SCHEDULE 14A
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 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) or Rule 14a-12
STANDEX INTERNATIONAL CORPORATION
- ------------------------------------------------------------------------------
(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 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:
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(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
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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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:
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(logo) STANDEX 6 Manor Parkway
Salem, New Hampshire 03079
September 18, 2002
To the Stockholders of Standex International Corporation:
You are cordially invited to attend the Annual Meeting of
Stockholders of Standex International Corporation which will be held at
FleetBoston, 100 Federal Street, Boston, Massachusetts, on Tuesday, October
29, 2002 at 11:00 a.m.
We hope that you will be able to attend the meeting. However, whether
or not you plan to attend in person, please vote your proxy card promptly,
in accordance with the instructions on the card, in order to ensure that
your shares will be represented. If you do attend the meeting, you may vote
your shares personally.
This booklet includes the Notice of Annual Meeting and the Proxy
Statement, which contain information about the formal business to be acted
on by the stockholders. The meeting will also feature a report on the
operations of your Company, followed by a question and discussion period.
Sincerely,
/s/ Edward J. Trainor
Edward J. Trainor
Chairman of the Board/CEO
(logo) STANDEX 6 Manor Parkway
Salem, New Hampshire 03079
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Standex International
Corporation (the "Company") will be held at FleetBoston, 100 Federal
Street, Boston, Massachusetts, on Tuesday, October 29, 2002, at 11:00 a.m.
local time for the following purposes:
1. To fix the number of directors at thirteen and to elect three
directors to hold office for three-year terms ending on the
date of the Annual Meeting of Stockholders in 2005 and one
director to hold office for a two-year term ending on the date
of the Annual Meeting of Stockholders in 2004;
2. To approve the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the fiscal year ending
June 30, 2003; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Stockholders of record at the close of business on September 9, 2002
will be entitled to notice of and to vote at the meeting.
Please vote by proxy using any one of the following methods:
(a) Use the toll free telephone number shown on your proxy card or
voting instructions form (if you receive proxy materials from a
broker or a bank);
(b) Visit the Internet Web site at: www.eproxyvote.com/sxi, or
follow your broker's instructions relative to Internet voting;
or
(c) Mark, date, sign and mail your proxy card in the prepaid
envelope provided.
By Order of the Board of Directors,
/s/ Deborah A. Rosen
Deborah A. Rosen, Secretary
September 18, 2002
Salem, New Hampshire
IMPORTANT
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL
MEETING. ACCORDINGLY, YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE OR VOTE YOUR SHARES
BY TELEPHONE OR THE INTERNET. IF YOU SO CHOOSE, YOU MAY VOTE YOUR SHARES IN
PERSON AT THE ANNUAL MEETING.
STANDEX INTERNATIONAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
October 29, 2002
This Proxy Statement is being furnished on or about September 18,
2002, in connection with the solicitation of proxies by the Board of
Directors of Standex International Corporation (the "Company"), for use at
the Annual Meeting of Stockholders to be held on Tuesday, October 29, 2002.
All proxies will be voted in accordance with the instructions contained
therein and, if no choice is specified, will be voted for the election of
each of the individuals nominated by the Board of Directors and in favor of
the other proposal set forth in the Notice of Meeting.
The election of Directors will require the affirmative vote of a
plurality of the shares of Common Stock voting, in person or by proxy, at
the Annual Meeting. The ratification of the appointment of Deloitte &
Touche LLP as independent auditors will require the affirmative vote of a
majority of the shares of Common Stock of the Company voting on the
proposal, in person or by proxy, at the Annual Meeting. Stockholders may
vote in favor of all nominees for Director, or withhold their votes as to
all nominees or withhold their votes as to specific nominees. With respect
to the other proposal, stockholders should specify their choice on the
enclosed form of proxy.
Shares which abstain from voting as to a particular matter, and
shares held in "street name" by brokers or nominees who indicate on their
proxies that they do not have discretionary authority to vote such shares
as to a particular matter, will not be counted as votes in favor of such
matter, and will also not be counted as shares voting on such matter.
Accordingly, abstentions and "broker non-votes" will have no effect on the
voting on a matter that requires the affirmative vote of a certain
percentage of the shares voting on a matter.
Any proxy may be revoked at any time before it is exercised by
delivery of written notice to the Secretary of the Company or by executing
a subsequent proxy.
The Board of Directors has fixed September 9, 2002 as the record date
for the determination of stockholders entitled to vote at the Annual
Meeting. At the record date, there were outstanding and entitled to vote
12,195,022 shares of the Common Stock of the Company. Each share is
entitled to one vote.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors and officers,
without additional remuneration, may solicit proxies in person and by
telecommunications. Brokers, custodians and fiduciaries will be requested
to forward proxy soliciting materials to the owners of stock held in their
names, and the Company will reimburse them for their out-of-pocket expenses
in this regard.
To assure the presence in person or by proxy of the necessary quorum
for holding the meeting, the Company has employed the firm of Morrow & Co.,
Inc. to assist in soliciting proxies by mail, telephone, facsimile and
personal interview for a fee estimated at approximately $5,000 plus
disbursements.
1
PROPOSAL 1 - ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to fix the number
of directors at thirteen and to elect as directors John Bolten, Jr., Roger
L. Fix and Daniel B. Hogan, Ph.D., identified below as nominees, for three-
year terms expiring in 2005, and to elect David R. Crichton, indentified
below as a nominee, for a two-year term expiring in 2004, unless authority
to vote for the election of directors is withheld by marking the proxy to
that effect. No proxy can be voted for a greater number of persons than the
four nominees named below.
There are fewer nominees named below than the number of directors
fixed pursuant to this proposal due to the vacancies created during the
prior fiscal year as a result of the retirements of Directors Sol Sackel
and Edward F. Paquette and the death of Director Samuel S. Dennis. The
Nominating Committee of the Board of Directors may consider various
potential candidates for nomination to the Board of Directors during the
course of the upcoming fiscal year.
In the event that any nominee for election should become unavailable,
the person acting under the proxy may vote for the election of a
substitute. Management has no reason to believe that any nominee will
become unavailable.
Information about each director and nominee for director at July 31,
2002 follows:
Nominees For Directors Principal Occupations During
For Terms Past Five Years And
Expiring In 2005 Certain Other Directorships
---------------------- ----------------------------
<s> <c>
John Bolten, Jr. + Consultant to the Company.
Director Since 1955
Age 82
Roger L. Fix President and Chief Operating Officer of the Company since
Director Since 2001 December 2001; Chief Executive Officer, Chief Operating Officer
Age 49 and President of Outboard Marine Corporation from August 2000
to February 2001; Chief Operating Officer of Outboard Marine
Corporation from June 2000 to August 2000; Chief Executive of
John Crane from 1998 through June 2000; President-North
America of John Crane from May 1996 to May 1998; prior
thereto President of Xomox, a division of Emerson Electric.
As COO of Outboard Marine Corporation ("OMC") (June-Au-
gust 2000), Mr. Fix completed a strategic review and commenced
implementation of programs to address the financial crisis the
company was and had been experiencing since about 1997. Mr. Fix
became President and CEO of OMC in August 2000. In December
2000, at the direction of investors, a voluntary petition in Bank-
ruptcy pursuant to Chapter 11 of the U.S. Bankruptcy Code was
filed for OMC.
