<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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
UNIVERSAL INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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 number of securities to which transaction 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>
UNIVERSAL INTERNATIONAL, INC.
5000 WINNETKA AVENUE NORTH
NEW HOPE, MINNESOTA 55428
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 15, 1997
------------------------
Notice is hereby given that the Annual Meeting of Shareholders of Universal
International, Inc. (the "Company") will be held at the 28th floor of the
LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota 55402 on Tuesday, July
15, 1997 at 3:30 p.m. Central Time for the following purposes:
(1) To elect five directors to the Board of Directors for the ensuing year;
(2) To ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
independent auditors for the current fiscal year; and
(3) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on May 16, 1997 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
Your attention is directed to the accompanying Proxy Statement for the text
of the resolutions to be proposed at the meeting and further information
regarding each proposal to be made.
SHAREHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON IF YOU WISH.
Enclosed for your information is the annual report of the Company for the
year ended December 31, 1996.
By Order of the Board of Directors
Mark H. Ravich
CHIEF EXECUTIVE OFFICER, SECRETARY AND
TREASURER
April 30, 1997
Minneapolis, Minnesota
1
<PAGE>
UNIVERSAL INTERNATIONAL, INC.
5000 WINNETKA AVENUE NORTH
NEW HOPE, MINNESOTA 55428
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--JULY 15, 1997
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Universal International, Inc. (the "Company") of proxies
to be used at the Annual Meeting of Shareholders of the Company (the "Meeting")
to be held on Tuesday, July 15, 1997 at 3:30 p.m. Central Time, at the 28th
floor of the LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota, and at
all adjournments thereof for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. ANY PROXY IN WHICH NO
DIRECTION IS SPECIFIED WILL BE VOTED IN FAVOR OF EACH OF THE MATTERS TO BE
CONSIDERED. This Proxy Statement and the accompanying Annual Report, Notice and
Proxy are being mailed to shareholders on or about June 10, 1997.
The close of business on May 16, 1997 has been fixed as the record date for
the determination of shareholders entitled to notice of and to vote at the
Meeting. At that date, the Company's outstanding voting securities consisted of
4,893,328 shares of Common Stock, par value $.05 per share (the "Common Stock").
On all matters which will come before the Meeting, each shareholder or their
proxy will be entitled to one vote for each share of Common Stock of which such
shareholder was the holder of record on the record date. The aggregate number of
votes cast by all shareholders present in person or by proxy at the Meeting will
be used to determine whether a motion is carried. Thus, an abstention from
voting on a matter by a shareholder, while included for purposes of calculating
a quorum for the Meeting, has no effect on the item on which the shareholder
abstained from voting. In addition, although broker "non-votes" will be counted
for purposes of attaining a quorum, they will have no effect on the vote.
Any Proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to its use by (i) delivering to the principal office
of the Company a written notice of revocation, (ii) filing with the Company a
duly executed Proxy bearing a later date or (iii) attending the Meeting and
voting in person.
The costs of this solicitation will be borne by the Company. The Company
will request brokerage houses and other nominees, custodians and fiduciaries to
forward soliciting material to beneficial owners of the Company's Common Stock.
The Company will reimburse brokerage firms and other persons representing
beneficial owners for their expenses in forwarding solicitation materials to
beneficial owners.
PROPOSAL ONE
ELECTION OF DIRECTORS
BOARD RECOMMENDATION
The Board of Directors recommends that the five persons named below be
elected as directors, each to hold office for a term of one year and until their
successor is duly elected and qualified. A shareholder cannot vote for a greater
number of persons than the number of nominees named.
2
<PAGE>
GENERAL
The Board of Directors met three times during the last fiscal year. Each
nominee director attended all of the meetings of the Board of Directors and
committees of the Board during the period he was a director. The Board of
Directors meets regularly to review significant developments affecting the
Company and to act on matters requiring Board of Director approval.
The directors are elected annually by the shareholders of the Company. The
Company's Bylaws provide that three or more persons shall serve on the Board of
Directors. All nominees are presently serving as directors.
Two of the nominees are not employees of the Company. The other three
nominees are executive officers of the Company with broad service and experience
in a variety of the Company's activities. Personal information for each nominee
is provided under the "Nominees for Director" section of this Proxy Statement.
