<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
TOYMAX INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
TOYMAX INTERNATIONAL, INC.
125 E. BETHPAGE ROAD
PLAINVIEW, NEW YORK 11803
Dear Stockholder:
You are cordially invited to the Annual Meeting of Stockholders of TOYMAX
INTERNATIONAL, INC. to be held on August 17, 1998, at The Chase Manhattan Bank,
Media Room, Lower Level, 395 North Service Road, Melville, New York 11747, at
9:00 a.m., local time.
The Notice of Meeting and Proxy Statement on the following pages cover the
formal business of the meeting, which includes proposals to (i) elect five
directors to serve on a classified Board of Directors consisting of three
classes and (ii) ratify the re-appointment of BDO Seidman LLP, certified public
accountants, as the Company's independent auditors for the fiscal year ending
March 31, 1999.
We hope that you will be able to attend the Annual Meeting in person. In any
event, in order that we may be assured of a quorum, we request that you
complete, sign, date and return the enclosed proxy as soon as possible. Your
vote is important regardless of the number of shares you own.
Sincerely,
DAVID CHU
CHAIRMAN OF THE BOARD
July 31, 1998
<PAGE>
TOYMAX INTERNATIONAL, INC.
125 E. BETHPAGE ROAD
PLAINVIEW, NEW YORK 11803
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 17, 1998
------------------------
To the Stockholders of
TOYMAX INTERNATIONAL, INC.
Notice is hereby given that the Annual Meeting of Stockholders of TOYMAX
INTERNATIONAL, INC. (the "Company") will be held at The Chase Manhattan Bank,
Media Room, Lower Level, 395 North Service Road, Melville, New York 11747, on
Monday, August 17, 1998, at 9:00 a.m., local time (the "Annual Meeting"), for
the following purposes, all as more fully described in the attached Proxy
Statement:
1. to elect five directors to serve on a classified Board of Directors,
which shall consist of three classes, each to serve for a specified term (Class
1 until the 1999 annual meeting, Class 2 until the 2000 annual meeting and Class
3 until the 2001 annual meeting) and until their successors are duly elected and
qualified;
2. to ratify the re-appointment of BDO Seidman, LLP as the independent
auditors of the Company for the fiscal year ending March 31, 1999; and
3. to consider and transact such other business as may properly be brought
before the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed July 1, 1998 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting and any postponements or adjournments thereof, and only stockholders of
record at the close of business on that date are entitled to such notice and to
vote at the Annual Meeting. A list of stockholders entitled to vote at the
Annual Meeting will be available at the Annual Meeting and at the offices of the
Company for ten days prior to the Annual Meeting.
We hope that you will use this opportunity to take an active part in the
affairs of the Company by voting on the business to come before the Annual
Meeting, either by executing and returning the enclosed Proxy Card or by casting
your vote in person at the Annual Meeting.
A copy of the Company's Annual Report for the fiscal year ended March 31,
1998 is enclosed herewith.
STOCKHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE REQUESTED TO
DATE AND SIGN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. A STAMPED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. IF A STOCKHOLDER RECEIVES MORE THAN
ONE PROXY CARD BECAUSE HE OR SHE OWNS SHARES REGISTERED IN DIFFERENT NAMES OR
ADDRESSES, EACH PROXY CARD SHOULD BE COMPLETED AND RETURNED.
By Order of the Board of Directors
Sanford B. Frank
SECRETARY
July 31, 1998
<PAGE>
PROXY STATEMENT
TOYMAX INTERNATIONAL, INC.
125 E. BETHPAGE ROAD
PLAINVIEW, NEW YORK 11803
------------------------
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 17, 1998
------------------------
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of TOYMAX
INTERNATIONAL, INC., a Delaware corporation (the "Company" and, together with
its predecessor companies, "Toymax"), for use at the Annual Meeting of
Stockholders to be held at The Chase Manhattan Bank, Media Room, Lower Level,
395 North Service Road, Melville, New York 11747, on Monday, August 17, 1998, at
9:00 a.m., or at any adjournment or adjournments thereof (the "Annual Meeting").
A proxy that is properly submitted to the Company may be properly revoked at
any time before it is voted. Proxies may be revoked by (i) delivering to the
Secretary of the Company (Sanford B. Frank) at or before the Annual Meeting a
written notice of revocation bearing a later date than the proxy, (ii) duly
executing a subsequent proxy relating to the same shares of Common Stock and
delivering it to the Secretary of the Company at or before the Annual Meeting,
or (iii) attending the Annual Meeting and voting in person (although attendance
at the Annual Meeting will not in and of itself constitute revocation of a
proxy). A proxy which is properly signed, submitted and not revoked will be
voted for the nominees for director named in proposal 1 and in favor of proposal
2 unless contrary instructions are given, and such proxy may be voted by the
persons named in the proxy in their discretion upon such other business as may
be properly brought before the meeting.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, directors, officers and employees of the Company may
solicit proxies by telephone or otherwise. The Company will reimburse brokers or
other persons holding stock in their names or in the names of their nominees for
their charges and expenses in forwarding proxies and proxy material to the
beneficial owners of such stock. On or about July 31, 1998, this Proxy Statement
and the accompanying proxy, together with a copy of the Annual Report of the
Company for the fiscal year ended March 31, 1998, including financial
statements, are to be mailed to each stockholder of record at the close of
business on July 1, 1998 (the "Record Date").
VOTING SECURITIES
The Company had outstanding 10,605,000 shares of common stock, par value
$.01 per share ("Common Stock"), at the close of business on the Record Date,
which are the only securities of the Company entitled to be voted at the Annual
Meeting. Each stockholder of the Company will be entitled to one vote on each
matter as may properly be brought before the meeting for each share of Common
Stock registered in its name on the Record Date. Only stockholders of record at
the close of business on July 1, 1998 will be entitled to vote. A majority of
all of the outstanding shares of Common Stock constitutes a quorum at the Annual
Meeting.
