<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 Section 240.14a-11(c) or Section 240.14a-12
EDUCATIONAL DEVELOPMENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
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Educational Development Corporation
10302 East 55th Place
Tulsa, Oklahoma 74146-6515
- --------------------------------------------------------------------------------
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 29, 1999
----------------------------------------
TO THE SHAREHOLDERS OF
EDUCATIONAL DEVELOPMENT CORPORATION:
The 1999 Annual Meeting of Shareholders of Educational Development
Corporation, a Delaware Corporation ("EDC" or the "Company"), will be held June
29, 1999, at 2:00 P.M., at the Sheraton Tulsa, 10918 East 41st Street, Tulsa,
Oklahoma, for the following purposes:
1. To elect two nominees as Class I Directors;
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record at the close of business on May 6, 1999 are
entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting. Whether or not you plan to
attend the meeting, you are requested to sign and return the enclosed proxy as
promptly as possible in the enclosed postage paid envelope. You may revoke your
Proxy at any time before it is exercised at the meeting.
By Order of the Board of Directors
/s/ Randall W. White
Randall W. White
Chairman of the Board and President
Tulsa, Oklahoma
May 20, 1999
<PAGE>
EDUCATIONAL DEVELOPMENT CORPORATION
10302 East 55th Place
Tulsa, Oklahoma 74146-6515
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the management of EDUCATIONAL DEVELOPMENT CORPORATION, a Delaware
corporation (the "Company" or "EDC"), for use at the Annual Meeting of
Shareholders of the Company to be held at the Sheraton Tulsa, 10918 East 41st
Street, Tulsa, Oklahoma, on Tuesday, June 29, 1999, commencing at 2:00 P.M., and
at all continuations and adjournments thereof. This Proxy Statement and
accompanying form of Proxy are first being mailed to shareholders on or about
May 20, 1999.
SOLICITATION OF PROXIES
A shareholder giving a Proxy has the power to revoke it at any time before
its exercise. A Proxy may be revoked by filing with the Secretary of the Company
a written revocation or a duly executed Proxy bearing a later date. A Proxy will
be suspended if the shareholder who executed it is present at the meeting and
elects to vote in person.
This solicitation is made on behalf of the Board of Directors of the
Company. The cost of soliciting these Proxies will be borne by the Company. In
addition to solicitation by mail, the Company may make arrangements with
brokerage houses and other custodians, nominees and fiduciaries to forward
Proxies and proxy material to their principals and may reimburse them for their
expenses in so doing. Certain officers and employees of the Company may solicit
Proxies by telephone, facsimile or personally from some shareholders whose
Proxies are not promptly received. Such officers and employees will receive no
compensation other than their regular salaries, but they will be reimbursed for
any expenses incurred in making such solicitation. Properly executed Proxies in
the accompanying form which are filed before the meeting and not revoked will be
voted in accordance with the directions and specifications contained therein.
VOTING SECURITIES
The Company's $.20 par value common stock is the only class of capital
stock authorized by its Amended and Restated Certificate of Incorporation. The
number of shares which may be voted at the meeting or any adjournment thereof is
4,557,890 shares, which was the number outstanding as of May 6, 1999, the record
date. Each shareholder is entitled to one vote for each share held except that
cumulative voting is authorized with respect to the election of directors. In
other words, solely for the purpose of electing directors, each share will
entitle the holder thereof to a number of votes equal to the number of directors
being elected and each shareholder may cast all of his votes for a single
nominee, or may distribute them among any two or more nominees. The presence in
person or by proxy of the holders of a majority of the shares issued and
outstanding at the meeting will constitute a quorum for the transaction of
business. Votes will be tabulated by an inspector of election appointed by the
Board of Directors of the Company.
PRINCIPAL HOLDERS OF VOTING SECURITIES
As of May 6, 1999, the following were the only persons known to management
of the Company to be beneficial owners of more than five percent of the
Company's outstanding common stock. Unless otherwise noted, the persons named
below have sole voting and investment power with respect to such shares.
