SIRCO INTERNATIONAL CORP.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Sirco International Corp.:
Notice is hereby given that the Annual Meeting of Shareholders of Sirco
International Corp., a New York corporation (the "Company"), will be held at the
Company's offices located at 10 West 33rd Street, New York, New York 10001, on
Thursday, August 17, 1995 at 10:00 A.M., local time, for the following purposes:
1. To elect six (6) directors to the Board of Directors for the ensuing
year;
2. To approve and adopt a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 3,000,000 to 10,000,000 shares and to authorize the issuance
of 1,000,000 shares of Preferred Stock from time to time on terms to be
determined by the Board of Directors;
3. To approve and adopt a proposal to amend the Company's Certificate of
Incorporation to limit the personal liability of directors to the Company and
its shareholders;
4. To approve and adopt the 1995 Stock Option Plan of the Company; and
5. To consider and act upon such other business as may properly come
before the meeting.
Only shareholders of record at the close of business on July 12, 1995 will
be entitled to vote at the Annual Meeting.
Whether or not you expect to attend the Annual Meeting, please mark, sign
and promptly return the enclosed proxy in the postpaid envelope provided. If you
receive more than one proxy because your shares are registered in different
names or addresses, each such proxy should be signed and returned so that all
your shares will be represented at the meeting.
By Order of the Board of Directors,
Joel Dupre,
Chairman of the Board
<PAGE>
SIRCO INTERNATIONAL CORP.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of Sirco International
Corp., a New York corporation (the "Company"), in connection with the
solicitation, by order of the Board of Directors of the Company, of proxies to
be voted at the Annual Meeting of Shareholders to be held on Thursday, August
17, 1995 at 10:00 A.M., Eastern Daylight Time, at the Company's offices located
at 10 West 33rd Street, New York, New York 10001 and at any adjournment or
adjournments thereof (the "Annual Meeting"). The accompanying proxy is being
solicited on behalf of the Board of Directors of the Company. This Proxy
Statement and the enclosed proxy card were first mailed to shareholders of the
Company on or about July 19, 1995, accompanied by the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1994, and the Company
incorporates the contents of such report herein by reference thereto.
At the Annual Meeting, the following matters will be considered and voted
upon:
(1) Election of six (6) directors to hold office until the 1996 Annual
Meeting of Shareholders or until their successors shall have been duly elected
and qualified;
(2) Approval and adoption of a proposal to amend the Company's Certificate
of Incorporation to increase the number of authorized shares of the Company's
Common Stock from 3,000,000 to 10,000,000 shares and to authorize the issuance
of 1,000,000 shares of Preferred Stock from time to time on terms to be
determined by the Board of Directors;
(3) Approval and adoption of a proposal to amend the Company's Certificate
of Incorporation to limit the personal liability of directors to the Company and
its shareholders;
(4) Approval and adoption of the 1995 Stock Option Plan of the Company;
and
(5) Such other business as may properly come before the Annual Meeting.
Voting and Revocation of Proxies; Adjournment
All of the voting securities of the Company represented by valid proxies,
unless the shareholder otherwise specifies therein or unless revoked, will be
voted FOR the election of the persons nominated as directors, FOR the other
proposals set forth herein, and at the discretion of the proxy holders on any
other matters that may properly come before the Annual Meeting. The Board of
Directors does not know of any matters to be considered at the Annual Meeting
other than the election of directors and the other proposals set forth above.
Where a shareholder has appropriately specified how a proxy is to be
voted, it will be voted accordingly. Any shareholder has the power to revoke
such shareholder's proxy at any time before it is voted. A proxy may be revoked
by delivery of a written statement to the Secretary of the Company stating that
the proxy is revoked, by a subsequent proxy executed by the person executing the
prior proxy and presented to the Annual Meeting, or by voting in person at the
Annual Meeting.
A plurality of the votes cast at the Annual Meeting by the shareholders
entitled to vote in the election is required to elect the director nominees, and
a majority of the votes cast by the shareholders entitled to vote at the meeting
is required to take any other action. Although no formal agreement exists, the
Company anticipates that the 681,000 shares (approximately 56.04% of the
outstanding shares) of the Common Stock, $.10 par value (the "Common Stock"), of
the Company beneficially owned by Mr. Joel Dupre, the Chairman of the Board and
Chief Executive Officer of the Company, will be voted as recommended for the
director nominees and for the other proposals set forth herein. Accordingly, the
Board of Directors anticipates that its nominees will be elected to serve as the
Company's directors and that the other proposals set forth herein will be
approved and adopted. In the event that sufficient votes in favor of any of the
matters to come before the meeting are not received by the date of the Annual
Meeting, the persons named as proxies may propose one or more adjournments of
the Annual Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares of Common Stock present in person or by proxy at the Annual Meeting.
The persons named as proxies will vote in favor of any such proposed adjournment
or adjournments.
Solicitation
The solicitation of proxies pursuant to this Proxy Statement will be
primarily by mail. In addition, certain directors, officers or other employees
of the Company may solicit proxies by telephone, telegraph, mail or personal
interviews, and arrangements may be made with banks, brokerage firms and others
to forward solicitation material to the beneficial owners of shares held by them
of record. No additional compensation will be paid to directors, officers or
other employees of the Company for such services. The total cost of any such
solicitation will be borne by the Company and will include reimbursement of
brokerage firms and other nominees.
Quorum and Voting Rights
The Board of Directors of the Company has fixed Wednesday, July 12, 1995
as the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. Holders of record of
shares of Common Stock at the close of business on the Record Date will be
entitled to one vote for each share held. The presence, in person or by proxy,
of the holders of a majority of the outstanding voting securities entitled to
vote at the Annual Meeting is necessary to constitute a quorum at the Annual
Meeting.
Change in Control of the Company
On March 20, 1995, pursuant to a Stock Purchase Agreement, dated as of
March 20, 1995 (the "Stock Purchase Agreement"), among Yashiro Company, Ltd.
("YC, Ltd."), Yashiro Co, Inc. ("YC, Inc."; together with YC, Ltd. sometimes
referred to herein collectively as the "Sellers"), Joel Dupre, the current
Chairman of the Board and Chief Executive Officer of the Company ("Mr. Dupre"),
Pacific Million Enterprise, Ltd., a Hong Kong corporation ("Pacific"), Cheng-Sen
Wang ("Mr. Wang") and Albert H. Cheng ("Mr. Cheng"; and together with Mr. Dupre,
Pacific and Mr. Wang sometimes collectively referred to herein as the "Buyers"),
the Buyers acquired an aggregate of 681,000 shares of Common Stock, constituting
approximately 56.04% of the issued and outstanding shares of Common Stock, for
an aggregate purchase price of $1,532,230.
Mr. Dupre acquired 414,334 shares of Common Stock, constituting
approximately 34.10% of the issued and outstanding shares of Common Stock, in
exchange for a cash payment of $400,001.50 and the issuance of a promissory note
(the "Promissory Note") in the principal amount of $532,250 in favor of YC,
Inc., individually and as agent for YC, Ltd. The Promissory Note bears interest
at the rate of 10% per annum payable quarterly in arrears commencing on June 30,
1996, with principal payable in equal annual installments of $88,708.33
commencing on March 31, 1996. Mr. Dupre borrowed $200,000 of the cash portion of
the purchase price from Mr. Wang, which loan is evidenced by a promissory note
dated March 9, 1995, bearing interest at 10% per annum and maturing on March 31,
2000. Mr. Dupre borrowed an additional $200,000 from Mr. Cheng, which loan is
evidenced by a promissory note dated March 13, 1995, bearing interest at 7 3/4%
per annum and maturing on March 31, 2000.
Pacific acquired 133,333 shares of Common Stock, constituting
approximately 10.97% of the issued and outstanding shares of Common Stock, for
$299,999.25 in cash. The funds for the purchase price were obtained from
Pacific's working capital. Mr. Wang acquired 88,889 shares of Common Stock,
constituting approximately 7.31% of the issued and outstanding shares of Common
Stock, and Mr. Cheng acquired 44,444 shares of Common Stock, constituting
approximately 3.66% of the issued and outstanding shares of Common Stock, for
cash payments of $200,000.25 and $99,999, respectively. The purchase prices were
paid from Mr. Wang's and Mr. Cheng's respective personal funds.
As an inducement to the Sellers to enter into the Stock Purchase Agreement
and to cause Bueno of California, Inc., a Delaware corporation and an affiliate
of Sellers ("Bueno"), to enter into the Asset Purchase Agreement (as defined
below) and related agreements, Mr. Dupre executed and delivered to the Sellers a
guaranty, dated March 20, 1995, pursuant to which Mr. Dupre guaranteed all of
the obligations of the Company under the Letter of Credit Agreement, the
Non-Competition Agreements and the Severance Agreement (each as defined below).
In addition, the Buyers entered into a Pledge Agreement, dated as of March
20, 1995 (the "Pledge Agreement"), with Bueno and YC, Inc., on its own behalf
and as agent for YC, Ltd. Pursuant to the Pledge Agreement, the Buyers pledged
their shares of Common Stock to Bueno and the Sellers as security for the
payment of (i) all obligations of Mr. Dupre under the Promissory Note, (ii) all
obligations of the Buyers under the Stock Purchase Agreement, (iii) all
obligations of the Company under the Asset Purchase Agreement, (iv) all
obligations of the Company under any agreement that is an exhibit to the Asset
Purchase Agreement, including the Exclusive Purchasing Agreement, the
Non-Competition Agreements and the Severance Agreement and (v) all obligations
of the Buyers under the Pledge Agreement.