The Board of Directors has two standing committees: the Compensation
Committee and the Audit Committee. The Compensation Committee, which consists of
Ernest M. Simon and Stanford A. Weiner, reviews and makes recommendations to the
Board of Directors regarding salaries, compensation and benefits of executive
officers and key employees of the Company and grants all options to purchase
Common Stock under the Company's 1990 Stock Plan (the "Plan"), apart from
options granted to directors under the Plan. The Audit Committee, which
currently consists of Ernest M. Simon and Stanford A. Weiner, reviews the
internal and external financial reporting of the Company, reviews the scope of
the independent audit and considers comments by the auditors regarding internal
controls and accounting procedures and management's response to those comments.
The Compensation Committee and the Audit Committee each met once in 1996. There
is no Nominating Committee or any committee performing those functions.
DIRECTOR COMPENSATION
The Company's non-employee directors each receives cash compensation of $500
for attending a regular or special meeting of the Board of Directors and $250
for any committee meetings. The Company also reimburses directors for costs and
expenses in connection with such director's participation at Board of Directors
meetings. During 1996, the non-employee directors were compensated an aggregate
of $6,000 for attendance at regular, special, and committee meetings.
In 1996, each non-employee director received options to purchase 3,750
shares of the Company's Common Stock. Commencing in 1997, non-employee directors
will receive options to purchase 5,000 shares of the Company's Common Stock for
each year of service as a director of the Company. Stock options for 11,250
shares to non-employee directors vested in 1996.
NOMINEES FOR DIRECTOR
The names of the nominees, and certain information about them, are set forth
below:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- -------------------------------- --- ------------------------------------------------------
<S> <C> <C>
Norman J. Ravich................ 70 Chairman of the Board of Directors
Mark H. Ravich.................. 44 Chief Executive Officer
Wesley J. Laseski............... 61 President
Ernest M. Simon................. 64 President of Strategic Management Group, Inc.
Stanford A. Weiner.............. 50 Vice President of Nathan Weiner and Associates
</TABLE>
3
<PAGE>
NORMAN J. RAVICH
Norman J. Ravich, the Company's founder, has been Chairman of the Board and
a director of the Company since its incorporation in 1956. Mr. Ravich is engaged
on a full-time basis as a buyer and seller of the Company's merchandise.
MARK H. RAVICH
Mark H. Ravich has been Chief Executive Officer of the Company since
September 1990. Mr. Ravich has provided the Company with extensive consulting
and other services since 1984 and has been a director of the Company since 1979.
For the past 18 years, he has been President and controlling shareholder of Tri-
Star Development Corp. and Tri-Star Management, Inc., a real estate development
company and a property management company, respectively. Mr. Ravich also is a
director of Odd's-N-End's, Inc., a Buffalo, New York-based closeout retailer.
The Company owns 40.5% of the outstanding common stock of Odd's-N-End's, Inc.
Mr. Ravich is the son of Norman J. Ravich.
WESLEY J. LASESKI
Wesley J. Laseski has been President and a director of the Company since
March 1993. Since April 1992, Mr. Laseski has been President and Chief Executive
Officer of Wes Laseski and Associates, a consulting and investment firm. From
June 1978 to April 1992, Mr. Laseski was President, Chairman and director of
Spearhead Industries, Inc., a seasonal production marketing firm.
ERNEST M. SIMON
Ernest M. Simon has been a director of the Company since April 1994. Since
January 1995, Mr. Simon has been President of Strategic Management Group, Inc.
an acquisition and turnaround consulting firm. From 1969 through December 1994,
Mr. Simon was Corporate Vice President of Operations of Dyson-Kissner-Moran
Corporation, a New York-based private investment company.
STANFORD A. WEINER
Stanford A. Weiner has been a director of the Company since December 1994.
Since 1986, Mr. Weiner has been Vice President of Nathan Weiner & Associates and
a Vice President of Sterling Incorporated, Kansas City, Kansas-based
organizations providing seasonal products. Mr. Weiner was one of the founders in
1983 of the Paper Warehouse retail chain based in Minneapolis which he sold in
1986.
