<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / 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 Rule 14a-11(c) on Rule 14a-12
Todhunter International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box:)
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies: N/A
- --------------------------------------------------------------------------------
(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): N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction: N/A
- --------------------------------------------------------------------------------
(5) Total fee paid: N/A
- --------------------------------------------------------------------------------
/ / 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 and 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>
TODHUNTER INTERNATIONAL, INC.
222 LAKEVIEW AVENUE, SUITE 1500
WEST PALM BEACH, FLORIDA 33401
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 10, 1998
------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
Todhunter International, Inc., a Delaware corporation, will be held at the
offices of Gunster, Yoakley, Valdes-Fauli & Stewart, P.A., at 777 South Flagler
Drive, Suite 500 East, West Palm Beach, Florida 33401, on Tuesday, March 10,
1998, at 11:00 a.m., Eastern Standard Time, for the following purposes:
1. To elect two (2) Class III Directors to hold office for a term of
three (3) years and until their successors have been elected and
qualified; and
2. To act upon such other matters as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on January 21, 1998
shall be entitled to notice of, and to vote at, the meeting or any postponements
or adjournments thereof.
By Order of the Board of Directors
/s/ Troy Edwards
TROY EDWARDS
SECRETARY
West Palm Beach, Florida
January 26, 1998
<PAGE>
TODHUNTER INTERNATIONAL, INC.
222 LAKEVIEW AVENUE, SUITE 1500
WEST PALM BEACH, FLORIDA 33401
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 10, 1998
------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors and management of Todhunter International, Inc., a
Delaware corporation (the "Company"), of proxies for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the offices of Gunster,
Yoakley, Valdes-Fauli & Stewart, P.A., at 777 South Flagler Drive, Suite 500
East, West Palm Beach, Florida 33401, on Tuesday, March 10, 1998, at 11:00 a.m.,
Eastern Standard Time, or at any and all postponements or adjournments thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement, Notice of Annual Meeting and accompanying proxy card
are first being mailed to stockholders on or about January 26, 1998.
Only stockholders of record at the close of business on January 21, 1998,
will be entitled to notice of the Annual Meeting and to vote the shares of
common stock of the Company, par value $.01 per share ("Common Stock"), held by
them on such date at the Annual Meeting or any and all postponements or
adjournments thereof. As of January 21, 1998, 4,949,714 shares of Common Stock
were outstanding and entitled to vote at the Annual Meeting.
Each share of Common Stock entitles the holder thereof to cast one vote on
each matter to be voted upon at the Annual Meeting. A majority of the
outstanding shares will constitute a quorum at the meeting. Abstentions and
broker non-votes are counted only for purposes of determining the presence or
absence of a quorum for the transaction of business and are not counted for
purposes of electing directors in accordance with Proposal One. None of the
actions to be voted upon at the Annual Meeting shall create dissenters' rights
under the Delaware General Corporation Law.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the accompanying proxy card will vote FOR the
Board of Directors' nominees as directors and as recommended by the Board of
Directors with regard to all other matters as may properly come before the
Annual Meeting or, if no such recommendation is given, in their own discretion.
Each such proxy granted may be revoked by the stockholder giving such proxy at
any time before it is exercised by filing with the Secretary of the Company a
revoking instrument or a duly executed proxy bearing a later date. The powers
of the proxy holders will be suspended if the person executing the proxy attends
the Annual Meeting in person and so requests. Attendance at the Annual Meeting
will not, in itself, constitute revocation of the proxy.
The cost of soliciting proxies in the form enclosed herewith will be borne
by the Company. In addition to the solicitation of proxies by mail, the
Company, through its directors, officers, employees and agents, may also solicit
proxies personally or by telephone. The Company will also request persons,
firms and corporations holding shares in their names or in the names of their
nominees, which are beneficially owned by others, to send
<PAGE>
proxy material to and obtain proxies from such beneficial owners and will
reimburse such holders for their reasonable expenses in doing so.
The presence at the Annual Meeting, in person or by proxy, of a majority of
the shares of Common Stock outstanding as of January 21, 1998, will constitute a
quorum.
