SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
STANDARD COMMERCIAL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
STANDARD COMMERCIAL CORPORATION
2201 Miller Road
Wilson, North Carolina 27893
Notice of Annual Meeting of Shareholders
To Be Held August 11, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of Standard Commercial Corporation at the Wilson Country Club off West Nash Road
in Wilson, North Carolina on Tuesday, August 11, 1998 at 12 noon to:
(a) elect four directors;
(b) ratify the appointment of Deloitte & Touche LLP as
the Company's independent auditors for fiscal 1999;
and
(c) transact such other business as may properly come
before the meeting.
Shareholders of record at the close of business on June 15, 1998 will be
entitled to vote at the meeting.
Sincerely,
/s/ Robert E. Harrison
-----------------------
Robert E. Harrison
President
June 26, 1998
You are invited to a luncheon immediately following the meeting. If you
plan to attend, please complete and return the enclosed card directly to the
Company or telephone 252-291-5507 Ext 259. Entrance to the Wilson Country Club
off West Nash Road is two miles northwest of the intersection of Ward Boulevard
and West Nash Street in Wilson.
PLEASE VOTE YOUR SHARES PROMPTLY BY COMPLETING AND RETURNING YOUR PROXY
IN THE ENVELOPE PROVIDED.
<PAGE>
STANDARD COMMERCIAL CORPORATION
------------------------------
Proxy Statement
Annual Meeting of Shareholders
August 11, 1998
------------------------------
The accompanying proxy is solicited by the Board of Directors. A
shareholder giving a proxy may revoke it at any time before it is exercised.
Shareholders of record at the close of business on June 15, 1998 will be
entitled to vote at the meeting or any adjournments thereof. It is expected that
proxy material will be mailed on or about June 26, 1998.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation divide the Board of Directors into
three classes as nearly equal in number as possible, each of which serves for
three years. The term of office of one class of directors expires each year in
rotation so that one class is elected at each Annual Meeting for a full
three-year term. Three of the present directors, William S. Barrack, Jr.,
Charles H. Mullen and J. Alec G. Murray, who were elected for three-year terms
expiring at this Annual Meeting, and William S. Sheridan, who was elected by the
Directors in January 1998, have been nominated for three-year terms expiring at
the Annual Meeting in 2001. The six other directors, who were elected for terms
expiring at the Annual Meetings in 1999 and 2000, will remain in office.
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
The information that follows as to the principal occupations and
directorships and the number of shares of the Company's common stock
beneficially owned, directly or indirectly, has been furnished to the Company by
such persons.
<TABLE>
<CAPTION>
<S> <C>
Name, Age and Year First Became Director Principal Occupation During Past Five Years
- ---------------------------------------- -------------------------------------------
Nominees for Terms Expiring in 2001
William S. Barrack, Jr. - 68, Director 1992 Retired Senior Vice
President, Texaco Inc.
A director of
Consolidated Natural Gas
Company.
Charles H. Mullen - 70, Director 1995 Retired Chairman and
Chief Executive
Officer, The American
Tobacco Company, and
retired Vice President,
American Brands, Inc. A
director of Swisher
International Group Inc.
J. Alec G. Murray - 61, Director 1977 Chairman of the Board
since August 1996;
previously
President/Vice Chairman
and Chief Executive
Officer.
William S. Sheridan - 44, Director 1998 Senior Vice President and
Chief Financial Officer
Sotheby's Holdings, Inc.
since 1996. Prior
thereto he was a partner
with Deloitte & Touche
LLP.
Directors Continuing in Office Until 1999
Marvin W. Coghill - 64, Director 1974 Chairman - Tobacco
Division; prior to
April 1994, President
of the Company.
Robert E. Harrison - 44, Director 1995 President and Chief
Executive Officer since
August 1996. He was
employed in July 1995 as
Senior Vice President
and Chief Financial
Officer and retained the
latter position until
April 1998. Previously
employed by R J
Reynolds International
in a number of
management positions,
primarily in the Far
East.
William A. Ziegler - 73, Director 1985 Retired partner, Sullivan
& Cromwell, attorneys;
currently consultant, and
a director of a private
company.
Directors Continuing in Office Until 2000
Henry R. Grunzke - 66, Director 1987 Consultant; and
President, International
Wool and Textile
Organization since
August 1996; previously
Chairman and
Commercial Director -
Wool Division.
