-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EfLyU4e7s5Fb6gEuOKisYGpMqL1QTMhIkkU4fzztqIbW85aBnEv4TFu/XbERQRvz EfWB3R4TzECHLrJC91AJoA== 0000950135-96-001439.txt : 19960322 0000950135-96-001439.hdr.sgml : 19960322 ACCESSION NUMBER: 0000950135-96-001439 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960425 FILED AS OF DATE: 19960321 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROSS A T CO CENTRAL INDEX KEY: 0000025793 STANDARD INDUSTRIAL CLASSIFICATION: PENS, PENCILS & OTHER ARTISTS' MATERIALS [3950] IRS NUMBER: 050126220 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06720 FILM NUMBER: 96536803 BUSINESS ADDRESS: STREET 1: ONE ALBION RD CITY: LINCOLN STATE: RI ZIP: 02865 BUSINESS PHONE: 4013331200 MAIL ADDRESS: STREET 1: ONE ALBION ROAD STREET 2: 50 KENNEDY PLAZA CITY: LINCOLN STATE: RI ZIP: 02865 DEF 14A 1 A.T. CROSS COMPANY 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) FILED BY THE REGISTRANT / / FILED BY A PARTY OTHER THAN THE REGISTRANT / / - -------------------------------------------------------------------------------- Check the appropriate box: / / Preliminary Proxy Statement /X/ Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12 / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) A. T. Cross Company (Name of Registrant as Specified In Its Charter) A. T. Cross Company (Name of Person(s) Filing Proxy Statement) PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX): /X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 (Set forth the amount on which the filing fee is calculated and state how it was determined): 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: - -------------------------------------------------------------------------------- 2 [COMPANY LOGO] NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 25, 1996 TO THE STOCKHOLDERS OF A.T. CROSS COMPANY: Notice is hereby given that the annual meeting of stockholders of A.T. Cross Company (the "Company") will be held on Thursday, April 25, 1996 at 10:00 a.m. at the offices of the Company, One Albion Road, Lincoln, Rhode Island 02865, for the following purposes: 1. Fixing the number of directors at nine, of which three shall be Class A directors and six shall be Class B directors (by holders of Class A and Class B common stock voting together as a single class). 2. Electing three Class A directors (by holders of Class A common stock only) and six Class B directors (by holders of Class B common stock only) to hold office until the next annual meeting of stockholders or until their successors are duly elected and qualified. 3. Transacting such other and further business as may properly come before said meeting upon which the holders of Class A common stock or Class B common stock, respectively, are entitled to vote. The stock transfer books will not be closed. The close of business on March 4, 1996 has been fixed as the record date for determining stockholders entitled to vote at the annual meeting or any adjournment thereof, and only holders of record of Class A common stock or Class B common stock as of that time are entitled to receive notice of and to vote at said meeting or any adjournment thereof. A proxy statement is set forth on the following pages. By order of the Board of Directors /s/ Tina C. Benik Tina C. Benik Corporate Secretary March 21, 1996 3 [COMPANY LOGO] PROXY STATEMENT FOR ANNUAL STOCKHOLDERS' MEETING APRIL 25, 1996 This statement is furnished in connection with the accompanying proxy which is solicited by the Board of Directors of A.T. Cross Company (the "Company") from holders of Class A common stock of the Company for use at the annual meeting to be held April 25, 1996. Any stockholder giving a proxy may revoke the same prior to its exercise by giving notice in writing or in person to the Corporate Secretary. If not revoked, the committee named in the accompanying proxy will vote such proxy in the manner specified therein and, in the discretion of the committee, for or against any matter upon which holders of Class A common stock are entitled to vote which properly comes before the meeting and which has been omitted from the proxy and proxy statement. Where an opportunity to vote by ballot is afforded to holders of Class A common stock, the accompanying proxy will be voted in the manner specified in such ballot. The cost of solicitation of proxies, including the cost of reimbursing brokerage houses and other custodians, nominees or fiduciaries for forwarding proxies and proxy statements to their principals, will be borne by the Company. Solicitation may be made in person or by telephone or telegraph by officers or regular employees of the Company, who will not receive additional compensation therefor. In addition, the Company has retained Georgeson & Co., New York, N.Y., to aid in the solicitation of proxies. The charges of such firm, estimated at $5,000, excluding expenses, will be paid by the Company. This proxy statement and the enclosed form of proxy are expected to be sent to stockholders on or about March 21, 1996. A copy of the Company's annual report for the year 1995 containing financial statements for the year ended December 31, 1995 is also enclosed, but is not to be considered a part of the proxy soliciting material. As of March 4, 1996, the Company had outstanding 14,755,677 shares of Class A common stock and 1,804,800 shares of Class B common stock. Only stockholders of record at the close of business on that date are entitled to vote at the annual meeting. Stockholders shall be entitled to one vote for each share held on the foregoing record date with respect to matters on which shares of that class are eligible to vote. STOCKHOLDERS' PROPOSALS Any