VOTING INFORMATION
A shareholder submitting a Proxy may vote for all or any of the nominees for
election to the Board of Directors or may withhold his vote from all or any of
such nominees. IF A SUBMITTED PROXY IS PROPERLY SIGNED BUT UNMARKED IN RESPECT
OF THE ELECTION OF DIRECTORS IT IS INTENDED THAT THE PROXY AGENTS NAMED IN THE
PROXY WILL VOTE THE SHARES REPRESENTED THEREBY FOR THE ELECTION OF ALL OF THE
NOMINEES. Each of the nominees has agreed to serve the Company as a director if
elected. However, should any nominee become unwilling or unable to serve if
elected, the Proxy Agents named in the Proxy will exercise their voting power in
favor of such other person as the Board of Directors of the Company may
recommend. The Company's Articles of Incorporation prohibit cumulative voting
and each director will be elected by a majority of the voting power of the
shares present and entitled to vote at the Meeting.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 30, 1997: (i) by each
director; (ii) by all directors and executive officers of the Company as a
group; and (iii) by each person known to the Company to be the beneficial owner
of more than 5% of the outstanding shares of the Company's Common Stock.
All shareholders have sole voting and investment power over the shares
beneficially owned, except with respect to the shares owned by Mark H. Ravich
(except the 220,000 shares noted below), L. Jack Roth, and Gilbert L. Wachsman
(the "Shareholders"), all of whom have their shares subject to a shareholders
agreement. Under the terms of that agreement, Mark H. Ravich is entitled to
exercise voting power with respect to such shares. The Shareholders are subject
to certain restrictions on the sale of their shares. These restrictions are in
addition to other resale restrictions on the shares held by the Shareholders
under applicable federal and state securities laws.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF OF OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS(2)
- ----------------------------------------------------------- ----------------------- -----------
<S> <C> <C>
Mark H. Ravich ............................................ 1,035,472(3) 20.5
5000 Winnetka Ave. N.
New Hope, Minnesota 55428
Gilbert L. Wachsman ....................................... 428,000(4) 8.4
7740 Marth Ct.
Edina, MN 55439
Heartland Advisors, Inc. .................................. 300,000 6.1
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Norman J. Ravich .......................................... 237,540(5) 4.8
Wesley J. Laseski ......................................... 200,000(6) 3.9
L. Jack Roth .............................................. 188,828(7) 3.9
Ernest M. Simon ........................................... 11,250(8) *
Stanford A. Weiner ........................................ 8,250(9) *
All officers and directors
as a group (6 persons) .................................. 1,681,340(10) 31.5
</TABLE>
- ------------------------
* Represents less than 1% of the Company's outstanding Common Stock.
(1) Unless otherwise indicated, each person has sole voting and investment
power with respect to the shares specified opposite his name.
(2) Based upon a total of 4,893,328 shares of Common Stock outstanding plus any
options applicable to the individual or group.
(3) Includes: a) 372,472 shares of Common Stock held by Mr. Ravich; b) 265,000
shares held by the Norman and Sally Ravich Family Trust of which Mr. Ravich
is co-trustee; c) 220,000 shares held by the Norman J. Ravich Irrevocable
Agreement of which Mark H. Ravich is sole trustee; d) 28,000 shares held in
trust for Mr. Ravich's children of which he is co-trustee; and e) options
granted to Mr. Ravich, available for exercise within 60 days, to purchase
150,000 shares.
(4) Includes: a) 200,000 shares of Common Stock held by Mr. Wachsman; and b)
options granted to Mr. Wachsman, available for exercise within 60 days, to
purchase 228,000 shares.
5
<PAGE>
(5) Includes an option granted to Mr. Ravich, available for exercise within 60
days, to purchase 75,000 shares.
(6) Includes an option granted to Mr. Laseski, available for exercise within 60
days, to purchase 200,000 shares.
(7) Includes an option granted to Mr. Roth, available for exercise within 60
days, to purchase 8,000 shares.
(8) Includes an option granted to Mr. Simon, available for exercise within 60
days, to purchase 11,250 shares.
(9) Includes an option granted to Mr. Weiner, available for exercise within 60
days, to purchase 6,250 shares.
(10) Includes options and warrants in preceding footnotes.
