officer, 1967
President and a Director.
Mr. Siegel has held the
position of Chief
Executive Officer since
Dec. 8, 2000. Mr. Siegel
has held the position of
President since 1999. Prior to
becoming President, since 1967,
Mr. Siegel was Executive Vice
President of the Company.
Bruce Cohen 43
Executive Vice President 1998
and a Director. Mr. Bruce
Cohen has held the position of
Executive Vice President since
1999. Prior to becoming
Executive Vice President,
since 1991, Mr. Bruce Cohen was
Vice President - National Sales
Manager of the Company.
Craig Phillips51 1973
Vice-President - Manufacturing,
Secretary and a Director. Mr. Phillips
has held the position of V. President -
Manufacturing and Secretary since 1973.
Ronald Shiftan 56 1991
Director. Mr. Shiftan has served
as Deputy Executive Director of
The Port Authority of New York &
New Jersey since September 1998.
Prior to becoming Deputy Executive
Director of the Port Authority of
New York & New Jersey, he had been,
since 1996, Chairman of Patriot Group,
LLC, a financial advisory firm.
Prior thereto, Mr. Shiftan held
executive management positions in
venture capital, investment banking
and financial advisory firms.
Howard Bernstein 80 1992
Director. Mr. Bernstein has been
a member of the firm of Cole,
Samsel & Bernstein LLC (and its
predecessors), certified public
accountants, for approximately
forty-nine years.
Leonard Florence 69 2000
Director. Mr. Florence has been
Chairman of the Board, Chief
Executive Officer and President of
Syratech, Inc., a consumer products
Company, since 1986.
Milton L. Cohen is the father of Bruce Cohen.
Jeffrey Siegel and Craig Phillips are cousins.
The Company has no reason to believe that any of the nominees
will not be a candidate or will be unable to serve. However, should
any of the foregoing nominees become unavailable for any reason, the
persons named in the enclosed proxy intend to vote for such other
person or persons as the present Board may nominate.
The Board recommends that stockholders vote FOR the election of
the nominated directors, and signed proxies which are returned will
be so voted unless otherwise instructed on the proxy card.
INFORMATION CONCERNING THE BOARD OF DIRECTORS OF LIFETIME HOAN
The directors of the Company are elected annually by the
stockholders of the Company. They will serve until the next annual
meeting of the stockholders of the Company or until their successors
have been duly elected and qualified or until their earlier
resignation or removal.
Directors who are not employees of the Company receive an annual
fee of $5,000 plus $1,000 for each meeting of the Board attended.
Directors, who are employees of the Company, do not receive
compensation for such services. The officers and directors of the
Company have entered into indemnification agreements with the
Company.
Audit Committee The Audit Committee is comprised of three
directors who are independent, as required by the Audit Committee
charter and the listing requirements for the Nasdaq National Market.
The Audit Committee held two meetings during 2000. The current
members are Ronald Shiftan (Chairman), Howard Bernstein and Leonard
Florence.
The Audit Committee, among other things, regularly:
1. reviews the activities of the Company's independent accountants.
2. evaluates the Company's organization and its internal controls,
policies, procedures and practices to determine whether they are
reasonably designed to:
3. provide for the safekeeping of the Company's assets; and
4. assure the accuracy and adequacy of the Company's records and
financial statements.
5. reviews the Company's financial statements and reports.
6. monitors compliance with the Company's internal controls,
policies, procedures and practices.
7. undertakes such other activities as the Board from time to time
may delegate to it.
The Audit Committee annually:
1. considers the qualifications of the independent accountants of
the Company and makes recommendations to the Board as to their
selection.
2. reviews and approves audit fees and fees for non-audit services
rendered or to be rendered by the independent accountants, and
reviews the audit plan and the services rendered or to be rendered by
the independent accountants for each year and the results of their
audit for the previous year.
The complete text of the Audit Committee charter is set forth at
Appendix A to this Proxy Statement.
Compensation Committee The Compensation Committee is comprised
of three directors who are independent. The Compensation Committee
held two formal meetings during 2000. The current members are Ronald
Shiftan (Chairman), Howard Bernstein and Leonard Florence.
The Compensation Committee, after consulting with the chief
executive officer, establishes, authorizes and administers the
Company's compensation policies, practices and plans for the
Company's directors, executive officers and other key personnel. The
Compensation Committee advises the Board of Directors regarding
directors' and officers' compensation and management development and
succession plans. The Compensation Committee is responsible for
administering the Company's 2000 Incentive Bonus Compensation. The
Compensation Committee also undertakes such other activities as may
be delegated to it from time to time by the Board of Directors.
