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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
STEWART ENTERPRISES, INC.
(Name of Registrant as Specified In Its Charter)
BOARD OF DIRECTORS
STEWART ENTERPRISES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) 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-
11:1 (Set forth amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
[ ] 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 of 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>
[Stewart Letterhead]
February 27, 1997
To Our Shareholders:
You are cordially invited to the annual meeting of
shareholders of Stewart Enterprises, Inc. to be held at
11:00 a.m. on March 27, 1997 in the LaSalle B Room of the
Hotel Inter-Continental, 444 St. Charles Avenue, New
Orleans, Louisiana.
The attached notice of meeting and proxy statement
describe in detail the matters proposed by your Board of
Directors to be considered and voted upon at the meeting.
It is important that your shares be represented at the
meeting. Accordingly, we ask that you read the attached
notice of meeting and proxy statement carefully and that you
complete, date and sign the enclosed proxy and return it
promptly in the accompanying postpaid envelope. This will
ensure that your vote is counted. Furnishing the enclosed
proxy will not prevent you from voting in person at the
meeting should you wish to do so.
Please return the enclosed proxy and save your company
the cost of having to contact you again in order to obtain
your signed proxy.
Sincerely,
/s/ Frank B. Stewart, Jr.
Frank B. Stewart, Jr.
Chairman of the Board
<PAGE>
STEWART ENTERPRISES, INC.
110 Veterans Memorial Boulevard
Metairie, Louisiana 70005
_____________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_____________________________________________
TO THE SHAREHOLDERS OF STEWART ENTERPRISES, INC.:
The annual meeting (the "Annual Meeting") of shareholders of
Stewart Enterprises, Inc. (the "Company") will be held in the LaSalle B
Room of the Hotel Inter-Continental, 444 St. Charles Avenue, New
Orleans, Louisiana, on March 27, 1997 at 11:00 a.m. for the following
purposes:
(i) To elect two directors to serve a three-year term of office
expiring at the 2000 annual meeting;
(ii) To ratify the appointment of Coopers & Lybrand L.L.P., certified
public accountants, as independent auditors for the fiscal year
ending October 31, 1997; and
(iii) 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 February
3, 1997 are entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited to attend the meeting in
person. However, if you are unable to attend in person and wish to have
your shares voted, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ACCOMPANYING POSTPAID ENVELOPE AS PROMPTLY AS POSSIBLE.
Your proxy may be revoked by appropriate notice to the Secretary of
Stewart Enterprises, Inc. at any time prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kenneth C. Budde
Kenneth C. Budde
Secretary
Metairie, Louisiana
February 27, 1997
<PAGE>
STEWART ENTERPRISES, INC.
110 Veterans Memorial Boulevard
Metairie, Louisiana 70005
February 27, 1997
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Stewart
Enterprises, Inc. (the "Company") in connection with the solicitation of
proxies on behalf of the Board of Directors of the Company for use at
the annual meeting of shareholders (the "Annual Meeting") of the Company
to be held on March 27, 1997 at 11:00 a.m. in the LaSalle B Room of the
Hotel Inter-Continental, 444 St. Charles Avenue, New Orleans, Louisiana.
Only holders of record of the Class A and Class B Common Stock of
the Company at the close of business on February 3, 1997 are entitled to
notice of and to vote at the Annual Meeting. On that date, the Company
had outstanding (i) 40,266,553 shares of Class A Common Stock, each of
which is entitled to one vote and (ii) 1,777,510 shares of Class B
Common Stock, each of which is entitled to ten votes.
The enclosed proxy may be revoked by the shareholder at any time
prior to the exercise thereof by filing with the Secretary of the
Company a written revocation or duly executed proxy bearing a later
date. The proxy will be deemed revoked if the shareholder is present at
the Annual Meeting and elects to vote in person.
This Proxy Statement is first being mailed to shareholders on or
about February 27, 1997, and the cost of soliciting proxies in the
enclosed form will be borne by the Company. In addition to the use of
the mails, proxies may be solicited by personal interview, telephone and
facsimile. Banks, brokerage houses and other institutions, nominees and
fiduciaries will be requested to forward the soliciting material to
their principals and to obtain authorization for the execution of
proxies, and the Company will, upon request, reimburse them for their
reasonable expenses in so acting.
<PAGE>
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
Stock Ownership of Directors and Executive Officers
The table below sets forth certain information concerning the
beneficial ownership, as of February 3, 1997, of the Company's Class A
and Class B Common Stock by (i) each director and director nominee of
the Company, (ii) each executive officer for whom compensation
information is disclosed under the caption "Executive Compensation," and
(iii) all directors and executive officers of the Company as a group,
determined in accordance with Rule 13d-3 of the Securities and Exchange
Commission ("SEC"). Unless otherwise indicated, all shares shown as
beneficially owned are held with sole voting and investment power.
<TABLE>
<CAPTION> Acquirable through
Currently
Number of Shares Exercisable Percent
Beneficial Owner Class Benefically Owned <F1> Stock Options<F2> of Class<F2>
________________ ______ ______________________ _________________ _____________
Directors and Director Nominees
<S> <C> <C> <C> <C>
Frank B. Stewart, Jr. Class A 4,377,748<F3> 45,000 11.0%
P. O. Box 19925 Class B 1,777,510<F4> -- 100.0%
New Orleans, LA 70179
Joseph P. Henican, III Class A 1,047,631<F5> 120,627 2.9%
William E. Rowe Class A 77,635 77,502 *
Ronald H. Patron Class A 15,000 27,501 *
Darwin C. Fenner Class A 244,845<F6> 21,130 *
John P. Laborde Class A 8,250 9,000 *
James W. McFarland Class A 1,368 14,625 *
Michael O. Read Class A 6,592<F7> 27,158 *
Named Executive Officers<F8>
Gerard C. Alexander Class A 171,967 42,501 *
Richard O. Baldwin, Jr. Class A 106,342 42,501 *
All directors and executive
officers as a group
(16 persons) Class A 5,972,016<F9> 543,892 16.0%<F10>
Class B 1,777,510 -- 100.0%<F10>
________________________
<FN>
* Less than 1%.
