<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
COMPASS PLASTICS & TECHNOLOGIES, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number 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 determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
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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 Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
COMPASS PLASTICS & TECHNOLOGIES, INC.
15730 South Figueroa Street
Gardena, California 90248
September 25, 1998
Dear Stockholder:
We cordially invite you to attend our Annual Meeting of Stockholders to
be held at 9:00 a.m. on Friday, October 23, 1998, at the Torrance Holiday Inn,
19800 South Vermont Avenue, Torrance, California 90502. Enclosed are the Notice
of Annual Meeting, Proxy Statement and a Proxy Card relating to the Annual
Meeting which we urge you to read carefully. Also enclosed is the Company's
Annual Report on Form 10-K for the fiscal year ended October 26, 1997, and
Quarterly Reports on Form 10-Q for the quarters ended January 25, 1998, April
26, 1998 and July 26, 1998. Whether or not you expect to attend the Annual
Meeting, please sign and date the enclosed Proxy Card and return it as promptly
as possible to ensure that your shares will be voted. Because mail delays occur
frequently, it is important that the enclosed Proxy Card be returned well in
advance of the meeting.
On Behalf of Your Board of Directors
GEOFFREY J.F. GORMAN
Chairman of the Board
MICHAEL A. GIBBS
President and Chief Executive Officer
<PAGE>
COMPASS PLASTICS & TECHNOLOGIES, INC.
15730 South Figueroa Street
Gardena, California 90248
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 23, 1998
-------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Compass Plastics & Technologies, Inc., a Delaware
corporation (the "Company"), will be held at the Torrance Holiday Inn, 19800
South Vermont Avenue, Torrance, California 90502, on Friday, October 23, 1998,
beginning at 9:00 a.m., local time. The Annual Meeting will be held for the
following purposes:
1. To elect five members of the Board of Directors, each to hold
office until the next Annual Meeting and until his successor
is elected and qualified; and
2. To consider and transact such other business as may properly
come before the Annual Meeting or any postponements or
adjournments thereof.
The Board of Directors has fixed September 24, 1998, as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any postponements or adjournments thereof, and only
stockholders of record at the close of business on that date are entitled to
such notice and to vote at the Annual Meeting. A list of stockholders entitled
to vote at the Annual Meeting will be available at the Annual Meeting and at the
offices of the Company for ten days prior to the Annual Meeting.
We hope that you will use this opportunity to take an active part in
the affairs of the Company by voting on the business to come before the Annual
Meeting, either by executing and returning the enclosed Proxy Card or by casting
your vote in person at the Annual Meeting.
STOCKHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. A
STAMPED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. IF A STOCKHOLDER RECEIVES
MORE THAN ONE PROXY CARD BECAUSE HE OR SHE OWNS SHARES REGISTERED IN DIFFERENT
NAMES OR ADDRESSES, EACH PROXY CARD SHOULD BE COMPLETED AND RETURNED.
By Order of the Board of Directors
PAUL J. IACONO
Vice President - Finance
Gardena, California
September 25, 1998
<PAGE>
COMPASS PLASTICS & TECHNOLOGIES, INC.
15730 South Figueroa Street
Gardena, California 90248
(213) 770-8771
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 23, 1998
INTRODUCTION
This Proxy Statement is furnished to the stockholders by the Board of
Directors of Compass Plastics & Technologies, Inc., a Delaware corporation (the
"Company"), for solicitation of proxies for use at the Annual Meeting of
Stockholders to be held at the Torrance Holiday Inn, 19800 South Vermont Avenue,
Torrance, California 90502, on Friday, October 23, 1998, at 9:00 a.m., local
time, and at any and all adjournments thereof.
The expense of this solicitation of proxies will be borne by the
Company. Solicitations will be made only by use of the mail except that, if
deemed desirable, officers and regular employees of the Company may solicit
proxies by telephone, telecopier and personal calls. Brokerage houses,
custodians, nominees and fiduciaries will be requested to forward the proxy
soliciting material to the beneficial owners of the stock held of record by such
persons and the Company will reimburse them for their reasonable expenses
incurred in this connection.
The Company's Annual Report on Form 10-K, including financial
statements for the fiscal year ended October 26, 1997, and Quarterly Reports on
Form 10-Q for the quarters ended January 25, 1998, April 26, 1998 and July 26,
1998, accompany but do not constitute part of this Proxy Statement.
The purpose of the meeting and the matters to be acted upon are set
forth in the attached Notice of Annual Meeting. As of the date of this Proxy
Statement, the Board of Directors knows of no other business which will be
presented for consideration at the Annual Meeting. A stockholder giving a proxy
pursuant to the present solicitation may revoke it at any time before it is
exercised by submitting a duly executed proxy bearing a later date or by
delivering to the Secretary of the Company a written notice of revocation prior
to the Annual Meeting. No proxy will be used if the stockholder is personally
present at the meeting and informs the Company that such stockholder wishes to
vote the shares in person. Subject to such revocation, all shares represented by
a properly executed proxy received prior to or at the Annual Meeting will be
voted by the proxy holders whose names are set forth in the accompanying proxy
in accordance with the instructions on the proxy. If no instruction is specified
with respect to a matter to be acted upon, the shares represented by the proxy
will be voted "FOR" the election of the nominees for director set forth herein.
If any other business shall properly come before the Annual Meeting, votes will
be cast pursuant to said proxies in respect of any such other business in
accordance with the judgment of the persons acting under said proxies.
It is anticipated that the mailing to stockholders of this Proxy
Statement and the enclosed proxy will commence on or about September 25, 1998.
<PAGE>
OUTSTANDING SECURITIES AND VOTING RIGHTS
Only stockholders of record at the close of business on September 24,
1998 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting. At that date, there were 4,883,750 outstanding shares of common stock,
par value $.001 per share, of the Company (the "Common Stock"), the only
outstanding voting security of the Company. There was no beneficial owner (as
defined under the rules of the Securities and Exchange Commission) of more than
5% of the Common Stock known to the Company at the Record Date, other than as
set forth under the caption "Security Ownership of Certain Beneficial Owners and
Management" below.
