-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G00Lx+YFCJG/VDaCoxJRckdnhviFgcxSI/MnLVMzbvBvpHvqO9IhibuF9hVwKMYF +5O9k4cBF5UijQLYSTiarQ== 0000926236-00-000045.txt : 20000421 0000926236-00-000045.hdr.sgml : 20000421 ACCESSION NUMBER: 0000926236-00-000045 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000525 FILED AS OF DATE: 20000420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEVENS INTERNATIONAL INC CENTRAL INDEX KEY: 0000817644 STANDARD INDUSTRIAL CLASSIFICATION: PRINTING TRADES MACHINERY & EQUIPMENT [3555] IRS NUMBER: 752159407 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-09603 FILM NUMBER: 605527 BUSINESS ADDRESS: STREET 1: 5700 E. BELKNAP ST. CITY: FORT WORTH STATE: TX ZIP: 76117 BUSINESS PHONE: 8178313911 MAIL ADDRESS: STREET 1: 5700 E. BELKNAP ST. CITY: FORT WORTH STATE: TX ZIP: 76117 FORMER COMPANY: FORMER CONFORMED NAME: STEVENS GRAPHICS CORP DATE OF NAME CHANGE: 19920703 DEF 14A 1 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 (Amendment No. ) Filed by 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) or Rule 14a-12 (Name of Registrant as Specified In Its Charter) STEVENS INTERNATIONAL, INC. ___________________________________________________________________________ (Name of Person(s) Filing Proxy Statement, If Other Than the 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)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ___________________________________________________________________________ (2) Aggregate numer of securities to which transactions 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: ___________________________________________________________________________ STEVENS INTERNATIONAL, INC. 5700 E. Belknap Fort Worth, Texas 76117 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held May 25, 2000 NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Stevens International, Inc. (the "Company") will be held at The Fort Worth Club, 306 West 7th Street, 12th Floor, Fort Worth, Texas 76102, on Thursday, May 25, 2000, at 10:00 a.m., local time, for the following purposes: (1) to elect six members of the Board of Directors (constituting the entire Board of Directors) to serve until the next Annual Meeting of Stockholders and until their respective successors shall be elected and qualified. (2) to transact such other business as may properly come before the meeting or any adjournment thereof. The close of business on April 10, 2000, has been fixed as the record date for determining holders of Series A Common Stock and Series B Common Stock entitled to notice of and to vote at the Annual Meeting of Stockholders or any adjournments thereof. For a period of at least 10 days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be open to examination of any stockholder during ordinary business hours at the offices of the Company, 5700 E. Belknap, Fort Worth, Texas 76117. Information concerning the matters to be acted upon at the Annual Meeting is set forth in the accompanying Proxy Statement. HOLDERS OF SERIES A COMMON STOCK AND SERIES B COMMON STOCK WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE APPROPRIATE PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. By Order of the Board of Directors /s/ Paul I. Stevens ------------------------------------------------- Paul I. Stevens Chairman of the Board and Chief Executive Officer Fort Worth, Texas April 21, 2000 STEVENS INTERNATIONAL, INC. 5700 E. Belknap Fort Worth, Texas 76117 PROXY STATEMENT For ANNUAL MEETING OF STOCKHOLDERS To Be Held May 25, 2000 This Proxy Statement is being first mailed on or about April 21, 2000 to stockholders of Stevens International, Inc. (the "Company") by the Board of Directors to solicit proxies (the "Proxies") for use at the Annual Meeting of Stockholders (the "Meeting") to be held at The Fort Worth Club, 306 West 7th Street, 12th Floor, Fort Worth, Texas 76102, at 10:00 a.m. local time, on Thursday, May 25, 2000, or at such other time and place to which the Meeting may be adjourned. The purpose of the Meeting is to consider and vote upon (i) the election of six directors (constituting the entire Board of Directors) to serve until the next Annual Meeting of Stockholders and until their respective successors shall be elected or qualified; and (ii) such other matters as may properly come before the Meeting or any adjournment thereof. All shares represented by valid Proxies, unless the stockholder otherwise specifies, will be voted (i) FOR the election of each person named herein under "Proposal No. 1, Election of Directors" as a nominee for election as a director of the Company for the term described therein, and (ii) at the discretion of the Proxy holders with regard to any other matter that may properly come before the Meeting or any adjournment thereof. Where a stockholder has appropriately specified how a Proxy is to be voted, it will be voted accordingly. The Proxy may be revoked at any time by providing written notice of such revocation to American Stock Transfer & Trust Company, 40 Wall Street, New York, NY 10005, Attention: Isaac Kagan. If notice of revocation is not received by the Meeting date, a stockholder may nevertheless revoke a Proxy if he attends the Meeting and desires to vote in person. RECORD DATE AND VOTING SECURITIES The record date for determining the stockholders entitled to vote at the Meeting is the close of business on April 10, 2000 (the "Record Date"), at which time the Company had issued and outstanding 7,466,347 shares of Series A Common Stock, par value $0.10 per share ("Series A Stock"), and 2,035,786 shares of Series B Common Stock, par value $0.10 per share ("Series B Stock"). Series A Stock and Series B Stock (collectively, "Common Stock") are the only outstanding securities of the Company entitled to vote at the Meeting. At the Meeting, the holders of Series A Stock, voting separately as a class, are entitled to elect two directors, and the holders of Series B Stock, voting separately as a class, are entitled to elect the remaining directors. As to any other matters that may properly come before the Meeting, the holders of Series