NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
ARROW-MAGNOLIA INTERNATIONAL, INC.
2646 Rodney Lane
Dallas, Texas 75229
To be Held May 27, 1999
Notice is hereby given that the Annual Meeting of
Shareholders of Arrow-Magnolia International, Inc. will
be held on Thursday, May 27, 1999 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 30, 1999 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
Chairman of the Board
Dallas, Texas
April 30, 1999
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 27, 1999
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 May 6, 1999.
April 30, 1999 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, 2,966,838 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 1999 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 30, 1999, 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 63.5% of the Company's Common
Stock and 57.1% 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
2646 Rodney Lane
Dallas, Texas 75229 1,050,498 (1) 33.4%
Mark I. Kenner
2646 Rodney Lane
Dallas, Texas 75229 682,792 (2) 21.8%
Fred Kenner
2646 Rodney Lane
Dallas, Texas 75229 422,378 (3) 13.5%
Robert D. DeRosier 49,973 1.7%
Clifton R. Duke 8,450 *
All Officers,
Directors and
Nominees as a Group
(Five Persons) 2,214,091 (4) 63.5%
*Less than 1%
(1) Includes 186,340 shares which may be acquired upon
exercise of an option.
(2) Includes 175,692 shares which may be acquired upon
exercise of an option.
(3) Includes 170,368 shares which may be acquired upon
exercise of an option.
(4) Includes 532,400 shares which may be acquired upon
exercise of options.
<PAGE>
ELECTION OF DIRECTORS AND INFORMATION
AS TO DIRECTORS AND NOMINEES
At the 1999 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 1999 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 77 Chairman of the Board and
Director
Mark I. Kenner 67 Director, Vice Chairman and
Chief Executive Officer
Fred Kenner 46 Director, President and
Chief Operating Officer
Robert D. DeRosier 72 Director
Clifton R. Duke 64 Director
All nominees were elected a Director of the Company on May 21,
1998 and will hold their positions until their successors are
elected.
Each of the above named officers was elected to his respective
office with the Company by the Board of Directors of the Company on
May 21, 1998, and serves as an officer of the Company at the
discretion of the Board of Directors. Mr. Mark I. Kenner is the
father of Mr. Fred Kenner, but 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
of the Company since December 1985. Until February 17, 1999, Mr.
Shwiff also served as President. 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, Vice Chairman and Chief
Executive Officer since February 17, 1999. Prior to that time, he
had served as 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 President of the
Company since February 17, 1999. Prior to that time, he had served
as 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, 1998, the Audit Committee held a total of
three meetings and the Board of Directors held a total of three
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 1998 failed to file any report under Section
16(a) of the Exchange Act with respect to the Company's most recent
fiscal year.
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, 1998 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, 1998 $161,200 $40,300 0
Chairman of 1997 $150,400 $37,700 0
the Board 1996 $140,000 $32,500 0
Mark I. Kenner 1998 $154,700 $38,675 0
Director, Vice 1997 $144,300 $36,075 0
Chairman and 1996 $133,900 $30,875 0
Chief Executive
Officer
Fred Kenner, 1998 $148,200 $37,050 0
Director, 1997 $137,800 $34,450 0
President 1996 $127,400 $29,250 0
and Chief
Operating
Officer
</TABLE>
Option Exercises and Fiscal Year End Option Values
- ---------------------------------------------------
The following table reflects option exercises during the
fiscal year ended December 31, 1998, 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 0 186,340 - $722,068 -
Mark I.
Kenner 0 0 175,692 - $680,807 -
Fred
Kenner 0 0 170,368 - $660,176 -
</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, 1998 as reported by the Nasdaq SmallCap Market.
<PAGE>
<PAGE>
INFORMATION CONCERNING THE STOCK DIVIDEND
On February 17, 1999, 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 15, 1999 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 based upon trading information), multiplied by the
fraction of a share resulting from such dividend.
The Board of Directors has 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 15, 1999.
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 Philip
Vogel & Co. PC as the Company's independent auditors for fiscal
1999. Representatives of Philip Vogel & Co. PC are expected to be
present at the Annual Meeting of Shareholders on May 27, 1999 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 2000 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
31, 1999. 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 1999 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, Chairman of the Board
Dallas, Texas
April 30, 1999
NOTICE: Upon written request from a shareholder of record at
April 30, 1999 (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, 1998, 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 30, 1999 or in respect of which the undersigned is entitled
to vote at the Company's Annual Meeting of Shareholders, to be held
on May 27, 1999 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 30, 1999.
Dated , 1999
----------
-----------------------------
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.
