SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
Filed by 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 Rule 14a-11(c) or Rule 14a-12
(Name of Registrant as Specified In Its Charter)
STEVENS INTERNATIONAL, INC.
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate numer of securities to which transactions applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
(5) Total Fee Paid
___________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
___________________________________________________________________________
(1) Amount Previously Paid:
___________________________________________________________________________
(2) Form, Schedule or Registration Statement No:
___________________________________________________________________________
(3) Filing Party:
___________________________________________________________________________
(4) Date Filed:
___________________________________________________________________________
<PAGE>
STEVENS INTERNATIONAL, INC.
5500 Airport Freeway
Fort Worth, Texas 76117
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 20, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Stevens International, Inc. (the "Company") will be held at the offices
of the Company, 5500 Airport Freeway, Fort Worth, Texas 76117, on
Thursday, May 20,1999, at 10:00 a.m., local time, for the following
purposes:
(1) to elect six members of the Board of Directors (constituting the
entire Board of Directors) to serve until the next Annual
Meeting of Stockholders and until their respective successors
shall be elected and qualified.
(2) to transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on April 8, 1999, has been fixed as the record
date for determining holders of Series A Common Stock and Series B Common
Stock entitled to notice of and to vote at the Annual Meeting of
Stockholders or any adjournments thereof. For a period of at least 10
days prior to the Annual Meeting, a complete list of stockholders
entitled to vote at the Annual Meeting will be open to examination of any
stockholder during ordinary business hours at the offices of the Company,
5500 Airport Freeway, Fort Worth, Texas 76117.
Information concerning the matters to be acted upon at the Annual
Meeting is set forth in the accompanying Proxy Statement.
HOLDERS OF SERIES A COMMON STOCK AND SERIES B COMMON STOCK WHO DO NOT
EXPECT TO BE PRESENT AT THE MEETING IN PERSON ARE URGED TO COMPLETE,
DATE, SIGN AND RETURN THE APPROPRIATE PROXY IN THE ACCOMPANYING ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
/s/ Paul I. Stevens
Paul I. Stevens
Chairman of the Board and Chief Executive Officer
Fort Worth, Texas
April 20, 1999
<PAGE>
STEVENS INTERNATIONAL, INC.
5500 Airport Freeway
Fort Worth, Texas 76117
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 20, 1999
This Proxy Statement is being first mailed on or about April 20, 1999
to stockholders of Stevens International, Inc. (the "Company") by the
Board of Directors to solicit proxies (the "Proxies") for use at the
Annual Meeting of Stockholders (the "Meeting") to be held at the offices
of the Company, 5500 Airport Freeway, Fort Worth, Texas 76117, at 10:00
a.m. local time, on Thursday, May 20, 1999, or at such other time and
place to which the Meeting may be adjourned.
The purpose of the Meeting is to consider and vote upon (i) the
election of six directors (constituting the entire Board of Directors) to
serve until the next Annual Meeting of Stockholders and until their
respective successors shall be elected or qualified; and (ii) such other
matters as may properly come before the Meeting or any adjournment
thereof.
All shares represented by valid Proxies, unless the stockholder
otherwise specifies, will be voted (i) FOR the election of each person
named herein under "Proposal No. 1, Election of Directors" as a nominee
for election as a director of the Company for the term described therein,
and (ii) at the discretion of the Proxy holders with regard to any other
matter that may properly come before the Meeting or any adjournment
thereof.
Where a stockholder has appropriately specified how a Proxy is to be
voted, it will be voted accordingly. The Proxy may be revoked at any
time by providing written notice of such revocation to American Stock
Transfer & Trust Company, 40 Wall Street, New York, NY 10005, Attention:
Isaac Kagan. If notice of revocation is not received by the Meeting
date, a stockholder may nevertheless revoke a Proxy if he attends the
Meeting and desires to vote in person.
RECORD DATE AND VOTING SECURITIES
The record date for determining the stockholders entitled to vote at
the Meeting is the close of business on April 8, 1999 (the "Record
Date"), at which time the Company had issued and outstanding 7,443,174
shares of Series A Common Stock, par value $0.10 per share ("Series A
Stock"), and 2,058,959 shares of Series B Common Stock, par value $0.10
per share ("Series B Stock"). Series A Stock and Series B Stock
(collectively, "Common Stock") are the only outstanding securities of the
Company entitled to vote at the Meeting.
<PAGE>
At the Meeting, the holders of Series A Stock, voting separately as a
class, are entitled to elect two directors, and the holders of Series B
Stock, voting separately as a class, are entitled to elect the remaining
directors. As to any other matters that may properly come before the
Meeting, the holders of Series A Stock and Series B Stock vote together
as a class, with each holder of Series A Stock having one-tenth of one
vote for each share of Series A Stock held by him or her, and each holder
of Series B Stock having one vote for each share of Series B Stock held
by him or her.
QUORUM
The presence at the Meeting, in person or by proxy, of the holders of
a majority of the issued and outstanding shares of each Series of Common
Stock is necessary to constitute a quorum to elect the directors of that
Series, and the presence of the holders of a majority of the issued and
outstanding shares of Common Stock as a single class is necessary to
constitute a quorum to transact all other business to come before the
Meeting.
The election inspectors will treat shares referred to as "broker non-
votes" (i.e., shares held by brokers or nominees as to which they have no
discretionary power to vote on a particular matter and have received no
instructions from the beneficial owners or persons entitled to vote
thereon), if any, as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. However, for purposes
of determining the outcome of any matter in which brokers or nominees
have no discretionary power to vote, broker non-votes will be treated as
not present and not entitled to vote with respect to that matter (even
though those shares are considered entitled to vote for quorum purposes
and may be entitled to vote on other matters). Brokers or nominees have
discretionary power to vote on Proposal No. 1.