A Stock and Series B Stock vote together as a class, with each holder of Series A Stock having one-tenth of one vote for each share of Series A Stock held by him or her, and each holder of Series B Stock having one vote for each share of Series B Stock held by him or her. QUORUM The presence at the Meeting, in person or by proxy, of the holders of a majority of the issued and outstanding shares of each Series of Common Stock is necessary to constitute a quorum to elect the directors of that Series, and the presence of the holders of a majority of the issued and outstanding shares of Common Stock as a single class is necessary to constitute a quorum to transact all other business to come before the Meeting. The election inspectors will treat shares referred to as "broker non- votes" (i.e. shares held by brokers or nominees as to which they have no discretionary power to vote on a particular matter and have received no instructions from the beneficial owners or persons entitled to vote thereon), if any, as shares that are present and entitled to vote for purposes of determining the presence of a quorum. However, for purposes of determining the outcome of any matter in which brokers or nominees have no discretionary power to vote, broker non-votes will be treated as not present and not entitled to vote with respect to that matter (even though those shares are considered entitled to vote for quorum purposes and may be entitled to vote on other matters). Brokers or nominees have discretionary power to vote on Proposal No. 1. PROPOSAL NO. I ELECTION OF DIRECTORS Nominees for Directors Six directors are to be elected, each director to hold office for a term of one year or until his or her successor shall have been elected and qualified. Under the terms of the Company's Certificate of Incorporation, the holders of Series A Stock, voting separately as a class, are entitled to elect 25% of the Board of Directors (or the next higher whole number if such percentage is not a whole number), and the holders of Series B Stock, voting separately as a class, are entitled to elect the remaining directors. Accordingly, of the six directors to be elected, two will be Series A Directors to be elected by holders of Series A Stock, and four will be Series B Directors to be elected by holders of Series B Stock. Approval of the proposal to elect the nominees to serve as directors of the applicable Series requires the affirmative vote of the holders of a majority of the shares of that Series present, in person or by proxy, at the Meeting. Votes may be cast in favor or withheld with respect to such proposal. Votes that are withheld will be counted toward a quorum, but will be excluded entirely from the tabulation for such proposal and, therefore, will not affect the outcome of the vote on such proposal. It is intended that the names of the persons indicated in the following table will be placed in nomination and that the persons named in the Proxy will vote for their election. Each of the nominees has indicated his or her willingness to serve as a member of the Board of Directors if elected; however, in case any nominee shall become unavailable for election to the Board of Directors for any reason not presently known or contemplated, the Proxy holders will have discretionary authority in that instance to vote the Proxy for a substitute. The nominees are as follows: Director Name Age Since Positions with the Company - ---------------------- --- -------- --------------------------------- Series A Directors: Michel A. Destresse 73 1996 Director Edgar H. Schollmaier 67 1995 Director (1)(2)(3) Series B Directors: Paul I. Stevens (3) 85 1986 Chairman of the Board, Chief Executive Officer Richard I. Stevens 61 1986 President, Chief Operating Officer and Director Constance I. Stevens 56 1987 Vice President, Secretary and Director James D. Cavanaugh (1) 61 1993 Director ____________________ (1) Member of the Audit Committee. (2) Member of the Stock Option and Compensation Committee. (3) Member of the Executive Committee.
James D. Cavanaugh has served as a director of the Company since May 1993. Mr. Cavanaugh served as Executive Vice President of Rockwell Graphic Systems from May 1983 until June 1985 and served as its President and Chief Executive Officer from June 1985 until his retirement in March 1993. Edgar H. Schollmaier has served as a director of the Company since March 1995. Mr. Schollmaier, Chairman of Alcon Laboratories, Inc., a maker of ophthalmic, pharmaceutical and therapeutic products, has served that firm in various capacities since 1958, including President and Chief Executive Officer from May 1977 to October 1, 1997. Michel A. Destresse has served as a director of the Company since May 1996. Mr. Destresse served as President Directeur Generale of Stevens International, S.A. (formerly Stevens Security Systems, S.A.) from March 29, 1996 to December 31, 1996 and as a consultant to the Chief Executive Officer of the Company since November 1995. From November 1992 to September 1995, Mr. Destresse served as the International Monetary Fund General Advisor to the Governor of the Central Bank of Russia, where he provided general advice on monetary policy, organization, legal matters, internal audit, branch problems and systems of payment. From 1950 to 1992, Mr. Destresse served in various capacities with the Banque de France, including Executive Director of the Printing Works, Director of the Legal Department and as a member of the Board of Directors for 15 years. Paul I. Stevens founded Stevens Corporation ("Stevens") in 1965 and founded the Company in 1986 to be a holding company for Stevens. He has served the Company as Chairman of the Board and Chief Executive Officer since December 1986 and served Stevens as an officer and a director since its inception. In 1974, Mr. Stevens founded Stevens Industries, Inc., a family-owned holding company which is an affiliate of the Company and of which he is the controlling stockholder. Mr. Stevens is the father of Richard I. Stevens and Constance I. Stevens. Richard I. Stevens has served as President and a