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:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BLESSINGS CORPORATION:
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PRELIMINARY COPY
Blessings Corporation
[LOGO] 200 Enterprise Drive
Newport News, VA 23603
(804) 887-2100
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21,1996
TO SHAREHOLDERS OF BLESSINGS CORPORATION:
We extend to you a cordial invitation to attend the 1996 Annual Meeting of
Shareholders of Blessings Corporation which will be held at 10:00 A.M. at the
Williamsburg Lodge, 310 S. England Street, Room B, Williamsburg, Virginia, on
May 21, 1996, for the following purposes:
1. To elect a board of eleven (11) directors to serve for the ensuing year;
2. To approve the 1995 Non-Employee Directors Stock Option Plan;
3. To transact any and all business as may properly come before the
meeting.
The Board of Directors has set April 3, 1996, as the record date. Only
holders of common stock of record at the close of business on such date will be
entitled to notice of or to vote at the meeting.
By Order of the Board of Directors
JAMES P. LUKE
EXECUTIVE VICE PRESIDENT
SECRETARY/TREASURER
Newport News, Virginia
April 8, 1996
YOUR VOTE IS IMPORTANT
IMPORTANT -- WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
PROMPTLY COMPLETE, DATE, SIGN AND MAIL THE ACCOMPANYING PROXY CARD IN THE
ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON.
IT IS NECESSARY TO HAVE A MAJORITY OF THE STOCK REPRESENTED AT THE
MEETING IN PERSON OR BY PROXY.
<PAGE>
BLESSINGS CORPORATION
200 Enterprise Drive
Newport News, VA 23603
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 21, 1996
SOLICITATION AND REVOCATION OF PROXY
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Blessings Corporation
("Blessings") for use at the Annual Meeting of Shareholders to be held on May
21, 1996, at 10:00 A.M. (E.D.S.T.). The approximate date this proxy statement
and the enclosed form of proxy, along with the annual report of Blessings
Corporation for the fiscal year ended December 30, 1995, are first being sent to
shareholders is April 8, 1996.
The cost of preparing, printing and mailing this proxy statement will be
borne by Blessings. Solicitation will be made for the most part by mail.
Employees of Blessings, who will receive no additional compensation, may also
solicit proxies by telephone, telegraph or personal interview. Blessings may
also request brokers and other custodians, nominees and fiduciaries to forward
the proxy material to their principals and will reimburse them for their
reasonable out-of-pocket expenses.
You have three choices on each matter to be voted upon at the annual
meeting. Concerning the election of Directors, you may:
1. Vote FOR all of the director nominees as a group;
2. Withhold authority to vote for all director nominees as a group; or
3. Decline to vote for any individual nominee by writing that nominee's
name in the space provided.
Concerning Proposal No. 2, by checking the appropriate box, you may:
1. Vote FOR the proposal;
2. Vote AGAINST the proposal;
3. ABSTAIN from voting on the proposal.
Shareholders executing a proxy may revoke it before it is voted by filing
with the Secretary of Blessings an instrument of revocation, by submitting a
subsequently dated proxy or by attending the meeting and withdrawing the proxy.
Each unrevoked proxy card, properly executed and received prior to the close of
the meeting, will be voted as indicated.
WHERE SPECIFIC INSTRUCTIONS ARE NOT INDICATED, THE PROXY WILL BE VOTED FOR
THE ELECTION OF ALL DIRECTORS AS NOMINATED AND FOR PROPOSAL NO. 2.
Abstentions and broker non-votes are counted as shares present in the
determination of whether the shares of stock represented at the meeting
constitute a quorum. Abstentions are counted in tabulations of votes cast on
proposals presented to stockholders. Broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
1
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only common shareholders of record at the close of business on April 3,
1996, are entitled to vote at the annual meeting. On April 3, 1996, 10,174,054
shares of common stock, $.71 par value, were outstanding and held by
approximately 1,900 beneficial shareholders. The presence, in person or by
proxy, of holders of a majority of the outstanding common stock entitled to vote
at the meeting is necessary to constitute a quorum to transact business.
Assuming the presence of a quorum, the affirmative vote of the holders of a
plurality of the shares of common stock represented at the meeting is required
for the election of directors, and any other matters to be voted upon will be
decided by the affirmative vote of the holders of a majority of the shares of
common stock present, or represented, and entitled to vote at the meeting.
Holders of common stock are entitled to one vote per share and have no
cumulative voting rights. The list of all shareholders of record on April 3,
1996, will be available at the office of Geddy, Harris & Geddy, 516 South Henry
Street, Williamsburg, Virginia, for the ten days preceding the annual meeting.
PRINCIPAL SHAREHOLDERS
REPORTED AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Title of Beneficial of
Class Name and Address of Beneficial Owner Ownership (1) Class (6)
<S> <C> <C> <C>
Common Stock Dimensional Fund Advisors, Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401............................ 531,602 5.2(2)
Quest Advisory Corporation
Quest Management Company
1414 Avenue of the Americas
New York, NY 10019................................ 662,600 6.5(2)
Williamson-Dickie Manufacturing Company
319 Lipscomb Street
Fort Worth, TX 76104.............................. 5,496,096 54.3
Williamson, J. Donovan
Suite 410
University Center I
1300 South University Drive
Fort Worth, TX 76107.............................. 5,498,328 54.3(3)
Williamson, Philip C.
Williamson-Dickie Manufacturing Company
PO Box 1779
Fort Worth, TX 76101.............................. 5,499,296 54.3(4)
</TABLE>
2
<PAGE>
SECURITY OWNERSHIP BY MANAGEMENT
REPORTED AS OF FEBRUARY 2, 1996
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Title of Beneficial of
Class Name of Beneficial Owner Ownership (1) (5) (9) Class (6)
<S> <C> <C> <C>
Common Stock Birnbaum, Leonard........................................ 78,338 *
Durboraw, Wayne A........................................ 7,000 *
Harkins, Joseph J........................................ 5,334 *
Hudson, Kenneth J........................................ 4,000 *
Lefler, R. Stephen....................................... 1,200 *
Luke, James P............................................ 23,530 *
McMackin, John W......................................... 14,210 *
Miller, Elwood M......................................... 41,294 *(7)
Patton, Richard.......................................... 800 *
Scherer, Otto E.......................................... 14,970 *
Villarreal G., Manuel.................................... 396,000 3.9(8)
Weber, Robert E.......................................... 6,700 *
Williamson, J. Donovan................................... 5,498,328 54.3(3)
Williamson, Philip C..................................... 5,499,296 54.3(4)
All of the above and other executive officers
as a group (16 persons)................................ 6,100,122 59.9
</TABLE>
* Less than 1% of issued and outstanding shares of common stock of the
company.
(1) Each person has sole voting and investment power with respect to the shares
listed unless otherwise indicated.
(2) Blessings has received notice from prior Notices of Filing with the
Securities and Exchange Commission on Schedule 13G and other reporting
sources of beneficial ownership of shares of Blessings' common stock in
excess of 5% of total shares outstanding by Quest Advisory Corporation, and
from Dimensional Fund Advisors, Inc. Such filings are made generally by
persons in a fiduciary capacity, such as investment managers, who acquire
stock in the ordinary course of business having no intention of influencing
management.
(3) The Williamson-Dickie Manufacturing Company owns 5,496,096 shares of
Blessings' common stock outstanding. Mr. J. Donovan Williamson owns 2,232
shares of Blessings' common stock in addition to Blessings' shares owned
beneficially through his interest in the Williamson-Dickie Manufacturing
Company.