PROPOSAL NO. I
ELECTION OF DIRECTORS
Nominees for Directors
Six directors are to be elected, each director to hold office for a
term of one year or until his or her successor shall have been elected
and qualified. Under the terms of the Company's Certificate of
Incorporation, the holders of Series A Stock, voting separately as a
class, are entitled to elect 25% of the Board of Directors (or the next
higher whole number if such percentage is not a whole number), and the
holders of Series B Stock, voting separately as a class, are entitled to
elect the remaining directors. Accordingly, of the six directors to be
elected, two will be Series A Directors to be elected by holders of
Series A Stock, and four will be Series B Directors to be elected by
holders of Series B Stock. Approval of the proposal to elect the
nominees to serve as directors of the applicable Series requires the
affirmative vote of the holders of a majority of the shares of that
Series present, in person or by proxy, at the Meeting. Votes may be cast
in favor or withheld with respect to such proposal. Votes that are
withheld will be counted toward a quorum, but will be excluded entirely
from the tabulation for such proposal and, therefore, will not affect the
outcome of the vote on such proposal.
<PAGE>
It is intended that the names of the persons indicated in the
following table will be placed in nomination and that the persons named
in the Proxy will vote for their election. Each of the nominees has
indicated his or her willingness to serve as a member of the Board of
Directors if elected; however, in case any nominee shall become
unavailable for election to the Board of Directors for any reason
not presently known or contemplated, the Proxy holders will have
discretionary authority in that instance to vote the Proxy for a
substitute.
<TABLE>
The nominees are as follows:
Director
Name Age Since Positions with the Company
---- --- -------- --------------------------
<S> <C> <C> <C>
Series A Directors:
Michel A. Destresse 72 1996 Director
Edgar H. Schollmaier (1)(2)(3) 66 1995 Director
Series B Directors:
Paul I. Stevens (3) 84 1986 Chairman of the Board,
Chief Executive Officer
Richard I. Stevens 60 1986 President, Chief
Operating Officer
and Director
Constance I. Stevens 55 1987 Vice President -
Administration,
Secretary and Director
James D. Cavanaugh (1) 60 1993 Director
____________________
</TABLE>
(1) Member of the Audit Committee.
(2) Member of the Stock Option and Compensation Committee.
(3) Member of the Executive Committee.
James D. Cavanaugh has served as a director of the Company since May
1993. Mr. Cavanaugh served as Executive Vice President of Rockwell
Graphic Systems from May 1983 until June 1985 and served as its President
and Chief Executive Officer from June 1985 until his retirement in March
1993.
Edgar H. Schollmaier has served as a director of the Company since
March 1995. Mr. Schollmaier, Chairman of Alcon Laboratories, Inc., a
maker of ophthalmic, pharmaceutical and therapeutic products, has served
that firm in various capacities since 1958, including President and
Chief Executive Officer from May 1977 to October 1, 1997.
<PAGE>
Michel A. Destresse has served as a director of the Company since May
1996. Mr. Destresse served as President Directeur Generale of Stevens
International, S.A. (formerly Stevens Security Systems, S.A.) from March
29, 1996 to December 31, 1996 and as a consultant to the Chief Executive
Officer of the Company since November 1995. From November 1992 to
September 1995, Mr. Destresse served as the International Monetary Fund
General Advisor to the Governor of the Central Bank of Russia, where he
provided general advice on monetary policy, organization, legal matters,
internal audit, branch problems and systems of payment. From 1950 to
1992, Mr. Destresse served in various capacities with the Banque de
France, including Executive Director of the Printing Works, Director of
the Legal Department and as a member of the Board of Directors for 15
years.
Paul I. Stevens founded Stevens Corporation ("Stevens") in 1965 and
founded the Company in 1986 to be a holding company for Stevens. He has
served the Company as Chairman of the Board and Chief Executive Officer
since December 1986 and served Stevens as an officer and a director since
its inception. In 1974, Mr. Stevens founded Stevens Industries, Inc., a
family-owned holding company which is an affiliate of the Company and of
which he is the controlling stockholder. Mr. Stevens is the father of
Richard I. Stevens and Constance I. Stevens.
Richard I. Stevens has served as President and a director of the
Company since December 1986 and Chief Operating Officer of the Company
since April 1987. Mr. Stevens also served as Vice President and
Assistant Secretary of the Company from December 1986 until April 1987.
He has served Stevens in various capacities since its inception,
including serving as its President from 1969 until December 1987, and as
a director beginning in 1969. Mr. Stevens is a stockholder, officer and
director of Stevens Industries, Inc. Mr. Stevens is the son of Paul I.
Stevens and brother of Constance I. Stevens.
Constance I. Stevens has served as a director of the Company since
April 1987. Ms. Stevens has served as Vice President-Administration and
Assistant Secretary to the Company since 1995, and Secretary since 1998.
From July 1989 to July 1995, Ms. Stevens served as President of a project
management consulting firm in Carmel, California. From May 1980 until
July 1989, Ms. Stevens served as the managing partner of Merritt
Associates of Carmel, California, an architectural design and real estate
development firm. Ms. Stevens is a stockholder, officer and director of
Stevens Industries, Inc. Ms. Stevens is the daughter of Paul I. Stevens
and sister of Richard I. Stevens.
