NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
ARROW-MAGNOLIA INTERNATIONAL, INC.
2646 Rodney Lane
Dallas, Texas 75229
To be Held May 21, 1998
Notice is hereby given that the Annual Meeting of
Shareholders of Arrow-Magnolia International, Inc. will
be held on Thursday, May 21, 1998 at 10:00 a.m., Dallas, Texas
time at the Community Room, Chase Bank of Texas, 12875 Josey
Lane, Farmers Branch, Texas 75234, for the following purposes:
1. To elect a Board of Directors of five (5) persons
as nominated in the accompanying Proxy Statement, such Directors
to hold office until the next annual meeting of shareholders and
until their successors are elected;
2. To ratify the declaration of a 10% stock dividend
on the Company's common stock; and
3. To transact such procedural matters as may
properly be brought before the meeting or any adjournment or
adjournments thereof.
Said meeting may be adjourned from time to time without
other notice than by announcement at said meeting, or at any
adjournment thereof, and any and all business for which said
meeting is hereby noticed may be transacted at any such
adjournment.
The Board of Directors has fixed April 9, 1998 as the date
for taking of a record of the shareholders entitled to notice of
and to vote at the meeting and at any adjournment or adjournments
thereof. The stock transfer books will not be closed.
Enclosed is a form of Proxy solicited by the Board of
Directors of the Company. Shareholders who do not plan to attend
the meeting in person are requested to date, sign and return the
enclosed Proxy in the enclosed envelope, to which no postage need
be affixed if mailed in the United States. Your Proxy may be
revoked at any time before it is exercised and will not be used
if you attend the meeting and prefer to vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
MORRIS SHWIFF
President and Chief
Executive Officer
Dallas, Texas
April 10, 1998
PAGE
<PAGE>
ARROW-MAGNOLIA INTERNATIONAL, INC.
2646 Rodney Lane
Dallas, Texas 75229
PROXY STATEMENT
Solicitation by the Board of Directors
of Proxies from Shareholders for
the Annual Meeting of Shareholders
to be held on May 21, 1998
The Board of Directors of Arrow-Magnolia International, Inc.
(hereinafter called the "Company") solicits your proxy in the
enclosed form, which you are requested to fill out, sign as
indicated and return to the Company in the enclosed,
self-addressed envelope, which requires no postage if mailed in
the United States. You are encouraged to return your completed
proxy whether or not you intend to attend the meeting in person.
Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is exercised by
filing a written revocation or a duly executed proxy bearing a
later date. Any written revocation may be delivered in person or
mailed to the Company at 2646 Rodney Lane, Dallas, Texas 75229,
Attn: President. A shareholder who attends the Annual Meeting in
person may revoke his proxy at the Annual Meeting and vote in
person if he so desires.
Proxies are being solicited by mail and all expenses of
solicitation have been or will be borne by the Company. The
approximate day on which this Proxy Statement and form of proxy
will be sent to security holders is April 13, 1998.
April 9, 1998 has been fixed as the record date for the
determination of shareholders of the Company entitled to notice
of and to vote at the Annual Meeting or at any adjournments
thereof. At the close of business on that date, 2,681,392 shares
of Common Stock, par value $0.10 per share, (the "Common Stock"),
were issued and outstanding, each share entitling the holder
thereof to one vote. Cumulative voting in the election of
Directors is not allowed.
Abstentions and broker non-votes will be counted as present
for purposes of determining the existence of a quorum at the
Annual Meeting. Because Directors are elected by a plurality of
the votes cast by shareholders, abstentions and broker non-votes
are not counted and have no effect in determining which
candidates have received the highest number of votes and are
elected, except in affecting the total number of votes cast for a
nominee. With respect to any matter brought before the Annual
Meeting requiring the affirmative vote of a majority or other
proportion of the outstanding shares, an abstention or non-vote
will have the same effect as a vote against the matter being
voted upon.
All shares of the Company represented by proxies relating to
shares of the Common Stock received in time and in proper form
and condition and not revoked will be voted as specified in the
proxy, or in the absence of specific direction, the proxy will be
voted by the person designated therein:
1. FOR the election as Directors of the Company of the
five (5) nominees named below to hold office until the next
annual meeting of shareholders and until their respective
successors shall be duly elected. In the event any of such
nominees should become unable to serve as a Director, the
proxies will be voted in accordance with the best judgment of the
person acting under it.
2. FOR ratification of the declaration of a 10% stock
dividend on the Company's common stock.