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VOTING PROCEDURES
The votes of stockholders present in person or represented by proxy at the
Annual Meeting will be tabulated by an inspector of elections appointed by the
Company. Abstentions may be specified on all proposals except the election of
directors and will be counted as present for purposes of determining the
existence of a quorum. With regard to the election of directors, votes may be
cast in favor of or withheld from each nominee. Since Proposal 2 must be
approved by the affirmative vote of the holders of a majority of the shares of
Common Stock of the Company represented and entitled to vote at the Annual
Meeting, abstentions on that proposal will also have the effect of a negative
vote.
Under the rules of the National Association of Securities Dealers, Inc. (the
"NASD"), brokers who hold shares in street name have the authority to vote on
certain routine items when they have not received instructions from beneficial
owners. Brokers that do not receive instructions are entitled to vote on the
non-contested election of directors, amendments to the Certificate of
Incorporation and ratification of auditors. Under applicable Delaware law, a
broker non-vote will have no effect on the outcome of Proposals 1 and 2.
Shares of Common Stock held by stockholders who do not return a signed and
dated proxy will not be considered present at the Annual Meeting, will not be
counted towards a quorum and will not be voted on any matter.
PROPOSAL 1: ELECTION OF DIRECTORS
The current term of office of all directors of the Company will expire at
the 1998 Annual Meeting. The Amended and Restated Certificate of Incorporation
of the Company provides for the classification of the Board of Directors into
three classes at this Annual Meeting, with the classes being as nearly equal in
number as possible. The term of office of the Class 1 directors will expire at
the 1999 Annual Meeting of Stockholders; the term of office of the Class 2
directors will expire at the 2000 Annual Meeting of Stockholders; and the term
of office of the Class 3 directors will expire at the 2001 Annual Meeting of
Stockholders (in each case, when their respective successors are duly elected
and qualified). The class of directors to be elected at each annual meeting of
stockholders subsequent to this Annual Meeting will be elected for a three-year
term and the directors in the other classes will continue in office.
Currently the Board of Directors consists of five directors, David Chu,
Steven Lebensfeld, Harvey Goldberg, Oren Asher and Joel Handel. Mr. Goldberg has
been renominated by the Board of Directors for election at the Annual Meeting as
a Class 1 director to serve until the election and qualification of his
successor at the 1999 Annual Meeting of Stockholders. Messrs. Lebensfeld and
Asher have been renominated by the Board of Directors for election at the Annual
Meeting as Class 2 directors to serve until the election and qualification of
their successors at the 2000 Annual Meeting of Stockholders and Messrs. Chu and
Handel have been renominated by the Board of Directors for election at the
Annual Meeting as Class 3 directors to serve until the election and
qualification of their successors at the 2001 Annual Meeting of Stockholders. If
any such person should be unwilling or unable to serve as a director of the
Company (which is not anticipated), the persons named in the proxy will vote the
proxy for substitute nominees selected by them unless the number of directors to
be elected has been reduced to the number of nominees willing and able to serve.
Proxies cannot be voted for a greater number of persons than the number of
nominees named. The election of directors requires a majority vote of the shares
of Common Stock represented at the Annual Meeting.
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INFORMATION CONCERNING NOMINEES
The following table sets forth information with respect to the nominees for
director, including the year in which the nominees' terms would expire, if
elected.
<TABLE>
<CAPTION>
IF ELECTED, YEAR
TERM
EXPIRES
NAME AGE DIRECTOR SINCE AND CLASS
- ------------------------------------------------- --- --------------- -------------------
<S> <C> <C> <C>
Harvey Goldberg.................................. 46 August 1997 1999 Class 1
Steven Lebensfeld................................ 45 August 1997 2000 Class 2
Oren Asher....................................... 44 October 1997 2000 Class 2
David Ki Kwan Chu................................ 51 August 1997 2001 Class 3
Joel Handel...................................... 62 October 1997 2001 Class 3
</TABLE>
DAVID KI KWAN CHU. Mr. Chu is the Chairman of the Board of Directors and has
been a director since 1997. Prior to the Company's Initial Public Offering in
October, 1997, Mr. Chu served as Chairman of the Board of Directors of Toymax
(H.K.) Limited, the then parent company of Toymax Inc., since its inception in
1990.
STEVEN A. LEBENSFELD. Mr. Lebensfeld is the President of the Company and has
been a director since 1997. Prior to the Company's Initial Public Offering in
October, 1997, Mr. Lebensfeld served as a director and President of Toymax Inc.,
since its inception in 1990 and as a director of Toymax (H.K.) Limited.
HARVEY GOLDBERG. Mr. Goldberg is the Executive Vice President of the Company and
has been a director since 1997. Prior to the Company's Initial Public Offering
in October, 1997, Mr. Goldberg served as a director of Toymax (H.K.) Limited
since 1995 and has served as Executive Vice President of Toymax Inc. since 1995.
Prior to that Mr. Goldberg was a consultant to Toymax since 1990.
OREN ASHER. Mr. Asher has been a director since October 1997. Mr. Asher has been
the Chairman of MGI Software Corp. ("MGI"), a leading developer of photo and
video software, since January 2, 1996. Prior to joining MGI, Mr. Asher was
President and CEO of Ditek Software Corp., a graphics software development
company which he founded in 1985 and which specializes in computer-aided design
and drafting (CADD). Mr. Asher continues to hold the office of Chairman with
Ditek Software Corp.
JOEL M. HANDEL. Mr. Handel has been a director since October 1997. Mr. Handel
has been a partner in the law firm of Baer Marks & Upham LLP, which serves as
counsel to the Company, since 1968. From April 1987 through March 1997, Mr.
Handel was a member of the Board of Directors of Tyco Toys, Inc., a company for
which Baer Marks & Upham LLP also served as counsel.
Additional biographical information concerning the directors is contained
under the heading "Directors and Executive Officers".