Daniel B. Hogan, Ph.D. Associate, Stratin Consulting since October 1991; President, The
Director Since 1983 Apollo Group (Management Consultants) from 1991 through 2001;
Age 59 Associate, Department of Psychology, Harvard University
from 1996 through 2000.
2
Nominees for Director Principal Occupations During
For Term Past Five Years And
Expiring In 2004 Certain Other Directorships
---------------------- ----------------------------
<s> <c>
David R. Crichton Executive Vice President/Operations of the Company since
Director Since 1992 June 1989.
Age 64
Directors to Continue Principal Occupations During
In Office For Terms Past Five Years And
Expiring In 2003 Certain Other Directorships
--------------------- ----------------------------
<s> <c>
C. Kevin Landry* Managing Director and CEO, TA Associates, Inc. (a private
Director Since 1975 equity firm), Boston, MA since January 1994.
Age 58
H. Nicholas Muller, III, Ph.D. President and CEO of The Frank Lloyd Wright Foundation from
Director Since 1984 May 1996 through May 2002.
Age 63
Edward J. Trainor* Chairman of the Board of Directors of the Company since
Director Since 1994 December 2001; Chief Executive Officer of the Company since
Age 62 July 1995; President of the Company from July 1994 to December,
2001.
Director of Mestek, Inc.
Directors To Continue Principal Occupations During
In Office For Terms Past Five Years And
Expiring In 2004 Certain Other Directorships
--------------------- ----------------------------
<s> <c>
William R. Fenoglio President and CEO of Augat, Inc. from 1994 through 1996.
Director Since 1997
Age 63 Director of IDG, Inc.
Walter F. Greeley Chairman, High Street Associates, Inc. (a management and
Director Since 1989 acquisition group) from 1988 to 2001. Vice President and Counsel
Age 71 of Surface Coatings, Inc.
Thomas L. King* Vice Chairman of the Board of the Company since December 2001;
Director Since 1970 Chairman of the Board of the Company from January 1992 to
Age 72 December 2001; President of the Company from August 1984 to
July 1994.
Deborah A. Rosen Chief Legal Officer of the Company since October 2001; Vice
Director Since 2001 President of the Company since July 1999; General Counsel
Age 47 of the Company since January 1998; Secretary of the Company
since October 1997; Assistant Secretary from June 1987 to
December 1997; prior thereto Senior Corporate Attorney from
September 1987 to December 1997.
<FN>
- --------------------
+ Founder of the Company.
* Member of the Executive Committee of the Board of Directors.
</FN>
3
STOCK OWNERSHIP IN THE COMPANY
Stock Ownership by Directors, Nominees for Director and Executive Officers
The following table sets forth information regarding beneficial
ownership of the Company's Common Stock as of July 31, 2002 of each
director, each nominee for director, each executive officer named in the
Summary Compensation Table and all directors and executive officers of the
Company as a group:
Beneficial Ownership (1)
---------------------------
Percent of
No. of Outstanding
Name Shares Common Stock
---- ------ ------------
<s> <c> <c>
John Bolten, Jr. 326,577 (3) 2.7
David R. Crichton 81,637 (2) **
William R. Fenoglio 2,000 **
Roger L. Fix 25,000 **
Walter F. Greeley 2,500 **
Daniel B. Hogan, Ph.D. 66,748 (4) **
Thomas L. King 102,716 **
C. Kevin Landry 5,368 **
H. Nicholas Muller, III, Ph.D. 6,130 **
Deborah A. Rosen 21,391 (2) **
Christian Storch 3,779 (2) **
Edward J. Trainor 196,525 (2) 1.6
All Directors and Executive Officers 876,859 7.2
as a Group (15 Persons)
<FN>
- --------------------
** Less than 1% of outstanding Common Stock.
<F1> As used herein, "beneficial ownership" means the sole or shared power
to vote, and/or the sole or shared investment power with respect to
shares of Common Stock. The directors have sole voting and investment
power with respect to the shares shown as beneficially owned by them
except for: 65 shares for Mr. Crichton; 2,000 shares for Mr.
Fenoglio; 1,300 shares for Mr. Greeley; 4,000 shares for Mr. Landry;
and 20,457 shares for Mr. Trainor, which are jointly held with their
respective spouses. The shares owned by spouses or minor children of
certain directors have not been included because the respective
directors have disclaimed beneficial interest in the shares. These
shareholdings are: Mr. Hogan's children (6,000), and Mrs. Landry and
their children (60,536).
<F2> The numbers listed include estimates of the shares held in the
Standex Employees' Stock Ownership portion of the Standex Retirement
Savings Plan at June 30, 2002, which are vested to the accounts of
Messrs. Crichton, Storch, Ms. Rosen, and Mr. Trainor. These
individuals have voting power over the shares allocated to them in
this Plan. In the event of a tender or exchange offer for the Common
Stock of the Company, these individuals (along with all other
participants) will determine, on a confidential basis, whether the
Common Stock held in their accounts should be tendered or exchanged.
The numbers also include the following shares which are capable of
being purchased by exercise of stock options within 60 days of
July 31, 2002: Mr. Trainor (106,640); Mr. Crichton (47,580); Ms.
Rosen (13,920); and Mr. Storch (2,300).
<F3> The number listed includes 137,738 shares held in three trusts of
which Mr. Bolten , Jr. is a trustee, and 28,710 shares held in a
trust of which Messrs. Bolten, Jr. and Hogan are trustees. To avoid
duplication, all of these shares have only been shown as beneficially
owned by Mr. Bolten, Jr.
4
<F4> The number includes a trust holding 62,188 shares wherein Messrs.
Bolten, Jr. and Hogan are co-trustees and Mr. Hogan is a beneficiary.
In addition, the number listed includes 2,014 shares held in two
trusts as to which Mr. Hogan is a beneficiary. To avoid duplication,
these shares have only been shown as beneficially owned by Mr. Hogan.
</FN>
--------------------
Stock Ownership of Certain Beneficial Owners
The table below sets forth each stockholder who, based on public
filings, is known to the Company to be the beneficial owner of more than 5%
of the Common Stock of the Company as of July 31, 2002.
Beneficial Ownership (1)
---------------------------
Percent of
Name and Address No. of Outstanding
Of Beneficial Owner Shares Common Stock
------------------- ------ ------------
<s> <c> <c>
American Express Trust Company 1,086,596 (1) 8.9%
American Express Financial
Corporation as trustee of the
Standex International Corporation
Retirement Savings Plan Trust
(formerly the Employees' Stock
Ownership Trust)
1200 Northstar West
Minneapolis, MN 55440-0534
Wedge Capital Management LLP 788,125 (2) 6.5%
2920 One First Union Center
301 South College Street
Charlotte, NC 28202-6002
<FN>
- --------------------
<F1> This number includes shares allocated to participating employees'
accounts over which such participants have sole voting power.
<F2> Wedge Capital Management LLP is an investment advisory company
registered under Section 203 of the Investment Advisers Act of 1940.
It manages funds for clients. Its beneficial ownership as set forth
in its most recent statement on Form 13F-HR, filed as of May 9, 2002,
consists of 788,125 shares over which it has sole power to vote or to
direct the vote.