director of the Company since December 1986 and Chief Operating Officer of the Company since April 1987. Mr. Stevens also served as Vice President and Assistant Secretary of the Company from December 1986 until April 1987. He has served Stevens in various capacities since its inception, including serving as its President from 1969 until December 1987, and as a director beginning in 1969. Mr. Stevens is a stockholder, officer and director of Stevens Industries, Inc. Mr. Stevens is the son of Paul I. Stevens and brother of Constance I. Stevens. Constance I. Stevens has served as a director of the Company since April 1987. Ms. Stevens has served as Vice President and Assistant Secretary to the Company since 1995, and Secretary since 1998. From July 1989 to July 1995, Ms. Stevens served as President of a project management consulting firm in Carmel, California. From May 1980 until July 1989, Ms. Stevens served as the managing partner of Merritt Associates of Carmel, California, an architectural design and real estate development firm. Ms. Stevens is a stockholder, officer and director of Stevens Industries, Inc. Ms. Stevens is the daughter of Paul I. Stevens and sister of Richard I. Stevens. Except as otherwise noted, no family relationships exist among the directors of the Company. Meetings and Committees of the Board of Directors The business of the Company is managed under the direction of the Board of Directors. The Board meets on a regularly scheduled basis to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. The Board of Directors met four times during 1999 in regular sessions and one time during 1999 in special session. The Board of Directors has three standing committees, the Audit Committee, the Stock Option and Compensation Committee and the Executive Committee and the full Board of Directors acts to nominate persons to serve on the Board. The functions of the committees, their current members and the number of meetings held during 1999 are described below. The functions performed by the Audit Committee include: recommending to the Board of Directors selection of the Company's independent accountants for the ensuing year; reviewing with the independent accountants and management the scope and results of the audit; reviewing the independence of the independent accountants; reviewing the independent accountants' written recommendations and corresponding actions by management; and meeting with management and the independent auditors to review the effectiveness of the Company's system of internal control. The committee currently is composed of James D. Cavanaugh and Edgar H. Schollmaier. The committee met two times during 1999. The Stock Option and Compensation Committee administers the Company's Stock Option Plan and reviews other matters regarding the compensation of employees of the Company. The committee currently is composed of Paul I. Stevens and Edgar H. Schollmaier. The committee did not meet formally during 1999. The function of the Executive Committee is to direct and manage the business and affairs of the Company in the intervals between meetings of the Board of Directors. The Executive Committee is empowered to act in lieu of the Board on any matter except that for which the Board has specifically reserved authority to itself and except for those matters specifically reserved to the full Board pursuant to the Delaware General Corporation Law. The Executive Committee is currently comprised of Paul I. Stevens (Chairman) and Edgar H. Schollmaier. The Executive Committee acted by written consent one time and met one time in 1999. During 1999, each director attended more than 75% of the meetings of the Board of Directors and respective committees on which he or she served. PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP The following table sets forth information as of April 10, 2000 (except as otherwise noted) regarding the beneficial ownership of Common Stock by each person known by the Company to own 5% or more of the outstanding shares of each Series of Common Stock, each director and nominee for director of the Company, including the Company's Chief Executive Officer, each other Named Executive Officer listed in the Summary Compensation Table below, and the current directors and Named Executive Officers of the Company as a group. The persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned by them, unless otherwise noted. Of the shares issued and outstanding as of April 10, 2000, Paul I. Stevens, Chairman of the Board of the Company, and members of his immediate family, own approximately 13.6% of the outstanding Series A Stock and 93.9% of the outstanding Series B Stock, representing in the aggregate approximately 72.4% of the total voting power of Common Stock with respect to matters on which Series A Stock and Series B Stock vote together. In April 2000, the Company completed a private placement of $1 million of 10% convertible subordinated notes ("the Notes"). Net proceeds of the Notes will be used for working capital. The Notes were issued in increments of $50,000 and are convertible into 2,000,000 shares of Series A Common Stock ("SVEIA") of the Company at $0.50 per share, subject to adjustment. The conversion of the Notes is at the holder's option anytime on or after the fifteenth day following the original issue date of the Notes and prior to the close of business on their maturity date. Issue costs for the Notes aggregated approximately $151,000. The Company has committed to register the shares that would be issuable upon conversion of the Notes. Dilution to existing shareholders would occur as a result of the conversion of the Notes to 2 million shares of Series A common stock. Should all the Notes be converted, these shareholders would own approximately 17% of the outstanding stock of the Company. The first quarter of 2000 will include a charge for interest expense of $1 million with a corresponding $1 million increase in "Paid in Capital in Excess of Par Value." Series A Stock (1) Series B Stock (2) ------------------- ----------------------- Name of Beneficial Number Percent Number Percent Owner or Group of Series of Series -------------------------------- ------- --------- --------- --------- Paul I. Stevens(3)(4) .......... 