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company held two meetings during the fiscal
year ended March 31, 1998. Each current director attended all meetings of the
Board of Directors and of committees of which he was a member during such year.
The Board of Directors has created two standing committees: a three-member
Audit Committee and a three-member Compensation Committee.
The members of the Audit Committee are David Chu, Joel Handel and Oren
Asher. The Audit Committee recommends to the Board of Directors the engagement
of the independent auditors, and has the authority to review with the auditors
and with the Company's management all matters relating to the annual audit of
the Company.
The members of the Compensation Committee are David Chu, Joel Handel and
Oren Asher. The Compensation Committee has the authority to review and approve
the remuneration arrangements for
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<PAGE>
executive officers and employees of the Company, review the benefit plans for
employees and select participants, approve awards under, interpret and
administer the employee benefit plans of the Company.
PROPOSAL 2: APPOINTMENT OF AUDITORS
BDO Seidman, LLP ("BDO"), certified public accountants, audited the
Company's consolidated financial statements for the fiscal year ended March 31,
1998. The Board of Directors, upon recommendation of the Audit Committee, has
appointed BDO to audit the Company's consolidated financial statements for the
fiscal year ended March 31, 1999, and recommends that the stockholders vote for
ratification of such appointment. A representative of BDO is expected to be
present at the Annual Meeting and will make a statement and/or respond to
appropriate questions from stockholders present at the meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL 2.
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE SHARES OF THE COMPANY'S
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING IS REQUIRED FOR APPROVAL OF THIS
PROPOSAL.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 1, 1998, with
respect to the beneficial ownership of the Company's Common Stock by each
director, each nominee for director, each named executive officer in the summary
compensation table under "Executive Compensation" below, all executive officers
and directors as a group, and each person known by the Company to be the
beneficial owner of 5% or more of the Company's Common Stock. This information
is based upon information received from or on behalf of the named individuals or
entities.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT OF
NAME OWNED(1) CLASS(2)
- -------------------------------------------------------------------------------- -------------------- -----------
<S> <C> <C>
David Ki Kwan Chu (3)(5)........................................................ 4,330,083 40.8%
Steven Lebensfeld (4)(6)........................................................ 1,312,500 12.4%
Harvey Goldberg (4)............................................................. 70,667 0.7%
Goldberg Family Trust (7)....................................................... 1,241,833 11.7%
Frances Shuk Kuen Leung (3)(5).................................................. 4,330,083 40.8%
Kenneth Price (4)............................................................... 225,000 2.1%
Carmine Russo (4)............................................................... 18,750 0.2%
5,842,000 55.1%
Executive Officers and Directors as a Group (8 Persons).........................
</TABLE>
- ------------------------
(1) Unless otherwise noted, the Company believes that all persons named in the
table have sole voting and investment power with respect to all shares
beneficially owned by them.
(2) Percentage amounts are based on the number of shares of Common Stock
outstanding as of the Record Date.
(3) David Ki Kwan Chu and Frances Shuk Kuen Leung are husband and wife. Their
address is: Units A and B, CDW Building, 382-392 Castle Peak Road, Tsuen
Wan, N.T., Hong Kong.
(4) Messrs. Lebensfeld, Goldberg, Price and Russo's address is: 125 East
Bethpage Road, Plainview, New York 11803.
(5) The share amounts shown for Mr. Chu and Ms. Leung are owned by Best Phase
Limited, a British Virgin Islands corporation, of which Mr. Chu and Ms.
Leung own 100% of the outstanding shares. The address of Best Phase Limited
is Units A and B, CDW Building, 382-392 Castle Peak Road, Tsuen Wan, N.T.,
Hong Kong. Frances Shuk Kuen Leung is the wife of Mr. Chu and they are
deemed to be the beneficial owners of each other's shares of Common Stock of
the Company.
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(6) Includes 126,000 shares held in trust or custodian accounts for the benefit
of Mr. Lebensfeld's children. Mr. Lebensfeld is not the trustee of such
trust and disclaims beneficial ownership of the 120,000 shares held in
trust.
(7) A total of 1,241,833 shares of Common Stock are beneficially owned by a
trust for the benefit of Mr. Goldberg's wife and children. The trustee of
this trust is not affiliated with Mr. Goldberg and Mr. Goldberg disclaims
beneficial ownership of such shares. The Goldberg Family Trust's address is:
c/o CIBC West Indies Offshore Banking Corporation, as trustee, International
Centre, Warrens, St. Michael, P.O. Box 405, Bridgetown, Barbados, West
Indies.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
officers and directors of the Company and persons who own more than ten-percent
of the Common Stock, to file initial statements of beneficial ownership (form 3)
and statements of changes in beneficial ownership (Forms 4 or 5) of Common Stock
with the Securities and Exchange Commission (the "SEC"). Officers, directors and
greater than ten-percent stockholders are required by SEC regulations to furnish
the Company with copies of all such forms they file.
During fiscal 1998, the following directors of the Company inadvertantly
failed to make all required filings on a timely basis: Oren Asher and Joel
Handel. All such required filings by such persons were subsequently made. To the
Company's knowledge, based solely on its review of the copies of such forms
received by it and written representations from certain reporting persons that
no additional forms were required for those persons, during fiscal 1998 all
filing requirements applicable to all other officers, directors and greater than
ten-percent beneficial owners were complied with.
DIRECTORS AND EXECUTIVE OFFICERS
The directors, executive officers and certain other key employees of the
Company are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
David Ki Kwan Chu.................................... 51 Chairman of the Board
Steven A. Lebensfeld................................. 45 President and Director
Harvey Goldberg...................................... 46 Executive Vice President and Director
Kenneth Price........................................ 36 Senior Vice President-Sales and Marketing
Carmine Russo........................................ 38 Chief Operating Officer
Andrew B. Stein...................................... 44 Vice President-International Sales
Amy L. Weltman....................................... 48 Vice President-Marketing
William A. Johnson, Jr. ............................. 45 Chief Financial Officer and Treasurer
Sanford B. Frank..................................... 45 General Counsel and Secretary
Jonathan Muir........................................ 37 Controller
Oren Asher........................................... 44 Director
Joel M. Handel....................................... 62 Director
</TABLE>
The business experience, principal occupations and employment, as well as
period of service, of each of the directors, executive officers and certain
other key employees of the Company during at least the last five years are set
forth below.