Concurrently with the closing of the transactions contemplated by the
Stock Purchase Agreement and the Asset Purchase Agreement, Takeshi Yamaguchi
resigned from the Board of Directors and the office of President of the Company;
Yutaka Yamaguchi and Neil Grundman resigned from the Board of Directors of the
Company; and Tsuguya Saeki resigned from the offices of Executive Vice President
and Chief Financial Officer of the Company. Pursuant to a Severance Agreement,
dated as of March 20, 1995, with Takeshi Yamaguchi, the Company agreed to pay
Mr. Yamaguchi $100,000 plus interest at the rate of 10% per annum on March 31,
1996 and $100,000 plus interest at a rate of 10% per annum on March 31, 1997. On
March 29, 1995, the Board of Directors of the Company, consisting of Mr. Dupre,
Ian Mitchell, Eric Smith and Douglas Turner, elected Mr. Dupre as the Chairman
of the Board and Chief Executive Officer of the Company.
Concurrently with the acquisition by the Buyers of the shares of Common
Stock under the Stock Purchase Agreement, the Company and Bueno entered into an
Asset Purchase Agreement, dated as of March 20, 1995 (the "Asset Purchase
Agreement"), pursuant to which the Company sold to Bueno all of the assets
relating to the Company's handbag division for a negotiated purchase price of
$1,785,605.55, of which $86,167.82 was paid in cash and $1,699,447.73 was
applied by the Company to the repayment of indebtedness of the Company to the
Sellers. The aggregate indebtedness owed by the Company to the Sellers at the
date of the acquisition was $2,238,506.01. The Sellers, which are affiliates of
Bueno, are controlled by Messrs. Yutaka and Takeshi Yamaguchi.
In connection with the Asset Purchase Agreement, each of the Sellers,
Yutaka Yamaguchi and Takeshi Yamaguchi entered into non-competition agreements
with the Company (collectively, the "Non-Competition Agreements"). Pursuant to
the terms of the Non-Competition Agreements, each of the Sellers and Messrs.
Yutaka and Takeshi Yamaguchi agreed not to compete with the Company's luggage
and related products business prior to the earlier of March 20, 2001 and the
date of repayment in full of all amounts due under the Promissory Note (the
"Restricted Period"). In consideration of their agreements to not compete, the
Company is obligated to pay $60,000 to each of the Sellers and each of Messrs.
Yutaka and Takeshi Yamaguchi, payable in three equal annual installments
commencing on March 31, 1996. In addition, pursuant to a separate
non-competition agreement, the Company agreed not to compete with Bueno in the
handbag business during the Restricted Period.
Also in connection with the Asset Purchase Agreement, the Company and YC,
Inc. entered into an Exclusive Purchasing Agreement, dated as of March 20, 1995,
(the "Exclusive Purchasing Agreement"), pursuant to which the Company granted to
YC, Inc. and its designees the exclusive right to purchase in Japan, at prices
to be mutually agreed upon, any goods manufactured or purchased by the Company
from unaffiliated vendors (the "Vendors"). Under the Exclusive Purchasing
Agreement, YC, Inc. will pay a commission to the Company for all goods purchased
by it or its designees equal to 5% of the purchase price of all such goods paid
by the Company (or directly by YC, Inc. or its designees) to the Vendors. The
Exclusive Purchasing Agreement will terminate on the date that all amounts due
under the Promissory Note are repaid in full and all obligations of the Company,
Mr. Dupre, Pacific, Mr. Wang or Mr. Cheng, as the case may be, under the Stock
Purchase Agreement and the Asset Purchase Agreement and all agreements that are
exhibits thereto are satisfied in full.
In addition, pursuant to a letter agreement (the "Letter of Credit
Agreement"), YC, Inc. has agreed to issue, or cause to be issued, for the
account of the Company, from time to time until March 20, 1997, one or more
unsecured trade letters of credit in an aggregate amount of up to the lesser of
$1,200,000 or 35% of the book value of all inventory owned by the Company. With
respect to each letter of credit issued under the Letter of Credit Agreement,
the Company will be obligated to pay an origination fee equal to 3% of the full
amount of such letter of credit and a financing fee based upon the outstanding
balance of any letter of credit equal to the base rate of interest announced
publicly by Citibank, N.A. in New York, New York, from time to time, as its base
rate plus two percent (2%).
Common Stock Owned by Directors, Officers and Other Beneficial Owners
The following table sets forth, as of July 12, 1995, the names, addresses
and number of shares beneficially owned by all persons known to the management
of the Company to be beneficial owners of more than 5% of the outstanding shares
of Common Stock, and the number of shares beneficially owned by all directors
and nominees for director and all executive officers and directors as a group
(except as indicated, each beneficial owner listed exercises sole voting power
and sole dispositive power over the shares beneficially owned):
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Percent of Outstanding
Name and Address Owned Common Stock
---------------- ------------------- ----------------------
<S> <C> <C>
Joel Dupre (1) (2) 681,000 56.04%
c/o Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Pacific Million Enterprise Ltd. (2) (3) 133,333 10.97%
Suite 1807
The Gateway, Tower 2
25 Canton Road
Tsimshatsui, Kowloon, Hong Kong
Joseph Takada (2) (3) 133,333 10.97%
c/o Pacific Million Enterprise Ltd.
Suite 1807
The Gateway, Tower 2
25 Canton Road
Tsimshatsui, Kowloon, Hong Kong
Cheng-Sen Wang (2) 88,889 7.31%
c/o Kao-Lien International Co., Ltd.
404 Jen-Ai Road
6th Floor, Section 4
Taipei, Taiwan R.O.C.
Albert H. Cheng (2) (4) 44,444 3.66%
c/o Constellation Enterprises Co., Ltd.
199 Chung Ching North Road
11th Floor, Section 3
Taipei, Taiwan R.O.C.
Ian Mitchell 0 0
Eric Smith 0 0
Douglas Turner 0 0
Eric M. Hellige 0 0
Paul Riss 0 0
Herzog, Heine, Geduld, Inc. (5) 66,931 5.51%
26 Broadway
New York, New York 10004
All directors and executive
officers of the Company as a
group (5 individuals) 681,000 56.04%
</TABLE>
<PAGE>
- ------------------
(1) Includes 266,666 shares for which Mr. Dupre has the right to exercise sole
voting control pursuant to a Voting Agreement dated as of May 1, 1995 (the
"Voting Agreement")under which Pacific, Mr. Wang and Mr. Cheng granted Mr.
Dupre the right to exercise sole voting control with respect to 133,333,
88,889, and 44,444 shares, respectively, held of record by them.
(2) As a result of the Voting Agreement, Mr. Dupre, Pacific (together with Mr.
Takada -- see Note 2), Mr. Wang and Mr. Cheng may be deemed to be a "group"
within the meaning of Section 13d-3 of the Securities Exchange Act of 1934,
and, therefore, deemed to beneficially own an aggregate of 681,000 shares
of Common Stock.
(3) Pacific has granted to Mr. Dupre an option to purchase all of the 133,333
shares it owns of record. By virtue of his ownership of 95% of the issued
and outstanding shares of common stock of Pacific, Joseph Takada may be
deemed to be the beneficial owner of all the shares of Common Stock
beneficially owned by Pacific.
(4) Mr. Cheng has granted to Mr. Dupre an option to purchase all of the 44,444
shares he owns of record.
(5) Herzog, Heine, Geduld, Inc. reported ownership of 66,931 shares of Common
Stock pursuant to a Schedule 13G received by the Company in December 1991,
as amended in January 1992.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the directors of the Company shall
not be less than three nor more than fifteen in number. In March 1990, the
number of directors of the Company was set at nine. There has been two vacancies
on the Board since the death of Burt J. Siris in May 1990 and the resignation of
Steven Wall in November 1992. In addition, in March 1995, concurrently with the
closing of the transactions contemplated by the Stock Purchase Agreement and the
Asset Purchase Agreement, Takeshi Yamaguchi, Yutaka Yamaguchi and Neil Grundman
resigned from the Board. The term of office of the directors is one year,
expiring on the date of the next annual meeting, or when their respective
successors shall have been elected and shall qualify, or upon their prior death,
resignation or removal.
Except where the authority to do so has been withheld, it is intended that
the persons named in the enclosed proxy will vote for the election of the
nominees to the Board of Directors listed below to serve until the date of the
next annual meeting and until their successors are duly elected and qualified.
Although the directors of the Company have no reason to believe that the
nominees will be unable or decline to serve, in the event that such a
contingency should arise, the accompanying proxy will be voted for a substitute
(or substitutes) designated by the Board of Directors.
The following table sets forth certain information regarding the director
nominees who currently serve as directors of the Company:
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation for Past Five Years and
Name Age Current Public Directorships or Trusteeships
---- --- --------------------------------------------
<S> <C> <C>
Joel Dupre 42 Director since 1990; Chairman of the Board and Chief Executive
Officer of the Company since March 1995; Executive Vice
President from November 1992 to March 1995 and a Vice
President from 1989 to 1992.
