SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
SIRCO INTERNATIONAL CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
SIRCO INTERNATIONAL CORP.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 12, 1997
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 366 Fifth Avenue, Suite 205, New York, New York
10001, on Thursday, June 12, 1997 at 10:00 A.M., local time, for the following
purposes:
1. To elect five (5) directors to the Board of Directors for the ensuing
year;
2. To approve and adopt a proposal to amend the Company's 1995 Stock
Option Plan to increase the number of shares of Common Stock that may
be issued thereunder from 400,000 shares to 600,000 shares; and
3. 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 May 5, 1997 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.
Sincerely,
JOEL DUPRE
Chairman of the Board and
Chief Executive Officer
<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, June 12,
1997 at 10:00 A.M., New York City time, at the Company's offices located at 366
Fifth Avenue, Suite 205, 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 May 12, 1997, accompanied by the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1996, 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 five (5) directors to hold office until the 1998 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 1995 Stock
Option Plan to increase the number of shares of Common Stock that may be issued
thereunder from 400,000 shares to 600,000 shares; and
(3) 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
proposal 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 proposal set forth above.
If 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.
<PAGE>
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, the
approval of the holders of a majority of the outstanding shares of Common Stock
is required to approve the proposed amendment to the Company's 1995 Stock Option
Plan 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 683,000 shares (approximately 43.5% 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 proposal 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 Monday, May 5, 1997 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.
Common Stock Owned by Directors, Officers and Other Beneficial Owners
The following table sets forth, as of May 1, 1997, the names, addresses
and number of shares of Common Stock 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 names and number of shares
beneficially owned by all directors of the Company and all executive officers
and directors of the Company 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) 693,000 43.9%
c/o Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Pacific Million Enterprise Ltd.(2)(3) 133,333 8.5%
The Gateway, Tower 2, Suite 1807
25 Canton Road Tsimshatsui,
Kowloon, Hong Kong
Joseph Takada(2)(3) 133,333 8.5%
c/o Pacific Million Enterprise Ltd.
The Gateway, Tower 2, Suite 1807
25 Canton Road Tsimshatsui,
Kowloon, Hong Kong
Cheng-Sen Wang(2) 88,889 5.7%
c/o Kao-Lien International Co., Ltd.
404 Jen-Air Road
6th Floor, Section 4
Taipei, Taiwan R.O.C.
Albert H. Cheng(2)(4) 44,444 2.8%
c/o Constellation Enterprises Co., Ltd.
199 Chung Ching North Road
11th Floor, Section 3
Taipei, Taiwan R.O.C.
Paul Riss(5) 18,750 1.2%
Eric Smith 0 0
Barrie Sommerfield 100 *
Eric M. Hellige 0 0
All directors and executive
officers of the Company as a
group (six individuals) 711,850 (6) 44.5%
- ------------------
* Less than 1%
(1) Includes 10,000 shares subject to options which are presently exercisable
and 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.
<PAGE>
(2) As a result of the Voting Agreement, Mr. Dupre, Pacific (together with Mr.
Takada -- see Note 3), 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 693,000 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) Consists of 18,750 shares of Common Stock subject to options which are
presently exercisable.
(6) Includes 28,750 shares of Common Stock subject to options which are
presently exercisable.
</TABLE>
ELECTION OF DIRECTORS
The Amended and Restated Bylaws of the Company provide that the number of
directors of the Company shall be at least three, except that where all the
shares are owned beneficially and of record by fewer than three shareholders,
the number of directors may be less than three but not less than the number of
shareholders. Subject to the foregoing limitation, such number may be fixed from
time to time by action of the Board of Directors or of the shareholders, or, if
the number of directors is not so fixed, the number shall be five. 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.
<PAGE>
The following table sets forth certain information regarding the director
nominees, all of whom 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>
Joel Dupre 43 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.
Eric M. Hellige 42 Director since 1995 and Secretary of the
Company; Partner for more than five
years of Pryor, Cashman, Sherman &
Flynn, counsel to the Company.
Paul Riss 41 Director since 1995; Chief Financial
Officer and Treasurer of the Company
since November 1996; Chief Financial
Officer of Sequins International Inc., a
manufacturer of sequined fabrics and
trimmings, from June 1992 to November
1996; 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.
