UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2002
Commission File No. 1-4436
THE STEPHAN CO.
_______________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Florida 59-0676812
________________________________ _________________
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1850 West McNab Road, Fort Lauderdale, Florida 33309
_______________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (954) 971-0600
_____________
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Class Name of Exchange on Which Registered
___________________ _________________________________________
Common Stock, $.01 AMERICAN STOCK EXCHANGE
Par Value
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to the filing requirements for at least the past 90 days.
YES X NO
____ _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ( )
State the aggregate market value of the voting stock held by non-
affiliates of the Registrant, computed by reference to the price at which
the stock was sold, or the average bid and asked prices of such stock, as
of a specified date within 60 days prior to the date of filing.
$10,596,531
as of March 14, 2003
The above amount excludes shares held by all executive officers and
directors of the Registrant
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:
4,410,577 Shares of Common Stock, $.01 Par Value,
as of March 14, 2003
2
THE STEPHAN CO. AND SUBSIDIARIES
INDEX TO ANNUAL REPORT
ON FORM 10-K
Page
PART III
Item 10: Directors and Executive Officers of the Registrant......... 23
Item 11: Executive Compensation..................................... 25
Item 12: Security Ownership of Certain Beneficial
Owners and Management..................................... 27
Item 13: Certain Relationships and Related Transactions............. 29
Item 14: Controls and Procedures.................................... 31
Item 15: Principal Accountant Fees and Services..................... 32
PART IV
Item 16: Exhibits, Financial Statement Schedules
and Reports on Form 8-K.................................. 33
Signatures.......................................................... 35
Certifications...................................................... 36-39
3
PART III
Item 10. Directors and Executive Officers of the Registrant.
Set forth below is certain biographical information with respect to
the Class I, (whose terms expired in 2001), Class II (whose terms expired
in 2002), and Class III (whose terms expire 2003) directors of the Company
(based solely on information furnished by such persons):
Year of
Age First
(as of Election as Principal Occupation(s)
Name Dec.31, a Company During Past Five Years;
2002) Director Other Directorships
----------- ------- ----------- -----------------------------
Class I directors
-----------------
John DePinto 85 1981 Retired executive for more
(1)(2) than the past five years.
Shouky A. 73 1998 For more than the previous
Shaheen (2) five years, President of
Shaheen and Co. Mr. Shaheen
is also the former owner of
Morris Flamingo, L.P., which
was acquired by the Company
in March 1998.
Class II directors
------------------
Leonard 68 1997 For more than the previous
Genovese (1)(2) five years through June 14,
1999 when he retired,
Mr. Genovese was Chairman
and Chief Executive Officer
of Genovese Drug, Inc., an
American Stock Exchange
listed company. Mr.
Genovese is a director of
two other publicly-traded
companies: Kellwood
Company and Roslyn
Bancorp, as well as Eckerd
Drug, a wholly-owned
subsidiary of JC Penney Co.
Curtis 50 1996 For more than the previous
Carlson (1) five years, partner in
various law firms.
Currently a partner in the
Miami-based law firm of
Payton & Carlson, PA.
23
Class III directors
-------------------
Frank F. 60 1981 For more than the previous
Ferola five years, Chairman of the
Board, President and Chief
Executive Officer of the
Company.
Thomas M. 73 1981 For more than the previous
D'Ambrosio five years, Vice President and
Treasurer of the Company;
practicing attorney.
(1) Member of the Audit Committee.
(2) Member of the Stock Option and Compensation Committee.
Executive Officers
The four executive officers and one former executive officer of the
Company consist of Mr. Frank F. Ferola, President, Chairman of the Board
and Chief Executive Officer; Thomas M. D'Ambrosio, Vice President and
Treasurer; David A. Spiegel, Chief Financial Officer; Peter Ferola, Vice
President/Administration and Secretary; and Franc Ferola, Vice
President/Operations.
The following sets forth certain information with respect to the
executive officers of the Company who are not also directors (based solely
on information furnished by such persons):
Mr. David A. Spiegel, 55, was appointed as Chief Financial Officer in
January 1994. For more than the five years prior to 1994, Mr. Spiegel was
the independent public accountant for the Company.
Mr. Peter Ferola, 34, was appointed as Vice President/Administration
in January 1996. For more than the previous five years, Mr. Ferola has
been employed by the Company in various capacities. In February 1997, Mr.
Ferola was selected as Secretary of the Company. Mr. Ferola had
previously been the Company's Assistant Secretary. Mr. Ferola resigned from
the Company, effective May 10, 2002.