DAVID KI KWAN CHU, CHAIRMAN OF THE BOARD. Mr. Chu is a co-founder of Toymax and
has served as a director of the Company since 1997 and as Chairman of Toymax
(H.K.) Limited since its inception in 1990. In this capacity, Mr. Chu, who is
based in Hong Kong, is the senior executive in charge of all of the Company's
sourcing, manufacturing and strategic planning activities. Mr. Chu became
involved in the toy industry in 1966. In 1972, he was named president of his
father's company and grew the manufacturing plant into one of Hong Kong's
leading OEM toy manufacturers. Mr. Chu serves as Chairman of Pingshan
Manufacturing Association, a local federation organized by a group of
manufacturers operating factories in Pingshan, and
5
<PAGE>
as the Vice Chairman of Shenzhen Toys Association, a quasi-governmental
organization devoted to fostering toy industry development in China's Shenzhen
Special Economic Zone. Mr. Chu and his wife, Francis Shuk Kuen Leung, own and
manage Tai Nam, the Company's purchasing agent, and Jauntiway, the Company's
leading manufacturer.
STEVEN A. LEBENSFELD, PRESIDENT AND DIRECTOR. Mr. Lebensfeld is a co-founder of
Toymax and has served as the President and a director of the Company since 1997,
the President and a director of Toymax Inc. since May 1990 and as a director of
Toymax (H.K.) Limited since December 1995. Mr. Lebensfeld is the senior
executive in charge of the Company's toy design and development activities.
Prior to his involvement with Toymax, Mr. Lebensfeld founded and was President
of Toy Biz from 1987 to 1989. Mr. Lebensfeld started the Kidworks (H.K.) Ltd.,
FOB division of Panosh Place, Inc. in 1985. Between 1984 and 1986, Mr.
Lebensfeld was Managing Director of HG Toys (H.K.) Ltd. Between 1979 and 1984,
Mr. Lebensfeld was affiliated with Regent Toys, a company he and Mr. Goldberg
founded.
HARVEY GOLDBERG, EXECUTIVE VICE PRESIDENT AND DIRECTOR. Mr. Goldberg is a
co-founder of Toymax. He has been a director of the Company since 1997, a
director of Toymax (H.K.) Limited since December 1995 and has served as
Executive Vice President of Toymax Inc. since September 1995. In this capacity,
Mr. Goldberg is the senior executive in charge of all of the Company's sales
activities and both of Toymax's domestic and international vice presidents of
sales report to him. Prior to joining Toymax, Mr. Goldberg served as a senior
sales and marketing executive for Toy Biz, H-G Toys (HK) Ltd., Regent Toys, H-G
Canada and Grand Toys. Mr. Goldberg is a director of MGI Software Corp., a
public company traded on the Canadian over-the-counter market.
KENNETH PRICE, SENIOR VICE PRESIDENT OF SALES AND MARKETING. Mr. Price is a
co-founder of Toymax. From its inception in May 1990 through September 1995, Mr.
Price served as Secretary of, as well as holding key sales and marketing
positions with Toymax. From September 1995 through May 1996, Mr. Price served as
Vice President of Sales and Marketing. Since May 1996, Mr. Price has served as
Senior Vice President of Sales and Marketing. Mr. Price supervises the Company's
domestic sales and marketing activities and is closely involved in the
development and distribution of Toymax's promotional television commercial
advertising. Mr. Price is also the Company's senior executive in charge of
securing, negotiating and maintaining licenses. Prior to joining Toymax, Mr.
Price served as a marketing and sales executive for Toy Biz and H-G Toys (HK)
Ltd.
CARMINE RUSSO, CHIEF OPERATING OFFICER. Mr. Russo has served as Chief Operating
Officer for the Company since April 1997. In this capacity, Mr. Russo is
responsible for the day-to-day management of all operational and research and
development activities including design, development, purchasing, sourcing,
production, shipping, and warehousing. Prior to that position, Mr. Russo served
as Vice President of Operations and R&D for Toymax from December 1994 through
March 1997. From December 1987 to December 1994, Mr. Russo held various senior
management positions at Buddy L, a subsidiary of SLM International where he
served as Senior Vice President-Operations and was a member of their Operating
Committee. Before joining Buddy L, Mr. Russo was a development and production
executive for H-G Toys from January 1984 to November 1987.
ANDREW B. STEIN, VICE PRESIDENT OF INTERNATIONAL SALES. Mr. Stein has served as
Vice President of International Sales for Toymax since March 1993. In this
capacity, Mr. Stein is responsible for managing all of the day-to-day
international sales activities, including calling on existing customers,
developing new business accounts, managing sales representative firms and
working closely with the Company's research and development department in
connection with the development of new products. From December 1990 to March
1993, Mr. Stein served in a similar capacity at Tyco Playtime. Prior to that,
Mr. Stein served as Vice President of International Sales and Marketing at Nasta
International. Mr. Stein has also served as an executive for H-G Toys, Inc.,
Amtoy and Ideal Toy Corporation.
AMY L. WELTMAN, VICE PRESIDENT-MARKETING. Ms. Weltman has served as Vice
President of Marketing of Toymax Inc. since January 1996. Ms. Weltman has
day-to-day responsibility for advertising, public
6
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relations, licensing, sales promotion, marketing and merchandising programs, and
research. She is involved in the development and execution of brand strategies,
and in short and long term strategic planning and product development. Prior to
serving as Vice President for the Company, Ms. Weltman served as a consultant to
Toymax from July 1994 to December 1996. From 1982 to 1994, Ms. Weltman was
Senior Vice President of Account Services at TSR Advertising, where she was
responsible for the following accounts; Galoob Toys, Cap Toys, CBS Toys and
Ideal Toys. Ms. Weltman is a member of the Board of Directors of Women In Toys.