proposal of a stockholder intended to be presented at the next annual meeting of the Company, scheduled to be held April 24, 1997, must be received by the Company's Corporate Secretary not later than November 21, 1996 for inclusion in the proxy statement and form of proxy relating to that meeting. VOTING RIGHTS Holders of Class A common stock have the right to elect one-third of the number of directors from time to time fixed by the holders of Class A and Class B common stock voting together as a single class; provided, however, that if the total number of directors is not evenly divisible by three, then the holders of Class A common stock have the right to elect that number of directors which is the nearest whole number when the total number of directors is divided by three. Holders of Class B common stock have the right to elect the remaining directors. It is proposed that the number of directors for the ensuing year be fixed at nine (see "ELECTION OF DIRECTORS"), and if this proposal is adopted, holders of Class A common stock will have the right to elect three directors. In addition, holders of Class A and Class B common stock vote together as a single class: a) For the reservation in the future of shares to be issued pursuant to options granted or to be granted to directors, officers or employees; and b) With respect to the acquisition of assets or shares of any other company if: (1) An officer, director or holder of ten percent or more of either Class A or Class B common stock has an interest in the transaction; 1 4 (2) The transaction would, in the reasonable judgment of the Board of Directors, presently or potentially increase by nineteen and one-half percent or more the aggregate of the Class A or Class B common stock outstanding immediately prior to such transaction; or (3) The transaction would involve the issuance of any Class A or Class B common stock and in the reasonable judgment of the Board of Directors the value of the consideration furnished by the Company is nineteen and one-half percent or more of the aggregate market value of all Class A and Class B common stock outstanding immediately prior to such transaction. Notwithstanding the foregoing, if the consummation of any transaction described above would, with respect to either the Class A common stock or the Class B common stock, result in a change in the designations, preferences, limitations or relative rights of the shares of such class or have certain other effects as specified in the Company's articles, the holders of Class A and Class B common stock vote as separate classes on such transaction. Except as stated above or otherwise required by law, all voting power is vested in the holders of Class B common stock so long as any shares of Class B common stock are outstanding. VOTING PROCEDURES The numbers of Class A and Class B directors will be fixed by vote of the holders of a majority of the Class A and Class B shares present at the annual meeting in person or represented by proxy, voting as a single class. The Class A directors will be elected in each case by vote of the holders of a majority of the Class A shares present or represented at the meeting, and the Class B directors will be similarly elected by the holders of a majority of the Class B shares. Shares represented by proxies which are marked "abstain" with respect to fixing the number of directors, "authority withheld" with respect to the election of any particular nominee for director, or to deny discretionary authority on any other matters will be counted as shares present and entitled to vote, and accordingly any such marking of a proxy will have the same effect as a vote against the proposal to which it relates. Under the rules of the American Stock Exchange, on which the Class A shares are listed, brokers who hold Class A shares in street name have the authority to vote such shares on certain items, including fixing the number of and electing directors, unless they have received instructions from the beneficial owners to the contrary, in which case the shares are to be voted or the votes relating thereto withheld, as directed by the beneficial owners. Such rules also provide that brokers may not vote shares held in street name on certain other matters without specific instructions from their customers. Shares subject to such "broker non-votes" will not be treated as shares entitled to vote on the matters to which they relate and therefore will be treated as not present at the meeting for those purposes, but otherwise will have no effect on the outcome of the voting on such matters. It is not presently anticipated that any matter which might be the subject of a "broker non-vote" will come before the annual meeting. 2 5 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The stockholders listed below were beneficial owners of more than 5% of the outstanding Class A or Class B common stock of the Company at the close of business January 12, 1996 (except as otherwise indicated) and may be deemed to be "control persons" with respect to the Company.