<F1> Excludes shares subject to options currently exercisable or
exercisable within 60 days, which shares are set forth separately
in the next column.
<F2> Consists of shares subject to options currently exercisable or
exercisable within 60 days. These shares are deemed to be
outstanding for purposes of computing the percentage of outstanding
Class A Common Stock owned by a person individually and by all
directors and executive officers as a group but are not deemed to
be outstanding for the purpose of computing the ownership
percentage of any other person.
<F3> Includes 4,148,448 shares owned as community property with Mr.
Stewart's wife and 229,300 shares owned by the Frank B. Stewart,
Jr. Foundation (a non-profit corporation), with respect to which
Mr. Stewart shares voting and investment power.
<F4> Each share of Class B Common Stock has ten votes per share and,
unless otherwise required by law, the holder of Class B Common
Stock votes together with the holders of Class A Common Stock on
all matters brought before the shareholders.
<F5> Includes 811,666 shares held by trusts for family members of Frank
B. Stewart, Jr. for which Mr. Henican serves as co-trustee and
shares voting and investment power.
<F6> Includes 229,300 shares held by the Frank B. Stewart, Jr.
Foundation (a non-profit corporation), with respect to which Mr.
Fenner is a trustee and shares voting and investment power.
<F7> Includes 2,250 shares held in trust, with respect to which Mr. Read
is a trustee and shares voting and investment power.
<F8> Information on Messrs. Stewart, Henican, Rowe and Patron, the named
executive officers other than Messrs. Alexander and Baldwin,
appears under the caption "Directors and Director Nominees."
<F9> Does not include 650,160 shares owned by Investors Trust, Inc.
("Investors Trust"), a subsidiary of the Company, as trustee of the
Stewart Enterprises Employees' Retirement Trust (a Profit-Sharing
Plan). Management of the Company has the power to elect the
directors and officers of Investors Trust, and to that extent
shares voting and investment power of the shares held by Investors
Trust.
<F10> As of February 3, 1997 shares of Class A and B Common Stock
beneficially owned by all directors and executive officers as a
group represented 41.5% of the Company's total voting power.
</FN>
</TABLE>
Stock Ownership of Certain Beneficial Owners
As of February 3, 1997, the person named below was, to the
Company's knowledge, the only beneficial owner of more than 5% of the
Company's outstanding Class A Common Stock, determined in accordance
with Rule 13d-3 of the SEC, other than Frank B. Stewart, Jr., whose
beneficial ownership of the Company's Class A Common Stock is described
above.
Amount and Nature of Percent
Beneficial Owner Class Beneficial Ownership of Class
_________________ _____ ____________________ __________
Putnam Investments Class A 4,341,530<F1> 10.8%
One Post Office Square
Boston, MA 02109
_______________________
<F1> Based solely on a report on Form 13G filed by Putnam Investments
with the SEC for the quarter ended December 31, 1996 indicating
that all shares shown as beneficially owned are held with shared
investment power, 407,764 of the shares are held with shared voting
power, and 3,933,766 of the shares are held with no voting power.
ELECTION OF DIRECTORS
General
The Amended and Restated Articles of Incorporation (the
"Articles") and the By-laws of the Company divide the Board of Directors
into three classes serving three-year staggered terms and, pursuant to
the Company's By-laws and a resolution of the Board of Directors, the
number of directors has been set at eight. The term of office of the
two Class I directors expires at the Annual Meeting. The Class II and
Class III directors are serving terms that expire at the 1998 and 1999
annual meetings, respectively. Accordingly, proxies cannot be voted for
more than two persons. Joseph P. Henican, III and Michael O. Read, the
Class I directors whose terms are expiring, have been nominated by the
Board of Directors for re-election at the Annual Meeting for a three-
year term of office expiring at the 2000 annual meeting and until their
successors are duly elected and qualified.
Unless authority to vote for the election of directors is
withheld, the proxy holders named on the enclosed proxy will vote all
shares duly represented thereby in favor of the election of each of the
two nominees listed below. The Company is informed that each nominee is
willing to serve; however, in accordance with the Company's By-laws, if
any of them should decline or become unable to serve for any reason,
votes represented by the enclosed proxy will be cast instead for a
substitute nominee designated by the Board of Directors, or, if none is
designated, the number of directors automatically shall be reduced by
the total number of nominees withdrawn from consideration. Under the
Company's By-laws, directors are elected by plurality vote.
Any shareholder of record desiring to nominate persons for
election to the Board of Directors must comply with the procedures
established by the Company's Articles and By-laws. Pursuant to the
Company's Articles and By-laws, a shareholder of record may nominate
persons for election to the Board of Directors at a meeting of
shareholders only if the shareholder is entitled to vote at such meeting
and provides timely notice in writing to the Secretary of the Company at
its principal office, 110 Veterans Memorial Boulevard, Metairie,
Louisiana 70005. To be timely, a shareholder's notice must be received
at the Company's principal office not less than 45 days nor more than 90
days prior to the meeting; however, if less than 55 days notice or prior
public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received at
the Company's principal office no later than the close of business on
the tenth day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made. The notice must
include the following information with respect to each person the
shareholder proposes to nominate: (i) such person's name, age, business
address and residential address, (ii) such person's principal occupation
or employment, (iii) the class and number of shares of capital stock of
the Company of which such person is the beneficial owner (as defined in
Rule 13d-3 of the SEC), (iv) such person's written consent to being
named in the proxy statement as a nominee and to serve as a director if
elected, and (v) any other information relating to such person that
would be required to be disclosed in solicitations of proxies for the
election of directors, or otherwise would be required, in each case
pursuant to Regulation 14A of the SEC. The notice also must include the
following information with respect to the shareholder giving the notice:
(i) the name and address of such shareholder and (ii) the class and
number of shares of capital stock of the Company of which such
shareholder is the beneficial owner (as defined in Rule 13d-3 of the
SEC). If requested in writing by the Company's Secretary at least 15
days in advance of the meeting, such shareholder must disclose to the
Secretary, within ten days of such request, whether such person is the
sole beneficial owner of the shares held of record by such shareholder,
and, if not, the name and address of each other person known by the
shareholder of record to claim or have a beneficial interest in such
shares.