The holders of a majority of the outstanding shares of Common Stock,
present in person or by proxy, will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum. "Broker non-votes" are shares held by brokers
or nominees which are present in person or represented by proxy, but which are
not voted on a particular matter because instructions have not been received
from the beneficial owner. Under applicable Delaware law, the effect of the
broker non-votes on a particular matter depends on whether the matter is one as
to which the broker or nominee has discretionary voting authority. The effect of
broker non-votes on the specific items to be brought before the Annual Meeting
of Stockholders is discussed under each item. The affirmative vote of a majority
of all shares of Common Stock represented and voting at the Annual Meeting is
required to elect directors pursuant to Proposal No. 1.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as to the shares of Common
Stock owned as of the Record Date, by (i) each person known to the Company to be
the beneficial owner of more than 5% of the Common Stock; (ii) each director;
(iii) each executive officer named in the Summary Compensation Table herein; and
(iv) all directors and executive officers of the Company as a group. Unless
otherwise indicated in the table or in the footnotes following the table, (a)
the persons as to whom the information is given had sole voting and investment
power over the shares of Common Stock shown as beneficially owned by them, and
(b) the business address of each such person is c/o Compass Plastics &
Technologies, Inc., 15730 South Figueroa Street, Gardena, California 90248.
<TABLE>
<CAPTION>
Number of Percent of
Shares Common Stock
Name and Address of Beneficially Beneficially
Beneficial Owner Owned(1) Owned(1)
- ----------------------- ------------ ------------
<S> <C> <C>
Sirrom Investments, Inc. ....................................... 867,144(2) 16.3%
500 Church Street, Suite 200
Nashville, TN 37219
North Atlantic Smaller Companies ............................... 787,500 16.1
Investment Trust plc
c/o JO Hambro & Partners Limited
10 Park Place
London SW1A 1LP, U.K.
Private Equity Partners, L.P.(3)................................ 279,106 9.2
808 Lexington Avenue, 2nd Floor
New York, NY 10021
Geoffrey J.F. Gorman............................................ 579,914(4) 11.9
808 Lexington Avenue, 2nd Floor
New York, NY 10021
Michael A. Gibbs................................................ 446,515(5) 9.1
James S. Adams.................................................. 46,124 *
G. Michael Frink................................................ 1,250 *
Stephen M. Adams................................................ 23,062 *
Jawed Ghias..................................................... 19,500 *
Christopher H.B. Mills.......................................... 787,500(6) 16.1
c/o JO Hambro & Partners Limited
10 Park Place
London SW1A 1LP, U.K.
Jay M. Swanson.................................................. 10,000(7) *
c/o Swanson Ventures LLC
77 North Street, Suite 6
Medfield, MA 02052
Werner H. Schulz................................................ 50,000(8) 1.0
All directors and executive officers as......................... 1,917,352 39.3
a group (8 persons)
</TABLE>
- ------------------------
* Percentage ownership is less than 1%.
3
<PAGE>
(1) In accordance with Rule 13d-3(d)(1)(i) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), shares beneficially
owned include shares issuable upon the exercise of options, warrants,
rights or conversion privileges within 60 days of the Record Date. For
the purpose of computing the percentage of outstanding shares
beneficially owned by a particular person, any securities not
outstanding which are subject to options, warrants, rights or
conversion privileges exercisable by that person within 60 days of the
Record Date have been deemed to be outstanding, but have not been
deemed outstanding for the purpose of computing the percentage of the
class beneficially owned by any other person.
(2) Includes five-year warrants to purchase 420,000 shares of Common Stock
at an exercise price of $6.75 per share, which were issued on February
27, 1998 to Sirrom Capital Corporation d/b/a Tandem Capital ("Sirrom")
in connection with the issuance of a $7,000,000 12.25% debenture by
Sirrom to finance a portion of the acquisition of M.O.S. Plastics, Inc
("M.O.S."). Does not include additional warrants to purchase 140,000
shares of Common Stock per year which may be issued to Sirrom in the
event any portion of the 12.25% debenture remains outstanding on
February 27, 2000 and on each anniversary thereafter, in each case at
an at an exercise price equal to the greater of $7.00 per share or 75%
of the average closing bid price of the Common Stock for the 20
trading days preceding the required date of issuance of such
additional warrants.
(3) Private Equity Partners, LLC ("PEP") is the general partner of Private
Equity Partners, L.P., a Delaware limited partnership.
(4) Includes (i) 279,106 shares of Common Stock owned by Private Equity
Partners, L.P., of which Mr. Gorman is the managing partner of PEP,
its general partner, and (ii) 271,091 shares of Common Stock owned
directly which are pledged to the Company as collateral for a loan.
See "Certain Relationships and Related Transactions."
(5) Includes (i) 46,515 shares of Common Stock owned beneficially through
Private Equity Partners, L.P., and (ii) 400,000 shares of Common Stock
owned directly which are pledged to the Company as collateral for a
loan. Does not include 222,222 shares of Common Stock which may be
issued in the future upon certain circumstances under options granted
to Mr. Gibbs under the Company's 1997 Stock Option Plan. See
"Executive Compensation and Related Matters-- Employment and
Management Agreements" and "Certain Relationships and Related
Transactions."
(6) Represents shares owned beneficially by North Atlantic Smaller
Companies Investment Trust plc, of which Mr. Mills is a managing
director.
(7) Represents shares of Common Stock issuable upon the exercise of a
five-year warrant, at an exercise price of $8.00 per share, issued to
Mr. Swanson for serving as a director of the Company. See "Information
about Board Meetings and Committees, and Management - Compensation of
Directors."
(8) Represents shares of Common Stock issuable upon the exercise of a
warrant issued to Mr. Schulz in connection with the acquisition of
M.O.S. on February 27, 1998. The warrant, which may be exercised at
any time, expires on February 27, 2003 and has an exercise price of
$10.80 per share.
