SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
RELIV' INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
|X| No Fee Required
<PAGE>
RELIV' INTERNATIONAL, INC.
136 Chesterfield Industrial Boulevard
Chesterfield, Missouri 63005
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO
BE HELD ON MAY 25, 2000
To: Shareholders of Reliv' International, Inc.
The annual meeting of the shareholders of Reliv' International, Inc.
will be held at the Doubletree Hotel and Conference Center, 16625 Swingley Ridge
Road, Chesterfield, Missouri 63017, on Thursday, May 25, 2000, at 10:00 a.m.,
Central Daylight Savings Time, for the following purposes:
1. To elect 10 directors to hold office during the year following the
annual meeting or until their successors are elected (Item No. 1 on
proxy card);
2. To ratify the appointment of Ernst & Young L.L.P. as auditors of the
Corporation for 2000 (Item No. 2 on proxy card); and
3. To transact such other business as may properly come before the
meeting.
The close of business on April 10, 2000, has been fixed as the record
date for determining the shareholders entitled to receive notice of and to vote
at the annual meeting.
BY ORDER OF THE BOARD OF DIRECTORS
April 21, 2000 /s/ Stephen M. Merrick
Stephen M. Merrick, Secretary
YOUR VOTE IS IMPORTANT
It is important that as many shares as possible be represented
at the annual meeting. Please date, sign, and promptly return
the proxy in the enclosed envelope. Your proxy may be revoked
by you at any time before it has been voted.
<PAGE>
RELIV' INTERNATIONAL, INC.
136 Chesterfield Industrial Boulevard
Chesterfield, Missouri 63005
PROXY STATEMENT
Information Concerning the Solicitation
This statement is furnished in connection with the solicitation of
proxies to be used at the Annual Shareholders Meeting (the "Annual Meeting") of
Reliv' International, Inc. (the "Company"), a Delaware corporation, to be held
on Thursday, May 25, 2000. The proxy materials are being mailed to shareholders
of record on April 21, 2000.
The solicitation of proxies in the enclosed form is made on behalf of
the Board of Directors of the Company.
The cost of preparing, assembling and mailing the proxy material and of
reimbursing brokers, nominees and fiduciaries for the out-of-pocket and clerical
expenses of transmitting copies of the proxy material to the beneficial owners
of shares held of record by such persons will be borne by the Company. The
Company does not intend to solicit proxies otherwise than by use of the mail,
but certain officers and regular employees of the Company or its subsidiaries,
without additional compensation, may use their personal efforts, by telephone or
otherwise, to obtain proxies.
Quorum and Voting
Only shareholders of record at the close of business on April 10, 2000,
are entitled to vote at the Annual Meeting. On that day, there were issued and
outstanding 9,551,102 shares of Common Stock. Each share has one vote. A simple
majority of the outstanding shares is required to be present in person or by
proxy at the meeting for there to be a quorum for purposes of proceeding with
the Annual Meeting. A simple majority of the shares present in person or by
proxy at the Annual Meeting, at which a quorum is present, is required to elect
directors. Abstentions and withheld votes have the effect of votes against these
matters. Broker non-votes (shares held of record by a broker for which a proxy
is not given) will be counted for purposes of determining shares outstanding for
purposes of a quorum, but will not be counted as present for purposes of
determining the vote on any matter considered at the meeting.
A shareholder signing and returning a proxy on the enclosed form has
the power to revoke it at any time before the shares subject to it are voted by
notifying the Secretary of the Company in writing. If a shareholder specifies
how the proxy is to be voted with respect to any of the proposals for which a
choice is provided, the proxy will be voted in accordance with such
specifications. If a shareholder fails to so specify with respect to such
proposals, the proxy will be voted "FOR" the nominees for directors contained in
these proxy materials.
<PAGE>
Stock Ownership by Management and Others
The following table provides information concerning the beneficial
ownership of Common Stock of the Company by each director and nominee for
director, certain executive officers, and by all directors and officers of the
Company as a group as of April 10, 2000. In addition, the table provides
information concerning the beneficial owners known to the Company to hold more
than 5 percent of the outstanding Common Stock of the Company as of April 10,
2000.
<PAGE>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership(1) Class(1)(2)
------------------------ ----------------------- -------------
Robert L. and Sandra S. Montgomery(3) 2,605,023 25.85%
Carl W. Hastings(4) 820,360 8.36%
David G. Kreher 274,836 2.81%
Stephen M. Merrick(5) 616,006 6.35%
Donald L. McCain 367,387 3.80%
Marvin W. Solomonson 347,925 3.63%
Thomas T. Moody 151,532 1.58%
Thomas W. Pinnock III 93,649 *
John B. Akin 40,880 *
Donald E. Gibbons, Jr. 137,645 1.42%
All Directors and Executive Officers as a
Group (11 persons) 5,455,243 53.80%
<PAGE>
*less than one percent
(1) In each case the beneficial owner has sole voting and investment
power. The figures include the following number of shares of Common
Stock for which an individual has the right to acquire beneficial
ownership, within sixty (60) days from April 10, 2000, through the
exercise of stock options: Mr. Montgomery - 525,304, Dr. Hastings -
256,778, Mr. Kreher - 220,150, Mr. Merrick - 140,916, Mr. McCain -
120,084, Mr. Solomonson - 35,500, Mr. Moody - 35,500, Mr. Pinnock -
57,500, Mr. Akin - 40,000, and Mr. Gibbons - 111,000.
(2) The calculation of percent of class is based upon the number of shares
of Common Stock outstanding as of April 10, 2000.
(Footnotes continued on next page)
<PAGE>
(3) Mr. Robert L. Montgomery is Chairman of the Board of Directors, Chief
Executive Officer and President of the Company. Ms. Montgomery is a
director of the Company. The Montgomerys' mailing address is 136
Chesterfield Industrial Boulevard, Chesterfield, Missouri 63005.