PRINCIPAL STOCKHOLDERS AND BENEFICIAL OWNERSHIP OF MANAGEMENT
The following tables set forth the number of shares and percentage of the
Company's Common Stock beneficially owned as of January 21, 1998 by (i) owners
of five percent or more of the Common Stock, (ii) each director and certain
executive officers of the Company, and (iii) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
NAME OF EXECUTIVE OFFICER OR DIRECTOR (1) NUMBER OF SHARES PERCENTAGE OWNED
- ----------------------------------------- ---------------- ----------------
<S> <C> <C>
A. Kenneth Pincourt, Jr.. . . . . . . . . . . . 2,149,578(2) 42.9%
Jay S. Maltby . . . . . . . . . . . . . . . . . 31,500(3) *
Thomas A. Valdes. . . . . . . . . . . . . . . . 16,000(4) *
D. Chris Mitchell . . . . . . . . . . . . . . . 36,900(5) *
Ousik Yu .. . . . . . . . . . . . . . . . . . . 46,000(6) *
W. Gregory Robertson. . . . . . . . . . . . . . 2,500 *
Leonard G. Rogers . . . . . . . . . . . . . . . 10,000 *
All executive officers and directors as
a group (8 persons). . . . . . . . . . . . . . 2,328,378(7) 45.1%
NAME AND ADDRESS OF
OTHER BENEFICIAL OWNERS
- ---------------------------
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, WI 53202 . . . . . . . . . . . . . 490,000(8) 9.9%
The Killen Group, Inc.
1199 Lancaster Avenue
Berwyn, PA 19312 . . . . . . . . . . . . . . 320,504(9) 6.5%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 . . . . . . . . . . . 247,800(10) 5.0%
</TABLE>
- ------------------------
* Less than 1%
(1) Except as otherwise indicated, each person listed above has sole voting
power and sole investment power with respect to the shares owned by such
person.
(2) Includes (i) 1,909,885 shares of which Mr. Pincourt has sole and direct
voting and dispositive power, (ii) 179,693 shares of which Mr. Pincourt has
sole voting and dispositive power as trustee for the benefit of his sister,
Ferne Pincourt, pursuant to a Revocable Trust Agreement, dated April 7,
1992; and (iii) 60,000 shares that may be acquired within 60 days of
January 21, 1998 upon the exercise of outstanding options under the
Company's 1992 Employee Stock Option Plan, as amended (the "Option Plan").
Mr. Pincourt's address is 222 Lakeview Avenue, Suite 1500, West Palm Beach,
Florida 33401.
2
<PAGE>
(3) Includes an aggregate of 30,000 shares that may be acquired within 60 days
of January 21, 1998 upon the exercise of outstanding options under the
Option Plan.
(4) Includes an aggregate of 15,000 shares that may be acquired within 60 days
of January 21, 1998 upon the exercise of outstanding options under the
Option Plan.
(5) Includes an aggregate of 32,500 shares that may be acquired within 60 days
of January 21, 1998 upon the exercise of outstanding options under the
Option Plan.
(6) Includes an aggregate of 46,000 shares that may be acquired within 60 days
of January 21, 1998 upon the exercise of outstanding options under the
Option Plan.
(7) Includes (i) an aggregate of 183,500 shares that may be acquired within 60
days of January 21, 1998 by the persons listed in the table set forth above
upon exercise of outstanding options under the Option Plan; (ii) an
aggregate of 2,900 shares owned directly by a person not listed in the
table set forth above; and (iii) an aggregate of 33,000 shares that may be
acquired within 60 days of January 21, 1998 by a person not listed in the
table set forth above upon exercise of outstanding options under the Option
Plan.
(8) Based upon responses to a questionnaire received from Heartland Advisors,
Inc., dated October 30, 1997, with respect to shares of the Common Stock,
which questionnaire discloses such stock ownership as of October 30, 1997.
The questionnaire further reports sole voting and dispositive power as to
490,000 shares of Common Stock.
(9) Based upon responses to a questionnaire received from The Killen Group,
Inc. with respect to shares of the Common Stock, which questionnaire
discloses such stock ownership as of October 30, 1997. The questionnaire
further reports sole voting power as to 153,410 shares and dispositive
power as to 320,504 shares.
(10) Based upon the AMEX Institutional Management Report prepared for the
American Stock Exchange by J.M. Lafferty Associates, Inc., Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed
to have beneficial ownership as of September 30, 1997, of 247,800 shares of
the Common Stock, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
Fund Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and any persons who beneficially
own ten percent or more of the Company's Common Stock, to file with the
Securities and Exchange Commission (the "Commission") and the American Stock
Exchange, upon which the Common Stock is currently traded, initial reports of
beneficial ownership and reports of changes in beneficial ownership of Common
Stock. Such persons are required by regulations of the Commission to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely upon on a review of (i) copies of Section 16(a) filings
received by the Company during or with respect to fiscal 1997 and (ii) certain
written representations of its officers and directors with respect to the filing
of annual reports of changes in beneficial ownership on Form 5, the Company
believes that each filing required to be made pursuant to Section 16(a) of the
Exchange Act during fiscal 1997 and for prior fiscal years has been filed in a
timely manner with the exception of one late filing of a Form 4 report during
fiscal 1996 by
3
<PAGE>
each of Mr. Maltby and Mr. Valdes reflecting one grant of options to each
such person under the Company's Option Plan.