1
<PAGE>
Name and Address of Amount of Beneficial Percent of
Beneficial Owner Ownership Class (1)
------------------- -------------------- ----------
Randall W. White
10385 South 76th E. Ave.
Tulsa, Oklahoma 74133 797,025 (2) 16.6%
Robert D. Berryhill
P.O. Box 740125
Tulsa, Oklahoma 74147-0125 365,000 8.0%
-----------------------------
(1) The Percent of Class was calculated on the basis of the number of
outstanding shares plus the number of shares which may be acquired
pursuant to currently exercisable stock options, however, shares which
may be acquired by such person pursuant to currently exercisable stock
options are not deemed outstanding for purposes of computing the
Percent of Class of shares beneficially owned by any other person.
(2) Includes 235,200 shares as to which Mr. White has the right to acquire
beneficial ownership through the exercise of currently exercisable
stock options.
COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
As of May 6, 1999, the directors and nominees of the Company and the
directors and executive officers of the Company as a group were the beneficial
owners of the following amount of shares of common stock of the Company. Unless
otherwise noted, the persons named below have sole voting and investment power
with respect to such shares.
Names of Directors and Amount of Beneficial Percent of
Nominees and Identity of Group Ownership Class (1)
- ------------------------------ -------------------- ----------
G. Dean Cosgrove 20,000 .4%
John M. Lare 20,850 .5%
James F. Lewis 83,160 1.8%
Robert D. Berryhill 365,000 8.0%
Randall W. White 797,025 (2) 16.6%
All directors and executive officers 1,377,872 (3) 28.5%
as a group (7 persons)
(1) The Percent of Class was calculated on the basis of the number of
outstanding shares plus the number of shares which may be acquired by
such person or group pursuant to currently exercisable stock options,
however, shares which may be acquired by such person or group pursuant
to currently exercisable stock options are not deemed outstanding for
purposes of computing the Percent of Class for shares beneficially
owned by any other person or group.
(2) Includes 235,200 shares as to which Mr. White has the right to acquire
beneficial ownership through the exercise of currently exercisable
stock options.
(3) Includes 285,200 shares as to which all directors and executive
officers have the right to acquire beneficial ownership through the
exercise of currently exercisable stock options.
2
<PAGE>
NUMBER OF DIRECTORS
The Amended and Restated Certificate of Incorporation and By-laws of the
Company provide that the number of directors which shall constitute the whole
Board of Directors shall not be less than three (3) nor more than fifteen (15).
Within said limits, the number of directors shall be determined by resolution of
the Board of Directors or by the shareholders at the annual meeting. The Board
of Directors has adopted a resolution establishing five (5) as the number of
directors of the Company.
ELECTION OF DIRECTORS
In accordance with the Amended and Restated Certificate of Incorporation
and By-laws of the Company, the directors are divided into three classes, Class
I, Class II and Class III, and are elected for a full term of office expiring at
the third succeeding annual shareholders meeting following the election to
office and when a successor is duly elected and qualified. The By-laws provide
that such classes shall be as nearly equal in number as possible. The term of
office of Class I directors expires at the annual meeting of shareholders to be
held on June 29, 1999, the term of office of Class II directors expires at the
annual meeting of shareholders in 2000 and the term of office of Class III
directors expires at the annual meeting of shareholders in 2001. At the Annual
Meeting of Shareholders announced herein, two directors shall be chosen to serve
as Class I directors. They will be elected for a full term of office expiring at
the annual meeting of shareholders in 2002, and will serve until a successor or
successors are duly elected and qualified. Unless authority to do so is
withheld, the persons named as proxies in the accompanying form of Proxy will
vote the shares represented thereby for the following nominees designated by the
Board of Directors to serve as Class I directors. Although it is not anticipated
that the nominees will be unwilling or unable to serve, if the nominees should
decline or be unable to act as a director, the persons named as proxies in the
accompanying form of Proxy may, unless authority to do so is withheld, vote for
any substitute nominee proposed by the Board of Directors. The business
experience shown for the nominees has been their principal occupation for at
least the past five years.
The affirmative vote of a plurality of the shares present in person or by
proxy at the meeting and entitled to vote is required for the election of
directors. An abstention from voting will be tabulated as a vote withheld on the
election of directors and will be included in computing the number of shares
present for purposes of determining the presence of a quorum for the
meeting.