Eric Smith 52 Director since 1988; Vice President -
General Manager of West Coast
Distribution Center of the Company since
1983.
Barrie Sommerfield 68 Vice Chairman of Licensing of Gore,
Sommerfield, Ditnes International, Inc.,
a consultant for trademark licenses, for
more than five years.
</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.
Board Meetings and Committees; Management Matters
The Board of Directors held five meetings during the fiscal year ended
November 30, 1996. Each director attended at least 75% of the Board and
Committee meetings of which he was a member during such time as he served as a
director. 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.
<PAGE>
The Board of Directors has a Stock Option Committee, which met two times
during the fiscal year ended November 30, 1996 and currently consists of Eric M.
Hellige and Barrie Sommerfield. The Stock Option Committee has exclusive
authority to grant options to the Company's executive officers under the 1995
Stock Option Plan. The Board of Directors does not have standing audit,
nominating or compensation committees or, except in the case of the grant of
stock options by the Stock Option Committee, any committee performing similar
functions.
The Directors recommend a vote FOR the election of each of the director
nominees.
PROPOSAL TO AMEND THE 1995 STOCK OPTION PLAN
Proposed Amendment
On April 9, 1997, the Board of Directors adopted, subject to shareholder
approval, an amendment to the Company's 1995 Stock Option Plan (the "Option
Plan") to increase the number of shares of Common Stock that may be issued
thereunder from 400,000 shares to 600,000 shares. At May 1, 1997, options with
respect to an aggregate of 201,500 shares of Common Stock were outstanding under
the Option Plan, and 38,500 shares of Common Stock were available for additional
grants.
The Option Plan
The purpose of the Option Plan, which was adopted in June 1995, is to
enable the Company to compete successfully in attracting, motivating and
retaining directors, key employees and consultants 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 Option Plan is intended to provide a method whereby
directors, key employees and consultants 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 Option Plan increases the Company's flexibility in furthering such
purposes.
Terms of the Option Plan
The Option 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. 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
<PAGE>
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 Option Plan to any director
who is not an employee of the Company and no option or stock appreciation right
may be granted under the Option Plan after July 1, 2005.
Administration of the Option Plan
The Option Plan is administered by the Board of Directors of the Company.
The Board will have full authority, in its sole discretion, to interpret the
Option Plan, to establish from time to time regulations for the administration
of the Option 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 Option 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
Option Plan to a committee appointed by the Board and consisting of not less
than two 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) ("Rule 16(b)(3)") under the Securities Exchange Act of 1934, as amended
(the "1934 Act").
Exercise of Options and Rights
Under the Option 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 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.
<PAGE>
Amendment of the Option Plan
The Board of Directors may alter, amend or terminate the Option 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 Option 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
Option Plan; or provide for the administration of the Option 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 Option 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.
<PAGE>
Non-qualified Stock Options and Stock Appreciation Rights. Non-qualified
stock options granted under the Option 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.
Generally, 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 proposed amendment to the Option 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 proposed
amendment to the Option 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, and all other executive officers of the Company whose
salary and bonus exceeds $100,000 in compensation during fiscal 1996
(collectively referred to as the "Named Executives"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Other Annual
Name and Compensation Options All Other
Principal Position Year Salary($) Bonus($) ($) (#) Compensation ($)
- ------------------ ---- --------- -------- --- --- ----------------
<S> <C> <C> <C> <C> <C>
Joel Dupre (1) 1996 $216,667 None None 40,000 None
Chairman of the 1995 170,000 None None None None
Board and Chief 1994 170,000 $47,776 None None None
Executive Officer
Richard Pyles (2) 1996 98,341 6,000 None 67,500 None
Senior Vice President 1995 95,025 None None 10,000 None
1994 93,517 5,000 None None None
- --------------------
(1) Mr. Dupre held the title of Executive Vice President of the Company during
the fiscal year ended November 30, 1994. In March 1995, Mr. Dupre was
elected Chairman of the Board and Chief Executive Officer of the Company.
(2) Mr. Pyles was elected Senior Vice President in November 1996. At all other
times, Mr. Pyles served as Vice President - Marketing and Sales of the
Company.