- -------------------------------------------------------------------------------------------------------------------- TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS - -------------------------------------------------------------------------------------------------------------------- A Bradford R. Boss 1,864,235 (202,925 directly; 480,000 indirectly as 12.1 11042 Turtle Beach co-trustee of W. Russell Boss, Jr. Trust A; 560,000 Road indirectly as co- trustee of W. Russell Boss, Jr. Trust North Palm Beach, FL B; 500,000 indirectly as co-trustee of W. Russell Boss, 33408 Jr. Trust C; 117,584 indirectly (stock subject to options); and 3,726 indirectly, held by a child) B Bradford R. Boss 1,804,800 (902,400 indirectly as co-trustee of W. 100.0 Russell Boss, Jr. Trust A; and 902,400 indirectly as co-trustee of W. Russell Boss, Jr. Trust B) A Russell A. Boss 1,755,213 (67,451 directly; 560,000 indirectly as 11.4 40 Peaked Rock Lane co-trustee of W. Russell Boss, Jr. Trust B; 480,000 Narragansett, RI indirectly as co- trustee of W. Russell Boss, Jr. Trust 02882 A; 500,000 indirectly as co-trustee of W. Russell Boss, Jr. Trust C; 117,584 indirectly (stock subject to options); 19,000 indirectly, held by his wife; 7,452 indirectly, held by his children; and 3,726 indirectly, held as co-executor of an estate) B Russell A. Boss 1,804,800 (902,400 indirectly as co-trustee of W. 100.0 Russell Boss, Jr. Trust B; and 902,400 indirectly as co-trustee of W. Russell Boss, Jr. Trust A) A Edwin G. Torrance 480,500 (500 directly and 480,000 indirectly as 3.1 129 Nayatt Road co-trustee of W. Russell Boss, Jr. Trust A) Barrington, RI 02806 B Edwin G. Torrance 902,400 indirectly as co-trustee of 50.0 W. Russell Boss, Jr. Trust A A Noel M. Field, Jr. 564,026 (100 directly; 560,000 indirectly as co-trustee 3.6 50 Sakonnet Point of Road W. Russell Boss, Jr. Trust B; 200 as trustee for Little Compton, RI children and 3,726 indirectly, held as co-executor of an 02837 estate) B Noel M. Field, Jr. 902,400 indirectly as co-trustee of 50.0 W. Russell Boss, Jr. Trust B A Fleet Financial 1,657,920 indirectly as agent and as trustee of various 10.8 Group, Inc. trusts (as of December 31, 1995) 50 Kennedy Plaza Providence, RI 02903 A John Hancock 1,482,204 (1,439,904 through its indirect, wholly owned 9.6 Mutual Life subsidiary NM Capital Management, Inc. and 42,300 Insurance Company, through its indirect, wholly owned subsidiary John through Hancock Advisers, Inc.) (as of December 31, 1995) indirect, wholly owned subsidiaries John Hancock Place Post Office Box 111 Boston, MA 02117 A Radnor Capital 886,000 indirectly in its capacity as an investment 5.8 Management, Inc. advisor (as of December 31, 1995) Two Radnor Corporate Center 100 Matson Ford Road, Suite 250 Radnor, PA 19087 - --------------------------------------------------------------------------------
Bradford R. Boss and Russell A. Boss are, together with Edwin G. Torrance, the co-trustees of Trust A referred to above; they are, together with Noel M. Field, Jr., the co-trustees of Trust B referred to above; and they are, together with Fleet National Bank, the co-trustees of Trust C referred to above. The co-trustees of each trust jointly exercise investment and voting powers with respect to the assets of the trust. 3 6 The Class B shares held by Trusts A and B are convertible into Class A shares on a share-for-share basis. If the Class B shares were all converted into Class A shares, Bradford R. Boss and Russell A. Boss would be the beneficial owners of 21.3% and 20.7%, respectively, of the outstanding Class A shares. If the Class B shares held by Trust A were so converted, Edwin G. Torrance would be the beneficial owner of 8.5% of the outstanding Class A shares, and if the Class B shares held by Trust B were so converted, Noel M. Field, Jr. would be the beneficial owner of 9% of the outstanding Class A shares. SECURITY OWNERSHIP OF MANAGEMENT The following table reflects as of January 12, 1996 the beneficial ownership of shares of common stock of the Company by directors, nominees, and officers:
- ------------------------------------------------------------------------------------------------------------------ TITLE OF AMOUNT AND NATURE OF PERCENT CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS - ------------------------------------------------------------------------------------------------------------------ A Bradford R. Boss 1,864,235 (202,925 directly; 480,000 indirectly as co-trustee 12.1 of W. Russell Boss, Jr. Trust A; 560,000 indirectly as co-trustee of W. Russell Boss, Jr. Trust B; 500,000 indirectly as co-trustee of W. Russell Boss, Jr. Trust C; 117,584 indirectly (stock subject to options exercisable within 60 days); and 3,726 indirectly, held by a child) B Bradford R. Boss 1,804,800 (902,400 indirectly as co-trustee of W. Russell 100.0 Boss, Jr. Trust A; and 902,400 indirectly as co-trustee of W. Russell Boss, Jr. Trust B) A Russell A. Boss 1,755,213 (67,451 directly; 560,000 indirectly as co-trustee 11.4 of W. Russell Boss, Jr. Trust B; 480,000 indirectly as co-trustee of W. Russell Boss, Jr. Trust A; 500,000 indirectly as co-trustee of W. Russell Boss, Jr. Trust C; 117,584 indirectly (stock subject to options exercisable within 60 days); 19,000 indirectly, held by his wife; 7,452 indirectly, held by his children and 3,726, held as co-executor of an estate) B Russell A. Boss 1,804,800 (902,400 indirectly as co-trustee of W. Russell 100.0 Boss, Jr. Trust B; and 902,400 indirectly as co-trustee of W. Russell Boss, Jr. Trust A) A H. Frederick 5,514 indirectly(1) * Krimendahl II A John E. Buckley 21,881 directly; 118,984 indirectly(1) * A Bernard V. Buonanno, Jr. 500 directly; 5,584 indirectly(1) * A Thomas C. McDermott 250 directly; 2,090 indirectly(1) * A Terrence Murray 2,000 directly; 5,440 indirectly(1)(2) * A James C. Tappan 1,000 directly; 2,000 indirectly(3) * A Edwin G. Torrance 480,500 (500 directly and 480,000 indirectly as co-trustee of 3.1 W. Russell Boss, Jr. Trust A) B Edwin G. Torrance 902,400 (indirectly as co-trustee of W. Russell Boss, Jr. 50.0 Trust A) A Steven T. Henick 1,226 directly; 28,666 indirectly(1) * A Michael El-Hillow 1,530 directly; 59,001 indirectly(1) * A All directors and 304,729 directly and 2,224,448 indirectly (including shares 16.4 officers as a group subject to options exercisable within 60 days) (19 persons) B All directors and 1,804,800 100.0 officers as a group (3 persons) (1) Shares subject to options exercisable within 60 days. (2) Excludes shares held by Fleet Financial Group, Inc. in various fiduciary capacities. (3) Held by spouse. * Less than 1% The Class B common stock is convertible share for share into Class A common stock. - --------------------------------------------------------------------------------