(4) Dr. Carl W. Hastings is Executive Vice President and a Director of the
Company. Dr. Hastings' mailing address is 136 Chesterfield Industrial
Boulevard, Chesterfield, Missouri 63005.
(5) Stephen M. Merrick is Senior Vice President, Secretary and a Director
of the Company. Mr. Merrick's mailing address is 136 Chesterfield
Industrial Boulevard, Chesterfield, Missouri 63005.
PROPOSAL ONE - ELECTION OF DIRECTORS
Ten directors will be elected at the Annual Meeting to serve for terms
of one year expiring on the date of the Annual Meeting in 2001. Each director
elected will continue in office until a successor has been elected. If a nominee
is unable to serve, which the Board of Directors has no reason to expect, the
persons named in the accompanying proxy intend to vote for the balance of those
named and, if they deem it advisable, for a substitute nominee.
Information Concerning Nominees
The following is information concerning nominees for election as
directors of the Company. Each of such persons is presently a director of the
Company.
ROBERT L. MONTGOMERY, age 58, Chairman of the Board, Chief Executive
Officer, President and Treasurer of the Company. Mr. Montgomery became Chairman
of the Board of Directors and Chief Executive Officer of the Company on February
15, 1985, and President on July 1, 1985. Mr. Montgomery has been a director of
the Company since 1985. Mr. Montgomery is also the President and director of
Reliv', Inc. and President and a director of Reliv' World Corporation, both
wholly-owned subsidiaries of the Company. Mr. Montgomery was, from 1982 to July,
1985, President of Spectrum Foods, Inc., a corporation engaged in the
development, manufacture and sale of specialized food products utilizing soy as
a base. Mr. Montgomery, together with Dr. Carl W. Hastings, founded Spectrum
Foods in 1981. From 1970 to 1980, Mr. Montgomery was the Executive Vice
President of Modern Income Life Insurance Company and from 1965 to 1979 was an
agent, manager and vice president of Modern American Life Insurance Company. Mr.
Montgomery received a B.A. Degree in Economics from the University of Missouri
in Kansas City, Missouri in 1965.
DR. CARL W. HASTINGS, age 58, Executive Vice President of Manufacturing
and Product Development, Assistant Secretary and a Director of the Company. Dr.
Hastings has been employed by the Company since February, 1991, and became
Executive Vice President of the Company on July 1, 1992. He has been a director
of the Company since February, 1990. Dr. Hastings is also a director of Reliv',
Inc. and Reliv' World Corporation. Dr. Hastings holds B.S. and M.S. Degrees and
<PAGE>
a Ph.D. Degree in Food Science from the University of Illinois. For more than
the past 20 years, Dr. Hastings has been engaged in a variety of employment and
consulting capacities as a food scientist. From May, 1988 to December, 1990, Dr.
Hastings was employed as President of Grove Country Foods, Inc. which was a
principal supplier to Reliv', Inc.
DAVID G. KREHER, age 47, Senior Vice President of Worldwide Sales and
Marketing and Assistant Secretary of the Company. He is also Secretary and a
Director of Reliv', Inc. and Reliv' World Corporation. Mr. Kreher was employed
by the Company in August, 1991, and became Senior Vice President on July 1,
1992. Mr. Kreher was placed in charge of Worldwide Sales and Marketing in
January, 1999. From 1988 to August, 1991, Mr. Kreher was owner and president of
Creative Options Corporation in Washington, D.C., a firm that provided
specialized advertising services. From 1981 to 1988, Mr. Kreher was Chief
Operating Officer of Sandven Advertising & Marketing in Kansas City, Missouri.
Mr. Kreher holds a B.S. Degree in Accounting from Southwest Missouri State
University. Mr. Kreher has been a director of the Company since June 1, 1994.
Mr. Kreher is the brother of Sandra S. Montgomery.
STEPHEN M. MERRICK, age 58, Senior Vice President/Corporate and
International Development and General Counsel; Director of the Company since
July 20, 1989; Secretary of the Company; and Secretary and a director of Reliv',
Inc. and Reliv' World Corporation. From January, 1999 through July, 1999, Mr.
Merrick was Senior Vice President - Finance and Administration of the Company.
Mr. Merrick is also a principal of the law firm of Merrick & Klimek, P.C. of
Chicago, Illinois, and has been engaged in the practice of law for over 30
years. Mr. Merrick has represented the Company and its subsidiaries since the
founding of the Company. Mr. Merrick received a Juris Doctor Degree from
Northwestern University School of Law in 1966. Mr. Merrick is also Vice
President and a director of CTI Industries Corporation (NASDAQ-CTIB).
THOMAS W. PINNOCK III, age 49, independent distributor for Reliv', Inc.
Mr. Pinnock has been an independent distributor for Reliv', Inc. since January
15, 1990. He has been a Director of the Company since April 29, 1992. Mr.
Pinnock was commissioned as a U.S. Army Officer in 1978 and commanded an armored
company in the 1st Infantry Division. For a period of more than five years prior
to the time he became a Reliv' distributor, Mr. Pinnock was a reporter for the
Orlando Sentinal. Mr. Pinnock holds a B.A. Degree from Valencia College,
Orlando, Florida and studied journalism at the University of Florida and the
Defense Department School of Journalism.
THOMAS T. MOODY, age 41, independent distributor for Reliv', Inc. Mr.
Moody has been an independent distributor for Reliv', Inc. since July, 1989. Mr.
Moody received a B.A. Degree from St. Mary's College in Winona, Minnesota in
1981. He has been a Director of the Company since October 20, 1989.
DONALD L. McCAIN, age 56, is the Chairman and co-owner of The Baughan
Group Inc., formerly Robertson International Inc., a worldwide supplier and
manufacturer of mining equipment and supplies with plants and facilities
throughout the United States and South Africa. Mr. McCain acquired his interest
in The Baughan Group in September, 1995. He is also Chairman and co-owner of
Coal Age Incorporated, a mining equipment manufacturer and rebuilding company.