NOMINEES
Director
Name and Business Experience Age Class Since
- ---------------------------- --- ----- -----
John M. Lare 52 I 1986
President of Pegasus Foods, Inc., an owner and
operator of Mexican quick service restaurants
since March, 1995. From October, 1992 to
January, 1995, Mr. Lare was a Director and Vice
President - Finance and Administration for Webco
Industries, Inc., a manufacturer and distributor
of steel tubing. From 1989 to October 1992, Mr.
Lare was a Principal for Pegasus Venture Capital
and the Argent Group, investment banking and
leverage buyout firms.
James F. Lewis 58 I 1992
CEO of The Lewis Companies Inc., a Tulsa based
holding firm that owns or controls the following
firms: Oil Capital Electric Inc., KBL Inc., FCE
Inc., OMNI Mechanical Services, Engineering
Design Group Inc. and various real estate
holdings. He has been the CEO for the past
twenty-seven years. He serves on the Oklahoma
Bank IV advisory board of directors.
3
<PAGE>
CONTINUING DIRECTORS
Director
Name and Business Experience Age Class Since
- ---------------------------- --- ----- -----
Robert D. Berryhill 53 II 1986
Private Investor. Vice Chairman of the Board of
EDC since October 1986. He was President of
Original Chili Bowl, Inc., Tulsa, Oklahoma, a
food manufacturing business, from August 1965
until January, 1992, and was Vice President
thereof for five years prior to his election as
President.
G. Dean Cosgrove 65 II 1986
Independent Consultant since 1985. He served as
Financial Vice President and Treasurer of Mapco
Inc., Tulsa, Oklahoma, an energy company, from
May 1984 until July 1985, and served as Vice
President and Treasurer thereof from January
1981 until May 1984.
Randall W. White 57 III 1984
Chairman of the Board of EDC since September
1986, President of EDC since January 1986, and
Treasurer of EDC since February 1984. From
February 1980 until joining EDC in January 1983,
Mr. White served as the Chief Financial Officer
of Nicor Drilling Company, Tulsa, Oklahoma, an
oil and gas drilling company.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended February 28, 1999, the Board of Directors held
three meetings. Each director attended all meetings of the Board of Directors,
except for Robert D. Berryhill who did not attend one meeting and James R. Lewis
who did not attend one meeting.
The only standing committees of the Board of Directors are described as
follows:
(i) The Executive Committee is responsible for assisting management in
establishing long-range plans, budgets and marketing and development
plans. The Committee consists of Messrs. Cosgrove, Berryhill and
White. No separate meetings of this committee were held during the
fiscal year ended February 28, 1999, all committee actions having been
taken by the Board of Directors as a whole during the regular Board of
Directors' meetings.
(ii) The Compensation Committee is responsible for administering the
Company's 1992 Incentive Stock Option Plan and the Incentive Stock
Option Plan of 1981. The Committee consists of Messrs. Berryhill and
Cosgrove. No separate meetings of this Committee were held during the
fiscal year ended February 28, 1999, all committee actions having been
taken by the Board of Directors as a whole during the regular Board of
Directors' meetings.
(iii) The Audit Committee is responsible for the review of reports of
external auditors and for liaison with the external auditing firm. The
Committee consists of Messrs. Lewis and Lare. No separate meetings of
this Committee were held during the fiscal year ended February 28,
1999, all committee actions having been taken by the Board of
Directors as a whole during the regular Board of Directors' meetings.
The Board of Directors has no nominating committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has an outstanding unsecured loan to John M. Lare, an outside
Director, in the total principal amount of $123,500 at May 6, 1999. This loan
matures February 29, 2000. Interest is payable at 9% per annum. Accrued interest
totalled $14,900 at May 6, 1999.
4
<PAGE>
COMPENSATION OF DIRECTORS
As compensation for all services rendered as a director of the Company, the
Company has a standard arrangement whereby a director who is not also an officer
of the Company is paid $250 for each directors' meeting attended in person. Each
director who is not also an officer of the Company and who is a member of and
who attends a meeting of one of the Committees of the Board of Directors is paid
$150 for such attendance. Directors are not paid for directors' meetings or
Committee meetings held by means of conference telephone calls.