(4) The Williamson-Dickie Manufacturing Company owns 5,496,096 shares of
Blessings' common stock outstanding. Mr. Philip C. Williamson owns 3,200
shares of Blessings' common stock in addition to Blessings' shares owned
beneficially through his interest in the Williamson-Dickie Manufacturing
Company.
(5) Amounts shown include shares subject to options that are exercisable within
sixty days for the named directors and executive officers and directors and
executive officers as a group as follows: Mr. Durboraw, 5,200; Mr. Hudson,
4,000; Mr. Luke, 15,400; Dr. Miller, 19,000; all directors and executive
officers as a group (16 persons), 48,800.
(6) Except for the percentages of certain parties that are based on presently
exercisable options which are indicated in Note (5) above, the percentages
indicated are based on 10,124,054 shares of common stock issued and
outstanding on February 2, 1996. In the case of parties holding presently
exercisable options, the percentage ownership is calculated on the
assumption that the shares presently purchasable or purchasable within the
next sixty days underlying such options are outstanding.
(7) Reporting person disclaims beneficial ownership of 200 shares held as
custodian for two minor grandchildren.
(8) Reporting person disclaims beneficial ownership of 276,000 shares held by
father and brother.
(9) Amounts shown for Dr. Miller and Mr. Luke do not include 25,000 shares each
granted and exercised on February 23, 1996 in accordance with the Blessings
Corporation 1991 Stock Option Plan (see Transactions With Management and
Others, page 10).
3
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the company's
directors and executive officers and persons who own more than ten percent of
the company's common stock to file with the Securities and Exchange Commission
and the American Stock Exchange initial reports of ownership and reports of
changes in their ownership in the company's common stock. Officers, directors
and greater than ten-percent shareholders are required by SEC regulation to
furnish the company with copies of all Section 16(a) forms they file. Based
solely on review of the copies of such reports furnished to the company and
written representations that no Forms 5 were required, the company believes
that, during the last fiscal year, all of the company's officers, directors and
greater than ten percent beneficial owners were in compliance with the Section
16(a) filing requirements.
THE BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of Blessings, although it is
not involved in day-to-day operating details. Members of the board are kept
informed by various reports and documents sent to them each month, as well as by
operating and financial reports made at board and committee meetings. There were
nine (9) meetings of the board and twenty-one (21) meetings of committees of the
board in the fiscal year ended December 30, 1995. The overall attendance at
these meetings was 94%. All members of the board attended at least 75% of the
meetings of the board and committees on which they served, with the exception of
Mr. J. D. Williamson due to conflicts with competing business matters.
COMMITTEES OF THE BOARD OF DIRECTORS
The board has eight (8) standing committees: the Executive Committee, the
Operating Committee, the Nominating Committee, the Audit Committee, the
Compensation Committee, the Organization Development Committee, the Long Range
Planning Committee and the Investor Relations Committee. The committee on which
each nominee serves is shown in the section entitled "Election of Directors" of
this proxy statement. The following is a description of the functions of each
committee:
EXECUTIVE COMMITTEE
The Executive Committee consists of seven members, four of whom are
non-employee directors. The Executive Committee meets on-call and has authority
to act on matters during the intervals between board meetings. The committee met
seven (7) times during the fiscal year ended December 30, 1995.
OPERATING COMMITTEE
The Operating Committee consists of four members, all of whom are
non-employee directors. The Operating Committee meets on call. The committee
reviews the operations of the various divisions and, in general, informs and
advises the Board of Directors in the management of the business and property of
the corporation. The committee did not meet during the fiscal year ended
December 30, 1995.
NOMINATING COMMITTEE
The Nominating Committee consists of three members, all of whom are
non-employee directors. The Nominating Committee considers and recommends
nominations for directors of the corporation and other matters as may, from time
to time, be deemed appropriate. The committee met twice during the fiscal year
ended December 30, 1995.
4
<PAGE>
AUDIT COMMITTEE
The Audit Committee is comprised of three members, all of whom are
non-employee directors. The Audit Committee reviews the results, findings and
recommendations resulting from audits performed by independent certified public
accountants, significant accounting policies, the audit fees to be paid and the
nature of non-audit services performed. It meets with appropriate officers and
financial personnel and independent certified public accountants in connection
with these reviews. The committee recommends to the board the appointment of
independent certified public accountants to serve as auditors for the following
fiscal year. The Audit Committee met three (3) times during the fiscal year
ended December 30, 1995.
COMPENSATION COMMITTEE
The Compensation Committee consists of four members, all of whom are
non-employee directors. The committee reviews and approves the remuneration of
officers and key employees and makes reports and recommendations to the board
with respect thereto. In carrying out such responsibilities, the committee,
among other things, recommends salaries, incentive compensation and related
matters. The committee met seven (7) times during the fiscal year ended December
30, 1995.
ORGANIZATION DEVELOPMENT COMMITTEE
The Organization Development Committee consists of two members, each of
whom is a non-employee director. The committee periodically reviews the
organization structure of the corporation and its operating divisions to ensure
effective organizational function and to ensure that replacements for key
positions are identified and provided for. The committee met once during the
fiscal year ended December 30, 1995.
LONG RANGE PLANNING COMMITTEE
The Long Range Planning Committee is comprised of seven members, five of
whom are non-employee directors. The committee reviews the long-range objectives
of Blessings. The committee meets with key members of management and outside
consultants to conduct examinations of each activity of Blessings and to
recommend a long-term growth and development plan for the company. The committee
met once during the fiscal year ended December 30, 1995.
INVESTOR RELATIONS COMMITTEE
The Investor Relations Committee is comprised of three members, one of whom
is a non-employee director and chairman of the committee. The role of the
committee is to assess the effectiveness of shareholder relations and
communications and to make recommendations with regard to improving overall
shareholder value. The committee did not meet during the fiscal year ended
December 30, 1995.
COMPENSATION OF MEMBERS OF THE BOARD OF DIRECTORS AND COMMITTEES
-- Non-employee directors not receiving other compensation are each paid
an annual retainer of $15,000 and a fee of $900 for each board and
committee meeting attended. In the event two or more meetings are held
on the same date, the fee for the first meeting will be $900 and the
fee for any subsequent meetings on the same date will be $450.
Committee chairmen receive an additional fee which varies depending
upon the committee served as follows: Compensation Committee, $4,000
per year; Audit Committee, $2,000 per year; Nominating Committee,
$1,000 per year; Long Range Planning Committee, $1,000 per year;
Organization Development Committee, $500 per meeting not to exceed
$3,000 per year. Non-employee directors of the company are also
eligible for limited life and accidental death and dismemberment
insurance and to participate in the company's medical benefit program.
No additional compensation is paid to employees for performance of
their duties as directors.
Mr. Otto Scherer, former Chairman of Blessings, receives, in addition
to normal directors' fees, $25,000 annually under a consulting
arrangement with the company. Mr. John McMackin, in his dual
5
<PAGE>
role as Chairman of the Board and Chairman of the Executive Committee,
receives annual compensation in the amount of $100,000 and was granted
a $60,000 bonus by the Board of Directors at its meeting on April 18,
1995. Compensation for the Vice Chairman of the Executive Committee has
been set by the board at an annual rate of $60,000.
1993 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE AND CERTAIN OTHER DIRECTORS OF
BLESSINGS CORPORATION
-- With the advice and assistance of nationally recognized independent
compensation consultants, the Compensation Committee of the Board of
Directors undertook the consideration of a restricted stock plan for
non-employee and certain other directors of the company. At the Annual
Meeting held on May 17, 1994, shareholders approved the adoption of the
1993 Restricted Stock Plan for Non-Employee and Certain Other Directors
of Blessings Corporation (the "Stock Plan") as recommended by the
committee to the Board of Directors. The Committee believes that the
Stock Plan serves to promote the company's interests and those of its
shareholders by permitting grants of shares of common stock to
non-employee and certain other directors, subject to restrictions, in
order to compensate such directors and reward them for long-term
performance, and increase their ownership of common stock.
