UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
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Material Pursuant to § 240.14a-12
Prestige
Brands Holdings, Inc.
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PRESTIGE
BRANDS HOLDINGS, INC.
90
North Broadway
Irvington,
New York 10533
Telephone:
(914) 524-6810
Dear
Stockholder: July
14,
2006
You
are
cordially invited to attend our 2006 Annual Meeting of Stockholders, which
will
be held on Tuesday, August 15, 2006, at 10:00 a.m. (Eastern time) at the
Tarrytown House Estate and Conference Center, 49 East Sunnyside Lane, Tarrytown,
New York 10591. With this letter, we have enclosed a copy of our Annual Report
for the fiscal year ended March 31, 2006, notice of annual meeting of
stockholders, proxy statement and proxy card. These materials provide further
information concerning the annual meeting. If you would like another copy of
the
Annual Report, please send your request to Prestige Brands Holdings, Inc.,
90
North Broadway, Irvington, New York 10533, Attention: Secretary, and one will
be
mailed to you.
At
this
year’s annual meeting, the agenda includes the election of directors and a
proposal to ratify the appointment of our independent registered public
accounting firm. The Board of Directors recommends that you vote FOR election
of
the nominees for directors and FOR ratification of appointment of the
independent registered public accounting firm. Members of the Board of Directors
and our executive officers will be present to answer any questions you may
have.
It
is
important that your shares be represented and voted at the annual meeting,
regardless of the size of your holdings. Accordingly, please complete, sign
and
date the enclosed proxy card and return it promptly in the enclosed envelope
to
ensure your shares will be represented. If you do attend the annual meeting,
you
may, of course, withdraw your proxy should you wish to vote in
person.
We
look
forward to seeing you at the annual meeting.
Sincerely,
/s/
Peter C.
Mann
Peter
C.
Mann
Chairman
of the
Board, Chief Executive Officer and President
Prestige
Brands Holdings, Inc.
90
North Broadway
Irvington,
New York 10533
Telephone:
(914) 524-6810
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
August
15, 2006
10:00
a.m. Eastern Time
The
2006
Annual Meeting of Stockholders of Prestige Brands Holdings, Inc. will be held
on
Tuesday, August 15, 2006, at 10:00 a.m. (Eastern time), at the Tarrytown House
Estate and Conference Center, 49 East Sunnyside Lane, Tarrytown, New York 10591.
The annual meeting is being held for the following purposes:
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1.
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To
elect directors to serve until the 2007 Annual Meeting of Stockholders
and
until their successors are duly elected and qualified or until
their
earlier removal or resignation (the Board of Directors recommends
a vote
FOR the nominees named in the attached proxy
statement);
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2.
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To
ratify the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of Prestige Brands Holdings, Inc.
for
the fiscal year ending March 31, 2007 (the Board of Directors
recommends a vote FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as the Company’s independent registered public
accounting firm); and
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3.
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To
transact such other business as may properly come before the annual
meeting or any adjournment or postponement thereof, including proposals
to
adjourn or postpone the meeting.
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These
items are fully discussed in the following pages, which are made a part of
this
notice. Only stockholders of record at the close of business on July 6, 2006
will be entitled to vote at the annual meeting.
Enclosed
with this Notice of Annual Meeting of Stockholders is a proxy statement, related
proxy card with a return envelope and our Annual Report for our fiscal year
ended March 31, 2006. The Annual Report contains financial and other
information that is not incorporated into the proxy statement and is not deemed
to be a part of the proxy soliciting material.
By
Order of the Board
of Directors
/s/
Charles N.
Jolly
Charles
N.
Jolly
Secretary
July
14,
2006
EVEN
IF
YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN,
DATE
AND MAIL THE ENCLOSED PROXY CARD. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. YOU MAY
REVOKE YOUR PROXIES AND VOTE IN PERSON BY FOLLOWING THE INSTRUCTIONS ON PAGE
3
OF THE PROXY STATEMENT.
Prestige
Brands Holdings, Inc.
90
North Broadway
Irvington,
New York 10533
Telephone:
(914) 524-6810
PROXY
STATEMENT FOR 2006 ANNUAL MEETING OF STOCKHOLDERS
TABLE
OF CONTENTS
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Page
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| GENERAL NFORMATION..................................................................................................................................................................................................................................................................................1 |
| VOTING MATTERS ..............................................................................................................................................................................................................................................................................................2 |
| PROPOSAL NO. 1 - ELECTION OF DIRECTORS.............................................................................................................................................................................................................................................5 |
| GOVERNANCE OF THE COMPANY.................................................................................................................................................................................................................................................................7 |
| PROPOSAL NO. 2 - RATIFICATION OF APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.............................................................................................12 |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................................................................................................................................................................14 |
| SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS................................................................................................................................................................16 |
| EXECUTIVE COMPENSATION AND OTHER MATTERS..........................................................................................................................................................................................................................16 |
| REPORT OF THE COMPENSATION COMMITTEE.....................................................................................................................................................................................................................................25 |
| COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION...............................................................................................................................................................................27 |
| CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................................................................................................................................................................................................27 |
| SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE................................................................................................................................................................................................27 |
| REPORT OF THE AUDIT COMMITTEE ...........................................................................................................................................................................................................................................27 |
| PERFORMANCE GRAPH...................................................................................................................................................................................................................................................................................29 |
| SUBMISSION OF A STOCKHOLDER PROPOSAL AND NOMINATION OF DIRECTOR AND ADDITIONAL INFORMATION................................................................................................30 |
| FORM 10-K...........................................................................................................................................................................................................................................................................................................31 |
GENERAL
INFORMATION
What
is this document?
This
document is the Proxy Statement of Prestige Brands Holdings, Inc. for the Annual
Meeting of Stockholders to be held on Tuesday, August 15, 2006. A form of proxy
card is included. This document is first being mailed or given to stockholders
on or about July 14, 2006.
We
refer
to our company throughout this document as “we” or “us” or the
“Company.”
Why
am I receiving this document?
We
are
sending this document and the form of proxy card to solicit your proxy to vote
upon certain matters at the annual meeting.
What
is a proxy?
It
is
your legal designation of another person, called a “proxy,” to vote the stock
you own. The document that designates someone as your proxy is also called
a
proxy or a proxy card.
Who
is paying the costs of this document and the solicitation of my
proxy?
The
Company will pay all expenses of this solicitation, including the cost of
preparing and mailing this document.
Who
is soliciting my proxy and will anyone be compensated to solicit my
proxy?
Your
proxy is being solicited by and on behalf of our Board of Directors (the
“Board”). In addition to solicitation by use of the mails, proxies may be
solicited by our officers and employees in person or by telephone, telegram,
electronic mail, facsimile transmission or other means of communication. Our
officers and employees will not be additionally compensated, but may be
reimbursed for out-of-pocket expenses in connection with any solicitation.
We
also may reimburse custodians, nominees and fiduciaries for their expenses
in
sending proxies and proxy material to beneficial owners.
Who
may attend the annual meeting?
Only
stockholders, their proxy holders and our invited guests may attend the meeting.
If a broker, bank or other nominee holds your shares in street name, please
bring a copy of the account statement reflecting your ownership as of July
6,
2006 so that we may verify your stockholder status and have you check in at
the
registration desk at the meeting. For security reasons, we also may require
photo identification for admission.
What
if I have a disability?
If
you
are disabled and would like to participate in the annual meeting, we can provide
reasonable assistance. Please send any request for assistance to Prestige Brands
Holdings, Inc., 90 North Broadway, Irvington, New York 10533, Attention:
Secretary, at least two weeks before the meeting.
What
is Prestige Brands Holdings and where is it located?
We
sell
well-recognized, brand name over-the-counter drug, household cleaning and
personal care products. Our leading brands in each of these segments,
respectively, are Chloraseptic®, Comet® and Cutex®. Our corporate offices are
located at 90 North Broadway, Irvington, New York 10533. Our telephone number
is
914-524-6810.
Where
is our common stock traded?
Our
common stock is traded and quoted on the New York Stock Exchange (“NYSE”) under
the symbol “PBH.”
1
What
am I voting on?
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You
will be voting on the following:
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•
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the
election of nine directors; and
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•
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the
ratification of the appointment of our independent registered public
accounting firm for 2007.
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Who
is entitled to vote?
You
may
vote if you were the record owner of shares of our common stock at the close
of
business on July 6, 2006. Each share of stock is entitled to one vote. As of
July 6, 2006, there were 50,039,071 shares of our common stock outstanding.
A
list of our stockholders will be open to the examination of any stockholder,
for
any purpose germane to the meeting, at our headquarters for a period of ten
(10)
days prior to the annual meeting.
May
other matters be raised at the annual meeting; how will the meeting be
conducted?
We
currently are not aware of any business to be acted upon at the annual meeting
other than the 2 matters described above. Under Delaware law and our governing
documents, no other business aside from procedural matters may be raised at
the
annual meeting unless proper notice has been given to the stockholders. If
other business is properly raised, your proxies have authority to vote as they
think best, including to adjourn the meeting.
The
Chairman has broad authority to conduct the annual meeting so that the business
of the meeting is carried out in an orderly and timely manner. In doing so,
he
has broad discretion to establish reasonable rules for discussion, comments
and
questions during the meeting. The Chairman is also entitled to rely upon
applicable law regarding disruptions or disorderly conduct to ensure that the
annual meeting proceeds in a manner that is fair to all
participants.
How
do I vote?
Proxies
may be voted by returning the printed proxy card. For more information about
how
to vote your proxy, please see the instructions on your proxy card.
In
addition to voting by proxy, you may vote in person at the annual meeting.
However, in order to assist us in tabulating votes at the annual meeting, we
encourage you to vote by proxy even if you plan to be present at the annual
meeting.
How
will my proxy be voted?
The
individuals named on the proxy card will vote your proxy in the manner you
indicate on the proxy card. If your proxy card is signed but does not contain
specific instructions, your proxy will be voted: “FOR” all of the directors
nominated and “FOR” ratification of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for the fiscal year ending March
31, 2007.
2
Can
I change my mind and revoke my proxy?
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Yes.
To revoke a proxy given pursuant to this solicitation, you
must:
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sign
another proxy with a later date and return it to our Secretary
at or
before the annual meeting;
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•
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provide
our Secretary with a written notice of revocation dated later than
the
date of the proxy at or before the annual meeting; or
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attend
the annual meeting and vote in person. Note that attendance at the
annual meeting will not revoke a proxy if you do not actually vote
at the
annual meeting.
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What
if I receive more than one proxy card?
Multiple
proxy cards mean that you have more than one account with brokers or our
transfer agent. Please vote all of your shares. We also recommend that you
contact your broker and our transfer agent to consolidate as many accounts
as
possible under the same name and address. Our transfer agent is Computershare,
Ltd., 250 Royall Street, Canton, Massachusetts 02021, and it may be reached
at
(781) 575-3400.
How
will abstentions and broker non-votes be treated?
Abstentions
and broker non-votes will be treated as shares that are present and entitled
to
vote for purposes of determining whether a quorum is present, but will not
be
counted as votes cast either in favor of or against a particular proposal.
What
are broker non-votes?
If
you
are the beneficial owner of shares held in “street name” by a broker, your
broker is the record holder of the shares, however the broker is required to
vote those shares in accordance with your instructions. If you do not give
instructions to your broker, your broker may exercise discretionary voting
power
to vote your shares with respect to routine matters, but the broker may not
exercise discretionary voting power to vote your shares with respect to
“non-routine” items. All of the matters identified in this document to be voted
upon at the meeting are considered to be “routine” items. In the case of
non-routine items, the shares that cannot be voted by your broker would be
treated as “broker non-votes.” To avoid giving them the effect of negative
votes, broker non-votes are disregarded for the purpose of determining the
total
number of votes cast or entitled to vote with respect to a
proposal.
How
many votes must be present to hold the annual meeting?
A
quorum
must be present at the annual meeting for any business to be conducted. A quorum
exists when the holders of a majority of the 50,039,071 shares of our common
stock outstanding on July 6, 2006 are present at the meeting, in person or
by
proxy.
How
many votes are needed to elect directors and approve other
matters?
Directors
are elected by a plurality of the votes cast by the holders of shares entitled
to vote at the annual meeting. This means that the director nominee with the
most affirmative votes for a particular slot is elected for that slot. You
may
vote in favor of all nominees, withhold your vote as to all nominees or withhold
your vote as to specific nominees.
The
ratification of the appointment of PricewaterhouseCoopers LLP as our independent
registered public accounting firm for the fiscal year ending March 31, 2007
will
be approved if the proposal receives the affirmative vote of a majority of
the
shares present and entitled to vote at the annual meeting.
3
How
many votes do I have and can I cumulate my votes?
You
have
one vote for every share of our common stock that you own. Cumulative voting
is
not allowed.