PROPOSAL ONE
ELECTION OF DIRECTORS
The following table sets forth information with respect to the continuing
directors, director nominees and executive officers of the Company.
Name Age Position or Office Held
- ---------------------------- --- -----------------------------------
A. Kenneth Pincourt, Jr. 66 Chairman of the Board and Chief
Executive Officer
Jay S. Maltby 47 President, Chief Operating Officer and
Director
Thomas A. Valdes 54 Executive Vice President, Assistant
Secretary and Director
D. Chris Mitchell 48 Senior Vice President -- Sales and
Director
Troy Edwards 59 Secretary, Treasurer, Controller and
Chief Financial Officer
Ousik Yu 45 Senior Vice President -- Manufacturing
W. Gregory Robertson 54 Director
Leonard G. Rogers 68 Director
In accordance with Article V of the Company's Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation"), the Board of
Directors of the Company is divided into three classes, designated Class I,
Class II and Class III. The maximum number of members of the Board of Directors
is currently six. Messrs. Maltby and Mitchell currently serve as Class III
directors and have been nominated for election at the Annual Meeting. If
elected, Messrs. Maltby and Mitchell will serve as Class III directors until the
2001 Annual Meeting. Messrs. Valdes and Robertson currently serve as Class I
directors until the 1999 Annual Meeting and Messrs. Pincourt and Rogers
currently serve as Class II directors until the 2000 Annual Meeting.
Messrs. Maltby and Mitchell have consented to serve on the Board and the
Board has no reason to believe that they will not serve if elected, but if
either of them should become unavailable to serve as a director, and if the
Board shall have designated a substitute nominee or nominees, the persons named
as proxies will vote for the substitute nominee or nominees designated by the
Board. Messrs. Maltby and Mitchell must be elected by a plurality of the votes
cast at the Annual Meeting.
NOMINEES AS CLASS III DIRECTORS
The biographies set forth below are submitted for consideration regarding
the nomination of each of Messrs. Maltby and Mitchell for election as a
director.
4
<PAGE>
JAY S. MALTBY -- Mr. Maltby joined the Company in January 1995 as
President, Chief Operating Officer and a director. Prior to joining the
Company, he served in various executive capacities with Bacardi Imports, Ltd.
since 1978. In 1993, Mr. Maltby became a member of Bacardi's Executive
Committee and Vice President of Finance and Operations.
D. CHRIS MITCHELL -- Mr. Mitchell joined the Company in 1984 as manager of
the Company's bottling operations. Mr. Mitchell was promoted to Vice
President -- Sales in 1989 and appointed as Senior Vice President in January
1994. Mr. Mitchell has been a director of the Company since 1991. Prior to
joining the Company, Mr. Mitchell was general manager of bottling operations for
United States Distilled Products from 1980 to 1984.
CONTINUING CLASS I DIRECTORS
W. GREGORY ROBERTSON -- Mr. Robertson joined the Company as a director in
September 1995. In 1989, Mr. Robertson founded TM Capital Corp., a private New
York City-based investment banking firm. Prior to founding TM Capital Corp.,
Mr. Robertson was an Executive Vice President and director of Thomson McKinnon
Securities Inc., where he headed the firm's investment banking and public
finance activities. Mr. Robertson is also a director of Vicon Industries, Inc.
of Hauppauge, New York (CCTV systems and components).
THOMAS A. VALDES -- Mr. Valdes joined the Company in July 1995 as Executive
Vice President. Prior to joining the Company, Mr. Valdes held various executive
positions with Bacardi Imports, Ltd. since 1979, the latest of which was Vice
President of Marketing and Operations.
CONTINUING CLASS II DIRECTORS
LEONARD G. ROGERS -- Mr. Rogers joined the Company as a director in 1992.
He was Chairman of the Board of the Company from 1974 to 1985 and since 1985 has
been a private investor. From 1969 to 1974, Mr. Rogers was Senior Vice
President -- Consumer Products Division for Gulf & Western Industries.
A. KENNETH PINCOURT, JR. -- Mr. Pincourt founded the Company in 1964 and
has been its Chief Executive Officer and a director since its inception and
Chairman of the Board since 1985. Mr. Pincourt also was President of the
Company from inception until January 1995, at which time Jay S. Maltby became
President.
EXECUTIVE OFFICERS
Certain information relating to each executive officer of the Company
(other than those set forth above) is set forth below.