</TABLE>
Employment Agreement
In November 1996, the Company entered into an employment agreement with
Paul Riss that provides for the employment of Mr. Riss as Chief Financial
Officer of the Company, and his appointment as a director of the Company,
through October 31, 1999, subject to certain rights of earlier termination.
Pursuant to such agreement, Mr. Riss will be entitled to a base salary of
$125,000 per annum, to participate in all bonus and incentive plans of the
Company and to certain insurance and automobile allowances and other benefits.
In addition, pursuant to such agreement, Mr. Riss received ten-year options to
purchase up to 35,000 shares of Common Stock at an exercise price of $2.875 per
share, of which 8,750 options vested on the date of grant and 8,750 options will
vest on each of the next three anniversaries of the date of the agreement. Upon
consummation during the term of such agreement of any debt (other than
traditional asset-based lending relationships or other traditional bank or
factoring arrangements) or equity financing in which gross proceeds to the
Company equal or exceed $1,000,000, the Company will grant to Mr. Riss an
<PAGE>
additional option to purchase 5,000 shares of Common Stock at an exercise price
equal to the then fair market value of the Common Stock. The agreement also
contains confidentiality provisions, and non-competition provisions that survive
for a period of two years following the termination of employment if the
agreement is terminated by the Company for "cause" (as defined) or by Mr. Riss
for "good reason" (as defined) or a period of one year if the agreement is
terminated for any other reason.
Stock Option Grants
The following table sets forth individual grants of stock options and
stock appreciation rights ("SARs") made by the Company during fiscal 1996 to
each of the Named Executives.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Percent Potential Realizable
Of Total Value at Assumed
Number of Options/SARs Annual rates of Stock
Securities Granted to Price Appreciation
Underlying Employees Exercise or For Option Term (3)
---------------------
Options/SARs in Fiscal Base Price Expiration
Name Granted (1) Year (2) ($/Share) Date 5% ($) 10% ($)
---- ----------- -------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Joel Dupre 40,000 (4) 19.2% $2.75 02/02/01 $30,400 $67,200
Richard Pyles 60,000 (5) 28.8 2.50 02/02/01 42,000 91,800
7,500 (6) 3.6 2.75 11/08/01 5,700 12,600
- ------------------
(1) No stock appreciation rights ("SARs") were granted by the Company in fiscal
1996.
(2) In fiscal 1996, the Company granted options on 208,500 shares of shares of
Common Stock to ten employees.
(3) The amounts shown in these two columns represent the potential realizable
values using the options granted and the exercise price. The assumed rates
of stock price appreciation are set by the Commission's executive
compensation disclosure rules and are not intended to forecast the future
appreciation of the Company's Common Stock.
(4) Options become exercisable subject to a four year vesting period with
10,000 shares vesting on each of the first, second, third and fourth
anniversary dates of the option grant date of February 2, 1996.
(5) Options become exercisable on the grant date.
(6) Options become exercisable on the first anniversary date of the option
grant date of November 8, 1996.
</TABLE>
<PAGE>
Stock Option Exercises
The following table contains information relating to the exercise of the
Company's stock options by the Named Executives in fiscal 1996, as well as the
number and value of their unexercised options as of November 30, 1996.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired on Value Fiscal Year-End(#)(1) at Fiscal Year End($)(2)
------------------------------- ------------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joel Dupre -- N/A -- 40,000 -- $35,000
Richard Pyles 60,000 -- 10,000 7,500 $16,250 6,563
- ---------------
(1) The sum of the numbers under the Exercisable and Unexercisable column of
this heading represents each Named Executive's total outstanding options to
purchase shares of Common Stock.
(2) The dollar amounts shown under the Exercisable and Unexercisable columns of
the heading represent the number of exercisable and unexercisable Company
options, respectively, which were "In-the-Money" on November 30, 1996,
multiplied by the difference between the closing price of the Common Stock
on November 30, 1996, which was $3.625 per share, and the exercise price of
the Company options. For purposes of these calculations, In-the-Money
options are those with an exercise price below $3.625 per share.
</TABLE>
Board of Directors Compensation
The Company does not currently compensate directors for service on the
Board of Directors.