Will
my vote be confidential?
Yes.
We
will continue our practice of keeping the votes of all stockholders
confidential. Stockholder votes will not be disclosed to our directors,
officers, employees or agents, except:
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as
necessary to meet applicable legal requirements;
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in
a dispute regarding authenticity of proxies and ballots;
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in
the case of a contested proxy solicitation, if the other party
soliciting
proxies does not agree to comply with the confidential voting policy;
or
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when
a stockholder makes a written comment on the proxy card or otherwise
communicates the vote to management.
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4
PROPOSAL
NO. 1 - ELECTION OF DIRECTORS
The
Board
is currently comprised of ten directors. Effective on the date of our 2006
Annual Meeting of Stockholders, the Board has set the size of the Board at
nine
to reflect the Board’s decision to conclude Frank Palantoni's duties as
Chief Executive Officer and President and not to re-nominate him to serve as
a
member of the Board. Our Board has affirmatively determined that six of
our directors are “independent,” as defined in the NYSE listing standards.
Except for Mr. Palantoni, the remaining members of the Board are standing for
reelection, to hold office until the next Annual Meeting of Stockholders.
The Proxies appointed by the Board intend to vote your proxy (if you are a
stockholder of record) for the election of each of these nominees, unless you
indicate on the proxy card that your vote should be withheld from any or all
of
the nominees. Each
nominee elected as a director will continue in office until the 2007 Annual
Meeting of Stockholders or until his successor has been elected and qualified,
or until his earlier death, resignation or removal.
Information
regarding our directors standing for reelection is set forth below:
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Name
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Age
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Position
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Peter
C. Mann
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64
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Chairman
of the Board, Chief Executive Officer and President
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L.
Dick Buell (1)(2)(5)
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55
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Director
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John
E. Byom (1)(2)(5)
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52
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Director
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Gary
E. Costley (1)(3)(5)
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62
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Director
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David
A. Donnini
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40
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Director
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Ronald
Gordon (2)(3)(4)(5)(6)
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62
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Director
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Vincent
J. Hemmer (4)
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37
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Director
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Patrick
Lonergan (1)(3)(4)(5)
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71
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Director
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Raymond
P. Silcock (2)(3)(4)(5)
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55
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Director
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______________________
(1) Member
of
the Compensation Committee.
(2) Member
of
the Audit Committee.
(3) Member
of
the Nominating and Corporate Governance Committee.
(4) Member
of
the Strategic Planning Committee
(5) Independent
director as defined in Section 303A of the NYSE Listed Company
Manual.
(6) Lead
Director for non-management and executive sessions of the Board
There
are
no family relationships between or among any of our directors or executive
officers. Stock ownership information is shown under the heading “Security
Ownership of Certain Beneficial Owners and Management” and is based upon
information furnished by the respective individuals.
Directors
Standing for Reelection
Peter
C. Mann,
Chairman
of the Board,
has
served as Chairman of the Board of Directors of the Company since its
incorporation in June 2004. From June 2004 through August 2005, Mr. Mann
was the Chief Executive Officer and President of the Company. From August
2005 through March 31, 2006, Mr. Mann served as Chief Executive Officer of
the
Company. On June 23, 2006, Mr. Mann was re-appointed Chief Executive Officer
and
President of the Company. Mr. Mann previously served as President and Chief
Executive Officer of Medtech Holdings, Inc. (our predecessor company)
(“Medtech”) since June 2001. Mr. Mann is a senior consumer and
pharmaceutical products business executive with over 35 years of general
management, marketing and sales experience. From 1973 to 2001, Mr. Mann
served as the President of the Americas Division within Block Drug
Company, Inc. and the only non-family member within the Office of Chief
Executive. At Block Drug Company, Mr. Mann was responsible for the
overall strategic and financial direction for the corporation and directly
managed all business conducted in the United States, Canada, Mexico and South
America. Mr. Mann joined Block Drug Company in 1973 as a Group Product
Manager and subsequently served in numerous key positions including Vice
President—New Products, Vice President—Consumer Products & Oral Care
Division, Senior Vice President—U.S. Consumer Marketing & Sales, and
President—U.S. Division during his career with the Block Drug Company. Prior to
his joining Block Drug Company, he held senior management positions for such
leading consumer products companies as The Mennen Company, Swift & Co.
and Chemway, Inc. Mr. Mann is a graduate of Brown
University.
5
L.
Dick Buell, Director,
has
served as a director since November 2004. Mr. Buell is currently
Chief Executive Officer and director of Catalina Marketing Corporation, which
he
joined in March 2004. From January 2002 to January 2004,
Mr. Buell was Chief Executive Officer of WS Brands, a portfolio company of
Willis Stein & Partners. From February 2000 to December 2001,
Mr. Buell was President and Chief Operating Officer of Foodbrands
America, Inc., a unit of Tyson Foods. Prior to that time, Mr. Buell
spent 10 years at Griffith Laboratories, Inc. and served as Chief Executive
Officer from 1992 to 1999. From 1983 to 1990, Mr. Buell served as Vice President
of Marketing for Kraft Grocery Products and from 1979 to 1983 as a consultant
at
McKinsey & Company. Mr. Buell earned his B.S. in Engineering from
Purdue University and his MBA from the University of Chicago.
John
E. Byom, Director,
was
appointed as director in January 2006. Mr.
Byom is
the former Chief Financial Officer of International Multifoods Corporation.
He
left the company in March 2005 after 26 years including four years as Vice
President Finance and Chief Financial Officer, from March 2000 to June 2004.
Most recently, after the sale of Multifoods to The J.M. Smucker Company in June
2004, Mr. Byom was President of Multifoods Foodservice and Bakery Products.
Prior to his time as Chief Financial Officer, Mr. Byom was President US
Manufacturing from July 1999 to March 2000, and Vice President Finance and
IT
for the North American Foods Division from 1993 to 1999. Prior to 1993 he held
various positions in finance and was an internal auditor for International
Multifoods Corporation from 1979 to 1981. Mr.
Byom
earned his B.A. in Accounting from Luther College. Mr.
Byom
is currently a director of MGP Ingredients Inc.
Gary
E. Costley Ph.D., Director,
has
served as a director since November 2004. Dr. Costley is currently
managing partner at C&G Capital and Management, a private investment
company, which he joined in July 2004. He previously served from 2001 to
June 2004 as Chairman and Chief Executive Officer of International
Multifoods Corporation and from 1997 to 2001 as its Chairman, President and
Chief Executive Officer. From 1995 to 1996, Dr. Costley served as Dean of
the Graduate School of Marketing
at Wake Forest University. Prior to that time, Dr. Costley spent 24 years
with the Kellogg Company where he held various positions of increasing
responsibility, including his most recent role as President of Kellogg North
America. Dr. Costley earned a BS in Animal Science and both an M.S. and
Ph.D. in Nutrition from Oregon State University. Dr. Costley is currently a
director of Principal Financial Group Inc., Accelrys, Inc. and Pharmacopeia
Drug
Discovery Inc.
David
A. Donnini,
Director,
has
served as a director since its incorporation in June 2004. Mr. Donnini is
currently a Principal of GTCR Golder Rauner, LLC, which he joined in 1991.
He
previously worked as an associate consultant with Bain & Company.
Mr. Donnini earned a B.A. in Economics summa cum laude, Phi Beta Kappa with
distinction, from Yale University and a MBA from Stanford University where
he
was the Robichek Finance Award recipient and an Arjay Miller Scholar.
Mr. Donnini is a director of various companies, including American
Sanitary, Inc., Cardinal Logistics Management, InfoHighway Communications
Corporation, Coinmach Service Corporation, Synagro Technologies Inc., Fairmount
Food Group, LLC and Syniverse Holdings Inc.
Ronald
Gordon,
Director,
was
appointed as director in May 2005. Mr. Gordon was most recently President and
Chief Operating Officer of Nice-Pak Products, Inc. from 2002 until his
retirement in 2005. Prior to serving at Nice-Pak, Mr. Gordon was Chief Executive
Officer for the North American operations of Beiersdorf, Inc. from 1997 through
2001. He also founded Gordon Investment Group in 1994 to finance and oversee
a
variety of start-up businesses. Earlier in his career, Mr. Gordon was the
President and Chief Executive Officer of Goody Products Inc. and held senior
positions at Playtex Family Products Corporation and Procter & Gamble. Mr.
Gordon earned a B.S. in Finance at The Wharton School of the University of
Pennysylvania and a MBA from Columbia University. Mr. Gordon is a director
of
Playtex Products, Inc., Oil-Dri Corporation of America and LaDove Inc.
Vincent
J. Hemmer,
Director,
has
served as a director since its incorporation in June 2004. Mr. Hemmer is
currently a Principal with GTCR Golder Rauner, LLC and has been with GTCR since
1996. Mr. Hemmer previously worked as a consultant with the Monitor Company
and an investment banker with Credit Suisse First Boston. He earned a B.S.
in
Economics, magna cum laude, and was a Benjamin Franklin Scholar at The Wharton
School of the University of Pennsylvania. Mr. Hemmer received his MBA from
Harvard University. Mr. Hemmer is currently a director of Fairmount Food
Group and Synagro Technologies.
Patrick
Lonergan,
Director,
was
appointed as director in May 2005. Mr. Lonergan is the co-founder of Numark
Laboratories, Inc. and has served as its President since January 1989. Prior
to
Numark, Mr. Lonergan was employed from 1959 to 1989 in various senior capacities
by Johnson & Johnson, including Vice President & General Manager. Mr.
Lonergan also served on the Board of Directors of Johnson & Johnson Products
Inc., and was Chairman
6
Raymond
P. Silcock,
Director,
was
appointed as director in January 2006. Since 2005, Mr. Silcock has been
providing consulting services to Blackstone and Morgan Stanley. From 1998 to
2005, Mr. Silcock served as Vice President and Chief Financial Officer of Cott
Corporation. Prior to being employed by the Cott Corporation, Mr. Silcock served
as Chief Financial Officer of Delimex Holdings, Inc. From 1979 to 1997, Mr.
Silcock was employed by Campbell Soup Company where he served in positions
of
increasing responsibility and became Vice President and Chief Financial Officer
of Campbell Soup Company’s bakery and confectionary division. Mr. Silcock earned
a MBA from the Wharton School of the University of Pennsylvania. Mr. Silcock
is
a Fellow of the Chartered Institute of Management Accountants (UK). Mr. Silcock
is currently a director of Bacardi Limited.
The
affirmative vote of a plurality of the votes cast in person or by proxy at
the
annual meeting of stockholders is necessary for the election of directors
(assuming a quorum of a majority of the outstanding shares of common stock
is
present).
Recommendation
of the Board
THE
BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS NAMED
ABOVE.
Additional
Director Not Standing for Reelection
Frank
Palantoni, Director,
As
stated previously, on June 23, 2006, the Board concluded Mr. Palantoni's
duties as Chief Executive Officer and President and determined not to
nominate him for reelection to the Board at the 2006 Annual Meeting of
Stockholders. Mr. Palantoni served as President and Chief Operating Officer
of
the Company from August 2005 and became Chief Executive Officer and President
of
the Company on April 1, 2006. Mr. Palantoni was appointed as director in January
2006. From 1998 to 2005, Mr. Palantoni was employed by Novartis Pharmaceuticals
AG where he served in positions of increasing responsibility which included
being the Global President and Chief Executive Officer of the Gerber Products
Company and Chief Executive Officer of Novartis Consumer Health, North America.
From 1987 to 1998, Mr. Palantoni held positions of increasing responsibility
at
Groupe Danone which included being the Vice President of Marketing for the
U.S.
based Dannon Company, General Manager of International Franchise Operations,
President and Chief Executive Officer of Griffins Foods in Australia and New
Zealand, and General Manager of the New Ventures Division for Groupe Danone
in
North America. Mr. Palantoni’s early professional experiences include marketing
and management positions with Procter & Gamble in household products and
Nabisco in various food categories. Mr. Palantoni earned his B.S. from Tufts
University and his MBA from Columbia University. Mr. Palantoni is currently
a
director of Lexicon Genetics Inc. and an independent advisor to Camelot Equity
Partners, an investment firm co-founded by Mr. Palantoni.
GOVERNANCE
OF THE COMPANY
Corporate
Governance
Our
Board
has a strong commitment to sound and effective corporate governance practices.
The Company’s management and our Board has reviewed and continues to monitor our
corporate governance practices in light of Delaware corporate law, United States
federal securities laws and the listing requirements of the NYSE. Based on
that
review, the Board maintains codes of ethics and conduct, corporate governance
guidelines, committee charters, complaint procedures for accounting and auditing
matters and an Audit Committee pre-approval policy.