4 7 ELECTION OF DIRECTORS It is proposed to fix the number of directors at nine, of which three will be designated "Class A Directors" and six will be designated "Class B Directors". Proxies will be voted for the nominees set forth below unless authorization to do so is withheld. All nominees are currently directors of the Company. Should any nominee become unavailable for any reason to accept nomination or election as a director, the persons named in the proxy will vote for the election of such other person or persons as management may recommend unless the stockholders vote to reduce the authorized number of directors. The terms of all directors will expire when their successors are duly elected at the annual meeting of stockholders scheduled to be held April 24, 1997. The following tables reflect information as of January 12, 1996. CLASS A DIRECTORS
PRINCIPAL OCCUPATION DIRECTOR NOMINEE AGE DURING PAST FIVE YEARS SINCE OTHER DIRECTORSHIPS 1 - ------------------------------------------------------------------------------------------------------------ Terrence Murray 56 Chairman, President and Chief Ex- 1982 Fleet Financial Group, Inc.; ecutive Officer, Fleet Financial Stop & Shop Companies, Inc.; Group, Inc. (diversified financial Allmerica Financial services corporation).3 5 Corporation Thomas C. McDermott 59 President and Chief Operating Of- 1992 Goulds Pumps, Inc. ficer of Bausch & Lomb, Inc. (1986 to 1993); President, TCM Associ- ates, Inc. (1993 to 1994; executive search consultants); Chairman, Chief Executive Officer & President, Goulds Pumps, Inc. (since 1994).2 James C. Tappan 60 Group Vice President and Director, 1994 Columbian Mutual Life Insur- General Foods Corporation (prior ance; The Milnot Company to June 1988); President, Tappan Capital Partners (June 1988 to present; equity investment firm).2 - ------------------------------------------------------------------------------------------------------------
5 8 CLASS B DIRECTORS
PRINCIPAL OCCUPATION DIRECTOR NOMINEE AGE DURING PAST FIVE YEARS SINCE OTHER DIRECTORSHIPS 1 - ------------------------------------------------------------------------------------------------------------- Bradford R. Boss 62 Chairman of the Board and, to April 1960 Fleet Financial Group, Inc.; 1993, Chief Executive Officer4 6 Bausch & Lomb, Inc. Russell A. Boss 57 President and, to April 1993, Chief 1962 Eastern Utilities Associates; Operating Officer; thereafter Brown & Sharpe Manufacturing President and Chief Executive Co. Officer4 6 7 John E. Buckley 55 Executive Vice President to April 1980 1993; thereafter Executive Vice President and Chief Operating Officer.4 Bernard V. Buonanno, 58 Chairman (to 1989) and Director, 1986 Old Stone Corporation Jr. Old Fox, Inc., manufacturer of fertilizers and other agricultural products; counsel (1988 to 1990) and thereafter partner, Edwards & Angell, Providence, RI, attorneys-at-law.5 7 Edwin G. Torrance 64 Partner, Hinckley, Allen & Snyder, 1995 Providence, RI, attorneys-at-law and counsel for the Company.2 8 H. Frederick 67 Limited Partner, The Goldman Sachs 1972 Krimendahl II Group L.P.; Chairman (since March 1992) Petrus Partners Ltd., New York, N.Y.5 9 - -------------------------------------------------------------------------------- The Board of Directors has an Audit Committee, consisting of Messrs. McDermott, Tappan and Torrance, and a Compensation Committee, consisting of Messrs. Buonanno, Jr., Krimendahl and Murray. The Audit Committee has responsibility for overseeing the establishment and maintenance of an effective financial control environment, for overseeing the procedures for evaluating the system of internal accounting control, and for evaluating audit performance. The Compensation Committee has responsibility for developing, overseeing and implementing the overall compensation policy for the Company including, subject to full Board approval, the implementation of an incentive compensation plan for the Company. During 1995 the Audit Committee and the Compensation Committee each held two meetings. The Board does not have a nominating committee. 1 Includes only companies with a class of securities registered pursuant to Section 12 or subject to the requirements of Section 15(d) of the Securities Exchange Act of 1934 and any company registered as an investment company under the Investment Company Act of 1940. 2 Member of Audit Committee. 3 The Company has a demand line of credit as well as cash and short term investments with, purchases gold and silver from and engages in other transactions with Fleet National Bank, a wholly-owned subsidiary of Fleet Financial Group, Inc., on substantially the same terms as those prevailing at the time for comparable transactions with other persons. 4 Member of Executive Committee. 5 Member of Compensation Committee. 6 Bradford R. Boss and Russell A. Boss are brothers. 7 Russell A. Boss and Bernard V. Buonanno, Jr. are cousins by marriage. 8 Hinckley, Allen & Snyder performed legal services for the Company during 1995 and is expected to perform services for the Company in 1996. 9 Goldman, Sachs & Co., an affiliate of The Goldman Sachs Group L.P., is assisting the Company with its stock buy back program.