<PAGE>
Employee Retirement Plan
In June 1995, the Board of Directors of the Company determined to
discontinue benefit accruals under the Company's tax-qualified Employee
Retirement Plan (the "Retirement Plan"). The Retirement Plan is administered by
the Board of Directors. 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(1)
---------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 3,750 $ 5,000 $ 6,250 $ 7,500 $ 8,750
25,000 4,625 6,250 7,313 9,375 10,938
30,000 5,625 7,500 9,375 11,250 13,125
35,000 6,563 8,750 10,938 13,125 15,313
40,000 7,500 10,000 12,500 15,000 17,500
50,000 9,980 12,604 15,625 18,750 21,875
75,000 17,105 22,104 26,948 31,986 37,249
100,000 24,730 31,604 38,873 46,236 53,874
125,000 31,355 41,104 50,698 60,406 70,499
150,000(2) 38,480 50,004 62,573 74,736 87,124
175,000 45,605 60,104 74,448 88,986 103,749
200,000 52,730 69,604 86,323 103,236 120,374(3)
- -------------------
(1) The annual benefits shown in the Table are integrated with Social Security
benefits and there are no other offsets to benefits.
(2) In general, Section 401(a)(17) of the Internal Revenue Code provides that
for 1994, compensation used for computing benefits under a tax-qualified
employee pension plan cannot exceed $150,000 (as adjusted).
(3) Under current law, the maximum annual benefit payable under the Retirement
Plan cannot exceed $120,000 (as adjusted).
</TABLE>
The Retirement Plan is funded by the Company on an actuarial basis, and
the Company contributes 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 were intended to provide for
benefits attributed to service to date, and also for those expected to vest in
the future. Based on the assumptions used in the actuarial valuation, the
Retirement Plan is fully funded.
The estimated credited years of service for each of the executive officers
named in the Summary Compensation Table is as follows: Joel Dupre (11 years) and
Richard Pyles (2 years). $150,000 of Mr. Dupre's compensation shown in the
Summary Compensation Table was used to compute his projected benefit under the
Retirement Plan.
<PAGE>
Benefits are computed on the basis of a straight-life annuity. Benefits
under the Retirement Plan are integrated with Social Security benefits.
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.
<PAGE>
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, 1991 and ending
November 30, 1996 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, 1991 and that all dividends paid by companies included in each index
were reinvested.
[GRAPHIC-GRAPH PLOTTED TO POINTS LISTED BELOW]
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
FISCAL YEAR ENDING
COMPANY 1991 1992 1993 1994 1995 1996
- ------- ---- ---- ---- ---- ---- ----
SIRCO INTERNAT CORP 100 100.00 118.18 113.64 81.82 131.82
INDUSTRY INDEX 100 41.07 46.97 46.18 72.29 80.69
BROAD MARKET 100 107.41 127.85 137.69 174.57 216.60
THE INDUSTRY INDEX CHOSEN WAS:
SIC CODE 513 - APPAREL, PIECE GOODS, & NOTIONS
THE BROAD MARKET INDEX CHOSEN WAS:
NASDAQ MARKET INDEX
THE CURRENT COMPOSITION OF THE INDUSTRY INDEX IS AS FOLLOWS:
ACTIVE APPAREL GROUP INC
CABLE & CO. WORLDWIDE
CARLYLE GOLF INC
CUTTER & BUCK INC
CYRK INC
DIPLOMAT CORP
HE-RO GROUP LTD
HOLLYWOOD PRODUCTIONS
LITTLEFIELD ADAMS & CO
NINE WEST GROUP INC
NORTH FACE INC (THE)
NORTON MCNAUGHTON INC
PACIFIC COAST APPAREL CO
ROCKY SHOES & BOOTS INC
TARRANT APPAREL GROUP
TOMMY HILFIGER CORP
SOURCE: MEDIA GENERAL FINANCIAL SERVICES
P.O. BOX 85333
RICHMOND, VA 23293
PHONE: 1- (800) 446-7922
FAX: 1- (800) 649-6826
<PAGE>
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, Mr.
Richard Pyles, Mr. Paul Riss and Mr. Eric Smith.
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
43.5% of the outstanding shares of Common Stock of the Company. See "Common
Stock Owned by Directors, Officers and Other Beneficial Owners." The Board
believes he is 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.