Except as otherwise noted, no family relationships exist among the
directors of the Company.
Meetings and Committees of the Board of Directors
The business of the Company is managed under the direction of the
Board of Directors. The Board meets on a regularly scheduled basis to
review significant developments affecting the Company and to act on
matters requiring Board approval. It also holds special meetings when an
important matter requires Board action between scheduled meetings. The
Board of Directors met four times during 1998 in regular sessions and two
times during 1998 in special sessions.
<PAGE>
The Board of Directors has three standing committees, the Audit
Committee, the Stock Option and Compensation Committee and the Executive
Committee and the full Board of Directors acts to nominate persons to
serve on the Board. The functions of the committees, their current
members and the number of meetings held during 1998 are described below.
The functions performed by the Audit Committee include: recommending
to the Board of Directors selection of the Company's independent
accountants for the ensuing year; reviewing with the independent
accountants and management the scope and results of the audit; reviewing
the independence of the independent accountants; reviewing the
independent accountants' written recommendations and corresponding
actions by management; and meeting with management and the independent
auditors to review the effectiveness of the Company's system of internal
control. The committee currently is composed of James D. Cavanaugh and
Edgar H. Schollmaier. The committee met three times during 1998.
The Stock Option and Compensation Committee administers the Company's
Stock Option Plan and reviews other matters regarding the compensation of
employees of the Company. The committee currently is composed of Paul I.
Stevens and Edgar H. Schollmaier. The committee did not meet formally
during 1998.
The function of the Executive Committee is to direct and manage the
business and affairs of the Company in the intervals between meetings of
the Board of Directors. The Executive Committee is empowered to act in
lieu of the Board on any matter except that for which the Board has
specifically reserved authority to itself and except for those matters
specifically reserved to the full Board pursuant to the Delaware General
Corporation Law. The Executive Committee is currently comprised of Paul
I. Stevens (Chairman) and Edgar H. Schollmaier. The Executive Committee
acted by written consent one time and met one time in 1998.
During 1998, each director attended more than 75% of the meetings of
the Board of Directors and respective committees on which he or she
served.
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information as of April 8, 1999 (except
as otherwise noted) regarding the beneficial ownership of Common Stock by
each person known by the Company to own 5% or more of the outstanding
shares of each Series of Common Stock, each director and nominee for
director of the Company, including the Company's Chief Executive Officer,
each other Named Executive Officer listed in the Summary Compensation
Table below, and the current directors and Named Executive Officers of
the Company as a group. The persons named in the table have sole voting
and investment power with respect to all shares of Common Stock owned by
them, unless otherwise noted. Of the shares issued and outstanding as of
April 8, 1999, Paul I. Stevens, Chairman of the Board of the Company, and
members of his immediate family, own approximately 13.3% of the
outstanding Series A Stock and 93.1 the outstanding Series B Stock,
representing in the aggregate approximately 72% of the total voting power
of Common Stock with respect to matters on which Series A Stock and
Series B Stock vote together.
<PAGE>
<TABLE>
Series A Stock(1) Series B Stock(2)
----------------- -----------------
Percent Percent
Name of Beneficial of of
Owner or Group Number Series Number Series
-------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Paul I. Stevens(3)(4) 961,302 12.7 1,706,415 82.9
Richard I. Stevens(3)(5) 266,464 3.5 250,313 12.1
Constance I. Stevens(3)(6) 263,106 3.5 107,725 5.2
James D. Cavanaugh(8) 35,000 * - -
Edgar H. Schollmaier(7) 310,500 4.2 - -
Michel A. Destresse(10) 15,000 * -
Hans W. Kossler(11) 55,000 * - -
George A. Wiederaenders(9) 53,275 * - -
Stevens Industries, Inc.(3) 123,106 1.6 74,140 3.6
All current directors and Named
Executive Officers as a group
(8 persons) 1,713,435 21.7 1,916,099 93.1
____________________
</TABLE>
* Less than 1%
(1) The information set forth for Series A Stock does not include the
shares of Series B Stock of such holder which are convertible, at
any time and from time to time, into shares of Series A Stock on a
share-for-share basis.
(2) Each share of Series B Stock is convertible into Series A Stock on a
share-for-share basis at any time.
(3) The address of Paul I. Stevens, Richard I. Stevens and Constance I.
Stevens is 5500 Airport Freeway, Fort Worth, Texas 76117 and the
address of Stevens Industries, Inc. is P.O. Box 562, Fort Worth,
Texas 76101. The shares of Paul I. Stevens, Richard I. Stevens and
Constance I. Stevens include shares held by Stevens Industries,
Inc. because, due to their positions as officers, directors and
stockholders of such corporation, they could be deemed to share
beneficial ownership of its shares.
(4) Includes 715,096 shares of Series A Stock and 1,628,475 shares of
Series B Stock owned by a trust for which Mr. Stevens and his wife
serve as Trustees, and 115,000 shares of Series A Stock purchasable
pursuant to options.
(5) Includes 115,000 shares of Series A Stock purchasable pursuant to
options.
(6) Includes 40,000 shares of Series A Stock purchasable pursuant to
options.
(7) Includes 20,000 shares of Series A Stock purchasable pursuant to
options.
(8) Includes 30,000 shares of Series A Stock purchasable pursuant to
options.
(9) Includes 50,000 shares of Series A Stock purchasable pursuant to
stock options.
(10) Includes 15,000 shares of Series A Stock purchasable pursuant to
stock options.
(11) Includes 55,000 shares of Series A Stock purchasable pursuant to
stock options.