6 9 DIRECTOR COMPENSATION Members of the Company's Board of Directors were compensated for their services during 1995 at the rate of $15,000 per annum, plus $900 for each Board meeting attended. During 1995, the Board of Directors held five meetings. In addition, members of the Audit and Compensation Committees received $500 ($750 in the case of the committee chairmen) for each committee meeting attended. Directors also automatically participate in the Company's Non-Qualified Stock Option Plan under a formula fixing the number of shares which are the subject of annual option grants as the number derived by dividing, in each case, the compensation payable to a director for his service to the Company as a director during the preceding calendar year by the mean between the high and low trading prices for the Company's Class A common stock on the last trading day of such year. Options under the non-qualified plan are granted with exercise prices equal to the fair market value of the Class A common stock on the date of grant. REPORT TO STOCKHOLDERS ON COMPENSATION MATTERS The reports set forth below shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that A. T. Cross Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts. The 1995 compensation of the Chairman, President and Chief Executive Officer, and Executive Vice President and Chief Operating Officer of the Company was established by the members of the Compensation Committee of the Board of Directors. None of the three directors comprising the Compensation Committee is an employee of the Company. The compensation of the remaining executive officers of the Company was recommended by the above-named officers, with input from the Company's director of compensation, benefits and international human resources, and approved by the Compensation Committee. The elements of compensation for each executive officer consisted of base pay and incentive bonus. In general, the decisions relating to the incorporation of the several elements into the compensation of each executive officer were based on three primary factors: -- The performance of the executive in meeting key strategic objectives, including increasing stockholder value. -- The external competitiveness of the Company's pay levels with those of other manufacturing companies with similar revenues and scope of operations. -- The internal pay equity that exists among individual executives and other Company employees. The Company is privy to external compensation data through its participation in, and analysis of, periodic compensation surveys conducted by independent consulting firms and associations, including but not limited to Towers-Perrin and Hewitt Associates, which report on compensation paid to other executives at companies of similar size. These companies, which include various manufacturing companies with sales volumes generally less than $500 million, are not represented in the peer group index used in the Performance Graph. The peer group index is limited by the low number of publicly traded fine writing instrument companies. The Company believes the larger sample size of the compensation surveys provides more meaningful comparisons. There are approximately 350 companies in the various survey groups. This number is subject to occasional change from year to year. The Company extrapolates the survey information using a combination of single and multiple regression analyses. Factors used in the regression analyses include, but are not limited to, corporate sales, company assets, stockholders' equity, return on equity, board membership, and years of service. In addition, the Company also utilizes the survey data to gauge its competitive position with other companies with respect to bonus and stock option grants. The Company also reviews its standing against other companies in a survey that compares a number of financial performance criteria. The survey ranks participating companies on one- and five-year returns on assets, equity and capital. It also ranks their one-year return on sales and common stock appreciation plus yield. The Board has reviewed the Company's exposure with respect to qualifying executive officer compensation for deduction under Section 162(m) of the Internal Revenue Code. The Board has deferred adopting a policy on this issue as it does not expect compensation to reach relevant levels in the near future. The following is a more specific discussion of each compensation component: BASE SALARY: The Company targets its base pay for the Chief Executive Officer and senior management at the 50th to 65th percentile of executive officers of manufacturing organizations of approximately the same size (less than $500 million in annual sales) and scope of operations as the Company. Based on survey data, the Company believes the base pay for its executives has been within this range for the last several years. In considering a base salary adjustment for the three named officers, the Compensation Committee took note of the significantly improved sales and earnings achieved for 1994. The Committee also reviewed the pay of similar level officers in the 7 10 survey groups referred to above and the amount of merit pay budgeted for the rest of the Company. The Committee approved base salary adjustments of 4.4% for Bradford R. Boss, 4.3% for Russell A. Boss, and 4.4% for John E. Buckley. The remaining two highest paid executive officers received a weighted average increase of 7.5%. This action was taken in light of survey data indicating that a more competitive base salary adjustment was appropriate for these two key positions. The percentage increases for the five executive officers as a group were within 1% of the average budgeted base salary increases granted to similar level executives of companies included in the comparative survey groups. BONUS: Bonus payments to executives for 1995 were subject to the revised Executive Compensation Program approved by the Compensation Committee to cover the period 1995-1997. The annual incentive payments to eligible executives are designed to provide rewards based on substantially improved company profitability from year to year as measured by the amount of increase in writing instrument operating income before taxes (OIBT). Also factored into the formula is a measure of the Company's effective use of capital. The percentage increase in OIBT over 1994 levels and the excess of the return on capital calculation over its benchmark figure generated a bonus of 66% of base salary for each of the Messrs. Boss and Mr. Buckley. The formula also resulted in a weighted average bonus of 48% of base salary for the next two most highly compensated executive officers. Eighty-six percent of the bonus earned by the Messrs. Boss and Mr. Buckley was paid in cash and the remainder was paid in the form of restricted shares of the Company's Class A common stock; the next two most highly compensated executive officers received 83% of their bonuses in cash, with the balance paid in the form of restricted stock. The restricted stock awards provide that restrictions as to 50% of the restricted shares will lapse when OIBT equals at least $25 million and restrictions on