COMPLIANCE WITH SECTION 16(a)
Under Section 16(a) of the Securities Exchange Act of 1934, the Company's
directors, its executive officers, and any persons holding more than ten percent
of the Company's Common Stock are required to report their initial ownership of
the Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and to furnish the Company with a copy of
each such report. Specific due dates for these reports have been established and
the Company is required to disclose in this proxy statement any failure to file
by these dates during and with respect to fiscal year 1999. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company, during and with respect to fiscal year 1999, all Section 16(a) filing
requirements were satisfied.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation of the Company's President during the fiscal years ended February
28, 1999, February 28, 1998 and February 28, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------
Name Other All
and Annual Restricted # Other
Principal Fiscal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation (1) Awards SARs Payouts sation
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Randall W. White 1999 $110,000 $ 20,000 $ -0- $ -0- -0- $ -0- $ -0-
Chairman of the 1998 $100,800 $ 20,000 $ -0- $ -0- -0- $ -0- $ -0-
Board, President 1997 $ 90,000 $ 20,000 $ -0- $ -0- -0- $ -0- $ -0-
and Treasurer
</TABLE>
(1) Does not include the value of perquisites or other personal benefits
because the aggregate amount of such compensation, if any, did not
exceed the lesser of $50,000 or 10% of the annual salary and bonus in
any of the three fiscal years reported in the Summary Compensation
Table.
5
<PAGE>
OPTION EXERCISES DURING FISCAL YEAR ENDED FEBRUARY 28, 1999
AND OPTION VALUES AT FEBRUARY 28, 1999
The following table sets forth certain information with respect to options
exercised by the Company's President during the fiscal year ended February 28,
1999, and the number and value of unexercised stock options held by him at the
end of the fiscal year.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
Shares Acquired Value at FY - End at FY - End
Name on Exercise Realized (2) February 28, 1999 (1) February 28, 1999 (3)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Randall W. White -0- -0- 232,500 $67,500
</TABLE>
(1) All unexercised options were exercisable as of February 28, 1999.
(2) Calculated by multiplying the number of shares acquired on exercise times
the difference between (a) the closing stock price of the Common Stock at
the exercise date and (b) the per share option exercise price.
(3) Calculated by multiplying the number of unexercised options times the
difference between (a) the closing stock price of the Common Stock at
February 28, 1999 and (b) the per share option exercise price.
COMPENSATION COMMITTEE REPORT
The executive compensation policy is subjective and not subject to specific
criteria. The compensation committee considers such factors as sales levels,
earnings per share levels and return on equity in determining executive
compensation.
Robert D. Berryhill
G. Dean Cosgrove
EMPLOYMENT CONTRACTS
The Company has an employment agreement with Randall W. White, President of
the Company, which expires March 1, 2000 and provides for annual compensation of
$110,000.
SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented at the 2000 annual meeting should
be directed to Randall W. White, President of the Company, at 10302 East 55th
Place, Tulsa, Oklahoma 74146-6515, and must be received by the president on or
before March 1, 2000. Any such proposal must comply with the requirements of
Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended.
6
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE RETURNS
ON AN INDEXED BASIS
The following graph compares the performance of the Company's Common Stock
with the performance of the Nasdaq Stock Market Total Return Index and the
Nasdaq Non-Financial Stock Index. The Center for Research in Security Prices
("CRSP") Index provided the Nasdaq indices used in this graph. The graph assumes
$100 was invested on February 28, 1994 in each of the Company's Common Stock and
the two Nasdaq indices.
The graph displayed below is presented in accordance with SEC requirements.
Stockholders are cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily indicative of future
performance. The graph in no way reflects the Corporation's forecast of future
financial performance.
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
Among the Company, Nasdaq Stock Market Total Return Index
and Nasdaq Non-Financial Stock Index
NASDAQ Stock Market NASDAQ Stock Market Educational Development
Total Return Index Non-Financial Stock Index Corporation
------------------- ------------------------- -----------------------
1994 100 100 100
1995 101.4 98.5 201.8
1996 141.3 137.8 373.8
1997 168.5 159.5 179.4
1998 230.6 215.1 130.8
1999 300.2 287.3 74.7
Note: Prior years EDC stock prices restated for 2-1 stock split effective April
1, 1996
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP audited the financial statements of the
Company for the fiscal year ended February 28, 1999. The firm of Deloitte &
Touche LLP has also been selected and approved by the Board of Directors as
independent public accountants to make an audit of the financial statements of
the Company for fiscal year ending February 29, 2000. A representative of
Deloitte & Touche LLP is expected to be present at the meeting. Such
representative will be afforded an opportunity to make a statement on behalf of
said firm and will be available to respond to appropriate questions.