953,202 12.8 1,702,615 90.6 Richard I. Stevens(3)(5) ....... 216,464 2.9 250,313 12.3 Constance I. Stevens(3)(6) ..... 246,617 3.3 107,650 5.3 James D. Cavanaugh(8) .......... 45,000 * - - Edgar H. Schollmaier(7) ........ 495,000 6.6 - - Michel A. Destresse(10) ....... 20,000 * - - George A. Wiederaenders(9) ..... 53,275 * - - Stevens Industries, Inc.(3) .... 73,106 0.1 74,140 3.6 All current directors and Named Executive Officers as a group (8 persons) 1,810,240 24.2 1,912,298 93.9 ____________________ * Less than 1% (1) The information set forth for Series A Stock does not include the shares of Series B Stock of such holder which are convertible, at any time and from time to time, into shares of Series A Stock on a share- for-share basis. (2) Each share of Series B Stock is convertible into Series A Stock on a share-for-share basis at any time. (3) The address of Paul I. Stevens, Richard I. Stevens and Constance I. Stevens is 5700 E. Belknap, Fort Worth, Texas 76117 and the address of Stevens Industries, Inc. is P.O. Box 562, Fort Worth, Texas 76101. The shares of Paul I. Stevens, Richard I. Stevens and Constance I. Stevens include shares held by Stevens Industries, Inc. because, due to their positions as officers, directors and stockholders of such corporation, they could be deemed to share beneficial ownership of its shares. (4) Includes 765,096 shares of Series A Stock and 1,628,475 shares of Series B Stock owned by a trust for which Mr. Stevens and his wife serve as Trustees, and 115,000 shares of Series A Stock options available for purchase. (5) Includes 115,000 shares of Series A Stock options available for purchase. (6) Includes 40,000 shares of Series A Stock options available for purchase. (7) Includes 25,000 shares of Series A Stock options available for purchase. (8) Includes 35,000 shares of Series A Stock options available for purchase. (9) Includes 50,000 shares of Series A Stock options available for purchase. (10) Includes 20,000 shares of Series A Stock options available for purchase.
MANAGEMENT COMPENSATION AND TRANSACTIONS Summary Compensation Table The following table sets forth certain information regarding compensation paid during each of the Company's last three fiscal years to the Company's Chief Executive Officer and each of the Company's other executive officers serving at fiscal 1999 year end whose salary and bonus exceeded $100,000, (the "Named Executive Officers"). Long Term Compensation ---------------------------------- Awards Payouts Annual Compensation ------------------------- ------- ---------------------------------- Securities Name and Other Annual Restricted Underlying LTIP All Other Principal Fiscal Compensation Stock Options/SARs Payouts Compensation Position Year Salary ($) Bonus ($) ($)(1) Award(s) (#) ($) ($) -------- ----- ---------- --------- ------ -------- ------- --- --- Paul I. Stevens, 1999 -0- - - - 115,000 - - Chairman of the Board 1998 116,957 - - - 115,000 - - and Chief Executive 1997 234,737 - - - 90,000 - - Officer Richard I. Stevens, 1999 40,000(2) - - - 115,000 - - President and Chief 1998 182,852 - 2,850 - 115,000 - - Operating Officer 1997 231,000 - 2,568 - 90,000 - - George A. 1999 95,000 - - - 50,000 - - Wiederaenders, Vice 1998 93,232 - 946 - 50,000 - - President, Treasurer 1997 101,251 25,000 871 - 25,000 - - and Chief Accounting Officer (1) Consists of automobile allowance and group insurance costs. (2) Deferred compensation of $100,000 was recorded in 1999 for Richard I. Stevens, but not paid to increase the cash availability of the Company.
Option Grants During 1998 Fiscal Year No executive officers received options in the fiscal year 1999. Options Exercised During 1999 Fiscal Year and Fiscal Year End Option Values There were no options exercised during the fiscal year 1999.The following table provides information related to the number and value of options held at fiscal year end. The Company does not have any outstanding stock appreciation rights. Number of Securities Value of Unexercised Underlying Unexercised In-the-Money Options/SAR's Options/SAR's At FY-End (#) At FY-End ($) -------------------------- --------------------------- Shares Acquired Value Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable ---- --------------- ------------ ----------- ------------- ----------- ------------- Paul I. Stevens - - 115,000 - - - Chairman of the Board and Chief Executive Officer Richard I. Stevens - - 115,000 - - - President and Chief Operating Officer George A. - - 50,000 - - - Wiederaenders Vice President , Treasurer and Chief Accounting Officer
Report of the Compensation and Stock Option Committees on Repricing of Options/Sars The Company's stock option plan has been used to provide executive officers and other key employees with increased motivation and incentive to exert their best efforts on behalf of the Company through the opportunity to benefit from appreciation in the value of the Series A Common Stock. Due to a decline in the price of the Common Stock in fiscal 1997, certain options outstanding under the Company's stock option plan were exercisable at prices which exceeded the then current market value of the Series A Common Stock. In order to restore the incentive value to such options, the Board of Directors approved the repricing of options. On September 10, 1997, each option outstanding under the Company's stock option plan, with an exercise price exceeding the market price of the Company's Series A Common Stock was canceled and reissued with an exercise price equal to the then current market price of $1.50. All other terms and conditions of these options remained the same. Additionally, as previously reported, in fiscal 1993 the Company repriced stock options as set forth below. The following table provides information related to all repricing of options during the last ten fiscal years for the named executive officers. Ten-Year Option/SAR Repricings Ten-Year Option/SAR Repricings Number of Market Securities Price of Underlying Stock at Length of Options/ Time of Exercise Price at Original Option SARs Repriced Repricing Time of Repricing New Term Remaining at or or or Amendment Exercise Date of Repricing Name Date Amended (#) Amendment ($) ($) Price ($) or Amendment ---- ---- ----------- ------------- ------------ --------- ------------ Paul I. Stevens, 9/10/97 90,000 $1.50 50,000/$5.50 $1.50 September 1999 Chairman of the Board 40,000/$4.5625 November 1997 and Chief Executive Officer Richard I. Stevens, 9/10/97 90,000 $1.50 50,000/$5.50 $1.50 September 1999 President and Chief 40,000/$4.5625 $1.50 November 1997 Operating Officer 11/18/92 30,000 $4.5625 $8.00 $4.5625 March 1994 George A. Wiederaenders, 9/10/97 25,000 $1.50 15,000/$7.125 $1.50 March 2000 Vice President, 10,000/$4.5625 $1.50 November 1997 Treasurer and Chief 11/18/92 6,500 $4.5625 $15.00 $4.5625 January 1997 Accounting Officer