Mr. Franc Ferola, 37, was appointed as Vice President/Operations in
January 1996. For more than the previous five years, Mr. Ferola has been
employed by the Company in various capacities.
Peter Ferola and Franc Ferola are brothers and are sons of Frank F.
Ferola.
24
Item 11. Executive Compensation
The following table sets forth information for the fiscal years ended
December 31, 2002, December 31, 2001 and December 31, 2000 as to the
compensation earned by the Company's Chief Executive Officer and the three
other most highly compensated executive officers of the Company whose
total annual salary and bonus exceeded $100,000 for services rendered by
them in all capacities to the Company and its subsidiaries during fiscal
year 2002 (collectively, the "Named Executives").
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------------------ ------------
Name and Other Securities
Principal Fiscal Annual Underlying All Other
Position(s) Year Salary Bonus Compensation Options Compensation
Frank F. 2002 $747,587 $0 $0 50,000 (1) $0
Ferola, (2) 2001 $622,242 $0 $0 50,000 (1) $0
President, 2000 $565,675 $0 $0 107,000 (1) $0
Chairman of
the Board
and Chief
Executive
Officer
David 2002 $166,251 $0 $0 -0- $0
Spiegel, 2001 $166,375 $0 $0 -0- $0
Chief 2000 $148,349 $0 $0 11,400 $0
Financial
Officer
Franc 2002 $183,013 $0 $0 10,000 (1) $0
Ferola, 2001 $166,375 $0 $0 10,000 (1) $0
Vice 2000 $151,250 $0 $0 47,050 (1) $0
President/
Operations
Peter 2002 $ 79,541 $0 $0 10,000 (1) $0
Ferola (3), 2001 $166,375 $0 $0 10,000 (1) $0
Vice 2000 $151,250 $0 $0 47,050 (1) $0
President/
Administration
(1) Reflects stock options granted pursuant to employment agreements.
(2) Total salary in 2002 includes 2001 vacation compensation.
(3) Employment terminated May 10, 2002.
25
Stock Option Grants in the Last Fiscal Year
The following table sets forth certain information concerning stock
options granted to those Named Executives who were granted stock options
in fiscal year 2002.
Potential Realizable
Value At Assumed Annual
Number of Percentage of Rates of Stock Appreciation
Securities Total Options for Option Term (2)
Underlying Granted to Exercise
Options Employees in Price Per Expiration
Name Granted(#) Fiscal Year(%) Share($) Date 5% 10%
-------- ---------- -------------- --------- -------- ----- ---
Frank F.
Ferola 50,000(1) 72% $3.00 1/01/2012 $244,334 $255,969
Peter
Ferola 10,000(1) 14% $3.00 1/01/2012 $ 48,866 $ 77,812
Franc
Ferola 10,000(1) 14% $3.00 1/01/2012 $ 48,866 $ 77,812
(1) Reflects stock options granted pursuant to employment
agreements.
(2) Potential realizable value is based on the assumption that
the Common Stock appreciates at the annual rates shown
(compounded annually) from the date of grant until the
expiration of the option term. These numbers are
calculated based on the requirements promulgated by the
Commission and do not reflect any estimate or prediction
by the Company of future Common Stock trading prices.
As of December 31, 2002, an aggregate of 498,950 options had been
granted to the Named Executives under the 1990 Key Employee Stock
Incentive Plan and an aggregate of 810,920 options had been granted to all
employees under the Plan, including current officers who are not Named
Executive Officers. Included in the above totals are options that have
been granted and subsequently cancelled and/or expired. Non-employee
directors of the Company are not granted options under the 1990 Key
Employee Stock Incentive Plan, but are granted options under the 1990
Outside Directors' Stock Option Plan.
Year-End Option Values
The following table sets forth certain information, as of December
31, 2002, in respect of the year-end numbers and values of unexercised
stock options held by the Named Executives. None of the Named Executives
exercised any stock options in fiscal year 2002. Based on the closing
price ($3.44) of the Common Stock as of December 31, 2002, there were
120,000 "in-the-money" unexercised stock options.
26
Number of
Unexercised Options
Held at December 31, 2002
Name Exercisable Unexercisable
Frank F.
Ferola 387,000 0
David A.
Spiegel 11,400 0
Franc
Ferola 132,050 0
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of April 15, 2003, certain
information as to the stockholders (other than directors and executive
officers of the Company) known by the Company to own beneficially more
than 5% of the Common Stock (based solely upon filings by said holders
with the Securities and Exchange Commission (the "Commission") on Schedule
13G, pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act")):
Number of Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned (1) of Class
------------------- ---------------- ---------
FMR Corp.(2) 453,500 10.28%
82 Devonshire St.
Boston, MA 02109-7614
Dimensional Fund Advisors, Inc. (3) 228,400 5.18%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
(1) Beneficial ownership, as reported in the above table, has been
determined in accordance with Rule 13d-3 under the Exchange Act.