TROY EDWARDS -- Mr. Edwards joined the Company in 1980, has served as
Treasurer, Controller and Assistant Secretary since that time, and was promoted
to Chief Financial Officer in 1992. In February 1997, Mr. Edwards was appointed
as Secretary of the Company. Prior to joining the Company, Mr. Edwards served
as Vice President of Administrative and Financial Services for New South
Manufacturing Company, a private label industrial chemical products concern.
5
<PAGE>
OUSIK YU -- Mr. Yu joined the Company in March 1990 and has served as Vice
President -- Bottling Operations since that time until his appointment as Senior
Vice President -- Beverage Division in January 1994. In 1996, Mr. Yu was
appointed as Senior Vice President -- Manufacturing. From 1986 to 1989, Mr. Yu
was employed by Brown-Forman Corporation, most recently as manager of
packaging/process engineering. Prior thereto from 1981 to 1986, he was employed
in plant engineering by The Stroh's Brewery Company.
BOARD OF DIRECTORS COMPENSATION; MEETINGS; COMMITTEES
COMPENSATION
Each non-employee director of the Company receives $20,000 per year and is
reimbursed for out-of-pocket expenses incurred in attending meetings.
MEETINGS
The Board of Directors of the Company held a total of four meetings during
fiscal 1997. Each incumbent director attended at least 75% of the aggregate
number of Board of Directors and committee meetings held during fiscal 1997,
during the period in which each such individual was a director of the Company
and served on such committee.
COMMITTEES
The Board of Directors has an Audit Committee and a Compensation and Stock
Option Committee. The Board does not have a standing Nominating Committee.
AUDIT COMMITTEE
The Audit Committee: (i) recommends to the Board of Directors the
engagement of independent auditors; (ii) reviews the Company's policies and
procedures on maintaining its accounting records and the adequacy of its
internal controls; (iii) reviews management's implementation of recommendations
made by the independent auditors and internal auditors; (iv) considers and
approves the range of audit and non-audit services performed by independent
auditors and fees for such services; and (v) reviews and approves of all
transactions between the Company and any of its officers, directors or other
affiliates. The present members of the Audit Committee are Messrs. Robertson
and Rogers. The Audit Committee held one meeting during fiscal 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee of the Board of Directors
was established to determine the cash and other incentive compensation, if
any, to be paid to the Company's executive officers. The Compensation and
Stock Option Committee is also responsible for the administration of and
awards under the Option Plan. This Committee currently consists of Messrs.
Robertson and Rogers. The Compensation and Stock Option Committee was
established in August 1992, in anticipation of the Company's October 1992
initial public offering. No executive officer of the Company serves as an
officer, director or member of a compensation committee of any other entity,
an executive officer or director of which is a member of the Compensation and
6
<PAGE>
Stock Option Committee of the Company. The Compensation and Stock Option
Committee met once during fiscal 1997.
The policies of the Compensation and Stock Option Committee in making
executive compensation decisions for fiscal 1995, 1996 and 1997 are consistent
with those of the Board of Directors applicable for fiscal 1992, when the
Company was privately held, recognizing that the Company is now publicly-owned.
Each member abstains from any vote regarding any compensation to be paid by the
Company to such member.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for the
fiscal years ended September 30, 1997, 1996 and 1995, of those persons who were,
for the fiscal year ended September 30, 1997 (i) the Chief Executive Officer and
(ii) the other four most highly compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
------------------------------------ ------------
OPTIONS(3)
(NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) OPTIONS) COMPENSATION(4)
--------------------------------------------- ---- ------ -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
A. Kenneth Pincourt, Jr. . . . . . . . . . 1997 $325,903 $140,000 -- $ 48,335(5)
Chairman of the Board and Chief Executive 1996 314,734 110,000 -- 46,256(5)
Officer 1995 309,397 65,000 -- 13,917
Jay S. Maltby . . . . . . . . . . . . . . . 1997 249,923 100,000 -- 15,772(6)
President and Chief Operating Officer 1996 240,000 85,000 50,000 1,970(6)
1995 180,000 50,000 -- 1,970(6)
Thomas A. Valdes . . . . . . . . . . . . . 1997 182,526 80,000 -- --
Executive Vice President 1996 175,000 65,000 37,500 --
1995 37,019 -- -- --
D. Chris Mitchell . . . . . . . . . . . . . 1997 161,261 23,000 -- 13,802
Senior Vice President -- Sales 1996 154,829 23,000 -- 13,884
1995 154,829 23,000 -- 13,917
Ousik Yu . . . . . . . . . . . . . . . . . 1997 153,660 23,000 -- 13,802
Senior Vice President -- Manufacturing 1996 141,107 23,000 -- 13,884
1995 131,703 23,000 -- 13,540
</TABLE>
- ------------------
(1) No other annual compensation, such as perquisites, is shown because no
named executive officers received perquisites with a total value which
exceeded the lesser of $50,000 or 10% of his salary and bonus or any other
"other annual compensation" required to be disclosed as such.