Ery W. Kehaya - 74, Director 1949 Chairman Emeritus since
August 1996; previously
Chairman of the Board and
retired Chief Executive
Officer.
Daniel M. Sullivan - 74, Director 1995 Founder and retired Chief
Executive Officer,
Frost & Sullivan, Inc.;
currently Chairman JLM
Couture, Inc. and
director of four private
companies.
- --------------
</TABLE>
There are no family relationships among any of the directors and executive
officers except that Ery W. Kehaya is the father of Ery W. Kehaya II, a Vice
President of the Company.
PRINCIPAL SHAREHOLDERS
The following table sets forth at June 11, 1998 the common stock owned
beneficially, according to advice received by the Company, by each 5% or larger
shareholder, by each of the executive officers listed in the Summary
Compensation Table and by all executive officers and directors as a group:
<TABLE>
<CAPTION>
Name and Address Shares Owned % of Class
---------------- ------------ ----------
<S> <C>
Ery W. Kehaya 2,853,769 1 22.3%
810 Saturn Street
Jupiter, FL 33477-4456
FMR Corp 1,023,805 8.0%
82 Devonshire Street
Boston, MA 02019
Royce & Associates, Inc. 834,316 6.5%
1414 Avenue of the Americas
New York, NY 10019
Dimensional Fund Advisors, Inc. 706,906 5.5%
1299 Ocean Avenue
Santa Monica, CA 90401
Marvin W. Coghill 221,066 2 1.7%
J. Alec G. Murray 206,443 3 1.6%
Thomas M. Evins, Jr. 81,324 4 *
Robert E. Harrison 36,848 5 *
William A. Ziegler 6,465 *
Alfred F. Rehm, Jr. 3,628 6 *
Henry R. Grunzke 2,607 *
William S. Barrack, Jr. 2,438 7 *
Charles H. Mullen 2,052 *
Daniel M. Sullivan 1,413 *
Paul H. Bicque 921 *
William S. Sheridan -0- *
All directors and officers as a group 3,676,104 8 28.7%
</TABLE>
- ----------------
* Less than one percent.
1 Includes (i) 615,165 shares held by Mr. Kehaya as trustee for the benefit
of his children; (ii) 3,404 shares underlying $100,000 principal amount of
the Company 7 1/4% Convertible Subordinated Debentures held by his wife
assuming conversion thereof at the current conversion price of $29.38 per
share; and (iii) 43,345 shares held by his wife.
2 Includes 3,417 shares held for Mr. Coghill's account by the trustee of
the Company's 401(k) Savings Plan.
3 Includes 11,566 shares owned by Mr. Murray's wife.
4 Includes 1,244 shares held for Mr. Evins' account by the trustee of the
Company's 401(k) Savings Plan.
5 Includes 343 shares held for Mr. Harrison's
account by the trustee of the Company's 401(k) Savings Plan and 33,333
shares represented by vested, unexercised stock options..
6 Includes 1,723 shares held for Mr. Rehm's account by the trustee of
the Company's 401(k) Savings Plan.
7 Includes 555 shares owned by Mr. Barrack's wife.
8 Includes the shares discussed in footnotes (1-7) above. Also includes
257,130 outstanding shares held beneficially by other executive officers.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation of the
Chief Executive Officer and the other four most highly compensated executive
officers of the Company (the "named executive officers") for services in all
capacities for fiscal year ended March 31, 1998.