Ian Mitchell 57 Director since 1988; President and Managing Director of Sirco
Leatherwares Ltd., a former subsidiary of the Company, since
1981.
Eric Smith 50 Director since 1988; Vice President-General Manager of West
Coast Distribution Center of the Company since 1983.
Douglas Turner 56 Director since 1978; President of Sirco International
(Canada), Ltd., a subsidiary of the Company, for more than
five years.
</TABLE>
The following table sets forth certain information regarding the director
nominees who do not currently serve as directors of the Company:
<TABLE>
<CAPTION>
Principal Occupation for Past Five Years and
Name Age Current Public Directorships or Trusteeships
---- --- --------------------------------------------
<S> <C> <C>
Eric M. Hellige 40 Partner for more than five years of Pryor, Cashman, Sherman &
Flynn, counsel to the Company.
Paul Riss 39 Chief Financial Officer of Sequins International Inc., a
manufacturer of sequinned fabrics and trimmings, since June
1992; Chief Financial Officer, Treasurer and Secretary of
ComponentGuard Inc., an administrator of extended warranty
contracts, from August 1990 to June 1992. ComponentGuard Inc.
filed a petition for protection under Chapter 11 of the United
States Bankruptcy Code in May 1992.
</TABLE>
The term of office of the directors is one year, expiring on the date of
the next annual meeting and thereafter until their respective successors shall
have been elected and shall qualify, or until their prior death, resignation or
removal.
<PAGE>
Executive Officers
The following table sets forth certain information regarding the executive
officer who is not a director of the Company:
<TABLE>
<CAPTION>
Name Age Principal Occupation for Past Five Years
---- --- ----------------------------------------
<S> <C> <C>
Gandolfo Verra 47 Secretary since 1991 and Controller of the Company since 1988.
</TABLE>
Board Meetings and Committees; Management Matters
The Board of Directors held one meeting during the fiscal year ended
November 30, 1994 which was attended by all directors except Yutaka Yamaguchi,
Ian Mitchell and Douglas Turner. From time to time, the members of the Board of
Directors act by unanimous written consent pursuant to the laws of the State of
New York. No fees are paid to directors for attendance at meetings of the Board.
The Company's Board of Directors has no standing committees.
The Directors recommend a vote FOR the election of each of the director
nominees.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 3,000,000
TO 10,000,000 SHARES AND TO AUTHORIZE 1,000,000 SHARES OF
PREFERRED STOCK
The Board of Directors unanimously recommends the adoption of an amendment
(the "Capital Stock Amendment") to the Certificate of Incorporation of the
Company to increase the number of authorized shares of Common Stock, par value
$.10 per share (the "Common Stock"), from 3,000,000 to 10,000,000 shares and to
authorize the issuance of 1,000,000 shares of Preferred Stock, par value $.10
per share (the "Preferred Stock"). The text of the proposed Capital Stock
Amendment is set forth in full in Exhibit A to this Proxy Statement.
The Certificate of Incorporation of the Company currently authorizes the
issuance of 3,000,000 shares of Common Stock. At July 12, 1995, 1,215,200 shares
of Common Stock were issued and outstanding. No shares of Preferred Stock are
currently authorized for issuance.
The Board of Directors believes that it is desirable to have the
additional authorized shares of Common Stock and authorized shares of Preferred
Stock available for possible future financing and acquisition transactions,
stock dividends or splits and other general corporate purposes. Having such
additional authorized shares available for issuance in the future would give the
Company greater flexibility and allow shares of Common Stock or Preferred Stock
to be issued without the expense and delay of a special shareholders' meeting.
The additional shares of Common Stock and the shares of Preferred Stock would be
available for issuance without further action by the shareholders, unless such
action is required by applicable law or the rules of any stock exchange on which
the Company's securities may then be listed.
Authorization of Additional Shares of Common Stock
The Company has no present plans, arrangements, commitments or
understandings regarding the issuance of any shares of Common Stock, and there
are no negotiations or agreements, either written or oral, with respect to the
issuance of any additional shares of Common Stock, except pursuant to the 1995
Stock Option Plan of the Company proposed to be approved and adopted at the
Annual Meeting. See "Proposal to Adopt the 1995 Stock Option Plan." The holders
of Common Stock do not have any preemptive rights to subscribe for or purchase
any additional shares of Common Stock that may be issued. The issuance of
additional shares might reduce the shareholders' proportional interest in the
Company.
The Capital Stock Amendment is not being proposed to provide additional
authorized shares of Common Stock that could be issued in an attempt to make
more difficult a change in control or takeover of the Company, and the Company
has no present intention of issuing such additional shares of Common Stock, or
any shares of Preferred Stock, for that purpose. In addition, Mr. Joel Dupre,
the Chairman of the Board and Chief Executive Officer of the Company,
beneficially owns and controls approximately 56.04% of the outstanding shares of
Common Stock, eliminating the possibility of the Company becoming the target of
a hostile takeover attempt. See "Common Stock Owned by Directors, Officers and
Other Beneficial Owners."
Authorization of Preferred Stock
Pursuant to the Capital Stock Amendment, shares of Preferred Stock could
be issued from time to time in one or more series as determined by the Board of
Directors. The Board of Directors would be authorized to fix by resolution as to
any series the designation and number of shares of the series, the voting
rights, the dividend rights, the redemption price, the amount payable upon
liquidation or dissolution, the conversion rights, and any other designations,
preferences or special rights or restrictions as may be permitted by law. Unless
the nature of a particular transaction and the rules of law applicable thereto
require such approval, the Board of Directors would have the authority to issue
these shares without shareholder approval. The Company has no present plans,
arrangements, commitments or understandings regarding the issuance of any shares
of Preferred Stock.
If the Capital Stock Amendment is approved, the Board of Directors would
be able to issue authorized and unissued shares of one or more new series of
Preferred Stock with such voting, conversion, liquidation, redemption and other
rights as the Board determines in its sole discretion without further
shareholder action. Any issuance of shares of Preferred Stock could have the
effect of diluting the earnings per share and book value of existing shares of
Common Stock. Because the Board of Directors would have the authority to fix the
voting rights to be accorded to any series of Preferred Stock, the holders of
shares of a new series of Preferred Stock could be entitled to vote separately
as a class in connection with the approval of certain extraordinary corporate
transactions in circumstances where New York law does not require such class
vote, or might be given a disproportionately large number of votes. The issuance
of shares of Preferred Stock could also result in a class of securities
outstanding that would have certain preferences (for example, with respect to
dividends or liquidation), or would enjoy certain voting rights in addition, to
those of the Common Stock.
Although the Company currently has no such intention, authorized but
unissued shares of Preferred Stock could be used to make more difficult a change
in control of the Company. Any issuance of shares of Preferred Stock could
dilute the stock ownership of persons seeking to gain control of the Company.
Shares of a new series of Preferred Stock could also be convertible into a large
number of shares of Common Stock or have other terms which might make more
difficult or costly the acquisition of a controlling interest in the Company.
Under certain circumstances, such shares could be used to create voting
impediments or to frustrate persons attempting to effect a takeover or otherwise
gain control of the Company. Such shares could be privately placed with
purchasers who might side with the Board of Directors in opposing a hostile
takeover bid. In addition, the Board of Directors could authorize holders of a
series of Preferred Stock to vote as a class, either separately or with the
holders of the Common Stock, on any merger, sale or exchange of assets by the
Company or any other extraordinary corporate transactions. The ability of the
Board of Directors to take such actions might be considered as having an effect
of discouraging an attempt by another person or entity to acquire control of the
Company.
Pursuant to Section 803 of the New York Business Corporation Law, approval
by vote of the holders of a majority of the outstanding shares of Common Stock
is required to authorize the Capital Stock Amendment.
The Company's consolidated financial statements and the notes thereto,
including Management's Discussion of Financial Condition and Results of
Operations, contained in the Company's Annual Report on Form 10-K for the fiscal
year ended November 30, 1994 sent to shareholders in connection with the Annual
Meeting are incorporated by reference into this Proxy Statement. Shareholders
are urged to review such consolidated financial statements and related
information in connection with the proposed Capital Stock Amendment.
The Board of Directors recommends a vote FOR the adoption of the Capital
Stock Amendment.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
LIMIT THE PERSONAL LIABILITY OF DIRECTORS
The Board of Directors unanimously recommends the adoption of an amendment
(the "Director Liability Amendment") to the Certificate of Incorporation of the
Company that would limit, to the extent permitted by New York law, the personal
liability of directors to the Company or its shareholders for damages for
certain breaches of fiduciary duty as a director. The text of the Director
Liability Amendment, which would add a new Article Sixth to the Certificate of
Incorporation, is as follows:
SIXTH: No director of the Company shall be liable to the Company or its
shareholders for damages for any breach of duty in such capacity except as
provided in Sections 402(b)(1) and (2) of the New York Business Corporation Law.