</FN>
5
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
on the Company's Common Stock as of the end of each of the last five fiscal
years, with the cumulative total stockholder return on the Standard &
Poor's 600 Small Cap (Industrial Segment) Index and on the Russell 2000
Index, assuming an investment of $100 in each at their closing prices on
June 30, 1997 and the reinvestment of all dividends.
Cumulative Total Return
--------------------------------------------------------
6/97 6/98 6/99 6/00 6/01 6/02
---- ---- ---- ---- ---- ----
<s> <c> <c> <c> <c> <c> <c>
Standex International Corporation 100.00 101.13 96.19 58.08 89.88 99.17
Russell 2000 100.00 116.51 118.26 135.19 136.08 124.28
S&P 600 Small Cap (Industrial Segment) 100.00 120.42 121.64 115.63 124.12 124.09
6
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") of the Board
of Directors, which during the prior fiscal year was composed of three non-
employee members of the Board, establishes and administers the cash and
non-cash compensation policies and programs as they relate to executive
officers and senior management of the Company.
Policies
The policy of the Company is to provide direct compensation programs
and potential earnings opportunities which reflect the relative size and
performance of the Company in the industry segment of which it is a part
and which accomplish the Company's mission and purpose. Simultaneously, the
policy will support the overall objective of attracting, retaining and
motivating highly qualified individuals for all positions within the
Company. Consistent with this objective, all compensation programs,
including those for executives, adhere to the following policies:
* Compensation is based on the level of job responsibility, the
individual's level of performance and Company or unit
performance.
* Compensation takes into account the value of the job in the
marketplace. The Company strives to be competitive with the pay
of employers of a similar size and stature who compete with the
Company for talent.
* Equity ownership is encouraged at all levels of the Company to
align more closely the interests of employees with those of the
stockholders. In addition to its Employee Stock Purchase Plan
and the Retirement Savings Plan the Company provides key
management employees worldwide the opportunity to build
significant ownership through periodic equity award grants in
the form of stock grants or stock options.
The compensation of executive officers and senior management is
closely related to Company performance and, in addition to base salary, is
comprised of annual incentive awards and long-term equity incentive
opportunities, each of which is discussed below.
The Company utilizes a Balanced Performance Plan process ("BPP")
which provides a tool to track management performance and ties rewards to
results. The BPP is intended to focus the Company and each division on
targets and goals in the financial, technology, employee and customer
sectors. The compensation of divisional management and executive officers
will be measured in part by the results of the BPP.
Base Salary
Salaries for the year for division presidents, group vice presidents
and corporate officers were established after a review of market survey
data, prepared by an independent compensation consulting firm, on total
compensation for comparable positions, specific information on pay
practices for similar positions in peer organizations of similar size,
business diversity, complexity and revenue size and generally ranged
between the 60th and 75th percentile for senior management and executive
officers.
Annual Incentive Program
The Company also has an Annual Incentive Program, which includes an
annual cash incentive program. Annual incentive opportunities are based on
achieving financial and non-financial performance
7
goals set under the BPP that are consistent with the strategic direction of
the Company for the year and are also reflective of the individual's
performance during the year. The annual incentive compensation paid to
senior divisional management and executive officers named in the Summary
Compensation Table on page 11 of this Proxy Statement (the "Named
Executives") takes the form of cash payments (net of deferrals for the
purchase of Company stock).
CASH PORTION: As part of the Annual Incentive Program, cash payments
are made to approximately 800 employees of the Company in order to motivate
them and reward their contribution toward the financial performance of the
Company in the immediately preceding fiscal year. Annual incentive awards
are considered for each year for the senior divisional management group as
well as the Named Executives. The maximum amount that may be awarded to top
divisional management is determined by the Committee on the basis of the
Company's overall performance (principally improvement in net income and
earnings per share) in the preceding fiscal year.
This year's specific annual incentive awards to top senior divisional
managers are based principally on the net income of each of their
respective divisions measured against its historical performance and its
performance relative to the other divisions that year. Annual incentive
awards to the Named Executives are based principally on the net income and
earnings per share of the Company in the preceding year as well as
individual performances.
Overall, incentive payments that were granted during fiscal year
2002, based upon fiscal year 2001 performance, were reduced in fiscal 2002
approximately 25-30% from amounts granted in fiscal 2001, taking into
account the Company's performance in connection with the overall global
economic slowdown experienced in the previous fiscal year.
STOCK UNIT PORTION: As a feature of the Annual Incentive Program,
senior management and the Named Executives are required to defer a minimum
of 20% (but may defer up to a maximum of 50%) of their annual cash
incentive payments into the purchase of restricted Company stock which
vests three years after the award and is paid in the form of stock. The
stock is purchased pursuant to the Management Stock Purchase Program
("MSPP") discussed under "Long Term Incentive Program" below.
Long Term Incentive Program
The Company believes that significant stock ownership by the Named
Executives and senior divisional management of the Corporation is a major
incentive in building stockholder value. Stock options are intended to
encourage such stock ownership and to align directly the interests of the
Named Executives and other key employees with those of the stockholders.
Awards of restricted stock are also periodically made to key employees to
recognize performance and motivate long-term commitment to the Company.
Under the 1994 Stock Option Plan (the "1994 Plan"), executive
officers are eligible to receive periodic grants of incentive stock options
and/or non-qualified stock options. The 1998 Long Term Incentive Plan also
provides for awards of incentive and/or non-statutory options in addition
to grants of restricted stock, the MSPP shares and performance share units
("PSUs"). Incentive stock options are granted at the fair market value of
the underlying Common Stock at the date of grant and are exercisable either
six months from the date of grant or over a period of years fixed by the
Committee. Non-qualified stock options may be granted either at or below
fair market value under the 1994 Plan. Non-qualified options may only be
granted at fair market value under the 1998 Long Term Incentive Plan.
Options and restricted stock generally vest in installments over a period
of years while MSPP shares and PSUs cliff vest after a period of years. The
vesting features of some of the incentive stock options, all of the non-
qualified options, restricted stock, the MSPP shares and
8
PSUs have the effect of providing competitive and leveraged long-term
incentive opportunities which will deliver awards for achieving long-term
performance goals of the Company, assuring that key employees have earnings
opportunities similar and comparable to their peers employed at publicly
traded companies and helping them build ownership in the Company.
The Committee determines and approves the amounts of all grants to
executive officers and senior management, the terms of the options and the
vesting periods. The size of option grants to executive officers is based
on the individual officer's level of responsibility at the time of grant
and upon market data as provided by an independent compensation consulting
firm.
MANAGEMENT STOCK PURCHASE PROGRAM: The deferral of a portion of cash
awards under the Annual Incentive Program into the purchase of MSPP shares
of restricted stock, described above, is a part of the Long Term Incentive
Program. The MSPP, developed with the assistance of an independent
compensation consulting firm, is intended to increase the incentive for the
Company's senior divisional management, corporate executives and Named
Executives to purchase and hold the Company's stock, thereby more closely
aligning their interests with the interests of the stockholders. Under the
MSPP, divisional management and Named Executives defer at least 20% of
their annual incentive compensation into the purchase of Management Stock
Purchase Shares, which are purchased at 25% below the lower of: (i) the
fair market value on the date of grant, or (ii) the fair market value at
the end of the corresponding fiscal year. The Management Stock Purchase
Shares are subject to a three-year cliff-vesting schedule, and dividends
accrue in the form of cash. Participants in the MSPP may elect to defer up
to a maximum of 50% of their annual incentive compensation for the purchase
of MSPP shares. MSPP shares acquired by the Named Executives in this fiscal
year are reported in the Summary Compensation Table on page 11 of the proxy
statement.