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation ----------------------
----------------------------------- Restriced Securities
Fiscal Other Annual Stock Underlying
Name and Principal Position Year Salary Bonus Compensation(1) Awards(2) Options
--------------------------- ------ ------- ------- ------------ ------- ----------
<S> <C>
Robert E. Harrison(3) 1998 $350,000 $100,000 $3,200 $37,083 100,000
President and Chief Executive 1997 271,250 -0- 2,250 -0- -0-
Officer 1996 142,500 -0- -0- -0- -0-
Marvin W. Coghill Chairman - 1998 $325,000 $ 50,000 $3,200 $61,145 -0-
Tobacco Division 1997 310,000 310,000 1 -0- 3,000 -0-
1996 0,000 -0- 3,000 -0- -0-
Thomas M. Evins, Jr.(4) - Tob Div 1998 $210,000 $ -0- $3,200 $36,488 -0-
Vice President and Regional 1997 200,000 -0- 3,000 -0- -0-
Mgr 1996 185,000 -0- 3,000 -0- -0-
- North & Central America
Paul H. Bicque Managing 1998 $182,430 $ 18,000 $ -0- $16,118 -0-
Director 1997 164,000 -0- -0- -0- -0-
- Wool Division 1996 142,100 -0- -0- -0- -0-
Alfred F. Rehm, Jr.(5) - Tobacco 1998 $140,000 $ 40,000 $2,800 $25,638 -0-
Division Vice President - 1997 130,000 30,000 2,600 -0- -0-
Sales 1996 122,000 101,000 2,440 -0- -0-
</TABLE>
(1) Employer contributions under the Company's 401(k) Savings Incentive
Plan. Eligible employees in the United States may contribute the lesser of
18% of recognizable compensation or the maximum amount ($10,000 in
calendar 1998) permitted under the Internal Revenue Code. Employee
contributions are partially matched with employer contributions in the
form of common stock of the Company. Noncash personal benefits for the
persons named above did not exceed the lesser of $50,000 or 10% of the cash
compensation reported.
(2) These awards were based on fiscal 1997 performance. The amounts shown in
this column were calculated by multiplying the number of shares issued by
the closing market price ($17.50 per share) of the Company's common stock
on the date of issuance. The shares awarded remain restricted for seven
years.
As of March 31, 1998, the number of restricted shares market value ($15.94
per share) of such shares held by the persons included in the table were as
follows: Mr. Harrison 2,119 ($33,777), Mr. Coghill 4,737 ($75,508), Mr.
Evins 2,833 ($45,158), Mr. Bicque 921 ($14,681) and Mr. Rehm 1,905
($30,366). Each recipient of restricted stock has all the rights, including
voting and dividends, of other shareholders, subject to certain
restrictions and forfeiture provisions.
(3) Mr. Harrison was elected President, Chief Executive Officer and
Chief Financial Officer on August 13, 1996; from July 1995 to August 1996
he was Senior Vice President and Chief Financial Officer. He
relinquished the position of Chief Financial Officer effective April 1,
1998.
(4) Mr. Evins resigned March 31, 1998 as a Director and as Tobacco Division
Vice President and Regional Manager - North & Central America.
(5) Mr. Rehm received both normal and sales incentive bonuses in fiscal 1996.
<PAGE>
Option Grants During Year Ended March 31, 1998
The following table summarizes all option grants during the year ended
March 31, 1998 to the named executive officers:
<TABLE>
<CAPTION>
Potential Realizable
Number of % of Total Value at Assumed
Shares Options Annual Rates of Stock
Underlying Granted to Exercise Price Appreciation for
Options Employees in or Base Option Term(2)
Granted Fiscal Year Price Per Expiration ---------------------------
Name (1) 1998 Share Date 5% 10%
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Robert E. Harrison 100,000 100.0% $17.00 April 14, 2004 $692,000 $1,613,000
</TABLE>
- -----------------
(1) The stock option grant shown in this column was made in April 1997 pursuant
to Mr. Harrison's employment agreement dated March 1997, and becomes
exercisable in equal annual installments over three years from the date of
grant, based on continued employment with the Company.
(2) The compounding assumes a seven-year exercise period for all option grants.
These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock, and overall stock market conditions. The
amounts reflected in this table may not necessarily be achieved.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information concerning holdings as of March
31, 1998, by the named executive officers. No named executive officer exercised
options during the year ended March 31, 1998.
<TABLE>
<CAPTION>
Number of Unexercised Options at Value of Unexercised In-the-Money
March 31, 1998 Options at March 31, 1998(1)
------------------------------------ -----------------------------------
Name Exercisable(2) Unexercisable(2) Exercisable(2) Unexercisable(2)
- ------------------- ----------------- ---------------- ---------------- ----------------
<S> <C>
Robert E. Harrison 33,333 67,667 $ -0- $ -0-
</TABLE>
- ---------------
(1) Calculated by subtracting the exercise price from the closing price of the
Company's Common Stock as reported by the New York Stock Exchange on March
31, 1998 and multiplying the difference by the number of shares underlying
each option.
(2) The first number represents the number or value (as called for by the
appropriate column) of exercisable options; the second number represents
the number or value (as appropriate) of unexercisable options.