This report is submitted by members of the Board of Directors, Edgar H. Schollmaier, Paul I. Stevens, Richard I. Stevens, Constance I. Stevens James D. Cavanaugh and Michel A. Destresse Pension Plan and Trust Effective January 1, 1989, the Company established the Stevens International, Inc. Pension Plan and Trust (the "Pension Plan"). The Pension Plan replaced and is the successor to two pension plans previously maintained by subsidiaries of the Company. The Pension Plan is a tax qualified defined benefit pension plan under Section 401(a) et. seq. of the Code. The Company's Board of Directors decided to permanently freeze all benefits under the Pension Plan effective April 30, 1997, as a part of the cost reduction measures taken in 1997. This action eliminates all future benefit accruals for participants in the Pension Plan for 1997 and thereafter. The following table illustrates estimated annual benefits payable upon retirement in specified compensation and years of service classifications and assumes (i) the participant attained age 65 in 1996, (ii) the compensation presented is subject to the maximum permitted in 1996 and preceding years, (iii) annual Social Security covered compensation amount for 1996 is $27,580, (iv) the maximum allowable years of service is 40, (v) the participant elected to receive his benefits for life, and (vi) the Internal Revenue Code limitation on benefits elected remains at the level of $120,000, the 1996 limit. Years of Service ----------------------------------------------------------- Compensation 15 20 25 30 35 40 ------------ ------ ------ ------ ------ ------ ------ $100,000 15,784 22,152 28,519 34,886 41,253 46,518 125,000 20,147 28,264 36,381 44,499 52,616 59,255 150,000 24,509 34,377 44,244 55,411 63,978 71,993 175,000 27,934 39,552 51,169 62,786 74,403 84,168 200,000 31,359 44,727 58,094 71,461 84,828 96,343 225,000 33,157 47,258 61,358 75,458 89,559 101,806 250,000 33,341 47,441 61,542 75,642 89,743 101,990 300,000 33,341 47,441 61,542 75,462 89,743 101,990
The amount of a participant's normal benefit is based on the participant's accrued benefit as of December 31, 1991, plus, with respect to service of participants after December 31, 1991, .75% of the participant's monthly compensation for each year of participation (not to exceed 40 years), plus .5% of the participant's monthly compensation (in excess of the Social Security covered compensation) for each year of participation (not to exceed 35 years). Under the Code, the annual benefit payable to a participant under the Pension Plan (expressed as a single life annuity beginning at the participant's Social Security retirement age), is limited to $120,000 in 1996 or, if less, 100% of the participant's average annual compensation for the participant's highest three years of consecutive service. For purposes of the Pension Plan, compensation includes a participant's base compensation, bonuses, commissions, and overtime pay. Compensation considered under the Pension Plan is subject to limits imposed by the Code ($150,000 in 1996). Benefits provided by the Company under the Pension Plan will become fully vested and nonforfeitable following the completion of five years of service by a participant. The estimated credited years of service under the Pension Plan for each of the executive officers listed in the compensation table above is as follows: Mr. Paul I. Stevens, seven years; Mr. Richard I. Stevens, seven years; and George Wiederaenders, seven years. Under one of the predecessor pension plans, benefits have vested on behalf of Mr. Richard I. Stevens who is entitled to a monthly annuity benefit for life of $2,083, commencing on his normal retirement date. Compensation of Directors The following table provides information related to the compensation paid to outside directors of the Company. Cash Compensation Stock Options Number of Securities Annual Underlying Name and Retainer Meeting Consulting Number of Options Principal Position Fee Fee Fee/Other Shares (#) SARs(#) James D. Cavanaugh - $9,000 - 5,000 - Audit Committee Michel A. Destresse - - $19,500 5,000 - Edgar H. Schollmaier - $7,500 - 5,000 - Executive, Compensation, and Audit Committees (a) Directors who are also executives of the Company are not listed in the above table. They do not receive compensation as directors. Refer to the Summary Compensation Table for information concerning their compensation. (b) Amounts shown include cash compensation earned and received as well as amounts earned but deferred at the election of directors. (c) Each director generally receives $1,500/board meeting and $1,500/committee meeting, however, certain director fees in 1999 were deferred. Mr. Destresse receives consulting fees in lieu of director fees. (d) The reasonable expenses incurred by each director in connection with his or her duties as a director are also reimbursed by the Company; this amount is not reflected in the above table. (e) There were no retainer fees paid in 1999. Report of the Compensation Committee of the Board of Directors on Executive Compensation The Company's executive compensation program is administered by the Stock Option and Compensation Committee of the