<PAGE>
MANAGEMENT COMPENSATION AND TRANSACTIONS
Summary Compensation Table
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years to
the Company's Chief Executive Officer and each of the Company's other
executive officers serving at fiscal 1998 year end whose salary and bonus
exceeded $100,000, (the "Named Executive Officers").
<TABLE>
Long Term Compensation
----------------------------------
Awards Payouts
Annual Compensation ------------------------- -------
----------------------------------
Securities
Name and Other Annual Restricted Underlying LTIP All Other
Principal Fiscal Compensation Stock Options/SARs Payouts Compensation
Position Year Salary ($) Bonus ($) ($)(1) Award(s) (#) ($) ($)
-------- ----- ---------- --------- ------ -------- ------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul I. Stevens, 1998 116,957 - - - 115,000 - -
Chairman of the 1997 234,737 - - - 90,000 - -
Board and Chief 1996 300,000(2) - 6,000 - - - -
Executive Officer -
Richard I. Stevens, 1998 182,852 - 2,850 - 115,000 - -
President and Chief 1997 231,000 - 2,568 - 90,000 - -
Operating Officer 1996 225,000 - 8,333 - - - -
Hans W. Kossler, 1998 117,925 - 822 - 55,000 - -
Senior Vice 1997 134,990 - - - 30,000 - -
President, 1996 150,000 - - - - - -
Operations *
William A. Kist 1998 113,459 - 682 - 50,000 - -
Vice President & 1997 125,047 - 631 - 25,000 - -
Corporate 1996 127,261(3) - 6,593 - - - -
Controller **
George A. 1998 93,232 - 946 - 50,000 - -
Wiederaenders, 1997 101,251 25,000 871 - 25,000 - -
Vice President, 1996 97,830 - 5,630 - - - -
Treasurer and Chief
Accounting Officer
</TABLE>
* Mr. Kossler resigned on April 16, 1999 to pursue other interests.
** Mr. Kist resigned on January 15, 1999 to pursue other interests.
(1) Consists of automobile allowance and group insurance costs.
(2) Paul I. Stevens earned a $149,262 bonus in 1995, but declined it
in 1996.
(3) Includes $25,000 of annual compensation earned in 1996, that was
deferred by agreement between Mr. Kist and the Company and paid in
1997.
<PAGE>
Option Grants During 1998 Fiscal Year
The following executive officers received options granted in the
fiscal year 1998.
<TABLE> Alternative
Grant Date
Individual Grants Value
--------------------------------------------------------------------------- -----
Number of
Securities % of Total Exercise
Underlying Options/SARs Granted or base Grant Date
Options/SARs to Employees in Price Expiration Present Value
Name Granted Fiscal Year ($/Sh) Date $1.05 (1)
---- ------- ----------- ------ ---- ---------
<S> <C> <C> <C> <C> <C>
Paul I. Stevens 25,000 8.8 $1.50 Mar.2003 $26,250
Richard I. Stevens 25,000 8.8 $1.50 Mar.2003 $26,250
Hans W. Kossler 25,000 8.8 $1.50 Mar.2003 $26,250
William A. Kist 25,000 8.8 $1.50 Mar.2003 $26,250
George A. Wiederaenders 25,000 8.8 $1.50 Mar.2003 $26,250
__________
</TABLE>
(1) Option valuation was determined using a variation of the
Black-Scholes pricing model with the following assumptions:
Expected volatility 60%
Expected dividend yield 0
Expected option term 5 years
Risk-Free rate of return 5.5%
Options Exercised During 1998 Fiscal Year and Fiscal Year End Option
Values
There were no options exercised during the fiscal year 1998.The
following table provides information related to options granted to the
Named Executive Officers during the 1998 fiscal year and the number and
value of options held at fiscal year end. The Company does not have any
outstanding stock appreciation rights.
<PAGE>
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SAR's Options/SAR's
At FY-End (#) At FY-End ($)
-------------------------- ---------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul I. Stevens - - 115,000 - - -
Chairman of the Board
and Chief Executive
Officer
Richard I. Stevens - - 115,000 - - -
President and Chief
Operating Officer
Hans W. Kossler - - 55,000 - - -
Senior Vice President
Operations
William A. Kist - - 50,000 - - -
Vice President and
Corporate
Controller
George A. - - 50,000 - - -
Wiederaenders
Vice President,
Treasurer and Chief
Accounting Officer
- ------------------
</TABLE>
Report of the Compensation and Stock Option Committees on Repricing of
Options/Sars
The Company's stock option plan has been used to provide executive
officers and other key employees with increased motivation and incentive
to exert their best efforts on behalf of the Company through the
opportunity to benefit from appreciation in the value of the Series A
Common Stock. Due to a decline in the price of the Common Stock in
fiscal 1997, certain options outstanding under the Company's stock option
plan were exercisable at prices which exceeded the then current market
value of the Series A Common Stock. In order to restore the incentive
value to such options, the Board of Directors approved the repricing of
options.
<PAGE>
On September 10, 1997, each option outstanding under the Company's
stock option plan, with an exercise price exceeding the market price of
the Company's Series A Common Stock was canceled and reissued with an
exercise price equal to the then current market price of $1.50.
All other terms and conditions of these options remained the same.
Additionally, as previously reported, in fiscal 1993 the Company repriced
stock options as set forth below. The following table provides
information related to all repricing of options during the last ten
fiscal years for the named executive officers.