On May 16, 1995, in accordance with the Stock Plan, the Board granted
3,000 shares of Blessings Corporation common stock to Mr. John W.
McMackin and 400 shares to the Vice Chairman and each of the other
non-employee directors.
-- At its meeting on April 18, 1995, the Board of Directors adopted the
following guidelines for common stock ownership by directors of the
Company:
<TABLE>
<S> <C> <C>
Three (3) years of service -- 3,000 shares
Five (5) years of service -- 5,000 shares
Eight (8) years of service -- 8,000 shares
</TABLE>
1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
-- At its meeting on May 17, 1995, the Board of Directors approved,
subject to the approval of shareholders, the 1995 Non-Employee
Directors Stock Option Plan (the "DSOP"). The Company believes the DSOP
promotes the interests of the Company and its shareholders by
strengthening the Company's ability to attract, motivate and retain
Directors of training, experience and ability, and by encouraging the
highest level of Directors' performance by providing Directors with a
proprietary interest in the Company's financial success and growth.
(See Item No. 2, page 17).
6
<PAGE>
EXECUTIVE COMPENSATION
The following information is set forth with respect to compensation paid by
Blessings during each of the last three fiscal years to the Chief Executive
Officer and the other four most highly-compensated executive officers of the
corporation:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Awards All
Restricted Payouts Other
Annual Compensation Stock Options/ LTIP Compen-
Name and Salary Bonus Award(s) SARs Payouts sation
Principal Position Year ($) ($) (1) ($) (2) (#) ($) ($) (3)
<S> <C> <C> <C> <C> <C> <C> <C>
WAYNE A. DURBORAW 1995 $105,200 $ 50,370 -0- -0- $ 4,708 $ 12,032
Controller 1994 105,200 42,082 $ 6,165 3,000/900 24,798 4,620
1993 105,200 35,069 2,866 -0- 3,020 15,395
KENNETH J. HUDSON (4) 1995 100,000 39,774 -0- 3,000/900 -0- 3,646
Vice President, Human 1994 92,308 30,000 -0- 4,000/1,200 -0- 1,993
Resources 1993 -- -- -- -- -- --
JAMES P. LUKE 1995 219,100 94,414 -0- 5,000/1,500 9,817 25,922
Executive Vice President 1994 219,100 87,647 22,887 8,000/2,400 51,732 4,620
Chief Financial Officer 1993 219,100 73,036 13,149 -0- 6,304 42,725
ELWOOD M. MILLER (5) 1995 262,500 113,116 -0- 10,000/3,000 136,744 67,586
President and 1994 237,500 118,763 27,185 10,000/3,000 176,109 4,620
Chief Executive Officer, 1993 112,500 100,000 307,407 9,000/2,700 -0- 54,339
Blessings
MANUEL VILLARREAL G. (6) 1995 96,272 74,000 -0- -0- -0- -0-
President and 1994 72,114 53,609 8,684 -0- -0- -0-
Chief Executive Officer, NEPSA 1993 -- -- -- -- -- --
</TABLE>
(1) Cash amounts awarded under the Incentive Bonus Plan for the respective
fiscal years.
(2) In accordance with the terms of the Incentive Bonus Plan, stock is awarded
at a market price determined as the average price during the last three
trading days of the particular fiscal year. The per-share stock prices used
in determining common shares earned were $14.167 and $12.042 for fiscal 1994
and 1993 respectively as restated for the two-for-one stock split paid
December 15, 1994.
(3) Amounts included in all other compensation for fiscal years 1995, 1994 and
1993 respectively include company matching contributions to the 401(k)
savings plan: in 1995 of $4,620 for Mr. Durboraw; $3,646 for Mr. Hudson;
$4,620 for Mr. Luke; $4,620 for Dr. Miller; in 1994 $4,620 for Mr. Durboraw;
$1,993 for Mr. Hudson; $4,620 for Mr. Luke; $4,620 for Dr. Miller, and in
1993 $4,283 for Mr. Durboraw; $4,497 for Mr. Luke; $2,729 for Dr. Miller.
The remaining amounts for the named officers represent accruals to the
Supplemental Executive Retirement Plan.
(4) Kenneth J. Hudson joined the company effective January 31, 1994.
(5) Dr. Elwood M. Miller joined the company effective July 1, 1993.
(6) Manuel Villarreal G. joined the company effective July 5, 1994, upon the
purchase of NEPSA.
7
<PAGE>
OPTIONS
The following table sets forth the details of options granted to the
individuals listed in the Summary Table during fiscal year 1995. The second
table in this section shows value of exercised and unexercised options.
OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN THE YEAR ENDED 12/30/95
<TABLE>
<CAPTION>
Potential
Realizable Value
Individual Grants At Assumed Annual
% of Total Rates of
Options/SARs Stock Price
Granted to Exercise Appreciation
Options/SARs Employees in Price Expiration For Option Terms
Name Granted* Fiscal Year $/Share* Date 5% - $ 10% - $
<S> <C> <C> <C> <C> <C> <C>
Wayne A. Durboraw -0- -0- -0-
Kenneth J. Hudson 3,000/900 7.2% 13.25 7/10/05 24,990 63,360
James P. Luke 5,000/1,500 12.0% 13.25 7/10/05 41,650 105,600
Elwood M. Miller 10,000/3,000 24.1% 13.25 7/10/05 83,300 211,200
Manuel Villarreal G. -0- -0- -0-
</TABLE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised In-the-Money Options/SARs
Acquired On Value Options/SARs at 12/30/95 at 12/30/95
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Wayne A. Durboraw -0- -0- 5,200/1,560 -0- 3,436/1,031 -0-
Kenneth J. Hudson -0- -0- 4,000/1,200 3,000/900 -0- -0-
James P. Luke -0- -0- 15,400/4,620 5,000/1,500 11,559/3,468 -0-
Elwood M. Miller -0- -0- 19,000/5,700 10,000/3,000 -0- -0-
Manuel Villarreal
G. -0- -0- -0- -0- -0- -0-
</TABLE>
8
<PAGE>
EMPLOYEE PENSION TRUST PLAN
The Blessings Corporation Employees' Pension Trust Plan is a defined
benefit plan and the amount of the contribution with respect to a specified
person cannot be readily calculated by the regular actuaries of the plan. The
plan defines annual earnings as taxable earnings plus any 401(k) deferrals of
the employee. While the plan formula does not incorporate a direct social
security offset, service credits are earned at the rate of 1% of the social
security wage base and 1.3% of earnings in excess of the social security wage
base for each participant. The Company maintains a Supplemental Restoration Plan
designed to restore pension benefits otherwise provided by the Company's
Employee Pension Trust Plan, but which have become limited as a result of
changes in the Internal Revenue Service Code. The Plan covers all employees of
Blessings Corporation who are participants in the Basic Plan and whose
retirement income benefits are limited, directly or indirectly, by the
provisions of Code Section 401(a) (17) or Code Section 415. In no event will
benefits payable under the Supplemental Restoration Plan, when added to the
benefits earned under the Employees' Pension Trust Plan exceed total benefits
calculated under the Employees' Pension Trust Plan as if no limitations had been
imposed.