The following table sets forth certain information regarding the
directors and nominees for election as directors of the Company. Unless
otherwise indicated, each director has been engaged in the principal
occupation shown for more than the past five years.
Nominated
Name, Age, Principal Occupation, Director for Term
and Directorships in other Public Companies Since Expiring
___________________________________________ _________ ____________
Nominees for Election as Class I Directors:
Joseph P. Henican, III, 48 . . . . . . . . . 1984 2000
Chief Executive Officer
and Vice Chairman of the
Board of the Company<F1>
Michael O. Read, 53 . . . . . . . . . . . . . 1991 2000
Business Development,
Johnson & Higgins of
Louisiana, Inc. (insurance
brokerage and consulting)<F2>
The Board of Directors unanimously recommends a vote FOR each of the
nominees listed above.
Continuing Class II Directors:
Frank B. Stewart, Jr., 61 . . . . . . . . . . 1970 1998
Chairman of the Board of the
Company<F3>
Darwin C. Fenner, 64 . . . . . . . . . . . . 1991 1998
Investment Counsel and Chairman -
Fenner & Williams Investment
Management Company
John P. Laborde, 73 . . . . . . . . . . . . 1995 1998
Director and Consultant,
Tidewater, Inc. (marine transportation and
natural gas compression)<F4>
Continuing Class III Directors:
Ronald H. Patron, 52 . . . . . . . . . . . . 1991 1999
Executive Vice President, President -
Corporate Division and Chief Financial
Officer of the Company
William E. Rowe, 50 . . . . . . . . . . . 1994 1999
President and Chief Operating
Officer of the Company<F5>
James W. McFarland, 51 . . . . . . . . 1995 1999
Dean, A.B. Freeman
School of Business,
Tulane University<F6>
<F1> Mr. Henican became Chief Executive Officer on February 1, 1995.
Until January 31, 1995, he was a partner in the law firm of
Henican, James & Cleveland, L.L.P., and served as general counsel
to the Company for more than 13 years.
<F2> Prior to January 1994, Mr. Read was a partner of Montgomery,
Barnett, Brown, Read, Hammond & Mintz, Attorneys at Law.
<F3> Mr. Stewart served as interim Chief Executive Officer of the
Company from November 1, 1994, upon the retirement of Lawrence M.
Berner as President and Chief Executive Officer, until February 1,
1995, when Mr. Henican assumed the office of Chief Executive
Officer.
<F4> Mr. Laborde was Chairman, President and Chief Executive Officer of
Tidewater Inc. from 1956 to 1994. He is also a director of Stolt
Comex Seaway S.A., Stone Energy Corporation, American Bureau of
Shipping and American Bankers Insurance Group Inc.
<F5> Mr. Rowe became President of the Company on November 1, 1994. He
became Senior Executive Vice President and Chief Operating Officer
in April 1994. Prior to that time, he served as Executive Vice
President and President of the Company's former Mid-Atlantic
Division.
<F6> Mr. McFarland is also a director of American Indemnity Financial
Corporation, Petroleum Helicopters, Inc. and Sizeler Property
Investors, Inc.
________________
During the fiscal year ended October 31, 1996, the Board of
Directors held six meetings. All of the incumbent directors attended
75% or more of the aggregate number of meetings of the Board of
Directors and committees of which they were members that were held
during the period in which they served.
The Board of Directors has an Audit Committee on which Messrs.
Fenner, Read, Laborde and McFarland serve. The Audit Committee has
general responsibility for meeting periodically with representatives of
the Company's independent public accountants to review the general scope
of audit coverage, including consideration of the Company's accounting
practices and procedures and its system of internal accounting controls,
and for reporting to the Board with respect thereto. The Audit
Committee also recommends to the Board of Directors the appointment of
the Company's independent auditors. The Audit Committee met six times
during the fiscal year ended October 31, 1996. The Board of Directors
also has a Compensation Committee on which Messrs. Fenner, Read, Laborde
and McFarland serve. The Compensation Committee reviews, analyzes and
recommends compensation programs to the Board. The Compensation
Committee also is responsible for the administration of and the grant of
awards under the Amended and Restated 1991 Incentive Compensation Plan
and the Amended and Restated 1995 Incentive Compensation Plan. The
Compensation Committee met two times during the fiscal year ended
October 31, 1996. The Board of Directors does not have a nominating
committee.
Compensation of Directors
Each member of the Board of Directors who is not a full-time
employee of the Company (an "Outside Director") was paid during the last
fiscal year (i) an annual retainer of $15,000, (ii) $1,000 for each
Board meeting attended, and (iii) $700 for each committee meeting
attended.
Pursuant to the Company's Amended and Restated 1991 Incentive
Compensation Plan, each Outside Director received options to purchase
5,625 shares of the Company's Class A Common Stock on each of February
16, 1993 and November 1, 1993, 1994 and 1995. Persons who joined the
Board as Outside Directors between option grant dates received a reduced
number of options based on the number of months of service on the Board
prior to the next grant date. The options became exercisable on October
31 following the date of grant and expire on October 31, 1997. The
exercise price of the options is 80% of the fair market value of the
Class A Common Stock on the date of grant.