7
<PAGE>
ANNUAL REPORTS AND FINANCIAL STATEMENTS
The proxy statement is accompanied by the Annual Report of the Company for
its fiscal year ended February 28, 1999. Shareholders are referred to such
Report for information about the Company's business and activities, but such
Report is not incorporated in this Proxy Statement and is not deemed to be a
part of the proxy soliciting material.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO SECTION 13 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, WILL BE PROVIDED WITHOUT CHARGE TO RECORD OR
BENEFICIAL OWNERS OF SHARES ENTITLED TO VOTE AT THE MEETING. Written requests
for copies of said report should be directed to Randall W. White, President of
the Company, at the Company's corporate headquarters located at 10302 East 55th
Place, Tulsa, Oklahoma 74146-6515.
OTHER MATTERS
Management does not intend to present and does not have any reason to
believe that others will present at the annual meeting any item of business
other than as stated in the Notice of Annual Meeting of Shareholders. If,
however, other matters are properly brought before the meeting, it is the
intention of the persons named as proxies in the accompanying form of Proxy to
vote the shares represented thereby in accordance with their best judgment and
discretionary authority to do so is included in the Proxy.
By order of the Board of Directors
/s/ Randall W. White
Randall W. White
Chairman of the Board and President
Tulsa, Oklahoma
May 20, 1999
8
<PAGE>
<TABLE>
<S> <C>
Please mark
your vote as
indicated in X
this example
UPON THE ELECTION OF DIRECTORS: The nominees for Class I Director are: John M. Lare and James F. Lewis
FOR the listed WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual nominee, write that
nominees AUTHORITY nominee's name in the space provided below.)
to vote for the
listed nominees
[ ] [ ] __________________________________________________________________________________
The foregoing is as set forth in the Notice of said meeting and in the accompanying Proxy Statement, receipt of which are
hereby acknowledged.
THIS PROXY WILL BE VOTED AS INDICATED BY THE SHAREHOLDER(S). IF NO CHOICE IS INDICATED ON THE ABOVE PROPOSAL, THIS PROXY
WILL BE VOTED FOR SUCH PROPOSAL. The Board of Directors know of no other proposals to come before this meeting. IF ANY
OTHER MATTERS SHOULD BE BROUGHT BEFORE THE MEETING, THE PERSONS NAMED IN THIS PROXY OR THEIR SUBSTITUTES WILL VOTE THIS
PROXY ON SUCH MATTERS IN ACCORDANCE WITH THEIR BEST JUDGEMENT.
The undersigned hereby revokes any Proxy heretofore given, and
ratifies all that said Proxies may lawfully do or cause to be
done by virtue hereof.
Dated: ________________________________________________, 1999
________________________________________________________ L.S.
________________________________________________________ L.S.
IMPORTANT: Please sign exactly as your name or names appear
on this Proxy and when signing as attorney, executor,
administrator, trustee or guardian, give your full title as
such. If the signatory is a corporation, sign the full
corporate name by duly authorized officer. If a partnership
please sign in partnership name by authorized person(s).
PLEASE SIGN THIS SIDE
FOLD AND DETACH HERE
</TABLE>
<PAGE>
EDUCATIONAL DEVELOPMENT CORPORATION
10302 East 55th Place, Tulsa, Oklahoma 74146
PROXY
THIS PROXY IS BEING SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS.
ANNUAL MEETING OF SHAREHOLDERS, JUNE 29, 1999
The undersigned hereby appoints Randall W. White and W. Curtis Fossett, or
either or both of them, proxies of the undersigned, with full power of
substitution, to vote all shares of Educational Development Corporation ("EDC")
owned by or standing in the name of the undersigned, at the Annual Meeting of
Shareholders of EDC, to be held at the Sheraton Tulsa, 10918 East 41st Street,
Tulsa, Oklahoma, on June 29, 1999 at 2:00 o'clock P.M., local time, and at any
adjournments.
(Continued on reverse side)
FOLD AND DETACH HERE