Board of Directors. During 1999, the Committee was composed of two independent, nonemployee directors. The Committee is committed to a strong, positive link between business, performance and strategic goals, and compensation and benefit programs. Accordingly, as part of stringent cost reduction measures, all officer base pay was reduced from 5% to a maximum of 50% in July, 1997. Overall Executive Compensation Policy The Company's compensation policy is designed to support the overall objective of enhancing value for the Company's stockholders by: * Attracting, developing, rewarding and retaining highly qualified and productive individuals. * Relating compensation to both Company and individual performance. * Ensuring compensation levels that are externally competitive and internally equitable. * Encouraging executive stock ownership to enhance a mutuality of interest with other stockholders. The following is a description of the elements of the Company's executive compensation and how each relates to the objectives and policy outlined above. Base Salary The Committee reviews each executive officer's salary annually. In determining appropriate salary levels, the Committee considers individual performance, internal equity, as well as pay practices of other companies relating to executives of similar responsibility. By design, the Committee strives to set executives' salaries at competitive market levels. However, in July, 1997, the performance of the Company necessitated a reduction of all officer salaries from 5% to a maximum of 50% of base pay. In addition certain reductions of the Chairman and CEO occurred in 1998. The Committee believes maximum performance can be encouraged through the use of appropriate incentive programs. Incentive programs for executives are as follows: Annual Incentives Generally, discretionary annual incentive award opportunities are made to executives to recognize and reward corporate and individual performance. Senior executives may receive bonuses ranging from 60% to 75% of eligible base compensation with attainment measured by corporate net income as compared to the annual plan. Bonuses can be increased or decreased incrementally based upon performance for the year. Other corporate officers and key employees may receive bonuses ranging from 5% to 20% of eligible base compensation, measured by corporate net income. Accordingly, no senior executive officers were awarded an incentive bonus based upon 1998 performance. External market data is reviewed periodically to determine competitive incentive opportunities for individual executives. The Company believes that it is in the mid-range of compensation and annual incentive programs, when compared to external compensation data. Long-Term Incentives The Company's long-term compensation philosophy is that long-term incentives should be related to improvement in long-term stockholder value, thereby creating a mutuality of interest with stockholders. In furtherance of this objective, the Company awards to its executive officers stock options. Stock options encourage and reward effective management that results in long-term corporate financial success, as measured by stock price appreciation. Stock options generally are exercisable at the fair market value at date of grant and options are generally exercisable in two installments beginning one year after date of grant. Rationale for CEO Compensation Mr. Paul I. Stevens has been Chairman and Chief Executive Officer of the Company since 1986. His compensation package has been designed to encourage short and long-term performance in line with the interests of the Company's stockholders. Mr. Stevens' large stock ownership percentage as described elsewhere herein is a substantial incentive to perform in such a way to enhance stockholders' interest and returns. His base pay was reduced 50% to $150,000 in July, 1997. In addition, Mr. Stevens voluntarily eliminated his base pay beginning October 1, 1998, to increase the cash availability of the Company. He is a participant in the incentive plans described above. The factors which the Committee considered in determining Mr. Stevens' 50% reduction in base pay in July, 1997, and the voluntary elimination of his base pay in October 1998, relate principally to the need for stringent cost reduction at all levels of the Company. Mr. Stevens declined his bonus earned for fiscal year 1995. No such incentive was paid to Mr. Stevens for fiscal years 1999, 1998, 1997, and 1996. In granting stock options in 1998 and 1997 to Mr. Stevens, as well as other executives, the Committee took into account the executive's level and scope of responsibility and contributions to the Company, as well as competitive long-term incentive practices as verified by external surveys. This report is submitted by the Stock Option and Compensation Committee of the Board of Directors, Mr. Edgar H. Schollmaier, member. The Board Compensation Committee Report on Executive Compensation shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts. Stock Option and Compensation Committee and Insider Participation During fiscal 1999, the members of the Stock Option and Compensation Committee were primarily responsible for determining executive compensation and matters relating to stock options, although certain of such matters were discussed by the full Board of Directors. Paul I. Stevens, as a director as well as an executive officer of the Company, participated in such discussions. The Company and Xytec Corporation ("Xytec"), a subsidiary of Stevens Industries, Inc., one of the principal shareholders of the Company and a corporation controlled by Paul I. Stevens, Richard I. Stevens and Constance I. Stevens, entered into an agreement during 1994 for Xytec to provide software and computer-related services and equipment of $2.1 million as a subcontractor on a major contract. During 1997, 1998 and 1999, the Company paid approximately $594,000, $856,000 and $328,000 to Xytec on this contract. The cost to Xytec of this subcontract was approximately 92% of its billings to the Company, or $575,000 in 1997, $787,000 