<TABLE>
Ten-Year Option/SAR Repricings
Number of Market
Securities Price of
Underlying Stock at Length of
Options/ Time of Exercise Price at Original Option
SARs Repriced Repricing Time of Repricing New Term Remaining at
or or or Amendment Exercise Date of Repricing
Name Date Amended (#) Amendment ($) ($) Price ($) or Amendment
---- ---- ----------- ------------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul I. Stevens, 9/10/97 90,000 $1.50 50,000/$5.50 $ 1.50 September 1999
Chairman of the Board 40,000/$4.5625 November 1997
and Chief Executive
Officer
Richard I. Stevens, 9/10/97 90,000 $1.50 50,000/$5.50 $1.50 September 1999
President and Chief 40,000/$4.5625 $1.50 November 1997
Operating Officer 11/18/92 30,000 $4.5625 $8.00 $4.5625 March 1994
Hans W. Kossler, 9/10/97 10,000 $1.50 10,000/$6.938 $1.50 November 2000
Senior Vice President
Operations
William A. Kist, Vice 9/10/97 20,000 $1.50 10,000/$7.125 $1.50 March 2000
President & Corporate 10,000/$4.5625 $1.50 November 1997
Controller 11/18/92 7,500 $4.5625 $15.00 $4.5625 January 1997
George A. 9/10/97 25,000 $1.50 15,000/$7.125 $1.50 March 2000
Wiederaenders, Vice 10,000/$4.5625 $1.50 November 1997
President, Treasurer 11/18/92 6,500 $4.5625 $15.00 $4.5625 January 1997
and Chief Accounting
Officer
</TABLE>
This report is submitted by members of the Board of Directors,
Edgar H. Schollmaier, Paul I. Stevens, Richard I. Stevens, Constance
I. Stevens, James D. Cavanaugh and Michel A. Destresse
<PAGE>
Pension Plan and Trust
Effective January 1, 1989, the Company established the Stevens
International, Inc. Pension Plan and Trust (the "Pension Plan"). The
Pension Plan replaced and is the successor to two pension plans
previously maintained by subsidiaries of the Company. The Pension Plan
is a tax qualified defined benefit pension plan under Section 401(a) et.
seq. of the Code.
The Company's Board of Directors decided to permanently freeze all
benefits under the Pension Plan effective April 30, 1997, as a part of
the cost reduction measures taken in 1997. This action eliminates all
future benefit accruals for participants in the Pension Plan for 1997 and
thereafter.
The following table illustrates estimated annual benefits payable upon
retirement in specified compensation and years of service classifications
and assumes (i) the participant attained age 65 in 1996, (ii) the
compensation presented is subject to the maximum permitted in 1996 and
preceding years, (iii) annual Social Security covered compensation amount
for 1996 is $27,580, (iv) the maximum allowable years of service is 40,
(v) the participant elected to receive his benefits for life, and (vi)
the Internal Revenue Code limitation on benefits elected remains at the
level of $120,000, the 1996 limit.
<TABLE>
Years of Service
------------------------------------------------------------
Compensation 15 20 25 30 35 40
------------ ------ ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
$100,000 15,784 22,152 28,519 34,886 41,253 46,518
125,000 20,147 28,264 36,381 44,499 52,616 59,255
150,000 24,509 34,377 44,244 554,111 63,978 71,993
175,000 27,934 39,552 51,169 62,786 74,403 84,168
200,000 31,359 44,727 58,094 71,461 84,828 96,343
225,000 33,157 47,258 61,358 75,458 89,559 101,806
250,000 33,341 47,441 61,542 75,642 89,743 101,990
300,000 33,341 47,441 61,542 75,462 89,743 101,990
</TABLE>
<PAGE>
The amount of a participant's normal benefit is based on the
participant's accrued benefit as of December 31, 1991, plus, with respect
to service of participants after December 31, 1991, .75% of the
participant's monthly compensation for each year of participation (not to
exceed 40 years), plus .5% of the participant's monthly compensation (in
excess of the Social Security covered compensation) for each year of
participation (not to exceed 35 years). Under the Code, the annual
benefit payable to a participant under the Pension Plan (expressed as a
single life annuity beginning at the participant's Social Security
retirement age), is limited to $120,000 in 1996 or, if less, 100% of the
participant's average annual compensation for the participant's highest
three years of consecutive service. For purposes of the Pension Plan,
compensation includes a participant's base compensation, bonuses,
commissions, and overtime pay. Compensation considered under the Pension
Plan is subject to limits imposed by the Code ($150,000 in 1996).
Benefits provided by the Company under the Pension Plan will become fully
vested and nonforfeitable following the completion of five years of
service by a participant.
The estimated credited years of service under the Pension Plan for
each of the executive officers listed in the compensation table above is
as follows: Mr. Paul I. Stevens, seven years; Mr. Richard I. Stevens,
seven years; Mr. Hans Kossler, one year; Mr. William Kist, seven years;
and Mr. George Wiederaenders, seven years.
Under one of the predecessor pension plans, benefits have vested on
behalf of Mr. Richard I. Stevens who is entitled to a monthly annuity
benefit for life of $2,083, commencing on his normal retirement date.
<PAGE>
Compensation of Directors
The following table provides information related to the compensation
paid to outside directors of the Company.
<TABLE>
Cash Compensation Stock Options
Number of
Securities
Annual Underlying
Name and Retainer Meeting Consulting Number of Options
Principal Position Fee Fee Fee/Other Shares (#) SARs(#)
<S> <C> <C> <C> <C> <C>
James D. Cavanaugh - 6,000 - 5,000 -
Audit Committee
Michel A. Destresse - - $41,545 5,000 -
Edgar H. Schollmaier - 3,000 - 5,000 -
Executive, Compensation,
and Audit Committees
</TABLE>
(a) Directors who are also executives of the Company are not listed in
the above table. They do not receive compensation as directors.