The management knows of no other matters to be submitted to
the 1998 Annual Meeting with respect to which the shareholders
are entitled to vote, but if other procedural matters do properly
come before the meeting, the persons named in the proxy will vote
according to their best judgment.
<PAGE> <PAGE>
SECURITIES OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the
Company's Common Stock owned at April 9, 1998, by (i) each
shareholder known to the Company to own beneficially more than 5%
of the Company's Common Stock, (ii) each of the Company's
Directors or nominees for Director, and (iii) all officers,
Directors and nominees as a group. All of the officers, Directors
and nominees of the Company, who own beneficially 64.3% of the
Company's Common Stock and 57.9% of the Company's outstanding
Common Stock, have indicated their intention to vote for each of
the nominees to be presented to the shareholders at the Annual
Meeting. These votes, when cast, will be sufficient to assure
election of each of the nominees regardless of whether other
shareholders vote for or against or do not vote with respect to
the nominees.
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
Morris Shwiff 980,999(1) 34.4%
2646 Rodney Lane
Dallas, Texas 75229
Mark I. Kenner 620,720(2) 21.8%
2646 Rodney Lane
Dallas, Texas 75229
Fred Kenner 383,980(3) 13.5%
2646 Rodney Lane
Dallas, Texas 75229
Robert D. DeRosier 45,430 1.7%
Clifton R. Duke 5,500 *
All Officers, Directors 2,036,629(4) 64.3%
and Nominees as a Group
(Five Persons)
* Less than 1%
(1) Includes 169,400 shares which may be acquired upon
exercise of an option.
(2) Includes 159,720 shares which may be acquired upon
exercise of an option.
(3) Includes 154,880 shares which may be acquired upon
exercise of an option.
(4) Includes 484,000 shares which may be acquired upon
exercise of options.
PAGE
<PAGE>
ELECTION OF DIRECTORS AND INFORMATION
AS TO DIRECTORS AND NOMINEES
At the 1998 Annual Meeting, the shareholders of the Company
will elect five (5) Directors, in each case to hold office until
the next annual meeting and until their respective successors
shall be duly elected. There will be submitted by the Board of
Directors of the 1998 Annual Meeting for election as Directors
the following five (5) nominees:
Morris Shwiff
Mark I. Kenner
Fred Kenner
Robert D. DeRosier
Clifton R. Duke
The Directors, nominees and executive officers of the Company
are as follows:
Name Age Position With Registrant
Morris Shwiff 76 Chairman of the Board,
Director and President
Mark I. Kenner 66 Director and
Executive Vice President
Fred Kenner 45 Director and Vice
President, Secretary and
Treasurer
Robert D. DeRosier 71 Director
Clifton R. Duke 63 Director
All nominees were elected a Directors of the Company on June
27, 1997 and will hold their positions until their successors are
elected.
Each of the above named officers was elected to his respective
offices with the Company by the Board of Directors of the Company
on June 27, 1997, and serve as officers of the Company at the
discretion of the Board of Directors. Mr. Mark I. Kenner is the
father of Mr. Fred Kenner and there is no other family
relationship between any of the executive officers or Directors
of the Company.
The principal occupation and employment during the past five
years of the Directors and each of the executive officers of the
Company are as follows:
Morris Shwiff has served as Chairman of the Board of Directors
and President of the Company since December 1985. For more than
five years prior to December 1985, Mr. Shwiff was a Director,
President and principal stockholder of Arrow Chemical
Corporation, which corporation was acquired by the Company in
December, 1985.
Mark I. Kenner has served as Director and Executive Vice
President of the Company since December 1985. For more than five
years prior to December 1985, Mr. Kenner was a Director, Vice
President and stockholder of Arrow Chemical Corporation.
<PAGE>
Fred Kenner has served as Director and Vice President,
Secretary and Treasurer of the Company since December 1985. For
more than five years prior to December 1985. Mr. Kenner was a
Director, Secretary and Treasurer and stockholder of Arrow
Chemical Corporation.
Robert D. DeRosier is the retired Chairman of the Board of
AmRep, Inc., a manufacturer of specialty chemicals, where he
served until 1991. He received a Bachelor of Science in Chemical
Engineering from Northwestern University.
Clifton R. Duke is Chairman Emeritus of the Board of Directors
of Container Supply, Inc., the principal business of which is the
distribution and sale of rigid packaging products. He served as
President and Chief Executive Officer of Chemscope Corporation,
the principal business of which is the manufacture and sale of
aerosol and liquid cleaning compounds. Mr. Duke is also General
Partner of D&D Investments, the principal business of
which is real estate development and leasing.