ANNUAL GRANTS OF OPTIONS AND PERFORMANCE SHARE UNITS: The Company
maintains a program pursuant to the 1998 Long Term Incentive Plan under
which certain senior management and executives will be rewarded for the
achievement of long-term corporate strategic goals. Key employees are
awarded, on an annual basis, long-term incentive awards consisting of two
components: stock options and PSUs (discussed in further detail below).
Awards granted this fiscal year were split 50-50 between these two
components, but the split may vary from year to year based on market
conditions.
The value of the stock option portion of the awards granted this year
was based on 50% of the assigned aggregate individual's long-term incentive
award, was granted at the fair market value as of the date of grant and
vests over 5 years. The balance of the long-term incentive award (50%) to
each individual was in the form of PSUs which are shares set aside and,
after a three-year performance cycle, may be distributed to the extent key
financial targets of the Company discussed below are met. One PSU equals
one share of Company Common Stock. For the July 2001-June 2004 performance
cycle, the metrics that will be used to determine whether the PSUs will be
granted at the end of the performance cycle are: specific measured
improvements on return on total capital and growth in operating income. The
metrics for each performance cycle may vary depending on the targets
established by the Committee and approved by the Board. Performance will
vary depending upon results measured by the matrix which could result in
none of the PSUs being distributed. In fact, no PSUs awarded in fiscal 2000
for the July 1999-June 2002 performance cycle were distributed, as the
goals under the performance matrix established by the Committee were not
met. The award of PSUs is intended to focus divisional management,
corporate executives and executive officers on the overall financial
success of the Company. The awards of PSUs to Named Executives are shown on
the chart on page 14 of this proxy statement.
RESTRICTED STOCK GRANTS IN FISCAL 2002: This fiscal year the
Committee awarded restricted stock grants on an ad-hoc basis to Roger L.
Fix, who joined the Company as President and Chief Operating
9
Officer on December 3, 2001, and to certain senior divisional management
for retention and incentive purposes. The grants of the restricted stock
are approved by the Committee and provide for a three-year vesting period.
Dividends on restricted stock accrue during the vesting period, after which
they are paid in cash at the date of payout. During the last fiscal year,
the Committee authorized the Company to grant a total of 40,000 shares of
restricted stock to be allocated among the employees described above.
Grants to the Named Executives for prior fiscal years are reported in the
Summary Compensation Table on page 11 of this proxy statement. Other than
Mr. Fix, no Named Executive received restricted stock grants this fiscal
year.
Fiscal 2002 Compensation of the Chief Executive Officer
The Committee reviewed information provided by independent
professional compensation consultants in determining the total compensation
for Mr. Trainor for fiscal 2002 and reviewed the financial and non-
financial goals established for Mr. Trainor at the end of the prior fiscal
year in determining the amount of the annual incentive to be paid for
fiscal year 2001 performance.
Effective October 1, 2001, the base salary of Mr. Trainor, the Chief
Executive Officer, was increased from $670,000 to $710,000 per year. This
increase reflected the Committee's determination that Mr. Trainor's base
salary should be at or near the 75th percentile target for base salary of
other chief executives of companies the size and complexity of Standex. The
Committee believes that this aggregate compensation is in line with Mr.
Trainor's peers in CEO positions with diversified manufacturing companies
of similar revenue size and with similar perceived complexities in the
operation of their business. The Board of Directors approved this
recommendation. The Committee also recommended and the Board approved an
annual incentive payment of $166,000 for Mr. Trainor for fiscal 2001. This
is a decrease of approximately 30% from the fiscal 2000 incentive payment.
This decrease is consistent with the overall reduction in cash incentive
payments to all recipients, as discussed on page 8, due to economic factors
affecting the Company during the previous fiscal year.
Policy on Deductibility of Compensation and KEYSOP
The tax deductibility by a corporation of compensation in excess of
$1 million paid to the Chief Executive Officer and any other of its four
most highly compensated executive officers is limited by Section 162(m) of
the United States Internal Revenue Code (the "Code"). "Performance-based"
compensation, as defined in the Code, may be excluded from the $1 million
limit, if among other requirements, the compensation is payable only upon
attainment of pre-established, objective performance goals under a plan
approved by shareholders.
During the fiscal year, the Committee recommended, and the Board
adopted, a key employee share option plan ("KEYSOP") to be effective
January 1, 2002. Under the KEYSOP, key employees who (in the judgment of
the Compensation Committee) have made a significant impact on the Company's
business operations may defer a portion of the compensation granted under
the Company's annual incentive programs and long-term incentive programs
for the purchase of share options under the KEYSOP. Some of the
participating employees might otherwise be subject to the $1,000,000 limit
contained in Section 162(m) of the Code. Consequently, with the opportunity
to defer compensation, the Company believes that the Section 162(m)
limitation will not have a material effect on the Company's income tax
expense in the near future. The Committee will continue to assess the
effect of these tax rules on the Company.
Compensation Committee
Walter F. Greeley, Chairman
Daniel B. Hogan
H. Nicholas Muller, III
10
EXECUTIVE COMPENSATION
The following table shows for fiscal years ending June 30, 2002, 2001
and 2000, the cash compensation as well as certain other compensation, paid
to the Company's chief executive officer and the four other most highly
compensated executive officers, other than the chief executive officer, who
were serving as executive officers ("the named executive officers") at June
30, 2002.
SUMMARY COMPENSATION TABLE
Long Term Compensation
------------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------- ----------------------- -------
Other Restricted Securities
Annual Stock Underlying LTIP
Name and Fiscal Compen- Awards Options / Payouts All Other
Principal Position Year Salary($) Bonus($) sation(4) ($)(6) SARs(#) ($)(1) Compensation(2)(3)
- ------------------ ------ --------- -------- --------- ---------- ---------- ------- ------------------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Edward J. Trainor 2002 $700,000 $132,800 $11,069 $ 11,066 32,200 $ -0- $12,152
Chairman of the 2001 $665,000 $177,206 $19,670 $ 35,810 39,100 $ 3,300 $12,023
Board/CEO 2000 $645,750 $176,000 $14,671 $430,956 26,000 $13,920 $12,264
David R. Crichton 2002 $434,750 $ 45,000 $15,000 $ 15,000 20,000 $ -0- $11,048
Executive Vice 2001 $410,250 $ 64,285 $21,407 $ 38,971 23,700 $ 1,980 $10,953
President/Operations 2000 $386,750 $ 88,000 $ 7,332 $ 35,090 15,100 $11,600 $11,194
Roger L. Fix 2002 $291,667 -0- -0- $536,250(5) 26,200 $ -0- $ -0-
President/COO
Deborah A. Rosen 2002 $223,250 $ 32,800 $ 2,734 $ 2,734 7,400 $ -0- $ 6,919
Vice President/CLO
Christian Storch 2002 $187,917 $ 16,800 $ 1,400 $ 1,400 5,400 $ -0- $ 6,436
Vice President/CFO
<FN>
- --------------------
<F1> LTIP Payouts reflect payments received by the named executive
officers pursuant to the Company's profit improvement plan. This plan
was terminated with regard to future grants in fiscal year 1996. The
outstanding grants matured over five years from date of grant, vested
one-third per year in the last three years of the five year term. At
maturity, the increase, if any, in the earnings per share of the
Company over the base year was accorded a price/earnings ratio of 10
and was paid to the participant in cash. There was no maximum payout.