Employment Agreement
In March 1997, the Company entered into a three-year Employment Agreement
with Robert E. Harrison, its President and Chief Executive Officer (and then
Chief Financial Officer). The agreement provided for a base salary of $350,000
per year, annual cash bonuses upon achievement of performance goals, as
determined by the Compensation Committee of the Board of Directors of the
Company, and other employee benefits. In addition, the agreement, which was
ratified by the Board of Directors on April 14, 1997, provides for the grant to
Mr. Harrison of nonqualified options to purchase 100,000 shares of Common Stock
of the Company at an exercise price equal to the fair market value as of the
date of the grant. These options will become exercisable, based on Mr.
Harrison's continued employment with the Company, in equal annual installments
over a three-year period. Mr. Harrison's employment agreement is renewable for
successive two-year periods after its initial three-year term. The agreement
also contains a covenant by Mr. Harrison not to compete with the Company until
one year after his termination, except if he is terminated by the Company
without cause. The agreement also provides that in the event Mr. Harrison's
employment is terminated by the Company without cause, he shall receive
termination pay in a lump sum equal to two years' base salary and one year's
bonus.
Retirement Plans
There is a Defined Benefit Pension Plan provided for participating
employees in the United States who retire directly from the Company or who
terminate service with vested rights. The Company pays the full cost of the
Plan, determined on the basis of an independent actuarial valuation, into an
independently maintained trust fund. Generally, full-time salaried employees who
are at least 21 years old and have been employed for at least one year are
covered by the Plan. The right to receive benefits under the Plan is 100% vested
after five years of service. The monthly benefit payable upon retirement is
based on average compensation for the three highest years multiplied by various
factors for each year of service up to 40. The definition of compensation
includes amounts deferred under the 401(k) Savings Incentive Plan and Pretax
Medical Plans, but excludes bonuses and other awards. The benefit normally is
computed in the form of a straight-life annuity, or the actuarial equivalent
thereof under other options specified in the Plan. In addition, an immediate
benefit is provided to the surviving spouse upon death of an active or disabled
participant. The maximum annual benefit payable from this Plan is limited by
Section 415 of the Internal Revenue Code to $130,000 in calendar 1998 ($125,000
in 1997 and $120,000 1996).
<PAGE>
A nonqualified Supplemental Retirement Plan provides such benefits from the
Company's general funds as would otherwise be provided under the above
tax-qualified Plan except for Internal Revenue Code limitations on amounts which
may be paid out of a tax-qualified Plan.
The table below shows representative total annual retirement benefits
payable to an employee retiring in 1998 under the above Plans for specified
levels of compensation and years of service computed as a straight-life annuity
at age 65.
<TABLE>
<CAPTION>
Years of Credited Service at Age 65
Average ------------------------------------------------------------------------
Compensation 15 20 25 30 35 40
- ---------------------------------------------------------------------------------------
<S> <C>
$100,000 $21,700 $ 29,000 $ 36,200 $ 43,400 $ 49,400 $ 53,200
150,000 34,100 45,500 56,800 68,200 77,700 83,300
200,000 46,500 62,000 77,400 92,900 105,900 113,400
250,000 58,800 78,500 98,100 117,700 134,200 143,500
300,000 71,200 95,000 118,700 142,400 162,400 173,700
350,000 83,600 111,500 139,300 167,200 190,700 203,800
400,000 96,000 128,000 159,900 191,900 218,900 233,900
</TABLE>
As of March 31, 1998, Messrs. Harrison, Coghill, Evins, Bicque and Rehm had
2, 40, 2, 6 and 19 years of service, respectively, for pension purposes. The
pensionable compensation covered by the U.S. and foreign retirement plans in
1998, 1997 and 1996 for each executive officer listed in the Summary
Compensation Table is equal to the "salary" amount shown in the Table. Foreign
pension plans use different formulae than the one used in preparing the above
table. At March 31, 1998, Mr. Bicque had accrued annual benefits payable at age
65 of $22,200.
Performance Improvement Compensation Plan
On August 11, 1992 the shareholders of the Company approved the adoption of
a Performance Improvement Compensation Plan (the "Plan"), which is administered
by the Compensation Committee of the Board of Directors. The Plan allows the
grant of a number of different types of equity based compensation vehicles.