The Director Liability Amendment is intended to facilitate the Company's
ability to attract and retain qualified directors to serve on the Board of
Directors and to protect against unfavorable changes in the cost of obtaining
directors' and officers' liability insurance. To date, the Company has not
experienced any difficulties in attracting or retaining qualified directors. By
approving the Director Liability Amendment, the Company, like numerous other New
York corporations, would receive the benefits conferred by the New York
legislature when it amended the New York Business Corporation Law ("BCL") in
1987 to provide directors substantially broader protection from the risks of
personal liability in the wake of expanded litigation and reduced and more
costly availability of directors' and officers' liability insurance.
The Director Liability Amendment would give the Company's directors the
full protection against personal liability that is permitted under the BCL by
eliminating the personal liability of directors to the Company and its
shareholders for monetary damages for breach of duties as a director except for
acts or omissions which: (1) are in bad faith; (2) involve intentional
misconduct; (3) involve a knowing violation of law; (4) result in a director
personally gaining a financial profit or other advantage to which he/she was not
legally entitled; or (5) constitute a violation of Section 719 of the BCL. The
provision limiting the liability of directors shall not be applicable to any act
or omission occurring prior to the adoption of said provision.
Adoption of the Director Liability Amendment would limit the remedies
otherwise available to a shareholder seeking to challenge a decision by the
Board of Directors, including, for example, a decision relating to an
acquisition proposal or a similar transaction, even if such a decision was
grossly negligent. While the Director Liability Amendment limits the directors'
liability for monetary damages for breach of fiduciary duty, it would not limit
the availability of equitable remedies such as an injunction or rescission based
on a director's breach of those duties, nor apply to claims against a director
arising out of actions taken as an officer of the Company or limit a
shareholder's ability to seek relief under any other law, including the federal
securities laws. Although equitable remedies such as injunction and rescission
would continue to be available, the Director Liability Amendment may
nevertheless reduce the likelihood of derivative litigation against directors
and may discourage or deter shareholders or management from bringing a lawsuit
against directors for breach of duty, even though such an action, if successful,
might have benefited the Company and its shareholders. The Board of Directors
believes that the Director Liability Amendment strikes the proper balance
between the need to attract and retain highly qualified directors and the need
to hold directors accountable to the Company and its shareholders for actions
that are not in the Company's best interest.
Shareholders should note, however, that because the Company's directors
may benefit from the added protection the Director Liability Amendment provides,
the directors have a personal interest in its adoption.
Pursuant to Section 803 of the New York Business Corporation Law, approval
by vote of the holders of a majority of the outstanding shares of Common Stock
is required to authorize the foregoing amendment to the Certificate of
Incorporation.
The Board of Directors recommends a vote FOR the adoption of the Director
Liability Amendment.
PROPOSAL TO ADOPT THE 1995 STOCK OPTION PLAN
The Plan
On June 8, 1995, the Board of Directors of the Company adopted, subject to
shareholder approval, the 1995 Stock Option Plan (the "Plan"). The purpose of
the Plan is to enable the Company to compete successfully in attracting,
motivating and retaining directors and key employees with outstanding abilities
by making it possible for them to purchase shares of Common Stock on terms that
will give them a more direct and continuing interest in the future success of
the Company's business. The Plan is intended to provide a method whereby
directors and key employees and others who are making and are expected to
continue to make substantial contributions to the successful growth and
development of the Company may be offered additional incentives thereby
advancing the interests of the Company and its shareholders. The Board believes
that the adoption of the Plan will increase the Company's flexibility in
furthering such purposes.
The following summary description of the Plan is qualified in its entirety
by reference to the complete text of the Plan, which is set forth in its
entirety in Exhibit B to this Proxy Statement.
Terms of the Plan
The Plan provides for the grant of incentive stock options ("ISO"), as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), non-qualified stock options, tandem stock appreciation rights and stock
appreciation rights exercisable in conjunction with stock options to purchase up
to an aggregate of 200,000 shares of Common Stock. The purchase price of shares
of Common Stock covered by an ISO must be at least 100% of the fair market value
of such shares of Common Stock on the date the option is granted and, for all
options is payable in either cash or shares of Common Stock, or any combination
thereof. No ISO will be granted to any employee who immediately after the grant
would own more than 10% of the total combined voting power or value of all
classes of capital stock of the Company, or any subsidiary of the Company,
unless the option price is at least 110% of the fair market value of the shares
of Common Stock subject to the option, and the option on the date of grant shall
expire not later than five years from the date the option is granted. In
addition, the aggregate fair market value of the shares of Common Stock,
determined at the date of grant, with respect to which ISOs are exercisable for
the first time by an optionee during any calendar year, shall not exceed
$100,000. No ISO may be granted under the Plan to any director who is not an
employee of the Company and no option or stock appreciation right may be granted
under the Plan after July 1, 2005.
Administration of the Plan
The Plan is administered by the Board of Directors of the Company. The
Board will have full authority, in its sole discretion, to interpret the Plan,
to establish from time to time regulations for the administration of the Plan
and to determine the directors and key employees to whom options will be granted
and the terms of the options. The term "employees", as defined under the Plan,
encompasses employees, including officers, regularly employed on a salary basis
by the Company or any subsidiary of the Company. The Board may delegate all or
part of its authority to administer the Plan to a committee appointed by the
Board and consisting of not less than three members thereof. No director may
serve as a member of such committee unless such director is a "disinterested
person" within the meaning of Rule 16(b)(3) under the Securities Exchange Act of
1934, as amended ("Rule 16(b)(3)").
Exercise of Options and Rights
Under the Plan, an option or stock appreciation right may be exercised in
such installments as are specified in the terms of its grant, but not sooner
than one year from the date of the its grant, unless otherwise provided at the
time of its grant. Each option or stock appreciation right shall expire ten
years after the date granted (or five years in the case of an ISO granted to any
person who owns more than 10% of the Company's voting stock).
Tandem stock appreciation rights and stock appreciation rights granted in
conjunction with options may be exercised only to the extent, during the period
and on the conditions that their related options are exercisable and may not be
exercised after the expiration or termination of their related options.
Options and stock appreciation rights are not transferable by the option
holder otherwise than by will or the laws of descent and distribution and are
exercisable during the option holder's lifetime only by such person.
If an option holder ceases to be continuously employed by the Company or
any of its subsidiaries for any reason other than death or for cause, such
holder may exercise the option and/or any stock appreciation rights at any time
within three months after such termination (provided it shall not have first
expired by its own term), but only to the extent that such holder was entitled
to do so at the date employment terminated. If an option holder dies while
employed by the Company or within a period of three months after termination of
employment for any reason other than cause, the option and/or any stock
appreciation right may be exercised at any time within one year after the date
of such death (provided it shall not have first expired by its own terms), but
only to the extent the decedent was entitled to do so at the date of death. If
an option holder's employment is terminated for cause as determined by the
Board, the option and/or any stock appreciation right terminates concurrently
with the termination of such employment.
Amendment of the Plan
The Board of Directors may alter, amend or terminate the Plan at any time
with respect to shares of Common Stock not subject at such time to options or
stock appreciation rights, but such amendments shall not adversely affect the
rights of any person under any option or stock appreciation right theretofore
granted without such person's consent. The Board may not, without the approval
of the shareholders of the Company, increase the aggregate number of shares of
Common Stock to be issued pursuant to options or stock appreciation rights
granted (except as permitted by Section 3 of the Plan); decrease the minimum
option price; increase the maximum amount a holder of a stock appreciation right
may receive upon its exercise; extend the option period with respect to any
option or stock appreciation right; permit the granting of options or stock
appreciation rights to anyone other than as provided in the Plan; or provide for
the administration of the Plan by the Board or a committee appointed by the
Board unless such administration meets the requirements for exemption provided
by Rule 16b-3.
Federal Income Tax Consequences
The Company has been advised that ISOs, non-qualified stock options and
stock appreciation rights granted under the Plan are subject to the following
Federal income tax treatment:
Incentive Stock Options. An employee will recognize no taxable income and
no deduction is available to the Company upon either the grant or exercise of an
ISO.
In general, if Common Stock acquired upon the exercise of an ISO is
subsequently sold, the realized gain or loss, if any, will be measured by the
difference between the exercise price of the option and the amount realized on
the sale. Any such gain or loss on the sale will generally be treated as
long-term capital gain or loss if the holding period requirements have been
satisfied. The holding period requirements will be satisfied if the shares are
not sold within two years of the date of grant of the option pursuant to which
such shares were transferred or within the one-year period beginning on the day
of the transfer of such shares pursuant to the exercise of the option.
If Common Stock acquired upon the exercise of an ISO is subsequently sold
and the holding period requirements noted above are not satisfied (a
"disqualifying disposition"), the employee will recognize ordinary income for
the year in which the disqualifying disposition occurs in an amount equal to the
excess of the fair market value of such Common Stock on the date the option was
exercised (or, if lower, the amount realized on the sale) over the exercise
price of the option. Any additional gain recognized on the sale will be a
capital gain, and will be long-term or short-term depending upon whether the
sale occurs more than one year after the date of exercise. The amount recognized
by the employee as ordinary income will be treated as compensation and the
Company will receive a corresponding deduction. The Company may be required to
withhold additional taxes from the wages of the employee with respect to the
amount of ordinary income taxable to the employee.
The excess of the fair market value of the Common Stock acquired by
exercise of an ISO (determined on the date of exercise) over the exercise price
is in effect an item of tax preference which must be taken into account for
purposes of calculating the "alternative minimum tax" of Section 55 of the Code.