<F2> All other compensation includes contributions made by the Company to
the Standex Employees' Stock Ownership Plan ("ESOP"), a defined
contribution plan that was merged along with the Company's 401(k)
Plan into the Standex Retirement Savings Plan in fiscal 2000.
Estimates of the aggregate amounts contributed to this Plan during
fiscal 2002 were $2,669 for each of the named executive officers
(except Mr. Fix, who did not receive an ESOP allocation in this
fiscal year); during fiscal 2001 the contributions were approximately
$3,356 for Messrs. Trainor and Crichton; and for fiscal 2000 the
contributions were approximately $3,847 for Messrs. Trainor and
Crichton.
<F3> This amount includes the dollar value of term life insurance premiums
paid by the Company for Mr. Crichton, ($4,129 in 2002 and $3,347 in
both 2001 and 2000) and $5,233 in 2002 and $4,417 in both 2001 and
2000 for Mr. Trainor. Also included are contributions to the
Company's 401(k) portion of the Standex Retirement Savings Plan as
follows: for 2002, $4,250 for Messrs. Trainor, Crichton and Ms.
Rosen, and $3,767 for Mr. Storch; for 2001, $4,250 for Messrs.
Trainor and Crichton; for 2000, $4,000 for Messrs. Trainor and
Crichton.
11
<F4> For 2002 this amount represents the spread between the closing market
price of the stock on September 17, 2001 ($22.05) and the price paid
by each named executive ($16.5375) multiplied by the number of
restriced stock units acquired pursuant to the Management Stock
Purchase Program ("MSPP") as further discussed in Note 6. For 2001
this amount represents the spread between the closing market price of
the stock on June 30, 2000 ($15.875) and the price paid by each named
executive ($11.91) multiplied by the number of restricted stock units
acquired pursuant to the MSPP. For 2000 this amount represents the
spread between the closing market price of the stock on September 10,
1999 ($25.25) and the price paid by each of the named executives
($18.94) multiplied by the number of restricted stock units acquired
pursuant to the MSPP.
<F5> This reflects a Restriced Stock Grant ("RSU") made under the 1998
Long Term Incentive Plan of 25,000 shares, with the aggregate value
calculated by multiplying the closing market price of the stock on
December 3, 2001, the date of the grant, ($21.45) by the number of
shares granted. The RSUs vest in annual increments as follows: 40% on
December 3, 2003 and 20% over each of the next three grant
anniversary dates. Dividends will accrue and be paid in the form of
cash on the date of each vesting distribution.
<F6> Included in this column are the values of the RSUs made on July 1,
1999, to Messrs. Trainor (15,000 shares), Crichton (1,000 shares) and
Ms. Rosen (650 shares), with the following aggregate values, based on
the market price of the Company's unrestricted stock on the date of
grant ($27.75): $416,250 (Mr. Trainor); $27,750 (Mr. Crichton);
$18,038 (Ms. Rosen). There are no performance based restrictions to
vesting. The RSUs vest after a three-year holding period, and
dividends will accrue in the form of cash at the end of the vesting
period. No such RSU grants were made in fiscal years 2001 and 2002
(except as noted in footnote 5, above).
All other amounts listed represent the dollar amount (net of any
consideration paid by the named executive) of RSUs received pursuant
to the MSPP. These amounts are determined by multiplying the number
of units received by the lower of (i) the closing market price of the
stock on the date of grant or (ii) the closing market price of the
stock on the last day of the just completed fiscal year. In September
2001, Messrs. Trainor, Crichton, Ms. Rosen and Mr. Storch each
elected to defer a portion of his or her annual cash incentive
compensation into the purchase of restricted stock under the MSPP.
Such election was also made by Messrs. Trainor and Crichton in fiscal
years 2001 and 2000. The shares were purchased for 25% below the fair
market value on September 17, 2001 (the date of purchase) for fiscal
2002; for 25% below the fair market value on June 30, 2000 for fiscal
2001; and for 25% below the fair market value on September 10, 1999
(the date of purchase) for fiscal 2000. The RSUs are subject to a
three-year cliff vesting period from the respective dates of
purchase. Each share was purchased for $16.5375 in fiscal 2002
(September 17, 2001 closing price of $22.05 less 25%); for $11.91 in
fiscal 2001 (June 30, 2000 closing price of $15.875 less 25%); and
for $18.94 (September 10, 1999 closing price of $25.25 less 25%) in
fiscal 2000. There are no performance based restrictions to vesting.
Dividends accrue and are paid in the form of cash. For fiscal 2002,
under the MSPP, the named executives purchased the following number
of RSUs: 2,008 (Mr. Trainor); 2,721 (Mr. Crichton); 496 (Ms. Rosen);
254 (Mr. Storch). For fiscal 2001, Mr Trainor purchased 5,106 shares
and Mr. Crichton purchased 5,557 shares. For fiscal 2000, Mr. Trainor
purchased 2,404 shares and Mr. Crichton purchased 1,202 shares. The
following aggregate values are calculated by multiplying the market
value of the Company's unrestricted stock at the end of the last
completed fiscal year, by the number of shares purchased, net of
consideration paid by the named executives: for fiscal 2002, using a
market value at June 30, 2002 of $25.10 per share, $50,400 (Mr.
Trainor); $68,297 (Mr. Crichton); $12,450 (Ms. Rosen); $6,375 (Mr.
Storch). For fiscal 2001, using a market value at June 30, 2001 of
$23.60 per share: $120,501 (Mr. Trainor); $131,145 (Mr. Crichton).
For fiscal 2000, using a market value at June 30, 2000 of $15.87 per
share: $38,151 (Mr. Trainor); $19,076 (Mr. Crichton).
</FN>
12
Stock Options
The following table provides information on stock options granted to
the named executives in fiscal 2002. This information is also provided in
the Summary Compensation Table, on page 11 of this proxy statement, in the
column entitled "Securities Underlying Options/SARs."
STOCK OPTION/ SAR GRANTS IN FISCAL 2002
INDIVIDUAL GRANTS
Number of
Securities % of Total Grant Date
Underlying Options Granted Exercise or Present
Options to Employees Base Price Expiration Value
Name Granted(#)(1) in Fiscal Year ($/Sh) Date ($)(2)
---- ------------- --------------- ----------- ---------- ----------
<s> <c> <c> <c> <c> <c>
Edward J. Trainor 32,200 17.60% $18.85 10/1/08 $139,432
David R. Crichton 20,000 10.93% $18.85 10/1/08 $ 86,604
Roger L. Fix 26,200 14.32% $21.45 12/3/08 $137,951
Deborah A. Rosen 7,400 4.04% $18.85 10/1/08 $ 32,043
Christian Storch 5,400 2.95% $18.85 10/1/08 $ 23,383
<FN>
- --------------------
<F1> Options granted are first exercisable one year from the respective
dates of grant in annual increments of one-fifth of the aggregate
shares subject to grant for all options granted. All options were
granted at a purchase price per share of 100% of the fair market
value of the Company's Common Stock on the date of grant. The options
will be exercisable immediately upon a change in control of the
Company as that term is defined in the 1998 Long Term Incentive Plan
of the Company under which all of the options were respectively
granted.