Stock Option Committee The Stock Option Committee is comprised
of three directors. The Stock Option Committee held seven meetings
during 2000. The current members are Jeffrey Siegel (Chairman),
Bruce Cohen and Ronald Shiftan.
The Stock Option Committee is responsible for administering the
Company's 2000 Long-Term Incentive Plan. The Company's 1991 Stock
Option Plan and 1996 Incentive Stock Option Plan are administered by
the Board of Directors.
The Board does not have a standing nominating committee; rather,
the Board as a whole performs the functions which would otherwise be
delegated to such a committee.
The Board of Directors held five meetings during the fiscal year
ended December 31, 2000.
Each director attended every Board Meeting and every meeting of
the committee(s) on which he served.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company
reviewed and discussed the consolidated financial statements of the
Company and its subsidiaries set forth in the Company's 2000 Annual
Report to Stockholders and at Item 8 of the Company's Annual Report
on Form 10-K for the year ended December 31, 2000, with management of
the Company and Ernst & Young LLP, independent accountants for the
Company.
The Audit Committee discussed with Ernst & Young LLP the matters
required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees," as amended, which includes,
among other items, matters relating to the conduct of an audit of the
Company's financial statements.
The Audit Committee received the written disclosures and the
letter from Ernst & Young LLP required by Independence Standards
Board Standard No. 1 and discussed with Ernst & Young LLP their
independence from the Company.
Based on the review and discussions with management of the
Company and Ernst & Young LLP referred to above, the Audit Committee
has recommended to the Board of Directors that the Company publish
the consolidated financial statements of the Company and subsidiaries
for the year ended December 31, 2000 in the Company's annual Report
on Form 10-K for the year ended December 31, 2000 and in the
Company's 2000 Annual Report to Stockholders.
April 6, 2001
The Audit Committee
Ronald Shiftan, Chairman
Howard Bernstein Leonard Florence
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Policies and Practices
The Board of Directors of the Company (the "Board") has
delegated to the Compensation Committee of the Board (the
"Committee") primary responsibility for establishing and
administering the compensation programs of the Company for its
executive officers and other key personnel.
The Committee annually reviews the Company's executive
compensation practices to determine whether the Company's executive
compensation practices (a) enable the Company to attract and retain
qualified and experienced executive officers and other key personnel,
(b) will motivate executive officers and other key personnel to
attain appropriate short term and long term performance goals and to
manage the Company for sustained long term growth, and (c) align the
interests of executive officers and other key personnel with the
interests of the shareholders.
Section 162(m) of the Internal Revenue Code (the "Code")
provides that compensation paid to a public company's chief executive
officer and its four other highest paid executive officers in tax
years 1994 and thereafter in excess of $1 million is not deductible
unless such compensation is paid only upon the achievement of
objective performance goals where certain procedural requirements
have been satisfied. Alternatively, such compensation may be deferred
until the executive officer is no longer a covered person under
Section 162(m) of the Code. Any compensation subject to the Section
162(m) limitations will be automatically deferred until the payment
of such compensation would be deductible by the Company except in
those cases where the Committee determines that nondeductible
payments would be consistent with the Company's compensation
philosophy and in the best interests of the Company and its
shareholders.
Executive Officers' Disclosure
Each of the executive officers of the Company receives a salary
at a level which is commensurate with the responsibility of such
individual, and his or her prior experience. In reviewing salaries,
the Committee takes into consideration the operating responsibility
of each individual, his experience in the ousewares industry, his
expertise in overseas purchasing and the amount of time spent abroad.
The Committee also examines the impact each individual has on the
profitability and future growth of the Company. Such salaries are
intended to be comparable to the salaries of other companies of
comparable size and nature. Salary reviews are done annually.
The Company adopted the Lifetime Hoan Corporation 2000 Incentive
Bonus Compensation Plan. Pursuant to which executive officers, and
other designated participants are entitled to bonuses based on such
performance criteria and targets as are established for an applicable
period. The Company also adopted the Lifetime Hoan Corporation 2000
Long-Term Incentive Plan which permits the granting of options (and
other stock based awards) to executive officers and other key
personnel of the Company and its subsidiaries.