If a disqualifying disposition is made of such Common Stock, however, during the
same year acquired, there will be no tax preference item for alternative minimum
tax purposes.
Non-qualified Stock Options and Stock Appreciation Rights. Non-qualified
stock options granted under the Plan do not result in any income to the optionee
at the time of grant or any tax deduction to the Company at that time. Except as
stated below with respect to officers, upon exercise of a non-qualified option,
the excess of the fair market value of the Common Stock acquired (determined at
the time of exercise) over its cost to the optionee (i) is taxable to the
optionee as ordinary income and (ii) is deductible by the Company, subject to
general rules relating to the reasonableness of compensation; and the optionee's
tax basis for the shares is the fair market value at the time of exercise.
Gain or loss recognized upon disposition of shares acquired pursuant to
the exercise of a non-qualified option will generally be reportable as short or
long-term gain or loss depending on the length of time the shares were held by
the optionee as of the date of disposition.
The exercise of a stock appreciation right by an employee results in
taxable compensation to such employee in the amount of the cash received plus an
amount equal to the fair market value (determined at the time of exercise) of
any shares received.
The Company believes that compensation received by participants on the
exercise of nonqualified stock options or the disposition of shares acquired
upon the exercise of ISOs will be considered performance-based compensation and
thus not subject to the $1,000,000 limit of Section 162(m) of the Code.
Vote Required
The Plan will become effective only upon approval by the holders of a
majority of the outstanding shares of Common Stock.
The Board of Directors recommends a vote FOR approval of the Plan.
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") of the Company (Mr. Joel Dupre, the Chairman of the Board and Chief
Executive Officer of the Company), and the chief executive officer of the
Company during the fiscal year ended November 30, 1994 (Mr. Yutaka Yamaguchi).
No other executive officer of the Company had a salary and bonus which exceeded
$100,000 with respect to the fiscal year ended November 30, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
---------------------------------------------- -----------
Other Annual
Name and Compensation Options All Other
Principal Position Year Salary ($) Bonus ($) ($) (#) Compensation ($)
- ------------------ ---- ---------- --------- ------------ ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Joel Dupre (1) 1994 $170,000 $47,776 None None None
Chairman of the 1993 170,000 None None None None
Board and Chief 1992 148,844 None None None None
Executive Officer
Yutaka Yamaguchi (2) 1994 None None None None None
Former Chairman 1993 $ 50,000 None None None None
of the Board, 1992 None None $50,000 None None
Chief Executive
Officer and
President
</TABLE>
- ------------
(1) Mr. Dupre held the title of Executive Vice President of the Company during
the fiscal year ended November 30, 1994. On March 29, 1995, in connection
with the transactions contemplated by the Stock Purchase Agreement and the
Asset Purchase Agreement, Mr. Dupre was elected Chairman of the Board and
Chief Executive Officer of the Company.
(2) Mr. Yamaguchi resigned as an officer and director of the Company effective
March 20, 1995.
No options were granted in the last fiscal year to any of the executive
officers of the Company. In addition, no options are currently held by the
persons named in the Summary Compensation Table.
The Company has an employment contract with Mr. Joel Dupre. Under the
terms of the contract, Mr. Dupre is to receive a base salary of $170,000 a year
for each of the three years ending November 30, 1995. Any incentive compensation
is tied to the performance of the Company. As described above, the Company
entered into a Severance Agreement dated as of March 20, 1995 with Mr. Yamaguchi
pursuant to which the Company will pay to Mr. Yamaguchi $100,000 plus interest
at the rate of 10% per annum on March 31, 1996 and $100,000 plus interest at the
rate of 10% per annum on March 31, 1997.
Board of Directors Compensation
The Company does not currently compensate directors for service on the
Board of Directors.
Employee Retirement Plan
In June 1995, the Board of Directors of the Company determined to
discontinue benefit accruals under the Company's Employee Retirement Plan (the
"Retirement Plan"). Pursuant to action taken by the Board of Directors at such
time, benefits ceased to accrue under the Retirement Plan on June 30, 1995.
Cessation of benefit accruals under the Retirement Plan is being administered by
the Board of Directors.
Each of the Company's full-time United States-based employees not covered
by union retirement plans was eligible to participate in the Retirement Plan.
The following table discloses estimated annual benefits payable upon retirement
in specified compensation and years of service classifications.
<TABLE>
<CAPTION>
Projected Benefit at Retirement
Years of Service
15 20 25 30 35
Salary ------ ------- ------- ------ ------
--------
<S> <C> <C> <C> <C> <C>
$ 20000 $ 3750 $ 5000 $ 6250 $ 7500 $ 8750
25000 4625 6250 7313 9375 10938
30000 5625 7500 9375 11250 13125
35000 6563 8750 10938 13125 15313
40000 7500 10000 12500 15000 17500
50000 9980 12604 15625 18750 21875
75000 17105 22104 26948 31986 37249
100000 24730 31604 38873 46236 53874
125000 31355 41104 50698 60406 70499
150000 38480 50004 62573 74736 87124
175000 45605 60104 74448 88986 103749
200000 52730 69604 86323 103236 120374
</TABLE>
The Company's funding policy is to contribute annually the minimum amount
required to cover the normal cost for current service and to fund supplemental
costs, if any, from the date each supplemental cost was incurred. Contributions
are intended to provide for benefits attributed to service to date, and also for
those expected to vest in the future.
The estimated credited years of service for each of the executive officers
named in the Summary Compensation Table is as follows: Joel Dupre (10 years) and
Yutaka Yamaguchi (none).
Benefits are computed on the basis of straight-line annuity amounts. The
benefits are subject to Social Security deduction.
The Retirement Plan will continue to comply with the applicable sections
of the Internal Revenue Code, the Employee Retirement Income Security Act, and
applicable Internal Revenue Services rules and regulations. In accordance with
the terms of the Retirement Plan, distributions will continue to be made to
retired and terminated employees who are participants in the Retirement Plan.
Comparison of Five-Year Cumulative Total Return
The graph set forth below compares the cumulative total shareholder return
on the Common Stock for the period commencing December 1, 1989 and ending
November 30, 1994 against the cumulative total return on the NASDAQ Stock Market
Index and a peer group comprised of those public companies whose business
activities fall within the same standard industrial classification code as the
Company and whose stock has been publicly traded for at least five years. This
graph assumes a $100 investment in the Common Stock and in each index on
December 1, 1989 and that all dividends paid by companies included in each index
were reinvested.
[GRAPHIC -- GRAPH PLOTTED TO POINTS IN TABLE BELOW:]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Sirco International 100 82.35 64.71 64.71 76.47 73.53
SIC Code Index 100 66.74 235.58 96.74 110.65 108.79
NASDAQ Market Index 100 81.20 99.22 106.57 126.85 136.61
</TABLE>
Report on Executive Compensation
The Board of Directors determines the compensation of the CEO and sets
policies for and reviews with the CEO the compensation awarded to the other
principal executives. The Company's executive officers consist of the CEO and
Messrs.
Eric Smith and Gandolfo Verra.
Salaries. Base salaries for the Company's executive officers are
determined initially by evaluating the responsibilities of the position held and
the experience of the individual, and by reference to the competitive
marketplace for management talent, including a comparison of base salaries for
comparable positions at comparable companies within the Company's industry.
Several of such companies are in the Company's Peer Group as described above
under "-Comparison of Five-Year Cumulative Total Return." The Company believes
that its salaries are below average as compared to its competitors. Annual
salary adjustments are determined by evaluating the competitive marketplace, the
performance of the Company, the performance of the executive, particularly with
respect to the ability to manage growth of the Company, the length of the
executive's service to the Company and any increased responsibilities assumed by
the executive.
Compensation of Chief Executive Officer. The CEO is a principal
shareholder of the Company and beneficially owns and controls approximately
56.04% of the outstanding Common Stock of the Company. See "Common Stock Owned
by Directors, Officers and Other Beneficial Owners." The Board believes he is
very substantially motivated, both by reason of his stock ownership and his
commitment to the Company, to act on behalf of all shareholders to optimize
overall corporate performance. Accordingly, the Board has not considered it
necessary to specifically relate the CEO's compensation to corporate
performance. The Company has an employment agreement with Mr. Dupre that sets
his base salary though November 30, 1995. Mr. Dupre received $47,776 in other
compensation during fiscal 1994, which amount was based upon the performance of
the division of the Company that was managed by Mr. Dupre during that period.
Board of Directors Interlocks and
Insider Participation in Compensation Decisions
The following members of the Board of Directors were officers of the
Company or a subsidiary of the Company during the fiscal year ended November 30,
1994: Joel Dupre, Eric Smith and Douglas Turner. In addition, Yutaka Yamaguchi
and Takeshi Yamaguchi were members of the Board of Directors and executive
officers of the Company during the fiscal year ended November 30, 1994. All of
such directors and officers (including Messrs. Yutaka Yamaguchi and Takeshi
Yamaguchi) participated in deliberations of the Company's Board of Directors
concerning executive officer compensation.
Certain Relationships and Related Transactions
Joseph Takada ("Mr. Takada"), the beneficial owner of approximately 10.97%
of the outstanding shares of Common Stock, is the Managing Director of Pacific.