<F2> In accordance with Securities and Exchange Commission Rules, the
Black-Scholes option pricing model was chosen to estimate the grant
date present value of the options granted. Assumptions used to
calculate Grant Date Present Value for the options granted to Messrs.
Trainor, Crichton, Ms. Rosen and Mr. Storch were: expected
volatility, .306; risk free rate of return, 4.41%; dividend yield,
4.45%; and time of exercise, 7 years. The assumptions used to
calculate the grant date present value for the options granted to Mr.
Fix were: expected volatility, .300; risk free rate of return, 4.50%;
dividend yield, 3.91%; and time of exercise, 7 years. The valuation
model was not adjusted for non-transferability, risk of forfeiture or
the vesting restrictions in the option. The Company does not believe
that the Black-Scholes model used, or any other model whether or not
modified, can accurately determine the future value of an option
because such values depend on future unpredictable factors. The
future values realized may vary significantly from the values
estimated by the Black-Scholes model or any other model. Any future
values realized will ultimately depend upon the excess of the market
price of the stock over the grant price on the date the option is
exercised.
</FN>
13
The following table provides information on stock options exercised
during fiscal 2002 and options outstanding on June 30, 2002.
AGGREGATED OPTION/ SAR EXERCISES IN FISCAL 2002
AND FISCAL YEAR END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options at
At Fiscal Year End Fiscal Year End($)(2)
Shares Acquired Value Exercisable/(E) Exercisable/(E)
Name On Exercise (#) Realized ($)(1) Unexercisable/(U) Unexercisable/(U)
---- --------------- --------------- ------------------------------ --------------------
<s> <c> <c> <c> <c>
Edward J. Trainor -0- -0- 90,153 (E) $ 86,545 (E)
72,147 (U) $420,034 (U)
David R. Crichton -0- -0- 37,807 (E) $ 51,536 (E)
43,993 (U) $257,150 (U)
Roger L. Fix -0- -0- -0- (E) $ -0- (E)
26,200 (U) $ 95,630 (U)
Deborah A. Rosen 1,740 10,458 11,120 (E) $ 4,452 (E)
17,540 (U) $ 97,559 (U)
Christian Storch -0- -0- 1,400 (E) $ 4,290 (E)
7,500 (U) $ 44,873 (U)
<FN>
- --------------------
<F1> Value Realized equals the fair market value of underlying securities
at time of exercise, minus the exercise price, multiplied by the
number of shares acquired without deducting for taxes paid by the
employee.
<F2> Calculated based on June 30, 2002 market price of $25.10 less the
price to be paid upon exercise.
</FN>
The following table provides information on Performance Share Units
awarded under the 1998 Long Term Incentive Plan during fiscal 2002.
LONG TERM INCENTIVE PLAN AWARDS IN FISCAL 2002
Estimated
Future Payouts
Under Non-Stock
Performance or Price-Based Plans
Number of Other Period Until (Target Number of
Performance Maturation Performance Share
Name Share Units Or Payout Units(1))
---- ----------- ------------------ -----------------
<s> <c> <c> <c>
Edward J. Trainor 12,900 July 2001-June 2004 12,900
David R. Crichton 8,000 July 2001-June 2004 8,000
Roger L. Fix 10,500 July 2001-June 2004 10,500
Deborah A. Rosen 2,900 July 2001-June 2004 2,900
Christian Storch 2,200 July 2001-June 2004 2,200
14
<FN>
<F1> In fiscal year 2002, the Compensation Committee (the "Committee")
authorized the award under the 1998 Long Term Incentive Plan of
Performance Share Units ("PSUs"). The PSUs earned by the named
executives at the end of the three-year performance cycle will be
determined by the Board of Directors upon the recommendation of the
Committee. One PSU represents one share of Company Common Stock set
aside and designated as a PSU. At the end of fiscal year 2004, a
Company performance matrix will be examined to determine whether the
Company's long-term financial goals have been met such that PSUs may
be distributed. The financial measures selected for the above
performance period range between 7% and 11% return on total capital
and between 2% and 10% growth in operating income. The Committee has
the discretion to amend the financial performance measures under the
PSU program. Performance will vary depending upon results measured by
the matrix which could result in none of the PSUs being distributed
at the end of the three-year performance cycle. Based on the
foregoing, threshold and maximum amounts cannot be quantified.
Recipients of the PSUs do not receive dividend rights until such time
as the shares underlying the PSUs have been issued. There are no
holding restrictions on the Company stock once the PSUs are
distributed.
</FN>
--------------------
Pension Plan Table
The following table shows the estimated annual benefits payable upon
retirement for the named executive officers in the Summary Compensation
Table and years of service classifications indicated under the Company's
retirement plans:
Years of Service
----------------------------------------
Average Compensation 10 20 25 30
- -------------------- -- -- -- --
<s> <c> <c> <c> <c>
200,000 27,000 54,000 67,500 81,000
300,000 40,500 81,000 101,250 121,500
400,000 54,000 108,000 135,000 162,000
500,000 67,500 135,000 168,750 202,500
600,000 81,000 162,000 202,500 243,000
700,000 94,500 189,000 236,250 283,500
800,000 108,000 216,000 270,000 324,000
900,000 121,500 243,000 303,750 364,500
1,000,000 135,000 270,000 337,500 405,000
1,100,000 148,500 297,000 371,250 445,500
Pensions are computed on a straight-life annuity basis and are not
reduced for Social Security or other offset amounts. Participants receive a
pension based upon average compensation in the three highest consecutive
calendar years multiplied by the number of years of service, times 1.35%.
Effective December 31, 1997 through June 30, 2002, accrual rates under the
Company's qualified retirement plan for certain named executives in the
Summary Compensation Table are as follows: Mr. Trainor 3.85%; Messrs.
Crichton and Storch and Ms. Rosen 2.35%. In addition, participants who were
ever employed by the Company in the position of Corporate Vice President,
Senior Vice President, Executive Vice President, General Counsel or Group
Vice President will receive an accrual rate of 2.35% and Division
Presidents will receive an accrual rate of 1.60%. Average annual
compensation is determined by adding the three highest consecutive years'
earnings and dividing by three.
The Internal Revenue Code of 1986, as amended, limits the benefits
which may be paid from a tax-qualified retirement plan. As permitted by the
Employee Retirement Income Security Act of 1974, the Company has a non-
qualified Supplemental Retirement Plan to provide for the full payment of
the above pensions to the extent the pension amounts exceed tax-qualified
limits. The pension amounts that exceed tax-
15
qualified limits are accounted for by the Company as an operating expense
and are accrued over the expected working career of the employee.