4
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE NOMINEES LISTED BELOW
A Board of five directors is to be elected at the Annual Meeting, to
hold office until the 1998 Annual Meeting of Stockholders and thereafter until
their respective successors are elected and qualified. The Board of Directors
proposes the five nominees named below, each of whom is presently a director of
the Company. All nominees have advised the Company that they are able and
willing to serve as directors. However, if any nominee is unable to or for good
cause will not serve, the persons named in the accompanying proxy will vote for
any other person nominated by the Board of Directors.
If one or more other persons are nominated as directors, the five
nominees receiving the highest number of votes will be elected as directors.
Accordingly, abstentions and broker non-votes will have no effect on the
election of directors.
Set forth below are the names and ages, and backgrounds, of the
nominees of the Board of Directors:
NOMINEES FOR DIRECTOR
Geoffrey J.F. Gorman - Age 40
Director since 1996
Mr. Gorman has been the Chairman of the Board of the Company and AB
Plastics Corporation ("AB Plastics") since September 1996. Mr. Gorman also
serves as managing partner of Private Equity Partners, L.L.C., an investment
fund, which he founded in March 1996. From 1985 to June 1996, Mr. Gorman was a
managing partner and stockholder of Ardshiel, Inc., an investment fund
specializing in leveraged buyouts. Mr. Gorman is currently the Co-Chairman of
the Board of Santa Maria Foods Corporation, a producer and distributor of
Italian specialty foods, and a director of Analab, Inc., an environmental
testing business. He was previously a director of Golden State Vintners, Koala
Springs International, Inc., Protein Genetics, Inc. and The Swanson Company. Mr.
Gorman received a B.A. from Boston University in 1979 and an M.B.A. from the
Amos Tuck School of Business Administration at Dartmouth College in 1985.
Michael A. Gibbs - Age 61
Director since 1996
Mr. Gibbs has been the President and Chief Executive Officer of the
Company, Chief Executive Officer of AB Plastics and a director of the Company
and AB Plastics since September 1996. Mr. Gibbs is also the President of Page
Mill Corporation, a consulting firm which he began in 1971. Mr. Gibbs has been
involved since 1991 as an advisor and principal in the identification,
evaluation, acquisition and operation of companies in the plastics industry
including Styrex Industries, Inc., an injection-molded plastics components
manufacturer which was sold in 1993 to PureTech Industries, Inc. Mr. Gibbs began
his business career in 1964 with the international business consulting firm of
Booz Allen & Hamilton
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<PAGE>
and spent five years as Vice President of Corporate Planning for Reliance
Holdings Corporation (formerly, Leasco Corporation) before becoming an
independent entrepreneur and business advisor in 1973. For the past 25 years,
Mr. Gibbs has served as a financial and business advisor to third parties in the
identification, financing, acquisition and operation of approximately 42
businesses, and has participated as a principal stockholder, executive officer
and director in certain of these businesses. A food distribution and a glass
distribution business in which Mr. Gibbs was the sole stockholder and served as
chief executive officer filed for Chapter 11 reorganization under the federal
Bankruptcy Code in 1980 and 1991, respectively. From July 1991 through October
1993, Mr. Gibbs rendered services for various corporate affiliates of The Selzer
Group and Transnational Capital Ventures, Inc., privately-owned companies
engaged in situations involving financially and/or operationally troubled
companies. In connection with providing such services, Mr. Gibbs served in
various capacities as an executive officer or director of C-B/Murray
Corporation, Inc. and American Specialty Equipment Corp., companies which filed
for Chapter 11 reorganization within the past five years. Mr. Gibbs received a
B.S. in Engineering from the University of Alabama in 1957 and an M.A. in
Industrial Management from New York Polytechnic Institute in 1965.
In June 1995, Mr. Gibbs individually filed a petition for
reorganization under Chapter 11 of the Bankruptcy Code. Such filing was
occasioned primarily as a result of litigation commenced against Mr. Gibbs by a
financial institution seeking payment of a personal loan made by such
institution to Mr. Gibbs in 1989. Mr. Gibbs accepted such loan principally in
reliance upon the completion of the sale of a business in which Mr. Gibbs was a
principal stockholder and which such financial institution had committed to
finance, but which sale was not completed. Mr. Gibbs has counterclaimed against
the institution alleging breach of its financial commitment. In April 1997, Mr.
Gibbs filed a plan of reorganization with the federal bankruptcy court in
Connecticut. Such plan, as well as the litigation between Mr. Gibbs and the
financial institution, is currently pending. Mr. Gibbs has been advised by
bankruptcy counsel that inasmuch as his investment in the securities of the
Company was made following the filing of his petition for reorganization, the
shares of Common Stock of the Company owned of record and beneficially by Mr.
Gibbs would not be part of the bankruptcy estate or be required to be used to
finance his plan of reorganization in a Chapter 11 proceeding.
Christopher H.B. Mills - Age 44
Director since 1996
Mr. Mills has been a member of the Company's Board of Directors and a
director of AB Plastics since September 1996. Mr. Mills has been a managing
director of North Atlantic Smaller Companies Investment Trust plc, an investment
trust, since 1984, and a director and senior investment manager of JO Hambro &
Partners Limited, an investment advisor, since 1993, both of which are based in
London. Mr. Mills serves as a director of American Opportunity Trust plc, an
investment trust, Horace Small Apparel plc, a manufacturer of occupational
uniforms, and Oryx International Growth Food plc, an investment fund, which are
publicly-traded companies in the United Kingdom. Mr. Mills also serves as a
director of D.S. Bancor Inc., a bank holding company, and PS Group Holdings
Inc., an aircraft leasing company, which are publicly-traded companies in the
United States. Mr. Mills was educated at Eton College and received a degree in
Business Studies from the Guildhall University in London in 1974.