WILLIAM A. JOHNSON, JR., CHIEF FINANCIAL OFFICER AND TREASURER. Mr. Johnson has
served as Chief Financial Officer and Treasurer of the Company since March 1997.
In this capacity, Mr. Johnson is the senior executive in charge of the Company's
finance, treasury, accounts receivable, customer service department, as well as
all MIS functions. From July 1987 to January 1997, Mr. Johnson was employed by
Noodle Kidoodle, Inc., and from May 1989, served as Vice President, Chief
Financial Officer and Secretary. Mr. Johnson was responsible for all corporate
financial functions and administration including Securities and Exchange
Commission and shareholder relations matters. From January 1976 to April 1982,
and then again from January 1987 to July 1987, Mr. Johnson was employed by
Deloitte & Touche, serving in various capacities, most recently as Audit Manager
and Consultant. From July 1982 to January 1987, Mr. Johnson was employed by
Associated Dry Goods (ADG) as Divisional Vice President of Corporate Accounting.
SANFORD B. FRANK, GENERAL COUNSEL AND SECRETARY. Mr. Frank has served as General
Counsel for Toymax since April 1994 and as Secretary since September 1995. In
this capacity, Mr. Frank is responsible for overseeing all legal affairs of the
Company. Prior to joining Toymax, Mr. Frank served as Vice President and General
Counsel for Tyco Playtime, a division of Tyco, from September 1990 to December
1993. From 1980 to 1990, Mr. Frank was in private practice.
JONATHAN P. MUIR, CONTROLLER. Mr. Muir has served as controller of Toymax Inc.
since July 1995. In this capacity, Mr. Muir is responsible for the day-to-day
operations of the Finance Department including the preparation of financial
statements, budgets and forecasts, accounting, accounts payable and accounts
receivable. Mr. Muir joined Toymax in September 1993 as Assistant Controller.
Prior to his association with Toymax, Mr. Muir served as Controller of
Balducci's Inc. from 1989 to 1993.
OREN ASHER, DIRECTOR. Mr. Asher has been a director of the Company since October
1997. Mr. Asher has been the Chairman of MGI Software Corp., a leading developer
of photo and video software, since January 2, 1996. Prior to joining MGI, Mr.
Asher was President and CEO of Ditek Software Corp., a graphics software
development company which he founded in 1985 and which specializes in computer-
aided design and drafting. Mr. Asher continues to hold the office of Chairman
with Ditek Software Corp.
JOEL M. HANDEL, DIRECTOR. Mr. Handel has been a director of the Company since
October 1997. Mr. Handel has been a partner in the law firm of Baer Marks &
Uphan LLP, which serves as counsel to the Company, since 1968. From April 1987
through March 1997, Mr. Handel was a member of the Board of Directors of Tyco
Toys, Inc., a company for which Baer Marks & Upham LLP also served as counsel.
7
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the Company's last three fiscal years
(ended March 31, 1998, March 31, 1997 and March 31, 1996), the compensation of
those persons who were, at March 31, 1998, the chief executive officer and the
other four most highly compensated executive officers of the Company.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER ANNUAL ALL OTHER
FISCAL SALARY BONUS COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($)
- --------------------------------------------------- ----------- ---------- ---------- ------------- -------------
David Ki Kwan Chu (1).............................. 1998 $ -- $ -- $ 30,000 $ --
Chairman 1997 -- -- 240,000 --
1996 -- -- 220,000 --
Steven Lebensfeld (2).............................. 1998 326,500 236,250 7,300 8,935
President 1997 253,500 -- 6,000 867
1996 275,000 -- 6,500 1,440
Harvey Goldberg (2)(3)............................. 1998 307,500 236,250 9,700 3,424
Executive Vice President 1997 240,300 -- 6,000 544
1996 160,000 -- 6,000 --
Ken Price (2)...................................... 1998 270,961 208,250 6,600 3,576
Sr. Vice President Sales and Marketing 1997 265,000 -- 6,500 399
1996 265,000 -- 6,000 232
Carmine Russo (2).................................. 1998 224,385 198,750 6,600 8,904
Chief Operating Officer 1997 160,000 -- 6,000 268
1996 160,000 -- 6,000 4,105
Andrew Stein (2)................................... 1998 185,000 138,750 6,600 8,736
Vice President International Sales 1997 150,000 -- 6,000 383
1996 150,000 -- -- 204
</TABLE>
- ------------------------
(1) Other Annual Compensation represents director's fees paid to Mr. Chu.
(2) Amounts shown as Other Annual Compensation constitutes car allowances.
(3) Mr. Goldberg's salary in fiscal 1998 included $130,500 in director's fees
from Toymax HK.
8
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OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth, for fiscal 1998, information concerning
grants of stock options to the named officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------- VALUE AT ASSUMED RATES
% OF TOTAL OF STOCK PRICE
NUMBER OF SHARES OPTIONS GRANTED APPRECIATION FOR
UNDERLYING TO EMPLOYEES OPTION TERM
OPTIONS IN FISCAL YEAR EXERCISE EXPIRATION ----------------------
NAME GRANTED (#)(1) (2) PRICE DATE 5% ($) 10% ($)
- ------------------------------------ ----------------- ----------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
David Ki Kwan Chu................... 60,000 11.26% $ 8.50 10/20/07 $ 320,736 $ 812,809
Steven Lebensfeld................... 60,000 11.26 8.50 10/20/07 320,736 812,809
Harvey Goldberg..................... 60,000 11.26 8.50 10/20/07 320,736 812,809
Ken Price........................... 46,000 8.63 8.50 10/20/07 245,898 623,153
Carmine Russo....................... 46,000 8.63 8.50 10/20/07 245,898 623,153
Andrew Stein........................ 28,000 5.25% 8.50 10/20/07 149,677 379,311
</TABLE>
- ------------------------
(1) Option granted under the Company's Stock Option Plan. Such options vest and
become exercisable with respect to 20% of the shares subject thereto one
year after the date of grant and, thereafter, options with respect to 20% of
the shares subject thereto will vest and become exercisable on each of the
second, third, fourth, and fifth anniversary of the date of grant, provided
that the grantee remains in the employ of the Company. Vested options may
not be exercised beyond three months after the grantee ceases to be employed
by the Company.