the balance of the shares will lapse when OIBT is double the OIBT attained in 1994. If the specified OIBT levels have not been achieved by December 31, 1999, all shares then subject to restrictions will be forfeited. The Company also analyzes its total cash compensation (base salary plus bonus) in relation to other similarly sized companies and targets the 75th percentile as a competitive norm when the maximum percentage increase in OIBT under the formula is achieved. Applying the most recent survey data available to the Company (April 1995), the total cash compensation (which includes 1995 base salary and the 1995 bonus as described in the Summary Compensation Table) for each of the executive officers as a group was at or above the 75th percentile compared to cash compensation received by executive officers at other companies included in the survey. LONG-TERM INCENTIVES: The Company has relied upon grants under incentive and non-qualified stock option plans to provide key officers and managers with an ownership position in the Company, while fostering a longer-term incentive to increase stockholder value. As part of the three-year (1995-1997) Executive Compensation Program, the Company granted stock options in December 1994 to its executive officers and other members of management under a revised stock option plan, subject to stockholder approval of the revised plan. This grant provided options approximate to the number that would be granted over a three-year period and provided for three-year cliff vesting of the options. The Program specifically provides that no other options will be issued to continuing participants (other than annual automatic grants to directors) until the completion of the three-year compensation program. The revised stock option plan was approved by the stockholders at the 1995 annual meeting. The option price of $15.1875 per share represented the fair market value of the Class A common stock on the date of the grants. The options granted to the five most highly compensated executives were as follows: the Messrs. Boss: 40,000 shares each; Mr. Buckley: 80,000 shares; Messrs. Henick and El-Hillow: 35,000 shares each. A comparison with the Company's survey sources indicates that the size of the grants analyzed on an annualized basis places the three named officers all below the 25th percentile versus other similarly compensated executives. The two remaining most highly compensated executives placed between the 45th and 50th percentiles of the comparison group. In addition to the stock option plan, the Executive Compensation Program includes a Performance Cash Plan. The Plan provides the opportunity for a one-time cash bonus to be paid to each qualifying executive if the Company meets or exceeds certain significant three-year cumulative compounded OIBT growth goals. The award pool to be determined after the conclusion of the 1997 fiscal year will represent a percentage of the three-year cumulative OIBT, not to exceed 6% of the three-year OIBT. Awards will be made to the five most highly compensated executives as well as other participants in the Executive Compensation Program in amounts as determined by the Compensation Committee in accordance with the Committee's assessment of each individual's performance and contribution to the Company's overall results. The one-time cash bonuses will be paid out in three equal annual installments beginning in the first quarter of 1998. The foregoing report is presented by the following: Bernard V. Buonanno, Jr. H. Frederick Krimendahl II Terrence Murray, Chairman 8 11 EXECUTIVE COMPENSATION The following table sets forth certain information with respect to the Company's Chief Executive Officer and the four other most highly compensated executive officers during 1995: SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION ------------------------ ANNUAL COMPENSATION OTHER RESTRICTED SECURITIES ---------------------------- ANNUAL STOCK UNDERLYING ALL OTHER NAME & SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION PRINCIPAL POSITION YEAR ($) ($) ($)(3) ($)(5) (#) ($) - ------------------ ---- ------ ----- ------------ ---------- ---------- ------------ Russell A. Boss 1995 $413,833(1) $216,884 $ 4,320 $45,327 1,485(6) $18,806(7) President and 1994 392,792 119,192 4,320 61,310 17,763 Chief Executive Officer 1993 376,792 0 4,320 21,088 6,372 Bradford R. Boss 1995 291,583(1) 149,646 4,320 31,275 1,485(6) 14,996(8) Chairman 1994 276,792 82,153 4,320 61,310 17,145 1993 302,833 0 2,775 21,088 6,713 John E. Buckley 1995 372,000(1) 193,875 4,320 40,519 1,485(6) 16,767(9) Executive Vice President 1994 351,167 105,901 4,320 101,310 15,807 Chief Operating Officer 1993 334,708 0 4,320 21,088 4,497 Steven T. Henick, 1995 204,583 81,833 10,406(4) 17,103 0 11,720(10) Vice President, Worldwide 1994 192,917 57,100 5,021 53,000 4,620 Marketing and Sales 1993 35,320(2) 2,000 677 25,000 0 Michael El-Hillow 1995 175,458 70,183 3,600 14,668 0 11,742(11) Vice President, Finance 1994 159,520 47,100 3,600 53,000 9,401 Treasurer, Chief Financial 1993 148,750 35,700 3,600 39,000 4,497 Officer - -------------------------------------------------------------------------------- (1) Includes director fees of $19,500, which are also included in Salary for 1994 and 1993. (2) Mr. Henick was hired on October 25, 1993. (3) Amounts listed under Other Annual Compensation consist of tax reimbursement payments made to the named individuals relating to amounts paid to these individuals as car allowances. (4) Mr. Henick's Other Annual Compensation includes a tax gross-up payment related to reimbursement of relocation expenses ($6,806 for 1995 and $1,421 for 1994). (5) Annual incentive awards which exceeded target award levels were paid in restricted Class A common stock under the A. T. Cross Company Restricted Stock Plan. The restricted stock awards provide that restrictions as to 50% of the restricted shares will lapse when writing instrument OIBT equals $25 million and restrictions on the balance of the shares will lapse when writing instrument OIBT is double the OIBT attained in 1994. If the specified OIBT levels have not been achieved by December 31, 1999, all shares then subject to restrictions will be forfeited. Termination of employment other than by reason of death or disability will also result in forfeiture of any shares subject to restrictions. The number and year-end value of the shares awarded for 1995, based on the December 29, 1995 closing market price of the Company's unrestricted Class A common stock of $15.125 are: Mr. R. Boss, 2,984 shares and $45,133, Mr. B. Boss, 2,059 shares and $31,142, Mr. Buckley, 2,667 shares and $40,338, Mr. Henick, 1,126 shares and $17,031, and Mr. El-Hillow, 965 shares and $14,596. Dividends will be paid on the shares of restricted stock if and to the extent paid on the Class A and Class B common stock. (6) Shares underlying formula option received as a director of the Company pursuant to the Company's Non-Qualified Stock Option Plan. (7) Mr. Boss's All Other Compensation for 1995 consists of 401(k) contributions ($4,620); profit sharing trust contributions ($13,713); and split dollar life insurance premiums ($473).