Refer to the Summary Compensation Table for information concerning
their compensation.
(b) Amounts shown include cash compensation earned and received as well
as amounts earned but deferred at the election of directors.
(c) Each director generally receives $1,500/board meeting and
$1,500/committee meeting, however, certain director fees in 1998
were deferred. Mr. Destresse receives consulting fees of lieu of
director fees.
(d) The reasonable expenses incurred by each director in connection with
his or her duties as a director are also reimbursed by the Company;
this amount is not reflected in the above table.
(e) There were no retainer fees paid in 1998.
(f) Two directors, Robert H. Brown, Jr. and John W. Stodder, who
resigned from the Board of Directors in March 1999 for personal
reasons were paid $1,500 and $6,000 in 1998, respectively. Mr.
Brown was a member of the Executive and Compensation Committees.
Mr. Stodder was a member of the Audit Committee.
<PAGE>
Report of the Compensation Committee of the Board of Directors on
Executive Compensation
The Company's executive compensation program is administered by the
Stock Option and Compensation Committee of the Board of Directors.
During 1998, the Committee was composed of two independent, nonemployee
directors. The Committee is committed to a strong, positive link between
business, performance and strategic goals, and compensation and benefit
programs. Accordingly, as part of stringent cost reduction measures, all
officer base pay was reduced from 5% to a maximum of 50% in July, 1997.
Overall Executive Compensation Policy
The Company's compensation policy is designed to support the overall
objective of enhancing value for the Company's stockholders by:
* Attracting, developing, rewarding and retaining highly qualified and
productive individuals.
* Relating compensation to both Company and individual performance.
* Ensuring compensation levels that are externally competitive and
internally equitable.
* Encouraging executive stock ownership to enhance a mutuality of
interest with other stockholders.
The following is a description of the elements of the Company's
executive compensation and how each relates to the objectives and policy
outlined above.
Base Salary
The Committee reviews each executive officer's salary annually. In
determining appropriate salary levels, the Committee considers individual
performance, internal equity, as well as pay practices of other companies
relating to executives of similar responsibility.
By design, the Committee strives to set executives' salaries at
competitive market levels. However, in July, 1997, the performance of
the Company necessitated a reduction of all officer salaries from 5% to
a maximum of 50% of base pay. In addition certain reductions of the
Chairman and CEO occurred in 1998. The Committee believes maximum
performance can be encouraged through the use of appropriate incentive
programs. Incentive programs for executives are as follows:
<PAGE>
Annual Incentives
Generally, discretionary annual incentive award opportunities are
made to executives to recognize and reward corporate and individual
performance. Senior executives may receive bonuses ranging from 60% to
75% of eligible base compensation with attainment measured by corporate
net income as compared to the annual plan. Bonuses can be increased or
decreased incrementally based upon performance for the year. Other
corporate officers and key employees may receive bonuses ranging from 5%
to 20% of eligible base compensation, measured by corporate net income.
Accordingly, no senior executive officers were awarded an incentive bonus
based upon 1998 performance. External market data is reviewed
periodically to determine competitive incentive opportunities for
individual executives. The Company believes that it is in the mid-range
of compensation and annual incentive programs, when compared to external
compensation data.
Long-Term Incentives
The Company's long-term compensation philosophy is that long-term
incentives should be related to improvement in long-term stockholder
value, thereby creating a mutuality of interest with stockholders. In
furtherance of this objective, the Company awards to its executive
officers stock options.
Stock options encourage and reward effective management that results
in long-term corporate financial success, as measured by stock price
appreciation. Stock options generally are exercisable at the fair market
value at date of grant and options are generally exercisable in two
installments beginning one year after date of grant.
Rationale for CEO Compensation
Mr. Paul I. Stevens has been Chairman and Chief Executive Officer of
the Company since 1986. His compensation package has been designed to
encourage short and long-term performance in line with the interests of
the Company's stockholders. Mr. Stevens' large stock ownership
percentage as described elsewhere herein is a substantial incentive to
perform in such a way to enhance stockholders' interest and returns. His
base pay was reduced 50% to $150,000 in July, 1997. In addition, Mr.
Stevens voluntarily eliminated his base pay beginning October 1, 1998, to
increase the cash availability of the Company. He is a participant in the
incentive plans described above.
The factors which the Committee considered in determining Mr. Stevens'
50% reduction in base pay in July, 1997, and the voluntary elimination of
his base pay in October 1998, relate principally to the need for
stringent cost reduction at all levels of the Company. Mr. Stevens
declined his bonus earned for fiscal year 1995. No such incentive was
paid to Mr. Stevens for fiscal years 1998, 1997, and 1996. In granting
stock options in 1998 and 1997 to Mr. Stevens, as well as other
executives, the Committee took into account the executive's level and
scope of responsibility and contributions to the Company, as well as
competitive long-term incentive practices as verified by external
surveys.
This report is submitted by the Stock Option and Compensation
Committee of the Board of Directors, Mr. Edgar H. Schollmaier, member.
<PAGE>
The Board 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 the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Stock Option and Compensation Committee and Insider Participation
During fiscal 1998, the members of the Stock Option and Compensation
Committee were primarily responsible for determining executive
compensation and matters relating to stock options, although certain of
such matters were discussed by the full Board of Directors. Paul I.