Pursuant to the Company's Amended and Restated Directors' Stock
Option Plan, each Outside Director received options to purchase 36,000
shares of the Company's Class A Common Stock on January 2, 1996. The
options become exercisable in 25% annual increments beginning one year
after grant. Exercisability of the options is automatically accelerated
in the event of a change of control, as defined in the Company's Amended
and Restated Directors' Stock Option Plan, and may be accelerated by the
Compensation Committee at any time in its discretion. The options must
be exercised within one year from the date of termination of Board
service and expire on January 2, 2001. The exercise price of the
options is the fair market value of the Class A Common Stock on the date
of grant.
EXECUTIVE COMPENSATION
Summary of Compensation
The following table sets forth information with respect to the
compensation paid by the Company, for services rendered during the
fiscal years ended October 31, 1996, 1995 and 1994, to the Company's
Chief Executive Officer and to each of the five most highly compensated
other executive officers.
SUMMARY COMPENSATION TABLE
<TABLE> Long Term
<CAPTION> Compensation
Annual Compensation Awards
___________________________________ ________________
Name and Other Securities
Principal Annual Underlying All Other
Position Year Salary Bonus Compensation Options Compensation
_________ ____ ______ _______ _____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>
Frank B. Stewart, Jr. 1996 $600,000 -- -- -- $16,293<F1>
Chairman of the Board 1995 600,000 -- -- -- 15,506
1994 600,000 -- -- -- 7,008
Joseph P. Henican, III 1996 450,000 $175,500 -- 65,812 13,005<F1>
Chief Executive Officer<F2>1995 300,000 190,000 -- 764,813<F2> 4,800<F2>
William E. Rowe 1996 450,000 175,500 -- 65,812 22,244<F1>
President and Chief 1995 400,000 190,000 $162,820<F3> 451,688 13,993
Operating Officer 1994 304,600 127,500 46,056<F4> 82,500 12,385
Ronald H. Patron 1996 300,000 136,875 -- 40,500 10,504<F1>
Executive Vice President, 1995 262,500 142,500 -- 259,500 9,656
President-Corporate Division1994 250,000 128,750 -- -- 5,903
and Chief Financial Officer
Gerard C. Alexander 1996 300,000 172,500 -- 40,500 7,001<F1>
Executive Vice President 1995 262,500 143,125 -- 259,500 8,695
and President - Central 1994 250,000 89,375 -- -- 6,042
Division
Richard O. Baldwin, Jr. 1996 300,000 136,875 -- 40,500 9,915<F1>
Executive Vice President 1995 262,500 127,500 -- 259,500 9,892
and President - Corporate 1994 250,000 127,500 -- -- 5,458
Development Division
________________
<FN>
<F1> Consists of Company contributions to the accounts of the named
executive officers in the Stewart Enterprises Employees' Retirement
Trust (a Profit-Sharing Plan) and the Stewart Enterprises
Supplemental Retirement and Deferred Compensation Plan, and, for
Frank B. Stewart, Jr. and William E. Rowe, includes life insurance
premiums, paid by the Company on their behalf as follows,
respectively: Mr. Stewart, $4,510, $10,929 and $854; Mr. Henican,
$3,663 and $9,342; Mr. Rowe, $3,875, $11,093 and $7,276; Mr. Patron,
$3,922 and $6,582; Mr. Alexander, $4,063 and $2,938; Mr. Baldwin,
$4,181 and $5,734.
<F2> Mr. Henican became the Company's Chief Executive Officer on February
1, 1995. Amounts shown for Mr. Henican for fiscal year 1995 include
compensation he received as a non-employee director of the Company
prior to his becoming the Company's Chief Executive Officer, which
consisted of the grant of options to purchase 5,625 shares of the
Company's Class A Common Stock and cash compensation of $4,800.
<F3> Includes reimbursement of $136,000 for the loss on the sale of Mr.
Rowe's house, in accordance with the terms of his employment
agreement.
<F4> Includes $19,750 in club dues and expenses and $13,400 in temporary
living expenses, in accordance with the terms of Mr. Rowe's
employment agreement.
</FN>
</TABLE>
<TABLE>
Stock Options
The following two tables present information with respect to the
executive officers named in the Summary Compensation Table concerning
grants and exercises of stock options during the last fiscal year, and
unexercised options as of October 31, 1996.
Option Grants in Last Fiscal Year
Number of % of Total Potential Realizable Value at Assumed
Securities Options Annual Rates of Stock Price
Underlying Granted Appreciation for Option Term<F3>
Options to Employees Exercise Expiration _________________________________
Name Granted<F1><F2> in Fiscal Year Price Date 5% 10% 15% 20%
_____________ _______________ _______________ _______ _______ ______ _______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph P. Henican, III 65,812 16.10% $22.17 10-31-01 $ 0 $ 0 $ 0 $2,897,702
William E. Rowe 65,812 16.10% 22.17 10-31-01 0 0 0 2,897,702
Ronald H. Patron 40,500 9.91% 22.17 10-31-01 0 0 0 1,783,215
Gerard C. Alexander 40,500 9.91% 22.17 10-31-01 0 0 0 1,783,215
Richard O. Baldwin, Jr. 40,500 9.91% 22.17 10-31-01 0 0 0 1,783,215
________________
<FN>
<F1> Exercisability of all options is automatically accelerated upon a
change of control of the Company and may be accelerated by the
Compensation Committee at any time in its discretion.
<F2> These options become exercisable if the average of the closing sale
prices of a share of Class A Common Stock for 20 consecutive trading
days equals or exceeds $52.87 by August 31, 2000.
<F3> The appreciation is calculated over the term of the options rounded
to the nearest one-half year, beginning with the fair market value
on the date of grant of the options.