Corporate
Governance Guidelines and Documents
The
Code
of Conduct Policy, Code of Ethics for Senior Financial Employees, the Complaint
Procedures for Accounting and Auditing Matters, the Corporate Governance
Guidelines, the Audit Committee Pre-Approval Policy, and the Charters of our
Audit, Compensation and Nominating and Corporate Governance Committees were
adopted by the Company for the purpose of transparency in our governance
practices as well as promoting honest and ethical conduct, promoting full,
fair,
accurate, timely and understandable disclosure in periodic reports required
to
be filed by the Company, and promoting compliance with all applicable rules
and
regulations that apply to the Company and its officers and directors. The
Company’s Code of Conduct Policy, Code of Ethics for Senior Financial Employees,
7
Board
of Directors
The
Board
held ten meetings during the fiscal year ended March 31, 2006. The Board
currently has three standing committees: the Audit Committee, the Compensation
Committee and the Nominating and Corporate Governance Committee. Each director
is expected to attend each meeting of the Board and those committees on which
he
serves. In addition to meetings, the Board and its committees review and act
upon matters through written consent procedures. Each of our directors attended
75% or more of the total number of meetings of the Board and those committees
on
which he served during the last fiscal year. The Board has a policy of expecting
members of the Board to attend the annual meetings of the stockholders. Six
out
of seven members of our Board (as it was constituted on July 29, 2005) attended
the Annual Meeting of Stockholders held on July 29, 2005.
With
regard to non-management and executive sessions of the Board, the Board had
utilized an informal rotation system for the selection of a Lead Director to
preside over such meetings. However, on May 9, 2006, the Board decided to
appoint Mr. Gordon as the Lead Director to preside over non-management and
executive sessions of the Board.
Director
Independence
In
accordance with the NYSE’s listing requirements, the Board has evaluated each of
its directors’ independence from the Company and its management based on the
NYSE’s definition of “independence.” In its review of each director’s
independence, the Board reviewed whether any transactions or relationships
exist
currently or, during the past three years existed, between each director and
the
Company and its subsidiaries, affiliates, equity investors or independent
auditors. The Board also examined whether there were any transactions or
relationships between each director and members of the senior management of
the
Company or their affiliates. Based on the Board’s review and the NYSE’s
definition of “independence,” the Board has determined that a majority of the
Board is “independent.” The independent directors are Messrs. Buell, Byom,
Costley, Gordon, Lonergan and Silcock. The Board has also determined that each
of the members of our Audit Committee is “independent” for purposes of Rule
10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
Stockholder
Communications with Directors
Stockholders
may send communications to the Board or any committee thereof by writing to
the
Board or any such committee at Prestige Brands Holdings, Inc., 90 North
Broadway, Irvington, New York 10533, Attention: Secretary. The Secretary will
distribute all stockholder communications to the intended recipients and/or
distribute to the entire Board, as appropriate.
In
addition, stockholders may also contact the Lead Director or any other
non-management director by writing to the Lead Director c/o Prestige Brands
Holdings, Inc., 90 North Broadway, Irvington, New York 10533, Attention:
Secretary. The Secretary will forward all stockholder communications to the
Lead
Director who will review and distribute all stockholder communications to the
intended recipients and/or distribute to the entire Board, as
appropriate.
Complaint
Procedures
Complaints
and concerns about accounting, internal accounting controls or auditing or
related matters pertaining to the Company may be submitted by writing to the
Chairman of the Audit Committee c/o Prestige Brands Holdings, Inc., 90 North
Broadway, Irvington, New York 10533. Complaints may be submitted on a
confidential and anonymous basis by sending them in a sealed envelope marked
“Confidential.” Alternatively, complaints and concerns about accounting,
internal accounting controls or auditing or related matters pertaining to
8
Audit
Committee
Our
Audit
Committee is comprised of Messrs. Buell (Chairman), Byom, Gordon and Silcock,
all of whom are “independent,” as defined in the NYSE listing standards and Rule
10A-3 under the Exchange Act. Our Board of Directors has determined that Mr.
Byom is an “audit committee financial expert” as such term is defined in the
rules of the SEC. The Audit Committee is responsible for, among other things:
(1) the appointment, compensation, retention and oversight of the work of the
independent registered public accounting firm engaged for the purpose of
preparing and issuing an audit report on the Company’s annual financial
statements for the fiscal year ending March 31, 2007; (2) reviewing the
independence of the independent registered public accounting firm and taking,
or
recommending that our Board take, appropriate action to oversee their
independence; (3) approving, in advance, all audit and non-audit services to
be
performed by the independent registered public accounting firm; (4) overseeing
our accounting and financial reporting processes and the audits of our financial
statements; (5) establishing procedures for the receipt, retention and treatment
of complaints received by us regarding accounting, internal control or auditing
matters and the confidential, anonymous submission by our employees of concerns
regarding questionable accounting or auditing matters; (6) engaging independent
counsel and other advisers as the Audit Committee deems necessary; (7)
determining compensation of the independent registered public accounting firm,
compensation of advisors hired by the Audit Committee and ordinary
administrative expenses; (8) reviewing and assessing the adequacy of the Audit
Committee’s formal written charter on an annual basis; and (9) handling such
other matters that are specifically delegated to the Audit Committee by our
Board from time to time. Our Board adopted a written charter for our Audit
Committee, which is available to our stockholders on our web site at
www.prestigebrandsinc.com
or is
also available in print to any stockholder who makes such a request to the
Company’s Secretary. A copy of the Audit Committee’s written charter was also
attached to our Proxy Statement for the Annual Meeting of Stockholders held
on
July 29, 2005. PricewaterhouseCoopers LLP currently serves as our independent
registered public accounting firm. The Audit Committee met 11 times during
the
fiscal year ended March 31, 2006.
Compensation
Committee
Our
Compensation Committee is comprised of Messrs. Buell, Byom, Costley and Lonergan
(Chairman), all of whom are “independent,” as defined in the NYSE listing
standards. The Compensation Committee is responsible for, among other things:
(1) determining, or recommending to our Board for determination, the
compensation and benefits of all of our executive officers and independent
non-employee directors; (2) reviewing our compensation and benefit plans to
ensure that they meet corporate objectives; (3) administering our stock plans
and other incentive compensation plans; and (4) such other matters that are
specifically delegated to the Compensation Committee by our Board from time
to
time. Our Board adopted a written charter for our Compensation Committee, which
is available to our stockholders on our web site at www.prestigebrandsinc.com
or is
also available in print to any stockholder who makes such a request to the
Company’s Secretary. The Compensation Committee met 4 times during the fiscal
year ended March 31, 2006.
Nominating
and Corporate Governance Committee
Our
Nominating and Corporate Governance Committee is comprised of Messrs. Costley,
Gordon (Chairman), Lonergan and Silcock, all of whom are “independent,” as
defined in the NYSE listing standards. The Nominating and Corporate Governance
Committee is responsible for, among other things: (1) selecting, or recommending
to our Board for selection, nominees for election to our Board; (2) making
recommendations to our Board regarding the size and composition of the Board,
committee structure and makeup and retirement procedures affecting Board
members; (3) monitoring our performance in meeting our obligations of fairness
in internal and external matters and our principles of corporate governance;
and
(4) such other matters that are specifically delegated to the Nominating and
Corporate Governance Committee by our Board from time to time. Our Board adopted
a written charter for our Nominating and Corporate Governance Committee, which
is available to our stockholders on our web site at www.prestigebrandsinc.com
or is
also available in print to any stockholder who makes such a request to the
Company’s Secretary. The Nominating and Corporate Governance Committee met 2
times during the fiscal year ended March 31, 2006.
9
The
Nominating and Corporate Governance Committee will consider as potential
nominees individuals properly recommended by stockholders. Recommendations
concerning individuals proposed for consideration by the Nominating and
Corporate Governance Committee should be addressed to Prestige Brands Holdings,
Inc., 90 North Broadway, Irvington, New York 10533, Attention:
Secretary.
Each
recommendation should include a personal biography of the suggested nominee,
an
indication of the background or experience that qualifies the person for
consideration, and a statement that the person has agreed to serve if nominated
and elected. Stockholders who themselves wish to effectively nominate a person
for election to the Board, as contrasted with recommending a potential nominee
to the Nominating and Corporate Governance Committee for its consideration,
are
required to comply with the advance notice and other requirements set forth
in
the Company’s Amended and Restated Bylaws, as amended (the “Amended and Restated
Bylaws”), and any applicable requirements of the Exchange Act.
The
Nominating and Corporate Governance Committee identifies potential candidates
for nomination as directors based on recommendations by our executive officers
or directors. Generally, candidates have significant industry experience and
have been known to one or more of the Board members. As noted above, the
Nominating and Corporate Governance Committee considers properly submitted
stockholder recommendations for candidates for the Board. In evaluating
candidates for nomination, the Nominating and Corporate Governance Committee
will consider the factors it believes to be appropriate, which would generally
include the candidate’s personal and professional integrity, business judgment,
relevant experience and skills, and potential to be an effective director in
conjunction with the rest of the Board in collectively serving the long-term
interests of our stockholders. The Nominating and Corporate Governance Committee
does not evaluate potential nominees for director differently based on whether
they are recommended to the Nominating and Corporate Governance Committee by
officers or directors of the Company or by a stockholder.
Strategic
Planning Committee
On
June
23, 2006, the Board created the Strategic Planning Committee (effective as
of
May 18, 2006) which will assist and advise the Board and management on mergers,
acquisitions, strategic planning and other related activities. The Strategic
Planning Committee, which is initially comprised of Messrs. Silcock (Chairman),
Hemmer, Lonergan and Gordon, is empowered to adopt a charter, form
subcommittees, engage consultants and advisors and to otherwise act as directed
by the Board. The Strategic Planning Committee is preparing a charter for review
and approval by the Board.
Director
Compensation
Directors
who are not our employees or who are not otherwise affiliated with us or our
principal stockholder, GTCR Golder Rauner, L.L.C. and its affiliates
(collectively, “GTCR”), each receive a one-time grant of our common stock equal
to $20,000 awarded as of the date of the first annual meeting of stockholders
held after such director begins service on the Board. In addition, each director
referenced in the immediately preceding sentence receives a $25,000 annual
retainer fee, an annual $50,000 grant of restricted stock with a two-year
vesting period, $1,500 for attendance at each Board meeting held in person,
$1,000 for attendance at each Committee meeting held in person, $750 for each
Board and Committee meeting held by telephone, and reimbursement for
out-of-pocket expenses incurred in connection with Board and/or Committee
participation. In addition to the foregoing, effective as of August 1, 2006,
the
Chairman of the Audit Committee, the Chairman of the Compensation Committee,
the
Chairman of the Nominating and Corporate Governance Committee (if not the Lead
Director), the Chairman of the Strategic Planning Committee and the Lead
Director will receive an annual retainer fee of $7,500, $5,000, $5,000, $5,000
and $7,500, respectively.
Involvement
in Certain Legal Proceedings
To
the
knowledge of the Company, no director, executive officer, or person nominated
to
become a director or executive officer of the Company has within the last five
years: (i) had a petition under Federal bankruptcy laws or any State insolvency
law filed by or against, or a receiver, fiscal agent or similar officer
appointed by a court for, any business or property of such person, or any
partnership in which he was a general partner at or within two years before
the
time of such filing, or any corporation or business association of which he
was
an executive officer at or within two years before the time of such filing;
(ii)
been convicted in a criminal proceeding or is currently subject to a pending
criminal proceeding (excluding traffic violations or other minor offenses);
(iii) been subject to any order,
10
The
Company is not aware of any material proceedings to which any director,
executive officer or affiliate of the Company, any owner of record or beneficial
owner of more than 5% of any class of the Company’s voting securities, or any
associate of any such director, officer, affiliate of the Company or security
holder, is a party adverse to the Company or any of its subsidiaries or has
a
material interest adverse to the Company or any of its
subsidiaries.
11
PROPOSAL
NO. 2 - RATIFICATION OF APPOINTMENT OF THE INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The
Audit
Committee has reappointed PricewaterhouseCoopers LLP as the independent
registered public accounting firm to audit the Company’s financial statements
for the fiscal year ending March 31, 2007. In making the decision to
reappoint the independent registered public accounting firm, the Audit Committee
has considered whether the provision of the non-audit services rendered by
PricewaterhouseCoopers LLP is incompatible with maintaining that firm’s
independence.
Stockholder ratification
of the selection of PricewaterhouseCoopers LLP as our independent registered
public accounting firm is not required by our Amended and Restated
Bylaws or other applicable legal requirement. However, the Board is submitting
the selection of PricewaterhouseCoopers LLP to the stockholders for ratification
as a matter of good corporate practice. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the annual meeting
of
stockholders, will have the opportunity to make a statement if they desire
to do
so and are expected to be available to respond to appropriate questions. In
the
event the stockholders do not ratify the appointment of PricewaterhouseCoopers
LLP, the appointment will be reconsidered by the Audit Committee and the Board
but in their discretion may still direct the appointment of
PricewaterhouseCoopers LLP.
