<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 16, 1999
___________
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 16, 1999, at 11:00 a.m., Eastern Standard Time, for the following
purposes:
1. To elect two (2) Class I 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 20, 1999
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 25, 1999
<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 16, 1999
___________
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 16, 1999,
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 25, 1999.
Only stockholders of record at the close of business on January 20,
1999, 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 20, 1999, 4,893,714 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 20, 1999, 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 20, 1999 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. . . . . . . . . . . . . . . 2,139,578(2) 43.2%
Jay S. Maltby . . . . . . . . . . . . . . . . . . . . 41,500(3) *
Thomas A. Valdes . . . . . . . . . . . . . . . . . . 23,500(4) *
D. Chris Mitchell . . . . . . . . . . . . . . . . . . 21,900(5) *
Ousik Yu . . . . . . . . . . . . . . . . . . . . . . 26,000(6) *
W. Gregory Robertson . . . . . . . . . . . . . . . . 4,900 *
Leonard G. Rogers . . . . . . . . . . . . . . . . . . 8,500 *
Edward F. McDonnell . . . . . . . . . . . . . . . . . 21,000(7) *
All executive officers and directors as a group
(9 persons) . . . . . . . . . . . . . . . . . . . . 2,302,778(8) 45.2%
</TABLE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
OTHER BENEFICIAL OWNERS
- -----------------------
<S> <C> <C>
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, WI 53202 . . . . . . . . . . . . . . . . 490,000(9) 10.0%
The Killen Group, Inc.
1199 Lancaster Avenue
Berwyn, PA 19312 . . . . . . . . . . . . . . . . . 319,404(10) 6.5%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 . . . . . . . . . . . . . . 364,100(11) 7.4%
Herman Merinoff
10 Westcliff Drive
Lake Success, NY 11020 . . . . . . . . . . . . . . 268,614(12) 5.5%
</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
<PAGE>
(2) Includes (i) 1,899,885 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 20, 1999 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.
(3) Includes an aggregate of 40,000 shares that may be acquired within 60 days
of January 20, 1999 upon the exercise of outstanding options under the
Option Plan.
(4) Includes an aggregate of 22,500 shares that may be acquired within 60 days
of January 20, 1999 upon the exercise of outstanding options under the
Option Plan.
(5) Includes an aggregate of 17,500 shares that may be acquired within 60 days
of January 20, 1999 upon the exercise of outstanding options under the
Option Plan.
(6) Includes an aggregate of 26,000 shares that may be acquired within 60 days
of January 20, 1999 upon the exercise of outstanding options under the
Option Plan.
(7) Includes an aggregate of 20,000 shares that may be acquired within 60 days
of January 20, 1999 upon the exercise of outstanding stock options.
(8) Includes (i) an aggregate of 186,000 shares that may be acquired within
60 days of January 20, 1999 by the persons listed in the table set forth
above upon exercise of outstanding options; (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 13,000 shares that may be acquired within 60 days
of January 20, 1999 by a person not listed in the table set forth above
upon exercise of outstanding options under the Option Plan.
(9) Reflects ownership as reported on Schedule 13G as of February 6, 1998, as
filed with the Securities and Exchange Commission by Heartland
Advisors, Inc. Heartland Advisors, Inc. has sole voting and dispositive
power with respect to all such shares of the Company's Common Stock.
(10) Reflects ownership as reported on Schedule 13G as of March 9, 1998, as
filed with the Securities and Exchange Commission by The Killen Group, Inc.
The Killen Group, Inc. has sole voting power with respect to 158,410 shares
and dispositive power with respect to 319,404 shares of the Company's
Common Stock.
(11) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 364,100 shares of the
Company's Common Stock as of September 30, 1998, all of which shares are
held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in a series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and the DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares. Dimensional
has sole voting power with respect to 236,200 shares and dispositive power
with respect to 364,100 shares.
(12) Reflects ownership as reported on Schedule 13D as of October 30, 1998, as
filed with the Securities and Exchange Commission by Herman Merinoff and
Efficiency Enterprises, Inc. Herman Merinoff, Efficiency Enterprises, Inc.
and Merinoff Family Co., LLC (collectively the "Group") filed a
Schedule 13D as members of a group pursuant to Rule 13d-5(b)(1) of the
Securities Exchange Act of 1934, as amended. The Group has sole voting and
dispositive power with respect to all such shares of the Company's Common
Stock.