(2) Fidelity Management & Research Company ("Fidelity"), a
wholly-owned subsidiary of FMR Corp., is a beneficial owner
of the shares reflected above as a result of its acting as
a registered investment adviser to various registered
investment companies. One such company, Fidelity Low-Priced
Stock Fund, owns the shares of Common Stock reflected above.
FMR Corp., through its control of Fidelity, has voting power
with respect to none of the above-indicated shares, but has
the sole power to dispose of all the above-indicated shares.
27
Security Ownership by Management and Directors
The following table sets forth, as of April 15, 2003, certain
information concerning the beneficial ownership of Common Stock by each of
the four nominees for election as a director of the Company (all of whom
are currently directors of the Company), each other director, the Named
Executives, as defined below, and all current directors and executive
officers of the Company as a group (based solely upon information
furnished by such persons):
Number of Shares
Name of Beneficially Percent
Beneficial Owner Owned (1)(2) of Class
-------------------- ---------------- --------
Curtis Carlson. . . . . . . . . . . . . . . 25,310 (4)
Thomas M. D'Ambrosio. . . . . . . . . . . . 240,964 5.43%
John DePinto. . . . . . . . . . . . . . . . 133,514 3.01%
Frank F. Ferola . . . . . . . . . . . . . . 969,935 (3) 20.01%
Franc Ferola . . . . . . . . . . . . . . . .142,050 3.12%
Leonard Genovese. . . . . . . . . . . . . . .26,310 (4)
Shouky Shaheen . . . . . . . . . . . . . . .327,306 7.39%
David Spiegel . . . . . . . . . . . . . . . .11,400 (4)
All executive officers and directors
as a group (eight persons) . .. . . . .1,876,789 36.65%
----------- -------
(1) Beneficial ownership, as reported in the above table,
has been determined in accordance with Rule 13d-3
under the Exchange Act. Unless otherwise indicated,
beneficial ownership includes both sole voting and
sole dispositive power.
(2) Includes the following shares that may be acquired
upon the exercise of options held by the specified
person within 60 days of the date of this report:
Mr. Thomas D'Ambrosio-24,250; Mr. John DePinto-25,310;
Mr. Frank Ferola-437,000; Mr. Curtis Carlson-25,310;
Mr. Leonard Genovese-25,310; Mr. Shouky Shaheen-20,248;
Mr. David Spiegel-11,400; Mr. Franc Ferola-142,050; and
all executive officers and directors as a group-710,878.
(3) Includes 14,305 shares owned by Mr. Frank Ferola's
personal charitable foundation, of which Mr. Ferola is
a co-trustee.
(4) Represents less than 1%.
28
Item 13. Certain Relationships and Related Transactions
In fiscal year 2002, the Company paid to Payton & Carlson, P.A., a
law firm of which Curtis Carlson is a partner, approximately $136,265 for
legal services rendered by such firm to the Company. The Company also
paid an annual salary of $54,000 to Thomas D'Ambrosio, a director and
executive officer of the Company. for legal services rendered throughout
the year.
Board of Directors; Committees of the Board
The Board of Directors met three times during fiscal year 2002.
During fiscal year 2002, no director attended fewer than 75% of the total
number of meetings of the Board and of the committee(s) of the Board on
which he served. The Company does not have a nominating committee. The
Board has established two standing committees, consisting of (1) an Audit
Committee and (2) a Stock Option and Compensation Committee. The current
functions of each such Committee are as follows:
The Audit Committee, which held numerous informal meetings during
2002, reviews the internal and external audit functions of the Company and
makes recommendations to the Board of Directors with respect thereto. It
also has primary responsibility for the formulation and development of the
auditing policies and procedures of the Company, and for making
recommendations to the Board of Directors with respect to the selection of
the Company's independent auditing firm. The Audit Committee is governed
by the Company's Audit Committee Charter. The Board of Directors of the
Company has determined that the current composition of the Audit Committee
satisfies the American Stock Exchange's requirements regarding the
independence, financial literacy and experience of audit committee
members. The Chairman of this Committee is Curtis Carlson. The other
members of this Committee are Leonard Genovese and John DePinto.