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,
1996: Joel Dupre, Eric Smith, Douglas Turner, Eric M. Hellige and Paul Riss.
Such members participated in deliberations of the Company's Board of Directors
concerning executive officer compensation during the fiscal year ended November
30, 1996. Mr. Turner's employment with the Company and his services as director
were terminated in September 1996.
Certain Relationships and Related Transactions
Mr. Joseph Takada, the beneficial owner of approximately 8.5% of the
outstanding shares of Common Stock, is the Managing Director of Ideal Pacific
Ltd. ("Ideal"), the Company's manufacturing agent in Hong Kong. During the
fiscal year ended November 30, 1996, the Company paid aggregate commissions of
approximately $467,000 to Ideal. Mr. Cheng-Sen Wang, the beneficial owner of
approximately 5.7% of the outstanding shares of Common Stock, is the Managing
Director of Kao-Lien Industrial Co., Ltd. ("Kao-Lien"), the Company's
manufacturing agent in Taiwan. During the fiscal year ended November 30, 1996,
the Company paid aggregate commissions of approximately $319,000 to Kao-Lien.
Mr. Albert Cheng, the beneficial owner of 2.8% of the outstanding shares of
Common Stock, is the President of Constellation Enterprise Co., Ltd.
("Constellation"). During the fiscal year ended November 30, 1996, the Company
purchased approximately $355,000 of luggage and backpack products and $30,000 of
product equipment from Constellation.
<PAGE>
Eric M. Hellige, a director of the Company, is a member of Pryor, Cashman,
Sherman & Flynn, counsel to the Company ("Pryor, Cashman"). Fees paid by the
Company to Pryor, Cashman for legal services rendered during the fiscal year
ended November 30, 1996 did not exceed 5% of such firm's or the Company's
revenues.
Barrie Sommerfield, a director of the Company, is the Vice Chairman of
Gore, Sommerfield, Ditnes International, Inc. ("Gore, Sommerfield"), a
consultant to the Company for trademark licenses. During the fiscal year ended
November 30, 1996, the Company paid $49,565 to Gore, Sommerfield for services
rendered in connection with obtaining licensed trademarks.
The Company believes that all purchases from affiliated parties were on
terms and at prices substantially similar to those available from unaffiliated
third parties.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company believes that, during the fiscal year ended November 30, 1996,
certain reports of ownership and changes in ownership of the Company's Common
Stock were not filed in a timely manner as required by Section 16(a) of the
Securities Exchange Act of 1934. A Statement of Changes in Beneficial Ownership
on Form 4 was filed by Joel Dupre, a director and executive officer of the
Company, on January 15, 1997, to report an event occurring on November 6, 1996.
INDEPENDENT PUBLIC ACCOUNTANTS
Nussbaum Yates & Wolpow, P.C. ("Nussbaum"), served as the Company's
independent public accountants for the fiscal year ended November 30, 1996. 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.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for presentation at the 1998 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 January 12, 1998.
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.
<PAGE>
ANNUAL REPORT
The Company's Annual Report on Form 10-K for the year ended November 30,
1996, including financial statements, is being mailed herewith. If, for any
reason, you do not receive your copy of the Report, please contact Mr. Paul
Riss, Chief Financial Officer, 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 and
Chief Executive Officer
Dated: May 12, 1997
Stamford, Connecticut
<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 Paul Riss, 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 366 Fifth
Avenue, Suite 205, New York, New York on Thursday, June 12, 1997 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.
The Board of Directors recommends a vote "FOR" the proposals set forth hereon.
PROPOSAL 1. The Election of Directors: Joel Dupre, Eric M. Hellige, Eric Smith,
Paul Riss and Barrie Sommerfield.
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
INSTRUCTION:To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
PROPOSAL 2. Proposal to amend the Company's 1995 Stock Option Plan to increase
the number of shares of Common Stock that may be issued thereunder from 400,000
to 600,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 which 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.
<PAGE>
Please be sure to sign and date
this Proxy in the box below.
----------------------------------------
Date
----------------------------------------
Shareholder sign above
----------------------------------------
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
SIRCO INTERNATIONAL CORP.
Please sign exactly as your name appears on this proxy card. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or corporation, please sign in full corporate name by
president or other authorized person. If a partnership, please sign in
partnership name by authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