He is also the Managing Director of Ideal Pacific Ltd., the Company's
manufacturing agent in Hong Kong ("Ideal"). During the fiscal year ended
November 30, 1994, the Company paid aggregate commissions of approximately
$245,000 to Ideal. Mr. Wang, the beneficial owner of approximately 7.31% of the
outstanding shares of Common Stock, is the Managing Director of Kao-Lien
Industrial Co., Ltd., the Company's manufacturing agent in Taiwan ("Kao-Lien").
During the fiscal year ended November 30, 1994, the Company paid aggregate
commissions of approximately $146,000 to Kao-Lien.
Eric M. Hellige, a director nominee, is a member of Pryor, Cashman,
Sherman & Flynn, counsel to the Company. Such firm did not render services to or
receive any fees from the Company during the fiscal year ended November 30,
1994.
For the year ended November 30, 1994, the Company purchased in the
ordinary course of business approximately $9,000 of handbags and accessories
from Yashiro Co., Inc. ("Yashiro"), Osaka, Japan, a manufacturer of handbags and
accessories. Yutaka Yamaguchi, the former Chairman of the Board of Directors of
the Company, is the President and a director of Yashiro. The terms of the
aforementioned purchase transactions were substantially equivalent to the terms
of purchases by the Company from its other suppliers, and the price paid to
Yashiro was not more than the price paid by the Company to other suppliers
providing equivalent goods. On August 18, 1988, the Company entered into a
five-year Product Supply Agreement with Yashiro that memorialized this ongoing
relationship of Yashiro and the Company. The Company remains free to purchase
goods from other suppliers. The Company's liability to Yashiro was approximately
$1,743,000 at November 30, 1994. The liability at November 30, 1994 included a
short-term loan of approximately $1,664,000 bearing interest at 7% per annum. In
fiscal 1994, interest and fees paid to Yashiro amounted to approximately
$300,000.
At November 30, 1993, Yashiro owed the Company approximately $132,000,
which amount primarily related to inventory returns and merchandise damage
claims. Approximately $36,000 of such amounts were received in fiscal 1994 and
the balance (approximately $96,000) was written off as uncollectible.
For the fiscal year ended November 30, 1994, the Company also purchased in
the ordinary course of business $3,489,000 of handbags and accessories
(representing approximately 24% of the purchases by the Company during such
period) from Lucci Creations Ltd., Hong Kong, a manufacturer of handbags
("Lucci"). Forty-five percent of Lucci is owned by the same individuals who own
Yashiro Co. Ltd. and Yashiro, including Yutaka Yamaguchi, the former Chairman of
the Board and Chief Executive Officer of the Company. The terms of such purchase
transactions were substantially equivalent to the terms of purchases by the
Company from its other suppliers.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Ernst & Young, New York, New York ("E&Y"), served
as the Company's independent public accountants for the fiscal year ended
November 30, 1994. Such firm has no other relationship to the Company or its
affiliates. Effective April 3, 1995, the Company dismissed E&Y and retained the
independent accounting firm of Nussbaum Yates & Wolpow, P.C. ("Nussbaum"), which
appointment applies for the audit for the Company's fiscal year ending November
30, 1995. Neither during the audit of the Company's two most recent fiscal years
nor during any subsequent interim period have there been any disagreements with
E&Y on any matter of accounting principles or practices, financial statements
disclosure or auditing scope or procedure. E&Y's reports on the Company's
financial statements for the last two fiscal years did not contain any adverse
opinion, disclaimer of opinion or qualification of any type. The decision to
change the Company's independent accountants was approved by the Company's Board
of Directors.
A representative of Nussbaum is expected to attend the Annual Meeting, and
such representative will have the opportunity to make a statement if he so
desires and will be available to respond to appropriate questions from
shareholders. No representative of E&Y is expected to attend the Annual Meeting.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for presentation at the 1996 Annual
Meeting of Shareholders and intended to be included in the Company's Proxy
Statement and form of proxy relating to that meeting must be received at the
offices of the Company by February 24, 1996.
OTHER BUSINESS
Other than as described above, the Board of Directors knows of no matters
to be presented at the Annual Meeting, but it is intended that the persons named
in the proxy will vote your shares according to their best judgment if any
matters not included in this Proxy Statement do properly come before the meeting
or any adjournment thereof.
ANNUAL REPORT
The Company's Annual Report on Form 10-K for the year ended November 30,
1994, including financial statements, is being mailed herewith. If, for any
reason you do not receive your copy of the Report, please contact Gandolfo
Verra, Secretary, Sirco International Corp., 24 Richmond Hill Avenue, Stamford,
Connecticut 06901, and another will be sent to you.
By Order of the Board of Directors,
Joel Dupre,
Chairman of the Board
July 19,1995
Stamford, Connecticut
<PAGE>
EXHIBIT A
CAPITAL STOCK AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
Article Fourth of the Certificate of Incorporation shall be amended to
read as follows:
Fourth: A. Authorized Shares. The total number of shares of all classes of
stock which the Corporation shall have the authority to issue is Eleven Million
(11,000,000), of which Ten Million (10,000,000) shall be common stock, par value
$.10 per share, and One Million (1,000,000) shall be preferred stock, par value
$.10 per share.
B. Common Stock. Each holder of shares of common stock shall be entitled
to one vote for each share of common stock held by such holder. There shall be
no cumulative voting rights in the election of directors. Subject to any
preferential rights of preferred stock, the holders of shares of common stock
shall be entitled to receive, when and if declared by the Board of Directors,
out of the assets of the Corporation which are by law available therefor,
dividends payable either in cash, in property, or in shares of common stock.
C. Preferred Stock. The preferred stock may be issued from time to time in
one or more series. The Board of Directors is hereby expressly vested with the
authority to fix by resolution or resolutions the designations and the powers,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including, without
limitation, the voting powers, if any, the dividend rate, the conversion rights,
the redemption price, or the liquidation preference, of any series of preferred
stock, and to fix the number of shares constituting any such series, and to
increase or decrease the number of shares of any such series (but not below the
number of shares thereof then outstanding). In case the number of shares of any
such series shall be so decreased, the shares constituting such decrease shall
resume the status which they had prior to the adoption of the resolution or
resolutions originally fixing the number of shares of such series. The number of
authorized shares of any class or classes of stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority of the stock of the Corporation entitled to
vote.
<PAGE>
EXHIBIT B
SIRCO INTERNATIONAL CORP.
1995 STOCK OPTION PLAN
1. Purpose of Plan
The purpose of this Plan is to enable Sirco International Corp. to compete
successfully in attracting, motivating and retaining key employees with
outstanding abilities by making it possible for them to purchase shares of the
Company's Common Stock on terms which will give them a more direct and
continuing interest in the future success of the Company's business.
2. Definitions
"Board" means the Board of Directors of the Company.
"Company" means Sirco International Corp., a New York corporation.
"Directors" means those persons duly elected and serving on the Board who
are not Employees.
"Employees" means employees, including officers, regularly employed on a
salary basis by the Company or any Subsidiary.
"Fair Market Value" means, as of any day, the last sale price on such day
on the New York Stock Exchange, or, if the Shares are not then listed or
admitted to trading on the New York Stock Exchange, on the American Stock
Exchange, or, if the Shares are not then listed or admitted to trading on the
American Stock Exchange, on such other principal stock exchange on which such
stock is then listed or admitted to trading or, if no sale takes place on such
day on any such exchange, the average of the closing bid and asked prices on
such day as officially quoted on any such exchange, or, if the Shares are not
then listed or admitted to trading on any stock exchange, the market price for
each such business day shall be the last sale price on such day as reported in
the National Association of Securities Dealers, Inc., Automated Quotations
System, or if the Shares are not reported on the National Market List, the
average of the closing reported bid and asked prices on such day in the over-the
counter market, as furnished by the National Quotation Bureau, Inc., or, if such
firm at the time is not engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business and selected by the
Company or, if there is no such firm, as furnished by any member of the National
Association of Securities Dealers, Inc., selected by the Company, or if the
Shares are not so reported, as determined by the Board of Directors.
"Incentive Stock Option" means an option granted under this Plan which the
Board intends, at the time it is granted, to be an ISO within the meaning of
Section 422 of the Internal Revenue Code; and any provisions elsewhere in this
Plan or in any Incentive Stock Option which would prevent such option from being
an incentive stock option under such Section of the Internal Revenue Code may be
deleted or voided retroactively to the date of grant of the option by action of
the Board.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Optionee" means a person to whom an option and/or Stock Appreciation
Right has been granted under this Plan which has not expired or been fully
exercised or surrendered.
"Shares" means shares of Common Stock, par value $.10 per share, of the
Company.
"Stock Appreciation Right" means the right of an Optionee, which may be
granted to him at or subsequent to the date of grant as part of the terms of his
option, to receive a number of Shares or, at the election of the Board, cash, or
Shares and cash, based on the increase of the market value of the Shares subject
to his option, as more particularly set forth in paragraph (g) of Section 5.
"Subsidiary" means any corporation that qualifies as a subsidiary of the
Company under the definition of "subsidiary corporation" in Section 424(f) of
the Internal Revenue Code, or any similar provision hereinafter enacted.