(2) Based on a total of 531,000 options granted to 59 employees and directors of
the Company.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
During fiscal 1998 none of the named executive officers exercised any
options, and as of March 31, 1998, all of the options granted by the Company had
exercise prices in excess of the then market value ($7.12) of the underlying
Common Stock.
The Company has not awarded stock appreciation rights to any employee and
has no long-term incentive plans, as that term is defined in the regulations of
the SEC. The Company has a stock option plan and bonus plans. During fiscal
1998, the Company did not adjust or amend the exercise price of stock options
awarded to the named officers, whether through amendment, cancellation or
replacement grants, or other means. Also, the Company presently has no defined
benefit or actuarial plans covering any employees of the Company.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an officer or full-time employee of
the company is entitled to receive director's fees at the rate of $15,000 per
year. All directors are reimbursed for actual expenses incurred in connection
with attendance at meetings of the Board of Directors or committees of the
Board.
EMPLOYMENT AGREEMENTS
The Company has separate employment agreements with Messrs. Lebensfeld,
Goldberg, Russo, Price, Johnson and Stein, each effective October 1, 1997
(individually and collectively, the "Employment Agreements"). The Employment
Agreements (except for Mr. Johnson's) each have a term of three years with
annual automatic one-year extensions, unless advance notice of non-extension is
timely furnished by either party. The Employment Agreement with Mr. Johnson has
a term of two years. Pursuant to the
9
<PAGE>
Employment Agreements, Messrs. Lebensfeld, Goldberg, Price, Russo, Johnson and
Stein are to receive base salaries for calendar 1998 of $315,000, $315,000,
$278,250, $265,000, $155,000, and $185,000, respectively, increasing each
succeeding year during the term of the agreement and are entitled to participate
in the Executive Bonus Plan and the Stock Option Plan. Each of the Employment
Agreements with Messrs. Lebensfeld and Goldberg also provide an annual "Stock
Appreciation Bonus" of 1% of the appreciation of the value of the outstanding
common stock of the Company during the immediately preceding year.
Under the Employment Agreements, the Company may terminate each executive
officer's employment upon notice to the executive officer and each executive
officer may resign and terminate the Employment Agreement at any time. If the
executive officer's employment is terminated at death, or by resignation or for
"Good Cause" (as defined in the applicable Employment Agreement) the Company has
no obligation to the executive except for payment of compensation and benefits
accrued but unpaid at the time of termination.
In the cases of Messrs. Lebensfeld and Goldberg, if the Company terminates
the executive officer's employment without "Good Cause" or if the executive
officer resigns with "Good Reason" (as defined in the applicable Employment
Agreement), in addition to accrued but unpaid compensation and benefits, the
executive officer is entitled to the payment of his base salary and continued
participation in the Executive Bonus Plan, payment of the Stock Appreciation
Bonus, and medical, dental and life insurance coverage for the remaining term of
the applicable Employment Agreement. In the cases of Messrs. Russo, Price,
Johnson and Stein, if the Company terminates the executive officer's employment
without "Good Cause," in addition to accrued but unpaid compensation and
benefits, the executive officer is entitled to the payment of his base salary
for twelve months following termination of employment.
All of the Employment Agreements provide for enhanced compensation in the
event of termination of employment following a "Change of Control" of the
Company, as such term is defined in each Employment Agreement. The Employment
Agreements with Messrs. Russo, Price, Stein and Johnson provide that, in the
event that following a Change of Control, the executive officer's employment is
terminated without Good Cause, in lieu of the twelve months' continuation of
base salary otherwise due the executive officer on account of termination
without Good Cause, the executive officer is entitled to 24 months' continuation
of base salary.
The Employment Agreements with Messrs. Lebensfeld and Goldberg provide that
in the event that the executive officer resigns within six months following a
Change of Control (as defined in the applicable Employment Agreement), or
following a Change of Control, the executive officer's employment is terminated
without Good Cause, then in lieu of the continuation of base salary due the
executive officer but in addition to all other compensation and benefits due in
the event of termination for Good Reason or without Good Cause, the executive
officer is entitled to (1) a lump sum cash payment equal to three times his
average compensation (i.e., base salary, Stock Appreciation Bonuses and
Executive Bonus Plan awards) for the two prior calendar years, and (2) an amount
equal to any additional income and excise taxes that will be payable by the
executive officer on account of 'excess parachute payments' (within the meaning
of Section 280G of the Internal Revenue Code).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of David Chu,
Joel Handel and Oren Asher. As more fully disclosed under "Certain Relationships
and Related Transactions", Mr. Chu, who is Chairman of the Board of the Company,
owns Tai Nam Industrial Company Limited ("Tai Nam"), which serves as the
Company's purchasing agent, and Jauntinay, which manufactures the majority of
the Company's products. Further, during fiscal 1998, the Company leased its
showroom facility in Hong Kong from Mr. Chu. Joel Handel is a partner at Baer
Marks & Upham LLP, a law firm which serves as outside Counsel to the Company.
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OVERVIEW AND PHILOSOPHY. The Compensation Committee (the "Committee") has
been delegated the authority to review and approve the remuneration arrangements
for the Chief Executive Officer and each of the other executive officers of the
Company. In addition, the Committee reviews the benefit plans for employees of
the Company, administers the Stock Option Plan and approves grants to be made in
connection therewith and administers the Company's Executive Bonus Plan.