Directors are elected annually and serve until their successors
are duly elected and qualified. Officers serve at the discretion
of the Board.
The Company's Board of Directors has an Audit Committee
composed of non-employee Directors Duke and DeRosier and the
Company's Chairman, Morris Shwiff. The Audit Committee was
appointed to review the Company's financial statements and its
relationship with its independent auditors. The Company has no
standing nominating or compensation committee. During the fiscal
year ended December 31, 1997, the Audit Committee held
a total of three meetings and the Board of Directors held a total
of eight meetings (or their equivalent), and each incumbent
Director then serving participated in all of such meetings (or
their equivalent).
Compliance With Section 16(a) of the Exchange Act.
Based solely upon a review of Forms 3, 4 and 5 furnished to the
Company, none of the Directors, executive officers or beneficial
owners of more than 10 percent of the Company's Common Stock
during fiscal 1997 failed to file any report under Section 16(a)
of the Exchange Act with respect to the Company's most recent
fiscal year except that Messrs. Duke and DeRosier failed to
timely file their initial Forms 3.
<PAGE> <PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the monetary and non-monetary
compensation paid by the Company during the three fiscal years
ended December 31, 1997 to the Company's chief executive officer
and to the Company's other executive officers.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation Awards
Name and Annual Number of Shares
Principal Compensation Subject to
Position Year Salary Bonus Options Granted
Morris Shwiff, 1997 $150,800 $37,700 0
Chairman of 1996 $140,400 $32,500 0
the Board 1995 $130,000 $17,940 0
and President
Mark I. Kenner, 1997 $144,300 $36,075 0
Director and 1996 $133,900 $30,875 0
Executive 1995 $123,500 $16,887 0
Vice President
Fred Kenner, 1997 $137,800 $34,450 0
Director and 1996 $127,400 $29,250 0
Vice President, 1995 $117,000 $15,990 0
Secretary and
Treasurer
Option Exercises and Fiscal Year End Option Values
The following table reflects option exercises during the fiscal
year ended December 31, 1997, the number of shares underlying
both exercisable and unexercisable options as of the fiscal year
end and the value of unexercised "in the money" options as of the
fiscal year end:
Number of
Number Shares Underlying Value of Unexercised
of Shares Unexercised Options In the Money Options
Acquired at Fiscal Year End at Fiscal YearEnd(1)
on Value Unexer- Unexer-
Name Exercise Realized Exercisable cisable Exercisable cisable
Morris
Shwiff 0 0 169,400 - $1,037,575 -
Mark I.
Kenner 0 0 159,720 - $ 977,486 -
Fred
Kenner 0 0 154,880 - $ 948,640 -
(1) For purpose of calculating this value, the Company has
utilized the closing price for the Company's common stock as of
December 31, 1997 as reported by the NASDAQ SmallCap Market.
PAGE
<PAGE>
INFORMATION CONCERNING THE STOCK DIVIDEND
On March 24, 1998, the Board of Directors declared a stock
dividend of one share for each ten shares issued and outstanding.
At the Annual Meeting, shareholders will consider whether to
ratify this stock dividend.
In connection with declaring this stock dividend, the Board of
Directors established July 14, 1998 as the record date for
determining shareholders entitled to participate and receive the
stock dividend. Each record holder as of that date shall be
entitled to receive on additional share of Common Stock for each
ten shares held, unless the Directors shall determine to rescind
the dividend after receiving the vote of the shareholders.
No fractional shares will be issued as a result of the share
dividend. Rather, any shareholder who would otherwise receive a
fractional share shall receive a cash payment for the fractional
share equal to the fair market value of the Company's Common
Stock on the record date for such dividend (as determined by the
Board of Directors base upon trading information), multiplied by
the fraction of a share resulting from such dividend.
The Board of Directors have reserved the right to rescind the
declaration of the stock dividend at any time prior to the record
date after the vote of the shareholder is calculated. In the
event that the stock dividend is not rescinded, then issuance and
distribution of stock certificates for the additional shares
should occur shortly after the record date of July 14, 1998.
The declaration of the stock dividend will not affect the
Company's shareholders' equity, but would increase the Company's
stated capital by 10%.
Management believes that increasing the absolute number of
shares available for trading may encourage active trading in the
Company's Common Stock and result in greater liquidity for the
Company's shares. Management therefore hopes that the dividend
will make the investments of existing shareholders more liquid
and may facilitate future offerings by creating an active market.