He acquired his interest in Coal Age, Inc. in September, 1994. Mr. McCain
co-founded G&T Resources, Inc., an owner and operator of nursing homes, in 1980
and was engaged in the management of that company until he sold his interest in
September, 1994. Prior to that time, Mr. McCain privately invested in real
<PAGE>
estate and owned and operated Expertune, Inc., a company with two locations that
specialized in fast oil changes. Mr. McCain was employed in the food processing
industry for fifteen years. Most of that time was with Archer Daniels Midland
Company as a manager of plant operations. Mr. McCain has been a Director of the
Company since July 20, 1989, and is also a director of Reliv', Inc. and Reliv'
World Corporation.
JOHN B. AKIN, age 71, retired as Vice President, A.G. Edwards & Sons
and Resident Manager of the Decatur, Illinois branch office in 1995. Mr. Akin
had been associated with A.G. Edwards & Sons as a stock broker, manager and
officer since April, 1973. Mr. Akin holds a B.A. Degree from the University of
Northern Iowa, Cedar Falls, Iowa. Mr. Akin has been a Director of the Company
since June, 1986.
SANDRA S. MONTGOMERY, age 54, has been a Director of the Company since
April 29, 1992. For more than the past five years, Mrs. Montgomery has been
engaged actively in the business of the Company. Mrs. Montgomery is also a
director of Reliv', Inc. Sandra S. Montgomery and Robert L. Montgomery are
husband and wife.
MARVIN W. SOLOMONSON, age 47, is the Manager of a bond offering for
Midwest Central Holdings, L.L.C. Mr. Solomonson was the founder and owner of
Solomonson Investment Services, engaged in the marketing of investments and
insurance products, and operated that business from 1983 until he sold it in
December, 1998, to pursue his current position. Since 1993, Mr. Solomonson has
also served as President and Chief Executive Officer for the following
corporations: Superior Family Foods, Inc. and Service Contracts, Inc. dba
Dealership Services. Mr. Solomonson has been a Director of the Company since
June 1, 1994.
Executive Officers Other Than Nominees
DONALD E. GIBBONS, JR., age 44, is Vice President of U.S. Sales of the
Company. Mr. Gibbons was employed by the Company in June, 1991, and became Vice
President of Finance. He became Vice President of Distributor Relations in 1992,
and accepted the position of Vice President of U.S. Sales in June, 1994, a
position he still holds. Mr. Gibbons was an Executive Correspondent for the
Governor of Illinois 1974-1976. From 1978 to 1990, Mr. Gibbons was a Journeyman
Electrician with I.B.E.W. Local 193. In 1981, Mr. Gibbons, with his wife
Elizabeth, became an independent distributor in a network marketing company and
operated that home business for 5 years. Mr. Gibbons received a B.A. Degree in
Accountancy from the University of Illinois, Springfield, graduating with
highest honors.
Committees of the Board of Directors
The Company's Board of Directors has standing Management, Compensation,
and Audit Committees. The Company has no standing nominating committee.
The Management Committee is composed of Mr. Montgomery, Dr. Hastings,
Mr. Kreher, Mr. McCain and Mr. Merrick. The Management Committee has all of the
authority of the Board of Directors during the interim periods between Board
meetings, except for certain specified powers that are stated in the Company
by-laws. The Management Committee met 9 times during 1999.
<PAGE>
The Compensation Committee is composed of Mr. McCain, Mr. Merrick and
Mr. Akin. The Compensation Committee reviews and makes recommendations to the
Board of Directors concerning the compensation of officers and key employees of
the Company. The Compensation Committee met 2 times during 1999.
The Audit Committee is composed of Mr. McCain, Mr. Merrick and Mr.
Solomonson. The Audit Committee reviews and makes recommendations to the Company
about its financial reporting requirements. The Audit Committee met 1 time
during 1999.
The Board of Directors met 4 times during 1999. No director attended
less than 75% of the combined Board of Director and Committee meetings.
Executive Compensation
The following table sets forth a summary of the compensation paid
during the last three fiscal years to the Chief Executive Officer of the Company
and to each of the four most highly compensated officers of the Company who were
officers of the Company as at December 31, 1999, and any executive officer who
left during the last fiscal year who would have been included in this group (the
"Named Executives").
E
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
------------------------------------------- -------------------------------- ----------
Other Restricted All Other
Annual Stock LTIP Compen-
Name and Principal Salary Bonus Compen- Award(s) Options/ Payouts sation
Position Year ($) ($) sation($) ($) SARs(#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert L. Montgomery 1999 $589,073 -- -- -- 450,800(2) -- $12,646(6)
Chief Executive 1998 $642,625 -- -- -- 75,000(4) -- $16,160(7)
Officer 1997 $485,000 $121,250(1) -- -- -- -- $12,916(8)
and President
Carl W. Hastings 1999 $334,010 -- -- -- 245,600(2) -- $ 9,533(6)
Executive Vice 1998 $364,375 -- -- -- 65,000(4) -- $44,495(7)
President 1997 $275,000 $ 68,750(1) -- -- -- -- $10,060(8)
David G. Kreher 1999 $242,917 -- -- -- 208,600(2) -- $ 6,870(6)
Senior Vice President 1998 $265,000 -- -- -- 55,000(4) -- $32,935(7)
1997 $200,000 $ 50,000(1) -- -- -- -- $ 8,298(8)
Donald E. Gibbons, Jr. 1999 $175,000 $ 3,000 -- -- 50,000(3) -- $ 6,790(6)
Vice President of 1998 $175,000 $ 5,000 -- -- -- -- $ 7,673(7)
U.S. Sales 1997 $145,000 $ 79,750 -- -- 50,000(5) -- $ 6,876(8)
Stephen M. Merrick 1999 $169,167 -- -- -- 80,000(3) -- --
Senior Vice 1998 --- -- -- -- 40,000(4) -- --
President,
Secretary(9)
<FN>
- ---------------------
(1) Reflects payments under the Company's Annual Executive
Incentive Compensation Plan (See "Compensation Committee
Report on Executive Compensation - Annual Executive Incentive
Plan").