in 1998, and $302,000 in 1999. Through September 30, 1998, each of Paul I. Stevens and Richard I. Stevens owned a 22.5% interest in a joint venture which was the landlord under the lease of the Company's corporate headquarters. Amounts paid to the joint venture as rent and maintenance in 1998 and 1997 were approximately $84,000 and $111,000. Through December 31, 1999, Paul I. Stevens, the Company's Chairman and Chief Executive Officer has loaned the Company $6.2 million on a long-term arrangement. The long-term loans from Paul I. Stevens are due June 30, 2001 and bear interest at rates that vary up to 2% over bank prime. Paul I. Stevens' loans at December 31, 1999 have first liens on certain assets of the Company, principally a $0.5 million platen cutter relating to the hold back on the 1997 sale of the Company's Zerand division, the assets of a foreign subsidiary, and certain accounts receivable for new customer equipment. The Company was paid $500,000 of the Zerand escrow hold back funds net of amounts owed to the purchaser on November 6, 1998. Because these hold back funds collateralized certain Paul I. Stevens advances, the $500,000 was paid to him to reduce his secured loans to the Company. The Company believes that the transactions described above are beneficial to the Company and are on terms as favorable to the Company as could be obtained from unaffiliated third parties. Such transactions are expected to be continued in the future, with review of and the approval required by the independent members of the Board of Directors. Stock Performance Chart The following chart compares the yearly percentage change in the cumulative total stockholder return on the Company's Series A Stock during the five fiscal years ended December 31, 1999 (adjusted for a stock split and the reclassification of the Company's Common Stock into Series A Stock and Series B Stock) with the cumulative total return on the Media General Composite Market Value Index and the Printing Equipment (SIC Code 355) Machinery Industry Index. The comparison assumes $100 was invested on December 31, 1994 in the Company's Common Stock and in each of the foregoing indices and assumes reinvestment of dividends. Comparison of Total Return of the Company, Peer Group and Broad Market [PERFORMANCE GRAPH APPEARS HERE]
12/30/ 12/29/ 12/31/ 12/31/ 12/31/ 12/31/ Company/Index/Market 1994 1995 1996 1997 1998 1999 - -------------------------- ---- ---- ---- ---- ---- ---- Stevens Intl CL A 100 52.24 17.91 12.66 13.43 3.22 Special Industry Machinery 100 145.39 137.38 172.75 173.39 446.37 AMEX Market Index 100 128.90 136.01 163.66 161.44 201.27
SECTION 16 REQUIREMENTS Section 16(a) of the Exchange Act requires the Company's directors and officers, and persons who own more than 10% of a registered class of the Company's equity securities, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission (the "SEC"). Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of the copies of such forms received by it with respect to fiscal 1999, or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its directors, officers and persons who own more than 10% of a registered class of the Company's equity securities have been complied with. INDEPENDENT AUDITORS On May 21, 1998, Stevens International, Inc. (The "Company") dismissed Deloitte & Touche LLP ("Deloitte & Touche") as its principal independent accountants. The decision to dismiss Deloitte & Touche was approved by the Company's Board of Directors as well as the Audit Committee of the Board of Directors. Deloitte & Touche's report on the Company's financial statements for the fiscal year ended December 31, 1997 did not contain an adverse opinion or disclaimer of opinion. However, such report was qualified or modified as to uncertainties involving factors raising substantial doubt about the Company's ability to continue as a going concern. There were no adjustments in the consolidated financial statements that might result from the outcome of this uncertainty. During the Company's 1996 and 1997 fiscal years and the period through May 21, 1998, there were no disagreements between the Company and Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which if not resolved to the satisfaction of Deloitte & Touche would have caused it to make reference to the subject matter(s) of the disagreement(s) in connection with its reports. A letter from Deloitte & Touche confirming the statements contained herein was filed as an exhibit to Form 8-K filed on May 29, 1998. On May 21, 1998, the Company retained Grant Thornton LLP to serve as the Company's principal independent accountants. During the Company's 1996 and 1997 fiscal years and the period through May 21, 1998, the Company did not consult Grant Thornton LLP regarding the application of accounting principles to a specified transaction or the type of audit opinion that might be rendered on the Company's financial statements. Representatives of Grant Thornton LLP are expected to be present at the Meeting with the opportunity to make a statement if they desire to do so and to be available to answer appropriate questions. STOCKHOLDERS' PROPOSALS Stockholders may submit proposals on matters appropriate for stockholder action at subsequent annual meetings of the Company consistent with Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended. For such proposals to be considered in the Proxy Statement and Proxy relating to the 2001 Annual Meeting of Stockholders, such proposals must be received by the Company not later than January 20, 2001. Such proposals should be directed to Stevens International, Inc., 5700 E. Belknap, Fort Worth, Texas 76117. OTHER BUSINESS The Board of Directors knows of no matters other than those described herein that will be presented for consideration at the Meeting. However, should any other matters properly come before the Meeting or any adjournment thereof, it is the intention of the persons named in the accompanying Proxy to vote in accordance with their best judgment in the interest of the Company. MISCELLANEOUS All costs incurred in the solicitation of Proxies will be borne by the Company. In addition to solicitation by mail, the officers and employees of the Company may solicit Proxies by telephone, telegraph or personally, without additional compensation. The Company may also make arrangements with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation materials to the beneficial owners of shares of Common Stock held of record by such persons, and the Company may reimburse such brokerage houses and other custodians, nominees and fiduciaries for their out-of-pocket expenses incurred in connection therewith. The Company's annual report to shareholders for 1999 is being mailed with this proxy statement to stockholders entitled to vote at the Meeting. The Annual Report is not to be deemed part of this Proxy Statement. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULE, BUT NOT INCLUDING EXHIBITS, WILL BE FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS DELIVERED UPON THE WRITTEN REQUEST OF SUCH PERSON ADDRESSED TO STEVENS INTERNATIONAL, INC., ATTN: MS. CONSTANCE STEVENS, 5700 E. BELKNAP, FORT WORTH, TEXAS 76117. By Order of the Board of Directors /s/ PAUL I. STEVENS --------------------------- PAUL I. STEVENS Chairman of the Board and Chief Executive Officer Fort Worth, Texas April 21, 2000 STEVENS INTERNATIONAL, INC. ANNUAL MEETING OF STOCKHOLDERS SERIES A COMMON STOCK The undersigned hereby appoints Paul I. Stevens and Richard I. Stevens, each with power to act without the other and with full power of substitution, as Proxies to represent and to vote, as designated on the reverse, all Series A common Stock of Stevens International, Inc. owned by the undersigned, at the Annual Meeting of Stockholders to be held at The Fort Worth Club, 306 West 7th Street, 12th Floor, Fort Worth, Texas, 76102, on Thursday, May 25, 2000, at 10:00 a.m. local time, upon such other business as may properly come before the meeting or any adjournment thereof including the following: (CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE) - --------------------------------------------------------------------------- A [X] Please mark your votes as in this example. FOR all nominees Listed at right WITHHOLD AUTHORITY (Except as marked to the To vote for all contrary below) nominees listed at right NOMINEES: Michel A. Destresse Edgar H. Schollmaier 1. Election of [ ] [ ] Directors INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW. - --------------------------------------------------------------------------- 2. In their discretion on any other matter that may properly come before the meeting or any adjournment thereof. This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no specific direction is given, this proxy will be voted (i) for the election of the nominees for director, and (ii) at the discretion of the proxy holders with regard to any other matter that may properly come before the meeting or any adjournment thereof. This proxy may be revoked prior to the exercise of the powers conferred by the proxy. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PLEASE DATE, SIGN EXACTLY AS SHOWN HEREON AND MAIL PROMPTLY THIS PROXY IN THE ENCLOSED ENVELOPE. Signature_________________________________________Dated______________2000 Note: Please date, sign exactly as shown hereon and mail promptly this proxy in the enclosed envelope. When there is more than one owner, each should sign. When signing as an attorney, administrator, executor, guardian or trustee, please add your title as such. If executed by a corporation, the proxy should be signed by a duly authorized officer. If executed by a partnership, please sign in the partnership name as an authorized person. STEVENS INTERNATIONAL, INC. ANNUAL MEETING OF STOCKHOLDERS SERIES B COMMON STOCK The undersigned hereby appoints Paul I. Stevens and Richard I. Stevens, each with power to act without the other and with full power of substitution, as Proxies to represent and to vote, as designated on the reverse, all Series B common Stock of Stevens International, Inc. owned by the undersigned, at the Annual Meeting of Stockholders to be held at The Fort Worth Club, 306 West 7th Street, 12th Floor, Fort Worth, Texas, 76102, on Thursday, May 25, 2000, at 10:00 a.m. local time, upon such other business as may properly come before the meeting or any adjournment thereof including the following: (CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE) - --------------------------------------------------------------------------- A [X] Please mark your votes as in this example. FOR all nominees Listed at right WITHHOLD AUTHORITY (Except as marked to the To vote for all contrary below) nominees listed at right NOMINEES: Paul I. Stevens Richard I. Stevens 1. Election of [ ] [ ] Constance I. Stevens Directors James D. Cavanaugh INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW. - --------------------------------------------------------------------------- 2. In their discretion on any other matter that may properly come before the meeting or any adjournment thereof. This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no specific direction is given, this proxy will be voted (i) for the election of the nominees for director, and (ii) at the discretion of the proxy holders with regard to any other matter that may properly come before the meeting or any adjournment thereof. This proxy may be revoked prior to the exercise of the powers conferred by the proxy. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PLEASE DATE, SIGN EXACTLY AS SHOWN HEREON AND MAIL PROMPTLY THIS PROXY IN THE ENCLOSED ENVELOPE. Signature______________________________________________Dated_________2000 Note: Please date, sign exactly as shown hereon and mail promptly this proxy in the enclosed envelope. When there is more than one owner, each should sign. When signing as an attorney, administrator, executor, guardian or trustee, please add your title as such. If executed by a corporation, the proxy should be signed by a duly authorized officer. If executed by a partnership, please sign in the partnership name as an authorized person. -----END PRIVACY-ENHANCED MESSAGE-----