</FN>
</TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Stock Options at Options at
Shares October 31, 1996 October 31, 1996<F1>
Acquired Value __________________________ ______________________________
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
___________ ________ ___________ _____________ ____________ ______________
<S> <C> <C> <C> <C> <C> <C>
Frank B. Stewart, Jr. -- -- 45,000 -- $1,141,200 --
Joseph P. Henican, III 266,250 $4,681,474 120,627 454,998 2,111,672 $5,951,723
William E. Rowe -- -- 77,502 454,998 1,421,927 5,951,723
Ronald H. Patron -- -- 42,501 279,999 835,613 3,662,602
Gerard C. Alexander -- -- 42,501 279,999 835,613 3,662,602
Richard O. Baldwin, Jr. -- -- 42,501 279,999 835,613 3,662,602
_________________
<FN>
<F1>The value reflected in this table is equal to the difference between
the stock price at October 31, 1996 and the exercise price multiplied
by the number of exercisable and unexercisable options, respectively.
</FN>
</TABLE>
Employment Agreements
Effective August 1, 1995 the Company entered into new employment
agreements with Messrs. Henican, Rowe, Patron, Alexander and Baldwin
(the "Named Executive Officers"). The agreements provide for employment
of the Named Executive Officer in his current position through October
31, 2000, subject to earlier termination of employment pursuant to the
agreement under limited, specified circumstances, at a fixed annual
salary and an annual bonus, 75% of which is based upon the attainment of
certain quantitative goals established by the Compensation Committee and
the executive and 25% of which is awarded at the discretion of the
person to whom the Named Executive Officer reports, or in the case of
the Chief Executive Officer, at the discretion of the Chairman of the
Board. Messrs. Henican and Rowe are entitled to a salary at the rate of
$400,000 per fiscal year of the Company through October 31, 1995,
$450,000 per fiscal year from November 1, 1995 through October 31, 1996
and $500,000 per fiscal year thereafter, and a maximum bonus of $200,000
per fiscal year. Messrs. Patron, Alexander and Baldwin are entitled to
a salary at the rate of $300,000 per fiscal year and maximum bonuses of
$150,000, $200,000 and $150,000 per fiscal year, respectively. If the
Company terminates the Named Executive Officer's employment without
"Cause" (as defined in the agreement) or the Named Executive Officer
terminates employment for "Good Reason" (as defined in the agreement),
the Company must pay the executive two times his salary over a two-year
period. In addition, the executive will be entitled to exercise
performance-based options if the performance goals are met within 180
days after the termination of employment. If the executive terminates
his employment for reasons other than "Good Reason," the Company must
pay to the executive one year's salary over a two-year period. Each
executive has agreed that he will not compete with the Company for a
period of two years after the termination of his employment.
Change of Control Agreements
Effective December 5, 1995 the Company entered into change of
control agreements with the Named Executive Officers which supersede the
employment agreements after a change of control. The agreements provide
that if a change of control occurs before October 31, 2000, the
executive's employment term will continue through the later of the
second anniversary of the change of control or October 31, 2000, subject
to earlier termination of employment pursuant to the agreement. After a
change of control and during the employment term, the executive is
entitled to substantially the same position in substantially the same
location as prior to the change of control. In addition, the executive
is entitled to the salary, bonus and benefits provided in his employment
agreement or, if more favorable, those provided to peer employees of the
acquiror.
If during the employment term the Company terminates the
executive's employment without "Cause" (as defined in the agreement) or
the executive terminates employment for "Good Reason" (as defined in the
agreement), the Company must pay to the executive in a lump sum in cash
within 30 days of the termination of employment an amount equal to three
times the sum of (i) salary, plus (ii) the maximum bonus for which the
executive is eligible. "Good Reason" includes the failure of the
acquiror to provide the executive with substantially the same position
after the change of control, and the executive's position is not
considered to be substantially the same after a change of control unless
he holds an equivalent position with the ultimate parent company of the
entity resulting from the transaction. In addition, a termination by
the executive for any reason during the 30-day period immediately
following the first anniversary of the change of control is deemed a
termination for "Good Reason." If during the employment term the
executive terminates employment for reasons other than "Good Reason," he
is entitled to receive a single year's salary over a two-year period.
The noncompetition provisions of the executive's employment agreement
continue to apply after a change of control.
If after a change of control the executive is subjected to an
excise tax under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") (whether by virtue of the benefits of the change of
control agreement or otherwise, including by virtue of the acceleration
of the exercisability of stock options), the Company must pay to the
executive (whether or not his employment has terminated) such amounts as
are necessary to place him in the same position after payment of federal
income and excise taxes as he would have been if such provisions had not
been applicable to him. The Company has agreed, to the extent permitted
by applicable law, to take all reasonable steps to ensure that the
executive is not, by reason of a change of control, deprived of the
economic value (including any value attributable to the change of
control) of (i) any options to acquire the Company's common stock or
(ii) any common stock of the Company beneficially owned by the
executive. The Company has agreed to pay as incurred, to the full
extent permitted by law, all legal fees and expenses the executive may
reasonably incur as a result of any contest of the validity or
enforceability of, or liability under, any provision of the agreement.
Compensation Committee Interlocks and Insider Participation
During the last fiscal year, Darwin C. Fenner, Michael O. Read,
James W. McFarland and John P. Laborde served on the Compensation
Committee. No member served as an officer or employee of the Company or
any of its subsidiaries prior to or while serving on the Compensation
Committee. No executive officer of the Company served during the last
fiscal year as a director, or member of the compensation committee, of
another entity, one of whose executive officers served as a director, or
on the Compensation Committee, of the Company.
Compensation Committee Report on Executive Compensation
General
The Compensation Committee of the Board of Directors, consisting
entirely of non-employee directors, approves all of the policies under
which compensation is paid or awarded to the Company's executive
officers. All such decisions are then recommended to the full Board for
final approval, except for decisions to make awards to executive
officers under the Amended and Restated 1991 and 1995 Incentive
Compensation Plans, which are made solely by the Compensation Committee
for tax law purposes.
The Company's executive compensation policies are designed to:
* provide competitive levels of compensation that integrate
pay with the Company's annual and long-term performance
goals;
* reward achievements in corporate performance;
* recognize individual initiative and performance;
* assist the Company in attracting and retaining qualified
executives; and
* align the interests of executives with the long-term
interests of shareholders through award opportunities that
can result in ownership of Class A Common Stock.