3. Limits on Options
(a) The total number of Shares with respect to which options and Stock
Appreciation Rights may be granted under this Plan shall not exceed in the
aggregate 200,000 Shares. This number shall be appropriately adjusted if the
number of issued Shares shall be increased or reduced by change in par value,
recapitalization, combination, split-up, reclassification, distribution of a
dividend payable in stock, or the like after July 1, 1995. The number of Shares
previously optioned or subject to Stock Appreciation Rights and not theretofore
delivered and the option prices therefor shall likewise be appropriately
adjusted whenever the number of issued Shares shall be increased or reduced by
any such procedure after the date or dates on which such Shares were optioned or
Stock Appreciation Rights were granted with respect thereto. Shares covered by
options which have expired or which have been surrendered or forfeited otherwise
than pursuant to the first paragraph of subsection (g)(ii) of Section 5 may
again be optioned under this Plan. Shares covered by options which have been
surrendered pursuant to the first paragraph of subsection (g)(ii) of Section 5
in connection with the exercise of a tandem Stock Appreciation Right, whether or
not the Company elects to settle all or part of its obligation in cash, may not
be optioned again under this Plan. Shares received by the Company in payment of
all or a portion of the purchase price of Shares issued pursuant to the exercise
of any option granted hereunder may again be optioned under this Plan.
(b) No Incentive Stock Option shall be granted to a Director.
(c) No Incentive Stock Option shall be granted to any Employee who
immediately after such option is granted, owns capital stock of the Company or a
Subsidiary possessing more than 10% of the total combined voting power or value
of all classes of capital stock of the Company or a Subsidiary unless the option
price at the time such Incentive Stock Option is granted is at least 110% of the
Fair Market Value of the Shares subject to the Incentive Stock Option and such
Incentive Stock Option is not exercisable by its terms after the expiration of
five years from the date of grant.
(d) The aggregate Fair Market Value of Shares (determined as of the date
of grant) with respect to which Incentive Stock Options which are exercisable
for the first time by an Optionee during any calendar year shall not exceed
$100,000.
4. Granting Of Options
The Board is authorized to grant options (which may be nonqualified
options or Incentive Stock Options as the Board specifies) and Stock
Appreciation Rights to selected Employees and is authorized to grant options
(other than Incentive Stock Options) and Stock Appreciation Rights to Directors
pursuant to this Plan beginning July 1, 1995 and in any calendar year thereafter
to July 1, 2005, but not thereafter. The number of Shares, if any, optioned in
each year or with respect to which Stock Appreciation Rights are granted, the
Directors or Employees to whom options and Stock Appreciation Rights are
granted, and the number of Shares optioned and Stock Appreciation Rights
granted, to each Director or Employee selected shall be wholly within the
discretion of the Board, subject only to the limitations prescribed in Section
3.
5. Terms of Stock Options
Subject to Section 3 hereof, the terms of stock options granted under this
Plan shall be as follows:
(a) The option exercise price shall be fixed by the Board but, in the case
of Incentive Stock Options, shall in no event be less than 100% of the Fair
Market Value of the Shares subject to the option on the date the option is
granted.
(b) Options shall not be transferable otherwise than by will or by the
laws of descent and distribution. No option shall be subject, in whole or in
part, to attachment, execution or levy of any kind.
(c) Each option shall expire and all rights thereunder shall end at the
expiration of such period (which shall not be more than ten years) after the
date on which it was granted as shall be fixed by the Board, subject in all
cases to earlier expiration as provided in subsections (d), (e) and (g) of this
Section 5 in the event of termination of employment, death or the exercise of
Stock Appreciation Rights granted in tandem with an option.
(d) During the lifetime of an optionee, his option shall be exercisable
only by him and only while continuously employed by the Company or a Subsidiary,
within three months after he ceases to be employed or if disabled (within the
meaning of Section 22(e)(3) of the Code), within one year of such disability
(but not later than the end of the period fixed by this Board in accordance with
the provisions of subsection (c) of this Section 5) if and to the extent the
option was exercisable by him on the last day of such employment.
Notwithstanding the foregoing, in the event that an optionee shall be terminated
for cause, all rights as to any outstanding unexercised and unexpired options or
portions thereof shall immediately terminate.
(e) If an Optionee dies within a period during which his option could have
been exercised by him, his option may be exercised within 12 months after his
death (but not later than the end of the period fixed by the Board in accordance
with the provisions of subsection (c) of this Section 5) by his executors,
administrators, legatees or distributees under the laws of descent and
distribution, but only if and to the extent the option was exercisable by him
immediately prior to his death.
(f) Subject to the foregoing terms and to such additional or different
terms regarding the exercise of the options as the Board may fix at the time of
grant, options may be exercised in whole at one time or in part from time to
time.
(g) The Board may include, but shall not be obligated to do so, a Stock
Appreciation Right with any option (other than an Incentive Stock Option)
granted under this Plan. The terms of each such Stock Appreciation Right shall
be as follows:
(i) The Stock Appreciation Right shall be exercisable during
the period and to the extent, and only during the period and to the
extent, the option is exercisable. The Stock Appreciation Right shall
expire and all rights thereunder shall end if not exercised upon the
exercise of the option.
(ii) The Stock Appreciation Right may be granted in conjunction
with and in addition to an option or may be granted in tandem with an
option. If the Stock Appreciation Right is granted in tandem with an
option, it shall entitle the Optionee to surrender to the Company,
prior to its exercise, the option or any portion of the option with
which the Stock Appreciation Right was included and to receive from
the Company in exchange therefor that number of Shares, the cash
value thereof or a combination of cash and Shares having an aggregate
market value in an amount equal to that determined by multiplying the
excess of the Fair Market Value of one Share over the option price
per Share fixed by the Board pursuant to subsection (a) of this
Section 5 by the number of Shares subject to the option, or portion
thereof, which is to be delivered to the Company. Notwithstanding the
provisions of the immediately preceding sentence, the Company may
settle all or part of its obligation arising out of the exercise of a
Stock Appreciation Right by the payment of cash, Shares or a
combination thereof to the Optionee in an amount equal to the
aggregate Fair Market Value of the cash and/or Shares it would
otherwise have been obligated to so deliver.
If the Stock Appreciation Right is granted in conjunction with
and in addition to an option, the Optionee shall, in addition to the
exercise of the option, be entitled to receive an amount in cash,
Shares or any combination thereof calculated in the same manner as
applicable to a Stock Appreciation Right granted in tandem with an
option. In such event, the manner of payment of the Stock
Appreciation Right shall be within the sole discretion of the Board.
(iii) The Board may also reserve the right to terminate any
Stock Appreciation Right at any time prior to its exercise and may
include or reserve the right to include in any Stock Appreciation
Right terms in addition to, but not inconsistent with, the foregoing.
(h) Unless otherwise provided at the time of grant, no option or Stock
Appreciation Right granted hereunder may be exercised prior to the expiration of
one year from the date of grant.
6. Reorganization of the Company
In the event that the Company is succeeded by another corporation in a
reorganization, merger, consolidation, acquisition of property or stock,
separation or liquidation, the successor corporation shall assume the
obligations regarding the outstanding options and Stock Appreciation Rights
granted under this Plan or shall substitute new options and Stock Appreciation
Rights for them, with only such modification in the case of Incentive Stock
Options by the successor corporation as may be necessary to continue their
status or the status of the substituted options as Incentive Stock Options for
purposes of the Internal Revenue Code.
7. Delivery and Payment for Shares
No Shares shall be delivered upon the exercise of an option until the
option price has been paid in full, and if required by the Board, no Shares will
be delivered upon the exercise of an option or a Stock Appreciation Right until
the optionee has given the Company (a) a satisfactory written statement that he
is purchasing the shares for investment and not with a view to the sale or
distribution of any of such Shares, and (b) a written agreement not to sell any
Shares received upon the exercise of the option or the Stock Appreciation Right
or any other Shares of the Company that he may then own or thereafter acquire
except either (i) through a broker which is a member of the New York Stock
Exchange, another national securities exchange or the National Association of
Securities Dealers or (ii) with the prior written approval of the Company.
Payment for Shares received pursuant to the exercise of an option may be made
either in cash, Shares, or any combination thereof at the election of the
Optionee. If payment is made (either in whole or in part) in Shares, the value
of the Shares received by the Company shall be the Fair Market Value of such
Shares as of the date received by the Company.
8. Continuation of Employment
Neither this Plan nor any option or Stock Appreciation Right granted
hereunder shall confer upon any Employee any right to continue in the employ of
the Company or any Subsidiary, confer upon any member of the Board any right to
continue on the Board or limit in any respect the right of the Company or any
Subsidiary to terminate the employment of any Employee or the service of any
member of the Board at any time.