Jay M. Swanson - Age 45
Director since 1997
Mr. Swanson has been a member of the Company's Board of Directors since
May 1997. Since February 1994, Mr. Swanson has been the Managing Partner of
Swanson Ventures and Blacksmith
6
<PAGE>
Partners, private investment firms specializing in leveraged buyouts. Mr.
Swanson currently serves as the Co-Chairman of the Board of Santa Maria Foods
Corporation, a producer and distributor of Italian specialty foods, is on the
Board of Directors of Northern Management Corp., and is a partner in The
Contrarian Group, an investment fund. From 1976 to January 1994, Mr. Swanson
served in various roles with John Hancock Financial Services managing portfolios
of investments. In 1994, Mr. Swanson was appointed to the Advisory Board of the
Competitiveness Center of the Hudson Institute. Mr. Swanson received a B.S. in
Finance from the University of Illinois in 1974.
Werner H. Schulz - Age 56
Director since 1998
Mr. Schulz became a member of the Company's Board of Directors on May
14, 1998, following the Company's acquisition of M.O.S. Plastics, Inc., the
company that he founded and served as its President and Chief Executive Officer
since 1974.
7
<PAGE>
INFORMATION ABOUT BOARD
MEETINGS AND COMMITTEES, AND MANAGEMENT
There was one meeting of the Board of Directors for the period
commencing September 3, 1997 (the effective date of the registration statement
for the initial public offering of the Common Stock) and ended October 26, 1997.
Each director attended the Board of Directors meeting.
Committees of the Board
Audit Committee - During the fiscal year ended October 26, 1997, the
Audit Committee of the Company's Board of Directors consisted of Michael A.
Gibbs, Christopher H.B. Mills and Jay M. Swanson. The Audit Committee did not
meet during the fiscal year ended October 26, 1997. The Audit Committee, among
other things, makes recommendations to the Board of Directors regarding the
independent auditors to be selected by the Board, reviews the independence of
those auditors and reviews audit results.
Compensation Committee - During the fiscal year ended October 26, 1997,
the Compensation Committee of the Company's Board of Directors consisted of
Geoffrey J.F. Gorman, Christopher H.B. Mills and Jay M. Swanson. The
Compensation Committee did not meet during the fiscal year ended October 26,
1997. The Compensation Committee recommends to the Board compensation plans and
arrangements with respect to the Company's executive officers and key personnel,
including grants of stock options under the Company's stock option plans.
Nominating Committee - The Board of Directors does not currently have
and does not intend to establish a Nominating Committee as such functions are to
be performed by the entire Board of Directors.
Compensation of Directors
The Company pays JO Hambro & Partners Limited ("JO Hambro"), of which
Christopher H.B. Mills, a director of the Company, is a director, an annual fee
of $50,000, payable quarterly, as a director's fee. Under a September 1996
agreement with JO Hambro, the Company is required to make these payments to JO
Hambro as long as a representative of JO Hambro serves on the Board of Directors
of the Company or AB Plastics and certain investors, previously introduced to
the Company by JO Hambro, hold in the aggregate in excess of 10% of the
outstanding shares of the Company's Common Stock on a fully-diluted basis. In
addition, the Company pays Jay M. Swanson, a director of the Company, an annual
retainer of $10,000 for serving on the Board of Directors, plus $1,000 for each
meeting of the Board of Directors or committee thereof attended. The Company
does not intend to separately compensate employees for serving as directors.
Certain Relationships and Related Transactions
In October 1996, the Company entered into a management agreement
effective as of August 1, 1996, with PEP, of which Geoffrey J.F. Gorman, the
Chairman of the Board of the Company, is the managing partner. See "Executive
Compensation - Employment and Management Agreements."
In October 1996, the Company entered into a management agreement,
effective as of August 1, 1996, with a corporate affiliate of Michael A. Gibbs,
the President of the Company, and Mr. Gibbs, individually. Under this agreement,
Mr. Gibbs and his affiliate agreed to serve as a consultant of the
8
<PAGE>
Company with primary responsibilities, subject to the direction of the Company's
Board, to review the general policies of the Company and to work with management
of the Company in all aspects of manufacturing, sales, distribution and customer
relations, the establishment of operating systems, cost savings methods and
budgets. In exchange for such services, in October 1996, the Company paid Mr.
Gibbs and his affiliate $183,333, representing fees for services provided prior
to the date of such agreement, and agreed to pay Mr. Gibbs and his affiliate an
aggregate annual consulting fee of $200,000, payable in monthly installments
until the earlier of December 31, 1998 or the employment by the Company of a
full-time chief executive officer. In September 1997, at the consummation of the
Company's initial public offering, the management agreement between the Company
and Mr. Gibbs and his affiliate was terminated.
In April 1997, the Company advanced $50,000 to Michael A. Gibbs as a
personal loan evidenced by a note payable out of any net proceeds received by
Mr. Gibbs from the sale of any shares of the Company's Common Stock held by him
directly (not beneficially). The note bears interest at a rate equal to the
highest interest rate paid by the Company or AB Plastics from time to time for
borrowed money.
Prior to the purchase of its principal executive offices in Gardena,
California in August 1997, the Company leased such offices from 15730 South
Figueroa Properties, a California general partnership, of which James S. Adams,
President of AB Plastics, is a general partner and holds a 50% interest in the
partnership through a family trust. The other 50% interest in the partnership is
held by the estate of Robert J. Adams, the brother of James S. Adams and father
of Stephen M. Adams, who died in 1996. The Company purchased this facility in
August 1997 for $3.1 million, the fair market value of such property as
determined by two independent real estate appraisal firms. The partnership
acquired the original lot and facility in 1980, and the side parcel in 1983, for
a total of approximately $3.9 million.
The Company's Certificate of Incorporation provides for indemnification
of the Company's officers and directors in certain circumstances.