Approval
of the proposal to ratify the appointment of PricewaterhouseCoopers LLP requires
the affirmative vote of a majority of the shares present and entitled to vote
at
the annual meeting of stockholders (assuming a quorum of a majority of the
outstanding shares of common stock is present).
Principal
Accountant Fees and Services
For
the
fiscal years ended March 31, 2006 and 2005, the following fees were billed
by
PricewaterhouseCoopers LLP to the Company (or its predecessors) for the
indicated services:
|
2006
|
2005
|
||
|
Audit
Fees
|
$826,000
|
$300,200
|
|
|
Audit-Related
Fees
|
--
|
--
|
|
|
Tax
Fees
|
293,624
|
139,631
|
|
|
All
Other Fees
|
99,850
|
1,500,000
|
|
|
Total
Independent Accountant’s Fees
|
$1,219,474
|
$1,939,831
|
Audit
Fees.
Consisted of fees billed for professional services rendered for (i) the audit
of
our consolidated financial statements and internal control over financial
reporting; (ii) the review of the interim consolidated financial statements
included in quarterly reports; (iii) the restatement of prior period financial
statements; and (iv) the services that are normally provided by
PricewaterhouseCoopers LLP in connection with statutory and regulatory filings
or engagements.
Audit-Related
Fees.
Consisted of fees billed for services that are reasonably related to the
performance of the audit or review of our consolidated financial statements
and
are not reported under “Audit Fees.” These services included employee benefit
plan audits and attest services that were not required by statute or
regulation.
Tax
Fees.
Consisted of fees billed for professional services for tax compliance, tax
advice and tax planning. These services included assistance regarding federal,
state and international tax compliance, customs and duties and international
tax
planning.
All
Other Fees.
Consisted of fees for products and services other than the services reported
above. In the fiscal year ended March 31, 2005, these services included due
diligence and related consultations in connection with: (i) the acquisition
of
Vetco, Inc.; (ii) the Registration Statement on Form S-4 with respect to the
exchange offer for our 9¼% senior subordinated notes; (iii) the Registration
Statement on Form S-1 with respect to our previously contemplated income deposit
security offering; and (iv) the Registration Statement on Form S-1 with respect
to our initial public offering. In the fiscal year ended March 31, 2006, these
services included due diligence services in connection with the acquisition
of
Dental Concepts, LLC.
12
Auditor
Independence
The
Audit
Committee has considered the non-audit services provided by
PricewaterhouseCoopers LLP and determined that the provision of such services
had no effect on PricewaterhouseCoopers LLP’s independence from the
Company.
Policy
on Audit Committee Pre-Approval and Permissible Non-Audit Services of the
Independent Registered Public Accounting Firm
The
Audit
Committee’s policy is to pre-approve all audit and permissible non-audit
services provided by the independent registered public accounting firm. These
services may include audit services, audit-related services, tax services and
other services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent registered public
accounting firm and management are required to periodically report to the Audit
Committee regarding the extent of services provided by the independent
registered public accounting firm in accordance with this pre-approval, and
the
fees for the services performed to date. The Audit Committee may also
pre-approve particular services on a case-by-case basis. Since January 2005,
all
audit and non-audit services were approved in accordance with the Audit
Committee’s pre-approval policies. A copy of the Audit Committee’s pre-approval
policy is available in print to any stockholder who makes such a request to
the
Company’s Secretary.
Recommendation
of the Board
THE
BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL
YEAR ENDING MARCH 31, 2007.
13
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except
as
otherwise noted, the following table sets forth certain information with respect
to the beneficial ownership of our common stock as of July 6, 2006 by: (1)
each
of the executive officers named in the Summary Compensation Table; (2) each
of
our directors; (3) all directors and executive officers as a group; and (4)
each
person or entity known to us to be the beneficial owner of more than five
percent of our outstanding shares of common stock. All information with respect
to beneficial ownership of a director and executive officer named in the Summary
Compensation Table has been furnished to us by the respective director and
executive officer. All information with respect to beneficial ownership of
a
five percent beneficial owner of our common stock was obtained from such
beneficial owner’s Schedule 13G filed with the SEC or the Company’s investor
relations database, as applicable. Unless otherwise indicated, (i) each person
or entity named below has sole voting and investment power with respect to
the
number of shares set forth opposite his or its name; and (ii) the address of
each person named in the table below is c/o Prestige Brands Holdings, Inc.,
90
North Broadway, Irvington, New York 10533.
|
Shares
Beneficially
Owned
|
|||
|
Name
of Beneficial Owner
|
Number
(1)
|
Percentage
(2)
|
|
|
5%
Stockholders:
|
|||
|
GTCR
Funds (3)
|
14,973,785
|
29.9%
|
|
|
FMR
Corp. (4)
|
5,004,089
|
10.0%
|
|
|
The
Bank of New York Co., Inc. (5)
|
3,009,135
|
6.0%
|
|
|
Scopia
Management Inc. (6)
|
2,612,979
|
5.2%
|
|
|
Directors
and Named Executive Officers:
|
|||
|
Peter
C. Mann (7)
|
762,950
|
1.5%
|
|
|
Frank
Palantoni (8)
|
2,390
|
*
|
|
|
Peter
J. Anderson (9)
|
234,885
|
*
|
|
|
Gerard
F. Butler (10)
|
170,006
|
*
|
|
|
Charles
N. Jolly
|
2,700
|
*
|
|
|
L.
Dick Buell (11)
|
4,000
|
*
|
|
|
John
E. Byom
|
--
|
--
|
|
|
Gary
E. Costley (12)
|
4,000
|
*
|
|
|
David
A. Donnini (13)
|
14,973,785
|
29.9%
|
|
|
Ronald
Gordon (14)
|
14,000
|
*
|
|
|
Vincent
J. Hemmer (13)
|
14,973,785
|
29.9%
|
|
|
Patrick
Lonergan (15)
|
5,200
|
*
|
|
|
Raymond
P. Silcock
|
--
|
--
|
|
|
All
directors and executive officers as a group (13 persons)
|
16,173,916
|
32.3%
|
|
__________________
*
Denotes
less than one percent.
| (1) |
As
used in this table, a beneficial owner of a security includes any
person
who, directly or indirectly, through contract, arrangement, understanding,
relationship or otherwise has or shares (a) the power to vote, or
direct
the voting of, such security; or (b) investment power which includes
the
power to dispose, or to direct the disposition of, such security.
In
addition, a person is deemed to be the beneficial owner of a security
if
that person has the right to acquire beneficial ownership of such
security
within 60 days of July 6, 2006.
|
| (2) |
Percent
is based on 50,039,071 shares of our common stock outstanding as
of July
6, 2006.
|
| (3) |
Amounts
shown reflect the aggregate interests held by GTCR Fund VIII, L.P.
(‘‘Fund
VIII’’), GTCR Fund VIII/B, L.P. (‘‘Fund VIII/B’’), GTCR Co-Invest II, L.P.
(‘‘Co-Invest II’’) and GTCR Capital
Partners, L.P. (‘‘Capital Partners’’) (collectively, the ‘‘GTCR Funds’’).
The address of each entity comprising the GTCR Funds is c/o GTCR
Golder
Rauner, L.L.C., 6100 Sears Tower, Chicago, Illinois 60606. The information
disclosed herein was obtained from the Schedule 13G filed with the
SEC by
the GTCR Funds and certain other affiliates on February 10,
2006.
|
| (4) |
The
address for FMR Corp. is 82 Devonshire Street, Boston, Massachusetts
02109. The information disclosed herein was obtained from Amendment
No. 1
to Schedule 13G delivered to the Company by FMR
Corp.
|
14
| (5) |
The
Bank of New York Co., Inc. and The Bank of New York have shared voting
and
dispositive power with respect to the number of shares disclosed
herein.
The address for The Bank of New York Co., Inc. and The Bank of New
York is
One Wall Street, New York, New York 10004. The information disclosed
herein was obtained from the Schedule 13G filed with the SEC by The
Bank
of New York Co., Inc. and The Bank of New York on February 15, 2006.
|
| (6) |
The
address for Scopia Management Inc. is 450 Seventh Avenue, 43rd
Floor, New York, New York 10123. The information disclosed herein
was
obtained from an investor relations database utilized by the
Company.
|
| (7) |
Includes
23,127 shares of our restricted common stock that vest during the
period
from July 7, 2006 through September 4,
2006.
|
| (8) |
Mr.
Palantoni concluded his duties as Chief Executive Officer and President
on
June 23, 2006. Mr. Palantoni will continue as a director through
the date
of the 2006 Annual Meeting of Stockholders, at which time his term
as a
director shall end.
|
| (9) |
Includes
8,457 shares of our restricted common stock that vest during the
period
from July 7, 2006 through September 4,
2006.
|
| (10) |
Includes
8,070 shares of our restricted common stock that vest during the
period
from July 7, 2006 through September 4,
2006.
|
| (11) |
Includes
2,222 shares of our restricted common stock that vest on July 29,
2006.
|
| (12) |
Includes
2,222 shares of our restricted common stock that vest on July 29,
2006.
|
| (13) |
Represents
shares held by the GTCR Funds as described in note (3) above. Messrs.
Donnini and Hemmer are each principals and/or members of GTCR Golder
Rauner, L.L.C. (‘‘GTCR’’) and GTCR Golder Rauner II, L.L.C. (‘‘GTCR II’’).
GTCR is the general partner of GTCR Partners VI, L.P., the general
partner
of GTCR Mezzanine Partners, L.P., the general partner of Capital
Partners.
GTCR II is the general partner of GTCR Partners VIII, L.P. (‘‘Partners
VIII’’) and Co-Invest II. Partners VIII is the general partner of Fund
VIII and Fund VIII/B. Accordingly Messrs. Donnini and Hemmer may
be deemed
to beneficially own the shares owned by the GTCR Funds. Each of Messrs.
Donnini and Hemmer disclaims beneficial ownership of any such shares
in
which he does not have a pecuniary interest. The address of each
of
Messrs. Donnini and Hemmer is c/o GTCR Golder Rauner, L.L.C., 6100
Sears
Tower, Chicago, Illinois 60606.
|
| (14) |
Includes
2,222 shares of our restricted common stock that vest on July 29,
2006.
|
| (15) |
Includes
2,222 shares of our restricted common stock that vest on July 29,
2006.
|
15
SECURITIES
AUTHORIZED FOR ISSUANCE
UNDER
EQUITY COMPENSATION PLANS
Equity
Compensation Plan Information
The
following table sets forth certain information regarding our 2005 Long-Term
Equity Incentive Plan (the “2005 Incentive Plan”) as at March 31, 2006.
|
Plan
Category
|
Number
of
securities
to be
issued
upon
exercise
of
outstanding
options,
warrants
and
rights
(a)
|
Weighted-
average
exercise
price
of
outstanding
options,
warrants
and
rights
(b)
|
|
Number
of securities remaining
available
for future issuance
under
equity compensation plans
(excluding
securities reflected in
column
(a))
(c)
|
||
|
Equity
compensation plans approved by security holders
|
61,776
(1)
|
$12.95
|
4,740,211
|
|||
|
Equity
compensation plans not approved by security holders
|
-
|
-
|
-
|
|||
|
Total
|
61,776
(1)
|
$12.95
|
4,740,211
|
| (1) |
On
June 23, 2006, the options to purchase 61,776 shares of the Company’s
common stock were forfeited by Mr. Palantoni when he concluded his
duties
as Chief Executive Officer and President of the
Company.
|
EXECUTIVE
COMPENSATION AND OTHER MATTERS
General
Our
executive officers are as follows:
|
Name
|
Age
|
Position
|
||||
|
Peter
C. Mann
|
64
|
Chairman
of the Board, Chief Executive Officer and President
|
||||
|
Peter
J. Anderson
|
51
|
Chief
Financial Officer
|
||||
|
Gerard
F. Butler
|
57
|
Chief
Sales Officer
|
||||
|
Michael
A. Fink
|
61
|
Senior
Vice President - Marketing, OTC/Personal Care
|
||||
|
Charles
N. Jolly
|
63
|
General
Counsel and Secretary
|
||||
|
Eric
M. Millar
|
62
|
Senior
Vice President - Operations
|
||||
|
Charles
Schrank
|
56
|
Senior
Vice President - Marketing,
Household
|
||||
Biographical
information for Mr. Mann is set forth above under “Proposal No. 1 - Election of
Directors.”