COMPENSATION OF EXECUTIVE OFFICERS
The following table provides information as to compensation paid by the
Company during each of the last three fiscal years to the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company whose cash compensation in 1996 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------ ------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)(1)
- --------------------------------- ---- ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Norman J. Ravich ................ 1996 150,000 -- -- 4,140
Chairman 1995 149,808 50,000 75,000 8,775
1994 165,481 -- -- 8,775
Mark H. Ravich .................. 1996 157,212 -- -- 9,000
Chief Executive Officer 1995 149,808 62,000 150,000(1) 9,000
1994 165,481 -- -- 9,000
Wesley J. Laseski ............... 1996 157,212 -- -- --
President 1995 149,808 62,000 200,000(2) --
1994 162,885 -- -- --
L. Jack Roth .................... 1996 134,940 -- -- 3,600
Executive Vice President 1995 128,750 15,000 -- 3,600
Buying 1994 128,606 7,500 20,000 3,600
Stevan Buxbaum .................. 1996 105,000 18,958 100,000 14,839
President of Universal 1995 -- -- -- --
Asset-Based Services, Inc. 1994 -- -- -- --
</TABLE>
- ------------------------
(1) The option granted to Mr. Ravich in 1995 was issued upon cancellation of a
previously issued option to purchase 100,000 shares.
(2) The option granted to Mr. Laseski in 1995 was issued upon cancellation of
the option granted in 1993 to purchase 200,000 shares.
Stock options granted pursuant to the 1990 Stock Option Plan totaled 312,500
as of December 31, 1996.
6
<PAGE>
The following table shows, as to the individuals named in the Summary
Compensation Table, information concerning stock options granted during the year
ended December 31, 1996.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
INDIVIDUAL GRANTS (#)(1) ANNUAL RATES OF
----------------------------------------------------- STOCK PRICE
% OF TOTAL APPRECIATION
OPTIONS FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------
NAME (#)(1) 1996 ($/SH) DATE 5% ($) 10% ($)
- --------------------------- ----------- ------------ ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Stevan Buxbaum............. 100,000 42.2% $ 4.75 4/12/01 $606,234 $764,992
</TABLE>
- ------------------------
(1) Options indicated vest and become exercisable over a four-year period from
the date of grant based upon the optionee continuing to be employed by the
Company.
(2) The 5% and the 10% assumed rates of appreciation are mandated by the rules
of the Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future price of the Common Stock.
No executive officer exercised options during 1996. The following table sets
forth, for each of the executive officers named in the Summary Compensation
Table above, the year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN THE MONEY OPTIONS
AT YEAR-END(#) AT YEAR-END ($)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Norman J. Ravich............................................ 37,500 37,500 0 0
Mark H. Ravich.............................................. 75,000 75,000 0 0
Wesley J. Laseski........................................... 100,000 100,000 0 0
L. Jack Roth................................................ 8,000 12,000 0 0
Stevan Buxbaum.............................................. 0 100,000 0 0
</TABLE>
1990 STOCK PLAN
The Company has reserved 450,000 shares of Common Stock for issuance upon
the exercise of options granted or available for grant under the Company's 1990
Stock Plan (the "Plan"). The purpose of the Plan is to create an additional
incentive for the Company's employees, directors, consultants, independent
contractors and agents to exert their utmost effort to improve the business and
increase the assets of the Company by providing them with the opportunity to
acquire the Company's Common Stock through the exercise of stock options. Under
the terms of the Plan all of the Company's directors and executive officers,
currently six individuals, are eligible to receive options under the Plan. The
Plan authorizes the granting of either "Incentive Stock Options," as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, or "Non-Qualified
Stock Options". As of April 30, 1997, the Company has granted options to
purchase 312,500 shares of Common Stock pursuant to the Plan. The term of
options granted under the Plan is determined by the Board of Directors in its
discretion, but may not exceed 10 years from the date of grant.
7
<PAGE>
All options granted to non-employee directors have an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant.
A director who is granted an option under the Plan generally will not
realize any taxable income upon grant of the option. Upon exercise of the
option, the amount by which the fair market value of the shares at the time of
exercise exceeds the exercise price is treated as compensation received by the
director in the year of exercise. The Company will generally be entitled to a
corresponding tax deduction at the time that the director realizes compensation
income. If the director sells shares which he has purchased pursuant to the
exercise of an option granted under the Plan, the difference between any amount
realized and the director's basis in the shares may be classified as capital
gain or loss item.