3
<PAGE>
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 1998 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 1998 has been filed in a timely manner.
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.
<TABLE>
<CAPTION>
Name Age Position or Office Held
------------------------ --- --------------------------------------
<S> <C> <C>
A. Kenneth Pincourt, Jr. 67 Chairman of the Board and Chief
Executive Officer
Jay S. Maltby 48 President, Chief Operating Officer and
Director
Thomas A. Valdes 55 Executive Vice President, Assistant
Secretary and Director
D. Chris Mitchell 49 Senior Vice President -- Sales and
Director
Troy Edwards 60 Secretary, Treasurer, Controller and
Chief Financial Officer
Ousik Yu 46 Senior Vice President -- Manufacturing
W. Gregory Robertson 55 Director
Leonard G. Rogers 69 Director
Edward F. McDonnell 63 Director
</TABLE>
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 seven. Messrs. Valdes and Robertson currently serve
as Class I directors and have been nominated for election at the Annual
Meeting. If elected, Messrs. Valdes and Robertson will serve as Class I
directors until the 2002 Annual
4
<PAGE>
Meeting. Messrs. Pincourt and Rogers currently serve as Class II directors
until the 2000 Annual Meeting and Messrs. Maltby, Mitchell and McDonnell
currently serve as Class III directors until the 2001 Annual Meeting.
Messrs. Valdes and Robertson 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. Valdes and Robertson must be elected by a plurality of
the votes cast at the Annual Meeting.
NOMINEES AS CLASS I DIRECTORS
The biographies set forth below are submitted for consideration
regarding the nomination of each of Messrs. Valdes and Robertson for
election as a director.
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 and has been a director of the Company since 1996.
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
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.
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.
CONTINUING CLASS III DIRECTORS
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.
EDWARD F. MCDONNELL -- Mr. McDonnell was appointed to the Board as a
Class III director on May 6, 1998. Mr. McDonnell is Chairman and Chief
Executive Officer of The Premier Group, a company he founded in 1995. The
Premier Group owns beverage alcohol distributing companies in the Caribbean,
Philippines and
5
<PAGE>
South Pacific. Prior to founding The Premier Group, Mr. McDonnell served in
various executive capacities with The Seagram Company Ltd. since 1981, most
recently as a director and executive vice president of The Seagram Company Ltd.
and president of The Seagram Spirits and Wine Group.
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.
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.
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 1998. Each incumbent director attended at least 75% of the
aggregate number of Board of Directors and committee meetings held during
fiscal 1998, 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.
6
<PAGE>
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 two meetings during fiscal 1998.
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
Stock Option Committee of the Company. The Compensation and Stock Option
Committee met twice during fiscal 1998.
The policies of the Compensation and Stock Option Committee in making
executive compensation decisions for fiscal 1996, 1997 and 1998 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, 1998, 1997 and 1996, of those persons who
were, for the fiscal year ended September 30, 1998 (i) the Chief Executive
Officer and (ii) the other four most highly compensated executive officers of
the Company.
7
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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. . . . . . . . . . . . 1998 $341,140 $119,000 -- $130,560(5)(7)
Chairman of the Board and Chief Executive 1997 325,903 140,000 -- 48,335(5)
Officer 1996 314,734 110,000 -- 46,256(5)
Jay S. Maltby . . . . . . . . . . . . . . . . . 1998 263,206 85,000 -- 34,559(6)(7)
President and Chief Operating Officer 1997 249,923 100,000 -- 15,772(6)
1996 240,000 85,000 50,000 1,970(6)
Thomas A. Valdes . . . . . . . . . . . . . . . 1998 191,772 68,000 -- 53,802(7)
Executive Vice President 1997 182,526 80,000 --
1996 175,000 65,000 37,500
D. Chris Mitchell . . . . . . . . . . . . . . . 1998 169,250 19,550 -- 27,415(7)
Senior Vice President -- Sales 1997 161,261 23,000 -- 13,802
1996 154,829 23,000 -- 13,884
Ousik Yu . . . . . . . . . . . . . . . . . . . 1998 162,918 19,550 -- 25,533(7)
Senior Vice President -- Manufacturing 1997 153,660 23,000 -- 13,802
1996 141,107 23,000 -- 13,884
</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.