Chief Executive Officer Disclosure
The compensation of Milton L. Cohen, Chairman Emeritus of the
Board and who, until December 8, 2000 was Chief Executive Officer and
until April 6, 2001 was Chairman of the Board, was governed by the
terms of an agreement dated April 7, 1996, which was approved by the
Committee and provides, among other things, for an annual base salary
of $700,000 and an annual bonus as provided in the Company's
Incentive Bonus Compensation Plan. His bonus for 2000 was $593,190.
The compensation of Jeffrey Siegel, President and, since
December 8, 2000, Chief Executive Officer of the Company, was
governed by the terms of an agreement dated April 7, 1996, which was
approved by the Committee and provides, among other things, for an
annual base salary of $400,000 and annual bonus as provided in the
Company's Incentive Bonus Compensation Plan. His bonus for 2000 was
$886,885.
The Committee reviewed Messrs. Cohen's and Siegel's compensation in
the same manner as described above for the other executive officers.
In light of the overall performance of the Company, the Committee did
not increase either Mr. Cohen's or Mr. Siegel's annual base salary in
2000.
April 6, 2001
The Compensation Committee
Ronald Shiftan, Chairman
Howard Bernstein Leonard Florence
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning
the compensation of the Company's Chairman Emeritus of the Board, who
was the Chief Executive Officer until December 8, 2000, and the
Company's President and, since December 8, 2000, Chief Executive
Officer and each of its other most highly compensated executive
officers whose annual compensation for the fiscal year ended December
31, 2000 exceeded $100,000 (the "Named Executive Officers") for the
fiscal years ended December 31, 2000, 1999 and 1998:
Compensation
Long-Term
Compensation
Compensat
ion
No. of
Shares of
Common
Stock
Annual Compensation Underlyin
g
Name and Stock All other
Principal Position Year Salary Bonus Options Compensatio
n
Milton L. Cohen 2000 $699,998 $593,190 (3) -- $6,415 (1)
Chairman Emeritus 1999 $699,998 $304,042 -- $6,017 (1)
Of the Board 1998 $726,921 $833,901 (4) -- $5,882 (1)
Jeffrey Siegel 2000 $400,010 $886,885 (3) -- --
Chief Executive 1999 $400,010 $304,042 -- --
Officer and 1998 $415,395 $833,901 (4) -- --
President
Bruce Cohen 2000 $221,000 $125,000 (5) -- --
Executive Vice- 1999 $201,000 $90,000 (6) 10,000 --
President 1998 $191,077 $90,000 (7) -- $56,050 (2)
Craig Phillips
Vice President 2000 $200,000 -- -- --
Distribution 1999 $200,000 -- -- --
and Secretary 1998 $200,962 -- -- --
Robert McNally 2000 $210,000 $25,000(5) -- --
Vice President 1999 $200,000 $15,000(6) 24,000 --
Finance and 1998 $196,269 $20,000(7) -- --
Treasurer
(1) Represents the current dollar value of premiums paid for split
dollar life insurance by the Company on behalf of Mr. Milton L.
Cohen.
(2) Represents compensation from the exercise of nonqualified stock
options.
(3) Includes $311,885 earned and paid during 2000 under the
Incentive Bonus Compensation Plan to each of Messrs. Milton L. Cohen
and Jeffrey Siegel. Also includes special bonuses paid to Messrs.
Milton L. Cohen and Jeffrey Siegel in the amounts of $281,305 and
$575,000, respectively, for the fiscal year ended December 31, 2000.
(4) Includes $320,901 accrued in 1998 and paid in 1999 to each of
Messrs. Milton L. Cohen and Jeffrey Siegel.
(5) Such amounts were accrued in 2000 and paid in 2001.
(6) Such amounts were accrued in 1999 and paid in 2000.
(7) Such amounts were accrued in 1998 and paid in 1999.
Mr. Jeffrey Siegel, Chief Executive Officer and President of the
Company, has an outstanding loan owing to the Company in the amount
of $129,579. This loan does not bear interest and is due on December
31, 2002. During 2000, Mr. Jeffrey Siegel repaid to the Company
$694,000 towards the loan.
Option/SAR Grants in Last Fiscal Year
There were no options to purchase Common Stock granted to the
named executive officers during the fiscal year ended December 31,
2000.