Stevens, as a director as well as an executive officer of the Company,
participated in such discussions.
The Company and Xytec Corporation ("Xytec"), a subsidiary of Stevens
Industries, Inc., one of the principal shareholders of the Company and a
corporation controlled by Paul I. Stevens, Richard I. Stevens and
Constance I. Stevens, entered into an agreement during 1994 for Xytec to
provide software and computer-related services and equipment of $2.1
million as a subcontractor on a major contract. During 1996, 1997 and
1998, the Company paid approximately $671,000, $594,000, and $856,000
respectively, to Xytec on this contract. The cost to Xytec of this
subcontract was approximately 92% of its billings to the Company, or
$604,000 in 1996, $575,000 in 1997 and $787,000 in 1998.
Through September 30, 1998, each of Paul I. Stevens and Richard I.
Stevens owned a 22.5% interest in a joint venture which was the landlord
under the lease of the Company's corporate headquarters. Amounts paid to
the joint venture as rent and maintenance in 1998 and 1997 were
approximately $84,000 and $111,000, respectively.
Through December 31, 1998, Paul I. Stevens, the Company's Chairman and
Chief Executive Officer has loaned the Company $1.66 million for
its short-term cash requirements and $2.95 million on a long-term
arrangement. The long-term loans from Paul I. Stevens are due June 30,
2000 and bear interest at rates that vary up to 2% over bank prime.
Paul I. Stevens' loans at December 31, 1998 have first liens on
certain assets of the Company, principally certain Ohio assets that are
being held for sale, the remaining $0.5 million escrow hold back on the
sale of the Company's Zerand division, the assets of a foreign
subsidiary, and certain accounts receivable for new customer equipment.
The Company was paid $500,000 of the Zerand escrow hold back funds net of
amounts owed to the purchaser on November 6, 1998. Because these hold
back funds collateralize certain Paul I. Stevens advances, the $500,000
was paid to him to reduce his secured loans to the Company.
The Company believes that the transactions described above are
beneficial to the Company and are on terms as favorable to the Company as
could be obtained from unaffiliated third parties. Such transactions are
expected to be continued in the future, with review of and the approval
required by the independent members of the Board of Directors.
<PAGE>
Stock Performance Chart
The following chart compares the yearly percentage change in the
cumulative total stockholder return on the Company's Series A Stock
during the five fiscal years ended December 31, 1998 (adjusted for a
stock split and the reclassification of the Company's Common Stock into
Series A Stock and Series B Stock) with the cumulative total return on
the American Stock Exchange Index and the Printing Equipment (SIC Code
355) Machinery Industry Index. The comparison assumes $100 was invested
on December 31, 1993 in the Company's Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends.
COMPARISON OF TOTAL RETURN OF THE COMPANY, PEER GROUP
AND BROAD MARKET
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
FISCAL YEAR ENDING
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
STEVENS INTERNATIONAL A 100 121.82 83.64 21.82 22.73 16.36
SPECIAL INDUSTRY MACHINERY 100 117.50 170.83 161.42 202.99 203.73
AMEX MARKET INDEX 100 88.33 113.86 120.15 144.57 142.61
</TABLE>
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange
Commission (the "SEC") and the American Stock Exchange. Such persons are
required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it
with respect to fiscal 1998, or written representations from certain
reporting persons, the Company believes that all filing requirements
applicable to its directors, officers and persons who own more than 10%
of a registered class of the Company's equity securities have been
complied with.
<PAGE>
INDEPENDENT AUDITORS
On May 21, 1998, Stevens International, Inc. (The "Company") dismissed
Deloitte & Touche LLP ("Deloitte & Touche") as its principal independent
accountants. The decision to dismiss Deloitte & Touche was approved by
the Company's Board of Directors as well as the Audit Committee of the
Board of Directors. Deloitte & Touche's report on the Company's
financial statements for each of the fiscal years ended December 31, 1997
and 1996 did not contain an adverse opinion or disclaimer of opinion.
However, such reports were qualified or modified as to uncertainties
involving factors raising substantial doubt about the Company's ability
to continue as a going concern. There were no adjustments in the
consolidated financial statements that might result from the outcome of
this uncertainty.
During the Company's past two fiscal years and the periods following
December 31, 1997, there were no disagreements between the Company and
Deloitte and Touche on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which if
not resolved to the satisfaction of Deloitte & Touche would have caused
it to make reference to the subject matter(s) of the disagreement(s) in
connection with its reports.
A letter from Deloitte & Touche confirming the statements contained
herein was filed as an exhibit to Form 8-K filed on May 29, 1998.
On May 21, 1998, the Company retained Grant Thornton LLP to serve as
the Company's principal independent accountants. During the Company's
past two fiscal years and the periods following December 31, 1997, the
Company did not consult Grant Thornton LLP regarding the application of
accounting principles to a specified transaction or the type of audit
opinion that might be rendered on the Company's financial statements.
Representatives of Grant Thornton LLP are expected to be present at
the Meeting with the opportunity to make a statement if they desire to do
so and to be available to answer appropriate questions.