(2) Non-Qualified and Incentive Stock Options issued on December
15, 1999, pursuant to the Company's 1999 Stock Option Plan
(See Option/SAR Grants table below).
(Footnotes continued on next page)
<PAGE>
(3) Incentive Stock Options issued on December 15, 1999, pursuant
to the Company's 1999 Stock Option Plan (See Option/SAR Grants
table below).
(4) Incentive Stock Options issued on December 30, 1998, pursuant
to the Company's 1995 Stock Option Plan. For Mr. Montgomery,
these options are exercisable for 21,174 shares on January 1,
2000; an additional 26,913 shares on January 1, 2001; and the
remaining 26,913 shares on January 1, 2002. For Dr. Hastings,
these options are exercisable for 21,667 shares on issuance;
an additional 21,667 shares on December 30, 1999; and the
remaining 21,666 shares on December 30, 2000. For Mr. Kreher,
the options are exercisable for 18,333 shares on issuance; an
additional 18,333 shares on December 30, 1999; and the
remaining 18,334 shares on December 30, 2000. For Mr. Merrick,
these options are exercisable for 13,333 shares on issuance;
and additional 13,333 shares on December 30, 1999; and the
remaining 13,334 shares on December 30, 2000.
(5) Incentive Stock Options issued on December 18, 1997, pursuant
to the Company's 1995 Stock Option Plan. Under these options
Mr. Gibbons is entitled to purchase Common Stock of the
Company at the price of $3.125 per share. The options were
exercisable for 30,000 shares upon issuance and 20,000 shares
on December 18, 1998. The options expire five years from the
date of grant.
(6) Includes the value of cash contributions by the Company to the
Reliv' International, Inc. 401(k) Plan, a defined contribution
plan of $6,250 for Mr. Montgomery, $7,500 for Dr. Hastings,
$6,250 for Mr. Kreher and $6,250 for Mr. Gibbons. Also
includes portion of premiums paid by the Company on life
insurance policies on each executive's life attributable to
the death benefit which each executive's estate is entitled
to. The allocated portion of premium paid was $6,396 for Mr.
Montgomery, $2,033 for Dr. Hastings, $620 for Mr. Kreher and
$540 for Mr. Gibbons. (See "Employment Agreements.")
(7) Includes the value of cash contributions by the Company to the
Reliv' International, Inc. 401(k) Plan, a defined contribution
plan, of $7,500 for each of Messrs. Montgomery, Hastings,
Kreher and Gibbons. Also includes portion of premiums paid by
the Company on life insurance policies on each executive's
life attributable to the death benefit which each executive's
estate is entitled to. Pursuant to agreements with each
executive, approximately two-thirds of the death benefit under
a policy is paid to the executive's beneficiaries. The
allocated portion of premium paid was $8,660 for Mr.
Montgomery, $2,620 for Dr. Hastings, $435 for Mr. Kreher and
$173 for Mr. Gibbons. (See "Employment Agreements".) Also
includes contributions to the Company's Supplemental Executive
Retirement Plan of $34,375 for Dr. Hastings and $25,000 for
Mr. Kreher.
(8) Includes the value of cash contributions by the Company to the
Reliv' International, Inc. 401(k) Plan, a defined contribution
plan of $9,500 for Mr. Montgomery, $8,125 for Dr. Hastings,
$7,938 for Mr. Kreher and $6,616 for Mr. Gibbons. Also
includes portion of premiums paid by the Company on life
insurance policies on each executive's life attributable to
the death benefit which each executive's estate is entitled
to. The allocated portion of premium paid was $3,416 for Mr.
Montgomery, $1,935 for Dr. Hastings, $360 for Mr. Kreher and
$260 for Mr. Gibbons. (See "Employment Agreements.")
(9) From January, 1999 through July, 1999, Mr. Merrick was Senior
Vice President - Finance and Administration of the Company.
</FN>
</TABLE>
<PAGE>
The Company has never granted any stock appreciation rights. During the
period from January 1, 1996 to December 31, 1999, there have been no awards or
payments made for long term incentive compensation and there have been no
restricted stock awards to any of the Named Executives.
The following table sets forth the options granted to the Named
Executives during the fiscal year ended December 31, 1999.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term(3)
----------------------------------------------------- ---------------------
Number
of % of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date 5% ($) (5) 10% ($) (5)
- ---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Montgomery
Non-Qualified Stock Option 250,800(1) 17.4% $2.045 12/15/04 $0 $0
Incentive Stock Option 200,000(2) 13.9% $1.2375 12/15/04 $39,663 $114,865
------- -----
450,800 31.3%
Carl W. Hastings
Non-Qualified Stock Option 105,600(1) 7.3% $2.045 12/15/04 $0 $0
Incentive Stock Option 140,000(3) 9.7% $1.125 12/15/04 $43,514 $ 96,155
------- -----
245,600 17.0%
David G. Kreher
Non-Qualified Stock Option 83,600(1) 5.8% $2.045 12/15/04 $0 $0
Incentive Stock Option 125,000(4) 8.7% $1.125 12/15/04 $38,852 $ 85,853
------- -----
208,600 14.5%
Stephen M. Merrick 80,000(1) 5.6% $1.125 12/15/04 $24,865 $ 54,946
Donald E. Gibbons, Jr. 50,000(1) 3.5% $1.125 12/15/04 $15,541 $ 34,341
<FN>
- ------------------
(1) Fully vested on the date of grant of such options on December
15, 1999.