Peter
J. Anderson,
Chief Financial Officer,
has
served as Chief Financial Officer of the Company since its incorporation in
June
2004 and previously served as Chief Financial Officer of Medtech since joining
in April 2001. Mr. Anderson is a senior financial executive with extensive
experience in the brand name consumer goods and over-the-counter pharmaceutical
industries, both domestically and internationally. Prior to joining Medtech,
Mr.
Anderson served as the Chief Financial Officer for Block Drug Company, Inc.
from
April, 1999 to March 2001, the Coach and Aris/Isotoner divisions of the Sara
Lee
Corporation from June 1996 to April 1999 and Lancaster Group USA, a division
of
Benckiser from March 1994 to June 1996. Other prior positions include Vice
President of Finance of the
16
Gerard
F. Butler,
Chief Sales Officer,
has
served as Chief Sales Officer of the Company since its incorporation in June
2004 and previously served as the Chief Sales Officer of Medtech since joining
in September 2001. Mr. Butler is a senior management executive with
over 30 years of consumer products experience. Prior to joining Medtech,
Mr. Butler served from April 1983 to April 2001 as the Vice President of
Consumer Products Sales for Block Drug Company, Inc. where, at the age of
34, he was named their youngest ever Vice President. In the latter part of
his
26 year career at Block Drug Company, Inc., Mr. Butler reported
directly to the president of Block Drug Company, Inc. and provided sales,
marketing and strategic leadership for all of Block Drug Company, Inc.’s
consumer brands. Previously, he held sales and sales management positions with
Procter & Gamble and Purex Corporation. Mr. Butler has a B.S. and
an MBA from Manhattan College.
Michael
A. Fink,
Senior Vice President - Marketing, OTC/Personal Care
has
served as Senior Vice President - Marketing, OTC/Personal Care of the Company
since its incorporation in June 2004 and previously served as Senior Vice
President - Marketing, OTC/Personal Care of Medtech since joining Medtech in
February 2002. Mr. Fink is an executive with extensive experience in
marketing over-the-counter personal care and consumer products. Prior to joining
Medtech, Mr. Fink served as Vice President & General Manager
Business & Marketing Development for Block Drug Company, Inc. from
March 1998 to May 2001 where he reported directly to the President of Block
Drug
Company. Mr. Fink left Block Drug Company in May 2001 in connection
with its sale to GlaxoSmithKline and worked as an independent consultant until
joining Medtech in February 2002. In his 25 year career at Block Drug
Company, Mr. Fink held various executive positions including Vice
President—General Manager of the Household Products Division, where he oversaw
such brands as 2000 Flushes, X-14, Carpet Fresh and Lava. Mr. Fink is a
graduate of American University.
Charles
N. Jolly,
General Counsel and Secretary,
has
served as General Counsel and Secretary since August 2005. Prior to joining
the
Company, Mr. Jolly was Of Counsel in the law firm Baker, Donelson, Bearman,
Caldwell and Berkowitz, PC from January 1998 to August 2005. Mr. Jolly also
served as Vice President and General Counsel of Chattem, Inc. from January
1977
to January 1994. Mr. Jolly has also served in the legal departments of Miles
Laboratories, Inc. and Swift & Company. Mr. Jolly received a B.A. from Holy
Cross College and a J.D. from George Washington University. Mr. Jolly is
licensed to practice law in the District of Columbia and Tennessee.
Eric
M. Millar,
Senior Vice President - Operations,
has
served as Senior Vice President - Operations of the Company since its
incorporation in June 2004. Mr. Millar was employed by The Spic and Span
Company, one of the Company’s subsidiaries, from December 2001 through June
2004. From January 2000 to November 2001, Mr. Millar was the
owner and director of Point Management Services, a business consultancy based
in
the United Kingdom, and carried out manufacturing and logistics assignments
for
both UK and USA based companies.
Charles
Schrank, Senior
Vice President - Marketing, Household,
has
served as Senior Vice President - Marketing, Household of the Company since
its
incorporation in June 2004 and previously served as a Senior Vice President
-
Marketing, Household of Medtech since joining Medtech in January 2001.
Prior to joining Medtech, Mr. Schrank served as Vice President of Marketing
for Block Drug Company, Inc. from August 1994 to January 2001. Prior
to that time, Mr. Schrank held various marketing positions of increasing
responsibility after joining Block Drug Company in 1978.
17
The
following summary compensation table sets forth information concerning the
annual and long-term compensation earned for the periods presented below by
our
Chief Executive Officer and our four most highly compensated executive officers
other than our Chief Executive Officer who were serving as executive officers
as
of March 31, 2006 and whose annual salary and bonus during the fiscal year
ended
March 31, 2006 exceeded $100,000 (collectively, the “Named Executive
Officers”).
Summary
Compensation Table
|
Long-Term
Compensation
Awards
|
|||||||||||||
|
Name
and Principal
Position
|
Fiscal
Year
|
Annual
Salary
($)
|
Compensation
Bonus
(1)
($)
|
Restricted
Stock
Awards
(2)
($)
|
|
Securities
Underlying
Options
(#)
|
All
Other
Compensation
(3)
($)
|
||||||
|
Peter
C. Mann
|
2006
|
442,000
|
0
|
-
|
|
-
|
51,745
(4)
|
||||||
|
Chairman
of the Board and Chief Executive Officer
|
2005
2004
|
425,000
415,265
|
212,500
2,506,701
|
(5)
|
-
-
|
|
-
-
|
|
12,300
12,000
|
||||
|
Frank
Palantoni (6)
|
2006
|
220,096
|
140,000
|
400,000
|
(7)
|
61,776
|
(8)
|
-
|
|||||
|
President
and Chief Operating Officer
|
|||||||||||||
|
|
|||||||||||||
|
Peter
J. Anderson
|
2006
|
309,000
|
0
|
-
|
|
-
|
12,600
|
||||||
|
Chief
Financial Officer
|
2005
2004
|
297,000
295,962
|
118,800
237,602
|
(9)
|
-
-
|
|
-
-
|
|
12,300
12,000
|
||||
|
Gerard
F. Butler
|
2006
|
236,000
|
0
|
-
|
|
-
|
|
12,600
|
|||||
|
Chief
Sales Officer
|
2005
|
227,000
|
90,800
|
-
|
|
-
|
|
12,300
|
|||||
|
2004
|
218,000
|
169,363
|
(10)
|
-
|
|
-
|
|
12,000
|
|||||
|
Charles
N. Jolly (11)
|
2006
|
215,000
|
0
|
400,000
|
(12)
|
-
|
|
-
|
|||||
|
General
Counsel and Secretary
|
|||||||||||||
|
(1)
|
Bonus
payments for any given fiscal year are paid promptly after completion
of
the audit for such fiscal year.
|
|
(2)
|
As
of March 31, 2006, each of Messrs. Palantoni and Jolly owned 30,888
and
32,468 shares of restricted common stock, respectively, which vest
based
on certain earnings per share and revenue targets set by the Compensation
Committee. The value of the restricted common stock owned by each
of
Messrs. Palantoni and Jolly as of March 31, 2006 was $375,906.96
and
$395,135.56, and were calculated using the closing price of our common
stock on March 31, 2006 which was $12.17. No dividends, to the extent
declared and paid on our unrestricted common stock, will be paid
on our
unvested restricted common stock.
|
|
(3)
|
Consists
of matching payments under our 401(k) plan. Payments are earned during
the
fiscal year reported and paid into the 401(k) plan promptly after
completion of the audit for such fiscal
year.
|
18
|
(4)
|
Includes
the payment by the Company of $39,145 to Mr. Mann’s legal counsel on
behalf of Mr. Mann in connection with the negotiation and execution
of Mr.
Mann’s Senior Management Agreement dated as of March 21, 2006.
|
|
(5)
|
Includes
a bonus of $2,251,663 paid in connection with the acquisition of
Medtech
and bonuses of $100,063 and $154,975 related to the performance of
The
Spic and Span Company (“Spic and Span”) and Medtech, respectively.
|
|
(6)
|
Mr.
Palantoni joined the Company in August 2005 and concluded his duties
as
Chief Executive Officer and President on June 23, 2006. Mr. Palantoni
will
continue as a director through the date of the 2006 Annual Meeting
of
Stockholders, at which time his term as a director shall
end.
|
|
(7)
|
Represents
the value of a restricted stock award granted on August 4, 2005 pursuant
to the Company’s 2005 Incentive Plan. The number of shares issued pursuant
to the August 4, 2005 restricted stock award was calculated using
the
closing stock price on August 4, 2005 which was $12.95, as quoted
on the
NYSE. 30,888 shares of restricted stock were granted to Mr. Palantoni
on
August 4, 2005 which vest based on certain earnings per share and
revenue
targets established by the Compensation Committee. On June 23, 2006,
all
of the shares of the restricted common stock of the Company held
by Mr.
Palantoni were forfeited by him when he concluded his duties as Chief
Executive Officer and President of the
Company.
|
|
(8)
|
On
June 23, 2006, the options to purchase 61,776 shares of the Company’s
common stock were forfeited by Mr. Palantoni when he concluded his
duties
as Chief Executive Officer and President of the
Company.
|
|
(9)
|
Includes
a bonus of $123,852 paid in connection with the acquisition of Medtech
and
bonuses of $28,250 and $85,500 related to the performance of Spic
and Span
and Medtech, respectively.
|
|
(10)
|
Includes
a bonus of $82,363 paid in connection with the acquisition of Medtech
and
bonuses of $21,600 and $65,400 related to the performance of Spic
and Span
and Medtech, respectively.
|
|
(11)
|
Mr.
Jolly was appointed General Counsel and Secretary of the Company
on August
1, 2005.
|
|
(12)
|
Represents
the value of a restricted stock award granted on October 1, 2005
pursuant
to the Company’s 2005 Incentive Plan. The number of shares issued pursuant
to the October 1, 2005 restricted stock award was calculated using
the
closing stock price on September 30, 2005 which was $12.32, as quoted
on
the NYSE. 32,468 shares of restricted stock were granted to Mr. Jolly
on
October 1, 2005 which vest based on certain earnings per share and
revenue
targets established by the Compensation
Committee.
|
Options
Granted in Fiscal 2006
We
granted the following options to our Named Executive Officers during the fiscal
year ended March 31, 2006.
|
Individual
Grants
|
Potential
Realizable
Value
at Assumed
Annual
Rates of Stock
Price
Appreciation for
Option
Term
|
|||||||||||
|
Name
|
Number
of Securities Underlying
Options
Granted
(#)
|
Percent
of
Total
Options
Granted
to
Employees
in
Fiscal
Year
|
Exercise
or
Base
Price
($/Sh)
|
Expiration
Date
|
||||||||
|
5%
($)
|
10%
($)
|
|||||||||||
|
Frank
Palantoni
|
61,776
(1)
|
100%
|
$12.95
|
8/3/2013
|
381,964
|
914,870
|
||||||
|
(1)
|
The
options vest in five equal annual installments beginning on August
4,
2006. As of June 23, 2006, Mr. Palantoni’s options were forfeited when he
concluded his duties as Chief Executive Officer and President of
the
Company.
|
19
Aggregated
Option Exercises in Fiscal 2006 and Fiscal Year End Option
Values
The
following table contains certain information regarding stock options exercised
during the fiscal year ended March 31, 2006 and options to purchase our common
stock held as of March 31, 2006, by each of the Named Executive Officers. The
stock options listed below were granted without tandem stock appreciation
rights. As of March 31, 2006, we had no freestanding stock
appreciation rights outstanding.
|
Shares
|
Number
of Securities Underlying Unexercised Options at 3/31/06
(#)
|
Value
of Unexercised
In-the-Money
Options at 3/31/06 (1)
|
||||||||||
|
Name
|
Acquired
On
Exercise (#)
|
Value
Realized
($)
|
Exercisable
|
Unexercisable
|
Exercisable
($)
|
Unexercisable
($)
|
||||||
|
Frank
Palantoni
|
-
|
-
|
0
|
61,776
(2)
|
0
|
0
|
||||||
| (1) |
Calculated
on the basis of $12.17 per share, the closing sales price of the
common
stock on the NYSE on March 31, 2006, less the exercise price payable
for
such shares.
|
| (2) |
On
June 23, 2006, the options to purchase 61,776 shares of the Company’s
common stock were forfeited by Mr. Palantoni when he concluded his
duties
as Chief Executive Officer and President of the
Company.
|
Senior
Management/Employment Agreements
Peter
C. Mann
On
March
21, 2006, Mr. Mann entered into a Senior Management Agreement (the “Mann Senior
Management Agreement”) with the Company and Prestige Brands, Inc. (the
“Employer”), a wholly-owned subsidiary of the Company, which superseded the
Amended and Restated Senior Management Agreement, dated as of February 4, 2005,
by and among Prestige International Holdings LLC (“Holdings LLC”), the Company,
the Employer and Mr. Mann. Pursuant to the Mann Senior Management Agreement,
Mr.