Awards under the Plan may be made to participants in the form of incentive stock
options, nonqualified stock options, discounted stock options, restricted stock,
stock appreciation rights, phantom stock, stock awards, performance shares and
deferred stock. A maximum of 500,000 shares of Common Stock may be issued under
the Plan. To date there have been grants only of restricted stock awards.
The restricted stock awards granted are subject to forfeiture for a period
of seven years if a recipient's employment is terminated other than because of
death, disability or retirement after age 62 under certain conditions. The
Compensation Committee may also waive the restriction. The recipient of an award
may vote the stock and is entitled to cash dividends.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The committees established by the Board of Directors to assist it in the
discharge of its responsibilities are an Executive Committee, an Audit
Committee, a Compensation Committee, a Finance Committee and a Nominating
Committee.
The Executive Committee consists of J. Alec G. Murray, Marvin W.
Coghill and Robert E. Harrison. This committee meets on call and has
authority to act on most matters during the intervals between Board meetings.
During the last fiscal year, the committee acted on various matters by unanimous
written consents.
The Audit Committee, which met six times during the last fiscal year,
consists of William S. Barrack, Jr., Charles H. Mullen, William S. Sheridan,
Daniel M. Sullivan and William A. Ziegler, none of whom have ever been employees
of the Company. This committee is primarily concerned with assisting the Board
in fulfilling its fiduciary responsibilities relating to accounting policies and
auditing and reporting practices, and assuring the independence of the Company's
public accountants, the integrity of management and the adequacy of disclosure
to shareholders. Its duties include recommending the selection of independent
accountants, reviewing the scope of the audits and the results thereof, and
reviewing the organization and scope of the Company's internal systems of
financial control and accounting policies followed by the Company.
The Compensation Committee, which met seven times during the last
fiscal year, consists of William A. Ziegler, William S. Barrack, Jr.,
Charles H. Mullen and Daniel M. Sullivan. This committee is primarily
concerned with administering the Performance Improvement Compensation
Plan, determining compensation of executive officers and oversight of the
Company's pension plans.
The Finance Committee, which met four times during the last fiscal year,
consists of Daniel M. Sullivan, William S. Barrack, Jr., Robert E. Harrison,
Charles H. Mullen, William S. Sheridan and William A. Ziegler. Of the current
membership on the Committee, only Mr. Harrison is an officer of the Company,
and there are no interlocking relationships. This Committee is primarily
concerned with monitoring the financial condition of the Company; making
recommendations regarding financial needs, business planning policies,
capital expenditures, dividends, stock repurchases, relations with the
financial community, mergers, acquisitions and other major projects; and
management structure and policy development.
The Nominating Committee, which met two times during the last fiscal year,
consists of William A. Ziegler, Robert E. Harrison, Charles H. Mullen and J.
Alec G. Murray. This committee is primarily concerned with recommending
to the full Board of Directors candidates for election as directors. The
Committee will consider candidates recommended by shareholders. Such
recommendations should be sent to the Nominating Committee, c/o Henry C. Babb,
Secretary, Standard Commercial Corporation, 2201 Miller Road, Wilson, North
Carolina 27893.
The Board of Directors held five meetings during the last fiscal year.
During that year, each director was present at 75% or more of the meetings of
the Board and its committees on which the director served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require disclosure of
late Section 16 filings by directors and executive officers. Except as described
hereinafter, to the best of the Company's knowledge and belief, there were no
late filings during fiscal 1998. Michael K. McDaniel filed a late Form 3
reporting his ownership of securities following his election as a Vice President
of the Company in June 1997. In December 1997, Mr. Harrison, the Company's Chief
Executive Officer, filed a late Form 4 reporting his acquisition of an aggregate
of 500 shares during calendar 1996.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive an annual retainer
of $15,000 for serving on the Board of Directors and $10,000 for serving on
Committees of the Board, plus a fee of $750 for each meeting of the Board and
$250 for each Committee meeting attended. On retirement after at least five
years service as a nonemployee Director, they receive annually for the number of
years equaling their years of service as a nonemployee director one half the
retainer in effect at the time of retirement.
COMPENSATION COMMITTEE REPORT
The compensation of the executive officers is determined by the
Compensation Committee.
Compensation Objectives
In determining the total compensation of an executive officer the Committee
has in mind the necessity of attracting and retaining exceptionally competent
employees and motivating them to achieve maximum profitability of the Company.
