PRELIMINARY
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.
<TABLE>
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned of Class
<S> <C> <C>
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)
</TABLE>
* 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
<TABLE> Long-Term
Compensation Awards
Name and Annual Number of Shares
Principal Compensation Subject to
Position Year Salary Bonus Options Granted
<S> <C> <C> <C> <C>
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
</TABLE>
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:
<TABLE>
Number of
Number Shares Underlying Value of Unexercised
of Shares Unexercised Options In the Money Options
Acquired at Fiscal Year End at Fiscal Year End(1)
on Value Unexer- Unexer
Name Exercise Realized Exercisable cisable Exercisable cisable
<S> <C> <C> <C> <C> <C> <C>
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 -
</TABLE>
(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 June 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>
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 1997 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.