Aggregated Option/SAR Exercises in the Last Fiscal Year and Fiscal
Year-End Option/SAR Values
The following table sets forth certain information with respect
to each exercise of stock options during the fiscal year ended
December 31, 2000 by each of the named executive officers and the
number and value of unexercised options held by each of the Named
Executive Officers as of December 31, 2000:
Number of Shares
of Common Stock
Underlying
Shares Unexerised Valueof Unexercised
Acquired Options/SARs In-The-Money
on Value at Options/SARS
Name Exercise Realized Dec. 31, 2000 at Dec. 31, 2000 (1)
Exercisable Unexercisable Exercisable Unexercisable
Milton L. Cohen -- -- 53,185 -- $0 --
Jeffrey Siegel -- -- 80,864 -- $48,161 --
Robert McNally -- -- 96,000 78,000 $5,998 $31,500
Craig Phillips -- -- 11,450 1,250 $0 $0
Bruce Cohen -- -- 9,100 7,500 $4,375 $13,125
(1) Calculated based on the difference between the closing sale
price of the Common Stock, as reported on the Nasdaq National Market
on December 31, 2000 ($7.25), and the exercise price of each option
multiplied by the number of shares of Common Stock underlying such
option.
PERFORMANCE GRAPH
The following graph compares the cumulative total return on
the Company's Common Stock with the Nasdaq Market Value Index and
the Housewares Index - Media General Industry Group. The
comparisons in this table are required by the Securities and
Exchange Commission and are not intended to forecast or be
indicative of possible future performance of the Company's Common
Stock.
LIFETIME HOAN CORPORATION
Cumulative Total Stockholder Return for the Period December 31,
1995
through December 31, 2000.
Nasdaq Media
Lifetime Market General
Date Hoan Index Index
12/31/95 100.00 100.00 100.00
12/31/96 127.03 124.27 124.04
12/31/97 118.24 152.00 165.25
12/31/98 119.52 214.39 150.29
12/31/99 66.29 378.12 123.76
12/31/00 94.69 237.66 103.62
Employment Contracts and Termination of Employment and Change-in-
Control Arrangements
Effective April 7, 1996, the Company entered into new
employment agreements with Messrs. Milton L. Cohen, then Chief
Executive Officer and Chairman of the Board and now Chairman
Emeritus of the Board, and Jeffrey Siegel, now Chief Executive
Officer and President of the Company, providing for annual salaries
of $700,000 and $400,000, respectively, and for the payment to them
of bonuses pursuant to the Company's Incentive Bonus Compensation
Plan. Mr. Siegel's salary under his agreement was increased,
effective January 1, 2001, from $400,000 to $700,000. The
employment agreements continued in force until April 6, 2001. The
agreements provided for, among other things, standard fringe
benefit arrangements, such as disability benefits, insurance and an
accountable expense allowance. The employment agreements also
provided that if the Company was merged or otherwise consolidated
with any other organization or substantially all of the assets of
the Company were sold or control of the Company had changed (the
transfer of 50% or more of the outstanding stock of the Company)
which was followed in the case of each executive by: (i) the
termination of his employment agreement, other than for cause; (ii)
the diminution of his duties or change in executive position; (iii)
the diminution of his compensation (other than a general reduction
to all employees); or (iv) the relocation of his principal place of
employment to other than the New York Metropolitan Area, the
Company would be obligated to pay to such executive or his estate
the base salary required pursuant to the employment agreement for
the balance of the term. The employment agreements also contained
restrictive covenants preventing each executive from competing with
the Company for a period of five years from the earlier of the
termination of such executive's employment (other than a
termination by the Company without cause) or the expiration of his
employment agreement.
Effective April 6, 2001, Mr. Milton L. Cohen resigned as
Chairman of the Board and as an employee of the Company. Mr. Cohen
will continue as a director of the Company and was elected Chairman
Emeritus of the Board. The Company paid Mr. Cohen a bonus of
$178,500 for the period January 1, 2001 through April 6, 2001. In
addition, Mr. Cohen and the Company entered into a Consulting
Agreement dated as of April 6, 2001 pursuant to which the Company
retained Mr. Cohen as a consultant to the Company for a period of 5
years. The Company will pay to Mr. Cohen a fee of $440,800 per
year payable in monthly installments of $36,733.33. Pursuant to
the terms of the Consulting Agreement, effective April 6, 2001, the
Company granted to Mr. Cohen an option to purchase 40,000 shares of
Common Stock of the Company.