9
<PAGE>
Management
The names and ages of the executive officers of the Company, and their
positions with the Company, are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Geoffrey J.F. Gorman............. 40 Chairman of the Board of the Company and
AB Plastics
Michael A. Gibbs................. 61 President of the Company and
Chief Executive Officer of AB Plastics
James S. Adams................... 68 President of AB Plastics
G. Michael Frink................. 47 Vice President - Sales and
Marketing of AB Plastics
Stephen M. Adams................. 37 Vice President - Technology of AB Plastics
Jawed Ghias...................... 43 Vice President - Manufacturing of AB
Plastics
Paul J. Iacono................... 37 Vice President - Finance of the Company
and AB Plastics
</TABLE>
See "Nominees for Directors" above for certain biographical information
concerning Geoffrey J.F. Gorman and Michael A. Gibbs.
James S. Adams is one of the co-founders of AB Plastics and for the
past 40 years has served as a senior executive officer of AB Plastics. Since
1982, Mr. Adams has served as President of AB Plastics. Mr. Adams received a
B.S. in Business Management from Pepperdine University in 1979. Mr. Adams is the
uncle of Stephen M. Adams.
G. Michael Frink has been the Vice President - Sales and Marketing of
AB Plastics since February 1997. He previously served as a Regional Manager of
Business Development of Southern Plastic Mold, Inc., a custom plastic injection
molder, from January 1992 to November 1996, and as West Coast Regional Manager
of Tenera, Inc., a plastic and sheet metal component manufacturer, from November
1996 to February 1997. Mr. Frink also held positions in sales and program
management at Avedon Engineering, a custom plastic injection molder, from 1984
to December 1991. Mr. Frink received a B.A. in Business Administration from the
University of Oregon in 1972.
Stephen M. Adams, the son of one of the co-founders of AB Plastics, has
been the Company's Vice President - Technology since September 1996. At all
times since 1982, Mr. Adams has served in a number of engineering and
technology-related positions with AB Plastics, the most recent being Vice
President - Operations. Mr. Adams received a B.S. in Industrial Technology from
Chico State University in 1983 and is currently completing on a part-time basis
an M.B.A. from the University of Phoenix. Mr. Adams is the nephew of James S.
Adams.
10
<PAGE>
Jawed Ghias has been the Vice President - Manufacturing of AB Plastics
since February 1996. From 1985 to February 1996, Mr. Ghias held a number of
positions with Industrial Molding Corporation ("IMC"), a custom plastic
injection molder, including Vice President of the Plastics Division, Plant
Manager, Quality Assurance Manager and Assembly Manager. Mr. Ghias received a
B.S. in Mechanical Engineering from N.E.D. University of Engineering and
Technology in Pakistan in 1983.
Paul J. Iacono has been the Vice President-Finance of the Company and
AB Plastics since October 1996. He previously served as Director of Finance of
Compounding Technology, Inc., a plastic compounding subsidiary of M.A. Hanna
Company, from March 1993 to September 1996. Mr. Iacono also served as Manager of
Business Operations of Ele Corporation, a custom plastic injection molder, from
October 1991 to February 1993, and in variety of positions in accounting and
operations including Controller and Materials Manager of IMC from 1980 to 1991.
Mr. Iacono received a B.A. in accounting from California State University at
Fullerton in 1984 and an M.B.A. from Pepperdine University in 1996.
No family relationship exists among any of the directors or executive
officers of the Company, except that James S. Adams and Stephen M. Adams are
uncle and nephew, respectively. No arrangement or understanding exists between
any director or executive officer and any other person pursuant to which any
director or executive officer was selected as a director or executive officer of
the Company. All executive officers are appointed annually by the Board of
Directors.
EXECUTIVE COMPENSATION AND RELATED MATTERS
The following table sets forth the total compensation paid by
the Company to the Company's Chief Executive Officer and the other four
executive officers of the Company (collectively, the "Named Executive Officers")
whose total compensation exceeded $100,000 for the fiscal year ended October 26,
1997:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
------------
Annual Compensation(1) No. Of
---------------------- Securities
Fiscal Underlying All Other
Name and Principal Position Year Salary Bonus Options Compensation
- --------------------------- ---- ------ ----- ------- ------------
<S> <C> <C> <C> <C> <C>
Michael A. Gibbs .................... 1997 $120,833(2) $ 0 222,222 $0
President of the Company and Chief 1996 0(3) 0 200,000 0
Executive Officer of AB Plastics
James S. Adams ...................... 1997 $100,000 $ 8,000 0 $0
President of AB Plastics 1996 232,365 0 46,124 0
Jawed Ghias ......................... 1997 $140,000 $ 35,000 0 $0
Vice President-Manufacturing of AB 1996 99,523 5,000 160,000 0
Plastics
Paul J. Iacono ...................... 1997 $ 85,289 $ 42,500 0 $0
Vice President - Finance of the 1996 3,269 0 120,000 0
Company and AB Plastics(4)
Stephen M. Adams .................... 1997 $100,000 $ 16,000 0 $0
Vice President-Technology of AB 1996 96,366 0 23,062 0
Plastics
</TABLE>
11
<PAGE>
- --------------
(1) The column for "Other Annual Compensation" has been omitted because
there is no compensation required to be reported in such column. The
aggregate amount of perquisites and other personal benefits provided to
any Named Executive Officer did not exceed the lesser of $50,000 or 10%
of the total annual compensation paid to such officer.
(2) Mr. Gibbs and a corporate affiliate of Mr. Gibbs received approximately
$92,000 from the Company pursuant to a management agreement effective
as of August 1, 1996. See "Employment and Management Agreements" below.
(3) Mr. Gibbs and a corporate affiliate of Mr. Gibbs received in the
aggregate approximately $200,000 pursuant to a consulting agreement
commencing in February 1996, superseded by a management agreement
effective as of August 1, 1996. See "Employment and Management
Agreements" below.
(4) Mr. Iacono became Vice President - Finance of the Company and AB
Plastics in October 1996.