(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 $32,837, $34,533 and $32,372 in fiscal 1998, 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 $657 in fiscal 1998 and $1,970 in each of fiscal 1997 and 1996
which represents the amount of life insurance premiums on Mr. Maltby's life
insurance policy paid by the Company during each of such years.
(7) Includes payments under the Company's Deferred Compensation Plan (as
described on page 11) as follows: Mr. Pincourt - $83,921; Mr. Maltby -
$20,100; Mr. Valdes - $40,000; Mr. Mitchell - $13,613; and Mr. Yu -
$11,731.
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
$265,000, respectively, subject to increases at the discretion of the Board
of Directors, and both executives are entitled to participate in all Company
compensation arrangements or plans, including the Company's discretionary
bonus arrangement, employee stock option and pension plan.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to any of the named executive officers
during fiscal 1998.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
No options were exercised in fiscal 1998 by any of the five named
executive officers. The following table sets forth information with respect
to the five named executive officers concerning the unexercised options held
on September 30, 1998.
<TABLE>
<CAPTION>
NO. OF SHARES COVERED BY VALUE OF IN-THE-MONEY
OUTSTANDING STOCK OUTSTANDING STOCK
OPTIONS(1) OPTIONS(2)
(#) ($)
-------------------------- --------------------------
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 -- --
Thomas A. Valdes . . . . . . . 22,500 15,000 -- --
D. Chris Mitchell (3) . . . . . 32,500 -- 16,406 --
Ousik Yu (3) . . . . . . . . . 46,000 -- 24,375 --
</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, 1998
stock prices less the exercise price of the options.
(3) During the first quarter of fiscal 1999, the Company offered certain
optionees, including Mr. Mitchell and Mr. Yu, who held options with an
exercise price of $12.25 per share, the right to exchange their options for
new options exercisable at $8.125. In connection with this transaction,
options to purchase 15,000 and 20,000 shares for Mr. Mitchell and Mr. Yu,
respectively, were exchanged on December 14, 1998. The new options vest in
equal annual installments over a five-year period through December 13,
2003, and are exercisable through December 2008. As a result of the
foregoing exchanges, the number of exercisable stock options held by
Mr. Mitchell and Mr. Yu as of January 20, 1999 were 17,500 and 26,000,
respectively.
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
COMPENSATION PHILOSOPHY
The philosophy of the Company's Compensation and Stock Option Committee
(the "Committee") for fiscal 1998 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
9
<PAGE>
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 1998, Mr. Pincourt was entitled to a base salary of $325,000
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 Company's compensation philosophy for management
generally. Based upon these considerations, Mr. Pincourt's annual base
salary for fiscal 1998 was set at $341,140. In addition, under his
employment agreement in effect as of the beginning of fiscal 1998,
Mr. Pincourt was eligible to participate in the Company's discretionary bonus
arrangement. Based upon the factors described above, Mr. Pincourt's 1998
bonus was $119,000. The amount of 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
10
<PAGE>
(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.
DEFERRED COMPENSATION PLAN
In 1998, the Compensation Committee approved another component of the
Company's executive compensation program, the Executive Nonqualified Deferred
Compensation Plan (the "Deferred Plan"). Under the Deferred Plan, the
Company has purchased life insurance policies on the lives of each of the
executive officers named in the Summary Compensation Table to provide
benefits in the event of the executive's death, disability or retirement. In
the event of cessation of employment with the Company for any reason other
than death, disability or retirement, the executive will not be entitled to
benefits under the Deferred Plan. In addition, the executive will forfeit
all rights to benefits under the Deferred Plan if the executive engages in
competition with the Company during the ten years following the executive's
cessation of employment with the Company. The purpose of the Deferred Plan
is to encourage the executives to remain in the service of the Company,
because benefits of the Deferred Plan increase over time.