The following table shows estimated annual benefits payable under both
plans (assuming payments made on the normal life annuity basis and not under any
of the various survivor options) to an employee at normal retirement age, i.e.,
age 65, after selected periods of service with respect to varying levels of
remuneration covered by the plan.
<TABLE>
<CAPTION>
Average Annual Earnings
During the Highest Five Annual Benefit Upon Retirement
Consecutive Years of the With Years of Service Indicated
Final Ten Years of Service 15 Year 20 Years 25 Years 30 Years 35 Years
<S> <C> <C> <C> <C> <C>
$100,000............................................. $ 18,259 $ 24,348 $ 30,435 $ 36,521 $ 42,607
200,000............................................. 37,756 50,348 62,934 75,519 88,104
300,000............................................. 57,253 76,348 95,433 114,517 133,602
400,000............................................. 76,751 102,348 127,932 153,515 179,099
500,000............................................. 96,248 128,348 160,431 192,514 224,596
600,000............................................. 115,745 154,348 192,930 231,512 270,094
</TABLE>
The credited years of service for persons named above at their normal
retirement dates are as follows: Mr. Durboraw, 30 years; Mr. Hudson, 21 years;
Mr. Luke, 32 years; Dr. Miller, 16 years; Sr. Villarreal is not a participant in
the Blessings Corporation Employees' Pension Trust Plan.
COST RECOVERY SUPPLEMENTAL RETIREMENT INCOME PLAN
Effective January 1, 1980, Blessings established a Cost Recovery
Supplemental Retirement Income Plan. The plan is an unfunded, unqualified plan
and is not subject to the Employee Retirement Income Security Act of 1974 as
amended. The plan covers Messrs. Durboraw, Luke and Miller.
The plan is designed to provide for covered executives a retirement benefit
of 60% of compensation less 100% of primary social security benefits, 100% of
benefits payable under the Blessings Corporation Employees' Pension Trust Plan,
and 100% of benefits payable under the Supplemental Restoration Plan. Benefits
are payable for ten years following retirement. Should the executive not live to
receive ten years of payments, his beneficiary will receive the balance. In
addition, the plan provides a pre-retirement death benefit of 30% of
compensation minus $7,500 annually for ten years not to exceed $50,000 per year
per individual. These death and retirement payments are paid from the general
funds of the corporation. The corporation purchases "key-man" insurance to be
used to recover the net after-tax cost of the deferred compensation benefits and
the net outlay for the insurance.
The plan is designed so that if the assumptions made as to mortality
experience, policy dividends and other factors are realized, the corporation
will recover substantially all of its payments plus a portion of the interest
paid or imputed for the use of the corporation's money. Estimated annual
payments for ten years after retirement stated at current value are as follows:
Mr. Durboraw, $21,363; Mr. Luke, $61,998; and Dr. Miller, $155,156.
9
<PAGE>
EMPLOYEES' DEFINED CONTRIBUTION 401(K) SAVINGS PLAN
The company maintains a Defined Contribution 401(k) Savings Plan for all
employees. Under the terms of the plan, each employee may elect to participate
through the deferral of from 1% to 15% of his or her earnings not to exceed an
annual limitation established by the Internal Revenue Service which was $9,240
during 1995. To encourage and assist its employees in saving for their
retirement, the company has established an employer contribution amounting to
$.50 for each $1.00 deferred by the employee into the plan with the company's
contribution not to exceed a maximum of 3% of the employee's earnings. The plan
further provides that all employee and company-matching contributions are 100%
vested by the employee at all times. Each individual may select on a quarterly
basis the type of investment account in which he or she would choose to have the
funds of the account invested: equity fund, guaranteed fixed income fund,
balanced fund, small company fund, intermediate bond fund. For the year ended
December 30, 1995, the company's matching contributions to the plan totaled
$337,935. Blessings' aggregate contributions under the plan for the three most
recent fiscal years with respect to the persons named in the summary
compensation table, all current executive officers as a group and all other
employees, excluding executive officers as a group, were as follows: Mr.
Durboraw, $13,523; Mr. Hudson, $5,639; Mr. Luke, $13,737; Dr. Miller, $11,969;
all current executive officers as a group, $82,609; and all other employees,
excluding current executive officers as a group, $1,033,231.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Pursuant to the provisions of the Blessings Corporation 1991 Stock Option
Plan (the "1991 Plan") and further subject to the provisions of the Blessings
Corporation Executive Stock Loan Purchase Program (the "Program"), which Program
was adopted as a sub-part of the 1991 Plan, the company has agreed to provide
guarantees of personal loans in the amount of $231,250 each, undertaken by Dr.
Elwood M. Miller and Mr. James P. Luke with a major financial insititution with
interest at the prime rate minus 0.25% in order to exercise stock options for
25,000 shares each of Blessings Corporation common stock granted on February 23,
1996. The guarantees are for a term not to exceed five years. The agreement
provides that the loans may be "interest only" for no more than three years with
amortization in full over the fourth and fifth years, if not sooner.
The company has undertaken this arrangement to facilitate the purchase of
company stock by its senior executives in order to align their financial rewards
with the financial rewards realized by all other holders of the common stock.
The following table shows the outstanding balance of personal loans with a
concomitant company guarantee as of February 28, 1996:
<TABLE>
<CAPTION>
Executive Officer February 28, 1996
<S> <C>
Elwood M. Miller, President & CEO $ 231,250
James P. Luke, Executive Vice President, CFO $ 231,250
</TABLE>
10
<PAGE>
STOCK PERFORMANCE CHART
The following chart compares the cumulative total return to shareholders on
the corporation's common stock with the cumulative total return of the American
Stock Exchange Market Index and a Plastics Industry Peer Group comprised of
fifty-nine public companies identified by SIC Codes 3080-3089 with annual sales
of less than $1 billion. The comparison assumes $100 was invested on December
31, 1990, in the company's common stock and in each of the foregoing indices,
and assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among Blessings Corp., AMEX & Plastics Peer Group
Fiscal Year Ending December 30, 1995
[INSERT GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Blessings Corporation 100 167 166 225 272 204
American Exchange Market 100 128 130 155 141 178
Plastics Peer Group 100 156 156 196 193 233
</TABLE>
11
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General Principles:
The guiding principle of the Executive Compensation Program of the company
as supervised by the Compensation Committee (the Committee) of the Board of
Directors is to provide incentive to senior managers which will align their
financial interests closely with those of shareholders.
Following this overriding principle, the compensation program:
-- Seeks to provide competitive annual compensation consistent with the
attainment of established return on asset performance objectives and to
create a results oriented environment;
-- Provides longer-term incentive for the appreciation of shareholder
value by offering equity ownership in the company through both the
stock award component of the Annual Incentive Plan and through stock
option awards;
-- Attracts and retains key executives critical to the long-term success
of the company.
Key Elements:
-- A basic element of the Executive Compensation Program is to set
compensation target levels around the fiftieth percentile of industry
practices for comparable companies.
-- Salary increases for the five highest paid executives are determined
through evaluation of performance and individual position within
established salary grade and compensation range criteria as established
by the Committee based upon competitive market analysis provided by a
nationally recognized independent compensation consultant. During 1995,
the Committee engaged its independent consultant to reevaluate the
thirteen (13) most senior management positions including a separate
study for the President and Chief Executive Officer (CEO) to ensure
that appropriately competitive compensation levels are maintained.
These studies conclude that, of the positions evaluated, most were at
or below the 50th percentile (median pay level) of the market. The
recommendations contained in the studies were adopted by the Committee,
and will provide the basis for compensation decisions regarding the
thirteen positions throughout the ensuing year.