(2) Amounts awarded under the Company's discretionary bonus arrangement.
7
<PAGE>
(3) See table regarding stock options for information regarding the value of
such options.
(4) Represents amounts awarded under the Company's defined contribution pension
plan.
(5) Includes $34,533 and $32,372 in fiscal 1997 and 1996, respectively, which
represent the amount of life insurance premiums on Mr. Pincourt's life
insurance policy paid by the Company during each of such years.
(6) Includes $1,970 in each of fiscal 1997, 1996 and 1995 which represents the
amount of life insurance premiums on Mr. Maltby's life insurance policy
paid by the Company during each of such years.
EMPLOYMENT AGREEMENTS
In January 1998, the Company entered into employment agreements with
each of Mr. Pincourt and Mr. Maltby. Each agreement has an initial term that
ends in January 2003 and shall be renewable thereafter for successive
one-year periods, unless earlier terminated. Under these agreements, Mr.
Pincourt and Mr. Maltby are entitled to a base salary of $325,000 and
$265,000, respectively, subject to increases at the discretion of the Board
of Directors, and both executives are entitled to participate in all Company
compensation arrangements or plans, including the Company's discretionary
bonus arrangement, employee stock option and pension plan.
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to any of the named executive officers
during fiscal 1997.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
No options were exercised in fiscal 1997 by any of the five named
executive officers. The following table sets forth information with respect
to the five named executive officers concerning the unexercised options held
on September 30, 1997.
<TABLE>
<CAPTION>
NO. OF SHARES COVERED BY
OUTSTANDING STOCK VALUE OF IN-THE-MONEY
OPTIONS(1) OUTSTANDING STOCK OPTIONS(2)
(#) ($)
-------------------------- ----------------------------
NOT NOT
NAME EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
--------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
A. Kenneth Pincourt, Jr. . . . . . . . . . . 60,000 -- -- --
Jay S. Maltby . . . . . . . . . . . . . . . . 30,000 20,000 54,375 36,250
Thomas A. Valdes . . . . . . . . . . . . . . 15,000 22,500 27,188 40,781
D. Chris Mitchell . . . . . . . . . . . . . . 32,500 -- 68,906 --
Ousik Yu. . . . . . . . . . . . . . . . . . . 46,000 -- 102,375 --
</TABLE>
- ------------------
(1) These options have exercise prices of $6.00, $8.125 and $12.25, and such
options are exercisable until November 2002, February 2006 and April 2004,
respectively.
(2) Amounts reflect gains on outstanding options based on September 30, 1997
stock prices less the exercise price of the options.
8
<PAGE>
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
COMPENSATION PHILOSOPHY
The philosophy of the Company's Compensation and Stock Option Committee
(the "Committee") for fiscal 1997 was to provide competitive levels of
compensation, integrate management's pay with the achievement of the
Company's annual and long-term performance goals, reward above average
corporate performance, recognize individual initiative and achievement, and
assist the Company in attracting and retaining qualified management.
Management compensation was intended to be set at levels that the Committee
believes is consistent with others in the Company's industry (beverage
alcohol and bottling), with senior management's compensation packages being
weighted toward programs contingent upon the Company's level of performance.
However, because of the limited number of companies that can be compared to
the Company in terms of product mix, net sales, net income, and similar
items, a significant amount of subjectivity was involved in the Committee's
decisions.
BASE SALARIES
Base salaries for new management employees 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 beverage alcohol industry.
Annual salary adjustments are determined by evaluating the competitive
marketplace, the performance of the Company, the performance of the
executive, and any increased responsibilities assumed by the executive. The
Committee believes the base salaries of executive officers are below those of
similar companies in the beverage alcohol industry.
BONUS ARRANGEMENT
To encourage and reward outstanding corporate and individual
performance, the Company has adopted a discretionary bonus arrangement for
its executive officers, based on the Company's operating results and the
achievement of certain defined major business objectives. Bonuses are paid
on an annual basis based on the results during the past fiscal year. The
Company anticipates that it will continue to maintain a discretionary bonus
arrangement for its executive officers during the current year and
thereafter.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Under Mr. Pincourt's employment agreement in effect as of the beginning
of fiscal 1997, Mr. Pincourt was entitled to a base salary of $230,000
subject to increases at the discretion of the Board of Directors. Since
1992, the Committee has granted increases in base compensation to Mr.