The Company's executive compensation program is comprised of
salaries, annual cash incentive bonuses and long-term incentive
opportunities in the form of stock options.
Salary
The salary levels of Mr. Henican and of the other Named Executive
Officers, other than Mr. Stewart, are set out in employment agreements
with the officers and were determined following consultation with
independent consultants and outside advisors after considering the
executive compensation policies described above. Mr. Stewart's salary
for the last fiscal year remained the same as in the prior fiscal year
and was paid in consideration of his contributions and value to the
Company.
Incentive Bonus
Under their employment agreements, during the last fiscal year
Messrs. Henican, Rowe, Patron, Alexander and Baldwin could earn annual
incentive bonuses of up to $200,000, $200,000, $150,000, $200,000 and
150,000, respectively. Seventy-five percent of the incentive bonus is
quantitative and based on the attainment of pre-established performance
goals and 25% is qualitative and discretionary.
Mr. Henican received a bonus equal to $175,500, or approximately
39% of his annual salary. The quantitative portion of his bonus was
awarded based on the achievement of performance targets relating to the
growth in Company earnings, additive acquisitions, prearranged funeral
services, earnings per share and the Company's stock price. The
qualitative portion of his bonus was awarded based upon such factors as
his individual initiative, effectiveness and management skills. The
bonuses paid to the other Named Executive Officers ranged from
approximately 39% to 58% of total salary and were based on similar
quantitative goals and qualitative measures relating to their particular
areas of responsibility.
Stock Options
The Committee's practice with respect to stock options has been to
grant options that vest based on the passage of time together with
options that vest based upon the attainment of Company performance
goals. The Committee continues to believe that the combination of these
two types of options serves as a valuable incentive. Accordingly, the
most recent grants to executive officers in September and December 1995
consist of two-thirds performance-based and one-third time-vest options.
The performance-based options will vest if the average of the closing
sale prices of a share of Class A Common Stock over 20 consecutive
trading days reaches $52.87 by August 31, 2000 and the time-vest options
will vest at the rate of 20% per year over five years. The number of
options granted to each executive officer who received options was based
upon the officer's salary level and level of responsibility.
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code of 1986, as amended,
limits the Company's tax deduction to $1 million for compensation paid
to certain executive officers in a single year. An exception to the
$1 million limit is provided for "performance-based compensation" that
meets certain requirements, including approval by a vote of the
shareholders. Options granted under the Company's Incentive
Compensation Plans qualify as "performance-based compensation" and will
be excluded in calculating the $1 million limit under Section 162(m).
The Company presently intends to keep "non-performance based
compensation" within the $1 million limit in order that all executive
compensation will be fully deductible.
Submitted by the Compensation Committee.
Darwin C. Fenner James W. McFarland
John P. Laborde Michael O. Read
TOTAL RETURN COMPARISON
The graph and corresponding table below provide a comparison of
the cumulative total shareholder return on the Company's Class A Common
Stock, the S&P 500 Index and an industry index made up of the Loewen
Group Inc. ("Loewen") and Service Corporation International ("SCI") for
the Company's last five fiscal years. The Company believes that the
Company, Loewen and SCI are the only major death care providers that
have been publicly traded in the United States throughout the entire
period covered by the graph. The information in the graph is based on
the assumption of a $100 investment on October 31, 1991 at the closing
price on that date and includes the reinvestment of dividends. The
returns of each issuer in the industry index are weighted according to
its stock market capitalization at the beginning of each period for
which a return is indicated.
[INSERT GRAPH HERE]
Cumulative Total Shareholder Return
_______________________________________
Index October 31,
________________________________________
1991 1992 1993 1994 1995 1996
____ ____ ____ ____ ____ _____
The Company 100.0 114.9 213.9 193.7 271.6 414.3
S & P 500 Index 100.0 110.3 125.5 129.9 165.6 204.5
Industry Index 100.0 99.0 158.3 164.1 255.0 332.7
CERTAIN TRANSACTIONS
General
The Company leases its corporate offices from a general
partnership in which Mr. Stewart owns a 99.3% partnership interest. The
Company paid an aggregate of $568,100 in rental payments to this
partnership during the fiscal year ended October 31, 1996. In addition,
the Company leased 4,000 square feet of office space from a corporation
of which Mr. Stewart is the sole shareholder. The Company made annual
rental payments of $51,400 under the terms of this lease during the
fiscal year ended October 31, 1996.
In November 1992 the Company purchased from Mr. Stewart all of his
stock in Investors Trust. A portion of the purchase price was paid by
delivery of the Company's $2,590,997 promissory note, secured by the
pledge of shares of Investors Trust common stock and payable monthly
over five years with interest accruing annually at 8% through December
31, 1993. On January 1, 1994, the Company refinanced the note by
delivering a new promissory note in the principal amount of $2,075,346,
due September 1, 1997 and bearing interest at 6.15% per annum. The
Company made principal and interest payments of $630,400 to Mr. Stewart
on this note during the fiscal year ended October 31, 1996.
Baldwin-Fairchild Funeral Homes, Inc., a subsidiary acquired by
the Company in 1983 from Richard O. Baldwin, Jr., an executive officer
of the Company, leases one of its funeral homes from Mr. Baldwin. This
lease, entered into in June 1990, provides for rental payments equal to
the greater of $110,000 (subject, after the initial five years, to
increases for inflation) or 7% of funeral service net revenues. During
the fiscal year ended October 31, 1996, rental payments made by the
Company pursuant to this lease totaled $139,900.
In 1993, a subsidiary of the Company acquired all of the stock of
Parklawn Memorial Park, Inc. and Richmond Memorial Parks, Inc. from
Brian J. Marlowe, an executive officer of the Company, and his father.