The Company's executive compensation is based upon three primary components:
base salary, annual bonuses and grants of stock options. Such compensation also
includes participation in various benefit plans generally available to employees
of the Company. The objectives of the Committee in determining the type and
amount of such executive officer compensation are to attract, motivate and
retain key management employees and to align the interest of management with the
best interests of stockholders.
In determining base salaries and annual bonuses, the Committee considered
the individual experience and performance of each executive officer as well as
the competitive marketplace to hire and retain qualified executives at the
appropriate level relative to the position, responsibilities and performance of
such executives. Mr. Lebensfeld's compensation arrangements are determined by
the Committee as well as his employment agreement. With respect to fiscal 1998,
Mr. Lebensfeld received a base salary of $326,500 and a bonus of $236,250. In
setting Mr. Lebensfeld's compensation, the Committee considered and recognized
his leadership and responsibility with regard to the Initial Public Offering
completed in Fiscal 1998, his positioning the Company for continued high growth,
as well as his efforts in implementing the Company's growth strategy.
CASH COMPENSATION. Cash compensation typically consists of a base salary plus an
annual performance bonus under the Executive Bonus Plan. The base salaries for
each of the executive officers are fixed under such employee's employment
agreements, each of which is described under the caption "Employment
Agreements," and annual performance bonuses are also determined by the Committee
pursuant to the Executive Bonus Plan. The Committee determines whether to
maintain the Executive Bonus Plan in any given fiscal year, the key management
employees of the Company who will be eligible to participate in a given fiscal
year and the amount, if any, for each participant based on such participant's
performance. The aggregate amount of awards under this plan for any fiscal year
are limited based on certain formulas. In determining cash compensation, the
Committee considers prevailing economic and business conditions and
opportunities, performance by comparable organizations, performance of
individual executives, stockholder value and such other criteria as the
Committee deems relevant. No particular weightings are assigned by the Committee
to any such factors. The Company paid bonuses to the Named Officers as described
above in the Summary Compensation Table under the caption "Executive
Compensation."
STOCK OPTION PLAN. The executive officers, as well as other employees of the
Company, are eligible to participate in the Stock Option Plan. The purpose of
the Stock Option Plan is to motivate and retain employees who are responsible
for the attainment of the primary long-term performance goals of the Company.
The Stock Option Plan is administered by the Committee. The Committee believes
that awards made under the Stock Option Plan provide the necessary long-term
incentive to focus managers on building profitability and stockholder value. The
Committee has the authority to determine the individuals to whom stock options
are awarded, the terms upon which option grants shall be made and the number of
shares subject to each option, all subject to the terms and conditions of the
Stock Option Plan. The Committee granted options to six executive officers under
the Stock Option Plan as described above under the caption "Options Granted in
Last Fiscal Year." The Committee believes that such awards provide the necessary
long-term incentive to focus managers on building profitability and stockholder
value.
OTHER COMPENSATION. The Company provides certain other benefits, such as health
insurance, to the executive officers that are generally available to Company
employees.
David Chu
Joel Handel
Oren Asher
11
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line-graph presentation comparing the cumulative
stockholder return, calculated on a dividend reinvested basis, for the Company's
Common Stock, against the cumulative total returns of the NASDAQ Composite Stock
Index and the Peer Group Index (as defined below) for the period from
commencement of public trading of the Common Stock on October 21, 1997 through
March 31, 1998. The graph assumes $100 was invested in the Company's Common
Stock, the NASDAQ Composite Stock Index and the Peer Group Index on October 21,
1997. Note that historic stock price performance is not necessarily indicative
of future stock price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
TOYMAX INTERNATIONAL, INC. COMMON STOCK,
NASDAQ COMPOSITE AND PEER GROUP INDICES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPANY INDEX MARKET INDEX INDEX 2
<S> <C> <C> <C>
10/21/97 100 100 100
10/31/97 90 93.093 91.983
11/28/97 92.5 93.559 88.816
12/31/97 86.25 92.064 81.45
1/30/98 86.25 94.952 80.543
2/27/98 76.875 103.867 85.694
3/31/98 71.25 107.697 90.235
</TABLE>
- ------------------------
* In accordance with SEC rules, the Company has elected to select a group of
peer companies (the "Peer Group Index") on an industry basis for comparison
purposes. The Peer Group Index is comprised of 10 industry participants: DSI
Toys, Inc., Empire of Carolina, Inc., Equity Marketing, Inc., Galoob Toys
Inc., Jakks Pacific Inc., Just Toys Inc., Play by Play Toys & Novelties,
Inc., Radica Games Limited, Toy Biz, Inc. and Yes! Entertainment
Corporation.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PURCHASING AND MANUFACTURING
Tai Nam, which is based in Hong Kong, serves as the Company's purchasing
agent pursuant to an Agency Agreement dated April 1, 1997, as amended (the
"Agency Agreement") between Tai Nam and Toymax Inc. Since the Company's
founding, Tai Nam and its affiliate, Concentric, have served as the Company's
purchasing agent. Tai Nam and Concentric are owned by David Chu, the Chairman
and a principal stockholder of the Company. As the Company's purchasing agent,
Tai Nam arranges for the manufacturing of the Company's products based on
purchase orders placed with Tai Nam by the Company. In addition, Tai Nam handles
all shipping documents, letters of credit, bills and payment, serves as liaison
with other vendors and performs quality control functions.
Pursuant to the Agency Agreement, Tai Nam receives an agency fee equal to
seven percent (7%) of the gross invoiced value of products purchased by Toymax
Inc. (based on the factory purchase price of the merchandise). Until April 1997,
the Company utilized Concentric as its purchasing agent on similar terms. In
fiscal 1997, Concentric earned $1,420,768 in agency fees and in fiscal 1998 Tai
Nam earned $3,587,095 in such fees. Tai Nam's duties include handling purchase
orders for, and acting as liaison to, manufacturers and vendors for the Company.