Mann is employed by the Employer for the period beginning as of February 4,
2005
through and including his separation from the Employer pursuant to the terms
of
the Mann Senior Management Agreement (the “Mann Employment Period”). From the
commencement of the Mann Employment Period through and including March 31,
2006,
Mr. Mann shall serve as the Chief Executive Officer and Chairman of the Board
of
the Employer. Beginning on April 1, 2006, Mr. Mann relinquished his title of
Chief Executive Officer but continues to serve as Chairman of the Board.
Commencing on April 1, 2006, Mr. Mann became a part-time employee and is not
expected or required to work more than twenty-five (25) days per
quarter.
For
the
Employment Period through and including March 31, 2006, the Employer paid Mr.
Mann a base salary of $442,000 per annum. Beginning on April 1, 2006, the
Employer shall pay to Mr. Mann an annual base salary equal to $225,000. At
the
end of each fiscal year covered by the Mann Senior Management Agreement, Mr.
Mann shall be eligible to earn a bonus pursuant to such subjective and objective
criteria as the Board in conjunction with the Compensation Committee, shall,
from time to time, adopt; provided, however, that Mr. Mann’s target bonus
percentage for the fiscal year beginning April 1, 2006 shall be 75% of his
annual base salary and shall provide for a maximum potential bonus payment
of
150% of annual base salary; and further provided that any actual bonus award
paid to Mr. Mann shall be subject to approval of the Employer’s Board, in
conjunction with the Compensation Committee. In addition, during the Mann
Employment Period, Mr. Mann will be entitled to such other benefits approved
by
the Board and made available to the senior management of the Company, the
Employer and their subsidiaries, which may include group medical, dental, life
and disability insurance policies (without extraordinary premium expense to
the
Company or the Employer) in light of Mr. Mann’s reduced-time schedule. The
Board, in conjunction with the Compensation Committee, shall review the annual
base salary of Mr. Mann and may increase or decrease the annual base salary
by
such amount as the Board, in conjunction with the Compensation Committee, in
their sole discretion, shall deem appropriate.
Pursuant
to the Mann Senior Management Agreement, the Mann Employment Period will
continue until the earliest of: (i) Mr. Mann’s death, disability or resignation
from employment with the Company, the Employer and their respective
subsidiaries; (ii) the Company, the Employer and their respective subsidiaries
decide to
20
As
of the
date of the Mann Senior Management Agreement, Mr. Mann owned 281,372 shares
of
common stock that were subject to vesting. Pursuant to the terms of the Mann
Senior Management Agreement, 140,686 shares of common stock are scheduled to
vest on each of March 1, 2006 and 2007 if Mr. Mann has been continuously
employed by the Company, the Employer or any of their respective subsidiaries
from March 1, 2006 to through and including such date. If Mr. Mann ceases to
be
employed by the Company, the Employer and their respective subsidiaries on
any
date other than an anniversary date specified above, the cumulative percentage
of shares of common stock subject to vesting that will vest shall be determined
on a straight-line pro rata basis according to the number of days elapsed since
March 1, 2006, as compared with the date of vesting. Upon the occurrence of
a
sale of the Company, all shares of common stock subject to vesting shall become
vested at the time of the consummation of the sale of the Company, if, as of
such time, Mr. Mann has been continuously employed by the Company, the Employer
or any of their respective subsidiaries from March 1, 2006 through and including
such date. In the event that Mr. Mann dies or becomes disabled during the term
of the Mann Senior Management Agreement, all shares of common stock subject
to
vesting shall immediately vest in Mr. Mann or his estate, as
appropriate.
Subject
to certain restrictions, the Company will have the right to repurchase from
Mr.
Mann and his transferees all or any portion of the shares of common stock
subject to vesting in the event Mr. Mann ceases to be employed by the Company,
the Employer and their respective subsidiaries for any reason. The purchase
price to be paid by the Company for each share of common stock subject to
vesting will be the lesser of (i) Mr. Mann’s original cost for the share; and
(ii) the fair market value of such unvested share as of the date upon which
the
Company notifies Mr. Mann or his transferees of its election to repurchase
the
unvested shares.
The
Mann
Senior Management Agreement also contains certain confidentiality,
non-competition and non-solicitation provisions as well as other provisions
that
are customary for an executive employment agreement.
On
June
23, 2006, Mr. Mann was reappointed the Chief Executive Officer and President
of
the Company on an interim basis at an annualized salary of
$442,000.
Peter
J. Anderson
As
of
February 4, 2005, Holdings LLC, the Company and the Employer entered into an
Amended and Restated Senior Management Agreement with Mr. Anderson (the
“Anderson Senior Management Agreement”) which amended and restated the Senior
Management Agreement, as amended, dated as of February 6, 2004, by and among
Holdings LLC, the Employer and Mr. Anderson. Pursuant to the Anderson Senior
Management Agreement, Mr. Anderson is employed by the Employer for the period
beginning as of February 6, 2004 through and including his separation from
the
Employer pursuant to the terms of the Anderson Senior Management Agreement
(the
“Anderson Employment Period”). From the commencement of the Anderson Employment
Period through and including termination of employment pursuant to the Anderson
Senior Management Agreement, Mr. Anderson shall serve as the Chief Financial
Officer of the Employer. During the Anderson Employment Period, the Employer
will pay Mr. Anderson a base salary of $285,000 per annum. In addition, during
the Anderson Employment Period, Mr. Anderson will be entitled to such other
benefits approved by the Board and made available to the senior management
of
the Company, the Employer and their subsidiaries, which shall include vacation
time and medical, dental, life and disability insurance. The Board, on a basis
consistent with past practice, shall review the annual base salary of Mr.
Anderson and may increase the annual base salary by such amount as the Board,
in
its sole discretion, shall deem appropriate.
21
Pursuant
to
the terms of the Anderson Senior Management Agreement, Mr. Anderson’s employment
will continue until (i) his death, disability or resignation from employment
with the Company, the Employer and their respective subsidiaries; or (ii) the
Company, the Employer and their respective subsidiaries decide to terminate
Mr.
Anderson’s employment with or without cause. If (A) Mr. Anderson’s employment is
terminated without cause; or (B) Mr. Anderson resigns from employment with
the
Company, the Employer or any of their respective subsidiaries for good reason,
then during the period commencing on the date of termination of employment
and
ending on the first anniversary date thereof, the Employer shall pay to Mr.
Anderson, in equal installments in accordance with the Employer’s regular
payroll, an aggregate amount equal to (I) Mr. Anderson’s annual base salary,
plus (II) an amount equal to the annual bonus, if any, paid or payable to Mr.
Anderson by the Employer for the last fiscal year ended prior to the date of
termination. In addition, if Mr. Anderson is entitled on the date of termination
to coverage under the medical and prescription portions of the welfare plans,
such coverage shall continue for Mr. Anderson and his covered dependents for
a
period ending on the first anniversary of the date of termination at the active
employee cost payable by Mr. Anderson with respect to those costs paid by Mr.
Anderson prior to the date of termination.
As
of the
date of the Anderson Senior Management Agreement, Mr. Anderson owned 456,864
shares of common stock that were subject to vesting. Pursuant to the terms
of
the Anderson Senior Management Agreement, the shares of common stock subject
to
vesting shall vest on a straight line pro rata basis through February 6, 2009.
If Mr. Anderson ceases to be employed by the Company, the Employer and their
respective subsidiaries, the cumulative percentage of shares of common stock
subject to vesting that will vest shall be determined on a pro rata basis
according to the number of days elapsed since the relevant milestone date.
Upon
the occurrence of a sale of the Company, all shares of common stock subject
to
vesting shall become vested at the time of the consummation of the sale of
the
Company, if, as of such time, Mr. Anderson has been continuously employed by
the
Company, the Employer or any of their respective subsidiaries.
Subject
to certain restrictions, the Company will have the right to repurchase from
Mr.
Anderson and his transferees all or any portion of the shares of common stock
subject to vesting in the event Mr. Anderson ceases to be employed by the
Company, the Employer and their respective subsidiaries for any reason. The
purchase price to be paid by the Company for each share of common stock subject
to vesting will be the lesser of (i) Mr. Anderson’s original cost for a common
unit in Holdings LLC; and (ii) the fair market value of such unvested share
as
of the date upon which the Company notifies Mr. Anderson or his transferees
of
its election to repurchase the unvested shares.
The
Anderson Senior Management Agreement also contains certain confidentiality,
non-competition, non-solicitation provisions and securities transfer
restrictions as well as other provisions that are customary for an executive
employment agreement.
Gerard
F. Butler
As
of
February 4, 2005, Holdings LLC, the Company, and the Employer entered into
an
Amended and Restated Senior Management Agreement with Mr. Butler (the “Butler
Senior Management Agreement”) which amended and restated the Senior Management
Agreement, as amended, dated as of February 6, 2004, by and among Holdings
LLC,
the Employer and Mr. Butler. Pursuant to the Butler Senior Management Agreement,
Mr. Butler is employed by the Employer for the period beginning as of February
6, 2004 through and including his separation from the Employer pursuant to
the
terms of the Butler Senior Management Agreement (the “Butler Employment
Period”). From the commencement of the Butler Employment Period through and
including termination of employment pursuant to the Butler Senior Management
Agreement, Mr. Butler shall serve as the Chief Sales Officer of the Employer.
During the Butler Employment Period, the Employer will pay Mr. Butler a base
salary of $218,000 per annum. In addition, during the Butler Employment Period,
Mr. Butler will be entitled to such other benefits approved by the Board and
made available to the senior management of the Company, the Employer and their
subsidiaries, which shall include vacation time and medical, dental, life and
disability insurance. The Board, on a basis consistent with past practice,
shall
review the annual base salary of Mr. Butler and may increase the annual base
salary by such amount as the Board, in its sole discretion, shall deem
appropriate.
Pursuant
to the terms of the Butler Senior Management Agreement, Mr. Butler’s employment
will continue until (i) his death, disability or resignation from employment
with the Company, the Employer and their respective subsidiaries; or (ii) the
Company, the Employer and their respective subsidiaries decide to terminate
Mr.
Butler’s employment with or without cause. If (A) Mr. Butler’s employment is
terminated without cause; or (B) Mr. Butler resigns from employment with the
Company, the Employer or any of their respective subsidiaries for good reason,
then during the period commencing on the date of termination of employment
and
ending on the first anniversary
22
As
of the
date of the Butler Senior Management Agreement, Mr. Butler owned 363,311 shares
of common stock that were subject to vesting. Pursuant to the terms of the
Butler Senior Management Agreement, the shares of common stock subject to
vesting shall vest on a straight line pro rata basis through February 6, 2009.
If Mr. Butler ceases to be employed by the Company, the Employer and their
respective subsidiaries, the cumulative percentage of shares of common stock
subject to vesting that will vest shall be determined on a pro rata basis
according to the number of days elapsed since the relevant milestone date.
Upon
the occurrence of a sale of the Company, all shares of common stock subject
to
vesting shall become vested at the time of the consummation of the sale of
the
Company, if, as of such time, Mr. Butler has been continuously employed by
the
Company, the Employer or any of their respective subsidiaries.
Subject
to certain restrictions, the Company will have the right to repurchase from
Mr.
Butler and his transferees all or any portion of the shares of common stock
subject to vesting in the event Mr. Butler ceases to be employed by the Company,
the Employer and their respective subsidiaries for any reason. The purchase
price to be paid by the Company for each share of common stock subject to
vesting will be the lesser of (i) Mr. Butler’s original cost for a common unit
in Holdings LLC; and (ii) the fair market value of such unvested share as of
the
date upon which the Company notifies Mr. Butler or his transferees of its
election to repurchase the unvested shares.
The
Butler Senior Management Agreement also contains certain confidentiality,
non-competition, non-solicitation provisions and securities transfer
restrictions as well as other provisions that are customary for an executive
employment agreement.
Charles
N. Jolly
As
of
August 1, 2005, the Company entered into an Executive Employment Agreement
with
Mr. Jolly (the “Jolly Employment Agreement”) pursuant to which Mr. Jolly shall
serve as the Company’s Secretary and General Counsel. During the term of Mr.
Jolly’s employment, the Company will pay to him a base salary of $300,000 per
annum. In addition, Mr. Jolly shall be eligible for and participate in the
Company’s Annual Incentive Compensation Plan under which he shall be eligible
for an annual target bonus payment of not less than 45%. During the term of
Mr.
Jolly’s employment with the Company, he will be entitled to such other benefits
approved by the Board and made available to the senior management of the
Company, the Employer and their subsidiaries, which shall include vacation
time
and medical, dental, life and disability insurance. The Board, on a basis
consistent with past practice, shall review the annual base salary of Mr. Jolly
and may increase the annual base salary by such amount as the Board, in its
sole
discretion, shall deem appropriate.