OTHER STOCK OPTIONS
There are options to purchase 785,500 shares of Common Stock which were not
issued under the Plan. These options were granted to Messrs. Ernest M. Simon,
Stanford A. Weiner, Norman J. Ravich, Mark H. Ravich, Wesley J. Laseski, Stevan
Buxbaum, Gilbert L. Wachsman, a former employee and director of the Company, and
Mark L. Bartholomay, a former director of the Company.
CERTAIN TRANSACTIONS
Norman J. Ravich entered into a three year employment agreement in October
1992 which was amended in January 1995 to extend through December 1996. Under
the amended employment agreement, Mr. Ravich agreed to serve as the Company's
Chairman for an annual base salary of $150,000 in 1995 and $150,000 in 1996.
This agreement further provides that Mr. Ravich shall be entitled to a bonus to
be determined by the Board of Directors at the end of each year. Mr. Ravich's
1995 bonus was $50,000, which was paid by the Company in March 1996. In January
1995, the Company granted Mr. Ravich a five year option to purchase 75,000
shares of the Company's Common Stock at an exercise price of $2.50 per share,
which option vests over a two year period from the date of grant based upon Mr.
Ravich's employment with the Company.
Mark H. Ravich entered into a three year employment agreement in October
1992 which was amended in January 1995 to extend through December 1996. Under
the amended employment agreement, Mr. Ravich agreed to serve as the Company's
Chief Executive Officer for an annual base salary of $150,000 in 1995 and
$157,500 in 1996 (5% increase based on 1995 pre-tax profits of the Company). The
agreement further provides that Mr. Ravich shall be entitled to a bonus of up to
$100,000, for both 1995 and 1996, based on pre-tax profits of the Company and
meeting performance objectives set by the Board of Directors. Mr. Ravich's 1995
bonus was $62,000, which was paid by the Company in March 1996. Under the
amended agreement, Mr. Ravich and the Company canceled an option to purchase
100,000 shares and, in consideration, the Company granted Mr. Ravich a five year
option to purchase 150,000 shares of the Company's Common Stock at an exercise
price of $2.50 per share, which option vests over a two year period from the
date of grant based upon Mr. Ravich's employment with the Company.
Wesley J. Laseski entered into a three year employment agreement with the
Company in March 1993 which was amended in January 1995 to extend through
December 1996. Under the amended employment agreement, Mr. Laseski agreed to
serve as the Company's President for a base salary of $150,000 in 1995 and
$157,500 in 1996 (5% increase based on 1995 pre-tax profits of the Company). The
agreement further provides that Mr. Laseski shall be entitled to a bonus, for
both 1995 and 1996, of up to $100,000 based on pre-tax profits of the Company
and meeting performance objectives set by the Board of Directors. Mr. Laseski's
1995 bonus was $62,000, which was paid by the Company in March 1996. Under the
amended agreement the Company also granted Mr. Laseski a five year option to
purchase 200,000 shares of the Company's Common Stock at an exercise price of
$2.50 per share. Under the amended agreement, Mr. Laseski and the Company
canceled an option to purchase 200,000 shares and, in consideration, the Company
granted Mr. Laseski a five year option to purchase 200,000 shares of the
Company's Common
8
<PAGE>
Stock at an exercise price of $2.50 per share which option vests over a two year
period from the date of grant based upon Mr. Laseski's employment with the
Company.
L. Jack Roth entered into a one-year employment agreement with the Company
in February 1989 under which Mr. Roth agreed to serve as the Company's Executive
Vice President--Buying. Mr. Roth's current annual base salary is $135,200. The
employment agreement remains in effect until terminated by either party.
During 1996, the Company purchased merchandise of approximately $200,000
from a Company of which Mr. Stan Weiner is a material shareholder. The Company
believes that such purchases were arms-length transactions and that the terms
and conditions of the purchases were normal for the industry.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Mr. Mark Bartholomay, a former director of the Company, served as a member
of the Compensation Committee of the Board of Directors during 1996. Mr.