As a mechanism for funding the pension amounts that exceed the tax-
qualified limits, in fiscal year 2000 the Company issued restricted stock
to salaried employees who are projected to have an unfunded Supplemental
Retirement Plan benefit greater than 20% of his/her total retirement
benefit. The restricted stock was issued pursuant to the 1998 Long Term
Incentive Plan ("LTIP"). The number of shares of restricted stock issued to
each such employee was dependent upon his/her age in fiscal year 2000. For
each such employee between ages 55 and 60, 50% of the Supplemental
Retirement Plan benefit is funded with restricted stock. For each such
employee between ages 60 and 63, 75% of the obligation is funded with
restricted stock, and for each such employee age 63 and older, 85% of the
obligation is funded with restricted stock. Each such employee made an
election to participate in this restricted stock award. At the employee's
respective retirement, if the value of the restricted stock equals or
exceeds the value of the supplemental benefit, the restricted stock only
shall be issued. If the value of the stock is less than the calculated
supplemental benefit, cash shall be used to satisfy the remaining unfunded
supplemental pension benefit. Because of the LTIP limitations on issuance
of RSUs the balance of Mr. Trainor's election to receive RSUs was completed
in fiscal 2001. In satisfaction of this election Mr. Trainor received a
grant of 10,651 shares. These shares are reported on the Stock Ownership
Table on page 4 of this proxy statement.
The compensation covered by the pension benefit is based on the
combined amounts set forth under the headings "Salary" (on a calendar year
basis), "Bonus" and "LTIP Payouts" of the Summary Compensation Table. The
years of credited service as of June 30, 2002 for the executive officers
named on the Summary Compensation Table are as follows: Edward J. Trainor,
18 years; David R. Crichton, 30 years; Deborah A. Rosen, 16 years; and
Christian Storch, 3 years. Roger L. Fix will become eligible to participate
in the pension program on January 1, 2003.
Employment Agreements and Change in Control Arrangements
Messrs. Trainor, Fix, Crichton, Ms. Rosen and Mr. Storch each have
employment agreements with the Company, which provide for full-time
employment for Messrs. Trainor and Crichton and Ms. Rosen through December
31, 2002, for Mr. Fix through December 31, 2003, and for Mr. Storch through
December 31, 2004. The agreements of Mr. Trainor, Ms. Rosen and Mr. Storch
provide for automatic renewal for two consecutive three-year terms unless
notice of termination is given one year prior to the end of the then
current term. The agreement of Mr. Fix provides for one automatic three-
year renewal term unless notice of termination is given one year prior to
the end of the then current term. The agreements provide for the payment of
minimum annual compensation to the executives along with participation in
benefit programs available to all executives. Their respective agreements
prohibit each named executive from competing with the present or future
business of the Company for two years subsequent to the termination of
their respective employments. Mr. Trainor presently receives base
compensation under his agreement at an annual rate of $710,000, Mr. Fix
receives $500,000, Mr. Crichton receives $441,000, Ms. Rosen receives
$227,000 and Mr. Storch receives $200,000.
The named executives' respective employment agreements contain
provisions that protect the executives from termination of employment in
the event of a hostile change in control as defined in their employment
agreements. These provisions require, in the event of termination,
subsequent to such a change in control, payment of three times the
respective executive's then current, annual base salary and bonus, 100%
vesting in all benefit plans in which the executive participates and three
additional years of benefit service credited to the executive under the
Company's retirement plans. Additionally, all life and medical insurance
plans would be continued for three years for each terminated executive.
16
Further, the named executives' respective employment agreements
contain provisions providing that, in the event of a hostile change in
control as defined in their employment agreements, and if in such event the
Internal Revenue Service (the "IRS") imposes an excise tax on the payments
received under the respective employment agreements, then the Company will
fully fund any excise tax assessed against the named executive, such that
the payments received by the named executive will not be reduced by any
IRS-imposed tax penalty.
OTHER INFORMATION CONCERNING THE COMPANY
BOARD OF DIRECTORS AND ITS COMMITTEES
Six meetings of the Board of Directors were held during the fiscal
year ended June 30, 2002. Each director of the Company attended at least
75% of the meetings held during the year by the Board and all committees on
which the director served with the exception of Mr. Bolten, Jr. who
attended 33% of the meetings.
Compensation Committee
The Board has a Compensation Committee consisting of Messrs. Greeley
(Chairman), Hogan and Muller. During fiscal 2002, the Committee held five
meetings. The Committee makes recommendations to the Board on the
compensation of the top management of the Company and reviews the
compensation of top divisional management of the Company. Between meetings
of the Board of Directors, the Committee exercises the powers of the Board
pertaining to the Employee Stock Purchase Plan, the 1994 Stock Option Plan
and the 1998 Long Term Incentive Plan.
Audit Committee
Messrs. Landry (Chairman), Fenoglio and Greeley serve on the
Company's Audit Committee. All of these directors are independent as
defined by the New York Stock Exchange rules. During fiscal 2002, the
Committee met on five occasions. The Audit Committee reviews, both prior to
and after the audit, the Company's financial reporting function, the scope
and results of the audit performed (or to be performed) by the independent
auditors of the Company and the adequacy of the Company's internal controls
and reports thereon to the Board of Directors. During fiscal year 2000, the
Committee recommended the adoption by the Board of an Audit Committee
Charter which sets forth the responsibilities and duties of the Committee.
The Board approved and adopted the Committee Charter on October 26, 1999.
At the recommendation of the Committee, on April 25, 2001 the Board of
Directors adopted an amended version of the Charter. The report of the
Committee for the past fiscal year appears below.
Audit Committee Report
The Audit Committee of the Board of Directors (the "Committee") is
entirely made up of independent directors as defined in the New York Stock
Exchange listing standards. It operates pursuant to a charter.
The Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process. The independent
auditors are responsible for expressing an opinion on the conformity of the
Company's audited financial statements with accounting principles generally
accepted in the U. S.
17
In this context, the Committee has reviewed and discussed with
management and the independent auditors the audited financial statements.
The Committee has discussed with the independent auditors the matters
required to be discussed by Statements on Auditing Standards No. 61
(Communication with Audit Committees), as amended by Statements on Auditing
Standards Nos. 89 and 90. In addition, the Committee has received from the
independent auditors the written disclosures required by Independence
Standards Board Standards No. 1 (Independence Discussions with Audit
Committees) and discussed with them their independence from the Company and
its management. And, the Committee has considered whether the independent
auditors' provision of non-audit services to the Company is compatible with
the auditors' independence.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors, that the audited financial
statements be included in the Company's Annual Report on SEC Form 10-K for
the year ended June 30, 2002, for filing with the Securities and Exchange
Commission.
Audit Committee
C. Kevin Landry, Chairman
William R. Fenoglio, Member
Walter F. Greeley, Member
Nominating Committee
During the fiscal year, the Nominating Committee of the Board
consisted of Messrs. Muller (Chairman), King, Sackel (prior to his
retirement from the Board on October 30, 2001) and Trainor. During the
fiscal year, the Committee met on one occasion. The function of the
Committee is to consider and recommend to the Board nominees for election
as directors of the Company. The Committee will consider nominees
recommended by stockholders. Although no formal procedure has been
established, stockholders may submit recommendations to the Secretary of
the Company, 6 Manor Parkway, Salem, New Hampshire 03079 at the time set
forth for submitting shareholder proposals generally.
Directors' Fees
During fiscal 2002, the Company paid certain non-employee directors
$22,000 as a retainer plus $1,000 for each Board meeting attended. Each
director also received $750 for each Committee meeting attended.