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, as amended. 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
11
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
Common Stock for each month in the five-year period ending September 30, 1998,
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), a peer group index consisting of 28 NASDAQ stocks of beverage
companies and the AMEX Stock Market (United States companies). The graph
includes the index for the AMEX Stock Market because the Company's Common Stock
began trading on the American Stock Exchange on October 8, 1997. The graph
assumes a $100 investment on September 30, 1993, in the Company's Common Stock
and in each of the indices, and a reinvestment of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TODHUNTER AMEX STOCK MARKET
INTERNATIONAL, INC. (US COMPANIES)
<S> <C> <C>
9/30/93 100.00 100.00
10/29/93 106.38 102.25
11/30/93 121.28 99.20
12/31/93 119.15 101.97
1/31/94 127.66 105.06
2/28/94 129.79 104.08
3/31/94 114.89 97.68
4/29/94 124.47 96.41
5/31/94 129.79 96.65
6/30/94 122.34 93.11
7/29/94 131.92 95.03
8/31/94 138.30 101.08
9/30/94 134.04 100.83
10/31/94 129.79 102.81
11/30/94 129.79 99.40
12/30/94 131.92 99.67
1/31/95 123.40 100.24
2/28/95 105.32 105.55
3/31/95 117.02 108.67
4/28/95 101.06 112.10
5/31/95 84.04 114.99
6/30/95 78.72 124.31
7/31/95 80.85 133.45
8/31/95 74.47 136.15
9/29/95 61.70 139.28
10/31/95 59.57 138.48
11/30/95 63.83 141.73
12/29/95 65.96 140.98
1/31/96 65.96 141.67
2/29/96 69.68 147.06
3/29/96 68.09 147.54
4/30/96 75.53 159.78
5/31/96 82.98 167.12
6/28/96 74.47 125.89
7/31/96 80.85 116.09
8/30/96 78.19 119.49
9/30/96 79.79 122.76
10/31/96 72.34 120.31
11/29/96 73.40 125.28
12/31/96 73.40 123.38
1/31/97 72.34 126.26
2/28/97 60.64 128.57
3/31/97 60.11 122.27
4/30/97 61.70 118.67
5/30/97 61.70 130.60
6/30/97 61.70 135.12
7/31/97 74.47 140.85
8/29/97 76.60 142.44
9/30/97 84.58 153.93
10/31/97 86.17 148.57
11/28/97 86.97 148.43
12/31/97 88.30 154.29
1/30/98 84.04 151.58
2/27/98 79.79 160.94
3/31/98 71.81 169.39
4/30/98 74.73 174.57
5/29/98 73.94 168.63
6/30/98 78.19 178.87
7/31/98 80.85 174.61
8/31/98 70.21 133.39
9/30/98 59.04 132.61
Legend
Symbol CRSP Total Returns Index for:
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 trading day is used.
D. The index level for all series was set to $100.0 on 09/30/93.
<CAPTION>
NASDAQ STOCKS
(SIC 2080-2089 US COMPANIES) NASDAQ STOCK
BEVERAGES MARKET (US COMPANIES)
<S> <C> <C>
9/30/93 100.00 100.00
10/29/93 101.88 102.91
11/30/93 100.05 98.54
12/31/93 103.08 101.22
1/31/94 98.52 102.52
2/28/94 103.24 100.31
3/31/94 98.15 94.08
4/29/94 97.32 93.11
5/31/94 98.04 93.02
6/30/94 98.18 90.23
7/29/94 102.97 93.44
8/31/94 106.09 96.28
9/30/94 104.98 97.90
10/31/94 101.74 97.17
11/30/94 99.08 92.95
12/30/94 102.05 94.39
1/31/95 99.59 96.93
2/28/95 99.89 100.08
3/31/95 104.50 101.47
4/28/95 105.94 103.93
5/31/95 108.16 106.86
6/30/95 108.26 109.39
7/31/95 110.13 115.09
8/31/95 114.81 118.07
9/29/95 118.37 120.46
10/31/95 115.27 115.84
11/30/95 108.51 119.25
12/29/95 105.47 121.45
1/31/96 111.92 121.56
2/29/96 104.33 123.56
3/29/96 103.38 124.70
4/30/96 98.78 129.03
5/31/96 98.14 133.31
6/28/96 96.00 159.59
7/31/96 88.33 145.35
8/30/96 90.88 153.50
9/30/96 92.40 165.24
10/31/96 87.99 163.41
11/29/96 94.70 173.51
12/31/96 94.78 173.36
1/31/97 93.49 185.68
2/28/97 98.47 175.41
3/31/97 92.25 163.96
4/30/97 91.46 169.08
5/30/97 101.14 188.24
6/30/97 111.92 194.01
7/31/97 123.16 214.49
8/29/97 130.43 214.16
9/30/97 140.66 226.81
10/31/97 137.75 215.07
11/28/97 137.63 216.15
12/31/97 142.04 212.69
1/30/98 133.86 219.37
2/27/98 137.77 239.96
3/31/98 149.24 248.81
4/30/98 144.59 253.03
5/29/98 139.61 239.14
6/30/98 137.21 256.00
7/31/98 135.43 253.23
8/31/98 126.39 203.73
9/30/98 134.59 231.84
Legend
Symbol
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 trading day is used.