(2) Exercisable for 29,970 shares on January 1, 2001; an
additional 29,970 shares on January 1, 2002; another 70,030
shares on January 1, 2003; and the remaining 70,030 shares on
January 1, 2004.
(3) Exercisable for 30,844 shares upon issuance on December 15,
1999; an additional 30,844 shares on December 15, 2000;
another 39,156 shares on December 15, 2001; and the remaining
39,156 shares on December 15, 2002.
(Footnotes continued on next page)
<PAGE>
(4) Exercisable for 41,217 shares upon issuance on December 15,
1999; an additional 41,217 shares on December 15, 2000; and
the remaining 42,566 shares on December 15, 2001.
(5) Value assumes price of Company's Common Stock increases each
year by 5% and 10%, respectively.
</FN>
</TABLE>
The following table provides information related to options to purchase
the Company's Common Stock exercised by the named executive officers during the
fiscal year ended December 31, 1999, and the number and value of such options
held as of the end of such fiscal year:
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-
Shares Value Unexercised Options/SARs at the-Money Options/SARs
Acquired on Realized Year End (#) at Fiscal Year End ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert L. Montgomery 0 0 455,304/290,496 0/0(1)
Carl W. Hastings 0 0 256,778/146,222 0/0(1)
David G. Kreher 0 0 220,150/113,850 0/0(1)
Donald E. Gibbons, Jr. 0 0 111,000/0 0/0(1)
Stephen M. Merrick 0 0 140,916/67,084 0/0(1)
<FN>
- ----------------------
(1) The value of unexercised in-the-money options is based on the
difference between the exercise price and the fair market value of the
Company's Common Stock on December 31, 1999.
</FN>
</TABLE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors of the Company is
composed of three members of the Board of Directors. The Compensation Committee
is responsible for establishing the standards and philosophy of the Board of
Directors regarding executive compensation, for reviewing and evaluating
executive compensation and compensation programs, and for recommending levels of
salary and other forms of compensation for executives of the Company to the
Board of Directors. The full Board of Directors of the Company is responsible
for setting and administering salaries, bonus payments and other compensation
awards to executives of the Company.
<PAGE>
Compensation Philosophy
The philosophy of the Compensation Committee, and of the Board of
Directors of the Company, regarding executive compensation includes the
following principal components:
o To attract and retain quality executive talent, which is
regarded as critical to the long and short term success of the
Company, in substantial part by offering compensation programs
which provide attractive rewards for successful effort.
o To provide a reasonable level of base compensation to senior
executives and to provide annual incentive compensation based
on the success and profitability of the Company.
o To create a mutuality of interest between executive officers
of the Company and shareholders through long-term compensation
structures, particularly stock option programs, so that
executive officers share the risks and rewards of
strategic-decision making and its effect on shareholder value.
The Compensation Committee has recommended, and the Board of Directors
has determined, to take appropriate action to comply with the provisions of
Section 162(m) of the Internal Revenue Code so that executive compensation will
be deductible as an expense to the fullest extent allowable.
The Company's executive compensation program consists of two key
elements: (i) an annual component consisting of base salary and annual bonus and
(ii) a long-term component, principally stock options.
Annual Base Compensation
The Compensation Committee recommends annual salary levels for each of
the named executives, and for other senior executives of the Company, to the
Board of Directors. The recommendations of the Compensation Committee for base
salary levels for senior executives of the Company are determined annually, in
part, by evaluating the responsibilities of the position and examining market
compensation levels and trends for similar positions in the marketplace.
Additional factors which the Compensation Committee considers in
recommending annual adjustments to base salaries include: results of operation
of the Company, sales, shareholder returns, and the experience,
work-performance, leadership and team building skills of each executive. The
Company receives information from the Chief Executive Officer with regard to
these matters. While each of these factors is considered in relatively equal
weight, the Compensation Committee does not utilize performance matrices or
measured weightings in its review. Each year, the Compensation Committee
conducts a structured review of base compensation of senior executives with
input from the Chief Executive Officer.
Three of the senior executives of the Company are employed under
Employment Agreements with the Company which provide a minimum base salary:
Robert L. Montgomery, Carl W. Hastings, and David G. Kreher. Over the period
1995 through 1998, the Company experienced increases in sales and profits and
the base salary levels of each of these executives was increased over this time
to levels above the minimums provided in their respective agreements. In
mid-1999, in light of the results of operation for the first six months of the
year, on the recommendation of the Compensation Committee and with the agreement
of each of these executives, the annualized rate of the base salaries of each of
the executives was reduced by 20%.
<PAGE>
Annual Incentive Compensation.
In March 1994, the Compensation Committee recommended the adoption of a
1994 Annual Incentive Compensation Plan. The 1994 Plan was adopted by the Board
of Directors on April 13, 1994, to be effective for 1994 and subsequent years,
and supersedes all prior incentive compensation plans. The purpose of the 1994
Plan is to provide competitive rates of incentive compensation to executive
officers of the Company for accomplishing periodic financial objectives. Under
the Plan, incentive compensation measured as a percentage of base compensation
will be paid to participants based upon achieving specific objectives. The
performance criterion for each executive will vary and include both corporate
and individual results. The criterion may include profits, return on average
equity, sales and expense control and may include other measures. The measures
selected for each executive will reflect the Company's business objectives which
the individual can directly affect.
Target performance levels for each measure of performance are
recommended by the Compensation Committee and approved by the Board of
Directors. The target performance levels will be based upon historic patterns of
Company performance and strategic objectives. Under the 1994 Plan, incentive
compensation is limited to a percentage of each executive's base salary.
During 1999, no incentive compensation was paid to any executive of the
Company.