-- On May 21, 1991, shareholders approved the Blessings Corporation 1991
Stock Option Plan which provides for the award of common stock options
and associated stock appreciation rights to senior executives and other
key managers of the company designated by senior management and
approved by the Committee. This plan is designed to recognize and
reward key employee performance, to enhance the interest of key
employees in Blessings' long-term success by providing them a
proprietary interest in Blessings and to enable Blessings to maintain a
competitive position in attracting and retaining superior key personnel
necessary for the success and development of the company. The company
has never repriced stock options.
-- On May 18, 1993, shareholders approved the Blessings Corporation 1993
Annual Incentive Plan for Key Employees (the 1993 Plan). The 1993 Plan
adopted an incentive compensation formula based upon a Return-On-Assets
(ROA) measure of performance under which actual three-year weighted
return on assets performance is measured against a pre-determined
return on asset target for the Edison Plastics(Register mark) Division
or for Blessings Corporation as appropriate for each individual
executive. Eligible executives can earn bonus cash compensation up to a
maximum of 50% of annual salary by achieving the pre-determined ROA
target. Performance below the pre-determined ROA target results in less
cash bonus and performance in excess thereof is compensated for in
shares of Blessings' common stock at a market price representing the
average price during the three last trading days of the particular
fiscal year. Such incentive stock is held in Treasury by the company
pending satisfaction of a three-year vesting requirement by each award
recipient. In the case of the President & CEO and the EVP & CFO, a
secondary measure, growth in annual profit, is also applied as a
modifier to awards earned under the basic formula. Under this
performance modifier, growth in
12
<PAGE>
annual profit contribution of 0% or less results in a 10% reduction in
the award earned. Profit contribution growth of between 0% and 8%
results in no modification of the calculated award; growth of more than
8% in annual profit contribution results in a 10% addition to the award
otherwise earned.
For 1995, the Committee authorized the introduction of a discretionary
component to the original plan formula. This modification provides for
a 25% increase or decrease to individual cash bonuses at the discretion
of the President & CEO [with the exception of his own which is
determined by the Committee], subject to the approval of the Committee
and to the limitation that the net amount of all such discretionary
increases or decreases will not exceed the total cash award for all
participants if calculated solely in accordance with the return of
assets formula.
Other:
-- Pursuant to the terms of the Blessings Corporation 1991 Stock Option
Plan, the Committee granted stock options totaling 41,500 shares to
twenty key individuals in 1995.
-- Regarding the Committees' agreement with Dr. Miller for compensation
forfeited upon leaving his former employer, Dr. Miller was issued
11,050* shares on November 15, 1994, and 7,938* shares on November 15,
1995. Additional shares are being held in accordance with the following
vesting schedule:
<TABLE>
<S> <C>
November 15, 1996 4,488 shares*
November 15, 1997 1,618 shares*
* After effect of 2 for 1 stock split paid 12/15/94.
</TABLE>
-- The company has an agreement with Mr. Luke which provides that in the
event of a change in control of the company (as defined in the
agreements) and upon termination of the key executive's employment with
the company for any reason other than cause, death or disability, the
executive shall have the right to receive as severance pay an amount
equal to the present value of the total amounts of salary and benefits
payable to the earlier of the date of his sixty-fifth birthday or three
years from the date of termination.
-- The company has an agreement with Dr. Miller providing that in the
event of termination by Blessings for reasons other than cause, the
employee will receive severance in the amount of one year of salary
plus a pro-rated amount of bonus based upon the portion of the fiscal
year employed prior to termination.
CEO Compensation:
The parameters used in determining the salary and total compensation of the
Chief Executive Officer were established in accordance with the results of an
extensive analysis of competitive compensation undertaken by independent
compensation consultants engaged by the Committee. These studies established
salary grade and incentive ranges for the CEO and other senior corporate
officers based upon published competitive survey data from numerous sources to
establish a market match for companies with similar characteristics (e.g.,
freestanding, public manufacturing corporations with annual sales of
approximately $200 million).
The CEO's current compensation level is in the low to middle range of
competitive industry analysis and, based on future performance and contribution
to the attainment of goals established by the Board of Directors, he will have
the opportunity to advance to the highest level of the competitive range.
The CEO's salary increase in fiscal year 1995 was based on the Committee's
evaluation of his performance. It is the opinion of the Committee that Dr.
Miller has been instrumental since assuming his CEO responsibilities in May
1994, in initiating programs designed to lead the company into new market
directions for the enhancement of long term growth and profitability.
Dr. Miller received an option grant of 10,000 shares under the 1991 Stock
Option Plan in fiscal year 1995.
13
<PAGE>
All recommendations of the Committee are submitted to the full Board of
Directors of the company for approval prior to implementation. There are no
Compensation Committee interlocks. All members of the Committee are non-employee
Directors of the Company.
This report has been provided by the members of the Compensation Committee
of the Board of Directors of Blessings Corporation: Leonard Birnbaum; Joseph J.
Harkins (Chairman); Robert E. Weber; Philip C. Williamson.
ITEM NO. 1
ELECTION OF DIRECTORS
The Bylaws of Blessings provide that the Board of Directors shall not be
less than seven (7) nor more than fifteen (15) members. The board has fixed at
eleven (11) the number of directors to be elected to hold office until the next
annual meeting and until their successors shall be duly elected and qualified.
All of the nominees have been selected by the Nominating Committee. The
Nominating Committee will consider nominees suggested by shareholders for
election at the annual shareholders' meeting. Shareholders desiring to suggest
nominees should advise the Secretary of the company in writing not less than
fifty (50) days nor more than seventy-five (75) days prior to the meeting date
and include sufficient biographical material to permit an appropriate
evaluation.
All of the nominees are currently members of the Board of Directors. The
appointees named in the accompanying proxy will vote for the election of the
nominees named below unless authorization to do so is withheld in the proxy. In
the event any nominees should become unavailable for election, which presently
is not anticipated, the persons named in the proxy will vote for the election of
such other person or persons designated by the Board of Directors. The
information presented below is as of February 2, 1996, and is based, in part, on
information furnished by the nominees and, in part, on the records of Blessings.
<TABLE>
<CAPTION>
Number Of
Shares
Name, Age And Principle Occupation Director Beneficially
For The Last Five Years Since Owned (1)
<S> <C> <C>
Leonard Birnbaum, 77, private investor and former President
and Chief Executive Officer of Peartree Imports, Inc.,
New York, New York. Mr. Birnbaum is Chairman of the Long Range Planning
Committee and a member of the Compensation and Audit Committees of the
Board of Directors....................................................... 1952 78,338
Joseph J. Harkins, 64, Executive Vice President, Retired, The Chase
Manhattan Bank, N.A., New York, New York; a director of Mutual Fund
Group, New York, New York. Mr. Harkins is also a director of Jefferson
Insurance Company and
New York, New York and Monticello Insurance Company,
New York, New York. Mr. Harkins is Chairman of the Compensation Committee
and a member of the Audit, Long Range Planning and Nominating Committees
of the Board of Directors (2)............................................ 1972 5,334
R. Stephen Lefler, 46, President and Chief Operating Officer and a director
of Williamson-Dickie Manufacturing Company, Fort Worth, Texas. Mr. Lefler
joined Williamson-Dickie in June, 1982, and has served in a variety of
executive functions. Mr. Lefler is a member of the Long Range Planning
and Nominating Committees of the Board of Directors...................... 1990 1,200(3)
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Number Of
Shares
Name, Age And Principle Occupation Director Beneficially
For The Last Five Years Since Owned (1)
<S> <C> <C>
James P. Luke, 53, Executive Vice President, Chief Financial Officer of
Blessings Corporation. Mr. Luke joined Blessings in 1975 and has served
in a variety of executive positions since that time. Mr. Luke is a member
of the Executive, Long Range Planning and Investor Relations Committees
of the Board of Directors................................................ 1988 23,530
John W. McMackin, 65, Partner in the law firm of Decker, Jones, McMackin,
McClane, Hall & Bates, Fort Worth, Texas, and a director of
Williamson-Dickie Manufacturing Company, Fort Worth, Texas. Mr. McMackin
is Chairman of the Board
of Directors of Blessings Corporation and Chairman of the Executive and
Operating Committees of the Board of
Directors (4)............................................................ 1977 14,210
Elwood M. Miller, 51, President and Chief Executive Officer of Blessings
Corporation. Dr. Miller joined Blessings in 1993.