9 12 (8) Mr. Boss's All Other Compensation for 1995 consists of 401(k) contributions ($4,620); profit sharing trust contributions ($9,500); and split dollar life insurance premiums ($876). (9) Mr. Buckley's All Other Compensation for 1995 consists of 401(k) contributions ($4,620); and profit sharing trust contributions ($12,147). (10) Mr. Henick's All Other Compensation for 1995 consists of 401(k) contributions ($4,620); and profit sharing trust contributions ($7,100). (11) Mr. El-Hillow's All Other Compensation for 1995 consists of 401(k) contributions ($4,620); and profit sharing trust contributions ($7,122). PERFORMANCE GRAPH The following graph compares the market performance of the Company's Class A common stock to the American Stock Exchange Market Value Index and Peer Group Index over the Company's last five fiscal years. The graph assumes that the value of the investment in the Company's Class A common stock and each index was $100 at December 31, 1990 and that all dividends were reinvested. [GRAPH] COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN OF COMPANY, PEER GROUP AND BROAD MARKET
MEASUREMENT PERIOD A.T. CROSS PEER GROUP AMEX MARKET (FISCAL YEAR COVERED) COMPANY INDEX INDEX 1990 $100.00 $100.00 $100.00 1991 $112.36 $127.04 $123.17 1992 $ 89.16 $174.79 $124.86 1993 $ 74.26 $161.55 $148.34 1994 $ 69.72 $151.19 $131.04 1995 $ 80.80 $198.01 $168.90
On a worldwide basis, A. T. Cross Company is the only major manufacturer of quality writing instruments that is not either privately held or part of a consolidated group. Therefore, relative performance data for the Company's primary competition is not readily available. The peer group included in this performance graph represents four publicly-traded companies (Bic Corp.; Hunt Manufacturing Company; Pentech International, Inc.; A.T. CROSS Company) based in the United States and included in Standard Industrial Classification (SIC) Code 3951 "Pens, Mechanical Pencils and Parts." 10 13 PENSION PLAN TABLE
AVERAGE YEARS OF SERVICE PAY 15 20 25 30 35 - ------------------------------------------------------------------------ $ 25,000 $ 6,000 $ 8,000 $ 10,000 $ 10,000 $ 10,000 50,000 12,000 16,000 20,000 20,000 20,000 75,000 18,000 24,000 30,000 30,000 30,000 100,000 24,000 32,000 40,000 40,000 40,000 150,000 36,000 48,000 60,000 60,000 60,000 200,000 48,000 64,000 80,000 80,000 80,000 300,000 72,000 96,000 120,000 120,000 120,000 400,000 96,000 128,000 160,000 160,000 160,000 500,000 120,000 160,000 200,000 200,000 200,000 - --------------------------------------------------------------------------------
The Company maintains a non-contributory qualified retirement plan for the benefit of its employees, including the individuals named in the Summary Compensation Table. In addition, participants in the plan whose retirement benefits would exceed amounts permitted under the Internal Revenue Code participate in a non-qualified excess retirement plan which provides a supplemental unfunded benefit equal to the amount of any benefit that would have been payable under the qualified retirement plan but for certain limitations under the Internal Revenue Code. The benefits set forth in the Pension Plan Table reflect the aggregate of the benefits under both the qualified and non-qualified plans. In each case, the indicated benefit will be reduced by the individual's social security credit. The qualified plan and the non-qualified plan are collectively referred to as the "Plan". Covered compensation under the Plan includes base salary, cash bonuses, overtime pay, and amounts contributed by the employee to the A.T. Cross Savings Plan maintained by the Company under Section 401(k) of the Internal Revenue Code. The Salary and Bonus columns of the Summary Compensation Table set forth previously, less director fees, reflect all covered compensation of executive officers for 1995. As of December 31, 1995, each of the individuals named in the Summary Compensation Table was credited with twelve years of service under the Plan with the exception of Steven T. Henick, who was credited with two years of service, and Michael El-Hillow, who was credited with five years of service. The amounts payable shown in the above Table are based on the following assumptions: (i) The individual shall have retired at the normal retirement age of 65, (ii) "Average pay" is the average of the covered compensation paid to such individual over the five consecutive years immediately preceding retirement, and (iii) Benefits are paid in the form of a straight-life annuity. Payment options for spousal benefits are available. 11 14 STOCK OPTIONS The following tables set forth, as to the Chief Executive Officer and the four most highly compensated other executive officers of the Company, information with respect to stock option grants in 1995, options exercised during 1995 and year-end values of unexercised options. No options were exercised by these officers in 1995. The Company does not grant any stock appreciation rights. OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE APPRECIATION INDIVIDUAL GRANTS FOR THE OPTION TERM - --------------------------------------------------------------------------------------------------- --------------------------- NUMBER PERCENTAGE OF OF TOTAL MARKET SECURITIES OPTIONS PRICE UNDERLYING GRANTED TO EXERCISE PER SHARE OPTIONS EMPLOYEES PRICE ON DATE EXPIRATION NAME GRANTED IN 1994 PER SHARE OF GRANT DATE(2) 0% 5% 10% ---- ---------- ---------- --------- --------- ---------- -- -- --- Bradford R. Boss 1,485(1) 1.71% $16.75 $16.75 October 1, 2005 $0 $15,643 $39,642 Russell A. Boss 1,485(1) 1.71% $16.75 $16.75 October 1, 2005 $0 $15,643 $39,642 John E. Buckley 1,485(1) 1.71% $16.75 $16.75 October 1, 2005 $0 $15,643 $39,642 Steven T. Henick -- -- -- -- -- -- -- -- Michael El-Hillow -- -- -- -- -- -- -- -- - --------------- (1) These options are received as a director of the Company under the formula provisions of the Company's Non-Qualified Stock Option Plan. (2) Subject to earlier termination in the event of termination of the grantee's office.