STOCKHOLDERS' PROPOSALS
Stockholders may submit proposals on matters appropriate for
stockholder action at subsequent annual meetings of the Company
consistent with Rule 14a-8 promulgated under the Securities Exchange Act
of 1934, as amended. For such proposals to be considered in the Proxy
Statement and Proxy relating to the 2000 Annual Meeting of Stockholders,
such proposals must be received by the Company not later than January 20,
2000. Such proposals should be directed to Stevens International, Inc.,
5500 Airport Freeway, Fort Worth, Texas 76117.
OTHER BUSINESS
The Board of Directors knows of no matters other than those described
herein that will be presented for consideration at the Meeting. However,
should any other matters properly come before the Meeting or any
adjournment thereof, it is the intention of the persons named in the
accompanying Proxy to vote in accordance with their best judgment in the
interest of the Company.
<PAGE>
MISCELLANEOUS
All costs incurred in the solicitation of Proxies will be borne by the
Company. In addition to solicitation by mail, the officers and employees
of the Company may solicit Proxies by telephone, telegraph or personally,
without additional compensation. The Company may also make arrangements
with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of
shares of Common Stock held of record by such persons, and the Company
may reimburse such brokerage houses and other custodians, nominees and
fiduciaries for their out-of-pocket expenses incurred in connection
therewith.
The Company's annual report to shareholders for 1998 is being mailed
with this proxy statement to stockholders entitled to vote at the
Meeting. The Annual Report is not to be deemed part of this Proxy
Statement.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULE, BUT NOT
INCLUDING EXHIBITS, WILL BE FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM
A PROXY STATEMENT IS DELIVERED UPON THE WRITTEN REQUEST OF SUCH PERSON
ADDRESSED TO STEVENS INTERNATIONAL, INC., ATTN: MS. CONSTANCE STEVENS,
5500 AIRPORT FREEWAY, FORT WORTH, TEXAS 76117.
By Order of the Board of Directors
/s/ PAUL I. STEVENS
PAUL I. STEVENS
Chairman of the Board
and Chief Executive Officer
Fort Worth, Texas
April 20, 1999
<PAGE>
Stevens International, Inc.
Annual Meeting of Stockholders
Series A Common Stock
The undersigned hereby appoints Paul I. Stevens and Richard I.
Stevens, each with power to act without the other and with full power of
substitution, as Proxies to represent and to vote, as designated on the
reverse, all Series A common Stock of Stevens International, Inc. owned
by the undersigned, at the Annual Meeting of Stockholders to be held at
the offices of the Company, 5500 Airport Freeway, Fort Worth, Texas,
76117, on Thursday , May 20, 1999, at 10:00 a.m. local time, upon such
other business as may properly come before the meeting or any adjournment
thereof including the following:
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
- ---------------------------------------------------------------------------
<PAGE>
A [X] Please mark your
votes as in this example.
FOR all nominees
Listed at right WITHHOLD AUTHORITY
(Except as marked to the To vote for all
contrary below) nominees listed at right NOMINEES:
Michel A. Destresse
Edgar H. Schollmaier
1. Election of [ ] [ ]
Directors
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.
- ---------------------------------------------------------------------------
2. In their discretion on any other matter that may properly come before
the meeting or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no specific direction is
given, this proxy will be voted (i) for the election of the nominees for
director, and (ii) at the discretion of the proxy holders with regard to
any other matter that may properly come before the meeting or any
adjournment thereof.
This proxy may be revoked prior to the exercise of the powers conferred
by the proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE DATE, SIGN EXACTLY AS SHOWN HEREON AND MAIL PROMPTLY THIS PROXY IN
THE ENCLOSED ENVELOPE.
Signature_________________________________________Dated______________1999
Note: Please date, sign exactly as shown hereon and mail promptly
this proxy in the enclosed envelope. When there is more than
one owner, each should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please add your
title as such. If executed by a corporation, the proxy should
be signed by a duly authorized officer. If executed by a
partnership, please sign in the partnership name as an
authorized person.
<PAGE>
Stevens International, Inc.
Annual Meeting of Stockholders
Series B Common Stock
The undersigned hereby appoints Paul I. Stevens and Richard I.
Stevens, each with power to act without the other and with full power of
substitution, as Proxies to represent and to vote, as designated on the
reverse, all Series B common Stock of Stevens International, Inc. owned
by the undersigned, at the Annual Meeting of Stockholders to be held at
the offices of the Company, 5500 Airport Freeway, Fort Worth, Texas,
76117, on Thursday, May 20, 1999, at 10:00 a.m. local time, upon such
other business as may properly come before the meeting or any adjournment
thereof including the following:
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
- ---------------------------------------------------------------------------
<PAGE>
A [X] Please mark your
votes as in this example.
FOR all nominees
Listed at right WITHHOLD AUTHORITY
(Except as marked to the To vote for all
contrary below) nominees listed at right NOMINEES:
Paul I. Stevens
Richard I. Stevens
1. Election of [ ] [ ] Constance I. Stevens
Directors James D. Cavanaugh
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.
- ---------------------------------------------------------------------------
2. In their discretion on any other matter that may properly come before
the meeting or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no specific direction is
given, this proxy will be voted (i) for the election of the nominees for
director, and (ii) at the discretion of the proxy holders with regard to
any other matter that may properly come before the meeting or any
adjournment thereof.
This proxy may be revoked prior to the exercise of the powers conferred
by the proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE DATE, SIGN EXACTLY AS SHOWN HEREON AND MAIL PROMPTLY THIS PROXY IN
THE ENCLOSED ENVELOPE.
Signature______________________________________________Dated_________1999
Note: Please date, sign exactly as shown hereon and mail promptly
this proxy in the enclosed envelope. When there is more than
one owner, each should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please add your
title as such. If executed by a corporation, the proxy should
be signed by a duly authorized officer. If executed by a
partnership, please sign in the partnership name as an
authorized person.