Compensation paid comparable executive officers by competitors is taken into
account, along with performance of the Company and the individual and of the
activities for which he is responsible.
Compensation Arrangements
Apart from benefits, which are dealt with in the accompanying tables, an
executive officer's total compensation has consisted of base salary, cash bonus
and awards of restricted shares of the Company's common stock under the
Performance Improvement Compensation Plan.
Base Salary. In determining base salaries for the executive officers, the
Committee examines available reports regarding salaries paid by competitors and
in industry generally and considers the executive officer's responsibilities,
the past and present performance of the Company and the individual and of the
activities for which he is responsible, and future potential.
Cash Bonus. The same factors considered in determining base salaries are
considered in determining cash bonuses paid to executive officers although
somewhat more weight is given to immediate past performance of the individual
and the activities for which he is responsible than in determining base
salaries.
Restricted Stock. At the annual meeting on August 11, 1992 the shareholders
approved the Performance Improvement Compensation Plan (the "Plan"), authorizing
the Committee to make effective for designated employees various arrangements
based on shares of Company stock. On June 14, 1993 the Committee adopted the
Restricted Stock Plan (the "RSP") as a means of awarding those employees, to the
extent certain performance objectives are met, restricted shares of the
Company's common stock pursuant to the Plan. In doing so, the Committee had in
mind not only the objectives generally applicable to the Company's compensation
arrangements, but causing participating employees to own more shares of the
Company's stock than might otherwise be the case and to identify more closely
with shareholder interests. The Company's executive officers are among those who
have been designated as eligible to participate. The RSP calls for awards of
restricted stock being made on the basis of overall Company performance in terms
of return on net assets. No awards are made on account of a year in which return
on net assets is not at least equal to a threshold figure. The Committee
establishes a target return on net assets for the year and the pool that will be
available if that target is achieved. Correspondingly more or fewer shares are
awarded to the extent the target is exceeded or not achieved. The Committee has
the discretion to adjust awards because of changed conditions or for other
reasons. Shares awarded pursuant to the Plan remain restricted for seven years,
except in the case of recognized exceptions. A total of 113,670 restricted
shares were awarded in fiscal 1998 based on fiscal 1997 performance.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In determining Mr. Harrison's compensation (including base salary, bonus
and stock options) for the last fiscal year, the Committee took into
consideration primarily the compensation paid to chief executive officers by the
Company's principal competition and an appropriate relationship between Mr.
Harrison's compensation and those of the executive officers reporting to him.
Although no executive officer of the Company received compensation in
fiscal 1998 in excess of the $1 million deductibility threshold established by
Section 162(m) of the Internal Revenue Code, the Committee will continue to
consider the deductibility and performance-based compensation issues raised by
Section 162(m).
This report has been provided by the Compensation Committee: William A.
Ziegler, Chairman: William S. Barrack, Jr.; Charles H. Mullen; and Daniel M.
Sullivan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are currently William A.
Ziegler, William S. Barrack, Jr., Charles H. Mullen and Daniel M. Sullivan.
Messrs. Ziegler, Barrack, Mullen and Sullivan were not at any time during the
fiscal year ended March 31, 1998 or at any other time an officer or employee
of the Company. No executive officer of the Company serves as a member of the
Board of Directors or Compensation Committee of any entity which has one or
more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.
PERFORMANCE GRAPH
The following graph compares total return, including reinvestment of
dividends, on the Company's Common Stock to the total returns of the Standard &
Poor's 500 Stock Index and a Peer Group Index (PGI) (as defined below) for the
last five fiscal years ending March 31, 1998. The comparison assumes a $100
investment on March 31, 1992 in (1) Standard Commercial Common Stock, (2) the
Standard & Poor's 500 Index and (3) the PGI, and shows in each case the change
in stock price and dividends paid (assuming dividend reinvestment) over the
ensuing five years.
[line graph plot points below]
NOTE: The past performance shown in the graph above is not necessarily
indicative of future performance.
<TABLE>
<CAPTION>
FYE March 31 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Standard $ 91 $ 56 $ 49 $ 35 $ 72 $ 71
S&P 500 $115 $117 $135 $179 $214 $275
Peer Group $109 $ 70 $ 81 $104 $131 $140
</TABLE>
The PGI combines the weighted total return, based on the average month-end
market capitalization, of the other two leaf tobacco dealers (DiMon Incorporated
and Universal Corporation) publicly traded in the United States.