Effective as of April 6, 2001, Mr. Jeffrey Siegel entered into
a new employment agreement with the Company that provides that the
Company will employ him as its President and Chief Executive
Officer for a term commencing on April 5, 2001, and as its Chairman
of the Board commencing immediately following the 2001 Annual
Meeting of stockholders, and continuing until April 6, 2006 and
thereafter for additional consecutive one year periods unless
terminated by either the Company or Mr. Siegel as provided in the
agreement. The agreement provides for an annual salary of $700,000
and for the payment to him of bonuses pursuant to the Company's
Incentive Bonus Compensation Plan. The agreement also provides for,
among other things, standard fringe benefit arrangements, such as
disability benefits, insurance and an accountable expense
allowance. The agreement further provides that if the Company is
merged or otherwise consolidated with any other organization or
substantially all of the assets of the Company are sold or control
of the Company has changed (the transfer of 50% or more of the
outstanding stock of the Company) which is followed by: (i) the
termination of his employment agreement, other than for cause; (ii)
the diminution of his duties or change in executive position; (iii)
the diminution of his compensation (other than a general reduction
to all employees); or (iv) the relocation of his principal place of
employment to other than the New York Metropolitan Area, the
Company would be obligated to pay to such executive or his estate
the base salary required pursuant to the employment agreement for
the balance of the term. The employment agreement also contains
restrictive covenants preventing the executive from competing with
the Company for a period of five years from the earlier of the
termination of Mr. Siegel's employment (other than a termination by
the Company without cause) or the expiration of his employment
agreement.
Limitation on Directors' Liability
The Company's Restated Certificate of Incorporation contain a
provision which eliminates the personal liability of a director for
monetary damages other than for breaches of the director's duty of
loyalty to the Company or its stockholders, acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law, violations under Section 174 of the Delaware
General Corporation Law or for any transaction from which the
director derived an improper personal benefit.
The Company has entered into indemnification agreements with
each of its officers and directors which provide that the Company
will indemnify the indemnitee against expenses, including
reasonable attorney's fees, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with any civil or criminal action or administrative
proceeding arising out of the performance of his duties as an
officer, director, employee or agent of the Company. Such
indemnification is available if the acts of the indemnitee were in
good faith, if the indemnitee acted in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal proceeding, the
indemnitee had no reasonable cause to believe his conduct was
unlawful.
CERTAIN TRANSACTIONS
On April 6, 1984, the Company, pursuant to its 1984 Stock Option
Plan, which has since been terminated, issued options to Messrs.
Milton L. Cohen, Jeffrey Siegel and Craig Phillips, officers and
directors of the Company. On December 17, 1985, such individuals
exercised their options and the following table reflects the numbers
of shares issued (the "Option Shares"), the aggregate purchase price,
average price per share and method of payment.
Number of
Shares of Aggregate Average
Common Stock Purchase Price per Method of Payment
Name Issued Price Share Cash Notes
Milton L. Cohen 1,713,204 $469,120 $0.27 $46,912 $422,208
Jeffrey Siegel 1,390,860 382,720 0.27 38,272 344,448
Craig Phillips 519,334 149,120 0.27 14,912 134,208
Total 3,623,398 $1,000,960 $100,096 $900,864
The promissory notes issued by Messrs. Milton L. Cohen, Jeffrey
Siegel and Craig Phillips all bear interest at the rate of 9% per
annum, are secured by such individuals' respective Option Shares and
were originally due and payable on December 17, 1995. From time to
time the due dates of the notes have been extended and, in December
2000, the Company extended the due dates of the notes to December 31,
2005. The interest has been paid each year when due.
As of April 6, 2001, the promissory note issued by Mr. Milton L.
Cohen was canceled and replaced by a new promissory note in the
principal amount of $855,777 (representing the principal amount of
$422,208 of the promissory note referred to above and $433,569 of
other outstanding loans) bearing interest at the rate of 4.85% per
annum, payable in twenty equal quarterly installments (principal and
interest combined) on the last day of June, September, December and
March of each year commencing June 30, 2001.
Mr. Cohen and the Company entered into a Consulting Agreement dated
as of April 6, 2001 pursuant to which the Company retained Mr. Cohen
as a consultant to the Company for a period of 5 years. The Company
will pay to Mr. Cohen a fee of $440,800 per year payable in monthly
installments of $36,733.33 Pursuant to the terms of the Consulting
Agreement, effective April 6, 2001, the Company granted to Mr. Cohen
an option to purchase 40,000 shares of Common Stock of the Company.