Pincourt based primarily upon many factors, including without limitation: (i)
the Company's financial performance, including but not limited to the
Company's gross sales, gross profit and net earnings; (ii) Mr. Pincourt's
level of leadership and responsibility for the management, operation and
growth of the Company, including his continued ability to secure sources of
financing from time to time when necessary for operations and to locate,
negotiate and consummate growth-oriented acquisitions of other companies;
(iii) the necessity, due to Mr. Pincourt's long-standing relationship with
the Company since inception, to continue to retain his employment with the
Company; and (iv) the
9
<PAGE>
Company's compensation philosophy for management generally. Based upon these
considerations, Mr. Pincourt's annual compensation for fiscal 1997 was set at
$325,903. In addition, under his employment agreement in effect as of the
beginning of fiscal 1997, Mr. Pincourt was eligible to participate in the
Company's discretionary bonus arrangement. Based upon the factors described
above, Mr. Pincourt's 1997 bonus was increased to $140,000. The amount and
timing of increases to Mr. Pincourt's annual base salary and bonus were
determined in accordance with the principles discussed in this paragraph and
were based upon a subjective evaluation by the Committee of the leadership
Mr. Pincourt has demonstrated during the past 12 months.
EMPLOYEE STOCK OPTION PLAN
The Board of Directors endorses the position that equity ownership by
management is beneficial in aligning management's and stockholders' interests
in the enhancement of stockholder value. The Company adopted its 1992
Employee Stock Option Plan on August 11, 1992 and amended it on May 8, 1995
and on September 9, 1997 (the "Option Plan"). The Option Plan authorizes the
grant of options to key employees (including officers and directors) and
consultants and independent contractors of the Company or any subsidiary
corporations. Options granted under the Option Plan may be either incentive
or non-statutory stock options. A total of 1,400,000 shares of Common Stock
have been reserved for issuance under the Option Plan.
The Option Plan is administered by the Compensation and Stock Option
Committee. This committee has full authority to determine the eligible
individuals who are to receive option grants, the number of shares to be
covered by each such option, the time or times at which an option is to be
exercisable, the maximum term for which the option is to be outstanding, and
whether or not the option granted is to be an incentive stock option. The
Compensation and Stock Option Committee also has the authority to grant stock
appreciation rights entitling the grantee to surrender an unexercised option
in exchange for a cash distribution from the Company equal to the difference
between the fair market value of the shares represented by such option and
the option price payable for such shares. With respect to specific grants of
options, the Option Plan will be administered by a disinterested
administrator or administrators and no Board member may serve on the
Compensation and Stock Option Committee if he has been granted options or
stock appreciation rights pursuant to the Option Plan during the previous
year. In light of recent amendments to Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, the Company amended the Option Plan on
September 9, 1997 to amend or delete certain requirements regarding
disinterested administration and director participation, among other changes.
PENSION PLAN
The Company has also adopted a defined contribution pension plan (the
"Pension Plan") which went into effect on January 1, 1983, and which is
subject to the provisions of the Employee Retirement Income Security Act of
1974. With certain exceptions, all employees age 21 and over become eligible
to participate in the Pension Plan after one year of service with the
Company. The Company contributes 6.0% of total wages, plus 5.5% of wages in
excess of the Social Security wage base, into a trust fund account for the
benefit of participants.
W. GREGORY ROBERTSON
LEONARD G. ROGERS
10
<PAGE>
PERFORMANCE OF THE COMPANY'S COMMON STOCK
The following performance graph compares the performance of the
Company's Common Stock during the period beginning with its initial public
trading on October 13, 1992, and for each month ending September 30, 1997, to
the Center for Research in Security Prices of the University of Chicago
Graduate School of Business ("CRSP") index for the Nasdaq Stock Market
(United States companies) and a peer group CRSP index consisting of 27 Nasdaq
stocks of beverage companies, including alcoholic beverages, having SIC codes
2080-2089 for the same period. The graph assumes a $100 investment in the
Company's Common Stock and in each of the indexes at the beginning of the
period and a reinvestment of dividends paid on such investments throughout
the period. The index level for all shares was set to $100 at October 13,
1992.