Long-Term Component - Stock Options
The long-term component of compensation provided to executives of the
Company has been in the form of stock options. The Compensation Committee has
recommended to the Board of Directors that a significant portion of the total
compensation to executives be in the form of incentive stock options. Stock
options are granted with an exercise price equal to or greater than the fair
market value of the Company's Common Stock on the date of the grant. Stock
options are exercisable between one and ten years from the date granted. Such
stock options provide incentive for the creation of shareholder value over the
long-term since the full benefit of the compensation package for an executive
cannot be realized unless an appreciation in the price of the Company's Common
Stock occurs over a specified number of years.
The magnitude of the stock option awards is determined annually by the
Compensation Committee and the Board of Directors. Generally, the relative
number of options granted to an executive has been based on the relative salary
level of the executive.
<PAGE>
On December 4, 1995, options to purchase 220,000, 92,400, 70,400, and
11,000 shares of the Company's Common Stock were granted to Messrs. Montgomery,
Hastings, Kreher, and Gibbons, respectively, under the 1995 Stock Option Plan
(the "1995 Plan"). These options expire on December 4, 2000. On May 31, 1996,
options to purchase 88,000 shares of the Company's Common Stock were granted to
Mr. Merrick. On December 18, 1997, options to purchase 50,000 shares of the
Company's Common Stock were granted to Mr. Gibbons. On December 30, 1998,
options to purchase 75,000, 65,000, 55,000, and 40,000 shares of the Company's
Common Stock were issued to Messrs. Montgomery, Hastings, Kreher and Merrick ,
respectively. These options were issued as part of the overall compensation plan
for these executives and are consistent with Ernst & Young L.L.P.'s report and
recommendations. On December 15, 1999, options to purchase 200,000, 140,000,
125,000, 80,000, and 50,000 shares of the Company's Common Stock were granted to
Messrs. Montgomery, Hastings, Kreher, Merrick and Gibbons, respectively, under
the 1999 Stock Option Plan (the "1999 Plan"). In addition to the incentive stock
options that were issued in 1999, non-qualified stock options to purchase
250,800, 105,600, and 83,600 shares of the Company's Common Stock were granted
in 1999 to Messrs. Montgomery, Hastings, and Kreher, respectively, to replace
incentive stock options that were previously issued in 1994 and expired in
December 1999 unexercised.
CEO Compensation
The Compensation Committee utilizes the same standards and methods for
recommending annual base compensation for the Chief Executive Officer of the
Company as it does for other senior executive officers of the Company.
In 1997, the Company entered into an Employment Agreement with Robert
L. Montgomery, Chief Executive Officer of the Company, providing that Mr.
Montgomery's base annual compensation would not be less than $485,000. During
the period 1996 through 1998, the Company experienced increasing sales and
profits and Mr. Montgomery's base annual compensation was increased to $642,625
in 1998. During mid-1999, in light of results of operation of the Company
through June 30, 1999, the Compensation Committee recommended, and Mr.
Montgomery agreed, along with other senior executive officers of the Company, to
reduce his annual rate of compensation by 20% for the balance of 1999, resulting
in an overall annual base compensation during 1999 of $589,073. For 1999, no
annual incentive compensation was paid to Mr. Montgomery.
The Compensation Committee recommended that Mr. Montgomery (and other
senior executives of the Company), receive incentive stock options, consistent
with observed market practices, so that a significant portion of his total
compensation will be based upon, and consistent with, returns to shareholders.
Mr. Montgomery was granted incentive options to purchase up to 200,000 shares of
the Company's Common Stock in 1999 and 75,000 shares in 1998. In addition, Mr.
Montgomery was granted non-qualified stock options to purchase up to 250,800
shares of the Company's Common Stock in 1999 to replace incentive stock options
that had expired unexercised.
Compensation Committee:
Donald L. McCain, John B. Akin, Stephen M. Merrick
Compensation Committee Interlocks and Insider Participation
Stephen M. Merrick, a member of the Compensation Committee, is the
Senior Vice President-Finance and Administration of the Company. Mr. Merrick is
a principal of the law firm of Merrick & Klimek, P.C., which has served as
general counsel to the Company and its subsidiaries since December 1, 1998.
During the year ended December 31, 1999, the aggregate amounts paid or incurred
by the Company to Merrick & Klimek, P.C. for services to the Company and its
subsidiaries was $220,000.
<PAGE>
Comparative Stock Price Performance Graph
The following graph compares, for the period January 1, 1995 to
December 31, 1999, the cumulative total return (assuming reinvestment of
dividends) on the Company's Common Stock with (i) NASDAQ Stock Market Index
(U.S.) and (ii) a peer group including the following companies: Herbalife
International, Inc., Nature's Sunshine Products, Inc., Nutrition For Life
International, Inc., Rexall Showcase International, Inc. and USANA, Inc. The
peer group consists of other companies marketing nutritional products through
direct sales. The graph assumes an investment of $100 on January 1, 1995, in the
Company's Common Stock and each of the other investment categories.
ANNUAL RETURN PERCENTAGE
Years Ending
Company Name / Index Dec95 Dec96 Dec97 Dec98 Dec99
- --------------------------------------------------------------------------------
RELIV INTERNATIONAL INC -18.73 195.24 -46.96 -30.80 -49.75
NASDAQ US INDEX 41.33 23.04 22.53 40.91 80.66
PEER GROUP 20.53 94.96 36.50 -45.05 -23.78
- --------------------------------------------------------------------------------
INDEXED RETURNS
Base
Period Years Ending
Company Name / Index Dec94 Dec95 Dec96 Dec97 Dec98 Dec99
- --------------------------------------------------------------------------------
RELIV INTERNATIONAL INC 100 81.27 239.93 127.27 88.07 44.26
NASDAQ US INDEX 100 141.33 173.89 213.07 300.25 542.43
PEER GROUP 100 120.53 234.99 320.75 176.27 134.36
- --------------------------------------------------------------------------------
Peer Group Companies
- ------------------------------------------
HERBALIFE INTL INC -CL A
NATURES SUNSHINE PRODS INC
NUTRITION FOR LIFE INTL INC
REXALL SUNDOWN INC (FORMERLY REXALL SHOWCASE INTL INC)
USANA INC
The historical stock prices of the Company's Common Stock shown on the
above graph is not necessarily indicative of future price performance.