Prior to that Dr. Miller was employed by the General Electric Corporation
for twenty-one years in a variety of executive positions. Dr. Miller is a
member of the Executive, Long Range Planning and Investor Relations
Committees of the Board of Directors..................................... 1993 41,294(8)
Richard C. Patton, 33, Private investor, former portfolio manager Fidelity
Investments, Boston, Massachusetts. Mr. Patton attended Harvard Graduate
School of Business Administration 1990 to 1992. Mr. Patton is a member of
the Long Range Planning Committee and Chairman of the Investor Relations
Committee of the Board of Directors...................................... 1994 800
Manuel Villarreal G., 43, President and Chief Executive Officer of Nacional
de Envases Plasticos, S.A. De C.V. (NEPSA), Mexico. Mr. Villarreal joined
NEPSA in 1976 and has served in a variety of executive functions since
that time. Sr. Villarreal is a member of the Executive Committee of the
Board of Directors....................................................... 1994 396,000(6)
Robert E. Weber, 64, Chairman and Chief Executive Officer of Osmose Wood
Preserving, Inc., Buffalo, New York. Mr. Weber is a member of the
Executive, Operating, Compensation and Organization Development
Committees of the Board of Directors..................................... 1989 6,700
J. Donovan Williamson, 59, Consultant to and Director of Williamson-Dickie
Manufacturing Company, Fort Worth, Texas; Vice President and a director
of Williamson Industries, Ltd.; Chairman and Chief Executive Officer of
JDW Southwestern, Inc., an investment company, Fort Worth, Texas. Mr.
Williamson is Vice Chairman of the Executive Committee, Chairman of the
Nominating Committee and a member of the Operating Committee of the Board
of Directors............................................................. 1973 5,498,328(5)
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Number Of
Shares
Name, Age And Principle Occupation Director Beneficially
For The Last Five Years Since Owned (1)
<S> <C> <C>
Philip C. Williamson, 34, Vice Chairman, Chief Executive Officer and a
director of Williamson-Dickie Manufacturing Company, Fort Worth, Texas.
Mr. Williamson is a member of the Executive, Operating, Long Range
Planning, Compensation and Organization Development Committees of the
Board of Directors (7)................................................... 1990 5,499,296(5)
</TABLE>
(1) Amounts shown include shares subject to options that are exercisable within
sixty days for the named directors as follows: Mr. Luke, 15,400; Dr. Miller,
19,000.
(2) Mr. Joseph J. Harkins was formerly an Executive Vice President of The Chase
Manhattan Bank, N.A. Mr. Harkins retired from his position as Executive Vice
President effective January 31, 1990. On August 18, 1994, the Chase
Manhattan Bank participated to the extent of $13,000,000 in the Term Loan
Agreement in the amount of $25,000,000 undertaken to finance the company's
investment in its Mexican subsidiary, NEPSA.
(3) Does not include shares owned of record by Williamson-Dickie Manufacturing
Company, in which Mr. Lefler has a .572% interest, due to the insignificant
percentage of his ownership in Williamson-Dickie Manufacturing Company.
(4) Mr. John W. McMackin is a partner in and shareholder of the law firm of
Decker, Jones, McMackin, McClane, Hall & Bates of Fort Worth, Texas. The law
firm of Decker, Jones, McMackin, McClane, Hall & Bates provides professional
services in the ordinary course of business to Williamson-Dickie
Manufacturing Company and its principals. Decker, Jones, McMackin, McClane,
Hall & Bates also provides legal services in the ordinary course of business
to Blessings Corporation, in particular, SEC and related public disclosure
advisory services.
(5) The Williamson-Dickie Manufacturing Company owns 5,496,096 shares (54.3%) of
Blessings' common stock outstanding. Mr. J. Donovan Williamson owns 2,232
shares and Mr. Philip C. Williamson owns 3,200 shares of Blessings' common
stock in addition to the Blessings shares owned beneficially through their
interest in the Williamson-Dickie Manufacturing Company. Thus, beneficially,
Mr. J. Donovan Williamson owns 5,498,328 shares (54.3%) and Mr. Philip C.
Williamson owns 5,499,296 shares (54.3%) of the outstanding common stock of
Blessings.
(6) Reporting person disclaims beneficial ownership of 276,000 of the shares
held by father and brother.
(7) Mr. Philip C. Williamson is the nephew of Mr. J. Donovan Williamson.
(8) Reporting person disclaims beneficial ownership of 200 of the shares held as
custodian for two minor grandchildren.
The shares represented by the proxy cards returned will be VOTED FOR the
election of these nominees unless instructions to the contrary are indicated on
the proxy cards.
16
<PAGE>
ITEM NO. 2
INTRODUCTION
The 1995 Non-Employee Directors Stock Option Plan (the "DSOP") was approved
by the Board on May 17, 1995, subject to the approval of shareholders. The
Company believes the DSOP promotes the interests of the Company and its
shareholders by strengthening the Company's ability to attract, motivate and
retain Directors of training, experience and ability, and by encouraging the
highest level of Directors' performance by providing Directors with a
proprietary interest in the Company's financial success and growth. The primary
features of the DSOP are summarized below. A copy of the DSOP is attached as
APPENDIX A and should be referred to for a complete statement of the terms of
the DSOP.
PLAN SUMMARY
ADMINISTRATION
The DSOP is administered by the Compensation Committee, which is composed
of non-employee directors who are eligible to participate in the DSOP. The
Compensation Committee shall have the power to interpret the Plan, and subject
to its provisions, to prescribe, amend and rescind rules and to make all other
determinations necessary for the DSOP's administration. All action taken by the
Compensation Committee in the administration and interpretation of the DSOP
shall be final and binding upon all parties. No member of the Compensation
Committee will be liable for any action or determination made in good faith by
the Compensation Committee with respect to the DSOP or any option. The Board
will have the power, in its discretion, to amend, suspend or terminate the DSOP
at any time, subject to the approval of the shareholders if and to the extent
necessary for the continued applicability of Rule 16b-3 under the Exchange Act.
The Board may not, however, amend the eligibility requirements or the granting
schedule more than once every six months other than to comport with changes in
the Internal Revenue Code (the "Code"), the Employee Retirement Income Security
Act ("ERISA") or the rules thereunder. Furthermore, no amendment, suspension or
termination of the DSOP, may alter, terminate, impair or adversely affect any
rights or obligations under any option previously granted without the consent of
the holder.
ELIGIBILITY AND GRANTS
Only non-employee directors of the Company are eligible to participate in
the DSOP. Following the Annual Meeting, eight non-employee directors will be
participants in the DSOP. Participants will be granted an option to acquire 500
shares of common stock of the Company on the first business day after the date
of each Annual Meeting, commencing with the Annual Meeting held on May 16, 1995.