A portion of the purchase price was paid by delivery of a promissory
note in the principal amount of $4,000,000 due January 31, 2003 and
bearing interest at 8% per annum through December 31, 1993. On January
1, 1994, the Company refinanced the note by delivering a new promissory
note in the principal amount of $3,797,331 due October 31, 1998 and
bearing interest at 6.15% per annum. The Company made principal and
interest payments of $888,000 to Mr. Marlowe on this note during the
fiscal year ended October 31, 1996.
In February 1992, a subsidiary of the Company acquired all of the
stock of Catawba Memorial Park and Funeral Home from Brent Heffron, an
executive officer of the Company. A portion of the purchase price was
paid by delivery of a promissory note in the principal amount of
$646,870 due April 30, 2007 and bearing interest at 7% per annum through
December 31, 1993. On January 1, 1994, the Company refinanced the note
by delivering a new promissory note in principal amount of $304,065 due
October 31, 1998 and bearing interest at a rate of 6.15% per annum
through October 31, 1998. The Company made principal and interest
payments of $71,100 to Mr. Heffron on this note during the fiscal year
ended October 31, 1996.
During the fiscal year ended October 31, 1992, Mr. Stewart and two
trusts established by Mr. and Mrs. Stewart, of which Mr. Henican serves
as co-trustee, entered into an agreement with the Company whereby the
Company, with the approval of all of the disinterested members of the
Board of Directors, agreed to advance the premiums on a split dollar
"second-to-die" life insurance policy purchased by the trusts and
insuring the lives of Mr. and Mrs. Stewart. The premiums are payable
over a 12-year period and the trusts are required to reimburse the
Company currently for that portion of the premiums paid by the Company
that, if not reimbursed, would be treated as compensation to Mr. Stewart
for federal income tax purposes. Interest accrues on the premium
advances at 8% per annum from the date each premium payment is made by
the Company. The advances are collateralized by an assignment of other
insurance policies owned by the trusts and Class A Common Stock of the
Company held by the trusts. The trusts have agreed that, upon the death
of Mr. or Mrs. Stewart, the proceeds of such other insurance policies
will be used to reduce the outstanding balance due to the Company. The
Company is entitled to reimbursement of the unpaid balance of all
amounts advanced, together with accrued interest, upon the first to
occur of (i) the surrender of the policy, (ii) the deaths of Mr. and
Mrs. Stewart, or (iii) the expiration of 60 days following the payment
in full of all premiums on the policy. The outstanding amount advanced
to the trusts by the Company, including accrued interest, was
approximately $677,000 at October 31, 1996, including $110,000 advanced
to the trusts during the fiscal year ended October 31, 1996.
In November 1996, in order to facilitate a sale of real estate
owned by Mr. Stewart to a third party, a subsidiary of the Company
concurrently sold a small parcel of real estate for $76,073 to the same
third party. The sale price was the fair market value of the real
estate as determined by an independent appraiser selected by the
Company's subsidiary.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and 10% beneficial owners to
file with the SEC reports of ownership and changes in ownership of
equity securities of the Company. During the last fiscal year Darwin C.
Fenner was inadvertently late in filing a statement of changes in
beneficial ownership, reporting one transaction.
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of
Directors has approved the retention of Coopers & Lybrand L.L.P. as
independent auditors of the Company for the fiscal year ending
October 31, 1997, which selection will be submitted to the shareholders
for ratification. If the shareholders do not ratify the Board of
Directors' selection of Coopers & Lybrand L.L.P. by the affirmative vote
of holders of a majority of the voting power present or represented at
the Annual Meeting, the selection of independent auditors will be
reconsidered by the Board.
Representatives of Coopers & Lybrand L.L.P. are expected to be
present at the Annual Meeting and will have an opportunity to make a
statement if they desire to do so. They will also be available to
respond to appropriate questions from shareholders.
The Board of Directors unanimously recommends that shareholders
vote FOR the proposal to ratify the retention of Coopers & Lybrand
L.L.P. as independent auditors of the Company for the fiscal year ending
October 31, 1997.
OTHER MATTERS
Quorum and Voting of Proxies
The presence, in person or by proxy, of a majority of the total
voting power is necessary to constitute a quorum. If a quorum is
present, (i) directors will be elected by plurality vote and (ii) the
ratification of the retention of Coopers & Lybrand L.L.P. as independent
auditors of the Company for the fiscal year ending October 31, 1997
requires the affirmative vote of the holders of a majority of the voting
power present or represented at the Annual Meeting. With respect to any
matter other than the election of directors that is properly before the
Annual Meeting, abstentions will have the effect of a vote against the
proposal and broker non-votes will be counted as not present with
respect to the proposal.
All duly executed proxies in the form enclosed received by the
Board of Directors will be voted as specified and, in the absence of
instructions to the contrary, will be voted for the election of the
nominees named above and in favor of the proposal to ratify the
retention of Coopers & Lybrand L.L.P. as independent auditors of the
Company for the fiscal year ending October 31, 1997.
The Board of Directors does not know of any matters to be
presented at the Annual Meeting other than those described herein.
However, if any other matters properly come before the Annual Meeting or
any adjournment thereof, it is the intention of the persons named in the
enclosed proxy to vote the shares represented by them in accordance with
their best judgment.
Shareholder Proposals
Any shareholder who desires to present a proposal qualified for
inclusion in the Company's proxy materials relating to the 1998 Annual
Meeting must forward the proposal to the Secretary of the Company at the
address shown on the first page of this Proxy Statement in time to
arrive at the Company no later than October 30, 1997.
Section 2.14 of the Company's By-laws requires the Company's
shareholders to provide the Company with advance notice of any proposal
they would like to present at a shareholders' meeting. Section 2.14 of
the Company's By-laws provides as follows:
(a) At any annual meeting of shareholders, only such
business shall be conducted as shall have been brought
before the meeting (i) by or at the direction of the Board
of Directors, or (ii) by any shareholder of record entitled
to vote at such meeting who complies with the procedures set
forth in this Section 2.14.