Pursuant
to the terms of the Jolly Employment Agreement, Mr. Jolly’s employment will
continue until (i) his death, disability or resignation from employment with
the
Company, the Employer and their respective subsidiaries; or (ii) the Company,
the Employer and their respective subsidiaries decide to terminate Mr. Jolly’s
employment with or without cause. If (A) Mr. Jolly’s employment is terminated
without cause; or (B) Mr. Jolly resigns from employment with the Company, the
Employer or any of their respective subsidiaries for good reason, then during
the period commencing on the date of termination of employment and ending on
the
first anniversary date thereof, the Company shall pay to Mr. Jolly, in equal
installments in accordance with the Company’s regular payroll, an aggregate
amount equal to (I) Mr. Jolly’s annual base salary, plus (II) an amount equal to
the annual bonus, if any, paid or payable to Mr. Jolly by the Company for the
last fiscal year ended prior to the date of termination. In addition, if Mr.
Jolly is entitled on the date of termination to coverage under the medical
and
prescription portions of the welfare plans, such coverage shall continue for
Mr.
Jolly and his covered dependents for a period ending on the first anniversary
of
the date of termination at the active employee cost payable by Mr. Jolly with
respect to those costs paid by Mr. Jolly prior to the date of termination.
The
Jolly Employment Agreement
also contains certain confidentiality, non-competition and non-solicitation
provisions as well as other provisions that are customary for an executive
employment agreement.
23
Our
2005
Incentive Plan provides that in the event of a change in control of the Company
and under certain circumstances, any stock options or restricted stock issued
by
the Company shall become fully vested. In addition, pursuant to the 2005
Incentive Plan, the Compensation Committee shall have the authority to grant
stock options or restricted stock that become fully vested solely upon a change
in control of the Company.
Frank
Palantoni
As
of
August 15, 2005, the Company entered into an Executive Employment Agreement
with
Mr. Palantoni (the “Palantoni Employment Agreement”) pursuant to which Mr.
Palantoni shall serve as the Company’s President and Chief Operating Officer.
During the term of Mr. Palantoni’s employment, the Company will pay to him a
base salary of $350,000 per annum. In addition, Mr. Palantoni shall be eligible
for and participate in the Company’s Annual Incentive Compensation Plan under
which he shall be eligible for an annual target bonus payment of not less than
60% with a maximum of 120% of annual base salary. Mr. Palantoni’s annual bonus
for the fiscal year ended March 31, 2006 was guaranteed but was adjusted pro
rata based on the target bonus of 60% regardless of the Company’s performance.
Upon execution by Mr. Palantoni of the Palantoni Employment Agreement, Mr.
Palantoni was awarded (i) restricted stock of the Company which will vest over
three years conditioned on certain performance criteria where the number of
shares awarded was determined by dividing $400,000 by the closing price of
the
stock on the date of grant; and (ii) stock options of eight years duration
to
vest over five years (20% annually) where the number of options was determined
by dividing $800,000 by the closing price of the stock on the date of grant.
In
the event of a change of control wherein 80% or more of the voting stock or
assets of the Company are purchased by a third party, or parties in common
control, all restricted stock and stock options shall vest in full immediately.
During the term of Mr. Palantoni’s employment with the Company, he will be
entitled to such other benefits approved by the Board and made available to
the
senior management of the Company, the Employer and their subsidiaries, which
shall include vacation time and medical, dental, life and disability insurance.
The Board, on a basis consistent with past practice, shall review the annual
base salary of Mr. Palantoni and may increase the annual base salary by such
amount as the Board, in its sole discretion, shall deem
appropriate.
Pursuant
to the terms of the Palantoni Employment Agreement, Mr. Palantoni’s employment
will continue until (i) his death, disability or resignation from employment
with the Company, the Employer and their respective subsidiaries; or (ii) the
Company, the Employer and their respective subsidiaries decide to terminate
Mr.
Palantoni’s employment with or without cause. If (A) Mr. Palantoni’s employment
is terminated without cause; or (B) Mr. Palantoni resigns from employment with
the Company, the Employer or any of their respective subsidiaries for good
reason, then during the period commencing on the date of termination of
employment and ending on the first anniversary date thereof, the Company shall
pay to Mr. Palantoni, in equal installments in accordance with the Company’s
regular payroll, an aggregate amount equal to (I) Mr. Palantoni’s annual base
salary, plus (II) an amount equal to the annual bonus, if any, paid or payable
to Mr. Palantoni by the Company for the last fiscal year ended prior to the
date
of termination. In addition, if Mr. Palantoni is entitled on the date of
termination to coverage under the medical and prescription portions of the
welfare plans, such coverage shall continue for Mr. Palantoni and his covered
dependents for a period ending on the first anniversary of the date of
termination at the active employee cost payable by Mr. Palantoni with respect
to
those costs paid by Mr. Palantoni prior to the date of termination.
Notwithstanding the foregoing, the Palantoni Employment Agreement expressly
provides that, in the event of Mr. Palantoni’s separation from the Company, the
Employer and their respective subsidiaries, Mr. Palantoni shall not be entitled
to receive any payments or benefits pursuant to the Palantoni Employment
Agreement unless Mr. Palantoni has executed and delivered to the Employer a
general release in a form satisfactory to the Employer. In addition, upon
delivering the general release required pursuant to the Palantoni Employment
Agreement, Mr. Palantoni shall only be entitled to receive the payments and
benefits set forth in the Palantoni Employment Agreement so long as Mr.
Palantoni has not breached the confidentiality and non-competition and no
solicitation provisions contained in the Palantoni Employment Agreement.
The
Palantoni Employment Agreement also contains certain confidentiality,
non-competition and non-solicitation provisions as well as other provisions
that
are customary for an executive employment agreement.
On
March
21, 2006, the Company amended the Palantoni Employment Agreement to reflect
that
as of April 1, 2006 Mr. Palantoni will also become the Company’s Chief Executive
Officer. Effective April 1, 2006, Mr. Palantoni was to receive an annual salary
of $400,000 and a target bonus of 75% of his base salary for the fiscal year
24
REPORT
OF THE COMPENSATION COMMITTEE
This
Compensation Committee report 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, as amended (the “Securities Act"), or
the Exchange Act, except to the extent that we specifically incorporate this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Overview
The
Compensation Committee of the Board assists the Board in establishing
compensation packages for the Company’s executive officers and independent
non-employee directors and administering the Company’s long-term incentive plan.
The Committee has the authority to retain and terminate any independent
compensation consultant and to obtain independent advice and assistance from
internal and external legal, accounting and other advisors. From time to time,
the Committee reviews our compensation packages to ensure that they remain
competitive with the compensation packages offered by similarly-situated
companies and continue to incentivize management and align management’s
interests with those of our stockholders. The Committee is comprised of four
independent directors. Each member of the Committee meets the independence
requirements specified by the NYSE and is an “outside director” as defined in
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
‘‘IRC’’).
Compensation
Policies
The
Committee is responsible for setting and administering the policies which govern
annual executive salaries, raises and bonuses and certain equity awards, and,
where applicable, compliance with the requirements of Section 162(m) of the
IRC
and such responsibility is generally limited to the actions taken by the
Committee, although at times the full Board has determined annual executive
salaries, raises and, where the Company has determined that compliance with
the
provisions of Section 162(m) is not required, bonuses as well as grants of
equity awards without having first received recommendations from the Committee.
During the fiscal year ended March 31, 2006, the Committee was composed of
non-employee directors who, on and after January 31, 2006, were Messrs.
Lonergan, Buell, Byom and Costley. The general philosophy of our executive
compensation program is to attract and retain talented management while ensuring
that our executive officers are compensated in a way that advances the interests
of our stockholders. In pursuing these objectives, the Committee believes that
it is critical that a substantial portion of each executive officer’s
compensation be contingent upon our overall performance. The Committee is also
guided by the principle that our compensation packages must be competitive,
must
support our overall strategy and objectives, and must provide significant
rewards for outstanding financial performance while establishing clear
consequences for underperformance. Annual bonuses and long-term awards for
our
executive officers should take into account not only objective financial goals,
but also individual performance goals that reinforce our core values, which
include leadership, accountability, ethics and corporate governance. It is
the
Committee’s responsibility to determine the performance goals for the
performance-based compensation payable to our named executive officers in
compliance with section 162(m) of the IRC, subject to ratification by the Board,
and to certify compliance with such goals before such compensation is paid.
In
addition, the Committee periodically reviews our incentive compensation and
other stock-based compensation programs and recommends changes in such plans
to
the Board as needed.
From
time
to time, the Committee and the Board, separately or collectively, has and will
continue to consult with independent consultants regarding executive
compensation for the Chief Executive Officer, certain other executive officers
and the independent non-employee directors. In determining the compensation
packages for our executive officers and independent non-employee directors,
the
Committee and the Board have evaluated the history and performance of the
Company’s previous compensation practices and packages awarded to the Company’s
executive officers and independent non-employee directors, and compensation
policies and packages awarded to executive officers and independent non-employee
directors at similarly-situated companies.
25
Compensation
Program Components
Our
executive compensation program emphasizes company performance, individual
performance and an increase in stockholder value over time in determining
executive pay levels. Our executive compensation
program consists of three key elements: (i) annual base salaries; (ii) a
performance-based annual bonus; and (iii) periodic grants of equity awards.
The
Committee believes that this three-part approach best serves our and our
stockholders’ interests by motivating executive officers to improve our
financial position, holding executives accountable for the performance of the
organizations for which they are responsible and by attracting key executives
into our service. Under our compensation program, annual compensation for
executive officers are composed of a significant portion of pay that is ‘‘at
risk’’ — specifically, the annual bonus and equity awards.
Base
Salary. In
reviewing and approving the base salaries of our executive officers, the
Committee considers the scope of work and responsibilities, and other
individual-specific factors; the recommendation of the Chief Executive Officer
(except in the case of his own compensation); compensation for similar positions
at similarly-situated companies; and the executive's experience. Except where
an
existing agreement establishes an executive’s salary, the Committee reviews
executive officer salaries annually at the end of the fiscal year and
establishes the base salaries for the upcoming fiscal year.
Performance-Based
Annual Bonus. Annual
bonus targets and actual bonus payments are computed as a percentage of base
salary calculated against the Company’s specific performance achieved during the
fiscal year and the executive officer’s contribution to the Company’s overall
performance.
Equity
Awards. Executive
officers of the Company and other key employees who contribute to the growth,
development and financial success of the Company are eligible to receive equity
awards under our 2005 Incentive Plan. Awards under the 2005 Incentive Plan
help
relate a significant portion of an employee’s long-term remuneration directly to
stock price appreciation realized by all of our stockholders and aligns an
employee’s interests with that of our stockholders. The Committee believes
equity-based incentive compensation aligns executive and stockholder interests
because (i) the use of a multi-year vesting schedule for equity awards
encourages executive retention and emphasizes long-term growth; and (ii) paying
a significant portion of management’s compensation in our equity provides
management with a powerful incentive to increase stockholder value over the
long
term. The Committee determines appropriate individual equity awards in the
exercise of its discretion in view of the above criteria and applicable
policies.
Compensation
of the Chief Executive Officer
The
Compensation Committee, either alone or with the other independent members
of
our Board, has the authority to determine and approve our Chief Executive
Officer’s compensation. The Committee followed the same philosophy and guidance
principles described above in determining the compensation package for Mr.
Mann,
our Chief Executive Officer during the fiscal year ended March 31,
2006.
As
our
Chief Executive Officer during Fiscal 2006, Mr. Mann was compensated pursuant
to
his Amended and Restated Senior Management Agreement entered into as of February
4, 2005. Mr. Mann’s base salary for the fiscal year ended March 31, 2006 was
$442,000. No bonus for the fiscal year ended March 31, 2006 was paid to Mr.
Mann
as the Company did not reach its established performance goals for such fiscal
year.
In
determining the compensation of our Chief Executive Officer, the Compensation
Committee and the independent members of the Board have applied our compensation
policies set forth above. The Compensation Committee and the independent members
of the Board believe that Mr. Mann’s compensation is appropriate given the
Company’s performance in the fiscal year ended March 31, 2006.
Section
162(m) of the Internal Revenue Code
Section
162(m) of the IRC generally disallows a tax deduction to public corporations
for
compensation other than performance-based compensation over $1,000,000 paid
for
any fiscal year to an individual who, on the last day of the taxable year,
was
(i) the Chief Executive Officer; or (ii) among the four other highest
compensated executive officers whose compensation is required to be reported
in
the Summary Compensation Table contained
26
MEMBERS
OF THE
COMPENSATION COMMITTEE
Patrick
Lonergan
(Chairman)
L.
Dick
Buell
John
E.
Byom
Gary
E.
