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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3 )*
THE STEPHAN CO.
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(Name of Issuer)
COMMON SHARES
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(Title of Class of Securities)
858603 10 3
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(CUSIP Number)
ANCORA CAPITAL INC
ATTN: RICHARD BARONE
ONE CHAGRIN HIGHLANDS
2000 AUBURN DRIVE, SUITE 420
CLEVELAND, OHIO 44122
(216) 825-4000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications)
September 27, 2004
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |__|.
Check the following box if a fee is being paid with the statement |___|.
SCHEDULE 13D
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CUSIP NO. 858603 10 3
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
ANCORA CAPITAL, INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Ohio, U.S.A.
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY -----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
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14 TYPE OF REPORTING PERSON*
HC
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SCHEDULE 13D
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CUSIP NO. 858603 10 3
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
ANCORA SECURITIES, INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Nevada, U.S.A.
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY -----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 20820
REPORTING -----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
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10 SHARED DISPOSITIVE POWER
20820
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20820
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.48
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14 TYPE OF REPORTING PERSON*
BD
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SCHEDULE 13D
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CUSIP NO. 858603 10 3
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
ANCORA ADVISORS, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Nevada, U.S.A.
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7 SOLE VOTING POWER
NUMBER OF 158001
SHARES
BENEFICIALLY -----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 123000
REPORTING -----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 158001
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10 SHARED DISPOSITIVE POWER
123000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
281001
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.43
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14 TYPE OF REPORTING PERSON*
IA
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The following constitutes Amendment No. 3 ("Amendment No. 3") to the
Schedule 13D's filed by the undersigned on July 22, 2004, August 16, 2004 and
September 8, 2004. This Amendment No. 3 amends the Schedule 13D as specifically
set forth.
Item 4. Purpose of Transaction
Item 4 is hereby replaced with the following:
"The Filing Persons ("Ancora") acquired shares to establish investment
positions in the Issuer ("Stephan" or the "Company"). Subject to market
conditions and other factors, Ancora may purchase additional shares, maintain
their present ownership of shares or sell some or all of the shares.
Merlin Partners ("Merlin"), a private investment partnership managed by Ancora
Advisors as its General Partner, expects to nominate five individuals to the
Board of Directors at the upcoming annual meeting. Merlin is planning on
soliciting proxies to vote shares at the 2004 Annual Meeting of Stephan and at
any and all adjournments and postponements of the meeting. We have confirmed
that our "Shareholder Nomination Notice" shipped to the Corporate Secretary via
Federal Express on September 8, 2004 was received at the Company's headquarters
on September 9, 2004. We have requested that the Company inform us of any
deficiencies in our notice. No response has been noted. We therefore believe
that Merlin will have the right to nominate our five representatives to the
Board of Directors of Stephan at the annual meeting. We have attempted to
contact senior management of the Company in order to discuss potential actions
by management that would avert a showdown at the annual meeting, but our recent
calls and messages have gone unreturned.
We were contacted by Mr. Carlson, a member of the Special Committee of the
Board of Directors regarding purchasing all of the outstanding stock of
Stephan. We replied that we were not interested, in no small part due to the
fact that we are not in the business of buying controlling interests in
companies. We do not believe a buyout is practical for a third party due to the
unreasonable severance arrangement between the Chief Executive Officer and the
Company. We believe that the current severance payout to Mr. Ferola upon a sale
of Stephan would be over $4 million, while the current market capitalization of
the Company is between $15 million and $16 million. We would also note that Mr.
Ferola's total cash compensation in 2003 was over $1.4 million while the Net
Income of Stephan was $760K."
Item 5. Interest in Securities of the Issuer
Item 5 is hereby amended by replacing the previous text with the following:
Set forth below for the Filing Persons, in the aggregate, are the number of
Shares which may be deemed to be beneficially owned as of September 30, 2004
and the percentage of the Shares outstanding represented by such ownership
(based on 4,369,557 shares outstanding):
Name: No. of Shares Percent of Class
Ancora Securities Inc(1) 20,820 0.48 %
Richard Barone(2) 0 0.00 %
Ancora Mutual Funds(3) 42,000 0.96 %
Ancora Managed Accounts(4) 183,000 4.19 %
Merlin Partners, L.P. (5) 55,001 1.26 %
Total 301,821 6.91 %
(1) These Shares are owned by investment clients of Ancora Securities who
may be deemed to beneficially own these Shares by reason of their power
to dispose of such Shares. Ancora Securities disclaims beneficial
ownership of all such Shares.