Employment and Management Agreements
In October 1996, but effective as of August 1, 1996, the Company
entered into a management agreement with PEP, of which Geoffrey J.F. Gorman, the
Chairman of the Board of the Company, is the managing partner. Under this
agreement, PEP and Mr. Gorman have agreed to serve as consultants to the Company
and AB Plastics with primary responsibilities, subject to the direction of the
Company's Board, to review the general policies of the companies and to render
assistance in connection with various forms of financings on their behalf. In
exchange for such services, in October 1996, the Company paid PEP an aggregate
of $225,000, representing $150,000 in fees for services provided prior to the
date of such agreement and $75,000 of reimbursable expenses, and the Company and
AB Plastics have agreed jointly to pay PEP an annual consulting fee of $100,000,
payable in monthly installments, and to provide benefits to Mr. Gorman
comparable to those provided to the Company's executive officers. The management
agreement extends through September 30, 2001, and includes non-disclosure,
non-competition and non-solicitation provisions through such date or so long as
PEP or Mr. Gorman continue to own shares of Common Stock of the Company or hold
options or warrants to purchase such Common Stock.
In September 1997, Mr. Gibbs entered into an employment agreement with
the Company expiring October 31, 2000. Pursuant to such agreement, Mr. Gibbs
serves as the President of the Company and Chief Executive Officer of AB
Plastics, and devotes not less than 75% of his business and professional time to
the affairs of the Company and AB Plastics. Under the terms of such employment
agreement, Mr. Gibbs receives a base salary of $275,000 per year, and is
entitled to receive annual bonuses of $100,000, $200,000 and $300,000 in each of
the Company's fiscal years ending in 1998, 1999 and 2000, respectively, if the
Company's EBITDA (as defined) shall equal or exceed $12.0 million, $18.0 million
and $24.0 million, or increments thereof, in the fiscal years ending in 1998,
1999 and 2000, respectively. In addition, the Company agreed to provide benefits
to Mr. Gibbs comparable to those provided to the Company's executive officers.
The employment agreement includes non-disclosure, non-competition and
non-solicitation provisions.
Pursuant to his employment agreement, the Company granted Mr. Gibbs
options to purchase an aggregate of 222,222 shares of Common Stock of the
Company pursuant to the Company's 1997 Stock Option Plan. Such options expire
October 31, 2002 and are only exercisable at a time when Mr. Gibbs
12
<PAGE>
shall be performing services for the Company, unless such services are
terminated by the Company "without cause," as defined in his employment
agreement. In addition, the options vest and are exercisable prior to their
expiration date, only to the extent of (i) 74,074 shares if the average of the
closing prices of the Company's Common Stock, as reported on Nasdaq or any
national securities exchange for any 30 consecutive trading days (the "Average
Closing Price"), shall equal or exceed $16.00 per share, (ii) 148,148 shares if
the Average Closing Price shall equal or exceed $24.00 per share and (iii)
222,222 shares if the Average Closing Price shall equal or exceed $32.00 per
share. See "Stock Option Plans" below.
In September 1996, in connection with the acquisition of AB Plastics,
AB Plastics entered into employment agreements with James S. Adams to serve as
the President of AB Plastics through June 1999 and with Stephen M. Adams to
serve as the Vice President-Technology of AB Plastics through September 1999.
Pursuant to the employment agreements, James S. Adams has agreed to continue to
perform services primarily in connection with customer relations and strategic
long-term planning and Stephen Adams has agreed to continue to supervise, on a
day-to-day basis, the technical aspects of the Company's business. The Company
currently pays each of James S. Adams and Stephen M. Adams an annual salary of
$100,000 and provides them with customary health and medical benefits. These
individuals have also agreed not to compete with the Company for the period
through September 2001 and September 2000, respectively, and not to disclose
confidential information relating to the Company at any time.
AB Plastics has also entered into employment agreements with each of G.
Michael Frink, Jawed Ghias and Paul J. Iacono to serve as Senior Vice
President-Sales and Marketing, Vice President-Manufacturing and Vice
President-Finance of AB Plastics, respectively. Under such agreements, AB
Plastics currently pays annual base salaries of $100,000, $140,000 and $100,000
to Messrs. Frink, Ghias and Iacono, respectively. Each of such individuals is
also entitled to receive an annual bonus, with Mr. Frink entitled to receive up
to $80,000 for achieving target performance levels based on sales and
diversification of AB Plastics' customer base, with a minimum of $20,000.
Messrs. Ghias and Iacono are entitled to participate in AB Plastics' bonus pool
for executive employees, to be established by the Board, to receive up to
one-half of his annual base salary. Each of such individuals has also agreed not
to compete with the Company during the term of his agreement and for one year
thereafter and not to disclose confidential information relating to AB Plastics
at any time.
On February 27, 1998, the Company entered into an employment/consulting
agreement with Werner H. Schulz. Under such agreement, Mr. Schulz has agreed to
render services to the Company, in a management capacity, in the areas of sales,
engineering and tooling relating to M.O.S. through February 1999 as an employee
of the Company, and thereafter through February 2000 as a consultant to the
Company. Mr. Schulz will be compensated at the monthly base rate of $16,667 with
respect to the period in which he serves as an employee and $4,133 with respect
to the period in which he serves as a consultant to the Company. Mr. Schulz has
agreed not to compete with the Company for the period through February 2003 and
not to disclose confidential information relating to the Company or M.O.S. at
any time.
13
<PAGE>
Options Granted During Fiscal 1997
The following table sets forth certain information regarding grants of
stock options to purchase the Company's Common Stock made to each of the Named
Executive Officers during the fiscal year ended October 26, 1997:
<TABLE>
<CAPTION>
Potential
-----------------
Realizable Value
at Assumed
Annual Rates of
Stock Price
Appreciated for
Individual Grants Option Term (2)
----------------------------------- ------------------
Number
of Securities Percent of Total Exercise
Underlying Options Granted Price Fair Market
Options to Employment in Per Value on Date Expiration
Name Granted Fiscal Year Share(1) of Grant Date 5% 10%
- ------------------- ------------- ---------------- -------- ------------ ------------ --- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael A. Gibbs... 222,222 100% $8.00 $8.00 10/31/2002 $0 $0
President of the
Company
and Chief Executive
Officer of AB Plastics
</TABLE>
- --------------
(1) All options were granted at or above market value on the date of grant.