On March 8, 1993, the Company's Common Stock was listed on The Emerging
Company Marketplace of the American Stock Exchange (AMEX) and, in July 1993,
graduated to the main board of the AMEX. On September 6, 1996, the Company moved
the listing of its common stock to the NASDAQ National Market Tier of the NASDAQ
Stock Market. Per share value as of December 31, 1994, 1995, 1996, 1997, 1998
and 1999 is based on the Common Stock's closing price as of such date.
<PAGE>
The information under this heading and under the heading "Compensation
Committee Report on Executive Compensation" shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 and shall not otherwise be deemed filed under
such Acts.
Employment Agreements
In June, 1997, the Company entered into an Employment Agreement with
Robert L. Montgomery replacing a prior agreement. The Agreement is for a term of
six years commencing on January 1, 1997, and provides for Mr. Montgomery to
receive base annual compensation during the term of not less than $485,000. Mr.
Montgomery is also to participate in the Annual Incentive Compensation and the
Long-Term Incentive Compensation Plans of the Company adopted in April, 1994,
the Company's Stock Option Plan and such other compensation plans as the Company
may from time to time have for executives of the Company. In the event of Mr.
Montgomery's death during the term of the Agreement, payments equal to his total
compensation under the Agreement will be made to his heirs for a period of six
months. The Agreement also allows Mr. Montgomery the option, upon reaching age
60, to reduce his level of service to the Company by approximately one-half with
a corresponding decrease in position and compensation. Mr. Montgomery also has
the option upon reaching age 60 to terminate his active service, and continue in
a consulting capacity. The term of the consulting period shall be 10 years and
Mr. Montgomery will receive approximately 20% of his prior annual compensation
as a consulting fee. The Agreement includes the obligation of Mr. Montgomery to
maintain the confidentiality of confidential information of the Company and
contains a covenant of Mr. Montgomery not to compete with the Company.
In June, 1997, the Company entered into an Employment Agreement with
Dr. Hastings replacing a prior agreement. The Agreement is for a period of six
years commencing on January 1, 1997, and provides for Dr. Hastings to receive
base annual compensation during the term of not less than $275,000. Dr. Hastings
is also to participate in the Annual Incentive Compensation and Long-Term
Incentive Compensation Plans of the Company adopted in April, 1994, the
Company's Stock Option Plan and such other compensation plans as the Company may
from time to time have for executives of the Company. In the event of Dr.
Hastings' death during the term of the Agreement, payments equal to his total
compensation under the Agreement will be made to his heirs for a period of six
months. The Agreement also allows Dr. Hastings the option, upon reaching age 60,
to reduce his level of service to the Company by approximately one-half with a
corresponding decrease in position and compensation. Dr. Hastings also has the
option upon reaching age 60 to terminate his active service, and continue in a
consulting capacity. The term of the consulting period shall be 10 years and Dr.
Hastings will receive approximately 20% of his prior annual compensation as a
consulting fee. The Agreement includes the obligation of Dr. Hastings to
maintain the confidentiality of confidential information of the Company and to
assign to the Company any and all inventions made or conceived by him during the
term of the Agreement and a covenant of Dr. Hastings not to compete with the
Company.
<PAGE>
In April, 1994, the Company entered into an Employment Agreement with
David G. Kreher, Senior Vice President and Chief Operating Officer, effective
from January 1, 1994. The Agreement has been extended through December 31, 1998.
The Company is currently negotiating an extension of Mr. Kreher's Agreement. The
Agreement provides for Mr. Kreher to receive base annual compensation of not
less than $125,000. Mr. Kreher is also to participate in the Annual Incentive
Compensation and Long-Term Incentive Compensation Plans of the Company adopted
in April, 1994, the Company's Stock Option Plan and such other compensation
plans as the Company may from time to time have for executives of the Company.
In the event of Mr. Kreher's death during the term of the Agreement, payments
equal to his total compensation under the Agreement will be made to his heirs
for a period of six months. The Agreement includes the obligation of Mr. Kreher
to maintain the confidentiality of confidential information of the Company.
In March, 1997, the Company entered into Split Dollar Agreements with
Robert L. Montgomery, Carl W. Hastings, David G. Kreher and Donald E. Gibbons,
whereby the Company pays the premiums on life insurance policies covering these
executive's lives. Upon the death of an executive, the Company shall be entitled
to receive the greater of (i) one-third of the insurance proceeds, (ii) the cash
surrender value of the policy and (iii) the total premiums paid under the
policy, with the executive receiving the balance of the insurance proceeds. On
termination of the Agreement prior to an executive's death, the executive shall
have the right to purchase the policy for the greater of (i) the cash surrender
value of the policy and (ii) the total premiums paid under the policy. The
policy amounts are $3,124,000 for Mr. Montgomery, $1,770,000 for Dr. Hastings,
$750,000 for Mr. Kreher and $750,000 for Mr. Gibbons.
In March, 1997, the Company entered into Salary Continuation Plan
Agreements with David G. Kreher and Donald E. Gibbons. The Agreements provide
for continuation of these executive's salaries upon termination of employment or
retirement, after these executives have reached the age of 55 and have been
employed by the Company for 15 years. Salary continuation payments are also made
in the event the executive is terminated prior to reaching these thresholds for
other than cause as defined in the Agreements. Payments are to be made for a
period of 10 years and the amount of the payments are based on the executive's
age at time of retirement or termination of employment.