VALUE OF $100 INVESTMENT
ASSUMING REINVESTMENT OF DIVIDENDS AT OCTOBER 13, 1992 AND AT EACH SUBSEQUENT
MONTH DURING FISCAL 1993, 1994, 1995, 1996 AND 1997
TODHUNTER Nasdaq STOCK MARKET Nasdaq STOCKS
INTERNATIONAL, INC. (US COMPANIES) (SIC 2080-2089 US COMPANIES)
BEVERAGES*
09/30/92 101.1 99.9
10/13/92 100.0 100.0 100.0
10/30/92 102.0 105.1 104.2
11/30/92 124.5 113.5 106.2
12/31/92 142.9 117.7 101.1
01/29/93 142.9 121.0 106.0
02/26/93 151.0 116.5 102.5
03/31/93 198.0 119.9 105.5
04/30/93 181.6 114.7 103.6
05/28/93 193.9 121.6 106.1
06/30/93 181.6 122.2 106.9
07/30/93 185.7 122.3 110.6
08/31/93 191.8 128.6 114.4
09/30/93 191.8 132.5 123.0
10/29/93 204.1 135.4 125.3
11/30/93 232.7 131.4 123.0
12/31/93 228.6 135.1 126.7
01/31/94 244.9 139.2 121.1
02/28/94 249.0 137.9 126.9
03/31/94 220.4 129.4 120.6
04/29/94 238.8 127.7 119.6
05/31/94 249.0 128.0 120.5
06/30/94 234.7 123.3 120.7
07/29/94 253.1 125.9 126.6
08/31/94 265.3 133.9 130.4
09/30/94 257.1 133.5 129.0
10/31/94 249.0 136.2 125.0
11/30/94 249.0 131.7 121.8
12/30/94 253.1 132.0 125.4
01/31/95 236.7 132.8 122.5
02/28/95 202.0 139.8 122.9
03/31/95 224.5 143.9 128.5
04/28/95 193.9 148.5 130.3
05/31/95 161.2 152.3 133.0
06/30/95 151.0 164.6 133.2
07/31/95 155.1 176.7 135.5
08/31/95 142.9 180.3 141.2
09/29/95 118.4 184.5 145.6
10/31/95 114.3 183.4 141.8
11/30/95 122.4 187.7 133.5
12/29/95 126.5 186.7 129.7
01/31/96 126.5 187.6 137.7
02/29/96 133.7 194.8 128.3
03/29/96 130.6 195.4 127.2
04/30/96 144.9 211.6 121.5
05/31/96 159.2 221.3 120.7
06/28/96 142.9 211.4 118.1
07/31/96 155.1 192.5 108.7
08/30/96 150.0 203.3 111.8
09/30/96 153.1 218.9 113.7
10/31/96 138.8 216.5 108.2
11/29/96 140.8 229.8 116.5
12/31/96 140.8 229.6 116.6
01/31/97 138.8 246.0 115.0
02/28/97 116.3 232.4 121.1
03/31/97 115.3 217.2 113.5
04/30/97 118.4 224.0 112.5
05/30/97 118.4 249.4 124.4
06/30/97 118.4 257.0 137.7
07/31/97 142.9 284.2 151.5
08/29/97 146.9 283.7 160.4
09/30/97 162.2 300.5 173.0
- ------------------------------------------------------------------------------
Legend
<TABLE>
<CAPTION>
INDEX DESCRIPTION 09/30/92 09/30/93 09/30/94 09/29/95 09/30/96 09/30/97
- ----------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
TODHUNTER INTERNATIONAL, INC. 191.8 257.1 118.4 153.1 162.2
Nasdaq Stock Market (US Companies) 101.1 132.5 133.5 184.5 218.9 300.5
Nasdaq Stocks (SIC 2080-2089 US 99.9 123.0 129.0 145.6 113.7 173.0
Companies) Beverages*
</TABLE>
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding day is used.
D. The index level for all series was set to $100.0 on 10/13/92.
- ------------------------------------------------------------------------------
* The beverage company index is based on information for a self-constructed
peer group of Nasdaq quoted beverage companies prepared for the Company by
CRSP, which includes the following companies:
A&W Brands, Inc., Canandaigua Brands, Inc., The Chalone Wine Group, Ltd.,
Coca-Cola Bottling Co. Consolidated, Adolph Coors Company, Frederick Brewing
Co., Genesee Corporation, Hart Brewing, Inc., Independence Brewing Company,
The Lion Brewery, Inc., Midwest Grain Products, Inc., Minnesota Brewing
Company, National Beverage Corp., New Day Beverage, Inc., Nor'Wester Brewing
Company, Inc., Pavichevich Brewing Co., Penwest, Ltd., Pete's Brewing
Company, Pyramid Breweries, Inc., R.H. Phillips, Inc., Redhook Ale Brewery,
Incorporated, The Robert Mondavi Corporation, Stearns and Lehman Inc., Tellus
Industries, Inc., Todhunter International, Inc., Vermont Pure Holdings, Ltd.
and Williamette Valley Vineyards, Inc.