Bartholomay was Chief Financial Officer of the Company from February 1992 to
April 1993.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors establishes the general
compensation policies of the Company as well as the compensation plans and
specific compensation levels for executive officers.
The Company has traditionally entered into employment agreements with its
executive officers, including the Chief Executive Officer (collectively, the
"Executive Officers"). In January 1995, the Company amended the existing
employment agreements with Norman J. Ravich, Mark H. Ravich, and Wesley J.
Laseski. The compensation for the Executive Officers was generally set forth
under their respective employment agreements. See "Employment Agreements."
EXECUTIVE OFFICERS' COMPENSATION PROGRAM
There are three basic components to the Company's executive compensation
program: base salary, annual incentive bonus, and long-term equity-based
incentive compensation in the form of stock options. Various benefits including
medical and retirement savings plans generally available to employees of the
Company are also made available.
While base salaries are fixed pursuant to the employment agreements, the
other components of the Executive Officers' compensation are established in
light of individual and Company performance, comparable compensation programs,
equity among employees, and cost effectiveness.
BASE SALARY
Base salaries are designed to be competitive, although conservative as
compared to salary levels for equivalent positions at comparable companies. The
1995 base salary was a fixed amount in the Executive Officer's employment
agreement and was subject to incremental raises during the term of the
agreement.
BONUS PLAN
The Company has an established bonus plan which provides for the payment of
cash bonuses payable to Executive Officers and other management personnel. Such
bonuses are determined by a formula based on pre-tax profits of the Company.
With respect to non-Executive Officers, bonus payments are made on a
9
<PAGE>
discretionary basis and may vary in amount from year to year. With respect to
the Executive Officers, each is entitled to receive a bonus. The Chairman's
bonus is to be determined by the Board of Directors at the end of the year. The
Chief Executive Officer and the President's bonuses are based on the Company
achieving pre-tax profits of least $1,000,000 and meeting performance objectives
set by the Board of Directors.
STOCK OPTIONS
One of the principal factors considered in granting stock options to the
Executive Officers of the Company is the ability of the Executive Officers to
influence the Company's long-term growth and profitability. All options are
granted at or above the market price. Since the value of an option bears a
direct relationship to the Company's stock price, the Committee believes that
options motivate Executive Officers to manage the Company in a manner which will
also benefit stockholders. The Committee therefore views stock option grants as
an important component of its long-term, performance-based compensation
philosophy. In April 1996, stock options exercisable for 100,000 shares of
Common Stock were granted to the President of the Company's 95%-owned
subsididary, Universal Asset-Based Services, Inc. This option expires on April
12, 2001 and vest over a four-year period.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
Mark H. Ravich has served as a director of the Company since 1979 and as
Chief Executive Officer since September 1990. His base salary was $157,500 in
1996 and has been set at $157,500 for 1997. The Committee believes that Mr.
Ravich's base salary in 1996 was, on a comparable basis with other chief
executives in the industry, below the norm.
Ernest M. Simon
Stanford A. Weiner
Members of the Compensation Committee
10
<PAGE>
STOCK PERFORMANCE COMPARISON
The following graph shows a comparison of cumulative total shareholder
returns for the Company, the NASDAQ Stock Market Index and an index of peer
companies selected by the Company.
STOCK PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
UNIV NASDAQ PEER GROUP
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12/31/91 100 100 100
12/31/92 27.94 114.22 80.76
12/31/93 19.61 131.07 74.62
12/31/94 16.67 126.88 68.02
12/31/95 37.26 177.53 57.78
12/31/96 15.69 217.84 100.02
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Assumes $100 invested on January 1, 1992 in the Common Stock of Universal
International, Inc., the NASDAQ Stock Market Index and a peer group.
The Company's peer group is comprised of other close-out wholesalers and
retailers. The members of the peer group are as follows: Consolidated Stores
Corporation, 50-Off Stores, Inc., MacFrugal's Bargains Close-outs, Inc., Tuesday
Morning Corp., Dolgencorp, and Family Dollar, Inc.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission ("SEC"). Such officers, directors and ten percent
shareholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) forms that they file. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company, all
Section 16(a) filing requirements applicable to its officers, directors and ten
percent shareholders were complied with.