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF APPOINTMENT OF AUDITORS
Subject to stockholder approval and ratification, the Board
reappointed the firm of Ernst & Young LLP as the independent
auditors to audit the Company's financial statements for the fiscal
year ending December 31, 2001. Ernst & Young LLP has audited the
Company's financial statements since 1984.
In addition to rendering audit services during 2000, Ernst &
Young LLP performed other non-audit services for the Company and its
subsidiaries. Fees for the last annual audit were $142,000 and all
other fees for service rendered during the year ended December 31,
2000 were $83,000, including audit related services of $36,000, and
non audit services of $47,000.
During 2000, the Company paid the following fees to Ernst &
Young LLP:
Audit Fees - US Operations $110,000
Audit Fees - Foreign Operations 32,000
Preparation of Tax Return - US Operations 47,000
All Other Fees 36,000
In making its recommendation, the Audit Committee reviewed past
audit results and other non-audit services performed during 2000.
In selecting Ernst & Young LLP, the Audit Committee and the Board of
Directors carefully considered their independence. The Audit
Committee has determined that the performance of such non-audit
services did not impair the independence of Ernst & Young LLP.
Ernst & Young LLP has confirmed to the Company that they are in
compliance with all rules, standards and policies of the
Independence Standards Board and the Securities and Exchange
Commission governing auditor independence.
If the stockholders do not approve and ratify this appointment,
other independent auditors will be considered by the Board.
Representatives of Ernst & Young LLP are expected to be present
at the annual meeting and will have the opportunity to make a
statement if they desire and to respond to appropriate questions of
stockholders.
The Board recommends that stockholders vote FOR the approval and
ratification of the appointment of Ernst & Young, LLP.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors, executive officers, and persons who own more
than ten percent of a registered class of the Company's equity
securities to file with the Company, the Securities and Exchange
Commission, and the National Association of Securities Dealers
initial reports of ownership and reports of changes in ownership of
any equity securities of the Company. During Fiscal 2000, to the
best of the Company's knowledge, all required reports were filed on a
timely basis, except by one Director, Mr. Leonard Florence, who filed
late Form 3 reporting ownership of securities of the Company. In
making this statement, the Company has relied on the written
representations of its directors and executive officers and copies of
the reports provided to the Company.
STOCKHOLDER PROPOSALS
A stockholder proposal intended to be presented at the Company's
2002 Annual Meeting of Stockholders must be received by the Company
at its principal executive offices on or before January 6, 2002, to
be included in the Company's proxy statement and proxy relating to
that meeting.
OTHER MATTERS
The Management of the Company does not know of any matters
other than those stated in this Proxy Statement which are to be
presented for action at the Meeting. If any other matters should
properly come before the Meeting, it is intended that proxies in the
accompanying form will be voted on any such other matters in
accordance with the judgement of the persons voting such proxies.
Discretionary authority to vote on such matters is conferred by such
proxies upon the persons voting them.
Financial statements for the Company are included in the
Annual Report of the Company for the fiscal year ended December 31,
2000 which accompanies this Proxy Statement.
Upon the written request of any person who on the record date
was a record owner of Common Stock of the Company, or who represents
in good faith that he or she was on such date a beneficial owner of
such Common Stock, the Company will send to such person, without
charge, a copy of its Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, including financial statements and
schedules, as filed with the Securities and Exchange Commission.
Requests for this report should be directed to Robert McNally, Vice
President, Treasurer and CFO, Lifetime Hoan Corporation, One Merrick
Avenue, Westbury, New York 11590.
By Order of the Board of
Directors,
Craig Phillips, Secretary
Dated: April 27, 2001
APPENDIX A
AUDIT COMMITTEE CHARTER
The purpose of this Charter is to codify the responsibilities of
the Audit Committee. The Committee will review and reassess the
adequacies of this Charter annually and recommend any proposed
changes to the Board of Directors for approval.
Composition
The Board of Directors will appoint the members of the Audit
Committee. The Committee shall be composed of no fewer than three
independent directors. Notwithstanding the foregoing, one director
who is neither a current employee nor an immediate family member of a
current employee, but who otherwise is not independent, may be
appointed to the Committee if the Board, under exceptional and
limited circumstances, determines that membership is required by the
best interests of the Company and its stockholders. In such case,
the Board must disclose in its next annual proxy statement the nature
of the relationship and the reasons for the determination.