In addition, upon initial election to the Board, a non-employee director will be
granted an option to acquire 500 shares of common stock on the first business
day following such director's election to the Board. Subject to certain
adjustment provisions described in the DSOP, the aggregate number of shares of
common stock that may be acquired upon the exercise of Options under the DSOP is
50,000. The closing price of the Company's common stock on February 12, 1996,
was $9.00 per share.
Subject to the approval of the shareholders, each non-employee director as
of May 17, 1995, will receive an option to purchase 500 shares of the Company's
common stock with a date of grant of May 17, 1995. At such time, there were nine
non-employee directors.
OPTION TERMS AND CONDITIONS
The maximum term of an option is five years from the date of grant. The
option will be exercisable immediately; however, shares of common stock obtained
upon the exercise of any option granted under the DSOP may not be sold by
persons subject to Section 16 of the Exchange Act until six months after the
date the option was granted. The exercise price will be the fair market value of
a share of common stock on the date of the grant. The exercise price may be paid
(i) in cash; or (ii) with the consent of the Compensation Committee
17
<PAGE>
in its sole discretion (A) by the assignment and delivery free and clear of all
liens and encumbrances to the Company of shares of common stock, owned by the
holder of the option for at least six months, with a fair market value on the
relevant exercise date equal to the exercise price, (B) by delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker, to properly deliver to the Company the amount of sale or loan proceeds
to pay the exercise price, all in accordance with the regulations of the Federal
Reserve Board, or (C) by a combination of any of the above.
Each option shall expire five years from date of grant except as follows:
(i) If a non-employee director ceases to be a director of the Company for
any reason other than the death or disability of the non-employee director, the
options granted to such person may be exercised by the person only within 90
days after the date the non-employee director ceases to be a director of the
Company (but not more than five years after the date of grant); or
(ii) In the event of the death or disability of a non-employee director,
during the non-employee director's service as a director, the options granted to
such person shall be exercisable, and such options shall expire unless exercised
within 12 months after the date of the non-employee director's death or
disability (even though such exercise period extends for more than five years
after date of grant). In case of death, the option granted to such non-employee
director may be exercised (to the extent that such person shall have been
entitled to do so at the date of such person's death) by a legatee or legatees
of the non-employee director under his or her last will and testament or by his
or her personal representatives or distributees.
No option or right under the DSOP will be assignable or subject to any
encumbrance, pledge or charge of any nature except (i) with the written consent
of the Compensation Committee, (ii) transfer or assignment in favor of the
Company, and (iii) under such rules as the Compensation Committee may establish
pursuant to the terms of the DSOP. Furthermore, no option or right under the
DSOP is transferable by a holder other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of ERISA or the rules thereunder. The designation by a
holder of a beneficiary is not a transfer.
DURATION
Unless the DSOP is previously terminated, the DSOP will terminate on July
1, 2005, except with respect to Options then outstanding.
ADJUSTMENT
If the outstanding shares of common stock of the Company are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of common stock or other
securities, through merger, consolidation, spin-off, the sale of all or
substantially all the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of common stock, or other securities,
then an appropriate and proportionate adjustment may be made in (i) the maximum
number and kind of shares covered by the DSOP and (ii) the number and kind of
shares of other securities subject to, and the exercise price of, then
outstanding Options.
FEDERAL TAX CONSEQUENCES
A non-employee director who receives an Option under the DSOP will not
recognize any income, nor will the Company be entitled to any tax deduction, in
the year of the grant. At the time that an option is exercised, the non-employee
director will recognize ordinary income in an amount equal to the excess of (a)
the Fair Market Value of the shares purchased over (b) the exercise price paid
for such shares. The Company will be entitled to a deduction in an amount equal
to the amount includable in the income of the non-employee director, in the
taxable year in which the non-employee director is required to recognize the
income.
18
<PAGE>
NEW PLAN BENEFITS
No New Plan Benefits Table is provided herein with respect to the DSOP
because, as described under "Eligibility and Grants," the only people eligible
to receive grants under the plan are the non-employee directors of the Company
(each of whom is eligible to receive 500 Options each year).
Approval of the DSOP by the shareholders requires the affirmative vote of
the majority of the votes cast at the Annual Meeting. Abstentions will count as
no votes. If the stockholders do not approve the Plan, the Options already
granted will be of no force and effect.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN.
SELECTION OF AUDITORS
The Board of Directors, in accordance with the recommendation of its Audit
Committee, the members of which are not employees of the company, has appointed
Deloitte & Touche LLP, independent certified public accountants, as the auditors
of the company for the fiscal year ended December 30, 1995, and is planning to
reappoint the firm for the 1996 fiscal year. The company has also engaged the
firm of Galaz, Gomez Morfn, Chavero, Yamazaki of the international accounting
firm Deloitte Touche Tohmatsu International as the auditors of its NEPSA
subsidiary for the fiscal year ended December 30, 1995, and has agreed to
reappoint the firm for the 1996 fiscal year. Deloitte & Touche LLP, a
nationally-known firm of independent certified public accountants, has audited
Blessings' financial statements for more than twenty-six years. Blessings has
been advised by Deloitte & Touche LLP that neither that firm nor any of its
associates has any relationship with Blessings or any affiliate of Blessings
other than the usual relationship that exists between independent certified
public accountants and client. If Deloitte & Touche LLP should decline to act or
otherwise become incapable of acting or if their appointment is otherwise
discontinued, the Board will appoint other independent accountants. Deloitte &
Touche LLP will have representatives at the shareholders' meeting who will have
an opportunity to make a statement and will be available to respond to
appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
FOR THE 1997 ANNUAL MEETING OF SHAREHOLDERS
Any shareholder proposal submitted for inclusion in the proxy statement and
form of proxy for the 1997 Annual Meeting of Shareholders must be received at
Blessings' principal executive offices in Newport News, Virginia, on or before
December 13, 1996.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The management of the corporation knows of no matters to be brought before
the meeting other than as stated in the Notice of Meeting. However, if any other
matters properly come before the meeting, it is the intention of Blessings that
proxies received in response to this solicitation will be voted on such matters
in accordance with the best judgment of the person or persons named on the
accompanying form.
A copy of the annual report for the fiscal year ended December 30, 1995, is
being mailed to shareholders with the proxy statement. The annual report is not
to be regarded as a proxy-soliciting material or a communication by means of
which any solicitation is to be made.
By Order of The Board of Directors
JAMES P. LUKE
EXECUTIVE VICE PRESIDENT
SECRETARY/TREASURER
Newport News, Virginia
April 8, 1996
19
<PAGE>
APPENDIX A
BLESSINGS CORPORATION
1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the 1995 Non-Employee Directors Stock Option Plan of
Blessings Corporation is to promote the interests of the Company and its
shareholders by strengthening the Company's ability to attract, motivate and
retain Directors of training, experience and ability, and to encourage the
highest level of Directors' performance by providing Directors with a
proprietary interest in the Company's financial success and growth.
2. DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Compensation and Stock Option Committee of the
Board as shall be appointed by the Board from time to time. The Committee shall
consist of two or more members of the Board none of whom shall be employees of
the Company.
(c) "Common Stock" means the $.71 par value Common Stock of the Company.
(d) "Company" means Blessings Corporation, a Delaware corporation.
(e) "Disability" of a Participant means that the Participant is disabled
due to a physical or mental condition so as to be prevented from engaging in
further services as a Director of the Company.
(f) "Director" means a member of the Board who is not an employee of the
Company or any of its subsidiaries.
(g) "Employee" means any employee of the Company, or of any of its present
or future subsidiary corporations.