(2) These amounts represent certain assumed rates of appreciation only.
Actual gains, if any, on option exercises are dependent upon other
factors, including the future performance of the Common Stock and
overall stock market conditions.
14
<PAGE>
Aggregate Option Exercises During Fiscal 1997 and Fiscal Year-End Option Values
The following table sets forth information on options exercised,
unexercised options and year-end option values in each case with respect to
options to purchase shares of the Company's Common Stock held at October 26,
1997 by each of the Named Executive Officers:
<TABLE>
<CAPTION>
Value of
Unexercised
In-the-Money
Number of Securities Options
Underlying Unexercised at Fiscal Year
Options at Fiscal End(1)
Shares Acquired Year End (Exercisable/ (Exercisable/
Name on Exercise(2) Value Realized (Unexercisable) Unexercisable)
--------------------------------- --------------- -------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Michael A. Gibbs................. 200,000 $ 1,400,000 0/222,222 0/0
President of the Company and Chief
Executive Officer of AB Plastics
James S. Adams................... 46,124 $ 322,868 -- --
President of AB Plastics
Jawed Ghias...................... - - 0/160,000 0/0
Vice President-Manufacturing of AB
Plastics
- - 0/120,000 0/0
Paul J. Iacono...................
Vice President - Finance of the
Company and AB Plastics
Stephen M. Adams................. 23,062 $ 161,434 -- --
Vice President - Technology of AB
Plastics
</TABLE>
- -------------
(1) Represents the difference between the closing sales price of the Common
Stock on October 26, 1997 and the exercise price of the option
multiplied by the applicable number of options.
(2) Each officer delivered to the Company his promissory note in respect of
the aggregate exercise price for such shares. See "Certain Relationships
and Related Transactions."
Stock Option Plans
1996 Stock Option Plan. In September 1996, the stockholders of the
Company approved the Company's 1996 Stock Option Plan, as previously adopted by
the Company's Board of Directors (the "1996 Plan"), pursuant to which officers,
directors, key employees and consultants of the Company are eligible to receive
incentive stock options and non-qualified stock options to purchase up to an
aggregate of 800,000 shares of Common Stock. There are currently outstanding
under the 1996 Plan stock options for an aggregate of 440,000 shares of Common
Stock at an exercise price of $1.00 per share, expiring on December 31, 2002.
The exercise price under such outstanding stock options represents not less than
100% of the fair market value of the underlying Common Stock as of the date that
such options were granted, as determined by the Board of Directors of the
Company on the date that such options were granted. Options to purchase 50,808
shares were granted to Mr. Gorman in 1996 at an exercise price of
15
<PAGE>
$1.00 per share, and options to purchase 200,000 shares were granted to Mr.
Gibbs in 1996 at an exercise price of $1.00 per share, all of which options were
exercised in September 1997.
With respect to incentive stock options, the 1996 Plan provides that
the exercise price of each such option must be at least equal to 100% of the
fair market value of the Common Stock on the date that such option is granted
(and 110% of fair market value in the case of stockholders who, at the time the
option is granted, own more than 10% of the total outstanding Common Stock), and
requires that all such options have an expiration date not later than that date
which is one day before the tenth anniversary of the date of the grant of such
options (or the fifth anniversary of the date of grant in the case of 10% or
greater stockholders). However, with certain limited exceptions, in the event
that the option holder ceases to be associated with the Company, or engages in
or is involved with any business similar to that of the Company, such option
holder's incentive options immediately terminate. Pursuant to the 1996 Plan, the
aggregate fair market value, determined as of the date(s) of grant, for which
incentive stock options are first exercisable by an option holder during any one
calendar year cannot exceed $100,000.
1997 Stock Option Plan. In June 1997, the stockholders of the Company
approved the Company's 1997 Stock Option Plan, as previously adopted by the
Company's Board of Directors (the "1997 Plan"), pursuant to which officers,
directors, key employees and consultants of the Company are eligible to receive
incentive stock options and non-qualified stock options to purchase up to an
aggregate of 800,000 shares of Common Stock. The Plan also provides for the
grant of stock appreciation rights, restricted stock, performance share and
performance units at the discretion of the Company's Board of Directors. There
are currently outstanding under the 1997 Plan stock options to purchase an
aggregate of 465,222 shares of Common Stock, of which 222,222 options are at an
exercise price of $8.00 per share, 93,000 options are at an exercise price of
$8.50 per share and 150,000 options are at an exercise price of $4.50 per share.
See "Employment and Management Agreements." The requirements of the 1997 Plan
with respect to incentive stock options are identical to the requirements of the
1996 Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors are
Geoffrey J.F. Gorman, Christopher H.B. Mills and Jay M. Swanson. No member of
the Board of Directors or the Compensation Committee has any interlocking
relationship with any other corporation that requires disclosure under this
heading.
16
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors
of the Company was established on September 3, 1997 (the effective date of the
registration statement for the initial public offering of the Common Stock) and
did not hold any meetings during the fiscal year ended October 26, 1997. The
duties and responsibilities of the Committee include the following:
(a) approval of annual salaries and other benefits provided for
executive officers of the Company;
(b) approval of the adoption of compensation plans in which the
executive officers of the Company may be participants and
awarding of benefits under such plans; and
(c) undertaking studies and making recommendations with respect to
the Company's compensation structure and policies and the
development of management personnel.