9. Administration
The Board may make such rules and regulations and establish such
procedures as it deems appropriate for the administration of this Plan. The
Board may delegate responsibility for administration of this Plan to a committee
of the Board (the "Committee") meeting, and acting in accordance with, the
requirements of Rule 16b-3 promulgated pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended ("Rule 16b-3"). The Board or the
Committee may interpret the Plan, prescribe, amend or rescind any rules and
regulations necessary or appropriate for the administration of the Plan, and
make such other determinations and take such other action as it deems necessary
or advisable, except, in the case of the Committee, as such action may be
otherwise expressly reserved in the Plan to the Board. Without limiting the
generality of the foregoing, the Committee may, in its sole discretion, treat
all or any portion of any period during which an Optionee is on military leave
or on an approved leave of absence from the Company or a Subsidiary as a period
of employment of such Optionee by the Company or such Subsidiary, as the case
may be, for the purpose of accrual of his rights under his option or Stock
Appreciations Rights. Any interpretation, determination or other action made or
taken by the Board or the Committee shall be final, binding and conclusive, and
the decision of the Board or the Committee shall be final and binding upon all
parties in interest, including the Company and its shareholders. Any decision or
determination reduced to writing and signed by all members of the Committee
shall be fully as effective as if made by unanimous vote at a meeting duly
called and held.
The Board or the Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent.
No member or former member of the Committee or of the Board shall be
liable for any action or determination made in good faith with respect to this
Plan or any option or Stock Appreciation Right awarded under it. To the maximum
extent permitted by applicable law, each member or former member of the
Committee or of the Board shall be indemnified and held harmless by the Company
against any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim with the approval of the Company) arising out
of any action or omission to act in connection with this Plan unless arising out
of such member's or former member's own fraud or bad faith. Such indemnification
shall be in addition to any rights of indemnification the members or former
members may have as directors or under the By-Laws of the Company.
10. Reservation of Shares
Shares delivered upon the exercise of an option or a Stock Appreciation
Right shall, in the discretion of the Board, be either Shares heretofore or
hereafter authorized and then unissued, or previously issued Shares heretofore
or hereafter acquired through purchase in the open market or otherwise, or some
of each. The Company shall be under no obligation to reserve or to retain in its
treasury any particular number of Shares at any time, and no particular Shares,
whether unissued or held as treasury Shares, shall be identified as those
optioned under this Plan.
11. Amendment of Plan
The Board without further action by the shareholders may amend this Plan
from time to time as it deems desirable and shall make any amendments which may
be required so that options intended to be Incentive Stock Options shall at all
times continue to be Incentive Stock Options for purposes of the Internal
Revenue Code; provided that no such amendment shall increase the maximum number
of Shares for which options may be granted, reduce the minimum option price,
extend the option period with respect to any option or Stock Appreciation Right,
permit the granting of options after July 1, 2005, increase the amount the
holder of a Stock Appreciation Right may receive upon its exercise, permit the
granting of options or Stock Appreciation Rights to anyone other than as
provided in the Plan, or allow administration of the Plan in a manner violative
of Rule 16b-3. The Board may include in the terms of any option otherwise
qualifying as an incentive stock option (within the meaning of Section 422 of
the Code) a provision that it shall not be an Incentive Stock Option, and, with
the consent of the Optionee and to the extent permitted by law, may amend a
previously issued option to so provide.
12. Termination of the Plan
The Board may, in its discretion, terminate this Plan at any terminate
prior to July 1, 2005, but such termination shall not deprive Optionees or the
holders of Stock Appreciation Rights of their rights under their options or
Stock Appreciation Rights.
13. Effective Date
This Plan shall become effective on July 1, 1995, and options hereunder
may be granted at any time on or after that date. However, no option or Stock
Appreciation Right may be exercised unless this Plan is approved by a vote of
the holders of a majority of the outstanding Shares represented at a meeting of
shareholders of the Company held on or within twelve months after the effective
date.
14. Compliance With Other Laws and Regulations.
This Plan, the grant and exercise of options and Stock Appreciation Rights
thereunder, and the obligation of the Company to sell and deliver Shares under
such options and Stock Appreciation Rights shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required. If at any time the Board or
the Committee shall determine in its discretion that the listing, registration
or qualification of the Shares covered by this Plan upon any national securities
exchange or under any Federal or state law, or the consent or approval of any
government regulatory body, is necessary or desirable as a condition of, or in
connection with, the sale or purchase of Shares under this Plan, no Shares will
be delivered unless and until such listing, registration, qualification, consent
or approval shall have been affected or obtained, or otherwise provided for,
free of any conditions not acceptable to the Board or the Committee. If Shares
are not required to be registered, upon exercising all or any portion of an
option or Stock Appreciation Right, the Company may require each Optionee as a
condition of such exercise, to represent that the Shares are being acquired for
investment only and not with a view to their sale or distribution, and shall
make such other representations deemed appropriate by counsel to the Company.
Stock certificates evidencing unregistered Shares acquired upon exercise of an
option or Stock Appreciation Right shall bear any legend required by applicable
state securities laws and a restrictive legend substantially as follows:
"The securities represented hereby have not been registered
under the Securities Act of 1933, as amended (the "Act"), and
may not be transferred in the absence of such registration or
an opinion of counsel acceptable to the Company that such
transfer will not require registration under the Act."
15. Withholding.
Where an optionee or other person is entitled to receive Shares pursuant
to the exercise of an option, the Company shall have the right to require the
Optionee or such other person to pay to the Company the amount of any taxes
which the Company may be required to withhold with respect to such Shares before
delivery to such Optionee or other person of a certificate or certificates
representing such Shares.
Upon the disposition of Shares acquired pursuant to the exercise of an
Incentive Stock Option, the Company shall have the right to require the payment
of the amount of any taxes which are required by law to be withheld with respect
to such disposition.
Federal, state or local law may require the withholding of taxes
(including income and social security taxes) applicable to gains resulting from
the exercise by an Optionee of an option other than an Incentive Stock Option (a
"Nonstatutory Option") granted under the Plan. Unless otherwise prohibited by
the Stock Option Committee or by applicable law, an Optionee who holds a
Nonstatutory Option may satisfy any such withholding tax obligation by any of
the following methods, or by a combination of such methods: (a) tendering a cash
payment; (b) authorizing the Company to withhold from the Shares otherwise
issuable to such Optionee as a result of the exercise of such Nonstatutory
Option one or more of such Shares having an aggregate Fair Market Value,
determined as of the date the withholding tax obligation arises, less than or
equal to the amount of the total withholding tax obligation; or (c) delivering
to the Company previously acquired Shares (none of which Shares may be subject
to any claim, lien, security interest, community property right or other right
of spouses or present or former family members, pledge, option, voting agreement
or other restriction or encumbrance of any nature whatsoever) having an
aggregate Fair Market Value, determined as of the date the withholding tax
obligation arises, less than or equal to the amount of the total withholding tax
obligation. An Optionee's election to pay his or her withholding tax obligation
(in whole or in part) by the method described in (b) above is irrevocable once
it is made, may be disapproved by the Stock Option Committee and, if made by any
director, officer or other person who is subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended, must be made (x) only during the
period beginning on the third business day following the date of release of the
Company's quarterly or annual summary statement of sales and earnings and ending
on the twelfth business date following the date of such release or (y) not less
than six months prior to the date such Optionee's withholding tax obligation
arises in connection with the exercise of the Nonstatutory Option.
16. Name.
This Plan shall be known as the "Sirco International Corp. 1995 Stock
Option Plan."
<PAGE>
REVOCABLE PROXY
SIRCO INTERNATIONAL CORP.
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Joel Dupre and Gandolfo Verra, or either
of them, lawful attorneys and proxies of the undersigned with full power of
substitution, for and in the name, place and stead of the undersigned to attend
the Annual Meeting of Shareholders of Sirco International Corp. to be held at 10
West 33rd Street, Suite 606, New York, New York on Thursday, August 17, 1995 at
10:00 a.m., local time, and any adjournment(s) or postponement(s) thereof, with
all powers the undersigned would possess if personally present and to vote the
number of votes the undersigned would be entitled to vote if personally present
at said meeting, all as described in the Proxy Statement dated July 19, 1995,
receipt of which is hereby acknowledged. The Board of Directors recommends a
vote "FOR" the proposals set forth below.
PROPOSAL 1. The Election of Directors: Joel Dupre, Ian Mitchell, Eric Smith,
Douglas Turner, Eric M. Hellige and Paul Riss.
[ ] For [ ] Withhold [ ] For All Except
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name on the line below:
________________________________________________________________________________
PROPOSAL 2: Proposal to amend the Company's Certificate of Incorporation to
increase the number of authorized shares of the Company's Common Stock from
3,000,000 to 10,000,000 shares and to authorize the issuance of 1,000,000 shares
of Preferred Stock from time to time on terms to be determined by the Board of
Directors.
[ ] For [ ] Against [ ] Abstain
PROPOSAL 3: Proposal to amend the Company's Certificate of Incorporation to
limit the personal liability of directors to the Company and its shareholders.
[ ] For [ ] Against [ ] Abstain
PROPOSAL 4: Proposal to adopt the 1995 Stock Option Plan of the Company.
[ ] For [ ] Against [ ] Abstain
<PAGE>
In accordance with their discretion, said attorneys and proxies are
authorized to vote upon such other matters or proposals not known at the time of
solicitation of this proxy that may properly come before the meeting.
This proxy when properly executed will be voted in the manner described
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted for each of the Proposals set forth herein. Any prior proxy is hereby
revoked.
Please sign exactly as your name appears at the left. When shares are held
by joint tenats, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Detach above card, sign, date and mail in postage paid envelope provided.
SIRCO INTERNATIONAL CORP.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