<PAGE>
Anything to the contrary notwithstanding in any of the Company's previous
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that incorporates future filings, including this Proxy Statement, in whole or in
part, the preceding Compensation Committee Report and Performance Graph shall
not be incorporated by reference into any such filings nor shall they constitute
soliciting material.
VOTING RIGHTS AND PROXY
On June 11, 1998, the Company had outstanding 12,809,763 shares of common
stock, all of one class and each share entitled to one vote. Shares cannot be
voted at the meeting unless the owner is present or represented by proxy. A
proxy may be revoked by the shareholder at any time before it is voted.
The election of directors requires a plurality of the votes cast and the
appointment of the Company's auditors requires the affirmative vote of a
majority of the votes cast at the meeting. For purposes of determining the
number of votes cast with respect to a particular matter, only those cast "For"
or "Against" are included. Abstentions and votes withheld, as well as broker
nonvotes will be counted only in determining the presence of a quorum.
Unless a shareholder specifies otherwise in a proxy, it will be voted FOR
the election as director of the three nominees listed under the caption
"Election of Directors" herein and FOR approval of the appointment of Deloitte &
Touche LLP as the Company's independent auditors for fiscal 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP audited the financial statements of the
Company in 1998 and, subject to shareholder ratification, the Board of Directors
has reappointed this firm as the Company's Independent Public Accountants for
fiscal 1999. Representatives of Deloitte & Touche LLP will be present at the
Annual Meeting, and will have an opportunity to respond to questions relating to
their audit of the Company's financial statements and to make a statement if
they so desire.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999 Annual
Meeting of Shareholders must be received by the Company before February 26,
1999. To be included, all such proposals must comply with the requirements of
Rule 14a-8 promulgated under the Exchange Act and the Board of Directors directs
the close attention of interested shareholders to that Rule. In addition, the
Company's Bylaws require that shareholders give advance notice and furnish
certain information to the Company in order to bring a matter of business before
an annual meeting or to nominate a person for election as a director.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, employees of the Company may
solicit proxies in person or by telephone.
At the time of mailing this Proxy Statement, the management is not aware of
any matters not referred to herein to be presented for action at the meeting. If
any other matters properly come before the meeting, it is intended that the
shares represented by the proxies will be voted with respect thereto in
accordance with the judgment of the persons voting them.
Henry C. Babb
June 26, 1998 Secretary
<PAGE>
STANDARD COMMERCIAL CORPORATION
Proxy solicited on behalf of the Board of Directors
The undersigned hereby appoints Henry C. Babb and Keith H. Merrick
proxies, each with full power of substitution, to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders of
STANDARD COMMERCIAL CORPORATION to be held at the Wilson Country Club off West
Nash Road in Wilson, North Carolina, on August 11, 1998 and at any adjournments
thereof.
<TABLE>
<S> <C>
(1) ELECTION OF DIRECTORS: [ ] FOR all nominees listed below [ ] VOTE WITHHOLD
(INSTRUCTION: To withhold vote for individual nominee(s), strike a line through the name(s) in the list below.)
Three-year terms expiring in 2001: William S. Barrack, Jr., Charles H. Mullen, J. Alec G. Murray and William S. Sheridan
(2) Ratification of the appointment of Deloitte & Touche LLP as the Company's independent auditors for fiscal 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In the discretion of such proxies, upon such other business as may properly come before the meeting.
(continued, and to be signed on the other side)
</TABLE>
<PAGE>
(Continued from other side)
A MAJORITY OF SAID PROXIES OR THEIR
SUBSTITUTES WHO SHALL BE PRESENT AND
ACT, OR IF ONLY ONE SHALL BE PRESENT AND
ACT, THEN THAT ONE SHALL HAVE AND MAY
EXERCISE ALL THE POWERS OF SAID PROXIES
HEREUNDER.
Dated___________________________ , 1998
---------------------------------------
[Signature(s)]
---------------------------------------
[Signature(s)]
Please date and sign as name(s) appear
hereon. When shares are held by joint
tenants, both should sign. When
signing on behalf of a corporation,
partnership, estate, trust or other
shareholder, state your capacity or
otherwise indicate that you are
authorized to sign.
NOTE: PLEASE COMPLETE, SIGN AND RETURN AS SOON AS POSSIBLE IN ENCLOSED ENVELOPE.