OPTION VALUES AT DECEMBER 31, 1995
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT SHARES DECEMBER 31, 1995 DECEMBER 31, 1995(1) ACQUIRED VALUE ---------------------------- ---------------------------- NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- -------- ----------- ------------- ----------- ------------- Bradford R. Boss........... -- -- 117,584 41,485 $ 44,675 $ 0 Russell A. Boss............ -- -- 117,584 41,485 44,675 0 John E. Buckley............ -- -- 118,984 81,485 49,522 0 Michael El-Hillow.......... -- -- 59,001 40,999 103,782 5,606 Steven T. Henick........... -- -- 28,668 49,332 62,777 31,386 - --------------- (1) Based on the mean between the high and low trading prices of the Class A common stock on December 29, 1995 ($15.1875) minus the exercise price.
12 15 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION As indicated under "Report to Stockholders on Compensation Matters" at page 7, above, the 1995 compensation of Messrs. Bradford R. Boss, Russell A. Boss and John E. Buckley, all of whom are members of the Board of Directors of the Company, was fixed by the Compensation Committee. The Compensation Committee is comprised of Terrence Murray, H. Frederick Krimendahl II, and Bernard V. Buonanno, Jr. The compensation of the remaining executive officers of the Company was recommended by the Messrs. Boss and Mr. Buckley and approved by the Compensation Committee. Bradford R. Boss is a member of the compensation committee of the board of directors of Fleet Financial Group, Inc. Terrence Murray, a director of the Company, is Chairman and Chief Executive Officer of Fleet Financial Group, Inc. and is Chairman of the Company's Compensation Committee. RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS The Company's principal independent public accountant for 1995 was Ernst & Young LLP. The Board of Directors has not yet nominated an accountant to examine the Company's and its subsidiaries' financial statements for 1996. The Company is in the process of soliciting bids from several independent public accountants relating to this work. Once the bids have been obtained, the Board of Directors will recommend an accountant to the holders of Class B common stock for their approval. One or more representatives of Ernst & Young LLP plan to attend the annual meeting and will be afforded the opportunity to make a statement and answer questions. At least twice a year the Audit Committee reviews and approves the services that may be provided by its auditors during the year, considers the effect that performing such services might have on audit independence, and approves guidelines under which management may engage the auditors to perform non-audit services. It also reviews the services performed to see that they are consistent with its guidelines. SECTION 16 COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors, and persons who own more than 10 percent of the Company's Class A common stock ("Insiders"), to file with the Securities and Exchange Commission and the American Stock Exchange reports of ownership and changes in ownership of such stock. Insiders are required by Securities and Exchange Commission regulations to furnish the Company with copies of all Section 16(a) reports they file. Based solely on a review of the copies of such reports furnished to the Company, the Company believes that during 1995 its Insiders complied with all applicable Section 16(a) filing requirements. OTHER MATTERS The Board of Directors and management know of no matter of business to be brought before the meeting which is not referred to above. However, if other business upon which holders of Class A common stock are entitled to vote shall properly come before the meeting, it is the intention of the persons named in the enclosed proxy or any substitute to vote said proxy in accordance with their best judgment. IMPORTANT NO MATTER HOW SMALL YOUR HOLDINGS, YOU ARE RESPECTFULLY REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED, PREPAID ENVELOPE AT YOUR EARLIEST CONVENIENCE. Tina C. Benik Corporate Secretary Dated: March 21, 1996 13 16 PROXY A.T. CROSS COMPANY ---------------------------------------------------------------- The undersigned holder of 1. NUMBER OF DIRECTORS: / / FOR / / AGAINST / / ABSTAIN Class A common stock of A.T. fixing the number of Class A directors at three and Cross Company does hereby Class B directors at six constitute and appoint Bradford R. Boss, Russell A. ---------------------------------------------------------------- Boss, and Edwin G. Torrance, 2. ELECTION OF CLASS A DIRECTORS: or any one of them as Terrence Murray / / FOR / / AUTHORITY WITHHELD attorneys and proxies of the James C. Tappan / / FOR / / AUTHORITY WITHHELD undersigned, with full power Thomas C. McDermott / / FOR / / AUTHORITY WITHHELD of substitution for, and in the name and stead of, the ---------------------------------------------------------------- undersigned to appear and 3. OTHER BUSINESS: In their discretion, the proxies vote all shares of Class A are authorized to vote upon such other business as common stock of A.T. Cross may properly come before said meeting or any Company held of record in adjournment thereof upon which Class A common the name of the undersigned stockholders are entitled to vote. at the annual meeting of This proxy when properly executed will be voted in A.T. Cross Company to be the manner directed herein by the undersigned. If held at the offices of the no direction is made, this proxy will be voted FOR Company, One Albion Road, proposals 1 and 2. THIS PROXY IS BEING SOLICITED Lincoln, Rhode Island 02865 ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS. on Thursday, April 25, 1996 Please date, sign and mail promptly in the at 10:00 A.M. and at any and enclosed envelope. This proxy will not be used if all adjournments thereof as you attend the meeting in person and so request. designated. (over)
Dated 1996 ------------------------------------- Signature: ------------------------------------- Signature: ------------------------------------- Important: Please sign exactly as your name or names appear above. When signing as attorney, executor, administrator, trustee, guardian, or in any other representative capacity, give full title as such. Corporate stockholders sign with full corporate name by a duly authorized officer. If a partnership, sign in partnership name by authorized person. -----END PRIVACY-ENHANCED MESSAGE-----