Each member of the committee must be able to read and understand
fundamental financial statements or become able to do so within a
reasonable period of time after appointment to the Committee. In
addition, at least one member of the Committee must have past
employment experience in finance or accounting, requisite
professional certification in accounting, or any other comparable
experience or background which results in the individual's financial
sophistication.
The Board may designate one or more Directors as alternative
members of the Committee, who may replace any absent or disqualified
member or members at any meetings of the Committee. In addition, no
person may be made a member of the Committee if his or her service on
the Committee would violate any restriction on service imposed by any
rule of the United States Securities and Exchange Commission ("SEC")
or any exchange on which shares of the common stock of the Company
are traded.
Purpose
The Audit Committee will review for the Board of Directors the
activities of the Company's independent accountants, and evaluate the
Company's organization, internal controls, policies, procedures, and
practices to determine whether they are reasonably designed to assure
the accuracy and adequacy of the Company's records and financial
statements, and to provide for the safekeeping of the assets of the
Company. In performing its duties, the Committee will maintain
effective working relationships with the Board of Directors,
management and the independent accountants. [To effectively perform
his or her role, each Committee member will obtain an understanding
of the responsibilities of Committee membership as well as the
Company's business, operations and risks.]
Responsibilities
The Committee shall:
1. Review the annual audit plan and the results thereof of the
independent accountants.
2. Review the activities of the independent accountants.
3. Review the Company's annual financial statements in
conjunction with management and the independent accountants,
including a discussion with the independent accountants of matters
required to be discussed by Statement of Auditing Standards No. 61.
Such review is to be completed prior to recommending approval by the
Board of Directors and publication to the Company's stockholders.
4. Review with management and the independent accountants
significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial
statements.
5. Review and approve the annual audit fees, including total
fees for non-audit services rendered by the independent accountants.
6. Recommend to the Board of Directors the retention or
replacement of the independent accountants retained by the Company
for the ensuing year.
7. Review the Company's system of internal controls and
receive a direct report in this connection from the independent
accountants.
8. Ensure that the independent accountants provide a formal
written statement delineating all relationships between the
independent accountants and the Company, consistent with the
provisions of Independence Standards Board Standard No. 1.
9. Discuss with the independent accountants any disclosure
made pursuant to Item 8 above that may impact the objectivity and/or
independence of the independent accountants and take, or recommend
that the Board of Directors take, appropriate action to ensure the
independence of the independent accountants.
In addition, the Audit Committee shall perform such other
responsibilities as may be delegated to it by the Board of Directors
from time to time.
Meetings
Meetings of the Audit Committee shall be held at least two times
a year and will be called by the Chairman of the Committee. The
Chief Financial Officer, in consultation with the Chairman of the
Audit Committee, shall prepare an agenda for each meeting. Other
officials may attend when invited by the Committee. The Audit
Committee shall also conduct private meetings with the independent
accountants at the Committee's discretion.
In addition to the above meetings, the Chairman of the Audit
Committee will meet quarterly with the independent accountants and
the Chief Financial Officer or his designee, either by telephone or
in person, to discuss the interim financial statements prior to their
release.
Independent Accountants
The independent accountants are ultimately accountable to the
Board of Directors and the Audit Committee. The Audit Committee and
the Board of Directors have the ultimate authority and responsibility
to select, evaluate and, where appropriate, replace the independent
accountants (and to recommend the ratification by the Company's
stockholders of the appointment of the independent accountants).
Definition of Independent Director
The term "independent director" means a person other than an officer
of the company or any other individual having a relationship which,
in the view of the Board, would interfere with the exercise of the
independent judgment. A director will not be considered independent
who:
1. is employed by the company or any of its affiliates for the
current year or any of the past three years,
2. accepts any compensation (other than compensation for services
as a director and certain other limited amounts) from the Company or
any of its affiliates in excess of $60,000 during the previous fiscal
year,
3. is employed as an executive by another entity where any of the
Company's executive serves on that entity's compensation committee,
4. is a partner in, or a controlling stockholder or any executive
officer of, any for- profit business entity to which the Company
made, or from which the Company received, payments exceeding 5% of
the Company's or such entity's consolidated gross revenues for that
year, or $200,000, whichever is more, in any of the past three years,
or
5. is a member of the immediate family of any individual who is, or
has been in any of the past three years, employed as an executive
officer by the Company or any of its affiliates.
_______________________________
1 Set forth the amount on which the filing fee is calculated and
state how it was determined.