The Company's performance graph for fiscal 1996 did not include Independence
Brewing Company and Sterns and Lehman, Inc., which are now included in the
peer group for fiscal 1997.
11
<PAGE>
STOCKHOLDER PROPOSALS
Stockholders who intend to submit proposals to the Company's
stockholders at the 1999 Annual Meeting of Stockholders must submit such
proposals to the Company no later than September 30, 1998, in order to be
considered for inclusion in the Proxy Statement and Proxy to be distributed
by the Board of Directors in connection with that meeting. Stockholder
proposals should be submitted to Troy Edwards, Secretary, Todhunter
International, Inc., 222 Lakeview Avenue, Suite 1500, West Palm Beach,
Florida 33401.
OTHER MATTERS
The Board has no knowledge of any other matters which may come before
the meeting and does not intend to present any other matters. However, if
any other matters shall properly come before the meeting or any adjournment
thereof, the persons soliciting the proxies will have the discretion to vote
on such matters as they see fit.
If you do not plan to attend the meeting, in order that your shares may
be represented and in order to assure the required quorum, please sign, date
and return your proxy promptly. In the event you are able to attend the
meeting, at your request, the Company will cancel any proxy executed by you.
The Board of Directors has selected McGladrey & Pullen, LLP, the
Company's independent accountants for fiscal 1997, to serve as the Company's
independent accountants for fiscal 1998. Representatives of McGladrey &
Pullen, LLP may be present at the Annual Meeting to respond to appropriate
questions and to make such statements as they may desire.
FINANCIAL INFORMATION
Detailed financial information of the Company and its subsidiaries for
fiscal 1997 is included in the Company's 1997 Annual Report to Stockholders,
a copy of which is enclosed herewith.
REPORT TO STOCKHOLDERS
THE COMPANY WILL FURNISH A COPY OF THE COMPANY'S 1997 ANNUAL REPORT ON
FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES THERETO, WITHOUT CHARGE, TO ANY
STOCKHOLDER WHO SUBMITS A WRITTEN REQUEST TO THE COMPANY FOR SUCH ANNUAL
REPORT. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO TROY EDWARDS, SECRETARY
OF THE COMPANY, AT THE ADDRESS OF THE COMPANY STATED HEREIN.
By Order of the Board of Directors
/s/ TROY EDWARDS
TROY EDWARDS
SECRETARY
January 26, 1998
12
<PAGE>
PROXY
TODHUNTER INTERNATIONAL, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 10, 1998
The undersigned, a stockholder of Todhunter International, Inc., a
Delaware corporation (the "Company"), hereby appoints A. Kenneth Pincourt,
Jr. and Jay S. Maltby, or either of them, attorneys and proxies of the
undersigned, with full power of substitution, to vote and act for the
undersigned at the Annual Meeting of Stockholders of the Company to be held
at the offices of Gunster, Yoakley, Valdes-Fauli & Stewart, P.A., at 777
South Flagler Drive, Suite 500 East, West Palm Beach, Florida 33401 on
Tuesday, March 10, 1998 at 11:00 a.m. local time and at any adjournments
thereof, in respect of all shares of the Common Stock of the Company
registered in the name of the undersigned as fully as the undersigned could
vote and act if personally present, on the following matters:
This proxy, when properly executed, will be voted as directed herein by
the undersigned. However, if no direction is given, this proxy will be voted
FOR Proposal 1 and, with respect to any other matter properly brought before
the meeting or any adjournments thereof, in accordance with the
determination of the proxies named herein.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TODHUNTER INTERNATIONAL, INC.
<PAGE>
<TABLE>
<C> <C> <S> <C> <C> <C>
(1) ELECTION OF DIRECTORS, NOMINEES: -- To elect Jay S. Maltby and D.
Chris Mitchell as
Class III Directors to hold office for a term of three (3) years and (2) IN THEIR DISCRETION, on any other matters
until their successors have been elected and qualified. that may properly come before the meeting or any
adjournments thereof.
VOTE FOR VOTE WITHHELD To withhold authority to vote for DATE: 1998
all nominees for all any individual nominee, print that (L.S.)
listed above nominees nominee's name on the line below. (L.S.)
except as marked listed above ---------------------------------- Signature(s)
to the contrary. as a group. Please date this proxy and sign your name exactly
/ / / / as your name appears herein. If the stock is held
jointly, all owners must sign. When signing as
attorney, executor, administrator, trustee,
guardian or in another representative capacity,
please give full title.
</TABLE>
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