The Company has no existing plans, undertakings, arrangements or
agreements to conduct any additional offerings, however, and has
not entered into any negotiations for such purpose. Furthermore,
management has no present plans to adopt any anti-takeover or
similar measures to ensure retention of control in connection
with the dividend, nor is management aware of any efforts, within
the past year, to obtain control of the Company.
No approval of the shareholders is required to permit the stock
dividend to be made, and the distribution of the stock dividend
may proceed at the discretion of the Board of Directors
regardless of the votes cast. Rather, the Board of Directors is
requesting the vote of shareholders in order to gauge the
receptivity of shareholders to the dividend. The Board will
consider the votes cast before determining whether to rescind the
dividend.
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected KPMG Peat
Marwick LLP as the Company's independent auditors for fiscal
1998. Representatives of KPMG Peat Marwick are expected to be
present at the Annual Meeting of Shareholders on May 21, 1998 to
make any statement if they desire to do so and to respond to
any appropriate questions of the shareholders.
PAGE
<PAGE>
SHAREHOLDERS' PROPOSALS
The day by which proposals of shareholders intended to be
presented at the 1999 annual meeting of shareholders must be
received by the Company for inclusion in the Company's proxy
statement and form of proxy relating to that meeting is December
11, 1998. It is important that proxies be returned promptly.
Shareholders are requested to date, sign and return the enclosed
proxy in the enclosed envelope, to which no postage need be
affixed if mailed in the United States. If you attend the 1998
Annual Meeting, you may revoke your proxy and vote in
person if you so desire, otherwise your proxy will be voted for
you.
BY ORDER OF THE BOARD OF DIRECTORS
Morris Shwiff, President
Dallas, Texas
April 10, 1998
NOTICE: Upon written request from a shareholder of record at
April 9, 1998 (or from any beneficial owner representing that he
is or was entitled to vote at the meeting), the Company will
furnish without charge a copy of its Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1997, as filed with the
Securities and Exchange Commission, including financial statement
and schedules thereto and a list of exhibits not contained
therein. The Company will furnish copies of the full text of any
such exhibits, if requested, upon payment in advance of the fee
prescribed therefor as specified in the list of exhibits
accompanying the Annual Report on Form 10-KSB. Such fee will
reflect the Company's reasonable expenses incurred in
providing copies of the exhibits. Requests should be directed to:
Morris Shwiff
Arrow-Magnolia International, Inc.
2646 Rodney Lane
Dallas, Texas 75229
PAGE
<PAGE>
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS OF
ARROW-MAGNOLIA INTERNATIONAL, INC.
The undersigned shareholder of Arrow-Magnolia International,
Inc. (the "Company"), revoking all prior proxies, does by these
presents name, constitute and appoint Morris Shwiff and Fred
Kenner and each of them, the true and lawful proxy and
attorney-in-fact of the undersigned, with full power of
substitution, to vote all shares of the Common Stock, par value
$0.10 per share, of the Company standing in the name of the
undersigned on the books of the Company at the close of business
on April 9, 1998 or in respect of which the undersigned is
entitled to vote at the Company's Annual Meeting of Shareholders,
to be held on May 21, 1998 at the Community Room, Chase Bank of
Texas, 12875 Josey Lane, Farmers Branch, Texas 75234, and at any
and all adjournments thereof, on the following matters:
1. Election of Directors
FOR all nominees WITHHOLD
listed below (except AUTHORITY to vote
as marked to the for all nominees
contrary below) listed below
Morris Shwiff, Mark Kenner, Fred Kenner, Robert D. DeRosier
and Clifton R. Duke.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
2. Ratification of the declaration of a 10% stock dividend
of the Company's common stock.
FOR AGAINST WITHHOLD
3. In their discretion, upon such other procedural matters
as may properly come before the meeting.
Please complete, sign and mail this proxy promptly in the
enclosed self-addressed envelope, which requires no postage if
mailed in the United States. IF NO SPECIFIC DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED "FOR" MATTERS NO. 1 AND 2.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders and the Proxy Statement each dated
April 9, 1998.
Dated
, 1998
Shareholder's Signature
Shareholder's Signature
NOTE: Please sign exactly as your name is shown on the left.
If stock stands in two or more names, please have all sign. If
this Proxy is executed by a corporation, it should be signed in
the name of the corporation by an officer thereunto duly
authorized. If this Proxy is to be signed as attorney, executor,
administrator, trustee, guardian, or in any representative
capacity, the title of the person signing should be given in full
and any necessary documentary evidence of authority to sign
this Proxy should be presented.