Costley
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During
the fiscal year ended March 31, 2006, none of the members of our Compensation
Committee, (i) served as an officer or employee of the Company or its
subsidiaries, (ii) was formerly an officer of the Company or its subsidiaries,
or (iii) entered into any transactions with the Company or its subsidiaries.
During the fiscal year ended March 31, 2006, none of our executive officers
(i)
served as a member of the Compensation Committee (or other board committee
performing equivalent functions or, in the absence of any such committee, the
board of directors) of another entity, one of whose executive officers served
on
our Compensation Committee, (ii) served as director of another entity, one
of
whose executive officers served on our Compensation Committee, or (iii) served
as member of the compensation committee (or other board committee performing
equivalent functions or, in the absence of any such committee, the board of
directors) of another entity, one of whose executive officers served as a
director of the Company.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Except
as
disclosed under “Executive Compensation and Other Matters” and “Governance of
the Company - Director Compensation,” our executive officers, directors,
director nominees and greater than 5% stockholders did not have significant
business relationships with us in the fiscal year ended March 31, 2006 which
would require disclosure under applicable SEC regulations, and no other
transactions which need to be disclosed under SEC regulations are currently
planned for the fiscal year ending March 31, 2007.
Pursuant
to law and our governing corporate documents, we advanced to Messrs. Mann and
Anderson certain legal fees for representation in connection with the securities
class action lawsuit pending against us, Messrs. Mann and Anderson and certain
other defendants. In the fiscal year ended March 31, 2006, the expenses we
advanced to each of Messrs. Mann and Anderson were less than $60,000. We cannot
reasonably estimate the total amount of expenses that may ultimately be advanced
to each of Messrs. Mann and Anderson until the conclusion of the securities
class action lawsuit.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our officers, directors and persons who
beneficially own more than ten percent of our common stock to file reports
of
securities ownership and changes in such ownership with the SEC, the NYSE and
the Company.
We
believe that during the fiscal year ended March 31, 2006 all forms required
by
Section 16(a) of the Exchange Act that were required to be filed with the SEC
by
our officers, directors and persons who beneficially own more than ten percent
of our common stock were timely filed.
REPORT
OF THE AUDIT COMMITTEE
This
Audit Committee report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act or the Exchange Act, except
27
The
Audit
Committee is composed of four directors appointed by the Board, all of whom
are
independent from the Company as defined in the NYSE listing standards and Rule
10A-3 under the Exchange Act. The members of the Audit Committee are financially
literate as that qualification is interpreted by the Board and the NYSE. The
Audit Committee operates under a written charter adopted by the Board in January
2005, which is available to our stockholders on our web site at www.prestigebrandsinc.com
or is
also available in print to any stockholder who makes a written request to the
Company’s Secretary. The Audit Committee recommends to the Board the selection
of the Company’s independent registered public accounting firm.
Management
is responsible for the Company’s internal accounting and financial controls, the
financial reporting process and compliance with the Company’s legal and ethics
programs. The Company’s independent registered public accounting firm is
responsible for performing an independent audit of the Company’s consolidated
financial statements and internal control over financial reporting in accordance
with auditing standards generally accepted in the United States of America
and
for issuance of a report thereon. The Audit Committee’s responsibility is to
monitor and oversee these processes and report its findings to the full
Board.
In
this
context, the Audit Committee has met and held discussions separately and jointly
with each of management and the independent registered public accounting firm.
Management represented to the Audit Committee that the Company’s consolidated
financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America, on a consistent basis,
and
the Audit Committee has reviewed and discussed the quarterly and annual earnings
press releases and consolidated financial statements with management and the
independent registered public accounting firm. The Audit Committee discussed
with the independent registered public accounting firm matters required to
be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees), as amended, and Rule 2-07 (Communication with Audit Committees)
of
Regulation S-X.
The
Company’s independent registered public accounting firm also provided to the
Audit Committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and the Audit Committee discussed with the independent registered public
accounting firm the firm’s independence from the Company and its management. The
Audit Committee also considered whether the independent registered public
accounting firm’s provision of non-audit services to the Company is compatible
with maintaining the independent registered public accounting firm’s
independence. The Audit Committee concluded that the independent registered
public accounting firm is independent from the Company and its
management.
The
Audit
Committee discussed with the Company’s internal auditor and independent
registered public accounting firm the overall scope and plans for their
respective audits. The Audit Committee discussed with the internal auditor
and
the independent registered public accounting firm, with and without management
present, the results of their examinations, the evaluations of the Company’s
internal controls, and the overall quality and integrity of the Company’s
financial reporting.
Based
on
the Audit Committee’s discussion with management and the independent registered
public accounting firm, its review of the representations of management, and
the
report of the independent registered public accounting firm, the Audit Committee
recommended to the Board that the Company’s audited consolidated financial
statements be included in the Company’s Annual Report on Form 10-K for the
fiscal year ended March 31, 2006.
MEMBERS
OF THE AUDIT
COMMITTEE
L.
Dick Buell
(Chairman)
John
E.
Byom
Ronald
Gordon
Raymond
P.
Silcock
28
The
following graph compares our cumulative total stockholder return since February
9, 2005, the date of our initial public offering, with the Russell 2000 Index
(in which the Company is included) and the S&P Supercomposite 1500 Household
& Personal Products Index. The graph assumes that the value of the
investment in the Company’s common stock and each index was $100.00 on
February 9, 2005. The graph was also prepared based on the assumption that
all dividends paid, if any, were reinvested.
|
Feb.
9, 2005(1)
|
March
31, 2005
|
March
31, 2006
|
|||
|
PBH.........................................................................
|
$100.00
|
$110.31
|
$76.06
|
||
|
The
Russell 2000 Index........................................
|
$100.00
|
$98.57
|
$122.61
|
||
|
The
S&P Supercomposite...................................
|
$100.00
|
$101.32
|
$106.25
|
(1)
The
Company’s initial public offering priced at $16.00 per share on February 9,
2005. Shares of the Company’s common stock closed at $17.75 per share February
10, 2005, the first day the shares of the Company’s common stock were traded on
the NYSE.
29
SUBMISSION
OF A STOCKHOLDER PROPOSAL AND
NOMINATION
OF DIRECTOR AND ADDITIONAL INFORMATION
Under
the
rules of the SEC, if a stockholder wants us to include a proposal in our proxy
statement and proxy card for presentation at our 2007 Annual Meeting of
Stockholders, the proposal must be received by us at our principal executive
offices at 90 North Broadway, Irvington, New York 10533 by March 16, 2007 (or,
if the 2007 Annual Meeting of Stockholders is called for a date not within
30
calendar days before or after August 15, 2007, within a reasonable time before
we begin to print and mail our proxy materials for the meeting). The proposal
should be sent by certified mail, return receipt requested, to the attention
of
the Company’s Secretary and must comply with Rule 14a-8 under the Exchange Act.
Our
Amended and Restated Bylaws provide that a stockholder wishing to present a
nomination for election of a director or to bring any other matter before an
annual meeting of stockholders must give written notice to the Company’s
Secretary at the Company’s principal executive offices not less than 90 nor more
than 120 days prior to the date of the first anniversary of the previous year’s
annual meeting (provided that in the event that the annual meeting is scheduled
to be held on a date more than 30 days prior to or delayed by more than 60
days
after such anniversary date, notice by the stockholder in order to be timely
must be received not later than the close of business on the tenth day following
the earlier of the day on which notice of the date of meeting was mailed or
public disclosure of such meeting was made). In the event we call a special
meeting of our stockholders, we must receive a notice of your intention to
introduce a director nomination (if directors are to be elected at such special
meeting of stockholders) or to present an item of business at the special
meeting of stockholders not later than the close of business on the tenth day
following the earlier of the day on which notice of the date of the meeting
was
mailed or public disclosure of the meeting was made.
Any
written stockholder proposal or nomination for director to be presented at
a
meeting of our stockholders must comply with the procedures and such other
requirements as may be imposed by our Amended and Restated Bylaws, Delaware
law,
the NYSE, the Exchange Act and the rules and regulations of the SEC and must
include the information necessary for the Board to determine whether the
candidate (with respect to a nomination for director only) qualifies as
independent under the NYSE’s rules.
Assuming
that our 2007 annual meeting is not more than 30 days prior to or delayed by
more than 60 days after the first anniversary date of this year’s annual meeting
of stockholders, we must receive notice of your intention to introduce a
director nomination or other item of business at that meeting not less than
90
nor more than 120 days prior to August 15, 2007. If we do not receive notice
within the prescribed dates, or if we meet other requirements of the SEC’s
rules, the persons named as proxies in the proxy materials relating to the
2007
Annual Meeting of Stockholders will use their discretion in voting the proxies
when these matters are raised at the meeting. In addition, nominations or
proposals not made in accordance herewith may be disregarded by the chairman
of
the meeting. Any stockholder interested in making such a nomination or proposal
should request a copy of our Amended and Restated Bylaws from the Company’s
Secretary.
30
FORM
10-K
We
will furnish without charge to each person whose proxy is being solicited,
upon
written request of any such person, a copy of our Annual Report on Form 10-K
for
the fiscal year ended March 31, 2006, as filed with the SEC, including the
financial statements and financial statement schedules thereto. Written requests
for copies of our Annual Report on Form 10-K for the fiscal year ended March
31,
2006 should be directed to Prestige Brands Holdings, Inc., 90 North Broadway,
Irvington, New York 10533, Attention: Secretary. Our Annual Report on
Form 10-K for the fiscal year ended March 31, 2006 can also be downloaded
without charge from our website at
www.prestigebrandsinc.com.
By
Order of the Board
of Directors
/s/
Charles N.
Jolly
Charles
N.
Jolly
Secretary
July
14,
2006
IT
IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. EVEN IF YOU EXPECT TO ATTEND
THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED
PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE
UNITED STATES. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY
SHOULD YOU WISH TO VOTE IN PERSON.
31
Annex
A - Proxy
Card
[PRESTIGE
BRANDS LOGO]
|
|
| Annual Meeting Proxy Card |
A.
Election of Directors
The
Board of Directors recommends a vote FOR each of the nominees listed
below.
| 1. |
To
elect directors to serve until the 2007 Annual Meeting of
Stockholders.
|
01
-
Peter C. Mann, 02 - L. Dick Buell, 03- John E. Byom, 04- Gary E. Costley,
Ph.D., 05 - David A. Donnini,
06
-
Ronald Gordon, 07- Vincent J. Hemmer, 08- Patrick Lonergan, 09- Raymond P.
Silcock
[
]
To
Vote FOR All
Nominees [ ]
To WITHHOLD Vote From All Nominees
|
[ ] For
All Except -To withhold a vote for a specific nominee, mark this
box with an X and
|
01 - [ ] | 02 - [ ] | 03 - [ ] | 04 - [ ] | 05 - [ ] |
| the appropriately numbered box to the right from the list above. | 06 - [ ] | 07 - [ ] | 08 - [ ] | 09 - [ ] | |
B.
Issues
The
Board of Directors recommends a vote FOR this proposal.
| 2. |
Proposal
to ratify the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of Prestige Brands Holdings, Inc.
for
the fiscal year ending March 31, 2007.
|
|
[
] For
|
[
] Against
|
[
] Abstain
|
| 3. |
To
transact such other business as may properly come before the Annual
Meeting and any postponement or adjoumment
thereof.
|
C.
Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
This
proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder. If no direction is made, this proxy will be voted
FOR
all nominees in Item 1 and FOR Proposal 2. In their discretion, the Proxies
are
authorized to vote upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
Please
sign as your name appears hereon. If shares are held jointly, all holders
should
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title. If a corporation, please sign full corporate
name by the president or other authorized officer. If a partnership, please
sign
in partnership name by an authorized person, indicating official position
or
capacity.
|
Signature
I - Please keep signature within the box
|
Signature
2 - Please keep signature within the box
|
Date
(mm/dd/yyyy)
|
| Proxy |
Prestige
Brands Holdings, Inc.
90
North Broadway
Irvington,
New York 10533
This
proxy is solicited on Behalf of the Board of Directors for the Annual Meeting
of
Stockholders on August 15, 2006.
The
undersigned hereby appoints Peter J. Anderson and Thomas W. Haller, and each
of
them, lawful agents and proxies with full power of substitution, to represent
and to vote as designated below, all shares of common stock of PRESTIGE
BRANDS HOLDINGS, INC. held by the undersigned at the close of business
on July 6, 2006, at the Annual Meeting of Stockholders to be held on August
15,
2006 at the Tarrytown House Estate and Conference Center, 49 East Sunnyside
Lane, Tarrytown, New York 10591, and at any postponement or adjournment thereof,
on all matters coming before said meeting.
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE AND SIGN THIS PROXY
CARD ON THE REVERSE SIDE. PLEASE PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED
ENVELOPE.