The Stock Option and Compensation Committee (the "Compensation
Committee"), which held numerous informal meetings during 2002, has
primary responsibility for the administration of the Company's 1990 Key
Employee Stock Incentive Plan, including principal responsibility for the
granting of options thereunder. The Compensation Committee is also
responsible for establishing the overall philosophy of the Company's
executive compensation program and overseeing the executive compensation
plan developed to execute the Company's compensation strategy. The
Chairman of the Compensation Committee is Shouky Shaheen. The other
members of the Committee are Leonard Genovese and John DePinto
Compensation of Directors
All directors of the Company are compensated for their services by
payment of $300 for each Board meeting attended.
29
During fiscal year 2002, options to purchase an aggregate of 20,248
shares of Common Stock, at an exercise price of $3.67 per share, were
granted by the Company to the four directors of the Company who were not
employees or regularly retained consultants of the Company (each, an
"Outside Director") pursuant to the Company's 1990 Outside Directors'
Stock Option Plan.
Under such Plan, each Outside Director is automatically granted, upon
such person's election or re-election to serve as a director of the
Company, an option exercisable over five years, to purchase shares of
Common Stock. Upon initial election to the Board of Directors, an Outside
Director is granted an option to purchase 5,062 shares of Common Stock at
an exercise price equal to the fair market value of the Common Stock on
the date of grant. An option to purchase an additional 5,062 shares of
Common Stock (at an exercise price equal to the fair market value of the
Common Stock on the date of such grant) is granted to each incumbent
Outside Director during each fiscal year of the Company thereafter on the
earlier of (i) June 30 or (ii) the date on which the stockholders of the
Company elect directors at an annual meeting of such stockholders or any
adjournment thereof. The aggregate number of shares of Common Stock
reserved for grant under the Outside Directors' Stock Option Plan is
202,500, of which options covering 101,240 shares have been granted.
Employment and Termination Arrangements
Frank F. Ferola
In January 1997, the Company entered into an employment agreement
with Mr. Frank F. Ferola. The term of the agreement was for three years,
expiring in January 2000. In 1999, pursuant to the terms of his
employment agreement, Mr. Ferola renewed his employment agreement for an
additional three-year term until 2003. In March 2002, pursuant to the
terms of his employment agreement, Mr. Ferola renewed his agreement with
the Company for an additional three-year term until 2006. Under such
agreement, Mr. Ferola is to receive compensation in the amount of $425,000
per annum, with annual increases of 10%, and an annual stock option grant
of 50,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on the date of grant. In addition, Mr.
Ferola is entitled to receive an annual performance bonus based on
increases of at least 10% in the Company's earnings per share, calculated
by comparison to a base year of 1996 and pursuant to a formula set forth
in his employment agreement.
In the event of a change in control (as defined in the employment
agreement) of the Company, Mr. Ferola is entitled to receive an amount
equal to his base salary for the remaining term of his employment
agreement plus an additional 24 months' salary. In addition, upon such an
event, Mr. Ferola is to receive from the Company, in a lump-sum payment,
an amount equal to the most recent annual bonus paid multiplied by the sum
of the number of years (including any fraction thereof) remaining in the
term of his agreement plus two.
30
Franc Ferola
In July 1998, the Company entered into an amended employment
agreement with Franc Ferola. Such amended employment agreement extended
the term of his agreement to January 2001. In September 2000, pursuant to
the terms of his employment agreement, Franc Ferola renewed his agreement
with the Company for an additional three-year term. Mr. Ferola is
entitled to receive a base salary of $125,000 per annum, with annual
increases of 10% and an annual stock option grant of 10,000 shares of
Common Stock at an exercise price equal to the fair market value of the
Common Stock on the date of grant. In addition, for the remaining term of
the agreement, Franc Ferola is entitled to receive an annual performance
bonus based on increases of at least 10% in the Company's earnings per
share, as determined by a formula set forth in his employment agreement
calculated by comparison to a base year of 2000.
In the event of a change in control, including a sale, merger or
acquisition (as defined in the employment agreement) of the Company, Franc
Ferola is entitled to receive an amount equal to his base salary for the
remaining term of his employment agreement plus an additional 12 months'
salary. In addition, upon such an event, Franc Ferola is entitled to
receive from the Company, in a lump-sum payment, an amount equal to the
most recent annual bonus paid multiplied by the sum of the number of years
(including any fraction thereof) remaining in the term of his agreement
plus one.
Other Transaction
In 2000, the Company entered into a separation agreement with a
former executive officer providing for the lump-sum payment of
approximately $380,000 who resigned for health reasons.
Item 14. Controls and Procedures
As of a date within 90 days of the filing date of this annual report,
an evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures was performed under the
supervision and with the participation of the Company's management,
including the chief executive officer and principal financial officer.