(b) At any special meeting of shareholders called at
the request of a shareholder, or group of shareholders, of
record in accordance with the Corporation's Articles of
Incorporation and these By-laws, only such business shall be
conducted as shall have been (i) submitted by the
shareholder, or group of shareholders, of record requesting
the meeting, (ii) described in the request for the meeting,
and (iii) described in the notice of the meeting.
(c) At any special meeting of shareholders called at
the request of the Board of Directors, the Chairman of the
Board or the President of the Corporation, only such
business shall be conducted as shall have been brought
before the meeting (i) by or at the direction of the Board
of Directors, the Chairman of the Board or the President or
(ii) by any shareholder of record entitled to vote at such
meeting who complies with the procedures set forth in this
Section 2.14.
(d) No proposal by a shareholder, or group of
shareholders, of record of the Corporation shall be
considered at an annual shareholders' meeting unless
Sufficient Notice (as described in subparagraph (f) hereof)
of the proposal is received by the Secretary of the
Corporation not less than 120 calendar days in advance of
the date in the current year that corresponds to the date on
which proxy materials were first mailed by the Corporation
in connection with the previous year's annual meeting. If
the date of the annual meeting is changed to a date that is
30 calendar days earlier or later than the date in the
current year that corresponds to the date on which the
annual meeting was held in the previous year, or if no
annual meeting was held in the previous year, Sufficient
Notice of the proposal must be received by the Secretary of
the Corporation not less than 60 days nor more than 90 days
prior to the meeting; provided, however, that in the event
less than 70 days notice or prior public disclosure of the
date of the meeting is given or made to shareholders,
Sufficient Notice of the proposal must be received by the
Secretary of the Corporation no later than the close of
business on the tenth day following the day on which such
notice of the date of the meeting was mailed or such public
disclosure was made.
(e) No proposal by a shareholder, or group of
shareholders, of record of the Corporation shall be
considered at a special meeting of shareholders called by
the Board of Directors, the Chairman of the Board or the
President unless Sufficient Notice (as described in
subparagraph (f) hereof) of the proposal is received by the
Secretary of the Corporation not less than 60 days nor more
than 90 days prior to the meeting; provided, however, that
in the event less than 70 days notice or prior public
disclosure of the date of the meeting is given or made to
shareholders, Sufficient Notice of the proposal must be
received by the Secretary of the Corporation no later than
the close of business on the tenth day following the day on
which such notice of the date of the meeting was mailed or
such public disclosure was made.
(f) Notice of a proposal shall constitute Sufficient
Notice only if it contains (i) a complete and accurate
description of the proposal; (ii) a statement that the
shareholder (or the shareholder's legal representative)
intends to attend the meeting and present the proposal and
that the shareholder intends to hold of record securities of
the Corporation entitled to vote at the meeting through the
meeting date; (iii) the shareholder's name and address and
the number of shares of the Corporation's voting securities
that the shareholder holds of record and beneficially as of
the notice date; and (iv) a complete and accurate
description of any material interest of such shareholder in
such proposal.
(g) Notwithstanding compliance with this Section 2.14,
no shareholder proposal shall be deemed to be properly
brought before a shareholders' meeting if it is not a proper
subject for action by shareholders under Louisiana law or
the Articles of Incorporation.
(h) Any shareholder proposal failing to comply with
this Section 2.14 shall not be considered at the meeting
and, if introduced at the meeting, shall be ruled out of
order.
(i) Nothing in this Section 2.14 is intended to confer
any rights to have any proposal included in the notice of
any meeting or in proxy materials related to such meeting.
(j) Notwithstanding the requirement in this Section
2.14 that a shareholder be a shareholder of record in order
to present a shareholder proposal at a shareholders'
meeting, a beneficial owner of shares entitled to vote at
the meeting shall be entitled to present a proposal at a
meeting if such beneficial owner complies with Rule 14a-8
promulgated under the Securities Exchange Act of 1934 and
the proposal has been included in the Corporation's proxy
statement for the meeting pursuant to Rule 14a-8.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kenneth C. Budde
Kenneth C. Budde
Secretary
Metairie, Louisiana
February 27, 1997
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
STEWART ENTERPRISES, INC.
The undersigned hereby appoints Frank B. Stewart, Jr., Joseph P. Henican,
III, and William E. Rowe, or any one or more of them, as proxies, each with the
power to appoint his substitute, and hereby authorizes each of them to
represents and to vote, as designated on the reverse side, all the shares of
Class A Common Stock of Stewart Enterprises, Inc. held of record by the
undersigned on February 3, 1997 at the Annual Meeting of Shareholders to be
held on March 27, 1997, or any adjournment thereof.
(Please See Reverse Side)
<TABLE>
<CAPTION>
<S> <C> <C>
1. To elect two Class I Directors. 2. Proposal to ratify the appointment 3. In their discretion to vote
of Coopers & Lybrand L.L.P., certified upon such other business as
FOR all nominees WITHHOLD AUTHORITY public accounts, as independent auditors may properly come before the
listed below (except to vote for all for the fiscal year ending October 31, 1997. meeting.
as marked to the nominees listed
contrary below) listed below For Against Abstain
/ / / / / / / / / /
INSTRUCTIONS: To withhold authority to vote
for any individual nominee, strike a line
through the nominee's name in the list below:
Joseph P. Henican, III
Michael O. Read
</TABLE>
The Board of Directors recommends that
you vote FOR the nominees and the
proposal listed above. This proxy when
properly executed will be voted in the
manner directed herein by the undersigned
shareholder. If no direction is given,
this proxy will be voted FOR the nominees
and the proposal.
DATED: ___________________________, 1997
________________________________________
(SIGNATURE OF SHAREHOLDER)
_________________________________________
(SIGNATURE IF HELD JOINTLY)
Please sign exactly as name appears hereon. When 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 full corporate name by president or other authorized officer. If
a partnership, please sign in partnership name by authorized person.