Compensation of Directors
Members of the Board of Directors who were not employees of the Company
received $800 per attendance at meetings of the Board of Directors and
committees thereof. Members of the Management Committee who were not employees
of the Company also received compensation of $1,000 per month for their services
and $2,000 per attendance at meetings of the Board of Directors or any
committees of the Board. On any date at which a Board member attends more than
one meeting of the Board or committee of the Board, the attendance fee is 150%
of the basic attendance fee. In addition to the options issued to the named
executives as described above, during fiscal 1999 options were issued to Mr.
McCain (50,000 shares), Mr. Akin (20,000 shares), Mr. Solomonson (20,000
shares), Mr. Moody (20,000 shares), Mr. Pinnock (20,000 shares), and Mrs.
Montgomery (50,000 shares).
Section 16(a) Beneficial Ownership Reporting Compliance
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and with the NASDAQ Stock Market. Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company, or written representations that no Form 5's were required, the Company
believes that during calendar year 1999, all Section 16(a) filing requirements
applicable to the officers, directors and ten-percent beneficial owners were
complied with.
Board of Directors Affiliations and Related Transactions
On December 31, 1999, Bob Montgomery owed the Company $89,250 due to
the overpayments of incentive compensation. He also owed the Company $75,000 for
a loan taken out against a corporate life insurance policy, for a total
indebtedness of $164,250. As of April 21, 2000, the remaining balance of these
advances is $59,250. The insurance loan has been repaid and $30,000 has been
paid towards the incentive compensation advance.
PROPOSAL TWO - SELECTION OF AUDITORS
The Board of Directors have selected and approved Ernst & Young L.L.P.
as the principal independent auditor to audit the financial statements of the
Company for 2000, subject to ratification by the shareholders. It is expected
that a representative of the firm of Ernst & Young L.L.P. will be present at the
annual meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE FOR "FOR" SUCH RATIFICATION.
Stockholder Proposals for 2001 Proxy Statement
Proposals by shareholders for inclusion in the Company's Proxy
Statement and form of proxy relating to the 2001 Annual Meeting of Stockholders,
which is scheduled to be held on May 24, 2001, should be addressed to the
Secretary, Reliv' International, Inc., 136 Chesterfield Industrial Boulevard,
P.O. Box 405, Chesterfield, Missouri 63006-0405, and must be received at such
address no later than December 22, 2000. Upon receipt of any such proposal, the
Company will determine whether or not to include such proposal in the Proxy
Statement and proxy in accordance with applicable law. It is suggested that such
proposal be forwarded by certified mail, return receipt requested.
Other Matters to Be Acted Upon at the Meeting
The management of the Company knows of no other matters to be presented
at the meeting. Should any other matter requiring a vote of the shareholders
arise at the meeting, the persons named in the proxy will vote the proxies in
accordance with their best judgment.
BY ORDER OF THE
BOARD OF DIRECTORS
Dated: April 21, 2000
/s/ Stephen M. Merrick
Stephen M. Merrick, Secretary
<PAGE>
RELIV' INTERNATIONAL, INC.
Annual Meeting of Shareholders
May 25,2000 10:00 a.m.
Doubletree Hotel & Conference Center
16625 Swingley Ridge Road
Chesterfield, Missouri 63017
(636) 532-5000
REVOCABLE PROXY
RELIV' INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Robert L. Montgomery and David G. Kreher,
or either of them, with full power of substitution, as proxies of the
undersigned, with all the powers that the undersigned would possess if
personally present to cast all votes that the undersigned would be entitled to
vote at the annual meeting of shareholders of Reliv' International, Inc. (the
"Company") to be held on Thursday, May 25, 2000, at the Doubletree Hotel &
Conference Center, 16625 Swingly Ridge Road, Chesterfield, Missouri 63017, (636)
532-5000 at 10:00 a.m., Central Daylight Savings Time, and at any and all
adjournments and postponements thereof (the "Annual Meeting"), including
(without limiting the generality of the foregoing) to vote and act as follows on
the reverse side.
This proxy will be voted at the Annual Meeting or any adjournments or
postponement thereof as specified. IF NO SPECIFICATIONS ARE MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED ON THE REVERSE SIDE AND FOR
PROPOSAL 2. This proxy hereby revokes all prior proxies given with respect to
the shares of the undersigned.
(Continued and to be signed on reverse side)
<PAGE>
ADMISSION TICKET
ANNUAL MEETING
OF
RELIV INTERNATIONAL, INC.
Thursday, May 25, 2000 10:00 a.m.
Doubletree Hotel & Conference Center
16625 Swingley Ridge Road
Chesterfield, Missouri 63017
(636) 532-5000
Agenda
------
* Election of Directors
* Ratification of the appointment of independent public accountants
* Report on the progress of the corporation
Please Detach and Mail in the Envelope Provided
A |X| Please mark your votes as in this example.
1. Election of Directors
Robert L. Montgomery
Sandra S. Montgomery
Carl W. Hastings
David G. Kreher
Donald L. McCain
Thomas T. Moody
Thomas W. Pinnock, III
Stephen M. Merrick
John B. Akin
Marvin W. Solomonson
FOR all nominees listed WITHHOLD AUTHORITY to vote for all
above Nominees listed above
|_| |_|
In the Event the undersigned wishes to withhold the authority to vote for any
particular nominee or nominees desginate by clearly and neatly writing through
or striking out the name of any such nominee or nominees.
--------------------------------------------------------------------------
2. Proposal to ratify the appointment of Ernst & Young as the Independent
Public Accountant for the Company for 2000.
|_|FOR |_|AGAINST |_|ABSTAIN
--------------------------------------------------------------------------
3. In their discretion upon such other matter as may properly come before the
meeting or any adjournment thereof.
Please complete, sign and mail this proxy promptly in the enclosed
envelope. No postage is required for mailing in the United States.
Signature Signature Dated: , 2000
--------------------- ----------------- ------
Note: Please date this proxy and sign exactly as your name appears on this
proxy. If shares are held by joint tenants both should sign. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