Based on that evaluation, the Company's management, including the chief
executive officer and chief financial officer, concluded that the
Company's disclosure controls and procedures were effective as of the
evaluation date. Subsequent to the evaluation date, there have been no
significant changes in the Company's internal controls or in other factors
that could significantly affect internal controls.
31
Item 15. Principal Accountant Fees and Services
Deloitte & Touche LLP, are the principal independent accountants of
the Company. In 2002, the Audit Committee of the Company recommended for
approval, and the board of directors of the Company approved, a policy
that thereafter the Company's auditors would be retained solely to provide
audit and audit-related services and advice with respect to tax matters,
and that the auditors would not be retained to provide consulting
services.
Audit Fees
Deloitte & Touche billed the Company and its subsidiaries $154,650
and $150,300 for 2002 and 2001, respectively, for the audit services,
including the audit of the annual consolidated financial statements of the
Company for the fiscal years ended December 31, 2002 and 2001 and reviews
of the interim financial statements of the Company included in quarterly
reports on Form 10-Q and quarterly reports to shareholders for the periods
ended March 31, June 30 and September 30, 2002 and 2001.
There were no other fees billed by Deloitte & Touche to the Company
in connection with audit-related, tax or other services.
32
PART IV
Item 16. Exhibits, Financial Statement Schedules
and Reports on Form 8-K
(a) Exhibits
10.1 Employment Agreement dated January 1, 1996 and renewals
dated January 1, 1998 and January 1, 2001, between The Stephan Co. and
Franc Ferola.
10.2 Employment Agreement dated January 1, 1997, and
renewals dated December 1, 1999 and March 14, 2002, between The Stephan
Co. and Frank F. Ferola.
10.3 Separation agreement dated November 17, 2000 between
The Stephan Co. and Lucille Murphy.
99.1 Chief Executive Officer Certification pursuant to
Section 906 of the Sarbanes Oxley Act of 2002.
99.2 Chief Financial Officer Certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
33
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto, duly authorized.
THE STEPHAN CO.
By: /s/ Frank F. Ferola
___________________________________
Frank F. Ferola
President and Chairman of the Board
April 30, 2003
By: /s/ David A. Spiegel
___________________________________
David A. Spiegel
Principal Financial Officer
Principal Accounting Officer
April 30, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
By: /s/ Frank F. Ferola By: /s/ Thomas M. D'Ambrosio
______________________________ ____________________________
Frank F. Ferola, Principal Thomas M. D'Ambrosio
Executive Officer and Director Vice President and Director
Date: April 30, 2003 Date: April 30, 2003
By: /s/ John DePinto By: /s/ Curtis Carlson
______________________________ ____________________________
John DePinto, Director Curtis Carlson, Director
Date: April 30, 2003 Date: April 30, 2003
By: /s/ Leonard Genovese By: /s/ Shouky Shaheen
______________________________ ____________________________
Leonard Genovese, Director Shouky Shaheen, Director
Date: April 30, 2003 Date: April 30, 2003
35
37
39
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of The Stephan Co. (the "Company) on
Form 10-K/A for the period ended December 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Frank F. Ferola, Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ Frank F. Ferola
__________________________________
Frank F. Ferola
Chief Executive Officer
April 30, 2003
CERTIFICATION OF CHIEF FINANCIAL OFFICER
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of The Stephan Co. (the "Company) on
Form 10-K/A for the period ended December 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
David Spiegel, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ David A. Spiegel
__________________________________
David A. Spiegel
Chief Financial Officer
April 30, 2003
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Frank F. Ferola, certify that:
1. I have reviewed this annual report on Form 10-K/A of The Stephan Co.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this annual
report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to record,
process, summarize and report financial data and have identified for the
Registrant's auditors any material weaknesses in internal controls; and
36
CERTIFICATION OF CHIEF EXECUTIVE OFFICER (continued)
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6. The Registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
/s/ Frank F. Ferola
__________________________________
Frank F. Ferola
Chief Executive Officer
April 30, 2003
37
CERTIFICATION OF CHIEF FINANCIAL OFFICER
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David A. Spiegel, certify that:
1. I have reviewed this annual report on Form 10-K/A of The Stephan Co.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this annual
report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to record,
process, summarize and report financial data and have identified for the
Registrant's auditors any material weaknesses in internal controls; and
38
CERTIFICATION OF CHIEF FINANCIAL OFFICER (continued)
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6. The Registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
/s/ David A. Spiegel
__________________________________
David A. Spiegel
Chief Financial Officer
April 30, 2003
39