Pursuant to the Agency Agreement, Toymax purchases products at FOB Yien Tian
prices. The Company pays all expenses associated with the making of molds for
new products and such molds are assets of the Company. The term of the Agency
Agreement ends on March 31, 1999. The terms granted to the Company and the
historical willingness of Tai Nam to permit the Company to delay payments at
certain times, has benefited the Company.
In fiscal 1998, the Company's purchases from Tai Nam totaled $51.2 million.
The majority of the Company's products are manufactured by Jauntiway, which is
also owned by Mr. Chu. In fiscal 1998, approximately 95% of the Company's
products were manufactured by Jauntiway (some using subcontractors).
In April 1997, Toymax Inc. entered into an agency agreement with Tai Nam
under which Toymax Inc. acts as purchasing agent for Tai Nam in the United
States in exchange for a fee equal to 5% of such purchases. During fiscal 1998
such fees amounted to $51,518.
The Company rents approximately 1,628 square feet of space in Kowloon, Hong
Kong from David Chu, Chairman of the Company, which it uses as showroom
facilities. The monthly rent under this lease is $5,900 (HK $45,584). The lease
expires on August 1, 1998.
The Company, Tai Nam and Mr. Chu have agreed that, all transactions with
affiliates, including Tai Nam and Jauntiway, will be subject to the approval of
the independent directors of the Company's Board of Directors.
During fiscal 1998, Mr. Lebensfeld, the Company's President, was indebted to
the Company for amounts representing expense and salary advances. The maximum
balance of such indebtedness during fiscal 1998 was $216,910. Mr. Lebensfeld is
no longer indebted to the Company.
Joel Handel, a director of the Company, is a partner at Baer Marks & Upham
LLP, a law firm which serves as outside counsel to the Company.
1999 STOCKHOLDERS' PROPOSALS
Proposals of stockholders to be presented at the annual meeting to be held
in 1999 must be received by March 30, 1999 in order for such proposals to be
considered for inclusion in the Proxy Statement and form of proxy relating to
such meeting. Stockholders who do not present proposals for inclusion in the
Proxy Statement but who still intend to submit a proposal at the 1999 annual
meeting, and stockholders who intend to submit nominations for directors at the
meeting, are required to notify the Secretary of the Company of their proposal
or nominations, and provide certain other information, in accordance with and
13
<PAGE>
during the time period set forth in the Company's Certificate of Incorporation
and By-laws. Additional information and a copy of the Certificate of
Incorporation and By-laws may be obtained from the Secretary of the Company,
TOYMAX INTERNATIONAL, INC., 125 E. Bethpage Road, Plainview, New York 11803.
OTHER BUSINESS
The management of the Company is not aware of any other matters to be
brought before the Annual Meeting. However, if any other matters are properly
brought before the Annual Meeting, the persons named in the enclosed form of
proxy will have discretionary authority to vote all proxies with respect to such
matters in accordance with their best judgment.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Compensation Committee Report" and
"Performance Graph" shall not be deemed to be so incorporated unless
specifically otherwise provided in any such filing.
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
MARCH 31, 1998, TOGETHER WITH FINANCIAL STATEMENTS AND SCHEDULES, AS FILED WITH
THE SEC ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST
ADDRESSED TO WILLIAM JOHNSON, CHIEF FINANCIAL OFFICER, TOYMAX INTERNATIONAL,
INC., 125 E. BETHPAGE ROAD, PLAINVIEW, NEW YORK 11803.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
By order of the Board of Directors
Sanford B. Frank
SECRETARY
July 31, 1998
14
<PAGE>
<TABLE>
<S> <C> <C>
PROXY
TOYMAX INTERNATIONAL, INC.
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints STEVEN A. LEBENSFELD, HARVEY GOLDBERG AND SANFORD B. FRANK with full power to act without the
others and with power to appoint his substitute as the undersigned's proxies to vote all shares of Common Stock of the
undersigned in TOYMAX INTERNATIONAL, INC. (the "Company"), a Delaware corporation, which the undersigned would be entitled to
vote at the Annual Meeting of Stockholders of the Company to be held at The Chase Manhattan Bank, Media Room, Lower Level, 395
North Service Road, Melville, New York 11747, on August 17, 1998 at 9:00 a.m., E.D.T., and at any and all adjournments thereof as
follows:
1. ELECTION OF DIRECTORS FOR all nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below
CLASS 1 CLASS 2 CLASS 3
------- ------- -------
(Initial term of one year) (Initial term of two years) (Initial term of three years)
HARVEY GOLDBERG STEVEN LEBENSFELD DAVID KI KWAN CHU
OREN ASHER JOEL HANDEL
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.)
2. Proposal to ratify the selection of BDO Seidman LLP as the Company's independent auditors for the fiscal year ending March 31,
1999. The Board of Directors recommends a vote FOR this proposal.
FOR ABSTAIN AGAINST
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
(over)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
3. In their discretion such other business as may properly come before the meeting and any and all adjournments thereof.
The shares of Common Stock represented by this proxy will be voted in accordance with the foregoing instructions. In the absence
of any instructions, such shares will be voted for the election of the nominees listed in item 1 and for the proposal in item 2.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders to be held on August 17, 1998 and
the Proxy Statement furnished therewith.
The undersigned hereby revokes any proxy to vote shares of Common Stock of the Company heretofore given by the undersigned.
, 1998
(Date)
Signature
Please date, sign exactly as name appears on this proxy, and promptly return in the enclosed envelope. When signing as guardian,
executor, administrator, attorney, trustee, custodian, or in any other similar capacity, please give full title. If a
corporation, sign in full corporate name by president or other authorized officer, giving title, and affix corporate seal. If a
partnership, sign in partnership name by authorized person. In the case of joint ownership, each joint owner must sign.
</TABLE>