(h) "Fair Market Value" means the closing price of a share of Common Stock
on the American Stock Exchange (or such other exchange upon which the Common
Stock is then primarily traded) Composite Tape on the date as of which fair
market value is to be determined or the actual sale price of the shares acquired
upon exercise if the shares are sold in a same day sale, or if no sales were
made on such date, the closing date of such shares on the Composite Tape on the
next preceding date on which there were such sales.
(i) "Participant" means each Director.
(j) "Option" means a stock option that does not satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended.
(k) "Plan" means the 1995 Non-Employee Directors Stock Option Plan as set
forth herein, as amended from time to time.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 7, the aggregate number of shares of
Common Stock that may be issued or transferred pursuant to exercise of Options
under the Plan is 50,000 shares of Common Stock. Such shares may be either
authorized but unissued shares or shares issued and thereafter acquired by the
Company.
4. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Committee, which shall have the
power to interpret the Plan and, subject to its provisions, to prescribe, amend
and rescind rules and to make all other determinations necessary for the Plan's
administration.
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(b) All action taken by the Committee in the administration and
interpretation of the Plan shall be final and binding upon all parties. No
member of the Committee will be liable for any action or determination made in
good faith by the Committee with respect to the Plan or any Option.
5. ELIGIBILITY
Only Directors shall be eligible to participate in the Plan. Prior to the
termination of the Plan, each Director who is serving in such capacity on the
Date of Grant (as hereinafter defined) automatically shall be granted, on the
first business day after the date of each annual meeting of shareholders of the
Company, commencing with the Annual Meeting to be held on May 16, 1995, an
Option to acquire 500 shares of Common Stock. Each Director upon initial
election to the Board automatically shall be granted an Option to acquire 500
shares of Common Stock on the first business day following such Director's
election to the Board. Initial election to the Board shall mean election to the
Board by the Board or by the Shareholders of the Company, whichever first
occurs. The date on which an Option is granted shall be the "Date of Grant" with
respect to such Option, except that the Date of Grant for options granted on May
17, 1995, shall not occur until and unless shareholder approval of the Plan is
obtained. Each Option will be evidenced by a written instrument including terms
and conditions consistent with the Plan, as the Committee may determine.
6. TERMS AND CONDITIONS OF STOCK OPTIONS
(a) The purchase price of Common Stock under each Option will be the Fair
Market Value of the Common Stock on the Date of Grant.
(b) An Option granted under the Plan may be exercised immediately. Shares
of Common Stock obtained upon the exercise of any Option granted under the Plan
may not be sold by persons subject to Section 16 of the Exchange Act until six
(6) months after the date the Option was granted.
(c) Each Option shall expire five (5) years from Date of Grant, except as
follows:
(i) In the event that a Participant ceases to be a Director of the
Company for any reason other than the death or Disability of the
Participant, the Options granted to such Participant may be exercised by
the Participant only within ninety (90) days after the date the Participant
ceases to be a Director of the Company (but not more than five (5) years
after the Date of Grant).
(ii) In the event of the death or Disability of a Participant, during
the Participant's service as a Director, the Options granted to the
Participant shall be exercisable, and such Options shall expire unless
exercised within twelve (12) months after the date of the Participant's
death or Disability (even though such exercise period extends for more than
five (5) years after Date of Grant). In case of death the Option granted to
such Participant may be exercised (to the extent that the Participant shall
have been entitled to do so at the date of said Participant's death) by a
legatee or legatees of the Participant under his or her last will and
testament, or by his personal representatives or distributees.
(d) Upon the exercise of an Option, the exercise price will be payable in
full (i) in cash; or, (ii) with the consent of the Committee in its sole
discretion, (A) by the assignment and delivery free and clear of all liens and
encumbrances to the Company of shares of Common Stock, owned by the holder of
the Option for at least six months, with a Fair Market Value on the relevant
exercise date equal to the exercise price, (B) by delivery of a properly
executed exercise notice, together with irrevocable instructions to a broker, to
properly deliver to the Company the amount of sale or loan proceeds to pay the
exercise price, all in accordance with the regulations of the Federal Reserve
Board, or (C) by a combination of any of the above. No payment by an assignment
of shares or by irrevocable instructions to a broker or by any combination
thereof will be allowed unless such payments are allowed under applicable
requirements of federal and state tax, securities and other laws, rules and
regulations and by any regulatory authority having jurisdiction.
7. ADJUSTMENT PROVISIONS
(a) Subject to Section 7(b), if the outstanding shares of Common Stock of
the Company are increased, decreased, or exchanged for a different number or
kind of shares or other securities, or if additional shares or new or different
shares or other securities are distributed with respect to such shares of Common
Stock or other securities, through merger, consolidation, spin-off, sale of all
or substantially all the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other
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distribution with respect to such shares of Common Stock, or other securities,
an appropriate and proportionate adjustment may be made in (i) the maximum
number and kind of shares provided in Section 3 and Section 5 and (ii) the
number and kind of shares or other securities subject to, and the purchase price
in, then-outstanding Options.
(b) Adjustments under Section 7(a) will be made by the Committee, whose
determination as to what adjustments will be made and the extent thereof will be
final, binding, and conclusive. No fractional interest will be issued under the
Plan on account of any such adjustments.
8. GENERAL PROVISIONS
(a) Nothing in the Plan or in any instrument pursuant to the Plan will
confer upon any Participant any right to continue as a Director or affect the
right of the Company to terminate the services of any Participant in accordance
with the By-Laws.
(b) No shares of Common Stock will be issued or transferred pursuant to an
Option unless and until all then-applicable requirements imposed by federal and
state securities and other laws, rules and regulations and by any regulatory
agencies having jurisdiction, and by any stock exchanges upon which the Common
Stock may be listed, have been fully met. As a condition precedent to the
issuance of shares pursuant to the exercise of an Option, the Company may
require the Participant to take any reasonable action to meet such requirements.
(c) No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Option except as to such shares of Common Stock, if any, that have been issued
or transferred to such Participant.
(d) Except as provided in (e) below, no Option and no right under the Plan,
contingent or otherwise, will be transferable or assignable or subject to any
encumbrance, pledge or charge of any nature except (i) with the written consent
of the Committee, (ii) a transfer or assignment in favor of the Company, and
(iii) under such rules and regulations as the Committee may establish pursuant
to the terms of the Plan.
(e) No Option and no right under the Plan, contingent or otherwise, will be
transferable by a Participant other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code of 1986, as amended (the "Code") or Title I of the
Employee Retirement Income Security Act ("ERISA"), or the rules thereunder. The
designation of a beneficiary by a Participant does not constitute a transfer.
9. AMENDMENT AND TERMINATION
(a) The Board will have the power, in its discretion, to amend, suspend or
terminate the Plan at any time, subject to approval of the shareholders of the
Company if and to the extent necessary for the continued applicability of Rule
16b-3 under the Exchange Act.
(b) No amendment, suspension or termination of the Plan will, without the
consent of the holder, alter, terminate, impair or adversely affect any right or
obligation under any Option previously granted under the Plan.
(c) Notwithstanding the provisions of Section 9(a), the Board may not amend
the provisions of Section 5 or the definition of Director in Section 2 more than
once every six months, other than to comport with changes in the Code, ERISA or
the rules thereunder.
10. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN
This Plan shall become effective upon adoption by the Board, subject to
approval by the holders of a majority of the shares of Common Stock which are
represented in person or by proxy and entitled to vote on the subject at the
1996 Annual Meeting of Shareholders of the Company. The Plan shall become null
and void, and all grants of Options thereunder null and void, if shareholders of
the Company should fail to so approve the Plan. Unless the Plan is previously
terminated, the Plan will terminate on July 1, 2005, except with respect to
Options then outstanding.
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