D. The index level for all series was set to $100.0 on 09/30/93.
</TABLE>
* 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,
Beringer Wine Estates Holdings, Inc., Frederick Brewing Co., Genesee
Corporation, Golden State Vintners, Inc., 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., Penwest,
Ltd., Pete's Brewing Company, Pyramid Breweries, Inc., R.H. Phillips,
Inc., Redbook Ale Brewery, Incorporated, The Robert Mondavi
Corporation, Stearns and Lehman, Inc., Tellus Industries, Inc.,
Todhunter International, Inc., Vermont Pure Holdings, Ltd. and
Willamette Valley Vineyards, Inc.
The Company's performance graph for fiscal 1997 did not include Beringer Wine
Estates Holdings, Inc. and Golden State Vintners, Inc. which are now included
in the peer group for fiscal 1998. The Company's performance graph in fiscal
1997 included Pavichevich Brewing Co. which is not included in fiscal 1998.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 6, 1998, Mr. McDonnell was appointed to the Board as a Class III
director. Prior to that date, during fiscal 1997, the Company and Mr.
McDonnell formed a wholesale liquor distributor in St. Thomas, United States
Virgin Islands, with each of the Company and Mr. McDonnell taking a 45%
interest in the new company, Premier Wines & Spirits, Ltd. ("Premier"). The
Company's subsidiary in St. Croix, United States Virgin Islands, had sales to
Premier during fiscal 1998 of approximately $1,490,000, of which $190,223 is
included in trade receivables as of September 30, 1998. Also, the Company
and Mr. McDonnell advanced $770,000 and $270,000, respectively, to Premier in
fiscal 1998; the amount of the Company's advance is included in notes
receivable as of September 30, 1998.
During fiscal 1998, the Company and Mr. McDonnell each acquired a 25%
interest in Antillean Liquors N.V. ("Antillean") a wholesale liquor
distributor in St. Maarten, Netherlands Antilles. The Company and Mr.
McDonnell each advanced $100,000 to Antillean in fiscal 1998; the amount of
the Company's advance is included in notes receivable as of September 30,
1998.
On May 6, 1998, the Company granted non-qualified stock options to
purchase 60,000 shares of the Company's Common Stock to Mr. McDonnell. The
Stock Options have an exercise price of $9.0625 per share and vest in
one-third equal installments, with the first installment to vest on the date
of the 1999 Annual Meeting of Stockholders, and subsequent installments to
vest on the date of the 2000 and 2001 Annual Meetings of Stockholders,
respectively, provided that Mr. McDonnell remains a director on and as of
each such date.
STOCKHOLDER PROPOSALS
Stockholders who intend to submit proposals to the Company's
stockholders at the 2000 Annual Meeting of Stockholders must submit such
proposals to the Company no later than September 30, 1999, 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 designated as proxy holders in the accompanying proxy
card 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 1998, to serve as the Company's
independent accountants for fiscal 1999. 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.
13
<PAGE>
FINANCIAL INFORMATION
Detailed financial information of the Company and its subsidiaries for
fiscal 1998 is included in the Company's 1998 Annual Report to Stockholders
which contains a copy of the Company's 1998 Form 10-K. A copy of the
Company's 1998 Annual Report to Stockholders is enclosed herewith.
REPORT TO STOCKHOLDERS
THE COMPANY WILL ALSO FURNISH A COPY OF THE COMPANY'S 1998 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 25, 1999
14
<PAGE>
PROXY
TODHUNTER INTERNATIONAL, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 16, 1999
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 16, 1999 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 Thomas A. Valdes and W.
Gregory Robertson
as Class I 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: 1999
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.