Additionally, non-employee directors serving as Committee chairmen were
paid $1,000 for serving in that capacity for the fiscal year. The Chairman
of the Board receives an additional annual retainer of $2,000.
Indebtedness of Management
During the past fiscal year, the Company continued its Stock Option
Loan Plan pursuant to which it has made loans to employees to enable them
to exercise stock options. Loans under this plan are made at market
interest rates at the time the loan is extended. The loans must be repaid
within ten years. Regular quarterly payments are made which reduce the
outstanding indebtedness. The Company holds as collateral all stock
received on the exercise of options under this Plan.
At no time from the beginning of the fiscal year through July 31,
2002 did the largest amount of indebtedness outstanding to any director or
officer of the Company exceed $60,000. Pursuant to the Sarbanes-Oxley Act
of 2002, which was signed into law by President George W. Bush effective
July 30, 2002, the Company will not be continuing its Stock Option Loan
Plan for its executive officers and directors and will otherwise not
directly or indirectly extend or maintain credit or arrange for a personal
loan to any executive officer or director. Any loans outstanding under the
Stock Option Loan Plan on July 30, 2002 will be paid under their terms
until satisfied.
18
PROPOSAL 2-APPROVAL OF AUDITORS
Subject to approval by the stockholders, the Board of Directors has
appointed the firm of Deloitte & Touche LLP, independent public
accountants, as auditors of the Company for the year ending June 30, 2003.
This firm and two of its predecessor firms have been auditors of the
Company since 1955.
It is expected that representatives of Deloitte & Touche LLP will be
present at the Annual Meeting of Stockholders where they will have the
opportunity to make a statement, if they desire to do so, and to respond to
appropriate questions.
Audit Fees
The aggregate fees billed for professional services rendered by
Deloitte & Touche LLP for the audit of the Company's annual financial
statements for fiscal 2002 and the reviews of the financial statements
included in the Company's Forms 10-Q for fiscal 2002 were $715,106.
Financial Information Systems Design and Implementation Fees
There were no fees paid to Deloitte & Touche LLP for financial
information systems design and implementation services in fiscal 2002.
Other Fees
The aggregate fees for services rendered by Deloitte & Touche LLP for
fiscal 2002, other than for the audit and financial information systems
design and implementation services, were $727,234.
A copy of the Company's Annual Report on Form 10-K has been mailed
along with this Notice of Annual Meeting and Proxy Statement to
shareholders. Additional copies of the Company's Annual Report on Form 10-K
may be obtained, without charge, by writing to Standex International
Corporation, Investor Relations Department, 6 Manor Parkway, Salem, NH
03079. Alternatively, Form 10-K may be reviewed on line at:
www.standex.com.
OTHER PROPOSALS
Management does not know of any other matters which may come before
the meeting. However, if any other matters are properly presented at the
meeting, it is the intention of the persons named in the accompanying proxy
to vote, or otherwise act, in accordance with their judgment on such
matters.
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to the Securities Exchange Act of 1934, the Company's
executive officers, directors and persons who own more than 10% of the
Company's Common Stock are required to file reports of ownership and
changes in ownership in the Common Stock of the Company under Section 16(a)
with the Securities and Exchange Commission and the New York Stock Exchange
with copies of those reports filed with the Company.
Based solely upon a review of the copies of the reports furnished to
the Company, the Company believes that during fiscal 2002 all executive
officers, directors and persons holding more than 10% of the Company's
Common Stock have complied with such filing requirements.
19
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for consideration at
the 2003 Annual Meeting of Stockholders must submit such proposal to the
Company, in writing, on or before May 21, 2003.
In order for a shareholder to bring other business before a
shareholder meeting, timely notice must be received by the Company on or
before August 2, 2003.
By the Board of Directors
/s/ Deborah A. Rosen
Deborah A. Rosen, Secretary
September 18, 2002
20
STANDEX INTERNATIONAL CORPORATION
Annual Meeting of Stockholders
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING.
ACCORDINGLY, YOU ARE URGED TO PROMPTLY VOTE YOUR PROXY IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE REVERSE SIDE. IF YOU SO CHOOSE, YOU MAY VOTE YOUR SHARES
IN PERSON AT THE ANNUAL MEETING.
DETACH HERE ZSDX72
PROXY
STANDEX INTERNATIONAL CORPORATION
Annual Meeting of Stockholders
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoint(s) Edward J. Trainor and Deborah A. Rosen as
proxies, will full power of substitution, and hereby authorizes them or any
of them to vote the stock of the undersigned at the Annual Meeting of
Stockholders of Standex International Corporation (the "Company") to be held
at FleetBoston, 100 Federal Street, Boston, Massachusetts, on Tuesday,
October 29, 2002 at 11:00 a.m., and at any adjournments thereof, as indicated
below on the proposals described in the Notice and Proxy Statement for such
meeting and in their discretion on other matters which may properly come
before the meeting.
In connection with those shares (if any) held by me as a participant in the
Standex Retirement Savings Plan (the "Plan"), I hereby direct the trustee of
the Plan in which I participate to vote all vested shares allocated to my
account under such Plan on September 9, 2002 in accordance with the
instructions on the reverse side of this proxy card or, if no instructions
are given, in accordance with the Board of Directors' recommendations, on
all items of business to come before the Annual Meeting of Stockholders to be
held on October 29, 2002 or any adjournment thereof. Under the Plan, the
shares for which no signed proxy card is returned or for which voting
instructions are not timely received or are improperly executed shall be
voted by the trustee in the same proportions on each proposal for which
properly executed instructions were timely received.
Unless otherwise instructed, this proxy will be vote FOR all nominees listed
in Proposal 1 and FOR Proposal 2.
(Important - To be Signed and Dated on Reverse Side) SEE REVERSE
SIDE
(LOGO) Standex
International Corporation
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
Vote by Telephone Vote by Internet
It's fast, convenient and immediate! It's fast, convenient and your vote is
Call Toll-Free on a Touch-Tone Phone immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
- ------------------------------------- --------------------------------------
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement and Proxy Card. Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/sxi
3. Enter your Voter Control Number 3. Enter your Voter Control Number
located on your Proxy Card above located on your Proxy Card above
your name. your name.
4. Follow the recorded instructions. 4. Follow the instructions provided.
- ------------------------------------- --------------------------------------
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/sxi
anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE ZSDX71
[X] Please mark
votes as in
this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE PROPOSALS.
1. Election of Directors.
For three year terms expiring in 2005:
Nominees: (01) John Bolten, Jr., (02) Roger L. Fix,
(03) Daniel B. Hogan, Ph.D.
For a two year term expiring in 2004:
Nominee: (04) David R. Crichton
FOR WITHHELD
ALL [ ] FROM ALL [ ]
NOMINEES NOMINEES
[ ] ____________________________________________
For all nominees except as noted above
2. To approve the selection of Deloitte and FOR AGAINST ABSTAIN
Touche LLP as independent auditors. [ ] [ ] [ ]
To transact such other business as may come before the meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Sign exactly as name appears on this Proxy. If the
shares are registered in the names of two or more
persons, each should sign. Executors, administrators,
trustees, partners, custodians, guardians, attorneys,
and corporate officers should add their full titles.
Signature: ____________ Date: ________ Signature: _____________ Date: ________