The Committee's policies with respect to executive compensation are
intended to achieve the following goals. First, they are intended to create base
compensation levels sufficient to attract and retain talented and dedicated
executive officers. Second, the compensation policies are intended to provide a
direct link between performance during the year (both the performance of the
Company as a whole and the performance of the individual officer) as a part of
the officer's compensation. Third, the compensation policies are intended to
provide executive officers with the opportunity to acquire an equity stake in
the Company through the grant of options pursuant to the Company's stock-based
incentive plan.
During the fiscal year ended October 26, 1997, the full Board approved
bonuses and granted options to certain of its executive officers and certain
employees. In each case, the Board's decision was based upon the principles and
procedures outlined above.
COMPENSATION COMMITTEE
Geoffrey J.F. Gorman
Christopher H.B. Mills
Jay M. Swanson
The Report of the Compensation Committee on Executive Compensation
shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or under the Exchange Act, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such acts.
17
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Common Stock against the cumulative
total return of the Nasdaq Non-Financial Index and the Russell 2000 Index for
the period commencing September 4, 1998 (the effective date of the registration
statement for the initial public offering of the Common Stock) and ended July
31, 1998 (the most recent practicable date prior to the mailing of this Proxy
Statement). The data represented below assumes $100 invested in each of the
Common Stock on September 4, 1997, and the Nasdaq Non-Financial Index and the
Russell 2000 Index on August 31, 1997. The stock performance graph shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933,
as amended, or under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such acts.
COMPARISON OF 11 MONTH CUMULATIVE TOTAL RETURN*
AMONG COMPASS PLASTICS & TECHNOLOGIES, INC.
THE RUSSELL 2000 INDEX AND THE NASDAQ NON-FINANCIAL INDEX
150 |------------------------------------------------------------------------|
| % |
| %# # % |
| %# %# # |
| @ %# |
| #% @ %# |
D 100 |-@#%---------#%-----%#@----------%#-------------------------------------|
O | @ |
L | @ @ |
L | @ |
A | |
R | @ @ |
S 50 |------------------------------------------------------------------------|
| |
| @ |
| @ |
| |
| |
0 |------------------------------------------------------------------------|
9/4/97 9/97 10/97 11/97 12/97 1/98 2/98 3/98 4/98 5/98 6/98 7/98
- --------------------------------------------------------------------------------
@ COMPASS PLASTICS & TECHNOLOGIES, INC.
# RUSSELL 2000
% NASDAQ NON-FINANCIAL
- --------------------------------------------------------------------------------
*$100 INVESTED ON 9/4/97 IN STOCK OR ON 8/31/97
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING OCTOBER 31.
18
<PAGE>
<TABLE>
<CAPTION>
September 4, 1997 October 31, 1997 July 31, 1998
----------------- ---------------- -------------
<S> <C> <C> <C>
Compass Plastics &
Technologies, Inc...........................$100 $107.81 $ 24.22
Nasdaq Non-Financial
Index....................................... 100 99.28 117.21
Russell 2000 Index............................... 100 102.61 101.96
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the Exchange Act, the Company's directors, its executive (and
certain other) officers, and any persons holding more than 10% of the Common
Stock are required to report their ownership of the Common Stock and any changes
in that ownership to the Securities and Exchange Commission ("Commission") and
the Nasdaq Stock Market. Specific due dates for these reports have been
established and the Company is required to report in this Proxy Statement any
failure to file by these dates during the fiscal year ended October 26, 1997.
All of these filing requirements were satisfied by the Company's directors,
officers and 10% holders. In making these statements, the Company has relied on
the written representations of its directors, officers and 10% holders and
copies of the reports that they have filed with the Commission.
PROPOSALS OF STOCKHOLDERS
Under certain circumstances, stockholders are entitled to present
proposals for consideration at stockholders meetings. Any such proposal to be
included in the proxy statement for the Company's next Annual Meeting of
Stockholders must be submitted to the Secretary of the Company prior to November
30, 1998. It is suggested that such proposals be sent by Certified Mail, Return
Receipt Requested.
OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Company knows of no other matters to be presented at the Annual
Meeting, but if any other matters should properly come before the meeting, it is
intended that the persons named in the accompanying form of proxy will vote the
same in accordance with their best judgment and their discretion, and authority
to do so is included in the proxy.
By Order of the Board of Directors
PAUL J. IACONO
Vice President - Finance
19
<PAGE>
COMPASS PLASTICS & TECHONOLOGIES, INC.
THIS PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD OCTOBER 23, 1998
Geoffrey J.F. Gorman, Michael A. Gibbs and Paul J. Iacono, and each of
them, as the true and lawful attorneys, agents and proxies of the undersigned,
with full power of substitution, are hereby authorized to represent and to vote,
as designated below, all shares of Common Stock of Compass Plastics &
Technologies, Inc. held of record by the undersigned on September 24, 1998, at
the Annual Meeting of Stockholders to be held at 9:00 a.m. on October 23, 1998,
at the Torrance Holiday Inn, 19800 South Vermont Avenue, Torrance, California
90502, and at any adjournment thereof. Any and all proxies heretofore given are
hereby revoked.
1. ELECTION OF DIRECTORS. To elect all nominees.
Nominees are: Geoffrey J.F. Gorman, Michael A. Gibbs, Christopher H.B.
Mills, Jay M. Swanson and Werner H. Schulz.
[ ] AUTHORITY GIVEN [ ] AUTHORITY WITHHELD
For all nominees listed above except:
-----------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
PLEASE MARK, DATE AND SIGN THE REVERSE SIDE AND MAIL PROMPTLY IN THE
ENCLOSED ENVELOPE.
Discretionary authority is hereby granted with respect to such other
matters as may properly come before the meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the Proxy Statement furnished therewith. Unless otherwise
specified, this Proxy will be voted FOR Proposal 1.
IMPORTANT: Please sign exactly as name
appears hereon. Each joint owner shall
sign. Executors, administrators,
trustees, etc., should give their full
title.
---------------------------------------
Signature(s)
---------------------------------------
Date
---------------------------------------
Signature(s)
---------------------------------------
Date
20