(2) Shares owned directly by Mr. Barone as an individual investor and are
held at Ancora Securities.
(3) These Shares are owned by the Ancora Mutual Funds. Ancora Advisors
and Mr. Barone do not own shares directly but, due to Ancora Advisors'
Investment Management Agreement with the Ancora Mutual Funds and by
virtue of Mr. Barone's positions as Portfolio Manager of the Ancora
Income Fund, Ancora Equity Fund, Ancora Special Opportunity Fund and
Ancora Bancshares, all of which are registered under the Investment
Company Act of 1940, Ancora Advisors and Mr. Barone may be deemed to
beneficially own 42,000 shares. Ancora Advisors and Mr. Barone disclaim
beneficial ownership of all such Shares.
(4) These Shares are owned by investment clients of Ancora Advisors.
Ancora Advisors and Mr. Barone do not own shares directly but, by virtue
of Ancora Advisors Investment Management Agreement with the investment
clients and Mr. Barone's position as Portfolio Manager of Ancora
Advisors, each may be deemed to beneficially own 183,000 Shares by reason
of their power to dispose of such Shares. Ancora Advisors and Mr. Barone
disclaim beneficial ownership of such Shares.
(5) These Shares are owned by Merlin Partners, L.P. Ancora Advisors and
Mr. Barone do not own shares directly but, due to Ancora Advisors' being
the General Partner of Merlin Partners, L.P. and by virtue of Mr.
Barone's position as Portfolio Manager of Merlin Partners, L.P., Ancora
Advisors and Mr. Barone may be deemed to beneficially own 55,001 shares.
Ancora Advisors and Mr. Barone disclaim beneficial ownership of all such
Shares.
Item 7. Material to be Filed as Exhibits
Schedule A annexed hereto lists all transactions in the Shares since
the filing of the most recent Amendment to Schedule 13(D) by the Reporting
Persons. All of such transactions were effected in the open market.
Signatures
After reasonable inquiry, and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, compete and
correct.
Richard Barone
Date: 10/01/04 by: /s/Richard A. Barone
Richard A. Barone
EXHIBIT A
THE STEPHAN CO. (TSC)
SECURITY CROSS REFERENCE (PURCHASES/SALES SINCE LAST FILING)
DATE BOUGHT/
SOLD QUANTITYPRICE
9/9/2004 -1,000 5.45
9/9/2004 -1,100 5.45
9/9/2004 3,000 5.4
9/9/2004 200 5.47
9/9/2004 1,000 5.5
9/9/2004 1,000 5.8
9/9/2004 11,800 5.25
9/9/2004 3,000 5.37
9/9/2004 500 5.36
9/9/2004 300 5.4
9/9/2004 1,000 5.33
9/10/2004 2,000 5.38
9/16/2004 -5,000 4.15
9/16/2004 -2,000 4.15
9/16/2004 -10,0004.075
9/22/2004 4,000 3.58
9/22/2004 1,000 3.6
9/23/2004 3,000 3.4
9/24/2004 3,000 3.35
9/24/2004 2,900 3.4
9/24/2004 100 3.35
9/24/2004 3,000 3.35
9/24/2004 5,000 3.35
9/24/2004 300 3.35
9/24/2004 4,700 3.35
9/24/2004 3,200 3.3
9/24/2004 1,800 3.35
9/24/2004 1,000 3.35
9/24/2004 1,000 3.3
9/24/2004 5,000 3.33
9/27/2004 5,000 3.31
9/27/2004 5,000 3.33
9/28/2004 2,000 3.3
9/29/2004 1,000 3.35
9/30/2004 1,000 3.5
9/30/2004 4,000 3.5
61,700