PROPOSAL TWO
RATIFICATION AND APPROVAL OF THE
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P., independent
public accountants, to audit the financial statements of the Company for the
fiscal year ending December 31, 1997. Coopers & Lybrand L.L.P. has audited the
Company's financial statements since 1990. Representatives of Coopers & Lybrand
L.L.P. are expected to be present at the Meeting and will have an opportunity to
make a statement if they desire to do so. They are also expected to be available
to respond to appropriate questions.
BOARD RECOMMENDATIONS
The Board of Directors recommends a vote for ratification of the selection
of the independent auditor. Ratification of the selection requires the
affirmative vote by a majority of the shareholders present or represented at the
Meeting. If the appointment is not ratified by the shareholders, the Board of
Directors is not obligated to appoint other auditors, but the Board of Directors
will give consideration to such unfavorable vote.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's 1998
Annual Meeting of Shareholders must be received by the Company on or before
December 15, 1997 to be considered for
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inclusion in the Company's proxy statement and form of proxy relating to such
meeting. The proposals should be addressed to Mr. Mark H. Ravich, Chief
Executive Officer, Universal International Inc., 5000 Winnetka Avenue North, New
Hope, Minnesota 55428.
OTHER MATTERS
A copy of the Company's Annual Report for the year ended December 31, 1996,
is enclosed herewith.
All properly executed Proxies delivered pursuant to this solicitation and
not revoked will be voted at the Meeting in accordance with the directions
given. In voting by proxy in regard to the election of four directors to serve
until the 1998 Annual Meeting of Shareholders, shareholders may vote in favor of
all nominees or withhold their votes as to all nominees or withhold their votes
as to specific nominees. With respect to other terms to be voted upon,
shareholders may vote in favor of the item or against the item or may abstain
from voting. Shareholders should specify their choices on the enclosed Proxy.
Any Proxy in which no director is specified will be voted in favor of each of
the matters to be considered.
The Board of Directors does not intend to bring any matters before the
Meeting other than as stated in this Proxy Statement and is not aware of any
other matters that will be presented for action at the Meeting. Should any other
matters be properly presented, the person named in the enclosed form of Proxy
will vote the Proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the Proxy.
Mark H. Ravich
CHIEF EXECUTIVE OFFICER
Dated: April 30, 1997
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PROXY
UNIVERSAL INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JULY 15, 1997
The undersigned hereby appoints Norman J. Ravich and Mark H. Ravich, and
each of them, with full power of substitution as proxies and agents (the "Proxy
Agents") in the name of the undersigned, to attend the Annual Meeting of
Shareholders of Universal International, Inc. (the "Company") to be held at the
28th floor of the LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota
55402 on Tuesday, July 15, 1997 at 3:30 p.m. Central Time, or any adjournment
thereof, and to vote the number of shares of Common Stock of the Company that
the undersigned would be entitled to vote, and with all the power the
undersigned would possess, if personally present, as follows.
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1. ELECTION OF DIRECTORS / / FOR all nominees listed below / / WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE TO VOTE FOR ALL NOMINEES LISTED
CONTRARY) BELOW
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(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME IN THE LIST BELOW.)
NORMAN J. RAVICH MARK H. RAVICH WESLEY J. LASESKI ERNEST M. SIMON STANFORD A.
WEINER
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2. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. as the Company's independent auditor
for the Company's current fiscal year.
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/ / FOR / / AGAINST / / ABSTAIN
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3. In their discretion, the Proxy Agents are authorized to vote on such other business as may properly
come before the meeting or any adjournment thereof.
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THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED TO THE COMPANY WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
PLEASE DATE AND SIGN EXACTLY AS THE NAME(S) APPEARS HEREIN AND RETURN
PROMPTLY IN THE ACCOMPANYING ENVELOPE. IF THE SHARES ARE HELD BY JOINT TENANTS
OR AS COMMUNITY PROPERTY, BOTH SHAREHOLDERS SHOULD SIGN.
Receipt of Notice of Annual Meeting of Shareholders and Proxy Statement
dated April 30, 1997, is hereby acknowledged by the undersigned.
Dated: -------------------------------, 1997
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Signature of Shareholder
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Signature of Shareholder
